good budget times and bad budget times. we have all seen periods in the past four we have pulled out all of the stops to retain people. when we have had service conditions so terrible or an economy that was so strong that we had to raise retention bonuses. we had to pay extra those are going to happen in the future as well. win we acknowledge the military service conditions are unique and it's vastly different from civilian conditions, the fact we can only get 17% of enlisted people to stay for the current system, to me, speaks for itself about the career and the few people willing to endure them for a long time. to then turn around and say, but we need to pay more to people believe.

to me any time you have a vesting system, that detracts from a career incentives. it cannot do anything else. in that budget times, it leads people bidding against themselves p l it drives up costs. if you want to talk fairness, the first thing you have to do is be fair to the people who suffer sacrifice the longest. that is the career person. the last thing we should be doing is cutting their package to fund a better package for people believe. >> when we are looking at fairness -- he brought up a good point because you were not even talking about the range of people. that is why in my opening statement -- you heard other, the department of defense -- you look at compensation as a total package. so across that whether it is basic pay, hazardous duty pay, and in danger pay, all of the

different aspects that go into a compensation, that is how we get the balance of fairness. when people come into the military, they understand the situation. they come in knowing what the various pieces are. as a result, because we are viewing it from not only basic pay but the ketchup conversation, we do get a balance of fairness. the point you bring out in terms of -- should we be adding a component to retirement to compensate for people less than 20 years, that is one of the reasons we are saying it is a very prudent to be looking at military retirement as part of the overall compensation to determine if there is something in that aspect we need to look at more closely. >> in the little time left, did you want to comment? "i just want to point out that we did a survey. that was one of the questions we asked. de think it is fair for people to get a pension -- you have to serve 20 years? 81% of them thought it was fair. in the ranks of the military,

there is no feeling that, gee, if i served 10 years and get out, it is unfair because somebody else serves 20 years at night they get a pension. i would also like to point out that it is not under the jurisdiction of this subcommittee. if somebody serve 20 years, they are then under the jurisdiction of the veterans committee. they have a colatitude of things they can use to be basically. >> did you want to comment? >> i think i agree with you that i believe we should look at it. we have a different color coming in every year. how do we know what the future will look like? what people are looking for in their retirement system. it may make the military more enticing to come and if an individual thinks they may have something they can take with them.

also, even though you have a gi bill, i think that is an outstanding benefits. whistle have an individual who will be separated possibly during drawdown with 12 years of service. i think we need to look at that. that is what we will do. >> to read very much. we will proceed to mr. kaufman of colorado. >> i guess my first question is, some of the testimony reference to that it is a relatively low percentage of payroll that supports the retirement system but nobody has said what that

is. i wonder if somebody can give me a percentage number. >> at this point we have some of the numbers i would like to take a for the record, please. >> very well. i just think -- first of all, i agree with the secretary of defense with the sec -- testified before. whatever reforms we do should not affect those who are currently on active duty and went in with the understanding that this is what the system is when they in fact interested or commission in the armed forces of the united states. with that said, myself being a retiree, to remember as i was approaching the 20th year marked -- if you are injured -- not on active duty, it is not

considered line of duty. he don't fall into that, you report back for duty. i was in the marine corps reserve. if you are determined to can't do what they ask you to do because you sustained an injury scheme, then you are automatically out. there's nothing there for you. i give up skiing in colorado as i got over to that 20 year marked just to make sure that nothing happened as i got closer. i just think that we need to take a look -- not so much the reservists, but the active duty components. i disagree with the notion that we ought to go in the direction of bond fund contributions. we are asking service members to get a lot. i think there needs to be a component of certainty in that. perhaps a more bifurcated approach that would be defined benefit with an element of defined contribution for those who would enter the armed forces after the effective date of the new system when it was put into place. i just think this system needs

to be reformed. indeed to be revised. his father was under the system as a world war to end of korean veteran. i think things have changed since then has terms of life expectancies and the number of other issues. i just think everything we ought to look at -- i understand the defense advisory board only looked at one issue, if i understand that. the only come across with one suggestion. is that my understanding? >> yes. that is the only proposal we have seen as one that is a defined contribution. >> i am surprised and disappointed by that. if you look at the system for civil service are members of congress -- i think for members of congress and their staff, it is 1.7% a year for the first 20

years. it is 1% every effort for the next 10 years there is a defense plant. it is a lower factor -- i can't tell you what it is for federal employees. the difference between federal employees and the military or members of congress as well -- i am not a fan -- for the military they do not have and they do not want them to have the sort of career protections that federal civil service has. when you compare the two retirement systems, i think you need to recognize that in a military system it has to complement the fact that today are all at will employees when making the determinations about retirement.

i look forward to working with you which it all of you in terms of coming up with a new system. i certainly am not want to say that the old system ought to be replicated going forward. i don't believe that. i do believe that we need to look at those folks who served less than 20 years -- i think it ought to recruit something for that. in the new system they can for those who are not members of the terps forces yet, i think we ought to look at the notion that she began drawing the defined portion of your retirement tried at the end of the 20 year mark or whatever the market is, i think there are a number of issues that ought to be on the table. with that, i yield back. >> we now proceed to congressmen dr. joe heck.

>> thank you for pulling this together so quickly after my request. thank you for providing the testimony p l i agree that it is certainly reasonable to review the pay and benefits and the retirement system of our armed services. when i disagree is what the defense business proposal -- when the defense business reposal bid without consideration to those serving in harm's way. i receive the e-mails and phone calls from folks wondering what is going on in hearing firsthand what you more rolla's on theater. not that they are not already worried enough about whether or not they are going to get their next paycheck back home, now they are worried about what will happen when they hit the 20 year market will go on with the potential retirement. the question of is the benefit package or the retirement relevant i think it poses a concern in how you define

relevance? i hope that is not a euphemism for the cost associated with the retirement program especially when 17% of the folks the spend a lifetime and the service wind up qualifying for a full retirement. i know it is hard enough under fiscal times what we are trying to figure out how the department of defense's 2400 $50 million that this administration has already called for. is this review of benefits and pay taking place in a vacuum or is it being looked at in conjunction with the amount spent on facilities and the amount we are spending of hardware and weapons system? are these being viewed in a silo? my concern is we can we can have the best weapon system, if we do have the person to pull the trigger like the great pilots i have at the creeks air force

base manning the rpa is now in theater, that weapon system does not do anything. is this being done in a vacuum or is it being looked at across the board in the entire dod budget? >> no, it is not being looked at. we are looking at not just across the board cuts but very strategically looking at what it needs to look at -- look like. how do we attract and retain the best people, keep our current troops but also go forward to retain. it is part of an overall strategic look at how we are going to face the budget challenges and the budget of defense going forward. >> @ appreciate what he stated having gone through the years of incentive bonuses and then using stop-loss to keep people in. now we are getting to the point where we are cutting the active duty for some of the army and the marine corps.

how does that play into the decision? we are already trying to downsize the for some purpose. now we are talking about potentially changing the retirement program which may cause an additional accidents. >> when i was indicating strategic, i do mean we are taking into consideration the we are looking forward and acknowledging the we will be recruiting new force is going forward. you mention specific capabilities. that is part of the area we know our forces for the future will rely on new technologies. we may have new requirements for recruiting those faults. as we are looking at what does this force look back -- look like, what are the attributes, we want to make sure our overall package is the right combination of package. >> i believe in five years on this side, i could get tested into a prayer retirement.

in talking about that later. as i sit here today, i am very concerned. it takes me back to the "by george washington. toward washington talked about how it will regard their service to this nation as how we treat our veterans. i recall my father sitting down and talking to me about how great it would be to set a career in the military. when i look at the career in the military, when i look at people serving in the military, that is a defining contribution. on the backside, i think we should be giving them a defined benefit for the contribution because of what they do. my first question is, to still have the savings plan for the men and women who made just serve five years'. while they are in a combat

theater, they are able to go back into the service plan and put it with some money. >> >> when we talk about comparing military service to the civilian sector, does it have something that is equal to the military justice? >> no, sir, they do not. >> in the private sector, other than being a professional athlete, does your position and your ability to progress through the ranks depend on your physical abilities?

do we mandate people have to get up at 6:00 in the morning regardless of the conditions there of to participate in physical training and activity? >> i cannot comment on private sector employment. however, i can say we all agree that sacrifices are not the same for our military personnel as they are for the private sector civilians. >> i think that is my biggest concern.

when we ask the men and women to do ever since those men answered the call of arms is different from somebody going to a bank or different from somebody coming here to work on capitol hill. if a dangerous road will mr. to go down the comparative analysis of the private sector of the united states military. i ask me be very careful about that. i think we are already starting to make some decisions. how many people in the panel did you remember what happened after desert shield desert storm will offer people money to exit the united states military? i.t.. have you done any research as far as the degradation of leadership which is something that general martin dempsey talk about when he came to testify before us a couple of weeks ago? have we look at that and what can happen as far as the congressional leadership?

>> i believe used the term hauling of the force. that is something we have learned many lessons in the past. we will not do anything to our compensation system so we end up with that forced. >> any comments? >> i would like to say, i know what you are saying about that. from the enlisted said, you have senior enlisted people -- you need first sergeants. >> nothing else, because people combined with the junior officers, you also have a senior enlisted person who can have a wealth of experience with the military 20 or 30 years who can exploit things to call on them, that makes it very powerful combination. >> ever testify to that as a young, stupid second lieutenant when i came in.

>> so many of these things in these analyses treaty people in the context of human resources. as if they were which it in a box. instead of thinking of human beings. when we model -- i have a lot of -- doing a lot of studies, working with ramp. the problem with all of these is the models do not include things you can not quantify. things such as a sacrifice, time away from home. they include all of the money people spend. they can measure behavior. but they do not talk about -- there is nothing in the bottle that accommodates the chance that we might go to war tomorrow. you might be going to iraq for the next 10 years every other

year. there is nothing in there that accommodates for the fact that we might do the opposite. we might stop a war. we might have a budget driven drawdown and you built your plans on staying for a career and all of a sudden we are going to force to oust. those are the kinds of things that service leaders are always seeking additional flexibility to be able to micromanage the force. the only thing we know about those kinds of plans is what every plan for five or 10 years is going to be wrong. the world is going to change your plan for you. to us, that is one thing when you have a very powerful incentive like the 20-year retirement plan, it is very

resistant to day to day manipulation. that is a good thing. >> thank you. i just hope that our fiscal responsibility on this side does not become born on the backs of our men and women in uniform. i yield back, mr. chairman. >> thank you very much. i am going to focus more on the gentleman -- ladies with my questions if i may. i would like to focus of we can on the 83% they get nothing. you were just talking about the potential of somebody to go overseas every other year for the next 10 years, 5 tores, and then have a drawdown or a force reduction. the bottom line is, that person would not qualify even though they may have wanted to stay for 20 years.

they would get nothing, is that correct? "i don't think that is correct. what we have these types of drawdowns. pour example, the congressman was talking about what happened in the 1990's. we had very special programs to provide additional incentives to try to entice people to separate voluntarily, for people with 15-19 years, congress authorized an early retirement program. as difficult as those things are, that was probably the best example of the kind of thing that can be done. now, the challenge is to drawdown what is coming up, and his physical environment, i think it will be a lot tougher for congress to authorize those kinds of programs. we are going to be seeing less incentives.

there will be some incentives, but probably less. >> of the 70% received the benefits from 20 years, what percentage of them are listed? 17% of the men and women who qualify? >> what percentage are invested? probably about 70%, i would think. >> 70% are enlisted? i guess my question is, i hear your objection to having -- you object to having any other plan, is that correct? no, i don't object to having any other plan. i object to saying that because civilians do these things, that the military should as well. the military is a very different system that is built to serve a very different purpose. to me, it has to start with the uniqueness and did not assume that what happens in the private sector is a good thing. it needs to be evaluated on its own merits. >> i agree with you that they are different.

i do think it is necessary for the committee and for us as the congress to do something that helps that 83%. there are many of them who serves many tours overseas. i understand that we have to have our experience and our offices and maintain those things, but i will also tell you that i do think we need to remember the 83% of people who spent their time and their family's time contributing a great deal to the freedoms we enjoy in this country. i see nothing wrong with them being free to choose a different retirement plan on their own will. we will work on that as time goes on. i would ask mr. davis, would you give me the match again that you used where you said 3000 was the last number and maybe 24,000 was the first in your presentation?

>> that was a 24,600 for 20 years as compared to the taking of the plan proposed which was to put them into a 401k after -- they would not be able to get that until age 57 to 60 years old.

>> how many years of the contribute to that 401k -- could you share the math to the committee? >> how the 3600 would be the initial volume of the defined a benefit retirement. in other words, the $24,000 would be reduced by 5% for each year the person left before age 57. assuming an enlisted person leaves at age 40, that means it would be reduced 85% so the defined benefit contribution or the defined benefit portion would be $3,600 a year. it would be some additional amount that person would receive from their thrift savings plan that would be in the range of 10 to $13,000 tickets are drying at the age of 60. >> that would be contingent on how much money they put into the savings plan. >> sure. >> i will like to see the math on that. >> short. we have a chart on that and our

formal statement. i can get that to you. >> thank you. >> thank you very much. >> thank you, mr. chairman. i appreciate all of you being here. i wanted to start if i could with the colonel and ascii to expand a little more on your comment earlier that you don't think if there was a new plan, you don't support having a new plan and grandfathering and current members of the military. could you expand on your concerns? >> i think my point was that people grandfathering, everything would be ok for grandfather the current force. i have a letter i referred to that went to tip o'neill expressing concern about the reduction plan congress was

about to enact. the latter spoke very eloquently on grandfathering. if you don't mind i would like to read it. while the changes we have been required to submit technically effect on the future interest, we expect an insidious effect on the moral of the current force. no matter how the reduction is package, it communicates the same message. the perception that there is an erosion of support from the american people for the servicemen and women on the call upon to ensure our safety. in absolute terms, its is the unique and interests and vital sacrifices they routinely make are not worth the taxpayer dollars they receive which is not overly generous. there was a line in their work he said, basically, you have two

categories of people serving side by side who each know that they have different benefits. that was a very accurate picture of what happened in the 1990's. you had the people who were trying to reenlist people saying they either best lead them and tell them what benefits they have, when the people find out that was not true, they get particularly upset. you have people saying, sorry, the benefit you have is not what your predecessors have. there is no way those people go through 20 years serving together that does not become a burr under their saddle. >> you are not for any changes at all? he wanted to keep the system the way it is now forever. >> it is probably not realistic to say here will never be any changes at all. the thing i think we would have to -- very frankly, and it would probably end up being budget driven changes of some type p l i think we have to start from the standpoint that we have tried some of these things before.

the one at that we know was a tragic failure was the redox system which compared it to the things we compared to they were pretty modest. >> can i hear from the department of representatives what you initiative the whole process? why do you think there needs to be some changes? what is the rationale? >> is actually multi-purpose. one is we are looking to our future force. we talked about such concepts as we don't want to hollow out the forces we are changing piano we know we are facing drawdowns. we know that our future force can very much look different in terms of the type of force and must occur, the qualifications, the technical aspects. right now as we are doing a

review, that prompted us to say, are we sure we have the correct pay benefits compensation package going forward. the timing of that review and not only the steve but -- speed up the deliberateness of that ties into our budget concerns going forward in the budget that we must begin the reductions we must meet. we are trying to meet all of the budget reduction strategically. this does become part of that discussion. it is not solely driven because it is a budget exercise. >> i want to jump to a concern that i have heard at home and see if any discussion has taken place with this with about 30 seconds left. is there any incentive currently in the system -- i do not believe there is -- to encourage people to stay 30 years? some of the concerns i have heard from a retired military at home is that right now we have many people retiring at 20 years and we are losing the knowledge and all of that experience. is there anything being looked at to encourage people to stay longer?

>> actually as we look at our review, we look at the whole force profile. we enjoy the 20 -- we agree that the force today of the services, they built their force profile around the behavior. we continue to have 2.5 percentage points of every year you stake in the military to over 100%. we do have changes that have happened several years ago as far as retirement. that will be part of your review. we have a model as steve said. a very strong model to look at the impact on retention. that is just reforms the product -- the process. all services are representative. that is where you have the piece of the review and the experience. >> thank you. i just want to encourage all of you as you go through this process to continue to get input from as many people as possible effected by this as well as

members of congress. this is a very important topic to people in my district and to our national security. no changes should be made lightly. thank you for what you are doing. thank you for the input. thank you for your service pd -- thank you for your service. >> do you have another question, miss davis? >> thank you, mr. chairman peter i was not sure if we were going to have another round. there are a few questions. i am wondering if within this discussion whether there are really some priorities, perhaps, that have been identified whether they were some areas to

feel you could find savings, can you prioritize any of the benefits for us, what should be protected, what could be modified, reduced, or eliminated. acknowledging, of course, he would rather not see any reductions at all. even the target is problematic. are there some carriers that could be helpful? >> what think you have to recognize is we are here representing 34 organizations. that does require a wide and diversity. we did have some difference of opinions on health care. the kinds of differences we were talking about or $5 a month. those were very significant within the coalition.

we had a lot of debate over the. whether we should just say no changes. there are a number of reasonable crypts would say no changes. i think are some people who would be willing to discuss some things. it would be much tougher on retirement, carry frankly then healthcare. even though we were talking about that, we were talking about the kinds of things that were on the table now which were very disappointing to us who did buy into a two dollar increase on pharmacy fees to having a the administration turn it around before that even gets enacted and say, no, we are going to raise that to $40. that is a big problem. that raises some credibility

issues. and give support to the idea that if you give an inch, you take a mile. that is a significant idea. every retirement plan that has been put forth for the past four or five years when you go back to look at the defense advisory committee for military compensation proposal, the defense business or proposal, all of those entailed radical changes -- way worse than the pretext that failed. when you see that, i think we all get our hair on fire and said, i am sorry, you are starting from the wrong place.

we are starting from -- how much money can we take out of this when what we should be starting for is -- what should people are for a career of service and sacrifice under conditions that can range anywhere up to and including deploying every other -- coming back and not only your life of your family's life is going to be changed forever. and those are the kinds of things that we believe have to be counted as the contribution. that is what people really pay in a career of service and sacrifice. >> thank you. i certainly appreciate what you are saying ' i think we all the. if there are things that you can offer to us, that is always helpful p l i don't know if you want to comment further. i have one other question -- >> i just wanted to second -- when looking at the retirement system, i think it is important to remember that our armed services are there to fight wars. war is a young band's or woman's profession. i look back at some of the things i did in the marines carrying artillery shares and the kind of activity that you do, i probably would not be able to do it today.

when you think about it, it is a young man posing woman's profession. the retirement system should reflect that. >> you can do this for the record because my time is almost up, could you also help us understand where you are looking to address other increased costs and expenditures we have in our contract services. i would like to know what we are doing about that. the concern, of course, is we are looking at retirement benefits and other benefits to the military. will see that despite the fact are trying to look at some of those costs, at the same time, we may be doing it with some services from our civilian personnel that we would have to go back and a contract with the outside. i've latino -- i would like to

know how you are going to address those issues. we are talking about cost across the board. i know in response to one of the other questions, you did say this is not the only thing we are looking at, of course. i'd like to know how you are going about that. call for a long we are in looking at a lot of the contracted services that also cost us a great deal of money. thank you very much. >> we will take up for the record given her time. thank you congressman. >> thank you very much. during her whole debate, i was impressed several times. it was reference about military families. as we are looking into the issues of retirement, the military families truly are of service and sacrifice. i just hope every effort is made to work with military families and get the input.

a truly sacrifice so much. a question that i would have is, as the department of defense consulted with your organizations and have they consulted with other military organizations at and associations for their input on this issue of retirement reform? >> not to date, no, sir. i think there are people who would prefer that they did not. >> we have not been emperor -- contacted from them for our input to.

>> i know what resources can be. i hope that he would be contacted. i know how broadbased both of your organizations are. monetary organizations active. i know there would give heart felt samples firsthand of the consequence propel any reform effort. i'd like to proceed to mr. kaufman.

>> i was in the military in the army on active duty during the first reduction which was in deal early 1970's -- which was in the early 1970's. there was no separation pay as was in the early 1990's, post- gulf war penuchle i think they get a lump-sum payment to separating senior noncommissioned officer of. i think what is stressful for that population in a reduction forces there is no understanding of what the system will entail -- it received notice that they're going to be out. then there may be a decision. that is unfortunate. i think that is one reason why i think it is important to have a reform that reflects some accrued retirement benefit for

people less than 24 years. i think that is something important to look at -- watch out for. i also want to reiterate again that i think whatever system would put into place should not impact the people currently on active duty. with that -- are there any responses from the panel to what i just said? >> i would just comment that the separation page you're talking about, at least as far as the law is concerned, we do not think it is right. would you look at the law, it is hard to come to the conclusion which is deemed a type of retirement payment. if you come back into the service and qualify for retirement, they will deduct the separation pay from the retirement pay.

we don't like that, but that is the way it is. in other words, under current law, that is the retired a piano the separation pay. -- the retired pay -- the separation pay. >> my last tour in iraq was civil affairs, i was infantry in the united states army. i have to tell you, that pretty much wore me out to. i think to the casual observer, they will verify that. there is such a wide disparity in occupations in the military. i have to tell you there are a lot of them that people show up to work in the morning and leave in the afternoon. it is not a whole lot different than a civilian job. there are those the jobs who are -- there are those jobs that are just a tough. if we cannot recognize that and retirement, we ought to

recognize it and tossing up our hazardous duty pay and all the other things that recognize people that don't punch out on saturday -- friday afternoon to go home. they just go day after day after day. i have done that he can theater -- and were twice. it is tough stuff. we needed to recognize that certainly i appreciate everybody's service in the united states military. i also appreciate the difference is. with that, i yield back. >> thank you very much. congressman heck. no further questions. congressman scott of georgia. ms. davis? being no further, thank you all for being here. again, military families, when we are talking about are consequences far beyond today. the meeting is adjourned. [captions copyright national

cable satellite corp. 2011] [captioning performed by national captioning institute] >> coming up, a hearing with president obama plus a decision troops to uganda.

then a deal between the u.s. government and a foreign mining company. it then had the european financial crisis may affect the economy. president obama's fund-raising speech tuesday night none could center cisco. -- night in san francisco. it crags bill discussed the marine corps and national security. he can see that on c-span2. also, the joint deficit reduction committee here shun the congressional budget office director. the deadline for cutting the deficit is four weeks away. also, homeland's security officer janet napolitano testifies and u.s. immigration policy and enforcement.

>> let the c-span network be your source for public affairs. on c-span, it is politics and public affairs. c-span2 has booktv. american history television on c-span3. all our programs are available at the c-span video library. it is washington your way. >> members of the house foreign affairs committee questioned president obama's decision to send 100 military personnel to you've gone the -- to uganda. this is a little less than two hours.

>> the committee will come to order. before we became, i would like to acknowledge the presence of evelyn. is that you? than you. if you could stand a second. thank you. she is a lra survivor u.s. travel to washington to witness this important hearing firsthand. we thank her for coming and her efforts. after recognizing myself, i will recognize the chair and ranking member of the subcommittee for three minutes and the chair and ranking member of the terrorism non-proliferation subcommittee

carry it frigid subcommittee. --- non-proliferation subcommittee. they can insert statements for the record subject to limitations. the department of state has included the lord's resistance army on the terrorism exclusion list since 2001. in 2008, its leader joseph kony was designated as a global terrorist. the lra is responsible for of the most violent and underreported conflict in africa.

it is a predatory force that has perpetuated some of the most deplorable atrocities. they make no attempt. it is of ducting women and children to surf this. they are forced to commit atrocities. it has been estimated that 80% is comprised of of affected children. they are forced to commit atrocities in front of their family and participate in bizarre rituals before being forced to fight. they find it difficult to return home. we know that he is.

the presidenthe signed into law of the army does armament in northern uganda recovery act. there are over 200 co-sponsors in the house. they enjoyed overwhelming support. it requires the president to develop a comprehensive strategy to deal and provide political and intelligence support to protect civilians. one increases the protection of civilian, apprehension and removal of the other senior commanders. promotion and the disarmament and reintegration of remaining combatants.

there is the provision of humanitarian relief. they emphasize the u.s. pulled pork with the national government and regional organizations to accomplish these goals. what steps to the u.s. undertake to achieve the objectives outlined? we ask them to summarize what progress has been achieved toward meeting the strategic objectives. u.s. troops are being deployed to central africa. i have authorized a small number of u.s. forces to deploy to central africa to provide

assistance to regional forces that are working toward the removal. although the forces are combat equipped, they will only be providing assistance to partnerthey will not engage forces unless necessary for self defense. as the sole house committee of jurisdiction for the lra act, it that it complies with both the letter and the spirit of the law and further u.s. national security interest. personate information was omitted from the report to congress. we need clarity on the rules of

engagement. what is the precise nature of the assistance that will be provided? houle of the partners be -- how will the partners be vetted? does the administration interpret the lra act as an operation of force? we will address this more throughout the hearing. thank you for making yourselves available to testify before this issue. i am pleased to recognize my good friend, the ranking member, for his opening remarks. >> thank you very much.

two weeks ago the obama administration announced it would send 100 u.s. military advisers to central africa to support regional efforts to defeat the large resistance army, lra. many questions were raised about the deployment. while lra -- why the lra? why now? this provides an excellent opportunity to discuss this important issues. as noted in the letter to the speaker and as reflected in the title of this hearing, it is congress that played a leading role in putting it on the agenda. for years they pass resolutions drawing attention to the lra's reign of terror.

the bipartisan legislation which president obama signed into law required the its mission to develop a comprehensive strategy for dismantling the lra and protecting civilians. we have all heard about the horrors perpetrated by the lra and the deranged leader. mass killing, rape, mutilation of innocent civilians, children forced to kill their neighbors and family members, more than 20,000 children of debt and forced to become soldiers or sex slaves, 2 million people displaced and tens of thousands

murdered. while the lra may not pose a direct security threat to the u.s., it does threaten the stability of a large area of central africa, the size of california. this includes south sudan whose independent efforts the u.s. strongly supported. you gonna, one of the the strongest allies against -- uganda, one of the strongest allies against terrorism. they're suffering the brunt of the atrocities. it is squarely in our natural interest to build allied forces so that they can fight and to support our allies when they need assistance as we expect them to do for us. the u.s. and international to

vanity have recognized that the lra poses a threat to the stability of central africa and have taken steps to stop the behavior. in 2005, at the criminal court indited him and three of his commanders for crimes against humanity. the u.s. place them on the terrace exclusion list -- terrorist exclusion list. uganda try to negotiate peace agreements. they launched a joint military operation but failed to apprehend him or stop it. i am very hopeful the comprehensive strategy including the deployment of a

modest number of advisers will help turn the tide against the lra. it is important to remember that civilian lead programs are an integral part of this effort. it includes diplomatic engagement with all of the central african countries to remain strong cooperation, effective campaigns to encourage child soldiers to abandon the group and reconstruction assistance for devastated communities. i look forward to hearing from our witnesses about the goals and expectations as well as the details of these efforts. thank you.

>> i am pleased to yield three minutes on non-proliferation and trade. >> thank you. the lra has been pillaging central africa for a while now. they exist for one reason, it to kill and capture and to resupply for the next plunger. there is no other reason for its being. this savagery has landed them on the terrorism list. it is good to see evelyn here. we appreciate your efforts on the behalf of other of debt to gross employees. one boy told that he was supposed to kill eight other

children. they were surrounded in a circle. they were taking turns bashing heads in. if this is not a crime against humanity, i do not know what is. it was orchestrated by a kony. congress passed legislation to counter the lra threat. we pressed it is rationed to be bold, and to develop a plan to help apprehend or remove joseph kony and his top commanders. a broad coalition were passing this. the administration is now sending small teams specializing in training foreign units. this is a reason the command was created. the need for a light footprint is targeted. this is far from the peacekeeping model. the u.s. has made a big

commitment in south sudan. the lra de in situ de stabilized. -- threatened to destabilize its. they seek to eliminate the root of the problem. the africans are not sitting on their hands. david like some help getting kony -- they would like some help getting kony. that is the deal. history is full of captivating leaders with bad idea is to do great damage. kony's removal will not guarantee peace. it is the one thing that makes peace possible in region. we tried this mission was before again kony in 2008.

let's succeed now at sidelining this terrorist. >> thank you. >> i am pleased to yield three minutes to the ranking member on the subcommittee on africa of global health and human rights. >> thank you very much for calling this very important hearing. after years of congressional bipartisan support and resounding support from the american people, the administration has taken action to bring an end to the predatory military group known as the lord's resistance army, lra. over the last 25 years, they have murdered, raped, objected tens of thousands of innocent men, women, and judge. they killed at least 22 civilians.

they heard about the lord's resistance army. they were wreaking havoc on the community. there is no doubt that without a sustain the u.s. action, kony and his gang will increase their attacks on civilians and abduction of children. a large number of commanders recently reduced in august, i traveled to the eastern congo where i met with women who were raped and sexual violence was used as a weapon of war by justice kony. i spoke to women who had been victimized and have lost their

children, adapted from their villages. i am looking forward to hearing from our witnesses about the details about the strategy that will be used. i was pleased that my friend recently stated on the senate floor a statement that the lra must be eliminated. he said that we are not at war with the lra. the troops are prohibited from any kind of combat aside from self-defense. last year we passed the lra resistance disarmament in northern uganda. the president announced that the troops will follow the letter of the law.

i strongly support the president's action. we must eliminate the murder. i go after this would chaining the groups in uganda. >> thank you very much for that eloquent statement. i will now yield one minute to any members who wish to make opening statements. he is recognized for one minute. >> thank you for completing this hearing. u.s. forces are engaged in more

than 50 countries around the world. they're providing support in more than 20 african countries alone. they're concerned about our military presence throughout the world. i am hopeful that this limit said -- this limited mission that has been approved by the house and senate on multiple occasions is critical to our security as well as global stability. i fear there is widespread information about the current mission even in defense of the lord's resistance army. we know that the lra has terrorize central africa from more than 25 years. its leader kony is guilty of unspeakable crimes. >> your time has expired.

>> this hearing is especially timely and helpful. the kony terrace populations in uganda. the tactics included the employment of child soldiers, sexual violence, objections and then slam them. millions have been displaced. this body to an important step in passing the lra disarmament, reaffirming the u.s. efforts to support regional partners in combating the lra. i yield back.

>> i yield to my friends. it is not proliferation and trade. >> in the last decade, the lra has killed thousands of innocent civilians. the president's authorization to deploy to work with regional partners toward the removal of judge kony is against the objectives. i look forward to hearing your perspectives.

>> the decision by the president to dispatch 100 military advisers to assist in the effort to address that threat is consistent with congressional intent and the passage of previous intention. it is important. we need to hear exactly what the rules of engagement are going to be and how the united states will react. he has demonstrated leadership here in this targeted dimension. i yelled back.

-- i yield back. >> thank you. >> you are recognized for one minute. >> thank you for calling this hearing. the lra is a horrible group that has tortured and raped hundreds of thousands of people in uganda. our concern is that the mission may be an expansion of military presence in a world that does not directly bolster security. this is just before members were breaking for a week.

i have anxious moments about whether the troops will grow to more. i will try to reserve judgment about this appointment until there is more of information. thank you. >> now the chair is welcoming our witnesses. i welcome the principal deputy assistant secretary for african affairs. he recently served as the ambassador to the federal area of ethiopia. and u.s. ambassador to the republic of djibouti to 2003. then we welcome mr. alexander

vershbow. prior to his appointment, he served as u.s. ambassador to the north atlantic treaty organization from 1998-2001. u.s. ambassador to the russian federation and u.s. ambassador to the republic of korea from 2005-2008. i would like to remind our witnesses to keep your oral testimony to no more than five minutes. without objection, the written statement will be inserted into the record. we will begin with you. >> thank you very much. thank you for having this hearing here today on this very important and difficult topic. and for the opportunity to brief this committee on the implementation of the u.s.

strategy eliminates the threat posed by the large resistance army. we are grateful for the bipartisan support. the legislation sent a very strong message not only that -- that we will help protect civilians and bring an end to the lra threat. we have appreciation to the americans have expressed their concerns for humanities under siege in to the people who are here today. from 2005 to 2006, they moved to the more remote border

regions. this is now known as the sudan. the united nations estimates that over 385,000 people are currently displaced in this region as a result of the lra activities. there have been to a near 50 -- over 250 attacks attributed to them this year alone. for the recent years, therefore together to pursue them across this. as reggie centers on four areas.

protecting civilians, apprehension and removal of joseph kony, the promotion of support of disarmament and reintegration of remaining fighters, and the provision of humanitarian relief to afflicted areas. they have continued to work with the united nations, the african union, and the regional government to put a military pressure. the united states has a strong interest in supporting our partners. they are addressing the press to peace and security. the united states is deploying u.s. military and pfizer's to improve our support to the coalition -- and advisers to

improve our support to the coalition. i will defer to my colleague to describe the details of these operations. we continue to consult with all the regional leaders. this is a short term deployment was specific goals and objectives. we know it leaders can provide capability to help forces succeed. we will review and ask whether this is sufficiently to enhance the regional effort. our staff will work closely with the advisers and make share that the political dynamics reduce and make sure that the political dynamics will help counter the work of the

advisers. the administration is helping communities to develop protection plans enjoying an early warning network including setting up high frequency radios and towers. this is not yet exist across the border. we recognize this gap. we hope to work with our partners to help address this. of the will continue to work on -- we will continue to work to come home. there are 12,000 you have done so. we will continue to work with the government to ensure that the fighter has the necessary importance with the family. we are grateful to you and the

members of both the house and the senate. thank you. >> thank you. >> thank you. i want to thank you all for inviting me today to discuss with you our efforts to assist the central african military encountering the large resistance army. as has been mentioned, there are four pillars to the comprehensive strategy to help our regional partners ended the threat. the second is the apprehension or removal of the joseph kony from the battlefield. that is the focus of the effort. is to be the focus of my remarks. -- it will be the focus of my remarks. we have been pursuing the lra for several years. it's the reduce the significantly. the mood out of northern uganda

completely. while the weekend the there remains at large, they continue to commit unspeakable atrocities. we have deployed a small number of u.s. military personnel to lra effected areas who are pursuing the lra. the personnel deploying under this mission will travel out to field locations with the regional forces were they will work in advisory and liaison role. these u.s. personnel, u.s. army special forces, will collaborate with the militaries engaged for information

sharing, cooperation, and effectiveness. what the department of defense is not in the lead with regard to the other pillars, and our advisors working alongside forces will be sensitive to the challenges of civilian protection. they will work to ensure that considerations are incorporated into planning. they will seek to encourage the relationship and sharing of information between regional militaries and local populations. this reflects lessons learned. they have key capability gaps. this would give impact well exposing u.s. forces to the brig.

we expect that only a portion of the personnel will directly advise and assist forces in the field. most of the u.s. personnel will carry out the functions. to be clear, u.s. forces deploying for this mission will not themselves engage in forces. given the potential need to defend themselves, there will be equipped for combat. they provided a formal report. we appreciate the strong congressional interest in this effort. we continue to engage with the congress to keep you informed of our progress. this is a great joint initiative between the executive and legislative branches. despite the bipartisan support, there are still many questions. many were proposed by you.

i would like to address several of these questions in remainder of my remarks. regarding the purpose and timing of the deployment. we are providing advisers to the forces because joseph kony and other leaders have refused to end peacefully. they continue to commit atrocities. there was a negotiated peace agreement during the talks in in 2006-2008. they ended when kony refused to sign. regional governments have continued to pursue a military approach. as for our regional partners, we provide assistance to the region's military in recent years.

we're providing equipment to the armed forces of the central african republic and supporting the uganda's people support force. we believe that despite the assistance they will benefit from the capacity to process information on the information. the u.s. advisers point to the operation. there is a specific timing to the deployment. it was predicated on the availability of the pre u.s. forces. >> thank you. >> maybe we will get to the rest of it. >> i have not measure the success. >> thank you very much.

thank you to both of you for excellent testimony. we will begin our questions and answers segment now. i wanted to ask you if the president's report to the congress transmited consistent with the war powers resolution trigger the authorization requirements under section 4 of the war powers resolution? if not, why? what is the anticipated scope, duration, and cost of this deployment? from where in the budget will the costs be absorbed? how does this deployment square with the department of defense's effort to cut 350 billion over the next 10 years. cuts may force d.o.d. to pull

back from africa. >> on the war powers issue, i think the reason why be made notification was based on one simple fact. the nature of the rabin region of the weapons are considered -- the nature of the weapons are considered to be equipped for combat. even though they're not going to be engaging in combat, the fact that they are equipped for combat trigger the requirement to file a report to congress when they will be entering the territory of a foreign nation. i do not know if he has more on the legal aspects of that. i am not a lawyer. we can be a more detailed response for the record. >> we would appreciate it.

we have some of our members that have many questions about the legal analysis of when the war powers act is triggered and what would constitute that. and your interpretation of it. >> we will do that. >> than on the scope, duration, and cost. >> i think that the clear goal for this advisory mission is to enhance the capacity of the regional forces so they can better protect their civilians and track down joseph kony and end the threat posed by the lra. we will be measuring success in a number of ways. we will see whether the regional forces are able to successfully apprehends lra commanders on the battlefield. whether we can encourage larger

numbers of the sections for lra moody -- from the lra and whether we can see a measurable degree of professionalism of the forces engage in this effort so that they have greater capacity both to protect their citizens and conduct counter lra operations. this is not an open ended commitment. as part of the decision to employ our advisers, we have agreed that there would be a review after several months in order to assess whether our advisers are making sufficient progress. continuing this is conditional on a number of factors including a sustained commitment and cooperation by a regional governments in addressing the lra threat. it is not open ended. we do not have a specific time

lime that we have adopted. we will be reviewing a state of affairs. >> thank you. i do not know that answers the question. we will follow up with that. this has been going on for so many years. what assurances can you offer that we will not be in intrenched conflict? >> we have already seen progress by other militaries in conducting this mission and reducing the lra numbers. we're building on a strong foundation. we do feel the regional forces have been limited by their capacity to acquire and process actionable information. giving them the information and greater skills in terms of

using intelligence could create a significant improvement in in ability to track -- in ability to track this. >> i look forward to getting written responses. if you could provide that in writing, i would be grateful. >> thank you very much. a few points. on the issue raised by the gentleman from illinois regarding a briefing, and the fact is that the administration pursuant to congressional law prepared a strategy which specifically included references to a military objective to remove kony and his top commanders from the

battlefield. it is a public document. it is a private briefing. this has been out there for almost a year. i would like to ask the questions. do you see them as the leading operations of? will we have some of our special forces working with the drc's first battalion? >> thank you very much. i think we need to focus on the

approach. it has to be addressing the problems of the crisis from victims. >> i understand that. >> the other issue is to help the countries that are victims of kony to coordinate better to go after him. >> will our forces be working with him? >> that is correct. in effort, they are trained on the border area. the issue of uganda troops has to be a coordination between the drc and the uganda troops. they must coordinate the work between them and how they will corner kony's forces.

when we had transferred the drc peacekeeping operations, at in there was one aspect of having focused on the lra and better coordination. this is something we have been trying to do. >> do you envision that our advisers will be deployed at the brigade level, the platoon level? are they authorized to be deployed with the ugandan forces? >> thank you. as he said, anything we do will be based on full coordination and consent of part of the

government. while they have all come out in support, we take nothing for granted. there'll be continuing consultation to ensure any steps we take will be with their consent. within the concept of operation, we would deploy forces into the drc possibly at the platoon level or at the headquarters level. what will be most effective. >> there is no artificial constraint on where you might deploy? >> no. there will be full consultation. >> i understand. they could well be deployed at the platoon level in field. >> that is right. but in advisory role. quite i understand. -- but in an advisory role. >> i understand. what will our military trainers be equipped with?

you say they will be combat equipped. >> i will have to give you a specific answer after the hearing. they will be carrying small arms for their own self protection. there may be other communications gear of course. beyond that, i would like to consult with my colleagues bac in joint staff to give the more specific answer. >> thank you. >> i would encourage the investors to be little more precise about the answers to the questions that we are opposing. thank you for getting it for us later. >> the question i was going to

ask has to do with the reality on the grounds that the you gone dins -- that the ugandans have been doing some heavy lifting in somalia. i have heard concerns that they might be little distracted on the follow-through. obviously, you have a different read. can you tell me your discussions with the uganda embassador and how you read their willingness? >> i did meet with the president on several issues. we have had very close discussions. he is fighting a multi-frontal conflict. it does not mean that he has lost or he is distracted. he is equally focused on both areas. on the lra and the violence

against uganda, that sits in the psyche of the ugandan people. he still have 1.5 million that are displaced. >> to the extent we can keep him focused on this, this will be part of our task. the other question is about them operating in the territory. how do we address this? >> we spoke to the president. we're trying to do process sees in which they will arrange how these forces will do it. >> what steps are you taking to try to improve intelligence? that is one of the missing pieces in the past on the relation -- location of kony. >> the issue is trying to get

intelligence that each of these countries have and to fuse it together and to analyze it. the military will be very helpful. >> that is somewhat limited. you have the ability to utilize radio's in order to get it. to are going, you're going be able to advise and directs them. will u.s. personnel be deployed in that kind of effort? i would suggest it be wise to do so. >> the u.s. forces will be able to help advise and train the indigenous forces in proving their skills. encouraging that people provide

tips to the forces. >> we need better until then we had not could 2008 -- intel than we had in 2008. we will have to drive the capacity by getting defectors to come in and getting us the information needed. they specialize in training foreign units. the are going to provide advice and assistance to these units. expectation is that you have some at the platoon level. i imagine both of them will be back in uganda coordinating the logistics. is that correct? >> yes. the bulk of the 100 people will

be in uganda. small teams will be deployed with small forces to help them improve their skills on the front line. >> special operations is headed by a a navy seal. he previously commanded u.s. forces. he knows the region well. i was wondering how this would be engineered. >> i believe that is the case. >> i yield back. >> thank you very much. >> thank you very much. i was at a camp last month.

i visited with people from villages that have been disrupted by the lra. we see the destruction that is continuing on. a number of people wonder why we are going after the lra and why we should care about uganda. uganda has a tremendous amount to treat in somalia. i was exported by the troops. they were doing an excellent job. we have so many responsibilities because of the fact that al qaeda is supporting al-shabab. it is all connected. we wonder why we have any concerns. it is clear why we ought to be here. they are going after small ian's -- somalians.

there were one of the strongest supporters of u.s. democracy around the country. hundreds of canyons -- kenyans died. it is intertwined. when countries are going out to support our causes, i think at least we have reciprocal 100 u.s. troops trained. i want to ask quickly. what impact will be elections -- will the elections have? quite the elections in the drc are tight.

it is not clear whether he could be elected or reelected. the issue comes in to the commitments. this still remains pivotal. we discussed this closely. >> what about the president in sudan? he supported the lra and the formation. they supported it together. is there any evidence that the government is supporting the lra today? >> we have not seen any of the intelligence since 2002 and

beyond. we had a very close discussion with the government on this issue. we have not seen evidence. >> what about the lra's activity in southern sudan? they are trying to put together the government. are they there in any large numbers? will they be a part of the training? >> part of them are in southern sudan. the forces of lra which has been depleted to about 200

corps fighters are in the drc area. >> what about a special advisor to the great lakes region? is this in the making? what is the prospect of that? >> we take it under serious advisement. >>the fact that we know that there is an expense of mobile phones. will you be using that technology to get the word out of? >> the use a cell phones,

basis. it is better communications and ordinations. greg thank you. -- >> thank you. >> thank you. bac in spring -- back in the spring, rhodes said " we are enforcing a resolution that has a fierce a set of goals that is protecting the libyan people, averting a crisis and setting up a no-fly zone. that involves kinetic military action. the nature of our commitment is that we're not getting into an open ended war in libya." since 2008, at the u.s. says helped finance regional military efforts to capture commanders. the u.s. has been $497 million

strengthening the ugandaj army. as we delve into this, before deciding to deploy approximately 100 u.s. military personnel, did they receive a request from uganda to provide this assistance? >> this has been a continuing effort. we have been working in partnership. they have welcomed them today. they had been indicating that additional support is needed. we looked at the experience from 2008 when we did provided

by users. >> did they specifically asked for boots on the ground in? >> they understood that they lack this capability. they're still out there committing atrocities. they indicated that they would welcome this kind of hands-on training. >> what we're doing is mainly training. can you define "kinetic military action"? >> i understand it to mean the views of actual legal force. we use considerable conidiophores to take out to

the air defenses of libya. most of the kinetic activity was carried out by our partners and nato allies who conducted the lion's share of the air strikes. we did continue to support to the suppression of enemy defenses. and we did on occasion used armed predators for specific targets that no other allied had the capability to hit. >> in this action, did we garner financial support from other countries such as the u.k. and france? are we there alone? >> there has been assistant. i will defer to my partner. this is a u.s. initiative. >> we had careful coronations

with france and the u.k. and begun the. -- uganda. we are providing the bulk of training. they are doing rehabilitation, the conciliation. >> how long do we anticipate the forces to be in there? do we have a timetable at all? >> we do not have a specific timetable. we are talking about months. i would not put a number on it. we will review the operation in a few months to see if it is achieving the desired affect. we will see if it is having an effect on the ground in terms of further eroding the lra. >> what do you define as a success? >> we define it on the basis of whether commanders are captured. whether we see further fracturing of the lra.

whether we see a tangible improvement in our partners capacities out in the field to succeed. that includes not just the kinetic parts of it but also if they are more capable of in beijing with the local population to develop the climate in which people turn and lra -- turn in lra sympathizers. >> we need to make it clear. i am out of time. i yield back. >> thank you so much. the gentleman is recognized. >> thank you to our witnesses for being here today. i want to start with a general question about how the u.s. is working with the international and regional partners, in

particular, what are the strategies and approaches, both diplomatically and otherwise, that the u.s. government is utilizing to insure a more effective collaboration among key actors to counter lra efforts? >> we have not only been talking at that level,ts but within their command structures. militarily as well as diplomatically, to see how we can coordinate better on our efforts, not just militarily, but comprehensively against the lra. we are talking to the african union, two regional groups, as well as the communities to see how we can bring our own specific assets that we have. we have the military training

program. u.k., france, others are doing humanitarian programs. there is a lot on coordination for the countries. >> and ambassador? >> i would add that what we are doing is a subset of the broader efforts that we are making a threat africa to promote -- making throughout africa to promote capacity of the african countries to solve their own problems. part of that is to invite countries to participate in a multinational training and exercises, to create a greater capacity of cooperation. this hopefully achieve the goal of taking joseph kony of the battlefield. -- off the battlefield.

so that we do not have to intervene in the future. >> let me turn to a more particular question for these operations. is this a unique model that is being used in central africa or is it is comparable to other operations -- or is this comparable to other operations like the southern philippines where we got to see a unique operation where a limited number of u.s. military were advising, not engaging in combat, but being focused on the terrorist safe havens and training camps there? is this a unique model or is this drawing on some other experiences and other places

that have worked? >> this is not a unique model in the sense that training and equipping partner forces is something we have done for many years in many parts of the world. my experience, if you look at my bio, is more in europe. we have trained the bosnian army forces. we helped train the georgian armed forces. each mission is tailored to the specific circumstances and the requirements of the partner involved. this is advise and assist so they can deal with the problem more effectively is a well established model that has proven its value.

>> it is in the context, if you look at africa, a good cooperation and coordination between the department of defense and state. training on not a specific area but continent-wide. the state department trimmed about 160,000 troops for peacekeeping operations. we use that with the department of defense for the guidance and advice. you have the state department helping to win diplomatic coordination. we are assisting -- helping doing diplomatic coordination. we are assisting money-wise. those are issues that were a model for this area. we are looking at other areas in parts of africa. >> thank you. >> thank you very much.

investor, -- ambassador, i read your report and i am confused. in one point, you refer to this as nothing more than what we already do with the thing we have in place in africa. i have been over there. that is basically an educational thing that we used to help african nations develop a more professional military. we also do some building of schools and hospitals. the reason why we had to go -- the president had to go to congress is because there might be a need to defend themselves, the troops on the ground. therefore the war powers resolution was put into place. what confuses me is, is this

what we do or is this different? there is always the danger they might have to defend themselves. there would not have to be any need to come to congress and say the war powers act may be invoked. or are we really -- matches anticipating but expecting, some conflict to a rise -- to arise. that is question no. one. question no. two. you said we would be asking about the deployment and how we would judge success. i did not hear any real clear answer as to what success is or the timing of this deployment. i think somebody should know what the cost is per day for these troops to be on the ground. the real cost and anticipated costs if they have to go into

conflict. those are my three questions.

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during which they may -- madam speaker, this resolution provides for a structured rule for consideration of h.r. 1904, the southeast arizona land exchange and conservation act of 2011.

makes in order every amendment that was filed with the rules committee. so this is like the texas victory last night a very fair rule and continues the record of the rules committee in this congress of making as many amendments in order as possible which otherwise conform to the house rules. that's been the goal of chairman dreier and his continuing record of fairness and openness in the formulation of this particular rule. madam speaker, i reserve the balance of my time. the speaker pro tempore: the gentleman reserves the balance of his time. the gentlewoman from new york. ms. slaughter: thank you, madam speaker. i thank the gentleman for yielding me the customary 30 minutes and i yield myself such time as i may consume. the speaker pro tempore: the gentleman is recognized. ms. slaughter: madam speaker, today's bill continues an effort started by the republican majority earlier this year. an effort to give away valuable american resources to foreign companies. today the majority's proposing to take sacred land from native american tribes and give it away to two foreign corporations, one of which is

partly owned by the chinese government. i stand here today in fierce opposition to this attempted fire sale of american resources that is being conducted under the guise of job creation. today's bill is not written for the american worker. it was written for foreign mining giants that hope to profit from our generosity. these firms are hoping this congress will be charitable enough to give away millions of tons of copper to foreign companies that have no responsibility to create american jobs. indeed, one of those companies is a leader in robotics and say they can control a mine from 600 miles away. the likelihood they will plan to create a number of jobs i think -- does not hold together. copper is one of the most scarce resources on the globe. and yet the majority's proposing to give this asset away. let me say that again, give this asset away. under this bill the united states receives no royalties

from these foreign companies for any copper found in our soil. furthermore, today's bill is not the solution to our jobs crisis. the proposed legislation gives federally protected land to companies that specialize in replacing miners with robots that do the same job. the majority hopes this will create jobs at some unnamed point in the future. but in addition to this approach being naive, the majority could be doing more to create jobs than simply relying on hope. the truth is we could be standing here today actually doing job creation. we could be voting to put money directly into the hands of firefighters, the police officers, or the teachers. we could be investing in new roads, rail roads, and schools. and creating showses of jobs for construction workers across our country. but once again the majority seems to believe that their job is to help foreign corporations grow the bottom line. it is not.

giving away our natural resources to foreign companies will do nothing but leave american workers in the dust and we much poorer. i strongly oppose today's proposed legislation. i urge my colleagues to vote no on the rule and the underlying legislation. more than ever we need to take tangible action to create jobs not sell our national interest to the highest foreign bidder. i reserve the balance of my time. the speaker pro tempore: the gentlewoman reserves the balance of her time. the gentleman from utah. mr. bishop: reserve. the speaker pro tempore: the gentleman continues to reserve. . the gentleman from new york is recognized. ms. slaughter: madam speaker, i would like to yield to mr. hastings to take my place. the speaker pro tempore: the gentleman from florida is recognized for what time period? mr. hastings: thank you, madam speaker. i yield myself such time as i

may consume. the speaker pro tempore: the gentleman is recognized. mr. hastings: madam speaker, i'm so accustomed to coming here and making repeated assertions regarding my friends on the republican side, but today we are really about the business of undertaking added emphasis on regulation and doing nothing about jobs. let me refer to an article that occurred in "the new york times" on october 4, written by bruce bartlett. an editorial opinion. mr. bartlett held senior policy roles in the reagan and the george h.w. bush administration and served on the staffs of the

distinguished former member of this house of representatives, the departed jack camp. and on the staff of ron paul. he says, republicans have a problem. people are increasingly concerned about unemployment but republicans have nothing to offer them. and i hope my friends on the other side don't jump up and start talking about their 15 forgotten bills, they're not only forgotten their featherble. and they're forgettable -- forgettable. and they're forgettable for the reason they don't create jobs. but here we are today dealing with three suspensions and one other measure and we've been out almost as much as we've been in session and we still aren't addressing the subject of jobs. continuing with mr. bartlett, he says, the g.o.p. opposes additional government spending for jobs programs and in fact favors big cuts in spending that would be likely to lead to

further layoffs at all levels of government. he goes on, but the specific takeaway that impressed me in his article that i wish to share is, in my opinion regulatory uncertainty is a canard invented by republicans that allows them to use current economic problems to pursue an agenda supported by the business community year in and year out. in other words, it is a simple case of political tunism, not a serious effort to -- opportunityism, not a serious effort to deal with high unemployment. and i want to address the subject of revlation because it seem -- regulation because it seems that someone -- i keep hearing this thing that the business community needs certainty. well, the american people need certainty as well. and certainty about their health and certainty about employment

and certainty about housing and toward that end i don't just distinguish one little category, it's a whole -- hole here in this country and in the period when we did not have regulation, my recollection of the no-regulation period led us to what we see and have experienced on wall street when there is no regulation. what do we think caused this great downturn in the economy? was it because students weren't going to jobs? to school? was it because people weren't going to work? was it because we had coal ash gas or did it occur because we didn't have regulation that we should have had that would have manifested itself?

madam speaker, i believe i may be the only speaker and toward that end, rather than continue, i will reserve the balance of my time at this time and have my colleague on the other side know that i'll be prepared to close when he's finished. the speaker pro tempore: without objection, the gentleman will control the time and the gentleman has reserved the balance of his time. the gentleman from utah. mr. bishop: you know, thank you, madam speaker. as the gentleman from florida knows, i do like baseball this time of year. one of the statistics that i saw the other day is that pete rose had 29 of his 4,000-plus hits off pitchers who would eventually become dentists. it is a true statement. it has almost no impact on anything, but it is a true statement. some of the rhetoric we've heard so far are true, but have no impact on what we're talking about. madam speaker, 15 different times republicans have come on the floor of this house and have

introduced job bills. those job bills are still sitting over in the senate. thousands of jobs would be up and available right now if the senate were actually to move on any of those 15. this is the 16th job bill that we have brought to the floor. look, one of the issues we have here is that there is a need in our lives for comfort. the business community needs copper. individuals need copper and our personal lives we need copper. if you want to build a three megawatt turbine for wind generation power you need five tons of copper to do that. if you want to build a hybrid car or an electric car you need at least 55 pounds of copper to build a car. the average home has 435 pounds of copper in that home. in fact, the study i looked at said each individual in his lifetime will consume 935 pounds of copper. i'm not quite sure how we do that, i certain he will hope the

word consume was not a literal word, more than a hypothetical word, because i have not had much copper on my cornplakes -- corn flakes lately but we will consume copper. whether we produce copper or not, we consume copper. we need copper. the fact of the matter is the united states now imports 30% of all the copper. we are relying upon other countries to produce copper. why is this a jobs bill? for those people who vote for this bill, we will be establishing the opportunity to develop a mine that could produce a quarter of our needs for copper for the next 40 years. we will move us to sell sufficiency -- self-sufficiency and more importantly we will create jobs with this particular bill. direct and indirect jobs are 3,700 for this mine. 3,000 jobs for the construction of this facility. 500 who are already in the pre-permitting stage right now. that's what the opportunity is. and if we vote against this bill we'll still be providing jobs. but jobs overseas.

for miners in chile, for the smeltering factories in china where they have to send the stuff because we don't have enough smelters right here to do it. we will produce jobs, but we can either have the choice of producing jobs here in america so that we can create american jobs and have american self-sufficiency or we can create jobs abroad. it's our choice on this particular bill. this is the jobs bill, whether you vote for it or against it, it is still a jobs bill. i just hope we vote for it because i hope our priority is creating american jobs for american need of copper which there is no way to get around, we have to have this crucial mineral. and this is the place in which to do it. this particular bill will be a land transfer in which the federal government works out like a bandit in it, the federal government will get 5,400 acres of land, the industry gets 2,000, -- 2,400 acres to try to get this production going. the city of superior gets 500 acres, 30 of which goes to their

cemetery. that's the purpose of this bill. this bill is viable for our economy, for our job creation, for natural resources, it does it in a responsible way and all the scare tactics out there that have been waved about before don't exist. there is not one single solitary environmental rule that is waived for the creation of this mine. not one. twice this bill has introduced -- been introduced before in congress by a democrat sponsor. it's the same bill. except this one doesn't provide a rock-climbing park for the state of arizona. other than that it's the same bill with the same considerations and the same restrictions and the same guarantees. madam speaker, i am ready to reserve my time if the gentleman has another speaker or wishes to take some time, then i will reserve. the speaker pro tempore: the gentleman reserves. the gentleman from florida. i thank my good friend and colleague for the information. and i would like to ask my

friend a question. is there anything in this measure that requires the copper that you just spoke about, and i don't disagree with many of the facts that you put forward, but is there anything in this bill that requires that copper to remain in the united states of america? mr. bishop: the gentleman will yield his time? mr. hastings: i would yield. mr. bishop: i want the sponsor to respond specifically to that in just a second but the answer is clearly, we have a desire for copper, we have a demand for copper, the concept of free enterprise and the balance of trade that we need will demand that the majority of that copper will be used here. if you want to try to come up with amendments to try and mandate that, there are some potential amendments that will be debated on this floor in this very good, fair, structured rule. however, you have to be very careful that sometimes when you try and make these mandates and put them in law it makes it very

difficult to enforce those particular mandates. and i will tell you that one of the amendments that will be debated here on the floor has wonderful intention but is almost impossible to force. so, will it happen? of course it will happen because we have that need, we have that desire right now. mr. hastings: i appreciate the answerer and i'll take that as a -- answer and i'll take that as a no. there's nothing to cause the copper to remain in the united states. what i really want to address -- yes, i'll yield to my friend. mr. bishop: there is nothing in statute, only in reality that will force it to be used here. mr. bishop: i -- mr. hastings: i understand. when you step up to the plate, you have to hit the ball, you can't fake like you hitting the ball. i don't know whether he has a dog in the world series fight or not, but i appreciate he and i going back and forth on that. but i do recognize that you did respond as i thought you would

about the america's job creators provision that occurs and i do encourage that people -- i normally don't advertise for the other side, but you have jobs.gop.gov and what it says is, empower small businesses and reduce government barriers to job creation. fix the tax code to help job creators. boost the competitiveness for american manufacturers. encourage entrepreneurship and growth. maximize american energy production. and pay down america's unsustainable debt burden and start living within our means. all of that is practkl. all of that seems to make sense -- practical. all that have seems to make sense but in the final analysis it's not putting a teacher, a firefighter or a police officer to work and we're talking about right now is when we have this

problem. we don't have this problem by the time we empower small businesses. then let's empower some of them, then. let's do some things to make sure that some money gets in their hands rather than dance around this issue. we need some direct programs from the united states federal government to help states, counties and municipalities in this country and to help individuals, particularly those that are on the frontlines dealing with these particular issues. which haven't done anything, am ths almost laughable, to come put on your website that you have 15 forgettable bills. i guess what we're trying to do, and it does make a little bit of sense to me, that we should point to the other body and say that we have passed measures here in the house of representatives that have gone to the other body and not become law. well, my last recollection is that we passed over 400 measures

when we were in the majority and they went over to the u.s. senate and here's where the catcher is that people don't seem to understand. the arcane rules of the senate require that they have 60 votes and the majority does not have 60 votes. and the republicans almost every measure that may have helped this country stood in opposition and quite frankly obstructed the passage of legislation and i guess now you are joining us and saying that they're doing the same things to you in the house of representatives. well, i accept that if that's your argument. but let's make it very clear that it is in the united states senate and that here we're not originating or evidently working with them to address the subjects of the need for jobs, housing and education in this country. after another week away from washington, thanks to my

republican friends, we're back here considering this bill on an issue that i think very few of my colleagues, me included, fully understand. the republicans have been in charge for 294 days and they have not brought one job-creating bill to the floor in that time. not one. i do make an exception that i believe all of us recognize that has been in the works through several administrations and that is the various trade agreements which in some respects are going to create jobs but in another respect are going to cause the loss of jobs and i don't think that that equation is full yet but, yes, that did pass the house of representatives. while americans continued to struggle to find work, this republican majority has been more interested in going on recess than in passing legislation. . the

the truth is, mr. speaker, the house has been in session only 109 days and we are almost in november. 109 days. during this limited time my friends on the other side haven't found time to send a single appropriations bill to the president. not one. when we were in washington look at the bills my colleague have debated passionately. defunding planned parenthood. defunding the national public radio. promoting the use of inefficient light bulbs. madam speaker, this would be comical if it weren't so serious. let me also remind my colleagues that only a paltry 43 bills have been signed into law this year. less than half the average for a session for congress since 1991, even compared to other years following shifts in control of the house. i believe that americans want

action to help our economy. now, they want us to consider the president's jobs bill now. they want us to quit wasting time on trivial issues that are only meant for 30-second political sound bites. they want us to do our jobs. but these friends on the other side just don't get it. four years ago their presidential nominee talked about country first. but in the house of representatives time after time we see the republican leadership ignore the needs of out-of-work americans. the bill before us today is more of the same. another enormous rip-off for struggling american workers disguised as a jobs bill. in fact, this time it's not even disguised very well. the underlying bill is a massive land give away to fund companies, looking to mine copper on american land. and that's why i put the question to my good friend

about whether that copper was going to stay in the united states. let me repeat that. this bill benefits foreign mining giants first and foremost at a time when millions of americans are unemployed and families right here in this country are struggling to pay their bills. the two companies that stand to benefit the most from this bill , british owned rio tinto, and australian owned b.h.p. biliton, are highly profitable titans in the mining world. as the bill is currently written, american taxpayers will receive no share of the expected billions in profits generated by this mining. all profits will be enjoyed by foreign companies. and claims that h.r. 1904 will lead to the creation of thousands of good-paying american jobs are dubious at best. both companies, the two i

mentioned, are pioneers in developing automated and remote control mining technology. seriously? we are creating jobs for foreign robots instead of american workers? no offense to r-2 dmplet-2, there are american workers who need help. on top of that any american jobs that may be created will be years in the future. this bill does nothing to create good jobs right now when we need them the most. my friends on in the majority want this process to seem fair. yes, they made in order all the amendments submitted. but that's not the same as an open rule. let me be crystal clear this is not an open rule. once again the rules committee is breaking the promises of this new majority. clearly the republican leadership is more interested in shutting down debate and

fostering a more closed house rather than living up to their campaign promises of a more open house of representatives. despite these broken promises, madam speaker, i'm pleased that the democratic amendments that my good friend mentioned are made in order will insert some common sense into h.r. 1904 if they are, in fact, adopted, and as i heard him say, that they will be debated and what have you but they are not real in terms of their mandates. mr. grijalva and mr. garamendi have offered an amendment to try to create more than just jobs for robots. their amendment would create -- require that these foreign companies actively recruit and hire local employees. i hope everybody votes for that amendment. that all the oil produced, they say, from the mine be processed in the united states.

and that all equipment used at the mine will be made in the united states. i hope everybody supports that amendment. mr. markey's amendment would require that these foreign companies pay a simple royalty to the united states often all minerals extracted from this site. if mining is done on u.s. land, the american people should be able to share in the profits. finally, what's most disturbing about h.r. 1904 is a complete lack of respect for sacred native american sites. that will be swept into mining operations. native people won't even be able to comment on the land transfer until after it has occurred. now, i have seen that often in our area. i represent native americans,

seminoles and others, and repeatedly where developers have gone forward not just in mining but the artifacts of our great history in this country have caused us to pause. and we should be very careful with this particular measure because we don't want to repeat that that i have seen happen time and again in florida. that's insulting and completely disrespective -- respectful to native traditions and culture. and my friends on the other side of the aisle should be ashamed by the blatant mistreatment of native americans by this bill. mr. lujan's amendment to exempt all native american sacred and cultural sites from land conveyance under this bill is not just commendable, it is crittably important and deserves the -- critically important and deserves the support of every member in this body. madam speaker, this is not a

jobs bill. and there is no effort by this republican majority to bring up a jobs bill. we shouldn't be wasting our time. we should not be wasting the american people's time with trivial bills that benefit foreign countries while our own citizens struggle to find work. i urge a no vote and on this business of the forgettable 15, i urge that we do something to create jobs and not just try to give the impression that we are creating jobs. i yield back the balance of my time. the speaker pro tempore: the gentleman yields back the balance of his time. the gentleman from utah. mr. bishop: i continue to -- thank you. you know minnesota twins pitcher jim koch who should be in the hall of fame, so today we'll call it copper's town

hall of fame, once said to reporters he was working on a new pitch. he called it a strike. you have heard a lot of accusations so far about this particular bill. most of which are balls low outside and in the dirt. i now yield four minutes to the sponsor of this bill, the representative from arizona, mr. gosar, to actually pitch some strikes about what this bill actually will do. the speaker pro tempore: the gentleman from arizona is recognized for four minutes. mr. gosar: thank you, mr. bishop. i appreciate the house spending time to consider this important jobs bill legislation this week. the need for this land exchange legislation and ensuing copper mine was one of the very first initiatives brought to my attention by the people of my district. the folks are excited about the economic development and sustainable growth this project will bring. they are anxious for these high priority conservation lands to be placed in federal stewardship and they are sick of waiting for congress to act.

h.r. 1904 may be new legislation, but this initiative is not. over the past six years this land exchange has been subject to intensive review, public consideration, and modification. it has been introduced in four separate congresses, twice by democrats, twice by republicans. this proposal truly has bipartisan support on the ground in our state and across the country. the mayor of the town of superior, an elected democrat, testified in support of h.r. 1904. democrat and republican county supervisors in each affected economy endorsed my bill. the governor supports my bill. this legislation is a win-win. h.r. 1904 specifically facilitates a land exchange that will bring into federal stewardship 5,500 acres of high priority conservation land in exchange for 2,600 acres of national forest system lands containing the third largest undeveloped copper resource in the world. it is the richest copy orr body

-- ore body in north america ever discovered. the united states imports over 30% of the country's copper demand. this could produce enough copper equal to 25% of our demand, contributing significantly to the u.s.'s energy and mineral independence. let me be clear, this is not going to be a new mine. the majority of the infrastructure is already in place. we are simply opening up the resource to the country's vital needs. today more than 500 employees and contractors are at work in arizona on this project. as they prepare to take full action on this bill. upon passage, the private company will be able to employ 3,000 workers during the six-year construction period and ultimately the project will support over 3,700 jobs providing for 220 million in annual wages over the life of the project. these are good-paying jobs.

this is good old superior right here who needs this. the total economic impact of the project is estimated to be over $61.4 million. over $1 billion per year. and another $19 billion in federal, state, county, and local tax revenue. $14 billion in federal tax revenue. in these tough fiscal times i think we can all agree the treasury could use that. this bill is not only a jobs bill, it's a conservation bill. in exchange for opening up the third largest undeveloped copper resource in the world, the federal government acquires 5,500 acres of high priority conservation lands containing endangered species, sensitive echo systems, recreational sites, and historical landmarks. many of the lands being convened are land locked by federal land and the consolvation of the federal lands will contribute to better, more economically, efficient land management. today the arizona republic, the largest newspaper in the state, issued an editorial in support

of h.r. 1904. in that article the editorial board highlights the big benefits of my legislation. jobs, tax revenue, and conservation. in the article they state, quote, the combination of benefits has every reason to get borte support, end quote. they continue, quote, in today's economy it's hard to imagine that members of congress would fail to give this bill a resounding approval in the house, end quote. madam speaker, i would like to submit the full editorial article for the record. the speaker pro tempore: without objection. mr. gosar: my legislation strikes the right balance between resource utilization and conservation. we could preserve lands and advance the important public's objectives of protecting wildlife habitat, cultural and historical resource, while enabling an economic development project to go forward that will generate economic unemployment opportunities for the state and local residents. vote yes on h.r. 1904. the speaker pro tempore: the

gentleman yield back. the gentleman from florida. mr. hastings: thank you very much, madam speaker. i would ask my friend when he finishes distributing the papers to the clerk if he would stay by -- mr. gosar. when you finish i would just like to ask you to respond. is he leafing me? i'm going to yield to you to respond to -- rio tinto, the company from australiaa, has a mine that is controlled by people that are 800 miles away from the mine. i urge you distinctly, let me make it very clear, i remember this measure being offered by the lady that you won office from previously as well, and i'm one who seriously encourages that we protect our

congressional areas, but when you say it's going to create 3,000 jobs, let me give you a poor example of how the local community does not work and then ask you to respond. in the everglades we, many members of this congress, rightly have dealt with trying to preserve this area, so we have with the army corps of engineers and a variety of other people, a lot of earth moving and a variety of undertakings that are taking place and in the meantime one of my cities has gone almost out of business. they are doing a remarkable job trying to stay afloat, and the area has diminished while all of this work is going on around them. . now, how are you going to stop rio tintow who can operate mines

with robots, how are you going to stop them from binging -- bringing their australian people, how are you going to stop the british from bringing their workers? because as in my city and county that i'm talking about, when theast big companies come in to do all of this work, they bring their workers with them and we don't have the kind of jobs that are needed. and in this instance you're talking about robots running large measures of it. so how does that create jobs? i'll yield to the gentleman. >> what i'm talking about is trust. trust is a series of promises kept. and what we see is right here in this picture. we have over 500 jobs that have been established here. we have seen the investment of this company in the local communities. helping job creators as far as truckers, independent construction organizations, trying to stay in business because, as you saw before, this

is superior, arizona. this is what we've done to america's main street, america. you see all the boarded-up streets. all the buildings that are here. what they've done is come in and establish trust because what they've done is actually put people back to work. you talk about robust, but what i'm talking about is trust is what's -- robots but what i'm talking about is trust is what's happening on the ground. mr. hastings: taking back my time and i yield to you. you address how you are going to cause these foreign companies, i'm not talking about that immediate amount of cement and i'll grant you 500 workers, but i heard you say 3,000. i'll also grant you that it's temporary and i'll make you a bet and i hope you and i are here, that when and if this measure passes and it does all of the things that you say it's going to do, i'd like for you to come with me and i'll go with you, you come with me to where we passed all these things and all these people came from other areas and they made money, but

the people in the area didn't. now, i understand that you have to have somebody to hammer a nail and to drive a truck to get something put up. but when it's all said and done, your area isn't going to have anything other than robots that are going to be controlling this, with the exception of a handful of people. i yield to the gentleman. >> yes. i think that's a little absurd because we're seeing right now, i've taken place, gone into the mine, seen the company. i've seen the work forces in here. i've gone down to the bottom of the mine. mr. gosar: i got suited up and have been part of that. that's not -- mr. hastings: you mean a copper mine or rio tinto? mr. gosar: i've been in this mine. mr. hastings: you mean the one in arizona? mr. gosar: yes. mr. hastings: i'm not quarreling with that. i'm talking about when rio tinto comes and this bill allows them to go forward in a way that allows them to robotize -- look, i'm not against technology but i'm saying to you is i don't see

how ultimately that foreign companies are going to cause local communities to have increased employment that's sustainable. do you understand what i'm saying? mr. gosar: but i'm pointing back to the same purpose that i've seen trust exibbletted here where they've hired people -- exhibited here where where they've hired people. that's a part of trust that we have to get back to in this country. mr. hastings: all right. at least we had a fair exchange and perhaps if we had more time with measures like this we could do similar. but i would hope then my argument about the native american measures does not fall on deaf ears when you take into consideration the need to preserve our cultural heritage and the artifacts that might be swept up in mining. mr. gosar: would the gentleman yield? haste hay i yield. mr. gosar: we spent time trying to discuss this with our native americans. we have law that we've gone through the area in exchange. this shows no actual artifacts

at all. so the thing about it is that we want to make sure that that's occurred and for the better part since the 109th congress we've dialogued with the native americans and what we've seen is an over and over exchange. so what's been transpired is actually that -- mr. hastings: reclaiming my time. just ask you one more question that requires a yes or a no and that is you support mr. lujan's measure then that will make sure that that happens, an amendment that's coming up, you going to vote for that? mr. gosar: mr. lujan's amendment is immaterial because it's already been done. mr. hastings: so you ain't going to vote for it. mr. gosar: it's already been supported by the documentation reported. mr. hastings: i get the picture. thank you very much. i reserve the balance of my time. the speaker pro tempore: the gentleman reserves the balance of his time. ia. -- the gentleman from utah. mr. bishop: thank you, madam speaker. i'm just trying to envision all those robots that are working in the rio tinto mine in my state that have also developed the land plan that have dealt those communities there, they really have disguised themselves

extremely well and wish to yield three minutes to the gentleman from arizona, mr. flake. the speaker pro tempore: the gentleman from arizona is recognized for three minutes. mr. flake: i thank the gentleman for yielding. i thank the chair for bringing this measure to the floor and the sponsor, mr. gosar. this is an extremely important measure for the state of arizona. i would invite those opposed to this legislation to walk down the streets of superior or walk down the streets of globe or miami, arizona, and see those empty streets, empty classrooms, and to try to say that these jobs aren't real, that mining jobs are not real. or to meet the hundreds of people as i have as well who have gone to this mine and have toured it and not one robot did i meet, not one that i'm aware of. and the notion that a mine is going to be operated by robots owned by some foreign company somewhere rather than local workers who will pay a lot of taxes, who will generate other

jobs that are ancillary, is just unbelievable. the notion that a foreign company can't have a significant investment in this country just runs afoul of everything we know about what has gone on for centuries here. the gentleman talks about a foreign company and they would only employ foreign workers. how about b.m.w. in south carolina, for example? do they only employ foreign workers? no. other car companies, other mining companies. part of the reason we have so few u.s. mining companies is because regulations here have driven them out of business. and so we're reliant on foreign mining companies to come in and actually make the investment to hire american workers and make no mistake there will be thousands of american workers hired here. walk the streets of superior right now. and meet the hundreds of people already working on this venture and try to convince them that

these jobs are not real. i would invite anybody opposing this legislation, just try to do that. try to tell somebody who finally has a paycheck to take home that that is not a real job. or that other jobs that are going to be created here are not real. it's all fine and dandy for people in washington to try to tell people in a local community that have seen mining jobs in the past that have gone, that when new mining jobs come that those jobs are somehow not real, or that because a foreign company hands to have some ownership here that that makes it less of a job for them. and that we should be able to tell them, i'm sorry, you can't have your job because a foreign corporation has made an investment here. how arrogant is that? that's just wrong. we shouldn't have that. so i applaud the gentleman for bringing this to the floor. this has been a long time in coming. many of us have worked for years on this, to get this land

exchange to go. and the gentleman is right, this is a win-win for everyone. it's a win for the federal government and others who want to see pristine lands preserved because far more acres are actually preserved here, sensitive, environmentally sensitive acres, than are actually given up to the mine. most of the mining here will take place between 4,000 and 7,000 feet underground. the speaker pro tempore: the gentleman is recognized for an additional 30 seconds. mr. flake: i thank the gentleman. so, this is good for everyone and it is real jobs, the notion that these jobs are not real, that this bill does not create jobs is simply not the case. it doesn't square with the facts. i urge adoption of this rule so we can debate this bill. and i yield back the balance of my time. the speaker pro tempore: the gentleman yields back the balance of his time. the gentleman from florida. mr. hastings: i continue to reserve my time. the speaker pro tempore: the gentleman continues to reserve. the gentleman from utah. mr. bishop: i wish to recognize the gentleman from new mexico, mr. pearce, for three minutes. the speaker pro tempore: the gentleman from new mexico is recognized for three minutes.

mr. pearce: thank you, madam speaker. i rise in support of h.r. 1904, southeast arizona land exchange and conservation act. it's one of the 40 bills that we have highlighted in the western jobs caucus, frontier report, the jobs frontier, as i report, of 40 different bills that will create jobs immediately. i find the conversation curious, from my good friend from florida . i wonder, the administration has just approved for the sale of aviation that will be producing airplanes in this country owned by a foreign country. so maybe the argument could be made, well, maybe those jobs aren't created and run by robots, we now direct our attention to toyota, maybe honda, all have manufacturing facility here's and i know they use robots and i don't see the gentleman from florida trying to shut them down. what we are doing at this point in our history is driving the unemployment off the scale high because we're making ludicrous

arguments against job creation bills across the spectrum. the -- in 1993 the u.s. accounted for 20% to 21% of all mining exploration. today we're at 8%. it's because people have blocked the -- block the new mines throughout the west. all we're trying to do here is make a land exchange from -- and the company give up land is giving twice the amount of land as the receiving in order to account for the value of the copper underground. we're trying to put about 1,500 long-term mining jobs in place in arizona. those jobs are going to be in the 60 -- $60,000 to $85,000 a year range. they'll pay taxes, they'll come off unemployment, they'll come off of welfare, food stamps. so we cut the cost of government simultaneously with increasing the revenues. that's a business mod that will always succeeds. the price of copper is what's driving this to be a mine site

that is now economic. previously 10, 15 years ago the price of copper was about 75 cents. today it's almost $4. so it's those economics that are encouraging us in this country to start producing from mines where we have not previously. this mine by itself would account for about 25% of the production in this country needed -- in this country for the next 50 years. it's a good project, let's approve the rule, let's get onto debate of the underlyinging bill. i yield back the balance of my time. the speaker pro tempore: the gentleman from new mexico yields back. the gentleman from florida. mr. hastings: madam speaker, i have no further speakers and i'll be the final speaker. i don't know if my colleague has additional speakers. mr. bishop: we're done. mr. hastings: you're prepared to close? thank you, with that in my mind, madam speaker, i yield myself the balance of the time which i will not use. i want to make it clear to my colleagues that i'm not against foreign investment in the united states of america. i'm not against real jobs being created in the united states of

america. including arizona, including superior. i'll tell you, i'll give you one superior and match you with one pay hokie and one south bay, florida, where the jobs didn't come when the other circumstances that would take place in the community did. i respect the mining industry and i believe the mining industry can do their job in an environmentally and culturally sensitive way. and there are demons thattive evidence says that take place all over this nation that show that. but what i'm trying to get across here is that my colleagues on the other side are still not in the business of seeing to it that we immediately do something about firefighters, police officers and school teachers in this country and i

assure you that that's something that we have not done in the 109 days that we have been here and the almost 104 days that we have not. please, let's get about the business of doing something about the massive unemployment in this country that is desperately in need of the attention of this institution, the house and the other body. i yield back the balance of my time. the speaker pro tempore: the gentleman yields back. the gentleman from utah. mr. bishop: madam speaker, in closing, this is the map of the area in which we're talking about. everything that's orange or copper color are historic or existing mines in this particular area. the yellow one is where this mine would take place. this is the mining district of the state of arizona. actually, even arizona has the color copper in its state flag. and we are talking about jobs in arizona versus jobs in where we are importing copper from now. we're importing copper from

chile, canada, peru and mexico, in that order. we either create jobs there or we can create jobs in arizona. we can either develop our own resources or we can allow ourselves to rely on resources from foreign places. we either go forward in what we are trying to do here, realizing that even firemen and policemen need copper before they can actually do their work. that all of us are going to have to have this mineral, we might as well get our minerals here, develop our jobs here, use our future here. this is a great bill. and it is a fair rule in which all of the amendments, one technical, three which have nice sounds to them but are going to be very difficult to put into reality if they actually were to pass, they will be debated here on the floor. i wish to reiterate the fairness of this structured rule. i urge this rule's adoption. i urge the adoption of the underlying legislation and i

>> the meeting will come to order. the hearing is on the euro zone bt crisi we have members of the financial services committee and will be permitted to sit in with members of the subcommittee today for purposes of delivering a statement, hearing testimony and questioning witnesses today. we limit the opening statements to ten minutes to each side based on agreement with ranking member. i recognize myself for as much time as i might consume. today's hearing is focused on the euro zone's debt crisis and potential impact on the u.s. economy. despite the financial assistance provided by the european union, eu, international monetary fund, imf, greece, ireland, portugal have plunged into deeper crisis. the german and french economies are showing signs of strain. in the past year there's been a series of credit rating downgrades from many eu members often following the rounds of

stress tests on systemically important european banks. these rating agencies have warned about the risk associated with a global interconnectiveness of european banks and potential risk of investing heavily in government bonds. the eu must take bold and aggressive action to ensure that crisis is addressed and contagion in the international credit marts is prevented. they hope to arrive at an agreement on how to address the worsening debt crisis. over the weekend work was done to come to an agreement. finalization oa plan to resolve the crisis on sunday but it changed to wednesday. we hope things will be finalized tomorrow so europe will be on path to recovery as swiftly as possible and will consider impact of crisis in europe on the united states. while the solutions to euro zone crisis must be a european one, the u.s. is not insulated from the problems in europe.

the euro zone debt crisis has significant implications for the u.s. economy. u.s. economy is highly dependent on trade with the eu and will suffer if our largest trading partner cannot fix the economy. our nick relationship with europe is significant and exceeds $4 trillion. more than 20% of goods are exported to europe totalling more than $400 billion. 35% of u.s. service exports are to europe. 70% of foreign direct investment fdi in the united states is from europe. this is a result of jobs for u.s. workers and it's a very important one. if the crisis leads to slower growth in the euro zone and general weakening of the euro agnst the dollar over the long-term, this could have a severe impact on trade by depressing demand for u.s. exports. in addition the market is interconnected and lack of market confidence can become contagion. we have seen the impact on u.s. stock prices and are concerned about exposure to the cris.

there's no question that it will be a u.s. consequence to further decline in the euro ne. it is our interest that there be a swift and effective resolution to the crisis in europe. stability in the euro zone is very important to u.s. econic interest and we should play constructive role where appropriate. as we look at this sue we need to be concerned about the u.s. exposure to foreign sovereign debt in europe. we must ensure that u.s. government is not using taxpayer money to bail out foreign governments or bank institutions. as taxpayers should not be on the hook for failure of foreign governance. today's hearing is focused on european policy options under consideration for containing the crisis. the impact of problems related to job growth in the u.s. our first witness fr the treasury department will shed light on the role of the u.s. as played in the european policy deliberations and they contemplate to reduce uncertainties in europe.

given the administratios involvement in talks in brussels, the oversight role is important. we want to know who the u.s. is meeting with a what is coming out of these meetings. we want to know what kind of commitments the administration is making during these meetings. in addition we are concerned about the impact of any commitment on u.s. taxpayers. overall i hope this hearing sheds some light for members on what the appropriate u.s. role should be during the crisis and how to protect u.s. taxpayers from exposure. our second panel of witnesses will help members understand how instability in europe can affect the u.s. economy and transatlantic trade. we want to understand the implicatns of the u.s. economy particularly with respect to exposure of u.s. banks and nonbank entities like hedge funds. we want to understand impact of u.s. companies regarding their exports. we're concerned about the impact on jobs in this country and the risk this poses to our own economic prosperity.

given the snificant economic and financial relationship between the united states and europe, u.s. had a substantial stake in the resolution of this crisis. how europe manages this issues will affect the united states economy. this crisisposes a significant threat to global economic recovery overall. again, i want to be clear that this is a european problem that must be solved by europe. there's no question our economy will be impacted by success or failure of the measure to resolve the crisis which is why the committee will follow progress on europe closely. we must work to insulate u.s. taxpayers by ensuring that u.s. funds are not on the hook for any resolution measures. we must work to insulate our own economy given our trade and financial markets interconnectiveness with europe. i want to thank the witness for being here today and for being able to present a good and honest forthright testimony of what's going on. i yield to the ranking member for three minutes. >> thank you, chairman miller, for holding this important

maer to examine the crisis and what potential impact could be for the united states. the global financial crisis tt we are continuing to rover from set the backdrop for what's become unsustainable debt levels and unsustainable financial positioning for a number of euro zone countries. what has become the euro zone crisis first started with solvency debt crisis in greece in early 2010. fear and concern over potential fall of greece and how that could spread to other countries set in across european and u.s. markets. european leaders responded to the siation in greece followed by ireland and portugal through a mix of financial assistance through a newly created crisis fund and several sending reductions. the policy responders thus far have been viewed by many in the international community as far too short. long-term solutions are necessary to addrs slow economical growth, lack of

investment confidence and undercapitalized banking systems. if europe cannot contain the crisis given our strong economic relationship with the european union, it could pose a significant risk to our economical recovery efforts. the president and the administration officials have been consulting with their european counterparts encouraging bold and aggressive action to stifle potential spread to other countries and the international markets. as we await the details of final agreement by the european leaders, media sources report solutions may include a leveraged european facility and new financial instruments for the international monetary fund. i look forward to hearing our witnesses today as we examine the impact that european economic proble may have on our own efforts on economic recovery. given the panel's expertise, i'm interested in hearing thoughts on what the european crisis strategy should be and

ultimately how they pursue economic recovery. with that i yield back my time. >> can i ask for four minutes for an opening statement? >> thank you, mr. chairman. i nt to thank you for holding this important hearing. i want to thapg our panelists for time and testimony here today. since the end of world war ii, the united states maintained a close and mutually beneficial relationship. they have served many interests. in the process the european union as a whole has become our largest trading partner with over $4 trillion in annual commercial trade while european union alone accounts for over 20% of all american exports. our financial and capital markets have become highly interconnect with european union's financial and capital markets. the united states has become the largest source of foreign direct investment in europe and europe has become the largest source of foreign direct investment in the

united states. as a result european economic conditions necessarily have a meaningful impact on american jobs,exports, and economic prosperity. so as europe goes through these difficult economic problems, the united states has a vital national interest in how these european economic problems are resolved. in europe's solutions don't inspire market confidence or if they impose too many losses on creditors, then american investors and financial institutions will be negatively impacted which will negatively affect american jobs and economic growth. if europe's solutions don't promote european economic growth, we could see significantly diminished trade with europe which again could negatively impact american jobs and economic growth. meanwhile, according to the bank for international settlements, american financial institutions have over $600 billion of direct and incorrect exposure to the most challenged euro zone countries. so for america's benefit and for

europe's benef, we need to see euro resolve its economic issues as quickly and as effectively as possible without exposing american taxpayers to undo risk. i look forward to hearing from mr. collins and our other witnesses on how europe's economic problems could impact the american economy especially with respect to trade, investment and jobs. i also look forward to discussing the european policy options that are uder consideration and america's role in those policy deliberations. finally, i think that many people are interested in hearing about the international monetary fund's participation in resolving the euro zone's economic issues and how the imf can provide meaningful support without exposing the american taxpayers to undo risk. again, i want to thank you mr. chairman for holding the hearing. i want to thank our witnesses for their time and testimony and i yield back. >> thank you. mr. lynch, recognized for two minutes. >> thank you for holding this critically important and timely

hearing. i want to thank you also for your courtesy in allowing me to attend and participate. i want to thank the witnesses for their willingness to come forwd and help this committee with its work. i've been increasingly concerned for some time about the gowing sovereign debt crisis in europe and affect on the american financial system and the global economy in general. that's why i ask to join this subcommittee for today's hearing. i commend the chairman and ranking member for starting what i hope will be an ongoing conversation in this congress about the economy's preparedness to cope with the growing sovereign debt crisis in europe. as the chairman noted earlier in his remarks, the u.s. and euro zone economies are more globally interconnected and intertwined than ever before. a relationship between the united states and european union

is interdependent. u.s. and eu combined make up 25% of global trade and 40% of gdp and hold assets between 60% and 70% -- and hold a share of 60% of 70% of the world's banking assets between them. as we have seen during our own financial crisis, closely intertwined financial markets come with benefits and risks. one is theapid and unpredictable spread of financial contagion in times of financial stress. it's clear that the u.s. fincial system's direct exposure to troubled european economies appears manageable, our indirect exposure to derivatives and other commitments is less clear. the bank for international settlements says the indirect exposure to greece, portugal, spain and italy alone could total $550 billion while money

markets, insurance, pension funds, is completely unknown. we know the problem is bad but we just don't know how bad it is i hope we get clarity today about how bad the problem is and what we're doing to address it before the european sovereign debt crisis because another american economic crisis. i look forward to having constructive conversation with the witnesses here today about steps congress might take to address this crisis. i thank the chairman and ranking member and i yield back. >> would like to welcome our witness today. honorable charles collin served as secretary for international finaing and is responsible for leading treasury's work on international monetary policy, international financial institutions, and regional and bilateral economic issues. he served as deputy director of the research department at imf where helped prepare the world economic outlook report.

he obtained first-class honors at cambridge university. normally we have a summary of five minutes but i would like you to take as much time as you deem appropriate to make your presentation and you are now recognized. >> thankou very much, chairman miller, ranking member mccarthy andistinguished members of this committee thank you for this opportunity to discuss recent developments. >> you might pull that microphone closer. it's not picking up very well. >> europe's financial crisis poses the most serious risk today to the global recovery. as members of this committee have noted, the united states has deep trade investment and financial links with europe and stability in europe is crucial for our exports and for american jobs. it's clear that th europeans have resources and capacity to deal with challenges they face. european leaders made progress

over the weekend toward designing comprehensive frame work for tackling this crisis and leaders will meet tomorrow. this agreement will need to be implemented quickly and firmly. stepping back for a moment, th macro economic and financial challenges faced by several european countries since the 2008 financial crisis have exposed serious crisis within the union. rent experiences reveal the ed for stronger mechanisms for fiscal discipline and more markets that allow countries to achieve growth potential and for adequate crisis response tool kit to respond to economic and financial stress. in response to these challenges, europe has taken wide ranging action both to strengthen

national policies and to reinforce the overall frame work for the euro area. at the country level over the last 18 months, much of the region has embarked on accelerated fiscal consolidation, growth orientated structural reform and banking sector repair. this is an extremely challenging agenda and completion will require efforts over sustained period of time. in parallel, european leaders have pledged to do whatever it takes to ensure the future of the euro. they have provided financing together with the imf to greece, ireland and portugal as these countries undertake very difficult reforms. moreover, leaders have expanded financial capacity of the main european financial crisis and the financial stability network and broadened the ways in which these resources can be deployed. meanwhile, the european central

bank has played a crucial role providing liquidity to banks and buying sovereign bonds in the secondary market and to prevent future crisis, the europeans have agreed to governance reforms that include a broader array of surveillance tools and enforcement devices to improve fiscal discipline and they also agreed on a pmanent crisis resolution mechanism. europeans have been working hard to design credible and effective approaches to mobilize the increased resources and greater flexibility of the efsf with the aim of reaching agreement at the leader summit tomorrow and delivering a comprehensive plan to address their crisis by the summit in early november. this plan will need to have four parts. first, europe needs a powerful firewall to guard against contagion concerns to ensure

that governments outside of the periphery can borrow at suainable interest rates while they bring dow debt and strethen growth. second, european authorities will need to ensure that their banks have sufficient liquidity and stronger capital to maintain the full confidence of depositors and creditors and if needed, access to a capital backstop. third, europe will need to craft a sustainable path forward in greece as it implements its difficult fiscal and structural reforms. finally, european leaders must tackle the difficult governments challenges to address the root causes of the crisis and ensure that every member state pursues economic and financial policies that support growth. let me emphasize that the successful resolution of the current european crisis matters

deeply to us here in thenited states because our country has no bigger more important economic relationship than we have with europe while the direct exposure of the u.s. financial system to the most vnerable countries in europe is limited, we have substantial trade and investment tries with europe and european stability matters greatly for american exporters and for american jobs. already the crisis has slowed growth significantly in europe and around the world as increased uncertainty and red e reduced risk appetite, undermine business and consumer confidence and reduced household wealth. there are downside risk to the outlook for the u.s. economy and job creation. it is vitally important to the united states that europe is able to address its issues effectively and in a timely fashion. for this reason the administtion has closely engaged with european leaders to encourage them to move forward in an effective way.

at the same time, our supervisors have for some time been working closely with the u.s. financial institutions to identify risks and to improve their ability to withstand a variety of contagion events emanating from europe. in managing global risks, one key challenge is to ensure sufficient financing in crisis situations. the european countries themselves are apprriately contributing the bulk of financing to countries in the euro zone riphery. in addition, the imf is an important role of financing and expertise in the effort to contain the crisis with long experience and independent judgment they set strong economic conditions for loans which return countries sustainability by promoting greater stability and safeguarding against deterioration of economic

conditions, the im supports the global economy and with that u.s. growth, jobs and exports. in addition to involvement in europe, the imf continued to offer financial support more broadly to countries around the world at a range of income vels. in closing, we appreciate the leadership and support of this committee on the key challenges and we look forward to working with congress as we engage with our international partners. thank you. >> dealing with greece specifically right now is a very small percentage of the eu which everybody recnizes and it sounds apparent that some form of a write-off will take place in terms of the debt that they currently owe which has to take place resolution of that before you can move onto italy and spain and you stated in your testimony you believe the eu leaders are finally ready to come to an agreement but what if that doesn't occur in the next few days what downside is there to that

not taking place? >> there's clearly deep commitment with european leaders to reaching a strong agreement over the next few days. there is a deep understanding that failure could have very damaging consequences witn the euro area although greece itself is relatively small share of the european economy. there's already been a considerable contagion affecting other countries in the euro area for events and greece and european leaders have rlized the serus dangers if they do not act sufficiently quickly. the longer action is delayed, the more the dangers increase.

that is why we do think that they are going to take actions in a comprehensive way over the next few days to put in place frame work for protecting the rest of the euro area from potential contagion from events in greece strengthening the capacity of euro zone sovereign to continue to access markets at reasonable rates and making sure the european banking system is adequately capitalized and adequately funded while at the same time -- >> on that capitalization the concern is that our downturn and banks held real estate. their's held sovereign debt. the ones who invested in greece know they will take some form of a loss. are they moving rapidly to make

sure there's adequate capitalization for their banks so they don't pull their head in like a turtle and say we won't get further involved based on current debt we hold. >> european banks have taken significant action to strengthen their balance sheets both writing down the value of greek debt and also raising additional capital earlier this year despite this we do think they need to take substantial additional action to strengthen their balance sheets and in particular to further boost their capital. the concern that markets have is now not just with exposure to greece but also exposure to other sovereigns that are under pressure and for this reason, we understand that agreement is likely as part of this comprehensive package on an approach to ensure adequate bank capitalization and to provide a

path to raise european bank capital to at least 9% capital relative to risk weighted assets which is a strong capitalbase. >> what role has administration played in negotiations so far and what, if any, commitments have they made on the part of the american taxpayers to this issue. >> the administration is closely engaged with europeans at all levels. >> can i ask the witness move the microphone closer to your mouth. i'm having a hard time hearing you. be proud of who you are and belt it out. >> the administration has been closely engaged with european officials at all levels. the president himself has regular contacts with his counterparts in europe to raise the deep concerns tha we have in the united states.

in the treasury we have continuing conversations. secretary geithner has visited europe many times in international meetings like the recent g-20 meeting. the situation in europe dominates the conversation. under the secretary, i myself and our whole european team is in constant conversation by phone and visiting europe. we feel that we can play a constructive role by sharing our own experience in the united states that we gained in dealing with our own financial crisis. there are lessons that europeans can learn. i think europeans themselves are interested in perspectives and our views and they welcome our close participation.

participation does not involve any commitments of u.s. taxpayer money. i believe the imf can play a very important role in supplementing european financial resources and through the imf, the united states can be very supportive. the united states has a substantial financial commitment to the imf but involvement in imf does not put a materia risk on u.s. taxpayers. u.s. taxpayers never loss any money from its financial commitments to the imf. the imf has preferred creditor status which means the imf is always paid first before any creditornd imf is a strong track record of being repaid by countries that do run into

continuing difficults. we also believe that strong commitment of the european leaders anstrong commitment to european finances demonstrates the very strong likelihood that europeans will achieve success and that is ultimately countries in europe will meet their financial commitments so we're not concerned about exposure of u.s. taxpayers. >> they are moving at a cautious pace which i understand. i hope the pace picks up rapidly. ranking members recognized for five minutes. >> thank you. thank you for your testimony. i want to go into two questions. the european financial stability fund, that's going to be replaced in the year 2013 by a permanent lending facility,

european stability mechanism. do you anticipate frame work will complement dodd/frank reforms that we have here and going back to issues that you talked about with imf, if imf creates additional crisis asstance mechanisms how would that impact lending capeabilities for the future? >> the esm will basically be a device for providing financing solve rinse that run into difficulties. it will have a different structure from current esf but will have same activities that esf does. it's not directly related to the

imementation of the financial regulatory reforms in europe similar to the dodd/frank reforms in the united states. nevertheless, europeans are taking actions to implement regulatory reforms that largely parallel the reforms that we are implementing in the united states and we in u.s. treasury are closely engaged with european counterparts to make sure that as we move ahead in financial regulatory area that we are maintaining a level playing field and ensuring that we are achieving high standard regulatory regimes in europe and the united states. in terms of imf resources, the imf has committed substantial resources to the euro zone

periphery countries to greece, ireland and portugal. nevertheless, those commitments are still relativy small share of the imf's total available financial resources. they remain a very substantial arsenal of financial resources to the imf, which it could use if needed to extend financing to european countries or countries around the world. we think imf does play a constructive role in europe but it equally important that that role continue to be in the context of a strong and comprehensive commitment by the europeans to dealing with the problems. europeans themselves have the financial resources to deal with this crisis. the imf plays a supplementary role and can substitute for

european financial resources. >> following up on that, when the emerging markets are able to adequately fill potential gaps, the emerging markets, will they be able to support just say if the eu is having a tough time? can they fill that spot? >> certainly the emerging markets are playing an increasingly important role in generating moment yum for the global economy, i think around 80% of global growth over the last year or so has been in fact contributed from emerging market economies like china, israel and brazil opposed to advance

economies like u.s., europe and japan. we think the erging markets could play a stronger role going ahead by shifting the balance of their economies relying less on exports to other countries and boosting the strength of domestic demand in their own economies and we same time as we've been working with europeans to resolve the european crisis we've al been working hard at the g-20 to encourage the emerging economies to take steps to ensure that their own growth momentum is suained by boosting their own domestic momentum and by adopting exchange regimes which are consistent and i would encourage the shift in the pattern of global demand growth. >> thank you. my time is expired.

>> vice chairman, recognized for five minutes. >> secretary collins thank you for being here. i would like to discuss if i could just your thoughts on international monetary funds role in resolving the european crisis and could you tell me and tell us the panel how the imf is assisting european countries and how imf's participation benefits the united states and if you could the degree with which the imf participation exposes the american taxpayers to potential losses? >> the imf is playing a crucial role in europe through a variety of channels. the most obvious one is the financial channel. the imf contributed around a third of the financial resources that have been provided. >> can you give me a rough estimate of what a third is? >> a third is around maybe $150

billion. around a third of the total commitments by the european economies. the imf is playing a crucial role in the design of the adjustment programs and play as crucial role as an independent partner with european countries to make sure that the adjustment programs are strong and well designed and able to address the fundamental issues so we are in the treasury strong proponents of imf playing this role. as i mentioned before, the imf can play and has played a crital part in staining global financial stability through this crisis management role without exposing u.s. taxpayers to risk of material

losses. they have a strong record of getting repaired by countries given the preferred creditor status. we bieve that imf can continue to play this strong role but as i said it needs to be in con junction with the european commitment to right policies and european commitment of adequate financing. >> secretary collins, from the u.s. economic perspective, what do you think are the most sensitive issues in resolving the euro zone's economic problems from our perspective? >> from our perspective, the key issue is really containing the contagion effects as investors are concerned aboutossible implications of what's happening in relatively small countries in the periphery, what are larger risks for cotries in europe with slow rates of growth and relatively high rates of public debt.

these are countries that are much more significant in terms of their trading relations and financial relations with the united states. if there were to be further deteriorati deterioration that would be a dangerous impact on u.s. financial markets and global financial markets. the key instrument that is needed is to create imposing firewalls that break the connection between difficult situations like greece with the stronger countries that are closer to the euro zone core. we know europeans are working hard. we've heard about various devices that they are looking for to leverage the resources

that they have set aside to build this firewall so that's a very important task in the days ahead to provide a mechanism that will work effectivelythat will be a america nichl that markets can work to continue to provide adequate fiscal resources that will be adequate financing to meet fiscal needs. >> there are the that believe the reason why focus is not on the united states is because of the problems in europe right now and that we're going to be next. do you believe that the united states has a similar spending problem as europe does and how would you compare europe's problems to our problems? what are similarities and what are main differences? >> the united states clearly has a serious fiscal issue over the medium term. >> medium term being defined as what? >> the administration has

committed to a very substantial reduction in the fiscal deficit over the next few years under the president's plan. fiscal deficit will be reduced over the next three years and it will be put on a path that will lower public debto g ratio consistent with our commitments to the g-20 at the toronto summit. at the same time, however, the united states does not face the short-term fiscal pressures that are faced by some countries in europe. we belve there's an important role for providing additional fiscal support to the u.s.

economy over the next year or so to maintain momentum of the present recovery that is not as strong as we would like. the progress on raising employment and reducing unemployment rate has not been as strong as we would like and we think it would make sense to provide some additional fiscal support to slow the pace of fiscal consolidation. in europe there are other countries outside of the periphery that also have maintained the confidence of markets and where the imperative fiscal consolidation is not as urgent. no country like germany for example the debt to gdp ratio is high and it does have room

within constraints of its own debt break, it has room to stabilize rk to support the german economy to play an important partin sustaining momentum of growth in europe. fiscal issueare certainly important in the u.s. in medium term but if we are able to put in place a convincing and credible approach to dealing with these issues, that would also provide us with room to taking steps to support our economy in the short-term and supporting american jobs. >> thank you, mr. chairman. my time is expired. >> thankou, mr. chairman. mr. collins, in the wake of the 2009 financial crisis, the u.s. passed comprehensive financial regulatory reform designed to promote transparency, monitor systemic risk in the financial system and ensure that financial

institutions can withstand shocks to the system. how have these reforms improved the ability of u.s. regulatory authorities and financial institutions to mitigate the impact on the u.s. financial market of economic turmoil in europe. >> i think the financial reforms have played an important part in strengthening the resilience of the u.s. financial system and helping to contain potential risk coming from europe in a number of different ways. one is that theunited states banks are much more strongly capitalized today than they were before the 2008 financial crisis. >> you need to move the microphone closer. wee having trouble hearing you here.

>> the largest u.s. banks now have average tier 1 core capital ratio of over 10% substantially higher than it was back in 2008. there has also been a major reduction in reliance on market fundg on wholesale funding to fund u.s. bank lending and substantial improvement in liquidity situation of american banks. all of this is consistent with the stronger capital liqdity and funding requirements put in place by dodd/frank. in addition to this, dodd/frank has put in place important mechanisms to make sure that u.s. regulators work closely with u.s. banks to anticipate

potential risk events in particularly the financial stability oversight committee has met frequently to assess potential ris and supervisors have benefited from the insight of this work to work closely with financial institutions within the united states to strengthen financial institutions capacity to deal with potential risk events coming out of europe. >> what is the role for the g-20 in coordinating policy responses? >> the g-20 has played an important part and continues to play an important part and one area where its role is crucial is in the financial regulatory area. the dodd/frank legislation has put in place a very strong and

very high standard set of regulatory requirements in the united states but it's important that leading financial centers around the world also adopt high standard regulatory frame work consistent with what we are doing in the u.s. and the g-20 has played an important part in making sure that this is achieved. the g-20 has also provided a forum in which challenges to global stability such as those coming out of europe are discussed, and where key countries, emerging market countries, can also express their concerns. so for example, in g-20 meetings, the situation in europe is discussed extensively and the concerns that are expressed, it's not just the united states that is expressing concerns, but also the large emerging market counies are alsoxpressing their deep concerns and i think helping the

europeans understand the critical importance of addressing their issues in a fundamental d decisive way. >> thank you. thank you, mr. chairman. i yield back. >> mr. mcconnell, you're recognized for five minutes. >> thank you very much. just a quick question. how is what is happening in the eurozone and the policy prescriptions that are being put forward differ from what the united states did during the t.a.r.p. situation back in 2008? >> in some respects ere are similarities but there are also important institutional differences, of course, between the u.s. and europe. important similarities is that this is a crisis of confidence and a crisis that has led to

huge increase in uncertainty with potentially very negative impact, if not contained. both here in the u.s. and in europe, what is needed, therefore, is an overwhelming, powerful response to reduce concerns, to reduce the uncertainty, to reassure investors that the situation is beg contained. in europe, it's been more difficult to put this decisive response in place, because of institutional constraints. there are 17 members of the eurozone and they all need to reach agreement on steps to establish and develop ese

crisis resolution mechanisms. that has taken time. politics is always complicated but we're talking about the politics in a multiplicity of countries. there's also a difference in the role of the european central bank, the ecb, from the role of the fed. during the arc financial crisis, the u.s. treasury and fed were able to work together closely and very quickly to develop effective tools to reassure markets that funding would continue to be available. the ecb's legal constraints have meant that there could not be such close relationship between the ecb and european treasuries and for this reason, the mechanisms that are being created now to reassure markets that funding will be available need to be more complicated and have taken more time to design. >> in discussing those

differences, one of the reasons that europe seems to be having difficulty with this is because unlike the united states, where we have a union of 50 sovereign states governed by a federal government, the individual naons of the eu seem to be having trouble, i think very understandably so, with the concept of their taxpays bailing out the investors for problems that were caused by other nation' fiscal -- lack of fiscal discipline. in the united states that was clearly a much lower hurdle to get over for the federal government to do, rather than trying to corral 50 different state legislatures to agree to do that. but doesn't the central principle of what they're trying to do in the eu equate with what was done in the t.a.r.p., in short, whether it is by individual nations of the eu or done in the united states by the federal government, the way they're trying to solve this

crisis of condence is to essentially tell investors to the greatest of their ability that you will not lose money under any circumstance, and that the taxpayers will cover it if you run into this. is that not the case? >> that is certainly the case, and that's particularly relevant for the creation of this firewall that we have discussed, but i think the problems in europe go well beyond the construction of the firewall. there also needs to be a fundamental economic reform in a number of countries in europe, greece being the most prominent examp example. a commitment to masve fiscal consolidation, and to deep-rooted reforms that restore dynamism to the greek economy.

ultimately, the european crisis cannot be resolved until countries around europe are able to convince markets they are going to be able to achieve the fiscal adjustmentsnd the economic reforms that restore sustainability. >> just if i m, mr. chairman, just a quick point. one of the problems that greece experienced, much like it once did during the time of the athenean city state, was when people realized they could avail themselves of the public treasury for their own benefit, and the absence of fiscal discipline that you see out of a country like greece, where they have an exploding public sector and an anemic private sector are not necessarily constrained to europe. thank you. >> i like starting with athenian democracy, working through roman republic. great way to start this. i like that. mr. lynch, you're recognized for five minutes. >> thank you, mr. chairman and the ranking member.

again, this is a very important hearing. mr. secretary, one of the next panel witnesses, desmond lockman from the american enterprise institute has raised some interesting questions and he points out that now the imf is acknowledging that greece's economic and budget rformance has been very much worse than originally anticipated. he points out that there's been a 12% contractionn greece's realgdp over the last 24 mohs, their unemployment has increased to over 15%, and that the situation there makes it a substantial write-down of greek sovereign debt in the amount of about $500 billion highly probable within the next few months. so in many analysts' minds, it's

not a question of whether greece will default, but when. that would be the largest such default in history. the imf is proposing european banks accept a 50 to 60 cents on the dollar write-down on their greek sovereign debt holdings and that would have a material impact on european banks' capital reserve positions. so what i am worried about is whether these european banks -- have these european banks or will the european banks be required to mark to market their greek debt before the recapitalization plan goes forward? because that obviously represents a delta or a difference between what they're saying their capitalization will be versus what we determine it

to be after stress tests and after properly marking down this greek debt, and do we have any sense of the real strength, the real health of these european banks? >> european banks have already been significantly marking down -- >> the imf now is saying, given today's situation, they're looking for a 50 to 60 cents on the dollar write-down of greek debt. >> markets have already be pricing in a very substantial discount on -- >> but the banks aren't marking the market. they're assets. that's the problem. the markets are discounting them but the banks, the banks are not showing that markdown on their balance sheets. so if you are going to stuff those banks full of money to save them, there would be a lot more money involved than what the banks are saying. that's the problem i have. >> right. banks have, in fact, been making

progress in marking down their exposure to greece on their balance sheets. they -- >> not nearly, though. 15%, not 50%. >> over time, they are moving in the recapitalization effort exercise that is now under way, this exercise will take into account sovereign risk in assessing banks' need for capital. and that assessment of sovereign risk will be based on market valuations rather than book value valuations of bank capital. so this exercise should be much more effective in boosting bank capital than previous exercises that the europeans have undertaken over the past -- >> don't you think your analysis is unrealistically rosy? from what we're seeing? i mean, just look at the data. look at what's happening.

look at the contraction in the economies. look at the slowdown even in some of the core countries like germany an france. i'm not -- i'm not -- look, i'm not trying to take you to task for anything. i think you're doing a great job. i just think that we're not being realistic with what's coming down the road, and that is inhibiting our ability to preparfor that. that's all i'm saying. i'm not trying to be the bearer of bad news. i just know what the numbers tell me. and you try to prepare for that instead of constructing this, you know, from what we've seen so far and the response from the european union and god bless them, u know, it's difficult because they are not unitary, like we are. they don't have a single fed and a single treasury totally committed to one program. it's been rather fragmented. but all i'm saying is that we can't build our expectations or

our course of action based on very ry scenarios that you're playing out here, you know. someone's got to sound the alarm and i ink your folks at treasury are probably the people to do that. and if you don't, then you're letting us walk this,ou know, we're walking right into this and we're not taking, i think, reasonable precautions under the circumstances. >> we are certainly expressing our grave concerns based on our perceptions of the downside risks. we don't just lk at baseline scenarios that may be optimistic but rather, we try to think what could go wrong and how do we take steps to make sure that the downside risks are not realized. both by encouraging the europeans to take more forceful action to deal with their problems, and by making sure that we have adequate defenses

here in the u.s. and in particular, the u.s. financial system is adequately protected from potential risk events. that's the crucial part of what the oc has been doing. >> have we done an assessment on at our exposure is? >> i'm sorry. >> thank you for your tolerance. >> you and i have the same concern. i wish germany would use more of a panzer approacho getting this done but they are very cautious on that kind of concept. their moving rapidly wouldn't hurt the mark. mr. huizenga? >> thank you, mr. chairman. i appreciate the opportunity to come. apologies, i had a bill up in front of the -- another committee and had to testify on that, so i'm trying to catch up based on some notes and some things that were handed to me. i just thought if you could address a little bit about u.s. exposure, whether there's direct exposure or exposure through other organizations that were involved in imf, for example, and what that may mean to the

taxpayer. >> right. u.s. direct exposure to the weakest countries in the periphery to greece, portugal and ireland, is really quite minimal. financial institutions have been aware of the risk and have been lowering their exposure and the residual risk is very small. the concern is that there is deep interconnectedness more broadly between the american financial system and the european financial system. the exposure to financial institutions in the european core are very large indeed. and these are institutions th themselves are exposed to risk in the european periphery. so any increase in volatility and market uncertainty about the

financial institutions in the european core very quickly translate into increased uncertainty in u.s. financial markets. we have seen that playing out over the past couple of months. and this is an area where u.s. financial supervisors have been working very closely together with u.s. nancial institutions to try to identifyhese risks and contain the risks. an important topic for -- important focus for the fsoc as they consider -- >> it seems to me that exposure and risk might be two different things. i understand the mitigation of the risk, but do we have exposure and through the imf or through some other organizations, if and when, because i think i agree with my colleagues here as well, i'm very concerned about what may be happening and how does that translate, and then, you know, adding into that some of the requirements that may be coming

under basel 3 and those types of things. how does that play into their ability to recover? >> the u.s. government has minimal direct exposure. we do not lend significant sums to countries like greece. we are supportiv of the imf playing a significant role in helping europe to deal with this crisis. the imf has provided about a third of the financing for countries like greece, ireland and portugal, and the united states makes a financial contribution to the imf. however, this financial contribution does not put the u.s. taxpayer at material risk. the imf has preferred creditor status which means it gets repaid first. in the past, the record of repayment to the imf has been excellent. the u.s. taxpayeras never lost a cent through its exposure to the imf. so the imf really plays an ideal

vehicle for us to make sure that the european programs are well designed based onhe imf's role, drawing on its long experience and expertise in dealing with financial crises. while at the same timeroviding a certain amount of financing. >> we've got just over a minute and i'm wondering if you could touch on basel and what that may mean as they're trying to recover. >> basel 3 is very important to impre the capital adequacy standards in banks in u.s. and in europe, in reducing reliance on -- excessive reliance on market funding and improving liquidity. as banks have moved towards strengthening their positions in these respects, their exposure to potential ri is

correspondingly reduced. so we think that basel 3 is already playing an important factor. the rules themselves do not yet come fully into effect, but financial institutions are anticipating in advance the requirements that they will face. >> in my closing seconds here, you just used a phrase excessive reliance on market funding. so you are expecting that there needs to be government funding as opposed to the market? >> no. by market funding i mean wholesale funding rather than deposit funding. banks need to have stable funding base, based on consumer deposits, retail deposits and other resources that can be relied upon to be stable, rather than using wholesale funding from the market to an excessive degree that could expose a bank to risk in a volatile financial environmen i'm certainly not talking about official funding for banks,

either united states or in europe. >> i thank you. my time has expired. thank you, mr. chairman. >> the chair notes that some members may have additional questions for the witness, which they may wish to submit in writing. without objection, the hearing reco will remain open for 30 days for members to submit the written questions and for responses to the record. we have many more questions, i know you have a lot of answers. we just don't have the time. mr. collyns, thank you for your testimony today. the panel is dismissed. >> thank you, sir. >> coming up and a few moments, president obama is fund-raising speech tuesday night in sent francisco. in more than a half-hour, republican presidential candidate rick perry outlines his plan for taxes and the economy. [captioning performed by national captioning institute]

[captions copyright national cable satellite corp. 2011] >> on "washington journal" this morning, we will hear about the gop's plans for creating jobs from the chairman of the republican policy committee. democratic rep henry cuellar will discuss today's hearing on possible iranian terrorist activities in the u.s. and megan mcardle joins us to talk about her article about whether members of congress are guilty of insider trading on the stock market. "washington journal" is live every day on c-span at 7:00 a.m. eastern. several law thence to tell you about. marine corps commandant will be at the council on foreign relations discussing national security. you can see that on c-span to at 8:30 eastern. 00 onon c-span 2, at 10:30 the deficit.

also at 10:00 a.m. eastern, janet napolitano is testifying before the house judiciary committee on u.s. immigration policy and enforcement. every weekend, let the c-span network to be your source for public affairs, nonfiction books, and history. c-span 2 has "book tv." and "american history tv" on c-span 3. all our programs are available any time at the c-span a video library. the c-span networks. is washington your way. >> part of the president's trip to the west coast included a fund-raising trip last night and said francisco -- in san francisco. this is a little more than a half-hour.

>> ladies and gentlemen, the president of the united states. [applause] >> hello, san francisco. thank you. thank you so much. thank you very much. thank you so much. thank you. [cheerse, whistles] everybody have a seat. it's wonderful to be back in san francisco, great to be back in california. i want to thank a couple of people. first of all, i want to thank nson fromon to flying in from hawaii. to perform.

he told me the waves are good. his nephew is going to berkeley, and he is trying to serve here and seit is colder. i want to acknowledge the outstanding mayor of sacramento who i expect to try to settle the nba strike all along with the other work he has done -- kevin johnson is in the house. [applause] and even though she had to be back in d.c., i want to make sure everybody knows that nancy pelosi continues to fight on behalf of you every single day, and she is doing a great job. we are very proud of her. now, as i look around the room, there are some people who have been supporting me since i was running for the united states

senate. relativelyf hyoyou are new to this process, but i am here to tell you, whether you are and old veteran or new to the scene, i need your help. i am here because if he thought the last election was crucial, that i have to tell you what happened this year is going to be more consequential, more important to the future of our kids and grandchildren than just about any election we have seen and a long time. for the past three years, we have been wrestling with two the worstpriccrises,

financial crisis since the great depression. we have also been dealing with a profound political crisis. all across the country, people are crying out for action. a lot of folks has spent months looking for work. they are living paycheck to paycheck. some are living day to day. others are doing their best just to get by. maybe they are giving them going up to a restaurant or going to a movie in order to make sure they are paying the mortgage. there are folks who have delayed retirement so they can send their child to college. they're feeling of enormous pressure and enormous stress. and they are not looking for that much. they are not asking for that much. they are not asking for handouts. they do not think the government can or should do everything to solve their problems. but they do believe what most o is that americaieve,

should be a place where you can make it if you try. no matter who you are, where you come from, what circumstances you are born into it, that if you are willing to put in the work and the effort and you do the right thing that you can make it. a country where everyone has a fair shake. and everybody does their fair share. that's what people are looking for. and those values which are reflected in how people deal with each other every day in the workplace and at schools and in their communities and neighborhoods, they like to see those values reflected in washington as well. and they have not seen enough of that. most folks feels as if the economy works best when it works for everybody. not just those at the very top.

they believe that hard work should pay off and responsibility should be rewarded. and these beliefs are not democratic values, they are not republican values. they are american values. they are the bedrock of what this country has always stood for. while i was in line, i met a gentleman who came here from india with 9 bucks in his pocket and is now the president of a community bank. this country continues to attract talent from all across the world precisely because people believe that there is something special about this place where what you put into it means you can get that piece of the american dream. and that is why so many of you worked on the campaign in 2008, because you had that same beliefs. you did not see it reflected in our politics.

'sw, three years later, its clear that washington has not gotten the message yet. month ihy over the last have been hammering at congress to see if they can actually do something for folks who are hurting out here. that is why we introduced a jobs bill that could actually start putting people back to work right now. this is a bill that is filled with democratic and republican proposals. these other kinds of proposals that in the past would have gotten bipartisan support. tax cuts for workers, small businesses, funding to rebuild our roads and bridges and schools, and to put construction workers back to work. funding to hire teachers and our veterans. paid a bill that's fully for by asking those of us who have been most blessed in this society to do a little bit more, to pay a little bit more.

so it is all paid for it, and independent economists, people who look at this for a living, not economists who work for me, say that it is the only jobs plan out there that would create jobs right now and grow the economy right now. one economists estimated that we could see as many as 2 million jobs created as a consequence of this bill. and polls show that americans overwhelmingly support the proposals that are in this bill. not just democrats, but independents and republicans as well. but despite all this support, despite the fact these are bipartisan ideals, despite that all the experts say that the -- this would give the economy what it needs right now, we have republicans in the senate that voted against it. last week, we had a separate vote on the part of the jobs bill that would put 400,000 teachers and firefighters and police officers back on the job,

and is paid for by asking people who make over