i am very honored to have even known her. guest: thank you for your call. it sounds like a real coast guard family. the weather channel has a new series about coast guard -- alaska. it is an arduous environment up there. we have some great coast guard men and women doing great things up there for the nation. if you look at the arctic there are increasing -- the arctic, there are increasing coastguard responsibilities. we're keenly focused on the work of the 17th district, the alaska district. if you took a state of alaska and overlaid it on the lower 48, it runs almost from the east coast to the west coast. it was ironic that last night, the new series aired, and there was a storm of sort of epic proportions that it alaska. it was one of the worst storms

in the last four or five decades. the weather, a long distances, arduousn environment. host: what is your web site -- website? guest: www.uscg.mil. it will take you to a lot of different places. google the coast guard compass blog. it has crashed content on a daily basis -- fresh content on a daily basis. >> rear admiral karl schultz. thank you for being on "washington journal." coming up, we're going to go to capitol hill, where the senate finance committee is holding a hearing on unemployment insurance and potential changes

to that. the chair of the finance committee is max baucus, senator, democrat, from montana. it is just about to start. you can see the room up there on capitol hill. it should be starting in just a minute. we appreciate your being with us today on the "washington journal." this weekend on "booktv," c- span2 of the weekend -- on the weekend, condoleezza rice has a new book out. bill clinton has a new book out. you can see both of those before weekend on "booktv." 48 hours of nonfiction. c-span3, "american history tv." that is c-span3, every weekend, 48 hours of nonfiction, american history.

look for those other networks this weekend. now back to the senate finance committee. the hearing should begin momentarily. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> i apologize to everyone here for late beginning. something came up that was unavoidable.

we will make up for it. peter roosevelt once said, the best pride that life has to offer is the chance to work hard at work worth doing. the great recession hit americans with soaring unemployment rates that has kept this price of a chance to were hard for millions of americans. the economy created 80,000 jobs in october, and the 13th uninterrupted month of job growth. that is the good news. however, we need faster job growth to keep this economy moving in the right direction. nearly 14 million americans are still unemployed. more than 42% of these folks have been searching for a job for at least six months. that means nearly 6 million americans have been without a job for half a year or more. for families to a been hit hard

by hard times, unemployment insurance is a crucial lifeline. it is an essential part of the solution to get folks back to work. families need these benefits to keep their homes, pay bills, stay afloat. folks who collect unemployment benefits have worked, want to work, and will work again. i recently spoke with one such man from montana. he worked at a paper plant model to his community. in 2009, the plant closed its doors. he shared his need for a job and was dramatic. unemployment benefits or a necessary lifeline for his family. the income he received from unemployment entrance was less than half of what he previously made.

his mortgage was 30% of his income. what collecting unemployment, the same mortgage paid 60% of that income. after his company closed, it was certified, fortunately, for the trade adjustment assistance program. he was able to meet with his case manager and go back to school. through this training program, he found a new career. he told me he thinks the best reemployment programs give someone the opportunity to find a job that meets this criterion. this first principle, the bonn -- the job is equal to or more than the job some left. the second is a job provides an opportunity for growth. the last measure is the job must be sustainable in the 21st century economy. i could not agree more. today, i encourage us to focus on how our unemployment insurance system can use reemployment strategies to save

existing jobs and create new ones. let's find a way to improve the program. there are several proposals this community is considering. some programs parcel replace the earnings of workers who suffered job loss. others help unemployed workers find permanent work either through direct job placement or through retraining. other models are designed to develop entrepreneurs. we need to tap into these ideas. there are many states doing great work. 22 states have implemented a work sharing program. under these programs, to avoid layoffs, states allow employers to trim the hours they pay their employees and use unemployment insurance funds to maintain pay for the full-time jobs. in my state of montana, they have their own version. i look forward to testimony today about rhode island's work sharing experience. some states create new jobs through wage subsidy programs.

these help employers cover a portion of the new employee's wages to encourage the hiring of unemployed workers. we will hear more today about the opportunities and challenges that rise from these programs. many components of unemployment insurance programs will expire at the end of this year. we must extend this program. it is critical for our economy and millions of americans. it is an opportunity for this committee to examine the unemployment system and make improvements. what people really want more than an unemployment check is to be back at work. that is really what this is about. let's focus on getting these folks back to work. let us heed the words of teddy roosevelt, make sure all americans have a chance at the price of working hard at work

worth doing. >> thank you, mr. chairman. this is a very important topic. it is one worthy of the committee's attention. the fact recalling this today is another reminder despite some scattered signs of recovery in the economy, to many americans are not able to find jobs. our unemployment rate is simply too high. while their differences of opinions on how to solve the problem, we are in agreement that congress must do more to restore job creation and help get the unemployment and underemployment rate down. today we will have another discussion about our nation's unemployment insurance system. my hope is we can get answers about how the animal, system can be reformed. the u.s. system is currently designed simply to process in this to be says -- but it is to be unemployed. those who faced job loss deserve better than this. the goal of a and implement a system would help unemployed

workers find new jobs. the success of the various program should not be measured by the number of people receiving benefits, but by the number of people who have moved from receiving benefits into long-term employment. today, i hope we will hear some ideas for making these types of changes. it is gratifying to see we of representatives from state work force agencies on the panel today. i'm convinced if we are on this three firms -- reforms to the system to get people back to work, they must come from innovation from the state or in the states. over the years, unemployment insurance essentially has been a state run program. will the federal, as provided guidance in the minister of funding, states have been given the primary responsibility of collecting unemployment taxes and disturbing benefits. with the recent economic downturn, we have seen an expansion in the federal government's role in the unemployment insurance and with expanded federally financed benefits, states have had less

flexibility to innovate and reform that individual unemployment insurance programs. it is unfortunate. as we have seen over the years, many states have generated ideas that have drastically improved their systems and an individual states have taken action and reformed their own programs, they effectively have been able to communicate their successes and even failures with other states. this has led to the best or the expansion of the best practices across multiple states. when i speak with utah officials about their programs, which are among the most efficient in the country, they continually expressed a desire to take on more responsibility in designing and implementing reforms and helping people get back to work. more than anything, state officials in utah want to see fewer restrictions coming from the federal level and greater flexibility to innovate. the evidence of state innovation is probably strongest in the area where discussing today. reemployment. i'm hoping today's panel will

give us some insight into what states have been able to do in this area, which programs have worked and which ones have not. most of all, i'm hoping to get clarity about what congress can do to help states find success is a work to solve their own unemployment problems. there are a number of issues that will have to be addressed between now and the end of the year. i am convinced if we want to see improvements and reemployment efforts and other areas of the system, the federal government's role need to be reduced. states need to be given more flexibility to develop their own approaches and to adopt an adult successful programs from other states. to the extent that congress complete role in this area, i believe should be getting the government out of the state's way. i am sure it in the coming days will hear very few state officials clamoring for more strings to be attached to their u.i. programs. i hope to gain greater insight today and look forward to hearing from our panel.

i will have to slip out for a little while to go or to the judiciary committee, but will be back as soon as i can. i welcome you all of the less welcome you all today. >> thank you, senator. i would like to introduce our witnesses. the first is dr. paul wadner, former senior economist with the department of labour. second, larry temple, executive director of the texas workforce commission in austin. third, it is a different order, charles fogarty, director of the rhode island department training and labour. his also the former lieutenant governor of the great state of rhode island. dawn patterson -- peitersen,

director of unemployment insurance and work force projects in colorado. full written statements are in the record. summarize them cleared pulled no punches. tell it like it is. life is short. cannot take it with you. [laughter] let's have at it. >> chairman baucus, other distinguished members of the committee, and a visiting fellow at the urban institute, a visiting scholar for employment research. thank you for inviting me to testify about real employment services. the views expressed are solely mine and should not be treated to the of john institute or the urban institute. the-should not be attributed to the upjoshn institute or the

urban institute. we implement services are important tools to accomplish that goal. many rigorous and impartial studies have shown that several rihanna hamas services have helped cost effectively returned unemployment insurance to productive work. over the past 25 years, a great deal has been learned about how the services help the jobless get back to work. researchers have used rigorous evaluation methods to assess what works and what does not. during my career, i participated in much of this research. i was fortunate to have initiated and overseen a series of social science experiments under the leadership of secretaries from bill brock to robert reischauer. valuations of these labor department experiments concluded that at least three re- employment approaches are cost-

effective for dislocated workers. these approaches are job search assistance, self employment assistance, and re-employment bonuses. work sharing evaluations have shown that program to be affective in the u.s. and over the other -- and over a dozen other nations. my testimony recommends each of these approaches be used nationally to help unemployment or unemployed workers return to work during the time of high unemployment. these re-employment approaches can be implemented and expanded at little cost to the government. john matching referral, job development and providing labor market information and job search workshops. together, they speed the return to work, reducing unemployment insurance payments and increasing tax payments.

they were supported by the recovery act, but these funds have expired. federal funding is needed to provide substantial amounts of job search assistance to those who need it. self employment assistance allows workers to set up their own businesses, creating their own jobs. program could dispense have shown to rapidly return to work and earn substantially more money than nonparticipants. federal law allows states to set their own self were set up their own self employment programs but few states have done so in the program is little used. temporary federal funding would greatly increase program adoption and use. work sharing is permissible under federal law in 22 states and the district of columbia have such programs, along reductions in hours instead of laying off workers. participants receive a prorated share of their weekly unemployment insurance benefits

for the days they do not work. work sharing is much more widely used and other industrial nations than in the united states. work sharing would be much more widely adopted and used by the state's if state unemployment trust funds were temporarily relieved of paying benefits. finally, re-employment bonuses of about $1,200 for workers who retain a job for four months have been shown to be a cost- effective incentive to speeding return to work. this finding is based on analyses of four reemployment bonus experiments that have been conducted in the u.s.. i recommend we try out this approach nationally. each re-employment strategy should be rigorously evaluated so we can determine how effectively they worked in this time of high unemployment and

public policy can be shaped accordingly. thank you for this opportunity to testify. i welcome your questions. >> mr. temple, you are next. >> good morning. for the record, and larry temple, executive director of the texas workforce commission. i appreciate the opportunity to share the exciting things were doing in texas to assist those on the unemployment insurance and those who have exhausted their benefits find work. our and implement rate is higher than we wish it were. -- our unemployment rate is higher than we wish it were. texas has felt the downturn of the economy, but have from september 10-of timber 11 critically 250,000 net jobs. caterpillar, toyota, to name a few, have selected texas for the new plant and for plant expansion. we are rated top of the

selection magazine as the top states to locate a business in 2011. i am proud to say our workforce commission and its network of local work force boards have been a part of this economic development team. through our system, job-seekers and employers are connected and by being a part of this team of economic development level, we're able to assist unemployed take advantage of these opportunities. over the past year, our boards have held over 500 job fairs to help connect employers and job- seekers. through our integrated delivery model and commitment to unemployment insurance, driven into reconnect over 800,000 unemployed texans to the work force. with a demand for consistent in the model is built around private employers as they are the key to job creation. little background on how our model structured. in 1995, the legislature created the commission by merging 28

work force development programs from 10 different agencies including the agency. 28 local work force boards, 241 stops serving our 254 counties. our boards build strong bonds between business, education, and job training and strengthen the economy to benefit everyone. they partner with the community colleges, organizations, education partners as well as local chamber of commerce. the local flexibility with the state oversight is our model and continues to serve texans best. second only to veterans, and unemployment insurance claimants is our number one party in our state some -- in our system. to reinforce his commitment, his party, with self imposed a measure with the gold standard for us to reemployed climates within 10 weeks.

not a federal measure or legislative, but something we put on ourselves. the unemployment rate was about 5% and performance was around 27% of the people going to work within 10 weeks. although 10 weeks is a great goal, we can get some back and 11, 12, 13 weeks, it is still better for everyone involved. to date, we believe -- in the first five years alone, this initiative save our trust fund about $1 billion. it also has put a little over $1 billion into the house holds of our claimants and the local economic impact with the conservative multiplier 1.5 puts about $1.5 billion in local communities. prior to -- in addition to this, when we worked with our claimants, we have such things we use as the taxes back to work

program, which is a hiring incentive program which provides employers with a $2,000 hiring incentive over four months. to date, we have placed us than two years, it 20,000 claimants with about 4000 employers participating. the targeting claimants who are coming at a $15 an hour or less jobs and for those who complete the program, they're receiving about 99.4% replacement wages. we have had tremendous success with this program. in addition to these programs, we also have a work sharing program. in 2009, it peaked at nearly 700 companies. to date, about 477 companies and about 25,000 people that are participating. but all of this goes to we have

flexibility at the local level to do these things. whether it be the u.i. or dwi at a, we hope that you consider giving states more -- wia, we hope the to consider giving states more. we can get much more accomplished in light of budget cuts. we're dealing with less money as well, the serving more people. thank you for the opportunity to share with you. i would be glad to answer any questions. >> thank you, mr. temple. mr. peitersen. i was mistaken, i apologize. >> thank you for this opportunity to testify. your focus and unemployment insurance program is timely.

in the past year, the assistant $115 billion on this program. over half the clements exhausted regular benefits and less to go on to receive federal benefits on average stay unemployed for over one year, climbing $16,000 in benefits. my testimony addresses strategies that offer an opportunity to realize a greater return on the significant commitment of taxpayer resources while returning unemployed americans to work more rapidly. according to a steady, job- seekers, more than half of visited the committed to work for centers over -- only once over the entire year. frick and work -- brick and mortar is not the only place. online paces not kept up with online. an immediate connection with the

re-employment will promoting a more engaged job search. for many states to have not adopted this progress, it is an issue. congress to allow states to use a portion of the unemployment insurance dollars to fund better reemployment efforts to provide a level of fiscal discipline this option to become the by requirement to meet stipulated return on the state's investment and program limit of 5% of the unemployment dollars. each day job seekers can see headlines like 7 million jobs. these headlines are easy to report but then leave a confusing impression on the job market. by highlighting the jobs lost, and overlook the significance of the 95% of jobs that remain. driven by natural turn in the labour market, thus 95% of jobs will provide 50 million hiring opportunities this year alone. labor market that has a far more

helpful story to tell, one that suggests finding a job was difficult is not impossible. to be successful, a job seeker must focus on cold calling and networking. most states simply ask a claim to contact water to employers per week, a task that could take less than two hours. that level of activity is hardly a recipe for success. we found effective job seekers have to the main characteristics. they treated as a job itself and maintain detailed records. congress is must -- over 80% were employed after precipitation. participants had greater job retention and greater wage gains. more than 80% of employers helped pass the expansion.

the president has proposed bridge to work which plans attributes of several state programs. bridge to work has promise, but should be modified to eliminate the employer mandate to hire, increase the maximum training up to eight weeks up to 13 weeks, and simplify a cumbersome to pair system by paying a subsidy directly to the employer. because the net cost of a wage subsidy program to make it a legacy or a loser, we recommend using the existing state strategies for early interventions for those claimants were most likely to exhaust their claims. state agencies are full of good ideas and promising solutions. u.i. was born supplely from employment service which was born supplely from work force investment back. hill has been done to harmonize the findings. -- little has been done to harmonize the findings. temporary assistance for needy families and medicaid, but not for unemployment insurance.

by providing states more flexibility of waivers in their programs and funding, a comfy by cost effective safeguards built and measured impact on reemployment, we could make serious inroads into getting people reemployed again. congress has a real opportunity to clear a path toward meaningful gains in real employment and enhancing job search, and giving states freedom and flexibility to devise an employe accretive new solutions. thank you and i look forward to your questions. >> thank you. >> it is an honor to be with you today to speak about rhode island's 20-year experience with the work share short-term compensation program. mr. chairman, simply put, it is a successful layoff of version program. it has prevented an estimated 14,600 layoffs in rhode island since 2007, the beginning of the economic recession in our state. that is especially important for

a state like ours because we've been experiencing double-digit unemployment since march 2009. we believe our work share program has kept its rate from escalating and causing further damage to our state economy. through work share, a, in a uniformly reduce the work hours of its entire work force or all employees with the net impact of business unit or division. the reduction can be as little as 10% to as much as 50%. income that would otherwise have been lost due to layoffs is partially reimbursed through unemployment insurance. in rhode island, the average unemployment insurance benefit covers approximately 60% of lost wages. for example, a person works full time earning $500 each week or $100 a day. underwork share from the same person has his or her workweek reduced from five days to four days and participating, it would play the employee for under dollars in wages.

unemployment insurance would pay him or her $60. -- would pay $400 in wages. unemployment insurance would pay him or her $60. had the person been laid off, the weekly benefit would the approximately $300. conversely, the weekly drain on the unemployment insurance fund would have been $300, $240 more than if he or she were participating in work share. work sharing is available to any employer with two or more employees provided the business meets certain criteria. it is designed as a layoff of version program during an unanticipated downturn and cannot be applied to a time period dissociate was seasonal slowdowns. only those employees who work normally 30 hours per week and would qualify for unemployment benefits would qualify. employers are asked to continue

to provide existing fringe benefits. in the case were collective bargaining unit is involved, the bargaining unit must sign off on the plan before the state will approve it. for rhode island, were chair has proven to be a win-win-win situation. when four employees, for employers and the state of rhode island. the biggest benefit for employees, they get to keep the jobs of which they already excel. that is important in rhode island with there are seven job seekers for every two job openings. those are tough odds if you're trying to put food on the table. that is why layoff of version programs like word share is so important. they help provide stability to family said otherwise may be facing an average of 30 or more weeks of unemployment. work share is a win for employers because they can protect their greatest investments -- trained a productive work force. employers will say when a laid- off worker walks out the door, all the knowledge and skills he

or she accumulated walked out with them. however, employers and benefited and will tell you because their employees are able to remain on the job part-time during hard times, those same employees will be prepared and better able to boost production when the economy turns around. i want to provide a couple of comments from some of the folks who have used the program. the ceo at programs group is involved in work share. he says, by giving small businesses an option to rifle lay off, work sure helps us to maintain skills that might otherwise be lost. people in small companies often wear many hats. so really offering a skill is lost to the company when a person leaves, unlike in large companies where skills are redundant. the ceo of another company calls his company the poster child for work share. the single most instruments action took that put this back on the map was work share. we were preparing a cut in our

staff and instead were able to have worked to subsidize the wages until we got to the downturn. we survive the recession. we're adding huge facility and will be hiring more people in rhode island. the state of rhode island, the win is simple. jobs. the kids taxpayers -- a key taxpayers employed. thank you for this opportunity to testify about this important tool. >> thank you to all of you. in listening to you, i would be curious as to your reaction of how these various alternatives work and which ones might work better with respect to our changing economy. in lots of ways, some of your efforts may be relevant to the changes and some may not. the changes obviously are that

with increased productivity, many companies are finding ways to prove their bottom-line with automation others increases productivity, if your employees -- fewer employees. also the recession caused by the financial crisis, which has cost a very prolonged effort to get out of the recession because of all of the the leveraging that is necessary. but public and private. international competition, globalization is even more an issue today than it was 10, 15 years ago and will continue to be an issue. the world is changing so much.

so given all of that -- you hear the story about how major corporations and states have about $2 trillion in cash on hand and just not spending it because of uncertainty. uncertainty as to what tax policy will be and uncertainty in other areas. maybe europe, who knows? just how do these programs you're talking about the dress these changes that continue and the nature of the american economy as it affects jobs, affects people working? anybody want to take a stab at that? yes, sir. >> as far as productivity, discussing productivity, i have discussed work sharing which has been shown in evaluations to

help employers retain skilled workers and prevent them from having to hire new workers and train them over again. clearly, if skilled workers can be retained and be there -- >> so you like the rhode island program? >> yes. >> it seems to make sense. >> it does. rhode island has done more and has had more work sharing relative to its size than any state in the country. it has done a particularly good job. but job search assistance as well. it prevents people from losing their skills and being unemployed for longer periods of time than they otherwise would. but alatas re-employment services will help --

>> are the new jobs the same jobs or different skill sets? we have to think ahead a little bit. >> what we're seeing in manufacturing, some growth, not nearly what we would like to see, but the logistics piece is an area that we are finding is really needed in the economy. and working with people and being able to assess and identify what skills that have that are transferable -- >> logistics'? >> transportation of getting the product moved around, inventory control and those kinds of things. our toyota initiative in san antonio, one of the primary pieces of our economic development in the southern part of the state, the suppliers.

getting those products to toyota just on a time basis. that is something that is different type of work that people who have strictly been on the production floor. but they have transferable skills. a strong work force program to provide services, identified through assessment or the skills gaps are, what skills are transferable, and connect them to trainers. and flexibility. i hate to get on that so box again, but what works in dallas does not necessarily work in el paso. >> so what is the greatest restriction of flexibility? >> between all of these funding sources, it is so siloed. you have the u.i. adelman dollars that you cannot do for much but getting the check out.

if you have the city could work toward reemployment services, though-if you had the ability toward pre employment services, putting people back to work -- those are silent and have different reporting. there is some flexibility of the federal level to allow states to move part and parcel of these among, -- among the various programs, but it needs a combined effort. >> and put that together? >> absolutely. a >> you? >> we're trying our best. looking at one stop shopping. >> what is the best way to figure out how to put that one stop together? >> i would be glad to provide you some ideas on how we can do that. >> ok. >> and rhode island, the governor's work force board has

identified growth areas that we see jobs now unlikely in the future, areas such as defense high tech, green jobs industry, hospitality, and health care. we form partnerships with businesses to identify training opportunities to make sure those skilled workers are there when the jobs are available. ironically, even in a state like ours with high income rate, we hear from employers seek having trouble -- >> i apologize, my time is up. >> as i mentioned in my opening statement, i believe we need to change the culture of the u.i. from simply measuring distribution of benefits to one focusing i'm getting the unemployed back to work. i gather from your statements here today, the changes like this are already been made in a number of states.

i'm glad to see this, but i believe we need to do more to facilitate this shift at the federal level. you have discussed your efforts to improve re-employment at the state level. what will evidence can you point to, the ideas you have mentioned, to reduce the length of time individuals spend receiving unemployment benefits? also, what metrics would use to evaluate these programs? these are at the federal or state level? we will start with you, mr. temple. >> in texas, we have self- imposed a 10-week reemployment on ourselves to rapidly reemployed. we use that as a measurement or as a metric to hold our local offices accountable to that by making them a priority and an

outcome-based initiative, i think is the key. to my knowledge, texas is the only state that is implemented estate was self-imposed measure. there is not a federal measure for re-employment at all. i think our model, and one other thing you could simply say, duration and exhaustion as a mentor to reduce it. the real deal is making this a party to get re-employment and holding ourselves accountable to do that. in government, if you don't measure, it don't exist. we measure it now and it exists. >> i would add to what mr. temple said, there is another factor you need to look at. not just looking at those measures of re-employment. i cannot agree with you more, senator hatch, about getting organizations to look first of getting people back to work. is to be the main focus.

yet a metric unit to look at is you should measure anything that is being done is, what is said to and to create savings for the u.i. trust fund sitting out there? by taking any methodology i, its to be proving what you're doing is making a difference with those funds your spending to get those people back to work by reducing the amount of time there on unemployment, thus saving money for the trust fund. one of the metrics i would like to see out there more is something that talks about how does this program impact the trust fund? when the impact the trust fund, your fear benefits being paid, people getting back to work quicker, reducing employers' taxes, etc. >> mr. temple, you describe a number of real implement services that texas offers to u.i. clemens. i'm hoping we can get a better idea of how these work in

practice. let's say i am an unemployed worker in texas and i filed for unemployment benefits. your goal is to help define a new job within 10 weeks. how do become aware of your states services whether it is job search services, which subsidy program, or something else? specifically, how do i take advantage of them? what will you require of me to be able to participate? >> tonight, every workforce board will generate a letter that will be mailed in the morning to everyone who applied for unemployment insurance in texas today. it will introduce them to the system, give them a number, location of the office closest to them, and inviting them to come in and get services. that is not the usual u.i., come in and do this. this is the welcome wagon letter. we start immediately letting them know.

the second thing we do come through our priority and work for sports, extensive outreach. 500 job there's just in the last month. we communicate through outreach with the claimants. for instance, our wage or hiring is in a program, we let them know they can take this and go out and sell themselves. it is strictly as a caring incentive to higher unemployment insurance claimants, they can take that and say, if you hire me, i know i do not exactly have the skills but here's $2,000 the will offset the training cost for me. we'll try to find them jobs and let himself market themselves of the same time. that is kind of how we start, day one, letting them know about the services. we also have an expectation of job search. we implemented in 2003 a minimum of three job searches a week.

on local boards set what it will be. generally around five. so there is an expectation on the clement's part they're having to work for -- on the claimant's card that they have to meaningful job search. we do about 1500 checks a week within the agency. trying to set the culture and said the agency that we're about putting people to work and sending that message to employers that we care and job- seekers that we care. >> thank you. what percent of people receive that letter initially? >> 100%. >> use in that letter out, the welcome wagon letter and have a

100% response rate. >> i thought unit sent out the letter. i'm not sure what the response rate is. i do know our outreach, our rapid we implement programs that we use our reaches -- outreaches about 60%. we have about a 90% show up rate. >> thank you, i commend you for a very important hearing. this is exactly what need to be focused on. gentleman, and had a great thrill almost 20 years ago when i had a chance to team up with the late senator kennedy and as a member of the house, congresswoman olympia snowe. we set up this program in 1993. essentially, this allows people who are carefully screened to

draw their unemployment benefits while at the same time being exempt from some of the search requirements that they would have to be part of unless there were setting up their own businesses. yesterday, sinner carper was one of the first in the country to folk -- senator carper was one of the first to use this program in delaware to considerable success. the reason in number of lost our focus on trying to expand this is we're seeing some extraordinary successes. i want to describe one to you. we have seen an enormously successful tech startup in my home state called urban

airship. you had some young guys that work in the technology field. they thought there were opportunities the consumers would want to make online purchases with smart phone applications. these were savvy software developers. instead of having the traditional maintenance to check for work, they could use the unemployment system as a trampoline to be able to, but new jobs, new industries. i have a picture of them. these are four young guys in their sneakers who know a lot about technology. is in this the kind of model

that should be expanded significantly having seen these successes going back to the early 1990's? >> the answer is yes. the program does produce the duration of unemployment. it ends up substantially increasing the earnings of people who participate. the problem with the program is because there isn't a dedicated funding source for training and counseling for entrepreneurial training for this program. it is difficult to put the program together and make it work. we do have the workforce investment act that has many kinds of training that can be

provided to individuals and one of them as entrepreneurial training. i think we need a change in the way we measure the success of all entrepreneurial training to get greater participation. it is important to engage the small business administration and the state small business development centers for the experts in counseling and training. >> is it fair to say the costs associated with the administration and training are pretty modest compared to the potential benefits? i have an article that describes how silicon valley is tripping over themselves to invest in urban airship. dr. wander has done some good work. my time is almost up.

their training costs, administrative costs and the light. ke. is it fair that those costs are modest compared to the potential benefits of self employment? >> yes. we have done in an experiment of benefit cost analysis. the benefits are substantially greater than the cost of the program. >> thank you, mr. chairman. enow.nators stab and >> thank you. i wanted to talk about the growing stills -- skills gap. people out of work but not matching up to the jobs that are available.

i know we have been talking about that. in michigan we've tried to address that with no worker left behind. that has help workers gain skills and credentials they need to gain the employment of jobs that are available or start their own business. how we could better coordinate the changing employer needs with training and placement and support for those that need jobs. >> well, there are many very fine training programs out there. what we need is more training, more training that is targeted to areas of economic growth and -- >> i know that in general, but we have very specific employers that are doing a job fairs and

so on in michigan and indicating they are not able to find the people that they need. so specifically matching up employers with employees. what have you found to be the most effective way to do that? >> the kind of job search assistance programs that try to match employers and workers that do job development, which is done in many states. that has debate more emphasized and better funded. >> would anyone else like to add to that/ ? >> thank you. we're finding that college is

important, not all students will go to college. all students need a continuing education level above high school. we're looking at setting up a mechanism where people can identify stackable certificates where they can look to see what the jobs or that are out there and how likened move up to the process. not a letter as much as a lattice -- not a ladder. so we get those skill levels up and the work force is one that matches needs of employers. it does have to be employer driven. >> absolutely. >> some of the workforce investment act has restrictions and prohibitions of being able to use dollars for incumbent workers.

if you can't upgrade the skills of incumbent workers -- build it and they will come. that is something when we talk about the flexibility as a practical approach. >> thank you. >> we're finding that businesses on the cost of whether to add somebody or not may need skills that are not out there and they have to come up with some dollars and we come up with some dollars. it is 8 win-win saturation -- it win situation.iwin- >> that is the duty of a lot of

wage subsidy programs -- that is the duty. getting the marginal skills that they need. >> as we look at the need to extend unemployment benefits, we are looking -- the urban institute has indicated there is a gp multiplier of about two. every dollar we spend generates about $2. >> in our state that is critical. once the full phase-out occurs in march, we're looking at a net impact of about $24 million a month. that impacts other businesses as well. the jobs are not out there. what is going to happen to them if they have no source of

income? we are concerned about that. >> thank you. >> senator cardenin. >> thank you. this is a vital link. it is count acicular -- it is counter seculaicular. our objective is to make sure you have the tools necessary to get people back to work. you talk about the different tools that you use it from job fairs and the texas 10 week online issues to the one-stop shops that we employ it in maryland, work share programs.

the challenge is that we don't have enough jobs out there for people unemployed on the system. yes, we do deal with the skill level. we don't have enough jobs. i hear about the incentive issues frequently. it's good to have some additional incentives. people want to work. if you are unemployed in a tough economic times and you were looking for a job, your chance of getting that job is less likely than somebody who is already employed looking for a job with the exact same skillful. there is discrimination against people who do not have employment today. tell me how we can adjust the guidelines or policies in our

federal unemployment insurance laws that would give you the best tools to deal with the challenges that we're confronting in this stubborn economic period? what would you like to see us do? >> you want us to extend unemployment insurance. you want flexibility. specifically how to deal with the challenges. do not be shy. >> i'm on it flexibility to soapbox. we took the encouragement of the health and human services and the department of labor in the summer before last to do higher incentive programs and use that to augment we have in

the general revenue. we are prohibited because of all of the technicalities and were not able to serve anybody that did not have a child. we have to find another pot of money. we were trying to target children who work aging out of foster care who were about to be unemployed, and we were not able to serve those individuals either. those were dollars right there -- >> the next step congress does usually is cut the funds. that is one of our challenges. how do you deal with the discrimination of someone who doesn't have a job? we met with college students yesterday that could not find jobs. they are trained.

how do you deal with that in the unemployment system? >> we are promoting these individuals on unemployment insurance. employers have said when things were tough, there were saying, just send me somewhat that will show up, and i will take it from there. the unemployment insurance folks are unemployed by definition it through no fault of their own. they are trained or trainable. they can do other things and were able to bridge the gap of the cost of training someone. we sell the individuals -- >> any of the flexibility you want from us -- any other

flexibility? my time is running out. >> businesses are not hiring as much as we would like them to. there are programs like work sharing that will prevent unemployment from happening for the first time. for unemployed workers looking for a job, they can create their own jobs if you of a self employment assistance program in your own state. people can create their own jobs. >> thank you, mr. chairman. >> thank you, senator. i was struck by what i read in one of the morning papers.

this was a column about a young lady in vietnam who works so hard. i think her mother is no longer with her. she takes care of the kids and bikes an hour and half to work. she is driven, absolutely driven to succeed. she is undertaking a huge obstacles. she is going to succeed. she is trying to become a cpa in vietnam. education, striving to succeed explains why to some degree asians tend to work harder and

get better grades in schools and work so hard, etc. i'm wondering if all these programs we're talking about -- this is hard. if there is an education component that makes sense. it is not just -- maybe it is education and a skill set. to instill education, the incentive to see that there is hope in america still. down.on't have to be the thought just occurred to me. i wonder if any of that makes any sense. maybe it is. i do think that this country to

get jobs and to have the jobs, we're going to have -- more of us will have to have that drive to succeed and to do well for the right reasons -- to provide for the family and so on. >> our state and the recession earlier than the rest of the nation. we had a high unemployment rate for a long time. the mindset has seven that we're in a tough time -- the mindset has saiet in. the fact that you just cannot take it for granted that a certain level of education will give you something. i believe by experience, education is letting people know if they want to be successful,

they have to look at different routes to get their. re. they have to be more focused. they need to take advantage of the training programs that are available. they understand because of the flexibility of the workplace today that unless they are nimble, the less trouble in the long term. i think that message is starting to get out there. i teach part time and i do see that in some of my students as they get ready to graduate. >> role models often help, too. they came from the ashes, from a

great difficult background, or difficult conditions -- there were layofid off. "boy, old joe, he was down an nd out." that is infectious. i wonder if that is more psychological than problematic. -- pragmatic. >> while they don't have jobs, i think we should be pushing education and training as much as we can, so when the jobs come back, people of the skills to take them. >> thank you very much. this is the challenge we have. senator hatch. >> mr. peitersen, lead me ask

you this question -- let me ask you this question. the so-called georgia works model. these programs would allow u.i. been a fisheries to work part- time and possible placement at the worksite at some point down the line. this has garnered a lot of attention recently as the obama administration has expressed interest in this idea. these programs have received a fair amount of criticism. these types of programs will incur abuse on the part of the employer. have you seen any abuse? >> we have not seen abuse.

abuse is using not present in these programs. it takes a lot for employers to take somebody into their shop with a company and train them and spend resources to get them involved in something. that is what george works is, a training program, teaching you new skills and new work habits, getting new prime to go to work in today's environment. it is only three days a week. other time they are still out there looking for work. a lot of the people ended up getting employment before the training ended, the eight weeks that they have for the training.

employers were giving them some skills and ability to go to work for somebody else and they were doing so. >> the one implemented in georgia is curly undergoing an overhaul. other states are trying out a similar version. which elements of this model have worked and which elements have not work? can this work on a large scale? >> i think it can work on it large-scale. they can work with claimants in getting them jobs. work with providing employers and seeing how they can adapt to the new skills that they need in the job. there are a lot of parts that go into getting people back to work. the more options we have for

people to get back to work, the more they will be able to. the georgia works is going through an evaluation. it was expanded a great deal. they pay a lot of the cost for the george works program out of state funds. those state funds dried up. there were paying for the worker comp. there were paying a stipend for transportation while there were still receiving their u.i. new hampshire is running the program without paying those kinds of costs. we will see which works the best. what works really well in georgia may or may not work well in north dakota or alabama. we to make sure that we have states that have enough

flexibility so they can look at things that are out there and saying, that makes a lot of sense for me. let me put it in here. it is not saying this is a big national program you need to have out there. how does it sfit? the best thing is to have eight wage subsidy kind of thing -- the best thing is to have a wage subsidy kind of thing. so now maybe we can do something on a subsidy program to get them for their trained on those skills and move them into full employment. there is a lot of gears going on and they all need to work together. >> i want to thank all four of

you. >> does georgia works work? i heard somewhere in has been discontinued. >> it has not been discontinued as far as i know. it has been ratcheted down. >> because? >> because of the cost. as the recession got worse, they expanded it out to everybody. they were using georgia works even though people were not u.i. on claims. but the cost became too big of a burden for them. they were using state funds for that. they had to cut back the program. >> i think we need an evaluation. the rest not been a rigorous

valuation of them yet and there's a lot we don't know about them at this time. huge, complex a country. we have 50 states. each is attempting to solve problems on their own. nothing is simple. we have to keep at it with all the people that are unemployed. it is a tragedy. we need new jobs. this is very helpful. mr. temple will send some information. we will try to figure how to make the best use of it. the meeting is adjourned.

>> wrapping up this hearing on capitol hill. the associated press is reporting the number of people reported for unemployment benefits is at its lowest level since april. applications drop to wait seasonally adjusted three under 90,000 -- 390,000 last week. ben bernanke is in south texas today. he is holding a town hall bliss. today at 4fort

live today, author elliiot cohen. he talks about how those bottles shaped the way we wage a war today. you get online at booktv.org. by spreading biden will be at the ninth annual first amendment event in concord, new hampshire. we will have live coverage of that. it gets underway at 7:00 p.m. tonight eastern. [cheer] >> let me remind you that moderation and the pursuit of justice is no virtue. >> he lost the 1964 presidential

election. galvanizewater's diaz the conservative movement. he is featured this week on "the contenders." live on fraud at 8:00 p.m. eastern. know that you all to n i'm doing the right thing. >> 1984 finds the united states in its strongest position in years. >> with every program since 1987, the c-span of video library is the definitive source for online political affairs. download and listen to mp3 audio, just 99 cents each. take c-span with you. listen to what you want, when you want, where you want.

from this morning's "washington journal." host: what is the home program? guest: it is not an acronym for anything. it is a program to build and renovate homes for the poor. there has been about $32 billion in funding to provide housing for the poor all over the country. hud provides grants all over the country and they in turn hire

developers to build and renovate housing. host: why did you going to investigate this program? guest: housing is a fundamental need and a huge issue right now given what's going on with the comic and foreclosures. since the largest block program -- now that what is going on with the economy and foreclosures. we decided to take up a national look at this. host: how long to spend looking at it? guest: we looked at it for over a year. it was a huge investigation. it was myself and some researchers and a great photographer. i called 165 housing agencies

over the course of a year. we found a pattern of delays all of a country. host: has it been a success? guest: that is a hard question to answer. we did not look at the history of this program over two decades. this is an important program. there are success stories all over the country. it has produced 1 million units over the life of the program. we found a pattern of troubled projects. then we looked at the government to see what was done about it.

hud doesn't routinely tracked the progress of these projects. they track how much money was spent but not what is coming out of the ground. that was the focus of our story. host: the first round of stories can now in may. there was a follow up this week with some unfinished projects. what are some of these photographs? guest: those are older projects or all of hud's money has been spent. nothing has been built. that is a labor hall and the shuddered church in california that was supposed to be torn down and renovated with new homes. that project is at least five years. then we will see an empty lot.

host: louisiana. guest: what we found all over the country, there were delays. private financing is hard to come by. sometimes you cannot get the land together. there is a pattern all over. it is delaying the production. host: in your follow-up article, you talk about finding more flaws hud's accounting. guest: the senate has also been investigating. they have been asking a hud lots of questions about the status of the program. hud doesn't know in many cases

what has been come out of the uilt.d and what has been bille congress asked hud for an accounting of this. in some cases, the reports to congress or pri inconsistent. host: did hud cooperate? did secretary donovan talk with you? guest: we talked to hide in advance of our for story. we do not speak to secretary donovan. we spoke to the assistant secretary in advance of publication. we were having car stations with hide all long -- we were having conversations with hud all

along. host: has there been congressional action because of your series? guest: there has been significant action in the house. they are calling for unannounced inspections and third-party monitoring, more tracking of projects. the senate is calling for something that does not exist now, construction deadline to make sure these houses are built in a certain amount of time. host: how much money has been wasted? guest: that is hard to do. as much as $40 million tied up and potentially delayed or defined projects -- $400 million . we documented another $40 million drawn and spent on

projects that have not been built. host: our guest is an investigative reporter with "the washington post." we're talking about hud's affordable housing program. we want to give your phone calls. the congresswoman who chairs a housing subcommittee had this to say after reading your series. >> we have uncovered individuals -- but never built a unit of housing or only built a few units were many units have been pledged. my staff to purchase of a chicago proper that was funded with hud dollars.

65 units were built with the funds of this project. there are not even close to 65 units at this location. it looked more like four units. who has the money? has a high demand repayment for the units that were not b uilt? guest: what happened was congress did their own investigation of this after we published. sometimes the addresses are wrong. in time it will be a street corner-- sometimes it will be a

street corner. funding these completed project was difficult. host: trenton, new jersey. please go ahead. caller: is in the responsibility on the part of the state to account for the money? why would anybody in the for our government have to track the money? guest: this is a federal block grant program. this was sent up by law to give maximum flexibility to local units of government. that's the whole idea of this program. the lot expect local units of government to police their own projects. but hud still has responsibility to oversee this program. much oversight should hide be

providing? -- how much oversight should hud be providing? their own inspector general has been pointing out that local housing agencies are not monitoring developers. what is the role of the federal government if that is the case? host: david from long island. caller: good morning. i wondered if you looked at the store on long island. a hud scammer was basically flipping houses. he would give it people to the tune of $30 million. all his files were supposedly lost on 9/11. george bush granted him a pardon.

that was such an ironic story. the political ruling class is were using the hud program to basically a feather their nest. guest: there is clearly fraud in the program. the inspector general talked about fraud in this program, kickbacks, bribes. the inspector general has launched 55 investigations involving fraud kickbacks. without oversight and without monitoring, the kind of stuff occurs. host: have you found incidences that may be your not looking for, but maybe the political aspect of this as going to favre developers by the administration -- that is going to favre

developers -- favor the developers. guest: just figured out whether projects were completed took us months. in prince george's county, we found a nonprofit developer with little or no experience that 0,000 to build0 houses. they had no money to build. we found cases like that the we documented throughout this report. host: any hope of getting that money back? guest: when the money goes back to non-profit developers, how do you get the money back if they are in bankruptcy or they are defunct?

they no longer exist. the housing agency and the local units of government are forced to take money from their own general funds to repay hud. host: the money goes to the housing agencies. they've stolen out to different contractors. guest: sometimes there are non- profit developers. so the money comes down from hud . then a state housing agency or a city or county will then figure out what their priorities are and hire developers to build and it is up to them to monitor and up to hud to oversee the program. host: somerville, georgia.

caller: i found your article interesting. i think it makes the best case for those candidates who want to eliminate such large bureaucracy. this shows us that there's not a single law in washington, dc, that is not a direct assault against middle class americans. guest: ok. i think the house and the senate, there are some steep cuts proposed for this program. even the republicans that are talking -- that have been critical of hud still talk about that this is a well intentioned -- people need housing. they need decent housing. this program when it works right

does provide funding for that. host: if people want to read your series from may, can find ithey find it? you confine this investigation on the washington post website. host: have there been any criminal charges filed? guest: no. not yet. we have had oversight hearings in the house. hud released a massive overhaul of regulations for this program. this is the first over all of this program since its inception two decades ago. it will do many of the things we talked about in the story. basic safeguards to try to

protect this money. hud , without on friday -- hud came out without on friday. host: or has congress been -- where has congress been? guest: i do not know of another time there was this kind of a probe of the home program. we could not find any thing. the present a lot of reaction since we a published -- there has been a lot of reaction. caller: former assistant secretary of hud under jack kemp. i listen to an interview with her on jarvis and public radio in oregon.

she said there was corruption in mr. kemp -- shed that said hud is being run as a criminal enterprise. she said there is "no government, this large defense contractors running the mechanism." she cited a spokesman who said that $500 billion to $1 trillion is laundered through the new york stock exchange. host: we have to leave it there. guest: wow. again, i can only speak to this program. i think this program was set up

with the best of intentions. i am not talking about -- i am talking at the local housing agencies. people want this program to work. most people are in this program because they want to build houses. there has been delays and fraud to fester. host: to do any comparison between who got the grants and political contributions? guest: we did not. we have more stories planned. host: the door from massachusetts -- theodore. caller: these programs have been produced with great intentions in mind, but they will not work

if they're not funded. have they traced the money trail about who stopped the money and what is being done to put them -- to put them in working conditions? the deregulation of programs and you put them in place and you deregulate, however they supposed to work? guest: i think a house committee has proposed a 24% cut to the program. the senate has passed 30%. those are steep cuts. we will look at the impact that might have on the ground in distressed communities that need housing. this lack of oversight with the failed projects. we have looked at that in places

of california, new ark. it does have an impact. host: you work to thked at "thei herald." she is a pulitzer winner and it goldsmith prize winner. what was the series that you went goldsmith prize for? guest: that comes from a harvard university. that was my first series with " the washington post." that was about landlords who are forcing tenants out of rent- controlled buildings so they can convert to condominiums and sell and make lots of money. that was before the market tanked. we document it landlords that would turn off the heat and

stop providing basic maintenance to force tenants from rent-controlled units. there was a nice response in the district. 20 landlords were sued. there was a lot of response to the project. host: what did you win your foot pulitzer for -- what did you win your pulitzer for? guest: we documented delay projects in miami and plucked the connected developers who received local housing money from miami and had walked away with the money and had not built a thing. there was a huge response in miami. people marched through the streets. they held an overnight vigil.

shoot response to the project -- huge response to that project. host: is there accountability/ ? guest: sometimes i feel like an investigative reporter. people cut checks but it does not feel like it is real money sometimes. if you're cutting a check to build a house, wouldn't you want to know that it was being built and the status/ that? that is not just a hud thing. the city and county came together to build homes. what had been a waste land of lots, suddenly people were moving in. one woman got a house. i was there the day she got the

house. she was waving the keys. "this is my home." host: debbie is an investigative reporter from "the washington post." david, go ahead. caller: thank you for taking my call. they are spending billions of dollars on hud. why don't they take the money and buy those homes and put people in those? that way you have some people involved and -- the government by straight and eliminates -- at least they are getting their capital back. wouldn't that help the communities?

guest: i have heard other people say that, too. i do not know if it is as simple as that. bypass the middleman and gore right to the source and put people in houses. i think some communities do things like that. a distressed support complex was bought from the government for $10 with the goal of putting people in the complex. it was being renovated. it was a massive renovation. they never got the work done. that create new obstacles for government. host: are there any states or localities that are worse than others? guest: yeah.

very few exceptions i found well intentioned people running these programs. newark, new jersey. there was a new chief there, coming in, trying to clean it up. he inherited a mess of a story. nothing was biluilt. we took pictures of it. there is a history of no oversight. that seems to be changing. host: where is a success story? guest: arlington, virginia. i looked at the records. i think they have a good handle on their programs. they just opened a new building.

a green building. it seems like it is running well. host: is that the jordan? kabul, colorado -- pueblo. caller: i think that maybe these block grants should go to states that are willing to put been tracking systems before they give those grants. the developers and contractors are dishonest. maybe they should be forced to put up bonds. i am concerned when things go to the state and local governments. anytime you get friends and friends of relatives put into play, that money gets passed around. we see that all the time. i think block grant should go to

states that are willing to put in tracking systems. guest: i think that is a feeling that all other people share and a very astute. point. when you compared that to the tax credit program, there are deadlines. if funds affordable housing construction. there are very tight deadlines and oversight monitoring requirements before you can tap into the program. with the regulation that hud is proposing, perhaps it will be more underwriting requirements for developers. developers could taphole money without much experience -- developers could tap money.

it was a very hands-off process and almost anybody could top into that -- could tap into caller: all of this is an obvious deception that grass roots people have been conscious of and lost hope for so long because they know that nothing will be done. take the state of texas -- as far as their hud situation is concerned -- i did some research to try to get some legitimate assistance don. everything was blocked. from the top down. as far as their regional administrator on down and up to the federal level. everything was disregarded.

it was intended to be brushed off. is there any possible way that a state like texas could be looked at as far as they're ending systematic obstruction of all profits and remove funding until the properties in use coincide with their established practices? they are not meant to get all. the deception is so blatant that everyone is aware of it. everybody else is going to reinforce it. host: we got your point, i think. any response? guest: as a hard question to

answer. we were in texas for this project. we interviewed homeowners in a situation like you are describing where they wanted to get renovation money for their homes. this program funds renovation money for owner-occupied -- for people who cannot afford to fix the roof. i met this wonderful family who lived for generations in a house that's up for hurricane damage and the walls were falling down and trying dapper desperately to get hud money. i have heard this frustration before. unfortunately, that is what we hear all over the country. host: here is a stweet -- next call comes from pennsylvania on a republican line. caller: i am listening to your program now and if there is that

much fraud going on, why don't we just pull the plug on this whole thing? it is a simple comment. guest: i hear you and many people feel that way, i think. we have heard that kind of comment before. i cannot really address that except to say this was a well intentioned program and it has produced poems. . homes. host: the caller use the word from the pri would use that word? guest: we did not specifically look for for but we looked at the defunct project. we looked specifically in the district at one deal where some longtime hud felons got more money from this program and we wrote about the project. the inspector general has talked repeatedly about fraud in the program.

clearly, money has disappeared but i don't know how widespread it is. host: has hud changed its procedures center series? guest: they say have been working toward this long before we published. hud has a database to better track projects and they are trying to] that have been idling on the books for years. they are in the process of rewriting but law that governs this program. we have a story coming out in the next few days about the district. i have been writing about the district since i joined the post in 2007. there is a new director of community development here who is doing common-sense things -- background checks and developers, credit checks on developers, making them sign contracts to say if you don't build in this timeframe, we are pulling the plug, just common

sense things. we have a story coming out on that in the next few days host: next call is from akron, ohio, a democrat and we're talking about hud's affordable home program. caller: good morning. i am a first-time caller. i have one question and one comment. why don't they go after the fraud and hold these people accountable and send a message? maybe it will stop. my comment is -- are you going to investigate hud affordable housing for rental properties and upkeep of maintenance in that department? guest: your talking about more section 8 housing or public housing -- hud is a major agency and there is lots of areas i would personally like to look at because i have been focused on housing.

there have been some investigations by newspapers and television stations over the years on section 8 housing and public housing and maintenance problems and safety violations and that is something we're interested in. in terms of fraud, i think that hud headquarters, when they find out about something, they generally seem to go after it. the problem is they often don't know what is out there because they have not tracked their projects. hud's acting deputy inspector general testified last week that what worries him is what we don't know about. host: you have some more suggestions coming in for you to work on -- guest: interesting question -- we have plans to look at

something like that in the coming months. host: she also follows up -- guest: good suggestion -- we have more stories plans. host: just a few minutes left. you can go to washington post.com and type in her name or go to the investigations page on the home page and read all of the investigative reports put out by "the washington post" best to get a staff. florida, good morning to you. caller: key for cspan. i was just listening and have to wonder -- all taxes ultimately fall in the individual. i don't care how you want to diffuse this thing but it ultimately comes down to the individual. we send this money to

washington. we build a big bureaucracy and it can't function per comment today. why take the money in the first place? shouted down. guest: again, we have heard comments like that. i cannot speak to whether or not the program should be shut down. when you look at places like arlington, va., there are housing agencies in california we talk to and they are trying to get the house is built. there was a housing agency in turlock, calif. with a new director and she is trying to revive two defund project's engine has 141 units planned >> see the segment in its entirety in the cspan video library. we go live now to fort bliss, texas for comments by fed chairman ben bernanke in a town hall meeting. >> to engage with and talk with

the chairman of the board of governors of our federal reserve system unbelievable.. this is actually his first visit to a military installation since becoming the chairman of the federal reserve. in looking back in history, since the federal reserve act of 1913, this may be the first time any chairman of the federal reserve bank has come to a military installation to again -- to engage with soldiers and families. we know his job is pretty tough. this economy of ours is a tough economy. i know we will have a lot of questions that have to do with the economy and other things of concern. a little bit about german bernanke -- he is from dillon, south carolina, a small town and he went to harvard, got his ph.d. at mit, was an economics professor at princeton and stanford and in 2006, he was chosen by president george w. bush to be the chairman of the

federal reserve board. he has also chosen to be one of the seven appointees who is a part of the governing board which is a 14-year term. as chairman, that is four years. he was just re-nominated last year by president barack obama for a second term. that shows the bipartisan nature of his job. a little bit about our federal reserve system -- the federal reserve bank is really our central bank. is the back's bank, of our federal government. there are 12 regions. luckily today, we also have the president of our regional federal reserve bank in dallas, mr. richard fisher and is good to have you here, sir. thank you for coming. our federal reserve bank has three or four general areas. one is conducting our monetary

policy as a nation. it has to do with regulating our banking institutions, maintaining the stability of our financial system and providing financial services to our lending institutions or depository institutions, the u.s. government, and foreign officials overall including playing a major role in operating our nation's payments system. as chairman, dr. bernanke also meets frequently with our president, the secretary of the treasury, and testifies in front of congress in front of the senate and house and he is a major player in our world economy. in addition to visiting us here at fort bliss, he also took the time voluntarily to greet our soldiers coming back from iraq this morning at 3:00 a.m. and we thank you for that. [applause]

we just appreciate you being here, sir. let's give a big texas welcome to dr. bernanke. [applause] >> thank you, general and good morning. it is an honor and privilege for me to join the men and women of fort bliss today. as somebody puts a high value on public service, i want to thank the soldiers here for their service to our country and for helping to make the world a safer place. i admire your professionalism and dedication. i want to thank her family members as well. service members could not achieve what they do without the support and sacrifice of their families. you should all be proud of what you have accomplished and what you stand for. you may be wondering what the chairman of the preserve is doing traveling to an army base in texas. as part of my job, i need to visit with all kinds of groups

with different backgrounds and different perspectives on the economy. i want to explain what the fed is doing and i want to understand how the people in military service are affected. they face lots of challenges. your home towns may be struggling with foreclosures. you may have had difficulty getting a loan, by a car, or a house. you may have family members who are having trouble finding employment in this tough job market and you may be worried about your own job prospects when the time comes for you to leave the military. i appreciate these concerns very much and i thought i would spend a little bit of time telling you what the federal reserve is doing to help strengthen our economy and increase economic opportunity. i also want to make sure you are aware of some special financial protections for people in the military. just this tuesday, i met with polly petraues in the consumer

financial protection bureau. she and i share a common interest to make sure that men and women who protect the security of our country are themselves protected from predatory financial practices. i would also share a few thoughts about what each of you can do to give you cells -- to give yourself the best shot at a promising financial future. a few words about the federal reserve -- we're working hard both the central bankers and the financial regulators to help restore our nation's prosperity. in 2008 and early 2009, the world suffered the worst financial crisis since the great depression, a crisis which had been left unchecked, would have resulted in a global financial meltdown and economic collapse. working with policy makers around the world, the federal reserve acted creatively and forcefully to help stabilize the financial system and halt the economic slide. our economy has been growing and

adding jobs for two years now. for many people, i know it does not feel like the recession never ended. the unemployment rate remains very high and more than 2/5 of the unemployed have remained so for 12 months or more which is the highest ratio since world war two. these problems are serious and we at the federal reserve have focused intensely on supporting job creation. supporting job creation is half of our marching orders, said to speak. the other half is controlling inflation. in the language of the law that sets the mandate of monetary policy, the federal reserve is required to seek maximum employment and price stability. we pursue these two important goals by influencing level of interest rates and other financial conditions. my colleagues and i on the federal reserve monetary committee of inflation at 2% or

less. that rate is low enough that people in businesses can make financial decisions without having to worry too much about rising costs but high enough to keep the economy away from deflationar which is a cause ana symptom of an extremely weak economy. although spike in oil and food prices and other transitory factors pushed inflation up earlier this year, inflation appears to be moderating and based on the best information we currently have, we think it will remain "reasonably close to our objective of 2% or less for the foreseeable future. in the longer term, monetary policy is the main determinant of inflation so the federal reserve policymakers have considerable latitude to choose our inflation goal. in contrast, maximum employment, the other half of our mandate, depends on many factors outside the federal reserve's control

such as the skills of the work force and the pace of technological innovation. right now, my colleagues estimate that the u.s. economy could sustain an unemployment rate of somewhere between 5% and 6% without inflation pressures. regardless of whether the sustainable rate is at that level, with unemployment currently at 9%, our economy is certainly fallen far short of maximum employment. that high unemployment rate is whether a reserved is focusing monetary policy and strengthening recovery for job creation including keeping short-term interest rates near zero and longer-term rates like mortgage rates at the lowest level in decades. keeping borrowing costs very low supports consumer purchases of housing, cars, and other services as well as business investment in new equipment, software, etc.

greater demand on the parts of households and businesses leads to increased economic activity and employment. like other central banks around the world, one way we have put downward pressure on long-term interest rates is by purchasing high-quality, long-term securities in the open market, specifically u.s. government securities and federally-backed mortgage securities. it is important to understand this of this type of activity is not the same as government spending. we will sell these securities back into the market or simply allow them to mature as part of the process of tightening monetary policy when the economy improves. in the meantime, we earn interest on the securities we hold. in fact, the federal reserve's security purposes and other actions during and after the crisis have have the side effect of reducing the federal budget deficit. last year and a year before, we

have returned a total of $125 million of those earnings to the u.s. treasury and payments to the treasury in the current year will be substantial as well. in addition to our monetary policy role, the federal reserve shares responsibility with other government agencies are regulated and supervising banks, protecting consumers in their financial dealings and fostering financial stability. we're working with other agencies to significantly increase the financial reserves that banks, especially the larger ones, must hold against possible losses. the fed and other agencies are toughening restrictions of the kinds of financial transactions that banks can undertake and working to ensure that banker compensation packages do not give them incentives to take such risks. we are requiring banks to compensate and assessed for close to home owners who are unfairly treated we're working

to increase the financial system as a whole against financial and economic shock that may occur in the future. we are collaborating with the federal deposit insurance corp. to implement new rules that will make it easier for the government to unwind big financial firms if they get into trouble rather than being faced with the terrible choice of either a bailing them out arresting the collapse of the financial system. the federal reserve was never intended to shoulder the entire burden of economic prosperity fostering a healthy growth and job creation is a shared responsibility of all economic policy-makers in close cooperation with the private sector. spending and tax policy is of critical importance but a wide range of other policies pertaining to labor market, housing, trade, taxation, and regulation, for example, also

have important roles to play. the federal reserve, along with other agencies is working hard to enforce and an array of strengthened regulations that protect mortgage borrowers, credit card holders, and other consumer financial services. the people in this room should be aware in particular of the special rights and protections provided for military personnel by the service members civil relief act, scra. the purpose of this tool out service members to perform their duties without worry of foreclosure, he victim, and civil prosecution under most circumstances. this lot taps interest rates for debts incurred before a service member begins active duty and prevents creditors from foreclosing on a home or repossessing a car without a court order, it gives service members the option to terminate residential property and motor vehicle leases. it entitles service members to

reinstate health insurance that was in effect before their military service began. additionally, the department of defense rules regulate high-cost loans to service members and their families such as payday loans, tax refund and participation loans, and motor vehicle title loans. it takes more than rules and enforcement to provide you a solid financial future. while i have the pulpit, let me offer some suggestions. while you are in the military, take advantage of trading opportunities. many specific skills learned of the military, nursing and health care, mechanics, computer programming, police and security work, transfer to the civilian jobs. the military also offers training in various light skills. for instance, i visited the fort bliss army community services

training office which offers classes on budgets, debt management, understanding credit, car-buying and protecting against identity theft. according to a recent study, 80% of veterans said their military experience helped them get ahead in life. they said the experience helped them mature, taught them to work with others, and built their self-confidence. the value of military experience reflected in the fact that the unemployment rate for veterans tend to be lower than the rate of non-veterans. the second piece of advice is when you leave the military, take advantage of education benefits for veterans. the post-9/11 to a bill pays for these, a monthly housing allowance, and supplies. on average, compared with high school graduates, people with college degrees earn about twice as much and supper about half the rate of unemployment.

finally, educate yourself about your own personal finances. research by the federal reserve here at fort bliss shows that financial education can pay off. beginning in 2003, the federal reserve collaborated with the army emergency relief, the u.s. army's own financial assistance program to provide an education course in two days. it was taught to younger enlisted soldiers, mostly men, in their early 20s. we survey that about their financial history and activity at the time of the course and we did follow-up surveys in 2008 and 2009 of service members who had participated and soldiers who had not. we found the soldiers who had taken the course were more likely to make smart financial choices such as comparison shopping for major purchases, saving for retirement, and educating themselves about money management. they were less likely to make questionable financial choices

like paying overdraft fees, taking out car total loans, and continually running credit card balances. making good well thought out a financial decisions can mccaul the difference in your financial future. i began my remarks by describing some of our country's near-term economic challenges. i want to end with a note of optimism. the u.s. economy remains the largest in the world with a highly diverse mix of industries and the degree of international competitiveness that has improved in recent years. the united states continues to be a great place to do business with a strong system of law as an entrepreneurial tradition and flexible capital and labor -- labor markets. our country remains a technological leader with many of the world's leading research universities and the highest spending on research and development of any nation. ultimately, these trends will reassert themselves if our

country takes the steps necessary to prepare for the future. by putting the federal budget on a sustainable path, improving our primary and secondary education system, for example. the federal reserve will do its part to restore high rates of growth in employment in the context of price stability. let me and by expressing my deep gratitude to all of you for your service to your country. i am happy to respond to your questions, thank you very much. [applause] >> anybody have a question? yes, ma'am? >> thank you for visiting us today. what lessons can the nation learn about healthy if not robust economy in army-town?

s? >> bell passover is a great example --el paso is a great example of military and civilian cooperation. fort bliss is expanding and bringing people here. it is creating services on the base and off the base. it looks to have been a real plus for the local area. el paso had a downturn like most areas of the country. it was less than in other parts of the country. it is clear that this has been a very productive development and it is very positive the way there has been cooperation on issues of education, housing, development. it has been a real positive and a role model for how military can create aers

good economic apartment. >> yes, ma'am? >> i was deployed in afghanistan last year. the congress engage in risky processes by not passing the budget until the 11th hour and raising the debt limit when soldiers were faced with the threat of not being paid while they were deployed. what kind of influence del the federal reserve have in the budget process to attempt having the congress avoid making such risky practices? >> that is a great question. ultimately, the federal budget is developed and passed by the congress. and approved by the president. that is where the responsibility lies. we try to help and advise where we can. it is not our decision. that being said, we were very

concerned about the debate in july and august about the federal debt ceiling. these expenditures and taxes had been decided by the congress. the difference between the two is how much you have to bar. that had already been decided. they were fighting about if we're going to pay these bills are not and if you make a decision about how much you will spend and giving your in come once you make that decision, you should pay your bills. it created a lot of problems because people were concerned that if the debt limit had not been passed either would have defaulted on the government debt which would have been a huge problem in financial markets or the government could not have made its payments and would have had to cut back and any number of things. it is hard to know which order it would cut back but a large portion of payments would have to stop. this was a very negative event. we saw that consumer confidence tried -- dropped quite a bit

during august and i think that had to do with how well our government is doing what it needs to be doing. the credit rating agency downgraded the u.s. treasury bills and bonds and its reason for doing that was not because they did not think the u.s. could not pay its bills, they're concerned that the political process could not deliver good results. that is a real concern. but is in everybody's interest to work collaboratively together and to stay away from that brinksmanship. it is very important that we address a long term fiscal issue. we have a super committee right now that is thinking about that and they have more to do after that. it is important to do with the right way. yes, sir, over here.

>> i have two questions -- with the recent release of the vatican financial manifesto and the recent calls within the united nations for debt jubilee, what is the federal reserve position on that? with the possible breakup of the eu, how will that impact the united states if the eu slims down to a smaller member nationsbloc? >> those are two tough questions. on the first one, it is true that debt is a big part of our problem. we have an overhang of debt. we have a lot of debt which is in diligence your default and that causes problems for a our financial system and for the borrowers. households trying to improve

their balance sheets and try to pay down their debt and reduce their credit-card balances are part of the reason why spending has been relatively weak and that has been a factor slowing the recovery. i think where possible we need to address the debt issues and there are various ways to do that. one good way to do that is for dealing with people who have mortgage issues. but the reserve has been an advocate for a long time -- the federal reserve has been an advocate for a long time working with troubled borrowers to modify mortgages so that people -- the bar or can stay in their house and make payments. -- the bar were can stay in the house and make payments. t --he borrower can stay in their house and make payments. it is something that has been very constructive. likewise, whenever there are

other debt situations which are unsustainable, when an individual family snowed under by its debt, clearly, counseling or bankruptcy is needed to get that situation straightened out and that is one option. on the question of the eu, as you know, there is a lot of stress now in the european union in the euro is own related to the debt obligations of grease and other countries. to give you some background -- there are 17 countries and was called the euro zone that share a common currency, the euro, and have a european central bank. bureau's own a similar to the united states in that way.

in the united states, we have a federal government which oversees the budgetary and fiscal decisions for the country as a whole. if one state has trouble and cannot make its taxes and expenditures match, the federal government is still there to pay social security payments, medicare payments and transfer money as needed to help states for individuals in trouble. in europe, you have 17 different countries without a single central fiscal authority. it is much more difficult for them to move money between countries because it requires the cooperation and coordination of 17 different parliaments. that has been the nature of the problems. you have a number of countries starting with greece who have had difficulties meeting their debt obligations. there is no single fiscal

authority that can help them out the concern the europeans have is that the banking system of europe owns a lot of the debt of these countries and therefore, if there was a default, that would cause a lot of pressure on the banks who would lose all the money on their balance sheets and that would in turn create a huge amount of financial straits in europe but in the world as a whole. the europeans are quite aware of this, obviously. it has created a lot of stress to their economy. they have been through a series of plans which have attempted to help the country's in trouble to pay their debts, to help the greeks meet their obligations by lending them money and secondly to strengthen the banks by making them have more capital so if they lose money they will still be strong and third by trying to put up a fire wall

that is a guarantee that if another country comes under pressure that the europeans as a whole will protect the country and prevent the problem spreading from country to country. it is a phenomenon called contagion. so far, they have not stopped the car. is they have taken astem the cre taken some actions necessary to stop the european crisis. this is important for us and europe and the emerging markets because if the financial system become -- comes under pressure, that could have bad implications to the economy. it is very important to do that. that is really the current issue. , whether they can stabilize the system and ensure confidence in the budgetary situation of a number of countries under

pressure from lenders. any other questions? the gentleman over here -- >> sir, why found on our small business owners and i am curious as to what you are doing -- my wife and i are small-business owners. alone rates don't help when we have to have 100% collateral to secure a loan. what is the federal reserve doing to help small businesses help create jobs? >> that is another very good question. as you point out, small businesses especially young businesses are a big part of the job creation processed. it is in the interest of the whole economy, not just individual small business owners, to get small business lending activity back on track. it is a significant problem. banks are lending quite freely to large businesses and they

have access to corporate bond markets. credit constraints are not really a problem for the larger firms. smaller firms that rely on collateral and the value of their home or other types of security are finding it very difficult. there is no easy answer. the fed is engaged in this issue. we have been meeting regularly all over the country with small businesses, with lenders, with government officials and. others we just had a small-business conference at the fed yesterday and i delivered the opening remarks. the idea was to talk about solutions and approaches to help small businesses to provide them with whatever assistance we give them whether technical or make a better law and publication and so on. -- better application and so on. as bank regulators, we try to take a balanced approach.

we give guidance to the banks and to our bank examiners. we tell them when you evaluate a small business loan, if it is a credit-worthy law, if the borrower can pay back, even if the collateral value has fallen, you should make that loan. it is good for the bank, is good for the bar were, but it is good for the economy, too. we don't want banks making bad loans. that is how we got in trouble in the first place. we have to be reasonably prudent and make sure the bar were as bo --rrowers have appropriate prospects and what ever collateral is relevant but we are pressing banks to look hard and many banks have taken a second look programs where if you are denied and you say you like a review, they will do a second review or you can meet with a counselor and they will make suggestions about how to address it.

i would suggest meeting with a number of different banks and trying to get advice about what parts of your application needs to be strengthened. it is difficult but our evidence is that things are getting a little better as banks have become more willing to lend. as the economy strengthens and the prospects of small businesses look better, i think the situation will improve. sir? >> i had a question -- you mentioned earlier that our credit has been downgraded by standard and poor's. what is the likelihood of another agency doing that to the united states and what affect would such a downgrade have in being able to read -- repay our interest in getting people to invest in the economy? >> as i noted earlier, we

downgraded -- there was a downgrading of u.s. treasury debt earlier this summer. that was based and our ability to have a reasonable balance in our budgetary matters. i am not aware of any near-term plans. as far as i know, other agencies don't have any immediate plans to downgrade the u.s. they are always reviewing and they try to make determinations about what the bonds present to investors. in some ways, it is a secondary issue. after the s&p downgraded u.s. treasury debt, interest rates we pay on our debt actually went down rather than up. in other words, the downgraded not scare off investors in terms of being willing to buy u.s. treasurys. in fact, u.s. treasurys remain a safe haven and whenever you see

a situation where there is increased volatility in the market because of concern about your for something else, you see people come in and buy treasurys. that is among the most safe investments in the world. in that respect, the downgrade are any potential downgrade has not made any significant damage to the united states economy or our fiscal situation. the underlying point is that we are not on a sustainable fiscal path. on our current programs, our national debt will begin to accelerate and eventually it will get completely out of control unless other actions to change that go into effect. it is important and the super committee is one step and more needs to be done beyond that. is important that we take measures to try and establish a

stable path for our national debt over a. time one of the key issues which comes up again and again is the fact that our economy is aging. our average public age of our sisson -- our citizens are increasing over time. more people retire and be on social security and need additional health care as they get older. health-care costs are rising at a rap. rate rapid rate we don't necessarily have that much better results in our health-care system even though it is the costliest in the world. we have a serious long-term problem in terms of our ability to survive decent living standards and good health care and applying that to our rapidly aging population.

i would say the biggest challenge on the health care side, if we can find ways to deliver quality health care to everybody efficiently in a way that does not break the bank -- right now we are on a track that we cannot sustain. >> good morning. in regard to the european union and their economic issues -- what type of far-reaching effects world -- will there be from this and how will they affect the u.s. specifically? >> there is definitely a significant risk of there. the world financial markets are highly interconnected. if there were to be a substantial increase in financial stress in europe because of may be an unexpected default by one the country'sies

that would create a freezing up of credit, a withdrawal of short-term funding, a decline in stock prices -- all those negative things would happen not just in europe but around the. world as a result a few years ago when the financial system freezes up, it has serious implications for the coming. it is in the interest of the emerging world and ourselves and the europeans for them to find a solution to that situation. it is not something we would be insulated from although we do all we can at the fed to maintain stability and keep monetary policy easy and do whatever is necessary to minimize the damage. i don't think we would be able to escape the consequences of a blow up in europe. it is important that they try to address these issues. yes? >> yes, sir, i helped prepare

taxes one year and it was very interesting. it was also heartbreaking to see people dip into their retirement and no one wants. do that they would dip into their retirement to help pay for their mortgage to save their home and at the end of the tax year, they get double hit. is there any, of influence the federal reserve has on tax policies for that? >> on what specifically? >> they would hold a lot of money on taxes which they could not pay because they dipped into their retirement to save their homes or save their children's homes and then they got a double hit at the end of the year for doing that with more taxes. >> that taxes are the same as they would have been otherwise. it was just a question -- not

just -- it was a question of having to pay the mortgage payments and taxes in the same year is what you are saying. is that right? >> they got penalized. >> oh, i understand. >> does the federal reserve have an influence on a tax benefit? >> you are saying they took money out of there for 1 k or something, not just their bank account. that's right. to take money prematurely elevate 41 k, you can be penalized there are a number of things you can take money out for. i thought housing might be one of them. you can either take it out on a tax-free basis or borrow against 401k and pay that back overtime.

i think that's a possibility. there have been various exceptions made overtime. there have been exceptions made for charitable contributions and the exceptions are made around the time of hurricane katrina to allow people to rebuild. this is not really my specialty. these are rules that are set by congress and approved by the demonstration as part of the tax law and any change would have to come from them. i would be interested to get more information from you if you can share it with us. my impression is that there is some things you can do either in terms of getting special dispensation or borrowing against the savings that can allow you to do that without. will take penalty. if you can get your mortgage

payment down, that would not be betty there. -- that would not be bad either. there are programs that allow people to refinance even if they are under water. a benefit is a very low mortgage rate that the reserve is able to generate in the economy is that if you are currently paying 7% mortgage and you are able to refinance, you can cut your monthly payments substantially. a lot of people have been on able to do that because they don't qualify because of their credit or they are under water which means that they owe more than their house. is worth there have been new initiatives including a program call harp by fannie mae and freddie mac that would allow people who are as much as 25% under water to refinance their mortgage and lower their monthly payments. yes, ma'am?

>> good morning. i wake up every morning to npr and it is the rare morning that you don't hear statistics about the unemployment rate and housing starts and the debt crisis in europe. i have no influence or control over those things but it makes it a very scary time as an individual investor. it takes nerves of steel to put money away especially for last three years. we continue to do it but it is hard to do it with confidence now a. data nowadays. what is your perspective on the noise in the media about getting back on track and getting the unemployment down and getting housing starts back to where they would be? we're not in a good place back in 2008 when things crash. we were doing things we should not have done and perhaps this

is the way of working it out. as a good thing for us. i'm wondering what you think about whether or not we should be looking to get ourselves back to where we were or are we in the middle of a serious fundamental shift in american life such as we were after the great depression when it comes to how people live, buy homes, save, invest, consume, waste? how will we be different or not at the end of all this? >> that is a very deep question. first of all, i don't think anybody wants to go back to 2005 if they are sensible. house prices were too high relative to their long run value. when of the banks and other financial institutions were taking risks. things were out of balance and it is true to some extent that we are experiencing the hangover from the correction of both.

problems that being said, i am not a believer in the old tested a theory of business cycles. i think we can help people, we need to help them. the couple reserve is trying to do what we can -- the federal reserve is trying to do what we can to get things back on track. we are far from where we want to be. i would break down my answer into two parts -- in the short run, the economy is still far from where we would like it to be. credit has not returned to normal particularly for small businesses and many household mortgages. the housing sector is still in very bad shape. unemployment is at 9% which is well above where we think it should be and many of those folks have been unemployed for six months or more which has long-term implications for their skills and ana ploybility.

there are a lot of short-term issues. volatility in europe is still pretty much with us. we're focused on the short run issues and trying to get more stability to get the economy moving slowly toward full employment and a stable situation and that is taking a. time understandably, people are impatient and worried. i fully understand that. i would offer a little bit of optimism. i think the fundamental strengths and problems of the u.s. economy today are pretty much what they were before all this happened. we still have the size and diversity of our economy and the market system we have an the conjures pri norhip, the technological innovation. we have many other aspects of our system which have produced

the wealth this country has ever years. we also have problems like the health-care issue and our fiscal budget, deficit issues but we have those before the crisis as well in some sense, we are trying to get back to more normal position and i have no doubt that we will as we try to deal with these individual problems we are addressing. in the longer term, i believe that taking into account and things like the growth rate of the population that we will return to a more normal growth rate. reason really see any why we could not. you are right in that 2005, 2006, 2007 was abnormal and we don't want to do that again but we want to get to an area that is well balanced in terms of trade with other countries and

give people opportunities to be employed and is financially sound. i think we can do that. hang in there. yes, sir? >> how can veteran soldiers or retiring apply for lower interest home loans? >> we don't have any programs that i know of specifically that focus on veterans in terms of lower interest loans but there are programs through the va and other parts of the government. we are focused on working with the department of justice and the department of defense to make sure that people --

veterans are soldiers who have mortgages don't get unfairly treated. for example, if you have a mortgage and you go out on active duty, there are rules whichban any increases in your interest rate while you were on duty. to give you another example, the federal reserve and other areking industryies requiring the banks that service mortgages that were found to have deficiencies and that practices, it requires them to go back and look at mortgages made in 2009 -- mortgages in which there was a foreclosure action in 2009 or 2010 and compensate people for whom there was any kind of problem there or mistreatment or failure to follow the applicable law. we are putting special attention

on veterans in that case. we are requiring the banks to look every single veteran mortgage that was in a foreclosure process in 2009 and 2010 and see if there are any problems. we have detected some violations of the service members civil relief, actthe scra, which protect service members and their families. we are trying to be helpful in terms of mortgages that are already out there. we want to make sure that veterans don't get a bad deal or get badly treated. in terms of new mortgages, the main thing i can say is that the fed got mortgage rates down pretty low. if you can qualify for a mortgage, the interest rate at this point is certainly among the lowest it has been in 50 years. the lady---

>> good morning, chairman. when i buyer is going to purchase a foreclosure, i don't see the banks being pro-active towards a buyer. i don't understand why that is. >> you have to say it more slowly. >> if i put an offer in on a new home, i will get a response back from the seller by put an offer on a foreclosure, i am waiting one month-three months to hear from the bank. >> a. i see a i see. the foreclosure process has been dragging out. it is taking months and months to go for. the process on au're making an offer proper rate which has already been foreclosed upon, it is just bad practice for a bank because they would like to sell it as soon as they can. it is puzzling to me that i

would not be responsive to you can get back to you. i would encourage you to keep pressing and try as hard as possible to find a single person who you can deal with on an ongoing basis. if you have any consumer complaints or concerns about mortgages and how you have been treated on a mortgage or credit card, the federal reserve does have a consumer complaint facility on our website, federal reserve.gov and a helpline and if you call it is not our particular area, we will transfer you to the appropriate agency or whoever can help you. if you have a concern like that, you should let us know. with this particular problem, we with this particular problem, we are encouraging banks