also need to say that i have spent a bunch of time scooping ice cream and hanging out in the parks with different occupies around the country. the people there and the corps activists are incredibly dedicated, passionate, intelligent, and creative people i am involved with the movement because i support them. lot of times, you see the people who are at the fringes of the movement but that is not what the movement is about. >> what do you think about tax reform? there has been quite a lot of political discussion. what do you think about that? >> i am in favor.

it is in words that are easy to understand. the effective rate that he pays and many others pay is less than his secretary. that is unfair and unjust. host: but do you want to pay more taxes? host: i am in favor of increasing tax rates on people in my bracket. -- guest: i am in favor of increasing tax rates on people in my bracket.

this is low when you compare it to other industrialized democracies and when you look at the tax rate that the wealthy have been paying in terms of the history of this country. we are at a low point right now. the country needs money. you will either get it out of the people that are more able to afford it or the people that are less able to afford it. host: ben and jerry's started in 1978 in burlington, vermont and employs 110 people. in 2000, it was purchased for $326 million. caller: i think that mthis man is somewhat of a hypocrite. my son goes to work to find that

the business closed, this was no advance notice. is this how we thinks the world should be run? host: i am really sorry to hear that the shop closed and i am sorry to hear that the people who worked there did not get more notice. the individual ben and jerry's ice cream shops are franchised, they are independent businesses. they are owned by a local person within the community. ben and jerry's the corporation does not really have control over whether they decide to close or not and how much notice they end up giving. like i say, i would have hoped

that there was more notice given but the other thing that you need to realize is that these shops are independent small businesses where people are not making a lot of money running them. they put their lives and their time and money on the line. pretty much the only reason why a shop closes is if it is losing money and they cannot afford to keep in business. my heart goes out to both your son and to the shop owner who put a whole lot of sweat and tears and money and it did not work out.

host: where do you stand on the tea party movement compared to the occupy movement? caller guest: the commonality is an understanding that government as it stands now is not working. not working for the majority of americans. i believe that there is an agreement between people who support the two party and people who support occupy that one of the recalls his of the problems is money in politics. i would like to see some kind of joint effort between tea party

people and the occupied people that would be working to get money out of politics. >> with regards to public financing of campaigns, what i don't know, -- what i don't need, another bill for the privilege of listening to others run for office. host: i am understand that no one would like to pay more money. -- guest: i am understand that no one would like to pay more money. it will cost more money to finance all federal elections. we can pay for that by cutting any one of dozens of loopholes so it does not need to cost the taxpayer any more money and the

end result will be the individual taxpayer in this country will be doing better because it will and all of those subsidies and tax breaks that are going to the rich corporations that are currently financing elections. host: our independent line, you are on with the co-founder of ben and jerry's. >> i agree with several points he made relative to the elections. of course, we have another candidate running here in massachusetts. i have one question, when you mentioned the economic justice, i worked up one about 15 years

before you started your business. i probably lean more towards the two-party then be occupied people. than the a party of them th occupy people. i assume that there was ice cream from cows. host: we are almost out of time. caller: you mentioned economic justice but i cannot afford your ice cream. this was by far the highest priced ice-cream. guest: that is the major problem with our ice-cream tend to one of the reasons why it costs more money is because there is a

whole lot less air in it. there is a lot more cream in it and higher quality ingredients all around. i wish it or not as expensive. host: the last call comes from michigan. caller: pleased to look -- host: that line is bad. what is your web site that you would like us to go to? guest: it is where you can learn everything about the movement, research groups, hopefully you can make a donation.

it will give you three for ways to be able to do that. host: ben cohen, we always appreciate you coming on and speaking to us. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> several live events to tell you about tomorrow. the brookings institution holds a forum on nuclear proliferation. our road to the white house continues with the gop candidate rick santorum in ohio. we will also be covering mitt romney and cleveland. the event is scheduled to include remarks by his wife and

new jersey gov. christie. >> even a person who is a senator. even a person now who is president faces a predicament when they talk about race. they face the fact that there are many people who are racially prejudiced. they face the fact that a much larger portion of the american populace with like to deny the reality of race even now. >> sunday, a harvard law professor and former clerk to thurgood marshall randall kennedy on race, politics, and the obama administration. >> president obama spoke at several fund-raising of fans in new york city including his

100th of the campaign season. once thought was that the abc kitchen restaurant for a half- hour speech. >> hello, new york. it is glad to b-- it is good to be back here. the event coaches. thank you.

we have a couple of elected officials here. i want to thank all of the talent who participated. ben folds, the roots. malia is a big "parks and recreation standpoint -- "parks and recreation" fan. i want to thank him. i have more twitter followers then you, man. i want to keep him, and hungary. we all have someone that does

that, fortunately i have mashel -- michelle. this is an incredible tapestry of what new york is all about. i also want to say to all of the asian-americans and pacific islanders to help to get this program off the ground. my roots back in hawaii and the incredible visit we made to india a year ago. it was a little discouraging. opened up the papers and there to headlines. president obama visit india and michelle obama rocks india. so, this is my life.

it keeps me humble. i am here today not because i need your help, although i do. i am here because your country need your help. there was a reason why so many of you work your heart out in 2008. i see some friends who were active in that campaign. you got involved because you thought it would be easy. think about it. he supported a candidate named barack hussain obama for president of the united states. you do not need a poll to know that is not going to be sure thing. you did not join the campaign because a me. it was not about one person.

it was a shared vision of america. and is not a vision of america where everybody is left to fend for themselves. it is a vision of america where everybody works together and everybody who works are has a chance to get ahead. this is the change we believed in. the matter what you look like, in this country, he can make it if you try. this is the change we believe in. we knew it was not going to come easily or quickly.

i want me to think about what we have done in just three years because of what you did in 2008. think about what change looks like. change is the first bill i signed into law. it says women deserve an equal day's pay for equal day's work. [applause] i want my daughter to have the same opportunity as someone son. change a decision made. some politicians were saying let's lead detroit to go bankrupt. with 1 million jobs on the line, we were not want to let that happen. today gm is back on top. the-recorded the highest profits in 100 years.

200,000 new jobs created in the last 2.5 years. the auto industry is back. that happened because of you. change is a decision we make to stop waiting for congress to do something about our addiction and finally raise our fuel efficiencies that. by the next decade, we will be driving american make cars almost 55 miles a gallon. that will save the typical family money at the pump and give us some independence from the gas prices that have been going up. that is what changes. that is what you did. change is the fight we went.

this processes student loans and gives it to families incident suny did so millions of unpeople are able to afford college is a little bit better. change is what happens after a century of crime. it ensures that in the united states of america, nobody will go bankrupt just because they get sick. already 2.5 million young people have health insurance today because this lesson stay on their parents' plan. every american can no longer be denied or drop by their insurance company when they need care the most. that happened because of you, because of what you were willing to fight for back in 2008.

we do not have to hide about serving the country you love. we got rid of don't ask don't tell. changes keeping another promise i made in 2008 for the first time in nine years. there are no americans fighting in iraq. with that war to an end. we refocus on the terrorist election attacked as on 9/11. thanks to the incredible men and women in uniform. al qaeda is weaker than it has ever been osama bin laden will never again walked the face of the spread. -- al qaeda is weaker than it has ever been a. osama bin laden will never again walked the face of this earth. we make clear that america will

abide by those core values that made this a great country. we promoted human rights. the make clear that america is a specific power. we demonstrated that the country's travel down the road of democratic reform, they will find a new relationship with the united states. bearbaiting by the power of our moral example. -- we are leading by the power of our moral example. nobody has announced a war yet. we appreciate your sentiment. you're jumping the gun a little bit there. none of this has been uneasy. we have more work to do.

they're still too many americans out there looking for work. over the past two years, businesses have had a 3.7 million new jobs. our manufacturing sector is creating jobs in the first time since the 1990's. our economy is getting stronger. the recovery is accelerating. american is coming back. the last thing we can afford to do is to go back to the very same policies that got into this mess in the first place. that is what other folks want to do.

i do not know if you've been paying attention. they make a secret about their agenda. they can jack of their premiums about a reason. they want to spend a trillion dollars more a tax rates for the wealthiest individuals even if it means adding to our deficit. forgetting our investment in clean energy are making it tougher for those who are on medicare. we are better off when everyone is left to fend for themselves. the most powerful complete by their own rules. we are at a crossroads here.

their vision for america is fundamentally wrong. our own. we are better off when we keep to that basic american promise that if you work hard you can do well enough to raise a family. it is bigger than you could ever imagine. many of you can retire with dignity and respect. after a lifetime of labor. if you have a good idea to start a business, you can go out there and start one. if you want to serve, there is a place for you. this is just another political debate. what is at stake is the defining issue of our time.

those of us who know we would not be here had it not been for the opportunity given our great grandparents. some of us who are here because of that basic american promise. we are in a make or break moment. we can go back to an economy that build on outsourcing and phony debt and for any financial problems. -- phony financial profits. all we can fight for an economy that works for everybody, that is built to last, that is built on american manufacturing and energy and education. and the values that made us great. this is the vision america that i believe in. this is what is at stake.

i want an america where we are still attracting the best in the practice around the world. i want an america where the next generation of manufacturing is taking root here. i do not want this nation to be known for how much we buy and consume. i want to be selling products all around the world. we have got to have a tax code that incentivizes people. nudges awarding people who are sending jobs overseas. -- not just awarding people but what capital and talent here.

that starts with the man or woman at the front of the classroom. because a recent study showed that a good teacher can increase the lifetime earnings of just one class by over $250,000. i don't want to hear people in washington bashing teachers. let's give schools the resources that they need to keep good teachers on the job. let's give them the ability to teach with flexibility and passion and to stop teaching for the test and to demand accountability. we need to make sure that teachers who love to teach are supported. when kids graduate, the most daunting challenges how to the afford college. right now we have more tuition

debt that credit card debt and america. congress needs to stop the interest rates on student loans from doubling in july. that is coming up. colleges and universities have to do their part to be more affordable. if they cannot stop tuition from going up, then the amount we give them should go down. higher education should not be a luxury, it should be something that every american family should be a will to afford. we have to invest in our people. that is what will determine who will compete in the 21st century. i the country's understand this, they are catching up. why are we seeing teachers laid off across the country? our priorities have gotten a

rigorous -- a little skewed. we want to support scientists and research is to make sure that the next breakthrough in energy captain's in america. let's invest in clean energy that has never been more profitable. [applause] we need to rebuild america i am a chauvinist when it comes to infrastructure, i want america to have the best stuff. i want us to have the best roads and the best airports and the fast as railroads and internet access. it is time to take the money that we are no longer spending at war, use half of it to pay

down the debt, use the other half for some nation-building here at home. let's put people back to work rebuilding america. [applause] in order to create this economy built to last, we have to make sure that we have a tax system that reflects everyone doing their fair that is why i have said we should follow the buffet role. if you make more than $1 million a year, you should not pay a lower tax rate and your secretary. -- then your secretary. [applause] if you make less than two hundred $50,000 a year, -- $250,000 a year, your taxes should not go out. -- up. this is not class warfare.

this is basic math. if somebody likes me gets a tax break i do not need then one of two things have to happen. i did that is going to add to the deficit -- either that is going to add to the deficit or we are going to reduce the deficit on the backs of folks who cannot afford it. the senior who suddenly have to pay more for medication. or a family that is trying to get by. that is not fair. it is not right. it is not who we are. i hear a lot about the values during the election season. politicians love to talk about values. i think back when i hear this talk about the values of my mother, my grandparents taught me, hard work, that is a value. looking out for one another, compassion, that is a valley.

the idea that we are all in this together and that we trust and care for one another, that is a valley. -- value. each of us is here because somewhere, somebody took responsibility, not just for themselves, but for the future, for their family, their community, their nation. the american story has never been about what we do alone, it is what we do together. we will not win the race for new jobs, security for middle- class families, with the same old, you are on your own economics. it does not work. it never worked. it did not work when we tried it in the decade before the great depression. it did not work when we tried it in the last decade. it will not work now. it will not work. [applause]

what everybody here understands is if we attract a teacher by giving her the pay she deserves and she goes on to educate the next steve jobs, we all benefit. if we provide faster and an aunt -- faster internet so a store owner can sell his goods around the world, and entrepreneur can start promoting music, even those who do not have a lot of capital. if we build a new bridge that saves time and money, or make airports work a little bit better so that everyone say is a couple of hours when you have to fly somewhere, -- everyone saves a couple of hours when you have

to fly somewhere, we all do better. this has never been a democratic or a republican idea. the first republican president launched the transcontinental railroad, the first grant for colleges, in the middle of the civil war. he understood, those investments will pay dividends for decades to come. teddy roosevelt, republican, called for a progressive income tax. he understood that we do not want a system in which barriers are created for the majority of people to be able to succeed. dwight eisenhower, republican, build the interstate highway system, bringing us together as one nation. republicans in congress supported fdr when he gave millions the chance to go to college on the gi bill. this is not a left-right idea. this is an american idea. that same sense of common purpose, it still exists. not always in washington, but in america, you go to main street, a town hall, a diner, a

small business, you talk to the members of our armed forces, you go to a synagogue or a mosque or a church, a temple, our politics may be divided but americans, they know we have a stake in each other. they know that no matter who you are, where you come from, we rise and fall as one nation, as one people. that is what is at stake right now. that is what this election is about. [applause]

let me say this, new york, this has been a tough few years for america. we have taken some shot. -- shots. the change we fought for has not always happen as fast as we would like. after all that has happened in washington, you look in the sea the mess and it is tempting to say, maybe change is not possible. maybe we were naive. i know it is tempting to believe that. remember what i always used to say, i said, real change, big

change is always hard. it is always hard. the civil rights movement was hard. winning the vote for women was hard. making sure that workers had some basic protections was hard. around the world, ghandi, nelson mandela, what they did was hard. it takes time. it takes more than a single term. it takes more than a single president. it takes more than a single individual. what it takes is ordinary citizens who are committed to fighting and pushing and inching this country closer and closer to our highest ideals. i said in 2008, that i am not a perfect man.

i will not be a perfect president. [laughter] but i promise you, i promised you that i would always tell you what i believe. i would always tell you where i stood. i would wake up every single day thinking about you. fight for you as hard as i could. do everything possible to make sure that this country, that has given me and michelle and our kids so much, that that country is there for everybody. and you know what? i have kept that promise. [applause] if you are willing to work with me and pushed through the obstacles, and push through the setbacks, and get back up when we get knocked down, if you are

willing to hold that vision we have for america in your heart, then i promise you change will come. if you are willing to work as hard as he did in the last election in this election, then we will finish what we strutted and remind the world why it is that america is the greatest nation on -- what we started and reminded the world why is that america is the greatest nation on earth. god bless you everybody. god bless the united states of america. ♪ [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]

♪ ♪ ♪

>> the senate ben bernanke testifies on capitol hill -- in more than an testified on

capitol hill. after that ,ben cohen on his support of the occupy wall street movement. >> our guests include republican inhofe. james in haland half some state are been thinking about welfare -- drug tests for welfare recipients. we will discuss state and local government finances with lisa blumerman and tracy gordon. "washington journal" is live at 7:00 a.m. eastern every day.

>> not a senate foreign relations committee hearing on political unrest and violence in syria. the united nations estimates more than 7000 people have been killed since the start of the uprising one year ago. this a little more than 1.5 hours. >> this hearing will come to order. thank you. i apologize for being late. i was a little delayed their. senator casey will chair this morning. which, i will have to do that. we appreciate everyone's coming here to discuss the ongoing situation in syria. as we all know, serious it's in the heart of the middle east, straddling its ethnic and sectarian a fault lines, and all of the region's important powers have a direct interest in what

is happening in syria, as to non-state actors like hezzbollah and hamas and others. the taliban appears to be trying to take a advantage of the chaos. as many as 9000 civilians have died with tens of thousands more displaced from our homes. in the syrian city of homs, there has been indiscriminate shelling for three weeks now. hundreds have died. the city is running critically low on food and medical supplies. given the indiscriminate killing of its own citizens, and given its back of the hand to the global community as well as the regional powers that have tried to intervene, it seems the assad regime is ultimately going to fall.

the longer the endgame, the messier the aftermath, and obviously, the more complicated the in between. the prospect of a full-fledged sectarian civil war is a stark reminder of a terrible situation that could become still much worse with potentially devastating consequences for neighbors. israel, lebanon, jordan, and adverse duplications for the middle east. the question for congress as well as elsewhere in america and the world is where do we go from here? america at at may have little direct leverage on -- america may have little direct leverage on syria, it is important to galvanize at the international community.

none of us should underestimate the ability of the global community to have an impact on any renegade regime anywhere in the world when the full intention and focus of the global community is properly convened. the last year has shown that when the world acts with one voice, motivated by the cause of freedom, a tyrant's script on power does not seem so fierce. that is why the russian and chinese veto at the united nations security council was so disappointing. because it actually extended to assad a political lifeline. he continued to use violence against his own people. we need to encourage the russians and the chinese and let them know that while we would like their positive involvement in putting a halt to the conflict, we are able to do and prepared to do much more if they continue to block of

progress with the security council. the arab league and gcc have ramped up their economic and political pressure. in turkey, interestingly, a year ago, a close friend and supporter of syria, had broken and done the same. the u.n. and the general assembly in recent weeks voted to condemn the crackdown. two months ago, the senate endorsed unanimously condemnation of the regime and expressing its commendation to the syrian people. there are still serious questions about various oppositional organizations, including especially the syrian national council and the free syrian army. they share the goal of getting rid of assad. they have not yet unified in

the way that the libyan transitional national council did. i believe it is time for us to redouble our efforts to engage with the opposition to shape their thinking, to understand it more fully, to identify more fully their leadership, too strongly encourage them to coalesce into a coherent political force. the friends of syria group is now a multilateral mechanism to support the syrian national council and other groups with technical assistance. is true that many syrians themselves remain on defense, especially members of the minority groups. they are horrified by the regime's atrocities, but they are also part but by the potential for a broad scale sectarian strife. thus, it is vital that the sec

to everything to unify politically, to put national emotions before political ambitions and to ensure all religious and ethnic minorities that they will enjoy full freedoms in a tolerant post- assad society. the international community's political support will a tamale be contingent on their ability to speak with one voice that represents the full diversity of syrian society and embraces the values that will bring the committee to its side. @ debate has started in congress and the region about whether -- a debate has started in congress and the region about whether and how it will start with the syrian army. there are serious questions to be answered about the free syrian army. we can think about how the international community can encourage its restraint. finally, we are all deeply

concerned about the disposition of syria's biological and chemical weapons and its lethal conventional weapons systems. i know the administration has formally engaged with respect to this particular challenge, and are working diligently to ensure there are contingencies to make sure these weapons do not fall into the wrong hands. i would urge my colleagues to be fully supportive of these efforts. to help us sort through the complexities of this situation, i want to emphasize, this is not libya. this is not egypt. this is not tunis.

this is of far more difficult and complicated situation. to help us work through these today, we're joined by two of the most accomplished members of the american diplomatic corps. i am pleased to welcome robert ford and jeffrey feltman. f r jerryeldman knows -- secretary feldman knows the region well and i think he understands the consequences this crisis could have. ambassador, we all want to commend you on your courageous, importance efforts that you made to distinguish between the clientitus that can affect issues of broad. i think we were all impressed by that. robert ford left the country after threats to its own safety, but he returned.

so, we thank you both in advance for providing your insides and look forward to your testimony. senator? >> thank you, mr. chairman. i join you in welcoming the secretary feldman and ambassador ford to this committee. ambassador ford was on the ground in syria and deserves special commendation. the hearing today takes place amid the deadly violence and gross human-rights violations, the degradations of the assad regime continues to inflict on the syrian people. since our last hearing on syria in november, the death toll in this 11-month conflict has risen dramatically.

we're confronted with horrific images. assad it is targeting civilians, journalists, doctors, women and, and children. i went to a meeting last week of the friends of the syrian people that brings together six nations and international organizations. continue to focus on humanitarian needs in syria. the efforts -- the absence of russia and china at the meeting was the neglect of their duties as permanent members of the united nations security council. the outcome and syria will have deep implications for the internal politics of neighboring countries, ethnic conflicts in the middle east, and broader issues.

terrorist groups will take advantage of instability and sectarian violence could spill over syrian borders. in the midst of this up people, we know syria has substantial stockpiles of chemical and conventional weapons that could directly threaten peace and stability throughout the region. our governance is focusing on intelligence and counter- proliferation assets to contain this threat.

the development of definable opposition would improve chances. the damage to the syrian people could be contained. some constructive opposition voices are attempting to emerge. at present, the syrian opposition lacks cohesion, and a specifically defined political agenda. it also lacks the physical space and technical means to mature, to overcome its internal differences and develop a plan for democratic transition. these sectarian divisions from iran and elsewhere and the lack of a democratic political culture weigh heavily against the short-term emergence of unified opposition on which to base the tolerant democracy. this presents the united states with very limited options. syria must support international humanitarian efforts. it should also work with willing states against the spillover affect generated by violence in syria.

we should not underestimate our ability to shape events in the country this morning. further attempts by the united states or the west to closely manage the opposition could backfire in an environment where the government blames outside influences for syria's troubles. while not taking any options of the table, we should be extremely sceptical about efforts to commit the united states to a military intervention in syria. under the constitution, taking up an armed conflict in syria rest with the congress. going forward with our international partners, and encourage you to work closely with congress as plans evolve, particularly as the situation becomes more complex. i look forward to your testimony very much and we are honored that you were with us today at. >> thank you, senator lugar. secretary feldman, if you would lead off?

and then ambassador for. >> thank you but, mr. chairman, senator -- thank you, mr. chairman, senator lugar. thank you for having this meeting. i met here to discuss the crisis in syria. since that time, our european allies have enjoyed it to impede the financial backing of the crackdown. the arab league has suspended syria's membership, with many members downgrading diplomatic relations and freezing syrian bank accounts. the arab league put forward a transition plan for syria. over 137 countries supported the u.n. general assembly resolution condemning the syrian regime and supporting the arab league transition plan.

the friends of the syrian people have been urged to endorsed the transition plan. the syrian opposition in tunis has articulated a clear transition plan and address minority fears convincingly. we now have $10 million in immediate humanitarian assistance with millions more from other countries. the u.n. and the arab league have joined and sent the high- profileenvoy kofi annan. and just this morning, the human-rights council in geneva overwhelmingly passed a resolution describing the situation in syria as a man made

humanitarian disaster. and we all know the identity of the man responsible for that disaster. these are just some of the examples of regional and international resolve, but nevertheless, as both of you have described, we have seen the assad regime has intensified its attacks against the syrian people. this situation is, frankly, terrific. including indiscriminate artillery fire against neighborhoods. and today's report from homs is terrifying. large numbers of syrians are living under siege. the basic necessities of life including food, clean water, and women and children are wounded and dying for lack of treatment. innocent people are detained and

tortured and their families are left to fear the worst. yet, despite the regime's brutality, the people of syria demonstrates enormous courage. the their determination to continue protests for their rights -- mostly peaceful protest -- is a tribute to the human spirit. as a secretary watching the events unravel in the arab world, i have to say we do not know when for sure the breaking point will come in syria, but it will come. the demise of the assad regime is inevitable. it is important that the tipping point for the regime to be reached quickly, because the lumber the regime of salk's the syrian people, -- the longer the regime assaults the syrian people, the greater the chances. as are referred at the start, to the friends of the syrian

people group, we are translating international consensus into action. we are galvanizing international partners to activate more effective sanctions and deepen the regime's isolation. we have called for the immediate transition in syria. we are moving ahead with humanitarian assistance for the syrian people, demanding access be granted and that attacks cease. a proud and democratic syria that upholds the rights and responsibilities of all citizens, regardless of their religion, gender, or ethnicity. together, we are working to persuade frightened communities inside syria that their interests are best served by helping build a better syria, not by casting their lot with a losing regime, a corrupt and abusive regime, which has been a malignant blight in the middle east for far too long. the goal of the opposition, and the syrian people alike, is as followed.

as syrian-led political transition to democratic government based on the rule of law and the will to people with protection of minority rights. i would like to close by echoing this fellow witness and friend ambassador robert ford. his actions on the ground in syria this past month have been a great credit to him, the foreign service, and the united states. he repeatedly put himself in harm's way to make it clear that the united states stands with the people of syria, and i want to think this committee for its leadership in supporting his confirmation.

>> thank you very much. we appreciate that. ambassador ford? maybe you should not say anything. just stopped. [laughter] >> senator, mr. chairman, ranking member lugar -- thank you for this invitation to come and speak before the committee today. i do not want to do a long opening statement because i am hoping we can open discussion about syria, but i do want to say how much i appreciate this committee support -- this committee's support during my time in damascus. we got messages from members of the committee staff asking how we were doing, how my team was doing. i would say that my team really appreciated those messages, especially during some of the tenser moments. it meant a great deal. i had a terrific team in damascus.

i really would like to think this committee for your support for our efforts. beyond that, i think the statement that investor felton made is quite good and i will stop there. thank you. >> thank you very much, mr. ambassador. we certainly appreciate your dialogue. let me begin by asking both of you if you would share with us your perceptions of the state of the assad regime right now. there have been executions of various military figures. that is due to any plots or defection. what is your view of the current fragility, if it is indeed that all? an alawite family enterprise that has a lot to lose, obviously.

>> a couple of things i would say on that, senator -- first, the assad regime is under greater stress than it was even too much for three months ago. this is in part because -- even two months or three months ago. this is in part because of restrictions. the military has retained its cohesion. but they are under significantly more stress now. in the first quarter of 2012 than there were even as recently as two months or three months ago. within the ruling circle, if i can call it that, there is greater concern. they are well aware that the business community, for example, is very unhappy. they have changed several times on a dime some of their economic policies to try to placate an increasingly unhappy business community which is suffering because of the sanctions that we have imposed, europe and now arab countries have imposed.

in general, they understand this is the biggest challenge during the 40 years of the assad makhlouf family control of the area. >> to refer back to that tympan point, the breaking point that i talked about in my -- that tipping point, the breaking point that i talked about in my opening comments, the calculation is to appeal to those people who have not yet made up their minds for change, but do not like the way that -- they do not like the direction that assad is taking them.

uc meetings in tunis as a way to appeal to the broader population, to try to move them toward change. this is a very important part to getting that second point, getting more people on the side of change. >> i cannot remember if it was the post or the times, but there was a photograph of the kuwaiti parliament having a vigorous debate and ultimately deciding to condemn violence. there seems to be a somewhat surprising and unique movement in the gcc and a number arab countries to really take unprecedented steps here. could you speak to that end with the potential is that is in the arab world itself, what the reactions may be and what the

potential there is for that to have an impact on the outcome? >> i think the arab leadership fund, the issue of syria has been remarkable. we are backing the arab league's own transition plan. syria sees itself as a major country in the arab league. the syrians call themselves the beating heart of the arab world. suddenly, the arab league has potentially suspended serious membership. this is not in north african country like libya that is out of the arab mainstream.

it is significant with the arabs are doing. why is this happening. in part, this is happening because of the air spring if you look at opinion poll after opinion poll, bashar is at the bottom of the list of popularity among leaders. he has no credibility across the arab world. i think the arab leaders want to show their own population that they get it, that they understand, that they need to be in tune with their popular opinion. without question, part of this has to do with competition with iran. people know that bashar has made serious a proxy for iran as a subservient partner for iran but would not underestimate the impact of the arab spring, even on those arab countries that are not going through a transition. i believe that arab leaders recognize that they cannot be on the complete opposite side of their public opinion. the kuwaitis, for example, there

was a scene in the kuwaiti parliament yesterday. >> based on your experience in lebanon and the region, share with us your possession -- your impressions of the rest and the sectarian violence that could flow if there is a total explosion or inclusion. >> without question, the minorities in serial look at lebanon or recently iraq with fear. i defer to embassador ford to talk about the cut delayed since -- to talk about the calculations inside syria. the syrian opposition is to disprove the bashar theory. it is his theory that says look at lebanon and look at iraq. this is where we're headed if you do not back me. there is irresponsibility on the part of the syrian national

counter and broader opposition groups to show that that is not where they need to go. >> what are the dynamics between syrian national council and the internal local groups? >> a couple of things i would say on that -- the two organizations are separate. there is not a hierarchy between the syrian national council. it has its own executive party and a broader general assembly. the free syrian army, as best we understand, has its own leadership hierarchy. they are not organically linked. however, they certainly do talk to each other. on the ground in syria, local revolution councils are being set up now. if you want, for example, aljazeera television, you often see a spokesperson for the revolution council in homs talking about the atrocities that are going on there. it is a very young man, a very brave man, who will literally go through the streets.

it was he that broke the news about mary holden's death, for example. people like him talk to the free syrian army, but he is not free syrian army. you mentioned in your statement about the divisions between the syrian opposition. there are different organizations that makes it a little more complex. so they talk to each other. sometimes the coordinate, but they not organically linked. >> thank you, mr. chairman. i want to pick up the point you made, secretary feldman, about the oil exports and the success apparently been bottling up a high percentage of the government. likewise, other sanctions against the country have caused what seemed to be normal terms and economic depression by normal standards.

this is likely to go further. what is not clear to me and i would like some thoughts that you have about what food supplies are available to the people of the country. how much is produced in syria now? i've understand that a drought has occurred this year. it was a critical factor in egypt, even while things were going on in tahrir square. food subsidies had ceased and that was the cause of considerable unrest. even if there were these problems in the business community or money for the assad regime, it would appear

that the allow we group, as opposed to the 65% of the population nor sunnis, the group that has an existential problems. the minimal be in favor of assad, but there is general -- there may not -- they may not be in favor of assad, but there is a general fear. protection of minority rights, this may be down the trail a few years in the future. your prediction is more of an accelerated turnover of the regime than most are predicting. most press accounts i have seen indicate that the assad regime may continue for years, not months. and the lack of cohesion of the opposition could even grow greater rather than smaller as various other forces enter the syrian picture and put off segments that may be helpful to their situations.

can you comment generally on the critical problems present -- the economic depression, may be food shortages that are dire on the one hand that lead to general unrest and come on the other, can we reasonably anticipate of the next three years to five years, say, that there could conceivably be a transition to something even with the vestiges of democracy, human rights, respect for minorities? the original prediction that i see is that assad might go, but the chaos that would ensue would be horrible including killing of

people and a general melee. it is not a question of who decides, but the pending disaster from a lack of authority. >> the dangers you point out are real. the opposition leadership recognizes those dangers. it is one of the reasons i said our policy is to excel ricky arrival of -- of that tipping point. i do not know what that to pinpoint is. we do not have any magic bullets to make it come tomorrow. the longer this goes on, the deeper the sectarian divisions and hire the risks of long term sectarian conflict. the higher the risk of extremism. we want to see this happen earlier. but the risks you point out are recognized by the opposition. despite all of the divisions between the opposition, the leadership of these groups to have a common goal.

they do seem to have a common understanding of the importance of the fabric of syrian society, the importance of preserving that fabric. i was in tunis with secretary clinton and listen to an inspiring speech where he appealed directly to christians. but to the syrians, he said something like many of you have left over the years. you have felt the need to leap over the years. and when you leave, part of syria dies. and we want a syria where you can all come home. i want to convey the sentiment of that. i think there's something to work with in the opposition leadership, this understanding that what is special about syria is that rich mosaic of communities, religion, ethnicity. and people want to preserve that. the alawites are scared, that is true.

on the economic side of things, the syrian business community, as i am understand it, there are levantine traders who have worked for decades, if not centuries, in commerce in the middle east and beyond. this is one of those communities who need to understand, in our view, that its future is better insured under a different type the system than is there now. one of the things that came out of the tunis meeting was a discussion, a commitment by the friends of syria, to set up a working group to talk about reconstruction of syria after words in ways that the business community could see. we're talking about trade relations, investment relations, financial communications. right now, the sanctions imposed on syria are by turkey, the arab world, by europe, and the united states. it has cut off humanitarian aid, including food.

however, food prices are rising without question. with 30% of the syrian population before the party line before this began, there's more hardship -- under the poverty line before this began, there's more hardship for more people. on figure 24th, it was announced that we make sure that we have the money to pay for partners who are used to dealing in conflict situations and provide resources. >> you have a comment. >> if i might, let me address three issues really quick. first, the economic situation

that you asked about, and then i would like to make two points on the political side. first, with respect to the economy, it is in a sharp downward spiral. the exchange rate, for example, has depreciated almost 50% in less than a year. it is really in the space of about seven months. it has driven prices on the local markets, for example, in damascus, where we monitor prices, food prices went up something like 30% between december and the beginning of february. that is a very sharp rise. what it is doing in syria is really -- consumers are contracting their purchases. that is aggravating the spiral that is going down. it is one of the reasons the business community is so upset. the sanctions that we have imposed had a real impact. we have tried as best we can, senator, to target our sanctions so that they do not

hurt the syrian people. we have targeted government revenues, for example, in order to make it harder for the government to pay for its repression, to pay for its military forces. but we have never tried to block supplies of, for example, heating oil or cooking gas that would go into syria. but there are terrible shortages of these. when i went back after being in the united states, i went back in december, the stories i heard from people, the biggest problem they complain about in damascus, aside from the fear of oppression and being arrested, the next thing out of their mouths was that there is no cooking gas. there is no heating oil. and damascus is surprisingly cold in the winter. it snows. the economy is hurting. food supplies are available, but

people are reducing their consumption in general because of the prices. with respect to the political side of this, two points must be made. first, the assad regime, in its darkest moments, will try to paint this as a fight against sunni arab islamic extremists. they're trying to frighten minority communities, especially when these minority communities look at what happened in lebanon and iraq. i think it is important for americans to understand that this is not about alois vs a sunni majority. they have suffered just as much brutality as their neighbors down the road. it is important, for example, that one of the leading activists on the ground in syria -- and she is in hiding and moves around from place to

place and will pop up in demonstrations -- she is a young woman aloi movie actress. she is very brave. the government has tried to arrest her many times. she is an anoli and people know this. this is about a family that happens to be aloi. we have constantly urged in our discussions with the syrian opposition in the country and outside the country to underline to the communities in syria, whether they be christians or business people or druids -- it is a very complex social make it -- that all people in syria would be treated equally, that all people's basic human rights would be respected. and it would be a syria where all different communities would be able to live in harmony.

we underline that message every time we see the opposition. the opposition is divided, as you have noted. i think -- i do not think it will unify into any single organization anytime soon. can the united around one vision? i described our vision and our suggestions. can the unite around a vision and can they unite around a transition plan? they do not have to unite into one single party. but they do need to share a vision and they do need to share a vision on the way forward. that is also what we are counseling. we're not writing their

transition plan. that is not our role. syria needs to do it. but they do need to get behind a plan. >> thank you. hopefully, we can stay so we have a lot of senators and have a lot of people who have questions. >> thank you, mr. chairman. mr. secretary, can you talk to us about what measures are being taken to encourage the russians or the chinese to remove their objection to action in the security council? in that regard, as you answer that, are you consulting with treasury on the possibility of designating and imposing sanctions under executive order 13572 on russian and chinese entities selling weapons to assad? there are a lot of media reports stating that russian state arms dealers are continuing to supply the assad regime with arms. at least for cargo ships have left a russian port for a syrian port since december this past year.

they were carrying ammunition, rifles, and a host of other armaments. can you give us a sense both of what is happening at the security council to move of them in terms of security council action and are we considering actions under the executive order considering this arms flow? >> you put your finger on a key element of any way forward in syria. i have to permit from the outset that i am not a russia expert. i would have to defer to my boss and my colleagues in the european bureau. but i want to assure you that the contact with russia at all levels of continuing -- russia has had an interest -- an

interesting influence in syria for a long time. russia will not divert those interests that russia deemed to be important if it basically rides the assad moahmoud titanic all the way to the bottom of the ocean. i went out with a colleague to moscow a couple of weeks ago to have a discussion with the russians about how we see the way forward in syria, how we see the inevitable demise of assad. i felt that there was a lot of discomfort in russia about where they are. their analysis is not all that different from ours about how unsustainable the situation is for bashar inside syria. so far, we have been disappointed, to use stronger language, about russia's actions.

even today, when the human rights council passed a resolution condemning what is happening in syria, the vote was 39-3. who were those three? china, russia, and cuba. they refused on civil rights grounds. it is time for the security council to act. this is the type of situation in syria that deserves security council action. we are still in conversation with the security council in an

attempt to persuade them that they can be part of a solution. they can use their influence inside syria and be part of the solution rather than continue to block. the question of arms that you raised is a deeply disturbing one. why are the russians to condemn foreign interference in syria being the ones, along with the iranians, to exit continue to be shipping arms from russia. they should probably have a discussion with colleagues from other agencies. >> i am happy to have that. i just want the administration to be thinking about whether we can get our russian and chinese counterparts to understand. they seem to be doubling down. at least russia seems to be doubling down. there flow of armament almost seems to be doubling down as well as their transactions in the security council. in order for all this to have mean, it needs to be enforced. i certainly hope that, at a minimum, they would do that. because stopping the flow of armaments to assad is incredibly important.

let me ask you one other question. what is the possibility of the situation devolving into a civil war? if so, what concerns you have with the political and >> there has already been a spillover in the neighboring countries. as syrians flee the violence to go to neighboring countries, they are already doing that. there's already a spillover effect. there is lard spillover effect -- already a spillover effect, senator, which is deplorable. we salute those families in those countries who are hosting syria outside their borders as

part of -- outside their borders. we try to provide assistance to those families and governments. bashar said his people want to believe that there will not be a civil war. part of this is, you know, the bashar propaganda machine to frighten people into believing they have no alternative but to stick with them. all of us recognize that it is a risk. but as ambassador ford said, but it is not a question right now of alawites vs. sunnis. but it is the local mafia that has hijacked the entire state of

syria for four decades to enrich itself and protect itself against the syrian people. that is what is happening right now. >> thank you. senator rich? >> ambassador ford, first of all, thank you for your service. i applaud your statement that what our policy is and you conveyed that to the opposition and what they need to do and how they think about this. having said that, in looking at what is happening on the ground out there, your statement about being a complex society is an understatement. i understand. you have the druids and the kurds and the sunnis and about a dozen other smaller groups. the difficulty i have is -- they do not have much of a history.

our culture has trouble thinking along those lines because they are so segregated. they are not like we are where we amalgamate into one society. they are very, very segregated. they marry within their groups. they stay within their groups. they socialize and do business within their groups. saying, when assad goes, they will all get together and do this, i am pretty pessimistic about that. i hear what you're saying. i think it is a good position to take. but from may simply pragmatic point of view, could you analyze your own analysis of it from that standpoint? >> it is a very fair question. it is a sad truth that not only in syria, but in other countries in that region, there is no history of rule of law and respect for human rights. that is the historical reality.

what i would say is a couple of things on this. one of the things i have learned from the arab spring, which is unprecedented in my 30 years working in the region, going to when i was a peace corps volunteer. there is a new generation coming up, and this generation is plugged into the internet and very plugged into satellite television. they know more about how to upload different kinds of videos. i had never watched youtube until i went out as ambassador to syria. now i watch it every day. >> do not want to know what you watch. >> we will not go there. there is no history, but the

people that are leading the protest movement, they had a vision, they have a vision, and i heard this very strongly when i went to hama and when i visited suburbs around damascus -- they want a country where people are treated with dignity -- everybody -- treated with dignity, and that is the key word, senator, "dignity." and they have a vision of a country ruled by law. my own experience, having served in iraq, this is a very hard thing to do. it takes time. we saw the same thing in algeria when i served there. there is change coming in values, and norms are changing

because they are plugged into the rest of the planet more than they used to be, and syrians are surprisingly plugged into the mediterranean. that was one of the things i've learned when i went out there. >> that is an interesting observation, and the question i would have is, does that spill over to their cultural hardwiring that they have? they were raised by parents in a society that protected them from the other minorities, other sects in the country. is that breaking down at all? are they intermarrying? that would be probably the most telltale sign in that. >> in damascus, there are many mixed marriages, and in other parts of the country as well. in fact, one of the things, if

we had syrians sitting at this table, they would say to you, senator, we have always lived together peacefully and we have never had these problems. we are not like iraq. we are different. one of the things that the political opposition needs to do, and we have told them this repeatedly, they need to address fears directly and not the fairness directly, and not simply fall back on the argument that syrians have lived together peacefully between communities, and therefore there is a problem. there is a problem, and they need to address it. the younger people understand that fear. in the demonstrations, every friday, where they have the really big ones, there are frequently banners that say "the syrian people are one," and what they're trying to express is no sectarian divisions, do not let the assad regime played one community off the other, which is very much what the regime is trying to do. there are signs all over damascus that the government put up saying, "beware of sectarian strife." it is the government raising the issue in the first place.

>> thank you, ambassador ford, and i appreciate your optimism on the subject. i hope you are right. >> senator cardin. >> thank you very much for your heroic service, and we watched what you were doing, and also the international community, and it was a great moment for united states leadership. we thank you for that. secretary feltman, we all read -- agreed that there will be a tipping point that the assad team will not survive.

the challenge is until that happens, the humanitarian disasters will only get worse. how many people are going to lose their lives or their lives will be changed forever -- until that tipping point is reached is a matter of grave interest to all of us. you point out there is a growing unity in the region in the arab world, which would i think point out that our options may be stronger than we think. we may have more opportunities to try to save lives. i am very mindful of senator lugar's cautionary notes, and we all share that, but my point is, what can we do? what can the united states do in the leadership to minimize the sufferings that are taking place and will take place until the assad regime is removed? what can we do working with international partners to

provide the best opportunity for the safety of these civilian populations in syria during this time? >> senator, thank you. this is a question we're talking about all the time -- what can we do, either ourselves as americans, but more importantly, what can we do together with our partners in the region and beyond? the "what we can do together" question is the more important one, because our influence in syria is much less than the influence of some of our neighbors. the economic ties with syria before this started work limited compared to the ties between syria and europe, syria and turkey, syria and the arab world. and there is an international consensus that we need to be doing more on the humanitarian side, working with partners who have a history of working in conflict areas, that can get things into deplorable populations, working with neighbors who are hosting people who have fled.

there is consensus on that in the region from the world. that is an important short-term goal, getting things in, making sure where houses are stocked, supplies are prepositioned. there is consensus for increasing pressure for assad. we talk about sanctions already, but there is always a look at more sanctions that can be done, from those countries that have had stronger economic times in order to deprive the regime of its income. there is a consensus we need to be working with the syrian opposition in its forms, and in tunis there was recognition that the syrian national council is a legitimate representative of the voices of this year in opposition, and we're working with that. your question hints that something beyond that, and far more aggressive action, we would need to have a larger international consensus than currently exists.

one thing we are definitely working on is to see what role the security council can play, because we think it is past time for the security council to be playing a role, and that was a consensus that came out of tunis, that people in countries want to see an end to the blockade by russia and china in the security council from taking action. >> you are right. i agree we need international unity. the security council is where we normally start that. it is not the exclusive area and not the determinative area, but one in which it would give a stronger footing.

i would hope we would work together exploring options to be more aggressive where we can effectively work in unity with the international community. you mentioned another point that i found interesting, and that is the popularity of the regime being at the low point, and i would expect that hamas recognize that when it pulled out of damascus, which represents a challenge for us, a terrorist organization that we are concerned about their influence in that region. it looks like they are taking further steps to become more popular among the arab population in countries. can either one of you give us an update on hamas and its movements and what -- how we are going to counter their issues in its relationship not only with syria, but also with iran and other countries? >> it says something when you have a terrorist organization

that has been cobbled for decades by the assad regime pulling out, saying they cannot even stand what the regime is doing. you are right, it gets to the popularity question. if you look at zogby polls, a couple years ago, there was a question posed to arabs -- who is the most popular arab leader outside your own country's leader? bashar al assad was the most popular leader out of where their home country is. if you look at the same polls today -- same questions, same places -- he is at the bottom of the list. that is not lost on terrorist organizations like hamas. this does not change our calculus on hamas. our demands on hamas are the quartet agreement, which is hamas can be accepted as a responsible player, needs to accept the quartet conditions, renunciation of violence, acceptance of israel, and acceptance of all the agreements signed between the plo and israel.

it is telling that hamas cannot stand what bashar al assad is doing to its people, but it does not changed our calculus. >> senator rubio? >> thank you for being here, and thank you for your service. it is one here to sit here and talk about these things. it is another thing to be the target of some pretty vicious stuff. a quick question -- this is probably for you, secretary feltman, i read in a bloomberg business this week that head of

the venezuelan national oil company said companies are not prohibited from shipping oil to syria under current sanctions. i would like to follow up with you to see if that is the case. >> that is technically correct, they are not prohibited. it is morally wrong to provide diesel that can be used in military machines that slaughter innocent syrians. it is morally wrong, but not legally wrong. it also is not the same as what syria had before november, the ability to export its own oil, earn its own revenues. >> that is a conversation for another day, but one of the things we can talk about is how we can introduce a third-party support. i want to focus on the u.s. national interests, and i want to pause at the story to you and see when you think about it. we looked at something in a country that for many years has been a transit point and haven for terrorists. damascus has been, in addition, a state sponsor of terrorism as well.

now the people are saying we want to get rid of the guy that runs this place, and there is internal division, and we talk about the complexities of all that. it seems to me as much as anything else this is about regime change, a change of direction for the country. from our point of view it as a competition for future and for once, who is going to influence the direction where syria is gone to go in the future? al qaeda sees this chaos and say we get the advantage of the chaos, and create a better place for us to operate in. the widespread sentiment cannot rule of law, they do not want to be a haven for terrorism, they wanted a normal people in a normal country.

our involvement is about what influences our of view of the war, which we could be a player in that country. my guess is, having traveled to libya in the aftermath of what happened -- there are big differences between libya and syria -- one of the things i was struck by his pro-american graffiti on walls, people walking up to us to thank us, and my point is i think it is going to be really hard five years from now -- not impossible -- for an islamist to go to one of these young guys who thought america was on the side and convince them to join some anti-american jihad. they are really angry at the chinese, where people of syria and the american people, the senate, the people of the united states are on the side of their aspirations. we cannot decide who is in charge, we want them to be able to pursue their peaceful aspirations and want them to have a country that prospers.

in the national interest of the united states, it is critical for syrians to say america is on our side. we want no part of the strange movements that would have us join some anti-american sentiment. that is what our national interest is here in the big picture, and i wondered if you agreed with that or would criticize it -- your thoughts. >> a couple comments. i cannot believe any of these countries, anybody is looking to trade one type of tyranny for another kind of tyranny. it is clear this quest of

dignity means people will guard against from going against one tyrants to another type of tyranny. we have also seen that while al qaeda has tried to exploit unrest across the region, that outcry that ideology does not have any appeal for the sort of young people and protesters across the region who are looking for dignity and opportunity. in terms of the syrian people, i will defer to my colleague, but i will give one example. when ambassador ford went to hama, the people there tossed flowers onto his limousine. he got back to damascus and the regime staged an attack against our embassy. the people of syria know exactly where robert ford stood in terms

of their rights and aspirations, and robert ford represented us very ably in showing that that is what the american people stood for. >> senator, i think it is very telling that in the demonstrations every week in syria, they burned russian flags, chinese flags, they burned hezbollah flags. that tells you what they think. frankly, from our strategic interests, that is a good thing, in that we want syria in the future to not be a militant actor that it has been supporting terrorist groups. there is a huge potential for us with the changes going on in syria, but that is not why the syrians are doing that.

they are doing it because they want dignity. i think it is very important for us as we go forward to keep in mind that the most important thing we can do is keep stressing over and over our support for universal human rights being respected in syria, like other countries -- freedom of speech, freedom to marched peacefully, the right to form political parties and to have life under a rule of law, a dignified life. that is what i tried to constantly underline during my time there, just as basic values. syrians can work out their politics, and it is going to be very hard, but if we stay on the track of respect for their human rights, we will ultimately be on the side of history here. >> thanks very much. i am next in line and i will try

not to use all my time, but, secretary feltman, thank you for being here today and for your ongoing public service. ambassador ford, it bears repeating, we are grateful for your service in so many assignments, but especially under the horrific circumstances you have had to face, and we are grateful you're with us today. some of us -- not being on the ground like you were, have difficulty in imagining or articulating the scale and the gravity of this violence. it is hard to even comprehend. i cannot imagine what it is

like, and a number of us have been frankly impatient with what washington has done or not done. and i will say both the senate and other institutions. so we are impatient. we're also frustrated. this hearing is one way to advance the development of a body of work that can undergird another resolution. we had another resolution, which i thought was very weak, so i'm glad we're having this hearing to advance the ball. i wrote down two words about the formulation of questions, and these are words makes sense for what we're trying to do, for

what i hope we can do. one is "solidarity," and the other is a "commitment." we need to figure out not just the outrage, but figure out ways to in fact bring about a policy or strategy that will demonstrate that will prove in our sense the solidarity we have with the syrian people. that is one priority. the other is commitment to a number of things come a number of priorities, but commitment to humanitarian and medical assistance. if we're going to say, and i think it is a contentious position, that this should not be a military engagement on our part. if we say that, we had better get the other parts right and the other parts are humanitarian

and medical assistance. so my first question is for mr. feltman. i know the frens of syria, meeting took place and that was very positive and i know we have a commitment of 10 million dollars to the refugees and the i.d.p.'s. but i want to get a better sense of what was agreed to at tunis. specifically as it relates to humanitarian assistance what happened the united states can do to address this horror. so if you can just walk through what is definite in terms of an agreement and what will actually lead to action? >> general casey, thanks. in tunis, the discussion on humanitarian issues fell in two categories. first, how do we help those

countries around syria and who are hosting syrians who have fled their country and that is frankly an easier topic, for the countries themselves and the families have been generous. for the most part people have gone to stay with friends and relatives outside of syria. it is a question of helping those close families getting assistance to what camps there are. the second question is a much harder one that came up in tunis and it comes up internally inside the united states government. access inside syria. how do you reach the vulnerable populations inside syria? that is a much, much harder issue. right now, the problem -- the problem of humanitarian deliveries in syria, not supplies, it is not related to money. the international community has sufficient resources, has sufficient commitments. it is a question of access.

just yesterday, you had valerie amos, the u.n. undersecretary and humanitarian coordinator who had been waiting in beirut for days. they were not going to be giving her a visa. that tells you not only is bash ar killing his people, butchering his people, we are not responding. unfortunately in today's world there are a lot of conflict situations around the world and partners with whom we have work around the world already. so you can work with groups, w.f.p., others, office of foreign disaster assistance has a history of being able to work inside conflict areas to make sure our assistance is going where it is directed, duit is not easy. the big question is access. it goes back to senator

menendez's question about russia. this is one area where the russians have expressed a lot of concern about that situation. we would like to see that russian concern to be translated into the type of pressure on the assad regime that helps ease these questions of access. >> thank you. ambassador ford? >> i like your two words, senator, solidarity and commitment. i think especially right now, when people in cities like those are under siege, i think holding this hearing is terrific and i think the concerns expressed by bodies like the united states senate are especially important. i would never want syrians to think that buzz we closed the american -- because we closed the american embassy we are no longer interested in their efforts there to create a new

syria that treats people with dignity and with respect to the commitment that jeff was talking about, i would just underline that we do need to get access so that we have supplies positioned. we just need to get acksbees the country.

i am just saying when you said the economy is moving forward at a slow pace, not having the -- taking away infrastructure money might hurt the economy. adding infrastructure money would help the economy. you want to do it as well as possible. is that a fair recapitulation? >> yes. >> say no more. those alternatives are not -- this is a yes or no situation for us now. money market funds. we all know the dark days of the fall of 2008. the panic that ensued when a large money market fund broke

the buck. there was a run on the funds. the fec instituted some reforms to address the problems that led to run in 2008. however, they have made it clear they believe more should be done. and recent reports they discussed a few options including a requirement that would lock up a portion of investors' money and proposal to require funds to abandon the stable $1 a share net asset value. the proposals have the potential to change the nature of the product. some say it would drive it out of existence. obviously, they play an important role in short-term financing of many different types of businesses. what are the risks to the economy and financial system if we were to fundamentally alter the money market funds, what do you think of the two different proposals made?

if investors have to keep 3% or a certain percent and cannot let our right away, it is not worth the investment to them anymore. it is not worth investing in a money-market fund for them anymore. >> first as you pointed out, the fec has already done some constructive things in terms of improved liquidity requirements. i think the federal reserve in general, and i would have to agree, there are still some risks in the money market mutual funds. in particular, they still could be subject to runs. one of the implications of dodd-frank is some of the tools that we use in 2008 to arrest the run on the funds are no longer available. the treasury can no longer provide the insurance they provided. the fed's ability to lead to money market mutual funds is

greatly restricted because of the fact that we would have to take a hair cut on their assets. that is not going to work with their economics. we support the ftc's attempt to look at alternatives. you mentioned some different things. i believe they have put out a number of alternative strategies. one would be to go away from the fixed net asset approach. i think the history will reject that pretty categorically. the question is what else can be done? what approach would create more capital? they have limited capital. there might be ways to build up the capital base. that is one possible approach. then either complementing that is a separate approach that involves not allowing the

investors to draw out 100% immediately. if you think about that, what that really does is that it makes it unattractive to be the first person to withdraw your money. therefore, it reduces the risk of runs considerably. you also have the investor protection benefit. if you are not monetary the situation moment by a lot -- moment by moment and you are the last guy to take your money out, you are still protected. >> i have heard from some investors and some funds that given the low margin that money- market funds pay, it would just end the business more or less. investors would not put money in if they knew they had to keep 2%-3% in there. >> their attractiveness is less. i do not know. i think you have to have some kind of discussion here because

part of the reason that investors invest in money-market mutual funds at they think they are one of represent find safe and there is no way to lose money. that is not true. we have to make sure that investors are aware and we take the steps necessary to protect their investments. >> you should try to keep them going? >> generally speaking. they are a useful source of short run money. again, please do not over read this, but europe does not have any. they have a financial system. >> if they are in great shape. >> there are many ways to structure your financial system. again, i envision money-market mutual funds will be part of the future of the u.s. financial system. >> thank you, mr. chairman.

i appreciate it. >> there are no more questions. thank you, mr. chairman. on behalf of the chairman and unless instructed otherwise, i will adjourn. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> in just a few moments, senate leaders with proposals that would have allowed employers to opt out of certain insurance coverage. in a little more than 50 minutes, the housing secretary testifies out at about his agency's budget. after that, one of president obama's fund-raisers last night in new york city. >> several lighted that to tell you about today. the brookings institution host a forum on the clipper of liberation.

that is on c-span at 10:00 a.m. eastern. road to the white house coverage continues at 7:00 p.m. eastern with rick santorum in ohio. we will also cover mitt romney in cleveland this evening at 7:00 p.m. on c-span3. the schedule includes remarks by his wife and new jersey governor chris christie. >> louisiana governor bobby jindal will reveal his proposal for balancing the budget. a budget $900 million in the red. in shreveport, it is mostly cloudy and 37 degrees at the airport. you are listening to shreveport's weather station. >> book tv and american history tb explore the history and literary culture of shreveport, louisiana, saturday starting at noon eastern on book tv on c- span2.

the union army's failure in indiana. then, a look at over 200,000 books of the john smith nobel collection housed at the lsu shreveport archives. then, a walking tour of shreveport with neil johnson. on the american history tv sunday at 5:00 p.m. eastern, a look at the role of the based on 9/11 and the history of the b-52 bomber. also, visit the founding fathers autograph collection. from the pioneer heritage center, medical treatment and medicine during the civil war. shreveport, louisiana -- this weekend on c-span2 and c-span3. >> the senate blocked a move to allow employers to opt out of health coverage. senate leaders to talk about the proposal for 15 minutes. >> today, the senate will vote

on an extreme ideological amend. women's access to health care. it would allow any employer or insurer to deny coverage for virtually any treatment for virtually any reason. i repeat, it will allow any employer or insurer to deny coverage for virtually any treatment for virtually any reason. i was pleased to hear that senator snowe intends to oppose this measure. i read that last night. although the amendment was designed to restrict women's access to contraception, it would also limit all americans' access to essential health care. here are just a few of the life-saving treatments employers could deny if this amendment passes. hard to comprehend but here's what some of them would be. madam owe grams and other cancer screenings. prenatal care, flu shots, diabetes screenings, childhood vaccinations. to make matters works, republicans held up progress on an important jobs bill to

extract this political vote. as the economy is finally moving forward a little bit, republicans have tried to force congress to take its foot off the gas. every member of this body knows the blunt amendment has nothing to do with highways or bridges or trains or train tracks. this amendment has no place on a transportation bill. but with two million jobs at stake, the senate cannot afford to delay progress on a job i-creating measure any longer. so developments have agreed to greed to vote on senator blunt's amendment so we can hopefully move on. once the senate disposes of this partisan political amendment i hope we'll be able to resume in earnest bipartisan work on a transportation bill.

the presiding officer: the republican leader is recognized. mr. mcconnell: i've spent a lot of time in my senate career defending the first amendment and most of that time i've focused on the part that deals with free speech. but recent actions by the obama administration related to the president's health care law have prompted many of us here and many across the country to stand up and in defense of another freedom that's covered in the first amendment, and that's religious freedom. let me just say at the outset that most of us didn't expect that we'd ever have to defend this right in a body which every one of us is sworn to uphold and defend the u.s. constitution. boast of us probably assumed that if ploinls liberty were ever seriously challenged in this country, we could always expect a robust, bipartisan defense of it, at least from within the congress itself. but, unfortunately, that's not the situation we find ourselves

in. democrats have evidently decided they'd rather defend a president of their own party regardless of the impact of his policies. so rather than defend the first amendment in this particular case they've decided to engage in a campaign of distraction as a way of obscuring the larger issue which 19 a stake here. -- at stake here. if democrats no longer see the value in defending the first amendment because they don't think it's politically expedient to do so or because they want to protect the president, then republicans will have to do it for them. and we're happy to do that. because this is an issue that's greater than any short-term political gain, gets right at the heart of who we are as a people, and we welcome the opportunity to affirm what this country is all about. what makes america unique in the world is the fact that it was established on the basis of an idea, the idea that all of us have been endowed by our creator

with certain unalienable rights. in other words, rights that are conferred not by a king or a president or certainly a congress, but by the creator himself. the state protects these rights but it does not grant them. and what the state doesn't grant, the state can't take away. now, the first of these rights according to the men who wrote the constitution is trite to have one's religious beliefs protected from government interference. the first amendment couldn't be clearer on this point. the government can neither establish religion nor can it prevent its free exercise. and if the free exercise of religion clause of the first amendment means anything at all, it means that it is not within the power of the federal government to tell anybody what to believe or to punish them for practicing those beliefs. and yet that's precisely what

the obama administration is trying to company do through the president's health care law. we all remember then-speaker pelosi saying we'd have to 35s the health care bill to find out what was in it. well, this is one of the things we found. that it empowers bureaucrats here in washington to decide which tenets religious institutions can and can't adhere to. if they don't get in line, they'll be penalized. according to congressional testimony delivered this week by usba uden of the becht fund for religious liberty, this is not only unprecedented in federal law but broader in scope and narrower in its exemption than the 28 state some have pointed to in the administration's defense. moreover, even in states with strictest mandates, religious institutions can still either

opt out of state-level mandate or self-sure. -- self-insure. but if they try that now, they run into this new federal mandate making it impossible for the first time for religious institutions to avoid punishment for practicing what they preach. now some of the proponents of this mandate say that in this case we should just ignore the first amendment. that's what the proponents are saying. in this particular instance, just ignore the first amendment. they say that certain religious beliefs in question aren't particularly popular, so they don't really deserve first amendment protection. but isn't that the entire point of the first amendment? to protect rights regardless of who or how many people hold them. isn't that the reason people came to this country in the first place? as a refuge from governments who said they had to toe the majority line.

some of the proponents of this mandate have also said they're willing to offer a so-called compromise that would respect what they call the core mission of loins institutions, but here's the catch: they want to be the ones to tell these loins institutions what -- religious institutions what their core mission is. the government telling the institutions what the core mission is. that's not a compromise, that's another government takeover. only this time isn't the banks or the car companies, it's religion. i mean who do you think has a better grasp of the mission of the catholic church, the cardinal archbishop of new york or the president's campaign manager? who are you going to listen to on the question of whether this mandate violates freedom of religion? the president of one of the-alarmest seminaries on the planet or -- the largest seminaries on the planet or some

bureaucrat in washington? the question answers itself. look, this is precisely the kind of thing the founders fear. it was precisely because of the danger of a government intrusion into religion like this one that they left us the first amendment in the first place, so that we could always point to it and say no government -- no government -- no president has that right. religious institutions are free to decide what they believe, and the government must respect their right to do so. and remember, as many of us said during the debate on the president's health care bill, this is just the beginning. if the government is allowed to compel people to buy health care, it won't stop there. now it's telling people what their religious beliefs are and what their religious practices ought to be.

i wonder what's next. let's be clear, this isn't about one particular religion. it's about the right of americans of any, any religion to live out their faith without the government picking and choosing which doctrines they're allowed to follow. when one religion is threatened, all religions are threatened. and allowing this particular infringement would surely ease the way for others. this is something my constituents understood immediately in this debate. i've received a lot of letters from religious leaders and concerned citizens who know that an attack on the beliefs of one religion is an attack on the beliefs of any religion. and many of them make the case a lot better than i can. so i'd like to just share for a moment some thoughts from my constituents on this issue. i'll start with the catholic archbishop of louisville,

archbishop joseph kurtz, the federal government which claims to be of, by and for the people, has just dealt a heavy blow to almost a quarter of those people: the catholic population. and to the millions more who are served by the catholic faithful. in so ruling, the administration has cast aside the first amendment to the constitution of the united states, denying to catholics our nation's first and most fundamental freedom, that of religious liberty. we cannot, we will not comply with this unjust law. people of faith cannot be made second-class citizens. here's what bishop ronald gainer of the catholic diocese of lech sing to -- lexington had to say: civil law and civil structure protect the church's right and obligation to participate in society without expecting us or

forcing us to abandon or compromise our fundamental moral convictions. if we have an obligation to teach and give eyewitness to moral values that should shape our lives and inspire our society, then there is a corresponding obligation that we be allowed to follow and express freely those religious values. anything short of government protection of that freedom represents an unwarranted threat of government interference. here's the president of the university of the cumberlands jim taylor, the intrusion of the administration into the right of the free exercise of religion is tkeus pointing. the choice -- disappointing. the choice to interfere with religious hospitals, charities and schools with a mandate violating their religious views is disconcerting and will in all probability be totally counterproductive, further polarizing this nation. and finally, i want to read a letter from dr. r. albert moler

jr., the president of the southern baptist theological seminary, the flag ship school of the southern baptist convention and one of the largest seminaries in the world. i'm going to quote it in full and then i'd like to submit it for the record. here's what dr. moler had to say. "i write to express my deepest concern regarding the recent policy announced by the department of health and human services that will require religious institutions to provide mandated contraceptive and antiabortion services to employees. this policy announced by secretary sebelius tramples on the religious liberty of american christians who are now informed that our colleges, schools, hospitals and other service organizations must violate conscience in order to comply with the affordable care act.

its exemption announced by the obama administration is so intentionally narrow, so intentionally narrow that it will cover only congregations and religious institutions that employ and serve only members of our own faiths. this exemption deliberately excludes christian institutions that have served this nation and its people through education, social services, and health care. the new policy effectively tells christian institutions that if we want to remain true to our convictions and our consciences, we will have to cease serving the public. this is a policy that will either require millions upon millions of americans to accept a gross and deliberate violation of religious liberty or to accept a total s.e.c. hrarzation -- secularization of all education and social

services. christians of conscience are now informed by our own government that we must violate our conviction on a matter of grave theological and moral significance. this is not a catholic issue. the inclusion of abortion forms of birth control such as emergency contraceptives will violate the deepest beliefs of millions upon millions of christians along with americans of other faiths who share these convictions. the religious objections to this policy are rooted in centuries, centuries of teaching, belief and moral instruction." he goes on. "this policy is an outrage. it violates our deepest constitutional principles and tramples religious liberty under the feet of deliberate government policy. as many religious leaders have already indicated, we cannot comply with this policy. the one-year extension offered

by the obama administration is a further insult, providing a year in which we are, by government mandate, to prepare to sacrifice our religious liberties and violate conscience. i along with millions of other americans humbly request that the congress of the united states provide an immediate and effective remedy to this intolerable violation of religious liberty. please do not allow this abominable policy to stand, protection of our most basic and fundamental liberties now rest in your hands." so, mr. president, i'll conclude with this. if there's one good thing about this debate, it's that it's given us all an opportunity to reaffirm what we believe as americans. it gives us an opportunity to stand together and to say this is what we're all about. this is what makes america unique. this is what makes it great.

that's why i'll be voting for the blunt amendment. and that's why it's my sincere hope that the president and those in his administration come around to this view too. that they come to realize from the outpouring we've seen over the past several weeks from across the country that the free and diverse exercise of religion in this country has always been one of our nation's greatest assets and one of the things that truly sets us apart. as i said at the outset of this debate, i hope the president reconsiders this deeply misguided policy and reverses it. it crosses a dangerous line. it must be reversed. but if he doesn't, either congress or the courts >> even a person who is a senator, even a person who is president of the united states faces a predicament when they talk about race.

they face all sorts of predicaments. they faced the fact that there are an appreciable -- appreciable number of americans who face of racial prejudice. a much larger portion of the populist want to deny the realities of race even now. >> sunday, harvard law professor and locklear to thurgood marshall, randall kennedy. he will take your calls, females, and tweaks for three hours on "at in depth." >> shaun donovan was on capitol hill yesterday testifying about his agency's budget request.

>> the 2013 budget request for the department of housing and urban development. there are encouraging signs that our economy is moving now in the right direction. although we are not moving quickly enough for families that are still struggling, the private sector has been adding jobs for two years, businesses are growing, and confidence is up. we have stepped back from the press bus, which is good news for the housing market, which depends on a strong economy to recover and thrive. despite the positive signs, we see significant challenges. the recent settlement that was announced is an important step.

it holds banks accountable and provides relief to homeowners. the settlement also paves the way for banks to proceed with foreclosures that installed in the pipeline. while it is important to reduce the excess inventory of distressed housing, increased sales of these properties at reduced prices may further depress home values. climbing back from the housing crash will not be easy, and i'm interested in hearing your views on how we can increase the stability of the market. the depressed market has taken its toll on fha. is made clear in the president's budget. for the first time fha may require funding to cover its losses. i've been concerned about the solvencies of the fha fund. many of the problems facing fha are related to older books of

business in short at the height of the housing boom. it will be important to recover or prevent excessive losses from older ones. i am pleased the recent market sentiment includes money for fha and other settlements will provide money to cover losses related to improper mortgage originations. these should help avoid the need for taxpayer funding, and i hope he will look for opportunities to recoup losses from fraudulent or poorly underwritten loans. additional changes to fha premiums contained in the budget represent your continued efforts to improve the solvencies of the fund and protect the taxpayer from having to cover its losses straight beyond fha, we will examine other parts of the request, which is to support hud's program straight this represents

over a 3% increase. 83 percent of the budget is dedicated to providing housing to the nation's most vulnerable. as we continue to live under the caps of the budget control act, this presents us with difficult choices. last year we worked very hard to protect core rental assistance programs, but that also involved cuts in other programs. cities are laying off workers or delaying investments in their communities. this budget faces many of the same challenges we dealt with last year. how do you craft a budget that

protect low income residents and give hide the tools it needs to manage its programs? while the administration budget crisis redress this, i'm concerned about proposals. i have seen this policy before. i'm concerned we will not have the resources when the bill becomes due. in the rental assistance account i am concerned the funding level requested to renew vouchers is flat. despite anticipated inflation, the budget also relies on savings from a number of policy changes which are not without controversy.

as we make difficult choices in this budget, i want to make sure we make decisions with an understanding of their consequences and an eye toward the future. there are bright spots in this budget. the request seeks $75 billion for new vouchers which has helped reduce homelessness in veterans. the administration has worked hard to develop a plan to end homelessness, and i'm glad a request for this program reflects a continued commitment to that plan. oversight of these programs becomes even more important. i look forward to work with the department and my colleagues to find ways to improve hud's programs. i would like to recognize the new inspector general of hud, and i look forward to working with him to help protect taxpayer dollars.

fiscal year 2013 budget request difficult choices to be made. as i work with colleagues to put together this bill i will be mindful of the millions of americans who rely on hud's programs for a place to sleep each night. mr. secretary, i look forward our discussion and working with you to develop a 2013 budget, and i appreciate everyone accommodating us and of the disappearing up. with that, let me turn it over to my colleague, senator collins. >> take you very much, chairman murray. that we say how much i enjoyed working with you last year as the crafted this important bill. we did so in a truly bipartisan fashion. we share a lot of the same

priorities, and it was a great pleasure to work with secretary donovan, and i appreciate his being here today. as we begin to construct the 2013 budget, we are mindful that we are once again operating under very difficult fiscal constraints. that is even more challenging when one considers that more than 80 cents out of every dollar of the budget request is required just to continue serving those who currently rely on hud for housing support. adjusting the challenge of homelessness remains the top priority of mine.

chairman murray and i continue to share this commitment, and we worked hard last year to preserve funding for the hud program. unfortunately, the veterans are 50% more likely to fall into homelessness compared to other americans. i am pleased that the budget request that continues funding for the hud program at $75 million. this level of funding should help us serve and an additional 10,000 veterans who otherwise would likely be homeless. veterans' homelessness fell by nearly 12% in the year 2010, demonstrating that these programs work.

i also have always supported funding for the homeless assistance grants program to put an end to homelessness. the budget proposes $2.2 billion for this program. that is an increase of approximately $330 million over the previous fiscal year. it is however important that we focus on what works, and one of the models that i have seen work in the state of maine is that housing first model for aiding those who are homeless. we need better data to ensure the effectiveness of all housing programs.

the budget proposes more than $19 billion. copper $1.60 billion -- agencies are having a difficult time administering their voucher programs. they have actually turned back vouchers as a result. that is very troubling. we do not want to overpay them for their administrative expenses, but they need expenses to run the program. another important issue i would like to address is the maine state housing authority section 8 voucher program. a series a recent newspaper stories revealed troubling cases

of code violations and other poor conditions in oxford county main. the local fire chief was so upset that he wrote a letter to my office asking for my help. i have an obligation to oversee the use of federal funds to public housing agencies nationwide and to ensure these funds are not supporting sub standard property. i want to share with my colleagues and the inspector general one of the particular women, one of the apartments cited in this newspaper series. they were paying $600 a month in federal subsidies for a department that was backed up. a damaged fire escape.

bat and rodent infestation. totally unacceptable. it is bad enough that taxpayers were charged for substandard units, but it is appalling that residents were forced to live in such horrible conditions. the the welfare and safety of tenants must be safeguarded in federally subsidized property. it must represent fair value to the tenant and the taxpayer alike. i have and requested the inspector general to have oversight of the unit inspections and the state housing a party administration program. it is critical that federally subsidized properties comply with all help, safety, and quality standards. i want to commend the secretary for taking my concerns very seriously and for asking the housing authority for corrective action plans. i am also please he has stepped

in and is investigating this problem i want to echo senator murray's concerns about the federal housing authority administration, which plays such a critical role in affordable home ownership the decline in the housing market over the past several years has had an impact on families and communities do not the nation as well as our economy as a whole. i understand capital reserves have been increased it remains troubling that the ratio remains below the congressionally mandated level of 2%. i am optimistic we will hear some good news as a result of the supplement, but it is still a concern. i also want to discuss with the

secretary what can be done to ensure the greater use of wood pellet heating systems in maine that have not qualified for systems under the fha program. those are increasingly popular. they are an alternative to fossil fuels. home heating oil prices have spiked. finally, the funding for the committed the government block grant program proposed about $3 billion is disappointing. this popular program supports the economic growth strategy of committees nationwide and enables key investments under long-term economic growth. it is programs like this that help build a foundation for future prosperity.

i look forward to working closely with you again this year. >> thank you for the opportunity to be here today. i would like to discuss how the 2013 budget proposal is essential to building communities built to last and will support 700,000 jobs. in developing the budget, we develop for principles. the first is to continue our support for the housing market while bragging private capital back. we all felt nearly 2.8 million families buy a home and homeowners refinance with average monthly savings of more than $125. we have taken the most significant steps in effigy -- fha history to reduce risk to the premium structure. but the premium increases

recently enacted by congress fha projects to add an additional $8.10 billion in proceeds to the capital reserve account in 2013. just this week we announced some additional premium changes that will increase receipts above those already in the budget by over $1 billion in fiscal year 2012 and 2013. we have taken significant steps to increase accountability and to expand a party with legislation that will further enable us to protect the fund, as will the recent summit with america's five largest servicers. fha received money to compensate for losses originating in service by a violation of fha requirements. with the current market share declining since 2009, these

reforms will further help private capital return while ensuring the fha remains a vital source of financing. just as importantly, while hud's request is $44.80 billion in gross budget a party. because of fha received, the cost to the taxpayer is only $35.35 billion. only 7.3% below the fiscal year 2012 enacted levels. more than meeting our deficit targets while allowing us to improve oversight of our programs. the second principle we used was to protect current residents and improve the programs that serve them. the families who live in high- assisted houses burned $2,002 per year and as a median and more than half are elderly or disabled. 83% of our budget keeps these residents in their homes and provides basic upkeep to public

housing while also continuing to serve our most warble population through or homeless programs. inflation and stagnant income put real pressure on the cost of these programs each year. we redouble our efforts to minimize and reverse these increases, not just for this year, but the years to come. we are working with your colleagues to and accepted a reform legislation that would save $1 billion over five years while also supporting the ability of public housing authorities in small towns to better serve the working poor. the budget achieves savings and the project based rental assistance programs -- program by approving oversight, capping increases, and offsetting reserves. protecting current families required us to make choices we would not have made in a different fiscal environment. requesting a $0.70 billion for the pbra required us to provide

less than 12 months of funding for the majority of contracts. even though the budget maintains our chip id tensions, the budget raises minimum rent's due out our rental assistance program to $75 per month. these very difficult decisions, are the kinds of steps we were required to take in this difficult budget environment. that is why our third principle, continuing investments that leverage private dollars and create jobs, is so important. we are helping communities engage in a broad range of public and private partners to transform our poorest neighborhoods and make sure our children are prepared for the 21st century economy. if we are going to compete with china and india, which can not leave anyone on the sidelines. the challenge communities to creatively use existing resources to bring jobs back to our shores. in memphis, which is using hud

committee challenge grants in neighborhoods surrounding its airport, fedex has created 3000 jobs. electrolux is poised to create another 1500. at a time when we have to make tough choices, dollar per dollar, the most effective job creators in our budget. these grants are essential. the leverage it resources of corps programs were smartly and efficiently. reducing regulatory burdens and increasing efficiently if the fourth and final principle we used to formulate this budget. the budget provides flexibility to better manage in this physical environment and to hold our partners accountable for the funding they receive. with your help, we are continuing the next generation management system that will improve monitoring and oversight of our programs and launched across -- cost-cutting initiative so that we have the

capacity to manage our budget. research also allows us to increase investment in programs we know work like permanent supportive housing and rapid rehousing that end homelessness and save money. that is why even in this difficult environment, as both of you have championed, we proposed additional funding for homeless assistance grants. insuring we can end chronic veteran homelessness by 2015. all told, despite tough choices, this proposed budget allows us to serve 27,000 more vulnerable families. it recognizes the recovery is essential to our broader economic recovery. every american should get a fair shot, do their fair share, and play by the same rules. thank you for having me here today. >> thank you very much, mr. secretary. let me ask you about the status of the fha's mutual insurance

fund. given the seriousness of this housing crisis, it is not surprising fha has sustained significant losses. i was concerned with the president of the budget stated six under $88 million, which you needed to cover fha losses in 2012, premium increases -- increases are expected to -- i want you to update us on the financial conditions. >> as you correctly stated, the information in the budget was outdated on the day it was published. we were waiting to make final decisions about premium increases until we knew the outcome of the supplement. i wish that had been resolved before the budget was finalized, but it was not. that is the reason for what was

shown in the budget. with the $900 million i described, that is the result of our work to recover bad loans to the fha program that are in the supplement. in addition, the premium increases we announced this week, we do expect that the fund will remain positive this year. in addition, because of the steps we have taken, the fund will be in a stronger position when the next actuarial study is done in the fall. that is the most comprehensive look, as you know, looking forward. we do expect that it will put -- changes we made will put us in a significantly better position come fall. we have to be vigilant. we will take additional steps if necessary. the single most determinant of the help of the fund is where how prices go this year and

beyond. we will continue to be vigilant and watch carefully to make sure if we have additional steps we need to take, we can work with the committee. >> what are the opportunities we need to look at? >> specifically for the estimate this year, the only thing that will affect that number are the premium increases. in implementing those quickly is very critical. and the level of loan volume we have this year. our estimates are if we take loan volumes that are more than 20% below our expectations to threaten the fund who the real estimate this year, or, more importantly for next year as we go to do the new actuarial study, the single most important factor is a house prices. our estimates last year showed it would take > a 4% reduction

in house prices this year. it would take a more than 4% reduction in house prices this year to push the fund-. that was before the premium increases. hour after that now is it will take a much larger decline in house prices, much larger than that 4%, to put the fund in a negative position. >> you decided to up -- increase the up front in the annual premium? >> as you know, congress made the decision to include a 10- basis point increase in our single-family program as part of the bill that extended the payroll tax deduction. in addition, we included a 75- basis point increase in the upfront premium. the 10-basis points equates the average loan to about $9 per month for a borrower.

the up-front premium increase is about $5 per month for the typical borrower. the only places where those increases are significantly larger is far jumbo loans -- over six under $25,000. we thought it was prudent to -- $625,000. the size of the long as much larger. >> thank you. the joint federal-state servicing solomon and the summit with bank of america represents a significant monetary award and sends a message to fha programs that there are serious consequences to not following the rules. just last week, so much for two additional letters were announced. it is really important to pursue opportunities to prevent or recover losses.

are there additional measures that fha can take far riskier loans they already have on the books? >> if there are. let me just complement david montoya, our inspector general, and his team for their remarkable work. but they partnered very closely with us and doj to allow us to make those recoveries, not just in servicing settlements, but with the ave and black star. i want to compliment him and his team. the additional steps we could take it -- there are a number of them that require legislative change. i am happy to say we are working closely with your colleagues. there is a bill and in the house that includes a number of the steps that would allow us to step up our enforcement. those bills are the recent regulation on indemnification we

put out that will allow us to further told lenders accountable for those prior loans that did not meet faa standards. >> we all think the fha -- it still remains difficult for qualified americans to get a mortgage today. the market recovery is still very fragile did -- it could have some serious consequences, not only for our overall economy. i wanted to ask you how you balance the continued need for an fha to provide access to credit and making room for private capital to return to the market. >> if you have asked the $64 trillion question. this is what keeps me up that night. this is exactly the key question we have to balance. frankly, it is not just helping

the broader market recover, but if we were to take steps to increase our premium to quickly, to take steps that would hurt the market recovery, we heard the fha fund and taxpayers. our old investments will perform much worse. in the steps that we have taken -- you asked exactly the right question -- what is the effect on the average home owner? we found $14 per month on average was acceptable particularly considering we have record low interest rates today. too many qualified borrowers are not able to get landing today. it is not the pricing that is the biggest barrier. it would be if we went too quickly on raising our premiums. the biggest challenge is the uncertainty that is out there in terms of how people and forced our rules. we have to make clearer what the rules will be. that is why it is -- that is why

clarifying it is important. fha need a clear policy on buybacks. it is why the servicing settlement was important as well. it created a single, clear, strong set of servicing standards and clarified foreclosure processes around the country so the market can move forward with greater certainty. again, it is always hard to get that balance perfectly. i don't think we are ever done. it is a critically important balance. i thank you and the ranking member for your understanding of the ballot. >> very good. i appreciate that. senator collins? >> thank you, madam chairman. i want to go back to an issue that senator murray touched on in her opening statements. i am concerned by the administration of the proposal to fund thousands of project-

based rental system contracts for less than 12 months. the reason i am concern is that short funding these contracts may create a perverse incentive for landlords not to invest in maintenance, to cut expenses because of the risk of whether or not the full appropriation for the remaining of the year is ever going to come through. i am also troubled that some owners may decide to leave the program altogether rather than take that risk. i know this has to be a difficult decision and clearly it was budget-driven, but how is hud going to mitigate these risks to the program and to the residence? >> first of all, let me say thank you are recognizing this

issue. this was one of the most difficult decisions we made in our budget. having run these programs my first time at hud, it was particularly difficult. i know the impact. there are two real risk here. one is an operational risk that we will not be able to mechanically get the contract funded with the short funding. that happened in the past when these contracts were short funded. i can assure you that i and my team have worked very hard to make sure that the operational processes are improved. over the last four years, we have not had those same kind of issues that might spring up from the shore funding. operationally, we've taken a lot of steps to make sure we have processes in place to monitor the unit. will this lead