dialogue. die thank you -- i thank you. i'm running back and forth between a market and government reform. i heard your opening statements, although i was not in the room. your focus has been the oversight. just three weeks ago, we had the undersecretary before us, talking about where dod is moving into 2017. i was delighted as i listen to the radio and heard your reference and trying to expedite the process getting to that clean audit. two words of caution. one, it is so import we get their cousin allows better management of resources.

but that it be true systemic changes, not a heroic effort to get a clean audit. the referenced the neck to controls, internal controls is where it is at. the second is that over 12 years we spent over a billion dollars and did not get a result from the billion dollars of taxpayer funds. we learn from that not to repeat that. but your leadership on financial management on the civilian side and general dempsey on the uniform side will be key. this is making sure that we have the resources to provide the training, equipment are men and women need and we do right by them and their families. a final one, beyond the scope of the hearing, but just a concern i have regarding our efforts in afghanistan. that is when the president

announced the surge, which i commend it in 2009, and the goal of starting to draw down troops this year, an important aspect of that statement was based on a fax on the ground. i accept the decision of our military leadership at the department that we can begin that troop drawdown this year. my concern is we already committed to 24,000 next year when we do not know the facts. if we are going to stick with that number, i hope within the department that we will look at least moving it back to december 31, once the winter sets in. i believe now it is currently september 30, and that creates a hardship for our commanders on the ground. no questions.

you have been very patient with all of us, but i will conclude with thanks for both of your leaderships, and we are blessed with both of you in the position that your hand. >> thank you for the remarks. general allan has been outstanding in the way that he has addressed his command position. i will rely a great deal on his recommendations as we go through this process. >> thank you again, and we wish you both great success in your new assignments, and as a nation to have both of you in those positions is a blessing for nation and our security. with that, i yield back. it >> seeing no more questions, i will reserve the last question for myself. secretary panetta, as others advocate for sharp cuts to defense, they are rarely discussed. i am concerned. the decline in funding will

result in an increase in short- term costs. things such as termination costs, contracts the of are committed to an increased procurement costs. can you describe to the committee how such unplanned reductions, should there result, it will be implemented and what liability we would face because of the termination of any planned procurements? >> i think we have to take those into consideration. but i do not want to cut off my nose to spite my face in the process. if we try to get savings that we have identified and it costs more because we have done it in a stupid fashion, i think that is a mistake. as i mentioned, i went through the brac process. i know all of the money that people are looking for, yet they did not take into consideration the cleanup or all of the work that had to be done, they did not take into consideration all

the deeds that had to be addressed. in many cases, it wound up costing more. i did not want to repeat that mistake. >> very well. members may have additional questions. please respond to them in writing. i want to thank the witnesses for their service to the country and their testimony today. the witnesses are excused and this hearing is adjourned. [captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute]

>> as the hearing with defense secretary panetta and joint chiefs chairman dempsey was wrapping up, republican members of the house armed services committee spoke to reporters to give their take on the pentagon's budget. the chairman of the committee gives a brief statement before taking questions at this 30- minute briefing. >> i am joined today by members of the house armed services committee. i would like to just give a

little history as to what got us here, and then where we are going to go from here. it was a pretty dramatic election last november. we had, i think all of us who campaigned in the last election, heard loud and strong from the people they were upset with our deficit, with our debt, and with the spending. when we came back and organized, we all understood that message, and a few weeks ago, months ago, we voted for the debt reduction act, which took about $469 billion out of defense. we heard that everything should be on the table. while many of us on the armed services committee did not agree with that, we understood what the american people, with their

request was. i personally feel that we have gone overboard on the cuts, but now the secretary of defense panetta and the chairman of the joint chiefs and the rest of the chiefs are working to see how they will cut that $469 billion out of the defense department over the next 10 years. but it will average almost $50 billion per year. those are pretty dramatic cuts. i think we have -- no, we don't. where are those posters?

we have a living billboard. this one shows the $46 9 billion -- this shows the $469 billion over the 10 years and what that means in today's dollars going forward. in that law, we passed a super committee that is charged with cutting another $1.2 trillion out of the projected spending going forward. they are not successful, then there are some automatic triggers that kicked in. the trigger will cost another half trillion dollars, $500 billion, to be cut out of defense across the board. that is represented by the red.

the blue is what we have spent in the past and going forward. at the blue and the red, if the super committee is successful and does not get into sequestration. we have been spending the past few weeks -- we had four hearings, and today was the fifth with the secretary and the chairman of the joint chiefs, general dempsey, and they are telling us what they have been doing. they cannot give us specifics. they have not made decisions yet as to what these cuts will be, so they were not able to give this to us today. we will move from gathering as much information as we could to disseminating that information, to make sure that all of our colleagues in the house and hopefully the senate and hopefully the american people understand that offense was on the table, and the first round

it took up half the table, very extensive cuts, and we are saying, we just joined together to send a letter to the special committee, almost all of the members on our side of the aisle, signed on to that letter saying no more cuts. the box stops here. -- the buck stops here/ did you get that? now i would like to turn this over to the chairman of the committee. >> mack thornberry, 13th district of texas. number one, i asked secretary panetta, if i heard him right, that he believed there should not be another dime cut from defense beyond that which congress has already enacted.

he said, yes, that is my view. my question then was, does the president agree with that position? he was very clear saying, yes, he does. i think it is important for the president as commander in chief to make his views known to members of the super committee, on both sides of the aisle, and to members of congress on both sides of the aisle, because as commander in chief, if he believes not another dime in defense ought to be cut, that is something we all ought to pay attention to, including maybe especially members of his own party. today, general dempsey said if there were to be cuts in defense beyond that which has already been enacted, some of the damage would be irreparable. when asked by what he means by that, he talked about in the past where we have made cuts, lost people, and then really not

been able to recover the people that you lose, the experience that you lose, etc. i am afraid some people may believe that if you cut some now, he could always make up next year. his point is, no, that is not necessarily the case. we can take actions now from which we cannot recover in the national security arena, and that would be a tremendous mistake. let me turn out to a member who is a freshman in this body, but a veteran out in the field, the gentleman from florida. >> thank you. i am a retired colonel in the united states army, 22 years active-duty service. the admiral said i do not feel an army of alliance led by sheep. at -- i do not fear an army of lions led by sheep.

i fear an army of sheep led by lions. in the years that i served in the military, i saw what happened when people in washington, d.c., decided the military and our veterans to be on social welfare type of government programs. we cannot allow that to happen at this time. just two days ago, we saw what one country was attempting to do right here in washington, d.c. that is just one of the countries we face of the current battlefield, a battlefield that is totally different from the one that i was in it in desert shield, desert storm, nine uniformed belligerence. if we do not understand that we must have peace through strength, that the military is a deterrent to prevent more of these threats coming to our shores, we will miss out. we have already cut our military very well.

many people said you cannot make cuts to defense, and we have done that. but the vice chairman just said, even the secretary of defense has said, we cannot afford to have any more cuts. i remember the rest coming out of desert shield, desert storm, and the deficit of leadership of captains, majors, and later attended kernels. what we have to understand it washington is not just those men and women in uniform, it is their families, it is what they do for us each and every day. they are my brothers, sisters, friends, and relatives. my responsibility, having been on the battlefield, is to protect that on capitol hill. thank you very much, and i will turn that over to my colleague from california, mr. hunter. >> who has not yet. arrived. >> thank you so much for the opportunity to talk a little

further about what alan was talking about, our military families. i just had the opportunity and are hearing to talk to the secretary and the chairman of the joint chiefs. general dempsey said so eloquently it does not matter how much technology we have and how progressive a force we are, without our men and women that are making the ultimate sacrifice, that are willing to serve both here and abroad with the sacrifices of leaving their families behind, without them, we cannot sustain being the greatest military and the world. i just want to take this opportunity as a member of this committee and as a mom who tries to provide love and security to my kids every day to know that we have a responsibility, a great responsibility to our military families. it is unconscionable we would hold our military families as an

insurance policy in a political debate. too many times in the short 10 months i have been here, we have done that. our military family certainly are not immune to the 24/7 news cycle. they understand and see exactly what we are doing in washington. i had the opportunity just a few months ago to visit with some military families in alabama. i sat next whistled for and his pregnant wife who is expecting credit -- a sex toy soldier. he said the matter what you do, i am ok, just pictures she is ok. we will lose more out amongst the men and women who are serving our country. i just want to call on members of the joint committee and all americans to remind those members of the joint committee about those who are serving and making the ultimate sacrifice. thank you so much.

>> mr. hunter from california? >> thank you. i was in iraq in 2003. babylon area.old i was in humvees that are soft skinned, did not have doors. we drove around with impunity because the ied had not been and that the at by the enemy. but i came back from my second tour as a u.s. marine from fallujah. in kuwait, prior to crossing into iraq, we went through a giant pile of sheet metal and had to weld steel on to our humvees. we had kevlar blankets and are humvees and we've laid that into our humvees. we had to do that because we were ill-prepared, because we had gutted the military. we were not prepared for this work, not even close.

the military was gutted in the 1990's. on my second tour, i had to weld on steel plates that had been shipped from the u.s., weld them on to my humvee. i flew ospreys, the marine corps b-22. i saw all of the new weapon systems. i used predator drones to target and strike the enemy where they were. it was a huge improvement, leaps and bounds in the past decade from what our men and women in the military need. that is a travesty that we started this war or we started because of the clinton administration cutting the military of the 1990's. if we want to have a conversation with the military, if we want to cut $one -- $1 trillion over 10 years, we need to tell the american people this, if there is a problem in china, the south china sea, if

we have to face them down over taiwan, we will not be up to respond if there is an incursion by iran and israel. we will not be able to do it. iwe will have to make those choices. i think the american people need to understand what these defense cuts mean. they mean we will have to make those choices. we will not be in the south china sea. it will only be in the arabian gulf and mediterranean. at we are not on to be up to take on iran if they invade israel or hit israel with knicks because we are involved too much with china or another sector of the world. terrorism is not going away, folks, it will be here forever. it is expensive to maintain the military and respond to conventional threat like china or north korea? yes, and it is extremely expensive to have that conventional force and still be up to respond to terrorism through the world in all of the different myriad ways that

terrorists are not work together now. they are decentralized. we have to hit them where they are, and they're everywhere, including here in the u.s. if we cut defense spending at the drastic levels we're talking about, those are the choices we will have to make perry we will have to say that we will not fight terrorism, we are part of these big conventional wars. or we are prepared for the big conventional wars and we will not fight terrorism. those are decisions i don't think the american people want to choose between. the no. 1 role of this president as commander-in-chief, constitutionally describe for this congress, is to protect this nation. if these defense cuts go through, congress and the administration will be abdicating their number one responsibility, which is to keep the american people safe, and we cannot let that happen. thank you. >> good afternoon.

i want to begin by thanking the chairman and a staff of the armed services committee for the great job they have done, not just for this press conference but in changing the questions and make sure we are asking the right questions. for about 2 1/2 years in washington, whether the white house for leadership in the senate or house, they've been asking, how much you want to spend for defense? the question that has not been asked or answered is, what are the risks that we assume by not providing the resources that we need for the national defense of this country? today, we are saying we will ask and answer that question. but when we talk about this, we try to sensitize it as much as we can come acceptable risk. acceptable to whom? you will hear other say it is a risk to the mission or institutions. that does not describe the risks. the risk we're talking about is what dubbin hunter talked about because he sought at an allen

west talked about. the bottom line risk is this, chairman skelton was up here yesterday. we asked it what one warning would give to the american people, congress, members of this committee. he said, since my tenure in congress, we have had 13 different conflicts with contingencies. only one did we know were coming. the other 12 were unpredictable. when we have another conflict with an almost a sure it will be not predicted. the risk is that we are placing on the lives of the men and women who will go try to defend this country and perform that mission. when you talk about acceptable risk, you better look everyone in the eye but to serve over there and say, what acceptable risk are you willing to take to put those men in harm's way. we hear a lot about priorities. before we put more risk on our men and women in uniform, if we had the money that we used to

bail out just fannie mae and freddie mac, we could have found that the entire base budget for the department of defense for three years. if we took the money that we give to the automobile manufacturers, we could have fun at the navy shipbuilding program over five years. -- we could have funded the navy shipbuilding program over five years. that money would have prepared every ship in the navy and we would have had to utter million dollars left over. if we had the taxpayer money that was spent to bailout aig, which could have purchased 44 attack subs. if we had the money that we paid to china for interest on the public debt, the air force could afford to buy almost three f-22 fighter jets per week. final question we need to ask is this, what about the economic impact of all of this to the american people? the number-one problem for most americans today are jobs in the

economy. if we see these cuts go into place, and say secretary. it is wrong and take less than half of what he says the job losses will be, the conservative estimates are we would have a job losses that would exceed the number of unemployed people in west virginia, new mexico, maine, nebraska, montana, hawaii, new hampshire, delaware, alaska, south dakota, vermont, wyoming, and north dakota combined. when the american people hear these questions asked and answered, it will say what we are saying today, which is basically this -- we have cut enough from defense, no more cuts to defense perr. >> thank you. any questions? >> what are you going to do it if the super committee comes into effect?

what is the next course of action? >> our next course of action is to explain to the super committee, to the rest of our colleagues in the house and senate, and to the american people what you have heard here today, that we have already cut enough, that the super committee's job is to find the other $1.2 trillion from the mandatory spending side, which is a little more than we found on the discretionary side. if we cut all of the defense budget, all of the discretionary budget, we would still be running a deficit of half a trillion dollars per year. we would compound a lot of other problems and not solve the problem we are faced with. they need to do the job by working on the entitlement side, which is the big driver of the problem. b>> he said most of them in the house signed it.

who did not sign on? >> we are still circulating it. so when we get it finally done in a confineded, out who did not sign it. >> have you spoken with many members of the super committee? >> i met with them a day before yesterday, explained, showed these charts, explains some of the things we have talked about today, how serious this problem ais. he will do all he can to make sure they come out with a solution, as did the speaker when i met with him, as did mr. when i met with him. >> the targets were waived by congress. with that considered this time around, the legislative effort to waive those targets? >> i am not sure i understand.

>> they tried to sequester funding in the past, and they waved those requirements letter. would you try to do that this time? >> what we are looking at right now is convincing the super committee to their job -- to do their job, and we will take this one step at a time. since we got back in august, we have been gathering all of this information, trying to find out the dollars. all we were talking about was dollars before. we're trying to find out what these dollars mean. we heard from members of the committee today with these translate into. yes? >> retirement and changing care, theoretically, there is a possibility it could be cut if all of the members are grandfathered in.

do you raised the possibility of perhaps looking at those possible cuts? >> we have already addressed that in our bill, which passed overwhelmingly of committee and into the house. that was a step. we're not addressing any further cuts. we are saying that we have made the cuts. now it is up to the super committee to find the rest of the $1.2 trillion out of the other side, the entitlements. we are not looking at any further cuts. yes? >> what do you say if the super committee says, well, we need a revenue increase. are you open to some kind of revenue increases if it gets you around that problem? >> the super committee is 12

people. they will make a decision. our job is to make sure they understand we have already cut defense more than most of us think we should have cut, and we are not accepting any more cuts in defense. however they work it out, that is their problem. i do know, however, there is probably nobody steny here who would vote for any tax increases -- nobody standing here who would vote for any tax increases. yes? >> secretary panetta said one of the greatest threats is congress. but candy legislature due to assuage the fears of soldiers and their families? >> that is a very big problem. she has been talking with soldiers. i had a call from a man who is a physician in the air force, 12

years. i watched him grow up. he called me and said, what will happen -- should i re-up? what will happen with my retirement. i went to camp lejeune and they had some of the same concerns. what will happen to us? we have soldiers, marines going outside the wire every day in afghanistan, on patrol, and they have to be thinking about what is happening with my family, what is my future. they should not even have to be thinking about something like that. they should be concentrating on returning home safely. they should be able to focus on ied's, the enemy, and returning him safely, and they should not be distracted by these thoughts. shame on us for even putting them in that position. any other questions? >> back to the taxes and

revenues, you sort of signal that you were open to some sort of revenue increases. >> in what hearing? >> you said something -- >> no, i have never -- if you are saying i said that, maybe there is a mix up there. my ranking member on the committee, every time he talks, he talks about we need to look for more revenue. what i say is we have cut defense enough. i think too much. i do not think it is our job on this committee to do the super committee's work of solving their problems. their problem is to come up with another $1.2 troy and cuts of entitlements. that is their mandate. i do not need to give them ideas. there is a chairman of the ways

and means committee, there is a chairman of energy and commerce, there is a chairman of our caucus there. that is just the three from our side. are we voting yet? one more. a month ago, he said faced with cutting defense or raising taxes -- >> i did not say that, a reporter asked me that. i think that is a false choice. i want to work night and day to make sure we do not have that choice. but the rest of the congress understands how serious this is, how many cuts we have made. remember the history at talked about at first? that we came back, we'll miss to the people telling us and the election that everything had to be on the table, even defense. i've been talking to people since then.

i told them about these cuts that we have already made. they said, that is that what we meant. we did not expect to decimate the military. we're talking about saving waste and fraud. we have gone way past that, ok? we have gone past cutting the fat. we have on past cutting into the muscle. if these other hits come from the trigger, if the super committee is not able to do their work and the sequestration comes in, we are into the bone and is all over. thank you very much. [captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute] >> next, house minority leader

nancy pelosi talks about her priorities for deficit reduction. then john mccain and rand paul lay out their jobs plan. then a news conference with president obama and south korea's press at thident. the senate passed a measure this week that would sanction china and other countries that manipulate their currency. one washington journal, we talk about the bill. then a discussion on the winter energy outlook. our guest is from the energy information administration and from the environmental and energy study institute. "washington "journal, each morning on c-span. now house minority leader nancy pelosi unveils the deficit reduction proposal that house democrats will present tomorrow to the joint deficit reduction

committee. she is joined by other house democrats to discuss the plan at this news briefing, which is about 35 minutes. >> good morning, everyone. tomorrow is the date by which suggestions to the super- committee, we decided on a term, are due. i am very proud to report that our ranking member is on all the committees of jurisdiction -- ranking members on all the committees of jurisdiction are submitting their reports to the committee. it is an excellent piece of work. a balanced proposal put forth by the super-committee to the congress later this year. it is about creating jobs, the

centerpiece of how we create groot that will bring money to the treasury to reduce the deficit -- create growth that will bring money to the treasury to reduce the deficit. there are proposals to grow small businesses. there are proposals on how we can find revenue and how we can reduce costs. i am very proud of the work of our members. as we do this, as we go forward, i think it is important to subject some of these suggestions to hearings. it remains to be seen what the republicans will be submitting. we had hoped they could be partisan. in a couple of cases, they will be. they're not yet in this packet, but they will be by tomorrow.

that would be the agricultural and veterans committees. we are hoping they will have bipartisan proposals. what we're calling for from the federal committee are open hearings. we want open hearings. rule 5 talks about transparency. we want to honor that role by having -- rule by having much more transparency in the proceedings. we are calling upon the super- committee and the co-chairs to have hearings with the proposal from simpson-bowles and the gang of six. we think they provide a good pathway for deficit reduction and economic growth, and would be a good place for us to start. i just want to add that when we passed the bill to avoid default, to honor the full faith and credit of our country, about some $2 trillion were cut. the bill called for an

additional $1.20 trillion to be cut. this would take us to $2.50 trillion. this is going to happen. will it happen by the work of this committee -- it will happen by the work of this committee or by the treasury. i hope it will happen by the work of this committee. we hope it will go farther than that to go to $4 trillion -- big, bold, balanced. in the interest of achieving that, we want to have as much transparency as possible. we have excellent proposals from our members. joining me to talk about how we go forward and what we're doing are steny hoyer, champion for jobs, mr. john larson, and our champion on small business in the house. steny has been a deficit hawk. he is here to talk to us about

that. >> thank you very much, madam leader. on big, bold, and balanced, i hope that is what the committee is focused on, affectionately, the super-committee. it is a super-committee in the sense that it has been given extraordinary powers to come up with a proposal that will then be considered. 51 members of the senate can pass it. if the majority of the senate agrees, it will pass. if the majority of the house agrees, it will pass and go to the president. i am hopeful that they will be successful. failure ought not to be an option. this is absolutely critical, in my opinion, for the fiscal health of america and for the economy of america and to restore america's confidence in our ability to face tough issues successfully. it will also come in my

opinion, restore the confidence -- also, in my opinion, restore the confidence of the international community in the ability of america to manage its finances in to lead as the world surely wants us to do. the committee had the responsibility to set us on a course that will both make significant progress on our debt and speed our economic recovery. in the bulls-simpson report -- bowles-simpson report, the domenici-rivlin report, and the gang of six report, they all spoke about the need to reduce the deficit and to grow the economy. we need to create jobs. we need to increase the revenue stream. not because we raised taxes, but because we have people working. the immediate focus may be reining in the deficit. the effect of the committee's recommendations will be felt across the economy.

the most important thing, i believe, is that the committee have a real chance to succeed and to reach compromise. we'll all -- we are all working to that end. this reflects the need to help the economy grow now while setting a path to reduce the deficit over the longer term. house democrats want the committee's recommendations to be, as our leader said, big, and bold, and balanced. and we want to make sure they're balanced with the investments we need to grow jobs and strengthen our competitiveness. our make it in america plan includes many such investments that could help create jobs right away and lay the groundwork for future growth. i also believe that it is important for the committee's recommendations to guarantee that all americans, each and every one of us, are paying our fair share and contributing to gather.

we cannot afford to place the burden of deficit reduction not only on the backs of working families -- reduction only on the backs of working families and the most vulnerable in our country. i joined leader pelosi in congratulating our ranking members and those were working in the bipartisan way to say that we can address our deficits and our debt, and grwo jobs -- grow jobs and our economy at the same time. indeed, if we do not do both, we will not succeed. i am pleased to yield to the chairman of our caucus, who has been such, as the leader pointed out, a vigorous, focused, effective advocate of growing our economy and focusing on jobs. john larson of connecticut. >> thank you. we do that by making it in america, of course. >> amen, brother. >> amen. let me _ what are two leaders have said with respect to the

efforts put forward -- underscore what our two leaders have said with respect to the efforts put forward by our caucus. there is a consistent theme in everything they have said -- job creation equals deficit reduction. job creation does equal deficit reduction. the cbo has said so clearly. there is no other item from a silver bullet, that reduces the deficit by 1/3 other than the creation of a job. what we have witnessed across america in the last several weeks are our citizens taking to the streets, borne out of frustration, born out of the desire for them to see the government respond to the simple dignity that comes from a job. the opportunity to look across

the table at your spouse, children, family, and let them know that they are secured -- not only in the the fact that you have a job -- but secured in their aspirations and in their dreams for this great country of ours. as the leader has said, we have an unbelievable opportunity, as witnessed by the enthusiasm of the people in our caucus, and we dare say -- i believe, members of the other side of the aisle -- who truly do want to come together in this moment, in this opportunity, when the rest of the world is imperiled and when the united states can be that shining example. we have an opportunity that will provide an up-or-down vote on something that is bold, something that is balanced, and something that is big. we all know that is the path

forward to job creation. and this opportunity is one for us to come together, not as democrats, not as republicans, but as americans, and seize this opportunity that we have before us. that will continue to be our message. that is the message that our members have set forward to this committee. we have a very short period of time to enact this. that is why we have to move. no one has led us in this area better. >> thank you, and good morning, everyone. the chairman said that job creation equals deficit reduction. i am here to say that the economic drivers of our economy are small businesses. they are the innovators and they are the ones who create jobs in our economy.

we will support deficit reduction and we are prepared to offer solutions to get our country back on track. the goal is simple -- to jump- start the economy, and that starts with small businesses. they already have plans in place to shrink the size of government. but this proposal which passed in august and created the joint committee will result in at least $2.1 trillion and spending cuts. this will decrease government spending and ease the burden on taxpayers, but while the savings are in place, we are here to say we go big, bold, and balanced. deficit reduction is essential, but it cannot be the and the bowl. we cannot be so short-sighted that we just cut spending but

failed to strengthen our economy were put people back to work. this is where small businesses, end. they are the cornerstone of our nation's economy. they're the innovators, creating 64% of new jobs. any legislative package out of the super committee must prioritize their role in the economic recovery. the committee should look at different areas that will be a win-win for the economy and taxpayers. we also need more banks that use federal small-business lending programs to make as much as $150,000 in profit on a single loan. and it is time that they do their fair share. this also means putting it greater focus on small loans to would be business people so they can start off, grow, and

continued to be the engine of our nation's economy. the reality is that growth that small businesses generate is like hitting the lottery. you not only create tax receipts, but you also create jobs. that is the power of businesses, and it is not a problem but rather the solution. thank you. >> once again, i want to commend our ranking members and members of the committee to work with them, to put together this proposal. since this super committee was formed, we have been getting ready for october 12. we had a series of steering and policy committee hearings to take testimony. our members and their committee have worked with a ranking member to bring forth their suggestions.

our members have met with thousands of small business owners to talk to them, listen to them come and hear their suggestions about how small business can be the key to job creation, which they are, capital formation, which they are, and how we could leverage our public initiative and a way that creates jobs and small business creation and enhancement. many of the ideas contained here have had bipartisan support. they just did not all have a bipartisan signature, but hopefully they will be well received by the committee and we look forward to seeing what the republicans will submit tomorrow. hopefully we will have a great deal of common ground. but we need the openness of public hearings and we call for the co-chair to have public hearings on these proposals. with that, we will be pleased to

take any questions. >> can you give at little detail about the spending policies? >> we want it to be big, bold, and balanced. on the balanced side, all of the presenters today have said we need to have everyone pay their fair share. in addition, we have -- i want you to read this, so i will not give a short cut, but in the national resources committee, the ranking member has proposals on how we could save tens of billions of dollars in his area of jurisdiction. we had proposals about small business creation, the small business committee with the lead

on that, but that is impacted by the ways and means committee and by other committees as well. i urge you to take a look. i think you'll be impressed by it. but it all comes under the frame work, big, bold, balanced. the talks about how we can save money, how we could have savings that do not hurt our economic recovery, as the distinguished whip has said. we have to have growth in order to reduce the deficit. it is interesting reading. it will not take that long. it is, i think, a very important document because it is realistic in what it proposes to achieve the goals that we have set out to do. >> could you comment on the abortion bill that the gop is bringing to the house?

>> first of all, it is not a jobs bill. i hope everyone in america has the creation of jobs as our top party. what are we doing? wasting time. i will yield 2 steny to talk about how ill-fated this legislation it is, but not before saying this -- every woman in america should be concerned about this assault on women's health. this is one aspect, but it has an impact across the board on how women get their health insurance. it is a waste of time, but i ny.l yield to ste >> it is not a new subject as i sat at the pen * pad. i have not seen you there recently. the fact of the matter is this is a political bill. the republicans have been talking a lot about, criticizing

the president for submitting a comprehensive jobs bill to put america back to work, a jobs bill which almost every economist who has commented on it has said, in fact, it will create jobs and will grow the economy. there is a defense as to how much that will be, but there seems to be little difference among economists, right, middle, and left, democrat and republican, that the president's jobs bill will, in fact, grow the economy and create jobs. nobody believes this bill will do that. second, this bill, substantively, puts women's health at risk. in fact, one aspect of it could undermine the responsibility for hospitals to deal with women who come in a crisis situation, where their lives and health are at risk and hospitals may not be

required to serve them under this bill. but the fact of the battery is they have criticized the president for presenting a jobs bill they say the president knows will not pass. two-thirds of the american public, of course, when told about the aspects of this bill supported. two-thirds of the american people believe we ought to act on the jobs bill. the fact of the matter is that this bill that you referred to, no republican believes it will pass the congress or be signed by the president. when they criticize the president for presenting a bill that will not pass, it should pass, two-thirds of the american public are for it, and it deals with the issue that the american public is very concerned about, which is jobs. this bill enjoys none of those aspects. that ought to be having a jobs bill on the floor, unlike the previous eight months where we have been in session when i have been no jobs bills.

economists, not democrats, not republicans, not spin masters, but economists say will grow jobs. none of the bills that have offered to date have done that. >> i would like to add something else. the fact we are dealing with the bill that you alluded to shows the disconnect between republican leaders and americans. 64% of the american public is supporting the jobs bill. we know this, we owe job creation to the 13 million people who are without a job. the fact of the matter is that wages and income are going down and poverty is rising in america. we have to show leadership. it is really sad that we cannot take this bill, the jobs act, and move it forward. and has bipartisan proposals. when it comes to small businesses, there is no

republican or democratic approach to the issue affecting small businesses. many of the proposals contained in the jobs bill are republican proposals and our democratic proposals. >> on the matter of iran, how tough can the usb with all of the questions -- how tough can the u.s. be with all of the question still at large? >> we have been very clear in our sections built on iran, in terms of trying to isolate them so they will have some change in their behavior, in terms of promoting terror and supporting those outside their country. i have been briefed on this matter. most of what i have been briefed on is in the public domain. at that which is not i cannot. the fact that iran has a program, a nuclear program, is

something that should be of concern to every country in the world. of course it is of concern to israel because they have proximity to iran, but it is an issue for all bus. i believe what we have to do is a country is be very frank with our allies around the world to say that a relationship with us means putting your foot down in terms of the development of a nuclear weapon in iran. ait is the most dangerous thing that is happening in the world today, and it must be stopped. hopefully, the sanctions we have been placed, at the precipitation of some of our allies will send a clear message. this incident now that, happily, fortunately was avoided is just another challengesf iran's

to the security in our country and across the world, across the globe. israel bears the brunt because they are their nearest neighbor and have had inflammatory statements made against them, do you praise the members tax a lot of these processors seem to be upset at the system as a whole. your partyconsider part of the problem as well ta? >> it is hard to explain the you a majority is, not enough. many proposals were obstructed in senate.

the failure was their success. let's take this to a larger place. this is about 99.9% that feel that they do not have a fair chance. they work hard and play by the rules. they are achieving success. i think any criticism is justified. when you say you pray to that, i commend them for being outspoken. the message is clear. the status quo is unacceptable and unsustainable for keeping a strong middle-class parents.

i want to emphasize this. winning can die on the floor -- women can die on the floor and house leaders can intervene. it is just appalling. it falls into that. it falls into a health issue. it falls in their the lot of other initiatives they have on the floor. america's families deserve better. it would create jobs. i cannot even describe to you the logic of what they are

doing. you will see in bars number of women on the floor today fighting for women's health issues as well as to point out how savage this disis. >> you have seen them strategizing about voter suppression. i am wondering if you have any plans to bring the administration in to even consider filing a lawsuit. >> it certainly rises to that level. we believe one of the most perverse one such a being pursued in states our efforts to subvert the americans' basic right to vote.

one is require identifications that many people do not have. they have their citizens. they have every hope. suppression efforts have gone on iraq this country. they have been accelerated in the last 12 months. we plan to heighten america's focus and undermine the basic american right to vote. i was a sponsor of the help america vote act. we want to make sure that every american can vote. we are working with non-partisan groups around the country interested in insuring the

basic right of americans to boats, working with human rights groups. there are voter education projects and working with the minority communities whether they be hispanic, african- american or any other american to ensure that in the coming months are years that every american not only has the right to vote but will be facilitated in making sure they can cast the boat. we intend to pursue this.

we make them confront and bring to life the ephors setter being made throughout this country minds omany it suppresses them from casting their goalie billy. -- their goal at legally. >> are there speed bumps t? >> this was the law. there were following the law. it is concluded that the laws violated the constitutional right of americans have the opportunity to write. we believe that some of these are clearly designed to

suppress the vote. they need to make sure that their government is paying attention to their needs. they can get attention. the way they get attention. americans have believed the basic power of the people is to select their leadership and policy. we want to make sure that is protected. >> i think the leader for this issue. our assistant leader has said this is a 20 percent share.

it is the kind of identification that was required. this is something we have always tried to remove obstacles. that has been the path of our democracy. they want to reverse that. it is wrong. it is what others are doing. i know the administration is fully aware. the dividing line is economics. they want to limit the access .ictur

do not forget to read the letters. i was thought would to make it easy for you. how about that? i was there. i wanted to see the blue angels. we have in the day before. -- we had them the day before. >> senate republicans released their jobs plan earlier. they talk about a balanced budget amendment.

they work from this very important issue. they have made in put and his legislation is part of this piece of legislation. we are announcing the

introduction of the jobs growth back. it economically creates jobs in gives americans hope again for the future. president obama has his plan. they can create jobs there reduce their government spending. we saw this in 2009. they said if you had an active

stimulus bill, maximum unemployment would be 48%. it to have millions of jobs created. they have millions today. i want to thank all of my colleagues that are here. i want to mention some of the highlights. if we are going to restore this nation's economy, we have to have a balanced budget. we need to give any president a line-item veto. we need to create a simplified tax system. we need to have a reduction of corporate taxes. we can have the finance have closing loopholes. it gives americans free tax brackets. 20 to bring home the 1.4

trillion dollars sitting, sees. we have the highest corporate tax in world. we need regulatory reform. every time i talk to business people, they are sitting on money. they're not investing here they do not know when it is coming down. we need a moratorium on all new federal regulations so they can have a predictable future. we need to lift all these crazy prohibitions on the offshore

energy exploration. it would create tens of thousands of jobs. there are many other provisions. my favorite is the farm dust regularion prevention act. we have the ammendement including the fact that he is familiar with. i asked him to say a few words. my colleagues will make brief remarks. we will respond to questions. it has been a great time. >> my understanding of legislative strategy is passing it now. it is not a great strategy for trying to get a jobs bill.

we have republican job as though we are introducing today. we consider this to be a conversation. do like to talk to us about our jobs plan and have a reasonable discussion, not just campaign rhetoric, we do not think that is very constructive. we want to have constructive conversations. we do have a different vision. we believe the private marketplace creates jobs. we believe that lowering tax rates create an economic boom. under alronald reagan we had growth in a couple of the years. you have joblessness and unemployment when it grows again. we can create over 5 million jobs. we are ready to discuss it. we welcome him coming down of

like to introduce the senator. this is based on a job plan. >> thank you. yeah denigrate doubt about talking about some of the specifics. we understand this will not be done by short-term sweeteners. i am proud to stand here with my colleagues. i am proud to say this proposal

will be the kind of thing that would help get our economy back. for the first time in a while, you saw a bipartisan bill. it does work for one of the elements of this jobs plan. it is to american exporters. you can through private sector he can sell more of your products and services. those will create 250,000 new jobs. that is the sort of thing we ought to be doing. i am hopeful that the administration will work with us as they did yesterday to move this economy forward and put people back to work. >> the elements for creating jobs are available. we are spending too much. we are borrowing too much, regulating too much. we can fix this with the jaws

proposal we are supporting. this is a republican alternative. it is important we open our energy industry. there are thousands of jobs moving because we have a basic moratorium on drilling for energy that is in our country's control. we will change that. when i talk to small businesses, the thing that is scaring them to death is the health care and what is happening in health care system with the rate of insurance going up in anticipation of this big tax increase. it is not going to improve the quality of health care. we had the elements to fix this problem. the president's plan does nothing new. ours is the way to go.

>> this creates temporary jobs. our plan rate policies that allow for economic growth. this plan that has been put together is a growth oriented plan to get people back to work and our economy moving again. can you get bipartisan support? when the major components, some of the others have introduced the plan. it incorporates a lot of our provisions. it can gain bipartisan support. it can provide growth that we have seen. it has been tied and tested -- tried and tested. the last time was a bipartisan effort. democrats and republicans were working together.

whether it is this our number of other provisions, they have gained democrats support in the past. this can be a bipartisan effort to create the growth that will create the jobs for the future. >> they have tried to create jobs by government spending they have insisted on higher taxes for more evidence. the republican plan is based on free enterprise principles. it is the way to create more tax revenues. if we look at any historical analysis, the more you raise taxes, the less revenue you get. if they want more tax revenue, which will help us reduce our

debt, this is a growth plan that will not only grow jobs but it will grow the amount of revenue that we bring in. we insist that the president work with us. he has to stop campaigning saying to vote for a bill now that harry reid will not allow on the floor. this can pass it the democrats will open their eyes and work with us. >> can you say your name? >> yes. i and center ron johnson from wisconsin. i have been a job creator. the reason they're not willing to expand their business is because the high level of uncertainty and lack of confidence. a lot of this blame rests with this president's agenda. president obama came into a tough situation.

if you want to get our economy growing, we should repeal the agenda. we should repeal by frank. we have a number of different pieces of legislation. all the components give us an opportunity to seek out the areas where we agree in start passing the components that will set aside a path to economic growth. thank you. all of us do business round

tables. we sit down with our business community and our respective states. we talk to them about what is happening. how is business that our you doing? when we asked the question to our job creators and business community, what is holding the back, what is there going on that is making the difference between expanding and hiring of bringing so people in, i will sit down with people from nebraska to talk about the regulations that are crushing them in home-building industry. if there is an ever an industry where we need to try to give

them a lift, that would be it. i talked to farmers and ranchers. they immediately turned to the epa. i had one woman say i have 48 employees. i have studied this health care bill every way i can. i have decided i will not ever grow my business past 50 even though i could add more now. i do not want to deal with this health care bill. that is what has happened here. but this legislation does is it takes a look at issues that are job traders are trading and provide solutions to their problems to get this economy up and going again. we have some enormous issues no question about it. part of the solution will be be have to get growth back into

this economy. this bill will do precisely that. >> from a republican point of view, this is a welcome one. the issue, are you better off than you were four years ago? 11 americans say no. will we ever be better off unless policy changes that i cannot imagine the of policy the policy put in place again. i wish the president would have a job summit. there are some things that we agree on.bably agreemen it to be helpful if republicans and democrats would find a break from r.j. a breakthrough.

this is a way forward and to make a lot of sense. i would like to sit down with democrats and see if we can find time. i'm not interested in taking votes that shape the election. >> it takes capital to create jobs. capital cannot be legislated into existence. it has to be provided by those who have it. those who have it create jobs inevitably. there is the understanding that if their investment turns out to be successful one, they will be richly rewarded by the economic success of their enterprise. the more they can offset that comment the more government tends to show with the job

creation. this jobs proposal operates based on that understanding. the federal government has expanded far too much in a way that often chills economic growth. i'm grateful to be a part of it. i am proud to be a co-sponsor. >> there are 14 million people looking for works. they cannot find a job. they've been out of work for over a year. it is more likely that the folks will never find a job. this is why we're here. do we want to get people back to work. we what ways to make it easier and cheaper for the private sector to create jobs.

the president had a press conference a little earlier today. he said i want to work with republicans. he pointed to the free trade agreements. we have been waiting for almost three years for those trade agreements to get here. it is the president to says one thing and does another one. his rhetoric is dead. -- is good. his actions are another thing. we talked about the job frontier. a lot of jobs that are included. they're bringing this to us today. they make american energy more available. this has to do with american jobs security. a want to thank those to put this plan together.

a number of these are included. >> to think it could attract the credit reports? >> what do you expect? >> it is something that is an area is bipartisan. i will point out there are different versions of tax reform. tax reform is clearly an area that we could join together. i hope this would be somehow attracted to the president.

there has been no one's there. this is not an outrage. >> we have to get beyond campaign rhetoric if you want to have some kind of campaign. it is not further the debate to go around the country and say millionaires are not paying their fair share. that is false. they pay 29 sermon of their income tax. it is false. it is not further the debate.

the commission and various groups have been in favor of simplifying the tax rates. if there is a millionaire are billionaire not paying taxes, we can agree to fix that. we're not opposed to fixing that. we are opposed to the discussion that said the rich are not paying their fair share. i think there are areas of agreement on tax reform. we're seeing regulations have to come back and be voted on. congress should do their job. you can get liberals to say maybe people should not write the regulations. there are areas for agreements. >> de say this as an overhaul

one. >> there would have to be part of tax reform. otherwise it stays the same. it has to be part of overall tax reform. absolutely. >> would somehow tie it? >> one of the leaders, white tie it to anything. -- white tie it to anything? clearly was some caveat, and it provides incentives. why tie it to another structure? what does this have to do with $1.40 trillion? this is the kind of problem we run into. >> they can find areas of this

job plan. are you finding a way to block this effort? >> we are not in the majority here. the president has taken action. it addresses this. they tried the most outrageous thing. it is the classic example of overreach. i am sure that they have tried to exceed their constitutional authority.

it is not fit with any idea compromise that i know of. how are we going to get anywhere? heaney's to take our bill and have a conversation. it cannot even be brought up. the democrats will not bring up this bill. >> is everyone in your caucus on board? >> we are confident that everybody will sign up sooner or later. there maybe a couple of exceptions. it is overwhelming. >> to you through the call for a jobs summit? >> i think i would be fine. i still remember the health care summit that we had.

we got a lot out of that. it is not very far. we will be glad to sit down. if you want to garner some and college a jobs summit, i am all for it. >> why hasn't there been any response to the call for republicans to sit down in the building tax hikes that would be fine. they're glad to sit down at any time. it is not a lack of goodwill. it is a lack of cooperation on issues that we campaigned on. we campaigned. i will not vote to raise your taxes.

it has to do the fundamental philosophy. the president believes it creates jobs. business creates jobs. we believe lack of regulation is the best thing. we have fundamental philosophical differences and not personal differences. >> i initiated that two months ago. i asked if i come to the democratic caucus and speak to them. we eat alone too much. i asked them. as informally in writing.

we are willing to talk. >> did he say why you are presenting the package now that? >> we have proposed many an immense and things. we just thought it was time to put this into a package. part of it was in response to the present saying we do not have a proposal. we put them together. they are out there. >> our jobs plan is this legislation has been there since february or march. we have had a joselyn for nine months. now we could divide it into a bill. >> there's a really strong

effort underway to cut the deficit. some people say job losses there. a statement stock that has alarmed many -- that has alarmed many is that their party is a chunk of money that the defense department has to account for. he said if there's any more it will devastate our national defense. >> if there is a failure on the part of the super committee, we will be amongst the first on the floor to nullify that provision. congress is not bound by this. we can reverse it. going back to this fundamental principle, of course we have to cut spending.

what is the interest on the national debt that hundreds of billions of dollars. what is the interest we are paying tax what is the problem with china going -- paying? what is the problem with china 0 wing? there's no way we will be able to restore this economy. we have provisions that require it. to somehow assume that it is the out of control spending is a major factor. >> >> they are down with cuts in? >> as far as i'm concerned. cost overruns as far as procurements. there are many ones that can still be opposed. they have redoubled again.

we will be working very hard on getting this incredible run. it was a national scandal. >> we're about to finish up. you have to increase the growth rate. for every point you increase your growth rate, a deep at trillions of dollars of revenue. we bring in the revenue. we a starkly bring an 18th term. after the bush tax cuts, we still brought an 18% of gdp. the cannot create jobs by infrastructure. that is putting a band-aid on things. he have to have your economy growing again. one thing linked to economic

growth is when you reduce marginal tax rates. we still brought in revenue. we got enormous growth in the late 1980's. to nullify theng rule. you are saying that if it triggered if you would lead an effort to overturn the conversation. >> it is the result of the super committee being unable to reach a conclusion. that is what is envisioned. i'm not saying i would lead it. many others would be opposed. >> what is the trigger? >> i did not agree with it being traded to start with. i had no ownership.

we cannot afford to have those additional cuts. i can tell you. there is a lot of savings that can be instituted. there is a cultural problem in the country today. it thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] president is in the u.s. this week on a state visit. people have the news conference with president obama. in his address to a joint meeting of congress. they have the initiatives tomorrow. we will tour the plant outside of detroit. >> the ceo of the solar company

solyndra resigned today. buy coverage from the house subcommittee begins at 9:30 a.m. eastern on c-span2. on c-span3 you look at potential threat from i ran and syria. live coverage is started at 9:00 there the eastern. -- 9:30 a.m. eastern. >> that a news conference with president obama. this is about 40 minutes.

>> please, everybody have a seat. good afternoon. >> this visit the fact that curry as love our strongest allies. we have stood together. -- that korea is our strongest ally. we have stood together. because this did together, to is able to build a strong and thriving democracy.

does not only on the korean peninsula but beyond. this also recognizes that self. is emerging as one of our key global partners. south koreans have surged bravely. south korean forces have partnered with us to prevent piracy of the shores of africa. once a recipients, they have supported asia and africa. he served as host of the summit. the success is proven. it is a cheat to be commitments of the president.

this is how it should work. there are bearing the irresponsibility a meeting global challenges. in the face of unprovoked attack on their citizens, you have shown extraordinary strength and resolve. president lee has shown my focus on what matters most, the prosperity of our citizens. countries. it will increase exports. it will increase american manufacturing exports. it will open the lucrative service market.

it's a level the playing field. as a former executive, and he will understand what i say. i hope that the south koreans will buy more of chevy is. tomorrow we will be visiting with auto workers. he's letting many americans that will benefit. this will boost american forces by up to $11 billion. it has ground-breaking protection for labor rights. the trade is free and fair. it to promote grain jobs and energy. it will be good for caribbean

businesses and jobs. i've looked forward to working with you to bringing it here as quickly as possible. guy did by our joint vision, we agreed to continue strengthening our capability to deter any threat. the commitment of the united states will never waver. the united states will maintain a strong presence in asia pacific. it is a foundation for prosperity in asia in 21st century. we discussed north korea. it will pose a direct threat to the security of both our nations. they are entirely united. we have succeeded in changing the equation by showing that they will be met not with

rewards but with stronger sanctions. the choice is clear. if they continue to ignore the obligations, it will invite more pressure and isolation. they began their quest for nuclear weapons. it will enjoy greater security. that is the choice they face. we discussed the full range of challenges for our security and prosperity. i think the president for the continued support for reconstruction in afghanistan. we agreed to continue our support for the transitions in middle east and north africa. we agree to courtney more closely on developments that can lift people in -- to coordinate

more closely on developments that can lift people. as we approached the g-20 and summit, we agree on the need for action that focuses on growth. we are strengthening the ties. succory is one the top sources of international students. in number of american students has been soaring. our teams are based banding -- are expanding change. i thank you for your partnership and friendship. i am confident that your visit will mark a turning point of enduring alliance.

>> thank you. first of all, i think president obama again for inviting me to make a statement. this goes out to the first lady. i am pleased to have had the chance to reaffirm the strong partnership and friendship between our two countries. i met with president obama six times over the past three years. our meetings were always constructive. it allowed us to reaffirm the strength of our alliance that is firmly based upon shared values and mutual trust. it guarantees peace, stability, and prosperity. we will continue to strengthen what is already a powerful and

far reaching alliance. i was privileged to have spent many hours with president obama during my visit to washington, d.c. this time. the situation in the middle east has various international security issues. then there the challenges that we face. we welcome the ratification of the free trade agreements. i am confident that the national assembly will ratify this important one. i thank the leaders of congress for their support and commitment. the free-trade agreement is a historic achievement that will become a significant milestone.

it will benefit both of our countries. it will generate more trade and stimulate our economy. it will bring numerous benefits to our workers and companies and small businesses and our consumers alike. furthermore, a mutual investment will increase and their economic partnership will become stronger. the courts will bring benefits beyond korea and the united states. it will be a gateway to enhancing ties between north america and asia. it will allow us to get and stay ahead in global market. the global economy is undergoing many challenges to treat a free-

trade agreement. it demonstrates that we can create good quality jobs. this is a good example. it had opened up a new chapter in partnership. for the last 60 years we have maintained strong political and military alliance. this signals the beginning of an economic alliance. it will strengthen and elevate our political alliance to a whole new level. it is evolving into a future oriented partnerships. it becomes stronger. and we adopted the joint division on could 2009, we agree to expand the scope of our strategic alliance. today we reaffirm our common commitment to a common future. it is the future of ensuring peace and stability on the korean peninsula and beyond

including the northeast region bea. recently we were shocked when we read the reports on the attempt to harm the envoy here in washington, d.c. we strongly condemns all forms of terrorism. as you can see, our two countries are working to bring peace and stability. we're partners. we agreed to continue our work

toward promoting universal values which has a democracy and freedom across the world. in particular, we agree about cree and the united states. they will contribute to the economic development in capacity in libya. ito provide training in medical care. they will reinvest in structure. will work with the support mission. this situation in europe is a source of great concern. we agreed to strengthen international cooperation it ish the g-20 so that'

not in danger the recovery of our real economy. we agreed to work together to bring that stability to our financial markets. as we have done for the past three years, we remain in complete agreement when dealing with north korea. our principled approach will remain steadfast. we agreed that the pursuit of nuclear weapons poses a serious threat. we will continue to work toward this. this will be held next month. we will review the progress made since 2010. the leaders will have one goal, it sued achieve this.

they will give us their full support. we'll continue to work with it. i've afford to welcoming president obama and mrs. obama. thank you very much. >> we're going to start off with ed henry. >> thank you. i want to start with you. when you mention no. 3, what steps you think has helped contain it? a wanted to be your first reaction to the plot. what specific steps will you take? if you do not want america to be

the strongest nation on earth, i'm not your president. you have this today. >> i did not know you were the spokesperson for mitt romney. let me talk about the plot. we have a situation here where the attorney general has laid out a very specific set of facts. what we know is that an individual of the iranian/american descent was involved in a plot to assassinate the ambassador to the united states from saudia a.

minutes. [inaudible conversations] i'm not

>> mr. speaker, the president of the republic of korea. [applause] [applause] [applause] [applause] [applause] [applause] [applause] [applause]

[applause] [applause] [applause] [applause] [applause] [applause] [applause]

[applause] [applause] [applause] [applause] [applause] >> thank you. thank you.congresshave [applause] >> members of congress, i have a high privilege and distinct honor of presenting to you his excellency, lim yong bok, republ president of the republic of

korea. [applause] [applause] [applause] [applause] [applause] [applause] >> will you please allow me. [speaking korean]mr. speake >> translator: mr speaker, mr. vice president, distinguished members ofof cong, congress, ladies and gentlemen,o it is a great privilege to speas to you from this podium in this

great institution representing democracy and freedom. and i am particularly grateful to the leadership of both parties into law the esteemed members of cgress for teir support in ratifng the korea u.s. free trade agreement last night in a swift manner. [applause] in a swift manner, which i ammah told is quite unprecedented. around the world to be here today among friends,

thinking about and deeply grateful for the friendship between our two countries. for korea, america is not a distant land. america is our neighbor and our friend, america is our ally and our partner. there is a korean expression that describes our 60-year partnership. >> translator: indeed. we have been going together for six years. [applause] for the last 60 years,

remarkable changes took place in both of our countries. for the uned states, it has been a journey to new frontiers on this planet and beyond. it has been a journey of achieving fan fantastic breakthroughs in science and technology which led to the advent of the information age. it was a gorpny of develop -- journey of developing new cures, making advances in machineries, and throughout this country, you served as peace and pros -- prosperity, the best the world has ever known. [applause] for the republic of korea, the last 60 years has been a time of transformation and renewal. it was a journey of poverty to

prosperity, from a hermit nation to a global korea. [applause] ladies and gentlemen, korea's story is your stoor too, and -- story too, and that fact is clear in our capitol city of seoul. during the korean war, seoul was almost completely destroyed. today, however, seoul is reborn. where there was once rubble, now stands the seoul tower looking out over a thriving modern me -- me trap los. where women searched the street,

soon magnetic strips will rule the street, and seoul is also the most wired city on the planet. as you can see, seoul is also one of the most dynamic and cosmopolitan cities in the world. last year, seoul was host to the g20 summit and next march, it will host a second nuclear security summit which will be attended by more tha 50 heads of state and government. to mark this 60th anniversary of the korean war, we invited american veterans back to see the land they helped liberate, and when they visited korea, they found very few landmarks that they recognized from the war. instead, they saw, in kore what you see here and experience in the united states today.

e pace and the pulse of modern life, a creative entrepreneurial spirit that knows no bounds, a sense of self-confidence, optimism, and pride, and then the unshakable faith in freedom, free elections, of free press, and free markets. oh, and yes, personally, our love for fried chicken. [laughter] [applause] yes, ladies and gentlemen, these are the values that we share. your great president and statesman, thomas jefferson, said that the only safe place to locate the ultimate powers of the society is in the hands of

the people themselves. these same values can be found in korea, too. one of korea's greatest kings, king sa jong, said approximately 600 years ago that the people are heaven, the will of the people is the will of help revered to people as you would in heaven. today, an ocean away in the people's house, these action words of our ancestors that calls us to revere o people still rings true. [applause] we also share a belief that political freedom and economic freedom must go hand-in-hand. during the 1960s, koreans

demanded democracy and freedom. as one of the student leaders who organized protest calling for democracy, i was caught and imprisoned, but this only strengthened my conviction that universal rights such as democracy, dignity of man, and human rights must never be mpromised. [applause] at the same time, the korean people yearned for another kind of fedom, freedom from poverty. back then, korea's per capita gdp was less than 80 u.s. dollars. university graduates roamed the streets unable to find a job. opportunities were scarce. it was difficult for people to have hope for the future.

this is when i realized that even if we had political freedom and democracy, we would not be truly free wthout economic freedom. afr i was released from prison for my political activities, i joined a small local company. this company, which hadless than 100 employees at the time, later evolved into a global company with over 160,000 employees and as win of its youngest -- as one of its youngest ever ceos, i was privileged to be a part of korea's remarkable economic rise and korea's economy grew into being near the global top ten. along the way, i was able to escape poverty myself, but being able to contribute to my untry's growth will always

remain one of my proudest moments. [applause] as you can see, we have won the fight to win two very important freedoms, our political freedom and our economic freedom. very few countries were successful in their quest to win freedom from poverty and freedom from oppression and koreans are proud and they also know that your friendship and our alliance has been indispensable throughout this remarkable journey, and this is why all 6 you here -- all of you here should be proud of what korea and the korean people have achieved. [applause] nevertheless, i still get asked

by many foreign leaders how did country with no natural resources, no technology, no capital, and no experience manage to achieve so much in just one generation? my answerto them is very simple and yet power the -- the power of education. [applause] the korean war, as i've said, comptely destroyed my country. the people had nothing to eat and nothing to wear. for years, we relied on foreign aid, but the korean people believed in one thing and that was education even if parents had to workday and night and drink nothing but water to chase away hunger, they spared nothing when it me to their children's

education. my parents were the same. they were determined to give their chirp hope by -- children hope by giving them a chance to learn, and i was determined to learn. i used to be a street vendor selling anything and everything during the day and then attended night school. after night school, however, attending college was anything but a drm, and yesterday i managed to get in because of the help of many others around me. although i had to wake up every day at 4 a.m. to haul garbage to pay my way through college, i knew that learning was the key. my parents, all korean parents, believed that education was the best way to break that vicious cycle of poverty. these children later became the lead actors in this great drama. their sweat, their tears, these were transforming korea to being

one of the poorest countries in the world to one of the most dynamic today. [applause] our desire for learning continues. currently, there are more than 100,000 korean students studying in your schools. these young students will become the leaders of tomorrow, becoming scientists, doctors, bankers, engineers, teachers, and artists. they'll continue to contribute to making both of our countries stronger, and they will bring our two countries closer together. [applause] distinguished members, today the

united states and korea have on of t closest, most important economic relationships in the world. for both countries, it's brought untold benefits and opportunities. our trading goods, services, and mutual investments has grown dramatically. we invest in you, and you invest in us because we are interdependent. when we trade together we grow together. when we build together, we rise together. when we work together, we win together. [applause] we see this in the towns and cities and states, this congress represents. we see it in west point, georgia where a new kia automotive plant

is expected to create 1,400 new businesses and more than 20,000 new jobs nearby. we see it in midland, michigan as well where dow chemical, a distinctly american company and co-chem engineering, a korean company, joined together to make some of the world's most advanced batteries, the building blocks of a new era of electric vehicles. [applause] i understand that president biden has been to the opening ceremony of this plant, and we have more than 10,000 korean companies including global

companies such as lg doing business and up vesting all across -- investing all across america, and, of course, we see such cooperation in korea as well. they are manufacturing and selling chevrolets to korean consumers. sales are up 27% in just the first six months since the brand was launched, and 55% of koreans say they would consider buying one. our cooperation is not just limited to automobiles. others provide similar examples of such cooperation, our mutual

investment is yet another example. [applause] mr. speaker, mr. vice president, distinguished members of congress, thanks to all 6 you in this -- all of you in this chamber, our economic ties are becoming even stronger. the korea-u.s. free trade agreement was ratified by this congress here last night. here, where the mutual defense treaty was signed by korea and the united states in 1953, a new chapter in our relationship has opened. our relationship has become stronger. [applause] this agreement is amajor step toward future growth and job

creation. it is a win for our corporations. the korea-u.s. free trade agreement will be able to ensure continued growth and also create jobs. this is a win for our corporations. it is a win for our workers. it's a win for small businesses, and a win for all the innovators both sides of the pacific. perhaps you have heard what the experts have said, that america's economic output will grow more due to the korea's-u.s. free trade agreement than from america's last nine trade agreements combined. [applause]

and that the tariff reductions and many of the labor fair labor provisions, rigorous environmental standards, and strong protections for intellectual property rights will be beneficial for all of us. these provisions will improve our business environments. these provisions will allow us to widely share the benefits of trade more than ever. in this century, much has changed, but not this basic truth. open markets built strong economies. [applause] and in this 21st century, i firmly believe economies must be green to grow. unfortunately, this was not always our way.

for far too long in my country, owth came at a cost. rapid economic growth cost a dark shadow on the environment, the air that we breathe, and the water we drink. that is why when i was near seoul, i considered it my responsibility to restore the stream that was kneeing legislated for decades -- neglected for decades. the restored stream revitalized the surrounding landscape. it revived commercial activity, and it enriched the lives of the people in countless ways, and as president, i announced a new national vision, one of low carbon green growth. [applause] it is our goal to become the

world's 7th largest green economy by 2020. the benefits of green growth are real. this is why we are investing heavily in the research and development of next generation power technologies such as the smart grids. this is why we're trying to become the leader in renewable energy sources. this is why we have required our biggest carbon emitting companies to set greenhouse gases here, and they will, of course, work to deliver on their promise. [applause] i am also aware that the u.s. is also taking measures to sustain a future. some of those steps we are

taking together. for example, in 2009, our government signed a statement of intention to work together on renewable energy, energy efficiency, and power technologies. the chicago smart building initiative is a good example of our cooperation between our two countries. during my visit this time, our two governments signed a statement of intent on the joint research project on clean energy. joint investments in cooperation will only increase. our work will lead to tangible results that will benefit mankind. as our country's move down this path, we will be moving even closer together, and we'll move forward together. [applause]

distinguished members, ladies and gentlemen, the strength of a country is not measured in dollars alone our mutua defense keeps us strong, and it keeps us safe. ours is an alliance forged in blood. that is how we, koreans, describe our mutual defense treaty. [applause] fifth-eight years ago today in october 1953 here in washington, d.c., the republic of korea and the united states signed the mutual defense treaty. in the words of that treaty, we pledged our common determination to defend ourselves against the

external armed attack so that no potential aggressor could be under the allusion that either of us stands alone in the pacific area. [applause] we know that defending freedom is never easy. it is never free of cost or free of risk, for this, i want to thank you. i thank you on behalf of the korean people for standing by us. [applause] we also want to thank the 28,500

american men and women who serve in uniform today in korea. [applause] we want to thank each and every one of you for keeping faith with the generation of your parents and grandparents defending freedom on the korean peninsula. we thank you for your service. pplause] [applause] [applause]

today, i would also like to thank the korean war veterans who areere with us today. they are representatives john conyers, charles rangel, sam johnson, and howard -- [inaudible] [applause] [applause] [applause] we thank these gentlemen for

their service. to these gentlemen and millions of others the korean war or division of peninsula are not abstract concepts, and they are not abstract concepts for me either. my older brothernd younger sister, both just children, were lled in that war. i will never forge them. i will never forget how my mother tried so hard to keep them alive. with the war raging all around us, there were no doctors, and we couldn't afford medicine. all my mother could do is stay up all night and pray to god. many koreans still live with such pain. i recognize the reality that korea has been split in two, but i will never accept it as a permanent condition. [applause]

the two korea's sharehe same lang, history -- language, history, and customs. we are a oneeople. 234 both korea -- in both koreas, there's family members who have never spoken to their loved ones for more than half a century, and my hope is that these people and all 70 million koreans will enjoy real happiness and real peace, and for this, we have to lay the foundation for peace on the korean peninsula, and upon this foundation, we have to strengthen cooperation between the two koreas. we must seek the path that will lead us towards mutual prosperity and achieve unification. [applause]

a unified korea will be a friend to all and a threat to none. a unified korea contributes to peace and prosperity, not only in northeast asia, but far beyond. [applause] we therefore must achieve the denuclearization of the korean peninsula. and north korea must give up their nuclear ambitions. [applause]

[applause] korea and the united states stand united. we are in full agreement that the six party talks is an effective way to achieve tangible progress. we are in full agreement that we must also pursue dialogue with north korea, however, we must also maintain our principled approach in north korea policy that is firmly rooted upon such principless the y that will allow us to ultimatelynd fundamentally resolve this issue. [applause]

north korea's development has been our collective interest, and this is what we want; however, this depends on its willingness to end all provocations and make genuine peace. we will work with you and the international community so that north korea makes the right choice. [applause] our mutu defense treaty allowed prosperity to flourish, not only on the korean peninsula, but all across northeast asia. northeast asia today is a more dynamic region than ever, and economic change in this region brings geopolitical change, and it brings shifts in the balance of power that has long

prevailed. the united states as a key player to the asia pacific region and as a global leader has vital interests in northeast asia. for northeast asia to play a more constructive role in global affairs, there must be peace and stability in the region. your leadership that has ensured peace and stability of northeast asia and beyond in the 20th century must remain supreme in the 21st century. [applause] the ideals that you represent and the leadership thatllows for such ideals to be true, must

continue. there remain many challenges in the world today, and your leadership is vita terrorism, proliferation, poverty, and disease. these are a few that require your leadership. ourree trade agreement has significance because it will be a force for stability because lasting stability, again, depends on economic opportunity being open and robust. our relationship can be the catalyst that generates growth and state all along the pacific rim and in doing so, it will make clear how fully our fates are connected. [applause]

more than ever, korea is looking beyond the horizon. it will willingly embrace its international responsibilities and work to resolve global challenge, and since becoming president of korea, my vision in the coming decades is for a global korea. global korea has joined united nations peace keeping operation in lebanon and haiti. korea was the third largest contributor of troops to coalition forces in iraq. we have sent reconstruction teams to rebuildafghanistan. our -- [applause] our -- [applause] our naval vessels support the united states and e.u. in fighting against piracy off the coast of malia.

we will take part in the international effort in bringing democracy to libya and rebuilding its shattered economy. [applause] and we have pledged to double our overseas development assistance by 2015 and next month, the high level forum on aid effectiveness will be held in korea's second largest city. in these and our countless way, korea will carry out its duties as a responsible member of the international community as we face the many global challenges that lie ahead, we will promote universal values. in 2009, when president obama and i signed the joint vision for the future of the alliance, we agreed to work closely

together in resolving regional and international issues based on shared values and mutual trust. [applause] during our summit tay, we renewed this cmitment. we also reaffirmed our commitment to face the challenges of today for the genetion of tomorrow. our alliance will grow and will continue to evolve. and it will prevail. [applause] mr. speaker, mr. vice president, distinguished members of congress, before i part, i want to thank you again for the honor

of addressing this congress. i would also like to thank president obamnd mrs. obama for the invitation. i also take this opportunity to pay tribute to the 1.5 million korean-americans who have. contributing to this great country. [applause] as president of korea, i'm proud that they are giving back to the country that gave them so much. i am also deeplyrateful to you and the american people for giving them the chance to make their dreams come true. [applae] yourideal ideals and

aspirations have been ours as they have been for much of the world. half a century ago, young americs served in the korean war for duties beyond the seas. today, our peoples hear the same. it may not always be combat, rugged mountains, or bitter winters, but it's a charge nonetheless, a charge to create a more peaceful and prosperous world. in the 21st century, the beauty and destiny calls us once again. and as before, let us rise to meet these challenges.

let us go together, together and forward. thank you.

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>> clearly more must be done to pressure iran to change course. we cannot avoid further delay. on september 10, 2010, the first sanction was made. four companies were deemed eligible by pledging to end their business in iran. in total the administration has used the special rule to waive sanction against five companies. i would expect the witness to present evidence that those firms have indeed done what they said they were going to do, ended all business in iran. i remain concerned about the activity between indian and chinese firms inran. e expressed this concern to secretary clinton in november of 2010 and may of 2011.

as important as it is for the u.s. to enforce u.s. law, we could greatly impair iran's ability to do business with these and other companies by tightening sanctions on tehran. on august i joined 90 others in asking the president to -- asking banks to join sanctions in iran. i would also like to ask the financial crimes enforcement network delivered to the federal network last night to implement section 104-e. i'm hopeful secretary cohen will explain how this practice works. banks may be engaged in sanctionable activity. saying we will prevent iran from acquiring nuclear weapons is good, but it is not enough. only our actions can stop iran.

sanctions have been the primary tool of the united states to convince iran to change its behavior. any success or failure must be judged against that goal. when held to this metric, it is most certain we have not yet succeeded. i look forward to hearing from the winds. i thank them for their work in making our country safe and working with them and our colleagues to make sure this country has everything it needs to stop iran from all the tools given it from being implemented. >> simply put, the regime in iran represents a threat to america. they are a state sponsor of terrorism who, by thumbing their nose at the international community, edge closer and closer to nuclear weapons

capabilities. they are directly responsible for attacks on our troops. they incite violence in israel and lebanon through their support of hezbollah and they help dictators like assad in syria. they are a flagrant violateor -- violator of human rights, and they have tried to kill people on our soil. it boggles the mind that we see american businesses doing business with iran when we are actively imposing sanctions. there has to be a greater sense of urgency here, and i hope you all agree. i think you do. i look forward to the rest of the hearing and proceeding effectively. >> thank you all. i want to remind my colleagues that the record will be open for the next seven days for opening statements and any other

materials you would like to submit. >> our first witness is wendy shermian -- sherman. our next witness is david cohen from the department of treasury. our final witness is david mills, assistant secretary of expert enforcement at the u.s. department of commerce's bureau of industry and security. i thank all of you again for being here today. i look forward to your testimony. i will ask the witnesses to limit your remarks to five to seven minutes. your witness statements will be submitted for the record.

under secretary sherman, please proceed. >> thank you very much, chairman johnson. distinguished members of the committee, thank you for allowing me to appear before you today to address the continued threat posed by the iranian regime. its support for international terrorism, its destablizing activity in the region and its human rights abuses at home. this hearing could not be more timely. before i address this week's news and the broader sanctions discussion, i would like to say a word about a dear colleague. i want to dedicate this secretary to philoe di d.o.e. philoe dedicated most of his

career to the middle east. the loss of his wisdom and leadership is a profound one for the department and for our country. i would like to address the conspiracy to address the attempt to attack the saudi arabia ambassador of london. this plot was a fly grant violation of international law, and a dangerous use of political sponsorship of terrorism. this included diplomatic agents, which iran has agreed to.

iran must be held accountable for its actions. we are taking robust action to increase pressure on the regime. the law enforcement and intelligence professionals that worked on this case deserve our highest praise. many would have been killed or injuried if the plot was successful. in the last 48 hours we have ininstructed every one of our ambassadors to inform them about the facts behind this plot. in contrast with the iranian regime's denial, we are laying out the facts of this plot.

the 21-page document is comprehensive. i have encouraged my partners to read it for themselves. we are appropriate. we are following up with additional face-to-face briefings to lay out the facts in this case. ambassador rice is hard at work in new york engaging her colleagues. this plot, so focused on one diplomat was a plot against all diplomats. we will be asking all countries to take actions, including any platform to operate within their country. working with international partners is fundamental for addressing all the problems we face with the iranian regime. i am grateful to be seated next to david cohen and david mills. along with executive branch -- executive branch agencies work

to address continued threats from the iranian regime. the world today is unified to an unprecedented degree in its concern that a nuclear armed iran would undermine the stability of the gulf region, the middle east, and the global economy. in defiance of the u.n. security council and the i.e.a. board of governor's resolution, iran has continued to expand its sensitive nuclear activities and refuses to cooperate with the iaea and raises concerns about their nuclear program. and iran supports hezbollah, hamas, and palestinian islamic jihad as well as militia groups. american policy in iran remains unambiguous. first and foremost we must prevent iran from acquiring nuclear weapons.

its nuclear activity is one of the greatest global concerns we face. we will continue to place the pressure. until iran addresses this seriously, we will continue with resolve and concern. since the passage of -- fassad as special rule has worked exactly as intended. it has given energy -- asked shell and others to withdraw

from activity in iran. iran is increasingly ice -- isolated from the international financial system as undersecretary of treasury cohen will detail. sanctions are doing more than raise the cost of illicit activity. they are finally shining a spotlight on some of the individuals and eventities perpetrating eggregious human rights abuses. we continue to compile more information and evidence that will allow us to identify more murderers, torturers, and religious particularors -- persecuteors. iran passed down a horrible as

nation simply for -- following his own religious beliefs. in my new role as undersecretary for political affairs, i look forward to working closely as possible with members of congress to make it more difficult for iran to interest -- interfere in the region. i have included a long written detailed testimony. i look forward to your questions, and thank you for this opportunity. >> thank you. mr. cohen, please proceed. >> thank you for the opportunity to appear before you today to discuss the treasury department's contribution to the obama administration's strategy to address the threat posed by

iran's nuclear program and its support for terrorism. the focus of my testimony today will be the progress we are making in our financial strategy to pressure and isolate iran, and in particular the steps we are taking to implement the financial provisions of fasada. first i would like to talk about attempts to assassinate the saudi arabiaian ambassador. we have been working to address the human rights abuses, misuse of the international financial system, and support for terrorist groups worldwide by iran. this week is no different. on tuesday, treasury impolesed financial sanctions against five individuals, including the

commander of likud force and three other officers connected with the plot. iran's primary arm -- >> yesterday we took another action against the quds force. this week's actions follow on a series to expose iranian illicit behavior and ratchet up the pressure on iran. in the last three months we have imposed sanctions on a major iranian port operator owned by the irgc. iran's air for supporting the

irgc. and al-qaeda network operating in iran under agreement with the iranian government. individuals and entities involved in human rights abuses both within iran and supporting the syrian government's oppression of the syrian people. actions like these, along with international sanctions, have put increasing financial pressure on iran and fasada has markedly am identified this effect. l fasada has helped us deepen and broaden iran's isolation from the international treasury system. since obama -- since president obama signed this into law, we have worked to implement this. we have explained to government officials that fasada offers a choice. a foreign bank can have access to the largest and biggest

financial sector in the world, the united states or it can do business with iranian banks, but it cannot do both. for the overwhelming majority of banks, the choice has been a simple one. those with potentially sanctionable relationships quickly elected to stop that business. where we learned of potentially sanctionable activity under fasada, we have actively investigated it, engaging in particular with foreign bank regular lateors and their home government. our efforts are paying off. iran is now facing unprecedented levels of financial and commercial isolation. the number and quality of foreign banks willing to transact with iranian banks and institutions has dropped presip tussly -- precipitously over the years.

iran has been increasingly unable to attract foreign investment, especially in its oil fields, leading to a projected loss of $14 billion a year in oil revenue through 2016. we are making progress, but there is much to be done to prevent iran from evading sanctions already in place and to provide sufficient additional pressure. we continue to focus on the central bank of iran. although u.s. financial institutions are prohibited from doing business from any bank in iran, including the c.b.i., further u.s. action against the c.b.i., if it obtains further support could further isolate the c.b.i. with a potentially powerful impact on iran.

all options are oned table, including additional sanctions. if iran continues to choose its path of defiance, we will continue to impose additional costs on iran. i look forward to continuing to work with congress and this committee to advance our national interests. thank you. >> thank you. mr. mills, please proceed. >> thank you, mr. chairman, senator shelby, distinguished members of the committee. i welcome the opportunity to appear before the committee today and to discuss the department of commerce's role in implementing comprehensive iran sanctions, accountability, and divestment act as well as the wider issue of imposing sanctions on iran. my department has a key role in imposing u.s. duel use export policies toward iran and under

the leadership of secretary hirshworn we have pursued this objective. we have worked closely with the department of state, homeland security, and the treasury as well as other agencies to implement and enforce our sanctions effectively. i wish to extend my heart-felt thanks to congress for incurring permanent authority on our agents last year. the office of export enforcement and our bureau of import security, or b.i.s. is the only office that has this authority. we have been using this authority to investigate a variety of export violations. iranian violations account for 37% of our investigations, and the number of cases we have open

is about 300. iran continues to engage -- the majority of our criminal investigations now involve iran, as i said, as the ultimate recipient of diverted item. much of our enforcement activity and analysis is folk focused on stopping the diversion of such items from iran, transportation hubs in the middle east. b.i.s. also employs a variety of administrative tools against illicit iranian activities. i want to share with you some examples of these enforcement efforts. just last month we imposed a civil penalty totaling $2.5 million and 10 of its foreign affiliates to settle 2888 charges related to unlicensed exports and reexports of pumped valves and related -- the b.i.f.

placed these charges in cooperation with ofac. cooperation has been critical to maximize impact of u.s. laws against violators. they have also made extensive use of the b.i.s. entity list to disrupt a range of overseas procurement efforts, most importantly, involving investigations of components for improvised explosive devices by related entities resulting in the addition of over 190 foreign entities to the list. four of our agents received the attorney attorney's award for further erg -- furthering the intentions. it also prevents public naming

of individuals and entities involved in or that pose a significant risk in engaging in significant activity. given my 18-year history of working with this, i feel at home with this approach. this prevents resellers and other parties in the united states and overseas from doing business with them. b.i.s. has made effective use of its authority to issue temporary denial orders, t.d.o.'s, to prevent imminent violations. on august 21, 2011, b.i.s. renewed a t.d.o. against mahan air of iran and related parties. the t.d.o. issued originally included the bali group in the u.k. that t.d.o. was critical in

preventing additional violations of the regulations and furthering our investigation into bali group's involvement in obtaining boeing 747's for mahan air. on november 7 they were sentenced to a $2 million criminal fine. bali group t.l.c. and aviation entered into a civil settlement with opec to which they paid the largest civil penalty imposed under the regulations to date. iran is a top enforcement priority and we fully intend to press forward with our efforts to combat diversion of sensitive products and technology to that country. we stand ready to work with the committee and the congress to maintain effective export enforcement programs. thank you very much. >> thank you for your testimony. as we begin with questions, i

will ask the court to put five minutes on the clock for each member. under secretary shermian -- cherman, while new u.s. efforts have had real impact and slowed iran's progress on their nuclear program, they have not yet forced iran to suspend it. iran has weakened the international committee's resolve to maintain sanctions pressure. what is your current assessment of iran's nuclear program including their timeline, and does it jibe with those of our major allies? how is the u.s. working with our international partners to ensure that the commitment to

sanctioning iran is strengthened rather than weakened over time? >> thank you very much, mr. chairman. you have raised the fundamental question, which has been laid out by some of your colleagues as well, which is, how do we move forward both to pressure and persuade iran to give up its nuclear ambition and its nuclear weapons program? how do we get them to stop their terrorism, their state-sponsored terrorism? how do we get them to recognize people's human rights? how do we get them to stop destablizing regions throughout the world? that is a very tall order? one prong of that two-pronged approach are the sanctions that we are discussing today. those sanctions must be thought about in three dimensions -- disparity of the sanction, the enforcement of the sanction, and

the international zation -- internationalization of the sanctions. sanctions are strong enough when they are internationalized and people throughout the world are enforcing those sanctions. we saw that in the change in apart i'd in -- in apartheid. we got change in the government of south africa. it is the same with iran. i must say, coming back into government, i have been incredibly impressed by the whole of government approach by the close cooperation that we have wip the -- within the government to not only work with the terrific ledge legislation that we have -- terrific legislation that we have placed before us that the president signed but to have worked throughout the world to increase that enforcement. over the last 48 hours both at the united nations in every single capital in the world and

by many, many phone calls made by the president, the secretary of state, the national security advisor, the department secretary of state, myself, every assistant secretary in every one of our department here we have talked to every capital and we have encouraged them to enforce the sanctions on the books, to look at the designations that treasury has made and make them themselves. we have encouraged them to make sure the quds force is not doing business in their country. if they have visits scheduled, we have asked them to postpone or cancel those visits. as david can detail, it has had a real impact on the financial well being of iran and created some of the splintering that we're seeing within the iranian regime.

the second prong is our ability to work with our partners in the p-5 plus 1 to increase the pressure on iran and say to iran, if you are, in fact, sincere in discussing your nuclear weapons program, which we have not seen to date, we would be open to having a discussion with you so that you in fact fulfilled the u.n. security council resolutions that you stop your nuclear weapons program that you in fact submit to all the iaea has put on the table. iran to date has not agreed to do that. recently at the u.n. general assembly i participated in the p-5 plus 1 p catherine aston put out a statement after that it

included china and russia to stay, i quote, we discussed the nuclear aiea report. we noticed iran's centrifuges as part of their capacity to enrich our our -- uranium and the possible minimum tri dimensions to iran's -- military dimension 20 -- to iran's programs. we are maintaining the most robust sanctions regime we have ever had. it has not yet detered iran's nuclear program but we believe it is making progress to do exactly that. >> thank you mr. cohen. you and i have discussed that athe threat of financial

institutions to cease doing business with iran. can you give the committee of how this process works, the role of new 104-e regulations required and roughly how many major banks have held off activity in iran or have withdrawn in the past couple years. can you also explain how you will use these tools, and how you verify that banks have voluntarily withdrawn from iran do not reverse course? >> thank you, mr. chairman. let me begin by describing the effort we have undertaken and how that has resulted in what we have seen as a dramatic

reduction in iran's access to the international financial system. dating back before fasada the treasury department was active in going out to the international financial community 0, the private sector, as well as government officials around the world and explaining the case for why they should voluntarily withdraw from the iranian financial sector, but in particular the designated iranian abouts -- banks. in particular, those banks that were involved in support for terrorism. we have been making good progress in isolating iran and limiting the number of banks around the world that were willing to do business with designated iranian banks. the numbers of banks, particularly in europe that were willing to do business with iran

were reducing iran's overall ability to access the international financial system was being impaired. with the enactment of fasada last july, to say to them, you have a choice. you can do business with the u.s. or do business with iran, but you can't do both. it has been tremendously effective. we have seen a steady decline

before and after. the line dropped straight down. we have continued to go around the world. we have continued the conversations and continued to make the points that we have been making. it has been remarkably successful. we will continue to pursue this. immediately upon the effect of that rule, we issued a series of rules to financial institutions asking about behavior of some of their correspondence. this follows up on a question

that the senator asked. this rule allows us to go to u.s. institutions where we have reason to believe that there may be potential violations. days very low thresh hold. if we have some reason in might be a violation, we can seek this information. we have begun this process immediately upon the effect of that rule that will compliment other sources of information that we have and we will continue to pursue those investigations.

>> who are they buying and selling to, just for the record? >> well, they sell to the e.u. spain is a major purchaser. turkey buys oil from iran. >> is japan a major purchaser? >> japan, south korea, major purchasers. >> who are the largest purchasers, japan? >> if you'll allow me to look at my paperwork on this. >> go ahead. >> japan is a major purchaser, the e.u., turkey, india are all major purchasers of iran. they are not wholly dependent on iran. each one of those purchasers

buys between $7 -- buys between 7% and 15% of their oil, give or take, from iran in a given year. >> are the chinese investing in exploration of oil and more gas in iran directly and indirectly? >> i will give you an answer to that question, but i think undersecretary sherman also has information on that. i think the basic dynamic we see in china is that clearly before the most recent round of sanctions, including security council resolution 1929 from last june, china was involved in iran's exploration of oil fields. we, across the administration, have made it clear to the chinese that we expect restraint. not just the united states but

the international community as a whole. the response has been by and large that china has exerciseed restraint. i would allow undersecretary sherman to exhand on that. >> go ahead. >> vice president president raised these issues on his trip with ho. we have -- secretary clinton has raised this. we have -- to your point, not back filling the business of other firms that have response plilably departed iran. we all know sometimes china goes looking for those opportunities when others leave the field.

we recently have seen reports that has had an effect. it is our belief from what we know that chinese companies have not finalized any new up had -- up-stream investments since the enactment of sanctions. we have monitored this and continue to because there is concern in this regard. i will add one thing about the chinese which is that they have been certainly in the p-5 plus 1 much more closely latched up with us, the european union, and even russia in this regard over the last several months, understanding the increased threats that iran places and, in fact, as you know, there was a january 19 u.s.-china joint

statement that caught for full implementation of u.s. sanctions . we share your concern. we are staying on top of this at the highest level. we think there has been a slowdown. we do not think there have been new refinery projects, but we will not stop our individual lens nor our pressure on china in this regard. >> it seems we are pushing the sanctions regime like we want them to do it. explain to the committee's russia's relationship with iran here in open forum, and our up-hill fight to bring them along on real sanctions against iran, and china, too.

>> i will speak briefly and then i will invite undersecretary sherman to speak more fully on the relationship with russia. the reality is that russia does not have a deep relationship with iranian financial institutions. we do not see russia providing a significant role for banking institutions. that said, the pressure iran is facing is unprecedented. they have never been under the financial channels narrowed to the extent they are today. so we are being very watchful to

see where iran may go to develop additional connections. russia is a potential point for iran to look. but as we sit here today, i can't say that russia is a significant problem with respect to iran's financial access. >> but you are not saying they are not a significant problem overall politically, though, in this area, are you? you are not weighing in on that, are you? >> i will -- >> you are tip-toeing around the political implications. >> i'm aware that to my right is undersecretary sherman who has the responsibility for that issue.

>> to what extent are their connections to russia? >> we have a significant watch on the corps as you know through the designation of irgc and also designation for their part in human rights abuses, which are quite egregious. generally foreign terrorist organization designations are used for nonstate actors, and i can't think of any state actor for which an s.t.o. designation has been used. >> it doesn't mean it shouldn't be, though. >> i appreciate that. >> you have to follow the facts. >> actually. and we will certainly, as we go forward and as we ratchet up the pressure consider any option that we have to deal with iran's am bigs and its terrorist activities.

i think if you look at the full array of the sanctions that we have in place, the irgc is quite prominent in many of them. as david outlined in his testimony, we have cut off their economic wherewith all in terms of some of the companies that they operate since they are becoming a greater and greater economic force in iran. >> do you believe they will be degnailt -- designate as a terrorist organization? >> i never speak of designations until they occur and we have never used the option -- >> you are not going to look the other way on this, though? >> there is no way we are looking the other way. with your help, senator, we have the toughest sanctions of any administration on iran.

>> thank you, thank you. >> senator menendez. >> thank you, charme. i will ask the secretary to work with me and hopefully the chairman will be lenient sim since i'm one of the prime sponsors of the legislation here. in terms of the conciseness of your answer. there is a lot of ground i want to cover. is it fair to say that sanctions have hurt iran significantly? >> yes, it has. >> so then sanctions work. that is the point i want to first drive here, that sanctions work. the reality is that we have never seen an administration, republican or democratic that has said please give me a sanctions law. they have always said, no, we

would rather have the flexibility. i hope my colleague understands that with 76 co-sponsors no administration has ever appealed to the congress to give them sanctions law, but the fact is, sanctions work. in that regard, madam secretary, i listened to your statement very carefully. i must say that when you say american policy regarding iran remains unambiguous. iran's nuclear capacity is one of the greatest concerns we face. that is very significant. we must do everything we can to ensure its illicit nuclear activity doesn't take place. if that is the kay, can you explain to me why the administration has been reluctant to sanction china's

state-run energy firm which has been reportedly shipping refined petroleum products to iran monthly for the last year. despite this, they have not been sanctioned. why has the administration been reluctant to sanction this type of a chinese company for energy violation whs this is ample evidence that they are violating our laws and there is precedence for us citing chinese companies for sanction violations. my next question to senator she will by is you talked about the energy sector in iran. investing in iran's energy sector is a violation. selling petroleum products to iran is also a violation. buying crude oil is not a

prohibited activity. which goes to my second question. the united states has passed all of these sanctions laws to put pressure on investments in iran's energy sector. which have reduced iran's oil and gas production. the iranian regime continues to sell 2 "3 million -- continues to sell 2 "3 million barrels of oil. the sale of iranian crude represents 50% to 5% of the -- 50% to 75% of the iranian regime's budget, enabling it to continue to oppress its population. it is clear we must find a way to target this life blood of iranian regime. one major loophole in our law permits iran to sell oil to

europe where it is refined and sold to the united states. today when americans fill up their cars with gasoline it is possible and legal for this gasoline to be derived from iranian crude oil. i think most americans would be appalled to learn they are putting iranian gasoline in their cars. i have been working to close this loophole to ensure the united states is an iranian-free zone. we can do this without imposing an emphasis e embargo on iranian crude which would significantly drive up the price of crude oil. those selling to the united states would have to replace their purchases of iranian crude with supplies from elsewhere. this would redirect sales of iranian crude to a small group of buyers, who with less competition for the price of iranian oil would be able to

negotiate significant price discounts with iran from every barrel of oil. this would deny the iranian regime billions of dollars in hard currency. can you tell me whether you are open to closing this loophole, establishing the united states as an iranian oil-free zone, and ending the practice of americans buying gasoline from iran and in doing so preventing the regime from commit ling violence against our allies and our troops in iraq and for which you yourself have said is our greatest global concern. >> thank you, senator. first regarding your question about the chinese entity, the administration is not reluctant to sanction and to designate companies when we have gone

through the designation and they meet the standards. under inksa, the iran-north korea-syria act we have designated the industries in china. this is not about never designating or never sanctioning a chinese entity or any other entity from any other country. it is a matter of doing a thorough investigation and making sure we have met the evidence ri standards -- eviden tiary standards. i can assure you, we list all the data incoming and we look through everything in front of us to decide along the lines of the standards that have been set out by the law to meet the standards of those laws. you have my assurance that we look at each one of these situations with a tremendous tear because we agree with you, nothing should be off limits.

we should look at every single situation and those that meet the standards should be designated and sanctioned. >> on that point, but a year later, a year later of public reports, which is not even intelligence reports, a year later public reports of this company selling refined oil products clearly within the designation of an illicit activity, we have not sanctioned them. how long do we have to wait before that happens? >> i hear your concern, and i will take it back with me, senator. regarding your legislation and buying crude crude oil, i understand your concern. this is one i am sure secretary cohen will speak to this. iran is the fourth largest producer of crude oil.

there has been much debate and discussion. obviously you have done a careful study about the impact of a targeted embargo on the world's economy, what that would mean for american consumers and so forth. i will let secretary cohen take up the financial implications and the global implications of this. i completely appreciate your desire to close this loophole and we look forward to seeing if we can find a way forward. >> let me very quickly -- i thank the chairman for his lienencey here. i am not suggesting an oil embargo on iran. i'm saying we should not permit refined petroleum products come to the united states. that would make the europeans have to buy from other places. it's a fundamental big

difference. i don't want to get it confused for the record. >> senator menendez to create the iranian oil-free zone and in particular to implement that by having european refiners that they want to sell into the united states to certify that they are not using iranian crude in the refined gasoline that they are selling, is something that we have -- we have seen that proposal. we are looking at that proposal. the economics that you described are complicated. and one of the things that i think we certainly share is the desire to reduce the revenue that iran is able to earn on its sale of crude without causing collateral ill effects to the u.s. or global economy. and one of the attractive features of this proposal is that it promises to do that, which is to reduce iran's

ability to pearn revenue without having the effect on the u.s. and global economy by increasing the price of refined petroleum. we're looking at that. i'm sure you know we have economists at the treasury department that are a heck of a lot smarter than i am on this thing, and i look forward to working with you on this proposal because it does hold promise to achieve that objective. >> thank you. >> i loved senator menendez lienencey and time because he has legislation pending. but to the committee are you -- i urge you to restrain yourself with the the -- within the

roughly five minutes time. >> mr. chairman and secretary sherman, welcome. i know you are very new to this. you just came out of the private sector a few weeks ago. i will direct my comments to david cohen who has been in this much longer. i think it is important that hear at this hearing we not hear your concerns, we hear your consequences for what's happened . i think it is very important for us not to look at this from washington's few looking at tehran in which one of your staffers gives long reports about how we have cut off cupcake sales from luxburg -- luxemborg to iran. it is important to look at what's happening in tran and what -- tehran and what is having an effect. and maybe put up the other chart that you have there. this is iranian enrichment activities. you can see here the program is

accelerating fairly impressively. so while we have long briefings of a lot of banking activity, we see the principle objective of the policy is not yielding a result. as i say -- think the senator has been eloquent on, once we get over 20% of enrichment, we are on our way to a bomb. i would be worried if you had any doubt that iran would transfer nuclear weapons to terrorist organizations as soon as they have them. i think that should be a primary assumption, that they will. if we compare i.m.f. statistics of u.s. economic growth to iranian economic growth, the i.m.f. says the u.s. economy

grew by 2.5% last year and the iranian economy grew by 3.2%, 22% faster. this is iranian economic growth. the point of this policy is also to cripple their economy. their economic growth rate has also expanded by four times. when you look at debt held by the public, according to the i.m.f., and i know some people would say we shouldn't believe the i.m.f., but it is the best data set and almost any other administrative decision is based on i.m.f. data, the united states has 70% of its g.d.p. in debt to the public whereas iran has 5.4%. now the i.m.f. said with regard to the u.s. economy it continues to recover at a modest pace but remains vulnerable. however there was a significant growth slowdown in the first growth slowdown in the first half of