-- standing up here as the director of the intelligence agency and representing those who have gone before. on the behalf of the great men and women serving as agency, thank you for that round of applause, because it is certainly on their behalf, anything that has been accomplished by any of us who are honored enough to hold the position of director is done because of those men and women at work in this agency each and every day, doing the job that they do. thank you very much, sir. his agency, this community, and this nation are very -- this agency, this community, and this nation are very fortunate to have this agency serving today. as we take a moment to reflect on the last 50 years, it is important to summationdecisionsy our nation's leaders and various -- at various times.

in the summer of 1961, the joint chiefs of staff wrote in a report to the secretary of defense, robert mcnamara, and said, "national intelligence and military intelligence are indivisible in practice." this important statement remains as clear, urgent, and relevant on our 50th anniversary. anniversaries however require more than just a look back. the full meaning of an anniversary also means that we see our history as a foundation for dia's contributions tomorrow. at this very moment, as we are gathered here, thousands of dia professionals around the world are forging our future in a highly complex and uncertain

world, alongside our troops in harm's way, conducting some of the nation's most sensitive missions. as we look toward the agency's next half century of contributions, we recognize our challenge -- to build upon the agency's legacy by recognizing and realizing the agency ossible potential -- agency's full potential as the engine integrating national and military intelligence. we will be doing so in a period marked by a accelerating change, risk, challenges, and threats no less severe than those that have been commanding the nation over the last half century -- confronting the nation over the last half century. the nation's leaders will turn to the dia for the best sources and information required

to prevent strategic surprise. dia will answer the call with its best analytical judgments, based upon the best human and technical collection, just as we have done for the last 50 years. the men and women of this agency will deliver the information that commanders and policymakers need to know, not what they may want to hear. we will continue to speak truth, because that is what the american people expect and deserve. that is our mission. that is what we as an agency deliver. let this time for reflection also be a time to rededicate ourselves to a very important mission, ever mindful that, no matter what our accomplishments are, we carry a grave responsibility to prove ourselves worthy of the public's

trust every day. as we leave the ceremony behind today and begin our next half century of service, we recognize that this agency is more capable than at any time in its past. dia's performance and contributions in the decades since 9/11 -- decade since 9/11 have been remarkable. some have said it represents our finest hour. once a garrison agency with some deployment, dia today is now a globally-deployed workforce, a professional intelligence service, supported by a headquarters. it has been a remarkable transformation, defined largely by unilateral commitment to team work, as has been mentioned. it is a commitment that is practiced daily here at the defense intelligence agency, that i believe this matched by our other members of the

intelligence community that we work so closely with. information-sharing, integration, cooperation have always been part of this agency's dna, not because it is in vogue today, but because it has always been the right thing to do. that is a legacy and identity to be proud of. it is a solid foundation for what this agency will be called upon to deliver in the years to come. there are challenges ahead. this agency will be tested. the intelligence community will be tested. our nation will be tested. this agency will be ready, because inside dia we never forget, because, while much of what we do was done in secret -- is done in secret, our work is and will remain a public

trust. we have a legacy worth celebrating. now is the time before our future. at this time, i would like to call your attention to the screen, for our tribute to our fallen. major robert p. perry. celeste m. brown.

>> i would like to invite mr. michael hughes, australian defense liaison, who is presenting a gift on behalf of major paul simon, director of australian defense intelligence organization, to please join the director. the dio congratulates lieutenant general burgess and the men and women of the defense intelligence agency and the 50th anniversary, by presenting australian, aboriginal musical instrument, the didgeridoo. it is a lasting reminder of the dia and its counterparts, including the australian defence intelligence the order organiza. [applause]

we would like to invite the canadian defense intelligence at shea and commander -- attache and commander to please come forward. in recognition of a longstanding relationship between dia and cdi, the rear admiral is presenting a western cedar paddle, traditionally used in ceremonies of the indigenous people of the northwest. in the early days of our continent, especially in canada, waterways were the only route to conquer the land and canoes were the only viable method of transportation. teh crew -- the crew had to paddle to go in the right direction. this battle is a symbol of the momentum the community has maintained with dia as a strong partner and leader, helping to steer our common efforts. [applause]

and air marshal christopher nichols, chief of defence intelligence, united kingdom. as a symbol of our strong heritage and partnership, the u.k. would like to present a framed picture of the old war office. since september, 1901, the building has been home to many secretaries of state and war, including sir winston churchill. to the ministry of defense, the old war office represents the same values as those of the defense intelligence agency. both are committed to excellence in defense and intelligence expertise. [applause] dia has assembled a time capsule containing significant objects celebrating its first 50 years.

it contains more than 50 items representing the agency's work and its workforce. generations of men and women who, over the decades, built an agency that is today making its greatest contributions to the nation's security. one item remains -- a letter which reads, greetings on behalf of the men and women on the -- of the defense intelligence agency on our 50th anniversary, we assembled the contents of this time capsule to tell some of the stories from the dia's first 50 years. our agency has a remarkable history of achievement over these past 50 years, from its inception in 1961, dia overcame early struggles and reorganizations. cold war challenges, threats of terrorism, and adaptation to asymmetric quarter, while growing in mission ability, size, capability, and credibility. from the cold war to the gulf war, from the conflict in vietnam to the current conflict

in iraq and afghanistan, from confronting communism to battling terrorism, the talented and dedicated professionals of dia have repeatedly demonstrated their commitment to excellence and defense of the nation. signed this 29th day of september, 2011, on behalf of the men and women, past and present, of the dia. sincerely, ronald burgess. sir, please place the letter in the capsule. [applause] >> no matter the location of crisis or conflict around the world, over the last half century, dia stands watch,

collecting and analyzing foreign military intentions and capabilities in supported policymakers, military commanders, and american men and women in harm's way all over the world. dia continues to unable successful military and intel operations -- enable successful military and intel operations. >> they are to the soldier in the foxhole turns to when they need to know what they need to know, when they need to know it. that is what dia is all about. >> they give us a competitive advantage. the ones that need this are out there on the edge. their ability to do that in the timeframe and scale that is unprecedented is what defines them as a generation of analysts that have advanced in this

country in ways that we are probably at to appreciate -- probably yet to appreciate. >> it is a mission that continues in an environment growing more complex every day. >> since 2005, our agency has had operational deployments totaling around 1500. and, each year, those numbers have gone up. for the foreseeable future, we see that continuing to be the case. >> over the years, i think dia has really come into its own. it is clearly a major component of the united states intelligence community that has unique capabilities, you need access. -- unique access. the support that has been rendered in the almost 10 years of combat in iraq and more recently in afghanistan, the work that dia does in the human arena, has been --

>> the biggest challenge that we have today is focusing not only on the current threat that we have, that we are facing, the focus on afghanistan and iraq, but also ensuring that we are postured to face the threats of the future as they are coming, because the rest of the world is not standing still while we are focused on the current fight. among young people that have never known anything but for during that -- >> young people that have never known anything but war during their time ntat dia. they understand better what is going on on the battlefield. they understand when to be there, when it is relevant. >> never underestimate the power of this agency to cause change. you can do a lot of things just

by speaking truth to power from the vantage point of knowledge. that has -- the motto of this agency says it all -- committed to excellence in defense of the nation. [applause] >> please stand and join miss anna turner in singing "god bless america," and remain standing for the departure of the official party and directors. ♪

>> ♪ god bless america land that i love stand beside her, and guide her through the night with a light from above from the mountains to the prairies to the oceans, white with foam god bless america my home sweet home god bless america

my home sweet home from the mountains to the prairies to the oceans, white with foam god bless america my home sweet home

god bless america my home sweet home america ♪ [applause] splendidly?e do let's tell her again, shall we? [applause]

receive the benediction. the lord bless you and keep you, each one of you, as you serve our great nation, upholding our security. we need you. i thank god for you. be blessed. amen. >> thank you very much for joining us today. mark your calendars for october when we will celebrate the 100th anniversary of this organization. [captioning performed by national captioning institute]

[captions copyright national cable satellite corp. 2011] >> and more live coverage later this afternoon at the museum -- newseum in washington for a discussion on how the government uses social media to communicate with the public. among the speakers, this a cargo mayor's -- the chicago mayor's social media director. coverage at the white house tonight -- ""road to the white house""road to the white house

-- "road to the white house" coverage tonight. >> he founded several labor unions and represented the socialist party of america as a candidate for president, running five times, the last time from prison. eugene debs lost, but he changed political history. he is one of the 14 men featured series,n''s new weekly "the contenders." watch videos about him on our special website for the series, c-span.org/thecontenders. >> it should always start with the assumption that, when a politician or ceo is saying something and they are not telling you the truth. they may be telling you the truth, but the burden should be on them to prove it.

>> he is an eagle scout, held a brief stint as editor of mother jones magazine, directed three of the top 10 grossing documentaries of all time, and also an author. his latest book is a memoir called "here comes trouble." your chance to call an tweet michael more live at noon eastern on c-span2's "booktv." >> missouri senator kirk claire mccaskill criticized waste and fraud during wartime. senator mccaskill and senator webb testified before the senate homeland security committee. the committee released a report from a finding as much as $60 billion of waste and fraud -- their report on friday, finding as much as $60 billion in waste and fraud. >> good afternoon. the hearing will come to order. se, our

colleague, senator mccaskill and senator webb. i'm going to put my whole statement in the record and just draw briefly from it in deference to senator collins who has an appropriations meeting she has to go to and to our two colleagues. the commission on wartime contracting was created by legislation sponsored by senator claire mccaskill and senator jim webb to investigate our reconstruction efforts in iraq and afghanistan. last month the commission issued its final, and i would say to me, very disturbing report. because it says that at least 31 billion and maybe as much as $60 billion have been squandered in waste, fraud and abuse in iraq and afghanistan over the past ten years. and those are, obviously, 31 to 60 billion taxpayer dollars. i supported the wars in iraq and afghanistan, i still do. i support the aggressive

rebuilding efforts in both these nations, and i still do. but, but -- and, of course, i believe that the ultimate waste of money and of the service and sacrifice made by our men and women in uniform would be to walk away and let iraq and afghanistan fall back into the hands of dictators and/or islamic fanatics. but that's not only no excuse, but even more reason why i'm so upset by the findings of the commission which are, basically, how sloppy and irresponsible so much of the spending was. some of the examples that particularly drove up by blood pressure, and i didn't have medication nearby so it was particularly harmful, u.s. tax dollars paid $30 million to taxpayers for $300 million to build a power plant in kabul,

afghanistan, that would supply the city with electricity around the clock. the whole idea build it and they will come, but the afghan government couldn't afford the fuel to run the pack and instead contracted to buy electricity from uzbekistan at a fraction of the price. and the power plant built with $300 million american dollars is now just an expensive back-up generator. another one that i thought was particularly outrageous was that $40 million of our money went to build a prison in diyala province in iraq that the iraqis said they didn't want and ultimately refused to take possession of. project was not only never completed, it was abandoned with $1.2 million worth of materials left at the site. so the commission report tells us. much of the waste identified by the commission stems from a lack of competition which, of course, should be the cornerstone of

government contracting. i will say that, finally, that perhaps my greatest frustration reading the commission's report is a general one which is that the underlying problems it identifies are not problems of first instance for us. we, in various ways we have seen these kinds of problems for years. and, in fact, at different time we've enacted as congress has enacted reforms legislatively that were supposed to address these problems. and yet here comes this commission report showing that billions of dollars, nonetheless, were wasted. so my response to the report is to thank the commissioners who we'll hear from next for their extraordinary work here, and also to see if we can't together find a way not to -- not because

we're too experienced, unfortunately, believe we can stop all waste and fraud forever, but we could sure do a damn better job than we're doing now, and i hope together we can find some ways based on this report to help make that happen. senator collins. >> thank you, mr. chairman. let me join the chairman in thanking the commission members for their report and the two authors of the legislation that established the commission. along with senator mccaskill and senator webb, i testified at the very first hearing of the commission on wartime contracting. at that time i noted that there are four categories of problems that lead to contingency contracting failures. first, unclear and evolving contract requirements.

second, poor management including an inadequate number of skilled contracting personnel. third, an unstable security environment. and, fourth, a lack of commitment by the host government officials to the reconstruction of their own country. unfortunately, the commission has documented all of these problems and more in our nation's wartime contracting efforts. it is especially troubling that our operations in iraq and afghanistan have been plagued by such a high level of waste, fraud and abuse. some of the examples are almost too astonishing to believe. for example, a july 2011 report by the special inspector general found that a dod contractor

was charging $900 for a control switch that was worth a mere $7. in some cases the ig found contractors overbilling the government with markups ranging from 2300% to more than 12,000%. now, i think we all understand that when you're contracting in this environment, there is going to be some kind of premium, but this was absurd. one solution to this problem is the establishment of a professional acquisition cadre. that's why i authored an amendment to the fiscal year 2009 defense be authorization -- defense authorization bill to create a contingency contracting corps. this year i've introduced two bills designed to further strengthen the government's acquisition work force, the

federal acquisition improvement act and the federal acquisition work force improvement act. i want to emphasize a point that was raised by one of the commissioners at a recent briefing about the report. congress should either enhance and improve the acquisition work force to handle these types of massive contingency operations, or we should rethink whether or not we want to run these massive operations. we simply can't justify doing major contracting without the necessary supporting work force as the findings of the commission's report highlight today. this is the point that i think often gets lost in the discussion of contingency contracting. the billions spent for development in big infrastructure contracting were invested in order to support

counterinsurgency efforts by winning the hearts and minds of the population and by establishing security. but with so many disappointing results, congress should ask are we fulfilling our obligations to the american taxpayers who are footing the bill for these projects? and should we really be surprised at the problems arising from attempts to run major development programs and embark on large infrastructure construction while we're in the middle of a war zone? the past ten years have taught us that we need to spend more time focusing on these broader questions before we get into another contingency operation if we hope to avoid repeating the mistakes of the past. as i stated at the very first commission hearing, how well we execute wartime contracting

helps to determine how well we build the peace. in my view, we can and must do better. again, i want to thank the chairman for convening this hearing and apologize to our witnesses that i do have to leave shortly for an appropriations markup. thank you. >> thanks, senator collins. we understand very well. thanks to senator mccaskill and senator webb for being here. it actually was the problems with wartime contracting which were part of the reason, um, why we created a special subcommittee of this committee to oversee federal contracting and why i asked senator mccaskill to be the chair of it, and she's done a great job. senator collins was ranking on it for a while followed by senator brown and senator portman, but you've remained right there at the helm with great effect for the committee and for the country, so i thank you for that, and i look forward to your testimony and then senator webb's. >> thank you very much, mr.

chairman. i want to thank both you and the ranking member for all the work you have done to improve contracting practices. you've been at this for much longer than either senator webb or i have been in the senate, and i want to acknowledge your work particularly senator collins deserves a great deal of recognition for all of her work in terms of acquisition personnel. it is so easy for us just to gloss over as we try to make the federal government smaller. it's so easy for us just to say, well, everything needs to be smaller. well, no, it doesn't. there's a few areas that can't be smaller. senator coburn and i talked this morning about the importance of fully funding gao, that our eyes and ears in terms of waste and fraud throughout government, and clearly the acquisition personnel, the at to teen of that work force has been a major contributor to the problems we're seeing. more than four years ago, senator webb and i began to advocate for the creation of the wartime contracting commission. at the time i was inspired by

missouri's own harry truman who as a senator headed a committee that investigated and uncovered millions of dollars of war profiteering, fraud and wasteful spending in world war ii. senator webb and i greed we needed a new investigatory body to honor the truman committee, to protect our tax dollars and bring better accountability to the way we do business while at war. you know, we use the cliche saying, well, they would spin in their grave, or they would turn over in their grave. harry truman, um, has been spinning for some time now, and he would be astounded at what this commission found. it is shocking that the commission has, in fact, validated, um, in many ways our worst concerns about the way contracting was ongoing in contingency. it is disgusting to think that nearly a third of the billions and billions we spent on contracting was wasted or used for fraud. frankly, i really believe that

estimate is very, very conservative. and it doesn't even begin to include the money wasted on projects that can't be sustained. very similar to the kabul power plant that you referenced in your opening statement, mr. chairman. i would like to take the opportunity to adjust one more anecdote that confirms how serious the problem is. shortly after i came to the senate, i took a trip to kuwait and iraq on contracting oversight. i asked not to see what most senators went when they went to theater, but i just wanted to focus on the way we were overseeing contracts. i particularly wanted to hone in on the logistical support contract that had been the subject already of a lot of negative headlines about the way we'd done business. it was a massive cost-plus contract, noncompete, that was supposed to provide all of the logistical support for our men and women that were serving us in iraq. i sat in a small room in a building on the outskirts of baghdad while many, many people in the room had lots of rank and

were military, one woman who was a civilian clearly was the knowledgeable one about the log cap contract. it was an awkward set of questions and answers because, clearly, i was asking very tough questions. i could not for the life of me understand how this thing had gotten so out of control. the moment i will never forget as long as i live is when i began to feel, you know, when you're pounding a witness on the stand as a prosecutor, you know when you need to let up. sometimes you do, sometimes i didn't. i kind of knew i needed to give this woman a wreak because, you know, all these guy guys were sitting in the room, and men and women were sitting in the room, and she was really being called on the carpet, so she had a bar graph and the requisite powerpoint that is required in every military briefing. there was a bar graph that showed the expenditures on the logcap contract, and it had started out in a number, i can't recall now, but in the billions and billions and billions.

and the next year it had dropped two or three billion. and be then it had kind of leveled out. so i'm trying to throw her a bone. and i said, would you mind telling me, how did you get the costs town the second year? as god is my witness, she looked at me and said, i have no idea, it was a fluke. at that moment i knew that this was something that had gone terribly bad in terms of contracting oversight. the commission's report and recommendations go to the heart of how we got into this mess, how we got to a place in iraq where we were spending billions without a clue as to where it was going. i applaud the commission for their thorough, comprehensive and bipartisan review and for the tremendous contribution that they've made to our understanding of these problems. we must know why we are contracting, who we contract with and what we are

i do believe the issue of sustainability is crucial at this point. while we know that the strategy against counterinsurgency involves something beyond conventional warfare, i do not think that we have quite figured out, as an important sculpture of leadership in the air military, as we need forces in terms of counterinsurgency, the

contracting oversight has to be part of the equation, including sustainability. we cannot build things for countries that they cannot afford to operate. we cannot build things or countries in a security impairment that they are just going to be blown up -- security environment that they're just going to be blown up after we have used countless the billions of dollars of americans hard- earned taxpayer money. the recommendations will require fundamental changes to the way the government operates. i plan to introduce comprehensive legislation this year. i'm working closely with senator webb on this legislation and i look forward to working with the members of this committee as well. as one of the generals said to me while i was in iraq, so much of what we're seeing on this trip in terms of mistakes were also made in bosnia. we did a lessons-learned after bosnia, except there was one problem -- we did not learn them. they forgot to learn the lesson.

if the commission's report becomes one more report sitting on someone's bookshelf, then we have failed as a congress and we have failed our military and the people of this great nation. this is our chance. this is our chance to tell the american people that the government can spend their money wisely, hold people accountable who are entrusted with contracting in contingencies, and make sure that the men and women in the military and civilian agencies get what they need to do their jobs. we cannot waste billions through fraud, abuse, and mismanagement. we cannot fail to plan an outsource more gaps in planning. we cannot report -- repeat the mistakes again. thank you so much for the opportunity to testify today. i do want to commend my colleague, senator webb. this would not have gotten through the senate without the cooperation of the chairman, the ranking member, and the hard work of the senator. we have something really good here if we did not take our eye off the ball.

thank you, mr. chairman. >> thank you, senator mccaskill. i was struck by your reference to president truman, wherever he may be today. if we go and interview him about this commission report and then released the transcript, we would have to delete several expletives. >> i need to say, for harry truman, this makes me goddamn mad. [laughter] >> i knew you would not let me down. senator webb, thank you for being here. s for her continuous involvement with this commission as it went through the hearings process and other members of the committee. purpose of this hearing is to allow the commission members to testify before you and to allow you to have an interchange with them, so i would like to, first, say i have a longer written statement which i would ask be

entered into the record and would like to summarize some of my comments from that at this time. >> without objection. >> i'd like to express my thanks to the commission members, particularly the co-chairs, michael tebow and former congressman chris shays, a number of their fellow commissioners and professional staff are here today. they did an an exemplary job. we talk in the senate and in the congress about presidential commissions and sometimes with a great deal of kept sit. but i think this -- skepticism, but i think this commission demonstrates the way these commissions should work. it was bipartisan, it was independent, it was high energy, it was composed of highly qualified people who were brought in for a specific period of time, and it's going to be sunsetted in a very short period of time having brought these observations and recommendations before the senate. when i came to the senate in '07, one of the real eye openers

for me as a member of the senate formulations committee was a hearing in which the department of state was testifying about $32 billion in funding for programs for iraq reconstruction projects, and i asked the government witness to provide the committee a list of the contracts that had been let, the amount of the contracts, a description of what the contracts were supposed to do and what the results were. and they couldn't provide us that list. we went back and forth for months. and they were not able to provide us that kind of information. as someone who spent five years in the pent gone and -- pentagon -- one as a marine and four as an executive, it was very clear to me that something was fundamentally wrong with the way that contracts for infrastructure reconstruction, wartime support and security programs were being put into place in iraq and afghanistan after 9/11. most of the companies who undertook these contracts were

good companies, and i think this commission was very careful to mention that in its report. and they were doing a great deal of good work. but there were also a series of major structural, procedural and leadership deficiencies in terms of the way that wartime contracting processes were supposed to be undertaken. you could look at the dynamics of what was going on particularly in iraq at that time and know that it wasn't out of the question to say that even then billions of dollars were being exposed to waste, fraud and abuse for a wide variety of reasons. and after many discussions with senator mccaskill who has great technical experience brought with her, great technical experience with her to the senate and who had expressed similar concerns as you just heard, we introduced legislation that led to the establishment of this commission. we had to give on some areas that we believed in strongly such as retroactive

accountability of some of the abuses that had taken place. we didn't get that provision. we weren't able to empower the commission with subpoena authority, but following close consultation with both members of the parties, we were successful in having this legislation enacted that put the commission into place, and we achieved a consensus that the commission would be independent, bipartisan, energetic, and it would come to us with the types of recommendations that might prevent the recurrence of these systemic problems and abuses in the future. and i commend the people on this commission for the intensive effort that they have put into satisfying this statutory mandate. they went to extraordinary lengths here in the united states as well as in iraq and afghanistan. twenty-five public hearing, full transparency. today's final report was preceded by two interim reports and five special reports, and i wanted to come here and express my appreciation personally for all the work that they have put

into this effort. thank you very much, mr. chairman. >> thank you very much, senator webb, for taking the time to be here and for your excellent remarks. we thank both of you for being here. i think we'll move on right now to the members of the commission. and so i'd call the members of the commission to the witness table at this time. >> i gather that, unfortunately, michael tebow, co-chair of t commission, cannot be here. as you all know, former deputy director of the defense contract audit agency and worked very hard on the report. i am delighted that mr. thibault's co-chair is here today, my dear friend and former colleague from connecticut in the house, chris shays, who served during his time here as a senior member of the house

oversight and government reform financial services committee and on the homeland security committee and had a particular interest in this kind of matter which is to say protecting taxpayer dollars. we also have, um, with us clark err visible, robert henke, is it -- you say schinasi? schinasi. charles tiefer and dov zakheim who is no stranger to us because of his time in the dartment of defense. ms. schinasi, i gather you've been voted the spokesperson. >> yes, that's correct. >> thank you all for the extraordinary work you did here. and i join my colleagues, the creators of the commission, senators mccaskill an webb, in thanking you for hard work and, really, an excellent report that gives us a road map forward. it's all yours. >> thank you. thank you, chairman lieberman, for, um, inviting us today and members of the committee to give us an opportunity to talk about the work that we have done.

as you mentioned, i am katherine schinasi, a member of the commission, and i am presenting this statement on behalf of the commission's co-chairs, christopher shays and michael thibault, and my fellow commissioners, clarke kent ervin, robert henke, charles tiefer and dov zakheim and grant greene who, unfortunately, could not be with us. if i may, i'd like to summarize my statement and submit the full statement for the record as well as a copy of our final commission report. >> without objection. thank u. >> thank you. 's fitting tat this committee should be the first to hold a hearing on our final report as the senate rules give you the unique authority to inquire into the efficiency, economy and effectiveness of all agencies and departments of the government. including the organization of congress and the executive branch. the solutions to contingency contracting problems that we have reported require a whole of government approach. we also believe the need for

change i urgent, and let me give you several reasons why. first, reforms can still save money in iraq and afghanistan. avoid unintended consequences and improve the outcomes there. because, ironically, even as the u.s. draws down its troops in iraq, the state department is poised to hire thousands of new contractors there. second, new contingencies in whatever form they take will occur. one has only to remember how quickly u.s. involvement in libya ose to recognize that the odds are in favor of some type of future operations. and the agencies have acknowledged that they cannot mount and sustain large operations without contract support. third, although the u.s. government has officially considered contractors to be part of the total force available for contingency operations for at least the last 20 years, the federal government went into afghanistan and iraq unprepared to manage and oversee the thousands of contracts d

contractors that they relied upon there. even though some improvements have been made by the agencies involved, a decade later the government remains unable to answer that it is getting value for the contract dollars spent. and unable to provide fully effective interagency planning, coordinati, management and oversight of contingency contracting. the wasted dollars are significant. as you pointed out in your opening, the commission estimates that at least $31 billion and possibly as much as $60 billion of the $206 billion to be spent on contracts and grants in iraq and afghanistan has been wasted. and many billions more will likely turn into waste if the host governments cannot or will not sustain u.s.-funded programs and projects. we believe that failure to enact powerful reforms now will simply insure that new cycles of waste and fraud will accompany the

response to the next contingency. and we also believe that these reforms could have wider benets. in our work on iraq and afghanistan, we found problems similar to those in peacetime contracting environments and in other contingencies. this committee in particular will recognize many of the problems we discovered ar simir to those that were contained in your 2006 report on hurricane katrina. and some of those are poor planning, limited or no competition, weak management of performance and insufficient recovery of overbillings and unsupported costs. the wartime environment brings additional complications which we address in our recommendations. for example, limited legal jurisdiction over foreign contractors and limited deploy ability of federal civilian oversight personnel into theater. if i had to give you just one bottom line, it would be that the wasteful contract outcomes

in iraq and afghanistan demonstrate that our government has not recognized that its dependence on private contractors, especially for services, is important enough to effectively plan for and execute those acquisitions. the commission has concluded that the problems, however, are multifaceted and need to be attacked on many levels. first is holding contractors accountable. federal statutes and regulations provide ways to protect the government against bad contractors and impose accountability on them including suspension and debarment from obtaining future contracts as well as civil and criminal penalties for misconduct. unfortunately, we found that these mechanisms areften not vigorously applied and enforced. and incentives to con train waste are -- constrain waste are often not in place. the commission's research has shown, for example, that inadequate business systems create extra work and deny the government of, um, insight and

knowledge on costs that we are being charged for the work done. fraud may go unprosecuted, recommendations for suspension and debarment go unimplemented, and past performance reviews often go unrecorded. one important check on contractor overcharges is the defense contract audit agency. currently dcaa has a backlog of nearly $600 billion which by some accounts could reach $1 trillion by 2015 is not addressed -- if not addressed. the dcaa hasreported a five to one return on investment, that is five for every dollar invested in dcaa, the government recovers $5, and we would say that's aretty important investment to keep in mind when we're thinking about how the fix these problems. the government hases also been remisin promoting competition. although exigent circumstances

may require sole-source or limited competition rewds in early phases of a conflict, a decade into an operation the multibillion dollar task orders that are being written with no breakout or recompetition of the base contract just defies belief. our report contains relations to bolster competition, improve recording and use of past performance data, expand u.s. civil jurisdiction as part of contract award, require official approval of significant subcontracting overseas. the second level we would attack holding the government itself more accountable. both for the decision to use a contractor in the first place and for the subsequent results. even when the government has sufficient policies in place, effective practices which range from planning and requirements definition to providing adequate oversight of performance and coordinating interagency activities are lacking. defense, state and usaid, the three principle agencies involve

inside iraq and afghanistan operations have much work maining to be done. we have recommended developing, for example, deployable acquisition cadres. elevating the position of agencies for acquisition officers and creating a new contingency contracting direct rate at the pentagon's joint stf where the broad range o contracting activities is currently treated as a subset of 40 gistics. contracting -- logistics. contracting has gotten to be much more. considering this committee's broad and interdepartmental mandat i would call special attention to two recommendations embodying a whole-of-government approach that will improve efficiency and effectiveness in contracting. the first is to estabsh a dual-headed position for an official to serve both in the office of management and budget and participate in national security council deliberations. such a position would promote better visibility, coordination, budget guy dance and strategic

direction for contingency contracting. currently, national security decisions are not informed by resource implications generally. and that's particularly troubling and distortive in this context because contractors are considered to be a free resource. the second is to create, the second recommendation of an interagency nature is to create a permanent inspector general with a small but deployable and expandable staff that can provide interdepartmental oversight from the outset of a contingency. the special igs have done some important work, but they have been hampered by their limited jurisdictions and their costly start-ups. finally, our commission closes its doors in just nine days. our organizationisappears, but the problems it has chronicled will not. action and in some cases appropriations will be required to implement these reforms. sustained attention will be essential to insure that

compliance extends to institutionalizing reforms and changing organizational cultures. that's really the gist of it. institutionalizing these reforms and changing the cultures. that is why ourfinal recommendation includes periodic reporting to the congress on the pace and results of the form -- reform initiates. in closing, i believe that the commission's work has demonstrated that contracting reforms an essential, not a luxury good. whatever form it takes, there will be a nextnt taky, part. planning now and putting the necessary structures in place will greatly increase the likelihood of having better options and making better choices. and that concludes our formal statement. my colleagues and i would be happy to take your questions. >> thanks very much for that excellent beginning. we'll do seven-minute rounds of questioning. um, i wanted to ask you whether

the contracting process be, in your view, improved over the years of our involvement in afghanistan and iraq. in other words, based on some of the things that are implicit in your report, but certainly in other ig reports and our own observations you could say, i suppose, or argue that some of the early waste resulted from, um, basically, the lack of planning and the rush to do it. andal the rapidly -- and also the rapidly shifting governance structure during reconstruction. but i wonder, in your investigation did you find a dividing lines between different stages of the wars and reconstruction? many and, obviously, i'm looking to see whether there was improvement and particularly whether we talked about lessons learned from bosnia. did we learn any lessons in

afghanistan that we applied in iraq or in iraq that we applied in afghanistan went on longer? i don't have a particular choice of commission members, so i'll leave it to you all to decide o feels best able to answer each question. >> let me just jump in for this first one tthank you, mr. chairman, and the members for allowing the full commissioners to attend because each of us is more than qualified to answe any of your questions. i think the simple answer is, yes, there was a notice blg improvement. noticeae improvement. but contracting became the default option, and we just did too much, too quickly. and when you have an emergency supplemental, it's not part of the regular budget. it ends, it's almost like a free thing to draw money on. so we just grew too fast. and then we didn't change after the first year. you've got a time where you say you can't keep doing it the way you were doing it, and we kept doing it the way we were doing

it. >> and if you had to give a reason why, why did we keep doing it the way we were doing it? even though people right there must have known it wasn't really working. >> it's an easy option to just keep relying on contractors. and when you have a contractor who's performing even if they're very, very, very expensive, you just want to keep going the way you're going. >> because they're doing the job? >> they're doing their job, but at an extraordinarily high -- >> great height. >> just quickly, having 15 people maintain electricity on a base when only three are being used, and they end up having so ch free time that they decide to build themselves a clubhouse. they're working 12-hour days, and only tee are working. and we did that for years. >> and nobody blew the whistle. i meanit was pretty obvious that that was happeng. let me pick up on the phrase you used because you warn about the use of contractors as the

default option in iraq and afghanistan. because, i presume, the government felt it lacked the ability to perform the capability and people they had working for them to perform many of these jobs. um, use of private security contractors and use of contractors to oversee other contractors are two examples of what you referred to as the default option. and i agree. um, what are some of the other, um, responsibility categories or functional categories that in your opinion have too often been placed in the hands of contractors, um, in the work that you do? ms. schinasi. >> i would look next at training, frankly. >> training? >> yeah. to see -- because that is a function we have almost totally outsourced to private companies.

>> i would also add -- >> mr. zakheim? >> i'd add, senator, if you look at aid in particular, that is an agency that year ago did it own work, frankly. it has becomal contract management agency -- become a contract management agency, and rajiv shah admits it and is trying to change it. but over the last decade they have, essentially, farmed out everything including, sometimes, managing the contracts. >> yeah. that's right. hire contractorso watch the contractors. we talked about that this morning on a bill we did on a markup -- a markup of a bill on homeland security, and, of course, this is not only in the war zones this happens, although the financial implications in the war zones was so high. so now i'm going to ask you because you had some hands-on experience in the department of defense, um, what can we do to stop this? maybe i should ask, first, i

presume what you're saying is you think we're overusing private contracts to fulfill government functions. >> i think we're all saying that, yes, sir. >> so, um, how do we draw the line? when do we decide that something really should be done by a full-time federalmployee? >> well, the standard answer is if it's inherently governmental. >> right. >> that is to say it's something that the government should be doing. well, we write in our report, and we all felt very strongly about this, is that that's not really the right measure in a war zone. and the reason is it may be that there are some tasks like, say, involving private security that in theory a contractor could do. but in practice maybe it involves security issues, you know, contractors that might fire too quickly or feel they're being attacked or bribery or corruption. we have a photograph in our study in our report, rather, of a bill, an invote that an --

invoice that an afghan insurgent group actually handed to a subcontractor, essentially saying if you want protection, here's the number to call. so there are going to be circumstances where the theory of inherently governmental doesn't fit. and so we felt that the measure should be risk. what are we risking here? and there will be cases where it clearly is not in the interest to have government to have a private entity taking on risks. >> so what are the risks? in other words, how do you define risk in this case? >> well, you could define risk, for example, if it's a very serious combat zone and you run the risk that maybe the contractors will be attacked or, alternatively, will attack first because they think they're being attacked. >> right. so final question because my time's running out, you've been inside. this is, seemsike -- i mean, a question that a senator shouldn't be asking, but i'm interested in your answer. why, why are we using so many

private contractors to fulfill governmental respoents not only -- responsibilities not only here, in the area that you covered, but we recently heard testimony abt the number of people working for the department of homeland security under contract. it's as many be as the regula just about as many as the regular employees of the department. @really stunning -- it's really stunning. >> well, one of the reasons, frankly, and we allude to some of that in our reports, training. our people just aren't -- our civilians just aren't trained. you can get a degree an go into government and never have to take another course again. well, if you want to keep up with things, you hire somebody else to do it for you because you can't do it yourself. so thas one reason. another reason is that we cut back, it wasn't so much that we had too many contractors in some circumstances, we had nobody to manage and oversee them. and that was because in the 1990s we cut back very seriously on just those kinds of people. so it varies with the circumstances. some cases we had just people

doing jobs the government should have been doing, in other cases we didn't have the government people to oversee tho doing the job. >> could i just make sure that we're clear -- >> yes. >> -- literally half of the personnel in theater are contractors. and there's a tremendous balance with a number of civil servants tre that are there. and we didn't rely address that the way we might have liked to have. but you have defense contractors and civil servants down here, and we seem to have to pay the civil servants a lot of money to want to go into theater. and i just want to make sure that we're also clear that when we talk about inherently governmental, if it clearly n't governmental, the government shouldn't do it. but when we say it's not inherently governmental, the government still maybe shoulbe doing it. >> gotcha. my time's up. obviously, i'm sure we'll come back and ask you if contracts are cheaper which is one of the arguments as well. senators, as is the custom of

our committee to be called in order of appearance, senators mccaskill, tester, coburn, levin and carper. senator mccaskill. >> well, i don't know where to start. there's so many things i'd like to talk about with all of you. first of all, let me once again say thank you. i'm not sure that america undetands the kind of expertise that i have sitting in front of me. and, um, all of you brought to this work unique backgrounds that made the combination of your efforts so powerful. d i will tell you i will not rest as long as i'm here until we get this work done. so i don't want you to think that the time you have spent and the effort you have made -- and i will tell you i'm proud that you're shutting down in seven days because one of e arguments existence the legislation was, well, we never start one of these things -- in fact, i think dr. coburn has made this argument a few times, that we start these kinds of things, and they never end. so i think you've done great work -- >> [inaudible]

[laughter] >> i get that. i get that, dr. coburn. we have not stopped asmany of them as we should, but i'm very proud of the work you have done. um, i want to talk about something that i meioned and you mentioned in your report, but i think it's something we need to flush out for this committee, and that's contractors being summit to the jurisdicti of the -- subject to the jurisdiction of the united states of america. heartbreaking incident in iraq that i'm sure you all are aware of where the negligence of one of our contractors killed one of our soldiers. and, um, in trying to find justice for that family, the contractor avoided the jurisdiction of the united states, and the most insulting thing about it was he then got another -- that company then got another contract. with our government. after they had used the fact that they were not subject to the jurisdiction of our country as a way to avoid justice for this man's family, we then decided we should sign up again with them.

by the way, they are now accused of also doing business with iran. um, so there's also some sanctions that need to be put in place as it relates to that. but talk, one of you, please, talk about the importance of anybody who wants to do business with the united states, and what are the arguments on the other side and why has the military been so reluctant to embrace this requirement. >> may i start that? >> go for it. >> senator, as you know, one of the huge issues that we've dealt with during the course of the commission in particular is the lack of visibility with regard to subcontractors. and this look -- lack of being subject to jurisdiction is our regulation for condition of being awarded the contract by therime contract that contractors summit themselves by virtuef the contract to u.s. jurisdiction. quite frankly, i cannot think of a contrary argument. this is american taxpayer money

and, therefore, the american taxpayer is,s has a right to demand this level of accountability. >> senator, if i can expand on that answer. um, and i do want to mention the bill which, that you mentioned which has been nicknamed the rocky bare gone that bill -- >> right. >> shined a light into what is a complicated area to figure out how to deal with it, so it was helpful to us. we -- let me mention two examples. one is that mihm mihm, one is first kuwaiti in what our hearingsound and our missions was compte irresponsibility, that is lack o responsibility by foreign contractors and especially subcontractors as commissioner ervin said. , the amimim came in front of a hearing of ours, and they basically laughed in our face. they said, go away, we're not going to give you records, we weren't required to give them to dca, we're not required to give them to you on a subject called

taints subcontracts. first kuwaiti which owed $124 million according to the state department ig, it's not paying. it's continuing to get contracts from it. t not paying. it's not paying. the argument that was put on the other side was that if you require foreign contractors to submit to jurisdiction, you will, therefore, lose competition out. i leave it to you to know if that's a likely prospect. >> well, um, at a minimum, um, should we be thinking about legislation that says to the united states government if someone has done business with us and owes us money and there e a foreign contractor, then that should equal suspension and debarment? >> that would be, commissioner shays was something of a pioneer in strengthening the suension debarment tool, and that would

be a good use of it, yes. >> why -- what is it, and thank you so much, coressman, for taking this assignment. a lot of people were vying for your talents at the moment you decided to step up and help us here, and i'm really, um, so glad you did. tell me why you think it has been beyond trus traiting to me -- frustrating to me that not only are these guys not doing work under a contract, they are then getting performance bonuses instead of suspension or debarment? >> well, the real expert is right here in the commission. um, we, the one area we backed off a little bit was automatic suspensions. we do think that in the end there are other factors that need to come in play. but it's very clear that contractors don't think they pay a penalty. and one way they don't think they pay a penalty is that theye not going to get replaced because the process takes so long. so they're going to still be around for a year, and it'sne of the reasons that we

recommended there should be a special cadre of government people, now i'm talking civil servants, what can come in and guard an embassy, and guard a facility, do something the contractors were doing. get 'em out right away and just bring in government people to replace them. i think that would do wonders, and that's one of our representations. >> so it's almost- recommendations. >> it almost goes under the category we can screw up because they're stuck with us, because we're in a contingency, and they have got no backup. >> you've got it. >> and so if we could, um, convince the military concern we have redundancy as a system, and almost everything in national security. but we have no redundancy systems in contracting. and i think you've hit the nail on the head, that this has not been a priority for the military, and we would never think of not having a redundancy in some of the coreilitary funks that relate to the mission, and contracting has beco one of those.

thank you very much, mr. chairman. >> thank you, senator mccaskill. senator tester. >> yeah, thank you, mr. chairm. i want to thank senator mccaskill and senator webb for testifying before. this is a critical issue. um, i haven't decided whether i need more blood pressure medicine or a bot bottle of brown liquor to take care of this problem. >> both. >> yeah, probably. you're probably right. >> not at the same time though. >> you know, the issue of private contracting, i can't help to think didn't come out of the whole privatization of government thing from a decade or so ago, and we can see where that's got us. it's unfortunate senator webb isn't still here, i wanted to ask him about when war started to be thought for profit. i don't know that it's been an occurrence throughout our history, but maybe it has. but i will say one thing, it is long past the time where we start to bring accountability and change to the way america contractors do business for this

country. i can tell you this, in the private sector if i've got a contractor that owes me money, he ain't getting another contract. i mean, that's just the way it is. and i cannot believe, and i don't know what happened to the system that would allow justification for somebody, number one, to tell you you ain't getting the information, and that's the way it is, and we're still doing business with the person. it is incredible. ..

which don't ne to have any discipline and our requirements process because we can always get more money and the corollary to that is that the contractors are also considered to be a fre resources cash, so we never have to factor into our planning -- >> witthe resources in the budget -- >> they are not required, the government itself is constrained by what is called fet, full term equivalent. so the number of government employees is capped so you can keep putting missions on in many cases these are new missions the agcies are taking on the didn't have anybody to do it so let's hire a cntractor and by the way we don't have to count that anywhere. the money we spend or the people we hire. >> i think it was senator mccaskill said the money spent was wasted.

is that for the whole of war effort? >> the figure is between 30 to 60 billion. the argument we would make many of us is it is closer o 60 but even if it was 30 we are talng out of 206 billion. >> gotcha. okay, so retroactive accountabilityid not have the ability to look back? but yet i heard catherine or one of you say things got better because the german question time moved forward. do you think if we look back the waste was even higher than what it is over the period that you looked at? >> i wouldn't say that, sator. i think there was improvement. there's no doubt. one of the reasons being when i was in the department and was the beginning of the iraq war we le contractcalled on definitize, that is a fancy word meaning we don't have the specifics. and of course we've improved on that with time. but another ea we did not and

the fundamental problem is what my co-chairman just talked about. we didn't have the people togo out there hardly because they didn't want to go out there and i can tell horror stories about that one and so you had a situation where it was contractors by default. if you don't have your civil servants ready to go to the theater and you can't force them to go, military people go in the civil servants, some do, some don't. to give you an example of that, we were out in afghanistan and we were talking to people from the agricultural department. it turned out that the agriculture department could not fill its a lot of people to go to afghanistan. we are not talking about thousands, we are talking dozens come still couldn't fill the allotment and those who went came from the foreign agricultural service many of whom had never seen a farm in their life. so that's an example. >> okay.

you talked about, katherine, in your testimony you talked about the waste and fraud, waste in particular may even be higher if the host governments can't. were you able to do any projections on that? quite frankly when i was in afghanistan they didn't look like they were rolling in dough ando when that turns around and the troops can pu out, i don't anticipate these projects to go forward. do you do any projections on how much money that might be? >> we don't have comprehensive numbers on that. i can tell you the special the inspector general for the afghan reconstruction came before us and said the entire $11 billion we're spending on the national afghan police program is at risk. that is just one program and won a number but that is clearly -- we were -- we issued a special report on the sustainability because we were so concerned not only the projects already started that couldn't be sustained but we were thinking about starting new projects that couldn't be sustained.

>> okay. >> go ahead. >> we started out, and robert henke was making this point to us and got us focused on this. he said it's clear we have to oversee contractors better. we are not doing a proper job. and then we began if we can't see contractors better, then maybe we shouldn't be trying to do too many contracts. and it even got to the point as we have been working on this that we think we are trying to just do too much. we are just trying to do too much with the gross domestic product of afghanistan hovering around a billion dollars. we got about $24 billion in the government, and the economy now. we've totally distorted the marketplace. >> yeah. >> one little quick point, we were doing a wonderful agricultural program that befit the culture and people come and then we had to spend money by the end of the budget year and we came in with 300 billion --

million, excuse me, to try to redo this program. >> look, out of time. my last question was going to be what do we do about this? i mean, you guys have recommendations about holding contractors available, the government for most competition. but when we are putting people involved in agriculture -- and that's something i'm involved in -- that don'know jack about agriculture, and expect to teach people who need to learn about agriculture to support themselves and they've got no way, no chce of being able to communicate any kind of information, because they don't have it in their head to start out with. who takes the calls on that? is this the head of the state department, is this the head of our military -- i mean, where is -- not too cold. but where does the buck stop all this stuff? we could be funded all. i'm not sure that's the right method to use. but maybe it is. >> let me just quickly say we

recommend some key positions. i mean, to head the national secure council decided to do things and not consider cost, that is why we want a dual headed position. someone at omb. we recommended, and senator levin, this is obviously very controversial but we think their needs to be a.j. ten. we have so many contractors as part of the military effort and there is no coordination as the joint chiefs of staff to deal with that issue. >> i've got to -- is it incumbent upon the joint chiefs to be able to consider costs when they are doing their job? now understand it's the protection of the country, but if -- ayaan, the head of the department of the agriculture could say you know, it's my job to make sure we have the security so i'm going to spend every doll that i've got. i mean, really. isn't it -- >> yes. >> isn't it incumbent? i understand that it isn't it incumbent on the people they're not to have a cop sitting in the room making surethey are

following the rules? >> we recommend somebody ashe assistant secretary level and above the key agencies including the aid, which would be the place the woodbury together with agriculture would worry about the kinds of programs you were talking about. somebody specifically in charge of contingency contracting issues. if you don't get the leadership of the top that is not going to follow. >> i just want to thank you guys for all your work. i very mh appreciate it. and i met senator mccaskill and probably everybody that sits at this table, we have a big problem we've got to deal with. we are talking about cutting programs and people need to pay for this kind of garbage. thank you very much. >> thank yousenator tester. sadr colburn. >> for the first time in my life and going to be called to the previous question. [laughter] >> akaka you're just beginning. >> i would like to offer my sincere thanks for your efforts on the commission's.

often times the amount of effort that goes into that is not appreciated and the amount of time that is spent. so offering my thanks for it. i have a couple of questions. are we going to have a second round? i want to talk about a couple things. i'm a big fan of oig. i think generally they do a super job. in afghanistan is been a disaster. and i'm worried about one of your recommendations and that's the head of this new ig. simply because in lots of other areas where we have like a special ig force-iraq we got some good data l of there. a lot of what you know we learned through stewart bolin and a lot of his efforts. but i'm worried about creating another one when we are not managing in afghanistan the ones we have. and so, it is fraught with some difficulty because we are not -- we are not holding somebody to accountability and we haven't.

our last ig in my opinion was incompetent, not the one that took geeral fields place but general fields actions didn't measure up at all at any level in the standard of that. so why worry about that and i would like for you to jut comment on why you made that recommendation and how that contrast with holding the institutions we have, the special ig from afghanistan and for iraq and what was done and then i going to share my observations having ben three times to afghanistan and what i saw change especially in the last two years especially since she came on because there is a difference with effective management. what you comment on that recommendation? >> i was the inspector general of this department at the beginning of the bush administration and i was the first inspector general of the department of homeland security sali was among the commissioners who first focused on that recommendation. and i am speaking for myself i speak for the commission i think when i say that we completely --

i agree with you said i think stuart berlin with whom i served in the bush administration and the forehand and a texas state government has done an exemplary job and set the job very high for the kind of accountability that we should all the man with regard to these war theaters. i also agree with you that to put it charitably, cigar by way of contrast has been slow off the mark. there's no doubt about it. but it seems to me the contrast between the two proves the point manly we shouldn't leave of two -- knowing we are going to be involved with every like it or not or admit ornot in the contingency going forward -- that we have that the exception of the contingency someone who is adequately trained, adequately staffed -- and we are talking about, as you know, and expandable office that would not have a hu staff how permanently, but rather would be able to scale and scale down as the circumstances require. of course come in under our recommendation they would go a ways away isn't as if there would be a third inspector general, there would be a standing one that would work in concert with the statutory

inspector general and gao. the final thing i would say about it is this recommendation is not intended to in any way denigrate from the work of the statutory inspector general, but as you know they are each limited in that their limited to the jurisdiction of the agency, and a specialist actors general, why they have the agency wide jurisdiction are limited timberlake and with regard to the subject matter. >> thank you. one of my observations when you go into theater as a member of congre is to get the briefing, and all the different groups or their. myirst trip about 80% of them couldn't answer the questions, the people sitting at the table. much like -- i am talking about people responsible for the area. and that changed a little bit. but the first time that i went back, that the i actually knew what he was talking about and knew what they were doing and they were deployed and they had to be oklahoma national guard because they were farmers from oklahoma, part of the guard that are actually farmers.

there just wasn't enough of them and they were not in their long enough to make the continuity in what we do is important as well, but specifically want to compliment the head of the usaid. the point i would make is something we ought to be demanding because the problems you're describing didn't just happen over there. it happens every day here. we know it. you talk about contacting problems. my friend, the chairman knows we have big ctract and problems on military projects, not -- have nothing to do with our efforts in afghanistan or iraq. but the difference is the director of usaid demands metrics now it is known going in if you can't give me metrics we are not going to continue the program. and so one thing i didn't see in your recommendation was in the contracting to actually have a metric requirement of

performance on everything we contracts for that would have presumed that you know with your body and so if you can't have ventured forth if you don't know what you're watching and i would like your comment on that because i see a big difference i could give u.s. aid for six years and i want to tell you i'm inove with the director because what i see him giving is effective management that makes the u.s. taxpayers' dollars a further and much more effective in the dollars. when we met with him privately as one of the most impressive meetings when he came and stified before us after omb decides what she can say is the staff decide what he can say publicly is not as helpful. one of the things the would be wonderful is to have the cand mess that he presented to us in meetings you may have with him. if we in government for a little

more candid it's not the fault of anyone in government now that contracting is bad. it goes way back and people are trying to improve it but we need to be honest with each other and admit that we've got a long way to go. >> let me deal wh the metrics issue, senator. what she is getting right isn't metric. the dod will for us to believe good resilience of metrics at you. the issue is the right metrics. and shall understands and his people wonder since there are metrics in net metrics. so it isn't a matter of saying we need metrics. everybody who's on the contract will float metrics that you. it's understanding the right ones. and what he's doing is fundamentally changing the culture of the place. >> i can get a lot of contracts in afghanistan that have no metrics on them to respect that is worse of course. hs changing the culture so theyhink the right way about these things. and one of the things -- one of our colleagues who couldn't

manage to get here today has constantly emphasized we've got to change the culture, whether it is in dod, the commanders on the field, aid, state, what have you come in all the way they think about contracting. >> i'm out of time. thank you. >> thank you, colburn. senator levin. >> thank you very much mr. chairman. let me thank senators mccaskill and senator webb for their efforts to bring you folks into existence and their leadship on this is critically important. senator mccaskill came to this body determined that she was going to focus on oversight. she's done exactly that. it's been an invaluable to us. your work is very, very important. i commend you on it. your willingness to serve -- one of the things you point out is the overall reliance on private security cntractors in iraq and afghanistan. that is not a new point. that is a point which has been very dramatically present for some time.

last saw timber the senate of the armed services committee released a report based on a yearlong investigation of the role in the oversight of private security contractors in afghanistan. we concluded that the proliferation of private security personnel in afghanistan is inconsistent with our strategy. afghan wr lords and straw men acting as force providers to private security contractors of acted against u.s. interests and against afghan interests and widespread failures to aduately fed, train and supervise armed security personnel pose risks to the u.s. and coalition troops as well as the afghan civilians. i assume the commission is familiar with that report. first of all i am wondering whether you agree with the conclusions of the report. but secondly, before i ask you questions about what legislation you're recommending following

your report and interested as to your reaction to what legislation we have recently adopted, what recommendations which recently made to see where that falls short and then i'm going to ask what additional legislation if any. but first are you familiar with those recommendations and if so, do you agree with the recommendations i've just read? >> senator, i am famliar with that report. the commission is familiar with that report. i want to say our own report - you in fact pass the ball along, and further investigations have been carrying -- have been going more and more deeply into it. we note that our private security in afghanistan appears to be a major source of payoff to the taliban. our report has the first official statement that it's the second largestource of money for the taliban. >> after drugs. >> after drugs, that's right.

>> that's similar to our fight but here's what followed our report. the department of defense is published a number of task forces directed the remedial action be taken. and so the question is have those task forces been effecte, are the operative of general petraeus himself told me about this importance of this issue. now he's kind of the most recent offer of the cnter insurgency strategy and i just am wondering are you familiar with those task forces, are they effective, are the opetive? >> well, one of them according to public sources came up with a figure of $360 million being paid to the taliban, so they are at least grappling with the issue. >> did you have a chance to interview those folks? >> i interviewed a group of analysts who sort of work for them or with them, and there is one useful thing that's being done although it's not considered to be enough to

control the problem. there is a type of vetting using intelligence information, which is that least going to keep the bad guys from being a direct contractors to us. that is obviously only a portion of the pblem. >> we were briefed in afghanistan about this, some of it we can't discuss here. let me say -- and i believe -- i was with the co-chairman shays out there and they are clearly getting their arms around the problem. getting your arms around the problem isn't necessari solving it. and a lot of this is still clearly going on, and it's going to take some work because, again, a lot of it has to do with what you heard earlier, visibility in thesubcontract. >> i agree with that very much. as a matter of fact, in fiscal year 2008, the defense authorization bill at we had a section called section 862. and what is required was government-wide regulations to be ssued on the selection,

training, the cooking and conduct of contractor personnel performing private security functions and iraq and afghanistan. so that was in fiscal year 08 offer my station. and i am wondering whether you can tell us whether the federal agencies have complied with the requirements of the section 862. >> i can. they've issued the guidance of the instructions and for the public comment the difference as you are well aware is the execution of that, there is a big difference between what the policy says and what being executed nine levels belowon the field. also notably, i believe that section 862 meek six of two mmission and the state department in the country whether they are following those recommendations. and because of the technicalities i believe in the wall i believe the state

department would have a different view as to whether at applies to them. >> can you give us a recommendation or have you given a recommendation on that section as to any need to strengthen it? is that one of your recommendations? >> it's not specifically in the report. we can certainly discuss that with you. >> if you have enough days left to do that. >> yes. >> -- would be helpful to do that. >> center, one of the things from the defense authorization bill to require a definition of the term inherently governmental. two weeks ago when be published their new definition. long story short, it lists now for the first time the security function under the long list of what functions are determined to be inherently governmental. >> long overdue. >> i think i have time for one more question before my time is up. we have a provision in the 07 defense authorization bill which required the department of

defense to assign a senior executive to lead the program management and contingency contract in efforts during military operations. it to identify, quote, que deplorable cadre of experts with the appropriate tools and authority, end of "to staff the efforts to take specific steps to plan, train and prepare for such contingency contract. and i'm wondering whether or not that -- whether the department of defense has implemented the requirement of that section. >> i don't know. >> i would say we found the lack of program management to be a continuingroblem. >> the way the department is done is it has some individuals who have responsibility for this in general, in policy-making. in osd. that is different to the estimate is. >> it's very different. >> it is sickening its specific pele.

>> we did not fnd somebody who was so designated which is why we made the recommendation that you need somebody coming and it has to be somebody at the assistant secretary level. we think it has to be somebody senate-confirmed. schenectady alaska department of defense why they haven't complied with section 233 of the 2007 act? was that question asked, do you know? >> they've taken a number of steps in totality there are not enough. >> okay we will ask. that's for sure. >> thank you, mr. chairman. >> thank you. senator carper is gone. let's do a second round of six minutes. it's a second round. i raise the question at the end of my first round of questions which is our contractors cheaper as presumably that is one reason why contractors are called on to do these jobs. in fact, the commision in its final report asked the question

and offers the following answer. it depends. and because it depen on, continuing the quote, av factor many of them under the direct government control, the consideration of cost cannot be the driving factor in determining whether the contract or what to contract. >> senator? >> they are cheaper if you use them efficiently. they are cheaper if you use 3-cd when you only need three. they are cheaper whenyou hire 15 to do the work of trees. they are cheaper when you don't have a contingency and therefore you don't need sevel servants to be on the payroll. so they can be much cheaper, and it's one reason why we use them and they can provide outstanding work. you just have to make sure you use them when you need them and you don't use too many of them and then when you don't need them you no longer have them. >> so the key here is how you manage them. >> more than that, senator.

>> you want to take issue with the chairman? [laughter] >> i never did. eat the crumbs off this table. >> man. all right. what i was going to do is played out in addition to that there's another factor and it's one we talked about earlier. one of the reasons that they are cheaper. obvisly local national is going to be cheaper. but then that is where so much of the corruption problems come plus very often we found in we've reported on this these people are exploited. this is the abuse side of the equation. we talked about waste and fraud. this is the abuse side so it is both of my esteemed co-chairmen -- >> you mean exploited by us? >> by their own contractors that hire them and so, those guys will be paid next to nothing can to force contracrs are cheaper so it's both of the circumstances of the environment in which they work which is what my co-chairman talked about, and the nature of the contract

themselves for people doing them. >> so part of this, congressman, if all i understand what you're saying is how these people are manage it's making the complicated matters simple but part of what you are saying is it can be cheaper if they are well managed. >> absolutely. what is really important is that we have experienced people that know how to see -- know how to oversee contractors even when we are not using them so that when we'd need to use them we know how to use them well. >> okay. let me get to that. i meioned in my opening statement about how some of this, you know, it is déjà vu all over again and how do we stop it. you probably know this. in 2007, this committee reported a contacting reform bill and one of its provisions which ended up being passed into law in 2008s part of the armed services

national defense authorization act required the ed administrator for the gsa to establish a contingency contract and/or whose members would be acquisition professionals from across the government to deploy the continncies such as iraq or afghanistan or a major disasters such as hurricane katrina. it's an interesting history here which is that this contingency contract in court nominally has been stood up the only got nine volunteers malkoff. and now you have come along and i welcome it of course the recommendation number two that the agency should develop a deployable condra for the acquisition management and

contractor oversight to talk to me a little about this because this is one of the great lessons of hurricane katrina and why we have been doing so much better in responding to natural disasters since then also we have met katrina was catastrophic and because fema and the department of homeland security developed contingency plans of people and plans, so how do we do this with regard to this particular matter because these are contingencies and as compared to the ongoing contract in which and the department of homeland security to the islamic we explored this issue in one of our hearings because our thought was this sounds like a good solution to some of the problems that we were identifying incoming and the executive branch witness came back and said well, it really isn't appropriate for an overseas contingency. and this really isn't going to answer the question. and we had the scrs, which was

also the representative from the state department there, which was also to be a deplorable civilian based cadre who could tually go over and do the work cannot adjust the acquisition work force to supervise, but those to do the work. the agency's -- the other agenes involved are not forced to put anyone up and don't. >> mr. henke, did you to that? >> yes, sir, if i might. we had a great example of that issue. the fundamental principle is if you're going to have contractors carryingut parts of the foreign policy work where appropriate, you better have a vigorous government oversight. an example, military as tell which is a joint contract in command in iraq and afghanistan. that's a good step fward. it's about 400 people with a brigadier general in charge of it. they realize general petraeus comes in and realizing he wants more contracting oversit, so he goes back to the service and says army, navy and air force, said the more contracting officers. they say we are tapped out.

we don't have enough to read we've deployed them six times and can't break the force. so they try to get -- number one the failed on getting more military volunteers were not enough. number two, they ask for civilian volunteers. they can't find enough. they wound up staffing of the contract in command with contractors to provide oversight of the contracting. >> it's crazy and unacceptable. so i'm ust going to finally in this line of questioning let's go forward to, three, four years. just as all of us want, we have wound down and our involvement in iraq and afghanistan, and maybe there is a continuing mutual defense strategic framework agreement. but we don't have many people there. and then some other contingency, some of their crisis occurs and we are required to deploy the troops in all that they need to

support them. so what do we want in place at that time to make sure in that new contingency wherever it is, we don't make the same horrific mistakes and waste of money as we have repeatedly in the previous contingencies'? >> may i start? >> yes searc to the estimate having the deplorable cauvery of professionals as important, no question about it but it's only part of the equation. and my colleague, ms. schinasi, began to mention this and we said it explicitly, but quite equally important it is critical the government had a choice. and that means that there needs to be at least a small and expandable organic capacity on the part of the three agencies to reform them themselves so the next time there's a contingency the government has a choice between going with contractors and going in house and the determination can be made whether it is more effective to do it either way, whether it is cheaper to do it either way as we said at the inception the government doesn't have an option, contractors are the default because this is the only

option. >> is this something we need to legislate on or something you are going to talk to the executive branch about putting? >> we need both. but first in the quadrennial review they've got enough with service to the contracting. it was hardly mentioned. half of the great expenditure is not any more. it's on services and we have to get people to wake up to that. you need the jade ten. in the military they treat contracting seriously. you need the key management people. the assistant directors ditties to be in al the different departments thinking about contingency. you need to have a cadre of people who can oversee contractors and a country of people that can go in to do the work of contractors. if you do those tngs and have real competition we won't have the same problems that we have had.

>> my time is up. i hear you that we should be working on the legislation to implement what you are about, and i can assure you senator mccaskill and the subcommittee when you go out of business will try to take up the oversight of what you started. senator mccaskill, you our next. >> thank you. i think also the place we have to keep this up i don't think we can underestimate and i think most of the members will agree with me the culture of the contract in, and i honestly believe that at the war college contra and has to be one of the core competenci and i honestly believe that our flag officers it is anecdotal that this is true. it actually happens. a general said to be when one of my contract and oversight trips i wanted ice cream in the mess hall yesterday and i didn't care what it cost. they see their mission as a

military mission and contracting is not something that the milita leaders have seen as part of heir mission, and there was probably when most of them were trained and efficient what they would be doing a leader in their career they didn't realize to what extent the military would be relying on contract in. and so i thi we've got to spend some time questioning in the armed services committee senator webb and senator collins, senator lieberman, me, senator levin we are all members of the committee and if we don't continue to pound the leadership of the military about contracting, we are going to expect more of the same. let me ask you a couple things can get first, let me ask it seems to me on the core -- by the way to follow-up on your question, omb is supposed to be standing of the contingency corps. that is what our legislation directs, and they have fallen down in terms of doing that.

but what i am wondering about is should we be looking at the guard and reserves in this regard? you know, sure what we talk about we need citizens that can be deployed when necessary. we have got alot of men and women serving in our reserve and serving in the national guard that have the core competencies as it relates to contract in an oversight. should we not be trying to work with the guard and the reserve to try to identify certain units of the guard and reserve that recruit and retain and maintain a level of competency in terms of being a deplyable during the contingencies as members of the guard and reserves because these are folks some of them may work as accountants in their jobs at de serve as civilians. it is a civilian court that can wear the uniform and have that kind of stick in a contingency

that maybe would bring more respect to this kind of work. any toughts on that? >> some of the success stories that we heard in a theater of the interagency kuhl lubber initial on the projects and how things worked really well together often had a guard reserve member as part of that gain was because of he domestic experience, if you will come devotee of brought to that that may -- mde the project successful. but it was almost by happstance. there was no planning for it. there was no identification issue of what are the skills we need from the guard to bring to the agricultural product in afghanistan but where that did happen, we heard many examples of succesul projects on the small level. >> it's also important that the same approach -- and you can't use the guard and the same way -- is taking place at the state and a lady and we heard about a

a ebit as you see they are going to be taking over a lot of the contract and what we cannot afford to let happen is the dod queens of its act as it were the other agencies do not command one of the concerns i personally have discussed you've got to give the people to go out there. it's not enough to rely on volunteers. if you're going to rely on volunteers you are always going to have a problem. >> let me switch because when you brought up relates to this sustainability to be as we transition back to the sta aid from defense we have created some precedents in this committee that are unprecedented in the military history, and one of them is the notion we now have the military with a reconstruction fund. that has never happened before in the history of america. for the first time this year an

the defense budget, there is afghanistan reconstruction. i'm not talking about search funds. i'm not talking abo the funds it is like they have more often to the militar is going to build things. and that is where the whole sustainability peace comes in. if the military is making the decision about when to build things, i believe that's why power plants will happen likes kabul. i need recommendations that we could put in legislation. what should the requirement be around the sustainability? what kind of process should we force in place that thy have to -- they are claiming now they are doing the sustainability analysis. i don't know if you saw any evidence of that. we have looked and can find n evidence of real analysis on the sustainability if the military says they have it somewhere they can get it to my office anywhere they would like but i do not

believe system of the analysi is going on in earnest and most of the decisions being made. i need guidance on should we be passing it off to the military in these contingencies to build things ever and pass it back to aid come ad don't we lose some of the oversight sustainability as we do those kind of things? and how do we get at this issue that counter insurgency means we build the health centers and power plants and highways even if the security and sustainability are now those issues are completely unlikely to ever have to be able to occur. >> senator mccaskill we deal with that in two ways. the first is to talk about pushing development, traditional development projects and the key u.s. 80 on the counter insurgency timeline. it just hasn't worked. so i think thatour concerns are inappropriate in terms of who is it that should be doing projects and what is their mind

set in terms of the time frame for that. the second is we have made recommendations although we don't have the metrics about the sustainability we have made recommendations in the speci reports contained in the back of this report that says cancel the project if you can't demonstrate that we're going to be sustainable, and again, you would have to come up with senar coburn's net tricks about how we are going to do that but if you can demonstrate that cancel. >> shod we put something in the law that says you can't go forward unless there is a written documentation about the sustainability analysis? are we -- this will drive you crazy because they are seeing welcome of the whole duty of the counter insurgency is how quickly we can move, which i have watched -- asking questions about 2007i have watched every year how it has gotten bigger and we started out with breaking windows and storefronts and that's the first year we are going to fix the broken windows. the next year we are going to have a wing on to the hospital or we are building highways and now we have a 400 million-dollar

front. >> nobody wants to take ownership and that is one of the reasons why we think we need to see that structure in place in the military, usaid and state as well. >> there is an element at aid that we discussed that's underrepresented and it's a small office called office of transition initiative and actually it's fascinating to read the entire office has only a think six government personnel. everyone feels is an individual consultant or contractor, whatever they want to call them. those are the only people that are geared to the kind of things you are talking about. and it seems -- this is my personal view. what they ought to do is create something that is to say you can go all the way to the top and get your budget money but he won't compete with the dominant culture which is long term development but you will have

people who now have a prospect the of moving up the ladder and therefore will stay. what we found in afghanistan was really remarkable. young people actually young women going out into these danger zones but then we are told well, you will do this for three years but then you can't come in because your contract is up so people knew what was going on. >> that's very weird. >> thank you mr. chairman. >> thank you, senator coburn. >> thank you. i think the commissioner mentioned the culture changes. the senator from misery and myself demanded the culture change and i don't know if we have gotten it or if you've done more follow-up hearings but we have had a chge in the top but what we found was no truth of it experience. they didn't have any formerly trained auditors it was a culture that goes with in the agency but you never have

outside training or outside experience in terms of auditing and in terms of what you recommended. any other things he would recommend for the -- dcaa and water they doing in terms of what your observations were in your study? >> it's too bad the co-chairman is in here because he would love to speak on this issue. the one thing we did mention this if you have a 600 million-dollar backlog of bills paid but not audited, think of the records people have to keep and we pay them tokeep those records. we pay tens of millions of dollars for people to keep records that we are then going to audit six or seven years later. the memory about them is going to be -- and so, one, the need for people. they need as senator mccaskill points out and you point out well-trained people but the need more peop. they clearly need more people to get at the backlog. >> one other question and then i will end, mr. chairman, is three

or four years ago i was on the louis bergercorporation for the incompetency. did you find out why some again did find $70 million still be able to contract? >> we looked into that. >> can you give a plausible common sense explanations of the average american can understand when somebody has actually cheated this and then find we would continue to use that when they have demonstrated that they are not competen, and number two, they actually over bill? >> i would give a three word answer from an answer in a few words is very good criminal defense lawyers for the company is how they are able to they worked out a deal with aid, that is louis berger's criminal defense workers worked out with aid that they promised they

would be good and have a monitor look them over and make sure they are improving and in return you would agree they wouldn't get one day suspension you might say why would aid make this deal? they love what they call their development partners. they love them too much to let go of them. they didn't want to do without not without him for a day. they didn't want to do without contracting the new contracts for one day. so the crucial opportunity to send the signal was -- with questions on aid at two different arings we raised this issue and they stood by and the technique worked out with the civil defense lawyers, the type of plea agreement that was done unfortunately looks like it is going to be a model for the future. >> so why would we as a

congressman told whoever made that decision, usaid accountable for the american people? >> i think the very least you want to call them in for a hearing and question them quite extensively. that's how he would hold them accountable. >> by the way, the former finance minister of afghanistan who still advises the president and is in charge of a variety of things goes absolutely ballistic when you mention lewis perjure for that reason so not only is it a matter of cheating aerican taxpayers, it is a matter of undermining our credibility with the government we have to work wi. >> did you see any other examples similar to that with other contractors we could learn from? who should have been disbarred or disbanded that weren't? >> that was the extreme example. louis berger is the biggest

defroster in the contingency area. nobody got up to the members of the criminal fraud that they did. having said that, what we found is that there's a great difficulty bringing a suspension debarment cases against companies for what happens in afghanistan because it' hard to get witnesses together, people rotate out, there are people from other countries who are a part of the allied effort who you can't possibly hold them and so forth and so what we did is we put some recommendations from making it possible just on contingencies to do the debarment. the reason this shoshoni even more recently than the report of the sort of test case to see whether you could do a successful the suspension debarment through the normal full-scale trial i the united states, full-scale here in the

united states i forget what the name is a hint to of ended up virtually in a win by the company. so, you do have to make it easier to do these proceedings or they won't happen >> so that is a recommendation we should be doing? >> is one of the written recommendations in the report. >> thank you. >> thank you, senator coburn and to the commission members. congressman? >> i would just allow me to thank senator mccaskill and senator webb on behalf of the full committee and senator collins and to you, senator lieberman because you have shown tremendous interest through the course of our nearly two and a half plus years and i would say that all of us would tell you it was a privilege to have this opportunity, and we really appreciate your interest. it's nice to be on this side and ben the friendly side with you, senator mccaskill.

>> that's a very gracious of you, thanks for your service. i recall that the beginning that senator mccaskill said that your services were being sought after and she was very glad that you agreed to take this on knowing that the commission expires in a week or so and i hope you can find a way to continue to keep busy and perhaps the involved in public service. >> thank you. [laughter] >> i thank all the members of the commission very much for your public sevice. we will call now the representatives of the defense department and the state department. >> in about 40 minutes, we will take you live to the museum in washington for the activism,

media, and policy summit with a discussion on how the government uses social media to communicate with the public. among the speakers, the cds news white house correspondent. more road to the white house coverage tonight and into the weekend. newt gingrich, this afternoon, unveiling his 21st century contract with america, his campaign platform. we will assure you that speech tonight tomorrow evening, we are in new hampshire for the first town hall meeting with rick perry. he founded several labor unions and represented the socialist party of america as a candidate for president, running five times, the last time from prison. eugene debs lost, but changed political history. he is one of the 14 men featured in the new weekly series "the contenders," friday, 8:00 p.m.

eastern. get a preview, and watched other videos about him that our special website for the series. >> you should always start with the assumption that when a politician or a ceo is saying something, they're not telling you the truth. now, they may be telling you the truth, but the burden should be on them to prove it. >> he is an eagle scout, held a brief stint as editor of "mother jones" magazine, and produced three of the top 10 grossing documentaries of all time, and is also an author. the latest, "here comes trouble." sunday, your chance to chat with michael moore on c-span to. >> former house majority leader dick armey and americans for tax reform president gordon norquist called for a balanced budget amendment to regulate government spending. they spoke for about 35 minutes at a conference hosted by the

american conservative union in orlando, florida. [captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute] >> hi, everybody. i am president of let freedom ring will be talking about the balanced budget amendment. i was privileged to be involved in the leadership of the cut, cap, and balance coalition as we were dealing with the debt ceiling how many of you think the debt ceiling debate came out well?

i think that as a unanimous vote of no-confidence. washington, one left to its own devices, inevitably produces a deal, even when it is clear when america is clamoring for a solution. therefore, i submit to you that i -- we can have no solution until we have a balanced budget amendment. how many people agree with that position? [applause] >> that is what we are going to discuss in this panel. we have three absolute experts with specifically relevant experience. i will introduce them one at a time, then they will speak for a few moments each, and then we are going to have a discussion. so, i would like to first to welcome grover norquist, the

president for the americans with -- for tax reform, and the force behind the pledge, grover norquist. [applause] >> another man should be a hero to everyone in this room is former congressman dick armey. majority leader, former prof. of economics and now chairman of freedom works, please welcome dick armey. [applause] >> and finally, jeff edgewater, chief financial officer of the state of florida. prior to that, eight years senator, two years as president of the senate, and prior to that, 25 years as a community banker. please welcome jeff atwater. >> there is no way you're old

enough. >> i am going to invite each of our panelists to open with five to six minutes of remarks in general about the balanced budget amendment as a concept -- how it works, things we need to be concerned about. not every but -- balanced budget amendment is the same. there are some bad ones out there that you are about to hear about. the budget control act requires that both the house and the senate vote on a the balanced budget amendment between the first of october and the end of the year, yet they do not define what it is. so, literally, any piece of legislation that has some reference to being a balanced budget amendment would qualify with that rather useless provision in the act. i think there is at least one out there that we need to really be on guard for, so let's all

support the concept of a balanced budget amendment, but do some really serious and critical thinking that helps us distinguish between and among different varieties of a balanced budget amendment. not everything that masquerades under that title is, in fact, helpful in putting us on the path to fiscal restraint and fiscal sanity. first, let's open up with grover norquist. >> thank you. our friend, barack obama, has come back in the past, and said we have a debt crisis, the deficit crisis, largely of his making, the solution of which in his view is to raise taxes. the real solution to spending too much money is spending less money. now he says we should have tax reform because the tax code is complicated and the rates are too high and the way he defines tax reform is about $2 trillion in tax increases. i assume he will jump in with both feet in favor of the new

balanced budget amendment, and will support an amendment which will raise taxes. the first thing to do is to make sure any balanced budget amendment requires at least a two-thirds vote to raise taxes. the state of california does. the state of arizona does. so, the balanced budget amendment will not force tax increases to balance the budget, but will help congressmen and senators who are fighting to reduce spending as a way to balance the budget. \ , let's focus on not raising taxes, and then we can focus on spending our group of americans for tax reform runs a no tax increase plan. we asked edits to commit in writing to citizens, not to me, despite what the president says sometimes, "i promise i will not raise taxes, no net tax increase."

it is a commitment to their state and their district. we have gotten a majority of the republicans in the house, over 230 members of the house, all but six republicans in the senate, all but seven in the senate, all but six in the house have made that commitment in writing that has taken tax increases off the table so that even though obama keeps coming back and asking for it again is told no, you cannot do that. the republican party needs to maintain that commitment never to rain taxes, and only one we convince people that we are never raising taxes do you ever get to a conversation about reducing spending. step one, and to not raise taxes. step two, now we bring spending down. we have a challenge because president obama's terry of how the economy works is the government spends a dollar, and we are all richer. he takes a dollar from somebody

that earned it, and gives it to somebody in chicago and announces there are more dollars in the room. harry reid, nancy pelosi, and barack obama stay on one side of the light, take out a bucket of water, and then walk around, and for the bucket back into the light, and announced they are stimulating. they will do this 800 billion times, and that will make the light become much deeper. he really believes this. when you tell somebody who works on saturday because you have worked on saturday will take more of your money, and say to somebody forgot to vote for a living, but decided to -- work for a living, but decided to vote, we will give you money. each ito did not have to work on saturday, there is no reason to

get a real job because we can get you government resources instead. so, the idea of keynesian economics, you take money from one person and give it to another is not just moving a stone from one side of the room to another. actually damages the economy by changing incentives for producers and for people deciding whether to work. we have to make sure the balanced budget amendment is a lid on spending, and not another tool to force tax increases appeared >> thank you very much. -- tax increases. >> thank you. [applause] >> let's first clarify the president's understanding of how the world works. i have to target, this guy cracks me up. by his own words, he describes about having a great adventure of going to harvard, and he made it a point to look up every marxist professor on campus

because he did not want to be seen as a sellout. he said that. i can only a imagine he was successful. i taught for 20 years, and i know you will be shocked to realize that for 20 years of teaching at american universities and i knew a lot of marxist professors. of the marxist professors had one thing in common, they were wrong, about everything. so, the first thing you have to understand about this president is he does not understand anything. he amazes me. second thing is he has been able to sell this effectively a least once. we hope that is the end of that. president obama thinks of the american political economy as a jockey and a horse. of course, if you realize we have the most beautiful course

in the race, in this world race for economic well-being and efficiency and effectiveness, productivity, production, equity, and distribution. but, obama is confused. he thinks the jockey is supposed to carry the force. his idea, the way you win the race, is you start with the reduced our the horse, and feed the jockey, -- you star of the horse, and feed the jockey. he is determined to do this. there is no doubt that when he took a one recreation course in question activities, he found the marxist equestrian and got that one wrong, too. our problem, ladies and gentlemen, is we have the big problem, the overwhelming problem that smothers the american economy. we have a jacket that is too

big, fat, dumb, and lazy. i do not mind arrogance in people that are competent, but we have a government that combines their stupidity, their ignorance, and there'd dumbness, and there largeness, with arrogance. i could tell you right now, i hope you read dick armey, because if you will and you read my book, because we will both profit, there is nothing righteous about an income distribution. what they are saying we need to say we what they are saying we need to do is feed the jet -- what they are saying we need to do is feed the jockey and make him stronger. whether you look at jobs in south carolina or coal mining jobs all over america, where the oil fields in north dakota with

the epa out of control of some silly minded recommendation that is killing jobs, the department of labor out of control because they are offended there might be jobs for people that are now members of labor unions, he is currently, as we speak, killing more jobs than he could ever possibly hope to create with that job expansion gag he has just pulled out. it is just plain, flat ignorance. the first job to restoring prosperity in the american economy is caught the size of government. [applause] >> cut it down, and rationalize it. it is very important that we make the cuts where it is dumb fact, and arrogant fact, and where we are insulted.

i was on television last week with howard dean, and he thought the most wonderful thing we could do is expand americorps. no. americorps is an insult to you and our children. we have to cut out stupid programs, counter-productive programs, put a rain on arrogance and regulation, and overall reduced the size of government. that means, yes, the entitlements. so, we have to look at those among us who have been brave like young paul ryan, and who have dared to step forward. the whole question of entitlement debate has been. on by two kinds of people -- has been brought on by two kinds of republicans -- people -- republicans that don't there, endicott and -- and democrats that don't care. once you cut government down and make it fit, the capabilities of

our economy, in a manner where it could be an ancient of assistance to what we do naturally, which is grow ourselves into a prosperous nation, then you reform the tax. there is only one legitimate reason to levy a tax, only one, raise money. anything you are trying to do with the tax code other than raise money is and audacity, and an affront to your taxpayer. claim that thing up. now, fortunately we are lucky. in 1984, we have the correct answer, a flat tax. if you think the answer is something other than a flat tax, i am sorry, you are wrong. we have the right answer. cut taxes to accommodate to a reduced government in such a way to allow the economy and their -- the room and the incentive to grow. not every balanced budget amendment that will be floated out there will give you that.

lucky, we have senator lee, and those of us in the tea party movement across america can be especially proud of senator lee, who has developed a lot of support within the legislative bodies for cut, cap, and trade. cut government red cap government, and then you could balance. -- government. cap government, and then you could balance. why do i say we are particularly proud, those of us that feel like we had a hand in helping him run? because he has given us the bella -- the best balanced budget amendment out there, and the republican that he replaced today, it's in office, would have not have voted for it. if we could stay on the job,

keep standards high, stay focused and demanding, we could have a truly conservative majority in both the house and the senate, and the white house, and we could get it right. do not let anyone say once you have fixed the problem of the deficit you have solved the problem. you can fix the problem of the deficit by destroying the economy as well as reviving the economy, and our choice is very clear. >> thank you, mr. leader. [applause] >> jeff atwater as chief financial officer of the state of florida is working with and under a balanced budget amendment. tell us how it works, and give us a little bit of the history of the balance budget amendment in the state of florida, and the difference between a constitutional fix, or a statutory fixed.

>> absolutely. thank you. every candidate on stage last night suggested it is the state that can be the laboratory, the petrie dish, that we could learn from naturally. so, 49 states have some sort of legal binder. 41 states for the legislature must act to the past eight balanced budget amendment. here, in florida, there was a time when we worked under a statutory lead designed requirement to balance our budget, but the wisdom of the people in florida indicted this in our constitution. >> when was that? >> that was 25 years ago. additionally, a super majority to advance corporate tax increases, so, putting a re- stricter on us was the right way to go. how is it working? a imagine what we are suffering

right now. the state of florida, the state hardest hit, the highest unemployment, highest foreclosures, greatest drop in valuation of property, greatest number of new participants in food stamps, you would think we would be the one struggling. we had a aaa rating from s&p going into the legislative session. governor rick scott, the speaker, they made tough decisions because people demand it in their constitution. they came out with a balanced budget. less spending, and no new taxes, no new fees. the same week s&p downgraded the country, they upgraded the outlook for the state of florida from - 2 stable because the people demanded it and decision makers have to deliver. i would like to add to what you said. there are all different varieties, but remember, the

balanced budget amendment is dealing with the symptoms. the disease is spending and debt. that is who we are going after. anything that we do that does not restrict a liberal's ability to just have a balanced budget amendment, they will take that to the western european socialist system faster than we can imagine. if a restricted plate is good for nascar, it should be good for the united states congress. we put a straw ballot question to the people of florida last fall, and every editorial writer in the state railed against it. it was a simple question. do you think the united states could develop a balanced budget amendment without raising taxes? not one dime is spent on that initiative, yet every editorial writer pounded it. by 72%, the people of florida

embraced it. that is our message to every presidential candidate, and every member of our delegation, give us a balanced budget amendment without raising new revenue. [applause] >> leader dick armey refer to the balanced budget amendment offered by senator lee, and then signed on by orrin hatch, rand paul, and a few others. there are three additional restrictions beyond the very basic provision that income and outlays must match. those three provisions are a super majority to raise taxes, 2/3, in its original form, a cap on spending, federal spending as a percentage of our total economy or gross domestic product of 18%, and then a third restriction that many people are not aware of because it only

consist of one sentence in the law, but it is a very important one, and is one that specifically strips the courts of the power to mandate, to a court order a tax increase. that is contrasted with the version of the balanced budget amendment that you remember very well from 1995 that came within a vote of passing, because that was a very simple balanced budget amendment that essentially just said incomes and outlays must match. i would like to have first leader dick armey, and then grover norquist talk about these restrictions, how important they are, and how they must function, because i think mr. jeff atwater has set the stage for us to dig deeper into debt aspect. >> they are critically important. these folks, if left to their

own devices will be inconvenienced minimizes. what they really want is the good life with as little trouble to me as possible. they're certainly not into hard work. so, what you have seen happen here, in florida, is the instrument forces a discipline. it is a wonderful word. discipline of workmanship, which requires making hard choices, rolling up your sleeves. we did a seminar in utah a couple of weeks ago on the budget. we have 300 utah citizens attend that seminar and it lasted about an hour and half for two hours. i left the next day because i knew i had a population of 300 citizens in utah that knew more about the federal budget and the united states government than any population of 300 house and

senate members you could put together, and you know i am right, because they are not disciplined. they are not disciplined. here is why i think we are winning. america has come away, and people understand these folks are willing to give me the job, but are giving me the jobless high expectations of workmanship, and they are watching me. so, we sent them off to washington, and we let them know. we do that, and we did disciplined workmanship. >> that is right. [applause] >> jack kemp, ronald reagan, newt gingrich, dick armey, to create a republican party committed to not raising taxes. the tea party movement created a republican party that is not going to spend as much money. prior to the tea party showing up and sitting at the table and saying our make it or break

issue is total government spending, oddly enough the party of small government did not have anyone at the table who central issue was total government. you have guys who had pieces, but not total government. part of it says the federal government should not be more than 18% of gdp, which hopefully we will recognize is much too generous and have to ratchet down, but it is lower than where we are right now. >> which is what? >> about 25%. >> it is not bad. it is a good target, but when we get we will of the mandate is lower, but it will be a lot of work to get there. focusing on government spending as a percentage of the economy is the correct metric. when we focus on the deficit, which is the difference between two interesting and important numbers -- how much they take and how much they spend, the difference is not the number, it

is the portion of the economy. we can have a bigger government and france because we are bigger than france. what percentage of the economy is the government, that is the measure. our team has two solutions to make the government smaller -- spend less, and grow the economy by taking all of the trial lawyers and putting them in a plastic bag, and floating them out to sea, reducing marginal tax rates, and a number of other important reforms. we can make the economy grow, and the government shrink. we have the modern democratic party that has no solutions to either reducing the size of the government, and they have demonstrated they have no idea how to make the economy grow. so, we want to stay on the playing field data shrink the size of government as a percentage of the economy, and not get into a discussion of just the deficit because the democrats have a solution to

that, and it is called higher taxes. >> how would you evaluate, though, both the value, and the sort of method of operation of those two restrictions? is there were a deal that were being made, it is willing to be very hard to get a substantial number of democratic votes for a balanced budget, so there is going to be some negotiation, some give and take, and at some point some people might conclude it is within reach, and that is when negotiation get serious. those three provisions, any one of those three, could you rank them? >> at the end of "the godfather," they say the person that comes to you. the person that says let's water down the bill, that is the one

that gets this thing around the neck. the other team will come and suggest we might be for this is the courts could mandate tax increases, and guys and our team might be tempted you might have six democrats that would vote for this if we parted down and started down. by the time we targeted down to where it was not worth their -- cards it down to where it was not worth very much, i bet you a nickel they disappear. i would argue the stick with the senator leave bill unchanged. if democrats as i have six moderates with an idea, i say write it down, put it as an amendment, and if it is good enough we will join your bill, but we are not changing hours on the prospect that you might someday have one, two, 10, moderate democrats joining it. just as in "the godfather," they

will come at us to water down the amendment, and while we water it down our friends decide we are not worth the effort, and our enemies are saying they're making it work less, so there will never help us enact a bill. i do not think we should get on any of them. i would rather defeat guys then negotiate with them. [applause] >> that means that we need to make a balanced budget amendment, and a real one with teeth a defining issue in 2012. not simply an issue, not simply an issue supported by 70% to 80% of the american people, but a defining issue.

>> i am sure you are going to have watched this in state legislative bodies. every legislative body has a defining margin of goals. put a proposition out there, and it will be voted yes or no. those that go now will have to convictions. those that vote yes out of convictions, and and within the body of the swing vote. i call them the bedwetters. their vote the loss to the people who they fear the most throughout my lifetime, the people they have feared the most has been the teachers unions, the afl-cio, the left disney gained. here is what is changing in america today.

the people they fear the most are the american citizens, real people without a special interest who asked nothing of you in office except be disciplined, do your job with some degree of competence and devotion, and do the right thing. the a's and gentlemen, they are more scared of us today -- ladies and gentlemen, they are more scared of us today. this is a marvelous revelation. we have to stay right on top of them. >> it will only happen if people in this room and millions like them never quit, never get off message, and the message is that we need to change the trajectory of spending and growth of government in this country. needs to come down. >> rover norquist, you talked about the 18%, and so did leader dick armey. the 18% cap as federal spending is a ratio of total gross domestic product, that number

did not come out of the air. that is the historic number for federal revenue from the end of the second world war till about five years ago, and about five years ago, it began drifting north. off until that point it stay at a narrow band around 18%, sometimes 19, briefly touched 20%, then went down a little bit. about five years ago, it started to head north. it was 24.8% one year ago, and it is now over 25%. so, the 18% number is not an onerous, draconian number at all. it is a number that has stood as well through economic cycles, through tremendous prosperity, through a number of foreign conflicts and so on. if this is not a foolish and

restrictive, and overly idealistic number. it is perfectly realistic. yes, sir? >> it is a realistic goal, and it is a nice interim goal. you have to understand, if it was good enough for hubert humphrey, a should be good enough for this gang of thieves, but at any rate, what we must force these people to do it is get down to some discerning, discretionary choices. if you believe in freedom, you should expect from your the government added do nothing -- expect from a government that it do nothing except what is correct and necessary. if it is the right thing to do, and it is not necessary the government should do it, they should not do it, and when we start making a judicious decisions on what are the legitimate and necessary enterprises of government, then

we will get below that 18%. there is a lot of fat, and blubber, and messing around with your rights and my rights at 18%. >> in our waning moments, let's ask jeff atwater to follow on exactly that point. how do choices get made under the cap of a balanced budget amendment? how does that change the dynamic? >> it is actually deliberating dynamic, because you are forced to prioritize. you can no longer hide behind who brought it to you, who wants it, who needs it. it is what you believe your solemn duty is to allocate the precious resources of the people back to what has to be done on the your constitutional charge. it makes it easier to read again, this 18% number, when you look around the globe, those enterprising nations, it is that low percentage number were

economic productivity is turned loose because of the mine sent and the work ethic of people that are not burdened -- mindset of people that are not burdened. in the state of florida, and i know this could be the case no matter what state you're coming from if it has conservative leadership, the last five years we have reduced everything we can education wise, department of transportation-wise, only to find out that the senate tore of the day here comes the federal entitlement of medicaid -- only to find out at the end of the day here comes the federal entitlement of medicaid, and after all of that we cannot reduce any further. it keeps piling on. how must the federal government takes ownership of the responsibility of being disciplined as those in the states, there is little the states can do to maintain a lower rate of expense burden on the citizens that they have the privilege of serving.

the federal government has to address this. >> it makes it easier to say no. that is the great sukhoi. any final remarks, grover norquist? >> this is an incredibly important fight. i would urge you to talk to any congressman or senator looking for your support. if we run a campaign going into 2012, we ought to win a lot of senate seats. there are 23 seats up for election. 10 republicans. at least half of the democratic seats are open to change if we run an election where this is a top issue, and are as successful as we will be. there is a very strong likelihood we could get a very good, strong vote for the. you have to call it, red ball, corner pocket, explain that we want this. when you win, you get the right

to push for. >> we have eight seconds left. that is just enough time for you to join me in thanking our panel. [applause] >> always good to be here. >> always good to be here c. >> thank you. ♪ >> we are alive now let and museum in washington, d.c., for the activism -- we are live now in washington, d.c., for a summit with speakers including the head of social media for the chicago mayor's office, and hear from cbs white house correspondent marc nowhere. it should get underway shortly. a study released today showed that while republicans have a 40-seat majority in the house they use twitter and a bigger edge, 2-to-one.

the state of florida is deciding it is moving up its primary to the end of january. that news is to be made official reportedly tomorrow. we spoke this morning on "washington journal" to afford a political reporter. . joining us on the phone is adam smith, political editor for "the st. petersburg times closed would in florida. it looks like florida is going to decide to move up its primary. what is going on? >> they want to make sure florida is the biggest battleground state. host: if they move up to january 31, that would make them the fifth primary? guest: that is the goal. they don't want to get in front of the four earliest states -- iowa, new hampshire, nevada, and south carolina but they want to

be alone. host: why does florida feel they should and they can have a decisive impact on the primary? guest: the feeling is, especially for the republicans, you can't really win the nomination without florida. it is the biggest battleground state and they don't want to be waiting until the nomination is already locked up to 2 vote. the idea is to move early, even if it means penalties from the party. host: what are the penalties? guest: they will lose half of their delegates. they have about 116 delegates so the rules say it that will be cut in half. i think the view in florida is, a couple of things, who cares, delicate stone mattered -- it is just people making -- wearing funny hats at the convention. two, florida is too important to actually get that penalty. the convention will be in florida and ultimately they will

not be penalized. host: what is of the financial benefit for florida to move up its primary? guest: it certainly will be good for tv stations. we will get a lot of advertising. we will have some campaigns year. but i don't think it is a big financial benefit. it is more about influencing the nomination. host: we see from census data that florida's hispanic voters jumped up 250,000 since 2008. what is the impact of that in the primary race? what are these gop candidates going to have to say to appeal to the voters? guest: when you talk about immigration, florida has a different population than some other states. we have a lot of cubans and people who've been here for a long time. they are not especially sympathetic with illegal immigration. it is not that hispanic voters are going to be opposed to

tougher sanctions on illegal immigration, but what you have to be careful is, is on the rhetoric. if you are to anti-immigrant you have a problem. host: which candidates are focusing their resources, their money, have a campaign organization on the ground in florida right now? caller: florida is such a big state. it is not a retail politician state like iowa and new hampshire. pierre greece has a decent organization and romney is -- romney has been of florida for a long time so he has a lot of support. has a campaign structure and a fund-raising structure. host: which part of florida does a gop candidate need to win to get the dominant -- nomination? caller: it is over the map.

it is different from the general election. but my area, two and orlando, about 45% of the primary vote -- tampa bay and orlando, about 45% of the primary vote. but you have to do well pretty much everywhere or target your campaign to specific areas to over, where somebody else might exmoor presidential politics tonight on c-span. newt gingrich, unveiling his campaign platform, the so-called 21st century contract with america. the associated press says the plan would form the core of his campaign for the republican presidential campaign. key elements include a repealing president obama health-care plan, and giving taxpayers the option of paying a flat tax. we will see that speech at 8:00

tonight here, on c-span. then on friday, rick perry holds his first town hall meeting. i will be lighted 6:00 p.m. eastern. >> we will take you back live to washington, d.c., for a discussion as a part of the activism media and policy assessment. among the panelists this afternoon, the white house correspondent for cbs news, my -- mark knoller.

>> this is one of a couple of panels we are covering today. in washington, the activism, media, and policy assessment that will focus on the use of social media and how the government communicates with the public. the editor of "the huffington coast" and also mark miller, and the social media director for the chicago mayor's office. it should get underway shortly. the associated press recently released a study of the use of social media on capitol hill, twitter in particular, and they write that republican senator john mccain of arizona is the most followed senator on twitter. among democrats, senator clear mechanical of missouri is the most followed, -- center mike

castle of missouri is the most followed. among the many c-span twitter handles you can follow they include c-span now for updates on all three c-span television networks.

>> good afternoon. we have a couple of stragglers coming in from upstairs. we have one more panel of tremendous if keynotes, and then we are off to l@ for a couple of cocktail's if you could bear with the.

i would like to introduce robbed, will be introducing our necks of the palace. he is an executive team member -- our next round of panelists. [applause] >> thank you, g-8. heritage is a proud sponsor of the camp summit. thank you for sticking around to the end. three wonderful speakers this afternoon. throughout the day we have heard some outstanding presentations, whether it has been in this room or upstairs. i want to commend everyone who has helped us create this wonderful conference today. it is an outstanding. our next two speakers bring a very unique perspective on how technology is shaping news and government, and we will begin with mark knoller, who is sitting to my right, and has been called the unofficial

historian of the white house, and officials in the clinton, bush, and obama administrations have all of knowledge that he's better records about presidential trips, bill signings, and social events that even they do. he is an award in -- award- winning white house correspondent for cbs news. he contributes to the weekend editions of the evening news and up-to-the-minute. he has covered every president since gerald ford. he came to the news in 1988 after 13 years with a correspondent with the associated press radio network. please join me in welcoming mark knoller. [applause] >> i have never been in the newseum before. i like it is a part of the

museum,? if you live in washington, you never get to go to the museums and libraries -- except when you take relatives to come here. i am able to talk my relatives into staying away. it was asked me if i could start filing some reports on twitter. on what, i remember asking. i really did not know what he was talking about. i thought it was for making dates with people. i did not know what twitter was all about. occasionally, i would write stories for cbsnews.com. that was the extent of my online experience. i said that i would think about, which is what i always say when

i try to get people off of my back. the executive called back in a couple of weeks and said, ask me again if i would start to reporting news on twitter. twitter let's open up a account. i figured that it could not hurt. i did not want to appear uncooperative. between the two of us on the phone, she helped be opened up twitter on my computer and sign- on and establish a twitter site for myself. i have no recollection of what my first week -- tweets were about. i remember feeling satisfied by having an outlet to with which to instantly report the news as quickly as i could gather it and write it in 140 characters.

on radio, you have to wait until the next newscast. either at the top of the hour or the bottom of the hour. in that amount of time, competitors and rivals and colleagues can beat you at it. i found the instant gratification with twitter to be very satisfying. when i had a development report, i did so instantly. suddenly, it was like having my own personal wire service. i am an old ap guide. i started with the ap. one of the things in which bp is most proud is the speed in which it can convey news.

with twitter, i found i was able to get news, breaking news out faster than the ap and reuters. one of the problems they have cut their copy goes through a copy editor. that slows it down. all i have to do is gather the news, write it and hit tweet. let me give you some very important advice. the temptation is, you think in your head, it makes perfect sense. before you hit the button, read it again. so often, when you are reading it, you think, that is not what i meant. or you have the wrong name. a few of the 40,000 tweets, there are a few that i had to

file corrections about that. it is important that for my own integrity and my all and reliability, my followers know that if i make a mistake, i will correct it. it is really important. my number one piece of advice to u.s. -- to view it is, we've read your copy, a check for spelling, grammar, and accuracy. are you saying what you intend? if i had a nickel for every tweet that went out about the killing of osama bin laden and somebody wrote obama instead of osama, i would have a truck filled with nichols. -- nickels.

you need to check your tweet before you send it out. even at the risk of losing precious seconds to be first on a breaking story. what surprised me most about filing news on twitter was the degree to which my instant reports would drawl instant common to, and criticism. this is a highly polarized nation with people having very strong points of view about various things. they are not shy about letting you know about it if you think you have transgressed in any way. even if you are confident that you have reported accurately and fairly. doing 30 years on radio and weekend television reports, i would get an occasional letter or a note from a listener or viewer. but it was very occasional.

we do not get all that much mail and radio and television, probably because it takes so much effort for somebody to sit down and write it, find out the address. cbs news does not advertise where it is. on twitter, each can trigger an avalanche of comment. some followers do not get or appreciate my sense of humor. some see a personal agenda where there is none. some of the comets are informed and intelligent. some of the comments ask questions that are likewise well put and to which i almost always respond. most surprising to me is the amount of anger and rage that reside on twitter and elsewhere on the internet. seemingly innocent reports by me

on what president obama says in a speech can bring scores of responses. sometimes i find myself accused of being a mindless stenographer of the president's allies. at times, i am accused of being all lapdog to the president's opponents. so did does not seem to understand that in journalism, if report reflects well or badly on the subject of the news story, it is not necessarily a reflection of bias. that is just the way it is. the more followers to get, it seems the more and greet weeds -- angry tweets i receive. everyone is entitled to their point of view, but it takes a while to get used to it.

i try to read all the tweets that i get, but i have made it a point to not respond to those that contain personal attacks. no, i am not an idiot. how do you even answer things like that? my objective is to be informative, accurate, honest, amusing, and thought-provoking. i want my twitter site to provide a window into the world of a white house reporter. i tried to give my followers the benefit of 35 years covering washington. i will occasionally be drawn into a running commentary on the travails of commercial air travel that is now part of my job since costs have reduced significantly the number of

presidential trips on which the networks and other news organizations will pay for a press plane. a press plane is more expensive than flying commercial. the way twitter gives me a very professionally satisfying the journalistic outlet. they are not taking -- shai ball taking issue with my tweets. -- shy about taking issue with my tweets. they have access to their own twitter sites and blogs were they can report things exactly as they like. jay carney took over the press site from robert gibbs.

the communications director has his own twitter site to comment on news reports or promotes policies. president obama has his own twitter site run by his election campaign on which his policies and appeals can be conveyed. its followers do not want reports from journalists, they can get unabashedly partisan reports from a multitude of government and political twittered sites. the white house has many. an official digital strategist at the white house is available for that kind of twitter. every president joe candidate is on twitter or facebook, many of which has more followers than my cold like 80,000. -- cult-like 80,000. that is the new media, and i am

very much a part of it. i still enjoy the challenge of writing type and writing clever in 140 characters of providing new insight into being a long time radio reporter. i noted that being a radio reporter has really helped me in crafting each of the tweets that are right. in radio, you have to write short, 35 seconds is the limit these days for a radio report. writing tight is an important ability. i will continue to tweet and polymers can respond. printed on and i will do the same period -- and followers can respond. bring it on and i will do the same. [applause] >> thank you, mark. i somebody you is leading the

new journalism operation at the heritage foundation, thank you for being a role model to so many of us young people who aspire to do the kind of work that you do. our next speaker is dr. paul taylor. he is the chief content officer and editor at large at " governing" magazine. he served as deputy state cio in washington state. he is among a number of experts with the information technology and innovation foundation here in washington, d.c. please join me in welcoming dr. paul taylor. [applause] >> robert, thank you. i find myself between -- some of

the best company i have kept in my career. i hope that i will do justice to the panel this afternoon. it is a pleasure to be with you this afternoon. it has been a very good day. i hope to amplify some of the things that we have heard from others today and maybe add a little bit as well. what you see here is the cover of the original debut addition of "governing. " it goes back a quarter of the century. it deals with the fiscal crisis and the states. it's funny how themes repeat themselves. the governing took a journalistic take on what was going on in state and local government. coverage innovation and the government before innovation in government was cool. the coverage was and remains

sophisticated. a really stems from a very simple premise. a person in a place with a problem and what the community is going to do about it. i would like to -- a person, a place, and a possum. in this particular story, opossum was both a problem and opened up a truly engaged solution from the community. when all this began, there was a lot of excitement about e- democracy. within government, up where i was serving at the time, there was a lot of excitement about

the transactional touch points between citizens and their government. it was new, exciting, there were not many rules and there was an opportunity to change the way that government worked. it turned government to face the system. it was a great promise and for the last 15 years, there have been many in public service trying to live up to the promise of that. just a word about "governing," it grew up under the umbrella of "cq." it has sister publications that are also in this issue of innovation. government technology -- the public cio celebrates the chief technologist with in government

as they make their move from the data center into more policy planning. all of them are print publications that were -- that we are incredibly proud of. all of them have online presence. facebook, twitter, linkedin. most of the editors and writers have their own twitter accounts. here are some that you may want to start with. i mentioned the halcyon days of the commodity end tonight. at the time, i served at the deputy cio in washington state. it looked like a lot of things that were being done at the time. there was always the opportunity

to do something that had never been done before or do something different. these days, on mineshaft or live chat is commonplace. -- online chat or live chat is commonplace. and the late 1990's, that was rather exceptional. we launched and learned with eds. we also monitored the traffic and the comments. every morning, there was a policy analyst that would go to the transcripts of these things. one of them pointed to the potential of bringing citizens and government together in unique ways. it was a woman on the east coast was moving to washington state. it was late and the day, the new hall was packed, the kids were put to bed, and she had some questions and a couple of things

that she wanted done before she began the long drive west. this went back and forth in a live chat environment. it went over about 3.5 hours. finally, the operator said, this will have to wait until you get here. we manage to do this and this and this for you. her response, wow. i never knew government could be like that. for those of us to have spent some time and energy in trying to work for this experiment, it was gratifying and we thought, we might be onto something. fast forward to today. live chat is being used october 8 in the new york state to have a wide-open online 4 on about

something as controversial as -- forum on something as controversial. they are where the people are. states and localities are gone to were the people are. you see on the right-hand side, a special site by the state of connecticut. it is a wide open, on the edited, non-moderated forum on issues both good and bad to irene. it is the state of connecticut in beijing people where they are and listening with both years -- engaging people where they are and listening with both ears. at lunch, we heard about the chief technology officer in the city of chicago who is removing

-- shifting, really -- from the data centers to taking a different view of the world. for people with that kind of orientation, it is remarkable that when asked about the trending issues in the next couple of years, they responded with a list that includes the things that you care about. the things that you work in. mobile services to citizens, businesses, field staff. also, web 2.0 standards. all that on a list that used to be dominated by data center. it is a much longer list. it is also worth thinking about where the web was when it did not have a number. critical mass matters.

instigators matter and catalysts matter. there is a small company in kansas that has been influential in this space. now they operate the official state portals for 23 states. they have thousands of other apps for public agencies across the country. they have half of the state portals. they have the resources to innovate. there is an opportunity to disseminate that innovation across half the country. there is talk today about transparency. with transparent tape comes the rise of -- which is transparency comes the rise of the open data movement. there are tens of thousands of data sets being posted by local governments. when you look at the federal government number, it is rather remarkable. at lunch, -- at launch, two

years ago, there were 39 data sets. as of last week, 390,000. beware the tendency for malicious compliance. it is not an arms race to get everything up. it is proper public stewardship to get it up in a way that is usable. there ought to be some content so people and developers to use this data use it -- understand it enough to use it properly. and this kind of arms race mentality of getting everything up quickly, some of that may have been lost. if that kansas city company was the closed loop, this data activity coupled with the

transparency activity is really the white open loop. you cannot see to the edges of this loop. there has been competition's, coach for america has gone hyper local. -- code for america has gone hyper local. all that has provided the follow long -- people who cut code are citizen voters making sense of government held data. making government held data useful. government needs some friends now. this suggests that they need it -- there are 103 billion reasons why a state and local government needs to look beyond itself for some help in doing things that communities made.

it is not likely to get better anytime soon. an analysis of a medium-sized police department in colorado, they looked for their calls of service. this is what they found. 80% of the calls for service did not require a response from a uniformed officer. what would be more appropriate is a response from neighbor. there is a there there when you think about psittacine engagement. -- when you think about psittacine engagement. engagement. there is an app for that. there was a showcase of a dozen

or more of these applications. this one caught my eye. this comes out of the san francisco bay area. the simple premise, if your job is to find a play date locations, it might be useful to know where they are bright your city, york county will publish locations. wouldn't be useful if they were mapped out? that was the genius. they took a publicly available data and used the interface. being able to see a pen drop is a powerful thing. we had lunch with kevin and he

showed us this interface. instead of the itinerary list of the mayor and council members, they dropped a pin at all these places. emmy geely, you did this visual image of where they are -- immediately, you get this visual image of where they are. it is able to focus policy. the city of boston has done it. they asked the question, where do you want to eat? people drop pins. its focus toward the permitting and regulation was able to be used. we are now back at the possum. the creation of what might be a dead possum society because it is the problem and the answer. this was one of the pictures

that came men through -- came in through their 3-1-1 app. it is a little bit gruesome, but he is alive. boston mary did with the opportunity to -- married to the opportunity to tweet. one night, the problem was reported. instead, there was a woman named susan. she was looking at the app, saw it, realized it was a couple of blocks away. and she solve the problem. was the possum living or dead? alive. she tipped the trash can over and left it with this benediction.

i wanted to talk to women who would write that poetically about a possum. we spoke last week. she got it exactly right. when people solve problems themselves and for each other, it makes the city a less faceless town. the city does not have to solve every problem. that is the wisdom of what thomas jefferson called the highest office holder. that is a citizen. thank you for your time. [applause] >> thank you to mark and paul. >> let me introduce a member of our executive committee and a

friend. the vice-president and be internet manager. [applause] >> i am excited to do this. i will introduce a colleague of mine. he does not need an introduction, but i have a little story. howard and i share something very important. we went to the same undergrads go. a wonderful institution and our country. colgate university. when i was a student at colgate, i wanted to get into media. i was told by career services you should write to this guy. i grew up watching him on television. i got the address for him at newsweek.

i wrote a wonderful letter. i said, you do not know me. i am so excited. i sent it. i never heard back. that was a problem. he has been a huge story of a lot of different careers, not of colgate. -- he has been a huge storage of a lot of different careers coming out of colgate. been a change agent of trying to harness all the things that we are doing as a news organization. he is more than qualified. in addition to being with us, he is a senior analyst and is on all the time. he is espousing great things. he had several roles at

newsweek. have howy excited to words to speak to us for a few minutes. let me turn it over to him. [applause] >> for me, this is the beginning of a period of atonement and my religion. the first thing i need to do is apologize to peter for not answering his letter. is this microphone on, by the way? peter, i am really sorry. if you play your cards right, you'll be running the company some day and you can refuse to answer my letter to you. i was supposed to be speaking here at lunch time. i apologize to all of you that i was not here. when peter asked me if i would do this, i said sure.

i did not look at my calendar. i did not realize that this was the first day of the high holy days on the jewish calendar. well peter was renting a calling me at noon asking me where i was, i was asking god for forgiveness. now i ask peter as well. i know that i am speaking right before you all leave for happy hour in georgetown. i will try to be brief. the guys who preceded me are -- all three of them are fantastic. in my career, i have done everything but skywriting.

i have worked for a local newspaper. i delivered the local newspaper when i was a kid. when i was at journalism school, i spent a month at the desk at upi. the b-wire is where all the weird local stories reside. i work for a newspaper in lieu of all. -- louisville, ky. i was a stringer for the new york times. i went to newsweek, one of the first baby boomers to be on it broadcast television regularly. i started doing cable television in addition to newsweek, first at cnn, and now at msnbc. because of my connection, i started writing for the internet

in 1998. i have done just about everything but skywriting. a year ago, almost exactly a year ago, i left newsweek at the invitation of arianna huffington. i did not even have to change starbucks. i did change my entire outlook on everything. it is one thing to file columns that are put on the web page. o file tweets.g tom

he has 80,000 twitter followers. that is powerful. even when you are doing that, you are still not changing your whole outlook on things. when i moved from one building next door to another building, i literally went from one world into another. a world that had been developing under my nose, but one that i now see from the inside. i am having the time of my life. i am working with people who generally are half my age, if not a third bite age. i tried very hard not to attempt to be cool because i know that i am not. i have not stopped wearing a tie. it is my destiny.

i love them. i think they have tolerated me so far. i went there october 1 of last year. at the time, it was still just a plain old "huffington post." there were nine or 10 people in eau. bur everybody was huddled around a couple of tables that they'd gotten from office depot. it had a cobbled together feel about it. even while they were changing the way news is distributed. the key was and is is that it is a combination of a new side and

a social networking site she was the first to realize the way news will be delivered in the 21st century is a combination of news and community. when you file a piece, if it is interesting, it might get 10 or 15,000 comments. unheard of in journalism the way it used to be. it was a lot of fun trying to build up a news organization, but we were going about it rather slowly. a few months after i joined in october, we merged with aol, one of the founding parents of the digital age. it had a market cap of 200 billion. it now has a market cap of 2 billion.

yet it has a lot of energy still in it. a lot of knowledge in it. a lot of good hearted people and neck. what we're trying to do is turn it from the combined media group, from a distribution company into a content company. i think it is working. have you any of you seen the movie -- have any of you seen the movie : apollo 13"? there is a scene where they are stuck up there and running out of air. the chief of operations comes in with a big box full of tools. this bridge tools and parts and pieces. he -- desperate tools of parts and pieces pretty dumps on the table and says you have one hour

to turn all this stuff into an air filter to save the astronauts. we're trying to do the same thing. we have a lot of pieces, we are trying to put them together in new and exciting ways. i think we are succeeding. aol.com is becoming a new site. if you look at it, we're taking some of the best content. the traffic is starting to go up. i think last month, we had 109 billion it unique users. this month, we will have 115 billion. it is want -- it is the largest independent side and a united states. we are not as big as google news, cnn, but for something

that did not exist six years ago, that is independent, we're blowing past everybody else. it is incredibly exciting. does everybody here now who walter cronkite was? i am not being facetious. he was a sort of everybody's favorite pipe smoking uncle who was the anchor of the cbs evening news in the 1960's and 1970's. when walter cronkite came on the air, he was regarded as the most trusted man in america. ews sed to do the evening nanc and and is broadcast by saying, and that is the way it is.

october 1, 1968, this is walter cronkite. about 25 million people or more would sit there and say, yes, that is what it is. caller: walter told us that is the way it is. -- uncle walter told us that is the way it is. there was a car rococo pyramid structure of journalism in media. the network newscast at the top with the great national newspapers, the news magazines, the great regional newspapers and the wire services. that was the way it was.

that was the pyramid. walter cronkite said, and that the way it is, every night at 6:30, that is the way it was. that world has completely disappeared. you still have brian williams and you have diane sawyer, but the network news broadcast probably pull 1/3 at most of the audience they had in the great days of the pyramid and i'm talking about. that is the beginning of what has changed. let me go through a couple of things. this is based on all of my experience in all media and having lived through a lot of this history. i identified -- and you know that i am old media. i did not have the video to show you. here are the changes.

ive in ine, we now le this community that is not a one-wait anymore. everybody is speaking to everybody else. i can assure you that walter cronkite would be tweeting today. back in those days, walter cronkite, which all the collected wisdom come up with all the consensus that there was, would tell you what the news was and was unshakable in his belief in his duty to have a one-way conversation with america about what the news was. it was one way. it is no longer one way. it is a community.

it is no longer mass discussion. it is individualized. the purveyors of the news are not speaking to everybody at the same time. they're speaking to people individually. we now have 30 different verticals. individual sections draw more traffic on the front page. the politics, one of our most popular sections, often draws more traffic on the front page. people did not come in the front door. the same front page at the same time. everybody sees what they want to see, what they are interested and. that has changed. it is constant and immediate

comment not periodic. you would have to wait for the next radiobroadcast. now you can tweak and stanley. that is true of everything about the whole world. there is no news cycle anymore. the news cycles -- in the old days, there were too news cycles. there were the morning newspapers, and the evening news. then there was the next morning's newspapers. the whole notion of a new cycle has disappeared. the distinction between local and global has disappeared. in the old days, the networks used to send correspondence out to cover events.

it was thunderbolts from the sky. it does not work that way anymore. the great speaker of the house is to say, all politics is local. even that is meaningless. there is no distinction between local and global anymore. everybody was there. when the revolution was happening in egypt. one of my favorite pictures of modern times is the one that some of you may remember. it was on the front page of the new york times." it was a bunch of people your age or younger sitting around the laptops with bottles of water and soda on their facebook accounts, sending stock to youtube, connecting to the world and jelly. all those people in cairo.

you may remember the picture. the old style narrative's are gone. people do not do long narrative anymore. what captures the attention of people now are items that are shorter. live blocks are very popular. they form a narrative in and of themselves. when we do a live block of a presidential debate, i am astonished of how many people follow the live blog. each individual, and does not and narrative make. it is all the collective narrative that comes about from all the different comments. it is not one writer sitting there doing a narrative in the manner of a novel or a nonfiction piece. that is not the dominant form today. next big change is video and pictures.

nothing moves without a video and pictures. if you went back and watched that walter cronkite show from the 60's, you'd be amazed at how little video there really was. there are a lot of readers. lots of times when walter would just create a long piece. -- read a long piece. he would spend a minute or two just reading something. this is obvious. there is no one authority, and a pyramid of authority the way there was before. the editors of the new york times may think that they still run the show. as much as i respect them, the new executive editor is a friend of mine for longer than either

one of us would admit. she is one of the great journalists of our time. the first woman, by the way, in that job. thatdoes not have the clout her ancestors had. the pyramid has flattened out. in public life, on this earth, there is no such thing as truth with a capital t. there was a consensus that started with world war ii and lasted until watergate in which we excepted that pyramid of journalistic 40. -- authority. that is completely gone. that is not necessarily a bad thing. it is different and more

complicated. in my view, it means that everybody has to be his or her own editor today. as a consumer of news, you have to be educated to be your own editor. you have to look for sources that you trust. you have to get outside your comfort zone. to be an informed citizen today is a much more interactive thing. it really taking us back to the early days of the republic. the media is much more openly ecological -- ideological. we are reinventing the wheel. the american newspaper started out as partisan sheets. they were not supposed to be olympia and sources of objective of 40. authority. you have to understand that it is impossible to reach that point.

we are at a time when people are more talking about the bias is that they bring to the table. this is something that has happened intellectually in academia of the last generation. you look for the motives behind the alleged truth. the social and political underpinnings. that is healthy. we should not assume that any one source of authority is the only one to look at. if you want to use the media to promote your point of view, it is fine, as long as you say so. the last thing i would mention, and then i will stop, this is an envelop in world that we are talking about. it is one thing if you read in newspaper that was a partisan newspaper that had a partisan point of view, the only told do certain things about the reality of the world. it was just a newspaper.

you could look up from the newspaper. reading the newspaper took half an hour. then he folded it in your pocket or through it away and looked at the real world. now people spend so many hours in the digital world, the danger is that if you only look to one source and one point of view, it will consume and replace the physical reality that we live in with a digital one. a lot more of our politics are and will be conducted solely on the internet. people are eventually going to be able to vote in a lot of places. they will get all their news on the internet. they will do all their political organizing on the internet. barack obama's campaign was the first campaign -- the first one

of the digital age was howard dean's campaign. barack obama has 18 million facebook friends. his challenge will be to expand that and up to win the next election. he will be using the web to try to do it. we will be covering that minute by minute break with that, i will stop and see if you have any questions. if you have no questions, i completely understand. you want to get across town to georgetown. as long as you got me here, i would be delighted to answer any questions that you have. >> thank you. just building on that last from the obvious of trying to make yourself go to news outlets that you do not always agree with, what are ways

that individuals can try to guard against or provide their consumers a way out of that echo chamber? >> that is a very good question. just because that pyramid has collapsed and everybody should be frank about their viewpoints, it does not mean that each news organization it should not try to do some of that educating that you're talking about. i mean, we are very proud of our origins. let's start a new progressive news and committed decide. -- community site. one of our top editors, howard the firstrst blogger,

campaign blogger ever. we should never deny or tried to obscure our progressive rates. i hope we are always known for that. i think we should invite more conservatives in and try to make sure that on her left hand side, that we try to have a more conservative voices. if we succeed had been popular, people will spend a lot of time on our side. we should try to do this on all around. it is silly for me to say, go look at other websites. spend an hour on fox.

>> [inaudible] been able to figure out how people are searching. when you talk to your writers and editors, how do you balance chasing the traffic would chasing the stories that really matter? there is a community out there. those stories often take 10, 20, 30, $40,000. [inaudible] >> great question.

i did not know anything about seo and then somebody took me in a dark room and explained to me. part of it is overdone. what that means is you do not have to write a list of headlines. i come from news magazines were we like to write these literary headline. they hint at this story but do not tell you what it is. on the internet, as you know, if you do not put the key words in there, if you do not hit people over the head with a mallet and tell them exactly what the story is, they will not click on it. what kind of commitment there is to investigative journalism to things that are not just responding to the instinct of the instant? that is what you are asking.

we are making a commitment to it. when i joined, we had a bureau of 10 people. we went on a hiring binge to get the best of the young generation of reporters. we have two full-time investigative reporters. neither one of them -- i think they both have a chance to be as good as mike is a cough. -- isakoff. we do find out what we do a good job of reporting and writing those pieces, and putting pictures with them, people will read along. people read a long piece and they will read it on our site. bea are very much aware of that. we know there is a counter to the trend. we have tripled the size of the washington bureau.

you are all aware of patch.com. had 858 local reporters during the original journalism. one of the things you're trying to do, without taking them away from their local jobs, is we are trying to standardize that and get them to do national reporting projects. over the last year-and-a-half, we have hired more than 1000 journalists. they are not there to respond to the instant stuff. we know where we have a responsibility to do that. i think you will see us try to do it. just today,