2014 if conditions in afghanistan do not justify withdrawal? i hope you will address exactly what conditions we would like to see before we withdraw and what contingency planning the administration is conducting. should we get to 2014 and discover the conditions in afghanistan have not progressed as quickly as we had hoped that they would. we hoped. it used to be that american with a drawl was conditioned on success. now it seems withdraw has been the definition of success. if that is the case, success in afghanistan will feel like failure. ideal bat. -- thank you. >> we will welcome the secretary today. she has served as the 67 the secretary of state for the united states since january 21, 2009.

she has served previously as the united states senator from new york and first lady of the united states and the state of arkansas and is an attorney and law professor. your full statement will be made a part of the record. if he could be so kind to summarize the written remarks to commit directly to the question and answer discussion on this by minute role in health seeking get as many members as possible. welcome. the floor is yours. >> thank you. to the members of the committee, i appreciate this opportunity to appear before you. >> i want to start by recognizing the concerns that many of you have about afghanistan and pakistan policy. you and the american people are right to ask questions, but i think it is also important, as the chairwoman alluded to in her opening statement, to recognize the significant results that our policy has already reported -- already produced. osama bin laden and many of his top the tenants are dead. the threat remains real and urgent, especially from al qaeda

affiliates, but the group's senior leadership has been devastated and its ability to conduct operations greatly diminished. many of our successes against al qaeda would not have been possible without our presence in afghanistan, and close cooperation with pakistan. in afghanistan, we still face a difficult fight, but coalition and afghan forces have reversed the taliban momentum in key areas. afghan security forces have a long way to go, but are taking more responsibility every day. and while the country still faces an enormous challenges from poverty and corruption, our development efforts have bolstered the economy and improved lives. you know the statistics. 10 years ago, fewer than 1 million students enrolled in

afghan schools, all of them boys. now several million and 70% of them girls. i offer these brief examples to show that we are making progress toward our goals, and we cannot let up. i will be the first to admit that in working with our afghani and pakistan partners is not always easy. but these relationships are advancing america's national security interest. walking away from them would undermine those interest. with that as a context, let me report as -- i just completed a report on both countries. i emphasize a three-track strategy of fight, top, and build, pursuing all three tracks at once. they are mutually reinforcing.

and the chance for all to read to be successful is greatly increased by strong cooperation from the pakistan and afghan and governments. we briefly discussed each track. first, the fight. coalition and afghan forces have increased pressure on the taliban and other insurgents, including with a new operation in eastern afghanistan launched in recent days. our commanders on the ground are increasingly concerned, as they have been for some time, that we have to go after the safe haven is across the border in pakistan. i will be quick to add that the pakistanis also have reason to be concerned about a tax coming at them from across the border in afghanistan. in islamabad last week, general

dempsey, director patraeus and i delivered a unified message. pakistan must join us in squeezing this network from both sides of the border and closing safe haven. we understand the urgency of the task at hand and we have detailed and frank conversation about the concrete steps both sides need to take.

i explained that trying to distinguish between so-called good terrorists and bad terrorist is ultimately self- defeating and dangerous. no one who target civilians of any nationality should be tolerated or protected. we are not suggesting that pakistan sacrifice its own security, quite the opposite. we respect the sacrifice that pakistan has already made, and it is important for americans to be reminded that over the past decade, more than 5000 pakistani soldiers have been lost, and tens of thousands of pakistani citizens have been killed or injured. that is why we are pursuing a path of shared security that benefits all. the second track is talking. and here, too, we are taking concrete steps with our partners. i reaffirm america's strong support for an inclusive, afghan-led peace process. and we are very clear about the necessary outcomes of any negotiation. insurgents must renounce violence, abandon al qaeda, and abide by the laws and constitution of afghanistan, including its protections for women and minorities. if insurgents cannot or will not need those red lines, they will face continued and unrelenting assault. and i want to stress, as i did in kabul, that the hard-one rights of women -- the hard-won rights of women and minorities must be protected.

the afghans as strongly believe reconciliation is possible still, and we support that has the best hope for peace and stability in the region. pakistan has a critical role and a big stake in the outcome. we look to them to encourage the taliban and other insurgents to participate in the afghan peace process in good faith, both through inequitable public statements and by public statements. this will be a key focus when i go to istanbul next week to meet with regional foreign ministers. for our part, the u.s. is working with the afghan government. in 2011, we had three washington-led rounds of discussions with the state department's leading an interagency team, including dod, usaid, and the noc.

these discussions resulted in a tax that is about 95% agreed to including democratic institution building, a human rights, and long-term reforms. among other things, we envision establishing and afghanistan- united states bilateral commission and associated implementation mechanism to help our focus remains on what needs to be done during the transition process. ambassador crocker and general allen are still working through some of the security corp. issues with president karzai. the negotiation is ongoing. although we do not expect this to take the form of a treaty or require advice and consent of the senate, we will consult with you on where we are in this process, and i will ensure that anyone who wishes to get a full briefing will get one, and we will very much welcome your views.

we anticipate having a transition that does in killed -- include security components not only from the united states but also from nato, commitments that were made at lisbon summit. finally, the third track is building. building what? building capacity and opportunity in afghanistan, pakistan, and across the region.

this is part of a clear right strategy rooted in a lesson we have learned over and over again are around the world. lasting security and stability go hand in hand with greater economic opportunity. people need a realistic hope for a better life, better job, a chance to provide for their families. it is critical to our broader efforts that civilian assistance continues in afghanistan and pakistan, and i thank the congressman for raising that. i will also be very clear that we have had to move rapidly and cheaply to strengthen oversight and improve effectiveness, and i will be happy to answer questions about that. early next week, i will be sending you a comprehensive status update on our civilian assistance, detailing our plans to shift from short-term stabilization to long-term development. as the transition proceeds and coalition combat forces leave afghanistan, they need to be realistic hopes for development. we are achieving agricultural feasibility and greater

exploitation in a way that benefits people of natural resources, increasing exports and strengthening the financial sector. i really want to underscore the point that the congressman made, which is really that we want to move from aid to trade. we cannot do that if we cannot get legislation which will lower tariffs on pakistani and afghan products and the enterprise fund, which will not require taxpayer dollars. this is what we did in central and eastern europe, and it was a big help in convincing people that the free market was a way to go. finally, we are pursuing a broader long-term vision for regional economic integration. it is not just an economic plan. it talks about how we can get these countries that have so many problems with each other to begin cooperating. to that end, i am pleased by the progress that india and pakistan are making on the commercial front and the

progress in implementing the transit trade agreement between afghanistan and pakistan. those are our talks, and we are on all of them simultaneously. we believe that the best place we can be in moving forward, and i look forward to answering your questions. >> thank you so much. i will yield myself some time for the question. first to say that i am gravely concerned about the safety of the residents in iraq. many members, including the ranking member and i, have sought the administration pose a commitment to securing their protection, giving the iraqi government's repeated failure to comply with its international human rights obligations to the residents, and in light of president obama's announcements of the final withdrawal of american troops from iraq, we need to be confident that our administration is being gauged with the government of iraq, the united nations high commission of refugees, and others to ensure the welfare of camp residents and to resolve their long-term security goals. my question deals with my native homeland of cuba, although in recent weeks, i feel the need to carry my papers with

me to find out when it is that i actually got to the united states. madam secretary, your administration has remained in opposition to many of the world's tyrants, to your credit, yet, the u.s. continues to engage the cuban regime. in march, you stated that gaddafi should leave power. in june, you said the solid should move out of the way. in july, you stated that assad not indispensable and we have nothing invested in remaining in power. in stark contrast, this administration continues to increase the cuban regime and provide the castro brothers a live line in the form of increased travel opportunities, supporting their offshore oil drilling aspirations. two weeks ago, undersecretary sherman confirmed that the department had recently met with cuban regime officials to discuss the sad case of alan gross. media reports stated the state department officials were willing to offer concessions such as allowing convicted cuban spies to return to cuba or

taking a cue ball off the state sponsor of terrorism list in order to obtain the release of mr. gross. united states should not be negotiating with a state sponsor of terrorism, so i ask you -- why is there a double standard with the castro regime? thank you. >> thank you so much for those questions. let me start on cuba, and then i will go back to camp ashcroft and our concerns about it. our position has been the same for more than 50 years. we think fidel castro should go. that is the unfortunate commitment that we have put forth over many years. unfortunately, he does not seem to be going anywhere. we do worry greatly about the activities of the cuban government and we have strongly supported the desire of the cuban people to freely determine their own future. it is our view that we should help those who are trying to work toward positive change.

so we do support a wide variety of activities on the island. we interact with a broad cross- section of individuals and groups in cuban society, and we provide humanitarian assistance, including food, over-the-counter medicines, and so much more. we think that that is a necessary kind of double approach. we want democracy for cuba. we have always supported democracy for cuba. we have tried to encourage changes and reform, but at the same time, we are going to keep working with individuals. >> have we met with cuban officials? >> u.s. officials regularly meet with their cuban counterparts, as i know you are aware, because we have a lot of areas of mutual concern. we have drug trafficking. we have immigration. we have all kinds of issues. our main objective for the last two years has to ensure alan gross' unconditional release. at no one has the u.s.

government been willing to give unilateral concessions to the castro regime or to ease sanctions as a means to secure his release, but i will _ -- we think it is a gross violation of his human rights and a humanitarian of use that he has not been returned to his family, and we would like to see that happen as soon as possible. with respect to camp-trough, which we deeply are concerned about, we know that there is an ongoing and very legitimate expression of concern.

we have elicited assurances from the government of iraq that it will treat residents humanely, that it will not transfer of residents to a country they may have reason to fear, and we are pushing very hard to get the united nations high commission on refugees to work with the governments. >> ranking member on africa global health and human rights. >> thank you very much. let me commend you, madam secretary, for the outstanding job you are doing. the recent five-country trip -- they only talk about to debut, but i know you have touched down in three others -- is amazing. your trip to libya where the president had really ask the europeans and data to lead and

that we would come in and help out was a very successful strategy. certainly commend the administration for living up to the agreement that president bush made when he said that our troops should be out of iraq at the end of this year. i congratulate our government for living up to that promise to have our troops back in america by the holidays, and the iraqi people want them out. the american people want them out, and i think they should be out. i certainly support what the administration has done in south sudan. i happen to be at the celebration of the new country, but i would hope we would give them all the support for the south sudanese people and that we continue to watch the door for -- darfur continue to support the government in somalia. we need to make that work. and also to urge the kenyans to assist, as they are doing now, to try to eradicate terrorists

who are coming into kenya and destabilizing the area. i also commend the president for the 100 troops going to the central african republic and to uganda, to train residents in trying to eliminate joseph coney, who this house passed legislation saying we should go out -- bipartisan support -- many of my colleagues on the other side have been just as passionate about the fact that he needs to be eliminated, needs to be captured or taken out because for 25 years, he has wreaked havoc on people with horrendous acts -- the horrendous acts he has done is just unconscionable. the time is past that he should be taken off the face of this earth. let me just then quickly get what you hear about afghanistan and pakistan. i almost forgot.

your strategy in afghanistan has been based on the belief that developing afghanistan's economy and institutions will win over the populations that support the afghan government, even after international forces drawdown. some analysts are concerned that the afghan economy may enter a steep depression as international military involvement in afghanistan winds down over the next few years. what steps has the u.s. taken to make sure that this does not happen? i know you did mention the new central asia/south asia trading hub that we are trying to create in afghanistan. will there be job training programs and community development so that that can overtake the military action? >> thank you very much, congressman, and banks, as always, for highlighting the important issues and security

concerns coming out of africa. i thank you for that, and i join with the congressman in saluting the life of former congressman howard will be, why had the privilege of working with in the 1990's and as secretary of state. with respect to the sustainability of the afghan economy, you are right to raise the issue that when this enormous amount of international money that has been used inside afghanistan begins to diminish, that raises questions about sustainability. there are three quick answers i would give you. one, we are working to strengthen the capacity of the afghan government itself at both the national and local level. because we think it is important to try to help them understand fundamentals like planning and budgeting.

usaid is currently developing a set of measurements about sustainability and applying them to all our programs. second, we are working on necessary reforms right now. a quick example -- the afghan power company -- they have to learn how to effectively collect revenue. they have to learn how to cover the cost of their operations, and we are also working with the ministry of public works and because the international community has built roads, but they have to learn how to maintain them, and that means collecting tolls or other tariffs. we are also working to make sure that we are coordinating with other donors. there are many big donations that come from infrastructure and training, and we're going to make sure we are all on the same page.

>> you so much. mr. burton, the chairman of the subcommittee on europe and eurasia -- sank you so much. -- >> thank you so much. >> there's a lot of congressmen and congresswomen concerned that unilateral action being taken by the administration in a military faction -- fashion. nobody morn's gaddafi -- mourns gaddafi been the scene, but we believe congress should be involved. that was a long duration the cost $3 billion of taxpayer money. i think the administration ought to be aware that there is a lot of concern among democrats and republicans that unilateral action is being taken without any consultation with congress. let me just talk about a couple of things and ask a question. in 1979, we supported either tacitly or directly, the removal of the shock -- shah the i toll impose -- ayatollah imposed sharia law.

and people who were sympathetic with the u.s. were lined up and killed. tunisia have said they will have shariah law. the interim government of libya has said the same. one of the things that bothers people is if you are an enemy combatants and defeated, your wife can be raped, and it is all right. i understand there are women who are being raped right now by the people that won the war because the people who supported gaddafi had wives, and they thought that that was proper punishment.

shariah la somethingw that is anathema to most americans. in egypt, the muslim brotherhood has taken on a larger and larger responsibility, and some believe they will end up running the country. higher northern tier of africa may very well be under shariah la as wellw ran. i am concerned and i hope my colleagues are that we could be facing another iran not only in iran but also in libya and tunisia, egypt, and who knows about syria? i would like to know what the administration plans to do to make sure that we do not have a radical government taking over those places. i know you were just there in libya. i watched on television your remarks. i understand the position of the administration. but i tell you, it worries me, not only from a security standpoint -- we still get almost 1/3 of our energy from that part of the world.

if we do not make sure that we did not have radical islamist government in that region, we could have a big problem like we have with iran. with that, i will be happy to hear your comments. then a congressman, i think that you have raised many different aspects of a question that is yet to be answered, and that is -- what does democracy mean? what is the likely outcome of these changes? and we know from our very long history, far back beyond 1979, the revolutions are unpredictable phenomena. sometimes it works out well. many times, it goes through really messy transitions, and it ends up in a place we certainly do not think represents democracy as we define it. the united states is deeply engaged in and committed to working with these new leaders, many of whom have never been involved in politics before, to make it absolutely clear that there must be a renouncing of

violence and military capacity if you are to be part of a democratically elected government, that there needs to be a respect for human rights, for women's rights, for the fundamental freedoms of speech and religion and all the rest that we hold so dear. sitting here today, i think a lot of the leaders are saying the right things, and some are saying things that do give pause to us, but i will assure you that we're going to do all that we can within our power to basically try to influence outcomes. but the historic winds sweeping the middle east and north africa were not our making. they were in many instances not even predicted. but they are going to have consequences first and foremost for the people of those countries, and then for the rest of the world. >> thank you, madam secretary. thank you, mr. burton.

>> i certainly want to personally welcome you, madam secretary, and want to commend you for the outstanding leadership that you have demonstrated not only in your capacity as the president was a chief negotiator, but just about everything that goes on in the world. thank you for the services you have given to our country. i deeply appreciate the opportunities i have had in dialoguing with you. some of the issues that are important to the needs of our country. just one question -- maybe i am being simplistic in trying to understand a little further about the challenges that are before us as far as pakistan and afghanistan is concerned -- there are 12 million pashtuns

afghanistan. seems to me there is really no such thing as an afghan because there are so many different tribes that make up the country of afghanistan. right on the borderline of pakistan, there are 7 million pashtuns funds, we end up with 720,000 taliban that we are going after trying to straighten out ways and, hopefully, in the process of trying to negotiate them, we have 100,000 troops right now in afghanistan, i guess with the purpose of going after the 27,000 taliban and costing us about $120 billion a year. are we still committed to 2014? given the amount of problems we have faced with this. >> yes, that is the commitment, and it is a mutually agreed upon commitment.

that is our commitment, and as you know, we have begun to transition security responsibility to the afghan forces and a number of areas. there will be more announced shortly by the afghan government. we have a plan that our military leadership is implementing to continue to advise and support as afghans take the lead, but to move away from any kind of ongoing, responsibility by american or nato troops. them in the second question, like the colleague, our chairwoman, i am deeply

concerned by the events that transpired in indonesia, where by the indonesian military police forces have arrested hundreds of unarmed harmless civilians, who apparently had a meeting. the congress said that they met, and among those arrested is a dear friend, a traditional leader. this gentleman would not even heard a fly. he is a traditional leader. out of sheer frustration, people have been waiting for the indonesian government for well over 10 years. they were supposed to be given special autonomy status.

the indonesian government has not done anything really to pursue and to promote this. i suspect our frustration, they simply wanted to declare independence. now the indonesian government is accusing them of treason. like i said, in that the gentlemen. he is an elderly person, a traditional leader. would not even heard a fly. i would really appreciate madam secretary if the administration would pursue this earnestly with the indonesian government. i realize this is an internal matter, but it does have a lot of serious international implications in terms of military forces and how the indonesian government is securing the spirit i wanted to ask for your assistance in working together to make sure that the traditional leader and others who have been arrested

are properly given their due process of law. >> congressman, we will certainly follow up on that and consult with you about it. >> thank you, madam chair. thank you. >> mr. turner is recognized for five minutes. >> thank you, madam chair. thank you, madam secretary. i recently returned from afghanistan and met with military and state people. there is a contrast between the optimism, at least that the military expressed, in achieving their goal in the next 30 months. which i think, minimally, is to fourth base of operations. -- is to thwart base of operations. state department seemed less optimistic in establishing a legal system and a rule of law, and i would be interested in hearing what you think of this, whether the cultural divide between what we expect from the

afghanis and what is really practical can be -- that can be closed within at least a reasonable time. certainly, 30 months is going to be very difficult. thank you. >> thank you very much, congressman, and thank you for going on that trip. i think it is important, and i hope you agree to see these situations firsthand and talk with people, so we appreciate your trick. i think that the civilian presence in afghanistan, which has been tripled in the last two years in response to what were clear deficiencies of attention in the prior years has made a lot of progress, but it is a complicated undertaking. i think that those with whom you spoke were being very candid with you, that it is something that is quite challenging.

as i said in the beginning, we have made a lot of progress. we think that progress has made a difference. but you have got to remember that afghans have had a lot of experience fighting, but not a lot of experience in putting together what we consider a modern government, and certainly, very little experience in what we're hoping to see the move toward, which is a sustainable democratic government. the progress is challenging, but it is continuing, and that is why it is important that we negotiate this strategic partner -- partnership documents so we have an ongoing relationship. there is no sensible way to compare any two nations because they are each unique, but we do have some experience.

after the fall of the soviet union, the people living in those totalitarian states have little or no experience unless they were quite elderly, in what a functioning democratic government even look like, what a trade union look like, what kinds of human rights should be expected. i think it is quite an accomplishment for the people of those countries over the last 20-plus years to have made the progress that they have made. we are starting on a very different level in afghanistan. there is no real experience. they went from a monarchy that was a very loosely governing presence in much of the country to a succession, first invasion by the soviet union, and the installation of a puppet regime, to the warlord-ism..

this is a country that has been through so much. i would add that even though there are different ethnic groups or different tribal and clan groups, they do consider themselves afghans. they do not have any doubt in their minds about that, but how they work out the modes of cooperation are still to be determined. we are entering this with, i think, the right dose of humility. i think in the beginning, maybe we did not have enough of that. we did not know how difficult it would be to make the transition, but we are making progress, and we're going to stay with it. on the civilian side, we will be with it after 2014? >> thank you. >> well played, mr. turner, the junior man on the totem pole. stuck around and got to ask the secretary questions.

mr. berman, the old guy, is recognized. [laughter] >> young at heart. madam secretary, the administration has made it clear that the war in afghanistan can only end through a political settlement. you have been quite candid that you would not support any agreement that gives of the hard-won rights of the afghan people. the red line's you previously mentioned a side, given the taliban's brutal history and that the movement is so ideologically driven, what makes you think, for example, they would either change course on

ideology? how we get them to change the way they see the world? >> congressman, i am not sure that all of them would. i am very realistic about that. we have had somewhere in the order of 2500 fighters officially reintegrate. in other words, we have registration of them. we know they have done it. of those, there seems to be both a weariness with fighting and a recognition that the path that the taliban had been on was not the right path. this is part of the testing process that we have to be engaged in. i think that the hard reality is that until we really put it to them in some kind of afghan- led negotiation, nobody will be able to gauge that. we have followed some intelligence threads, which suggests there is a debate going on about, for example, letting girls go to school, which is something back with seem to me would be absolutely a condition. so i think you are asking the

right question. i am just not yet at the stage of how this is unfolding to be able to tell you -- are our chances 50/50, 40/60 -- we just do not know yet. >> in the stand. i am going to get into an issue that has concerned me. it is a sensitive issue, and i had to miss your testimony because of all politics is local. had to do this issue in the aviation subcommittee of transportation infrastructure, but last march, in accordance of section 203 of the enhanced partnership with pakistan act, you certify that pakistan was continuing to cooperate with the united states in efforts to dismantle supplier networks, that it has demonstrated a sustained commitment and is

making significant efforts towards combating terrorist groups. given at roland's recent statement, the discovery of osama bin laden in pakistan -- given at malmo and's resisted me, -- given admiral mullen's testimony, i wonder if you have regrets about making the certification, and is there anything on your recent trip or anything else that has gone on in the last few weeks that makes you feel optimistic that the purposes we are trying to achieve in the certification requirement we can move forward on? >> congressman, the certification that i signed with regards to pakistan's role in combating terrorist groups, as you know, was mandated by

legislation from the preceding fiscal year. at the time, they beat -- at the time i made the certification, a closely consider the requirements on the statute and consider that on balance, pakistan met the legal threshold. one of the challenges is that there are a number of factors here. there was no doubt that pakistan had entered the fight against terrorists and have made sacrifices for that fight. there was certainly a continuing intelligence cooperation, particularly focused on the al qaeda operatives, that was proven to be helpful. >> can i ask for an additional minute just to finish the answer to this question? >> no, i am sorry.

>> i will be happy to provide you additional written material about that because i know what a serious question is, and i have to do this on an annual basis, and i also would point out that in the last six months, we have had great success in taking out al qaeda leadership, and we have to weigh all of these factors. >> mr. smith is recognized. >> i thank my distinguished chairman for recognizing me. let me ask a couple of questions. 10 years after the taliban, not a single public christian church remains in afghanistan. he w. christian afghan citizens almost certainly would have lost their lives had there not been a huge intervention, and we were part of that. i know you were part of that. my question would be -- what are we doing to ensure that christians and other minority religions are not subjected to an increase repression? the international u.s. commission said that the situation for christians "worsens" in the last few years. we see the same in pakistan. we know that pakistan's minister for minority affairs was assassinated, a terrible loss.

he was opposing the blasphemy laws in pakistan, and we know that other faiths, including the induce -- it has been reported by the human rights commission of pakistan that 20 to 25 hindu girls are abducted and converted to islam every month. i just chaired a hearing about caustic christian girls, a three-hour hearing focused on -- and the chairman and it was at that hearing. it was living that we now see in egypt that young teenage girls are abducted in their teenage years -- 12, 13, 14 years old, and then they are forced into islam. then they are sold or given in marriage at age 18 to an islamic men. there is even a very aesthetic expression that they are

islamisizing the womb all but collision,. of a kidnapping. i have not heard anything from the administration on that. perhaps you want to speak to that. but the deteriorating situation on religious freedom, and that is, as we all know, a fundamental tenet of human rights, and it is getting worse. finally, i want to associate my remarks about the double standard with regard to cuba. fidel castro is really given, i think, a large pass for his egregious human rights abuses in a way that is similar to what happens with whom gentile -- hu jintao 8 dinner. , i would ask, please pick up the phone and call the foreign minister of china and ask where is he? next week, i am chairing an emergency commission. there have been rumors and reports.

we do not know if they are true. he may have been beaten to death. as you recall, he is the blind activist lawyer. i know you know all about him. he has stood up for women who are being coerced into forced abortions and forced sterilizations. he took on their case, and the iron fist of the chinese dictatorship has ever since years in prison and now under house arrest, and now we hear he may have been beaten to death. we do not know, but please call the foreign minister on that.

>> congressman, i share not only your concerns, but your outrage over what we're seeing happening. we will follow up on your request to china. specifically on the question of persecution, obviously, what we are seeing is deeply distressing. it is not only against christians or hindus, but it is also against different sects of muslims. there are discriminated against and persecuted and their adherents brutally treated. this is one of our biggest problems in the world right now. there needs to be a greater acceptance of religious tolerance and in so many places, there is no history of religious tolerance. i am searching for ways to be effective. one of the things that we have tried very hard to do is to work with a number of countries including muslim majority countries to begin to change the dialogue from something they wanted to call religious

defamation, which would be a legal rationale for persecuting people who spoke out about their own religion or criticize someone else's, to a broad acceptance that there needs to be an equation between freedom of speech and freedom of religion. we are trying to many different approaches -- >> thank you, madam secretary, and i thank mr. smith. mr. sherman is recognized. >> thank you for coming before us. i hear you had a busy schedule. and i missed your opening statement for the same reason as the ranking member. all politics is local and our district our coal located. my first question or matter relates to the sind province of pakistan. you may just want to respond for

the record because that is not one of the hot issues, but they have been influenced by the sudanese train of islam. they have moderate values harmonious with american ideals, and i would hope that we would do all we could for their role area that is suffering from this year's floods, which are on top of last year's floods, and that you would speak to the pakistanis. you have so many issues to cover with them, but one is the disappearances of activists in southern pakistan. in this committee room, we dealt with the authorization bill. it may never become law, but it does reflect whatever wisdom there is on this side of the

room. and we took a look at the voice of america, which has a budget of $750 million. i believe it was unanimous to direct the voice of america to spend at least $1.5 million of that. we are talking about a small amount of money. broadcasting in the language. further research indicates that the best way to reach the people would be a.m. or medium wave broadcasts originating from the uae. we already broadcast into pakistan, but the language is spoken by far more people. while it may be the language of preference by islamabad, the language spoken in the homes in southern pakistan is cindy.

i do not know if you have a comment on that or would just want to take that under advisement. >> i think that is a very useful suggestion, and i will get back to you for the record. >> many of us saw this at about camp ashraf featuring a 14- year-old girl who faces extermination. we face a tough circumstance in that we are withdrawing from iraq. in the past, there have been -- some would say massacres. at least terrible instances in which tens of people have been killed. there are press reports that the iraqi officials say not to worry about it too much and after all, the folks are on the u.s. terrorist list.

what are we doing to assure that when we leave iraq, we will not see the massacre of 3400 people at can ashraf and how is it going on with the any case should be on the terrorist list? >> on those points in particular, in accordance with the d.c. circuit 2010 ruling, the state department is reviewing the designation. there will be a decision. it has to be done expeditiously, but thoroughly, and we hope to have such a decision in the future. i would add that the current designation does not pose a bar to the resettlement, and the humanitarian situation in our opinion is also not related to the designation.

i think it is also important to recognize that we need to do as much as we can to move as many people out of the camps -- out of the camp before the end of the year, and we are trying to do that. we are working primarily through the united nations and certainly with both the residents of ashraf and the government of iraq to try to put in place a very rapid assessment of individuals, and we have urged the eu and other countries to favorably consider resettling of any residents granted refugee status because we want to shrink the numbers as best we can. >> thank you, madam secretary. thank you, mr. sherman. >> you can see all that hearing leading off our primetime

tonight at 8:00 eastern on c- span. on c-span2, kenneth feinberg we have permitted him to ally himself with all of the hemisphere. which in not taking that lightly. you stated that we're going to do as much as we can. it has been 500 days since the court ordered us to reconsider this terrorist designation. that should be plenty of time to

understand what the issues are. people have determined that they do not put them on the terrorist list. they're not doing as much as we can. we will do what we can to make sure there is not another massacre. we have officially requested the state department for an information about the massacre. do you intend to comply with that request as we have been told? how are you backtracking from that commitment? >> we will provide what information we can to you. >> that sounds like the operative words of how to get out of answering the question. >> are you going to provide the

records the? we have a request from congress. you agreed to do it. will you comply. >> we will. >> thank you. i cannot tell you what will be in the reply. >> there are libyan funds that are frozen right now. how much did we spend to help them defeat the their tyrant. i do not think it would be at all inappropriate us to free some of those funds. we put our request and to be paid for what we did to help the libyans. are we planning anything like that? >> the latest figures that i have is about $1 billion that was spent. i am sure the defense department would -- that is really their

money. i will wait to see what their final figures are. we are in discussions with the libyans about a number of issues. it is a little challenging until they get a government. we're going to look to see how we can best coordinate and organize any kind of reimbursement for certain functions. there has been no government yet to negotiate. >> let me suggest what could be a very defendable and admirable policy in terms of people of the united states might think. for us to ask for compensation at a time when we are borrowing money is not right. it is the right for us to borrow

money from somebody else in order to help another group of people free themselves of put our people in debt. the libyans have a normal -- enormous assets. if we expect the american people to continue throughout the world. i know there has been a lot of talk about this lady. i do not blame the president at all. i am not here to talk about -- the call for extending our deployment i do not believe reflects the desires of the american people. the cannot extend resources we do not have. it cannot keep doing the fighting for someone else when it is up for them to defend

themselves. thank you very much. quite thank you. >> thank you. thank you. >> thank you. thank you, madam secretary. thank you for the spectacular work here. i'm very concerned about the capability and capacity and corruption. those things have been cited as major obstacles. how do we ensure that the billions of dollars of funds after being spent are being used for the intended purpose and when it remains to big obstacles.

there is a call for funding which includes economic support funds. you compare it to the two largest loan programs. it totals $574 million. it is a third of the amount we're sending to afghanistan. it is a hard thing for my constituents to understand that we are investing this kind of resources. it makes it even more difficult. i would love to know how you think we are proceeding on those fronts and when we can expect to do this work on their own.

>> thank you very much. i certainly understand and supplies with the legitimate questions of your constituents and americans everywhere. i think that the drawdown of troops represent a very large net savings to the american taxpayers. they withdraw on a very measured basis. our civilian assistance is such a small percentage of the overall money that is spent. did the vast majority comes from our d.o.d. security forces. we are aware of that.

i find it's one of our biggest problems is a cancer in some any problems or people enriching themselves as opposed to making investments that will provide a better future for their own people. the key is to build institutional capacity and create systems. the largest sums of money the people that worried about corruption. it comes from the enormous amount of money. both of them and absolutely committed. we're promoting the enforcement of anti-corruption laws. we are including judiciary personnel and that.

the fbi and others are working with their counterparts. we go after the correction that comes from drug-trafficking. we have improved our accountability. we have worked with our partners to do the same. we are committed to transparency and accountability and the rule of law. it remains a problem. >> thank you. >> thank you. i will try to make this to the point. last time we were here, we

talked about the safety of the camp. later the iraqi soldiers came in. people disagree on how that occurred. right now they are leaving. also, he has made it clear that the camp will close. when we read in iraq, we met with him on the issue. if the very heated. he refused to let us see it. we had been invited to leave the country. the number one thing he said about the way iraq treated the camp was the u.s. designation.

he spent all of this time saying this is the reason they are treated the way our. you have designated them as a foreign terrorist organization. my concern is about the safety. they are dear. some are americans. the others are among the 2000. their permanent residence of the u.s.. what are we doing to make sure they extend the deadline so that people can do what is necessary through the un to get out of iraq? these are my issues.

>> i can assure you that i am personally very focused on trying to make sure that we protect the safety of the residents of the camp. our administration chambly condemns the violence that led to the deaths. 36 residents and died because of april the eighth. we are monitoring this as closely as we can. we continue to urge the government to show restraint. we have written assurances from the government to treat the residents humanely. to follow the engagements that they have.

we are trying to nail down as much as we can to provide some protective screen for the residence. we know they have approached -- pushed them to have even more of a presence to do more and move as many determinations. we're going to move as expeditiously as possible to a final resolution. >> do you have any time frame on the designation?

>> i cannot even moore's pacific. >> i just want to urge you and the administration to make sure that that things did not happen to those there. they put their weapons down. they get asylum status somewhere in the world. the safety is paramount. i would urge that. >> i appreciate that. i appreciate the concerns. i take them very seriously. >> the chair will recognize herself. if i can ask you to clarify the comments. and also urged the government of pakistan to get tough on the very same network which has directly killed scores of u.s. troops.

we were asked -- which is a? crackdown or negotiate? >> we want to build all of the same time. part of the reason is to test whether the organizations have any willingness to negotiate in good faith. sometimes we hear that they will. there are elements within each that wish to pursue that. other times it is off the table. i think with respect to the

network, it illustrates this. there is a major military operation that was held in afghanistan in the past week that rounded up and eliminated more than 100 operatives. they're behind a lot of the attacks spirit and made it clear that the attack on our embassy was an outrage. the attack on our forward operating base that injured 77 of our soldiers was a similar outrage. in both instances, it was terrible. we avoided having dozens and

dozens wounded or killed. >> if i can as a question related to the statement president cars i -- karzai made. god forbid if there ever is a war between pakistan and america. we will side with pakistan. is this something that he told you in your meeting? howdy you interpret this in the broader question? are they reliable allies? >> we had a very productive meeting. we are making progress on a lot of issues. we are coordinating closely on the fighting the insurgents and trying to test of this reconciliation. when i heard about the comments, we immediately asked the ambassador to go in and find

out what it meant. he is one of our most experienced diplomats. he reported that he really believe that what cars i/o -- karzai was talking about was the refuge that pakistan provided to millions of afghans that were seeking safety during the soviet invasion. it is not about the war that anybody was predicting. address taken out of context and misunderstood. >> thank you very much. >> thank you. i get the good luck of being

here. i was not here when he raised the question. it was pretty scathing in terms of their attack. our partnership was a lot to be said in terms of what had happened. they were very irritated. where are we with the charges made by mr. mollen? >> everyone agrees that the haqqani network has save havens.

it gives them a place to direct operations that kill afghans and americans. we agree with what admiral mullen said. there is no solution without pakistan. a stable future without partnerships. if you look at everything that he said in his testimony, he raise serious questions which are government has repeatedly praised publicly and privately about the safe haven. he also said the bilateral relationship was consequential and that we have shared interests, particularly in the fight against terrorism. it is important to recognize that we're all balancing these two realities. it to be great if we could get rid of one, mainly the safe havens. they believe that they have

already paid a grievous price and worry about how they can sustain that. we operate on both of those channels. >> i wanted to raise the question. for over 10 years now, it seems that our countries seem to be bogged down. this seems to be our whole form policy, a centralized. he has reached a visit to asia. there does seem to be a shift in terms of what exactly are the priorities and how would look at the situation. why are we so bogged down on the issue? we have the rest of the world to deal with. am i wrong looking here? our interest in asia is just as critical and important as we

are in other regions of the world. >> you are right. i made a number of trips. i just recently wrote an article. we're making a pivot toward asia. we think it is very important to begin to focus on the challenges and opportunities that asia presents. it is a wonderful visit to one of our pacific islands. this administration certainly is focused on asia. we are looking at how we maintain our vigilance about terrorism. we cannot forget. it is from the border regions in afghanistan that we were attacked. that was a costly event in our history in terms of dollars spent and lives lost.

we did not choose where we had the focus in the last 10 years. we're in a position to make that pivot. there are many that believes that much of the future is going to be written in asia. the united states must be a major player if we expect to maintain our global leadership. this is a very important commitment that i hope is a bipartisan commitment. we feel strongly that it is in the best interests. >> will no longer have for all to ourselves. >> thank you. >> i have a question for you. the organization that carried out the attacks on a move by -- mumbia --mumbai

in recommendation that came out was that we condition our assistance to pakistan their exclusion of l.e.t. in their attempt to shut down the organization. would you consider making that a condition in terms of the scorecard? >> as you reference, you had

intensive discussions with our indian counterparts. i do not want to commit at this time to taking such a path. i think it is important that there be further consideration of all of the implications. every time we meet, we have pressed them on l.e.t. and the failure to fulfil all of the requirements necessary for prosecutions related to the michael by -- mumbai attacks. >> if we do not drive this, now, it seems that some and

their assistants are setting a motion and the type of policies that can lead to conflict. when you look at the mumbai attacks and then find the connection to isi officials who are involved in operation. when you look at some of the other operations when the find of they were involved in the training, it leads you to question the intention from an intelligence perspective of sending in a force them to face on your territory.

this has to be elevated in terms of the discussion with pakistan. it has to be conditional. cannot be the case for they say we are helping with the organization that is targeting the leadership of pakistan. they have targeting states. i just ask if you think there is a potential for the spinning out of control in terms of the attacks that have been carried

out on the capital a major capital centers. >> we worry about that very much. we discussed it in great depth. it is a concern of theirs. it is also concerning to us. there is presence and activities on a regular basis. i think our policy has been carefully coordinated with the concern. >> perhaps the words will allow us to carry this conversation on.

>> thank you. i want to wish you a happy birthday. i want to ask you your comments on this wonderful article. and do not know any comments. -- i do not know if you have any comments. >> i think the country recognizes the wonderful job you are doing. i want to thank you. some want to speak about something you have. it does impact on other countries.

the israeli prime minister has just said that he will negotiate with the palestinians. he was even talking about potential freezes arm expansions of neighborhoods and things like that. the palestinians refused to speak to the israelis. there were still persistent going to the united nations to get a declaration of independence. this congress is trying to anticipate that we'll have legislation. >> we're deeply focused on trying to move the parties to negotiations that will lead to

eventual to state outcomes. -- two-state outcomes. we have a process that is currently operating. there were meetings held yesterday. there has been an emphasis on trying to get specific proposals made by both sides on territory and security. we're pushing very hard for that to occur. you are right. there remain difficulties. we are pursuing these goals their proximity talks.

it is not in the interest of both. what we have learned is that a vacuum is not good for israel or the region. i should _ publicly our strong -- i will underscore publicly our strong preference that aid not be cut, are severely aid for the security forces. it is in israel's interest. they publicaly said "do not cut resources to palestinian

security." i would hope that there would be a recognition that we do not want unintended consequences. we don't want there to be a collapose of the security. >> another has been some criticism about withdrawing from iraq at the end. we have been successful, using drones and other terrorists. there seems there can be more efficient means been keeping us in afghanistan for ever and

ever. i like to hear were your thoughts are. >> there has been an agreement that 2014 is the year. >> thank you. >> in a recent interview with us about negotiations with the insurgents, you spoke about the universal redlines, specifically renouncing violence and ties to al qaeda appear in our these preconditions to talks -- to al qaeda. are these preconditions to talks? you mentioned the importance of protecting women's rights. i happen to agree with you. can these be reconciled with the implementation of the law

which is a stated objective of the insurgents that you are offering a place of in african government? >> there are outcomes which would have to be satisfied. you rarely sit down to negotiate peace with anyone that agreed withy ou. you determine whether the outcomes you seek can be satified. that is our intention. it is part of a line of how you end conflicts like this. in regards to the laws of afghanistan that to protect the rights of women, there is an absolute condition that we have said.

to the outcome must be to meet that. i know there is a lot of discussion and information about it and what it means and how it is applied. there are different countries with different kinds of applications of what they consider to be the law that rises out of the koran. i do not want to judge. it is our guide. the law of afghanistan that to give respect to it and its appearance to islamic principles is what we are demanding be respected. i think it might be useful to

take a look at all the different meanings of that phrase and how it is applied. from time to time i think it is not clear what the implications would be. >> that is one area i would encourage the administration. the presence of the sharia law could potentially devastate the rights of women. i'm sure you are aware of that. recent comments by haqqani network leaders have suggested we have a tentative bilateral negotiations with them in order to spread them off from the taliban/. the network has said it only if negotiate with the approval and participation. are we prepared to negotiate

with ken? under what circumstances would are conditions be what is your assessment of the hot connie -- haqqani network? >> the negotiations that would be part of any afghan led peace process would have to include it. it would have to include some recognition by id which is still loved by omar. they wish to participate in such a process. that is what i meant the city do not make enemies with their friends. we're pursuing every thread of any kind of interest you might have been voting when i said that the i s i assets to meet with a representative of the -- when the isi said to meet with a representative of the haqqani

network. this was done in part because i think they want to be able to move the haqqani network to were some kind of peace negotiation. >> thank you. thank you. limbaugh also congratulate you in the obama administration for the supreme work you have been doing. this is talking about how we're doing things differently. when i talk to other nations and countries, they're feeling intuitive. it is leadership were where bringing the world back together. we're resolving problems in the

world together. we have seen that. this is what libya was really about. the president kept his word. we worked it out. we saved hundreds of thousands of lives. we did in a multilateral way. this is what i think smart power is all about. my first question is, though turkey seems to be a little removed, i know you're going to turkey. they have asserted themselves as keepers of the peace. my question is, has turki bin -- turkey been otherwise engaged in

region? that could be another partner that we need to have in helping us. >> they have been both involved in helpful. i remember my first trip to afghanistan. troops were responsible for the airport. turkey has a great ability to communicate with a lot of the leaders in afghanistan and elsewhere. it has a history of democracy. now it is an islamic based party, the aap, that is leading the party. the involvement is very helpful to us.

>> i think we need to move into a post-cold war conversation. i was wondering if russia has been involved. >> for a long time russia was not particularly involved. there are many years of conflict that ensued. russia has been helpful. they have cooperated with us. this is our alternative route to get troops and equipment into afghanistan and the pakistani route is unavailable or under pressure. russia is the participating in many of the discussions about the path forward. afghanistan has been a

crossroads for conflict. russia wants to see a stable afghanistan. they worry greatly about the heroin trade. that is a domestic problem. we are appreciative of the role there playing. >> as we pull out, and of the agreement in afghanistan, what is the response? do these organizations still remain as a cohesive command? what role will they be playing in region generally? it is tremendously important.

>> the commitment that was made last year at the lisbon/nato summit to remain involved and have an enduring partnership was a very strong signal. nato countries understand that it is for the security of the country. >> thank you. thank you for being here today. i was really very impressed by your visit. i've had the privilege of visiting pakistan. i was so impressed by their military. we read their to encourage the pakistani military and the u.s. marines for the earthquake recovery several years ago. the organization was professional. the military itself was very positive.

i was very pleased. there is a young marine who is of pakistani/american heritage. do you see them working together, with that in mind, the program's behalf, and you believe they're making sufficient progress? by what metrics are you judging the level? >> thank you for traveling there. i share your strong endorsement of the positive work we have done between the pakastani military and the united states military in earthquake relief. we are very proud of that. civilian assistance -- we think we are making a difference, but

it sometimes gets overwhelmed by all the other activities that go on in our relationship. we will be sending you the latest status report on what we have done next week, i think. we have built roads. we have increased their energy production. the assistance we give to civil society -- i did a town hall meeting in islamabad and several people both publicly and privately thanked us for the programs that made a difference in their understanding on how to engage with their government. none of this is easy and none of this, frankly, is without challenge, but i believe we have to stay the course on this. >> i have been very encouraged with india that pakistan is

developing eight most-favored nation trade status with india. i have been the co-chairman twice on the india caucus. i have a deep interest. the biggest beneficiary of pakistan is india. why do you think this is moving at this time, and what can be done to promote a level of trade and positive contact between india and pakistan? >> i agree with you that the real game changer in the region is not so much of our bilateral relationship, is the relationship between pakistan and india the more that there can be progress, the more likely there can be even more progress we have, in pakistan today, a leadership, both civilian and military, that wants to see progress with india and we see the same on the

indian side. there have been successful visits in the last several months. announcements have been made. they have tried to streamline of visas for businesses to accelerate movement across borders. the most favored nation status is really important. we encourage it. we try to tell both sides how much it will change their relationship. when i was there last summer, i spoke about a new silk road where goods could go up to cause ex-con. -- kazikstahn. it would go to pakistan and afghanistan. i firmly believe a greater economic integration would revolutionize the economy in pakistan. india is a huge market. pakistan produces things and

yet needs, but they do not get into india in any direct and cost-effective way. the more we can do that, the better. >> i share your enthusiasm. all of central asia could benefit so much. i appreciate your enthusiasm. every effort to reduce and eliminate terrorism, which is been a tragedy to india. i yield back the rest of my time. >> thank you, madame chair. welcome back, madam secretary. i want to get at least one comment and a couple of questions in with my allotted time. first, as you know, with chris smith, my colleague and chairman of the bosnian caucus -- i will take opportunity to make can -- make a comment. i reckon not -- i represent one

of the largest bosnian american populations in the u.s. progress is in question. increasing risk to the region from an action. my comment is, we all need a solution, but first we really need a vehicle that can bring together the bosnian people, the leaders, the european union, and u.s. leadership is essential. we hope you -- we can work with you and the appropriate folks in the department to work for such a vehicle to move the process forward so it does not backslide and create what i think could be a big problem. back on topic here, as you know, i have supported active u.s. engagement around the world.

i believe the obama administration has shifted to a policy of smart power and responsible per dissipation. it has been in our great interest. our security interest, our economic interests, and our value around the world. the mission in afghanistan has been in essential in developing that country. also, it engages 80% of the cost with our partners. they are helping to share that burden. to ensure they have the ability to take on a bigger role as america plans to draw down their troop presence in the future. what effect would the cuts proposed by this committee have on the un's ability to pursue that important work? >> first, we would be delighted to work with you and congressman smith on bosnia. we share your concerns. we would love to consult to you, so i will reach out and set up a time to do that.

i think activities in afghanistan are essential to the safety and security of our troops, our civilian employees, and the success of the transition. i wrote to the chair earlier this month that i was deeply concerned that the proposed un reform bill mandates actions that was severely limit u.s. participation in the un and greatly harm our interest. i am focused on first and foremost on hours. the requirement that the u.s. will hold 50% of its contribution until the un shares to a voluntary funding scheme for most of its programs would undermine our leadership at a time when we really have to be at the forefront. we are being asked to do more with less anyway. we get a lot for our investment because, as you say, the bulk

of the funding is carried by others. they are a critical partner in building afghan civilian capacity, monitoring human rights, supporting afghan elections -- everything we talked about today we partner closely with you in,. if we cannot depend on them, we will have to pay for some other because we do not have another partner that has the credibility and the reach that they have. >> thank you. finally, you have been a great champion for including minorities and especially women for transition of afghan control. give us a brief synopsis of what the administration is doing to prepare for the upcoming conference and beyond to ensure that happens. >> you have been a great

champion for the women of afghanistan as well. we are requiring a lot of emphasis by eight the united states and our partners on what is happening with women in afghanistan. i met with a group of women leaders when i was there. we expect there to be a process where women are involved at all levels of the peace and reconciliation efforts, which they can then speak for themselves and have their own say about their own rights. i will give you further information about that, but we have made specific requests of the government of afghanistan that they be included. >> before i recognize the next speaker, the secretary will be departing after these questions. mr. macke is recognized.

>> thank you, madame chair. it is great to see you again, a secretary. -- secretary clinton. i am going to switch gears. i served as the chair of the western hemisphere subcommittee. there is a lot to talk about, but i wanted to talk a little bit about fast and furious. at what point did the state department learn of operation fast and furious? >> congressman, i do not know the exact time. i can tell you that based on our information from the part of the state department that would deal with this kind of issue, we have no record of any request for coordination. we have no record of any kind of notice or heads up.

my recollection is that i learned about it from the press. that is my recollection. >> i think then i know the answer to this question -- did the state department issued the justice department a license for a written waiver in order to allow for the transfer of thousands of weapons across the u.s.-mexico border? >> congressman, this is the first time i have been asked this. based on the record of any activity by the bureau that would have been responsible, we have seen no evidence. let me do a thorough request to make sure what i am telling you replace everything we know. >> thank you. that would be greatly appreciated. i wrote a letter to you yesterday. i am sure you got it and you read it. >> i thought it was for my birthday. >> happy birthday. [laughter] under the arms export control

act, the justice department is required to receive a written waiver from the state department to account for their attempt to cause arms to be exported to drug cartels in mexico. if no such waiver was received, justice department officials have violated the law. you would agree with that, correct? >> i do not know. this is the first time i am being asked. >> i am not asking if there was such a written request. if they had not asked and received, by law, the justice department would be violating u.s. law. >> i cannot offer any opinion on that. i do not have any information or analysis. i can only tell you the facts we know in the state department. >> if the law says that they have to get a -- the state department is required to give a written waiver for the cause of arms to be exported to drug

cartels in mexico and if they did not do that, they are in violation of the law. who do we hold responsible? i think there is a lot of frustration, at least for myself, that when we hear mexico and president calderone complain about weapons being moved south of the border, to learn that our government was involved and the delivery of those guns is quite concerning. i am sure you fill the same way. we are looking for answers as to who knew what, when, and why, and how this happened. i look forward to you getting back to me and the committee on -- about the waiver and whether or not the state department issued that waiver. second, do you agree with

ambassador brownfield that there is an insurgency in mexico that are using terrorist tactics in mexico? >> congressman, i have expressed my concern about that in the past. we are sensitive to the characteristics that some of these drug traffickers have adopted that certainly resemble terrorist activity. we are also aware of the concern by the mexican government that we not mix apples and oranges, so to speak. let's focus on criminality. let's not focus on something else. this is an ongoing discussion. >> she is quick to gavel me down. you, in the past, have identified it as an insurgency. >> i have said that it has characteristics of an insurgency, but i am very

sensitive to the legitimate questions that the mexican government raises about whether those characteristics are such that it should be defined as that. >> thank you so much, mr. secretary. madam secretary, preparations for this oversight hearing were done by our afghan war veterans. thank you so much. it is a pleasure having you here. the committee is now adjourned. >> thank you for allowing me to sit on the panel. thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

[indistinct conversation] [indistinct conversation]

[indistinct conversation] >> tomorrow, the bolivian ambassador to the u.s. will talk about gaddafi. the political transition that is taking place in libya. that is from the national

council on u.s.-arab relations like that of a clock 45 eastern on c-span. at noon eastern, the urban institute hosts a discussion of how the current downturn is affecting children. we will hear from a former republican congressman and judy woodruff. up next, military generals testify about budget cuts and defense department revenue. then, nancy pelosi. after that, at a hearing on the bp fund set up after the gulf oil spill. >> let the c-span network speed this was republic of bears, nonfiction books, and american history. -- network for affairs, nonfiction books, and american

history. american history tv on c-span 3 . all of our program are available at the c-span video library. this is then that works, it is washington your way. the pentagon is planning to make for under $50 billion in cuts in the next 10 years. next, leaders talk about the cuts and the defense department post a readiness to fight another war. they testified at a house armed services subcommittee. we will also hear from the chairman of the armed services committee. >> i want to welcome all of our members. a hearing on how we maintain readiness, what is the risk of the national defence of our

country if we continue making cuts. i want to thank our witnesses. i know several of you had to cancel long standing personal commitments to be with us. i appreciate your willingness to testify on this most important topic. in the interest of time, because we know we could have a votesin the interest of time, because we know we could have a votes coming any time and we may have to recess and come back because this is important and we want to get all of this on the record, i will dispense of any opening remarks. inth of them put the record. i would like to, however, look at a procedural matter we like to use in this committee. we discussed prior to the hearing that we would like to dispense of the roles and apart from the regular order so members can ask questions during the discussion.

weould like to proceed with standard order for members to address witnesses, however, if any member has a question, please seek acknowledgement and wait to be recognized by the chair. we will hold questions to the standard five minutes. i ask unanimous consent for the purpose of this hearing that we spense with the five minute rule and proceed as described. without objection, it is so ordered. gentlemen, we are delighted to have you with us today. we have the honor of having the general with us today, who is the vice chief of the united states army. he has been so since august 4, 2008. he is commanded at every local from platoon to core. -- platoon to corp. we also have admiral ferguson.

he is the vice chief of admiral -- of a navy operations. he is the chief of legislative affairs and chief of naval personnel. also, the assistant commandant of the marine corps. general don ford has gone to a u.s. army ranger schoo and u.s. army war college and at has a very distinguished career. we appreciate the expertise he brings to this panel. last, a general brief love. general, we appreciate you being with us. general breedlove is the vice chief of staff for the air force. he is a georgia tech graduate. we played you the other week. it may be the one bright spot we have this year, but thanks for your help and cooperation in that. he is also a graduate of arizona state university where he has a

master of science degree. without further ado, we want to get right to your opening statements. we are pleased to have the ranking member joining us now. we also have with us the chairman of the full committee. before you got here, we talked about dispensing with the opening statements and putting them in the record. >> mr. chairman, i would like to welcome our witnesses. >> we appreciate your service to this committee. we have a special relationship and i just appreciate her help with this committee and the great work that she does. with that, we are going to do something a little bit different today. we are going to put your statements in the record we want you to tell us the importance of what we have. i want you to expound on questions which your testimony anything that you want to stay.

we'll start with general corelli. we have already had for under $65 billion cut from national defence. -- $465 billion cut from national defence. there are discussions that that will significantly reduce the force that we have in the united states army. general, you have been serving for a long time. u.s. served in almost every capacity in the army. when we talk about the rest these cuts can have, sometimes we talked about them as institutions, but it comes down to men. what have these kinds of cuts done to these -- the rest of these men that served under you? chairman ford -- forbes, a distinguished members, i thank you for allowing me to be here

today. these are challenging times. u.s. attorneys say that before. we are passed a decade of war. we have always had volunteers in our course, but it is important to note we have never fought for 10 years. we have never fought within entirely voluntary force. our forces are amazingly resilient. at the same time, we are strained. they have been absolutely amazing over these 10 years of war. i would like to leave you with three key points from my opening statement. first, we recognize that budget cuts and corresponding reductions will be made. however, we must make them sponsible so that we do not end up with a hollowed out force. i can expand on that later on. our nation is in the midst of a fiscal crisis and we recognize

we must all do our part. we are continuing to identify efficiencies. we work very hard on our portfolio review process, which is found many of those deficiencies. when we appeared before the committee in july, we run looking at cuts and in the vicinity of $450 billion. the army's portion of that court is about 26%. that will be tough. the secretary of the army and chief of staff of the army has said it will be doable. i get paid to worry about things. i do worry that are cuts will be a little bit higher than that. above and beyond that, it will directly impact every part of our army and our ability to meet our national security objectives and effectively protect our country against all threats. whatever cuts are made, it is

amazing to sit here with the vice chiefs of staff when so many of the 31 before may have sat. they have had to make some of the same arguments and answer some of the same questions. i am sure that was true after the debate for the gulf war. we cut our army down to ju over 300,000 folks only to grow it to fight that four-year war. at the end, we cut our army down to 530,000 soldiers. that number sounds familiar, i hope. we ended up with the korean war. in the korean war, the first battle of that war was task force smith, an ill equipped, ill trained force that had entry but i guess there were

incomplete, infantry battalns that were missing. the results were predictable. general bradley when the cuts were talked about after world war ii supported it. he went on to say that the strength of the military depended on the economy and we must not destroy the economy. but in his autobiography after the korean war, bradley wrote "my belief in significantly higher defense spending would probablyreck the economy was a mistake -- possibly the greatest mistake i made in my post war years in washington." i lived through an army that came out of a vietnam and did some of the same kinds of things. 10-12 years we had to rebuild that army. these questions, these decisions have been made before. there is a tendency to believe that at the end of the war will never need ground forces again.

we have never got that right. we do not have the imagination to always be able to predict exactly when thatill be. whatever decisions, whatever cuts and reductions, we must ensure we do not lose the trust of the soldiers, the brave men and wom, who fought for these last 10 years and their families. mr. chairman, i thank you and i look forward to your questions. >> thank you, general. we go to get into that with a little more depth. thank you for that. admiral ferguson, you are facing a tough time. you are looking at a navy -- we can argue about numbers -- but china has more ships in the navy

than we have in our navy. you have paid a $3 shortfall -- three and $67 million shortfall. we recognize that on surface-to- surface missiles we have a distinct challenge between chinese missiles and our missiles because we've not given you the dollars you need for technology. in addition to that, we see the projections for our submarines that could put us in the next 10 years where china could have a 78 for 32 of ours. what do these cuts mean to you? what would it mean if we put additional cuts out to you? anything you want to put in your opening remarks, we want to hear from you. >> thank you, chairman for this.

bes.hairman ford's it is my honor to represent the navy. we stand watch around the world today. i offer my appreciation for congressional support. an era of declining budgets, we are mindful of the lessons of the past. taken in somer in part, low personal quality, aging equipment, degradation of a material readiness will inevitability -- will inevitably lead to a reduction in force. we need to keep our navy as the world's preeminent maritime force. to do so, we mustustain the proper balance through the long term. those elements may be simply stated -- sustain the force

structure, man th force with high-quality personnel with the requisite skills and experience, support it with accurate and the tories of squirt their parts -- support it with the accurate inventory of spare parts. our objective and challenge in this period of austerity will be to keep funding for future readiness and balance and holding a acceptable level of risk and the capacity of those forces. how we shape our cells in this environment must be driven by strategy. we feel that is extraordinarily important. the cuts that are contained and you discussed we will accept as part of that reductions in pacity. it will affect certain everests of presence, our response times,

the decisions will be tough, but ey are executable. in looking at the strategy review, we think we can meet those challenges. we will meet those challenges contained in the act. we intend to take a measured approach. we will look at deficiencies in our overhead, our infrastructure, personnel costs, and our modernization. absent the support of the congress, the impact on our industrial base will be immedie, severe, and long- lasting, and fundamentally chan the navy that we have today. mr. chairman, members of the committee, i appreciate the opportunity to testify and look forward to answering your questions. >> thank you, admiral ferguson. general, you have also served your entire career in the maris. one of the things a lot of

people believe is once we get out of iraq and afghanistan you will have all the resources you need to do everything you nee to do around the world. as you look at the cuts that have already been made and we lookit the potential cuts, or forces could go down to as low as 150,000 men and women. what would that impact be on you and would you be able, even if we are out of iraq and afghanistan, to conduct a single contingency around the world? the floor is yours. >> thank you very much for the opportunity to appear before .ou to \ almost 30,000 are around the world are doing what must be done.

20,000 are in afghanistan. those remains -- those marines remain our number one priority. i recognize that the nation faces an uncertain security environment and some difficult fial challenges. there is no doubt we have tough decisions to make to support the difficult decisions we have to make, we of gone to a force structure review. we offer that framework will allow us to provide recommendations to the secretary of defense and to frame the issuis similar to the ones the chairman asked me in his opening question. we recognize the need to be good stewards of resources and are working hard to account for every dollar. in the end, we know we will have to make cuts. i think we need to adjust three situations -- strategy, balance, and keeping faith. strategy, we need to know what

the nation requires us to do. we will build the most capable course we can to do it. we will use what we learned during the four structure review effort to make recommendations. with regard to bance, we do not want to make cuts that will affect the course. i have seen it personally in the 1970's as a young lieutenant. we do not want to have an imbalance between our training, our equipment, and our modernization efforts. at the end of the day, every unit will be ready to respond to today's crisis today. finally, we haveo keep faith in our people. it is the right thing to do and it is necessary for us to maintain a high quality volunteer force. we need to send a loud and unmistakable message that the contributions that our men and women have made are recognized

and appreciated. there are many different definitions of keeping the faith. some attributed to george washington give this a good baseline. he said the willingness of future generations to serve will be directly responsible to how they perceive veterans. those words seem as relevant today as they were over two wondered years ago chairman, to get back to your specific question, when we went through the force structure review efforts, we came up with a size of 186,800. that is a single major contingency operation force. it can respond. 150,000 would put us out below the level needed. i would take about what amphibious forces have done. disaster relief in pakistan, supporting operations in

afghanistan, responding to the crisis with pirates, supporting operations in libya, supporting our friends and in the philippines and japan we will have to make some decisions. we will not be able to do those kinds of things on a day to day basis. we will not be there to deter potential adversaries. we will not be there to assure our potential friends or assure our allies. we certainly will not be there contain a small crises. with 100 the thousand marines, there would be some significant risk. we will be asking our marines to do more with less. perhaps more importantly, their responses this will be significantly degraded. >> thank you, general. general breedlove, we thank you

for working in your schedule to be here. when the air force and, when everybody else might come home, the air force often does not come home. they have to stay there and continue to do operations. i would like to have any comments that you have about what these cuts have meant to the airports already and what future cuts could do. the floor is yours. >> thank you, chairman. thank you for the opportunity to talk to you today about 690,000 proud chairman who serve as the part of the joint team that you see in front of us. these are challenging times and the air force has been at war for more than two decades. we went to the golf at the beginning of the '90s and did not come home. quite often when the natn

comes back from a war, we need significant assets to overwatch remaining forces to provide support to those who would remain behind. the cuts that we see, i think my remarks and will talk about in just a minute,hese are challenging times. the tempo is exacerbated by the fact that our aports since the opening of the gulf war has 34% of your aircraft that we started with and about 26% fewer people. the tempo that we face, which we do not see a change in in the future, puts stress on the force. as lead to a steady decline in our unit revenues. we have tried to pick up new missions. the air force has been asked to

support this joint team in intelligence, surveillance, and reconnaissance. we have been asked to build a in an increed capacity in special operations. we will continue to meet both of those requirements as part of this joint team d answer the call and the future. all the while, the strain put on our course -- we need to -- we are flying the oldest fleet the air force has ever flown. the department of defense and will have to be a part of this covery and the air force will pay its part -- play a part in that recovery. our goal is to do two things. first of all, maintain a credible military force. we expect it will be smaller and much smaller in some areas. we need to remain credible and

capable as we get smaer. second, to avoid becoming a hollow force. like joe and pete mentioned, i was in the air force and the '70s and saw what day hollow airports looked like. we had air place that could not fly and buildings with no -- buildings with people whoad no training to accomplice missions. we do not want to go there again. we will get smaller to remain capable. many of t challenges we see will come on the backs of our people. ase get sller, the task does not change. in many cases, we stay behind if there is a peace dividend. the tempo will only increase. the tempo on our reserve component, which is an iegral part of our airports, will have to increase because they will

become ever more important. finally, if cuts are allowed to take place, we will have to go beyond just getting to our capacity. we believe we will have to look at what ar the capabilities we will have to shed and no longer offer to this joint team. a reduction in size would reduce the number of airman we can keep on board in the air force. it will impact the size of our industrial base. finally, as we downsize, some of the first missions will have to shed where we preclude of further combat or where we bill at -- build allies that will help us. >> think you, gentle -- thank you, general.

this is probably the most bipartisan committee in congress. we work together very well. i am privilege to have all of our members here. we also have the chairman of the full committee. part of the reason wserve in such a bipartisan means it is because of his leadership. i do not think he will ask questions, but i would like to defer to him for any comments he would like to make. >> thank you, mr. chairman. bank you for being here and for your comments. i think the cuts you are all working harto put into place, i met with admiral mullen a month and a half ago and he said that he assigned $465 billion in cuts. that came from the president's spech in cutting $400 billion.

it is a cumulation of a lot of things. it is hard to get an exact number. i have also heard $489 billion. we will start hearing the details in january. most people in the country do not understand the focus on the super committee if they are not able to do their work, if they do not realize the extent of the cuts we have been working on now and will be hitting us next year. we have had five hearings. that is not counting all of the subcommittees to get a handle on

this and try to educate the rest of the congress and the populace of the country as to what really is going to happen to our military the first were the impact on the actual military -- the men and women that you served with those who lay their lives on the line right now. i nevereen what us to do this while we are fighting a war. i think it is incumbent upon us to try to get the word out, the message to see if this is really what people expect. when i tell people what is happening, they say that is not what we wanted. we want to get the troops out of germany or we want to get the troops home from korea. they do not realize the extent of what has already been done let alone what will happen with the super committee.

yesterday we had another hearing where we had three economists a they talked about the financial impact to our economics -- to our economy. we are already in a fragile economy with a 9% unemployment rate. they are talking about job losses of 1.5 million, which could increase the unemployment rate upward 10%. the combation of all of this i am hoping will cause us to step back and say, wait a minute. is this really what we want to do? this economic problem we are in right now thawe have been building over decades cannot be solved in one budget cycle. we need to have some real understanding of what we are doing here and is this really

what we want to do given the risks that we see facing us around the world. with that, mr. chairman, i think you. i thank you for being here. it looks like we are going to be having votes, by the way, which is unfortunate. i am hopeful we will return after the votes. thank you. >> faq. i will hold all my questions to the end. i would like to recognize the gentle lady from long for any questions she might have. >> i have a number of questions. the admiral stated in july that further efficiencies and budget cuts would be determined to a comprehensive strategic review. to what extent are each of the

services involved in conducting this review? what are some of the key tenets of this review? withou a plan in place, why are we proceeding with archer cuts? why not wait until such a plan is developed. i do not understand the rationale of the reductions in force or the deactivation of the battalion's. i will start with admiral ferguson. >> if the gentle lady will yield for just a moment. they have called the vote. several of our members need to go to that vote. where would be coming back afterwards. with that, if you like to answer. >> all the services are participating at the vice chief level in the ongoing strategy review.

those discussions that are ongoing presently are looking at the budget submissions tha the services have done and then they were primarily given a fiscal target. now they are looking at those fiscal submissions and looking at the overall strategy's going to forward and will take action as we make those decisions about balancing between those portfolios in terms of capability and capacity and does it meet the strategy we see going forward? >> the reviews are not completely finished. is that correct? >> that is correct. >> they are not completed yet. those discussions are ongoing. >> do we have time for any other answers?

we will come back to any additional questions that you have. would anybody else like to respond? >> we are -- admiral ferguson got it right. we are participants in the process of to do the mprehensive strategic review. we have an opportunity to provide input in the comprehensive strategic review. we are confident the results will be the framework within which specific cuts will be made. we h to take a look and assume proportional cuts across the board as we went through the drill. at the end of the day, as we get toward december, the strategic review will be complete. at that point, will be able to talk about specific decisions, but our understanding is he is not made any final decisions.

>>he other witnesses have the same answer? >> i would argue from the army standpoint that we are participating in the debate and the building. when i get up and in the morning and see how the stock market is dog, they seem to be discounting the requirement for ground forces, which is the natural tendency after what we have been through in the last 10 years. every other time we have done that in our history, we have done so on the backs of servicemen and women, soldiers on the ground. quite frankly, let's be honest -- it has cost us lies. it cost us lies every single time. >> we have not done this when a war is going on. what is the timeline for the

review completion? >> let's hold that until we get back. we have a few minutes to get up for vote. we will recess until right after the vote. we will be back. nvenience of us having to go and do this vote, but that is what we are here for. we thank you for your patience. >> general breedlove, what is the timeline for the review completion? >> as we were walking out, we

all looked at each other in cape to the same conclusion. we expect the review should wrap up in december. as we are working on the budget issues between now and then and as we understand the facts of the review -- i would just echo mike three compatriots. we are and have been a part of formulating that strategy. >> thank you, very much. >> that is our collective wisdom. >> thank you. admiral ferguson, you did not answer fully the question i asked. -- i asked about the review process. i said i did not understand the rationale for the reductions in force or the deactivation of the two ceebee battalions.

could you answer that? >> as we look at the construction battalions around the ut globe, the initial budget commission we prepared had an order to meet the commands of the commanders. as we size our forces, those forces are on call to the combat commanders to serb future demand. we had to take reductions in certain elements of capacity across the force. -- across the force in order to meet the budget targets that we had. ceebees are a potential reduction. that is part of the effort we are looking at as to what the final construction will be. >> thank you. i had one other question. why it was congress considering potential changes to recruiting and retention incentives, such as military retirement and

health care or reductions to essential training with the military cannot identify the cost they pay for contracted services? the national defense authorization act requires contracts or requires an inventory of contracts for services. for nearly half a decade while this nation has been at war, the air force and the navy have failed to implement this law which would help us control the skyrocketing costs and expenditures before contract services. what is each of your military departments doing to reduce contracted services instead of just reducing dollars? if you are only reducing dollars, you are likely setting up conditions to default to contractors. i guess there force will answer

that first. >> thank you for the opportunity. we are, as our other services, looking at everything we do contractually, the lessons of the war we have been in for the past 10 years. what is inherently governmental and what would she be retaining versus those things we contract for, most specifically in combat zones. every facet of what we do via contract has been reviewed to see if this is something we either want to eliminate, do we need to repurchase and bring back into our service those things in a military way? this is at a time where our airports will get smaller rather than larger, so there is a lot of pressure on the process. how does that relate to the jobs that our civilians are typically do? we are in an ongoing review,

focusing most specifically on those things done in combat zones and whether they should be a blue suit job or a contract job. we are putting fiscal pressure on what we spend on contracts to help us incentivize. >> anyone else care to answer? >> in the navy, the office of the secretary is leading an effort to look at service contracts and other contracts that we have along the same lines as the other services to see what is inherently governmental and what we are paying for excessively. >> are you all again agreement? >> we are doing the same thing. we have appointed the deputy secretary to handle contracts and service contracts, going to a complete review of them to

understand where there are redundancies, where there are places where we can cut, and where there are certain areas that may fall under the purview of being able to use soldiers to help us in some of these areas. >> general? >> we are part of the same process that general ferguson described. >> what is the timeline for this review? >> i will be honest, i am not sure. i do not know what the time line is for the review, but i assume it is in conjunction with the budget that will be due in december. we will have an initial assessment of our contract. we will get back to you if it will extend past december. >> thank you, a gentleman. i yelled back. >> the gentle lady has additional questions, but she is graciously deferred until the end so that our members can get their questions in we now have

the gentleman from georgia, mr. scott, for five minutes. >> i hope you'll continue to inform the committee of things that are in the code sections. things that we would like to pretend that we can afford, but we cannot, like some of the energy demands. the would like to invite you down to the air logistics center. if you come in hunting season, i promise i will make it a worthwhile venture. i will even get you to a georgia tech game, although i might wear a different hat at the game. that would be a great opportunity for you to come as well. the men and women in our area are very grateful for the commitment of the three-the post cabbagy -- three-depo strategy.

thank you so much for that. as we go through these cuts, i hope that -- as a member of congress, i know that you know more about running regencies, you're different departments, i should say, than i do. i hope that you will be very forthcoming with us about what we can do to help you in doing that. i want to be an ally for you. i am sorry that we're going through this. quite honestly, i am embarrassed that we have more discussions in this congress about cuts to the military than we do to social programs. i think that is something that quite honestly is carrying america down a very dangerous path. i know america is tired of the

wars in afghanistan. i know our men and women who have been over there continue to go, but they're ready for more time with their families. but i'm not sure that, when we come out, that the world will not be more dangerous place than it is today. i want to thank you for everything you have done. thank you for your support of robins. if i can never hope to, please feel free to call on our office. >> thank you. we do have a commitment to the three-depos. we thank you for your support to us. as we all look at what we can do to address the tale of our forces to add to the tooth, that will continue to be important as we go for it. the depos bernanke the ability to all of our services that are unmatched around the world to make sure that our services, our force, and that their plans they

fly are ready to do their mission and our commitment is strong there. >> yes, sir. the other aspect is that those cuts -- we need to rebuild a lot of our machines that we have used. every dollar that we take at of rebuilding those machines is a dollar that comes out of a man or woman's pocket that is working on the assembly lines. if you want to create jobs in the country, i would respectfully submit that this is the place where you do it. every citizen gets a direct benefit from a strong and well equipped military and every dollar that we spend in building our equipment is a dollar that goes back into an american working man or workingwoman's pocket. thank you again for what you have done for our country and we will continue to stand ready and willing and able to help. >> the gentleman from

connecticut is recognized for five minutes. >> thank you for holding this hearing and for the witnesses for spending some time with us here today. first of all, i wanted to ask a question about a very specific issue, which is the t-27 cargo aircraft. it appears that a full production plan has been put on hold or partially delayed. obviously, for the army, that is a big issue. it is pretty old those that are left there. i wanted and a bit on where that decision stands, where it is related to the $465 billion or if other issues are at work. i do not know whether the general wants to comment. >> sir, i will be the first to comment on that.

i cannot speak specifically to what you mentioned about the decision on full-scale production. we will take that for the record and get back to you. as far as the c-27 and the mission of supporting the army and what would probably be called the last portion of the delivery of goods to our ground forces, both marine and army, the air force has a full commitment to that commission. we will not back off of the requirement for the airforce to meet that mission. if that mission is to be done ish c-27's or c-130's, that a decision that is still pending and is part of this ongoing budget review. but that will be worked out in the next few months. >> charles, did you want to comment? >> we are committed to the c-27. it fills the gap. right now, my rotary wing aviators have goods on the ground for 12 months.

they're coming home from a newer from 12 months to 14 months. a lot of it is moving from airfield-to-year field where ac- 27 can fill in a gap that we think is absolutely critical. even in afghanistan. but if you take it to other places in the world, it is even more convincing. plus, it provides a tremendous capability for homeland defense. that is one of the things that was critical about the c-27 and its ability to get into airfield here in the united states that other aircraft can i get into in the case of a homeland defense- kind of missions. we're totally committed. >> if we could get that follow- up, that would be great. many of us are interested in pushing them along. i think the germans come in his opening remarks, talked about the shortfalls in the megan's account. in many respects, this should be

a milestone -- shortfalls in the maintenance account. in many respects, the should be a milestone year. we are doing a full startup of r&d for the ohio program. obviously, this is progress that could be challenged if the sequestration goes into affect. maybe if you could talk a little bit more about the account in terms of impact and fleet capability of. >> in the navy, we set in stride. we deploy. over half our forces are under way in ships and submarines on a given day. about 40% are forward deployed. the demand for those are going up.

the maintenance funding that we have come up when we bring them home for their turnaround, is absolutely essential to sustain that force, to reset it, and prepared to go, both of the amphibious left for the marines and the aircraft carriers and surface ships. we have watched the trend over time. we are operating within acceptable levels. there is a negative trend over the long term as we shrink those maintenance funds. as we go forward, we're absolutely committed to keeping the force whole and ensuring that those forces that are operating are well maintained and operating. it does present a challenge with a declining budget. >> thank you. >> the gentleman from alabama is recognized for five minutes. >> thank you for being here. the dod in this current year budget projected fuel costs per barrel to be $431.

the d.o.a. has paid $366 per barrel. and it is predicting that that law will be sustained throughout the balance of this fiscal year. how will you do with that? >> thank you for the opportunity. we do have an aggressive program in fuel savings. we're looking at opportunities, both existing technologies and new technologies, to get after it. a good example is a recording of our c one--- of our c-1/3 year crash. -- c-130 aircraft. simple things that we're doing across our aircraft fleet, changing as we buy new aircraft, some of the exterior hold the suns, it cuts down on a little bit of fuel. you would think that that is not significant. but we understand that the air

force is the number one user of fuel in the united states. every little bit that we can cut saves money on things that we need in the force. we are attacking this because this is the most important thing that we can get out for air force savings. >> thank you so much for the question. we share your concern about that and what i perceive to be a critical vulnerability, airlines of fuel, not only from a cost perspective, but from a long line of logistics', especially when we have seen in afghanistan but that doesn't terms of putting people in harm's way to deliver that fuel. -- what that does in terms of putting people in harm's way to deliver that fuel. every unit that goes over there has renewable energy. that includes not only solar panels, but tend liners, low

energy or energy efficient lighting. as we look at our requirements, as we acquire new equipment, fuel efficiency is a critical part of our requirements document. as a whole, within the department and navy, the secretary of the navy is leading an aggressive effort to replace our fossil fuels with alternative fuel sources and other initiatives in developing technologies that are available to releases from the shackles of fossil fuels, again, not only from a cost perspective, but from delivering it to the battlefield. >> i am hearing that this 25% increase in costs that was not budgeted is something that you think you will be able to adequately deal with? >> we are making choices. we increase on the reliance for proficiency and then our pilots and ground forces to make

sure that we can maintain a high state of readiness and still pay all our bills. i will not say it will let be difficult. it will be challenging. this exacerbates an already stressed maintenance account. but we're trying to work within the resources that we have, again, to ensure that our folks maintain proper training before they are deployed. but we have no issue with delivering fuel to our forces in the field which is our number one priority. >> we are also report of a very aggressive energy effort led by the secretary for all of our bases. but more to your point is the challenges of this fiscal year that we are facing. should the current prices be sustained, lately, we have seen the start to come down a bit, but there were sustained for the entire year for the department of the navy, the short part -- the shortfall would be about $1 billion. we would offset those by reductions in other areas and operations and maintenance

account to pay for that or seek a reprogramming or other action from the congress to address it. because it is an execution year, the horizon of many of our efficiency initiatives will not generate those savings in order to generate them this year. what we will let do is reduce the commitment of the operating forces to the combat commanders and the will to sustain what we need to train and operate forward. >> i have little to that except for the fact that the army is working in three specific areas, operational energy for forces deployed. we will do whatever we can to balance accounts to ensure that they have what they need. but we're looking at ways to reduce their reliance. one of them is replacing all of our generators with new fuel- efficient and a jitters. the savings is huge. both the request for proposals for the ground combat vehicle, the infantry fighting vehicle, and the jltv, the tactical

vehicle include energy savings. i think that is a big selling point when you look at the lifecycle cost of those vehicles once we bring them on board. in the closed-captioned stations, we're working with a net-0 pilot in three installations. we're using solar at the training center and other locations to help with our energy needs. and also for the human resource command, the new personal command of the army at fort knox, kentucky, they use geothermal to produce heating and cooling in the summertime. >> thank you. >> the lady from hawaii is recognized for five minutes. >> thank you. by the way, i think we owe you a happy birthday to the marine corps. you will be celebrating for the next couple of days or so. let me begin with statements to have made in your statement.

i am curious about the fact that you said that our nation needs an expeditionary force that can respond to today's crisis with today's force today. first, i would like you to explain what you meant by the expeditionary force. also, tell me -- you're talking about today's crisis with today's force today, but as we look at a 10-year budget, what is the force to look like in the year 2020? buzzer discussions we have been having with secretary panetta -- those are discussions we have been having with secretary panetta as well as the new chief. >> the first question concerns expeditionary. number one, we would not be relied on political actions provided by somebody else. if we needed to go someplace,

naval forces are uniquely capable of being able to do that. we're capable in operating in an austere environment. wycombe with the water and fuel supplies that our marines and sailors need. in general terms, that is what we mean by expeditionary. by what we mean by today's forces today, the physical presence matters. number one, it absolutely shows a sign of our economic and military commitment to a particular region. it perturbs potential adversaries and ensures our friends. as you start moving up the range of military operations, it allows you to respond in a timely manner to crises. many times, you have hours if not minutes to provide or respond to a crisis. you cannot do that from the continental united states. the naval forces are on the scene and able to do that. the other thing it does is it allows you to buy time for decision makers.

when you have forces there, they can contain the crisis as the rest of the joint force prepares to respond to something that is a bit larger than the crisis being dealt with on the scene. from my perspective, when you look at expeditionary forces, you look at responding today's crises today -- what you really have with four deployable forces is the head did to bring that up from day-to-day operating conditions and respond to a crisis. the sticker price for that same force, you can enable a joint force to respond to something larger. >> you'll also 0 went off -- you also went on to say that director panetta ordered half the time to achieve readiness. is it not the underlying assumption that we all have that we know where we will be? thus there not also have to be some kind of analysis?

if you will be ready to go within a couple of hours or whatever it is, we know where we would most likely be, that your services will most likely be needed. i am for quality. i have kaneohe. if you're deployed to afghanistan, it will not be a couple of hours. these trees ise because we do not have money for everybody. so where is it we will put our resources? >> it is pretty clear to all of us and has been stated by the secretary of defense. before the foreseeable future, we will have security challenges in the united states central command related to pakistan. this is another area where we expect a significant presence. but if there is one thing we're

not very good at is predicting the future. as sure as we talk about the priority of the pacific and then the challenges that exist in the united states central command, someplace else will cause us to respond and we do not know where that will be. so when combatant commanders asked for deployed forces to be out there on a routine basis, each of them ask for that. they ask for that as a mitigation to the risk of the unknown. that is what i believe we provide. again, from a party perspective, certainly, we will see the proponents of our effort and commitment to be in the pacific command and the central command. but priority cannot be exclusivity. we still have to soot -- still have to satisfy the demands of the of the combatants. but it is a hedge against the risk of the unknown. >> i am curious as to what an expeditionary force would be comprised of. i am talking about ships,

helicopters and vehicles. if you can give me an idea for a things are no longer necessary, i will have an idea of whether or not we know what we're talking about. >> i will do that. the good news for use the there are expeditionary capabilities on the island of hawaii and available on the pacific in times of crisis. i would be happy to get back to you on the detailed expeditionary forces and rebel forces that are critical to our ability to do our job. >> thank you very much. >> i would be happy to do the same for the army. >> and the air force? >> and if you call it anything other then expeditionary force, i would appreciate knowing what that is. >> we have been 100% right in something and that is never getting it right. >> general dempsey said the same thing. >> that is true. we have to do is look at history.

when we do not have a balanced force that can meet wherever u.s. national interests are threatened, for the central curtises we must provide military force, that is when we get ourselves into trouble. i think that is important, to look at the history of how we have done. we are repeating a cycle that is something that has happened many times in our history. >> thank you very much. >> i want to thank you for your patience. we have just a few more questions. i will ask the gentleman from guam if she can ask a quick question of him. >> this is for you, general. what shortages in critical skill sets in your respective services are your already experiencing because of manpower reductions already taken? what impact would you anticipate

from further reductions? how are these shortages affecting your war fighting capability? general, why do not go first since we know that the air force has experienced shortages in more than a dozen enlisted nco and officers skill sets, especially in the maintenance area. >> general. >> thank you for the question. you're absolutely right. there are several skill sets that have come under pressure. i think it talks to capacity. in our air force, some portions of our air force have a good capacity to handle the first fight. and then we will be stretched a little bit on the second fight. but already come in a scenario where we have one fight or where we are engaged just like we are now in afghanistan and iraq, we

are already stressed in some very key areas. you mentioned several of them. we are growing so fast in the intelligence surveillance and reconnaissance that we're struggling to keep abreast of the requirements for those people who take the data that is coming into the system and break it down for use by our ground forces and others. our battlefield and men that were billed for a certain model during the cold war, we are catching up to their requirements for our battlefield chairman. all of the units on the ground are supported by those air combat control folks, see ct, our special tactics for fox -- special tactics folks. special operations, weather, and security forces, as we have picked up one more responsibility of the fence around bases. they're all under pressure. in our officer career field,

some of the things that we never thought about, dissented because of the way that the services do differently, we have a lotus senior contracting nco's and officers. they normally do this with civilians. our expeditionary officers in some of these critical field, like air of subcontracting and specific civil engineering sets are all under pressure and things that we need to move forward on. as we construct our forced across these budget battles, we will be keeping our eye on growing those so that the air force will come under pressure in other areas. but we will have to keep an eye on those very critical ones so that we can grow to a better and more acceptable level of risk. >> thank you very much. >> we will come back to that question as soon as the general has answered one more question. since the korean war, it is mine

understanding that there has not been a single soldier or marine who lost his life in combat due to a threat from the air. that is 58 years. i may be inaccurate, but that is a statement that was given to me. oftentimes, we call that their dominance. if we were to move to those cuts that sequestration could bring about, would that put into question our continued ability to have that kind of air dominance? >> mr. chairman, i would never beg to correct, but i would in one way. we have, since the korean war, suffered an air attack by scud and by some others who have taken the lives of our soldiers, sailors, airmen, and marines on the ground. i think that the point that you make is one that is often talked about. that is the fixed-wing air, to our opponents, airforce is,

naval air forces, we have not lost or have been under attack since the latter part of the korean war. that is something that our air force says centered on our air force. but our marine air and naval air and even the robbery arm of the army, we have put together what we have called their dominance over the years to give our ground forces the ability to react and fight under that protection. i give you one small example that my friend from the army will chuckle about. when i was in europe during the late 1980's, we would practice for the big war on the plains of northern germany. we would go out in our brigade formation. when we came under attack from supposedly soviet force air, we would do herringbone maneuvers and all kinds of things to react to so that they could set up and defend us and so forth. we have now come to an age where

we are so used to and so enabled by the year dominance that the joint team brings to the battlefield that i cannot remember even talking about a herringbone maneuver in the last few years. our situation on the ground and in the sea would change drastically if it were not for the joint air forces that bring this capability. certainly, we will all be in a pressure under the new budget regime and especially if we go to sequester. i would just say that, without starting a long conversation about areas of the world where we talk about the paradigm of area and a to raheem devaughn, anti access area denial event, so that our opponents build an area that is so constricted to our ability to enter the area or fight in the area due to their ability to cut air defenses, sea defenses, ship defenses that keep us at range that the future

of the budget scenario that would severely constricted our ability to approach those requirements, those weapons, those new aircraft or other weapons that would give us the a2ad accessn thisa2a environment, i think that is where the pressure will be paired in some portions of the world, if we are not able to break the environment, i believe that we will be in a position where we will not be able to guarantee that their dominance for air supremacy to our sea and land forces as we operate. >> thank you so much for being here. i know you have to go. we are accusing you from the hearing now. please know how proud we are of your service. thank you for being with us. >> mr. chairman, thank you very much for the opportunity.

>> gentlemen, we will not will be much longer. just a couple of things that we want for the record. >> getting back to current shortfalls and the impact of future reductions, and mentioned in my opening statement that our deployed marines have all they need in terms of equipment and leadership to accomplish the mission. that is their absolute number one priority. the cost of insuring that they have all they need has been felt by the units at home station. two-thirds of our units at home station are currently in a state of degraded readiness. that impacts our ability to deal with another contingency for the unexpected -- there is a cost when we come back out of afghanistan to reset the force, to address those equipment shortfalls and to refresh the command that will be coming out

of afghanistan. we currently estimates that bill at $3 billion. in some ways, that is a good news story. a couple of years ago, that bill was in excess of $15 billion. but in the last couple of years, we have been able to do some resetting and support operations both in iraq and afghanistan. as with to the future, i would be concerned about two things. one, that we do? we reset the force and address those deficiencies and replace the equipment that is worn out from operations in afghanistan as we move to the future. the second thing is our ability to continue to modernize and keep pace with modern threats. and over and above the recent cost that brings us back to the force we had before we went to afghanistan and replacing ned equipment, we need to keep pace and modernize our equipment. for the reductions would preclude our ability to modernize. over time, we would end up in the same state but we were in the 1970's where our equipment was antiquated and worn out.

that is one of the key aspects of all of this. >> as we look at the manpower issues, the force is under pressure. our average deployments, 50% of our ships are under way and stretching out to about seven months. our ships are doing water in order to meet operational commitments overseas. so they are under stress. within that area, we have a group of very critical specialists. i am thinking of our nuclear operators, linguists, proctology is, those involved in highly technical fields like acoustics and aviation maintenance and electronics where, because the outside economy is presently not hiring to the level where they could think about leaving, they are staying with us. i concern, as we go forward into this environment, which echoes my fellow vice chiefs is concerning this element of keeping faith with the force we

have and ensuring we sustain their compensation in an area under high stress should the economy gets better and we lose those individuals in the future. retention is something we watch very carefully. we are enjoying great recruiting right now with the highest quality force we have ever had. we are very appreciative of that. in the long term, manpower, critical specialties are what we are most concerned about for our future. >> recruiting retention has never been stronger. it is absolutely amazing. if you had told me this eight years ago, i would have said that there is no way we could pull this together for eight years and having as strong as it is today. it is absolutely amazing. but at the same time, as the guy who gets paid to worry about things, i also believe it is fragile. i worry about rotary wing aviators. that is an area that my folks

are spending 12 months in theater, coming home for maybe 50 muster now and then right back out. i have a beat -- for maybe 15 months right now and then right back out. we are increasing our uniformed contract in court. the exterior of the army has made a decision to add additional uniformed contacting specialists, officers and senior non-commissioned officers to the united states army, even as we downsize the force. we realize it is absolutely critical. electronic warfare is also an area where we are adding to our rules, even as we downsize. >> i would like to pylon to what the general said. what really concerns me is the modernization area. the ground combat vehicle, the infantry fighting vehicle is critical to the united states

army. we're not talking about going into full reproduction. all we're trying to do is get from milestone a to milestone be and see what industry can give us at a point where we can make a decision from two years from now whether to go to a new build that industry brings us while, at the same time, during that time, we will look at off-the- shelf solutions to an infantry fighting vehicle. there are many. and then when those two lines of effort converge to and a half years from now, we will make a cost-informed decision on what we can afford. but to cut that off now, to not provide us the ability to do that will only put us two years behind. a modernization program is critical to the army. i think we're doing the same thing with the jltv. we are looking at the possibility of recapping some of

these and what that would cost. at this -- recapping humvees and what that would cost. we want to buy this vehicle between two hundred dollars -- two hundred thousand dollars and two hundred $40,000 per vehicle. -- between $200,000 and $240,000 per vehicle. do we recap humvees or do we go with a new jltv? i think it is absolutely essential that we be allowed to continue that critical work or we will end up with a force that is not modernized and a force that is not modernize is an unbalanced force. in the end, it will cost us

lives. >> thank you. that is very informative. >> one of the things that all of it -- all three of you talked about -- first of all, i want to compliment you. all three of your services have done a great job in retaining your troops and recruiting. i have looked and seen the price in each of your eyes as you look at the products that you're able to train and turnout. but i also hear you saying a phrase -- keeping faith -- which is the compensation package. it is a holistic approach. it is more than just the dollars. it is everything. it is the commissaries that they go to, the schools that they use, the programs that they have as an overall package. when someone sits down and determines whether they will reach up or sign in the first place -- there wily will re-up r sing in the first place

we had a recent policy change with don't ask/don't tell. we did an in-depth study, surveys, focus groups that were done before we implemented that policy. i wonder if you could elaborate a little bit what the army did, the navy did, the marine corps did in terms of that policy. and then compare that to what we have done with the compensation packages. have we done any similar types of analysis? >> we have not. the proposals have been coming from every direction. you're so correct. this is a holistic review. it needs to include those benefits you have for medical care, retirement, educational benefits -- they'll have to be

looked at in a holistic package and not looked at as individual programs because they are all interrelated. we need to do those focus groups. we need to know what the educational benefits mean to a 19-year-old kid coming out of high school in coming into the united states army. what role does that play in making their decision during a time of war? the secretary of the army and the chief of staff went out and talked with soldiers. they were expecting to get questions. they got a from a 19-year-old kid who said, "mr. secretary, what are you doing to my retirement?" we know the numbers, less than 70% of those will never reach retirement.

but it leads one to believe that that retirement package had a role in this individual making a decision to join us during a time of war. if we go back to what we just talked about in recruiting and retention, these are huge in our ability to be able to maintain this forced overtime. i would only echo what you say, chairman. we really need to take the time to look at this. we nitpick we understand it needs to be looked at. but -- we understand it needs to be looked at. but let's look at it collectively, the entire package, and see where that will take us. >> how many years have you served in the army? >> just short of 40. i do not look it, do i? >> no, you do not [laughter] . would you say it would be foolish or unpredictable for us to begin launching on is

compensation packages before we see what it will do to the force? >> yes. >> i would echo his comments and say that, when i go out and travel through the force and i visit, it is the number one question that i get. part of the benefit of the review process that happened under the steady for the repeal of don't ask/don't tell, we allowed a very methodical review of the policy issues, and ability to socialize discussions with the force and allow people to work through and air the questions and things of the had about the policy development. it was a pretty thorough process. they're worth surveys and policy development and analysis and communication. in an issue as important as retirement to our force, and for their decision about the attention, is similar type

review of that thoroughness in nature would be important, as well as the ability to have the force be communicated on the elements that are under consideration. i think that is essential for the long-term viability of the force. >> thank you. >> thank you for that question. i would agree with the characterization that you laid out in terms of compensation. i would summarize the key point in that is this. there have been many proposals about compensation that are out there that talks about how much money we will save. i have not seen a single proposal that provides analysis of what the effect on the force would be. at the end of the day, what compensation is about is our ability to continue to recruit and retain the high quality force that we have had in harm's way over the last 10 years. if you played for, it is a conversation about a young sergeant will have with his spouse 10 years from now. the spouse will say that your four years are up and what will we do? you have been away from home 180

days out of every 365 days. this is really hard. you're missing the key milestones of your children's lives. will we stay in or will we get out? at that point, the family will look holistic the at housing, education for their children, medical support, behavioral health support that exists and some of the intangibles like is their service a valued commodity have respect in their community, do their leaders treat them with trust? those are the tangible and intangible aspects the cause people to serve. when we talk about compensation, we need to talk about it in that light. it needs to be a holistic approach to ensure that, at the end of the day, when they have that conversation that the compensation for his service and the value placed in his service exceed the risks that we ask him to endure. >> general, i want to ask you the same question. despite your youthful, how many years have you served in the

united states marine corps? >> i have served a mere 35 years in active duty. >> how detrimental do you think it would be to your force if we launch on an changing these compensation packages before we do these reviews? >> i think it would be reckless to do changes in our compensation package right now without understanding the effect. i think each of the gentleman on this table will remember the quality of force that we had in the late-1970's. that is not what we want to go back to. as long as our nation has made a decision that we will have an all-volunteer force, the critical aspect is that we have to make sure that the compensation meets the requirements of the all- volunteer force. whether it is expensive or not is relative to what you get from it and how much it costs may not be expensive when you think about it in those terms. from my perspective, again, the chairman has said that we looked at compensation and we should study compensation.

at the end of the day, we have to do that in a way that ensures that we continue to recruit and retain that high-quality force. folks who lose sight of that are it heading down a path where they have no idea what is on the other end. >> i would like to shift gears a little bit. we hear a lot of discussions, both in congress and across the country. if we were to not be ford- deployed, if we were to pull our troops and assets from across -- not to be forward-deployed, if we were to uphold our troops and assets from across the globe, in general, can you tell us how that would impact the marines if that was done and whether or not you think that would be a good policy for us to undertake? >> first of all, as i mentioned

, our forward-deployed and forward-based forces show our commitment to various regions. being engaged this way helps us to shape the environment rather than reacting to the environment. we're allowed to respond to crises in an efficient manner. to give you an example, from a time and space perspective, from the impact and pulling back to the continental united states, at the 10th amendment -- the marine expeditionary force in okinawa and move it to the continental united states, in the event of a crisis, chairman, it would take months to move that forced the western pacific.

it would take a miracle of planes, trains, and automobiles to move that force. >> we had a sea power symposium in rhode island. nearly all were chiefs of their navies from countries around the world. the question that they raised repeatedly is will you be here with us? will you be forward and operate? they articulated the need for stability against piracy, to provide a shield for our allies in europe, a nuclear deterrent, to be able to operate with our partners, the marine corps, project power from a carrier air wing, from a submarine sgn, or from the amphibious forces. but the primary element is the stability and assured the to our allies to be forward and to respond quickly. the demand for naval forces has

never been higher, both in central command and the western pacific, but also in other regions. or to support special forces from international waters. we see the pulling back those forces would abdicate the nation's maritime neleadership n the world. >> thank you. general. >> we understand that adjustments will have to be made to forward-deployed army forces. at the same time, we think it is absolutely critical from engagements standpoint. the relationships that are made when a young captain meets another captain from another service and they grew up together in their own services and have that connection back and forth, they are absolutely critical, particularly in a strategy that will rely on the ability of allies to assist us.

without that forward engagement, that living and working and training with those forces, we lose so much. i would be very, very careful at taking a look at just what the green-eyeshade people would look at when they look at forward- deployed and station forces. i would look at some of the second and third order effects and the intangibles of the relationships that are built and how critical they are in a time of crisis. it is always good to have someone on the other side you can call. and many of these engagements provide that. >> we sometimes get caught in the nomenclature and the syntax. if we make all of these cuts, we will have to come back and redo our strategy so that we cannot do as many missions. the chairman was kind enough or

smart enough to have the three former chairman testify before the committee a couple of weeks ago. we had a former chairman -- we had former chairman hunter and skelton and warner from the senate. i ask them what warning you would like to give to our committee or to the congress from all of your years of experience. and congressman skelton said that, throughout his tenure in congress, there were 13 contingencies, 12 of which were not protected. -- or not predicted. -- were not predicted. do you know when you were asked to perform by the president of the united states and said you could not because it was not in your strategy? >> no. when i was a division commander,

i spent a year in iraq. i came back and went into a recent days. i was back for three months when katrina hit in the continental united states. i was told that i was at the lowest readiness level of any unit in the united states army. to pick up a brigade and send it to new orleans, to fort hood, texas within 24 hours. when i asked the question -- are you kidding me? we had just gone back from iraq. they said, you do not understand could you pick up your brigade and be in new orleans in 24 hours. we will never fail you. we will always do it. but if we are not trained, not equipped, do not have the proper force structure, the results will not be good. they will not be good. >> would it be fair to say that but that includes the number of men and women who come back -- >> that is exactly where those try to show in my historical examples.

no one ever said no, we will not take task forces into korea. they said roger, we will do it. they went in with incomplete infantry battalions and ill- equipped and they took 40% casualties. that is what happened. we will never say no. that, i think, we can all promise you. the key is the results when we do that mission. >> admiral ferguson? >> i would echo that. in the history of the nation, we have never said no and we will never say no in the future. our forces will be as ready as we can make them. we will operate forward and be ready and we will take risks at home rather than in any way keep the forces that we have able to achieve emission. >> would you agree that, if that risk is increased that the risk of the number of men and women

may come back from that mission are at risk if they are unprepared? >> i think all of us in the service except that risk as part of the business of wearing this uniform and serving the nation. we accept that as part of the calculus. our mission as leaders is to make them as ready, to give them the equipment and minimize that as much as possible. >> saying no to the commander- in-chief is not in our dna. we will never do that. we never have. i would agree with what they have said. we will never say. but if you go into harm's way without adequate equipment, without adequate leadership, the cost of going into harm's way without being ready, which is what we have articulated today, which is the requirement to keep our forces and a high rate of readiness, not to have them prepared for the unexpected. but the cost of going into harm's way without the benefit of feliz readiness is absolutely

at the cost of young americans. >> one of the things that we asked the former chairman is that, if you could give us one warning about the cuts, what with the warning be you would give to the full committee that we could give to congress? out of all of your years of experience, what concerns you most? with that, please feel free to tell us anything that we have left out that you feel you want to get on this record so we can give you that opportunity to do that. then i will wrap up by letting the chairman and missed the bill have any final comments that they would like to make. bidell.miss the bil >> my biggest fear is that -- we understand that we have to downsize the army. we know that we're going to 520,000 -- that is in the book.

i am concerned about losing the entire temporary strength increase because i have such a high number of individuals who are in the disability evaluation system. is taking me wait too long to get through that. i will not go into it in great detail. but i hope we will look at the disability evaluation system and design one for an all-volunteer force rather than a system that currently is built for a conscript force. i think that is a huge issue out there when it comes to readiness that we have to look at. but my fear is that we will might do this in a balanced way. whatever size force we have at the end has got to be modernized, well-trained, and maintained. that is absolutely critical. and besides shrinking our force, the real mistake we have made in the past is to take some kind of solace in the fact that, from the army standpoint, we maintain at hueneme.ucture tha

it was the modernization of that force and the training of that force that got them into trouble. that is what caused the 40% casualty. i just ask that, as we look at this, that we do so with that 3- assessed at the top about early on, force structure, modernization, and training and maintaining that forced and ensure that, whatever size the army is at the end of this thing, that it is a well- trained, modernize force that can do with the nation asks it to do. >> i firmly believe that america is a maritime nation, faced by two oceans and our prosperity and our standing in the world in many ways is insured by the no forces that we are able to

deploy forward. around the globe, potential competitors are working to negate the advantage through anti-access aerial the nile activities and we have to be able to pace that in the modernization of our forces as we go forward. our allies and our friends look to was to provide stability in the global common, that is the sea. we have assured them that we're committed to do so. i think that is an important point of our security as we go forward. and i think about the future, the element of balance within the naval portfolio is important. it is about ensuring the forces that we have, whatever level that we sat on those from a strategy and the fiscal environment are extraordinarily capable to meet that threat, able to move forward, ready with adequate weapons, people, training, such that it delivers to the president and the nation options that he can use forward

away from our shores. as i leave you with thoughts were things that really affect me, i had the occasion to attend the memorial service for the seals were killed in that crash in afghanistan. the strength of their families and the commitment of those individuals who are operating on a 700-day cycle and are gone for about 500 days -- have been doing this for 10 years of war. that core of people in the united states are willing to raise their right hand answer. to me, we can never lose that. that is the most essential element. thank you. >> what concerns me -- without an adequate appreciation of the implications of readiness or of breaking faith. what concerns me is that folks who think that, if we get it wrong that we can simply fix it

in a year or two. that is not possible. if we break the trust of our marines, sailors, soldiers today, it will be ticket before we get it back. some of the decisions we make, from an industrial base perspective, but also from a human factor perspective, we cannot possibly get it wrong. we will not get it exactly right, but we cannot exactly get it wrong. the last thing is that people would assume that the united states of america reduces in capability and someone else will be out there to pick up the slack. i do not know who that would be. who will pick up the slack for people who -- we assume extremist vetter critical to the united states if they are not there to deploy, not forward to engage and not providing our potential feliz. >> thank you, general. we have been joined again by our chairman. i would like to ask if he has

any final questions or comments you'd like to offer. >> yes, thank you, mr. chairman. not to drag this out, but i had a call several weeks ago from a young man that i watched grow up. his dad is a good friend of mine. he is an air force officer. he is a physician station data send a tailspin -- stationed out of senate failed -- stationed out of san mateo. he has been in the service for 12 years. he asked me what he can expect. he is enjoying the service, but he is very concerned. i could not tell them. i do not know what his future is. i do not know

>> can we look forward to a career? i have seen this movie before, when i was pretty new in the congress. i was going up to this at west point and i had a lieutenant colonel with me. he did not let us go anywhere alone. his dad had been the chief of the army. no, his grandpa had been the chief of the army. his dad had been the youngest brigadier in the army, and then he suffered a stroke, and that ended his career. this lieutenant-colonel, his whole life, that was all he ever want to do was serve in the

military. .e was being rif'd the drawdown under bush and clinton earlier in the 1990's, he did not want to leave, but he did not have a choice. when we got to west point, we were greeted by a lieutenant colonel there, and he was also being rif'd. to the first guy, it meant a lot. that does break faith as far as i am concerned. you start somebody out on a career, you send them to west point or annapolis or air force academy, and you make certain promises, and then you break those promises. that is basically what has

happened. i think about these young men that are going outside the wire over in afghanistan every day on patrol, and if they are having to think about what is happening about my future, instead of contra rate -- concentrating on ied's's or snipers are just not being able to be totally focused on their job, that puts them at risk today, needlessly. >> mr. chairman, we thank you for those comments and that passion and you have for our men and women who serve in our military. >> thank you very much, mr.

chairman. i want to thank the general for his comments about the specific area and how important it is that we continue to increase our force structure. this is a troubled area, and mr. chairman, i live there. that is my home. i want to know that we americans living in guam and other islands surrounding us are protected. and to all of you who gave us information this afternoon, i found it very valuable and how important is to keep up the strength of our military forces. >> we thank you for your service to our country and for the men and women who served under you. i think we can tell from listing

to your testimony and the comments appear, this is not just about procurement, not just about aircraft carriers. does all come down to individuals and those men and women who served under you. all of us have those stories that make this very, very real. mine was a young marine. only wanted to do from the time he was 11 was served in the marine corps. when he was 18, he became a marine. when he was 19, i was speaking at his funeral. he had a tattoo of an american flag, and another one of family. this is the absolute best that america has to give. one of the things we have to make certain of is that we do not break that fate. admiral ferguson, as you mentioned, and if if we lose those families, if we lose those people, this country has a tough road for us to travel down.

i think he could tell from this subcommittee, we don't plan to go quietly in the night. we plan to fight as much as we can to make sure you guys never have of their fight. we are keeping faith and making sure they are the best trained, best prepared, best equipped military in the world. thank you for your careers and helping to make that happen and thank you for giving us a record that we can share with other members of congress to help make that a reality. with that, we are adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

to achieve the american dream. we are working to that affect. -- to that effect. >> the plan is $1.50 trillion. >> i have not seen that, actually. i cannot address that. $1.50 trillion is not enough. we have to be bold. big in terms of the number, but we can really do something big for our country in terms of deficit reduction, but old by realizing that revenue coming from the treasury comes from job

creation, small business, and public-sector -- the education of our children -- that is a very important element in terms of jobs. you have consumers -- you have demand. that does not sound like anything that would be in league with what the bipartisan bowles-simpson or any other initiatives that have been put forth. be careful how you cut and when you cut because you may slow down the momentum of economic growth that we have as we go forward. position republicans' on revenues, what is your stance? >> we have to ask them without assuming that they are responsible.

we know how important this agreement is. it will extend to the world, to the markets, to the american people, the confidence it will build -- it is a missed opportunity if we do not do this. we all need to be as open as possible. we all know what we believe and we will be true to our beliefs, but in terms of how we get there, there is a new way of thinking about proposals that are put on the table. >> if you mentioned at the jobs component. the you think it is vital for the economy? >> it is vital for the plant to be successful, to do the job it needs to do to turn the economy around. this is about deficit reduction, yes. it is also about job creation. we know you cannot reduce the

deficit if you are stagnant in terms of growth. it is not just about my caucus, it is about meeting the needs of the american people. it must get done right away and be signed by the end of the year. the part of it from day one is to instill confidence. we need to replace some of the fear that is out there. do not take risk because of the back of certainty of where we are. it is a very exciting time. i know you appreciate what could be done there. it is a strong example of the president's agreement with -- it isohn maynboehner

all about our values. all of the politics and everybody's position on this side of the aisle, we all agree that we want to educate our children for the competitiveness of our country, but we want to be number one in job creation and innovation. innovation begins in the classroom the creation of good paying jobs in our country, the retirement of our seniors, which is important not only to them, but to educate the next generation. the cleanliness of the neighborhoods in which our children grow up and national security is our responsibility to protect and defend. to do that in a fiscally sound way, this committee has a super opportunity to get an important job done.

we stand ready for the agreement. i want to talk to you -- i do not know what other of facts they need, what more information they need to understand that it has to be bold and ballot. let's get right to it. i do not know why we have to go until the 23rd. members will be -- will be becoming familiar with it, as will the american people. you do not want to be here the day before they skidding do you? i did not think so. [laughter] as soon as that is suggested to the congress, we will move as quickly as possible to send a message of confidence to the country and to the world. in any event, regardless of

whether we want to be here to not, we want to be in a place in our country where as soon as possible we make the decisions we have to make and use our time well and that we know this is the opportunity and we want to take advantage of it and exploit the fast-track opportunity that is there. our work will not be done then. >> we have work to do. i intend to accomplish it in the first six days of january following the holiday break. i thank you all for being here. >> the fund created for victims of the be. -- bp oil spill has paid out to

claimants. we will speak to kenneth feinberg next. on washington journal, we talk to republican congressman who chairs the transportation committee and the former vermont governor. washington journal each morning at 7:00 eastern on c-span. today, the libyan ambassador to the u.s. will talk about the death of more gaddafi and the political transition taking place in libya. live at 12:45 eastern here on c- span. at noon eastern on c-span2, a discussion on how the current economic downturn is affecting children. we will hear from jim kolbe and judy woodruff. >> i do not want every story to be at 1800 words.

>> jill abramson became the first woman to hold the post of executive editor at "the new york times." she believes the times is as irreplaceable as ever >> there is a certain lack of discipline sometimes. a. this repeated too many times in a story or there are three quotes making the same point where one would do. i would like to see a variety of a story lines. >> she will discuss her career, her new book, and the future of the times sunday night on c- span's to add a. >> dewey's did the by harry truman was iconic and he continued to impact political history. this week on "the contenders," followed the career of thomas dewey who imposed national politics in the elections of dwight eisenhower and richard nixon.

"the contenders" live friday at 8:00 p.m. eastern on c-span. >> the administrator of the bp fund set up to compensate businesses hurt by last year's, of mexico oil spill says new rules are being created of the fund. kenneth feinberg testified before the house natural resources committee about the fund created by bp. this area is over two hours. -- this hearing is over two hours. >> the committee will come to order and the chairman notes the presence of a quorum which under rule three is to members. the committee on natural resources is meeting today to hear testimony on an oversight hearing on gulf coast recovery, president obama's sister be p. compensation fund and how is was

it working. under committee of rule for f4f statements are limited -- that any member wish to have an opening statement do so bere the close of business today and without objection so ordered. i also note several members from the gulf coast that are not members of this committee have requested an opportunity to sit on this committee on the dais and ask questions during that timeframe. we have got requests from mr. bernard of alabama and mr. miller florida and mr. -- mississippi mr. scully solis and in ms. jackson-lee of texas and without objection, those members will be able to sit on the dais and ask questions at the appropriate time. without objection so ordere i will now recognize myself for my opening statement and hopefully the ranking member will be here in a very timely manner and i am sure that his staff is frankly e-mailing him right now on that regard.

nearly a year and a half ago president obama call bp to the white house for a meeting that resulted in the president personally announcing an agreement to establish a 20 billion-dollar presidential bp compensation fund. at the time the president assured those affected by the deepwater horizon disaster and oil spill that legitimate damages would be paid in a quote quickly, fairly and transparently last goodwin president obama announced the appointment of mr. ken feinberg is administrator of the compensation fund there was no doubt mr. feinberg at a difficult task ahead. the impact to the gulf's local economy as well as the environment was very real and there are certainly many moving pieces involved in evaluating real damage to victims filing claims. to date, nearly 1 million claims have been filed by over 500,000

claimants while roughly 95% of all the claims have been processed. process demean rejected, accepted or turned back to the claimant for more information. process does not mean age. of the over half a million claimants that have filed claims with the gulf close -- coase claims facility a little over 200,000 have been paid, or around 39% and quite frankly i have heard from many of my colleagues on both sides of the aisle in the gulf states that the numbers simply unacceptable to the people whose livelihoods was disrupted by this disaster. during the aftermath of the deepwater horizon we constantly heard from president obama and bp, from president obama, that bp would be held fully responsible for the damages in the gulf. yet that does not appear to be the case with the claims filed with the compensation fund. under the terms of the agreement

agreed to and announced at the white house, bp appears to have no responsibility further than simply writi a check. in president obama announced the creation of the compensation fund he accepted bp's $20 billion, held a press conference in exempted the company of responsibility to make certain goal families and small businesses remain whole. in announcing this fund, the president specifically heralded thatit was an independent body, countable of if no one am the sole responsibility of mr. feinberg. however, the congress has an ligation ensure that this fund is operating properly and fairly so that the people in the gulf remain whole for the harm caused to them and that the economy of the gulf is to get back up and running again. it is not absolutely clearf the fund is actually under the jurisdiction of this or any other congressional committee,

and i is chairman appreciate your willingness of mr. feinberg to, and to sit before this committee today. today there is a large hole in proper oversight and accountability to ensure legitimate claims are getting the attention they deserve, and that the process of the ministry of payments is conducted in a timely manner. there is an appropriate effort in congrs to direct an open transparent funds and i certainly hope and expect the fund will comply. and it can be expected the committee will continue to to properly conduct oversight into the process, payments and operations of the fund in order to ensure that there is a transparent and fair pay system. so this hearing than as an opportunity to peer into that process that for the most part has flown under the radar of proper public oversight. we are pleased to have mr. feinberg as our witness and i look forward to hearinghis comments and discover if there's anything congss can do to help make his job easier and get

deserving legitimate claimants their due compensation. and with that i yield to the distinguished ranking member mr. markey. >> thank you mr. chairman very much. the focus of today's hearing is to examine compensation fund set up for the residents of the gulf coast who were harmed by the bp spill. however, we addressed that question, think it would be instructive to consider what doesn't work when it comes to conference saving people affected by an oil spill. the 1989 exxon valdez ran aground in prince william sound alaska. a ruptured single-hulled tankers belched up to 750,000 barrels of oil into the frigid waters, killing wildlife and harming the fishing industry. for the citizens of alaska who live near this bill, the event itself was just the first part of an ongoing nightmare. commercial fiing businesses shuttered, recreation and

tourism dollars were lost. exxon meanwhile immediately entered into a position of aggressive litigation rather than financial mitigation for the people affected. exxon bought the initial 5 billion-dollar judgment by alaska's courts for years all the way to the united states supreme court. in 2008 nearly two decades after the spill the supreme court finally held exxon accountable for about 00 million in punitive damages to the victims and an additional 500 billion of interest on those damages. the litigation went on for so long that nearly 20% of the 32,000 victims seeking compensation had passed away before the final ruling against exxon. and to top it all off, the first credit default swap ever created stemd out of the exxon valdez spill. jpmorgan, chase bankers created the now infamous financial mechanism to hedge their own viability after staking nearly $5 billion in

credit to exxon to cover the company's potential payouts. subsequent credit default swaps went on to play a critical role inigniting the financial crisis 2008. now let's take a look at the bp compensation fund. within two months of the start of this the spill the president obama secured a commitment from bp to set aside $20 billion to begin immediately calm and saving the american people and businesses affected by the spill. ken feinberg manage the victim funds following the 9/11 attacks and the virginia tech shootings and was asked to take charge of the fund and he was given complete independence to run it. i late august of last year mr. feinberg works epping claims ensign paying for lost wages and other economic impacts. through this fund people were compensated in timeframes closer to days rather than decades. the exxon valdez led to the invention of the credit default swaps but with the bp

compensation fund, the only question is how quickly could this -- mr. feinberg find a way to deal with these issues? unfortunately, there were some who said that ths fund accounted to a chicago style shakedown politics but in a difficult time in our nation's hio when an oil rig sank to the bottom of the ocean and oil washed up on our shores, this fund kpt families and businesses afloa more than 200,000 residents and businesses have been paid roughly $5.5 billion so far this year. thousands of new claims are still coming in every week as people see their neighbors being made whole. i've been quite critical of bp for many things associated with the spill but here i believe the company did e right thing. and i really would like to thanked the work done by ken

feinberg. i think it is a model for how tragedies basicay bring out the best in people and mr. feinberg you demonstrated that as you did in creating the climate that brought out the best and the people in the gulf of mexco and trying to resolve these issues as well. finally i would like to thanked the chairman for scheduling the additional day of testimony that i and democratic fellow members on the committee requested on the bp spill and the governments joined in investigative team report the minority has requested that the company invite the ceos of the companies involved in the deepwater horizon disaster, bp hallurton transocean and cameron. it is up -- we received testimony from the top executiv from these companies is this committee evaluate the findings and recommendations in the governments reported and i thank you for working with us

mr. chair. >> i thank the gentleman for his opening statement and we have only one witness today. we have mr. ken feinberg here and mr. feinberg you are the ministry of the gulf coast claims facility as both of us noted. you have a very difficult task and we look forward to your testimony. you have been here before and you know it works aout the same way. your full statement will appear in the record but if you could hold your oral arguments to five minutes, we will probably have votes before then but the green light means you are doing fine in the yellow light means you have one minute and the red light means -- b. mr. chairman and i thanked the ranking minority. i very much appreciate the invitation. it took me about two seconds to agree to appear. i think it is important that these issues be explored by congress and by this committee. it is about my sixth visit to the house and senate i'm ad to be here to talk about the fund.

let me give a few statistics which i think are very telling. in the 14 months we have administered this fund we have received just about 1 mlion claims from 50 states and 38 foreign countries. build it and they will calm. there are some very creative claims. we have processed 95%. you are correct mr. chairman, not paid that we have -- process, we are current in processing 95% of the claims. it takes the initial contact to the claimant about 10 days to two weeks in almost all cases. we have distributed over 5.5 lien dollars if you include outstanding offers we are waiting to hear from claimants it is closer to $6 billion in just over one year. we have paid over 200,000 people

and we have as evidence of the success of this program, we received still every week over 2000 claims per week, still rolling into the gulf coast claims facility. this on average demonstrates i think there is a lot of support in the gulf by residents who see that the program is working and are filing claims. inhe first three months, and this is important, we paid over $2.5 billion in interim emergency claims, no release required, nwaiver of any rights against -- a gift. where the claimant receive compensation and in return could sue, could come back to the fund again and again. this was in the first three months during the critical emergency period.

since then we have paid another $3 billion to claimants in the form of quick payments, interim payments, final payments. we get the claimant a choice. 130,000 people have chosen a quick payments. 63,000 people a final payment, 30,000 interim payment with no obligation and they can keep coming back as long as they can document the damage. any praise about this program or any criticism about this program really should he directed at me and me alone. the administration has largely taken a complete hands-off attitude as the ranking member points out. bp has in no way interfered with my processing of these claims. i am out there on a limb and if it works, thank you and if it fails, i would be at the brunt

of that criticism. the claims not only in terms of of -- but iterms of complexity are apparently thing to anybody who examines the program now why don't we pay every aim? there is an absence of documentation wit many claims. nevermind no tax returns, no much of anything. we receive thousands of claims mr. chairman with no proof, just a request to be paid. sometimes claims come in from massachusetts or minnesota or sweden where there is simply no eligibility, i don't care what people attached. they are simply so far removed from the spill that the claim is to tangential. we cannot pay by agreement when we did not made an agreement between the administration and bp. we can't pay government claims. i've no jurisdiction over government claims. unfortunately i can't pay moratorium claims. now this is unfortunate. we have got 1600 moratrium

claims. i have to send them to a special moratorium in no new orleans set up by bp. i've nothing to do with that and it is unfortunate but i can't pay those claims. in terms of transparency, 1500 people unhappy with my decisions either as to eligibility or damage, have gone to the united states cst guar under the oil pollution control act and asked the coast guard t review my claim and make an independent determination. in every single case, everyone, the coast guardhas agreed with my determination, so i think we are doing something right. in conclusion, the program is not perfect. congressman bonner is here, my most constructive admired clinic and congressman bonner knows better than most the program is not perfect. were doing our best. my final point and i'm done, want to reiterate what congressman markey said.

there has never been a program like the gulf coast claims facility. i know in my experience of no example. resident bush did get the 9/11 victim compensation fund enacted to his credit, but that was public taxpayer money. this is the only program i know of in history where an administration succeeded in convincing a corporation to admit wrongdoing and put out $20 billion. it isn't perfect but i think overall we are doing our job, we are delivering on the president's promise and i'm proud to be here today. >> thank you very much mr. fienberg for yo testimony and now we will try to get through these questions here. i just have a couple of them and you alluded to the fact that, alluded to the fact that i just want to mke sure there has been no oversigh from the white house at any time since the

june6 when this fund was created and so forth. is that correct? >> that is largely correct if you say the white house. the department of justice monitors what i'm doing i am doing just like bp monsters it that often has suggestions like an independent audits but there is no oversight as to how i dede indidual claims that appear before me for processing. >> in that regard and this is probably them more speculation, but it would be interesting to hear what the responses. in hindsight d since hindsight is 2020 and he said this is a unique fund, do you think, let's hope we don't have to go through this again as another disaster but his is a proper model? >> that is for policymaks to decide. i would say that at least with the gulf coast claims facility mr. chairman, the united states coast guard is at least there under the federal oil pollution

control act to review any one of my claims determations. but i think it is relative, this congress 10 years ago you will recall when it enacted the 9/11 victim compensation fund and we enacted it six months ago during the lame-duck session expressly prohibiting any oversight without fund. expressly, said you cannot go to the brd to review 9/11 determination so everything is relevant but i must say it is problematic when one person is delegated this type of authority with limited oversight so why share your concern but i leave that to the policymaker. >> we are have a debate in th country on whether the definition of a dictator is and maybe this falls under that category. you menoned the doj and part of that interaction has been an audit. when can we expect to have the results of that audit that you

have agreed to be made public to us? >> that independent audit timing should be directed to the department. the department, not the gulf coast claims facility is going to determine who that auditor should be and how quickly that process will begin, but i will say one thing. you can't win on this independent audit. i know that on the one hand, there is a request for members of congress and others to get that audit going. correct, i will come the audit. we should do it as fast as possible. on the other hand, as many of you know there are interest groups, elected officials in the gulf, lawyers, organizations, all clamoring r some input in the nature of the audit, the scope of the audit, and much of that input has just arrived at the department of justice this month. so on the one hand, speed and on the other hand a demand on the part of interest groups to

participate. i think the department is moving fast as they can considering it doesn't want to be accused of delay and on the other hand and what doesn't want to be accused of high handedness i think that is something not to be addressed. >> when exactly was the audit requested? >> was at july of this your or last year? >> occo now,this year. i think the audit was requested for the first time i think around august of a few months ago. >> okay, good. thank you very much and i recognize the ranking member. >> thank you very much. mr. fienberg, can you briefly lay out for us what's what the situation is with people who live decided that they would rather litigate than move through the compensation fund? >> everybody has a right to litigate. in fact, claimants come to the fund. if they don't like what they see in a way of my determination so

that deteinations of the gccf they have a voluntary choice to opt out and head to court through the united states coast guard after the coast guard reviews as they want. they ultimately have a right to go to court. now, the first trial, the first trial arising out of the explosion is scheduled for february of 2011 -- 2012. by that time, i will have already, the gccf would have distributed in the vicinity slightly over $6 billion, and i must say a firs trial in february of 2012 is miraculous. i think that what the judge has done in new orleans and what the lawyers have done in accelerating the trial schedule is a real tribute to them frankly. they pulled it off. still, implicit and congressman markey's question, we have

between the explosion and the date of this first trial we will ha distributed over $6 billion. >> so how long in contrast to going to court and of the first case doesn't begin until february of next year, how long does it take for it to work through the process with you? >> on average, the claimant gets an initial determination, a response from us within two weeks. 10 days to 14 days. it wasn't like that at the beginning. as congressman bonner will i'm sure will remind me but we have greatly accelerate this process so it claimant has the file. it seems in order, we can cut you a check, here are your options, we need more information, but we have greatly shortened the time for an initial contact with the claimant. >> okay, so earlier this week abc news returned to the gulf of

mexico to interview shrimpers affected by the vp oil spill. when asked about experiencing the

i want to say one other thing. i think we have to do better by the shrimpers. i was downn new orleans last week and we are now reviewing ways to make the pre i'm even more generous for the shopping industry in louisiana in particular. >> okay, so the indications are that this is a real, real catastrophe hitting the shrimpers down there. and it seems to be related to the spill. now, if this continues next year, the year after, what happens to the shrimpers? out many times can they come back in order to be compensated

for what could be damaged that goes on for years? >> gccf by agreement isn't around for years and years and years. it expires automatically in august of 2013. a shrimper, a shrimp company are an individual shrimp company can decide, i am uncertain. it seems that it is not going to come back, as you put it. a shrimper can decide to file interi claims, take a check from the gccf, wave no rights, keep coming back until the shrimper either has a sense that it is okay now or we have want a final payment, or the shrimper can take a final payment, or until the program expires in the shrimper can of course go to court if the program isn't extended. >> mr. chairman, mr. fienberg is from boston massachusetts, the home of rocky marciano and while he doesn't shy away from a fight

mr. fienberg, he actually tries his bet to find a peaceful resolution or every one of the issues thahe has been confronted with not just here but in the 9/11 fund in all of the other very tough situations that he has been tasked with trying to resolve. >> marciano was 49-0 so it sounds like he didn't back away from a faulty there. ivan invites we may have vote as early as 10:15 and so that being th case, just to figure out how we will do it, we will recess and then come back after, immediately after the last series of votes. mr. fienberg has to leave by noon, but i'm advised we can have boats as early as 10:15 so with that i recognize mr. lamborn. >> thank you mr. chairm. thank you for the work you are doing. i'm not from a gulf coast state and i know they have some burning questions. just a procedural question mr. fienberg, and to to to stand

for it to their testimonial claim determinations are made without interference from from the or bp. i know the department of justice has sent several letters making suggestions on the administration of the fund but does this mean the wte house is not contacted you once about the fundince president obama announced this creation last june? >> that as greg. >> and as a is the follow-up would eat do with suggestions when pople send them to you such as from the department of justice or from whomever? >> we tke, we take very seriously any suggestions from the deptment of justice, from members of congress, from intested citizens. we have made changes. based on constructive criticism. it is always constructive. we welcome it, and wdo our best in this difficult assignment to move the process forward and improve its day to day today. >> thank you. mr. chairman i yield back.

>> mr. holt is recognized for five minutes. >> thank you mr. chairman, and thk you pfister find burke and i appreciate mr. markey for clarifying that you are from massachusetts. who would have guessed? [laughter] and i tnk you for doing work that i'm sure many days seems thankless and so, we have heard from many that the six-month drilling moratorium and economic impact was worse than the impact of this bill itself. but mr. chairman i would like to introduce in the record a letter from the baton rouge area foundation, which administered the 100 million-dollar oil rig workers assistance fund over which mr. fienberg i believe has no control, no responsibility and no direct association. i would like to introduce this to the record.

the oil rig workers assistance fund was set up as you will recall to help individuals who worked on the deep water rigs that might have been affected by the moratorium and experienced financial losses. to receive the assistance under that baton rouge fund, the rig workers had to submit some simple documentation, their w-2 forms, pay stubs, unemployment forms forms and so forth. at the time of the moratorium, the fund expected that maybe 9000 workers from the deep water rigs would apply for financial assistance. in reality it was 357. 357 applications were completed by the rig workers seeking financial assistance or a total of $5.3 million in financial assistance. you know, i am not saying that the oil rig workers financial

losses are unimportant, i am just saying that it doesn't appear that they are anything like the losses that mr. markey and others were documenting in the fishing industry and the other associated industries. because over 90 million from the fund was still available, th funds eligibility was expanded to individuals who were indirectly affected, or might have been affected by the moratorium's, support vessels, those who transport food or supply ice orsupplies or whatever it is and during this round anadditional 428 applications for financial assistce were completed. so, if we just look at the nuers people who have applied to mr. fienberg and people who apply to the baton rouge aea foundation, it looks pretty clear that the fects of the oil oil spill on tourism, on

fisheries, are well, greate than the effect on the oil industry. >> i think you are characterizing it fairly congressman. the problem is i dot know how that foundation in louisiana is treating not rig workers that these other vendors. i have got 1600 claims that i am sending to that foundation in new orleans, and it is not clear to me that the foundation is honoring all of those moratorium claims. somebody shld be honoring those claims, and i hope you are right that the foundation is more receptive to claims that are prohibited from paying, but i'm not sure that foundation i doing as well as it should with all those types of moratorium

claims. i just don't know the answer. >> real. mr. landry just a moment. is there something we should be doing to see whether that foundation -- i realize it's not a government foundation and is not a government institution. is there something we should be doing to see that they are giving sufficient attention to people who might be herding? >> you might inquire and find out as you are with the gulf coast claims facility just exactly what the rules are, what the eligibility criteria are. i know is i'm hearing from moratorium businesses impacted by the moratorium, -- >> mr. chairman would you care to join me in a letter asking for that information? i realize we can't demand it. i suppose we could. >> we are going to have a lot of questions that have come out of this hearing i suspect, and i will say this right now instead of at the end of the committee, we will continue to have oversight into this and i am more than happy to work th the

gentleman. just sounds as if the effect really has been on these other industries. i am sorry mr. landry. i intended to get to you but i see my time has expired. >> the time has expired. i recognize the gentleman from louisiana. >> thank you is her fienberg and appreciate your willingness to take either the credit or discredit, whichever. that is a model for us here in washington. we generally have it 50% right here. we accept the credit but not the discredit, so we thank you serve for being willing to take the heat on that. just a couple of quick questions before i get into something deeper. do you have or will you have a metric for satisfaction among people compensated? >> i have said from day one as with is with a 9/11 victim compensation fund, i would hope that at the end of this program at least 90% of all eligible individuals and businesses opt into the program.

i think that is sort of an objetive measurement that i've used i have used over the years and other contexts. >> but i mean will you have a questionnaire or a survey? i mean obviously somebody might agree to something but not be satisfied. do you have any way of measuring that? >> maybe we should measure that. i'm pretty confident that people who accept compensation arn't satisfied. i think that is human nature. i would ask that you consider that again. is sounding like to me that there may be money left over at the end of the day, and that might be reason to go back and reopen just a little bit some of these cases. you mentioned fraud. is there any prosecution or do you plan to prosecute people who provide fraudulent claims? >> there certainly is and it has been pretty effective. we have received out of 1 million claims, about 10,000 claims that we think are fraudulent. we have sent after we do an internal investigation with our

anti-fraud team, if it still appears fraudulent we send it to the department of justice in the criminal division, lanny brewer. they have been fabulous were king with u.s. attorneys in the gulf. they have indicted people. there've been guilty pleas. there've been convictions i believe d they think fraud is an ever-present concern. nothing will undercut the credibility of this program. >> thank you, sir. what i want to turn to in my remaining time is you may well be aware that louisiana has been the biggest oyster production state in the union. 40% of the total yield has been in louisiana. washington state is now taking this because it appears that it wasn't this bill itself but the downstreaming of freshwater that has now changed this salinization of the water in the beds which which were heretofore

perfect for growing oysters. as i understand that there is a multiyear rebuilding of that. you have to recede the beds and i'm not sure if i have all the terminology correct. can you kind of walk walked through that and see where we are. we do think they're a special issues on compensation. >> there clearly are special issues. we treat oyster separately from any other industry. oysters are different. and what we have decided is that an oyster claim, if somebody wants interim damage and can show their media damage we will pay it. if somebody wants a final payment, if someone says to us we are filing a claim and we want a final payment and we will be gone, we give them four times their 2010 damage. and, if a claimant leases oyster beds, currently harvesd his --

harvest oysters but has a lease in the beds themselves there's a special additional payment that we will make. we have tried with oysters to recognize the unique s. that you reference referced in your questioning. >> the four times as a reference to the four years, that it takes to build these beds back up and get them in no know back. is there any -- and this may be a little bit outside yo rview but is there any evidence that the sailing content of that area is beginning to return to normal? >> outside of my bailiwick think the independent evidence at least from what i'm hearing in terms of the oysters being good to eat and encouraging people to come back to the gulf and eat those oysters, i think the predictions are pretty positive, but i agree. i agree. nobody knows for sure. it is an uncertain biology, and people who want to wait it out

and see have every right to do so. >> alright. just one final question if i have time. how many lawsuits are out there or how many do you expect at the end of the day? >> i really don't know. i think, as a lehman reading the newspaper, think they're about 130,000 lawsuits that have been filed, but i haven't checked to see how many of those that have been filed havarti been paid ies and release. so i can't come i can get you that information but i don't have it at my fingertips. >> thank you and i yield back mr. chair. >> thank you very much and recognize the gentleman from south carolina. >> thank you mr. chairman and mr. feinberg thank you for answering these questions here for us today. it was interesting to hear that you cat pay moratorium claims because i think that it's been a significant impact on the gulf region with the loss of businesses, the domino effect not just the oil rigs but the whole industry servicing

oilfield servicing industries of welders and pipefitters and people haulers and food services and it just goes on and on as you delve into it. i do know that from talking t mr. landry the batteries foundation that pays the moratorium claims is closed now. close now. the remaining moneywent to another charitable organization versus paying folks that were heard in the moratorium. i don't have a unique specific questions and i nt to yield the balance of my time to someone who knows this issue, mr. landry from louisiana. >> mr. feinberg how are you? i am concerned about the moratorium fund because is it not correct, very short for my limited amount of time, that the fun that you administer, you cannot pay out to companies who were affected by the moratorium? is that not correct? >> that is correct. >> okay so they have to go do a 100 million-dollar fund. you have a 20 billion-dollar fund they think and i'm going to

visit with you because i don't have a lot of time but i will tell you that is a disaster as well. the problem i'm having, do you know how many claims were settled in regards to the shrimping industry that were paid to shrimpers who were louisiana certified commercial shermen? i can probably get you that number. >> okay because the concern i have is that once you open that fund, there was a blue light special on white boots down in louisiana, and to me, that allowed, that allowed people to claim that they were shrimpers that they were not shrimpers or were not traditional commercial shrimpers and of course i have heard stories where there were shrimpers i got paid very little and there are hobby and shrimpers i guess you would call

them, or tourism shrimpers i got paid a lot. and to me, it is very simple. wildlife and fisheries in louisiana certified our commercial fishermen,but you all are not using that in the matrix when you all are paying out and that concerns me because it seems as though, when i go back on the ground, i continued to hear stories of people who really need this money, people who have been in the shrimping industry for generation after generation that are not getting the help, but the fly-by-night people are getting a check and maybe it is not as much as the actual traditional shrimper would be eligible for, but you know, a five, 10 or $50,000 check for a guy who just puts up a troll in this boat, that is a concern of mine. can you address that? >> akin address of a couple of ways. first, were paying commercial

shrimpers, large shrimp companies, individual shrimpers, we do not discriminate against commercial shrimpers. but i want to agree with you congressman, i think that if there is one area where the gulf coast claims facility has to be more receptive and generous it is with the commercial shrimping industryn louisiana. >> okay, so you said this a second time and i appreciate that. the question is, what are you going to do about it? >> here is what we are doing about it. within the next few weeks, weeks, we hope to announce rules, new rules to deal particularly wi louisiana's shrimpers. i have been down to new orleans in the past few weeks to meet with the whole group of shrimpers. one of them is here todain the audience, and i'm listening

cusack to the point you or make you. i hear from them which is mr. feinberg we don't regret sure thing people who are shrimpers but we are the real historical shrimping industry and the gulf and we think you are not paying sufficient attention our -- >> let they make this suggestion in the seconds i have because you are a very very bright lawyer and you have a great reputation. it is simple, go go-go to wildlife and fisheries down in louisiana. that is your client. they have the records. you don't need to visit with anyone else other than those that are from louisiana, certified, commercial fishermen. i would appreciate if you took that and built that into your matrix and mr. chairman i yield back. >> the chair recognizes the gentleman from arizona mr. coffman. >> thank you very much mr. chairman. researchers discovered a

potentially dangerous change following this spill and one of the most abundant fish marshes of the gulf, an indicator many believe of the health of the ecosystem which may indicate the presence of a much larger problem. in fact, researchers concluded that there maybe some of the same early warning signs that we saw in the years following the exxon valdez oil spill in alaska before pink salmon suffered population, severe population declines. if in fact there are those ticking environmental time bombs, it may lead to longer-term impacts on fish and result in future losses by fishermen and shrimpers. can they be compensated in the years to calm on the assumption assumption -- if this ticking clock goes off? >> that is an excellent question. we are around, e gulf coast

claims facility until august of 2013. so, alleged damage between now and then caused by this oil, by the verizon explosion, people compensate. we will also -- daily weekly monitoring what the experts tell us about the impact of the spill, as yo point out. so when we make a final offer in some 60,000 individuals and businesses that it accepted the final offer, we are trying to factor in with the best experts tell us about the future. if somebody doesn't agree congressman with our estimation of long-term damage, they don't need to accept a final payment. 30,000 people have accepted an interim payment for immediate damage and they want to wait and see as you point out, what the future holds and then they come back at that time.

once august 2013 expires, there is no more gulf coast claims facility and they will have to go to bp ielf. >> and so after 2013 if there are still impacts being felt or impacts thait have developed in that interim, the source of their making themselves hole in some ways would be with the company? >> or a courtroom i guess. >>ne other point if i may, sir. for those people that have been harmed by this spill, is new true that the documentation requirements in place to receive compensation from the claims fund are much more inclusive than it would be in a court proceeding? when you say inclusive, think we are much more liberal and much more generous in recognizing a valid claim than would be the case in court but that could be argued i suppose. i'm confident that we obtain claims on a recorthat is much

less rigorous than would be required in a ourtroom. >> i appreciate it. you back. >> the gentleman yields back. mr. flores from texas. >> mr. feinberg thain for joining us today. i'm going to yield the first four minutes to mr. landry and ask him -- nevermind i'm not going to yield to him. in any event, i want to thank you for your candor in the buck stops here statements that you made. that is in the words of mr. fleming, refreshing here around washington d.c.. i have a couple of questions. i noticed in going to the statistics, the metrics you included in your testimony, that there are 17,000 claims that were all for final settlements that were offered but were not accepted. at happens with those and can you tell me roughly, does that mean that the offer he did not accept them or you rejected them? what does that ean?

>> most of the 17,000 final claims that were not acceed, they have 90 days to make a decision. i will bet you the great bulk f those 17,000 claims are within the 90 days period and the claimant hasn't decided yet whether to accept the final offer or not. if they don't want the final offer, they don't have to take it. they can take in lieu of that, and interim payment for their immediate damage and come back and every quarter and seek additional compensation. ultimately, congressman, if they just can't get satisfaction, they ultimately always have the right eventually to get to court and file a lawsuit as if the gccf had never been established. >> how many of the 17,000 have actually gone to litigation. >> very few. inow that about 1500 individuals were dissatisfied with what we decided and went to the coast guard.

the coast guard independently reaffirmed that we had done. now how many of those people who didn't get satisfaction from the coast guard then went on to file a lawsuit i do not know the answer to that. >> it looks like a process is working. 1400 claims that folks didn't like when the coast guard upheld so it looks like you are doing all ght. i'm going toield the balance of my time to mr. landry. >> thank you. i think this is important because it has come up twice. my question to yous, if the claim process is dragged out, there is a prescriptive period by which those claimants wold have to file a suit in federal court against bp if that is correct. >> yes but i think that prescriptive period is not a barrier. i think bennie people have made that filing in court. >> how would they? are you saying that there are people who let the made th