in looking at the japanese system to see if there's was less effective than ours. power plants must demonstrate for the satisfaction of you, the nrc, that the plant can continue to operate safely, even during a blackout scenario. i believe that as senator alexander noted, the ap1000 would have gravity-fed water processes that would shut down a plant even if there was a complete loss of power and the backup failed. so, those would be even safer plants, it seems to me, and those ought not to be

unnecessarily delayed. delay is cost, and you create uncertainty. pretty soon, people are afraid to invest one would need to be invested for us to create a cleaner, more productive form of energy that is safer than other forms of energy. my goal has always been that we should have cleaner energy. we want american energy, not imported, wherever possible, we want safe energy, we want cost- efficient energy -- energy that does not place an unnecessary burden on our people and our economy. nuclear power fits all of those. it might not be the total solution, but it fits all of those qualities. i hope, pray, and urge that you

do your job to make sure we are safe, make sure it is operating safely, but do not be a burden on our ability to meet the needs for increased electricity in the future by blocking a reasonable cost development of new sources of nuclear power. i have noticed that in alabama we have a shutdown of power. we have power failures to our nuclear plant at browns ferry. the backup system responded just as expected, just as required, just as you have monitored and required, and there was no dangerous scenario that happened. i also appreciate the fact that your committee has found there is no reason to doubt the safety of our nuclear power facilities. your task force report concludes "a sequence of the events like the fukushima accident is not likely to happen

in the united states. continued regulation and licensing activities do not pose a significant risk to public health and safety." madam chairman, thank you for having the hearing, as i think it is something we should move forward with, and hopefully we will be able to effectively allowing new generation of even more efficient, more safe nuclear power plants to come on line. plants that produce tremendous amounts of base load electricity with the polluting our atmosphere and provide safety to all concerned. >> thank you, center. -- senator. under the agreement we have reached, chairman will have five minutes, and each colleague will have three. chairman, go ahead. i will ask everyone to stick with their time because we are so close to a vote and we want

to conclude before then. >> chairman boxer, members of the committee, on behalf of the commission i appreciate the opportunity to appear before you to discuss the near term task force recommendations and their potential implementation. in the aftermath of the fishing off accident the commission -- fukushima accident, the commission started the task force of members that include more than 135 years of experience. the task force efforts were independent, but by no means an isolated or solitary. in developing recommendations, the task force said access to the untitled -- entire nrc staff. if they spend thousands of hours reviewing products and information and consulted with the nrc team in japan.

they outlined 12 recommendations, many with short and long term elements that touch on a broad range of issues including the loss of electrical power, earthquakes, flooding, and emergency preparedness. i provided a detailed review in a written testimony. as the report makes clear, the task force hasn't done an outstanding job helping the -- has done an outstanding job helping us understand what the commission needs to do. the commission has not yet reached a decision on how to proceed. although my colleagues might hold differing viewpoints, i believe our goal remains for the commission to come to an agreement on a -- in an open and transparent way to make a decision in a finite period of time. the commission must move forward with the urgency called for by these real safety issues. although the task force did not

find imminent risks, they identify specific concerns, and recommended improving the regulatory framework. fukushima clearly demonstrated that extraordinary circumstances can challenge plants in unexpected ways, and we must commit to a strong and timely response. the american people expect no less. to the members of the committee, thank you for the opportunity before you. i would be happy to answer questions. thank you. >> thank you. commissioners and a key. -- commissioner svinicki. >> thank you. thank you for the opportunity to appear before you today. the members of the nrc's near- term task force covered tremendous ground in the conduct of their 90-day review. the task force concluded that a sequence of -- sequence of events like the food fish in

the accident is not likely to happen in the united states, and continued licensing activities do not pose an imminent arrest. in providing the safety reassurance to the commission and the public, the task force's work within their responsibilities. it provides the opportunity to proceed with established rules. the nrc is now in a position to conduct activities that the task force's short time frame did not allow them to undertake, namely a more extensive stakeholder involvement, and opportunities to consider a comprehensive set of facts regarding the events in japan and to receive the. expert views on reactor safeguards. in that vein, i view the report

as an important first step in the process of learning from the events at fukushima. if the conclusions drawn by the six individual members must now be open to challenge by our many public stakeholders and tested by the scrutiny of a wider body of experts, including the technical staff who would be responsible for carrying out the changes. i support acting with the appropriate urgency, but without shortchanging the thoroughness, inclusiveness, and the liberation of our response. thank you for this opportunity. >> thank you. the hon. george apostolakis. how did i do on that one? we met in california, so i had a chance to practice that. go ahead. >> chairman boxer, chairman carper, ranking member reso, and members of the committee, good morning. i appreciate the opportunity to appear before you today.

my views regarding the way forward are summarized as follows -- first, it is important to bear in mind the significant task force conclusion that the current regulatory commission has served the public well, and a sequence of events like those that happened in fukushima are unlikely in the united states. second, many people have referred to the events in fukushima as unthinkable or not foreseen and implied that we should protect nuclear plants from unimaginable events. however, there is growing evidence the historical record of tsunami is had not been used improperly to determine the design basis, and consequently protection of the plans was not sufficient. in addition, the location was less than optimal with respect to protection against flooding.

the accident was not of extremely low probability. it was not unthinkable or unforeseen. these observations suggest they should be mindful of striking a proper balance of confirming the corrected design basis and expanding the design basis of u.s. plants. third, the timely disposition by the commission of the near term task force recommendations is important. it is also important to do this in an open and transparent manner. three months should be sufficient time. fourth, our process should be methodical and systematic. the three mile island experience is relevant here as the task force states that some of the actions taken by the nrc were not subjected to a structural review. subsequently, some of the resulting requirements for

found not to be of substantial safety benefit and were removed. fifth, with these recommendations in mind, i believe deliberations would benefit from an evaluation of task force recommendations from battersea management, the views of stakeholders, and a review by the advisers. these reviews might result in additional or different recommendations. i will be working with fellow commissioners to reach a solution. thank you. >> thank you very much. now we look to commission member william magwood iv. >> thank you. i appreciate the opportunity to appear before as soon as the seriousness of the events of folks shima became evident, the commission started a task force. they provided us with the recommendations we have

discussed. i congratulate the six-person team, and also want to point out dr. charles miller, the chair, is with us. tomorrow is his retirement date. >> can we ask him to raise his hand? >> thank you, charlie. nevertheless, while the task force found that u.s. plants are safe, and the state that quite clearly, this is not licensed for complacency. if there are lessons that could further improve the regulatory framework, and the task force has made the 12 recommendations we've spoken of this morning. odyssey, they are limited in time and scope and ability to reach out to stakeholders -- obviously, they're limited in time and scope and ability to

reach out to stakeholders. we were able to deal with issues that were not covered by the task force in an open and transparent manner. we must move quickly and effectively to engage stakeholders in consideration of the task force put the recommendations, as well as situations the task force did not have time to realize. while there are many who believe that we should move very quickly on every recommendation, i think what senator carper said this morning was apropos -- some recommendations can be implemented almost right away, and the votes of the commission so far have indicated that as possible, and there are others that might take more time, and we should take that time to do things the right way. with that, i look forward to

your questions. thank you. >> thank you. mr. ostendorff, welcome. >> ranking member reso, members of the committee, thank you for the chance to be here today. i commend the nrc's near-term task force for its dedication, but from this, and professionalism in conducting this review. they have provided a very significant product that will serve as well. i carefully studied the report before forming my position, meeting with the task force, seeking import from nrc staff, and listen to the views of my colleagues at this table. i cast my vote last wednesday and made the vote publicly available. serving my view as the anchor for this report our findings related to safety of reactors in the united states.

the task force noted that the current regulatory approach has served the commission and the public well and the continued operation and licensing operations do not pose an imminent risk to public health and safety. as i stated at the july 19 public meeting, while i support thoughtful consideration of potential safety enhancements in a systematic and holistic manner, at the same time i do not believe the existing regulatory framework is broken. my vote is centered on three key principles -- we need to implement a broad approach. the sale -- the failure to have this approach was the key lessons learned to the nrc response at three mile island. it was stated as a concern going forward with fukushima one we had our public meeting. not all 12 recommendations that have 35 sub-parts are equal from either a safety enhancement

or urgency perspective. second, some action should be taken sooner than others. my vote supports edo coming back within 30 days with a list of recommendations. i specifically called out in my vote six discrete actions i think should happen now. there are perhaps others. i will wait to hear as to what those recommendations might be third, and finally, i join with my colleagues in supporting the full engagement of my -- our stakeholders. that is absolutely critical. i appreciate the committee's oversight in this area and i look forward to your questions. thank you. >> thank you, each of us will have five minutes. >> we are not dealing with safety issues that are straightforward like seat belts. we know it is essential people to buckle up.

they save lives. what we are dealing with is fatal doses of radiation if you do not do your job right. today, that the york times had a story, fatal radiation found that japanese plants. the operator said workers on monday found an area where radiation exceeded in a measuring devices. a fatal dose for humans. when i hear colleagues, this is my interpretation of what they said, recommendations for safety, more washington red tape. that is what the ranking member said. i can tell you that people in the japan would have got down on their knees and praised god they had more safety measures in place. i want to ask some questions here.

the task force recommends requiring -- in the reactors. reason is that what happened in japan is that the fuel in reactors and became partially uncovered which led up to a bill that of gas. because the events were not working, explosions occurred in all three units. we know some of the reactors have made some safety improvements. but the task force recommends requiring events -- vents. only three reactors in america have installed vents. there are five that have not. why do we have to wait before we implement that recommendation. i'm going to ask each of you, should we move on the recommendation to move forward

with this recommendation of the vent designs. >> i think that is a final recommendation. >> i do not know at this time. >> it sounds reasonable. >> i cannot answer at this point. i support looking at are venting capability. they did not have a clear understanding of whether the operators were able to operate the vents., >> i take that as a no. what is your purpose? when you became a commissioner, which your highest duty? >> public health and safety. >> safety is security. >> protect health and safety. >> health and safety. >> i would like you to consider

what happened in japan and looking at the similarities we see in some of our plants and move on it. let me tell you why i am concerned. after 9/11, the nrc took decisive action. i want you to listen to this. i hope the public is listening to this. you ordered power plants to take it security measures. we worried about terrorist attacks. in my home state, they were handing out iodine pills. that is how worried they were. we have millions of people that live within 50 miles of power plants. they later codified those orders. you know when? march 31, 2010. from 2001 to 2010. i want assurances from each of you that you will not allow that to happen.

i want to hear from you as to whether or not you believe we can move on these recommendations and put them in place within a year. >> i believe we can move within 90 days and have full implementation with recommendations in five years. >> 90 days to move on to most of these recommendations and put them in place. that is a yes. >> i do not believe that -- >> how many? >> i am not certain. i propose we receive an evaluation. >> you do not know. next. my time is over. kohen. >> i agree with the chairman there we should disposition of them. >> i think they could be a disposition within 90 days.

some of them could. >> thank you. my time is up. >> thank you. when we had our june meeting, i had a commitment that kept me from being here. i asked the senator if he would ask the chairman to provide a full account of the actions he took while exercising his emergency authority as provided in section 3 of 1980's plan. to date, i have not received such a report. section three says, "following the conclusion of emergency, the chairman shall render a report to the commission on the actions taken during that emergency. let me start by asking each one of the question, as the chairman provided such a report?

>> i have not received a report. >> i have not. >> i have not received a report. >> as he informed you that he has ceased using his emergency authority? >> he is not informed me of that. >> he has not. >> i have to assume he is still using the emergency. this is terry confusing. >> would you like your response? >> not yet. but if you want to extend my time. >> sure, i will extend your time. >> my colleagues have been informed -- >> it might be better if i finish. i have to assume he is still using, since they have not received. i want to do this. none of us were around at that time but in 1980, when this

provision was passed, it was tobey, a democrat congressman from connecticut. want to read this. i want to have this in the record. this is from our 30 years ago. "there will be to situations in the future. where the chairman is an agreement with the majority and those were he and she or not. where the chairman has a majority of commissioners with him or her, it is obvious the chairman will not need the extraordinary powers to work his or her will. the chairman can move in unison with the commission toward the policy." what about the other situation? or the chairman is in the minority, regardless of party affiliation, within the commission when the majority oppose the chairman? is it equally obvious that those special powers will be most

appealing to the chairman? is it clear that these powers are ever to be needed and utilize, it is by the chairman? if that is the case, is this plan constructed to get regulation and would not be subject to the sort of partisan manipulation." that was over 30 years ago. before you make your comments, i would like to get a commitment from you that you will respect the will of the commission on this report that all other issues you will not attempt to implement any of these recommendations. do you feel comfortable making a commitment? >> everything i do is consistent with that. with regard to the emergency powers, the commissioners have

been briefed by me on the status of our situation. we no longer have our emergency operations center activated. that is a signal that -- >> data is not what they said. they have not been notified by you. >> that is a true statement. for them to infer there not aware of the status of the agency, you assume you -- i am continuing to use emergency powers. i do not think that is a fair assumption. their staff is briefed on a weekly basis of our activities related to japan. they were provided reports iraqi activity of everything going on. they have received a report which summarizes and looks at the actions taken following the fukushima incident. to infer that the commission is being kept in the dark, that is not true. they have had been receiving

multiple briefings including -- >> all four of them were not telling the truth. >> i cannot speak for them. they certainly have received many reports about what we have done following fukushima including a report in front of you. if that is not a report summary recommendations, i do not know would be. that is one of the clear requirements of the reports in the statute. i cannot explain their response. >> i think i can. thank you. >> ok. how about a smile from everybody? can you do that? not quite. >> we don't always smile appeared. >> we try to. >> i am listening and and reminded of something my mother

used to say with respect to moving on these recommendations or not -- my mother used to say, haste makes waste. my father would say that work expands to fill the amount of time we allocate to a job. i had one parent pushing on the accelerator and one parent tapping on the brakes. not a bad combination. it sounds like what we want to do here. in some cases, some of the recommendations, we can push on the excel a raider. with others, we can tap on the brakes. one of the things i like to do is try to encourage consensus across the aisle. i'm going to see if we can get some consensus with some of these recommendations. you mentioned, there are some recommendations a could be

implemented right away. there were other sec could take some time. -- others that could take some time. >> i have generally tried not to point out recommendations. i would like to have the process worked its way. a clear example is what we call the walk down the inspection to confirm that the plants are prepared to deal with floods. that is an obvious one that can be done quickly. i am in general agreement with what has been recommended. there are others whose ultimate action, the one where we have to study before those are implemented, it can take years to do it. it may not be done in a few weeks. many of these could be implemented quickly. the me share, because i have

talked with the commission. i have no sense of anyone who wants to delay. i think everyone is looking at this seriously and wants to move forward. we want to make sure the process is done correctly. >> did i hear the half-dozen? is that was said? >> yes, sir. i will summarize some of those things that could be done and decided on in a matter of weeks. the first is to reevaluate the size of plotting how serious at all sites. the second is seismic in flood protection walked down so that any vulnerabilities could be found. third, advance notice to address the blackout rule. we discussed it at the last hearing. review our fire and flooding

protection to ensure they can withstand a seismic event or flooding. with additional equipment in the event of another accident. review the venti capability on the reactors. six, maintain the guidelines. those are examples of things to do. >> was number 6? >> we have management guidelines to guide our licensees as to how to deal with a catastrophic event. making sure those are in good order is a high priority. >> let me go down the line here. did you want to react to a half- dozen? >> i do not have any disagreement. beyond that, there are not many recommendations that the task force recommended for near-term action. i think some of this discussion is about semantics.

four of them were long term recommendations. two or targeted toward nrc recommendations. there are only six directed toward licensees. i do not think the universe -- they were a subset of that. the ones that appeared to be missing were regulated. the need to have capability to deal with spent fuel. that is one most people would agree is an action that we would want to address in the near term. i do not think there is that many left once we take those issues the we cannot get all this work done. >> my time has expired. just quickly, would you like to give some indication if you agree with the list of half-

dozen things? >> i would just add that i did not have any negative reaction to the task force's recommendations. i agree they varying complexity. i think my proposal was to hear from those staff who would be responsible for carrying out such actions. i think the recommendations when it ships to the offices may come back to a slightly different. i would like to do it once and do it right as opposed to continually prolonged uncertainty. that is undesirable. >> all i am saying is that i would like to have the opinion and judgment of the senior management before we go ahead. this sounds like a reasonable list but i would like to have this additional input before we make a decision.

people may come up with additional provisions. i do not think we should limit ourselves to the task force. >> thank you. how involved were you in the selection of the members of this task force? >> i was not involved. i may have been told the list of people the would be on it. >> were you involved in the deliberations of the task force? >> nodded off. i spoke to them before they began their work. i told and they had a tremendous responsibility. >> the report talks about a patchwork of requirements from the current regulatory program. do you agree with the implication that our current program of nuclear safety is defective? >> i do not believe that is what the task force said. the inference that it is cost-

effective is not true. it is true we have a patchwork of regulation. we have some things, if you look at the emergency procedures, we have those that fall into three classes. others recall emergency operating procedures. we have some for severe accidents. we have a others dealing with the september 11 type of action. each one of those has a different treatment. all three of them likely comparable in their importance and should be integrated into a whole process of emergency procedures. that was a patchwork that existed. each of those came out of a particular incident. when we recognized there was a need to have better preparation, the guidelines can matt of september 11. there was never an effort to look at those a as a unified set of procedures.

that is what the task force is recommending. a sum would get a greater treatment than they get right now. >> you stated in your notation pride itself on openness. you said they have principles of good regulation that you use in your decision making. and if they have a couple of public meetings on the recommendations, which that suffice to make -- meet the goals of openness and meet the standard of the principles you referenced? >> i think public meetings are a key component of that effort. we had a public meeting last thursday which is a very good start. i think all of the commissioner support the chairman's call for open meetings as being a key component. there's also discussions outside of public meetings to

inform the privatization. >> usage you did not believe the existing framework is broken. is this 82 page report larger than expected given that statement? >> if i can address that comment, i agree with all that the chairman said a few minutes ago on his definition of the characterization of the pasteur. i think there has been a damned -- dynamic involving regulation s. i do not think the patchwork is a fair characterization. i think the explanation is correct. i think it is something we ought to look at. i do not think it is something that is an and -- of immediate concern. >> thank you very much. you said lacking the evaluation

, you said i do not have a sufficient basis to except to reject the recommendations of the task force. how can we achieve that the basis of knowledge and make a decision about these recommendations? >> i had made a proposal which is not yet decided upon but it would be that the programmatic staff would take this recommendation and come back to the commission within 45 days with a prioritization and a plan on how the agency might move forward. they could also identify the more straight forward recommendations. i did not think in needed to take an excessive amount of time. >> thank you. >> senator. >> i'm going back to the ap

article. figure all regulators have been working with the industry to keep the aging reactors operating within the safety standard by repeatedly weakening those standards are failing to enforce them. throughout this discussion, there are a half-dozen times where members of the committee have quoted the statement in the task force which says, the task force concludes the sequence of events is unlikely to occur in united states. we heard that a half-dozen times but we have not heard the paragraph before that. that paragraph says, "this regulatory approach established and supplemented piece by piece over the decades and has addressed many concerns and

issues using the best information and techniques available. the result is a patchwork of regulatory requirements and other safety initiatives. these are all important but not given equal treatment by licensees or during technical review and inspection. consistent with the organization of value of excellence, the task force believes that improving the regulatory framework is an appropriate goal. german asko, -- chairman, what is the problem? my friend from wyoming talked about someone sang they would affect. i did not hear that. i did not hear was defective. i hear they want to improve it. do we have a problem of improving the regulatory framework?

let's be clear what we're talking about. you have knowledgeable people who have made 12 recommendations. recommendations. they want you to go forward. no one is saying you have to accept all 12 recommendations tomorrow. they're saying, look at them. analyze them. tell us what you like. he is ready to go on some of them. some of them yes concerns about. fine. what is the problem about taking these recommendations and starting a discussion to see what we like >> >> that is something we can do. it is something we should be able to get done in 90 days. >> what is the problem with starting this discussion? >> i voted within days of receiving the report to begin the discussion. i do not see that my proposal -- >> you are ready to get going?

>> yes, i am. >> i was the first one to vote. >> you are ready to begin immediately to start a discussion on these recommendations. >> absolutely. >> i think we are already. >> i'm glad to hear that. is the process ready to go? when my missing? >> i think we are stuck in developing a process rather than moving forward to begin the discussion and the dialogue on the recommendations. right now we're talking about a discussion. unfortunately, with exception of the commissioner, most of my colleagues have weighed in about the process.

>> ordered the differences of opinion? >> they are not severe. i think they are minor. the difference is setting an expectation. hard decisions about recommendations, that is a reasonable timeframe. that is and when i hear the biggest -- >> to you think -- >> i agree with the chairman. >> and do you agree that we can get these recommendations and in 90 days? >> i believe some of them are complex enough to would not be possible to make a final decision in 90 days. >> i believe we can do it in 90 days. the major difference in the processes is a that the road map will go directly to the commission. some members feel we should get

senior management evaluation first. >> as i see it, i see a great to a commonality. i think there's a consensus to move forward. as a said earlier, some of these recommendations could be implemented. >> to you agree we can get moving? >> i think we can do some of them sooner than 90 days. >> i believe we can, most of these recommendations within 90 days. unfortunately, there has been, in the press, a perception that there is dissension among the commissioners on this topic. i do not think that is true. everybody is ready to move forward. there is agreement on the need for us to put emphasis on priorities. there is. >> thank you.

senator alexander. joba traffic policeman's would be to keep the traffic say. all five of the said public health and safety was your job. if a traffic cop stopped all the cars, his supervisor might say, that is not very created a year. -- creative of view. is there anything to make a nuclear power plant to create an environment in which a power plant can actually operate and be built? >> i do not think there is a charge for that to be the motivation for what we do. >> that is not a part of your charged? to create an environment in which a car plant -- if you're on the charges public safety, you would shut them down. >> our charges insurance and

public safety. the charges that we are providing a level of assurance that is reasonable. >> there is no economic responsibility? norris also the ability to make sure a power plant could also be operated? >> our requirements fallen to two categories -- those under the basic tenets of safety. we're required to make those decisions in respect of of the economic considerations. certainly when it goes to the implementation of requirements, we cannot consider the economic impact and look to see which is the most cost beneficial. >> you can consider that. >> at that stage but not at the basis of determining if something is a state requirement. then we are barred by court decision. >> is your objective to create an environment in which nuclear power plants could be built? >> my goal is to continue to

ensure we have an environment in which power plants are safe in new plants will be built as a safe as our requirements dictate. >> what about the recommendation of the commission to complete the ap1000 design? >> that was a recommendation not to take action but indicating there was no reason to delay action as a result -- >> that sounds like action to me. are you planning to do it without the delay? 90 days? >> we are continuing to move forward. we will be close to receiving a final rule on the ap1000 in october. when we go into the decision of looking at a final design, it is

important that we know what any cheap -- know what changes would impact. >> considering all the recommendations, all 12, will that delaying your consideration for the a p 1000? >> not in my opinion. if we do not consider the recommendation, there could -- it could delay the licensing. >> there is a lot of talk about the late. this report said he should do this without delay. why did they say that? >> added something to ask the task force. the information that is relevant is that it was useful information for the commission to know there were no immediate issues with the design. >> let me pursue further. you said you think everything could be done in 90 days. that does that include these designs? >> i said it is important for

the commission to dispossessing the recommendations. statements related to new reactors are not any of the 12 recommendations of the task force. >> they are in the report. they say without delay. >> we're currently not doing any of the work. if we do not act on these recommendations, it will create uncertainty for what actions would be flexible to those reactors which could actually lead to a potential delay if we do not position these recommendations promptly. >> my hope is that you will take -- if you're going to take the task force's advice to do the recommendation within 90 days, that you will take the task force post of vice --'s task force on's advice.

>> the u.s. nrc is an entity created by congress. it is to license the byproduct in order to protect public health and safety, promote the common defense and security and protect the environment. >> madam chair, i would think that it is a legitimate question whether a traffic cop should stop all the traffic. that is one way to have safety. his supervisor might ask and if he could not be more creative and let people drive. >> i do not think that is the right analogy. it is no analogy when you're dealing with nuclear energy. >> we have had a lot more traffic deaths.

38,000 every year. we have never had one with a nuclear reactor. >> us as a loss for the fact we have an independent agency protecting the health and safety. they said the same thing in japan until recently. let's move on. we have differences here just like your differences there. i want to make the point, and i want to make this point because i made it to you before. as many differences as we have here, we are friends. we differ, we argue, we debate. i am sensing with you that maybe there needs to be a little bit more french ship. -- friendship. i still think it is important that these differences not become personal. if we can do, we are really different. then anybody could do it. anyway, here we go.

we are moving on. we're going now to the senator. >> crisis. -- thank you. this is beginning to look like a glee club. everybody has happy faces. what you see is not what you get. the nrc recently renewed the operating license for the hope creek nuclear plant in new jersey through 2046. what did we learn from the incidents in in japan when you decided to grant extensions? which conditions? >> for any reactor, whether it is a reactor that his been operating for 35 years, if we adopt any of these recommendations, they would

likely apply to every reactor in the country with exception of some of the recommendations like the vent issue. the license renewal process is about ensuring they have a program in place to deal with the aging of components in the systems. nothing came out of the task force test on those issues. -- touched on those issues. we would hope one would be required to implement along with the others. >> and not too much specific information came from the fukushima that influenced your granting of the extension of a license? >> not at this point. nothing that affected the extension. ultimately if these are adopted, some of them would apply to hope creek as an operating plant,

just like any other plant in the country. >> the g1 containment system that was used at fukushima is also used their u.s. plants including two reactors in new jersey. it is said we did not know what went wrong with the containment system at fukushima. what did this uncertainty factor bring into the recent task force recommendation? when will we know about what we're wrong with the japanese plants? >> that could take years. they will have to decontaminate the facility to be able to get in and analyze and look at the equipment and try to, almost like a criminologist to try to recover and reconstruct what happened in the accident. there are some things we can do in the short term. this is an area where the task

force recommended the requirement. the mark one containments, similar to what they had in japan, they are containment designs that you have hard vents. the task force recommended we do that. the advantages that it brings it under our inspection. we can monarch terret it -- monitor it. >> it would take years and to fully understand what took place? >> in may. -- it may. >> these were specific events. we're not talking about the influence of people in the area, that kind of thing. the specific trigger for this claps is obvious. >> that is why you see a number of recommendations from the task

force. acknowledge there were some things that we do not know. there were six recommendations that they believed we had a submission to information. >> looking ahead, you said in a speech that the nrc should develop new regulations which require spent fuel to be moved to storage after it has been allowed to cool. the task force recommended enhancements to spent fuel but did not advocate requiring storage. given that it falls short of your proposal, how can we be sure that the task force approach will be safe? >> the recommendations is a

short-term recommendation. that is to ensure that event like fukushima, the challenges we saw, and knowing how much water is in the pool, making sure there is sufficient capability to put water into the pool to keep a cool. those things would be addressed. that is what they have asked for. over the long term, we can analyze this issue and whether we should have more fuel in pools, purses in a dry storage. the when and that short-term issue of making sure the fuel is going to be an enhanced configuration. >> i am being rolled out. thank you. >> senator sessions. >> there have been some complaints about your leadership in the commission. i do believe that it is important that to reflect the proper role of the chairman and which has some administrative responsibilities. we have a commission.

the commission is established to decide with regard to this emergency power, did you file an official document assuming emergency power of any kind? >> note. it is not something in which that is formerly -- form costs -- formally done. and make sure my counsel knew about that. i ask members of the staff. should make a formal declaration. in all honesty, i got one or two people who said no, that would distract you. frankly, i got distracted by dealing with the emergency response and did not turn back to it until several weeks later. >> did you seek a a formal opinion as to whether any event on the other side of the world would give the american nuclear

regulatory commission the power to assume that would in some ways diminish the influence of the other members of the commission? >> they advise me was perfectly appropriate. i have a written opinion. i believe it has been provided to the committee. >> with regard to this committee, are you still assuming those powers? >> i have deceased that weeks ago. >> did you issue a report to? >> we provided reports to the commission at the beginning of those incident. those reports were issued multiple times. >> the statute of 1980 said following the conclusion of the emergency, the chairman delegated the emergency shall

render a complete and timely report to the commission on the actions taken during the emergency. have you done that? >> i believe that i have. we can provide you with the situation reports. >> that is not what the status -- statute requires. of the actions taken during the emergency? >> i have confered with the general counsel and i agree i have more -- actions that were taken during. >> i'm not arguing about that. a lot of information -- i believe the statute under which you serve requires that the chairman or the emergency official render a complete and

timely report. not a series of situation reports in a box somewhere. wouldn't you agree that that's what it seems to say, plainly? >> as i read the statute, it is clear that they envision one piece of information. >> why wouldn't you do that? >> because i think we provided much of that information already to the commission and i have heard nothing from my colleagues that they have any interest in that particular report. >> well, i have an interest in it. the people of the united states have an interest of their chairman to have n.r.c. following statutory requirement. i'll ask you what hesitation do you have to put a formal report together that say what is you did while you assumed emergency powers? >> i would be happy to put that together, senator. and i believe i have more than done -- more than provided information to the american people through testimony and through a variety of different reports that have provided significant information about the actions that were taken

during this event, but i would be more than happy to summarize those in a single report. >> just comply with the statute is all that i'm asking. >> i have confered with the general counsel and we believe i have more than complied with the statute in that situation. we can provide additional analysis as well. >> i believe it has a single report at the conclusion. it is pretty obvious you have not done that. with regard to this committee and the six members that were appointed, you said you didn't select them but e.d.o. did. who is e. dombings? >> the executive director of operations. >> who do they work for? >> the chairman. >> and so did you know who was being selected? >> as i -- >> members that discussed with you before they were selected? >> i believe he gave the names to me. i thought they were a good selection.

>> did you make any selections to him about names that might be on that list. >> i don't recall whether i did or didn't. your don't recall? >> it was presented to me and i i believe i signed off on it verbally. i believe they were a good selection. the people that he selected were excellent people and i don't recall if there was a time or smaller group, but i could check my records but it was not a significant decision for me and i trusted the e.d.o. to present the appropriate people to that task force. >> i will submit a written question concerning how it was that the commission plan that stake holders would be invited to submit suggestions was eliminated from the staff effort. >> thank you very much, senator. the last hearing we had here, we did ask the chairman about this in depth. so i'll also get you about his taking over the emergency powers.

do not start the clock yet because i have another thing to do. senator, i'm just going to put this out here. he would like this answer in writing. if the commission delays actions on recommendations on the grounds you don't have enough information yet about what happened to fukushima to move forward, does that suggests that the n.r.c. also does not have enough information to move forward with licensing? that's a question he wants answered. we're going to have the second round here. i think the senator is coming back and senator sanders will have a second round. >> i just have one brief -- >> well, i go first. >> sorry. >> you are the chair. >> thank you for noticing. ok. here's where we are. i want all of you to know, we're going to have you back every 90 days until i know what you're doing. and we'll take all the answers

you gave, how much you're going to work to make this happen. a half a dozen, a dozen, a bakers dozen, whatever it is. and we're going to stay on this. i'll tell you why. after 9/11 we had all of these great ideas. the n.r.c. took decisive action and nine years later some of these things went into affected. that is not going to happen, or if it happens, the american people are going to know. here is the point. whether you love nuclear energy, don't like it or you're agnostic. it ain't going anywhere if it is not safe. it is not going anywhere if the public does not have faith in you. if the public thinks you are somehow not independent, not doing their business, they will not be happy. i have a question for you. i cannot say your name, forgive

me. svinicki. the n.r.c. finds itself at the appropriate point now to move away from small group taskings including the commission itself attempting to labor in isolation. this is very disturbing to me. very disturbing. the commission itself attempting to labor in isolation? you were an independent entity. what are you talking about? isolated from who? >> i meant that term to reinforce the importancor having public meetings and stake holder outreach meaning that the commission ought to have the benefit. >> you don't think that is up to stake holders to decide what we should approve. you're an independent commissioner, are you not? >> yes, i meant that the process should be informed by the public. >> and chairman jazz co has laid jaczko laid out a plan.

to have votes by october 7, 2011. do you agree with that? >> i -- as i indicated in response to your earlier question. >> i'm not asking you an earlier question. i'm asking you this question. chairman jacks jaczko has proposed a process to address your concern. external stake holders and to have votes on specific recommendations by october 7, 2011. do you agree? it seems to match what you called for. now that he has put it out there, it echoes what you want to do you yes aggressive? >> i support commission meetings. i'm not sure that all the task force recommendations could be decided on in 90 days. >> how many do you think could be decided on in 90 days? commissioner ostendorff has pointed out six. do you agree with him? >> i proposed -- >> yes or no? yes or no.

do you agree with him? >> these could be decided in 90 days. i don't have a specific count. >> well let me just say your responses disturb me. when you say that the commission isolated, your role by statute is to be independent. chairman jaczko has laid this out. i want you to know i have got seven million people who live within 50 miles -- i went there with the wonderful friend sitting next to you. commissioner apostolakis. you know what they told me? i said what is your plan if there is an emergency? they said we have to go out on the highway. that's all we can do. escape that way. do you ever go that freeway? you probably have not. you can't even move an inch. i have 7 million people there. you're sitting there saying

basically you can't move forward. i want to compliment the members of this special task force. it is not red tape at all. it is 12 recommendations. they make sense and i am stunned to hear that you -- is there one you could say we can move forward before you hear from the industry, anybody? any one of these you can recommend? >> i agree that the task force identified the correct areas but i would like the n.r.c. staff that would be responsible for carrying out the recommendations -- i would like to have respectfully their input prior to deciding. >> that's right and chairman jaczko has laid out a path to do just that. but you say you won't be ready in october. what is the date you will be ready? what date do you think is good to be ready to vote on perhaps the simple ones that everyone else seems to think we could move on. what is the date? give me a date? >> my objective would be if some are less complex to move before

90 days. >> excellent. which ones do you think those would be? what is less complex? i looked at all of these. most don't seem too clecks. -- complex. emergency preparedness and all the rest. which ones do you think are less complex than the others? give me a couple of the 12. >> i think relooking at the flooding and seismic requestss is a very straightforward recommendation. >> every 10 years the operators have to come up with new assessments as to the safety? that's the recommendation. >> i was referring to the recommendation that asked the staff to relook at our basis on seismic. >> how about that one, the one i just said. they say every 10 years the operator of a plant that is located near has to do a relook

at these problems because with science moving forward, commissioner, we have new information all the time as to whether the seismic problem is worth less harsh. right now we're very concerned because science shows us that it is moving in the wrong direction. more tsunamis. more earthquakes. harder. deeper. what do you think about that? every 10 years, the operators there ought to look at it. that is one of the recommendations. do you think that is complex? is that complex? >> i think that we as an agency constantly look at our state of knowledge in those areas as you suggest. >> do you think it is complex to ask the operator who is operating a plant on or near an earthquake fault or near a possible tsunami zone, to ask them every 10 years to reassess the safety of their plant? is that a complex recommendation? >> i would assess that we

actually require them to be looking at that constantly, if there is any new information that comes forward as is the case in california with faultlines off the coast, we require even in advance of a 10-year period. >> good. so you would support then an -- every time there is new science anover all new look at the safety of these plants. is that correct? >> yes. i require that now. >> are you ready to vote on that in the next 90 days? what you say you support? are you ready to go for that in the next 90 days? >> respect flirks my proposal asks that -- respectfully, my proposal asks that the n.r.c. staff provithevide us with the path on these recommendations. >> all i can say is if i'm the people of california and i'm watching this right now, a i'm not so sure about whether i want

that plant to operate. because it is very simple. it is very -- and we have our plants there coming in to get relicensed. and i urge them not to do that. not even to issue -- not to move forward until they have studied it. you seem to be on my side and then you have to hear from everybody else. i would submit to you, it is common sense. there are certain things -- you should have more belief in what you say. because it is common sense. and i'm just saying we have oversight over the work you do. ms. chairman, i want to compliment you and say that the commissioners who were ready, willing and able to act in a time frame of 90 days, thank you. because if we don't do that, we're not going to see people supporting nuclear power. you have -- i take an opposite view of my friends on the other side today. the more you convince the people

that you're doing your job, the more they are going to be comfortable with nuclear power. if you give me answers like i have to wait and i can't tell and then you have a situation where it took nine years to put into place the last safety measures, that's ridiculous. so as long ooze i'm sitting over here -- -- as i'm sitting over here and i have a voice, i'm going continue to call you before us. i mean, i really -- can get used to this because i think you need to know how important the work you do is to the safety of the people first and foremost and to the future of nuclear energy secondly. senator sanders? >> just a few questions. chairman jaczko, some of my republican colleagues have kind of suggested that you have initiated a bolshevik coup on the n.r.c., running a

dictatorship to undermine american democratic values. so i just wanted to ask you once again, do you believe and does the not partisan general council of the n.r.c. believe that you have fulfilled the statute in terms of your utilization of the emergency powers? and in terms of emergency powers, as i understand it, quite appropriately, after fukushima, you wanted to make sure that the -- was it 13 plants that we have in this country that are similar designs to the fukushima plants? you quite appropriately wanted to make sure that something similar to what happened in japan does not happen to the united states. is that correct? >> the primary focus is really on american citizens in japan. we were doing everything we could to protect them as they were there. that was in many ways the prime focus.

most of the issues related to how we dealt with u.s. plants were really dealt with by the commission when it established this task force that was how we decided to go forward in that way. i didn't really exercise any authorities with regard to domestic facilities. >> does nonpartisan general counsel -- council believe that you acted appropriately? >> i believe that is the case. >> say again? >> may i ask the general council if he could -- did he ask if he was within the law? >> yes, he can. please join us. >> i'm general counsel, a career federal employee. when the simple answer to your question is i believe the chairman's actions were

consistent with the powers that he has under the statute. i received an inquiry from his office fairly early on in the event and based on my view and actually an assessment of my predecessor's view, actions taken during in response to 9/11 when there also was not a specific event in the u.s. facility, although a threat environment obviously to u.s. facilities, my view was that given the intentions of president carter and then the congressional endorsement under the reorganization plan that his actions were consistent with those of responsibility. >> you were as i understand a nonpartisan official. >> yes, i'm a career official. i'm appointed by the commission. >> thank you very much. i appreciate you coming up here. i hope that puts an end to the

consistent attack against chairman. let me ask mr. ostendorff if i could, a question. mr. ostendorff, my understanding is that you are prepared to move pretty quickly on a number of the recommendations of the task force. let me ask you about their first recommendation, and that is the task force recommends establishing a logical systematic and coherent leg tori framework for protection that balances defense and depth and risk considerations. that is an important recommendation. are you prepared to move rapidly on that? >> i addressed that specific recommendation in my vote in some detail. i think it needs to be looked at. there are some concerns that trying to embark on that now will distract us from taking the other actions that can and should be taken in the short term. i'm looking at trying to improve the framework that we currently have. >> i just don't quite get that

answer. you see this as an important recommendation. no one is suggesting that you have to swallow hook, line and sinker. what is the problem with beginning that discussion right now? >> senator, i've been around the program for many, many years and have seen a lot of efforts in the naval seas command and power on our submarines and carriers. i've seen how actions are implemented. i thinks this going to take a few years to do. i supported a second effort to look at recommendation one. i don't think it should hold us up in trying to take shorter term actions. >> thank you. mr. chairman, i would yield the familiar. >> thank you. we're going to closette out. i have a couple of questions to ask of our commissioners and then i think we're going to vote here bret soon. this is a question for -- pretty soon. that is question for

commissioner magwood and commissioner ostendorff, if i could. it is my understanding that the majority of you have asked senior staff to take a second look at these recommendations and you have asked these senior staff to provide suggestions to the commissioners on how to proceed with these recommendations. here is my question. and we talked around this already but i'm going to ask you just directly. since senior n.r.c. staff made these recommendations in the first place and are now asking other senior staff to come in and provide suggestions, why is this next step needed? and just explain that to me, why is it needed? >> i'll start. first, i think that -- i'll speak for myself here, certainly. my perspective is it is not simply another assessment by n.r.c. staff although i look forward to seeing what senior

staff has to say about the recommendations. for me the most important thing is to have the staff interact with stake holders in a direct fashion to understand what their responses are to the various recommendations and to hear what their suggestions are and then think about that and feed that information to the commission. i don't look at it as simply the n.r.c. staff looking at what the n.r.c. staff has already said, i think of it as them using the mechanisms we have in place, public meetings and a public venue, of course to, hear details about the reaction, the recommendation. that's really the normal, in large respect what we do every day. >> ok. commissioner ostendorff? >> thank you. i agree with commissioner magwood's comment. i will make just two points here. when i asked the director of operations how he thought we should proceed, he supported having his office, the e.d.o.'s

office come back and give us the integrated list. that was a key lesson learned from three-mile island. the agency did not do that. i think we'll get more bang for the buck and it will make a real difference sooner to call for that in 30 days. not all of these recommendations are equal. some should be done now and some require more information. >> all right. thank you. chairman jaczko. a question on orders versus regulatory process. some of the regulatory tools that the commissions -- the rule-making process and apparently the issue of orders. could you just describe or compare both processes for us and for each one, what kind of opportunities are there for public comment and input from stake holders? >> well, generally, the orders have more limited opportunity for public involvement.

they are usually activities that either we believe need to be taken in a very prompt period of time for safety reasons or their responses to violations of our regulations. so they are not a preferred tool because they don't provide for the more in depth public engagement that a regulation would. one of the activities that i've challenged since i've been chairman is to better streamline our rule-making process so we can use that as a more viable tool and get things done in a more timely way but still have that stake holder input. generally, the orders -- in most cases when relating to a specific issue, we usually initiate a rule-making process as well so that eventually that same content of the order gets captured in a regulation. >> stake holders in the industry and in the environmental

community have shared, discussed concerns with my own staff about moving these recommendations through your order process. what has been the n.r.c.'s experience with expedited rule making and might it have a role to play with some of the parts adapted by the commission sfrrp everybody wants to process to go forward faster. we have mixed success with that. a lot of it comes down to usual challenges and focus. we did recently complete a regulation from start to finish in about four months having to do with an issue related to how we deal with the fatigue and tired -- workers who may get tired at a nuclear power plant. i think there are ways to do it. we would change how we do our

regulations but i think it is doable. in my mind that would be the most preferable way for some of these things to do them in four or five months rather than the two to three years that it typically takes. >> well, the vote hasn't started yet. it looks like another hour or two. all right. not that long. but what i would like to do is just do something -- it is my mother calling in to say haste makes waste. not really. what i want to do -- sometimes i like to at the close of the hearing ask -- we always ask you to give an opening statement. sometimes i find it helpful to do a closing statement. i'm not going to ask for a lengthy closing statement but given conversation that we have had and the questions that have been asked and the responses that have been given, just a

response before we go vote. commissioner ostendorff, why don't you go first? >> thank you, senator. i would say that we talk all the time. each week when we're in town. >> how often are you in town? >> i would say with are all together to meet at least three weeks out of four. i would say it is clearly my perception based on discussions with all of my colleagues here that we all want to move forward quickly. we all want to do the right thing. i don't think we're as far apart as maybe some of the questioning might have suggested. i really think we want to do those things but not all of these are longer term actions. some are short term. some are interimmediate. some require more information. i use the one example -- that

was asked about. i asked the institute for nuclear power july 15, the senior executive there, do you sufficient information in order right now support the order recommended di the task force to install those? he said no. the task force report itself said we do not understand whether or not the operators at fukushima actually operated these vents. i think we need explore this area. it could be a month from now when we have sufficient information but that's just one example. there are some things that do require more information. >> ok. thanks. commissioner magwood. just a closing thought or two, please? >> i think commissioner ostendorff actually covered it. he said it quite well. the only thing i would add is i believe we'll move forward quickly. we're taking this very seriously. i think we all were talking to

each other during the fukushima event and i think almost immediately began to think about what lessons were being learned as we're watching it unfold on television. i see this as the conclusion of what started back in march. i feel very positive that we'll get this done quickly and do the right thing. >> go ahead. >> i agree with my colleagues. i think the commission will act in a timely manner. it is just the details. i don't see any problem at all. >> i agree with what my colleagues have said thus far. in summary remarks there is a lot of overlap and commonality in the approach here. i believe it is possible to stroke the appropriate balance between urgency and moving forward and also being a thoughtful and getting it right. thank you.

>> thank you. mr. chairman ? >> i would say i appreciate all the comments of my colleagues and i think there are -- there are far more areas of agreement than disagreement but i do believe strongly it is important for us to -- these commissions in 90 days. i think that is doable. i think there is perhaps more agreement than disagreement about that. >> good. in closing, one of my favorite people to work with here in the senate is a republican from -- mike enzi. we worked on a couple of things. he is the senior republican on the health education labor pension committee and the senior democrat for many years was a guy named kennedy. ted kennedy. they were remarkably effective. the committee was productive. i would say you have one of the

most conservative republicans here and you guys get so much done. regardless who is the chairman, kennedy or enzi. he said ted kennedy and i subscribe to the 80/20 rule. what is that? he said we agree on about 80% of the stuff. we disagree on maybe 20% of the stuff. what we decided to do is focus on the 80% that we agree on. >> i call on my colleagues on this side in the senate to subscribe to the 80/20 rule. if we did that on a consistent basis, i think it would be not just a better place to work, but a better country. it seems like we have about -- i don't know if it is 80%, but a pretty broad agreement on what needs to be acting on promptly and that which needs more scrubbing. in deference to my mother,

haste does make waste. but work does expand to alal-- to allocate the job. the stuff that needs more time, let's take more time, but not more time than we really need. that having been said, we are going to wrap this up. you guys go have lunch, i am going to go vote. this hearing is adjourned. thank you all for coming. i think our colleagues have two weeks to submit questions. if you get more questions, please respond to them. thank you. [captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute]

>> in a few moments, a news conference in iraq with ad -- admire mike mullen, chairman of the joint chiefs of staff. and then a meeting on the violence in libya. >> now the chairman of the joint chiefs of staff, mike mullen. he spoke with reporters for a

half hour tuesday in iraq. >> i believe they also understand that time is quickly running out for us to be able to consider any other course. my government has made it clear that we would entertain a request for some troops to stay. i was encouraged last night that iraqi lerds plan to meet and discuss the merits of such a request. i am hopeful that well achieve some clarity.

serious attempts to resolve the issue are now under way. in the mean time we will continue withdrawing our troops on schedule. to do otherwise would be to violate an agreement we signed. regrettably, not every one of iraq's neighbors are committed. the iranian regime continues to intervene in iraqi social fares, training and equiping militants and thwarting efforts by the reak people to pursue economic growth, development and independence that geography and democracy have bestowed upon them. these are hardly the acts of a friend. it is clear that tehran seeks a weak iraq and an iraq more dependent upon and more beholden to a persian world view. i don't know not know how many reaks -- iraqis share tehran's

goal. i suspect more than a few. they want to define for themselves their own postseason in the world around them. that is evident to me the prime minister and the president. it is evident in the stepped-up operations of the iraqi security forces in concert and coordination with our own forces. as a result we have seen a dramatic reduction in the deadly attacks. the same spirit of cooperation was also onities play yesterday afternoon in mosul where iraqi security personnel oversee side by side with their counterparts all the security operations in that province.

this was once bloody ground, sacrificed for greatly by iraqis, americans and others in our coalition. today as peaceful, prosperous and patrolled by citizens of this great country. it is a model both of iraqi sovereignty and of the transition to iraqi responsibility we have all been pursuing. i give great credit to the general for his leadership in that regard and general austin for his terrific work as well. regardless of whether or not your government asks us to stay, regardless of whether or not my government does so if asked, we have proveen together through hardship and through bloodshed that leadership can be yours, and should be yours alone. nothing changes about my military's dedication to that goal or my nation's dedication to furthering our long-term strategic partnership. we have given over thousands of

our young lives to achieve it, as have you. it is time to continue to see the work through. i will take your questions. >> in your talks with prime minister maliki and the president, did you give them any specific time frame in which a decision needs to be made. rahm dawn is starting. >> the secretary, when he was here a couple of weeks ago made it pretty clear that we really need a decision now. i just reiterated that. there are certainly discussions which are ongoing, and i am hopeful that a decision by the iraqi leadership is made very quickly. with respect to the forces that

are here, for us a significant part of this is just a physics problem. you get to a point in time where you just can't turn back, and all the troops must leave. that is why it is so important to make the decision absolutely as soon as possible. >> mr. chairman, can you give us a little more details about your meeting with both the president and prime minister last night? what sense did you get from them? you hinted at some optimism, but what makes you say that, and whether you think there is a possibility that there will indeed be a meeting today as they have suggested? and particularly during those meetings, did they give you any sense about even maybe the air support or any other types of troops that if indeed something does happen, that these are the types of things we would like? >> we had no discussions about

what specific capabilities might be included should they get to a point where they would enter negotiations. they are very aware of the urgency of the issue. they are committed to meeting, and i guess i would summarize both meetings from the standpoint of degree of difficulty. there are some very difficult political challenges associated -- internal challenges -- associated with reaching this decision. that is really obviously up for them to continue to work towards. it was aparent to me meeting both with the prime minister and the president, that they are anxious to resolve and reconcile those differences. that is really up to them. >> but did they suggest that they are getting any momentum?

>> we really didn't talk about that. they are very committed to getting together and to getting to a point where they make a decision one way or the other. >> does the u.s. believe that any future trading -- training milk in iraq could involve only contractors, or would it be better to have u.s. troops involved? >> again, the u.s. doesn't take a position on this at this point. we've got to get to the first point, which is whether we even enter negotiations, which could include the invitation on the part of the iraqis for support, assistance and training. and then there would needle to be the specifics of what that

support and training would focus on. then that would drive the answer to your yes of what combination of military and contractors would provide that. we are just not there yet. >> thank you. admiral we have heard a lot about what continued cooperation with the u.s. military would do for iraq. could you tell us what it would do for the united states? >> the united states is very committed to the region. it is committed to a long-term relationship and partnership with iraq. as is the case when we work with any country, we get to know each other better. we understand how our systems may operate together. there are exercises, training opportunity, and over a long period of time, the

relationship just gets stronger and stronger. clearly with a country like iraq, or other countries that we work with, we are at the beginning of that relationship from the standpoint of possibly putting it in place long-term. i think probably in all, that is the most important part, the people-to-people aspects of it. oftentimes these relationships get focused as a senior level. he is strong, and we are both very committed to this. our young officers and n.c.o.'s learn about each other. we are not beginning a relationship but actually continuing one over many years. iraq is a critical country in a critical region.

i think there is great hope for stability, great hope for economic growth, great hope for a democracy in this region. so there are many reasons, i think, to commit to this overall long-term partnership and relationship far beyond just the military to military aspect of it. >> i know the u.s. military is not directly involved in syria, but there must be some concerned to you, the mounting violence there. has this been discussed, not just the impact of syria itself, but the destabilization of the region, which does matter to you? >> you have stated it very well. each of those countries that

are undergoing this revolution and resistance, we focus on them individually clearly. but they all have an impact on the region. with respect to syria, we decry the violence. the violence needs to stop as quickly as possible. the people of syria are certainly keeking a different and reformed government and governance. many, many countries throughout the world have called for president assaad and his leadership team to make those changes. we would hope that the violence would stop immediately and that those changes would be initiated. clearly there -- this is not a very stable part of the world, and more unstable countries would not be helpful.

being here in iraq, obviously a direct neighbor, there is concern in iraq with how things turn out in syria. so again, we would like to see the violence stop immediately and that president assaad take steps to resolve the issues that are clearly being raised internally by the syrian people, and shoes which call for substantial change. [inaudible question] >> there is no indication whatsoever that we would get involve directly with respect to this. politically and diplomatically we want to bring as much pressure as we can to effect the change that so many countries are calling for. >> i wanted to ask you, sir, about the group that was

involved in many of the attacks here against u.s. forces. looking back, hundreds of these members were held in u.s. facilities, and the decision was made to hand them over to the iraqi government, knowing they would most likely be released in the second half of 2009. when you look at that decision now, knowing what they have done and their involvement in attacking u.s. forces? do you see that as a decision you wish you could take back? >> when you look at the tensions in iraq, at one point there were up ward of 26,000 detain's -- detainees here. that number has been reduced over the course of the last several years to a handful. that has been part of what we -- a part of the agreement we reached with the iraqi

government. certainly as is the case in any detention effort, we are concerned with recidivism. we have worked hard with the iraqi government to support them in their rule of law prosecution efforts, and we continue to do that. we are very much aware that there are those who have gotten back on the battlefield. we continue to press the iraqi government very hard with respect to this. and yet at a very high level, the streaming level, from the standpoint of looking at the tension problems and challenges that exhibited in 2007, 2008, 2009, et cetera, i think we are in a much better place than we were given our commitment to the turning of these detainees over to iraq.

there are those who obviously have been released and returned to the battlefield. we would like to see that stopped, and we continue to address that. >> one follow up? >> yes. >> do you feel that the top of the iraqi government is doing enough to crack down on these militia grooms? i know recently the president at the prime minister's request gave amnesties to some who had been convicted in criminal court. >> we are very concerned about the extremist groups. al qaeda certainly being one, but also the shea -- shiah grooms. they have taken some steps internal to iraq, and they have addressed it in tehran. we have seen a pretty dramatic

drop from where we were in june to the last 2-3 weeks. one of the points i have emphasized is that drop need to be sustained. the united states is going to take whatever steps we need to, to protect our people. i appreciate the fact that the president and the prime minister have intervened in that regard, very positive short-term results that just need to be extended to the long-term. >> i wanted to return to a domestic matter. a year ago you said the biggest threat to national security was the national debt. i am curious, with the vote being taken, is america in a saver position now that they have appeared to resolve this

issue? they appear to be cutting from the pentagon budget, and how do you feel about that? >> well, i have found i don't do very well counseling lawmakers. obviously the recent debate and resolution for the near term i think are important steps. but it is really up to congress and the president to figure out how to move ahead with respect to the debt. i haven't changed my view that the increasing debt, continually increasing debt, is the biggest hurdle we have to our national security. with respect to the deal that has been made, i don't have any details on that yet, so i don't know. i have an expectation that there will be defense cuts as a part of this. i just don't know what those

will be. i suspect that we will find out the details here in the next couple of days. i think we are still at a point where the senate has not voted. with respect to -- we have done a lot of work in recent weeks and month with respect to expectations to cut the defense department bulge $400 billion over course of the next 10-12 years. there are various combinations of options on how to proceed ahead. but a lot of that depends on what the top line is, witness we don't know that yet. and yalls our judgment on the degree of difficulty of making certain adjustments. i don't have anymore detail right now. i think when we get that, some of us are going to have to move

pretty quickly. fiscal year 2012 starts in under 90 days. it is a budget we put together last year, and we are going to have to figure out how to execute that budget as congress gives it to us in the near future, i hope. >> a follow up on a different matter. i have spent some time talking to troops who have been here and parents of troops who have died here. they are concerned that washington isn't fully aware of what is going to happen in september, that if things don't get sorted out properly, that all of this will be in available. the family members and all who had, should they be concerned? >> i first came to iraq in 2004. then i took this job in 2007 right at what i consider to be the peak of the downsize.

in my return, and i have returned many times to see the progress made. when i see the u.s. forces having noun turned over all the security check point, and that there are iraqi forces, exclusively iraqi forces patrolling these points, and doing it in a way, quite frankly, that i get feedback from my people is more advanced and further down the road than our own people expected. i see that as representative of this dramatic change. i flew over the city last night, and you see a city which is lit up. you see traffic on the roads, which was just not the case. you see an economic infrastructure starting to emerge that in a few years,

giving particularly the oil resources that are here and the investments in that, there is this tremendous up side for this 26 million people. as i look at it, and we have details to work out on what the relationship looks like, but as i look at it, the blood that has been sacrificed here has given an opportunity to have 26 mill who had a bleak future, have an entirely different future. i see it change for the better each time i come. they are more stable. there are huge challenges. i don't want to understate those. but progress is pat panel over time and continues to be very visible each time i see it. and this is a conversation i also have with the troops. troops have been here multiple

times. troops who come threw here in 2003, they sit back in amazement at the change and progress that is very evident here. from my perspective, this was not an issue. >> there was an incident north of baghdad over the weekend in which iraqis are alleging that a unilateral mission in which three iraqis were killed. can you shed any light on that? >> i will not talk about details of any mission. i will say broadly that the united states is going to take the necessary action to defend our people. we have done that historically, and we will continue to do that. we also do that in conjunction with reak security forces. that continues as well. but i wouldn't talk about a

specific incident. >> the chief of staff and the air force commander said iraqi troops need at least 10 years. from your military perspective, how long do you think the u.s. troops should stay here? >> well, right now there is no plan to have any troops here based on the current security agreement. i am aware of the general's statements, and we have hard with the rammy forces to identify areas of strength and areas that need to be support. that is very clear. we need to get to a point where the iraqis make a decision about whether we are going to

have any u.s. troops here for any kind of training, or assistance, or whatever the true composition would be. we are not there. that is the internal discussions going on right now. if that decision is made, then we will work out the details, certainly to include the length of time. this will be a negotiation. so it won't be one side or the other gets to decide. it will be the two sides that will get into this negotiation and make a determination on what capabilities, how much, how long, that kind of thing. but we are not there yet. we have to get to a point where the iraqis make a decision that asks for this kind of assistance. >> the question of unity seems to be from the iraqi point of

view and u.s. point of view one of the key sticking question. if there is something for the troops to stay past december 31st, that they have something from the iraqi parliament? >> it is a privilege. it is consistent with how we negotiate and reach agreement with countries around the world for our people to be consistent with that, and the law here in rack. that kind of an agreement which would include privilege and immunities for our men and women in uniform would need to go through the court. >> would need to? >> yes. >> thanks very much, everybody. >> the u.s. representative to libya's transitional council

has returned from four months in benghazi, a stay that included talks with the rebel body. they briefed reporters on the libyan unrest and violence. this is a half hour.

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adjustments we have gotten, we take that review process very seriously. it is an in-depth process. if your staff had opportunity to look at letters we sent back and forth, there is a record that develops. we have been denied one and of the others we have approved, which we have modified every request that has come in. ultimately, it is a balancing act. we want consumers to make sure they get the benefit of the 80% provision. some states have a number of smaller companies that are on the edge of making money or not making money. these are the ones we are most

concerned about. if there are not other options available, we do not want them, if the company were to leave, they do not always explicitly threaten to leave and sometimes they tell the commissioner if we have to hit that 80%, which may have to leave the market. we try to reach a balance. it tried to get as close as we can to 80%. that is reflected in our decision. we support the provision. we think it is important. we will continue to look at these closely. >> i look forward to a response. >> you mentioned the child only policy. aggressive for your leadership on this aspect of health care.

. alaska is one of the 17 states that have been contacted and a harsh way. this has been harmful to my state wyoming does not have one. they do not have the is no child policies. i think it is fair to say this is harmful to these states where we do not have any coverage. i am been working on this legislation to allow parents in my state to purchase child only policies across state lines to ensure we're not leaving any of these children behind.

the legislation would also require human services to issue a uniform and roman period of 45 days. i appreciate your testimony here today. a couple of questions for you. these relate to the news story that this has on the states. the main concern is that they do not have uniform open enrollment. parents can sign their selves -- their kids out. this selection exit's the child- only market. it goes without saying that as a direct result of this policy, we are seeing our nation's children put in a difficult position.

we can talk about who is at fault, what they're not it is the insurers or what not. i'm not here to defend the insurers. the question is, what other options are out there to these children in the 17 states? what options exist when there's only one insurer that is writing a child-only policies. what is the administration doing to help get children access to insurance? >> we share your concern about what has happened. it has been disappointing to see the reaction of the insurer's. we have given them a number of tools to manage risk. they can charge higher rates. they can have their own open enrollment. we have given them every option to ensure sick and healthy kids.

at think it is clear they did not want to ensure the sick kids. it decided not to participate. this does not affect kids that are currently covered. we have provided a number of, and i think there are a number of options available. first of all, states have employed different tools. some of passed legislation. you also have to cover travel- only policies. we know that kids now have coverage to their parents policies up to age 26. to the extent there's parental coverage, you have access to that. we also made changes to the program that operated across the states to lower premiums so that they are more affordable and to

make it easier for kids to get into the program. we have allowed insurers to screen kids for availability in other programs like the chip program. when you put all of these provisions together, there are many avenues for access for kids. there are tools available for the states and issuers. >> is the administration planning on issuing guidance that defines a uniform open enrollment. period? to you think it makes sense to do so? >> we can. our preference is for the state to design a solution. that is why many states to teach in a state like alaska where we do not have anybody there. 16 and do not have anybody. we are caught in a bind.

alaska's's population is low enough that we are not attractive in the first place. when we lose those that will write the child-only policies, we are stuck. my proposal is to allow for purchasing across state lines. that is one avenue. recognize that even with the expansion of medicaid, the fact of the matter is you will have a lot of children whose parents won't qualify for either of those programs. we have a real cap here. i appreciate the fact that the administration recognizes that but you have to work with us so we can find the solution so we do not leave these kids hanging. >> we can certainly look harder at that. our initial preference, states for taking action. but if we're at the point where states have to and what we can,

we can look at a backstop open enrollment provision for states that still have an issue for these kids. >> my time has expired. i have another question. maybe we will do that in the second round. >> i want to thank the chairman for having this hearing on this very important topic. thank you, mr. larsen, for your continuing work on this complex and important issue. i know a little bit about it from the standpoint of a state official, having served as attorney general and participated in a number of hearings on rate review issues. hearings that were not required under connecticut law. one of the weaknesses is that hearings are not required, rates can go into effect without prior

approval. despite your citing an example in connecticut, i agree the example of one insurance proposal being cut as a result of public notice and attention being focused on that proposed increase of 20%. there are more examples of rates going up than rate proposals being cut. i venture to say that is true across the country. let me begin with a question -- question, would you agree that approval or disapproval is a very important feature of the effective rate for you? -- rate review? >> we defined that would -- as a

review process. if the question is in the spectrum of activities, at one and you have -- one end you have a review process and then at the other end of the spectrum is approval. certainly the prior approval provides a maximum level of protection to consumers. >> in my personal view, without being critical of my own state, i believe that our rate review system should be strengthened by providing more transparency and accountability, including the opportunity for citizens to participate and for prior approval by the insurance commissioner after that process.

and the right of appeal which many states lack. would you agree that right is also important? >> those are all important features of a full and fair rate process, public input and the right to appeal. >> aside from the grants you can provide and thank you for a benefiting connecticut with a grant, among the other states, what more can the administration do to encourage more accountable and effective review systems across the country, given its present authority? >> we are in the process of granting a and making the grants. we have a lot of back-and-forth with the insurance department's. hopefully we can play a role in cross pollinating ideas from different states. we get asked that question a

lot. we can provide more technical expertise. we're working with people on that regard as well. in terms of an evaluating the progress that states are making, we want to hold them to standards to make sure they're doing what they said they were going to do. that is an important part of maintaining the review process. >> which you say the industry could do more in encouraging that kind of review? a specially companies in the industry. unquestionably there are some who want a responsible accounting. >> it has been my experience the industry is wary of their rate review process. maybe both weary adnd wary.

if they felt it was a fair process, which i think it should be, i think they have to feel it is a fair process. >> where they feel and would you feel that a fairer process would be administered at the federal level that might be applied more uniformly? >> i do not know how to answer that. most companies want, and we want, for the reviews to be conducted at the local level by the local commissioner who was more familiar with the market and where people are situated who are covered by the policy. it is not our objective to have a large federal involvement in the process. we want to have that at the state level. we are only performing as a backstop function, only where

states cannot have an effective review. will lead to the reduced. >> of my time has expired. ing ll welcome a continu dialogue on this issue. >> senator hatch. >> thank you for having this hearing to discuss the rising cost of health care and how the laws have failed to deliver a promise. tms recently 6 -- published its report as a result of the laws, premiums will increase by 9.4% in the 2014. i would like to ask for consent my opening statement be included in the record. thank you, sir. welcome. i appreciate the work you're doing. cms recently published its

report for 2010. the report found the premiums will increase by 9.4% in 2014 as a result of the president's health law. you discussed the tools the ministration is using to decrease the number of increases. the central premise of a law was that it would reduce premiums, not the rate of growth. in light of the new report issued by your agency, how can the law keep its central promise of reducing premiums? my understanding was that the report showed the rate of health care spending was at the lowest it had been in many years. in fact to the rate was moderating. i think that is a significant

point. i apologize i am not able to speak to the estimates by the cms actuary. it is the difference between what rates would have pinned but we continue to believe the affordable care act is going to moderate premiums. how would is going to do that depends a with respect to health insurance exchanges. for small businesses, it will have opportunities to do not have today. they're going to get efficiencies that they do not have today. we continue to believe that the tools will help moderate. >> this report also found that prescription drug spending will increase by 10.7%, which is higher than without the health law. services will increase by 8.9%. that is 3% higher.

hospital spending will increase by 7.2% which is 1% higher. this report shows that the health lot did not reduce the cost of health care in the long run. instead, we're going in the wrong direction. do you agree that the cost of health care continues to rise and that the tools under the health law will not bend the cost curve downward? >> i do not agree but i have to admit i have not reviewed the actuary's estimates. >> that is fair. you said that "states are the principal regulators." how does the rate review program established under the law, it still law requires the government to do a review?

>> that is an important question. we touched on it a little bit in the prior exchange. and our objective, and i think we have large be reached that, is for the states to be the primary reviewer. we just completed an evaluation of all the states and the level of effectiveness they have. i think we found that only seven states so far were not affected. meaning that the vast majority are affected. even those that are not, they can come back to us and say we have authority to review rates. that is usually the biggest barrier. some states do not have an existing law. but the vast majority are effective reviewers. the will to a we can to support the small number of states left.

>> you have an entire section focusing on transparency. there are a number of places where they have fallen short. the benefits that were mandated will not receive a public comment. i asked that she consider the impact of these mandates and urged her to provide a comment period. can you tell me why the --inistration's transparency why their transparent for some issues but not all? >> on preventive services last year, we've got comments on various aspects of preventive services which are included. we took those comments into account when we issued the latest decision with regard to

women's preventive services. we feel like we took comment. we responded to the comment. in the amended rule we just put out, we have an initial comment period. >> i have to leave but can ask one other question? do you believe that a majority of the employers will be incentivized to stop providing health insurance as a result of the mandate and penalties under a lot? >> we think employers will continue to offer and those will increase between now and when the exchanges are online. i think there are a number of studies that also make a projection. >> if you could submit those to the committee.

i would like to read them. thank you. >> senator hayden. >> thank you. i appreciate the work your office is doing. i hear from my constituents on a regular basis about how frustrated they are that their premiums continue to rise. can you tell me whether the top 3 reasons that health insurance continues to have such large increases? >> there are a number of reasons. the insurance companies indicate their passing along health care costs. those are driven by a unit cost in which they're paying for a hospital stay. there are a number of reasons why a cost is increasing.

this will bring transparency to exactly why rates are going up. there is not know is a good answer to your question. i think there's a lot of confusion. i think that is the real benefit of this provision. we will have a uniform disclosure and -- disclosure about what is causing these increases and then we can talk about why they're going up. >> is that a good benchmark for the increases or should we expect further reductions? when the states set their own specific threshold's, starting in 2012, to you expect that the threshold will be greater or less than 10%? >> that is going to vary by state. there raises a good point. tim% was a starting point. we looked at a number of indices

and landed at a 10%. it is a national number but we all know the markets are a very local and the rate of increase in one state can be different in another. the 10% may turn into a 12% in one state, 9% in another state. >> i hear from constituents all the time, particularly small businesses. they are frustrated because of their premiums. under these new regulations, will there be opportunity for consumers to file requests to review with you in your office or with the insurance commissioner? >> the way it is structured now, consumers do not have the ability to ask for a review formally. we added into the final rule an

explicit provision requires states to have public input in some way. many had no public input in the process. the reviews are triggered by a rate being filed that is over the 10%. the reviews do not depend whether someone asked for them. they are automatic. we did add in that provision for public input. >> thank you, mr. chairman. >> i thought about your question about increase is going up. i don't know what it's like in north carolina but when you have two carriers that have 80% of the market, this is a monopoly practice. wire the rates going up? because they can.

the profits these people are making. look at the increase in the premiums. they just about match. that is why rate review is so important. it is so important to try to get on top of. the transparency, getting information out there of what is happening, a lot of times we do not know. there is a cloud. we do not know what is driving those costs. we do know that from 1999 to about the middle of this last decade, insurance costs went up about 131%. the medical inflation was only 31%. 100% more than the medical rate of inflation. some of these companies are doing quite well. mr. murphy, did you have any questions?

>> i'm going to pass. >> thank you for being here. >> can i ask a quick question? this follows on the earlier discussion about the flexibility to the state. 10 states were told that they have insufficient a great review authority. you mentioned that as well. they might be taking over in september if they do not have it fixed. you also mentioned the fact that several of the states lack that authority to fix it. unfortunately, it is my and your understanding that many of these states do not have legislatures there currently in session. in alaska, we passed a law to address this rate review structure.

it goes into effect jan. of 2012 but what is going to happen is that they're still going to step in a for this period between september and enactment. i have to question how this promotes flexibility. we passed a lot to gain authority. it is not quite match with requirements under the law. we have a three month time were you all step in. does this promote flexibility? it does not seem like it works. >> you put it well when it does not match. we are caught between the september 1 date and the date your law takes effect. i can go back and talk to our staff. the one thing we want to make sure is that somehow consumers are going soon get the benefit

of the law. my understanding is that until the law took effect for the markets, -- the challenge for us, we would prefer for the states to do it. >> we would like to work with you on this. but it seems highly inefficient. it goes against the goals for you to have a three months -- >> if you could not do it and we did not step in, you would have companies who would raise rates for january. this is the time of the year when they're looking for increases. you and others are going to get past, how come these rates are not getting reviewed? i think we have the same goal. if there is a way to get their -- >> alaska is unique. it brings up the issue for these

other states. they lacked the authority. their legislatures are not in session. how would like to know that we can be working with you so that we provide for the information we are hoping for without serious inefficiencies. thank you. >> thank you, mr. larson for being here. our next panel -- huh? that's right. which one? this one. we have three witnesses. mr. john dictken. he directs evaluations of private insurance and prescription drug pricing. we have danielle, the president

of css distribution group. a packaging company headquartered in kentucky. his testimony covers the u.s. chamber of commerce. then i will yield to senator murphy for introduction. >> it is my pleasure to introduce a teresa miller. i commend her for her work in the insurance division. she joined in 2008, bringing a background of policy issues, having worked as -- she oversees a staff of 100 and a budget of $10 million. the division protect consumers by licensing companies and agents to make sure insurers are

financially sound, reviewing violations of insurance law. she has been -- she is done a superb job of bringing diverse parties to the table. i am delighted you're here to share in sight. -- your inisights. >> your statements will be made a part of the record. if you could do them in five to seven minutes. >> thank you. ranking members of the committee, i am pleased to be here to discuss the oversight of health insurance premiums. as the cost of health insurance continues to rise, policy makers have raised questions about the extent to which these increases

are justified and could adversely affect consumers. while oversight of private health insurance is primarily a state responsibility, the 2010 patient protection act establishes a role for hsf to work with states to establish a process for the annual review of on reasonable increases. in addition, it requires the secretary tour of award grants to states. my statement highlights key findings from a report requested by chairman harkin that will be released today. this report ascribes a premium rates in 2010 and will exchanges that states in received have begun making to enhance their oversight. for this report, we surveyed

officials from the insurance department of all 50 states and district of columbia. we conducted interviews with officials and other experts and reviewed the grant applications. we found that oversight varied among states in 2010. all 48 of the 50 states who responded to our survey reported they reviewed filings in 2010, the practices reported married in an three areas. first, a variation in terms of the timing of finding reviews. specifically, respondents from 38 states reported that all filings were reviewed before the rates to collect while others reported summary filing said after they went into effect. there was variations in the type

of information. while nearly all respondents reported information such as a medical costs and services, fewer than half reported capital levels. some respondents also conducted reviews of rate filings while others reported little information. a third area variation was opportunities for consumer involvement. 14 respondents reported providing consumers with opportunities to be involved in oversight such as participation in hearings or public comment periods. most reported their state did not provide opportunity for consumer involvement. also the outcome of state reduce varied among states in 2010. specifically, respondents from

five states reported that over half of the filings they reviewed were disapproved, with strong, or resulted in rates lower than originally proposed. responses from 19 states reported these in less than 10% of the time. let me close by discussing how states have been used grants provided by hsf. 41 respondents reported their states have made changes to enhance their ability to oversee premium rates. for example, half of these took steps to review their process or developed new processes. saucer reported they were changing information incorporating additional data or analyses or taking steps to of

consumers in the rate review process. in addition, two-thirds reported there began to increase their capacity to receive premium rates. these included hiring staff or outside actuaries and improving information technology systems used to analyze filing data. more than a third reported their states have taken steps such as introducing legislation in order to attain -- obtained authority for overseeing health premium rates. mr. chairman, this concludes my statement. i look forward to answering questions you may have. >> thank you for getting the report out in a timely manner. mr. mather -- miss miller, please proceed. >> members of the committee, my name is theresa miller. i am the minister leader of the department of consumer and distance services.

i am honored to be here today and appreciate the opportunity to talk to about how hedgerow grants are improving our health insurance process. oregon has worked hard to strengthen our a state law and opened our process. because of these efforts, the process is one of the most transparent in the country. as we continue to improve, the grants have allowed us to hire staff necessary to conduct more in-depth reviews and have provided funds necessary to solicit a meaningful, from the public. i have included more detail, but those include posting all documents upon submission on our website. e-mail in policy holders. opening a comment period a and

emailing policy holders. a first, the funding we received as part of the rate to review grant allowed us to solicit public comment. unmentioned we have a 30 day public comment period. those who did comment generally said, they could not afford to their rising premiums. they did not address the statutory factors, we reviewed. this is why we used $100,000 of our grant to contract with the consumer advocacy group to weigh in on behalf of consumers. they used to the funding to hire an actuary and has been providing detailed analyses focused on the statute. unlike many states, oregon has a competitive health insurance market.

we of seven insurers to compete in this market. because of our competitive process, we review 40 rate requests a year. the the first round of grants enabled us to add an actuary to our staff and we are proposing to add another in our next cycle. and this will allow us to dig deeper and address issues brought up by the consumer advocacy group and to hold public hearings so that those who want to participate can see the scrutiny firsthand that we provide with regard to these requests. grande dollars have also allowed us to communicate better with consumers about rate filings. we created a web page to help with a search engine that allows consumers to more easily find a filing as well as information about how we review filings. we used a grant dollars to create a story about health insurance costs.

we also used federal dollars to conduct a public hearing on a recent filing. how how consumers benefited from these improvements? aside from the transparency efforts to help educate consumers, and give them opportunity to weigh in on requests, the changes have saved consumers money. in the year that followed, we lowered insurance company requests 50% of the time, saving consumers $25 million, $10 per person. that does not solve the affordability of health insurance but every percentage point matters to us because the matters to consumers. at the same time, we know we must control health-care costs. that brings me to the steady we're conducting. also monday, the key to stabilizing cost is controlling medical costs.

in oregon, an average of 89 cents of every dollar goes to pay health care. to try to tackle this, we used $150,000 to contract with a firm for a study. the study is exploring whether there are opportunities within our process to deliver -- to control the growth of health care or improve the delivery system. as i mentioned, we're applying for a second round of grant money to hire another actuary and to allow public hearings. in conducting the public hearing, it became clear that even one of the most open processes, consumers are unaware to the scrutiny we apply. i am proud of the work we do. i want people to see the rigor of our reviews. the money available is helping states improve their review of health insurance rates. it is giving states like oregon

resources to solicit detailed consumer input, conduct more in- depth reviews, and improved information available to consumers. the next frontier is finding ways to help lower medical costs so we can make insurance more affordable for consumers. thank you for the opportunity to share our experiences. i would be happy to answer any questions. >> thank you for inviting me today to testify on health care, the efforts. my name is dan. behind me since my beautiful daughter. i apologize i might be a bit nervous because i'm testifying

in front of my biggest fan. i am honored to be here. thank you 4 years service to the united states. in 2006, pima my wife and i borrowed nearly $1 million from friends, credit-card companies, to open css distribution group. wheel -- we approach everything by doing the right things. we've worked hard to grow our company but to date we have not made a profit. although we've projected this year to be a breakout year, it is hard to see how new regulations will impact our business. we reduced our six-foot -- or force in order to retain flexibility. we're paying our full-time employees overtime instead of hiring new employees. we are trying to hedge our bets. one element of our business, that is unpredictable as the cost of health care coverage. we have offered coverage ever since we opened our doors.

as a small business, our employees are like family to us. for the past five years, we have offered all employees a choice health savingsnd accounts. half of our employees take up the offering. two are enrolled in the ppo. one has elected to purchase a less-expensive plan and that leaves one more, my wife. while i am committed to offering coverage, the increases we have seen are beyond what we can afford. it is beyond what my employees can afford. each year, we have seen 30% increases except to the summer after the law was passed. last summer, after the enactment of the affordable care act, there was an increase of 42%.

i have tried everything i know to mitigate the increases. the only way i been able to curtail them is by restructuring the plant. increasing deductibles and revising co-payments. these changes have helped reduce premiums but they do nothing to impact the out of pocket cost we have to pay. these increases cannot be blamed on my plan or the insurance industry at large. i believe health care costs is what driving this. not the insurance companies. i have researched other plants. i am in the middle of the research right now. despite my efforts, i cannot find any other options at a lower premium. and for some, i am an optimist at heart, but i do not think this will change. it is simple economics. plans are now required to --

many at no cost. requiring a review, increases will not stop that from happening. restructuring the market will also not reduce the cost of coverage. it is simple. if you want more, it will cost more. a product cannot be sold for less than the costs. this applies to health care services. in conclusion, this may not be what you want to hear but the new health care law has made it more difficult to compete. i urge you to repeal the costly part of a law on the behalf of thousands of businessmen and women in america. please listen to our concerns. i look forward to taking your questions. >> thank you. we will start a series of 5 minute questions.

mr. miller, i will start with you. i was reading your testimony last night. you're talking about what you did, you used $100,000 to make a contact with a consumer advocacy group. it reminds of the questions consumers want answered. he also made a contract with an actuarial. frankly, i do not know of any other commissioner in the country to do something like that. i applaud you for that. not many want to contract with a a consumer advocacy group. they usually are a thorn in your side. i compliment you because i think in package you'll input from

consumers. you have shown great leadership there. one of the other things you mentioned, you were looking at different ideas on how you can affect health care costs. you mentioned, you said, one idea is to deny rate requests. if the insurer reimburses medical errors that should never have happened. i find that intriguing. can you flush sat out a little bit more? >> thank you for the question. it gets down to the contracts that insurers enter into with providers. when i reach out and talk to the insurers in oregon, one of the things i heard for years was that they have a difficult time negotiating with providers, especially hospitals. getting all the provisions in contracts it would like to see.

they raised this as a specific issue and said we would like to include a provision that says it is another event happens, if you amputate the wrong arm, if something happens like that. who should bear the brunt of that expense? policyholders, should a combative the provider? -- it come out of the provider? i understand that today is more common for those provisions to be included. that is one of the ways we are studying this. i do not know exactly how we get at these underlying costs. as state regulators, we have an opportunity to get at these costs. trying to look at, can we influence that provider, and that might be an interesting place to look. i hope that is helpful. >> are you looking at things like readmission rates, for

example? we know there are some hospitals that are doing a great job in keeping them low. others do not. when you have all of these readmission rates, who bears it? policyholders? i hope you are also looking at readmission rates. >> part of what we asked the actuary who performed the study is, let's look at everything. i do not want anything to be off the table. if there is a way for us to make a dent in those costs, we want to do it. everything is on the table. >> i compliment you for what you have done. itt set a high standard for insurance commissioners around the country. is that haley or hallee?

welcome. are you enjoying washington? a greatll you're having summer. it seems like you have been swimming. [laughter] thank you for coming. you said something about the health insurance exchanges which will be up in 2014. since i come from a state that has a lot of small businesses and i have met with them on this issue, when in 2014 comes up, because of the number of employees you have, you will go to an exchange. you will have more competition, more people competing for covering you. it will be open and transparent. will that help you in terms of

your premiums and the quality of coverage? >> i really do not know, senator harkin. there is no definitive information about exchanges at this point that i can read about. i cannot comment on what the exchanges will do for me. i have done my best to research that. i've worked city chamber of commerce. it is difficult to find that information. >> i do not know where kentucky is on that but states are in the process of setting up those exchanges. i think the law sets out how those exchanges are to operate. again, i do not know kentucky. in our state, two two insurers have 80% of the market. there is not much transparency

or competition. let me also ask you, right now small businesses can get a tax credit. for the purchases of their, for what it couldn't for their employees -- what they put in for their employees. are you taking advantage of the tax credits? >> no, sir. we do not qualify. >> you are over the $50,000. you do not get the tax credit. but you will be able to shop on the exchange. >> according to the law. we try to plan business in one and two-year increments.

. we are about five rows away. i do not think there's much out there that any of the skin comment on exchanges. . dicken, i appreciate their reports that have come out. and looking at the authority to review rates, did any of the states provide evidenc or the review results that any of the companies that have pulled out of the markets, will that decrease the number of policies available or decrease the types of policies available? >> thank you, senator. we did not specifically asked as to whether there were any

changes in the market share. certainly your point is very fair. we have looked at the market share of carriers in many states. some only have one carrier that may represent half of the market or more. many states, 23 states, had five or fewer carriers representing them. carriers may have increased or decreased their role as part of this rate for you. >> i think small business health plans would have increasing number of businesses participating. i hope this reform does, too. miss miller, congratulations on hiring an actuarial firm. i assume that the actuary was

used to trim the rate you allow regions to pursue. >> to be clear, we have actuaries on staff the to the review. the study and mention, which hired a firm to conduct that steady. we have actuaries on staff. we added an additional actuary to work with the joke grant funds. >> i am concentrating on the company. product forelling a less than what the people pay, that would not be a sustainable business model. if their costs are higher than the actual art -- extra real charts, how long will they be able to -- you have an

adjustment for that? >> when we considered surplus as part in the rate filing process, we do so very carefully. will understand that long-term products need to be priced appropriately. in the regents case, we reduced it to 12.8%. there were concerns that caused dip into the surplus. it was a concern appointed by the advocacy group. their plan had dropped from about 100,000 members to less than 60,000 members today. the key concern was that if we had approved an increase, that would result in further losses. that would drive up claims

resulting in higher increases down the road. part of " we're trying to do -- part of what we were trying to do was to stem those losses. >> thank you. credit for bringing your daughter. i did that when my kids were young. they have a lot of memories from that. getting back to the insurance, did you know that in 2014 the small businesses will not be able to buy health insurance plans that have deductibles that are more than $2,000 for individual plants or four thousand dollars for family plans? do you think this new requirement will increase your premiums? >> no, i did not know. but i can tell you that the only way we can stem the increase in cost is by raising deductibles. if w h