i have to tell you, she's made the mistake a couple of times of calling medicare on the phone. my poor 88-year-old mother spent 90 minutes one time on the phone to get an answer. that's he kind of care we're going to get from the affordable care act. it's not affordable care, it's not accessible care, it's not good care. i want to thank the quelt from michigan for yielding and giving us the opportunity to remind the american public, we repealed obamacare in this chamber. that repeal bill is sitting over in the senate. thank you very much. i yield back. . mr. benishek: thank you my colleague from maryland. i appreciate you bringing up those great points. you know, the president's health care act was to allow people to get more access to medicine. and as we have seen from multiple discussions here this evening, with the closure of

many small hospitals throughout america due to the decreased payments underneath the president's health care bill, many small hospitals are facing closure. i know -- i know the young lady from new york mentioned, i have small hospitals that are on the razor's edge that are either being in the black or in the red. recently, a small hospital in my district that is on the verge of bankruptcy. how is closing five hospitals in the 200-mile area increasing access to care? it isn't. it's making it more difficult, more i am personable. physicians, like ourselves, we're concerned about what's going to happen here, because i'm concerned about my patients.

i'm concerned about my colleagues who complain to me about their patients. and i think it's a fawley to be able -- folly to regulate health care from above. health care needs reform. we have the best health care in the world. the problem is, it costs a lot of money. it costs a lot of money because there isn't enough market forces -- as my friend from louisiana mentioned. once somebody pays their co-pay, they don't care what anybody else costs. i paid my co-pay, i'm good. we need to have health insurance be more like car insurance. can you buy car insurance from multiple different companies, 1,000 different companies. in michigan, you can buy it from an insurance company in florida

or tennessee. and the car insurance doesn't pay for new tires. doesn't pay for the routine expenses, because if you are a car insurance paid for your oil change and your new tires, it would really be expensive. just like our health care insurance is today. need to have people understand that health care isn't free once they pay their deductible. and i think the health savings account concept where people save money, use that money for their routine medical care and have health insurance be what it should be, not complete coverage of everything in medicine, but insurance for catastrophic disease, for items you choose to insure for not what the government makes you insure for, like abortion, which you may not want or pregnancy, which you may not -- why should you be paying

for insurance on a pregnancy. there should be choice in insurance to allow people to have a cadillac plan or chevrolet plan or a young person a catastrophic plan if they don't feel they will have significant health issues. so that type of marketplace and that type of philosophy is what we need in the health insurance business in my view. i will ask my colleague from louisiana if that view of medicine, market-based insurance and competition among physicians is your view. mr. fleming: i will briefly respond to that. the point i would like to make on that very question is that coverage is not the same thing as access. there are countries around the world that have 100% coverage, yet they have no access to care. and i'm not talking about

communist or socialist countries. canada, takes a year to get a ct scan and yet everybody is covered. that is the fine point we need to understand and take away. and i will add in response to the gentleman talking about the independent payment advisory board is that it will have more power than congress itself. will take a 2/3 vote from both bodies to overturn their decisions. and i don't think that americans are ready to put all of that power in the hands of 15 bureaucrats who may or may not be physicians. and with that, i yield back. mr. benishek: thank you. let me ask my colleague from georgia if he has any other comments he would like to make. mr. gingrey: i thank the gentleman from michigan, mr. speaker, and i did want to comment before we close tonight and i'll yield back to the gentleman for the remaining time, but the members of the

house g.o.p. doctors caucus, along with the health care providers, that caucus on the senate side, in the other body, have just recently sent a letter to the american association of retired persons, a.a.r.p. executive director, mr. barry rand, asking them and the 35 million seniors that they represent in their advocacy and the definition of a senior for them is anybody who has reached the age of 50. so certainly they can reach a whole lot more seniors and i'm sure membership is important to them. so we have sent a letter to them reaching out to the organization and asking aarp to meet with the doctors caucuses in the respective bodies in a very bipartisan way to try to save

medicare. there are things that that are organization, which i respect and indeed i have been a member of, that we agree with and there are things that we don't agree on. now aarp was oppose todd what we had in the republican budget last year, the so-called paul ryan budget in regard to how to strengthen, protect, preserve the medicare program, not just for our current seniors and recipients of that program, but for our children, our grandchildren and great-grandchildren indeed. we want to sit down with them and see what they do like. and we know what they don't like. they didn't like -- i guess they didn't like the mandate of premium support in our budget last year. but chairman ryan is working in a bipartisan way with senator

wyden, the gentleman from oregon, on this same idea of premium support. instead of mandating it -- and of course it was mandated for those younger than aged 55. everybody else was held harmless. the idea is to say, let's everybody choose and decide. it's their option. do they want to stay on medicare as we know it, the legacy program, or would they prefer to go to the doctor and the hospital of their choice with their own premium support. so i just wanted to mention that. and i'm looking forward to having a dialogue with the aarp and 35 million seniors that they represent. back in 2003, my colleagues weren't then, but i was, and had the opportunity to vote in favor of it as a physician member for the medicare part d, prescription drug act and aarp supported that.

and yet our democratic colleagues on the other side of the aisle, many of them came down and tore up their membership card of the aarp. we are going to work with them and i thank you for yielding me time and i yield back to the gentleman for closing purposes. mr. benishek: i would like to thank the gentleman from georgia, the gentleman from louisiana, from arizona, the gentlewoman from new york and my colleague from maryland as well for appearing with me tonight and trying to explain to the speaker and the american people some of the issues that we have with the president's health care bill that do not solve our problem with health care. and while we want to repeal it. so i encourage all to look further into this issue and become educated so that you can inform yourself and your friends

how serious this problem is. and with that, i yield back the remainder of my time. the speaker pro tempore: the gentleman yields back the balance of his time. i thank the gentleman. mr. benishek: thank you very much. the speaker pro tempore: under the speaker's announced policy of january 5, 2011rks the chair recognizes the gentleman from texas, mr. gohmert, for 30 minutes. the gentleman is recognized.

mr. gohmert: thank you, mr. speaker. it's wonderful to talk to my friends and colleagues on the floor discussing what is so important to this nation, responsibility and if you want to talk fiscal responsibility, it would certainly seem in the first place to start with the repeal of obamacare. if you want to talk about freedom individually, once again, best place to start is with repeal of obamacare. there are so many things that have been going on, the federal government encoaching into individual liberties, individual freedoms. it begins to get quite scary

that we are encroaching on the very things that our original founders were willing to fight and die to ensure that we had the freedoms to do. that we would have the freedoms to avoid doing damage to our conscience. it's so ironic that so many came to this nation in its earliest days and then through its history seeking relief from persecution as christians. so many groups. they came here believing that this could be a place, a

promised land of sorts where fleem could be experienced -- where freedom could be experienced more than anywhere else in the world and that dream has been realized. for far too long in our country's history, it was not extended to all men and women, race, gender. there were problems for some because there was racial and gender bias. but no one in those days ever anticipated we would get to the point in america where we are today, where people of faith who believe with all their heart that certain practices are just wrong in god's eyes.

that they would be forced by their government to commit those acts of wrong. we know that the president of notre dame university back in 2009 endured a great deal of heat when he brought a man who had fought so hard in illinois to allow late-term abortions, a man who had fought to prevent people of conscience from being allowed to be counseled. -- on exactly what they would be doing. there were all kinds of efforts in illinois to deal with the issue of abortion.

and he's now president. so there were some that believed that bringing that individual to a catholic university like notre dame and giving an honor area degree and bestowing this honor upon him was not a good idea. . . sarah palin points out in an op-ed piece she wrote on tuesday. she said, consider catholicism's most prominent academic leader, the reverend john general since, president of notre dame. he took a serious risk in sponsoring obama's 2009 honorary degree and commencement address which promised a sensible approach to the conscience clause.

jenkins now complains, quote, this is not the quote of, quote, sensible, unquote, approach the president had in mind when he spoke here. sarah palin notes, obama has made jenkins and other progressive catholic allies look easily duped. because this administration appears to want to wage war on catholic christian belief. amazing. that someone would take those kinds of positions the administration currently is, basically a war on religious freedom for christians. there's a edtorial posted by mark brownfield today entitled

"morning bell: obamacare's latest victim is religious freedom." it says, it is not -- it has not even been two years since obamacare was enacted and already the president's health care law has taken another victim. through religious freedoms americans hold dear, as reflected by the first amendment. the obama administration recently reaffirmed a rule under obamacare that requires many religion -- religious employers to provide health coverage for all f.d.a. approved contraceptive methods, sterilization procedures and related education and counsels on the grounds that certain f.d.a. approved contraceptive methods can sometimes, quote, cause the demise of embree yows both after and before uterine implantation. many groups also believe that the rule forces them to cover abortion.

as the article points out, it's not just catholics affected by the rule. leaders from other faith traditions have expressed their concern. this is deeply troubling. another article here from "the washington post" entitled obama plays his catholic allies for fools, my bimichael gosen, published january 30. he said on january 20, three days before the abule march for life, the obama administration announced its final decision that catholic universitys, hospitals, and charities will be compelled to pay for health insurance that covers sterilization, contraceptives and abortifacients.

it was bad enough that obamacare was going to take away individual freedoms regarding health care. we can take care of those who cannot take care of themselves. we should not do as a government what has been done for far too long. provide incentives for people not to reach their potential. provide incentives for people in effect to take the life of an unborne, make it easier to do that. as so many pointed out, if a government can order any individual, all individuals in

the country to purchase a particular product, including health care insurance, there really isn't anything the federal government cannot order them to do, to purchase. we're seeing that play out, more problematic, even theological that the federal government can order you not to follow real jus beliefs. it's really quite shocking how far we've come. now those of us that study the teachings of jesus know he tole christians, you will suffer for my sake. i didn't deserve to be born in

america. go to places like afghanistan, iraq, places where there's so much heartache. places around the world where you see people in africa, the places i've seen so much heartache, so much suffering. we didn't deserve to be born here, but by the grace of god we were. we were told by jesus, you'll suffer from my sake, for whatever reason we were allowed to grow up free. free from suffering on account of suffering for christian beliefs. this bubble in time and space that was allowed for yen ration

after generation. to be able to follow real jus beliefs as christians without persecution, that time has changed. now, it would seem people yell at christians, throw things at christians, fuss on the nightly news how christians are haters and want everyone to go to hell if they don't believe just like them, what a terrible misinterpretation. -- misinterpretation of christian faith an beliefs. an article from "the wall street journal" talking about the contraception rule, talking about the discussions about it among the political candidates.

people need to understand, the christian faith is under assault and this administration has stepped up the ante in that assault. if people, whether they're christians, jews, muslims, whatever faith, hindu, buddhist, atheist, once you see a federal government telling christians you cannot practice what you believe with your whole heart spiritually. you could be next. this ought to stir up not merely christians, it ought to stir up people of all kinds of

faith because again, the federal government can tell you to buy one product can tell you to buy any other, it has that much power. a federal government that tells christians they cannot actually practice their religious beliefs can tell other religions the same thing. we've just about come 360. this gift we've been giving, we've been blessed with more freedoms in this country than think country in the history of the world. it doesn't take much studdy of world history to see that. doesn't take much traveling around the world to see that. as i go back to my days as an exchange student in the 1970's in the soviet union, developed

a love of people all over the world, ironic when people call you a xenophobe when they have no idea how many people you love with all your heart, people in africa, europe, asia. as one west african told me when i was visiting there, you have to understand, we were so excited when you elected a black president but now we've seen america growing weak. you must let the people in washington know that unless america stays strong, we will suffer. without you staying strong we don't have hope of having the freedoms we have right now. america's strength an america's standing for freedom and liberty doesn't just affect the people in america.

i jotted some notes inspired by a pastor's comments decades ago. art thinking about what we have seen in this country, first they said you can't have prayer in school. most people didn't speak out because they would just pray somewhere else. then they said you couldn't publicly post the 10 commandments. because people might be tempted to rae them and if they read them, they might be telled to follow them and live moral lives. but most people didn't speak out because they knew where to find the 10 commandments if they decided they wanted to have that kind of moral code. they said you couldn't use a

cross far headstone even for soldiers who died in the christian faith in jesus christ, believing what jesus said that greater love hath no one that this, that a man lay down his life for his friends. but not enough people have spoken out because the soldiers are gone and they can't respond so maybe it doesn't really matter. had a judge tell students, recent history, they could not have the freedom of speech to say what was on their hearts if it included horrible verboten words like prayer, invocation, benediction, the worst of all,

god, prayer, amen, bow our heads, join in prayer. and most people didn't speak out because man, that was somewhere else. judge somewhere else, not ours. some judges said you couldn't say god in a pledge in a public place. seems more judges have said that in recent history. fortunately, struck down, but they're still saying it. and not enough people are speaking out because, some other judge, maybe an appellate court will strike it down. hope so. now we're being told by some, if you want to hire someone, unless you're here hiring a minister, you can't hire

someone with the same religious spiritual faith that you have. not enough people speaking out because they think surely that won't apply to me. at least not for a while. we're being told if you know in your heart that killing the most innocent among us, the infant unborn, if you believe that killing it is murder, it's wrong, well, we're the federal government and you have to forget your religious beliefs. we're going to tell you what you can or can't believe, you have to go ahead and pay in tax money or in health insurance money, to pay for someone else to kill an unborn child.

we have hospitals, doctors, nurses, health care providers, being told you may know in your christian heart that it's wrong, personally, to participate in the taking of an innocent life. like an infant unborn, but if you want to stay in the health care business, probably going to have to do it anyway. we're the federal government what not only you may believe or not believe, but what you may put into practice or not put into practice. and there are and there are som government telling military chaplains, even military preachers, you may believe in your spirit, in your heart, in your soul that marriage is

between a man and a woman, that nature's god intended the perfect biological fit to produce a combination of a sperm and an egg. and some wanting to tell them, you have to set aside your religious beliefs and do what we the federal government tell you and tell you whoever we tell you to marry. you believe in romans one, forget it, tear it out of your bible. we have the right to tell you what you can and can't believe. some say it's ok to force catholics to violate their christian consciences and their religious beliefs because our federal government has the power

to tell them what to do. not enough people are crying out. they figure, well, i'm not really catholic, maybe i'm catholic, but surely they wouldn't tell me what to do in violation of my christian spiritual beliefs. but if the government can order with the full power of federal law enforcement anyone to violate their christian beliefs, we have come full circle. and the prayers of generations, the work of churches throughout our history first, to even have a revolution based on freedom, based on the liberty that they knew god gave us where over a

third of the signers of the declaration of independence weren't just christians, they were ordained christian ministers, but they believed in freedom so strongly, that they were willing to fight and die for the spiritual freedom of all people in this country. and the constitution was put together and followed by a bill of rights. and it said what it meant, but it took a long time for it to be applied across racial bounds. it should have been clear, it's not a living, breathing document, but it says what it means. and it means that all people should have those rights under the bill of rights. that we were all created equal

in god's eyes. the founders believed that. the churches were the heart and soul of the and litigationist s' movement to do away with that horrible evil called slavery. john quincy adams after he was defeated for a second term as president, be seaching, preaching, against the evils of slavery, inspired by what he knew as a christian in the united kingdom doing the same thing before him. abraham lincoln inspired by that overlapping time by john quincy adams down the hall because of his christian beliefs and faith. if anybody doubts what motivated

that man, read the second inaugural address on the inside of the north wall of the lincoln memorial as he tried to make sense as a christian spiritually about all the injustice and wrongs and death and suffering in america. the movement for women's equality involved women of great faith. the civil rights movement. the greatest saint of the movement was a man who was an ordained christian minister who knew in his heart what jesus had done for him and he wanted all people to have liberty equally together and be judged by the content of their character, not the color of their skin. and now, it appears war is being waged like never before on

people of biblical christian beliefs. wonder what some of the founders had to say. samuel adams was one of the strongest christians alive during the revolution. he was inspirational. how strangely will the tools of a tyrant pervert the plain meaning of words, samuel adams, that devout strong christian said. his wonderful quote inspired by his faith and he said if you love wealth better than liberty, the tran quilt of servitude, than the and mating contest of freedom, go promise in peace. we seek not your counsel nor your arms. crouch down and lick the hands that feed you. may your change set lightly upon

you and may posterity forget that you are our countrymen. these are people of faith who believed in liberty that started this place. and to have courts saying, you can't say the word god in invocation. we start every day with a prayer in this chamber and have for centuries. well, we go back and i finish with this, the speech of benjamin franklin that we have from his own handwriting, what he said, 1787, late june, 1787 when nearly five weeks had gone by and accomplished virtually nothing. and he pointed out that they had accomplished nothing. they had more noes than ayes on virtually every vote. and he went on to say, in this situation in this assembly,

groping isn't in the dark to find political truth and scarce to find it when it is presented to us, how is it happened that we haven't thought that applying to the father of lights to illuminate our understanding. in the beginning contest when we were sensible of danger, we had daily prayer in this room. that was independence hall. this great, brilliant man who most of us taught was a dieiest. all of us, franklin, said, we were engaged in the struggle must have observed fwrecteab heances of a providence in our favor. the longer i live, the more convincing proofs i see of this

truth, god governance in the affairs of men. now the judges in this country, there are those who would say, he shouldn't be able to give that speech. he just mentioned the g word. yet, it is what inspired people, these kinds of speeches. he said, and if a sparrow cannot fall to the ground without his notice, is it possible an empire could rise without his aide. we have been assured, sir in the sacred writing that they labor in vein that build it. i also firmly believe he said without his concurrent, we shall succeed in our political building no better than the builders of babel and be confounded by a local interest and we shall be a by word

throughout the ages. he believed they should start every day with prayer. he was followed by landoff from virginia who basically pointed out, here we are at the end of june let's hear a sermon. the lutheran church, went to church and heard a sermon and came back in a new spirit and gave us a constitution and gave us the bill of rights after that. how in the world a federal government that came from those roots could begin to declare war on christians, catholic christians now, beware, beware. the federal government that can declare war on catholic christian faith may be after your faith next. and with that, i yield back.

the speaker pro tempore: the gentleman yields back the balance of his time. the gentleman have a motion to adjourn. mr. gohmert: at this time i move we adjourn. the speaker pro tempore: the question is on the motion to adjourn. those in favor say aye. those opposed, no. the ayes have it. the motion

and the capitol hill, republican lawmakers criticized eric holder for his handling of the gun smuggling investigation as the fast and furious. then them bernanke on the u.s. economic outlook. >> at least half of the energy that uses its will come from non fossil fuel sources. >> the first to use a nuclear power, the reasons for a new energy standard. we are susceptible to supply shocks. even if we got enough, we are susceptible to price shocks.

when libya started and the price of oil went up $40 a barrel, that was almost $1 billion a day additional. $1 billion. the only place we got that money was operations or training. we train our sailors and marines less. >> more with the 75th navy secretary. >> president obama attended the national prayer breakfast and spoke about the link between faith and public policy. this is hosted by the fellowship foundation. the president's remarks are 20 minutes.

>> thank you. thank you so much. thank you. please, please, everybody have a seat. well, good morning, everybody. it is good to be with so many friends united in prayer. and i begin by giving all praise and honor to god for bringing us together here today. i want to thank our co-chairs mark and jeff; to my dear friend, the guy who always has my back, vice president biden. all the members of congress -- joe deserves a hand -- all the members of congress and my cabinet who are here today; all the distinguished guests who've traveled a long way to be part of this. i'm not going to be as funny as eric but i'm grateful that he shared his message with us. michelle and i feel truly blessed to be here. this is my third year coming to this prayer breakfast as president.

as jeff mentioned, before that, i came as senator. i have to say, it's easier coming as president. i don't have to get here quite as early. but it's always been an opportunity that i've cherished. and it's a chance to step back for a moment, for us to come together as brothers and sisters and seek god's face together. at a time when it's easy to lose ourselves in the rush and clamor of our own lives, or get caught up in the noise and rancor that too often passes as politics today, these moments of prayer slow us down.

they humble us. they remind us that no matter how much responsibility we have, how fancy our titles, how much power we think we hold, we are imperfect vessels. we can all benefit from turning to our creator, listening to him. avoiding phony religiosity, listening to him. this is especially important right now, when we're facing some big challenges as a nation. our economy is making progress as we recover from the worst crisis in three generations, but far too many families are still struggling to find work or make the mortgage, pay for college, or, in some cases, even buy food. our men and women in uniform have made us safer and more

secure, and we were eternally grateful to them, but war and suffering and hardship still remain in too many corners of the globe. and a lot of those men and women who we celebrate on veterans day and memorial day come back and find that, when it comes to finding a job or getting the kind of care that they need, we're not always there the way we need to be. it's absolutely true that meeting these challenges requires sound decision-making, requires smart policies. we know that part of living in a pluralistic society means that our personal religious beliefs alone can't dictate our response to every challenge we face. but in my moments of prayer, i'm reminded that faith and values play an enormous role in motivating us to solve some of our most urgent problems, in keeping us going when we suffer setbacks, and opening our minds and our hearts to the needs of others.

we can't leave our values at the door. if we leave our values at the door, we abandon much of the moral glue that has held our nation together for centuries, and allowed us to become somewhat more perfect a union. frederick douglass, abraham lincoln, jane addams, martin luther king, jr. , dorothy day, abraham heschel -- the majority of great reformers in american history did their work not just because it was sound policy, or they had done good analysis, or understood how to exercise good politics, but because their faith and their values dictated it, and called for bold action -- sometimes in the face of indifference, sometimes in the face of resistance.

this is no different today for millions of americans, and it's certainly not for me. i wake up each morning and i say a brief prayer, and i spend a little time in scripture and devotion. and from time to time, friends of mine, some of who are here today, friends like joel hunter or t.d. jakes, will come by the oval office or they'll call on the phone or they'll send me a email, and we'll pray together, and they'll pray for me and my family, and for our country. but i don't stop there. i'd be remiss if i stopped there; if my values were limited to personal moments of prayer or private conversations with pastors or friends. so instead, i must try --

imperfectly, but i must try -- to make sure those values motivate me as one leader of this great nation. and so when i talk about our financial institutions playing by the same rules as folks on main street, when i talk about making sure insurance companies aren't discriminating against those who are already sick, or making sure that unscrupulous lenders aren't taking advantage of the most vulnerable among us, i do so because i genuinely believe it will make the economy stronger for everybody. but i also do it because i know that far too many neighbors in our country have been hurt and treated unfairly over the last

few years, and i believe in god's command to "love thy neighbor as thyself." i know the version of that golden rule is found in every major religion and every set of beliefs - from hinduism to islam to judaism to the writings of plato. and when i talk about shared responsibility, it's because i genuinely believe that in a time when many folks are struggling, at a time when we have enormous deficits, it's hard for me to ask seniors on a fixed income, or young people with student loans, or middle- class families who can barely pay the bills to shoulder the burden alone. and i think to myself, if i'm willing to give something up as somebody who's been extraordinarily blessed, and give up some of the tax breaks that i enjoy, i actually think that's going to make economic sense.

but for me as a christian, it also coincides with jesus's teaching that "for unto whom much is given, much shall be required." it mirrors the islamic belief that those who've been blessed have an obligation to use those blessings to help others, or the jewish doctrine of moderation and consideration for others. when i talk about giving every american a fair shot at opportunity, it's because i believe that when a young person can afford a college education, or someone who's been unemployed suddenly has a chance to retrain for a job and regain that sense of dignity and pride, and contributing to the community as well as supporting their families -- that helps us all prosper. it means maybe that research lab on the cusp of a lifesaving discovery, or the company looking for skilled workers is

going to do a little bit better, and we'll all do better as a consequence. it makes economic sense. but part of that belief comes from my faith in the idea that i am my brother's keeper and i am my sister's keeper; that as a country, we rise and fall together. i'm not an island. i'm not alone in my success. i succeed because others succeed with me. and when i decide to stand up for foreign aid, or prevent atrocities in places like uganda, or take on issues like human trafficking, it's not just about strengthening alliances, or promoting democratic values, or projecting american leadership around the world, although it does all those things and it will make us safer and more secure. it's also about the biblical call to care for the least of these -- for the poor; for those at the margins of our society. to answer the responsibility

we're given in proverbs to "speak up for those who cannot speak for themselves, for the rights of all who are destitute." and for others, it may reflect the jewish belief that the highest form of charity is to do our part to help others stand on their own. treating others as you want to be treated. requiring much from those who have been given so much. living by the principle that we are our brother's keeper. caring for the poor and those in need. these values are old. they can be found in many denominations and many faiths, among many believers and among many non-believers. and they are values that have always made this country great -- when we live up to them; when we don't just give lip service to them; when we don't just talk about them one day a year.

and they're the ones that have defined my own faith journey. and today, with as many challenges as we face, these are the values i believe we're going to have to return to in the hopes that god will buttress our efforts. now, we can earnestly seek to see these values lived out in our politics and our policies, and we can earnestly disagree on the best way to achieve these values. in the words of c.s. lewis, "christianity has not, and does not profess to have a detailed political program. it is meant for all men at all times, and the particular program which suited one place

or time would not suit another"" our goal should not be to declare our policies as biblical. it is god who is infallible, not us. michelle reminds me of this often. so instead, it is our hope that people of goodwill can pursue their values and common ground and the common good as best they know how, with respect for each other. and i have to say that sometimes we talk about respect, but we don't act with respect towards each other during the course of these debates. but each and every day, for many in this room, the biblical injunctions are not just words, they are also deeds. every single day, in different ways, so many of you are living

out your faith in service to others. just last month, it was inspiring to see thousands of young christians filling the georgia dome at the passion conference, to worship the god who sets the captives free and work to end modern slavery. since we've expanded and strengthened the white house faith-based initiative, we've partnered with catholic charities to help americans who are struggling with poverty; worked with organizations like world vision and american jewish world service and islamic relief to bring hope to those suffering around the world. colleges across the country have answered our interfaith campus challenge, and students are joined together across religious lines in service to others. from promoting responsible fatherhood to strengthening adoption, from helping people find jobs to serving our veterans, we're linking arms with faith-based groups all across the country. i think we all understand that

these values cannot truly find voice in our politics and our policies unless they find a place in our hearts. the bible teaches us to "be doers of the word and not merely hearers." we're required to have a living, breathing, active faith in our own lives. and each of us is called on to give something of ourselves for the betterment of others -- and to live the truth of our faith not just with words, but with deeds. so even as we join the great debates of our age -- how we best put people back to work, how we ensure opportunity for every child, the role of government in protecting this extraordinary planet that god has made for us, how we lessen the occasions of war -- even as we debate these great issues, we must be reminded of the difference that we can make each day in our small interactions,

in our personal lives. as a loving husband, or a supportive parent, or a good neighbor, or a helpful colleague -- in each of these roles, we help bring his kingdom to earth. and as important as government policy may be in shaping our world, we are reminded that it's the cumulative acts of kindness and courage and charity and love, it's the respect we show each other and the generosity that we share with each other that in our everyday lives will somehow sustain us during these challenging times. john tells us that, "if anyone has material possessions and sees his brother in need but has no pity on him, how can the love of god be in him? dear children, let us not love with words or tongue but with actions and in truth." mark read a letter from billy graham, and it took me back to

one of the great honors of my life, which was visiting reverend graham at his mountaintop retreat in north carolina, when i was on vacation with my family at a hotel not far away. and i can still remember winding up the path up a mountain to his home. ninety-one years old at the time, facing various health challenges, he welcomed me as he would welcome a family member or a close friend. he welcomed me as he would welcome a family member or close friend. this man who had prayed great prayers and inspired a nation, this man who seems larger than life, greeted me and was as kind

and gentle as could be. we had a wonderful conversation. before i left, reverend graham started praying for me, and when he'd finished praying, i felt the urge to pray for him. i didn't really know what to say. what do you pray for when it comes to the man who has prayed for so many? but like that bursa and romans, the holy spirit interceded when i did not know quite what to say, and so i prayed. briefly. but upgrade from the heart. i don't have the intellectual capacity or the long capacity of some of my great creature friends here that have prayed for a long time, but i prayed. and we ended with an embrace and

a warm goodbye. i thought about that moment all the way down the mound, and i've thought about it in the many days since. because i thought about my own spiritual journey, growing up and household that was not particularly religious, going through my own time of doubt and confusion, finding cries when i wasn't even looking for him so many years ago, put -- possessing so many shortcomings that have been overcome by the simple grace of god. and the fact that i would ever be on top of mt., saying a prayer for billy graham, a man whose faith had changed the world and sustained him through triumphs and tragedies and movements and milestones. that simple fact humbled me to my court. i have fallen on my knees with

great regularity since that moment, asking god for guidance, not just in my personal life and my christian law, but in the life of this nation and in the values that hold us together and keep us strong. i know he will guide us. he always has, and he always will. and i pray his richest blessings on each of you in the days ahead. thank you very much. [applause]

>> businessman donald trump endorsed mitt romney. lester mr. trump had talked about a possible run for president, either as an. -- an independent or republican. >> thank you very much. it is a great honor for me. as everybody in this country knows, our country is in serious, serious trouble. >> whether it be opec, or the opec nations, or china, or anybody we do business with throughout the world, they take advantage of us, they laugh at us, they can't believe their good fortunes. i knew these people, and they can't believe what they are getting away with. though we really have an opportunity to do something great for the country. just a little while ago, i didn't even mention this, but the cbo chief in washington announced that unemployment is going up to 9.2 percent by sometime in january.

so it's going to go up, and the growth rate is going to be at about 1 percent. so this just came out, not so good news. it's my honor, real honor, and privilege to endorse mitt romney. [cheers and applause] and by the way, this is a great couple. you look at this couple-but mitt is tough he's smart, he's sharp, he's not going to allow bad things to happen to this country that we all love.

so gov. romney, go out and get them. you can do it. [applause] >> there are some things you can't imagine happening in your life and this is one of them. being in donald trump's magnificent hotel and having his endorsement is a delight. i'm so honored and pleased to have his endorsement and of course i am looking for the endorsement of the people of nevada. [applause] donald trump has shown an extraordinary ability to show how our economy works, to create jobs for the american people. he's done it here in nevada, he's done it across the country, he understands that our economy is facing threats from abroad, he's one of the few people who stood up and said, you know what, china has been cheating. they've taken jobs from americans, they haven't played fair. we have to have a president who

will stand up to cheaters. we believe in free trade and free enterprise but we don't believe in allowing people to cheat day in and day out. i'm going to work very, very hard to make sure the people in this country that that just being projected by the cbo. their analysis of what's going to happen in the future of america is driven by the policies from a president who's failing. he's frequently telling us that he did not cause the recession, and that's true, but he made it worse. and he made the recovery long and tepid. the people here in nevada are suffering. so many people have their homes under water, it's extraordinary. and nevada leads the nation in a very negative way, which is if you look at foreclosures of the last 90 days, nevada is number one in the nation. this is a very tough time for the people of nevada. and i want to do everything in my power to get this economy going again. so people can be in homes they can afford, so people can come here for tourism, so the american people can have rising incomes again, so we can make sure america stands strong

around the world. we have a president who may be a nice guy, but he is way over his head. he does not understand what it takes to get america working again. and i do. i spent my life in the private sector, not quite as successful as this guy, but successful nonetheless, sufficiently successful to understand what it takes to get america to be the most attractive place in the world for innovators, entrepreneurs, and business and job creators. i want america to be the place where people want to come and grow. and i will use all my energy to get america working again, to help the people of this country to have rising incomes and good homes that are worth something again. so i want to say thank you to donald trump for his endorsement. it means a great deal for me to have the endorsement of mr. trump and people across this country that care about the future of america. i think it's time for us to recognize we can't keep going down the road we're on. we have to dramatically change course. we have to restructure the way the government interacts with

people. our government is too big, it's too intrusive, it's placed too great burdens on people of this country. i will dramatically change the way this country is working. i'll also stand up for our friends abroad and make sure america remains the shining city on a hill. thank you so much for your help and your endorsement today, and i look forward to seeing you on the trail. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> a couple of people i should mention, the lieutenant governor has been chairman of my efforts in this state and i appreciate that. governor, please stand .pheavalup

i look forward to seeing you all out on the trail. i need every vote i can get. thank you. [applause]

♪ >> republican presidential candidates campaigned throughout nevada today. the maine caucuses began a week- long process on saturday. next week, colorado and minnesota will hold a party caucuses and primary voters go to the polls and misery. at the end of the month, arizona and michigan hold primaries, and washington state will have its presidential caucuses on march 3. for more information on the "road to the white house covered, go to c- span.org/campaign2012. >> c-span is "road to the white house" political coverage take you to the live event.

>> we balance the budget every single year and kept our schools first in the nation. my leadership will end the obama era and begin a new era of american prosperity. >> there is a mess up in washington. they have created a mess and get enough -- given us a lousy for an policy, a lousy budget, and allow the recession. the wonderful thing is that in the grassroots, people are beginning to realize the problem is too much government. we need more personal liberty. >> it you are prepared to do what it takes to make sure that we change direction, not just the presidency, but the congress, the bureaucracy, the judges, the policies, so that the entire system gets on the right track, so that america can give our children and grandchildren a more prosperous, said, and a better future. >> all the candidates as they meet with voters.

>> thank you so much. >> and use our web site to view recent video from the campaign trail and read the latest postings from the candidates, political reporters, and other reporters from social media sites. next, attorney-general eric holder is questioned about his handling of the investigation into the bureau alcohol, tobacco and firearms fast and furious program. that program was shut down after the death of border security agent brian perry. congressman beryl eisa --darrell issa is chairman of the committee. >> the committee will come to order. please close the outside doors.

americans have a right to know that the money washington take from them as well spent. americans deserve an efficient, effective government that works for them. our duty on the oversight and government reform committee is to protect these rights. our solemn responsibility is to hold government accountable to taxpayers because taxpayers have a right to know what they get from their government. our job is to work tirelessly in partnership with citizen watchdogs to deliver the facts to the american people and bring genuine reform to the bureaucracy. i will now recognize myself for

an opening statement. today we are joined by the attorney general of the united states are a matter that this committee has invested in more than a year in research. in november of 2009, fast and furious opened. in december 2009, va meets with the atf and gets info on fast and furious targets. in so they could well have ended the operation. on january 6, 2010, fast and furious becomes in fact a joint exercise. on march 15, 2010, the first federal wiretaps are issued in this case. december 15, 2010, ryan terry is murdered with weapons found at the scene that came from fast and furious.

an january 27, senator grassley first asked the department of justice about fast and furious, and within days, we are given a false statement of facts, denying that guns were ever allowed to walk. within days of that, we began to note that fast and furious was going to be difficult. that was more or less groundhog day a year ago. today is groundhog day again. this committee has lost its patience to wait longer. we will not wait until next groundhog day to get answers for the american people for brian terry and four others. on march 3, john dawson goes public. agent dodson is here today.

he, too, deserves to have this nightmare of uncertainty of having the temporary assignment of not being allowed to do the job for which he has dedicated his rear put behind him. on october 11, after months and months and months of this committee trying to get further voluntary cooperation, we issued subpoenas for documents. today, we have been told to things. first of all, they are difficult and time-consuming to give us, and yet 10 times as many documents weren't -- were provided to the inspector general. more than three times as many people have been able to be interviewed by the inspector general. during that time, whistle- blowers have consistently brought us additional information. that information allows us to glean more than most of the documents we have received

through discovery. the minority can say what they want an issue the opinions they want, the memos they want. they have been absent from this, and i am disappointed for that. this is a legitimate requirements of this committee to get to the bottom of it and to get genuine change so this cannot happen again. and i repeat, the genuine change, the safeguards, the protections that were not there, apparently, before, so this cannot happen again. mr. attorney general, as we go for questioning, my question will be when is the primary investigative committee of congress, of the u.s. house, going to be allowed to have the same access that your own, essentially self-appointed inspector general has question marks the 12,000 people of the inspector general's office throughout the government are important, and we expect them to

be respected and we expect them to receive information. but the 70 men and women that work for the majority and that 30 or so that work for the minority are very small fraction of that. we ask very little government by comparison to what the internal controls historically and always will ask for. our budget is less than 1/20 of what the inspector general's office is. we are not an agency that can ask for vast amounts of documents. we have asked you for documents, and if you look at the totality of government, we have asked for very little compared to the eye chikamatsu -- to the ig office. it is our opinion that we have not gotten the need for over managing and redacting in careful looking by teams of lawyers have gotten in the way of the legitimate speed with which we should get that.

we are going to ask you many things today. hopefully you came prepared to know a great deal about fast and furious. the important things i am going to ask today are, what can you do to bring this to a close? what can you do before the ig completes her investigation to allow the american people to see change that tells them this is no longer going on and it will not go on in the future? before i recognize the ranking member, it is this majority of the committees to believe that this is an operation that included reckless behavior at atf, failure to push harder and four more by dea and the fbi, u.s. attorney a clearly did not do his job in a way that anyone should be proud of. we now have adjusted to permit official who has taken the fit. we have moved up airways, and

all those people should be ashamed of that ryan terry is dead because they did not do as good a job as they should. kenneth elkton -- kenneth nelson has said publicly and privately that he bears a great deal of that blame. the point here today is, we want to know how justice will oversee every local operation, every state, every one of the very agencies that are either under your authority or in a joint task force become under your authority, how you will ensure for the american people that this will not happen again, or at least the systems are in place to give us the confidence that it is much more unlikely to happen. those are the items that i come here today, ask you to come here today, and i appreciate you being here voluntarily, to answer. i hope we would get the answers and the commitment today that we ask for.

>> thank you very much, mr. chairman. i want to welcome the attorney- general today. mr. chairman, when the committee started this investigation almost a year ago, you and i made pledges to the family of agent brian terry to find out what led to the release of hundreds of firearms to criminal networks on both sides of the border. we pledged to follow the facts wherever they may lead and provide the public with answers. mr. chairman, i want to of knowledge your efforts here, and over the past year, we devoted incredible amounts of time, money, and energy to investigating this issue. we interviewed 22 witnesses, including senior officials at the department of justice and atf. we also reviewed thousands of pages of documents and we had four full committee hearings on this very topic.

because of our extensive work, we have had concrete results. the committee has exposed a five-year pattern of gun walking operations run by the phoenix division of the atf, the arizona u.s. attorney's office. more importantly, we have put a stop to it. this is a significant accomplishment, and i commend you for it. in addition, we can now explain to the public how this series of reckless operations originated and evolved over the past five years. i ask unanimous consent to place into the record a report i sent to members earlier this week. >> without objection, so ordered. >> this 95-page report called fatally flawed, five years of gun walking in arizona, provides a detailed and comprehensive account of what we learned in our investigation.

it documents how suspects in 2006 and 2007 barricaded more than four hundred 50 firearms during operation wide receiver as atf agents who knew they had probable cause chose not to make arrests in order to build bigger cases. as one field agents said at the time, "we want it all." it documents the case in 2007 in which suspects purchased 200 firearms and atf failed repeatedly to or -- to coordinate interdiction with mexican officials. despite alerting then attorney general mukasey about the spelled operations, they continue. it documents a case in 2008 in which atf agents watched in real time as suspects who were part of a trafficking ring that

bought more than five -- more than 100 firearms pack weapons into the backseat of a car and drove them across the border. it documents operation fast and furious, during which the same atf special agent in charge of the phoenix steel division in all three previous opt -- operations, take an order from the deputy director of atf to shut down the operation. as the aged -- as the agent stated, "i don't like headquarters driving our operation." instead, field agents continue to encourage gun dealers to sell firearms suspects for months. there are several things are investigation did not find. we found evidence that agents or prosecutors in arizona acted in bad faith. they sincerely wanted to put away gun traffickers and higher level targets.

in pursuit of that goal, however, colossi of privilege and -- predictable collateral damage by letting guns wall. contrary to many unsubstantiated allegations, the committee retained no evidence indicating that the attorney general authorized on walking. none of the 22 witnesses we interviewed claimed to have spoken with the attorney general about the tactics used in operation fast and furious before this controversy broke. mr. chairman, although you deserve credit for exposing these operations over the last five years, we part ways in what we should do next. you now appear intent on escalating the controversy and promoting unsubstantiated allegations in a campaign that looks more like an election year which taught at an even-handed investigation. this is the sixth time the

attorney general has testified on these issues. in contrast, you have never once called the former head of the atf to testify at a public hearing, even though atf was the agency responsible for these reckless programs. although attorney general holder has answered questions repeatedly, he refused to even interview former attorney general mukasey. when i was the starting as a lawyer some 37 years ago, the senior partner in the law firm said to me, young man, you have to take the facts as you find them. you cannot manufacture them. now that we have the facts, i hope that we can put aside the politics and the rhetoric and focus on concrete reforms to ensure that this never, ever, never happens again. with that, i yield back. >> i thank the gentleman.

i will now recognize myself for five minutes. i am sorry, i am a little off on that. to be honest, i just thought i would respond to a few of your things, that will wait. mr. attorney general, we are pleased to have you here as the highest-ranking law official in the land, we appreciate your commitment to the time both here and in the sense that you have given. contrary to the ranking member, i believe that today will be one of the first times in which you are fully briefed and prepared to answer in detail questions exclusively about fast and furious, and i would caution both sides of the aisle to stick to the subject. we are not the judiciary committee. the attorney general is not here to answer a plethora of

questions we may have about the conduct of his office. he is not here to generally tell us about law enforcement. i will assert the gavel if someone goes on a broad expedition beyond fast and furious, and as the ranking member said, related activities including wide receiver and others. i think respect for the attorney general's time and the legitimate portion of the jurisdiction that our committee has taken requires that i ask all of you to please stick to that, particularly since the attorney general's time is valuable. pursuant to the rules of the committee, i would ask that you rise and take the oath. >> mr. attorney general, do you solemnly swear or affirm the testimony you are about to give roby the truth, the whole truth -- let the record represent an affirmative answer.

thank you, mr. attorney general. in order to allow time for discussion, the committee, like all committees, will tell you to stay within five minutes. i have no intention of picking up the gavel as long as you present what you have here today. i would ask that to the greatest extent possible, you realize that your opening statement in its written form is completely in the record and that you certainly have our permission to include material not in the record in order to further delineate prepared testimony today. with that, attorney general, you are recognized through cracks i am here today because i understand and appreciate the importance of congressional oversight and because i am committed to ensuring the highest standards of integrity and professionalism at the u.s. department justice. that is precisely what i pledged to do exactly three years ago tomorrow when i was sworn in as attorney general and it is exactly what i have done over the last three years. i dedication to the department's

mission is shared by extraordinary group of colleagues, over 170,000 employees to eat each day in office all round world worked tirelessly to protect the american people from a range of urgent and unprecedented threat from global terrorism and financial fraud, crime, human trafficking, civil-rights abuses, and more. of the last three years we have made a number of significant improvements, including policy and personnel changes that address many of the concerns that are the subject of this hearing today. a lot to discuss some of these improvements in specific terms and outline the steps we have taken to ensure that the flawed tactics in operation fast and furious and earlier operations under a prior ministration are never used again. in some of my comments today, if they sound familiar it is because this marks the sixth time i have answered questions about this operation before congressional committee in the last year. that is start something that cannot be said enough.

allowing guns to wall, whether in this administration or the prior one, is wholly unacceptable. i have been consistent on this and said it since day one. tactic of not interdicting weapons despite having the authority to do so appears to have been adopted in misguided effort to stem the number of firearms that are traffic each year from the united states to mexico. stopping the dangers low of weapons is a laudable goal, but attempting to achieve it by using improper tactics is neither acceptable nor excusable. that is why when i learned early last year about the allegations raised by atf agents involved with fast and furious, i took action. in addition to requesting an inspector general's investigation, i order that a directive be sent permitting the use of such tactics. there have been important personnel changes in the department. and bought reformer reflecting

lessons we have learned from operation fast and furious have been implemented. today i want to reaffirm my commitment to ensuring that these blog tactics are never used again. i reiterate my willingness to work with congress generally and with this committee more specifically to address the public safety and national security crisis along our southwest border that has taken far too many lives. congress has legitimately saw answers to questions about law enforcement operations wide receiver and fast and furious. i colleagues at the board of justice have worked diligently to provide those answers. in addition to my frequent testimony before congress, i have answered and am continuing to answer questions that have been submitted for the record during previous hearings. the department has also responded to more than three dozen letters from members of congress and facilitated numerous witness interviews. you have also submitted are made available for review some 6000 four hundred pages of documents to congressional investigators.

this has been a significant undertaking court justice department's employees and our efforts in this regard remain on going. we have also brought a congress with virtually unprecedented access to internal documents to show how inaccurate information was initially conveyed in a letter sent to senator grassley on february 4, 2011. these documents show that the park officials relied on an affirmation provided by supervisor from the relative components in the best position to know the facts. we now know that some of the information they provided was inaccurate. we understand that in subsequent interviews with congressional investigators, the supervisors stated that they did not know at the time that the information they provided was inaccurate. in producing internal communications regarding the grafting of the letter, the department made a rare, ltd. exception to longstanding executive branch policy. this decision reflected unusual

circumstances and allow us to respond and most comprehensive way possible to congressional concerns and the departments of concluded that information in the letter was inaccurate. the documents reduced have answered the question of how that letter came to be drafted and put to rest questions of any intentional effort to mislead. all of our communications to congress should be accurate, and that is the standard i expect the department to meet. at my direction, the deputy attorney general has instituted new procedures to increase safeguards in this area. as i testified a previous hearing, the department does not intend to produce additional the liver to materials. i want to emphasize deliver to materials about the response to congressional oversight or a media request that -- this decision is consistent with a longstanding approach taken by the department and about democratic and republican administrations and reflects concerns for the

constitutionality of separation of powers. robust internal communications would be chilled and the tocutive branch's ability respond to oversight request would be impeded. for both branches, this would be an undesirable outcomes. the brokerage functioning of the separation of powers requires that executive branch officials have the ability to communicate confidentially as they discuss how to respond to inquiries from congress. i want to note that the separation of powers concerns are particularly acute here because the committee has saw information about open criminal investigations and prosecutions. this has required a permit officials on how to accommodate -- also ensuring that critical ongoing law enforcement decisionmaking is never compromised and this freak from even the appearance of political influence. such candid internal

deliberations are necessary to preserve the independence, integrity, and effectiveness of the department's law enforcement activity and would be chilled by disclosure to congress of such materials. just as we have work to accommodate the committee's legitimate oversight needs, i trust the committee will equally recognize the executive branch constitutional interests and will work with us to avoid further conflict on this matter. the committee is keenly interested in policy changes that the department has undertaken in the wake of operation fast and furious. the atf, which is now under the leadership of acting director todd jones has implemented a number of key reforms and critical oversight procedures to prevent such a flawed operation from occurring again. these reforms are numerous and include a number of things. i am pleased to report that under the leadership of the department's criminal division, we have bolstered the crime- fighting past the on both sides of the u.s.-mexico border. we have done this by doing a number of important things as

well. this is an important start, but we have to do a lot more. no one knows this better than the members of our nation's law enforcement community, including the atf agents to testify before this committee last summer. not only did these agents bring the inappropriate and misguided tactics of operation fast and furious to light, they also sounded the alarm for more effective laws to combat gun trafficking and include public safety. these courageous agents explain that atf's ability to stem the flow of guns from the united states into mexico suffers from lack of effective enforcement tool. 2011, the majority of house members voted to keep law enforcement in the dark. individuals can purchase multiple semiautomatic rifles and shotguns in gun shops along our southwest border states. in this new year, i hope that we

can or together to provide law enforcement agents the tools that they say they desperately need and that they have requested to protect our citizens and insure their own safety. incidents of violence against law enforcement officer or approaching highs level we have seen in nearly two decades, even though by crime is down overall. that is simply unacceptable, and the justice department is committed to turning back the rising tide and protecting those who serve on the front lines. we have designed and implemented comprehensive new training initiatives to bribe law- enforcement leaders with the information, analysis -- to provide law enforcement leaders the information they need to respond to threats. that me be clear. nothing is more important than ensuring the safety of the great lawn for professionals who put their lives at risk for us each and every day. but we cannot make progress we need and that the law enforcement partners we have deserve without your assistance and without your leadership. as i said before, i am determined to insure the are

were shared concerns about these flawed law enforcement operations leads to more than just worn out washington games and cynical finger-pointing. the department just to stand ready to work with you, not only to correct the mistakes of the past but also to strengthen our law enforcement capacity in the future. thank you. >> before i begin my questioning, would you agree to release to us legal opinions on the constitutionality of the material that you have thus far refused to supply the committee could door cracks to the extent that there are legal opinions, i will look at them and to the extent they can be provided, i have no objections to that. to the extent that i can, i will make those available to you. >> i will begin my questioning by following up. mr. attorney-general, the executive branch has executive privilege. it is narrow, well-defined,

there is case law. if you do not find a legitimate basis to deny us the material we have asked for, and we will seek remedies necessary to compel. having said that, i appreciate you being here today and i don't want to waste any of yours or my time on this at this point. the scope for a couple of items here. first of all, it is reported through discover that we have received that mr. monty wilkinson may have been formed to of agent terry's murder in a timely fashion. is that true? >> i know the murder occurred december 14. i heard about probably within 24 hours of its occurrence. >> we were informed about that within 24 hours, did anyone inform you or allude to the fact

that the weapons found at the scene were from fast and furious creston or >> know, i did not know about operation fast and furious until the beginning part of 2011 after received that letter from senator grassley and at the end of january. that was about operation gun runner. i actually learned about fast and furious in february of that year. >> would you make available to us through whatever records you can find the name of the person who inform you, so that we can ascertain why that individual would not or did not tell you what was widely known almost immediately, that in fact, law enforcement allow weapons to walk, that basically these were fast and furious weapons. the emailed we have received through whistle-blower show extensively that law enforcement was aware and concerned about it. we would like to know why someone kept that from you. >> i am not sure anybody kept it from me. i found out about it in january

or february of 2011 and i am not even sure how found out about it. it might have been a letter received from senator grassley on february 9. i am not sure if it was included in there. there were certainly media reports about it in february. i am not sure exactly how found out about the term " go fast and furious." >> would it be fair from your own knowledge to said that no one did anything to stop the program after they learned what it was about? fast and furious, prior to brian terry's death. >> they both admitted that they were aware of operation wide receiver. they never connected the techniques to operation fast and furious, and as a result, did not take any action. and above the din that was a mistake.

>> of want to make sure we do deal with quite wide receiver versus fast and furious. as of today, your law enforcement authorities, did have the ability -- have the ability to see a straw purchase and follow them to the next location? in other words, that law enforcement have the ability to follow suspected gun traffickers with the weapons in their car from location to location? >> and keep them under constant surveillance? they still have that capacity. >> as far as we have been reported, every piece of evidence shows that in wide receiver, every effort was made unsuccessfully many cases, which is one of the things that concerns us, to follow the weapons. to your knowledge, was there ever an order under wide receiver to abandon following

the weapons and let them walk? >> isiah leggett seymour on quite receiver caught " -- as i have seen more on wide receiver -- >> do you know of any time that people were ordered to peel off and let the weapons walk under a wide receiver? >> i know that in the early days of the investigation, observations were made of people buying guns and decisions made not to surveil them after those purchases were made. as a result, hundreds of guns walt and there were complaints raised by people connected to the investigation about the fact that guns were walking in operation wide receiver. >> since it was never allowed to it simply let known gun buyers fall into their hands, have you taken any action to fire or

discipline anyone from operation of wide receiver? >> it occurred in the prior administration. >> we are talking about people who would trends in the transition period to your knowledge, have been disciplined anyone from wide receiver? >> no, i have not. >> have the discipline anyone from fast and furious? >> no, i have not, as yet. there have been personnel changes made at atf. revenue u.s. attorney in arizona. we have made personnel switches at atf, people have been moved out of positions. i am certainly going to wait and see what i get from the inspector general, the report we have from the majority. -- from the minority. i will be taking all that into consideration and make personnel changes as i think they are program. >> my time has expired. i will say that i don't think

the minority report is going to do you a lot of good, since it seems to say that nothing happened. i recognize mr. cummings for his round of questions. >> are respectfully disagree with what you just said. our staff worked very hard on that report. by the way, it is based upon the evidence that the majority presented. you all heard the same evidence that we heard, and we basically look at the facts as presented. mr. attorney general, i want to thank you again and i am sorry my colleagues on the other side of the aisle have made completely unsubstantiated allegations against dedicated and hardworking fbi agents, dea officials and others, and i want to thank all of them for what they do every day to protect the american public. i have to ignore the political sideshow and keep my focus on

the real problem that led to these flawed operations. as our report explains, we have no evidence that you approved gun walking. we have no evidence that you knew about it. this and can probably be said of the former attorney general. i assume that if either of you actually heard about god and walking take thuringia up if you heard about gun walking -- it either of you had heard about gun walking, you would have put a stop to it. hundreds of weapons went to criminal networks on both sides of the border because agents did not arrest suspects when they could have. i also get upset that this one on for so long. you identified four different operations in phoenix over five years, across two administrations, involving hundreds of weapons. these weapons put law

enforcement agents in danger. in your written statement, noted that 177 officers lost their lives in the line of duty last year. 70 of those debts involved firearms. as the country's chief law- enforcement officer, what is your reaction to the fact that these operations continued for so long? >> it bothers me a great deal when one sees the death toll we have seen in mexico, 40,000, 50,000 people have been killed over the last five years, 60,000 guns traced from the united states into mexico. that means they are probably substantially greater numbers and have gone into mexico. a concern have is that some point these guns will be trained on law enforcement officers, though we have seen the historic drop in the crime rate, we have seen a rise over the last two years of the number of police

officers, federal enforcement agents who have been killed. i've been to far too many funerals and had to talk to far too many widows about the death of great people who have died in the service of their country, and we have to do something about it. we have to. >> and the atf director william hoover became concerned in 2010 about the number weapons involved in fast and furious. he told us he did not know about gun walking, but he ordered an exit strategy based on his overall concerns. he told a phoenix office to end its operation within 90 days and bring indictments. but they did not do it. but did not like atf headquarters won their cases and they continued for months to encourage gun dealers to sell to straw persons without arrests. mr. ruder also told us that he never told anyone at the department of justice about his general concerns with the

operation or his order for an exit strategy. in our interviews with justice department officials, would confirm that. i understand that field agents do not like bureaucrats in washington looking over their shoulder. but how can a field office effectively ignored the directives of atf headquarters in this way, and what specific reforms are now in place, or should reconsider, to ensure federal coordination and oversight? >> there is a tension between the field and headquarters. depending on where i sit, i think greater wisdom exists in that place. we have to come up with ways in which we make clear what the policies are. after i heard about gun walking , i was very firm. i had a directive, sent out by

the deputy attorney general to the field that indicated that those kind of techniques for simply unacceptable, were not to be used by the department of justice. todd jones, the acting director at atf, has instituted a number of reforms. the report you have put out contains at the back a number of suggestions with regard to reforms. a substantial number those have been instituted by todd. among them, coming up with ways to ensure that the trafficking of guns does not occur. more levels of review have to occur. also significant is that we have to have ways that those who have concerns about 80 of operations have greater of -- ability of servicing things so that people, the leadership at atf and ultimately headquarters can take necessary, corrective actions.

>> thank you. we now go to mr. burton for five minutes. >> nice seeing you again. >> it has been a while. >> it sure has. it is very interesting, mr. attorney general. for six years, remember when you were with janet reno and the deputy attorney general, and we fought to get documents, and we had a difficult time. the center today that there are certain documents that you will not give us because of the separation of powers. we have been down the road before. and we got them, but we had to threaten that we would have a contempt citation in congress. this is not just during reno administration, but during

gonzales as well. and we got the documents. so i think you are hiding behind something here that will not stand up. so you ought to give us the documents. now we have received 6000 documents with reductions, and i know that is an old school policy. send them up here in cross out everything of relevance and let us try to figure out what it is. and you dump them on us on friday night so that the staff here cannot do anything with them unless they stay over the weekend and were 10, 12, 14 hours. i have been down that road, too. there are 93,000 documents that you are not giving this committee, and you are saying the separation of powers prohibit you from doing that. that is baloney. that is just baloney. and i have worked with you -- i have worked for six years when you were the deputy attorney general. so why don't you give us those documents? the conclusion i come to is there are some things in there

that are being hidden that you don't want us to see. i don't know if it involves you or some other atf agents or some other members of the justice department, but this committee is the oversight committee and we have every right, under the constitution, to check on what you are doing. we are supposed to oversee the executive branch, and you are part of that branch. for you to deny this committee is dead wrong, and i don't think you'll find anybody can do it. i would urge the chairman to move a contempt citation against you if you don't give them to us. now, let me just ask you a couple of questions. let patricku cunningham, the head of the criminal division in phoenix, and emery hurley, why won't you let them come and talk to the committee? why won't you let them do that? >> a couple of things.

just for the record, i was only a deputy attorney general for four years. it seemed like six. >> it seemed like longer than that for me. >> with the gentleman yield? >> i would be happy to yield. >> since mr. cunningham has now taken the fifth, i would say none of us have the direct authority, but would you make all testimony and information of mr. cunningham's immediately available to us, unredacted, so we may evaluate what you know about why he took the fifth? i yield back. >> in terms of making available, i am not sure where you get the number of 93,000 documents. the reactions that have occurred are only because there are things that are either not relevant or are protected by a grand jury secrecy rules, court

orders that have sealed material. we have provided to this committee material that is relevant and only redacted that which is necessary. with regard to the two people you talked about, mr. hurley is a line prosecutor and we never make them available. every attorney general i know has called that policy. mr. cunningham no longer works in the justice department and i don't have the ability to compel him to testify. he left the justice department this past monday. >> you ask him to leave, i guess. >> know. he had planned to leave well before he invoked the fifth amendment privilege to take a job in private practice, or at a company. >> as i understand it, the ig has a 80,000 documents and you have given us 6000. whether we are talking about 93,000 documents or 80,000, this

committee has asked for them and has not gotten them. it appears as though we are being stonewalled and there is something being hidden. have you apologized partially to the whistle-blowers who were in effect called liars by those within your own agency, when we now know they were telling the truth, and that we would not know any of this that they had not come forward? i am talking about people like john dobson who is here today. >> i have not apologize to them. i have spoken to agent dodson when the chairman gave him my and telephone number and i told him to give me a call pierre >> why don't you call him and apologize? you are the attorney general of the united states and you are in charge of these people, and they were in effect called liars, and they were telling the truth. it should be your responsibility to say i am sorry that you were called liars when you did tell

the truth. >> i am not aware of them being called liars. we tried to treat them with respect. i don't think any adverse actions were taken against any of the people who came here and testify before this committee. i would be more than glad to talk to him. i know he has had a meeting with acting director of atf and he has expressed his pulse. i am more than glad to have a conversation with him. >> i wish you would call a general -- call the gentleman. >> taking the fifth is not a cloud? >> i don't know why he took the fifth. there are a variety of reasons, not the least of which is apparently there was a report or statement by this committee that he had acted inappropriately. i don't know why he invoked the fifth amendment privilege.

that is certainly his right as an american citizen. we have provided 153 documents, 387 pages of material. we will continue to look at that material and to the extent that there is information that is relevant, we will provided to the committee. >>we now recognize the other former chairman of the committee for five minutes. >> thank you very much. this committee has not obtained one shred of evidence that would contradict your testimony. not one witness, not one document, not one e-mail, and still, some suggest that you authorized gun walking in the tactics in operation fast and furious. i hope this will be the last time you have to answer this question.

did you, mr. attorney general, ever authorized and walking? >> i did not. i am from new york. i will say it that way. i would say it a different way. i will say i did not pay >> i am from new york so i would understand your accent. did you ever authorize the tactics employed in operation fast and furious? >> not only did i not authorize those tactics, when i found out about them i told the field and everybody in the united states department of justice that those tactics had to stop. that it would not acceptable and that gun walking was to stop. that was what my reaction was to finding out about that technique. >> to your knowledge, did the

deputy attorney general or the assistant attorney general ever authorized gun walking with the tactics employed in fast and furious? >> to my knowledge, they did not. >> if you had been asked to approve the walking, what would you have done or said -- approved begun walking, what would you have done was -- gun walking, what would you have done or said? >> no. there are questions you have in narcotics cases, all you going to let the drug is what. we have a spirited conversations. the notion you would let gun is absurd. it was the reason i said it

could not happen. it is not our policy. anyone who does it is breaking a direct directive. >> if you had been asked or told by atf or the united states attorney's office about the tactics in operation fast and furious how would you have acted? >> in the same way i did in early march of 2011 by telling everybody, i do not do this. this is unacceptable. it is stupid, dangerous, and not something we can ever do. >> i want to thank you for coming. thank you for your testimony. i think it is clear that the attempts to tarnish the reputation -- it is pure politics. it has a political flavor. that is unfortunate. on that note, i will yield back.

>> i thank the gentleman. we now go to the gentleman from north carolina. >> thank you. thank you attorney-general holder for being here. listening to the interview had for the former chairman, -- the insert you had for the former chairman, we are here 13 months after we found that an agent was murdered for policies you did not support. we find out you have not fired a single individual. we find out that you have not rebuked any staff members. you have not even put a letter in people's personnel file saying they acted and an agent was murdered. that is absurd.

so i ask you, why had he not taken steps -- why have you not taken steps to make sure this does not happen again? >> i have taken steps. >> you told people you were mad. that is silly. you have not taken action. you have not fired anybody. it is clear you did not enforce the policy before. you did not even know about it. it strikes me as incompetence in terms of management. >> i am not sure you understand how the justice department works. i did not express the fact i was mad. i issued a directive that says this kind of technique is inappropriate. we are still in the process of trying to determine where this policy originated. we know it started in the atf

office in phoenix. who the people were who actually approved the technique, we are still in the process of trying to work through. that is not all i have done. i have made personnel changes in regards to leadership positions. we have instituted a series of policies that a design to make sure that does not happen again. >> an agent was murdered. your action is to merge -- move people around. that seems to inconvenience people, not to rid them of federal employment. >> to the extent we find out who was involved, i will assure you that unless there is a compelling circumstances, those people will be removed. we are in the process of investigating that murder and the people who were responsible for it will be held accountable.

you will hear something about that soon. >> relatively soon. 13 months later. it is 13 months after the fact. that is what i am saying. at what point a year going to take action? >> as soon as we are in a position to hold people accountable, put them in a court of law and try them. >> is that this year? >> i think that is likely this year. >> it is it in the next six months? >> i think it is in the next six months. >> dc is happening this quarter? >> is possible. >> 13 months later we have a possibility of someone being punished for an agent being killed. this is absurd. >> it is not absurd. it takes time to build a case

you are going to be able to take before a jury with the high standards of proof to convict somebody. it did not want to go in and put yourself on a time limit because critics are going to say we are not acting fast enough, lose the case, and the people responsible are not held accountable. we go into court when we think we have cases that are ready to go. i am not putting pressure on people except to do it as quickly and thoroughly as we can. >> i thank the gentleman for yielding. noted. mr. brewer is not going to be criminally indicted. when will asking about holding people accountable, we were asking about people who work for you. if you're managing style hands off or hands on?

>> i think i have a hands on style. >> if you had a hand on style, have you read any of the wiretaps -- if you have a hands on style, have you read any of the wiretaps? >> i have not read them. >> we were told, this has been reported, that he was sick to the stomach, this was approved by the office. indications are your chief deputy new about this. it comes through a criminal division at some point. the question is, is it not appropriate that he know about these wiretaps so you can know what former atf director is new. these wiretaps are believed to be -- directors knew? these wiretaps are believed to

be -- this should have stopped sooner. the office of criminal division knew or should have known. that is the thing we were asking about, holding people accountable. are you prepared to do any of that prior to the final report? you have not done any so far. >> i think you mean the inspector general's report. >> i keep confusing the two generals. i know the report. it seems to be the reason in the delay on executing on disciplinary action. >> first off, there is no indication that my former deputy was aware of the tactics that were employed in this matter until everybody became aware of them which was january or february of last year. the information, i am not, at

this point, aware that those tactics were contained in any of the wiretaps. to the extent those have been shared, that is in violation of court orders. if i find that somebody in the department of justice has shared the contents, that will be something that will have to be looked at there is a wide variety of information we can share. i am not going to go against ceiling orders. anybody who reads or estimates that material does so at their peril. >> i appreciate that. members of congress are not covered by that. members of congress are not under that order. if we receive the information from whistle-blowers, it is legitimate for us to know it and act on it. we are not covered by that

federal court order. if you want to respond? >> i think what you just said about the media and congress and court orders is incorrect. i think you at a apparel did you think that is the truth. >> we will say the release of information from out testimony of mr. nelson that was leaked to your people was also inappropriate. with that, we recognize the lady from new york. >> i would like to respond to my good friend's statement that they had not responded to the death. he responded a immediately. he has expressed his concern for the other agents that are being killed at a higher rate than ever in our history. i will not yield.

not only did he do that, he took swift action to stop gun walking, which did not happen in the prior administration, and established reform to prevent this from ever happening again. he called for, we could all help him do this, to confirm a permanent atf director. that would help more than anything. he also called for a federal firearms trafficking statute. he called for appropriate funding for the atf to do its job. these are some of the actions he has taken in response to that debt. once again, this investigation continues on its vast and curious mission to fix the symptoms rather than the cause of so much that legal gun

violence on the southern border. -- so much a deadly gun violence on the southern border. we have refused to examine the underlying problem that so heavily contributed to a series of ill-conceived, they dili flawed programs such as fast and furious. as everyone should know, fast and furious was not the first but the fourth investigation to use gun walking as a tactic. the strategy dates back to 2006, the prior administration. just to underscore how fast and curious this investigation is, is this the sixth occasion that you have been before congress? >> it is the sixth time i have testified about fast and

furious. >> it is the sixth time he testified. he handed up a list of what his responsibilities are. i would like him to be able to do. i would like to ed implementing the health and compensation bill -- ad implementing the 9 /11 health and compensation bill. an ongoing review. all of this is taking place. in your testimony, i appreciated your tribute to the courageous agents that worked in the atf. you spoke about the whistle- blowers and outrages they are. i wanted to point out -- and hell courageous they are. i wanted to -- how courageous

they are. i wanted to point out one agent who called current laws toothless. he said also it of things. do you agree there is no enforcement? law enforcement does not have the tools to crack down? >> i agree with the agent. there is a need for a statute. we need increased penalty for stock purchases. -- straw purchases. we would like to put in place these measures that would help atf and the federal government be more effective in the fight against the flow of guns into mexico. >> after that hearing, i worked with a ranking member and also with a congressman and a congresswoman and we drafted a bill conduct.

it would go -- but did a bill that would crackdown on this conduct. we do things that are far more helpful than going on a politically motivated fishing trip, which i feel is what we are doing today. the real agenda of this investigation does not aid or honor those who risked their lives every day, working to keep american safe from gun violence. i must say, this is getting out of hand. the testimony, over 60,000 guns you said have been traced in mexico that are directly tied to having been brought in there from america. i must say, one chilling example was an advertisement that al qaeda put on the website sang, go to america, it guns, it

is so easy. if your guns -- get your guns. i want to congratulate you for your vision and mission of wanting to give law enforcement the tools to get the job done, to ban gun trafficking. >> will the gentle lady yield? >> i will. >> i join with you in believing the 2010 designate should be given an up or down vote. should be given an opportunity to be confirmed. i will note, he was not put up. no one was put up for the first two years. it is said they did not have somebody earlier. i thank you for yielding. >> i want to thank the chairman for supporting the confirmation. he can help us make that happen.

>> we will do what we can. we brett -- recognize the gentleman from utah. >> thank you for being here. i had an opportunity to ask a question in 2011. i ask if you had spoken to president obama, secretary clinton, or secretary nepal ton of. you said you had not spoken to them about fast and furious. is that true today? >> clinton, yes. >> you have spoken with her? >> i should say, no. clinton, no. i have had passing conversations with the president. >> on wednesday, the viewer 16, you issued a press release saying you had met together. a man had just been killed in

mexico. there were questions about whether there had been ties. you say you did not have any interaction about fast and furious. my question is about secretary clinton, what interaction did you have with the state department. >> i am not sure if at lower levels there was a correction. i know i have not interacted with secretary clinton. >> i was questioning whether you had had some interaction. you said, you have to understand something about the way washington works. explain that to meet in the interaction your agency has had? >> what i was trying to say, i got cut off, when people know i am going to be the subject of these hearings, six times,

nobody wants to get involved in these things or dragged into it and have some interaction or conversation be made more than it is. i understand when people do not want to talk to me about best and furious. -- fast and furious. >> you know they are withholding information from you. >> know they are not to request you just said. >> i said they did not want to have conversations with me. >> if you cannot tell the boss what is going on, you will be oblivious. >> i say the people who work under them, executive branch agencies, are providing information. >> is the justice department providing the intermission to the state department or homeland security? you cannot have been face-to-

face discussions, which troubles me. -- you are not having a face-to- face discussions, which troubles me. >> i am not afraid to come to congress. >> you can claim ignorance on the issue. that is the problem. my question is, is there an expectation there is interaction? >> there is not only an expectation, there is that interaction. i know that dhs is working with the fbi. >> what about the state department? >> state does not have as direct a role. we interact with out of it but in mexico. we talk to the state department -- of our counterparts in mexico. we talked to the state department. of it hasible of five the money, you talked about --

>> paragraph 5 of york has the money, you talked about the border. >> through other ways in which the law enforcement components talk to one another. >> my time is so short. >> do you have a point of order? what if he asks a question, he should have an opportunity to answer it. without him being able to respond, what a we doing? >> the dead woman's point is valid. -- gentleman's point is valid. >> i asked for one additional minute. mr. attorney general, at the end of any round of questioning, within a reasonable period of

time, if you feel you have been unable to answer a question, we will give you the additional time so you may answer it. i do respect that a member may want to go onto a next question. with that, i mean no disrespect. i wanted to make that clear. our policy is to make sure that people get to make full answers. >> i would ask that without the starting of the clock, if you want to fully into that. i want to be able to pursue the follow-up question. if you want to more completely answer that. >> i am not sure where i was. >> the interaction between the department of justice and state department. >> we work with the state

department counterparts on a number of things. there is an initiative which is the umbrella way in which we operate in mexico. there is a lot of contact at lower levels. not so lower levels. i know are deputy attorney general speaks with his counterpart. >> the testimony from october 27 of this year, secretary clinton gave in the senate. she said, "i can tell you we have no record of any request for coordination. we have no record of any notice ." how is it she is saying, we have never been involved in fast and furious and you of testifying is happening on a regular basis? >> you have to look at it in context. we interact with them in a number of ways.

fast and furious may not be a primary thing. we are working more closely with dhs. those things are discussed. it might not be a primary thing that exists in a topic of conversation. >> you have 1500 weapons. we have 300 dead people. we have a dead u.s. agent. we have a press report. you have the people at the highest level sang, we do not talk to each other. we have to remain ignorant because we are going to have to testify. at the same time, you are telling me they are interacting on a regular basis. the state department is telling us it is not happening. they are saying similar things of the department of homeland security. if we are going to solve this problem, we have to solve these challenges.

>> the gentleman was a time has expired. >> i am not sure -- the gentleman's time has expired. >> i am not sure about the context of that remark. when it comes to violence in mexico -- >> can i read the question? the question that secretary clinton got. you asked a legitimate question. if you make that available to the staff so they can brief him. we will return to that of of order to get an answer. in fairness, we have given sufficient time. if you make it available to staff. with that, we go to the gentle lady from the district of columbia. >> thank you. i do not know if conversations with secretary clinton are of

major importance. i do know this, after calling the attorney-general six times book for the congress, i think the public would have expected -- six times before the congress, i think the public would have expected we would talk about a remedy. there is no remedy to give the justice department the tools they need to prosecute people. here we go again for the sixth hearing. i want to commend you for the changes you have made. the multiple changes you have made, while this matter was unfolding and the facts were coming forward, recognizing that until you get the inspector general's report, particularly considering this is the justice

department that without due process would be unseemly. you have to understand that when there is an issue like this, it was very important because of the death of an agent, there is an instant, if a committee can get hold of a high place government official, to call him as much as you can. my concern, for the attorney general who has foreign and domestic matters, that a remedy come out. we have not seen anything. i would like to go through the five years of gun walking. they all get merged. we have three years of gun walking in the bush administration, five years total.

two in this administration, beginning with the arizona-u.s. attorney. we have not had the of the kennedy to have him before us. the problem of the merged -- we have not had the opportunity to have him before us. the problem emerged but of his office. there were issues that the atf raised issues about moral objections. we do know, we have not had the opportunity to speak with him, he was briefed. he continued to allow hundreds of guns to walk across the border to mexico. the nine koreas hernandez case the rose during the bush administration -- notorious hernandez case the rose during

the bush administration. the gun walking case continued. now come to this administration. when you became attorney general in 2009, were you aware that atf had this long history of gun walking in its phoenix office? >> i did not become aware of it until the beginning of 2011. >> mr. attorney general, if every attempt at coordination, and remember, mr. hernandez was never arrested. no one was ever taken into custody. if every attempt at coordination fails, do you think the agents should have stopped of the rising further attempts -- stopped authorizing

further attempts to coordinate between mexico and the united states? >> do you think they should have allowed that? >> do you think that, given the repeated attempts of built coordination, that the agents should have stopped authorizing -- of failed coordination, that the agents could have stopped authorizing it? no of arrests being made on the mexican side. >> i think based on what you have noted, there was no basis for a continuation of gun walking. even conceptually, the notion that you would let them walk is something that i think is not a seventh technique. >> when does it become -- not a sound technique. >> when does it become gun walking? >> when you have the ability to

arrest someone for fire arms transactions they have engaged in, you make a determination not to make the address, -- arrest. you do not take any affirmative action. you allow that person who has committed an offense to simply walk away with the fire arm. that is gun walking. it is not a good thing to do. >> thank you. >> a note for the record, the attorney general has testified as to fast and furious, on november 8, on december 8, the of the previous testimony is when not on this subject of fast and furious. he was not able to answer it during that time. this is the first time before

our committee. the judiciary has not taken the lead the way this committee has. >> if i could correct the record. i did speak, the no. 5 or 6 is correct. >> the times you were asked. >> i was asked questions about fast and furious and answer those questions -- answered those questions. >> the next gentleman will be the gentleman from michigan. >> thank you. thank you for being here today. i am tempted to ask your opinion on joe paterno. it might be an interesting conversation. i would state that joe paterno reported allegations of child

molestation to his superiors but did nothing else. he did not want to just does procedure. -- jeopardize procedure. one man knew about them walking as early as april, 2010. after meeting with atf about it, he failed to follow up. joe paterno, a legend in his board, and yet, he was unceremoniously fired. weinstein continues in his current position even though fast and furious has held deadly consequences, most importantly, to an agent. my question is, what is the difference between the case of joe paterno and the justice department? >> i am not going to get into

the paternal case. i will talk about a --pterno case. i will talk about one's diet. he knew about wide receiver. he has indicated he did not know about the tactics, the inappropriate tactics, the gun walking tactics involved in fast and furious until later on. he did not connect those tactics with the ones used in wide receiver. he admitted what he did was a mistake. he has indicated he failed in not making that connection. >> and so he continues on, as do other senior officials. no consequences of significant nature at this point in time. no admission except that now when brought into the public light, that this has gone wrong,

it was set up to go wrong. frankly, i believe it was set up to go wrong in order to deal with second amendment liberties of law-abiding citizens and pushing into perceptions it was the problem of second amendment. more importantly, you overside of an agency, of a department, of leaders in a department, that have not been held accountable. >> with all due respect, the notion that this was a set up to do something about second amendment rights is absurd. the operation that was put together here was an attempt to stop the flow of guns from the united states into mexico. >> it was not affected. >> it was not.

it was flawed. >> very flawed. >> i have said that from day one. the notion this was a set up to come up with things to impinge upon the second amendment -- >> with all due respect, i would concur your mention of it impinging upon the second amendment liberties but that up. an article yesterday noted that you launched a reckoning of cia interrogations of terrorists by directing the justice department to reopen investigations closed years before. this decision was opposed by leon panetta and his seven predecessors. the article notes he made the decision without reading memos prepared as prosecutors -- by

those prosecutors. you are well known for not reading memos. you said you fail to read memos addressed to you in fast and furious. you failed to read memos related to the arizona immigration law. what does that say about your leadership and management that you continue to fail to read extremely important papers? >> the gentleman will suspend, this hearing is limited to fast and furious. i would answer you limit your answers to the management style that may relate to fast and furious. >> i disagree with that. i will respond to some of that.

i am the attorney general of the united states. when it comes to deciding what i'm going to investigate, how i am going to investigate, i take into account a wide variety of things. the decision i made to open up those matters, i was aware this was opposed. i read a great deal before i made that determination. i had access to material to other people have never had access to. i have great respect to people who put their lives on the line to protect this nation in a way -- i see a briefing every day above the great work they do. there were things done, things that were done during the course of those interrogations which were and difficult to american values and resulted in the death of certain people. that investigation has run its course. we are at a point where we are

about to close those investigations. it would have been irresponsible given the new information not to order that investigation. with regards to your more general point above me reading or not reading memos, i read those things that are brought to my attention or things i think i need to read to make appropriate decisions. i am confident the management style at have, the involvement i have is adequate to allow me to make appropriate decisions based on interpretations of a lot. i have a good step that brings to my attention those things i need to read. >> before i move on. we are speaking to your staff. the report that on numerous occasions congress has interviewed attorneys, including in the rocky flats investigation, i would ask that

your staff review that so you may correct the statement that it never happens. we go to the gentleman from massachusetts. >> indulge me if you will. our obligation is to the families of the deceased, the citizens of this country. we are charged with first find out what happened, and then once we have determined that, making sure we can work on practices so it never happens again both members of both parties -- again. both members of both parties have or to determine the facts. they have gone on about the number of interviews and documents. it also laid out in number of actions that were recommended. i know you have taken some actions and the new atf director

has set up some actions. we have a couple of alternatives. we could explore how the program began in two dozen 6 -- 2006, repeated itself in 2007, two dozen 8, 2009, but to do that, -- 2008, 2009. to do that, we would have to bring in front a former attorney general. he was the only one he knew about those programs. certainly, trying to find out more? about what happened, he would be somebody with talking to. -- worth talking to. we could explore what reforms -- what statutory changes might be involved. the majority does not seem interested in that.

we could continue to chase the political agenda, trying to find out that somebody had knowledge or authorized this operation. if that were the case, it would seem to me a good witness would be the then acting atf director. he indicated he is willing to come as a witness. he even testified, or was interviewed with staff from both parties. they asked him if he ever approved gun walking. he said he had not. they asked if he had ever been briefed the he said no. they asked if he had been aware of senior officials. he said no.

he would have known about it. this is what he said, "i do not believe i had knowledge of this specific tax 6 -- tactics until the facts were disclosed in the media. " the justice department never authorized it. he was not aware of it. he never briefed the attorney general or anyone else about it. i think that is the label information. if the information is going to be who knows what, when, and where. that was seven months ago. we can draw some conclusions and of our own as to why that testimony contradicts the assertions that the operation was approved at the highest levels. that leaves us with finding out whether or not there were any bad actions by people in high levels. mr. attorney general, did the

director of atf ever raised issues about the conduct of operation fast and furious? >> no he did not. >> do you rely on them to bring significant issues to your attention. ? >> short. -- sure. >> and a disappointed that nobody raised concerns to your attention? >> i am disappointed that other people in the department who had this knowledge and did not bring it to my attention and who admitted they made a mistake in not bringing it to my attention, the fact that gun walking existed in these operations. >> as anybody tell him accountable for not bringing those to your attention? >> he made the determination and we agreed it would be better for him to leave atf.

>> thank you. i ask consent to enter into the record the transcript of the interview. >> i object. you know that is inappropriate. >> it is inappropriate to have a witness who is not allowed to come before this committee and testify. i thought we would go to the next best thing. both parties had an opportunity to interview him and talk about issues you say our core. >> -- are core. >> i reserved. speaking on my reservation, does the gentleman believe that is the right thing to do? to make public an ongoing investigation that includes a number of officials, a situation in which an official has taken

the fifth and left the justice department, to make the publicly available -- those publicly available? >> i hope we have made the point. what is important is for you to allow him to come here and testify in public and answer the questions that have been core to the allegations you continue to make erroneously but refused to acknowledge. >> i would note, i have not called for the attorney general's resignation. i have not said he knew. i have said that people did not know who should have known things. we are a crime to find out where the figures were made other it -- we are trying to find out where the failures were made.

the acting director in fact it is callable for not knowing more what a director should know. i join with the gentleman in saying that it does concern me that somebody who is supposed to direct over 1800 individuals did not know that this involved a gun walking. remember, on february 4, well after these events, the attorney general's office gave us a document which said we never let guns what. that is of concern too. the committee is not shy about having additional hearings. the attorney general made himself available at this date. we are not saying this is the culmination. >> the interview was seven months ago.

a direct quote from you, "atf and justice is telling us this goes to the top. it goes all the way to the office of the director and the office of the attorney general. this is at the highest level of the obama appointees. quote those are allegations you are going to make. it would be important to have him come in here and testify. >> i appreciate the gentleman giving a plug. those allegations were made with in number of other false allegation. i might note, we were given statements that the atf director was viewing on an internet connection the actual purchases being made.

after receiving testimony, we discovered although he inquired about the capability of viewing these tapes, no such event occurred. this often happens in an investigation. >> i am glad you recognize that those comments are false. maybe we can move onto the business of determining what we can do. >> a follow up on what you just said. i know you are reserving. i was just wondering if there was a way we could have a portion of that document that goes to the testimony where he clearly states he never told the attorney general about fast and furious and where he said he did not know.

>> i think the gentleman has done a good job of making that available. >> i want to make sure the record is complete. the attorney general has been accused of some very unkind things. his reputation hangs in the balance. i think we have the former atf director who stated he never said anything about this. he even said he did not know about this himself. i was wondering if we could have that portion of the transcript. >> i will work with the member to find a corporate coarsens that can be made available. i might note, -- find appropriate portions and be made available. i might note, my side has quoted

where he said he was sick to his stomach when he read the wiretaps and discovered what he did not know. although it is inappropriate, i will work with the gentleman, we will hold the record open to make of corporate statements that you believe unnecessary to make the -- to make appropriate statements that he believes are necessary. >> it is why i want to make it part of the record. when he said he said at his kitchen table, i have read it, he said his stomach was in not, his point was, he did not know about it before. if he did not know about it, it is impossible for him to tell the attorney general. >> i apologize mr. attorney general. i am not going to allow this to turn into a sequence. both sides could get into testimony. i will work with the gentleman.

we will return to regular order. >> thank you. >> can i say one thing? when he said he became sick to his stomach, it was not when he was reading the wiretaps, he was reading reports of investigations. >> i appreciate that. we now go to the gentle lady who has been waiting patiently from new york for five minutes. >> thank you mr. chairman. thank you mr. holder. i want to make a couple of comments to start up. we have heard it from the other side of the aisle with regards to this being a democratic or republican issue. whether this is a political game. if this is an election year survey. -- charade. i think it is important to

recognize that you need to be held accountable, or somebody does, as to what happened. i am amazed that of all the issues that face the country, this is the issue i hear from my district so frequently about. today, i will enter them into the record, i had no fewer than 30 questions from folks who wanted to know what happened, why it happened, and who is going to be held accountable. i was taken aback by a response when you sort of declared i am the attorney general. with all due respect, yes you are. you are accountable to the folks in my district and the american people. if you will indulge me, play a recording, most importantly, we had a hearing here in june.

in that hearing i asked his mother -- we will play that. >> you would like us to ask. >> we would want to know if the net that is set to find everyone involved in his murder will be set deep enough and wide and not -- enough to encompass anyone involved in the operation fast and furious? if the guns used in the his murder or part of the operation, then we would want to know everyone in the operation who had to deal with those weapons be brought up on charges of facilitating the murder of

brian terry. >> thank you, we will ask that question. on behalf of brian terry's cousin, to what lengths has year investigation gone? will everyone in that operation that had to deal with those weapons be brought up on charges? >> we are working nell -- now, this is an ongoing investigation. it is a very sensitive time. i am not sure i can talk and all a lot about where the investigation is. i have indicated a think we are close to making some announcements. we will seek to hold accountable those people responsible for agent terry's death.

with regards to people involved in the operation fast and furious, we are trying to find out who made the determination to allow guns to walk. i am not at liberty to talk about the weapons be used -- we used in the incident. that will come out during the course of the trial. we will hold accountable the people who are involved in this investigation. one other thing, i did not mean to imply that i should not be held accountable. i also think there is a thin as component to this. i ought to be held accountable for those things that are within my area of responsibility. i should be held accountable for things that are factually correct. i am more than willing to admit

mistakes when i have made them. i also think, if we are going to get ahead here, if we are going to make progress, we need to put aside the political gotcha game and focus on matters that are serious. when one looks at the debt held in mexico -- death toll in mexico -- >> i have one more question. i did call for your resignation. i feel the department of justice, you are responsible for all of the activities. i think that you have denied, you should not be held accountable. what more could have been -- gone wrong that he would have been held accountable? the president has been quiet about coming to your defense.

how many more border patrol agents would have had to die as a part of operation fast and furious for you to take responsibility? >> the gentleman may answer. >> >> that is the kind of thing. you wonder what you are getting those kinds of calls. as a member of congress, and you know, really, is that the way you want to be seen or known? i should be held accountable for my role in whatever i did or did not do in connection with the supervision of fast and furious. i am the attorney general of the united states and i should be perhaps given some credit for the things this justice

department has that under my leadership whether it deals with national security, revitalized civil rights enforcement effort. one has to balance all of these things. i am not claiming to be a perfect person or attorney general. i get up every day and try to do the best job i can. that kind of question i think is -- i think that is beneath a member of congress. >> >> that was attorney general eric holder testifying before the house oversight committee. he appeared for nearly five hours taking questions about an atf drug smuggling program. you can watch as the video in its entirety at c-span.org. hearing nextke 's

on c-span. the remarks from treasury secretary tim geithner on wall street regulations. president obama attends the national prayer breakfast. anne las vegas, and donald trump endorses mitt romney. -- in las vegas, donald trump endorses mitt romney. >> on washington journal tomorrow morning our guests will be keith ellison and represent ative david schweikert. washington journal is live on c- span every day at 7:00 eastern.

>> for those who are not aware of what the parliamentarians does around here, he is like an umpire in in the bowl -- in a ballgame calling balls and strikes. it should not be surprising to hear we have not always agreed with those calls. it is not easy to keep up with 200 years of precedence. >> he is the only parliamentarians to be hired by both democrats and republicans leaders. he was retained in his position despite a change of senate control four times by five different majority leaders. one cannot be an effective parliamentarians without being judicious. he also brings to the job a willingness to hear both sides of the government and consider every side of the issue. >> after serving nearly 20 years, alan firm and has

retired. he talks about his rare role in the senate. >> is there some kind of lawyer client relationship as as you will not tell senator be what senator a is up to? >> there is definitely that relationship. all conversations in my office is held in confidence. yes, we do have two sites coming to us. it requires a certain amount of juggling to tell senator a and to tell senator be as much as senator be has asked of us without violating any confidences. >> watch the entire interview all archived and searchable at the c-span video library. >> next, federal reserve chairman ben bernanke is asked about the fed's decision to keep interest rates at record low levels. he testified before a

congressional panel. topics include the federal deficit and the european debt crisis. paul ryan and shares the house committee. this is 2.5 hours.

>> thank you for coming to our committee to talk about the state of the economy. we will proceed quickly so we can get you back on your schedule. nothing is more critical to today oppose the economy than restoring real business growth in america. yet for almost three years, the u.s. economy has remained mired in a slow-growth high unemployment trap. the president and his party leaders say things are getting better. yet we continue to hear from families and businesses in our district and says this talk is disconnected from reality. this administration said the

stimulus plan would keep unemployment from ever rising above 8%. unemployment climbed as high as 10% and today stands at 8.5%. the cbo confirmed it is predicting economic growth to remain sluggish and the unemployment rate might hover around 9% through 2014. the obvious question is, why did these policies fail? i think when you get out and talk to families and businesses the answer becomes clear. the policies added hundreds of billions of dollars to the annual deficit. the explosive growth of our debt created tremendous uncertainty of our fiscal and economic future. when government sews doubt about future tax rates, interest rates, and tax stability, it undermines the security that families need to plan and invest. this puts a drag on economic growth. there is a monetary side to the uncertainty as well. the fed announced it will hold

interest rates at extremely low levels through 2014. i think this runs a great risk of fuelling asset baubles and eventually eroding the value of the dollar. the prospect of all three is holding the economy back in many of our judgments. the fear that it will be incredibly difficult, not just technically difficult politically difficult as well. the fed recently announced it would be -- it would accept higher than desired inflation to promote employment. this is not because unemployment is a lesser concern. the fed's tools for promoting employment are limited and can have unintended consequences. by contrast, the fed is uniquely positioned to protect the currency, the value of our money. i would find it very disturbing if that role were to be

diminished. the inflation dynamic that can be quick to materialize and painful to eradicate once it takes hold. for the sake of our economy in particular and the global recovery as a whole, it is vital that we focus on stability and certainty, especially when it comes to the value of the dollar. i firmly believe a course correction in washington is needed to help us get back on the right track. americans have risen to greater challenges and prevailed in the past. we hope to provide a plan to judge -- to do just that. >> thank you. welcome, dr. bernanke. we must use all the tools at our disposal to help people go back to work. i commend you and your colleagues of using various forms of monetary policy to promote stable prices and higher levels of employment. i do find it troubling at a time

when millions of americans are still out of work, many of our republican colleagues want to strip the federal reserve of that mandate that focuses on full employment and putting americans back to work. obviously, the federal reserve must not waver in its commitment to price stability but to deprive you of the tools necessary to boost employment would be a big mistake. without those tools, the economy today would be in much worse shape. as you testified previously before this committee, the measures taken by the federal reserve, the politically unpopular but not economically necessary tarp legislation engineered by the bush and administration and the recovery act by the obama administration averted an extraordinarily severe downturn, perhaps a great depression. indeed, we have averted a great depression. it is important to remember the

day president bush left office, the economy was collapsing at an even faster rate than originally thought. the gross domestic product was plummeting at a rate of 8.9%. in other words, -8.9% gdp. we were losing 840,000 jobs every month. three years later conditions have improved. the economy grew at an annual rate of 2.8% in the last quarter and 3.2 million private- sector jobs have been created since march 2010. reports and findings by the congressional budget office confirm your earlier assessments. the passage of the recovery act coupled with the actions by the federal reserve and others did help end the free fall and have helped began the climb upwards toward economic growth. indeed the congressional budget office has told us the recovery act helps save or create up to 3

million jobs and enter the year 3000 -- 2010 and lowered unemployment in 200011 compared to what it would have been if congress had not acted. those are not my facts, those are from the congressional budget office. it is clear we are on a huge fast downhill slide and action taken by the federal reserve, president obama, and congress at the time helped and the economic freefall and help us turn the corner. while we know the economy has improved, millions of americans remain out of work. unemployment remains unacceptably high and american families around the country are still hurting. the economy is still vulnerable to outside shocks whether it be the japanese see money to the brewing european debt crisis. that is why our first priority has to be nurturing the economy and making sure we do what we

can to help small businesses and other businesses help put people back to work. i commend you in articulating in your prepared testimony that in pursuing median and long-term fiscal sustainability which we must do, we ought to take care not to 2/investments to quickly because of those would impede the economic recovery. some policy makers in europe are coming to the notion a little late. the british economy, for example, contrasted by 0.2% the last quarter due in part to the severity of government spending cuts according to the january 31 article in the wall street journal. the british model was much heralded a few years ago by some of our college by an example of how austerity could work. severe austerity is coming back to bite them. christine a la carte was quoted

by bbc recently by saying that the imf is not suggesting there should be fiscal consolidation across the board. they say you need to look at this on a case by case basis. standard and pour in a " explained the rationale between -- a downgrade of nine eurozone nations. domestic demand falls in line, falls in line with consumer rising concerns about job security and a disposable incomes eroding the national tax revenues. then also contributing to long- term deficits. there are reasons -- these are reasons why we should take immediate action. we should take up the president's joplin that he presented in september including important investments. we should also finish the job

with respect to the payroll tax cut. we should make sure unemployment assurances are there for millions of others who are out of work through no fault of their own. dr. bernanke, i apologize for you in advance. the conference committee also begins at 10:00. i will have to leave before i want to. let me close by saying as we nurture the very fragile economy, we should also take immediate steps to enact a plan to reduce our deficits and debt. we should do it in a stable, predictable, and balanced way. the question is not whether we should do that, the question is how we do that. i believe are rigid bipartisan commission's provided the overall framework to the approach is not every specific recommendation they make. with that, thank you for you and

your colleagues work. >> the floor is yours. >> i appreciate the opportunity to discuss my views on the economic outlook, monetary policy, and the challenges facing federal fiscal policy makers. over the past two and a half years, u.s. economy has been gradually recovering from a deep recession. conditions have improved, the pace has been frustratingly slow. particularly from the perspective of the millions of workers remain unemployed or underemployed. the sluggish expansion has left the economy vulnerable to shocks. last year supply chain disruptions stemming from the earthquake in japan, a surge in the prices of oil and other commodities from the european debt crisis, the risk derailing the recovery. over the past few months indicators of spending and job

market activity have shown signs of improvement. economic projections just released, committee participants said they expected somewhat stronger growth this year than 2011. the outlook remains uncertain and close monitoring of economic developments will remain necessary. as is often the case, the willingness of households to spend will be an important determinant of how the economy expands. real consumer spending rose moderately, house will continue to face significant head winds. growth stagnated in 2011 and access to credit remained tight for many potential borrowers. consumer sentiment remains improved but remains at levels that are still quite low by historical standards. household spending will depend on developments in the labor market. over all the jobs situation does appear to have improved moderately over the past year.

private payroll employment increased by 160,000 jobs per month in 2011. the unemployment rate fell by 1% and claims for unemployment declined somewhat. we still have a long way to go before the labor market can be said to be operating normally. particularly troubling is the high level of long-term unemployment. more than 40% of the unemployed have been jobless for more than six months. that is roughly double the fraction of the economic expansion of the previous decade. uncertain job prospects along with tight mortgage credit conditions continue to hold back the demand for housing. although lower interest rates on conventional mortgages and the drop in home prices have greatly improved the affordability of housing, both residential sales and construction remained depressed.

dow would pressure and limiting the demand for new construction. in contrast to the household sector, the business sector has been a relative bright spot in the current recovery. many u.s. firms have benefited from strong demand from foreign markets of the past few years. more recently the pace of growth has slowed likely reflecting concerns of both the domestic outlook and developments in europe. however there are signs of the concerns are evading someone. confidence continues to improve, u.s. firms should be positioned to increase capital spending and hiring. larger businesses are able to obtain credit and historically low interest rates and corporate balance sheets are strong.

many smaller businesses continue to face difficulties in obtaining credit, credit conditions have began to improve modestly for those firms as well. globally economic activity appears to be slowing restrained in part by spillovers from fiscal developments in europe. the combination of high debt levels and weak growth prospects in a number of european countries has raised significant concerns about the fiscal situation is leading to substantial increases in borrowing costs, concerned about the health of european banks, and associated reductions in confidence and the availability of credit in the euro area. resolving these problems would require concerted actions on the part of the european authorities. they are working hard to address their fiscal challenges. nonetheless, risks remain and may unfold and favorably and could worsen prospects here at home. we are in frequent contact with european authorities and will continue to monitor the

situation closely and take every available step to protect the u.s. financial system and the economy. let me turn to a discussion of inflation. as we had anticipated, overall computer price inflation moderated considerably. in the first half of the year is surgeon the prices of gasoline improved along with a pass through to higher prices had pushed consumer inflation higher. around the same time supply disruptions in japan put pressure on motor vehicle -- motor vehicle prices. this faded in the second half of the year leading inflation to decline to about 1.5% in the second half close to its average pace in the preceding two years. in an environment of well anchored inflation expectations, more stable commodity prices and a slack in labor and product markets, we expect inflation to remain subdued.

against that backdrop they decided to maintain their stance of monetary policy. the committee decided to continue its program to extend the maturity of its securities holdings to maintain an existing policy of reinvesting principal payments on securities and to keep the target raise -- the target rate at 0-0.4%. economic conditions are likely to want low levels of the fund rate at least through 2014. as part of our ongoing effort to increase the transparency and predictability of monetary policy, following the january meeting the released a statement intended to provide greater clarity about the longer-term goals and policies strategy. the statement begins by emphasizing the federal reserve's firm commitment to its congressional mandate to foster stable prices and maximum employment. to clarify how it will achieve the directives, and they stated

their collective view that inflation at the rate of 2% as measured by the annual change in the price index is most consistent over the longer run with the federal reserve's statured mandate. it indicated the current estimates of the longer run normal rate of unemployment is between 5.2% and 6%. when they are not complementary the committee will take a balanced approach to return inflation and employment to their desired levels. in my remaining remarks i would like to briefly discuss the fiscal challenges facing your committee and the country. the federal budget deficit widened with the onset of the recent recession and has averaged around 90% -- 9% of gdp over the past three years. this exceptional increase in the deficit has had a weak economy as well as fiscal actions to aid

the recovery. as the economy continues to expand in stimulus policies are phased out, the budget deficit should narrow over the next few years. even after economic conditions of return to normal, the nation will face a sizable budget gap of current policies continue. using information from the recent budget outlook, one can construct a projection to the federal deficit assuming most tax provisions are extended and the position payment rates are held at their current level. under the assumptions the budget deficit would be more than 4% of gdp in fiscal year 2014 assuming the economy is close to full employment. lot return projections based on plausible assumptions about the evolution of the economy and the budget under current policies show it increased significantly over time and the ratio rising rapidly.

this dynamic is clearly unsustainable. these structural imbalances did not emerge overnight. an aging population and fast rising health-care costs, both which had been predicted for decades. the cbo predicts that federal outlays for of entitlements which for 5% of gdp in 2011 could raise by 2035. although we had been warned of such developments for many years, the time for projects is to become reality are coming closer. it runs the risk of serious economic consequences. over the longer term, the current trajectory of debt threatens to crowd out and reduce productivity growth. a growing share of our future income would be contributed to interest payments.

high level of debt impairs the ability of policymakers to respond to future shocks and events. even the prospect of unsustainable deficits has caused an increased possibility of a sudden fiscal crisis. as we have seen in a number of countries, interest rates can soar quickly if they lose confidence in the ability to manage fiscal policy. we can be sure that without corrective action our fiscal trajectory will move the nation ever closer to that point. to achieve economic and financial stability, fiscal policy must be placed on a sustainable path that insurers' debt to relative income is stable or preferably declining over time. attaining the goal should be a top priority. even fiscal policy makers should take care not to impede the

current economic recovery. the two goals of achieving long- term sustainability and avoiding headwinds for the current recovery are fully compatible. they are mutually reinforcing. a robust economy will lead to lower deficits and debt in coming years. a plan that clearly puts fiscal policy on a path to sustainability could help keep longer-term interest rates low and improve household and business confidence by supporting improved economic performance today. fiscal policy makers can also promote stronger economic performance in the medium term. to the fullest extent possible, our spending policies should increase incentives to save, anchorage our work force, stimulate private capital formation, premier research and development, and provide infrastructure. although we cannot expect the economy to grow its way out of

the fiscal imbalances, a more productive economy will ease the trade-offs that we face. it will help us lead a healthy economy to our children and grandchildren. thank you mr. chairman. >> thank you. we agree completely with the last part of your statement which is if we do not get the house in order it will get ugly fast. also, i want to sully you to have a more transparency on operation of the federal reserve. the latest statement clearly was an attempt to put your policy on the table and let the country see it. it is in the policy i have a couple of questions. early on he put an inflation target rate of 2%. that puts more clarity. but at the end of the statement, i will quote it -- in setting monetary policy, the sea to mitigate inflation from its longer-term goal.

these objections are generally complimentary. under circumstances under which the committee judges objectives are not complementary, it follows a balanced approach and promoting them taking into account the magnitude of deviations and a different time horizons under which employment, inflation are projected to return to levels in just consistent with the mandates. here is what i do not get. it seems as if you are moving away from an inflation target with that kind of a statement. at best it is ambiguous, at worst it says if the deviation is higher than unemployment, it follows my interpretation is that the fed is willing to accept higher levels of inflation than your preferred rate in order to chase your employment mandate. is that we should interpret out of this? >> know, i would not say that is correct. 2% is our definition of price stability. as part of our mandate we want

to achieve 2% inflation rate in the medium term. monetary policy works with a lag. we cannot achieve it every day or week. over a period of time we want to move inflation back toward 2%. we are not seeking -- we will not actively seek to raise inflation. we will not seek to move away from the target. we are trying to bring inflation back to the target. the only sense in which there is a balance -- looking at the two sides of the mandate, the rate of speed, the aggressiveness may depend on some extent to the balance of the two objectives. we are always trying to return both objectives back to their mandate. we are not seeking high inflation. we do not want higher inflation. we are not tolerating higher inflation. the core mission of every central bank is stable prices. it is a necessary precondition for economic growth.

you and i talked about mandates single versus double a lot. if we were going to say we will not look at the deviations between the two. if we are saying that we think full employment is 5.2%, we're clearly above that. at your pc e we are closer to where your inflation target is, i do not know how else other to interpret this then the result of this balanced approach is that higher inferred inflation will tolerate -- not that it is desired but it will be tolerated. i will simply just " paul volckler who said central bankers who are willing to tolerate a little bit of inflation and at getting more than expected. my concern is that this appears less to be an inflation targeting statement and an inflation equivocations statement.

we are now targeting deviations. that is the concern. with this statement was released we saw a buildup of commodity prices, even though i think you said recently that demand is down. therefore, commodity prices should be low. my basic question is, if this is our interpretation and we have a spike in commodity prices that occurred after the statement was released, is that not the market's interpretation of this? >> first of all, as we say, the two size are basically complementary. we agree that low inflation is good for the economy. is good for growth and employment. we think most of the time there is a complementary relationship between those two. the actual results you mentioned -- you discussed earlier, the responsibility of the central bank for the dollar and for the price level, inflation currently

looks to be very well controlled. our expectation will adjust policy as needed. our expectation is a flexible be below target over the next couple of years. unanticipated events can happen. the dollar has been pretty stable since the crisis. i do not think you should read into this and the unwillingness to keep price stability as a critical goal of the central bank. all central banks take into account to some extent the overall state of the economy. over the medium term they seek to return inflation to the -- to its objective. that is what we are trying to do. >> let me turn to quantitative easing. the federal reserve has applied an unusual and unprecedented amount of monetary easing for a long period of time, not just during the crisis moments but well after that.

now apparently through 2014. by buying down treasury rates, is it your view that this is putting an artificial cap on price discovery and the treasury market's? is that not lolling fiscal policy makers into a false sense of security when true price discovery might give us the with a call we need to get our act in order to fix our problem. are we calling ourselves into a false sense of security by this intervention in the treasury markets? >> first, quantitative easing the is very analogous to the usual policy of cutting short interest rates. that also lowers longer-term rates. it is a way of trying to provide more support to the economy. our policies are hardly unusual. at this point, almost every

major industrial central bank excluding canada which had less of a recession that we did has a large balance sheet and low interest rates, including the ones with a single mandates. again as i mentioned, we not having any signs of higher inflation or a declining dollar, in terms of the issues relating to distorting the bond market, the objective of the policy is to give rates lower to provide more support for the economy and to bring inflation up to target if necessary. i think the basic reasons for long-term rates, which are also a feature of every other major industrial economy, are low inflation, slow expected -- slow expected growth, and the fact that the dollar is a safe haven. with problems in the world, people are investing in u.s. treasurys because they are attracted.

it is important for me to say that if congress is being lulled, they should not be lulled. the attention is to be paid to these issues as is the case to some of the countries are referring to like greece and portugal suggest, if investors lose confidence the rates will go up. there is nothing the central bank can do about that. it is important for congress to address these problems. i have spoken out about it quite consistently. >> i think we would agree that we think sustainable long run economic growth to rise from savings and investment. i knew you well enough to know that we more or less agree with that. do you measure the effects that these policies have on savers -- on people living on fixed income, on cds? are you concerned at all about

the very low interest payments that these savers are getting from these kind of fixed income assets which are hitting our savings and investment side of the economy in exchange for helping the borrowing and consumption side of the economy? >> we are quite aware of that issue. we hear a lot about it. we consider and think about it. i recognize that for people on a fixed income or people who has a meaning come interest on cd, i recognize that imposes a hardship. the purpose of our policy though is to create a stronger economy. savers' collectively hold all of the assets, all of the capital in the economy. if you do not have a strong economy, if you have a weak economy you will not get good returns on all the other assets. >> my time is running out. let me give you a sense of this.

a lot of us believe that the federal reserve was to lose for too long and enter the 2003- 2005. -- in the 2003-2005 period. i know you do not agree with that, but because you do not agree with it our fear is you will create the same mistakes again but buy orders of magnitude we cannot comprehend or not. the federal reserve preprimary goal is to manage the money is involving itself in fiscal policy. it is bailing out fiscal policy because the branch of government in charge of fiscal policy is not doing its job. a budget has not passed congress in two years. we're going to pass the budget, we did one last year. there is nothing in the senate. fiscal policy is not being done away needs to be done. that is not an excuse for the federal reserve to step in and try to bail us out. that can be done at the expense of the priority which is unique to the federal reserve of

maintaining our currency as a reliable store of the value. we fear that these exercises and these new ambiguous statements will compromise that. that is the point i'm trying to make. >> thank you. thank you for your testimony. you laid out what i think is a very clear two track strategy. the first is recognizing the fiscal and budgetary challenge that we have. i think there is agreement on this committee that we need to come up with a predictable stable way to reduce our deficit and debt. we have had disagreements over how we do it, but not whether we do it. there are two lessons i think from what we see happening in europe. one is the debt crisis that if you wait too long to address the issues, you are right. you're borrowing costs are going

to go up. you're going to lose faith. we should heed that as an early warning and not to delay putting in place those predictable changes. but your testimony also pointed out there is a danger in over reacting to that in the near term in terms of the negative impact that could have on economic growth. the other strategy that you have laid out is the need to nurture this very fragile economy we are in right now. if you could just briefly talk about some of the lessons we have learned from the european experience, recognizing the that the debt crisis and early warning system, but the austerity only and immediately approach, some countries cannot avoid it like greece because they have themselves in a fix. talk about the fact that an austerity only and immediate deep cuts, whether or not that can have an negative impact on

the very fragile recovery that we're having. >> the european situation is complicated among other things. they have monetary union and a fiscal this union. they do not have the same kind of situation we have here. you are correct also that there are some countries like greece and others that have very difficult fiscal sustainability issues and they have tried to address them in the near term. i hesitate a bit to advise my colleagues and enter europe. i cite to the imf and others very slow growth that makes fiscal growth more difficult. it is important to try to figure out what the right balance is

there. i want to be very clear. i do not want anyone interpreting me saying anything other than the this congress has a very difficult and important job to address the long-term fiscal sustainability of of our federal budget. that is a critical thing. i think even more aggressive strategies that had been pursued recently are warranted over the longer term. i thing that can be done in a way that is persuasive to markets. it is not quite a jolt the recovery -- it does not do it all at once. i think that as long as there is a credible strong plan over a long period of time and we move into that plan, we will achieve most of the objectives of fiscal sustainability.

we need to avoid doing harm. doing no harm is an important piece of advice i would offer you. there is a balancing act that i think is important for us to pay attention to. >> thank you. as you pointed out, those two goals are totally consistent. sometimes the get modeled in the message. sometimes people here and interpret the need to prevent doing harm to the fragile economy now as meaning we should not move ahead on long-term deficit reduction. of course we should. you can do things at the same time. if you undermine the fragile economy as the imf has warned is being done with certain fiscal policies at enter europe, that creates an even bigger hole. i apologize, i have to leave to go to the conference on the payroll tax extension, if you

could comment on whether or not fair to extend the payroll tax cut for 160 million americans and whether to extend unemployment compensation -- whether failure to do that would be a drag on what is already a very fragile economic growth? >> congressman, i know you appreciate that i do not endorse individual tax and spending policies. i think that is a good approach for me to take. obviously, you need to look at the whole picture. i agree with what you said before. you cannot do one and not the other. you cannot say, well, we have to protect the recovery. we completely put aside all fiscal -- approaches to fiscal sustainability. you have to do both simultaneously incredibly. i think it is a question of balance that is important.

>> just a follow up. as i look at your gdp grumblers -- your gdp numbers, it seems pretty clear to me that they assume some extension of current policy. i am not saying specific numbers, but there are differences between those and cbo. cbo had to assume current law and assume we do not extend the current payroll tax cut. all the tax cuts at the end of the year including middle income tax cuts laps. that is one of the reasons the cbo economic projections are lower than yours. >> thank you, chairman. i will yield the time. >> we are going to allow mr. dogget to continue and it will

go forward. >> thank you for your testimony. just continuing along the same line of questioning -- chairman brian has expressed some concern that under certain circumstances the fed has a balanced approach. do you believe that the fed is having any difficulty in a cheating the growth of employment and price stability? >> i think there is evidence on the employment side we like to see greater progress than we have seen. on the inflation side, i am very confident of chairman ryan's concerns. at least for now we appear to be pretty close to target. i think what i would say about that, of course we will have to continue to evaluate monetary

policy as new data comes and and so on. i said before and i think it is important to emphasize monetary policy cannot do everything. this body and others who need to think about troubling parts of the economy and places where improvements can be made in tax code or in other areas. again, to answer your question, we are not satisfied with where we are. we look to ny we will continue to do what we can to meet our dual mandate. we hope that all of you and the administration will look for alternative ways to strengthen our economy. >> you have the capacity to recommend to the congress to alter that mandate if it was interfering with the objections.

>> i think the dual mandate has worked fine. we have as good an inflation record as any other central bank. i do not think it has been a major problem. i think it served us well. with that being said, congress created the fed. congress gave us our mandate. if you determine you want to change it we will do whatever you assign us to do appeared >> to determine how to implement the mandate. he said with reference to price stability, a goal of 2% is your goal. with reference to unemployment, did i hear you say 4.5%-6%? >> the difference between inflation and unemployment is the fed can control inflation in the long run. we cannot control unemployment in the long run. that is determined by many other factors and policies that we do not control. we cannot set an arbitrary targets but we can try to make

our best guess on the what levels of unemployment the economy could sustain over a period of time. 5.2%-6% is our best estimate. >> while we would certainly be delighted to be at that range today or at the end of this year, that still is a substantial amount of unemployment, is it not? >> certainly. we have very high levels of unemployment. we have not come remotely close to replacing jobs lost in the recession. i think we all agree that unemployment and underemployment and people leaving the labor force and all of those things are serious problems. >> all i am saying is that the objective that you have set in implementing the goal --

>> you will have another five after -- >> let me just finish on this one. . the objective you said is not an overly demanding objection as far as unemployment here >> will let you answer that another five minutes. >> so i heard your answer, you said you normally do not like to give a comment with regard to fiscal policy. i thought, really? is that still your opinion? i was really taken aback recently when the fed issued an unsolicited white paper on housing policy. you certainly mirrored much of the positions of this administration. i dunno how the two go to get it. here you had a white paper that was not solicited. i know you are protective of

your independence. would you advocate for a position like that, why would you issues such a paper? >> is important for the economy and monetary policy. we are being supervisor so we are -- >> let me ask you this. congress has a lot of interest in monetary policy. is this an invitation that we should be issuing resolutions to what the monetary policy of what the fed should be doing? >> i hear lots of advice from congressman. can i say the bottom line here. we have got a lot of requests for our views and analysis. it was not the intent of that white paper to provide a set of recommendations. it was not a list of

recommendations. we were trying to provide pros and cons, analysis backgrounds. i am sorry if you think we went too far. >> within 24 hours after that, gov. elizabeth duke was advocating those positions. you cannot be on both sides of an issue. saying this is what we think and then the governor's coming out saying they are advocating. if it is because you are saying members are asking your opinion, we were asking your opinion -- we would like to have seen a white paper back when the presidents colossal failure with the stimulus was going through and we would have liked a white paper to say or how that would have worked out. why do we not see a white paper at that time spelling whether this would work? >> again, i know you are skeptical but we are trying very hard to avoid encroaching on congress's fiscal responsibilities.

with respect to what you said about gov. duke, they are not representing any official member of the board. there are speaking on their own recognizance. if you pay attention to the speeches they give, there is a wide variety of opinion even on monetary policy. there was no official endorsement of the positions. we are trying to provide useful background. i apologize if it was misinterpreted. our goal was to be helpful. >> i guess i would just take off with the chairman was talking about. you have two mandates in the area of employment and monetary policy. we have a mandate in the area of fiscal policy and we would like to retain that. let me go to another area. you do have a responsibility -- you are the owner of about one trillion dollars write-down of mortgage-backed securities. wearing that hat, can you comment on the presidents proposal of the 35 plan. what have you looked into that?

>> we have not been the specific calculation. i am not going to endorse or not endorse -- >> do not endorse the program, what is the cost to do that? >> there are costs as the president acknowledged. there are costs to it. it would have to be raised some how whether from a bank tax or some other way. he mentioned $5 million or $10 million, we have not looked at that and we -- >> your the investor in this situation. you bought these at a premium. have you begun to look at what your cost would-be? >> i think it should be acknowledged that although the rates have been refinanced --

extremely low over the last couple of years, it is reversing the game that we got. you are right. there are costs to the program. there costs to investors. their costs to the government potentially pierre >> that is one area we would like to have specific for mission back on. also, as a regulator what the impact would be to increase the fees on them. >> let me just returned to the last question. many in congress would think unemployment of 5.26% leaves many people out there hurting badly in an economy. is much better than where we were today. and setting your goals of trying to avoid excessive price instability and inflation, you have not taken a drastic position on unemployment.

you tried to have some balance between the two, have you not? >> and there is nothing in our statement that suggests we think 5.2%-6% unemployment is desirable or a good outcome. which is a given were the economy is today, that is what it can sustain under more normal conditions. there are many policies congress could consider with work-force skills and other things that might affect the long-term unemployment. >> under your estimates on what type of growth you will see in the near term the are in your testimony and reports of the fed, what assumptions to those estimates make concerning fiscal policy and where the congress will be? i understand you are not getting into specific bills. >> in order to make forecasts, we make guesses about what congress will actually do.

there is no endorsement or non endorsement involved in that. basically the cbo presented to the kind of extreme proposals. one is the current law proposal which assumes all the tax cuts are ended. there was an alternative scenario which took the most -- >> we had testimony by both yesterday. >> all the tax cuts were extended and -- sort of the opposite approach. our numbers are based on an intermediate level that assumes some of these policies are undertaken and not all of them. we try to make our best guess. it is only staff guesses about what they think congress may do. i do not think the forecasts -- the details are particularly

helpful to you. you're going to be trying to figure out with the right thing to do is. >> with regard to an issue we discussed when you were here in the committee before on whether the policies of the financial community concerning the rest rewards and compensation for taking excessive risk remain a problem, you finally issued a report in october dealing with that. it indicated that there had been some improvement, but among the largest banks there continue to be a number of problems with regard to risk taking and how that leads to rewards from some of those taking the risk with other people's money. can you give us an assessment of what is happening since the report came out in terms of what progress is being made to deal with the issue that many of us are concerned could lead to another financial meltdown? what's the federal reserve undertook even before financial reforms passed by the congress, we undertook to look at this as

a safety and soundness manner. early on we began working with the boards and the compensation committee's of the major institutions to try to structure their compensation in ways that did not lead to more or excessive risk-taking. i think as the report suggested, we made a good deal of progress. it really is about that time of the year when a lot of the information is finalized in terms of what the compensation packages are going to look like. we continue to make progress on that. we continue to work with the banks. as i said, i think a lot of the major institutions of taken serious steps in this direction. i would point out in addition to that to beyond the actions of the federal reserve took independently,dodd frank requires other regulators to establish incentives can --

standards and that role making progress -- process is underway. that will eyed -- add to the guidance we have already provided. we have seen progress and we continue to work actively with the banks in everyone's interest to make the banks safer and reduce the risks to the taxpayer. >> does more need to be done? >> will continue to work on it. as we said in our report, we do not think we are where we need to be necessarily. there is a lot this is a topic of research about what role should options and stock payments play, so more does need to be done, but i think part of the process is going to be learning with our

consultations with academics and others about what works best. >> thank you. >> thank you for being here tonight and for your testimony and commons. for eight years we have had people come in the us we have structural problems and we need to do something about it. and we are now in a situation where there are going to be consequences nobody is going to be willing to except the problem is we call the democrats' tax- and-spend liberals.

unfortunately the does not solve the problem. when everybody knows what has to be done, we have had several commissions. they all say you have to get to 46 trillion dollars in savings if you are going to have an impact on the long term deficit in this country. we all know we have got to contain discretionary spending, and we all know that we need of pro-growth tax code in this country that fits the 21st century. we all know that. we might have some differences on how to do this, but we know we need to come together. what we need is an armistice to solve this problem, because if we do not, all these other things are not going to matter.

>> it is striking that they got downgraded by s&p. it was more about what they cited as political concerns about the ability of congress to make progress, so it is easy for me to save. i recognize politics is a tough game and there are lots of disagreements, but the more that can be done to show collaboration, i think we all agree. good >> this last january i was in new zealand and the philippines, and i was surprised that they are worried about congress to's inability to solve this problem because they know the problem is going to explain to them if we do not solve the problem here.

let me ask you. you believe the general assumption that we have to get the four trillion dollars do 6 trillion dollars in savings is the right number zero or a number that will stabilize our deficit and get us in the right direction. it is sometimes difficult to explain to the public what might happen. can you paint a picture of what you might think could happen to this economy if we put it off another year? >> the four to six trillion dollars was a number that was talked about for the next decade. i was supportive of going day when we were discussing these

issues last summer, sir yes, i think a very substantial additional attack on the deficit is needed, but the four trillion number is about the next decade. the biggest problems we have are beyond the next decade. they stretch out i was accosted begin to go further. one thing is not just to focus on the 10-year official budget window, even beyond 10 years, because what we have seen is social security reform, which is still being phased in, the more

time you give people, the more warning, the more likely it is going to be successful, so you need to look beyond 10 years. in terms of implications to the economy, and a good scenario is when the economy recovers we have higher interest rates, higher and borrowing abroad. the bad case scenario, which ultimately will happen if we do not change trajectory is analogous to what we have in europe. we will see loss of confidence in u.s. and death, which means changes will have to be made, but thin a much more disruptive

way. >> thank you for joining us. it seems to me you are independent of congress. you are managing the monetary system, and you are an independent agency trying to insulate the notion that you're at the beck and call of that particular administration. that is the structure to try to give you that independents. am i missing something here? >> the fed was created by congress. we have a number of roles which

bring us into contact with issues relating to housing and mortgages and so on, but i want to be clear that our intention was to try to provide useful background, and we look at both sides of the issue, and when we recognize it is covered and has to make these decisions. >> i appreciate that. there are lessons to be learned by all of us. i hope congress is defined by what they did or did not do. the notion that we might ask the fed to come up with a report on the recovery act, there is an independent agency who produced such a report but said it raised real inflation-adjusted gdp

between .3 of a percent and .9%. it increases the number of employed between 400,000 a 2.4 million and increased the number of full-time equivalent jobs by between half a million and 3.3. you may not like the answer, but asking an independent agency to do this is not going to get us any further down the line. i am personally struck by what my good friend from idaho said, because he is making sense during get -- making sense. i have opined that we know what to do. it is not about hard but we could do things to rein in military spending without

putting us at risk. we could move to have a health- care system that rewards volume instead of volume, that meets the test common -- the test, which is not just in 10 years. the real test is 20 or 30 years, and i am hopeful we are able to focus on the big picture, that this budget committee can look at things that actually enjoyed bipartisan support that could make a difference over the next quarter century and not have the picture that is being portrayed today and yesterday by independent experts to become a fulfilling prophecy. i feel this is something we ought to be focusing on, and in

particular, the notion we are looking at the longer term. we live with a 10-year budget window, but the real challenges are beyond that, and that is where the save -- the savings have to occur. that is where it gets easier, not harder, and for us to bludgeon this, i think you have done an extraordinary job trying to balance being more transparent, but not adding fuel to one fire or another. i do appreciate your patience coming here even though it is probably a statutory duty, but you do it with good humor, and i do not know we have subpoena power, but i am hopeful we can focus on the lessons we learned or should have learned and get to the things you have talked

about or should have talked about. >> that sounds like the budget. the gentleman's time has expired. >> id used to be bipartisan support. >> you make policies on housing as much as i personally wish you in on theen -- weigh proposals, you have been quite judicious about not doing that,

but what you have opined on is the importance of housing and housing recovery if we wish to have our robust job growth. would you like to comment? >> i certainly would. this is the reason we have i housing committee, which is a bunch of staff looking at this all the time, i would say one of the main reasons the recovery is as disappointing as it has been is usually housing provides an important impetus to growth, not just construction but all of the services tied to housing. it has been very weak. is it generally remains at low level, so recovery in housing

would be an important news. it works in a number of different ways, not just construction, but a wealth of consumers and their well-being. the access to credit means the federal reserve monetary policies are less effective than they otherwise would be, because not as many people as could be are taking advantage of the mortgage rates we are trying to create. there are a lot of other implications for borrowers and lenders. continued poor conditions in housing market, applied foreclosures, people who cannot move for sell their houses, so there are a lot of costs in the neighborhood or housing market as well, but i do think the lack

of housing recovery is one of the increases recovery has not been more strong than it has. >> without advocating a specific solution, you are saying it is something we should be paying policy attention? >> it would repay your efforts to remove some of the barriers to recovery and housing. axe shifting gears for just a second, can you comment on the last 30 days or 60 days? house a recovery, -- is a recovery closer or further away in your view?

if it is not well constructed, that would affect us. would you tell us about what impact that would have on us in? >> there have been a couple of developments. the european bank has provided financing to the central banking system and will provide another round of financing this month. that has had the benefit of affecting the banking unit. it has even affected the borrowing costs of other countries as well. that has given breathing space. there has also been progress made in terms of the international agreement within the eurozone to have mutual surveillance of fiscal policies

to try to get long-term agreement on fiscal stability within the eurozone. there is a lot that remains to be done to greek negotiations. they are still ongoing. the banking system remains undercapitalized. it has been retracting its credit to secure a good -- its credit. i think the bank stocks needed to protect if one country has problems, to protect the other countries from contagion, the european union has been setting up new backstops to do that.

it is important to conclude there are deep fundamental problems. countries on the periphery are not at all competitive to germany. they have a deficits. they cannot change the exchange rates because they are tied to the euro. those things together mean we could have very slow growth in some european countries for quite awhile. >> we have had job growth. the unemployment rate is up the lowest level in three years. is very noticeable at home. different.eably

it was noticeably different last year with stories about companies hiring. obviously, we can do better. you said more robust recovery will lead to better deficit in coming years, so here is our frustration, and our colleague who gave us a list of ways to reduce debt and deficit, it is noticeable he did not include job creation. it was cut spending. we are doing that. we need to do more. entitlements, there is common ground we can find, but he left

off in job creation. yes, if we have lower unemployment we can have lower deficit. he said the underutilization of capital in the economy. the projected federal deficit in 2012 would be about 1/3 lower. that deficit would be equal to 4.0% of gross domestic product compared to 6.2% in 2012. the rate of unemployment and certain government programs would be lower, so here is mine

frustration. congress has not been able to come to a common agreement on ways to assess infrastructure and research and development, so give us some words of wisdom. what do you believes is the most effective policy options all of us can pursue to lower the deficit? >> i am glad to hear that it is a little better. there has been some progress, but it still has been very slow. in my testimony i made three related points about fiscal policy. the first is we have got to keep our eye on the long term. we have to make sure we have a

credible plan that will move us towards sustainability in our fiscal policies over the next few years and into the subsequent decades, so we have to keep that always on the table. i think that is really important. secondly, we can avoid unnecessary disruption to the economy. i think that is important. under current law there is going to be a massive fiscal retraction in 2013. without addressing specific policies, i think congress should be aware of that and try to avoid having too big a hit on the recovery in 2013, and without taking specific policies, my third point was that fiscal policy is not just about total taxes.

good a lot of it is quality. are the things we are spending on going to help our economy? do they support our skills that will help the economy and the long run, -- in the long run? you want to look at total spending and deficit, but it makes a difference the quality of the programs, the way the money is spent, the way the money is collected. it makes a difference in terms of job growth. >> thank you very much, and before i get to my questions, i want to talk about the role you played with tarp, and i want to thank you for of the

transparency and efforts to restore public confidence in the fed and reagan in his three -- in the fed. a lot of people are going to have a lot to answer to, but i think you did a terrific job for the country, and i appreciate it very much. you laid out compellingly the fiscal challenge we face going forward, and i think that is what we wrestled with more than anything else. you mentioned spending restraint. appropriations has cut spending. we have an agreement. they are going to let out nobel

to a little but not a lot. and we did higher long-term spending cuts to the debt ceiling increase, so there are lots of signs we are beginning to see some discipline, and it is likely to stay here for a while. the president extended the tax cuts for two years. he had the ability not to do about. he had majorities to do what he wanted. he told us he thought we needed those tax cuts for another two years. he signaled that come january next time we are going to have a revenue increase for high income earners, and they will have the ability to impose that, so who

he is in the position to do that, so that will be a revenue increase. are those two things sufficient to deal with long-term structural deficit you describe her? we did you describe it? >> i do not think they are. discretionary spending is not particularly high as a share of gdp relative to his three. i think you could cut discretionary -- relative to history. i think you could cut discretionary spending close to zero and it would not help much in the long term. >> or on the revenue side. >> on the other side, there are

many arguments for and against changing the taxes on higher income individuals, but up by itself is not going to close the budget deficit either. we need a much broader set of policies. i think the elephant in the room is health care costs. we are heading towards 9% or 10% of gdp and another 8% or 9% in private health care sector spending, so that is of broad issue that affects the budget and the efficiency of our economy, but i do not think we are going to get a real solution without some way of addressing the problem. >> i agree, and we had an effort to do that.

i hope we look at social security as well as pure a good -- as well. we have a lot of conditions to put out. a lot of ideas. as the president laid out some policies spending? >> i do not know of any comprehensive plan. there have been a number of commissions. even those commissions are not fully detailed. a lot of there serious work has been done, in

think tanks and the like. >> thank you very much. >> thank you for being here. i want to associate with the comments of mr. kohl. steady heading a h through this crisis, i can appreciate it is not an easy task. nor is it an easy task for this committee. the first chart, we have heard a lot about some people can pay 15%, a tax rate around 10% to 13% lower than firefighters, teachers, and police officers, particularly in north and jersey. i understand you can use of 15%

rate on investment income rather than wage income. did we have been told about increasing the rate will discourage investment. warren buffett said he had worked with investors for 60 years, and he has yet to see anyone even when capital gains were at 39.1%, he has never seen anyone shy away from a sensible investment because of the tax rate on the potential gain. people invested to make money, and potential taxes have never scared them off. according to the national income, the top tax rate on investment income significantly changed over the last 80 years, which i have heard you speak

about many times. good it is as high as 39.7% in 1976, and now it is 15%. investment grows with the cycle. in your opinion, to changes in the capital gain tax rates mainly affect investments already made rather than new investments being considered? the latter is what drives growth. what is your opinion? >> you are pulling me into a complex topic. ate economic theory says th

you should tax consumption rather than savings or investment, and that is the rationale for lower rates on capital gains or capital income. there is a variety of estimates. it is hard to pin it down exactly. there are many other issues. i did not want to be pinned down in the response, because it could be justified by economic theory, are arguments for the need for corporate tax integration, but i think congress has the task to try to balance whatever impact it has on equity.

can people converged regular income and capital gains income and who evade taxes there are complicated issues on both sides. while there is disagreement, there is some of fact on the rate of return. >> you see the problem not just the rate of capital gains is so much lower than earnings? we could discuss that because we have seen a real turnaround in the last 50 years on what we do tax, and those that say income earners are added disadvantage -- are at a disadvantage, and we

debated this. in the interest loophole but encourages the difference. what is your opinion about that thelma -- about that? should you answer the question? >> i am going to punt that. >> it is a complicated question. >> warren buffett has become a financial group were, making recommendations. he is a gentle man who will not release his tax returns, who pays himself in $100,000, who has never contributed to the federal government, who is doing all he can to skirt his responsibility, but that is a complete a side.

and leading to concerns about a health of european banks and resolving these problems will require concerted efforts on the part of european authorities. do you believes that an loans carry a greater risk than they did two or three years ago? >> you mean to the government's? >> yes. >> you can see it in the interest rates. >> would you explain the exposure to the credit challenge they have? >> in the official sector, the united states is a 15%

shareholder of the imf. the imf is involved in programs for the three small countries greece, portugal, and ireland. the imf has a very good record of being paid back. they are very much engaged in making sure that countries are taking appropriate policies. as i have explained in the previous day news, the federal reserve has -- previous meetings, the federal reserve does not have an obligation of any european government directly. the european central bank is

highly creditworthy. it is owned by all the central banks of the countries in the eurozone, and they give us euros as collateral a. from an exposure point of view, they take the exchange rate risk. >> are you able to quantify the exposure of the u.s. taxpayer to the rest through the imf and elsewhere? >> i do not have the number exactly, but it would be in the tens of millions. >> it may be higher than that. the you believe it is appropriate for the fed and the united states taxpayer to have of a greater exposure through

the imf, or are we where we ought to be? should we decrease our exposure? >> the imf plays an important role in helping stabilize countries. the treasury secretary is our director, and he has the most direct responsibility, and he has been very clear that he is not supportive of any increase in u.s. contribution to the imf, so i would leave that to his judgment. his view it is that it is up to the europeans to take necessary actions to stabilize the situation. >> let me state very quickly about the comments you made about health care and medicare and medicaid. our discretionary budget is about one trillion dollars. the amount of deficit is greater than one trillion dollars, so

one could do away with all discretionary spending. is it possible to not even get to a balanced budget without even addressing medicare, medicaid, social security? >> part of that is due to the weak condition. if the economy returns to normal by 2017, the deficit would be more on the order of 4% or 5%, which would be six the billion dollars or $70 billion. now -- $60 billion or $70 billion. that is true let discretionary spending could not bear the brunt. it is not possible. >> thank you, mr. chairman. thank you for appearing before

the committee. i represent a part of upstate new york and hosts the third fastest growing high-tech jobs in the country, and we have are higher share of the work force than anywhere else in america, and the innovation is a reality in paying bills to many families, came about with a huge deal of planning in public and private sectors, so i am interested now on your comments about investments that need to be part of the response to the troubled economy. also, the requirement of sound

public infrastructure. when i was out the street research and development authority, we saw what happened and unable to this comeback. when i was here i saw these given dynamics. can you develop further the benefit that comes with this focus on skills set and infrastructure? >> there is a lot of evidence that clause 3 could be beneficial -- that clustering could be beneficial. the public sector has a role.

many high-tech sectors have grown in the context of a university where there is a lot of exchange between scientists and the university and the private sector, and the u.s. has many supporters in education who indirect and in indirect ways. it also supports public education for younger people. it helps the range of people, but certainly people conversant with the math and science. there are some important roles. infrastructure, that is a topic

of debate to. most people agree there are certain types of infrastructure the government has a role in providing, from roads to airports to public airports, crime and firefighting services, to a variety of things, so that can support industry. i recently gave a talk considering what role the government should play. there is some argument to the fact that without government intervention, basic research may be under-provided because the people doing that do not share in the benefits of that. you have our nt -- research and

development tax credit. there are other ways as well to support research and development. i think the lesson of experience is industrial policies which attempt to determine which projects are not very successful, there often is a role for government partnerships to create the basics where private sector can be very productive. >> they you have any sense of how we might fare with the international community? >> we do pretty well. public and private. we have the biggest amount in an absolute terms of research and development, and we have a well. high g.d.p. as

some other countries like china are beginning to approach us, but as we remain our research and development leader. >> thank you for joining us. i want to follow up on some of the questions we had earlier today and to talk about policy responses. we were worried about fiscal stability as we move forward, and it looks like we do not have to reinvent the wheel when it comes to policies. you can see the differences in recoveries during the 2007-2011 timeframe. there was an op-ed in 40 washington journal -- in the washington journal that said if we had to follow the policies reagan followed when we had a

bad economy we would have 17 million more americans in jobs today, and the basic question, we all recognize is the government has a basic responsibilities. some people feel like we need to provide basic research. everything else is on the table when you look for it. my questions are fairly simple he radioed i would like you to give a response. hulu and -- my questions are fairly simple. who is a better allocator of funding, the private sector or federal government? >> there are some areas where the federal government is the only provider, but for innovative industries, it is

generally agreed the private sector is better. china has a communist party running the show, but they allow private sector activity at a very big role in development of new industries. >> you have private-sector investments like keystone pipeline versus public sector investments. that is pretty obvious that the federal government does a pretty good job of allocating resources. you see anything fed could dissuade us it would be better for the private sector to provide resources than the federal government? >> the private sector is often better at innovating. i do not want to get into the keystone situation. i do not know of loughner -- do

.ot know enough about it >> i am just saying, as an example. on the one hand you have a private-sector with thousands of jobs created. on the other hand you have half a billion taxpayer dollars. no jobs. >> you can point to the situation like the space program for the internet where it paid off, but we have a market economy and want to use the market whenever appropriate. >> looking at the stimulus plan, if you use the most aggressive optimistic numbers, the cost of the stimulus plan divided by the number of jobs is about $400,000 per job. would you say the private sector could have done better than that

if you said, we are going to leave those stimulus dollars in the hands of the taxpayers to start with instead of cycling through washington? would that have created a better economic outcomes for the united states? >> it is hard to say. we are in a deep recession. one difference between this recession and 1982 and 1986, when the fed cut interest rates that was a big reason for the recovery. in this case, rates are zero. they cannot do as much as they did in the mid 1980's. the other thing i would comment is that dividing the number of an -- dividing the total cost by the number of jobs to me is not exactly the right way to think

about, because the total cost provides also the provision of what was constructed -- praxair was not trying to get into the -- >> i was not trying to get into the math. i am just saying what would have presented a better economic outcome for the american taxpayer? >> i think there are times when monitoring fiscal policy can create better employment, but the private sector is clearly where the decisions about what industries and products should take place. >> back to the chart we just had, can i ask that be put back up again? german bernanke, -- chairman for nagy, some of my colleagues are talking about reagan a lot more,

but when you talk about recovery, you have to talk about how you got in the position you did. we did recover during the recession, but i think it is important to point out but with what we are saying rates now, we had a housing collapse fed really embroiled us into housing being the last leg of this recovery moving forward, so you cannot compare the two and say the same solutions would have worked for this recovery, and the other question i might ask you is would you say that 2007 is a fair starting point for talking about where the recovery started on this chart?

>> december 2007 is the beginning of the recession. the recovery began in june of 2009, but i think this has been a unique experience, this last crisis. we have never had a housing boom and bust have such an impact. the financial crisis was extraordinarily severe. we did come close to a total global meltdown, and while people can disagree about how much thought has held back the recovery, i think people can agree that small businesses and other areas are part of that, and people can agree the monetary issue is part of the. the mortgage rates in the early 1980's were 18%, and letting rates come down was certainly part of why the economy bounced back like it did, and housing

was one of the areas that bounces back. there is some comparability in all recessions. >> i would like to go back to some of the discussion we had about our interaction with the international market, and we are facing some decisions, and i believe we need a balanced package of revenue, spending cuts as a robust discussion about how we move forward. there are many in my colleagues who work to implement the cuts. going back to some of the discussions, i had an interesting meeting with ford motor co. a couple weeks ago, and they said, if we had an energy plan that would allow ford to go game buster's,

whether it was going to be electric, biofuel, if we had an energy policy that countries like japan have an energy policy, that would really help our business sector be part of global competition going forward. can you may be talk about energy policy to allow our businesses to move forward to get there? -- together. for release them when they knew they needed to build diesel they could -- ford told us when they needed to build a diesel car they built the best they could. >> companies would like to have clarity about what energy sources are going to be used, how the government is going to

subsidize different kinds of energy. i think the main issues are environmental as much as anything else. japan has decided to phase out its nuclear power because of safety concerns. the eu decision on diesel was generated by environmental issues, so those are the kinds of issues, that scenario where the government may make decisions because certain types of energy may be better for the environment. putting that aside, we do need to maintain a role for energy markets. there is a remarkable increase in natural gas in the united states, and that is a good thing as long as we can maintain

it in a sound way. >> i want to drill down a little bit on something you have talked about in general today, which is europe'. since you have been here last time i think we have now grown from roughly 2.8 billion to roughly $103 billion last week, and my first question is where does that money come from. and where does that money come from? >> it becomes a liability and an asset on the federal reserve's balance sheet. it is paid for by greater reserves in the banking system, and on the other side and we have an asset, which is money given in exchange to the european central bank. >> that would be new money.

we chose to do it that way because monetary policy, but it would not be difficult to sterilize that to a number of different methods. >> you stated earlier it is your current intention to reinvest those. all of them are less than 90 days. is it your intention to reinvest then in swap agreements? >> they are the two main counterparties that would determine the request. it is not our choice. if the swaps run out, that would

mean a comparable drop in assets. good >> if it comes back within the terms of the agreement and are reinvested in domestic securities, does that have an expansionary effect on monetary supply? >> it does increase high-powered monetary supply a little bit. in this case it would be 3% or 4 per cent sign. is does not have much affect on money in circulation. it does not affect interest rates. they are improving funding for u.s. and foreign banks. we do not see any major implications on foreign

spending five how does that impact what you are trying to accomplish with qe1 and qe2? attacks the difference being that -- >> the difference being that they were much bigger. second, we were buying medium to long-term securities on the open market. in this case, the money is going the of the ecb to help finance the dollar aspect of european banks. >> i understand the first half, but when the money comes back from europe and you reinvest it, how is that differed from qe1 and qe2? >> this does not involve any change in our holdings and securities. and we have a liability, which is increase in excess reserves. unless the banks are l