a weakened state, a week and the system. host: democrat from west newton, pa.. caller: richard, good morning. i am a proud retard member of the uaw. when i was still working, i was a financial offer. onehing i would like to clear up that a lot of people do not understand is in the uaw, we had a voluntary program. that was the only money that was filtered to a politicians' campaigns. no dues dollar when there. the only money from dues that we spent for political reasons were for brochures and pamphlets and we supported different candidates. i just wondered what your thoughts were on that. guest: i appreciate bringing that up. one of the statements made

earlier was it, "i belong to unions and i was forced to give money." that is another mess. the money that goes to candidates really is voluntary money, someone that has given voluntarily to a federal candidate or a state candidate. the money that we use, the dues money used for political or legislative action is with our members to educate them, mobilize them. it does not go to party structure or anything else. i appreciate you making that comment, because i did not make that clear, shame on me. host: richard t t t >> timothy geithner is next on c-span. the pentagon would limit the

obama administration ought chance for trying terrorist detainees. we hear from the defense department general counsel. >> 6 republican presidential candidates travel to des moines. and water are live coverage as well as governor rick perry and ron paul and michele bachmann. >> treasury secretary tim geithner is questioned about the jobs package, the current tax code and leadership on the economy. he testified at the small business community chaired. this is two hours and 20 minutes.

>> one year ago, senate democrats and it two of our republican colleagues battled for months to pass a small business jobs act of 2010. it has been called the most significant piece of legislation to help small business and over one decade by the national economic council. today we will review the results of portions of the act and will attempt to ascertain what our next steps should be keeping in mind the important goal of providing capital to small businesses on main street

dropped a america -- an essential component the job creation and economic recovery. what is clear today is that lending has exceeded pre recession quarters in the final levels of 2011. the jobs act alone initiative led to an all-time high on approval level 47 a and a loans a supporting over $30 billion in small-business lending making the two -- the 2011 the most successful year and fda programs. as a result, some of the provisions we had included in the top act. also as of september 22, this year, the treasury had approved more than 1.2 billion of the 1.5 available for small business credit initiative programs. under the state's small business initiative lead in small measure

by senator levin, states can leverage funds to help small business access credit. today, 50 states and territories -- we have 55 including the district of columbia, have been approved. the programs include capital access programs, and loan guarantee programs, venture capital programs of among others to help private lenders extend more credit to small businesses. these businesses are not in the beltway here in washington. they are not on wall street and new york. they are in rural suburban and urban areas on main street throughout the america that has been starved for capital because of this recession. many of these programs have recently received programs from treasurys. a complete picture will have to wait. you will get a national data from secretary guyana.

i intend to have a meeting early of next year to receive testimony from a variety of state programs. the small business lending fund was a key element of a small business jobs at. under a barrage of criticism, i dislike the program was born. it is a wonder it survived at all. while some of my colleagues today will be quick to point out the gap between the initial expectations and actual lending, i've like to read into the record just a few letters received by this committee from community banks that are participating in its lending program. the first -- i will not read the entire letter, but i will submit that for the record. and clear financial corp. from pennsylvania, 612 main street is their address.

our bank, the national bank headquartered in vending go county, pennsylvania serves a counties in western pennsylvania through 13 offices. we are a clubroot county bank founded in 1900 serving businesses and individual interests. our banks employ 120 professionals and is the bank of choice. four of our banking offices are the only bank in town in markets where they are located. while we don't you funding as an optical form of funding, both programs have provided capital support during a difficult economic period. both programs of supported recent growth and in turn local economy where we operate. specifically, < two months ago,

we have funded and closed more than 700,000 and qualified loans under the program. power commercial lending efforts built around a traditional sound asset quality standards as planned in the coming years have been organized around a program to ensure optimal utilization of the funding from programs in the best return for our constituents. from literally the name of the next bank is "heartland." in iowa -- i am pleased to read you on behalf of heartland financial input concerning our small loan funds. we are a $4.7 billion bank holding company headquartered in iowa with operations in the midwest and western states. let me begin by expressing the opportunity to participate in the program.

beatrix our roots to the year 1935 when our flagship bank was founded in the depths of the great depression. our purpose then and now was to make credit available to businesses and serve as an economic engine for growth. we provide added incentive to reach out within our communities to enhance job creation and economic growth. deal by the lower cost of funding, will provide which will in turn increase employment and sustain the communities we serv.

funding boosted the capital by 30% and allowed us to beat our plans to grow by 10% annually for the foreseeable future. thank you so much. finally, leader bank out of arlington, massachusetts. we are proud to be a participant in the small business lending fund. in september of 2011, we raised approximately 121 $9 million for the u.s. treasury's. using the funds, we have learned over $4 million to qualifying businesses under this program. we have supported the creation of 113 new jobs. a variety of businesses as will as a frozen yogurt franchiser, neighborhood convenience course, and fuel companies. one more letter that i want to

rebound from a woman posing business initiative and wisconsin that is not a bank. the lending corporations were included. she goes on to say what a tremendous shot in the arm and has been for her. today we will hear that the treasury was able to distribute $4.2 billion of the $30 billion available. it is important to note that the treasury estimates $4 billion will lead to small business lending ranging from $5 billion to $16 billion over the next two years. to put this into context, i call your attention to charts that showed just how the large wraps minister on lending.

over two years, even at the lower rates of lending because it took so much time to get the program up and running. there was some opposition to initially, it has done not too badly in comparison. today we will hear that 137, 332 borrowers were also part recipients and used some money to pay these lawns. there is nothing in as controversy all. there is a reason we included tarp recipients in this program. they requested that we do so. there requested the provision. the bottom line is this. small-business lending fund banks whether they received tarp or not must increase loans to small business to keep their rates low. if they do not keep their small-

business lending, they will be paying treasury back at higher interest rates. despite provisions, we will see more lending to small business. today we will hear the process took too long to get clones out of the door. i will remind everyone this is an entirely unique program. they did not have a road map sitting on the shelf to take down and this year. it took time to develop. despite the difficulties, the program was launched. community banks are traded, compared stubborn and resilient. precisely the type of people who we need to help our economy grow. i am pleased to during this recession america opposing legislative scheme together to pass an innovative idea to help turn the tide when it comes to access for capital. i am pleased to report we could potentially increase the amount of small business lending by mid billions of dollars. we did not release as much as we had hoped, we have a degree of

success nonetheless. i intend to take the testimony given today as much as the boats from banks and small businesses to develop a small business lending fund as well. until the recession is at a distance in the rearview mirror, i believe this committee has an obligation to turn out time tested as well as new and innovative programs to the capital and to the only people's hands that can bring the recession to end and. and small businesses throughout our country. i look for to hearing about this program from secretary kinder to the extraordinary act. i thank you for your time. i would like to turn this over to our ranking member snow and we will take a question to -- hear the testimony and take questions. thank you. >> n certainly because at the

time of economic crisis of beckett -- epic proportions, we welcome you today. it is important to explore the issues of job creation. the lack of economic growth -- the lack of jobs creation over all. your primary mission -- at this point, it simply is not working. i think there is no doubt. there is nothing more urgent than creating jobs for the american people. our nation has a played by a staggering unemployment rate for nearly three years. according to the bureau of labor statistics, the average unemployment rate for 2010 was 9.6%. that translates into 14.8 unemployed americans. 27 of the last 32 months, the unemployment rate has been at 9% or higher.

45% has been out of work for at least six months. the level unforeseen since world war two. what is frustrating -- i think ever more so than americans who are unemployed or underemployed, this is not a new issue. it has been out there for three years. it is something we have known. this catastrophe did not happen overnight. and you appeared back in early february, i was a describing to you the scenario. what i was hearing as well in my capacity as well as members on the finance committee, he said my view was dark and pessimistic. what i was relating to you is what i have been hearing. i think listening is the key ingredient of leadership. understanding what is impairing the ability of small businesses to create jobs.

the people we depend on to create those jobs for high working deserving americans. america has always provided the promise of the dignity of the job. people can support their families. millions of america right now are missing out on that opportunity. that is what we have to restore. seven months later -- since early february. and the puree with about 9%, the unemployment rate today is 9.1%. the number of long-term unemployed rose to 6.2 million in august. the first time since world war two that no new jobs are created in a single month. according to the bureau of labor statistics, total unemployment was hung -- 142 million in 2009. a high of 40 million in september of this year. it is a decline of 2.2 million jobs. i think it is about looking at

the stock members prayed who represents those numbers. in order to restore any stability in our economy. , to change the numbers and the back to the previous recession levels of 2007, it would require more than 280,000 jobs be created every month for five consecutive years. a former colleague of ours who has noted in a recent college, had the u.s. economy recovered the way it bounceback since world war two, r gdp would be $3,553 higher than is today. all the 0.9 million more americans would be employed. as a, we have 40 million americans who are still unemployed and have been so says the longest periods as recapped records in 1948. we are in the pop worst post

recession recovery in our country. it requires urgency in addressing those issues. we looked at the recovery during the reagan years. after the recession, we would have had almost 16 million jobs created. one remedy after another for us to stop the crisis that has mushroomed into a state of emergency, it is long past time for the alarm bells to sound. when you miss the target in a systemic fashion, one has to dig deeper to unearth the underlying causes. in my view, the culprit -- that is the private sector and the small business upon who weaker yen -- we want to create the jobs pretty to listen to those businesses as i do on my main street towards and in the conduct of round the tables and the numerous business people i need here and everywhere, they

brought to you -- the two main issues as tax reform and fewer regulations. that is what is driving the problems that we are facing in america. it can be temporary solutions. there is no reflection of that urgency or the needed to move forward in a direction to reform by tax code and overhaul of regulatory system. i know he said recently in our october that the idea that regulation is effecting our economies without foundation, when you talk to business after business, they cite the regulatory impacts. the 3000 regulations every year. we have had 50,000 since 1996. with a 407 coming out of the administration to cost an additional $58 billion. we depend on these businesses because they are the ones that have driven past economic

recovery. at they are asking the government to make the environment conducive be enough to expand the private sector. care and lies the problem. the jobs that have been created have been created the government sector, but in the private sector. the lending fund in the jobs act is a case in point. by the time the jobs act was discussed on the senate for more than one year ago, was started one year ago in july. i warned at that time that the lending fund -- the mass of lending fund of $30 billion was a new and expensive federal program that resembled target. i reminded everyone the in terms of its design, participants in the application process, it would essentially be an extension of time. and the proponents of legislation did not share the

view. they did not hear it to the did not heed the warnings, they claim the program would be immensely popular with the 7000 community letters across our nation requiring a full $30 billion. in reality, we wasted entire nine months on this program. nine months before a single dollar was distributed. only 4 billion will be utilized by 332 banks. 132 of which are using 2.2 billion to refinance their outstanding tax obligations. with only 1.8 billion remains actual small-business lending. the wall street journal pointed out. as depicted in this charge, the fellers on october 6. where is the disconnects? $30 billion a year one year ago, i know how urgent it was. everyone said we had to have the

$30 billion per acre of the problems were anticipated. they were forcing. here we are today dealing with less than what $1.8 billion out of the entire kennedy billion dollars for small business lending. not surprisingly, the banks are a great deal. the refinance. this can be expected when a program is encouraging paying off one credit card with another, the lending fund, to obtain lower interest rates.

we should contrast that experience to this program with other initiatives that were extended and the jobs bill last september. the bottom line is, this administration praise the kind of conditions that warranted in these urgent *. something has gone terribly wrong. what i hear over and over again is there is no tempo. a campeau of urgency. there is an emergency out there. the more taxposing incentives that are only for a year, that is the problem. we have temporary solutions.

one year temporary solutions are not going to be sufficient to extricate ourselves from the worst post recession recovery in the history of this country. that is why we need fundamental reform on taxes and on regulations so they have stability beyond one year taxes. we have 11 out of 12 on the jobs bill at the end of the year. there are all retire -- expiring. that is the point. beyond one year, there is nothing. that is the point. that is why we need fundamental reforms right now. it requires the leadership to join the congressional leadership to get it done now. >> thank you for the chance to come talk to you about the challenges about small businesses and how we can address them. the biggest challenge facing small business today is the demand for the goods and

services they produce is not growing fast enough. the most important thing we can do for small businesses is to strengthen the overall rate of economic growth. we have proposed to the congress a small set of tax incentives to increase economic growth and help put more americans back to work. these proposals according to independent estimates would increase economic growth by between 1% and it 2% and add more than 1.5 million jobs. if congress does not act on these measures, taxes will go up for virtually all working americans. taxes will rise for most businesses -- businesses large and small. unemployment rates will rise and not fall. it will be fewer jobs for veterans in the long-term unemployed. the housing market will be weaker. are damaged infrastructure will leave businesses with a growing

cost. cities and states will have to cut back on services laying off more teachers and first responders. enacting the proposals and the jobs act will not solve all of the problems we face as a nation. we need comprehensive tax reform that lowers rates, reduces taxes and loopholes and improves incentives for investing in the united states. we need a sustained program of investments to rebuild america pause infrastructure. the need our education system to produce results. we need to expand exports building on the trade agreements congress passed last week. we need to get our deficit back to work as the economy recovers to make sure we are living between our means. as to work on those long time challenges, we need to get the economy working more rapidly. to that, we need to get congress to act. we cannot tax which we cannot

pass tax cuts for businesses, we can't get critical help local governments without the help of republicans alongside democrats. i provide my written testimony high full range of credit programs to put in place of the last 2.5 years to help small businesses. because of these programs, it is lower than when the president took office. because of the programs in the last 2.5 years, we've made it possible for business to write off equipment. we have cut to zero capital rain dates on small businesses. because of the small business credit program, the cost of credit is lower. small banks that are in solid shape but have been able to raise capital from the private markets have been able to take investments from the treasury's said they can increase to small businesses could be provided $15.5 billion in capital and a

total including roughly $4 billion to a total of 713 community banks across the country. we are a very large economy. these numbers menace in small, but as roughly 10% which is a very substantial number of banks assisted do these programs pretty are not designed to help banks, there are to help banks in the capital they need to extend credits. community development institutions have been able to get support from the treasury to expand communities urban and rural throughout the country grissom most hit by the recession. republican and democratic governors of unable to access support for a treasure to put more and a range of small business programs. businesses have been able to access loans to the guarantee programs and larger amounts and the lower cost. these programs have been among the most cost-effective programs we have available to us to help

economic growth. it worked alongside the private sector. the not estimate the amendments made in banks under the original tarp programs will produce billions of dollars of gains for the american taxpayer. those provided the oxygen that is essential for economic growth. they were a critical reason why the economy started growing again in the spring of 2009 under the deepest recession since the great depression. these were not large enough to cancel a small businesses from the credit by the crisis pretty made a major difference. there are a very good model of how to provide tax and dentists with programs to ease some of the burden on businesses. i appreciate the support of many of you. i hope we continue to work together on the steps to help small business access the credit and capital they need to meet the needs of their customers. thank you.

i would be happy to answer your questions. i am grateful for the chance to do so. >> thank you. let me begin. but the key to reiterate the initiative the administration has taken to reduce the tax burden to small business. i think that is important. i do agree with senator snow. we disagree about other aspects. i do agree that given some long- term stability and relief in the tax code is important. we don't have and the small business committee jurisdiction. that is a finance issue. we have provided ideas along those lines the reiterate some of the accomplishments lowering tax rates to businesses. what you intend to continue to do in that regard. >> led me say that i completely agree that the tax system we have today for businesses -- we have tremendous uncertainty year

by year by what tax rich will pay. a system of which is riddled with a special preferences is a system that need to form. it is tory important as we focus on these short-term temporary thing to get the economy grow rapidly be keep our eye on the long-term imperatives. we need a little bit more clarity and certainty about the basic environment that businesses face on the tax side. we want a system that creates better incentives for the united states. we are not going to do -- even at the super committee is tremendously -- we are not want to do fundamental tax reform in two months. at the start to lay the foundation for a broader political consensus on tax reform, we need to be doing some

things now to help get the economy growing more rapidly. and my testimony i listed the full array of temporary -- there were temporary -- put short-term tax incentives. there are very powerful. i can't, the two i think our most powerful -- two are zero capital gains for businesses. that is good for start of spring that has been brought by a bipartisan support. did a range of other things to make the expensing deduction generous. that makes that much more likely that businesses will meet the the end the conflict. this is the broadest and most sweeping and creative mix of taxes that congress has ever considered for small businesses in a short period of time. i wanted to emphasize again we should think about this as a bridge to fundamental long-term tax reform -- not as a substitute for a separate >> let me ask you about regulatory relief premed last question will

be about this program. i wanted to remind everybody that the focus is on the jurisdiction of our community and small-business lending. since it has been raised, i also hear a lot of criticism about overregulation. could you comment on the actions that you are taking with other members of the administration to review that and what your initial findings are in terms of reducing regulations on small business? >> the president -- the run this effort and have undertaken a comprehensive review of the existing body of regulations and announced a series of changes to regulations. they are designed to deregulation smaller, reduce the burden where we can. i am completely supportive of that. i am sure there is a whole range of work we do in that area. it is absolutely true that because of health care reform the changes we are making to encourage americans to use

energy more efficiently, we are changing the basic protections that americans depend on and businesses depend on across the economy. if you look at profitability, if you look at employment in these sectors of the economy where there has been the most reform, there is no evidence to suggest profitability is lower in those cases. if you look across the economy today, the level as you know is at historically high levels. having said that, it is very important that we put a much greater burden on all of us to make sure that as we are

changing the rules designing stronger productions, we do so in ways that are responsible. we do -- we get regulations that are smarter. the biggest problem facing the economy today, if you look at every poll of a business to say today, they're overwhelming challenge is they don't see enough growth and a demand for their products. they have other concerns as well. date list goes way down the list of issues of concern. they put to regulations as a meaningful challenge. again, i am very sympathetic to the argument to want to get the walls better and smarter there is a good evidence to support the proposition that its regulatory burden is what is causing the economy to grow more slowly than any of us would like. >> one final question and that will extend the time equal to send at first appeared when of the criticisms of the program despite the fact we are going to

get between a $4,000,000,000.410066361 dollars is that it was to parklike. could you comment briefly on that and explain all the criticisms of tarp that it looks like from the lending from terps as well as the taxpayers will actually make money. >> again, you have to look at the independent assessments of the cbo and others. the conclusions they reach is that those programs will earn a substantial positive return to the taxpayer. current estimates are over $10 billion and positive returns to the american tax payer. that is not the most important benefit they had. the most important benefit they had four banks as they take in an economy that was falling off the cliff and the president took office. economic growth began again in the second quarter of 2009 --

two months after the president took office because of the scope of the measures, the president enact including programs put in place to make sure that banks or more stable. their savings are protected. it did not face the catastrophic collapse we saw in the great depression. these capital programs, they are the most efficient use of taxpayer money we have. every dollar of capital you make available for a bank is worth somewhere between $8.10 dollars and lending capacity. if you have that $1 and capital, had more capacity to expand a. these are very effective, very successful programs.

where they have been slower to get off the ground, it is because we have been very careful to make sure these investments came with a strong protections to protect the taxpayer interest. >> i will allow 7.5 minutes to senator snow. he i guess the point is many of the recipients would have made as investments anyway. they were doing it anyway. 51% of the recipients. that is the point here. it was all recognize that the time. it was identified as one of the major issues. the talk about 1% or 2% of interest. they increased their lending. that was a minimal level of lending. >> i respect and understand

fully your concerns with the original design of the program. i don't agree with you about that. what we try to do -- we try to combine investments in banks with an incentive to improve the odds they used to lend. you cannot force banks to lend, for every bank that got capital in this program, they have more capacity to lend than they otherwise would have had. i am not aware of a more effective way than this -- a lot said all the other things we did more generally that can help get more credit to small businesses. i am very supportive of the guarantees pretty have a good case for those things. those were not enough. we had to complement those with banks having access to capital. not all banks deserve capital. there is a significant -- 10% of banks across the country were there was a very good economic case for giving them an

investment with the return to the taxpayer. the evidence shows very good return. >> those are the facts. 51% of the recipients or already going to increase their lending. the already met the lower level. >> can i respond to that? >> break quickly. those are the facts. >> what congress authorized was a $30 billion program. banks applied for one-third of the program. we can't force banks to come. only half were eligible. why were only half eligible? we had to be careful to make sure that the taxpayers' resources were going to banks that were viable. we were not for to take too much risk. the reason it is for is because banks only applied for one- third and only half of the banks

were eligible. >> you should have known that to begin with. they did not care responses as to why they were ineligible. >> we can to force banks to come. >> i am saying you should have known in advance how the program would work. you have an urgent unemployment issue in a america, you are putting your eggs in that basket. you are already forewarned about it. >> the cbo scored this as making money for the taxpayer. the idea we put resources at risk -- >> i am talking about job creation. there was a whole issue as to whether or not it would ultimately do that. even the special inspector

general for terps indicated it. those are the facts. >> we don't disagree on that. the facts are that banks were allowed by congress to refinance their tarp money. that was congress's intense. there is no mystery that that was going to happen. there is a good case for that. the capital they have on this program comes with a better incentive to use it to lead. congress made the judgment knowing people would say you should not refinance. >> it is the inspector? general -- it says in this report on may 13, some of the tarp banks, it simply replaced the number of funds and terps. >> he is right. there is no in sight in his investigation. >> the point is, $1.4 billion out of $30 billion. i know you are referring to

expanding the lending into 2014 and 2016. people cannot wait. there have been too many faulty assumptions and miscalculations. we get -- regrettably, the burden has been born of some many people unemployed. i would suggest whichever e- commerce you are talking to, they get down on main street. if 42% of americans think we are moving in the wrong direction, what is it you are not hearing? i really do think you need to listen to the average american and what they are facing on main street which is a decimation. when you talk about all the tax provisions, it is all temporary. that is the point. one-year tax policy will not make a major difference. some of those initiatives are worthwhile. given the mixed message coming

out of this administration on tax and regulatory policy, they do not dare. i am hearing about everybody regardless of size. i am not making it out. i did not make it up in february. i have been trying to get the administration to concentrate on jobs, jobs, jobs. i don't know who you are talking to. you need to talk to the average person on filtered pirie go down to main street and told them what they are talking about. we don't dare make a move. after one year, then what? given the dynamics of the e economy -- even the ceo of ge, he is chairman of the president's jobs council. he said in an article in dayton, ohio back on may 13, the prime -- the priority is the guy to

regulation. decades of uncourtly the regulations create unnecessary hurdles for entrepreneur is and businesses large and small across the country. that is what is happening. i was on the tax reform panel back with you in fact be wary of 2009. we talked about it. we cannot do it and two of months. why not? they are both branches. i was here when president reagan was elected. we went through circumstances. guess what? we got it done for the american people. rome is burning. we are facing the decimation of

our community. they are feeling that they are not getting any difference from the administration and in congress for that matter. if you are talking about policies in 2014 and 2015, we have had three years of virtually the same unemployment numbers as today. that is the point. this is nothing you. we needed to get a head of the curve at some point and make long-term predictable changes in our tax and regulatory policies. i am hearing it from everybody. from a fortune 500 companies to companies of 3 or 1, everybody is saying the same thing. they need certainty and stability. the price tag is being borne by now by the americans unemployed. that is what we have to correct.

>> i would encourage you again as we are working together on the long-term challenges, don't lose sight on the e economy not growing fast enough. realistically, we have to focus on things that matter now and have traction right now -- not just long-term reforms. i agree about the tax reform. i hope we have a chance given parliamentary procedure advantages. >> i know everybody has a strong feelings about this and the secretary has been order fall to give us time. we will go in order of appearance. remember, our hearing is about the program and credit. our committee doesn't have jurisdiction over these issues. i will try to provide leeway because it is very important for small business. >> thank you for calling the

hearing. thank you for your leadership and getting the bill passed. it took your determination to get it passed. you had to overcome a filibuster which was almost one year long. now i hear a complaint it is not being implemented fast enough. one year filibuster against this bill which we so desperately need for small business, supported by community bankers, still supported by main street bankers. we have lots of main street and michigan as well. when i talk to small businesses, they talk about two thanks. lack of demand -- the economic situation generally. they also talk about the availability of credit. this bill is aimed it to provide credit. it was filibustered by the republicans for one year. it is amazing to hear the complaint that one part of the

dollar is not being implemented fast enough. if the republicans had their way, it would not have been in the books at all. the chamber of commerce tells us that a lack of demand -- the economic situation is the number-one problem for businesses. united states and that comes second. regulation is not at the top. taxes are not at the top. as the secretary of treasury just pointed out, small business taxes have already gone down under the administration. what we are desperately trying to do is provide support for small businesses. we are trying to get collateral support for small business. one part of this bill which is not yet in talks about but i want to focus on is this something called the small business credit initiative.

44 states in a number of territories have made use of the initiative. i don't know if every member of the committee state has made use, the odds are that all or almost all of us come from states which have used the small business credit initiative. it is a way of giving it support to the collateral which small businesses provide. the problem with the recession -- i hear this from some businesses, probably more than anything last year, more than anything was the lack of availability of credit because the volume of the collateral had gone down because the value of all of our collateral had gone down. almost all of our homes are worth less because of the recession. the same thing is true of assets of small businesses. the same thing is true of the inventory value, the building, equipment body.

they have gone down because of the recession. when small businesses go to take out a loan, the value of their collateral is less. that does not mean less customers by the way. it does not mean they have not paid their bills. the complaint i got more than any other complaint, far surpassing anything of our regular -- regulation or taxes, as collateral support problem. the collateral issue. community banks had given them wants all of their lives now could not give them loans because the requirement of the regulators is the collateral be a certain percentage of the home. if the value went down, it was more difficult to take out a loan. the community bankers came to us. these are main street bankers. these are not the big banks, these are community bankers that came to us to support a bill to help them lead to small businesses. we have to overcome a filibuster

for one year, get it done, part of it we are all frustrated that it is not moving more quickly. we understand that. i share the frustration in that part. to attribute that -- to suggest this bill is a failure because part of it is being implemented too slowly. if the republicans have their way would not be there at all. that is not my product, that is counterintuitive. -- that is not ironic, that is counter and -- counter intuitive. how to talk if i have time left about the small business initiative. i want to ask the secretary two questions. is it a fact that the initiative is producing the intended effect? this is the collateral sport program which the state's -- this is something we are using the states -- michigan led the

way. we are using state funds, adding to them, offering them support that almost all of our states and inventories are taking advantage of the fund. in their view, this is a success. >> i agree. you are exactly right. as a complement, we thought we would work with the whole range of state programs. we thought we would be quicker if we worked to the states. sometimes to get a better feel of what programs are. 54 states and territories submitted a notice to apply. 47 states and five territories submitted applications. five municipalities, 43 states and the two territories have been approved for 1.3 $5 billion in funds. we are well on the way of getting the money out the door. we are breaking with a grain of existing programs. >> i would suggest to our

members whether they are here or not on the committee. to test the volume of this bill they talk to two people. the talk to their states. their economic development people. they see whether or not they have applied -- all have. a few. and why they have applied. talk to your state governors and economic development people to test the value of that part of this bill. the other tests will be to talk to your community bankers. they will say they either got some support -- in some cases they did but not enough. or they get support, that would have liked it. they wished we would have taken a look to see if we cannot modify the is in order to make it to available to all banks. that is the complaint we get. not more banks got it, not that it is a pet program, and was implemented in a conservative

way to protect the taxpayers. that may get less available to more banks. that is the complaint i get. we wish we could even have more banks get the benefits of this program. that is what i think we should focus on. >> thank you. we are going to submit for the record the timing on this bill. it may not have been a year, we received the bill engine. we were on the phone -- we were on the floor in july. we could not overcome a filibuster. the republican members did not support the bill in the senate. there was a lot of resistance to bringing this. we will get it for the record. >> i want to create -- correct my statement about one year. >> we will get it in the record. it was some time that it took us to pass this with all the -- >> came to the floor in july. we had in august recess.

it became law in september. drexel had to overcome a filibuster. >> i do stand corrected on the year. it was a matter of months it was filibustered per >> it was not a matter of months. >> it was a matter of 60 votes. >> we will not argue about that now. when this idea came before the small business committee as well. we will get it into the record. >> i wanted to focus first on small-business lending funds purdy said a few minutes ago every bank that received that money had more capital and was in a better position to lend. if they traded out that money dollar for dollar, they did that more capital? >> that is a good point. it was designed so the capital-

letter guy -- even if they used it to replace tarp capital, it is structured in a way that makes it more likely that they will use the capital. that was the purpose of the design feature. we cannot force banks to get capital and it cannot force them to lend. we can make a more compelling for them to lend. >> again, i just want to underscore over half of all the money that went out was used to review pay tarp money. that is what we expected. that amounted did not increase progressive would not say that. that is roughly what we expected at the design phase. no surprise there. >> in dollar terms, did that $2.2 billion increase capital in the small banking sector? >> it is a more effective way. it is -- >> one of those folks who supported the program who took

the money was heartland financial usa. their chief operating officer was quoted in this article. it is a bit of a shell game. they took $81.7 million and used every penny to repay tarp money. do you disagree with that quote? >> the architects of this bill intended it to be available to repay tarp money for the reasons i said. the capitol was designed that there was stronger lending. we expected the amount of refinancing. we never claimed otherwise. there is no surprise in that number. it is still on its merits is a very cost-effective way to help mitigate some of the credit pressures businesses still face. >> i understand. i am not suggesting it was a surprise. i am suggesting it has limited impact when the majority of the money is used to repay t.a.r.p.

the vice president of small business policy at the chamber said it was basically a bailout for 100 plus banks. >> i disagree with that. >> the businesses that supported this bill, they supported this provision. >> i am sure they did. the small banks love this provision. >> you could ask the question this way, why are you concerned about this? if you look at estimates of the cost of taxpayer and the return to the taxpayer, this is going to look good against anything else. if you hold it up against the sba programs is pretty good. we have a tough economy, i'm not sure why you are so concerned about this. the bankers and business people who supported this bill and the

congress who greeted this bill designed it's a part of it could be used to refinance t.a.r.p. because they thought it would be a better incentive for lending. >> but they get to that point of taxpayer return. first of all, a lot of folks have noted the small banks were all for this provision. of course they were. absolutely. they can repay money if it is cheap money. they were, just like the big banks were all for t.a.r.p. i do not know what that proves. it does not prove it had a significant impact in the actual small business sector. it did have an impact that the small banks like. let's go to your comment about taxpayer return. when this taxpayer money is used dollar for dollar to repay t.a.r.p. on the accounting side, is that accounted for in a

different way than the banks repaying out of their own funds? >> of course. when we describe, as we do regularly, what the overall estimates are, we take into consideration the net effect for this program. we do not double count it. >> in the t.a.r.p. accounting side, that is not accounted as repair of taxpayer dollars. >> we try to show both numbers. the bottom line is, these investments are all in. the programs that allow banks to get capital, overwhelming, positive return. >> again, i want to be clear. when you talk about a total number of t.a.r.p. repayment, this is not included? >> we show both members. we show the number of the loan and we footnote it or we account for it and show a separate

number for the estimates. you will see when we do our next accounting. >> so it is a footnote. >> when you see our new members after this program, it is closed on september 28. now we know how many banks came. you will see when we next show it the full picture. you will see the overall return to the american taxpayer in investment to banks was overwhelmingly positive to a substantial degree. >> thank you senator vitter. i want to submit, and we will get it clear, we have a quote that appeared in the wall street journal. i have a letter saying the exact opposite. that is what this hearing is for, to get the truth on the record. i am instructing the staff to call this gentleman and asked whether he wants to go by this letter or the quote in the wall street paper. i will give you a copy of the letter. i want the record to reflect the

truth. it was not a dollar for dollar swap, it was 1/3 of the bank's refinanced with t.a.r.p., which was designed by those of us support of this program. t.a.r.p. was not a program to help small banks lend. it was a program to build big banks of of that investment. this program was designed differently. while the numbers were not as high, it seemed to have worked for banks to use it. -- for banks who have used it. >> thank you for being here. could you comment on what you think about occupy wall street? >> i have been asked that a lot over the last two weeks. my general view, if you look at the challenges the country faces today, very high unemployment,

increase in the equality, a rise in poverty, a sense of economic insecurity, lost in confidence and faith of public institutions, -- loss in confidence in fate of public institutions, there is a huge challenge. that is why we are trying to work so hard with the congress to get more things in place to make the economy stronger and put in place stronger protections over the financial system, healed the damage caused by this crisis, and we have a lot more work to do. >> i think a lot of people are frustrated. they think the big banks got access to capital in about 10 seconds. it has taken nearly 10 months for these small businesses to

get access through community banks. i know, in my state, the banks that got access have proven that they have increased lending to small businesses. it was a success. so people are frustrated still that main street cannot get access to capital. are you for reinstating a program like this to get more capital to small businesses through community banks? >> i am a big supporter of these programs. we have been refining them, designing more of them, trying to improve them. i am completely willing to continue to work on new ways of doing that. absolutely happy to do that. >> you would provide some level of transparency about why mou's were signed between treasury and banking regulators, on why banks were denied access and not given

reasons? he would clean up the transparency? >> on the question about why this took so long, i want to address this. we are all frustrated. we designed a system, i do not know a different way to do it, that requires the bank supervisors to make a judgment to us that they were a viable and eligible. it took them a long time to do that. in the laws of the land, we have legal protection for disposal of continental's supervisory information. we were prohibited -- of confidential supervisory information. we were prohibited from sharing information about the nile. we have worked at arrangements and banks are now --about denile. we have worked out arrangements and banks are now getting concrete communication about why they did not meet the standards. groupon the reason this took so

long is because we were careful -- the reason this took so long is because we were careful. the reason we were not able to inform about denial was because of the legal implications. banks are hearing about it now. >> i do not know you could capture the level of frustration that america feels. the fact that big banks did not jump through any hoops and yet that access to capital. the small banks that are seeking loans to businesses have been frustrated with not knowing the answers, not having their questions out there. a continued line of frustration. non responsiveness. it is very frustrating. i wanted to clear up one last point. you stated the reasons -- the things the administration is looking at doing. you talk about a demand for goods and services, that was

your number one issue. do you think there are small businesses that have demands? >> the economy is growing. most economists think 2%, maybe a little stronger, a little weaker. it is not strong enough to bring unemployment down. some businesses are growing faster, some less. if you are a small business in construction or retail, growth is still very weak. those of the averages. they are not strong enough. >> i would beg to differ. there is demand by some small businesses it may not be as a luminous -- illuminous as the large banks. these small businesses can create jobs. they need access to capital. >> i agree 100% on that. >> i hope that the administration would say we also

have to give capital to main street, where demand has been seen, and it does business is growing. 75% of the job creation in america. >> i completely agree with you. >> thank you. senator paul. >> thank you for coming. you mentioned that lowering tax rates is good for economic growth. i could not agree more. we lowered marginal tax rates, we lowered unemployment. unemployment seems to be rising under the current administration. your statement saying that lowering rates would encourage economic growth seems to conflict with the policy your administration and the majority party of the senate. the president's budget would have increased tax rates. the democrat jobs plan, a

variation of your jobs plan, would also increase marginal tax rate. i do not know if you have read the republican jobs plan. it would lower tax rates and simplify the code by getting rid of loopholes and evening out the tax code. i am wondering that your testimony is here in support of the republican jobs plan. >> no risk of that. i am sorry to disappoint you. how you think about tax reform, we're going to disagree on pieces. on the strategy of lowering rates and greater and better incentives to invest, that is what will guide our strategy. >> it is part of our plan. my office is open. i am happy to meet with them. it is part of the republican plan. lower rates, broad and the base. what the thing caught the housing crisis? -- what do you think caused the housing crisis and the housing

doubled? >> we had a long period of a very low rate. -- very low rates. we had bad underwriting standards. it caused an over investment in housing. americans were allowed to borrow in huge amount in relative to income. >> who do you think had more influence over interest rates than anybody else? can you think of a body? the central bank? the federal reserve? maybe the new york fed bang? -- fed? >> i was president of the new york fed. i started in the fall of 2003. >> here is my point. i hate to interrupt you. interest rates i see as the price of money. they should fluctuate based on the demand for money.

if government controls the interest rates and you obscure the market forces, as an economy heats up, people are bidding for money. you get a slowing down of the economy. if you do not do that, if interest rates are not allowed to rise, the economy keeps going but it is an illusion. that is bad policy. that is still what we are in today. we still want to have no interest rates and spur growth of nothing. we want to create this illusion. this is gone. it is why you cannot get the economy growing again. >> the what loan rates to be hired? >> i want the market to control what the rates are. the soviet union failed because they could not determine the price of bread. we are trying to determine the price of money. we should not have central bankers determining the price of money because when they do, they make mistakes. they are fallible and they are human. it is this pretense of

knowledge, people think they are smart enough, somehow, to tell us what the price of money should be. >> on this question, the fed does not have the ability to affect interest rates across the country. they affect the short-term interest rates. they cannot control the long rate. they can have some effect in terms of prices. they cannot do what you feel they are trying to do. >> why do you think rates were low? it is a market force that kept rates low? >> i am commenting on monetary policy which i try not to do. i think most economists would say because in 2001 we had a recession, rates were low coming out of that recession. as you know, you had a huge set

of global forces that caused investing in the united states. that kept rates down. as i said, the reason why we had that boom in housing was because we had a long period of low rates. we had an erosion of underwriting standards across the nation. those were very damaging. >> i want to thank you for coming. congratulate you for inadvertently or certainly supporting part of the republican jobs plan. >> i agree that tax reform is coming. >> that is what we are all about. it is in the republican jobs plan. if you can agree to some of our plan and we can agree to some of your plan. >> you cannot balance the budget, it cannot get the budget under control unless you are willing to see some modest increase in revenue. we may disagree on that and who

should bear that burden. we think the most fortunate americans can forced to bear that burden. >> we have lower rates with less loopholes and tax credits. >> time has expired. >> thank you. i do appreciate you holding this hearing. thank you for participating. i know we are here to talk about the small business lending fund. in north carolina, i know that eight banks have received $855 million in capital to lend to small business. there is no doubt that is helpful and positive. i think the hope for this program was much, much higher. while those banks that were approved to participate were pleased with the program, they have started lending, more also frustrated with the communications from the

department. i heard from community banks that said that after they applied to the program, they did not hear back four weeks. i have also heard back from others that there was little explanation as to why they were not approved. if you could comment on that. was there a standardized process for how the department responded to applicants? was there any formal way for the banks to appeal or seek summer you -- seek some review of the decision? i think the timing of it was late in the process. there has been an incredible amount of frustration. >> i share that frustration. why did it take so long to approve applications? we put into place, to protect resources, a system on where we relied on supervisors to make a judgment for us about whether

banks were viable to benefit from the program. that took some time. that took more time than they estimated. >> nine months? >> it took nine months to legislate the bill. we did not get the first applications -- approvals until early june. the time frame between when we started getting approvals from the regulators -- it was short. i would have loved to accelerate that process. we cannot design a program to judge how to look at applications. we had to rely on the primary supervisors to do that. the second frustration was why did you not tell us why we were not eligible? as i said earlier, we have legal protections with criminal penalties on sharing of confidential information. there are a lot of good reasons. to protect the system as a whole. we were not in a position to

tell banks why. it has taken us four weeks to work out with the bank supervises a system whereby we can let them know. that is happening right now, as we speak. we have approved a way, consistent with the law, to let them understand why they did not meet the requirements of the program. i wish it could have been different. we are being careful with the taxpayer resources. we cannot force banks to come and apply for credit. we cannot lower the eligibility standards to the point where we risk putting taxpayer money exposed to risk. we are taking a risk as it is. we want to make sure it has the maximum possible effect. we want to enjoy it has the capacity to look for ways to support the programs in the future. if we had got in that balance wrong in this program, we would have undermined these programs in the future. >> there is no opportunity to appeal? >> that is not quite true.

you apply. the decree gives your application to the primary supervisor. -- we give you an application to the primary supervisor. it would be the federal reserve. they provide an assessment of that application to a committee of supervisors. we wanted checks and balances so an individual supervisor was being too tough, there was some checks and balances. that allows for a pretty careful review. where supervises had new information, they were able to reflect that. i do not know how we could design a process where they could appeal to somebody besides me. if you were in my shoes, i do not think he would want to be in a position to judge, not just for a supervisor, but for a committee of the appears to make sure the wind up being too tough

or too soft -- of their peers to make sure it they were not being too tough or too soft. it took us this long. once we started getting assessments from the regular it is, we moved very quickly. >> is there any opportunity -- only $4 billion was allocated -- to apply for more? >> that is in the hands of congress. >> the timing is the way it is now. it is a catch-22. >> banks had a long time, as you can tell, to get exposure to this program and decide whether they wanted to apply. it is possible, if you were to do this again, you might see a few more. there was a huge national effort by the congress and

administration to get the word out. i do not think it was a secret. >> the people who did not receive the funding. >> again, roughly half of the banks who applied did not meet the standards. it is understandable they are frustrated and concerned. it is not a surprise because they have relationships with the supervisors. it was the supervises judgment. i do not know if more time would have increased the number that was approved. >> thank you. what senator brown -- senator brown. >> thank you for holding this hearing. i want to thank you also for correcting this information. i appreciate you correcting the

information that it was weeks not a year to push this through. i remember this clearly. there was guidance sang, $30 billion is the number, 7000 banks coming forward, and her 30 applied only a fraction were approved. -- and nine but 30 applied, only a fraction were approved. why is he concerned? the banks that all but were able to refinance their t.a.r.p. debt. very little of it went out to main street. four big banks, it was a slam dunk. they got the money. they are ok. with the smaller banks, and ultimately, the main street are aware,-- borrower, it is nothing. >> $15.50 billion capital total

since the fall of 2000 it went out to community banks across the country. more than 700 banks. you are mistaken in your numbers. this was designed to be up to $30 billion. we cannot force banks to apply. >> one reason they did not apply was because there was a tremendous amount of red tape. the red tape in applying and then the process, not having any idea why. i know you have addressed that. >> if you were in my shoes, you would want to be very careful that we are using the taxpayer'' money carefully in this context. judging the help of a bank is complicated. we are not in the position to do that. we had to rely on the supervisors. you would have done the same. the fact that not all banks are eligible is not a surprise. we have a tough economy, coming

out of the worst financial crisis since the great depression. a lot of those things are under pressure. they are not going to meet the test of eligibility. the reason we had a smaller yield than we expected, the reason this took some time is because we are careful to protect the taxpayers' resources. >> you said that, thank you. with all due respect, i do not think you can guess what i would do. as i travel around my stick and the country, the number one thing that i find, -- my state and the country, the number one thing i find, it is the uncertainty. this wet blanket over their efforts to create jobs. in the last year, we had a four hundred -- 488 regulations deemed significant. a cost of $80.70 billion imposed by new rules. we had 64,000 pages of new

regulation. 8.9 million hours of annual paperwork. the number one thing i hear, not only from banks, but from individuals and businesses is the lack of certainty and stability. they do not know what is next and they are very scared. they do not want to go in and take advantage of these programs. the people who are borrowing do not want to go borrow because of the strings attached to it. there is a disconnect between getting the money out the door in a quick and effective and timely matter. >> can i offer two contrary explanations? i think if you look at the evidence, i will cite a couple of things, if you look at the body of regulations proposed by this administration compared to the average in the bush administration, it is roughly in line. there is no increase in the rules proposed.

it is unfair to suggest there has been dramatic, sweeping changes that can account for weaker growth across the country. i know businesses always complain about regulation. they want less of it. >> they want regulations they can understand. but usually they want less, too. -- >> usually they want less, too. >> they want to know what the game plan is. they want to know they can walk in, get a sheet of paper -- understand what the process is. i only have time for one more question. it has been bugging me and many of the people, businesses in massachusetts. the 3% withholding tax issue. you have extended the deadline. it costs more to implement than we are going to get back. why don't you get rid of it so we can move on to something more important and not at that this is -- that uncertainty, lack of

predictability. we are not going to hire because we have to pay 3 percent cut withholding. >> we are willing to work with you and any of your colleagues on any idea. happy to take any ideas. we have a substantial body of proposals before the senate today. they are a powerful set. if there are other ideas we are open. >> there are plenty of ideas. we have all made to them. there is no republican or democrat bill that is going to pass. it needs to be a bipartisan bill. to have you going around the country sank, pass this bill, it is not going to pass unless we work together to get it done. i appreciate you saying that earlier. we have to take the best of both bills. the repatriation issue, whether

you are talking about the 3% issue, the employer tax deductions for employers, employees. those are things we all agree on. why cannot we get them done with your leadership and the president talking about those things? >> you cannot legislate without republicans and democrats. you have to find bipartisan consensus. i see that as a challenge in a divided country. the proposals we put before the senate, on the tax side, on the infrastructure side, have had overwhelming bipartisan support in the past. it is not the answer to all our problems. >> thank you. i want to remind this committee, i know everyone is far stated frustrated about regulatory reform. we do not have oversight. i think it secretary for his patient. i think senator brown for expressing his views.

>> thank you for holding the hearing and secretary geithner for being here. like my colleagues on this committee, and you have expressed this, i share the frustration for how long it has taken to get small business lending up and running. the disappointment with the number of banks in new hampshire that have participated. having said that, i support the program. i think means -- there is $9 billion out there to lend that would not have been there before. i think it has helped the situation. i continue to hear from small businesses in new hampshire, not so much that banks do not have money to lend, but it is more that they have been reluctant to

take risk. when i talk to some of my friends in the banking community, their response is they are reluctant to take those risks because what they are hearing from the regulators. i wonder if you could comment on that and the challenge that presents as we are trying to get this lending going? >> i think you are exactly right. if you talk to banks across the country, let's talk about the small banks, but they still say is that they feel under tremendous pressure to tighten lending standards more than they think necessary. if you look at lending standards, they are much looser than they were six months ago, 12 months ago, 18 months ago, two years ago. banks still say they think their examiners are being too tough. it is hard to know whether that is justified. they say that. they cite that more than the banks do than the concerns with

the forthcoming reforms. most of the reforms in a dodd- frank do not touch community banks. they touch the big banks. the fed and the chairman had been looking at ways -- they put out a series of guidance to examiners to temper that risk of excess caution. there is more to do. what always happens in the aftermath of a big credit boom is a standards were too loose and then they over correct. the market can of a correct and sometimes supervises can reinforce that. -- the market can over-correct and sometimes supervisors can reinforce that. >> the other issue, this is a little off topic, i think it is so important to the underlying concern that we all have, which is how we get this economy moving again. we still have a housing market

that is not functioning. the number one at constituent concern that i have had since i got elected has been hearing from people in new hampshire who are facing foreclosure. the difficulty, not without community banks, but with the big banks that are still not willing in any real way to engage with homeowners on modifications and looking at we can at how we can keep people in their homes. there are a lot of people who are able to do that. when we have gotten involved, we can get some of those big banks's attention. they are willing to look at the mortgages and make modifications. it should not take calling your congressmen or senators office to do that. i wonder if the administration

has any other efforts or initiatives that you expect to take to help address this situation? we need to get somebody's attention to this. >> i completely agree. it is still terrible out there. there is no other way to say it. having built this mortgage business, they are still doing an unacceptably bad job at making these new customers. if you look at the total number of modifications that have happened over the last two and a half years, it is between 3,000,004 million. it is a reasonable number of people that are getting -- 3 million and 4 million. it is a reasonable number of people. there are millions of americans who are at risk of losing their homes if, given a chance, they can keep their house for a period of time. we want to do as much as we can to reach as many people as we can. as you have been reading and as the president said, we are in

the process of working with the fhfa, the oversight body of a fannie mae and freddie mac, to put in place a program to allow americans to refinance and take advantage of lower interest rates. our hope is that in the coming days we are going to be able to get the details of a program to make that possible. that is one thing that would help too. if you can lower your interest rate, you can lower your monthly payment, make your house more affordable. that is a good complement to these modification programs that have been disappointing. it has reached a t 3 milliono 4 million americans. >> good morning, mr. secretary. thank you for being here. all these issues we are talking about, what of the housing crisis, lack of revenue to local state and federal government, at

the root of all of this is jobs. >> and weak economic growth. >> none of the people are working. if someone does not have a job it is hard for them to make a mortgage payment. i think he would agree, if you went out and ask people, what is the number-one issue, they would say the lack of jobs. jobs that do not pay what they used to. the employment issues are at the root of everything we are facing. >> the 90% of americans who have a job is that they fear they'll lose their job. if you do not have a job, your main concern is will he get a job soon enough. >> the issue of jobs -- let me ask you, it is going to be difficult, impossible, to turn around the joblessness issue, the 9.2% rate, without significant and sustained private-sector growth. >> absolutely. >> any job plan, whether it is

this bill or the one the president is proposing, any bill that purports to be a job plan has to be judged by what affect it will have on private-sector behavior and job creation. >> i agree with that. there is a good case as a complement to that. for public investments -- to rebuild american infrastructure and reduce some of the pressure on cities across the country to reduce first responders and teachers for the. with that exception, growth is going to come from the private sector. >> all of it is designed as what government can do to create jobs. as you are aware, both plans call for a surtax on millionaires, to generate a revenue. obviously, you are aware that that answer talks would hit

about 30% of small business income. >> let me put it differently. under the tax proposals we have suggested, it is true we have suggested to allow the tax rate from the top 2% of americans. it affects the top 3% of businesses to revert to the level they were before the bush administration. we have proposed to raise the burden further on the most fortunate americans. if you look the growth affect of that, they are likely to be very, very small. we are all trying to back it very difficult -- to balance very difficult pressures. we want to maintain fiscal responsibilities. >> the rates are going to go up in 2013. the top rate. you are going to add, under the plan, 5.6% surtax. that would put the top rate at

45.2%. >> for a small fraction of american. >> you add to that, the health- care lot -- let's say the top rate will be 45%. you think the top marginal rate being at 45% would have no impact on job creation? >> economists do not agree on anything. if you ask economist, it tends on where they sit on the political spectrum. judgment,ok at cbo's those tax proposals would have a very small. you have to look at the alternatives. if you look -- leave the economy with unsustainable fiscal deficit, where if you are cutting spending for there to support those low-tech rates for upper-income americans, that would be more damaging. >> what about the people that greeted jobs. the national the ration of independent businesses say the surtax is a job killer. are they wrong?

>> yes. what they are suggesting -- we have a physical choices. we have to govern. >> the manufacturers say the same thing. they say it is a job killer. >> any business that faces a proposal from congress to raise taxes will oppose the proposal and say it will kill jobs. that is their job. >> this is a quote from the president, "the last thing you want to do is raise taxes in the middle of recession. that would take more demand out of -- the economy." but that is a reason why this act is so important. -- >> that is why this act is so important. if you do not act, they will go up in 2011. >> raising taxes in the middle .f a recession in k what has changed since he said that?

>> good question. the proposal before the contest today -- congress today would lower taxes on all americans who have a job and all businesses across the country. if you do not enact the proposals, taxes will be higher in the beginning of 2012. the proposal we made to raise taxes will only take effect at the end of 2012. it would only apply to a small fraction of americans. we are open other ways to think about how we can pay for things the government does. we are not going to dig our way out of the deficit without thinking about tax changes. >> i am overtime. the statement the president made was in the context of an interview bragging about the fact we were not raising taxes on anybody. >> we have lowered taxes for everybody. >> he made that in the context of we are not raising taxes for anybody. what has changed? when he said that, the unemployment rate was at 9.7%.

now it has not -- it is at 9.1%. >> i would not differ from how hard it is a commie is. the difference is, what should we do about it? the president has always proposed that at the end of 2012 we allow a modest changes that apply to a fraction of americans to go into effect. without that, you are going to ask us to go out and borrow $8 million over 10 years. i cannot do that. >> the surcharge will have no negative impact on job creation? what you have to look at it relative to the ultimate. if you do not figure out ways to get modest amount of additional revenue to the most fortunate america there are going to be deficit for a long period of time or you are going to ask us to cut spending. that is our judgment. >> line of questioning -- i have

been very liberal and given a lot of latitude. this hearing is about the small business lending program. this is all important. as a supporter of raising the surcharge, i want to get one thing straight. i do not, and the members of the senate that are supporting raising taxes on families or individuals making over $1 million, is not the same as raising taxes on millionaires. millionaires are people who have $1 million worth of assets. many people have a million dollar worth of assets. their income is only $100,000. it is not millionaires, it is individuals and families that have income over $1 million. i want to get that straight for the record. i think it is important not to confuse the two. many americans are millionaires. many of them have made their own

million. they have not inherited it. we represent a lot of people who through hard work have assets over $1 million. the proposal -- one of the proposals is to raise taxes on income over $1 million. the marginal rate at 45%, you could argue that. it is a portion over the first million. the first million, they pay a certain rate, over the million, it would pay a second rate. >> a millionaire's tax is not my terminology. it is what i have heard the president said. >> the president has a different view. for those of us supporting the tax, it is not a tax on millionaires. it is a tax on income over $1 million. i wanted to get that straight. >> can i add one thing? >> i have one more senator. go ahead. >> can i offer one of the way to

think about this. if you want to keep those tax rates low, where they are today, for the most fortunate americans, then you have to ask me to go out and borrow one trillion dollars over 10 years to finance it, which i cannot do, or you have to figure out a way to find one trillion dollars in savings from medicare, medicaid, to do it. unless you want to assume peace breaks up around the world. -- out of around the world. you have to make tourists. we do not relish the concept of letting those expire. we are looking at choices about how to restore fiscal sustainability and silver -- still sustain core functions of the government. >> i am not arguing. i do not want to support anything that will hurt job creation. it is not about protecting

anybody. it is about not doing anything that will hurt job creation. >> thank you so much. >> thank you, mr. secretary. i want to follow up. senator had been addressed what i wanted to address -- hagan addressed what i wanted to address. in visiting with our bankers, they were told by the regulators, their primary regular theaters -- regulators that they qualified, then when the denial occurred, you were the one delivering the denial. they could not get any answers from the folks who told them that they were going to receive these funds. my understanding, as of this morning, the pressure department has notified of those who were rejected to have an opportunity to sit down and have a conversation with a person to explain the denial. i suppose the other complicating

factor is that at the stage at which the denial occurred, so close to the end of the program, there was no effective way to appeal, even if you could have sat down to talk to your regulator and say what did i do wrong? let me tell you what we did differently. at this point, it is too late because it is at the conclusion of the program. am i missing something? >> kyiv that it basically right. we are performing under a caboshed you got it basically right. -- you got it basically right. we did not rely just on the judgment of the primary supervisor, the bank supervisor. we rely on the attachment of a committee of their peers. we wanted to protect banks from the risks that individual supervisors were too tough or too soft. the balance is not perfect. we were trying to be careful. i think we got the balance. >> i have a couple of other

questions, semi-related to the topic. i will not wander as far as my other colleagues have gone. the president said something about the consumer financial protection. that was troublesome to me. if the cfpb was in existence, the bank of america would not have been able to raise charges on customers as has been prevalent in the news. is there something in the consumer protection financial bureau that allows a regulator to make a determination in terms of the fees charged by a bank? >> the cfpb made statements about that issue. let me tell you what our objectives are. we want to take a system where there was terrible protection for the consumers, poorly enforced, people -- and make sure they have a better

understanding of what they are paying. that requires more transparency and complicity in their basic fees. we are making progress in that direction. we have a ways to go. we are trying to give consumers a better capacity to choose and encourage banks to be more explicit and clear and simple about the charges that a company, mortgage loan, credit card loan come automobile loan, or a check in account or a debt account. >> do they have the ability to turn what a reasonable fee is? >> i do not think so. that was not the intent of the law. i would be happy to ask my lawyers. >> part of that statement bother me because it seems like a threat to banks. it did not do what it wanted --

what you wanted it to do. it also bothered me because we greeted another opportunity for a regulatory agency to be fixing with a relationship between a bank and its customer. i have worked at opening markets to cuba since the year of 2000, food, medicine. the result of those efforts has been the passage of tesra. the department has the ability to develop regulations. we have had some success in those markets. this is related to job creation in the sense that it goes back to the administration's support for trade agreements with south korea, panama, colombia. the more we export the more opportunity for job creation.

i thought we always had a silly policy with cuba. if we are the only one implementing dissension, they're going to buy from someone else. -- implementing the sanction, they're going to buy from someone else. we got the law changed. there was a retrenchment. 20% of the sales occurred to cuba after that. it was sales for cash up front. we were successful and adding to the financial services in general -- and a general government. an amendment that allows for direct payments. cash up front, to get rid of the letters of credit that current regulations require. the challenge now is -- the politics of this issue is always challenging. the administration has a staff in regard to this bill, including objections to this amendment as written. all i am looking for you, this

morning, we are working closely in trying to modify the language that will be satisfactory. i want to highlight this issue and ask for your continued commitment to work with me to find the right technical terminology that maybe something the administration would not include in their opposition. >> i'm happy to give you that commitment. >> thank you very much. but when you secretary geithner -- >> thank you secretary geithner for your work. we are all frustrated that the program did not generate more interest i think -- interest. point onsenator levin's the delay makes sense. we should have moved in a faster manner.

we are also concerned that we had anticipated a much larger interest. in reality, there was not the interest we thought even though, i agree, the need is out there. it is a matter of trying to generate jobs. we need to anticipate the realities of the banking system in this country. it is interesting that we put out less money from state programs. i can speak for maryland, i cannot speak for the rest of the country, those funds were put up wicker and leveraged very well -- put out quicker and leveraged very well and have greeted results. i was pleased we included that and the administration supported those funds being used for state programs. we can be proud in the manner that was used. i really do applaud the manner in which maryland step uped up.

there was another suggestion that did not receive it semitism from the administration. that was the right lung. -- received the same enthusiasm from the administration. that was direct loans. there has been some capacity by the federal government to make some direct loans. there was concern as to whether you can gear up for that. i mention that because, the results on the $30 billion program were less than we had anticipated. should we be reconsidering the use of direct loans as a way in which we can generate the type of activity that we want, recognizing full well that the evaluation of loan guarantees give you the same risk factors as if we made direct loans? but we have had a chance to talk about this in private. -- >> we have had a chance to talk about this in private.

i think you know my views. i would be concerned about the capacity of the federal government to design a national program for rep lending -- for direct lending, both because of the time it would take and the risk that government officials are not the best people to make judgments about credit risk. i understand the merits of that. of going around banks in this context. i think there are special cases in which it makes sense to do that. i would be happy to talk to you more detail about this. based on the experience across lot of other countries, i think there is a risk that in those programs, you get less good results and it's much harder to get the balance for the taxpayer alike with the amount of risky what the government to take. >> i expected that reply. let me urge us to rethink this.

based upon the experience we had with the bank participation program. based upon the facts that we currently about with loans for risk -- the value it loaned for risk, causing the government to guarantee 90% of the loan. the competition factor of having this source available might intrigue the banks to get more aggressively involved in the basic program itself. i would urge us to rethink this. it might help us do what senator snowe and landrieu want done. >> i'm always happy to take another book at these things. >> thank you. >> thank you for your leadership on this issue. the final questions will go to senator snowe.

>> thank you for holding this important hearing. i would comment on this during discussion. it is well within the realm. it ranged on a number of issues because it all but small business bottom line. all of these issues enter into the fray in terms of how we are going to reconcile major impediments to job creation. the whole issue of job creation, that is what it is all about, and being precise. we have a focus like a laser but we have to get it right. we are 24 months into a recovery. we have spent $800 billion in stimulus. we have had a $700 billion in the t.a.r.p. quantitative easing was $600 billion. we have had the maximum when you think of all the stimulus and monetary policy.

here we are, when you think about it, and calculations that i have read, that 40 months since the start of the recession. generally, you get an average of 7.6%. this is the case of four of the greatest recession since world war ii. we are at 0.1%. the trial and error have to be over now. we are in this new norm that we cannot accept, that is the 9% unemployment rate. if you look at the track record, it is disturbing. that is the message i want to impart. if there is one message i can give to you. it is not working. people are hurting. we hear the same things over and over again. i wish we could tackle tax reform and regulatory reform. you mentioned the small business lending fund, i do not how you mentioned-measure the success.

how do we know? do we know how many jobs have been treated? you also mentioned the present -- have been created? you also mentioned job created. where does that number come from? >> we have not given our own estimates about what the job of that would be of the jobs act. what we try to do is give congress a range of independent estimates. can i respond to your central point? i want to offer two things. the economy is much weaker than any of us would like. it is lower today than it was in the early quarters of the recovery because of the following reasons. it is important to understand the reasons. it is lower because we had a damaging slump of oil prices. we had a disaster in japan. we have a crisis in europe that is having a huge negative impact. and we have an economy still

healing from a long period where we took on too much debt, built too many homes, and there was too much risk-taking and leverage in the financial sector. those factors give us a weaker economy growing more slowly than we would like. the question is, what can we do about it? i think what i would offer back. apart from regulatory reform, we can agree to disagree about where the balance is, but we completely agree. apart from that, what can you join us in supporting, up because those things alone, they are not going to get the economy growing fast enough given the pressures we face globally in

digging our way out of this crisis. that is why we are focused on temporary. that can be very powerful. and we are making sure the average american has a lower tax burden, and without congress acting on that front, the economy will be weaker. i am not sure how much we can do, but that is not going to be announced. -- be enough. >> he is calling for tax increases. you have got it in a package of temporary incentives for business for one year, and you have tax increases but will

affect smaller businesses. they are putting the cart before the horse. why can we do tax reform right now lamon? >> because of we do not, the economy will be weaker pierre rec and parks -- will be weaker. >> mean the region we need certainty. one year is not going to create certainty. you need a larger picture now. a lot of people i have talked to across a range in the private sector. we need to be growing the private sector, and they are not going to change that risk. it is not getting better. they are going to add more employees next year. it is down from 19% in july, so

it is going in the wrong direction you could make a fundamental change if we work together on the same issues. if everybody is talking about it, we cannot shift the conversation. they are the job generators. that is what counts now. they are the ones we depend on. if it is taxes and regulations, let's do it. they kept saying, we are going to get it on the floor. we have not done anything. >> just think about the following thing. if you do not do anything now and the next three months, taxes for everybody who has a job and go up substantially inferior and reason you need to extend

temporary tax measures is because if you do not, they will be weaker. i agree there are some fundamental things we need to get right. we are happy to move as quickly as possible, and maybe they are going in and to help us. >> why doesn't the president work with congress to get it done? >> i am happy to do that, but we have to get the near-term stuff, soup. -- too. >> thank you for being here. thank you for hanging around end taking my question is very good -- taking my question.

liberty bank has a strategic goal of providing for small and medium-size businesses. the lending fund allows us to have additional capital to better serve the needs of businesses in our communities. we are experiencing an increase in the volume of loans to small businesses. he says, we complement the u.s. treasury on its handling of the application and, approval, and confirmation process awhile. the process was completed with a minimal difficulties, which we view as quite an achievement, given that the program is being initiated for the first term, some people are happy with some

of what you are doing a curator -- know what you are doing. i have of bill. basically what it allows people to do is set aside their own money tax-free where they can set it aside tax-free, and to me it seems that is a good approach because people are using their own money. do you have any comments on that legislation? as i am happy to look at that. i am happy to work with you on both of those things. i think there is a very good

case to look get the things we can do in this contest. we are open to and new ideas. >> that is a 25% tax credit for angel investors common and and that could get us over the hump. i would love to continue to work on. this is a great financial institution. they are doing well, even boehner they still continue to be strong. they say there is a lack of demand for small-business loans. the banks are not lending to them, so it seems when i talked

to both of them they say the regulators have made it more difficult. would you tell us how that is working and what we can do to get our economy out of neutral? >> lending demand fell a lot during the recession. growth was relatively slow, and many people are too much. overall demand for loans was very weak early in the recovery and has been slow to take out. they are dramatically improved, and lending terms come back to an normal in this context, but some of them have trouble getting credit because they

depend on breaks -- banks, and it has hurt him in this context. you might find it hard tune find a new bank. there is obviously is some risk that examiners are being pretty tough, and maybe for some, i think the best thing we can do to mitigate that is what we are doing, we choose to make sure they have access to capital. there is a whole range of things we can do, and i will continue to work on it. >> one last thing. this is from homeland security.

one of the cases i have been working on has been turned over to the irs, so a of we call to have a meeting. my only request is that we talked to the right person. we would love to do that this week. gerd thank you. >> thank you. you have been very patient, but you are a popular witness. >> i do not think popular is the word you are looking for. >> i want to thank you all on republican as the democratic side. i would like for you and your staff as we consider what our to tell usight bee

the recommendations for improvements if we were to go on. i have a few suggestions myself, and i have learned a lot today. i want to underscore the points made about thanks reassessing collateral against small- business loans, because if we do not come up with a way to address that, we may go through another round of the devaluation and a softening of lending, and you know the extent of that, and we're going to submit some ideas, and finally, given that we have discussed trade with cuba, tax reform relief, regulatory reform, and

the price of bread, we now have all the argument we need to rise for more money and the staff to cover these issues. gone plus -- god bless you so much. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> according to the obama

administration, provisions of the bill would restrict the transfer of detainees on to the u.s. detention center at guantanamo bay, cuba. we will hear from the pentagon lawyer about the policy next. and remarks from senate republicans opposed to the president's detainee policy. later, one of the leaders of the political movement that led to the fall of the government talks about the country's transition. iraq's because i am a businessman, and i am very proud and connected to a large company, the opposition has attempted to picture me as an opponent of liberty, but i was a libertarian before the word.

and before another distortion of the word liberal. >> although he lost the election, he left his mark in political history, speaking out on civil rights and becoming an ambassador for his former opponent, rose about your your he is -- former opponent, roosevelts. >> now the defense department general counsel discusses administration's opposition to part of the bill having to do with the detention of terror suspects. the administration said the provision would limit the president's flexibility in dealing with terrorists. this is an hour a.

>> good afternoon. it is a pleasure to welcome you to our auditorium. welcome to those who join us on our website. if you would be so kind as to check cellphone one last time of we proceed this the program, and my staff would be especially happy. we will oppose this within 24 hours, and e-mail, comments, questions can be sent any time. introducing our special guest this afternoon, mr. stempson is a leading expert in criminal law, military law, military

commissions, and attention policies. he served as secretary of defense for detainee affairs and issues worldwide including guantanamo bay, iraq, and afghanistan. he also served four years as an assistant district attorney. before that he was a domestic violence prosecutor in san diego. please welcome me enjoining my colleague a. -- in welcoming my colleague. good [applause] >> we are delighted to welcome jeh johnson to the heritage foundation. after president obama was elected, but 04 he swore on the constitution, a senior high

ranking military official called me, and i know this person, and he said, you ought to have a chat and get to know jeh johnson, because i know him. he served with distinction as the air force general counsel during the clinton administration, and you should now get to know about one. as i called called him. the began a professional and collegiate il conversation and from shepard -- and furniture that started december and january before the president took office. -- and friendship that started december and january before the president took office. i told him i oppose the 2006

act, and i sent a memo saying why i oppose it. i hope the administration would upgrade and keep the military commissions act, and they did that. we have had numerous conversations since then, and i have found those conversations to be constructive spirit and my point is that for too long, there has been an over politicization of the attention matters, and we have come to a point to 10 years since 9-11, where there has been an odd but favorable convergence of opinion on the questions, and acceptance but we are at war and the acceptance that pursuant to , military detention was an

aspect of the war effort. the topic was more detainee legislation necessary. good we ask that because as you know, there are two competing bills that contain various provisions dealing with the attention. it is important to put this in context. since 9-11, the united states has detained while over 100,000 individuals. most were detained in iraq. 10,000 or so were detained in afghanistan. guantanamo have 778 individuals, and now we have 771. the important principles are not the numbers but the overlying respect of the law and our country. the legislation today does not address the vague issues that --

the big issues that have bounced around a refinement to existing policy, mainly dealing wesith detainees in guantanamo, so we are absolutely thrilled in the spirit of putting politics aside in getting down to common sense legislation, to have jay here to talk about this. j serves as a general counsel to the department of defense. that means he is the chief legal officer into an army of lawyers. more than 10, and he is also the chief legal adviser to the secretary of defense. he served with distinction as a federal prosecutor in the southern district of new york,

where he took on public corruption cases. after his stint in the southern district, he moved on a. he tried high-stakes commercial corporate cases. he was appointed by president elect obama to be the general counsel for the department of defense, and he has tackled a number of issues, and i am sure you may want to ask him about those things, so without further ado, i turn the podium over to the hon. jeh johnson.

>> thank you for that introduction. thank you for the invitation to speak to this distinguished organization. he referred to the fact that i was a federal prosecutor for three years. i am sorry the former attorney general could not be here today. i know his connection with this organization, and just thinking about the reference he made, i am reminded of when rudy giuliani hired me in 1988 to be an assistant to the united states attorney and the southern district of new york. i have been out of law school for six years, and i was a litigator. i was anxious to try cases, and

i had never tried a case, so i got into the united states attorney's office and figured i was finally unleashed to try cases, and almost immediately, i had my first trial. it was about three weeks into the trial, and i was taught you always give essentially the same opening statement before every jury. it varies depending on length and the nature of the trial, but you essentially gives the same opening speech to every jury, and it was pete into me. before you introduce yourself to the jury, you are supposed to go over to the defendant, and you are supposed to walk away from the jury and a point of the defendant and say that man sold drugs, and i am going to show

you how he did it. then you return to the lectern, and you say, i am an assistant u.s. attorney. i represent the government, and for the next 20 minutes or so, every statement should be preceded by a, the evidence will show this, and by the end of the opening statement, you say the same thing. in conclusion, i asked you to do three things. listen to the law, and use your common sense, and if you do those things, i am confident you will find the defendant guilty as charged. but was the same opening i gave to all of the cases are tried. now i am out in the defense bar, and i am thinking, this is my real opportunity to be unleashed, because i do not

have to a playboy the same rules. i was representin -- i do not have to play by the same rules. i was representing someone accused of selling crack. i said, he was not selling crack. he was using crack. that is what a client told me. i am not a seller. i am just a user, so i try the mope the fans. i said, the defense attorney is going to point at you during his opening statement common and i suggested to him what happened to me during my first trial. i said, a trial is an emotional thing, and sometimes, it is ok to let your emotions ago, when you are accused of something really bad, so he walked over

got in his face, and he cried right on and put his head down and started calling his eyes out, and it was great. the injury looked at him in sympathy, -- jury looked at him in sympathy, and i did not point at him. i said, this is of poor crack addicts. i did not begin with, the evidence will show. i left the lectern, and i was pretty much on auto pilot, and i was given this great opening. i said, ladies and gentlemen, i want you to do three things.

i want you to listen to the law. i want you to use your common sense, and if you do all of those things, you will find the defendant guilty as charged. that was my currier in criminal defense. good -- my career in criminal defense. , perhaps it told mae was my predecessor -- the job of general counsel was a relatively sleepy one. i came to the job with a belief based on prior experience that a general counsel should rarely if ever been publicly seen or heard, but when i return to the pentagon, i found a very different place.

office of general counsel of the defense department, particularly in the post 9-11 world in the middle of 90 different issues. -- of many different issues. "don't ask, don't tell", privilege. google search my name, and you will find a number of hits about controversies in our third over the region -- controversy i stirred. when i read the newspaper, i discover a story with a public account of a private legal advice i supposedly offered in government deliberations. when i look around, i find some

people are are actually interested in what the general counsel has to say. in every opportunity before civilian offices such as this, i devote part of my remarks to paying tribute to the sacrifices and dedication of men and women in the u.s. military. these remarkable men and women in the post 9-11 military have volunteered in the sense of patriotism and selfless duty to a larger cause. each time irene this list, the most painful thing for me to read -- each time i read this

list, the most painful thing for me to read is ages. these young people gave their lives before they ever had a chance to know what life is about. many will never know the joy of parenting a son or daughter or so many other experiences in life has to offer. then there are those that survive their injuries and must struggle without an arm or a leg or something else the rest of us take for granted. the navy lieutenant is the nephew of one of my deputies. he was a member of an explosives disposal team. on december 7, lieutenant snyder went into an on-line area to declare safe passage -- into a mine area to declare a safe passage for others. and i.e.d. exploded in his face, taking his eyesight for the rest

of his life. despite his injuries, lt. snyder refused a stretcher and managed to guide the medic to those who were wounded. one of the most remarkable things about those seriously wounded in action is a powerful sense of unit cohesion and dedication they retain even after they are taken out of the fight. within hours they will frequently express an inpatient desire to join their bodies in their unit and continue service. i will never forget the amputee who asked me, do you think this will affect my ability to get a command? when lt. snyder learn the secretary of defense was about to visit him at bethesda, he said to his mother, i need to get out of bed, but i have no parents. -- no pants.

polls indicate the u.s. military as the most respected and revered institution in america today. i am convinced one of the other reason our military is so respected is for all its power, we place sharp limits on the military's ability to intrude into the civilian life and affairs of our democracy. this is a core american values that is part of our heritage, dating back to before the founding of our country. the declaration of independence and listed among our grievances against the cain the fact that he had kept among us in times the factinst the kenyaing he had kept among us standing armies. this is reflected in the federalist papers, and the father of our constitution,

james madison, wrote, a standing military force with an overgrown executive will not long be safe companions to liberty. the means of defense against foreign danger have always been the instruments of tyranny at home. this core value and its heritage today is reflected in such places as the third amendment, which prohibits ps i'm ordering of soldiers -- prohibits boarding of soldiers in homes in times of peace. this brings me to the point of my remarks today. there is danger in over militarizing our approach to qaeda.

there is risk in expecting the u.s. military to expand its reach into traditional areas reserved for civilian law enforcement in this country. against an unconventional non- state actor that does not play by the rules, operates in secret, observes no geographical limits, and continues to look for opportunities to export terrorism in our homeland. we must use every tool in our disposal. the military cannot be the only answer. recent events remind us that broad assertion of military power can invite challenge. overreaching with military power can result in litigation in which the courts intrude further and further into our affairs and can result in national security setbacks, appoint best

demonstrated by the question donald rumsfeld as my successor. am i going to go down in history as only secretary of defense to have lost the case to a terrorist? particularly when we attempt to expand the reach of the military on to u.s. soil, the courts resist, consistent with our heritage. we have worked to make military detention less controversial, not more. the overall goal should be to build a counter-terrorism framework that is legally sustainable and and now and that preserves every lawful toulon at our disposal. this is meant as the president counter-terrorism adviser said recently, an approach that is " pragmatic, or a wholesale retention of past practices."

to build the framework, we have in the last several years accomplish the following. we have applied the standards of the army field manual to interrogations conducted by the federal government. where appropriate, we have invoked the public safety exception to the miranda rule, created by the supreme court, ensuring the opportunity to govern voluble intelligence is fully utilized and preserving the prosecution option. we have worked with congress to bring about a number of reforms reflected in the military commissions act of 2009, and we issued a new manual for military commissions. by law, use of statements obtained for cruel and degrading attainments is known

and prohibitive. we have accomplished these reforms by working with a bipartisan coalition in congress and with the full support of the leadership in the military. we have appointed a highly respected former judge advocate general of the navy, bruce mcdonald to be the convening authority for military commissions. marine colonel joseph caldwell and appointed mark martin's, a west point valedictorian and rhodes scholar, to be the chief prosecutor. ithare recruiting a team whe this procedure. we established a new public websites and in general built what are believed to be a credible, sustainable, and more transparent system.

in the litigation brought by guantanamo detainees, lawyers in the department of justice and the department of defense have worked hard to build credibility by conducting a thorough scrub of the evidence and intelligence before we put forward our case for detention in the four frigates and and now we have a rough -- in the courts. we have refined reviews for the cases of detainees in guantanamo and afghanistan. overall company the hard work of many counter-terrorism professionals is producing results. first and foremost, we have been aggressive and focused in the fight against all kinds of. -- against al qaeda. we have not hesitated to use lethal force, and we are taking the fight to them in a plot

were they train to export terrorism to the united states. counter-terrorism experts say publicly about how tight the senior leadership is severely degraded -- that out--- al qaeda senior leadership is severely degraded. we seek to bring other planners of 9-11 to military commissions. other charges have been made. give the government is seeing consistent success in the habeas cases brought by guantanamo detainees. the courts have largely recognized and accepted our legal authority, and the government has prevailed in more than 10 consecutive case moves

brought by detainees. -- cases brought by detainees. the department of justice successfully defended to detainees held in afghanistan. fourth, through the interrogation of those captured by the united states and our partners overseas, we continue to collect valuable intelligence about how high debt and its intentions. this administration -- about qaeda and its intentions. i know firsthand the strength, security, and the effectiveness of our federal court system. a federal court system is even more effective, and as a result of lengthy and mandatory minimum prison sentences, those

convicted of terrorism-related offenses have often raised in decades if not life in prison the results speak for themselves. since 9-11, numerous individuals have been convicted of terrorism-related offenses. we have seen a guilty plea from the man who admitted to having plotted to bomb the new york subway system, a guilty plea for the man who tried to bomb over detroit, a life sentence imposed on the individual who attempted not to bomb and not over times square, and a life sentence for the bombing of our embassies in kenya and tanzania a. the department of justice has successfully prosecuted hundreds of terrorism-related cases. despite our successes, we know the fight is not over.

we know in opposed bin laden period, and al qaeda and affiliates remain devoted tune carrying out terrorist acts against the united states. it relies on affiliates to carry out terrorist aims. we know how high is likely to continue to metastasize and recruit affiliates. these terrorists and in threats are increasingly complex and a fire -- and defy categorization. we have seen terrorists who claim affiliation to more than one terrorist organization and served as a conduit to another,

fit within our military commission's jurisdiction but not within the military detention authorities and fit within neither our military detention authority nor our commission is jurisdiction but can be prosecuted in our federal civilian courts. on top of all this our concerted efforts to recruit the of the internet with a reach into the united states. over and over again, we see individuals within the united states whose self-regulate and fought in dealing with this category of people who aren't here in the united states, who have never trade in an odd- region who -- now we must guard

against any impulse to label that as a congressional aide declared enemy to be dealt with using military force. hour prior efforts in this conflict to put into military detention those arrested on u.s. soil led to litigation when the federal appellate courts. the military cannot always be the first and only answer. this is contrary to our heritage and will undermine our overall counter-terrorism efforts. in responding to threats and acts of terrorism, we must build a legally sustainable arsenal and have all of the tools and in the arsenal, whether it is legal force, military detention, interrogation, supporting counter-terrorism efforts of other nations, or prosecution in

federal court or by military commission. against this backdrop, we confront a series of laws and new litigation that limits the military's counter-terrorism options, complicate our efforts to achieve continued success, and will make military detention more controversial, not less. here are some specific examples. section 1032 of the 2011 defense authorization act prohibits the use of defense department funds to transfer any guantanamo detainees to the united states for any conceivable purpose. no waivers or exceptions, including federal prosecution or to be a cooperating witness in a federal prosecution. given a lengthy prison sentences mandated and the range of offenses available, there are

some instances in which it is preferable and more affective to prosecute an individual in our federal civilian courts. section 1033 of the same law requires before the government can transfer of guantanamo detainees to a foreign country, my client must personally certify certain things about the detainee country unless there is a court order directing the detainee's release. after living with this requirement for almost a year, i will tell you it is near impossible to satisfy. not one guantanamo detainees has been certified for transfer since this has been imposed. -- certification requirements and reduce our ability to pursue the best options in an evolving

world situation and intrude upon the traditional ability to conduct foreign policy, in this case to determine when sending a detainee to another country for prosecution we do when prosecution would better serve our interests. our nation is not the only one on earth that can deal effectively with this issue. the other potential consequence of such a rigid requirement is that it incentivizes executive branch to leave to the courts the hard work of determining who can and should remain at guantanamo. we want the courts and less involved in this business, not more. certain proposals for the 2012 defense authorization act are equally problematic. section 1039 of the house version of the bill prohibits the use of defense department funds to transfer to the united

states in a non-u.s. citizen the military captors anywhere in the world as part of the conflict against al qaeda and affiliate's. no exceptions. we have determined such a ban on qualified b -- such an unqualified ban is not in our national interest. suppose the military captors and individual it turns out would be vital as a cooperating witness. must the option to bring these individuals to a civilian court room in the united states be prohibited by law? likewise, section 1046 imposes an across-the-board requirement that if military jurisdiction eggs is to prosecute an individual, we must use

commissions for prosecution of a broad range of terrorist acts. decisions about the most appropriate form in which to prosecute a terrorist should be left case by case to prosecutors and national security professionals. considerations that go into those decisions include the defenses available for both systems for prosecuting conduct, the weight and nature of the evidence, and the likely prison sentence that would result if there is a conviction. a flat legislative ban, whether it is a commission system or the civilian courts, in favor of the other is not the answer. section 1036 rewrites the review process. -- the review process for guantanamo detainees.

a proposed congressional rewrites mandates the use of military review panels. our research shows interagency review is preferred to take a tentative the expertise available across our national government. finally, section 1032 of the senate version of the defense authorization bill includes what has come to be known as the mandatory military custody provision. it requires certain members of out kind of or affiliate's be held in military custody pending disposition under the law, unless the secretary of defense agrees to give him up. for starters, the trigger is unclear. some of my friends on the hill say this is intended to apply only to those who have been

captured with hostility. it applies to individuals were other every day wherever they are taken into custody -- to individuals wherever they are taken into custody, including those arrested in the u.s. by first responders in law enforcement. this would include an individual who, in the midst of an interrogation by an fbi agent at the airport, and mitzi is part of out--- admits he is part of al qaeda. must they stop in order for the army to take him away? well we use the phrase i kinda -- al qaeda and its affiliates

publicly, the term affiliated has no accepted no legal meaning and has not been tested in court. likewise, the phrase in the bill, are participant in the course of planning or carrying out an attack against the united states has never been carried out in court. we will oppose efforts to make military detention more controversial and restrict the executive branches of flexibility to pursue our counter-terrorism efforts. they need the case to make a well-informed decisions about the best way to capture, detain, and bring to justice suspected terrorists. the case against al qaeda is complex and multifaceted.

both the congress and the executive branch must be careful not to impose rules that make military detention more controversial, not less. i have spoken today about ways to legally solidify and improved armed combat, not end it. this should not be the natural order of things, but war is sometimes necessary to secure peace. you heard meekness described the tragic end her royal the story of the young naval officer who lost his eyesight to an i.e.d.. martin luther king said that in the end common when -- in the end, and i for an eye of leaves

everyone wrong. we should all continue to believe that the art pinwheels towards peace. thank you very much. [applause] >> i am going to take the prerogative as opposed to take the first question, and many -- as host to take the first question, and my question stems from a paper we just published. we also believe the mandatory military custody provision is very problematic in practice and that the executive should have all tools available to him or her in the fight against

terrorist organizations and affiliate's organizations. one thing we covered in our paper that we did not touch upon, there are proposals on the hill regarding reaffirming and perhaps extending the authorization for use of military force, which was passed on september 18, 2001. could you spend a little time giving us your thoughts on that topic, whether it makes sense, how it works or does not work in practice? >> i have a couple of thoughts about that. there is a provision to

from 2001 andnewabl makes express reference sooto te taliban, al qaeda, and associated forces. this portion of the bill and renews its in respect to the attention only, and not to imply it is not valuable in other respects, but the senate bill makes a direct reference to the attention of authorities. i was asked about this in march house armed services committee, and i testified then and continue to believe that the authorities we have now in the department of defense are adequate, given our

interpretation of those in authority to address the i have had occasion to evaluate, and i think that is what i said no word for word. having said that, -- that is what i said word for word. having said that, i do think the provisions have become very controversial. there is a lot of debate on the and a lot ofoor, people in debate interpreted that language as an effort to prolong operations in afghanistan. that is not an effort to make some global war on terror in

definite, and in that respect, i think the political debate has become somewhat overheated. my understanding of the intent of the draftsmen of that provision was to more or less codify what they believe to be our existing interpretation of authorities. i think the reason we have concerns about efforts to do that what i do not want to end up with is something less and what we thought we already had, through the authorities on the books and our interpretation of authorities on the courts have largely accepted our interpretation, so at the end of this process, and i have been

very plain about this, that we do not want to end up with less than what we had, so i am sure this will work its way through once it gets on the senate floor, once they get to conference, but those are my thoughts. >> we have received a couple but i wanty tweezeitter, to honor the people who are actually live here. for all questions, please identify yourself, your organization, and pose a question. >> i am an attorney, and thank you for coming here. my question is about a slightly different topic, which is the

administration's views and your thoughts on targeting of u.s. citizens who are participating in the conflict against us. i wonder if you could share your thoughts and explain your views and the administration's views on that >> nice to see you again. let me know when you are ready to -- -- ready to leave private practice. >> is that a job offer? >> not quite. [laughter] in general, and the courts have said this, the supreme court has said this -- those who for part -- who are part of a congressional aide-declared enemies do not have immunity if

they are u.s. citizens. as i'm sure you know in the clearing case, 1942 level it was, and much more recently in hamdi, 2004, the courts essentially endorsed the attention and in the other case, of some one of you -- of how someone who was a u.s. citizen. their special considerations -- there are special considerations, i believe, when it comes to someone who is of u.s. citizenship, and the care that should be taken if we encounter somebody who has u.s. citizenship. i am satisfied that the military is conducting itself in full compliance with domestic legal party some of --

authorities. and i believe that at some point we will probably have more to say on the topic. >> what you're standing, jeh, since no one is watching, let us in on this intiff, - this little of legend ftiff -- this tiff betweenesd you and another lawyer. >> i think that the so-called tiff between harold and myself is largely exaggerated. journalists like to find controversy, difference of opinion within the executive branch. sure herald i'm

would agree, it is really exaggerated. the particular context that you are referring to, i think harold and i both agree that when it comes to al qaeda, and the concept of associated forces, a group can become an associate of force provided that there are two things -- one, sufficient contact, connection, affiliation with the corporate, and two, an element of co-belligerency with a core group in the fight with the united states and its coalition partners. harold and i both agree on that proposition. frankly, i do think that the supposed this agreement is

exaggerated. on the other hand, if lawyers agree on everything, within the executive branch, within the federal government, then we're not thinking hard about these subjects and having a robust debate to get to the right answers. i know that from sitting around my conference table, i want disagreements and debate within the office of general counsel. there are one ared two lawyers who typically come down on one side and a couple more that typically come down on the other side. they state their views and stake out their positions, and i asked for their legal support for their positions. and we get to what i believe is a healthy, sustainable conclusion. when you do not have those discussions and you lapse into group fincke, that i think and lead to dangerous results. -- group think, that, i think,

can lead to dangerous results. >> that reminds me when we rolled out the directive on detainees. there was a counter article and its reporter, male or female, said, i understand there was actually a debate in the interests -- in the administration to include this. and my response, yes, and it was better for the system than not. in the front, then. -- ben. >> i'm from the brookings institution. >> hello ben. >> how are you? you take sharp issue, and i certainly agree, with your criticism of various legislative positions. but you're also describe the objective of the administration as a stable, legally sustainable

framework. and presumably their role of congress and the development of that framework is not zero. so if congress wanted to be constructed in helping to build that framework, what is the positive agenda of that it should be thinking about, rather than these lists of restrictions on things that you guys think you should have flexibility on? >> first of all, congress has an oversight role, and i believe in that oversight role. so i am on a regular basis meeting with the council for the house and arms -- house and senate armed services committees talking about what we're doing, my latest interpretations of our legal authority, so forth, because i want them to know how we are applying the authority that they have given us. i believe strongly in congress's oversight role.

i hope that the congress would consider working with us to help us build that's sustainable framework, and a perfect example of that was the military commissions act of 2009. we have the 2006 act and the supreme court decision followed. there was a fair amount of controversy and debate in the run-up to the 2006 law. when i came into office, we started thinking about ways to reform the system. by about the same time, my colleagues on the hill were thinking about the same lines. we work together on a bipartisan basis -- we worked together on a bi-partisan basis for there is still some bipartisanship that occurs on a hill, i have found. there's a fair amount of it around on services committees. i'd generally work with democrats and republicans on

both committees. cela's an effort to help sustain and solidify our legal authority -- that was an effort to help sustain and solidify our legal authority in a way that we all believe was more sustainable and more credible, took out some of the more controversial aspects of the 2006 law. to me, that is a good example. i think as i said in my prepared remarks that we have to be careful that congress not try to micromanage, not legislate certain options taken off the table completely, because the future can be uncertain, and things can go in under anticipated directions. i hope i've answered your question. >> you did a good job sort of answering the question. perhaps others will proceed.

-- pressing you. let me go first decade and into julienne to start her question. >> kate martin, and thank you, mr. johnson. all follow-up to that question, it seems to me that the administration has been very clear that your authority to use military force to detain people is tied to the office, which we appreciate. and i also understand that it is the administration's position that you have the authority you need to go after new associated groups, at least like a kite that in the arabian peninsula. -- al qaeda in the arabian peninsula. i would assume that legal analysis says that with the deployment of u.s. military force targeting detention

authority, some question is, not as a matter of legal requirement but as a matter of constitutional good practice, does it make sense 10 years later to go back to congress and say, yes, you had in mind invading afghanistan, but the war has led over to pakistan. now we need to exercise military assets i grant -- against aqap which was not in existence at the time, and we will specific congressional authorization to use military force that, and with that we will go with military detention center targeting, in should there be another such group that the administration again turns to congress until congress the contours of the authority that it needs, rather than leaving it up to congress to say, you can

have it for the whole world and everywhere? >> a couple of things. one, what i said was is that i thought our authority was adequate to address the threats that i have had a chance to evaluate. and without getting into specific groups, the concern that we have is that the congressional legislative process is a sausage-making process. you have two competing versions of that effort in the house and senate right now that look very different from one another. nervous whene very congress decides to undertake to rewrite the authority that i believe that i have now. and i do not know how it is going to look at the end of this process.

if in the abstract, i could be king of the legislative branch and i could write my own laws, but i cannot, this is not a market -- monarchies, then i would take more comfort in the principles you have articulated. but in the pending legislation now, there are new context bill to end like to give captured in the course of hostilities" in the senate bill, which is a phrase that is not tested in court. that is our concern. >> julian barnes. >> "wall street journal," and i may have been the reporter you're talking about there. my question follows along the queries we have had today, which is you have talked about the

categorization problems and in recent days, that certain individuals might be covered by military commissions, but they might not have the other law for authority. that makes me think that there is a role for congress and clarifying that. then you also been critical of the use of "affiliated entity" in legislation that has become before the congress. one, how should congress who you have jurisdiction over? and two, do you think just for clarity going forward, do you believe that guantanamo could take another captured detainee, or is that off the table now? >> let me answer the last

question first. it is the firm policy of this administration not to add to the guantanamo population. the president pledged to close guantanamo. we continue to be committed to that goal. so we do not intend to add to the guantanamo population. military commission jurisdiction is different from detention authority. our detention authority for the guantanamo detainees is the march 13, 2009 definition that i and others in this room helped to write. that is somewhat different from commission jurisdiction. and very different from jurisdiction to prosecute someone under title xviii. so my remarks should not be interpreted as an invitation to expand military commission jurisdiction or to someone expand our detention authority.

as i said before, i think that we have to be careful about expanding the role of the u.s. military in our society. i do believe that if an individual does not fit within our detention authority or commission jurisdiction, then we have to look seriously at whether that purpose, and we hit -- and we should and we have -- look seriously at whether they can be prosecuted in a federal criminal court, which has a number of different ways to prosecute that individual for material support of terrorism, other acts the result in very, very, very lengthy prison sentences. i used to think that when i was a prosecutor, narcotics sentences were along but they pale in comparison to what the federal sentencing guidelines and the federal law calls for when it comes to tax of terrorism.

-- acts of terrorism. >> this will be a quick question and we have time for one more. this is a tweet from carol rosenberg at the "miami herald." is the navy looking at fort bragg proceedings? >> like i said, we remain committed to close in guantanamo. we have from time to time look at alternate locations, and so that is involved -- that has involve looking here and there over the last two years. so that is probably all that i want to say. >> ok. i guess that would apply to the

previous administration had looked at previous -- other locations. >> a comment on what the impact or the lack of impact it would be if congress is unable to pass an authorization bill for 2012. of there any areas particularly complicated by that? >> yes, that is a complication for us. there are a party -- authorities that expires the end of this fiscal year, and i was just looking at that, authorizations, not appropriations. they expire at the end of this year and they are extremely valuable to us in what we're doing overseas. unless the congress acts to pass a new authorization bill, or expressly deals with something in a new appropriations bill for we will have real

problems. it is the case that every time congress, instead of passing a full-year appropriations bill, passes a cr, there are some of authorities they get left behind, that we have to scramble to figure out how to cope with. all of us hope that we have seen over the last year or two does not become the norm. >> well, polls, i think we have an excellent discussion today. traditionally we give our speakers i heritage tie. i'm afraid if i gave jeh a heritage tie he would not be allowed to go into the white house. i want him to stay in his jaws. because general meeks is not here and he has written the heritage guide to the constitution, and exxon expos

say on the constitution, and i know that jeh is a student of provide youution, we worke with this and let's give jeh a warm round of applause. [applause] we are adjourn. -- adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> senate majority leader harry reid may now allow the senate to take up the defense programs bill. earlier, senator reid said he would not bring up the measure unless certain provisions relating to accused terrorist and attention were removed. next, we will hear from senate republicans on the president's policy.

[unintelligible] president. mr. president, today we come to the floor to talk about the importance of the defense authorization bill. for 50 years, five zero, 50 years, the congress of the united states has enacted a defense authorization bill, enacted it do law and had it signed by the president of the united states. now, there have been times when this legislation has been very contentious. days during the vietnam war, days during operation desert storm, operation iraqi freedom, bosnia, companies owe voe, all -- kosovo, all of

those times the defense authorization bill has been a vehicle for debate and votes on the floor of the senate concerning transcend ant issues of national security. and for 50 years we have cared for the men and women who have served and provided them with the equipment, the pay, the benefits that the men and women of this country deserve, with hundreds of hours of deliberation, thousands of hours of written testimony and testimony before the committee, full committee, and subcommittee, such as the chairmanship of the senator from the state of georgia. and now because of a part of the legislation the majority leader has decided that we will not take this bill to the floor of the senate. that, my friends, is a betrayal of the men and women who are serving this nation. now, i understand that there are differences on the issue of

a detainee treatment. i understand it's an emotional issue. but should it be a reason for the united states senate to carry out its 50-year tradition and debate and discuss and amend and vote and come out with a package that provides for the needs, the training, the equipment, the benefits of the men and women who are serving? i quote from a letter from the -- from the distinguished majority leader who says, and i quote, the letter to be senator levin and to me, he says "however, as you know, i do not intend to bring this bill to the floor until concerns regarding the bill's detainee provisions are resolved." is that the way the senate works? that we don't bring bills to the floor unless objectionable -- that are disagreed with by one side or the other are not resolved? i always believed the way these issues are resolved is through

debate, through amendments, through votes, through allowing the american people also to see and hear our deliberations, our discussions, and our debate. so now it appears -- and obviously the fiscal year has expired, and so this bill is obviously long overdue. so now we are in a position that apparently the majority leader wants to take up the president's job bill one by one, apparently, in complete disregard of the needs and the requirements of the men and women who are serving in our national security. part of that bill also is the intelligence parts of the bill from the intelligence committee. the senator from georgia, who i -- and by the way, i note the presence of the senator from south carolina who knows more

about detainees than any member of this body without question. he continually travels to iraq and afghanistan, he has visited the prisons, he understands the issues better than anyone. and i'd be willing to ask him how he feels about the detainee provisions after the senator from georgia makes a comment about the importance of the intelligence portion of the defense authorization bill. mr. chambliss: i thank the senator from he arizona. this is the ninth defense authorization bill that i've been involved in since i've been a member of the senate, and i must say that the refusal to bring this defense authorization bill to the floor by the majority leader is truly disheartening. it's critically important that we address the issues not only of what's going on in iraq and afghanistan, but the day-to-day operations of our military from the standpoint of pay raises, quality of life, purchase of weapons systems for future use,

any number of issues that are included today and the refusal of the majority leader to bring this to the floor because of his objection to a very critical aspect of this bill truly is disheartening. during committee consideration of the bill, committee considered and adopted by a vote of 25-1 a comprehensive bipartisan bill -- provision relating to detainees. we have no detainee policy in this country today. if we had captured bin laden, what would we have done with him? if we had captured anwar awlaki, what would we have done with him. certainly we could have gained actionable intelligence from either one of those individuals, but we have no detainee policy in this country today. we have nowhere to take them to that we can hold these individuals and ensure that they don't get lawyered up quickly and that we're unable to get the

type of information that we need to get from -- from individuals like that. over the past several years there's been an ongoing debate about the importance of being able to fully and lawfulfully intergate suspected terrorists. one thing is clear after all these years that our nation still lacks this clear and effective policy. this bipartisan detainee compromise goes a long way toward ensuring we can get timely and actionable intelligence from newly captured detainees connected to al qaeda and other terrorist organizations. the compromise also provides for a permanent process for transferring guantanamo detainees to other countries. and we're in the midst right now of review within the intelligence committee of the thought process that went into the transferring of the detainees by both the bush administration and the current administration, and i will tell you that there are real flaws in that policy.

those flaws have resulted, according to the d. niemplet, general clapper, of a recidivism rate of guantanamo detainees of 27%. that means 27% of the individuals that we have released from guantanamo and sent to other countries who have been willing to take them under various agreements, 27% of them have returned to the battlefield and are killing -- seeking to kill americans. so the policy is not only about detainees, but policies with regard to what we do with guantanamo detainees is extremely important. there were a number of us that were involved in those -- the amendments that went into the authorization bill in committee. senator graham from south carolina, senator ayotte from new hampshire was integrally involved. and let me just turn to senator

ayotte, and from the perspective of the people of new hampshire, where do you think we are with respect to a detainee policy in this country today? ms. ayotte: thank you, senator chambliss. i would say this, you highlighted the importance, number one, as did senator mccain of passing the defense authorization. i have been to the floor twice on this issue because i think it's so important for our country. the notion that it's been half a century since we have failed to pass this authorization, what is at stake for our troops and for the troops and the message that it sends to them. we still are at war, in two wars. there are threats that face our country every day, and our military men and women, we owe it to them that they know that we're going to pass this authorization to address issues like pay increases and issues like weapons that they need, and all of the fundamental day-to-day issues to make sure that they know that we're behind

them. but this issue of the detainee policy of this country, i would summarize over the last few months in the armed services committee, military leader after military leader has come before our committee, and we have asked them about this issue of how do we treat detainees. and i questioned general carter himm, the commander of the africa command about what we would do if we captured a member of the al qaeda in africa. he said he would -- quote -- need some lawyerly help to answer that one. is that what we have come to? our commanders need lawyerly help in order to know how to deal with captured terrorists and how to treat them within our system to make sure that we have a secure place to gather intelligence from them and to ensure that the american people and our allies are protected? this detainee compromise that the majority leader is holding up the entire authorization bill for was an overwhelmingly

bipartisan compromise. this provision in the committee was voted 25-1 in support of this because there is such a need to address how we treat detainees. and as senator chambliss already highlighted, we have a 27% recidivism rate from those who have been released from guantanamo. just a couple of examples of what those individuals are doing right now, against us, our troops and our allies. for example, the number two in al qaeda in the arabian peninsula was someone released from guantanamo. another top commander of the taliban in the kadasura is out planning attacks, someone we released from guantanamo. that's why this issue cries out for a detention policy for our country. this is a very important issue to be brought to the floor along with the entire authorization, and i see my colleague from

south carolina here, senator graham, who i know has worked very closely on these detention issues as a j.a.g. attorney and someone who has visited afghanistan just in office. i would ask him, have you ever seen, first of all, in your time in the senate us acting like this with respect to the defense authorization, the senate in this way? and second, how important do you think it is that we address this detainee issue? mr. mccain: could i just say i thank the senator from new hampshire and the enormous contribution she has made in putting together this legislation. and i would also like both of you and my friend from south carolina in the letter to address this issue, in the letter that senator reid, the majority leader, i would ask my colleague, sent to senator levin and me, he used as the rationale for not bringing the bill to the floor, he says i do not intend

to bring this bill to the floor until concerns regarding the bill's detainee provisions are resolved. it goes on and on. and then he says, as deputy national security advisor john brennan stated in a recent speech, he said, in sum, he said this approach -- talking about the approach that we have taken in the bill, i believe the vote was 25-1, he said this approach would impose unprecedented restrictions on the ability of experienced professionals to combat terrorism, injecting legal and operational uncertainty into what is already enormously complicated work. i wonder if the senator from south carolina -- does mr. brennan understand what's in the legislation? mr. graham: well, i thank the senator from arizona and all of my colleagues for working on what is a very difficult subject matter, but when 25-1 becomes the outcome, that's pretty good.

and i don't know what the -- this is not -- quite frankly, i like senator reid. this goes back to the white house. this is president obama's team. this is not harry reid. this is not the senate holding up this bill. it's the white house holding up this bill because they have an irrational view of what we need to be doing with the detainees. they have lost the argument, and i tried to help, to close guantanamo bay. it's not going to close. we're not going to move those prisoners inside the united states. the congress has said no. the american people have said no. and the reason we have lost that argument is after working with the white house for about a year and a half to try to find a national security-centric detainee policy that would ensure the american people that we're not going to let these people roam around the world and treat them as common criminals, they could never pull the trigger on the hard stuff. we're here because the white house cannot tell the aclu no.

there are 48 people at guantanamo bay being held under the law of war who will never see a courtroom, military or civilian courtroom, and that's part of military law. you don't have to let an enemy prisoner go. most enemy prisoners are never prosecuted. and they are being held down at guantanamo bay under the law of war in executive order issued by the obama administration gives them an annual review. we have been trying to work with the obama administration for a couple of years now to create a statutory scheme to deal with every class of detainee that we may run into in this war that will go well beyond my lifetime. and the reason that mr. brennan objects is because there is a decision made by the congress to say that if a detainee is captured and interrogated by the high value interrogation team which i like, which is an interagency combination of the c.i.a., the f.b.i., military and other law enforcement agencies to make sure we get the best intelligence possible, that we create a presumption for

military custody. and the reason we're doing that is because the obama administration has been hellbent on criminalizing this war. sheikh mohammed, the mastermind of 9/11, had charges against him during the bush administration and he was ready to go to trial, literally ready to plead guilty. the obama administration withdraws those charges and was going to put him in norkd, giving khalid sheikh mohammed the same constitutional rights as an american citizen, take that show on the road from guantanamo bay and have a trial in the heart of new york city that would cost $300 million alone for security. that blew up in their face. you just don't get it. most americans don't see these people as some guy that robbed a car -- stole a car or robbed a liquor store. most americans see the detainees that we're capturing on the battlefield throughout the whole world as a genuine threat to this country. and i applaud the obama administration for taking the fight to the terrorists, for going after bin laden, for using predator drones on the

battlefield all over afghanistan and pakistan. what i fought them with is that we have no way of capturing someone and acquiring good intelligence because you have locked the system down. and this detainee legislation that we have before the senate will allow a way to go forward. what happens if you capture someone tomorrow, where do we put them, what jail do we have as a nation to put a captured terrorist in? we don't have a jail because they won't use guantanamo bay. they captured a terrorist and put him on a ship for 60 days. the navy is not in the detention business. we don't build ships to make them jails. we build ships to fight wars. so this aversion to using guantanamo bay is going to bite us as a nation. so this legislation allows us to move forward. if you capture someone, you can gather good intelligence. there is a presumption that they are going to be held as an enemy combatant, but there is a waiver provision there. what i don't want to do is start

reading rights to everybody we capture in the united states as part of a terrorist organization's plot. we're not fighting a crime. we're fighting a war, and under the rules of war, you can hold an enemy combatant and interrogate them as long as necessary to find out what the enemy is up to. that's what this legislation does to my colleagues. you have written a very balanced approach. and this idea of never using guantanamo bay again is dangerous. the idea that the c.i.a. cannot interrogate enemy parissers in as a policy is dangerous. by give order, the president of the united states, president obama, within a week of taking office took off the table enhanced interrogation techniques under the detainee treatment act that were classified, that were not waterboarding within our values, but they were techniques available to our intelligence community, senator chambliss overseas, that will allow them over time to acquire good intelligence. one of the reasons we

captured -- killed bin laden is because of the intelligence picture we acquired over ten years. but this president within a week said by executive order the only interrogation tool available to the united states of america is the army field manual which is online, you can go read it for yourself. mr. mccain: i ask my colleague, it's a fact, as the senator from new hampshire pointed out, that 27% of the detainees that have been released from guantanamo bay have returned to the fight. not only have they returned to the fight. the fact that they were in guantanamo gives them an automatic kind of charisma and aura and leadership in al qaeda and other terrorist organizations. and is that -- do you think the american people find that acceptable, that one out of every four that we have released from guantanamo bay have re-entered the fight and clearly are responsible for the deaths of -- at least of some brave young americans and may be responsible for the deaths in

the future of americans? mr. graham: not only i think are most americans upset by that, but they are worried about what comes down the road. that's what i'm worried about. the senate legislation is trying to create a pathway forward for the future. what do you do with these people we have at guantanamo bay that may never go on trial? what do you do with these people at guantanamo bay who come from countries if you return them to that country, they would be back in the fight by the end of the day? mr. mccain: as has happened in yemen. mr. graham: so we have a bipartisan proposal that will allow us as a nation to make rational decisions about detention, and the white house is holding it up, and there is -- there is provisions in this bill that affect the day-to-day lives of the men and women in our military, and the white house is saying detainee policy driven by the aclu is more important to them than a bill that would allow the c.i.a., the authorization they need to go fight this war, that would provide wounded warrior

assistance at a time when wounded warriors need it the most. you talk about perverse view of things. you talk about having it wrong in terms of what's most important. allowing the detainee issue to deny the c.i.a. the authorization they need to protect us all is dangerous. to put the men and women's needs in uniform in terms of their health care, their pay, their ability to take care of their families, secondary to detainee policies that make no sense driven by the far left in this country is what this debate is about. well, to the white house, we're not going to change this bill. mr. mcconnell: would the senator yield for a question? mr. graham: yes. mr. mcconnell: then am i correct, i would say to my friends from south carolina and new hampshire and arizona, that because of the administration's opposition to a detainee treatment provision that was, i gather, approved overwhelmingly

in the armed services committee, we will for the first time deny everybody in the senate an opportunity to offer any amendments on any subject to the d.o.d. authorization bill and in fact will not consider it on the floor of the senate for the first time in four decades? mr. graham: the minority leader is absolutely right, but i would just add to my good friend from kentucky, even more -- it's not just about us. what we're denying is general petraeus, the new c.i.a. director, authorization language he desperately needs to fight the war. what we're denying is men and women in uniform pay raises, health care benefits that they desperately need because of detention policy driven by, i think, the most liberal people in this country and 25 out of 26 senators blessed this package. so senator mcconnell, you are absolutely right. not only does the senate not have a say about what would be the way forward on detainees,

the men and women in uniform and our c.i.a. operatives out there taking the fight to the enemy do not have the tools they need because of one area of this legislation, and it would be a national tragedy if we could not pass this bill which is sound to its core in all areas because the aclu doesn't like what we have done on detention. mr. chambliss: senator, if the minority leader would yield for a question? as you well know, the intelligence community depends upon the defense authorization bill for the authorization to operate in the intelligence community. whether it's the budget or whether it's policy. all of that is compromiseed in the majority leader's refusal to bring this bill to the floor. and without the authorities and the respective intelligence bills that are passed by the house and by the senate, then our intelligence committee is

handicapped and hamstrung in policies that are needed as we move forward in this ever-changing war on terrorism. by ask the senator from kentucky if he has ever in his long experience in the senate, ever seen any bill of this nature held up and not allowed to come to the floor because of any single senator's refusal to accept the provisions that are in the bill by an overwhelming vote like this. mr. mcconnell: mr. president, i'm not sure who has the floor but i would say in response to my friend from georgia -- mr. mccain: i would say we have unanimous consent for a colloquy. mr. mcconnell: there may have been examples but i'm hard pressed to think of one recently. and the tradition of the passing the defense authorization bill is there for a good reason. the national defense of the united states is the most important thing the federal government does, and the

committee upon which the senator from georgia and the senator from arizona and the senator from new hampshire serve are the experts on this the matter and i find this truly astonishing. it's consistent, however, i must say with the pattern around here in recent times. no amendments, fill up the tree, deny the majority and the minority in this case, both the majority and the minority, the opportunity to have any input on a piece of legislation that determines what we do in the federal government's most important responsibility. i think this is another example of the way the senate has deteriorated into operating like the house. and it's extremely bad direction for this institution and for the american people. ms. ayotte: i would just like to

add as well this detainee compromise as senator mccain and i have talked -- have talked about before is actually the group of individuals that we're talking about here are military custody for members of al qaeda or affiliated groups who are planning an attack against the united states or its coalition partners, and you think about that category of individuals, the most dangerous category of individuals that we have to address, is why we came to the compromise in committee that the default would be military custody for those individuals and it's inconsistent with the administration's position. if you think about it, they are rightly so and i agree with them, undertaking -- taking out members of al qaeda around the world that fall under that category that are out there killing americans and plotting against americans and our allies. yet they're objecting to a provision, a detainee provision that would give guidance to our

military and intelligence leaders that those individuals should be treated in the first instance with military custody seems to me very inconsistent with what they have been doing in other contexts and obviously this is a category of individuals on a bipartisan basis we agreed to in committee were the most dangerous category of individuals who should be held in the first instance in military custody. and i wanted to add that mr. brennan, whom the majority leader has cited on behalf of the administration as objecting to this provision, he doesn't seem to in his speech to harvard that he gave recently to appreciate who this provision applies to and that there is actually a national security waiver in the provision. so i would ask the administration and mr. brennan again to read the provisions that were passed on a bipartisan basis by the committee because this is such a key issue to move forward to give guidance to our military, but i'm concerned that the administration's objections to this are misguided and they haven't read the actual

legislation we are working on here. so it is my hope as the majority leader -- excuse me, as our leader, the minority leader has said, that we will move forward with passing the critical pieces for our troops because our troops deserve nothing less than for us to bring this forward to the floor because of the pay raises in there, the weapons systems that they deserve to have, everything that is in that bill. but also i would ask the administration to revisit its position because it seems inconsistent with its own policies and they don't seem to have actually read the compromise that was overwhelmingly passed out of the armed services committee. mr. mccain: i thank the senator from new hampshire. i know that we have addressed this issue in some depth but by remind my colleagues, this is the defense authorization bill. this is the product of thousands

of hours of work, of staff work, hundreds of hours of testimony and hearings, a week-long markup with the full committee putting this package together. the thoughts, the ideas, the recommendations of the administration, people in and out of the administration, the knowledge and expertise of thousands of individuals goes into this most important piece of legislation. that for 50 years has been taken up, debated, amended, passed and signed into law by the president of the united states. now because of one small provision of this bill, the majority leader of the senate at the behest of the white house has decided that we won't take up the defense authorization bill for the first time in 50 years. i think that the distinguished republican leader and i, who have been around here for quite

a while, have seen this process now deteriorate to the point where we now cannot debate, amend, and pass legislation that is so vital to our nation's security and the men and women who take part in preserving it. kind of a sad day for this member. mr. mcconnell: i would just finally, i'd ask both the senator from arizona who has been our leader on national defense issues and the senator from new hampshire, the basis of this, if the administration wants to establish the precedent that they can capture enemy noncombatants anywhere in the world and send them straight into the united states into and article 3 court, is that the crutch of this, by ask my friends? ms. ayotte: i would say to our distinguished republican leader, i think that is at the heart of this, they want to treat these individuals in the context of our civilian court system.

otherwise why would you object to a provision on military custody for those who are members of al qaeda who are planning an attack against the united states or have attacked the united states? because in -- and also by point out there is a national security waiver in this provision. so the only thing i can take from it is they do want to treat this war as really people who are enemy -- we're at war with as civilians as opposed to who they are, which are enemies of our country. mr. mcconnell: could i ask the senator from new hampshire, a former attorney general, a further question. does this not lead inevitably in the direction of a mindset that would say on the battlefield you capture an enemy combatant, and that enemy combatant is inevitably on the way to an article 3 court, could it lead to the feeling that that enemy combatant should be read his

miranda rights on the battlefield? if he is viewed as an individual who is on the way to a u.s. court, under u.s. law, where does it end, i ask my friend from new hampshire. ms. ayotte: i would say that's an absolute concern here because this would be the first war in the history of our country where we would be treating those we capture on the battlefield, giving them the rights to our civilian court system. and that is where do we draw the line? it would be outrageous to require members of our military and intelligence officials to immediately ask do i have to give miranda rights, do i have to give the same -- do i have to worry about some of the speedy trial and presentment issues that come from a civilian court system. and that's why in the guidance of the committee on a bipartisan basis was that this category of

individuals, the presumption should be military custody because these are individuals who are enemy combatants that we are at war at and that's fundamentally at issue here and it does seem inconsistent with what the administration is doing in treating these individuals in terms of rightly going after them around the world and killing them in certain instances, that we wouldn't provide them military custody in the first instance. mr. mccain: could i also point out to my friend and my colleagues, that as is the case quite often with even though the vote was 25-1 on this provision in the senate armed services committee, we did provide at the request of the administration a waiver for national security. so we included a waiver that says the secretary of defense may in consultation with the secretary of state, the director of national intelligence, waive the requirements of the paragraph 1, that's the detainee issue, if the secretary submits to

congress a certification in writing that such a waiver is in the national security interests of the united states. so there is a national security waiver. we've given the president of the united states a way that he could waive every provision of this legislation. something that i wasn't particularly happy about, but in the spirit of compromise, we gave a waiver. and could i say also, i'm sure i see the majority leader on the floor, yes, there have been contentious times. there was contention last year about the "don't ask, don't tell" act, last year there was contention about the fact they added the hate crime bill which had nothing to do with national security on to the bill. but at least we ought to go ahead and take up and debate and amend and have the senate act as the american people expect us to, and that is is consideration, voting, and the president if it is that objectionable, obviously could veto the bill. but to just say because of these

few pages, these pages right here, of the bill, that therefore we won't even take up the bill for the 50 -- for the first time in 50 years, in my view is a great disservice to the men and women who are serving. i thank my friends, the senator from new hampshire and the minority leader. i yield the floor. >> tomorrow, a discussion on state and federal education funding. the president of the american federation of teachers, randi weingarten, joins us. then we will talk with tucker carlson of the "daily caller" about the republican presidential race. after that, look at the help of the nation's largest banks. yalman onaran of" is our guest. "washington journal" each morning at 7:00 a.m. eastern on

c-span. janet napolitano will testify about homeland security oversight at the senate judiciary committee at 10:00 a.m. eastern. after that, natalie cole will be at the national press club talking about hepatitis c. the singer was diagnosed with the disease during a routine blood test in 2008. that gets underway at 1:00 p.m. eastern. >> it is very obvious to me that with all the priorities we have, and they are all worthy, till further notice every decision the national government makes, every close call made in favor of economic growth, in favor of growth of the private sector. >> he worked as an adviser in the reagan white house, omb director and george w. bush's administration, and as governor of indiana, he introduced

spending cuts that produced a surplus. mitch daniels on his new book, the economy, and his decision not to run for president. >> one of the leaders of political demonstrations that led to the fall of hosni mubarak's government talks about the transition. ahmed maher is the co-founder of the april 6 youth movement, which began as a group on facebook. the arab-american institute hosted this event. >> welcome to the arab american institute. established in 1985, we are a nonprofit or it hasn't committed to the civic and political life of arab-americans. we represent our community throughout the united states.

campaign in elections, and the policy formulation and research on the most rigid on domestic and foreign-policy price. in the aftermath of the arab spring, americans looked at the arab world with newfound admiration. it inspired not only change in their own home countries but here as well. as the president of our institution noted, the change there is what we needed home. people throughout the world are demanding increased freedom, including the freedom to express their political will, and they do not need our help in doing that. the egyptian and indecent people demonstrated that clearly very what they need from us is -- and tunisian people demonstrated that clearly. in the aftermath of the arab spring, there have been a welcome to date of u.s. farm policy. the arab people, they're

concerns, their aspirations, they are now part of the conversation. we're privileged to have with us one of those arab voices. ahmed maher is co-founder of egypt's april 60 youth movement, a move that began in the spring of 2008 as a facebook group supporting workers in the industrial cities in the delta. with more than 100,000 members, they call for a successful national strike on april 6. together with other groups, they are credited for organize that organization -- the demonstrations that sparked the revolution. is a civil internet -- civil engineer by training. -- he is a civil engineer by training. when the rest of the world was debating whether or not this was the facebook revolution, it revolutionahmed and his colleagues that their use of

social media was just part of the mobilization of the movement that they lead. whether it was to wear black and a certain day, calling for certain strikes, handing out fliers for mass turnout, they reach people who did not have computers, facebook, and twitter. he was instrumental in taking this approach and continues today to be a key coordinator of the operation. our format will be very simple. we'll hear from him and then to a question and answer and we welcome your participation. please join me in welcoming ahmed maher. [applause] >> i am very happy to be here. the arab-american institute for this invitation. i have the chance to talk with you in formal meetings and

talking in informal meetings. we want to share our ideas with you and discuss the future of egypt, of the revolution, and discussing also and american rules and. the admiration between our nations of youth. we started as a group after establishing a movement towards the modern movement in egypt. towards the beginning of the struggle of the mubarak regime, we were a group of the people.

the majority -- about 3000 or 4000. after the parliament elections, we continued our activities in egypt. they banned any activities in egypt in the street at that time. we started to use social media, the internet. at that time, there was no facebook. we tried to reach more people, to organize our group, to spread our ideas. the main aim of our speech or our message was how to connect to the people in the streets, not the internet, because the majority of people did not have

any internet, any cable television. we had to find a way in which people could reach us, so we got the idea in 2008. we started the experience of many countries, of poland, romania, ga., we have training in serbia to destroy egypt and things like that. we started to study these countries to develop our behavior and bring structure to our movement.

twitter, social media, and finding new ways for people to escape from security. to send our message to the people in the street. flash mobs, we kept thinking of new tools over the years. we have connections with the new political and youth movements. in 2010, there was a campaign. they use to groups at that time. in 2010, there was a facebook page committing to organize many of beds at that time. after the elections in 2010 and many events, awareness in the

streets increase every day. we love to have a link between political demands and social and economic events. inn we started to organize december of 2010. in tunisia, the people know what is the solution. what is the solution? how can we do this? the moments we can start to make a decision with mubarak, to encourage people that the solution is like tunisia. the message, the solution is

tunisia. we depended on our experience to organize demonstrations. we succeeded at that time. also, the 20th of january, at that time. tahrir square, in 18 days. of course, there were many problems after a revolution. we have started the experience of europe after a revolution, the experience in poland, ukraine, georgia, serbia. after a revolution, any time,

there are many problems. there is another problem -- we are not governing egypt. now those governing egypt have another project. they want to keep the power and make a new regime, not like we want. depending on security, the same behavior of the regime, they want to make a little changed like we want. now we are negotiating, organizing demonstrations against the government. i am optimistic. we may spend five, six, seven years but after this parliament

and the next president, we will gain the demands of the revolution. i am optimistic at all conditions. a people, the youth in egypt, they can achieve freedom of speech, social justice, equality. those are our main demons. now we are running for the elections. many journalists are asking about what is the rule in this experience? do you want to transform to bring it to a party? are you running for election?

we said yes. it is really important if we haven't used politicians and parliament members -- to have youth politicians and parliament members. we are not finished yet. we have another mission, to be sure. we want to keep pressure on the next government, the latest government. pressure on the next president. maybe we will transform into a party after many years, but now that is not our mission. we want to create a watchdog group or movement in egypt. and we will try to do the best and try to send our message to

those in the streets and change the mentality of the people. it is more important to change the mentality in the streets. i am very happy to be here. and i can accept any questions. >> we will open it up for questions now. please identify yourself and ask your question. we will start here. >> can you elaborate more on the watchdog -- the new organization that you're going to create? it is important to change the mentality, the mindset of the people in the street. i know it is very short before elections. in the long run, maybe you will have more of a chance to do something.

>> as i said, it is very important that we have a youth political party. young politicians. there must be a group to supervise the government. it will help the people in the streets. it will help insurance and social justice. it will supervise any inequality in the government or any president. we are planning for supervising the parliament and making pressure on the next government. that is our rule. that is our next job. the battle of the revolution is

not finished yet, so we will continue our pressure to be free from that regime. >> i am with "democracy for egypt." i think you for all that you have done with your colleagues and friends. what have you done regarding the accusations that you have betrayed egypt? what have you done with all these political problems so far? if you could help us understand, thank you. >> we have our first meeting with the new government. they said they're pretty happy with our rules. they consider us like children. and they will help us to build a new country. we had many meetings after that in march, april, may, june.

the last meeting was on the 27th of june. we sent to the many projects, a map, a schedule for decrees. and they said, ok. they took our planning and said, ok, we are going to be discussed in -- discussing it. we organized citizens in t ahrir square and we refused to finish until we have real change in the government, in the system, in the regime. we need changes in the names of change in these

meetings. we found a sentiment from the united states and serbia. we found a national tv and being in the newspaper to use pictures of guys with fake weapons, plastic weapons, that we are planning in serbia it to use against the regime. we start talking with the government, but they ignore us and send this to the military. they also ignored -- of course,

we will have the program in the streets. we said, ok, you can approve that. if we take any money or have the full agenda. but there is no answer now. but we will talk to the people in the streets and discussing about agendas, funding. there are many members in the streets joining our movement. i think they will try to keep the mubarak regime. there will be many changes, but they're keeping the same. >> why don't we come back? >> do you think there is any situation that you could see

leading up to the elections or maybe afterward where the elections are not conducted in the way that you envision? that they are not there? that that might practice of it -- that might precipitate another gathering? if it is not fair, is there a chance you might see and arab spring 2.0 or something like that? >> the next election is very important. it will lead to the next stage of revolution. that is my opinion. if we think about the stage in terms of seniority, it was after the confusion in chechnya, and now is the same conditions.

problems with christian operations and running for elections. the system of mixing individuals will keep the same persons of the mubarak regime. the opening day for candidates, you will see differences between the mubarak regime and the other party that is running for election. there might be differences in other cities, but in egypt and many cities, it will depend on money. not free elections.

we will have not homogeneous parliaments. that is maybe 35%, maybe 30% or more from the people. it will be not homogeneous parliament. there will be suffering because we do not have a solution. the next parliament will be very important. i think it will lead to the second stage of revolution. >> thank you. >> i do not want to debate your intentions. since you mentioned that this is not really intending to hand over power to the civilians, i

think that there is a timetable and there are elections in people campaigning. as you said, these elections are important. this strong pressure -- there is a push towards democracy for several political parties in the political sphere. i think it is much more promising, at least this is my point of view triet regarding your new ways of acting right now, are you considering that some things have changed in this environment? >> yes, of course. we have a civil country and a president next year. there will leave authority as soon as possible.

but many have questions. like why we did not apply the lazlo, why they are keeping the same persons in the media? it is a revolution. every day you have a program against revolution. why is the national tv calling for defending or protecting our army. these are clashes between muslims and christians. why do they insist on a system that refuses a united list? there are many questions about that. regarding the budget or the

army, the authority of the army, i think -- and our rules of the future, to be a pressure group, of course it is some change in freedom of speech. we are now more free to talk with the people in the streets. we are more free to make sure the people -- spreading our fliers to different places. we are seeing more change. in places like upper egypt, the delta. we were using conditions to make pressure. and point the people to the

solution. libertyoing to take the before we move on. you gave an account of meetings to the fall of the government and after. they sounded quite cooperative. good conversations. at a certain point, it broke. more recently, you had the kind of violence your all witnessing. more of a concern, obviously. what the thing has changed since that period? with the way the movement has engaged with the military? and what you think has imposed the most recent violence? >> after many meetings with the government and staff, they found us not flexible like they were. we refused to leave tahrir

square and the majority of political groups. there are no more political parties. -- there are now more political parties. the key pressures, many reasons between their groups and the end of july. no meetings between these groups -- there is only a.m. meeting between the government and the political parties. we want to have a meeting with an them in. -- a meeting with them. >> i asked a local expert at

georgetown university who is very knowledgeable about egypt, i said, what you make of the composition of the group that breached the israeli embassy in cairo? he told me that he had met some of the people in the actual group and that his assessment was that consisted of frustrated revolutionary youth. do you find the level of frustration in your group growing for the reasons you said? is that leading to difficulties in managing growth? >> and they do not want any war any place, with any country. there is also behavior of total

support to his trial. -- to israel. all of the arab youth are angry in our generation. in front of the embassy, they started in june. there are no problems with the israeli embassy. but the killing of our soldiers on the border in sinai, we want a statement from israel about what happened on the borders. also we want the camp david agreement, we want to take our land from any unknown groups. there is no problem with that.

we tried to organize a demonstration on the night of september. -- the ninth of september. at that time, i was traveling through poland. i found a statement in many national newspapers talking about the order to destroy many places and escape to poland. what is that? so i sent a message to my friends in egypt. you must start a demonstration at 6:00 p.m.. if they organize something else, you will say no. we have finished our day and we are done. we stop our demonstration.

our main goal -- we found that groups had hammers and try to attack the embassy. the first thing that's, if anyone tried to breach that, they will shoot them. if anyone tries to attack the embassy, they would shoot them. at the time, there were no soldiers in the place. i think it is a message from someone saying, democracy the case. >> i'm from the public affairs council. i want to tear off into the more cultural. i know that the main point of this youth movement is to put pressure on the government to make sure that the local

outcomes become what the revolutionaries wanted. are you making any effort to unify the youth across the country to become part of your group or comply with your motivations? the youth movement that has started is a unique group in egypt who has access to the internet, computers, western ideology, cultural sink of democracy. but some are more confined in their political understandings and actions. what you think? what are your goals with that? >> all of the groups are united against the regime. our main goal is to take down

the regime. the first step was to make sure mubarak was gone. there were many debates and discussion about what is next. there has been discussion about ideas of the country. we took part in discussions between many groups. after the revolution, we found hundreds of youth movements every day. it is so strange -- after a revolution with as many parties and groups, with demands of their own, now groups are united about the same demons. how to decrease the election.

and make armies into camps again. now we are discussing together, the parties and youth movements, to find the schedule of decrees for the same period. we try to find a united map or schedule. we made a campaign between the youth groups and political parties, including the islamic. the unions are increasing in that period. all of the groups will agree with us. but we cannot make united organizations. the main goals, not organizations. >> are you going to go outside of the balance of these local organizations and across the

entire egyptian territory? >> we tried to do that. we have been talking to people every day. we try to get members, we try to talk with the people to join any organization. and we would take time to do that. >> what can the elected do, if you see any role for them at all? -- what can the u.s. do, if you see any role for them at all? >> i do not agree with pressure

using americans only. before the revolution, there were supporting mubarak. the key of many issues in egypt. during the revolution, we saw the direction of the american government just watching who is the winner. they will support the winner at the end. i think they support the government. the talk about their rule and the schedule and things like that. i think mainly support the people, not that scaraf and tho government. they will support the government all -- it will support democracy all over the world.

they will stop any regime against the people. they must change the behaviors with other countries. the must not support -- they must consider the rights of palestinians. they must support the people by investments, by trying to support their education. i think it will be good support to the egyptians. >> i am from the u.s. state department. you mentioned earlier that the media still has a lot of the same faces that existed before the revolution, saying many of the same things against what you're trying to accomplish. i understand that there is more freedom in the media since the revolution happened.

what do you regard as the good, new centers of investigative journalism in the country? where do people get accurate information? do you think that the people are listening to those good sources or you think they're listening to the traditional sources that are against what you're trying to accomplish? >> the new sources or the official media? >> more in the sense of tradition. it could be online, but reporting. where do people go if they want accurate, reliable information these days? >> some people in the poor

areas, depending on the state tv and national tv in egypt. there is also cable television or private channels and the internet. but the national tv is playing political truth. they are under control from the scaraf. we are trying to find new ways to reach people. we also must cancel any control from the government to the national tv and newspapers. they allow for freedom, but they control many things in the media. new media, they cannot control. but they are making investigation with some bloggers talking about the government. they cannot control the new media, but they have control

over the national tv and many private channels which goes by the ndb guys from the workers regime. there are now three new channels. they are trying to establish a new channel. >> thank you for coming. it is good to see you again. my question is about your tactics. the tactic of demonstration has decreased in popularity in egypt. the public opinion suggests that they are very much approach -- very much opposed to long demonstrations. how are you thinking about shifting your tactics to deal with the elections and the transition moving forward? >> we will not depend on demonstration only. our main goal -- that is to make

the people as a part of the political movement. to make more people involved in egypt. we are demonstrating when we see that we will need demonstrating. our main goal is to connect with the people and get people involved with in their communities. we try to improve our message to make the people the solutions. we have a campaign called "you are a solution." talking about the criteria of parliament members in a white circles and black circles. how to choose good them -- how

to choose good men in the parliament. >> i am with national public radio. you initially mentioned in the amount of community people had in terms of getting barack out of office. now looks like things are in disarray. i am wondering what concerns you the most? what really worries you that you think could derail everything? >> nothing. we continue. groups will do the best to continue the revolution. we are pushing for the common interest between the groups and all of the groups agree with how to continue the revolution. >> any other questions for the audience?

>> i m. serra from the commission of security cooperation in europe. i am wondering what your approach to the caustic christians increase in violence is? >> we supported the christian right's before the revolution. some of our members were arrested in demonstration to support christians in december before the revolution. because we are calling for equality, for citizenship in egypt. after the revolution, we are talking about the church and mosques. and trying to ban any -- yes.

but the garment is late to apply this. -- the government is late to apply this. we advise that we want to do that very quickly. what happened is there are no clashes between muslims and christians. what happened is the army attacked the people in the streets. they shot many people in the streets. they tried to ban the demonstration at that time. the national media used the same ways to attack the army.

you must protect the army. muslims went to the streets to try to defend the army against the christians. they are the reason of what happened that day. to investigate about that issue, and to end the control from the government to the national tv and to make the media more free and increase their respectability. yes. it can cause many troubles if they talk about these things. >> you're going to attempt a

conference for egyptian- americans from friday-sunday. it will deal with egyptian rights and talking about the politics in egypt and the future of egypt. what message do you want to give to the egyptian-americans living here? what would you like for them to do to support egypt? [speaking foreign language] thank you so much. >> and my message to the egyptian-americans is that they can help egypt by more investment. they can help egypt by pressure to the rights for voting to the egyptian league. they must make pressure on that.

they must make pressure about the military elections. because we heard about watching the elections, not just monitoring. we need real observation and direction. we may allow the foreign observers toward egypt. >> i'm with the international foundation for electoral systems. i was wondering if you could talk about the activities of the april 6 movement and context of the election. will you be endorsing any candidates? or trying to educate people on what their rights are, where the polling stations are taxed if you could talk about those activities.

>> that is divided into three stages. the first page -- which started two months ago talking about the rights of voting, about elections, about the white circle and black circle. we did have it candidates in that definition. but we are talking about the criteria for a good guy and bad guy. we will try to band nbdb -- to ban the ndb guys from winning in those elections. that is the first stage. talk to the people and talk about what the criteria of good guys and bad guys are.

dealing with the process, we will have a process to monitory the elections. a foreign ngo. we are the organizer and have a network of persons to do that. we have our own website. we will publish what happens and we have experienced from several leagues to make a proper monitoring, to get the people involved. sending video immediately and publishing that at the same time. and sending to all newspapers and ngo's at the same time. after the process go-moku -- after the process, we will make our watchdog group and get daily reports about what is going on in parliament. what they vote for, what the

behavior with the people in his neighborhood is. it uses up 42, using that authority in his business. anything that you look for, we will mention and make monitoring the parliament member less about parliament -- about councils, national councils. we will have candidates for that, because it is not authority of parliament or government. it is people in service. we will monitor the behavior of the government. we will support someone. for now, we do not know we support. we will support programs and wait for speeches. then we will decide our movement.

>> we are in washington, as you know. we spend a lot of time during analysis on the other parts of the world. it is incredibly refreshing to hear from you directly about your experiences in egypt. one of mike alois is optimistic you are when the question was posed to you about the challenges facing each of going for. you answered by saying, the revolution moves forward. you cannot stop it. what are the things that you have look for? what would have to happen for you to start to worry? and what is something that would sound alarm bells in your head sanctuary would say, this is not good? give us a sense of that. >> the obstacles to the problem? >> yes, the obstacles. what would you ftc to be worried about it? -- what would you have to see to be worried about it? >> if we are not united in egypt

at this moment, it will also be a great danger. it will allow a hijacking from the government, the revolution. there are many obstacles, but i'm optimistic because there are many groups. we will do everything to be successful or continue the revolution. we want to change the regime. we want to change the mentality of the people. we want to change everything in egypt. it will take time. >> if you could join me in banking ahmed maher -- in thinking ahmed maher. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> tim geithner was on capitol hill today talking about the jobs package and the economy. that is next on c-span.

there is something in congress that would limit the obama administrators octants for terrorist detainee's. then we will hear from senate republicans to oppose the administration's position on that detainees. tomorrow, an oversight hearing on property that contains half of the substances are contaminants. the epa estimates there are more than 400,000 of the sites across the united states, called brownfield sites. we will look at the effectiveness of the program. live at 10:00 eastern. later, a senate panel will look at concussions in sports. and those for marketing confession -- concussion- producing sports equipment. that from the senate commerce

committee on c-span. >> because i am a businessman, of which, incidentally, i am very proud. i was connected with a large company. i have attempted to picture me as an opponent of liberalism. i was a liberal before many of those men heard the word. i fought for the reforms of the elderly and theodore roosevelt and woodrow wilson before another roosevelt adopted and distorted the word liberal. >> he was a member of the democratic party for over 20 years, switching in 1940, when he saw and won the republican nomination for president. although the loss, he made his mark in history. becoming the ambassador for his former opponent, franklin roosevelt. he will be featured on "the

contenders," friday at 8:00 eastern. >> treasury secretary tim geithner is questioned about the jobs package. he testified at the senate small business committee, chaired by it louisiana senator who -- mary landrieu. this is two hours and 20 minutes. >> good morning and thank you for joining us. a special welcome to secretary geithner, who has the toughest job in washington. we thank you for being with us this morning. one year ago, senate democrats and our republican colleagues have battled for months to pass the small business jobs act of 2010.

it has been called the most significant piece of legislation to help small businesses in over a decade, by the national economic council. today we will review the results of portions of the act an attempt to ascertain what our next step should be. keeping in mind the important goals of providing capital to small businesses on main streets throughout america. an essential component of job creation and economic recovery. what is clear today is that lending has succeeded pre- recession levels in the final three quarters of 2011. the jobs act loan initiative led to an all-time high sba loan approval level, supporting over $30 billion in small-business lending, making 2011 the most successful year in the history of sba loan programs. as a result, some of the

provisions that we had included in the small-business jobs act. as of september 22 of this year, the u.s. department of the treasury approved more than $1.2 billion of the $1.5 billion available for the small business credit initiative program. under the small business credit initiative, states can leverage federal funds to support a variety of state programs that help small businesses access credit. today, 50 states and territories, we have 55 including the district of columbia, have been approved with f stayour its pending. this includes capital access programs, a venture-capital as programs, among others that all private lenders to extend more credit to small businesses. these businesses are not in the beltway here in washington. they are not on wall street in

new york. they are in rural, suburban, and urban areas on main streets throughout america that have been starved for capital because of this tough recession. many of these programs have just recently received funding from treasury, so a complete picture will have to wait. we will get some initial data this morning from secretary geithner. i intend to have a hearing early in the second quarter of next year to receive testimony from a variety of programs. the small-business lending fund was a key element of the small business jobs act. under a barrage of criticism and public criticism by the minority leader, this lending program was born. it is a wonder is survived at all. while some of my colleagues will be quick to one of the gaps between initial expectations and actual landing, i would like to read into the record just a few

letters received by this committee from community banks across the country that have participated in the lending program. the first, and i will not read the entire letter, but i will submit them for the record. from pennsylvania, 612 main street is their address. "our holding on the subsidiary bank, the farm was national bank of washington, served 18 counties throughout pennsylvania. with nearly $500 million in total assets, we are a bank founded in 1900 serving businesses and individual interests. our commercial banks employ 120 professionals and is the bank of choice for more than 40,000 local customers. four of our offices are the only bank in town in markets where they are located. while we do not view government-

sponsored funding as an optimal form of capital from our company and banks, both programs have provided capital support during a difficult economic period. both programs have supported recent growth in the local economy where we operate. specifically,sblf investments less than two months ago, we have closed more than $700,000 in qualified loans under the program. our commercial lending efforts built around traditional asset- quality standards as planned in the coming years have been organized around the program to ensure audible -- ensure optimal utilization of funding. the name of the next bank is heartland from iowa.

"i am privileged to write you on behalf of heartland financial usa inc., concerning the small business loan fund. we are a $4.2 billion bank in the midwestern states. let me begin by expressing appreciation for the opportunity to participate in the program. our company traces its roots to 1935, when our flagship bank was founded in the great depression. our purpose then, as now, was to make credit available to businesses in the community and serves as an economic engine for growth. the sblf ensures added incentives to reach out to the community. it provides affordable credit to small, agriculture clients, which will increase employment and sustain economic recovery in the communities we serve."

the people's bank from georgia. "we were founded in 1890. it is a state-chartered bank located in central georgia, half a billion columba it -- halfway between columbus and macon. we are the only bank headquartered in the county or to add to some counties. -- two adjacent counties. the sblf has allowed us to meet our goals. thank you so much." finally, leader bank. "leader bank is proud to be part of the sblf. we raise approximately $12.9 million. using those funds, we have

learned over $4 billion to qualifying businesses under this program and have supported the creation of approximately 113 new jobs. a variety of businesses have borrowed funds from a sblf, including firms in the biotech industry, as well as a frozen yogurt franchiser, neighborhood convenience stores, and fuel companies. one more letter that i will not read, but it is from the women's business initiative in wisconsin. because of my insistence and others, the lending wereorations, called cdfi's included. she goes on to say what a tremendous shot in the army was to her and the women to represent in wisconsin. today we will hear that the treasury was able to distribute $4.2 billion of the $30 billion available.

it is important to note that treasury estimates that the $4 billion will lend to small business rand -- small-business lending leading from nine get billion dollars -- bleeding from $9 billion to $16 billion. this will show how small banks leverage their own lending. you with j.p. morgan, city group, and bank of america. sblf, after two years, even after lower rates of blending, because it spent so much time to take this car running and when there was so much opposition, it was done not too badly in comparison. today we would hear the 137 of 330 to borrowers were recipients and use some of the money they receive to repay these loans. there is nothing here that is controversial. controversial. there is a