it makes are harder for the smaller causes to get attention if they do not have the numbers behind them. host: new hampshire is on the line for independents. caller: cutler calling. think the reason a march is successful is because it is for a specific cause. right now, there are multiple causes for which we should be marching. host: this tweet says that we are screaming into deaf ears. you get the last word. guest: that does not happen often. i think both of those comments suggest -- this may be odd coming from someone who wrote

about the marches on washington. maybe it is not always the right tactic. maybe because of the multiple causes, the electoral politics into your voting for will be just as important. i do not want to minimize it. people think that people who came in 1963 had one cause. they have multiple causes. that is why keep saying the margin washington for jobs and freedom. they were about unemployment as well as civil rights. we associate it with the civil rights bill. that is fine. but those same people were also concerned about what was going to happen in terms of elections, their local communities. it is not always going to be the thing to do to come here. we all have to take that into consideration.

host: we're going to have to leave it there. lucy barber is the author of "marching on washington." we want to let the viewers and listeners know what will be on the program tomorrow. we have damon wilson, former director to the nato secretary general talking about the nato partners and the lead they took in the situation in libya. then we have a discussion on the history of race relations in the u.s. with michelle bernard, kweisi mfume, and leonard .teinhorn

that is on "washington journal" tomorrow morning. you will be able to say that live -- see that live tomorrow at 7:00 a.m. eastern. [captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute] >> today, we take you live to fema for a briefing on hurricane irene. homeland security secretary janet napolitano and craig fugate live at 11 on c-span. sunday, congressional black caucus chairman, rep emanuel cleaver, on the caucus's view on the employment situation.

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>> i have discovered fascinating individuals whose mark on the presidency's and the white house for virtually on known except for a few scattered stories here and there. everyone kind of a new george washington and thomas jefferson had slaves, but eight out of the first wells --12 did. >> a discussion on a proposal to eliminate or phase out the mortgage interest deduction. this is hosted by the tax policy center and the reason foundation. this is about 90 minutes. >> hello, everybody. i am the director of the urban

brookings tax policy center and it is my pleasure to introduce you today. today's events are about rethinking the mortgage deduction. washington today is focusing on a very urgent, pressing fiscal challenge, the need to increase the debt ceiling, but here at the urban institute, and our friend that the reason foundation, we like to think ahead and get away from the day- to-day fighting. one of the key challenges that we face is the broken tax code. the american tax code is in very sorry shape. a is complicated, inefficient, harms the economy, on fair, and it does not raise enough money to fund the government. what they is can we do to fix our tax code? the game most noticeable thought

the tax code is how many tax breaks are embedded in id. they deserve a close review. is to lookof today's at the most used, the mortgage deduction interest. revisiting the large tax break, we have put together a panel of four experts. eric toder. dean stansel, who teaches up florida gulf coast university and is an adjunct at the fellows foundation. seth hanlon. and finally lawrence yun, the senior vice president of research at the national association of realtors. we also have ed andrews as our moderator. but he works for "the national journal."

thank you for joining us today and i turn it over to ed. >> thank you. i think this is a great way to attack the tax reform. the mortgage interest deduction as one of the very, very biggest and certainly most popular tax deductions out there. it is expensive. critics say it is unfair. if we are going to tackle tax reform, dealing with this microcosm, if you will, will bring to light all of the issues that we have to grapple with in talking about reform. i look forward to getting this under way. i just want to cover a couple of

small housekeeping details. next each of our panelists is going to speak, given opening presentation, that will hopefully last about eight minutes that will get us off to a good start. then i will take a few minutes to fire off my own question that the panelists. in our third section, i will open this up to questions from you in the room, the audience, as well as our online audience. to those watching on line, i urge you to e-mail in questions to the panelists and that's -- at publicaffairs@urban.org and we will try to handle as many as

we can. let's proceed with their speakers. we are beginning with eric. >> thank you very much. i am pleased to be here. my role is to provide a little bit of an overview of the mortgage interest deduction and then we will get the straight up opinions later. i want to talk about four things very briefly. a little bit about the background and history of the deduction, where it fits in with income-tax is an tax neutrality principles, and that i will go on to who claims and benefits from this. there are some tables in your package to which i will be referring. first on the background and history, we could possibly call this an accidental tax subsidy. all income interest was deductible. interest payments were viewed

as earning investment income, however the congress made a instinguisheing in 1913 taxable income and non-taxable and come 00 -- income. at that time, there was very little effect and the mortgage market was not about well- developed. only the very highest income individuals paid any income tax of the deduction was not important. the unchanged in world war ii and in the aftermath, it became a mass tax instead of a cost tax. the availability of the mortgages fueled a large poster of and more expansion in homeownership and by the 1970's, the mortgage interest deduction was one of the largest in the tax code and it remained so. do in 1986 tax reform act made

other important changes that eliminated consumer interest which left it standing alone as the only non-business interests that was deductible. it limited the deduction to loans of $1 million, or up to $1 million, and allow taxpayers to deduct an additional 100,000 in home-equity loans. when the treasury was developing the tax reform proposals in 1984, we were given its full range to look anything we wanted to except the mortgage interest deduction. they specifically said it got was hands-off. we looked and recent tax reform proposals, the boat show -- the bush reform proposed a 15% credit and geographic base caps.

the president's fiscal commission and the bipartisan policy center have proposed replacing the mortgage interest deduction with a refundable tax credit. it is definitely now on the table, as it has never been before. let me discuss a little bit about the policy. interest income is taxable and in interest payments and are deductible. housing generates non-taxable returns, so the question is should you allow a deduction for something that generates a non- taxable return? there were two separate issues. one, if you denied the deductions for mortgage interest to me you'd be giving a preference to people who could finance their homes by equity and over those who had to

borrow. one group would face the pre-tax cost in the post-tax cost of capital. it you extended the preference to borrowers, and you would be increasing preference over owner-occupier bursas rental. but then you had these neutrality issues. the mortgage interest deduction has become more of an anomaly partially because of the other forms of consumer debt which are no longer deductible. most people do not pay taxes on their interest income with access to 401k plans. it is no longer the case that the margin for the interest is taxable, olli true at the very high end. there is much less under the consumption tax treatment and the justifications are non for allowing a this.

going on now to who claimed the credit, table one, this comes from 2007 to july data, the next most recent year for the data being available. also, the most recent year before the crash. in 2007, people who are earned between $50,000 and $200,000 or 65% of those claiming the mortgage interest deduction. that was 46% of adjusted gross and that is where the deductions are concentrated in the upper middle-income group. only those who itemize kind of deduction, as a 28% of tax filers claimed did in 2007.

in each group with income over $75,000, as you look at the table, in some it was over 70% claiming. one other thing not in the table, the benefits are hardly concentrated geographically. one study some years ago estimated that the net benefit is what you would get from having the deduction rather than the money being distributed equally to people per-capita. they made the calculation of which regions benefited and which did not and found that the deduction provided net benefit to only 10% of the metropolitan areas and 75% of the net benefits came to three metropolitan areas, and new york city, new jersey, the los angeles area in riverside county, and sent francisco/san jose and. it is really kind of amazing --

cisco/san jose. how is it distributed by a incumbered? we did some simulations shown in table two be in a three looking at current laws as a base line assuming when tax cuts expire. one is current policy assuming that everything is offended -- everything is extended. i will just summarize briefly our findings. to put this in perspective we do not assume any behavior when you eliminate and we do not as soon as any real behavior, assume that people change how much house they buy or whether they buy a house. we do make two assumptions. one, the tax optimization

switching to the standard deduction and the other is a financial optimization. we assume that people who have other sources of capital income will not continue to pay tax on net income and have non- deductible mortgages to have other taxable capital and, to avoid the elimination of the deduction by paying down their mortgages and reducing their tax burden on the income. when we go through these calculations, we sure that eliminating the mortgage deduction would raise, in most parts of the distribution, raise taxes for only a minority. it would raise only in the top quintile. the taxpayers between the lower 75% of the upper quintile experienced the highest cuts from eliminating the deduction.

the tax payers in the bottom three quintiles and the top 1% experienced smaller incredible burdens than average. what is driving these results? only itemized benefit from the production and most people do not itemize the use the standard deduction. most people in higher brackets itemize. renters are concentrated in the lower brackets and. the benefits is larger for those in higher marginal tax brackets with higher rates. finally, at the top, people are relatively less hurt by the elimination of the deduction for two reasons. they can avoid the tax increases by paying down their mortgage and the second is that as income rises, housing costs

become a smaller share of income. those are some basic facts and i look forward to participating in a back-and-forth. >> can you come eric. we will hear next from -- thank you, eric. next from dean stansel. >> one of our biggest questions, as you see in the subtitle, was the vague idea that if we got rid of the mortgage interest deduction that there'd be an impact, so we wanted to look at benefits and by how much. we could not find a lot of good independent analysis. i have six things someone to talk about, so i may talk fast. in one study came out today, and there is a link to the web pages i last slide, and the six things are -- how effective is the idea of home ownership? who benefits? the oslo interest -- as low

income housing benefit? how effective? you would think if it were an effective tool for increasing in the homeownership rate which has been fairly stable between 19 -- between 64%-69%. if your goal is to increase homeownership, maybe this is not the right tool. and how big is the mortgage interest deduction? if you just look at the irs, they say it is nearly $500 billion. there's nothing inaccurate about the number in particular, but the problem with that measurement is that say john and jane doe have average itemized deductions of about $19,000 including mortgage interest of

$10 and dollars. we repeal that, and then you just claim -- it including the canada thousand dollars -- we repeal that and you take away the $10,000. you do not lose the mid, only the amount by which it goes over. it's 5.5 times smaller. billion.s only $85.5 people respond to incentives. even that number is too high. let's say you are john and jane richie and you are empty nesters sitting on $500,000 in liquid assets. you go buy a condo in palm

beach. do you pay cash or do you look at the incentives? get rid of the incentive, and what will they do? they will have lower investment income. it is not just the $85 billion that you would gain in getting rid of the mid, but there will be much smaller because of the lessening of taxable income. who benefits? it has been fairly stable for the% of total returns that aybemed, about 25%, or maub lower. what does this mean/ 75% of taxpayers do not benefit and this varies by income level. claim arese who

middle income, and by definition that's $50,000. if you look at the chart, that's nowhere near it. 60% earn over $75,000. it varies by age, as well. when you are yonder you have a higher mortgage because i have not paid off the principal. how much do they benefit? here is income level. eric did a great job of summarizing this. in the paper, you can see we use the joint committee on taxation. you can find this and replicate what we've done here. the biggest benefit in dollar terms are at the top. to be fair, if the measure this

in percentage, the disparity is smaller, which is way too much detail for a power point slide. this is some of the detailed if you look daily the far right column, average tax savings as a percentage of the tax bill. the risks really do not benefit more than the middle class. most of those in the middle class are not actually claiming mid so it changes the point. what happens to housing prices? it depends. we did a little simulation and took taxpayers and worked through the average tax savings data we put together using the joint committee on taxation approach and we found that you have the tax savings, how much more would be able to afford to pay, and that is over there on the far right column, the increase of how much you can

afford to pay, less than 1%. the nar claims 15%. mit said between 3%-6%. so is it 3%, 6%, 1%? ideal tax policy involves broad based low rates. the problem is that this creates a dead weight loss. that is lost wealth. it would be larger if the rate is higher. from our perspective, which is where we will defer from the other panelists, the idea of reform would be to broaden the base but get rid of the mid and make a proportional reduction so that revenue remains the same. we're looking at tax policy. in my view, the best thing to do

would be to minimize the negative impact, broaden the base, lower the rate. our calculations show it would be about an 8% reduction in rates. think about what that really means. for those who do not itemize, 75%, we would get an 8% tax cut. where is the money coming from? for those who itemize, there will be some adverse impact of this reform. the study would give you more details on that, so i will gloss over them. and clewiston -- inclusion says even 25% even benefit at all. a revenue-neutral appeal would allow for a reduction in income taxes that be beneficial for the economy and give us substantial tax cuts for most earning under $100,000. the url for the study there is

the correct one, not the one in your chair. thanks. >> thank you for a very quick and lucid run-through of the criticism here. seth? the directorhanlon, of fiscal reforms at the center for american progress. it is a pleasure to be here. these are tax policy questions and these should be separate. i think i disagree. when the talk about the mortgage interest reduction, we cannot separate it from the physical challenges. we are here at a time where there is an immediate crisis about raising the debt winnetka -- debt limits, and a lot of partisan ill will over that.

from all sides the political spectrum, there is an understanding that we are in an unsustainable fiscal course. wheat is pretty clear that we have a spending and a revenue problem. revenue as a share of gdp is estimated to be less than 15%. the lowest since 1950 when harry truman was president. it is pretty clear they have declined. we have rising health-care costs that we need to discuss. it is clear that the revenue base is not sustainable. we need a balanced approach fiscally. the key to a balanced approach and looking at both sides of the government ledger, spending and taxes, and looking at the cost

effectiveness of our spending programs and the embedded social programs, business incentives, everything imbedded in the tax code, tax expenditures. the overall tax expenditure budget, as estimated by the treasury, is about $1 trillion per year, the single largest in you could compare it medicare payments for social security payments, it is even twice as large as the domestic discretionary budget. if you leave that area of spending top of the table that is really a myopic approach. we have a program called doing what works. liberal sides of the ledger, revenues, and focus on identifying the programs in a cost-effective way. we want to see if we can reform them so they do. the mortgage interest reduction,

if we follow this analysis, is equivalent to a government spending program. the government could essentially match based on a marginal tax rates and it could provide a check, a refund, or a subsidy. it is pretty clear the mortgage interest deduction should be looked at as a spending program. it is an enormous spending program. its revenue cost, so the fiscal cost of the government is projected to be just shy of of $1 billion this year. that is about twice the size of the budget request for the departments of housing and urban development. in a sense, twice as big as the other housing programs combined.

the key questions of any program would be, what are the programs purposes? are they important? most progresses and certainly the american -- center for american progress think homeownership is a worthy goal with tangible benefits. people around the income scale should have the opportunity to own. if you look closely at the mortgage interest deduction, which is the question, if we wanted to target the incentives toward the families on the margin of possibly not being able to afford to own a home. eric mentioned some of the numbers, but it is clear that is

not the mortgage interest deduction does in the way it is currently designed. will your family is getting much bigger benefit in what is known as the upside down effect. the have bigger homes and but theys to write off, o also have a higher marginal rate giving a bigger tax benefit. eric mentions some of the numbers, and i think they square off in the national tax journal, but it will look at the static effect, homeowners in the $40,000-$75,000 income and benefits, on average, five under $42 per year and those above he50,000 -- 10 times te

subsidy for higher income. that is the static estimate. if we were to eliminate the mortgage interest deduction, will the taxpayers could pay down their mortgage, adjust their portfolio, but research shows even if you take the most conservative assumptions about output, they received a far outsize the benefits, 6-8 times the benefit. i think all of this creates fairness issues and it needs to look at the mortgage interest deduction. i just want to be clear. a lot of the times you hear proposals or polling questions about eliminating the mortgage interest deduction, but keeping

the market to interest deduction in its current form is not the only option i think there are different ways of reducing and better targeting the mortgage interest deduction, lowering the amount of debt on which interest can be deducted, which is $1.10 million, and even lowering that to $250,000, "the national tax journal" found which is more than most proposals would suggest effect 7% of homeowners. then there is reducing downside benefits because people in higher tax brackets come either by reducing the value of the reduction from its current maximum of 35% to 28%, which is what president obama has proposed for all itemized

deductions, or one step further moving to a credit richard be flat for all taxpayers, and a gun at about the lowest marginal rate of 15% -- a credit which would be flat and down to the marginal rate of 15%. there are two aspects of the mortgage interest deduction and it is hard to see how they advance home ownership. the deduction is allowed on second homes including vacation homes, not just houses but boats that can be used as houses and up to $100,000 in home equity debt. that is a subsidy for reducing the equity in one's home and it

is hard to see how that advances the primary of homeownership. the center for american progress recently released a long-term balanced budget report called budgeting for growth and prosperity, and one key point is that it is not necessary and would be undesirable to make too many changes to quickly. i think that is true of all deficit reduction measures because of the fragility of the recovery. and we do not want to either raise taxes, cut spending either too much too fast which is true of the mortgage interest reduction to with the fragility of the housing market. we can look at making these changes over a longer period of time, which is what we do in our plan, and step down the value of the deduction until it is transformed into a 15% credit, fought for all households,

limited to $25,000 in interest and adjusted on a primary residence. we do that over a 20-year timeframe so as not to upset the economic expectations and dueling and minimize the impact on housing prices. the one international example would be england which reduced theirs over a time frame with little effect on home ownership or a shock to home prices. there is a balanced approach that as more fiscally responsible and targets the subsidy for home ownership in a more cost-effective way. >> thank you very much. lorenz, you are right on the receiving end. -- lawrence, you are at the receiving end. tell us why they're wrong.

>> i want to thank the tax policy center for inviting me to give my viewpoint. in washington, they say nothing gets done because there is too much debating over different issues, yet we have the urban institute, the center for american progress, both considered left of center, and the reason foundation, to the right, all agreeing. all these editorials are also in agreement with regards to what needs to be done with mortgage interest deductions. where do i stand and where does the association stand? let's look at the situation first. it is the worst possible time to discuss this because of the fragility of the housing market and ben bernanke laid out that without the house and to recover that an economic recovery would be very lackluster. penis is not a good timing

issue. i have laid down some of the issues on the recovery process. what about during the bubble years? we tried to identify the causes of the bubble, things like the growth of pro bowl. come on higher hide mandate on how much mortgages that need to be in the underserved market, the credit rating agencies, the perverse incentives to provide its aaa credit rating. i would also mention, on the last point, there were some key people making pronouncements to buy, buy, buy which was misplaced. mortgage interest deductions have been in place for 100 years. we should look for something

peculiar to recent times. one can do a study, but perhaps mortgage interest deduction perhaps caused some aspect of the bubble. mortgage interest deduction by itself, it is hard to figure it out given the 100 years of existence. some are reporting to the community reinvestment act, but that has been around for four years and you cannot argue that is the cause of the bubble. i think this figure in mortgage interest deduction, $120 billion tax expenditure, the figure is a measurable in light of the current debt ceiling debate. some people view this as a tax expenditure, government

spending, so one can find the equivalent of it. i would say that most americans would do this and not as a tax expenditure but as a tax increase. you can ask people, how do you feel? furthermore, i believe the sovereignty and reside with the lot and the tax code clearly says that this mortgage interest deduction means you will pay less tax. despite the strong economist argument, strong washington argument, removing the mortgage interest deduction would be a tax increase, not a reduction in government spending. regarding what happens if we remove the mortgage interest deduction, given the $100 billion annual tax revenue potential, this is how much homeowners are giving up. you put your money in the bank, how much is that asset worth? one does the analysis, and at

the current 5% interest rate, it should be worth about $2 trillion. depending on how one plays the raid, a 10% price decline, 20% price decline, it depends. that would impact not only people who are taking the mortgage interest deduction but every homeowner. if we own and exactly identical home, i have a huge mortgage interest deduction and he pays off the debt. but my home body of goes down, his goes down. the impact is on all homeowners in not just those getting the mortgage interest deduction. the rich are getting more benefits because of the higher tax bracket, but that is looking only at one side of the ledger. on the other side, they are paying more taxes. in terms of percentage in relation to come, it is the

younger families more beneficiary of the mortgage interest deduction. the longer people take the mortgage interest deduction, 91% earn less than $200,000. the homeowners currently pay about 80%-90% of federal income tax. if we remove it, they could pay up to 95% of all federal income tax. people can argue if that does not include social security taxes and others, but it depends how you determine that exactly as defined or rather the social insurance fund should be a part of the overall revenue looking at the figure. in absolute dollar terms, all families to benefit, but in terms of percentage, it is the younger families that are definitely benefiting. one of the strong economic

arguments for having some type of incentive would be to say if there is a market failure, something as pollution, they tax. if there is a positive, then you try to provide some incentive. we find that sustainable homeownership is associated with higher student test scores, lower juvenile delinquency, higher health outcome, higher civic opera to the patient, a volunteer tiber charity, and more. there are societal benefits true to being in the community, and the research on sustainable home ownership, not the bubble. nar has some influence in washington. when we knock on congressional offices, they open the door.

i went to the former soviet republic, which is in my biography. his book was on the special interest groups. many of the policy advocates certainly benefit our members, but the true beneficiaries are the homeowners. did not see these sudden reduction in an homeowners make of 75 million families, so they are a comfortable majority. homeowners cannot organize. they do not have the incentive to organize so the nar represents their point of view, so we are representing a public interest. i know that we are a group of many economists and thinkers

here. this is a big assumption, but assume there is a loss of the mid, then e we need to change the tax code, but as i mentioned if we changed the rules in the middle of the game, it impacts the people and made decisions based on the current rules. it will global warming and everybody moved to the north pole, we are not funding from all over, but this is a history of people who make their decisions knowing that was in place. if there is a net weight loss, there's always a way to negotiate and provide the necessary way to remove that loss. i'm not sure what it is, but i industry to raise the question for people who think there is the loss. productivity growth. "the wall street journal" editorials as housing is a dead

investment. it is a dead investment. what if a house produced work ethics or a certain intangible quality for people wanting to work hard? we do not know. there is not only the capital deepening, but also we do not know with the productivity growth is. and many homeowners, they are making a long-term decision and some psychology journals say people thinking long-term making more prudent decisions over time whether than thinking week to week or month to month. buying a home changes your outlook. the answer is clearly not resolved. the fact that the u.s. is the fastest and the largest world economy since the introduction of the mortgage interest

deduction in 1913, is that because of or in spite of? that is one question that can never be answered. i also want to bring up james buchanan's idea of the government getting larger and larger and there is no way to stop it. mid was one way to prevent the leviathan from getting larger. we have 1 million members. i would say 20% of our members are from the tea party. they say they want a lower tax rate. i say to look at the new reality. what if we give up the mid and 5 or 10 years from now, the tax rate goes up? after thinking that over, and some people change their mind. in theory, the lower tax rate is

good. but what happens in the real world? i am always cautious about international comparisons about apples to oranges, but if the mid is removed, there are appreciation and other benefits. i buy a home for my brother, my brother buys a home for me, and they get the mid and depreciation and so what happens? in a heavily populated rental area, there tends to be more rent control and economists would say to have affordable housing, rent control is the most ineffective way to go about it. that could introduce more distortion into the program. the aging population, on and i

only want to mention perhaps there could be some savings were more countries are democratic or could be a repeat. i am going away of tangent, and the only reason i am mentioning this is because there are some people who are clearly evil. many places where there is massive debt, whether in china, russia, and others, and there has been land reform. we have had the bloodiest century, but if we have a society, one has to think about whether this leads to more stable social outcomes, and this is just my personal statement.

the two most transformative president, fdr, who mentioned a nation of homeowners is income per. perhaps there are more numbers. ronald reagan came to the nar convention and he said he would not touch the reduction because it symbolized the american dream. so the thinking of the broader society and considering many aspects. again, i think the tax center for inviting me to this and i am on the opposing and so i have to come up with many possible counter arguments to this discussion. thank you. >> i have heard all my life

about homeownership is the key to the american dream and that the mortgage interest deduction is key to the american dream. i did not think it was the key to the future of the world. that was a great and rousing defense. i would like to start just by bringing these discussions together a little bit. argument seemed to be going was not to abolishing the tax for princes for home ownership, but to change them. -- the tax policies for home ownership. he was outlining an approach that would have made the

distribution of the benefits more fair and would have presumably reduced the benefits for those who do not arguably need them so much, the wealthy. i would like you to sort of address those questions. is it reasonable to talk about fixing this system if you feel that there needs to be some support? i think lawrence raises some questions that are very hard to unravel about transition cuts. i know that you were speaking to this win use it if you did these changes needed to make them over time. all of the property values in this country and and then the

assumption of these tax deductions. if they are gone, it pulls value out of a huge slice of american assets, you need to do it very carefully. going in that direction, reforming this, and so on, do we really end up in a terribly different place? we are still trying to prop up homeownership everywhere in the tax system. >> thinking through the transition process that any changes need to be gradual, but has sudden changes could be quite destructive -- because sudden changes could be quite destructive. we do not have the distribution

impacts. the question really comes down to exactly that, the distribution impact. it is not really a question of mortgage interest deduction, but more a question if warren buffet doesn't need the mid, does he need the extra income? it should be on the broader tax structure to say that some people view the wealthy papal as not paying their share -- the wealthy people as not paying their share. that is just one of the broader issues not directly related to mortgage interest deductions. one other thing about the distribution of impact is that there was, i believe, some consensus that the current economic recovery would be quite slow due to the deal leveraging

impact. one aspect of the leveraging that is not being looked at closely is that many small business owners, not microsoft or amazon, where do the small business owners get their money? also, they tax housing equity, and their family, housing equity to get startup and come to start a business. given that home values have declined so much, this will make it extremely difficult for many small businesses to actually tap into some capital sources to get the small businesses going, another reason why the economic recovery, the way things are set up, looks to be very slow, not only for one or two years but probably the next five.

>> we really do need to think through the transition issues. on the way the policy and budget process works here in d.c., all of these discussions about reducing the debt are focusing on the 10-year budget window. i think that is really unfortunate that we are not looking further out. it is hard to look at those projections 20 years out. i think that is really what we need to be doing, preparing for the decade after this one. on the current base line, which is unrealistic in some ways, but if we do not do the recovery is absolutely nothing. the share of gdp, 69%, will only go up to 76% by 2021, but then after that.

the fiscal problem that we have is not the media. we do not need to do too much deficit reduction too quickly. not just in the housing area, but in all areas. it really threatens the very fragile economic recovery and it can make us more worse off in the long run because of it. thinking 10 or 20 years ahead, to something that is lower and more flat for all households really puts us on a much better fiscal footing. if you do that coupled with changes like reducing the size of the mortgages that are eligible for the deduction, we can cut the costs of the mortgage interest reduction in half.

we can plan to do these now. we can discuss this and plan to do it now. it will put things in place that will slowly and gradually put us on a much better fiscal footing 10 years from now when the real problem is. >> let me back up >> let me back up. anybody that wants to send questions, they can e-mail us. i want to throw out a couple of more questions. it seems to me that a core question if we are talking about tax reform, and all of you have kind of circle around it, is if we are going to do

something about the mortgage interest deduction, fix it up, or whatever, the first question is do we start from the premise that is flawed and needs to be fixed, or he eliminated completely in the broader context of some tax reform. is it so big of an issue that it cannot be avoided in a tax reform, where is it so important to so many people and so disruptive to change that we ought to hide it off, and have tax reform that leaves the part of the code unchanged? as eric alluded to, that is what a reagan administration did in 1986, saying this was too tough

to handle -- the american dream, and all of that -- it was too big to handle, and they left it alone. the question is, from a fiscal and policy perspective, can we afford to not tackle this huge tax expenditure, both for reasons of fiscal strength, and, you know, good policy, or, is this break so big and so entrenched that the political reality is that we are going to miss the chance for reform in all other areas? i would like to throw in a political and economic question. perhaps eric, since she did have a little experience in the real political world, you would like to take a stab at this? >> my colleague said this also.

given the size of the fiscal problems we face, i do not think it is possible to do anything to address these without doing something that is politically unrealistic. just saying it is politically unrealistic in today's context is not enough to push off the table. if we view this as backdoor spending, which is the why i look at it, there are many other forms of backdoor spending through the tax code, and we have never taken a position through front door spending where we say all spending has to go or stay. we'd look at things case-by- case, to look if they're worth keeping or not, or can we. down, and approve it, make it

cost less, and worked better? certainly, along the cost less and work better is the way we should think about this. >> dean, i have a feeling you're having instance to get rid of it. >> my perspective changes when you leave washington. a repeal today would have any effect that we might not want. some sort of compromise position all along those lines would probably be a wiser way to go about it. >> right. right. i would like to ask, laurence, a core question here, in all of your defense of the economics of the mortgage interest deduction, i did not hear you or anybody else actually question

-- really question the assumption that the end of the day the deduction, the tax breaks, make homes cheaper. on a gut level, i have never believed that because it seems to me when you are putting a piece of property on the market, the buyers and sellers both know what the advantages are, so the price of just. for all of the particular areas of destruction that might be caused by eliminating it, is it really indefensible to say that the deduction makes, but the end of the day, homes more affordable? they certainly still the decision for a buyer in favor of ownership. there is no question about that. but, do they really benefit the

homeowner at the end of the day by making the home actually more affordable? >> the capitalization issue -- if there is a benefit that goes on for many years, and the home value gets capitalized, and one removes the benefit, one's value declines. because the deduction has boosted up home values, from byre perspectives, they are paying higher home prices, get the deduction, but they're not getting a net benefit situation. they're a two economic studies, one from the national bureau of economic research, which looked at home ownership and they found the impact is about five percentage points. the study was more than 10 years ago. it was before the bubble and the crash. five percentage points, that this same as the current rate is

66%, with output, it would be 61%. that is quite sizable. >> you can see the rest of us at c-span.org. we go live to hear from federal officials for an update on hurricane irene as it moves up the east coast. >> thank you. i have a few brief remarks, and then bill. will update you on the storm hit. we will hear from craig fugate, and major blood from the salvation army. thank you for joining us on a saturday morning. as expected, hurricane irene made landfall earlier this morning along the north carolina coast. i've spoken to the governor this morning. she said they were hunkered down. they are ready to do damage assessments as soon as possible, especially for assets like the bridges and roads.

irene remains a large and dangerous storm. people need to take it seriously, and people need to be prepared. as we have suggested, think of this in three phases -- preparation, response, and recovery act. some of our states are moving into the response mode. other states, as you are for their north are still in preparation mode. if you are receiving a warning to evacuate, please do so. even if you have not done so, -- received a warning, please stay inside, stay off of the roads so they can be clear for emergency vehicles for our first responders. we anticipate heavy rain, potential flooding, and significant power outages throughout the area of the storm, which means all up and down the eastern seaboard.

with that, let me turn it over to bill read, who will give you an update, and then you hear from craig fugate. >> thank you, madame secretary. on the image here, we have the visible load of irene, the center of which is 50 miles to the west, moving to the northeast at about 15 miles per hour. the outer banks are going to be impacted over the next several hours. next in line is the hampton roads area. they're having adverse conditions there. i've spoken to relatives in the area. the rainfall has been incredibly heavy and the water levels are coming up now. i would also like to report a good story coming out of that in that the information they have gone through in advance of the storm of all what to do or not to do is outstanding. it fits in with what they should

be doing. next picture, please. radar imagery -- we see these bands coming around the top. every now and then they will go off the radar. [unintelligible] stay are jammed up, working in the great plains. we have storm surge tides in the upper finny tel -- end of the sounds. five-9 feet is the forecast, depending where you are. storm tides will be high on the coast. add to that the effects of the high waves, and the beach erosion. it is very dangerous on the island. heavy rain -- a large area has been getting rain since late

yesterday afternoon. we will see five, to 10, and maybe some isolated 15 inches across north carolina before the storm and its later today. next slide, please. by late this evening, the center should be moving past the norfolk area. there will see hurricane-force wind gusts through a lot of locations there. the sustained winds will be mostly over the water. a number of years ago we had a lot of tree damage in that area. i suspect we will see reports of that in that area also. this evening, overnight hours, it will go along the coast, past places like ocean city, and impact in the delaware bay.

by the early morning, near new jersey, moving up the coast line of new jersey, effected all of the resort areas during the morning hours, and then making as big land fall across long island, into new england, very near new york city. i do not want you to get too. away at that exact point. -- carried away at that exact point. we will keep hurricane-force winds in the forecast at least for now. next slide, please. the tropical storm wind probabilities, as we talked about for several days -- this gives you an idea of how large an area is likely to be impacted by at least tropical storm force winds while irene makes its trek up the eastern seaboard. where we have the saturated

ground, that is where we will focus on for the wind damage associated with trees coming down and a light. next slide, please. this is a probability of storm surge engage off a four-foot exceed in. right now, the higher probability storm surges where it is actually happening. i also want to point out the likelihood of succeeding four feet in the upper strings that come into the chesapeake and the ocean in the hampton roads area, and then some part of the lower chesapeake have a chance. the upper chesapeake on the strike is not looking like it will have the flood issue you saw what is about. maybe some small water rises, but then the wind likely swings the other way. you'll see a lowering of the water levels there. not so fortunate for dollar day.

-- delaware bay. the areas all the way down to bethany and into the ocean city, we have a high probability of exceeding four street in storm surge, coupled with the waves. also, further up the coast, we are looking at the same issue on the storm surge when you get up into the long island sound, and the new york metropolitan area. our forecast is for four to 8 feet. there are detailed informations in your local offices [unintelligible] there's a lot of variability within that range. of course, the rainfall is starting to show that now. as the storm moves northward, the rainfall shift from the northeast quadrant of the storm,

as an essentially in the northwest, coming under the influence of the weather fecit -- features pulling it off to the north. we are expecting a swath of five-to-10 inches of rain. we expected into the new york metropolitan area and the western part of new england. all of these areas have had excessive rain in the test, so the ground is saturated, and we will have issues of flash flooding, and probably river flooding before it is all over. craig fugate, i will turn it over to you. >> i wanted to key in on a couple of points. when we talk about category of hurricane, if that does not explain all of the risks. you deal with four principal risks. the high wind, storm surge, and these two are tied to the category that describes how strong the winds are, but also s bill talked about, rainfall and tornadoes, and they're not tied to the category of storm.

even though they might be a category one? -- category one, it is not tied to the rain fall. some of the most devastating floods have happened in tropical storms. the tornados will be very quick. they will not be on the ground very long. they could still be very devastating. that is why we are asking people who are outside the evacuation zones during the storm to stay inside stay in interior areas, just as you would prepare for tornadoes. make sure you bring supplies with you. the other key issue, an immediate aftermath of the storm, we will start the response phase in north carolina as irene moves north. if the best thing people can do is stay home, stay inside. a lot of people like to get out and travel about. it is very hazardous. the responders and the utility

crews to deny me to get behind you when they're trying to go help. in the aftermath, we have seen many people injured and lose their lives after the storm came through because it is still very dangerous. finally, yesterday, we had announced over our block that we had released one of our apps for android. i want to show you right now that we are out with information to read what is good about this is that it has the information that if you do lose connectivity, if it has prepared information about what to do during and after hurricanes and other hazards. again, it is for the android. his on the market. it is the official fema -- it is on the market. it is the official fema app. the iphone and blackberry apps are coming soon. as we talk about responding to

this disaster, it is not just about what government is doing predicted is about volunteer agencies, so we have gal mcgovern of the red cross, and major who would of the salvation army. -- hood of the salvation army. >> thank you. we appreciate your leadership. our organizations are tightly- length. the continue to work well together. we appreciate the partnership. we are in the middle of what could be one of the largest response is that the red cross operations have had in recent memories. there are a number of evaluations, and that reinforces the serious nature and how far- reaching the storm is. we have operations in more than one dozen states. our priority right now is sheltering. last night, we had 13,000 people in our shelters from the states

that were evacuated. we have nearly 150 shelters open right now. we are preparing to open dozens more as the storm continues to go north, and many are being opened as we speak. if you need and location of a shelter, if you should go to redcross.org, as there is an app that will show you where they are. we also have a brand new app on the iphone. we have 60,000 downloads since the storm began. we expect that to grow. like every other agency, the phones are probably going to start ringing, so if you need to get in touch with us, the internet is your best bet, and local media will cover where the shelters are we also encourage people to -- are. we encourage people to register

on say federal law, an application on our website that house family members that you are out of harm's way. the storm is on going. those in the northeast still need to take precautions. if officials tell you to evacuate, he is really important to heed those warnings. they're serious. if you are not in an area that as an evacuated, please have supplies on hand. we asked for people to have an emergency kit with food and water for up to 72 hours -- radios that are battery operated, your personal medication. the stuff that you need to survive for 72 hours. we are pulling the full force of the american red cross behind this operation. that means we have thousands of volunteers that are already hitting the east coast. we have two-thirds of our fleet either on the east coast or heading toward the east coast.

these are emergency response vehicles. this will last all long time, so the vehicles will be there to go to the communities, offering food, relief items, a lifting kits and the like. we have thousands of pre- packaged meals on site. we are able to feed of loss 1 million meals a day. part of the reason we can do this is because of the wonderful partnerships we have with other nonprofits and faith-based organizations. people have asked what they could do to help those and not reaching those that are not in the effected area -- my guess is this is going to be a costly operation, so donations are welcome. there are also a number of blood drives that had to be canceled in the areas effected by storms, so we suspect there might be a blood shortage. if you are eligible to donate blood, and you can do so, you

can give a life-saving gift of god. speaking -- blood. speaking of our partnerships, it is my privilege to introduce major hood from the salvation army. >> thank you. i'm actually filling two rolls if -- i represent the salvation army as the chief communications officer, but i am also representing a network of when the fall voluntary organizations that we refer to as national voluntary organizations active in disasters. it is a network of 50 different non-profit organizations, he's extremely gifted with a particular skill, and throughout the year, not just when a disaster are rides, but 365 days out of the year, this group of organizations work on how we can best respond collaborative lead when ever a disaster strikes.

that organization have been mobilized very effectively thus far with this particular hurricane, and some preliminary numbers -- one of the agencies are the southern baptists, and the southern baptist men are known for their ability to cook wonderful meals. already they have 131 kitchens on standby with an average capacity of 130,000 meals on a daily basis. so, there is all kinds of that type of work that will take place -- pre-planned, a highly coordinated, as a support infrastructure for fema as we work together. both the red cross and the salvation army are active members. from the salvation army's standpoint, when we say that we have been actively engaged since irene came on the radar screen. the reason being that we have responsibility for pr, and some of the islands of the caribbean.

i would remind you to look back a few days, as we have been dealing with major issues on the islands of the caribbean, puerto rico, the dominican republic, and we have reports from yesterday 800,000 individuals have no power on those islands. so, feeding, sheltering, and spiritual care is of being implemented on those regions. in the early days of preparation, we put come and teams in florida, north carolina, pennsylvania, all positions in safe ranges so that when we understand where the impact is most going to be, we will be mobilized and quick to respond. we currently have, in north carolina, the capacity of 300,000 -- 300 canteen's that conserve 1500 meals a day, and mobile kitchens that can prepare up to 150,000 meals.

our specialty is mass care, mostly feeding, doing some sheltering. three shelters are operating under our auspices in north carolina, and they tell me breakfast began at the crack of dawn. that kind of work is going on. we are positioning florida assets moving further off the coast, and put a large asset base at a salvation army summer camp to house people in eastern pennsylvania who will be mobilized in whichever direction on the east coast of their most needed as the definition of the storm continues to take shape. we agree, and have continually announced that this is a serious storm. we are putting all of our assets in place. we have approached this from the salvation army," viewpoint as a national disaster, which gives us access from all of the resources from all 50 states,

and we are mobilizing volunteers and those assets in key strategic areas, so that as the storm moves through, we will know precisely where to send those assets to be able to respond. our contribution to this will be mass feeding, some sheltering, long-term case management, and emotional and spiritual care. those of the things we feel we do extremely well, and we're able to function in this partnership with the red cross, fema, and through the group of the 50 organizations. thank you very much. >> will now go to some questions. >> for a mr. craig fugate or secretary to paul o'connell, -- or secretary janet napolitano, to the states have everything they need in preparation or possible response -- things and you are anticipating -- things i do are anticipating? >> we have been in regular touch

with the states. none have reported any unmet needs right now, we are really at the beginning of this storm response. we are basically at the end of the preparation phase, and not get into response and recovery, so we will work with the state's as they do their assessments and see what damage the storm essentially cost in their areas. >> again, the secretary has been in contact with the governors. the president was yesterday. we moved resources to get ready, but until we get the impact, we will not know how bad areas are being hit, and north carolina is being hit now, so we are getting some ideas with large-scale power outages carry as we start getting the impact, that will better -- outages. as we start getting the impact,

will better define what is needed a lot of different organizations have been moving resources and people. just prepared, but not with a fixed site until we get reports of damages from the governors. >> it has been weakened to some degree. do we expected to weaken more, or pick up strength? is there any assessment? >> category one means you are at 79 or 80 miles per hour. as i said earlier, i would not advise people to focus too much on category one, two, or three. if you are in a hurricane, if you are in a hurricane, and is a big deal. we have a huge in advance of associative tropical storm winds extending well over 200 miles beyond the hurricane areas. you have the combination of the hurricane, the expanded wind area. . as crag mentioned, we have some

associated tornadoes. that is kind of the formation of this storm right now. if it changes, or as it changes, the national hurricane center and fema will give current updates. do you want anything? >> i think bill could tell you about the forecast and what it would look like. >> we do not see it strengthened. the proximity to land will take care of most of that. as it crosses the resort areas, the wind is above the ground. not that far above the ground. several floors could be higher, close to the funneling effect you could not predict. the folks in the high-rises will experience a higher wind and the folks down low. -- than the folks down low. >> the storm surge could be up

to 48 feet on long island? is that correct? >> bill, the question was, surged on long island, 4-to-8 feet? >> there are some spots that are more sensitive. that is why we encourage you to look at the offices locally for high details. there is a probability map that hurricane.gov. >> we will go to questions from folks on the phone. please remember to state your name and publication when asking a question. >> we do have a question from pascall fletcher with reuters. >> in relation to the forecast,

just how much of a flooding risk does a storm surge of that forecast magnitude represent for low lying areas of metropolitan new york? >> well, it certainly does pose a risk. that is why the mayor and officials in that area have be back with the low lying areas that are prone to be flooded. a defects transportation at the onset. -- at -- it is effect transportation and the onset. the first thing to go with a surge is transportation. emergency,ave appln responders cannot get to them. that is why we move people out. a lot of people are compacted against the coast these days. >> thank you. >> the next question is from suzanne goldberg with "guardian." >> i was wondering if you could tell us more about the tornado

threats, and how devastating you think those could be, and when geographic areas would be most at risk? >> sure. the tornado threat is common with landfall in hurricanes. the numbers are highly variable. the intensity is usually considerably less than the ones we saw in the spring. we're not looking at the large, super-sell tornadoes. these rain bands have moved out ahead of the center. the wind is still strong in them, and the interaction with the land creates an environment that allows these brief span ups. it is unpredictable, for any specific spot, but in general, we cover with watches as we move off the coast, the area's most at risk for tornado's path >> thank you. -- tornadoes. >> thank you. >> there are no further questions from the phone lines. >> thank you it all. >> thank you all.

[captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute] >> nearly two hundred thousand homes in north carolina are without power right now from hurricane irene. overnight, president obama signed federal emergency declarations for new york, massachusetts, connecticut, new jersey, virginia, and new hampshire, after declaring one in north carolina earlier this week, which allows the states to apply for federal funds to pay for damage to roads, public buildings, water treatment plants, and electrical grids. "the washington post" writes that the head of the federal emergency management agency, craig fugate, who we just heard from, says that roughly $900 million is immediately available in the federal disaster fund. earlier this month, he talked of

how the agency handles disasters. -- about how the agency handles disasters. >> we are privileged to have with us today administrator craig fugate, who heads the fema organization. his held this position since may, 2009. he brought a wealth of relative experience, having served eight years as director of the florida division of emergency management, and i observed that during his tenure, it was the first state-wide emergency management program in the nation to receive full accreditation from the emergency management program. so, kudos to the administrator, but i would say that he also brings the votes on the ground experience, because he began his

career, actually, as a volunteer firefighter, and served also as an emergency paramedics, and finally as a lieutenant in the rescue team. he has served in a wealth of relative positions, and brings a great deal of experience. i think you'll find him quite interesting. [applause] >> good afternoon. i have three microphones on it, so i will try to cover all of that. i was asked to talk about a whole community. what do they mean by whole community? what does it mean? what they doing differently? it is not really mysterious. actually, i think what happened was my staff got tired of using my talking points, so they

started calling it a whole community foreshortened. i refer to it as emergency management. it essentially based upon two things. one is one response to disasters, where we serving? who is the team? there are a couple of observations that i started making as i was looking at my job in florida, particularly in the aftermath of hurricane andrew. i was not with the state. i was with the county at the time, but i came to the state in 1997. just like now with fema, i am always live in the aftermath of katrina because it is always you handled a few tornadoes for us, as well as support in response to international disasters, but you still have not done a katrina, so we're not sure you guys have fixed anything. that was my situation when i got to florida in 1997. we lived under the shadow of

hurricane andrew, and the shuttle was to halt -- how to improve that india was challenges, particularly when you have a state that is prone to hurricanes. when the things we thought we learned after hurricane andrew is there were unofficial reports -- when somebody can tell you in the first 15 minutes after something big has happened that it seems a we dodged a bullet, ron. i have heard this twice. i heard we dodged a bullet in hurricane andrew. the reason they thought they dodged a bullet was because they were not getting any 911 calls. there were getting the usual powers outcome of trees down, but from about 122nd street south, there were no calls coming in, so the assumption was in the absence of calls for help, it is not that bad. instead, the reason you're not getting calls was because just

about everything had been erased. we heard that in hurricane katrina. remember the initial report was that it looks like we dodged a bullet, and that is because the water has not reached your ankles yet. we thought we learned in hurricane andrew that the key to learning how ben something is is to do a quick assessment, so we came up with a rapid impact assessment team. when we were going to do is get subject matter experts that could go in, and do it quick snapshot of how communities have been impacted. we were going to get experts from utilities, health, - transportation, and will want to put them in helicopters, fly them over the areas. they're going to meet with counterparts, write the stuff up, and send back to the states. the only thing that i ever found was rapid about this was the amount of time that it took us

to say we were going to do it, because from that point forward, it lost all essence of been rapid. it seems had grown because everybody wanted to have somebody on the scene. you had about eight experts, but you have to get somewhere. by the time they land, and linked up with people better busy dealing with the disaster, and ask them about the system, it was about 72 hours. the problem was that in about 72 hours, you are now trying to make decisions about when he will send. that builds in another 24-48 hours. we are getting their at about the same time frame we got there in hurricane andrew in the first place, about five days to late. i said maybe if we make the team smaller, may be focusing on a much quicker response -- what was interesting was that i kept finding ourselves, no matter what we did, we were getting things on the ground effective,

no earlier than about 72 hours from the time an event happened. this was with a hurricane you could see a common -- see coming. it took a 72 hours before we're able to see stabilization. i asked a different question. instead of trying to figure out how bad it is, let's define what the outcome is that we want to change. i started looking at things and disasters a little differently. we often talk about responding, but nobody ever says what are we doing, and how much time will it take to get that done. as i did that, i started dissecting these disasters. i looked at international, a variety of things, earthquake response, and those type of event. i said there is a standard amount of process that we have to get to. first, you have to reestablish communication. most people think that as electronic. i was thinking more

logistically. if you cannot get to the location, you cannot bring anything into change the outcome. he needs to get in there. you would think in most cases, you could drive in, but as we saw in hurricane eisen, when you lose the bridge, you have to be able to get to the area. the other thing i found was safety and security. there is a tendency to wait, or a reluctance to use national guard in law-enforcement until you have a security issue, writing, a sense of lawlessness. i found talking to social scientists that you are doing more good getting people there more quickly by reassuring them they're not by themselves, and showing them people can get in from the outside this is one of the things the major to debt claimed -- presence is a mission. you need to make sure you are safe and secure. i never. a gun in my career of public safety. one-shots' get fired, where they going to do with their not

carrying guns? they stopped. it does not take an actual situation. it just takes the perception that it might be dangerous, and you either shut down almost all of your non-law enforcement disaster. the third thing was search and rescue. the injured do not has timed. a lot of our teams would get their 24 or 48 hours, or 72 hours later. the reality is when you look most earthquakes, and other types of events, of large scale damage, what does a survivor numbers look like after 24 hours, 48 hours, 72 hours. is it a stable population, or is it -- is a decreasing rapidly. for the injured, the sweet spot is the first 24 hours. if you change the outcome for the injured, you will have to get there to intervene. after about 24 hours, you are

dealing with a population that is trapped, where they will make it without you. the ones that you couldn't make a difference for, that decision is done. that is a time factor. he will not get that back. then, getting the supply and commodities in there. that's 72 hours it took us to figure out how bad it was, was- with a time frame needed all of that stuff there. so, it was kind of like i need to do the assessments to see how bad it is to respond. the time it takes to do that could eat up the time to change the outcome. i proposed something that a lot of people thought was radical. let's do away with the assessment. bad it is?now how we will not if i have a major hurricane impacting a major area, why don't i just respond against what the potential impact will be, and adjust downward? well, they say there will be a lot of risk for waste and

everything else. i've never seen a disaster go well when you do not enough stuff there fast enough. if you get there, and overwhelm it, and stabilized, you buy time, and you might not need as much, but you did not order as much stuff. getting to the point of stabilization, to where a community -- i'm not saying it is better, but you stop the loss. that is a key element. that is how we were approaching. in 2004, we have a tropical storm hit before charlie did. it hit august 13. 22 days later, hurricane francis had. a 11 days later, hurricane irene hit. in each one of those situations, we were able to get that response stabilized and free resources to go to the next disaster. if we were using the traditional model of doing the assessments

and ordering resources, we would have had overlaps where we could not have moved to the emergency phase for the next disaster while we were basically maintaining a steady state to get into recovery. i thought i had figured this out. i am going this is good? we could make this work. then, the next year, you have a series of hurricanes. most people forget that we started out with hurricane dennis. that should have been indicator will going to have an interesting year. it was not -- it was one of the earliest major landfall hurricanes in florida's history, but it was relatively low cost. we thought we had figured this out, and here comes the trend. as much as you read about katrina, what you do not realize is that you basically stopped all of the resources out of the system. at the point where the

hurricane setting off the yucatan peninsula, which then got to a barometric pressure even lower than katrina starts moving toward florida. we are in a situation where the country is focused on the katrina response. we had a lot of resources committed. i am looking at a substantial hurricane coming to florida which did not weaken enough. we go into our response. we have a category two hitting the west coast, exiting to the east coast. you would assume the worst damage would be on the west coast, and the least on the east, but it did not read that book. we had greater impact on our east coast because hurricane wilma took power out to about 16 million people. we responded based upon the potential and tax. we sent supplies, said the

distributions, and got things on the ground within 24 hours. we have distribution all the way into the florida keys. the problem was we did not have all of the distribution hot up in the first 24 hours. again, we had waited more heavily on the west coast than the east coast, which was the greater demand, and we were slammed because of our poor response in not having enough supplies out to everyone in the first 24 hours after the tropical wind had exited the coast. this is where i learned another part. after hurricane andrew, we learned that the volunteers and the organizations have to be part of the team. we cannot run with different organizations doing their response, and we do in ours. we have to work as a team. those were lessons we learned pretty good after andrew, and

we built a good team to do that. where we have not built a team was with the private sector. based on previous history, particularly early 2004, the presumption was if the power was out, retail was down. this is what i found to be the trap. we were being government- centric, looking at a problem as how the government would solve it. we had been responding to these hurricanes that have been bad enough that a government- centered approach was getting the job done, but when hurricane wilma hits, it is a much bigger area. we park art as much product in three weeks as we did 3 -- we put out as much product in three weeks as we did in the three hurricanes in 2004.

as we were setting up and putting out distribution, again with the assumption the private sector is not up and running, we started getting reports that did not jibe with that. they started saying there are stores open. they had generators. when did they start do in bed? they did it about -- when did they start doing that? they started doing it about halfway through the 2004 season. from miami, to come beach county, we started calling big box stores, where we new power was out, and only five were not open. governor bush, who i was working for at the time, he likes to remind me of this because he was out meeting with constituents who were complaining about the long lines that we have located in areas

that were central to the communities we were serving was good road access, and networks, and had good parking. we were in the parking lot handing out free food and allies. -- and ice. they were eating fast food and they had just bought groceries in the park -- groceries. this threw me for a loop. up until this point, we had been so focused on what government was going to do, the assumption with disasters was that government was going u.s. to do everything, take care of everybody -- government was going to have to do everything, and take care of everybody. most of the goods and services is done by the private sector, not government before the

hurricane, so why do we assume we can deal with that one minute after? our first question, and you may have heard this a circus -- katrina, why don't we contract with those that know how to deal with this? it turned out that for a small fee, that was more and then my annual budget, to have that much slack and capacity, they would be interested, but they operate in a system that does not have a lot of slack or the capacity to absorb demand beyond what they're doing for their own stores, and i-we're going to invest in that, they could move some stuff in small disasters, but they could not do the things we were doing. i said i was asking the wrong question. what can i do to get you open?

it dawned on me. i am competing with the private sector at something they have perfected. then, i am trying to come in after disasters, set up, and operate in that environment, and actually compete with them. maybe i need to change the question, and stop the competition to what can i do to get you open, and where are you not going to be open? first, you look at what their footprint is like. they are actually in the same places that most local governments say are the point of distribution. where you look -- when you get where they're not bad, you look at inner-city is, and areas that did not have big box stores. if you worked as a team, those places are where we would have set -- sent supplies to.

they do not have walmart, home depot. we stepped back and said perhaps this is all model we need to look at. how we work as a partner. you hear the public/private partnership. i want to be so operational that i know where your stores are, and their status, where i am distributing supplies. i want to know where stores are shutting down, no so i can do my distribution -- so i can do my distribution. when i came to fema, i brought that philosophy, bringing in the retail sector. if you are in government, there are 1000 reasons why people say you cannot do something, and i

am sure fleet agreement of that. we were to bring your -- cheerfully ignorant of that. we bring in folks that actually have a position dedicated to the scene the -- to the famous center on a regular basis -- fema center on a regular basis. looking at the private sector, not competing with them, but asking them how to get them open, and with fema i do not have the support -- as local officials, if i can work issues back to the state, opening up lines of communication and getting things done. my team started getting that it was not going to be government- centric. we would embrace the volunteer organizations. the fourth piece had started out that we tend to call them

victims, and i kept talking to social scientists and here is the problem. in helping people deal with trauma, you have to empower them and give them control. loss of control, the ability to make decisions, oftentimes makes the recovery more difficult. they said sometimes words do have power. so, i had adopted in florida the term "survivor" not "dictum." one of the things i realized when we were doing catastrophic planning in florida, and i like to use historical events because a lot of people will say you are becoming a novelist. i like to take historical events, and say what it said happened today? we took the great miami hurricane of 1926, and we overlaid debt, and say what does this look like? some -- overlaid that, and said what does this look like?

we looked at the numbers, and said this is about a $120 billion hurricane, or $150 billion hurricane. the population impact is up to 8 million people. housing losses are almost five times what hurricane andrew took out, much bigger than katrina in terms of total impact and dollars. we were doing our catastrophic planning, looking at the government resources of the way up to the department of defense, and even the private sector. we were running it against these timon's of getting the area stabilized in the first 72 --

time lines of getting these areas stabilized in the first 72 hours, and the answer was it cannot be done. you can not redefine success to me what you're capable of doing. -- need to what you are capable of doing. as we are going through this, i said what about the people living there and the answer was they are all victims. i've been to a lot of disasters. this tendency for people to portray that everyone is shellshocked, sitting around, and not doing anything, that does not happen. people start trying to help each other. people will start doing things. there is this bias that we look at the public as a liability. we tend to the public as a liability that will do bad things. i can remember after hurricane andrew there was a concern about people that were starting to cut, small groups setting up community kitchens, and the big

fear was they were not licensed. [laughter] >> the fear was you would get food-borne illness, outbreaks. i have read the mortality reports, and i did not see anyone that died of food poisoning. i understand we are concerned about sanitation, and those kind of breaks, which could be devastating, but what did not make more sense to give them some quick instructions about sanitation as opposed to saying to not do this? i figure if it is not that bad, and to you have the luxury of telling the public to stay on the sidelines and not help? there is a real challenge. the first thing that came up was the liability. the other issue was there are not trained. we have developed this idea that we will all be credentialed, and everyone will

have chips on them they could waive and everyone knows who you are. again, if that is true, i'm still waiting for that to get sold to somebody. the reality is every disaster is come-as-you-are. if it is really bad, you do not tip the luxury of choosing what to use -- you will not get the luxury of choosing what to use. we do not really say this, but we tend to take a parental approach to the public. if we tend to sink that we will have to tell them what to do, what -- we tend to think we will have to tell them what to do, and make decisions for them, and get in see that anything this suggests the public will take matters in their own hands. we have to get past that.

most recently, these tornadoes, as much as we give credit to the first responder communities, who was due in the first rescues? the neighbors crawling out of the debris, going over to the next rubble pile, searching for their neighbors. that happens time and time again. it is not a unique thing. it is pretty much what people do. i thought maybe we should change messaging from being prepared, to add one little thing, once you and your family are safe, check on your neighbor. during the heat waves, we, again, you saw this message going out from red cross and other officials -- check on your neighbors. you might say a life. if you go back three or four years ago, you might not see or hear that, but we are starting to see more and more recognizing that we have to engage the public. my evolution has gone full circle from government-centric,

having to do everything, to recognizing that is a finite capability. volunteers, those that organized and trained, those that emerged, you have to be able to bring them in. the private sector, in particular. that is an evolving process because you start getting into different sectors. if you are the subject matter experts on this, and it's always funny because we regulate a lot of folks. they will talk to us. how do we go through and really look at getting critical lifeline, services, delivery, online, that are essentially non-governmental, up and running, and do that in no way

that speeds the recovery process? the private sector is starting to realize something else. they cannot plan autonomously from government. they are starting to realize that no matter how good business continuity plans are, if the community's plan fails, they might not be successful either. is your community going to be able to deal with housing and schools open, a basic public services up and running? if they fail, i do not know if your plan will cover that. how many will keep employees in schools -- it schools will not open for months. if i have marketable skills, and i going to stay here that long? what if there is law enforcement not rock -- up and running? this is an evolution that we have gone through to get what

we call the whole community. we are not saying government is telling you the government is saying you are on your own. you just need to move away from a government-hundred approach and realize there are other solutions out there, particularly when they're doing it every day in the community. they oftentimes know as little about us. this has been part of our efforts to bring them together. on the flip side, which goes back to being prepared, this is where we need to get feedback because we saw on parental -- we sound parental. the reason we are telling it to be prepared is because we are all on our own, it is all smoke and mirrors. well, that would be the senate's approach. -- cynic's approach. let me be more pragmatic.

if everyone in this room who lives in the d.c. area -- have something happens here, and it is powerful, and it's the area, and power is not out, and you lose everything in your refrigerator, and you did not have water pressure, and we start setting up supplies in commodities, have you ever ask yourself -- ask yourself we were competing with when you go get them? this is what i focus on there is a shared responsibility. it is not above being on your own. everybody needs to understand you prepared to the best of your abilities because when you do not, those that should and head of the financial means and resources, when we show up to get our supplies, who do we cut in line in front of? those are most vulnerable have the least amount of resources and aren't the greatest risk.

for all of the people of this is -- are at the greatest risk. for a lot of people, they're not comfortable hearing this because they pay their taxes, why cannot -- way -- why do they not get their supplies? part of this is trying to get everyone to understand that in a disaster the more we have individually prepared ourselves and families, the less resources we have to ship in, and we can get essential services up and start moving back toward recovery. when we talk about prepared this, too often it sounds like this -- he need to have a plan, your supplies for 72 hours, and thank you, you're done. it never tells people why that is so critical. why there will be members of the committee that will not have the resources or ability to get ready, that we do bring supplies and should that have to

compete with the rest of us. the faster the response in almost any crisis is a neighbor helping neighbor. we have gone away from that. with talk about what government is going to do, but part of this is being honest with people. the fastest response was not the fire department. it was neighbors helping neighbors. within 24 hours they got the primary areas done, but still fun people several days later. the bulk of the rescues were done in the first 24 hours, but the credit goes to neighbors helping neighbors, people literally applying skills sets that they have. so, that is that. one last piece. in our planning, we have overly-identified what we were going to do based upon planning

for what i call eight generic population. now, if we were doing a good job for that generic population, why is it every time we have a big disaster we identify a group that was march allies, we did not meet their needs, and we read and an ax? in my time frame, we have written an annex for the elderly, people with disabilities, people that have pets, and were about to for people that have children. [laughter] >> i started asking myself how much of the population is that? you are up to half of the population has pets, up 2 1/4 have children at home, depending on your community. it was like, with a minute,

wait a minute, we are planning for easy, and the people that should have been prepared and not need everything we are bringing. it really hit me. mark shriver on the commission of children and disasters said we have to address children's issues, we have to write an amex because you're not getting these needs met. innocent children should not have to suffer these indignities. i looked dead marks, and i said that sounds like our typical response -- abs mark, and i said that some of our typical response. i said what did not make sense to make the people who need the most out of the core of our plan? you're i'm not sure going to have the focus on children.

children are not small adults. their needs and dietary issues are different. if we put them in and an ax, everybody will think it is done, and trust me, it will not be part of the court process. it will be an afterthought you have to think about. i gave him the example. here is the problem -- if i get a request for meals for 1 million people, what will i shipped them? i am going to ship them 1 million meals, or if i'm really desperate, mre's. as a grandfather, my two-year- old can not knock through an mre. i will do what is easy.

i will be source the stuff that we have always done, shelf- stable meals, ready-to-eat. we do not put the formula in there. we do not have infant formula. if i write and an axe, is that going to fix it? we have to change the culture. if we are feeding the general population, you have to go from the consent of the way through the insurer. what goes in and comes out, you need adult models reach in the bottles and disposable -- bottles and disposable items. theyu're shopping people, might show up in a wheelchair, right? our solution was to have a special needs shelter, but they

could not go to a general population shelter because they were special. the disability community said we do not like the term special needs, and the americans with disabilities act frowns upon what you are doing. i said why can we just not be part of the community and the integrated in and you look at our functional needs. this, for emergency managers is tough. we were basically writing for people metro forehead access to mass transit, high school or better education, english as a primary language, financial resources, have insurance -- not exactly the most vulnerable

folks in the room, but that is who we were planning for. then we put everyone that was too hard to do in an annex. we'll take our planning guide and said that approach fails every time. we will start planning for the communities that we live in, not those that fit our plan. we know we are going to have to address these issues and their response, so let's address them in our prepared this, our exercises, how we train, how we staff and equipped. if we maintained infant baby supplies, we are going to look at instead of just special needs shelters, we have functional access shelters because people are not -- so people are not turned away. we are looking at how to

incorporate all of these issues in the planning phase, and bring the folks together that day-to-day work with these various communities as a part of our team. i've got and pushed back that says this is too hard to do, it is on funded, and not realistic to expect. how many people really heard of joplin before the tornado hit it. i went there pretty quick. i got there the night after it hit. i am there my second day, i get to the red cross shelter, there was no special needs shelter. there was a red cross shelter. people were there on oxygen, wheelchair's, medical attention was being given, and they were not turned away. nurses provided counseling and screening. they had infants and children

with supplies that were being. for by -- cared for. you have the wireless companies who figured out not only did they need to set up more cell sights. one of the local casinos went to their chargers and donated them. when people showed up with their pets, they were not turned away. how did this happen? they took of the challenges that people said to hard to do, and is said to does this every day? we're going to meet, and we're going to plan if we ever have to open up a shelter how to work as a team and bring the

resources together. a couple of weeks after a couple of weeks after that meeting, they got to practice incurred when people tell me -- practice at it. when people tell me it is too hard to do, i say they did it. the tornado gave barely any warning, took out and destroyed one of the major medical facilities for the region, and yet in spite of all of that, they operated a shelter that was a textbook of how we plan for the communities that we live in, not what is easy to make them fit our plans. so, fema, we are trying to embrace the whole of community, try to build speed in our response, tried to before- leaning and thinking. i tell my guys when something big happens, go big, go fast, the smart about it. by the time you know, you lose the ability to change the outcome.

people say it is wasteful, you will spend this money, and i say trust me, if you did not plan, do not respond the way and get behind, he will be far more costly. we did not do this on every possessor. when we have come -- disaster. we are going to change the outcome, but we are not unwind to do with just as the law. we have to bring the full seem to the table. that as a thumbnail of whole of community. people say this is all brand new, but i should this is pretty much emergency management. this is forcing ourselves to recognize emergency management is not just what government does. it is how do you bring in the whole team because the real goal here is we lose fewer lives, we get to the injured quickly, we stabilize, recover, rebuild, and restore communities in a rapid manner.

that all tends to be set in the first couple of days of response. failure there can prolong, protect, and increase suffering, loss of life, total cost to the committee and the taxpayer. our goal is to speed up the response, but not limited to what government can do, but how we will build a team. look at things like the tsunami in japan, and those things could happen here. events of that scale are definitely in the realm of possibility, not hypothetical. we have had historical events that say not only have they happen, but are going to happen again. so, with that, that is whole of community, and my thoughts. question? [applause] [captions copyright national cable satellite corp. 2011] [captioning performed by

national captioning institute] >> sir? >> can i ask how you would use the mass media as and enabling, and supporting function, instead of having them in the react mode? i have read books where the media would come into cmo or emergency management and learn what it really took to -- fino or emergency management and learn what it really took. >> if you try to call what the media to be part of your mouthpiece, they will rebel and you will never get there. if you look to what the media has -- their primary responsibility is to report the good, bad and the ugly. the other part is they can be a great communicator to provide information about what to do. what you have to understand is there is a balance there.

you need to educate and provide that information ahead of time. you build relationships. you make yourself available. you understand the media's role. tomorrow, i will be doing a check with the weather channel about hurricane preparedness. we will do a live chat thing, and i will be tight in my answers. you have to build on the front end. you have to understand that if you try to call what the media so that they are part of the team, they say wait, we need to maintain separation and independence because we will report the good, in your bed. -- and your bad. u.s. law understand what their job is, but they can also educate -- you have to understand what their job is, but they can also educate the viewer.

the provide for mess that are useful. this is classic. how many people see they do the press conference a 5:00 p.m.? for the television guy, it's like "you are killing me." can we move it earlier? can we both did during our show instead of deleted when we are not in show? that this stuff that a lot of times seven people dead and go to the media, and say what works for -- savy people get and go to the media and say what works for you? my trying to make information user-friendly. the more user-friendly i was, the greater likelihood the use this information and get it out. there is a new peace to this.

if the public are survivors, and we have to look them as part of the team, maybe they are not a liability, they are a resource. this is something everybody is dipping into, but the best information i have gotten a lot of recent disasters has either come from weather channel folks are other folks on the ground, or from the public itself. i ran a 911 center. do you know how many bad calls you got? there are many times i went to an unknown illness where guns were drawn. you have to build relationships set of time. you also have to remember that if they even think you are trying to control them, or show them the good news, you will lose whatever relationship you have, and if it is bad news, you might as well get it out there because they will find out

anyway. sir? >> what kind of relationship does fema have with foreign governments, particularly with recent incidents in japan, to ensure that lessons learned from there are applied to our country and a similar scenario? >> we have a lot. i just signed mou's as a part of our bilateral agreements with australia. we have had staff go there in the aftermath of debt. -- of that. the other part is not everything that happens might be applicable to us, so we go through the process of what happened, how did you deal with it, what applies to us? what was interesting about the earthquake, tsunami, and and the nuclear power plant, which was most of our attention in the united states, because --

which was kind of tragic, was looking at this from the standpoint of are we planning for things this bad? we did not know the tsunami what happened, obviously, but if you look at the numbers of what we need to be planning against, the tsunami in japan actually sits underneath where our realistic thresholds are. in some cases, we find a star delegating some of the things we have been talking about because a lot of -- start invalidating some of the things it we have been talking about because a lot of people say we will never have anything that big. we look at the lessons learned, and we also validate. one of the interesting things from our conversations with australia and new zealand, australia has a similar programs to the u.s. in that their territories and local

governments and provincial governments actually have more authority, like a state does. we found ourselves, one we're talking to australia's about big floods, that many of the similar issues of -- talking to australia about big floods, then many of the similar issues are things that we face. it is something we do invest time in. again, sometimes it is validating. sometimes it is not relevant. sometimes there are nuggets of stuff that we go this is something we will have to prepare for. >> he mentioned the role of the state national guard. what key areas the think the death -- the department of defense could support index >> ruble-status commanders. this is probably one of the breakthroughs. congress passed a law that

formed the council of governors, which appointed 10 governors, have republican, have democrat, to look at ongoing issues of the national guard, with a particular focus on one of the challenges we have always said. when we brought in forces into a state, having to have cooled command structures, and all of -- dual command structures, this had been troublesome because many have served overseas and had been titled 10 commanders. when it came back states said, they're told you can not be in a legal chain of command. we introduced a concept of gould-status command that has moved through the process of allowing governors to innominate -- to nominate

officers to bedual certified to both the man stayed active duty -- to both come and state active duty. this is been a significant breakthrough. it is part 1 of part two. that is being able to bring in title 10 forces into a state and integrate them in gives us unity of effort, and the other pieces something that we still face as a nation. i am sure most of you know this. we cannot reach out and touch our reserve forces in a disaster without a presidential mobilization, which has a time commitment, and basically takes away from being able to do any other duty for the timeframe of that activation, yet many of our combat support forces could be faster and more responsive if we had congress giving the

authority to provide that presidential call-up could be less than a call up under the current reserve act. right now, secretary janet napolitano can be reserved call-ups of the coast guard, but the secretary of defense does not. the next big goal for the department of defense, and this will require congressional action, is to provide for the ability to bring up reserves for short-term durations in support of disaster response. that will be one of the key issues of bringing the rest of the team on board. although there are out there, they're difficult to bring in to respond to the situation we face. longer-term, we have been looking and a tendency for us to over-think problems. we were talking to folks about search and rescue.

when we look at earthquakes, the tendency is we have the specialized teams that are really designed for the collapsed, complex structures, but if we have relaxed structures, a lot of suburbia will be impacted. we need for small compliers. the tendency we get into is we try to tell you what to do, instead of telling you what is the outcome, what do you think would work? we came in and said we want engineering units. they would be perfect to do search and rescue. we actually came back with our urban search and rescue guys, and they said that is not what you need. you get to go house-by-house and do a quick search. he did not need those engineers. -- you do not need those engineers. it was like do not tell me how to solve the problem, tell me

what the problem is, and let me apply a solution. for katrina, we wrote so many mission assignments. instead of trying to tell you how to do it, we told you what is the outcome, and give greater flexibility to meeting those needs. with the department of defense, it is always just as you are, you do not always available when the next disaster strikes, so the ability to not be so focused on a particular type of unit gives greater flexibility, and also writing mission statements and assignments that are broad in scope and give commanders more flexibility in applying the tools they have. these are some of the things we are working on, but the biggest thing is speeding up the process. mission assignments, and getting a pass, and getting people in, and deployed, it still takes us a long time.

i was really pleased we were working on that with one of the joint chiefs. he shares my passion. there is a lot of process that we need to speed up to get things going faster because if we're going to change outcomes in 72 hours, we need to speed that process up. part of that is making mission assignments more flexible, and more based upon outcomes. >> my question is about the whole of community concept. can you speak to the future of the private sector prepared this program, and how it integrates into your vision? >> dhs , or the private sector in general? >> both, if you want. >> i am finding that if i really want to get the private sector engaged, i have to do something differently and talk about return on investment.

i am taking a little bit different tack. if people are focused in on credentials and excess, and that is great, but what i'm really finding it is if you want to get to the heart of businesses, it is all about finding a bottom line. unless they are in non-profit, what is the return on investment? if they cannot answer the question, did not do some stuff come off as for good will, but it will not be a sustained investment. i am pushing for this -- a lot of companies would be better off scrapping contingency plans, and just have enough insurance to pay off everything, making a profit, and) -- and close. if the community is not ready, they're better off not reopening. i'm trying to get across that their interest is as great. when i started this, most everyone i ran into where business continuity managers focused on data and financials. we now see titles more and more

called emergency managers. i think the prudential peace to all of that was an early attempt. -- credential piece to all of that was an early attempt. it is worse than church and state. it is a separation. we are finding it is useful to share data across open data systems to give them visibility and what we are doing, and what they're doing. we're pretty close for several major retailers will give us live data feeds, where we can map and see store status in real time in a disaster. so, there are some good starts there, but we're going way test bed to look at how we work, respond, and support each other in a situation where you are not going have clear lines of knowing who is government and was the private sector.

>> there are a lot of us in this room that are involved in the study of homeland security or federal emergency management. what are those areas which we can focus on, whether it be as think tanks or in academia that would help you do your job better? >> i think we could see a much emphasis on the hazards and less on the societal impacts and the sociology of how people deal with things. in my profession there are a lot of people -- the hard science, the engineering, the forecasting, the meteorology -- if this is one the things i have often questioned. we have spent more money coming up with a perfect forecast, but we never change a -- asked the outcome if we will change the outcome and are we using the right methods? we issue a warning. people still die, what happened?

this is a big question with joplin and the southeast tornado. we often time spend so much time on the science, we forget about the people, and this is for me the societal aspects of how populations react. how do you change behavior? there are two successful campaigns. when i was growing up, not wearing your seat belt and smoking were the norms. if you or your seat belt or did not smoke you were an outsider. today, it is the other way around. when we talk about preparedness, most people come if they have a flashlight and very basic steps, it is about as good as it gets pretty you are and how liar if she really got ready. how the change that? you start diluting yourself.

in both situations there were punitive impact, bad things happened and have consequences. since the disasters are such a low-frequency event, fortunately, there is a hole in that. what i think we need it is more scientists, social scientists, and more research which is not high-science, and most of the think it is not that relevant, but with the signs we're trying to work in, we end up talking at them, and they do not hear us. we do things, and except certain things to happen, and we cannot figure out why he. i think it is because we do not look at markets and research's -- research involving social science. we do not understand the

demographics of the community. that is why it is easy for us to plan for a community and forget we do not live in pakistan government structures. people do not live in a city, they live in a neighborhood. people did not identify with government structures, yet everything we do is based on government response try to overlay that. to me, that is a big area that 10 cents to get the funding, it is not glamorous, but that is if where you're going to change outcomes, or have the ability to provide information that will get people to behave differently. if we do not, it does not matter how good the forecast as. it to the people that could change the outcome did not, we do not know why. it is because we do not get it.

>> i got the hook. [laughter] [applause] >> actually, kind as giving you a graceful way out because these people would keep you here for another hour, easily. so, i wanted to live. at that was terrific. it is clear you are a national asset, and we are delighted to have you inside the beltway, although you might not be delighted by that. >> cheese and wine. >> i thought that in 1995. [laughter] >> we are honored to have you talked to us today. it was a wonderful presentation. you bring a wonderful wealth of experience and talent. >> thank you.

thank you, everybody. [applause] >> sunday, the congressional

black caucus chairman on the black caucus's view of the u.s. job situation and its effect on african americans. also, a look at federal spending. that is on sunday at 10:00 a.m. eastern here on c-span. >> obscure people with little known stories. american university professor reveals who they work as well as many other black men and women who left their imprint forever on the white house. >> i began to discover a fascinating individuals whose mark on presidencies and mark on the white house were virtually unknown except for a few scattered stories here and there and everyone kind of knew it george washington and thomas jefferson had slaves, but most people probably did not know eight of the first 10 presidents had slaves.

>> sunday night on c-span. >♪

>> now, remarks from representative benjamin tucker on how reduced recidivism bank later, remarks from actor martin sheen on the incarceration of drug offenders. this is part of a subcommittee on drugs and veterans. is about an hour and 45 minutes. [gavel bangs] >> of the hearing will come to order. this morning's hearing will consider a growing component of our criminal justice system. there are over 2500 drug courts in our country. many jurisdictions including my home state of rhode island are developing co better are developingurts.

today's hearing will closely examine the role they can play of cost effective solutions for protecting public safety and reducing recidivism. a drug court is a specially defined calendar that addresses the case of non-violent drug offenders. the require participants to commit to intensive substance abuse programs generally for a year or more. they hold participants accountable through frequent appearances and regular drug testing. individuals going through them are rewarded for doing well but sanctioned if they do not satisfy obligations. they work in my home state of rhode island. i worked to establish our state's first drug court. we now have 10. they take many forms, but a consistent element is the close cooperation with many players in the criminal justice system including judges, prosecutors, law enforcement, attorneys,

correction officers, and the community at large, including mentors, treatment organizations, and counseling services. this is bipartisan and reaches as far as capitol hill. i was pleased to join with senator cochran this morning and representative berkeley at an event in the warmer outside whether to de. drug courts have been in operation in the united states for over 20 years pending veteran courts are a more recent phenomenon. like drug courts cannot veteran treatment courts are specially supervised courts that provide direct services to a particular set of offenders. many veterans who have sacrificed so much for our country return from combat suffering from post-traumatic stress disorder that can adversely affect their behavior. they work to identify and

address the underlying causes of this behavior by referring them to treatment programs or other alternatives that can keep them out of jail while protecting public safety. these records and team up with the va health system and support organizations to assist them in resuming successful roles in our community. there are now at least 50 an operation in our country. last month, i had the pleasure and privilege of welcoming attorney general eric colder and the assistant attorney general to rhode island for a roundtable discussion focused on the pilot programs serving veterans in our state. i came away with that discussion deeply impressed by the thoughtful planning and community participation that has gone into that project. i am glad that we will be welcoming a judge from the district court in rhode island that is leading a pilot program

and will tell the senate about the important work in this area. as my colleagues know, the budget constraints facing us demand that we marshal the resources that we devote as effectively as possible. today's hearing will allow congress to consider the role of these courts in smart and cost effective solutions. i think the witnesses for joining us today and then look forward to working with the senators on both sides of the aisle as we continue to support these solutions to protect our communities. i am not i am not delighted to welcome the junior member from minnesota to make a few opening remarks and to join the hearing. >> thank you for calling this important hearing. you are right. i am not a member of this subcommittee. but in the judiciary committee, every member of the committee is

invited to attend each subcommittee hearing. i wanted to be here because this is the effectiveness of drug courts, and the veteran courts is a great new development. i am a strong supporter of these problem-solving courts. i think we should be doing everything we can to promote these programs which are extremely fiscally responsible. as we have the debate over our budget, it is important we understand how cost-effective these courts are. i want to take a moment to recognize judge rancourt, who is not testifying in this hearing, but who is attending. he is from minnesota. i just learned he is the incoming chairman of the board

of directors of the national association of a drug court professionals. i want to congratulate the judge. i am pleased you are here joining us for today's hearing. in 2007, minnesota adopted statewide drug court standards, with the goal of enhancing public safety, insuring practice and accountability and reducing costs to society. i'm pleased to say the adult treatment courts, juvenile courts, the w why courts, and our first veterans court are all doing exactly that -- helping to prevent future crime, giving participants into treatment they need, and saving money. saving money in the long run. judge john callahan, who presides over the hampton county

drug court, submitted a statement i would like to submit for the record, with your approval. he writes that participants in his court are subject to intensive probation, breath, and urine testing and counseling. they are also required to appear in his court every other week to update him on their progress. judge hallahan quotes a letter he received from the parents of a graduate in his drug court, who wrote, "thanks to you and the hennepin county court system, we have our daughter back, and she is conquering her addiction to alcohol and drugs. she has attended every court session and sees what happens if you screw up. without a program like yours, a lot of young adults would not get a second chance, and wood waste a lot of time in jail. i think this statement perfectly

sums up how effective drug courts can be. i look forward to hearing more from our witnesses about how we can continue to improve and expand the success of these great programs. thank you again, mr. chairman. >> you are welcome, senator franken. i am delighted to welcome senator khol. the will introduce benjamin tucker, deputy director of the office of national drug control policy, overseeing the high- intensity drug trafficking areas, drug-free communities, and national youth anti-drug media campaign programs. he has previously served in numerous positions, including as deputy director of operations at the u.s. department of justice community oriented police. he received his kpfa from the

college of criminal justice and from foreman it -- fordham university. please proceed. your entire statement, which if read will be made a part of the record -- thank you very much. members of the subcommittee, thank you for this opportunity. as the director of fort state, local, and tribal affairs, it is my job to work closely with the state, local, and tribal communities to developing policy and programs. i understand how important it is to identify and support alternatives to incarceration, having walked the beat as a new york city police officer and worked in criminal justice for the past 35 years. we cannot arrest our way out of

the nation's drug problems. the obama administration recognizes that addiction is a disease. prevention, treatment, recovery, and law-enforcement are all essential of a comprehensive strategy to reduce drug use. just last week, the administration released its 2011 national drug control strategy. it articulates a balanced approach to drug control while addressing issues of concern to specific populations confronting unique challenges related to substance abuse issues, including service members, veterans, military families, college students, women and children, and those involved in criminal justice. i am here today to discuss one of the administration's fundamental policy objections -- stopping the revolving door of arrest, incarceration, and so on through alternatives to incarceration.

according to a 2007 report reflecting on the success of drug courts, we know that of the state prisoners who were dependent or abusing drugs, 53% had at least three prior sentences. these numbers have gone unchanged since 1997. drug courts have existed for more than 20 years, and their effectiveness in reducing recidivism is well documented. with over 2500 drug courts in operation today, approximately 120,000 americans annually receive the help they need to break the cycle of addiction and crime. the movement continues to grow. they help prevent future criminal activity while reducing the burden and cost of repeatedly processing drug offenders through national courts, jails, and prisons.

they received intensive treatment and other services for a minimum of one year. the are subject to random drug testing with sanctions and incentives to encourage compliance. most important, participants gain the tools to rebuild their lives and re-enter society as productive citizens. drug courts relied upon the daily communication and cooperation of judges, treatment providers, and other social service providers threat to community. this promotes the overarching goal of improving public health and public safety. in a recent department of justice study, participants reported a 25% less criminal activity and 16% fewer arrests than comparable offenders not enrolled in drug courts. in times of serious budget cuts, it offers state and local governments a cost-effective

approach when developed and operated within longstanding proven standards. the success has led to the development of other specialty courts, like a veteran courts, family treatment courts, and tribal wellness courts. veteran courts are a priority for this administration. as americans, we must keep in mind the duty we owe to military veterans. the challenges they face when returning home, particularly psychological health problems, often go untreated. sadly, these challenges can lead to criminal and other destructive behaviors. according to a recent justice department survey of prison inmates, an estimated 60% of the veterans were struggling with a substance used disorder, while 25% reported being under the influence of drugs at the time of their offense. there are over 75 operations of

veteran treatment courts nationwide. they are showing promise in promoting sobriety, recovery, instability for our veterans. a veteran treatment courts combined rigorous treatment and personal accountability with the goal of breaking the cycle of drug use and criminal behavior. in addition to traditional partners, they incorporate federal and state veterans services. in doing so, the connect veterans court participants to the treatment and support systems they need, such as medical benefits, home loans, and other services to help facilitate their reentry to the community. in conclusion, i acknowledge and commend our judges, law enforcement officers, treatment providers, and others. we're helping them break the cycle of drug use and crime to become productive members of society. thank you for allowing me to

testify here today. i look forward to working with you and this committee to address these challenging and important issues. i am happy to answer any questions you may have. >> let me welcome senator blumenthal. everybody is very busy. a sign of people being here is a sign of a key interest. let me ask you about the federal interest in drug courts. in a letter panel, will hear from a witness who says the federal government should not manage with this. -- should not bother with this, and it should be left to the states to manage drug courts without support from the federal government. you've been involved in this for a long time. make the case for a federal goal and supporting drug courts

around the country. >> in terms of my experience, as you indicated, i have been involved in this work for a long time. in any number of programs that have been successful, such as drug court programs over the last 20 years, it seems that very often the beginnings of those programs, the testings and demonstration projects that give rise to these programs -- that are funded in some cases by private dollars, but often to the interest of the federal government in providing seed money for these programs, so they can get traction. that is what has happened with drug courts. while drug courts are primarily funded through state and local resources, it is definitely in the best interest of the federal government to continue to support funding for technical assistance and operational support, so our drug courts can continue to thrive.

based on what we know about the success of drug courts, we have the opportunity to change the paradigm. continuing to arrest offenders who have drug problems is not one to be cost-effective. the notion that we can divert these folks and get them out of the system, focus on public health, and improve public safety at the same time as we say funding -- every dollar spent on drug courts, we yield $2 in savings for the criminal justice system. it makes sense financially. it makes sense in terms of the comments made earlier about the fact that we have the opportunity to give people their lives back. for all those reasons, the federal investment to grow in model we know has merit is the way to go.

>> let me add that in addition to your testimony, there is also a statement coming in from the department of justice, which will be put into the record but was not ready in time for this hearing. the record will remain open for seven days. anybody who would like to submit an additional statement. >> thank you, senator white house, for holding this hearing today. i would like to say a few words about the excellent work wisconsin is doing in this field. wisconsin has been a model for creating and using treatment courts to strike the right balance between holding non- violent offenders accountable for their crime, but also helping them break the cycle in and out of the justice system. these into a broad support back

home from democrats and republicans, law-enforcement and judges, and local communities. they are successful at reducing recidivism while saving state and local governments thousands of money. one >> wisconsin has also been a leader in creation of treatment courts that focus on drunk drivers. waukesha county focuses on people who have been tending -- convicted of the third dui. council workers work with repeat offenders to stay sober. this is no model for similar courts around the country, -- this model has been -- this has been a model for similar courts

around the country. finally, i am proud of our state of the veterans courts. in 2008, the state public defender office and the department of veterans affairs led an initiative to bring veterans courts to wisconsin. now i have six, and most recently, brown county is establishing a court to serve the green bay area. this ensures veterans are treated for the challenges. they are highly effective that saving taxpayer dollars. state and local officials want to extend programs and get new programs off the ground. in light of severe budget constraints at the federal, state, and local levels, how can we work together to maintain the

courts but we have, and start new ones? -- that we have come and start new ones? >> it is really critical, senator, for the collaboration's that are really the foundation of the drug courts to continue to function and operate. you are correct, in tight budget times, they will test the mettle of our drug court professionals in every respect. i think the advantage, though, is because drug courts and the model bring together law enforcement, social services, veterans administrators, and a number of people -- probations officers -- altogether, to work on these issues, i think having them work together in a way they can focus and keep their own identity in terms of the work they do, but the fact they can come together and collaborate

for the purpose of improving the public safety and the public health by keeping the drug courts vibrant, alive, and focused on keeping people out of the system, as opposed to putting people in our criminal justice process, will be very effective. it will, no question, be challenging. my experience, from law enforcement, when money and dollars get tight, i think people figure out how to come together when they know they have a program and a process that works. they have to struggle to produce results. that is the challenge we face. no question that that exists, and we know that our treatment providers are going to be strained, but nevertheless the need remains, and we need to be focused on how we allow that to

continue. >> mr. tucker, as you know, these are a relatively new effort. what is the ondcp doing more broadly throughout the country? >> as you might be aware, the office of national drug control policy, and the national drug control strategy is focused on drunk driving. so, drunk driving has been recognized as a serious problem across the country. it does fit, neatly, into the connection with driving under the influence. so, we are doing a number of things to move the bar on drunk driving, in terms of educating drivers, working with organizations to get the word

out, to be the bully pulpit, and sort of work with law enforcement agencies, drug enforcement -- recognition agencies, and ensure that we put the resources where they should be, on the roads, and focused on individuals -- identifying individuals who might be driving while under the influence. we are providing resources to improve and better ways to do roadside testing. we are providing resources to educate more police officers, state and local, to be aware of, and be able to identify those who might be driving while under the influence, if not of alcohol, then those under the influence of some other controlled substance. >> thank you, mr. tucker. chairman whitehouse. >> thank you, senator kohl.

senator coons has joined us. the order on our side is senator franken first. you, mr. chairman. i notice that former congressman jim branstad is here. i would like to recognize him, too, for his leadership in parity andlth care today for treatment of addiction. minnesota has actually been the leader in addiction treatment, and we are very proud of that. minnesota, we have seen drug courts do very good things. when you talk to return on -- you talked to return on

investment in your opening statement and in your response to senator kohl, and part of this is recidivism. we have found that in minnesota, participants in drug courts are less than half as likely to be arrested for another crime as offenders who are prosecuted in traditional courts. this, of course, is the equivalent kind of a rest, etc. i want to know if you are seeing now a nationwide -- get trend nationwide in drug courts in terms of recidivism? >> with respect to recidivism, senator, we are seeing them nationwide. in fact, drug courts -- one of the primary things that make them effective is the impact on the participant. his 84% of graduates who and gone through the program remain drug-free after being graduated

after the first year of graduation. with respect to the to a below- year mark, 73% -- two-year mark, 70% have not been arrested or charged with any serious crime. this is true, consistently, with respect see the research and the data that we see. so, that is just another indicator of why this becomes so critical. the notion of not just taking someone who has committed a crime, but keeping them in treatment, in recovery, giving them an opportunity to get the support they need to stay in recovery and be more productive citizens is, you know, what we are after. the data suggests that we are in a position to have, and repeat that success going forward. >> well, let's talk about the

return on investment, and where it comes from. to me, as we are in this budget crisis, and as deficit crisis, and we all recognize that there is one, we have to find ways in which to bring that cost to society and the government. if you are reducing recidivism, you are reducing the number of people in prison, the crime, the cost to society. you are changing lives. people who might be in prison have jobs. they're paying taxes. i want to ask about one other thing, which is families. to me, one of the huge, maybe overlooked, aspects of addiction is the toll on families. we have found satisfying results

from drug courts in minnesota in that more families are staying together, or being reunited. in dakota county, they found children of drug court recipients are placed in foster homes far less often than children of other offenders. so, to me, that is a wonderful result. what impact do you think this has on families, both immediately, and in the long term? >> well, immediately, i can speak at it from personal experience with respect to the role i played when i was a police officer. it is no different today. i spend a lot time going into homes where there was domestic violence, and a variety of other behaviors that was detrimental to the core of the family. one of the things i think the drug courts do and we focus on

to the national drug control strategy is as we treat this as a public health and safety issue is to focus on a new ways to provide the service and treatment that folks need. the challenge of someone who has a drug problem and is an offender to the rest of the family, we know, is significant. i go to a lot o drug court graduation's several months back in charlotte, virginia, and sat next to, coincidentally, the mother of one of the so graduates of that graduation. we struck up a conversation, and she was clearly supportive of her son, enamor about the fact that he was successful in meeting the conditions of being in the drug court, participating, and getting himself on the right track to been claimed to read at the same time, you could see she was -- to being clean.

at the same time, you could see she was apprehensive. you could see she had been through a lot. if you're not attend a graduation, i recommend you do, because you feel hopeful and renewed that the work we do really matters for sure. with respect to the costs, and the state and local level, when we compare traditional case processing in drug courts, we, along with regular courts, we are saving serious amounts of money per individual. for example, some of the research tells us that every drug court for this can't -- for every drug court participant, we have savings somewhere around

$4,400 we are roughly in the area of just over a thousand dollars. but -- over $8,000. the associated of comes -- outcomes in terms of getting them back to work and making them productive really does have some financial benefit overall. >> let me stop you there. we can go onto senator bingaman blumenthal. >> i will say one more thing you talk about the hope that families feel. these are inspiring things. this treatment is not always work. it is not always work. but, i want to say that as we get past this current budget crisis right now, this debt crisis, this budget crisis, and

we move on after that to start addressing our problems, and start addressing long-term debt problems -- this is a bipartisan thing. i wrote a letter to major and we keep funding for this, and i had -- to make sure we keep funding for this, and i had bipartisan support. what is great about this is there really is a return on investment, and it saves money, and also lives. i want to thank everyone that is involved. >> senator blumenthal is recognized. >> thank you, chairman whitehouse for having this hearing. and i will be abbreviated in my questions because we another panel. not to indicate any brevity or shortness in my interest in this, i would like to follow-up with you afterwards on the very

good work you are doing, not only and drug courts, but most particularly on veterans courts. ve you know, many of the bra young men and women come back from the sacrifice of a broad broad in combat with wounds and internal injuries that sometimes lead to domestic violence, and drug use -- all kinds of serious devices. one of the most telling statistics i have heard is that about 30% of those instances of posttraumatic stress of our

genetic brain injury are -- and traumatic brain injury, are undiagnosed, so many of these men and women go back into society and are candidates for the kind of violence that was recently documented in "the new york times" article about the staff sergeant, and his struggle with exactly these problems, and the way that he was, in a sense, rescued from suicide through a veterans court, or lease treatment as a veteran. so, my question to you is, where would we look for the best models of these veterans courts? whether they're separate courts, or dockets, or specific schedules, or calendars for veterans' issues, because i think the more we can do to spread the word, spend a brea

best practices, the better of states like connecticut will become less and our country. >> i did see that article, and was going to reference it as well. it is a classic example but unfortunately meet its itself over and over again with respect to your question, -- classic example that unfortunately repeats itself over and over again. with respect to your question, i think each drug court has something different to offer. the research, and you might hear more about this from douglas marlow when he testifies, but my sense is that we have to continuously evaluate, to look at, examined those programs that are working, take from them the best practices, support those, and replicate those where we think it makes sense. it is also helpful, as we learn

about what does not work so well. with respect to the examples i have seen, with respect to the veterans course in particular, the coming together of the court personnel, the military services personnel, law enforcement personnel, the judges, and the veterans' organizations, both at the state and federal level is the way to go. to the extent that we can keep that model, keep everyone informed, and then, i think we can continue to be effective in terms of the service provided. >> i appreciate your answer. what i would like to do, for provide meu wantould with five of the best practices, what you regard as the five best examples of how of veterans courts are working in the country, perhaps on a confidential basis, and maybe

some of the best practices as well, so that we can perhaps use them as models in connecticut and elsewhere around the country? >> that is a question for the record? >> yes. thank you. >> and senator amy klobuchar. >> thank you, chairman whitehouse. thank you, mr. tucker, for being here. we had a great event this morning. i know there were a number of republican senators there, and that shows the bipartisan support for moving forward with drug courts could i see my former congressman out there, the former congressman for the state of minnesota, and i know that when patrick kennedy was splashed on the front page of the paper with his addiction problem, it was jim moran said that when to stand by his side. he stood and by his friend draw

his experience in getting sober, and going on to get -- with his friend throughout his experience in getting sober, and going on to get married later this month. it is not a republican problem, a democratic problem. it is all of our problem at the numbers are astounding. 70% of those in the drug courts will not be arrested again. i have seen this in our state. we now have 30 drug courts in our state. i think we all know that the dollars and cents, and the money that can be saved -- the reason that so many people are here to support the concept is not necessarily because of those numbers, it is the people that we know, the teenager that can get their lives back again, the family that can send their kids out on the street corner without worrying about drug crime, and the added that has a chance for another life. thank you for the good work you

are doing. i have a question about the dollar and cents. between the time we have the celebration and this hearing, if i had a budget meeting, and i know my colleagues and i are focused on this, and this could be a big part of how to save money and do good at the same time. can you explain why drug courts save money, and what do you think the most accurate estimate of the potential savings is? >> first of all, center, it is good to see you again. >> it took me a lot of words to get to that point, so thank you. >> [laughter] the answer to your question relates to my earlier comment, in response to senator bingaman paul's question, and that has to do with sort of richard blumenthal's question, and it sort has to do with the general

statements. when it hit somebody out of the system, just effected we incarcerate as we do in this country, more people than anywhere else in the world, and we have maybe of the 7 million people in the system, 5 million on probation or some sort of community supervision, but having them out there, instead of the system, saves us money. to the extent we can shut down their return to the system obviously also saves us money. those figures that i gave, the $1,400 per purchase and, -- per participant, and the associated out comes of an individual not remaining in our jails or prisons, but that is where we see the savings and a regular basis. >> 1 no. i heard is the cost of participation is less than $7,000, and the cost of incarceration would be $22,000. and what that the per year? >> i would have to get back to

you. i think it is a range, actually. i could get a response for you on that. >> thank you. i have one last question about the synthetic drugs, and what you are seeing with those. we had a young man died in minnesota, who ordered off the internet. others almost died as well. we have been working on a number of bills to include these substances on the list of illegal drugs. what are you seeing? in our state we have seen a number of kids at the emergency rooms, doubling, tripling what we have seen. "the new york times called reported just this weekend that they had 3400 calls about bath salts to poison control centers. >> we are seeing a dramatic rise in such stimulus -- stimulants

like that. the drug enforcement administration, as you may know, is focused on that, and has begun to regulate some of the ingredients in those products. i think the challenges in some cases knowing what is there. as in all from the drug policy perspective, ondcp, our strategy is to continuously focus on the prevention side as much as we possibly can. >> i know the senator and his suit and into the hearing, but the education peace will be -- has to end the hearing, but the education part of it will be adopted next week compared to what appeared >> thank you, chairman whitehouse 4 came in this hearing. i'm from the state, a delaware, does have a successful drug program since 1994. like senator blumenthal, i am interested in the process of our

veterans court, which our attorney general has just launched in the last year. i would ask for a brief answer about what kind of constructive role in your view, nationally, has the leesburg as patient in been chords played, -- denithe g courts played? put, collaboration is the name of the game. >> we have wide support. i think people have come to the realization that this model works. anyway in which we could support it, is what i think people are choosing to do. it has been one of the reasons why this is been so successful. we were to the chiefs of police,

and others, and we should just continue to do that. >> i wanted thank you for the recognition that addiction effects every family, every community across the country, and we need to have a balanced approach with law enforcement, a treatment, and community engagement. i think your leadership has been critical. thank you. >> thank you. >> mr. tucker, thank you for your service and testimony. we will excuse you now, and take a minute or so recess was a change the table for the next panel. thank you for your petition. >> thank you, mr. chairman. [captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute]

>> the hearing will come back to order, and i am delighted to welcome a second panel of lionesses, and we'll go across the table, left-to write. our first witnesses martin sheen, who has appeared in more than 60 feature films, including "apocalypse now" and martin scorsese's "the departed

." his performance on "west wing" earned him six emmy nominations. he is been a supporter for drug courts and we're delighted his taken the time to offer his testimony. mr. martin sheen. >> thank you, chairman whitehouse, and distinguished members of the subcommittee, it is a very rare privilege to be here today and advocate on behalf of drug courts. i would like to emphasize that i am not a drug court professional, nor am i an addiction specialist. i make the distinction because we on those celebrity, to a greater or lesser degree is so often confused with credibility. for instance, i am not a former president of the united states, though i played one on tv. [laughter] >> my first exposure to drug courts began 20 years ago and opened my eyes to the capacity of human beings to change.

hyoscine individuals mired in the death of addiction -- i have seen individuals mired in the death of addiction. while i prefaced my opening remarks confirm my amateur status, i was, however, directly responsible for helping to create a drug court system in berkeley, california, 1996. we called it options, and our chief focus was the homeless and addiction street population of berkeley. we began a treatment center and one sober living house. today, there are six sober living in houses, and they're all run by drug court graduates, and nearly 6000 people have gone through them, and returned to their health, body, mind, and spirit. these miracles happen every day

in a drug court, and i believe this country's greatest untapped resources are addictive population. every year, drug courts help save over 120,000 seriously addictive people, bringing them from darkness to light, and setting them on a course for fulfillment, freedom, and enviable joy. imagine the impact we could have its drug courts were available to all 1.2 million a gifted individuals that would be best served by drug courts if one were available? imagine the impact of 1.2 million people making up for lost time in their community, and serving their families, and their country? this is the purpose of drug courts. this is why it is critical that congress funds drug courts added cost of $88.7 million for fiscal year 2012. it is no secret that our current prison system provides

little return on our investment. we spend over $70 billion on corrections, and it has done little to stem the tide of drugs and crime. instead, addictive people cycle through the system at great expense to the public. drug court stops that cycle. we have a proven solution that we can count on to draw -- counted drug abuse and crime. every system benefits when one that did the person gets clean and sober. i would like to take a moment to talk about drug courts serving veterans, and the emergence of veterans treatment courts. i spent some time with judge robert russell, of buffalo, new york, who was among drug courts hall of fame's. he created the first nations veterans treatment center, to restore the honor of these heroes. ps so much of our men and women in uniform, and s so little in

return -- de ask for so little in return. it is our duty to treat our veterans. today, there are 80 veterans treatment courts, with over 100 planned. drug courts and veterans' treatment courts are on the front lines in insuring that when our veterans suffer from substance abuse or mental health disorders and get in trouble with a lot, they have the opportunity for treatment and restoration. by helping to restore their health, we give honor to their service. our criminal justice system has been transformed over the last two decades by dedicated professionals who believe that a blend of accountability and compassion can and should be the foundation for which we handle our a gifted population. -- our addictive population. this same professionalism is handling how we treat veterans.

there is no better investment this congress can make than drug courts and veterans courts. the time has come to reap the staggering social and economic benefits of extending this proven budget solution. thank you for the honor of appearing before it today. i appreciate your time, and your service to our country. >> thank you, mr. sheen. my next -- our next witness is a personal favorite, chief judge of the rhode island district court, chief judge jeanne lafazia, who was also an active civil litigator in private practice, and a leader in the rhode island community, serving on the parole board, the commission on judicial tenure and discipline, and serving as the rhode island share and the international defense council. she introduced a pilot program

for the state's first drug -- veterans court, and convened an extraordinary round table for attorney general eric holder on his recent trip. she graduated from boston university and suffolk law school. we welcome her today. >> good morning. thank you, chairman whitehouse for affording me this opportunity to discuss something i feel passionate about. immediately prior to becoming chief of the rhode island district court i spent three years on the arraignment calendar in kent county. i noticed that old veterans and active members of the military were appearing in increasing numbers. sometimes they were immediately recognizable by their stance and occasionally by uniform. other times, they would hide their status, and attempts to quickly resolve the charge without further attention. i was also hearing from victims

in domestic matters who were telling me this behavior would not have happened prior to deployment or multiple tors of duty, which is a phenomenon we're seeing more in this war than ever before. it became apparent some of these men and women were returning with injuries that were very real, but not visible to the naked guy. i also noticed that a sentence imposed on members of the military could have a more harsh result than a private citizen. a rhode island judge sometimes offers a filing on a first offense with intent to give them an opportunity start over on a clean slate. the judge also can impose no contact order, which prohibits them from carrying a firearm. there is an exception for law enforcement, but no such exception for military. active military must be qualified to carry a firearm, so this military defendant stands to lose his or her job, their

future, or their benefits. is hardly what we intended. recent statistics indicate that close to 1.7 million americans have served in iraq or afghanistan, and why this is a significant number, nationwide this presents us less than one- half of our national population, and rhode island has given more than its fair share of this. the call back for the national guard is the second highest in the united states. as of september 30, 2010, the number of veterans to a surge in the gulf war's living in rhode island is three times the national per capita average. most veterans returned home, and successfully reintegrate into the fabric of society, but what about the small or increasing percentage that are not able to do so? studies indicate that one in five returning military will exhibit some symptoms of mental illness, and not all of them will be involved in a criminal

justice system no soldier left behind is a code americans have been proud to live by. we do not deserve soldiers on the battlefield. should this not be true on the home front? do we not only similar duty when they come home injured or effected in a way that is altered who they are, or what they do, especially if the injury causes or fuels behavior that puts them into the criminal justice system? these men and women were not drafted. they volunteered. they put on a uniform and fall of the american flag into combat to fight and protect the fundamental rights and privileges that we enjoy every single day. most people agree that we have the duty, but what does that mean, how does a transit to the criminal justice system, and the role of the judiciary in these cases? the rhode island district court is now a partner in implementing the first jail diversion program in rhode island for veterans. this grant has allowed or

violence to begin the process, but it is only the beginning. it does not mean that anyone will not be held accountable for their actions simply because of military status, or even medical diagnosis alone. this is not a free pass. what this duty does mean is that we need to increase our focus on this group of people. we need to recognize them, implement programs that will address their unique challenges, and provide them with tolls and insight needed for them to become whole again. veterans courts are problem- solving course. rhode island is a small state, and we have tremendous collaboration with law enforcement, community mental health providers, and other state departments. the rhode island national guard has actively involved and fully support of. as we anticipate future drawdowns, the number of returning personnel who will retire the services will grow --

require the services will grow. this will allow us to address the individuals who enter the judicial system because of service-related injury. we are ready and position to take on the responsibility of the statewide veterans calendar. we have the network and the resources to make it successful and sustainable. i hope we will see this in the relatively near future. for this, we look to you, our leaders in washington. i am proud to have the rhode island district court to claim a leading role in this issue, and thank you for the opportunity for discussing this today. i would appreciate any questions you have. >> thank you, your honor. our next witness is douglas marlow, the director on research and an adjunct professor at the university of pennsylvania school of medicine. his published over 80 professional articles and chapters, and is on the

editorial view of the drug court review and criminal justice and behavior. he is a member of the board of directors of a drug court professionals, where he serves as chair of the research committee, and the reform committee. we're delighted to have him here. >> thank you, chairman whitehouse, members of the committee. it is a great honor to be here. i know you have all been waiting for martin sheen and the chief justice to finish speaking, so you could hear about the scientists -- from a scientist related to facts and data. [laughter] that is my job, to stay on top of the scientific research, which is no easy task, because the last time i did a search on drug courts i found well over 1000 published studies. they have been studied more than any other program. there are people in this room taking medication for cancer,

diabetes, and other medic -- other issues that have less chances for success. on average, all else being equal, and drug courts will reduce crime anywhere from 10% to 26%. that is on average. the best will cut crime rates in half, which is not heard of in the criminal justice system. as a matter of cost effectiveness on average, all else being equal, for every $1 invested in drug court, he will get two $21 cents back. how many of you are getting a 221% return? the best drug courts are returning $27 for every $1 invested. the u.s. government

accountability office in 2005 concluded that drug courts reduced crimes, but they want to know what else they do, so they launched a multi-site evaluation. those findings have just been published in the last few days. a national study of drug courts, every region in the country, over 1200 participants, 23 drug courts -- they found not only do drug courts reduce crime, but they reduce drug abuse, family conflict, improve family functioning, and those are so should with domestic violence and child abuse, they improve employment and annual income. we now have as good as you are going to get research on the effects of drug courts. if anybody tells you they have looked at the research and they do not accept it, they must reach the same conclusion about every other criminal justice and

substance-abuse program in existence. there is no other program that has equivalent success than drug courts. some people say there are only five or seven randomized studies. according to the fda, you need two for a medication to be considered evidence? bass, and a proven practice. drug courts -- evidence-based to be considered a proven practice. why a federal role? most crime is inter-state, person-on-person, person-on- property, have been in a single time, in a single place. everything that happens in drug court, transportation, manufacturing, procurement, use, the facts are inter-state, not intervention national -- not international. that is why the federal government launched war on

drugs. before that, there was sent increase -- there was an increase. is a national impact, and needs a national level response. as far as veterans treatment course, veterans have always been a national priority, and they're the biggest movement currently -- treating veterans who, as you heard, have 80% coming in contact with the criminal-justice system are addictive or mentally ill i am happy to answer your -- ill. i am happy to answer any questions, or to provide proof for any of the facts i have asserted. >> thank you, dr. douglas marlow. our final witness is dr. david muhlhausen. he joined heritage in 1999 after

serving on the staff for the senate judiciary committee. prior to that, he was a manager at a juvenile correction facility in baltimore. he holds a doctorate in public policy from the university of maryland, baltimore county, and a bachelor's degree in political science and justice studies from frost for university. >> my name is david muhlhausen, and i am a research fellow at the heritage foundation. i think chairman whitehouse, ranking member john,, and the rest of the committee for the of the jury to testify. the views are my own, and should not be construed as the official positions of the heritage foundation. mice testimony will focus on three points -- -- my testimony will focus on three points. increase federal spending of state and local courts should

not be a priority. by the end of the fiscal year, the congressional budget office warns of the federal debt will reach 70% of gross domestic product. this would be the highest percentage since shortly after world war two. this is hardly a good time for congress to increase funding for grant programs to subsidize the routine criminal justice operations of state and local governments. instead, congress should reform the grant program to focus entirely on reimbursing drug courts for serving recently- return combat veterans with substance-abuse problems. this reform would get the federal government out of subsidized routine operations, and save taxpayer federal dollars as well. second, while a large number of drug court evaluations have been formed, many of the studies have significant shortcomings in scientific rigor. before we can judge a program to be effected, we first must

understand the importance of selection. it can be astoundingly difficult to distinguish between what is working and what is not. nowhere is this predicament truer than when it comes to the criminal justice system tried to change human behavior. for example, individuals volunteering for a program might be more motivated than individuals not seeking entry. such motivational factors are often invisible to those assessing the effectiveness. a failure to account for these crucial factors can produce misleading associations between drug corps participation and outcomes. experimental evaluations, the gold standard of research designs, are most capable of handling the problem of selection. in my review, i was only able to obtain three experimental evaluations of drug courts. clearly, more experimental evaluations are needed.

they should transcend political party lines. both democrats and republicans should agree on this issue. third, while under some circumstances in particular locations drug courts might be more effective than traditional responses, congress should review the claims of effectiveness coming from advocates of increased federal spending on drug courts. three evaluation reviewed in the recent testimony provide a mixed bag of evidence about the effectiveness. obviously, some drug courts are effective, while others are not. effective drug courts can produce cost savings, and some might produce more benefits than costs, however this rule is not universal for all drug courts. a relative example is the cost findings of the newly released multi-site drug court evaluation performed by the urban institute. after comparing 23 drug courts to six other types of

intervention, they found that drug courts produced in everett -- average net benefit of over two thousand dollars, but it is not statistically significant. in other words, policy makers cannot be sure that the drug courts participating in this evaluation produce more benefits than costs. the cost might outweigh the benefit. more details on the results of this evaluation and other evaluations in my testimony are available to you. thank you for inviting me. >> thank you, mr. muhlhausen. i will be here until the end of the hearing, so rather than take up the other senators time, i will yield to the end, and feel to senator bingaman pa, and wherever else is next. >> thank you, -- said to bloom install and whoever is next.

>> thank you for bringing together this panel. i want to suggest that there is a danger here, which is to conflate veterans' problems and drug problems, and to see a drug court as also, potentially a veterans court. i think what is so impressive about the work that you have done, judge jeanne lafazia, is your live started to address not only meet in visible wounds a posttraumatic stress, and the traumatic brain injury that can cause many of the addictive behaviors that resulted in criminal activity, but also to

address the problems that are unique to veterans. they can become addictive, but they also have other problems. i would like to invite you and others on the panel to perhaps talk about why we need to address separately the issues that affect veterans, as opposed to simply opening drug courts that may deal with veterans treatment issues. >> i think there's certainly a lot of overlap, and that will involve both the cost factor of doing this program, and there's a huge overlap on the successes that we are able to celebrate. that being said, i think the veterans have a number of unique issues the need to be dealt with, and i think some of the standard counseling that we provide for substance abuse

issues, alcohol issues, and other issues, are not always competent, or able to address some of these underlying issues the veterans have to deal with. we have had tremendous collaboration in our project in rhode island. is a small state that lends itself to that. that includes collaboration with law enforcement and mental health providers, and also a great support from our legislature and governor this year. we had a loss signed into effect that allowed us for core- ordered counseling on dui cases, we are now able to do that counseling to the veterans' association. i think that makes a huge difference because they have a unique set of circumstances that most of us do not even have a point of reference for. i think you need to have people involved in these projects tebet

background, and said, understanding -- that have that background, his insight, and understanding. >> and making use of veterans themselves to provide debt counseling and aid? >> yes, and on two fronts, when the other elements critical for success is the use of mentors and the redo process. -- in the review process. we are in our infancy stage in rhode island, but i think not only from the professional counselors with a military background and military insight, i think you also need the support from a marine who can speak maring talk to a fellow marine, whenever the branch might be. you need to have people that have been there, walk the walk, talk the talk, and have come back and help you through it. >> i would like any members of the panel to do what i thought

that "new york times" tis did so well, and that is to give a face and a voice to the veterans. i think that is very powerful in depicting how a specific docket, calendar, or channel for providing justice to veterans, in helping to address the specific and unique problems a veteran might face. >> can i take a stand a fedex it takes a tremendous amount of conditioning 2 -- 8 step add that? it takes a tremendous amount of conditioning to get somebody ready for war. our natural inclination is not to harm ourselves, or harm other people or be vigilant for threats everywhere we go. we have to be sought and condition to do that months --

four months and months, if not years. we've known that since the beginning of worse, we have not known is that you have to de- conditioned. mix that with substance abuse and trauma, and you conflate those issues. it is not a drug court. it is not a mental health court. it is a reentry program for people returning to civilian life. that is what better and courts understand by using veteran peers and veteran mentors, the veteran ministrations services -- people that i've been through that process and either have difficulty and learn through this function, or they have been trained, and they come from the world, and they understand. so, it is a fundamentally different animal than these other programs.

i am here to tell you that we have always seen a huge number of homeless veterans in the criminal justice system after war. we are seeing it now. these veterans courts need to wrap up and be ready quickly. -- ramp up and be ready quickly. >> thank you for following in the footsteps of many former presidents. when they leave the oval office, or the oval office set, to pursue important projects. i'm wondering why you chose drug courts. >> thank you, senator. i would just say quite frankly that it is an extension of my work with the peace and justice community -- social justice, is, i think, incumbent on all of us to participate in, to bring

healing where we can, understanding, bring light were there is great darkness. this was just a natural progression of my work in peace and justice. the description is very extraordinary, and gets to the point that senator blumenthal was talking about. i read that article yesterday. as i mentioned, i was with judge russell yesterday to initiate the first court, and he is quoted in that article about that gentleman, and the parameters surrounding that horrible situation when he was in the woods in michigan with a gun, and there were officers surrounding the area and they thought they were being shot at, and their lives were in danger, and this veteran, this fellow is alive, and getting help now, and those officers had

actually dropped all of their charges as well. it is an extraordinary level of compassion about what that guy alone in the woods with a gun was going through. he was back from iraq after three tours, living with that extraordinary anxiety, and adrenaline. we have no idea, and no comprehension at all what that is like in a combat zone, and we are in three countries now, where it is just everyday, normal life. a lot of these men and women are serving multiple force. we have to be aware of that. we know it is going to cost us. anything of great value is going to be costly. when i think of the work they are doing, i'm reminded of the irish tell of a guy who came to the gates of heaven, and saying peter said show us your scars. he said i had no scars, and st.

peter said what a pity, was a nothing worth fighting for? i cannot think of anything more worth fighting for the and drug courts. it just -- more than drug courts. it just goes to the center of this issue, in a deeply compassion, understanding and humane way, and i think it is the only way out, frankly. >> dr. douglas marlow, if you want to respond to some of the things that dr. muhlhausen had pointed out, where we are engaging in having to bring our debt down, and looking at smarter solutions in the criminal debt area -- criminal- justice area -- i find it and some people can spend less money and get better results. can you talk