language was included in last year's bill that would prohibit law enforcement agencies from selling operable weapons to cartels. this request that you are giving us removes that language, saying it is unnecessary. we want to make positively sure, and that what happened does not happen again, and i would hope you would support our insertion of that language again. last year, our commerce justice state bill provided $10 million to expand the capacity of the overcrowded el paso intelligence center, and this is critical for our southwest border information sharing and has the potential to become the border's focal point to stop the flow of narcotics, combat illegal immigration.

it is imperative that the el paso intelligence center and the dea take full advantage of resources available from the department of justice agencies, and i hope you can give us an update on the status of this funny. there have been reports that cartels across the border are attempting to recruit college students to smuggle drugs into the country, and it says minors are more appealing because criminal penalties are later for them. one of the good parts of your budget request is $312 million for juvenile justice prevention programs, and i will be interested in hearing if you think if you are aware of these

border threats to our youth and if some of that money that you are requesting could be put on the border to try to make sure we try to help our youth overcome the cartel overtures. in addition, there is a request to cut of 1.5% from state and local law-enforcement grants, which are very important grants to these counties and local law enforcement agencies along the border that has such a burden with the trafficking that is coming across the border, and i would hope you would help us restore that funding. the valor program is one that i applaud your efforts to put in place, and unfortunately, the number of federal, state, and

local officers who died in the line of duty in america last year increased from 153 to 173. the feedback from the training and research being conducted through valor is very positive, including the alert center at texas state university, which was credited by the two officers that came into fort hood, when the shooter started shooting unarmed military people. but those officers survived, but they both credited their swift response that day to the alert the to the shooter training program that they had received. that is something that i applaud in your budget.

i want to state a concern that i have about the u.s. national park service pushing for construction -- which is in progress -- on an unmanned border crossing the big bend national park in texas. this is not a justice decision, but it is going to affect some of the personnel. i am concerned that this is an area where illegal immigrants can walk across. the water is knee deep, and you can walk right into big bend. having an unmanned border crossing i think is insufficient. we are going to talk about that at some point to see if we can get fbi, atf, border patrol,

somebody to man a place like that where it is so vulnerable. last but not least, i am going to ask you some questions about your public integrity unit. i am going to give you full credit for dismissing the case against senator ted stevens when you learned of the corruption within that division of your department. i am going to ask you questions because the report will be public within days. if there is anything that you should take as your major responsibility, it is that the public corruption unit in the department of justice is fair and evenhanded, and clearly, that was not the case in the prosecution of a great friend to many of us and a great patriot for our country, who, unfortunately, was very badly

abused by the department of justice. but i will say you did dismiss the case when you learned of the misbehavior, and i gave the credit on the senate floor for doing that and will again, but i do want to ask you about the report when we have time to ask questions. thank you. >> mr. attorney general? >> thank you. i want to thank you for the opportunity to appear today and for your support to the justice apartment's critical work. i look forward to discussing the budget for the department and how these investments will be used to build on what is our record of success. the president's proposal demonstrates the commitment to augment our important obligation, and that is protecting the american people.

despite the fiscal constraints, the dedicated employees who serve in the office have made significant progress in safeguarding our citizens from terrorism, cyber crime, and from a range of threats that often threaten the most vulnerable members of our society. we have proven our commitment to acting as stewards of precious taxpayer dollars. in the most recent request, proposed spending increases have been exceeded by proposed cuts. as a result of numerous steps taken to streamline operations, almost $700 million worth of savings have been developed, and we invested in critical mission areas. i believe the department is more efficient than ever before. recent achievements, especially when you consider our national security efforts -- by

continuing to work alongside u.s. and international partners, we have identified and disrupted numerous alleged terrorist plots, including one by two iranian nationals to assassinate the saudi ambassador, and we have secured convictions against a number of dangerous terrorists. in october, the department obtained a guilty plea from abdul mutallib. in november we secured the conviction of a notorious arms seller. the list goes on and on.

with the sustained investments included in the budget for the comprehensive national cyber security initiative, the joint terrorism task force, and other key national efforts, the department will be able to strengthen our surveillance and intelligence gathering capabilities. it will allow us to bring our fight against financial fraud to a new level. on monday, the president issued a proclamation to mark the beginning of this year's consumer fraud protection week, and i know the justice department branch has established a record of success in defending the interests of american consumers. in 2011 alone, our consumer protection branch obtained a 95% conviction rate, and

obtained sentences totaling more than 125 years in prison against more than 30 individuals. this represents a remarkable progress, but is only the beginning. since the start of the administration, the justice apartment has signaled an unwavering commitment to combating and preventing a wide range of financial and health- care fraud crimes, and we have taken steps. charges have been brought against numerous ceo's, board members, and other executives of wall street firms, hedge funds, and banks who have engaged in fraudulent activities. we have attained prison terms of up to 60 years.

just this week we secure a conviction against a former board of directors. the task force has established new working groups, the consumer protection group, which will enhance civil enforcement of consumer fraud and the residential mortgage bankers group, which will help investigate and prosecute abuses in the housing market. both will foster cooperation and collaboration in the department's response to problems. a similar approach that the departments of justice and housing and urban development and 49 states attorneys general to achieve a settlement.

this agreement builds on the record of fair lending obtained last year and will sustain relief to homeowners. it provides a blueprint for future collaboration across government and party lines. there is no better illustration of our progress than the work to combat health care fraud. in cooperation with the department of health and human services and others, by utilizing authorities provided under the false claims act and other statutes, we were able to recover nearly $4.1 billion in funds that were stolen from federal health-care burdens, and that is the highest amount record in a single year. we also opened more than 1100 new criminal health care fraud

investigations, secured over 700 convictions, and initiated more than 1000 investigations, and for every dollar we have spent, we have returned $7 to united states treasury. these numbers are stunning, but my colleagues recognize we cannot be satisfied, and this is no time to become complacent. that is why in addition to helping us build on this record of success, the budget request will bolster our fight against drug trafficking, gangs, and cyber criminals, and increase efforts to protect the law enforcement officers who keep us safe and expand on the work being done by our civil rights division to guarantee the rights of all americans are protected in border areas and work places and voting booths. i am committed to build on these and the other many achievements, and you understand in this time of uncommon threats and complex challenges we simply

cannot afford to cut back on the amount and quality of justice that we are obligated to deliver. the department must remain diligent in protecting and enforcing the law, and these efforts must be funded. i look forward to continued to work with the members of this committee to accomplish this, and i will be happy to answer any questions you might have. >> thank you, mr. attorney general. we will now turn to senator shelby. he has a banking committee that he must attend, and then i will pick up with senator hutchinson. we will recognize members in order of arrival and follow the five-minute rule. >> thank you, madam chairman. good morning. two key justice department

facilities will soon be operating -- the fbi's terrorist explosive device or analytical center, and the national center for explosives training and research. these assets will help officials deal with a growing threat posed by terrorists and criminal use of powerful explosives. you and i have discussed these previously, and you agreed then that the missions of these groups are distinct but complementary, and that makes sense to collate them at redstone. can you describe how the department of justice will utilize these agencies?

>> it deals with the examination of the ied's that we see coming out of afghanistan, and the agency run by atf deals with the other, the more prevalent explosive devices we see, and you're right. they have fundamentally different responsibilities, but they complement one another, and the location of them in that place makes a great deal of sense. >> could you describe locating these in the same arsenal? >> there may be breakthroughs they can exchange with people relatively close by. having the agencies responsible

for explosives determination and prevention having been close by, although distinct roles, have been pretty well delineated. it is clearly having them there and talking to one another. [unintelligible] >> highest per-capita ph.d. communities in science and engineering. >> there are a lot of smart people there. we use smart people when ever we can find them. there are a lot there. that is fair. [unintelligible] >> and pay for it. attorney general holder, the justice department is seeking funds to activate a new women's prison in alabama. this present was designated as a female-only facility based on input from your department, and

it cost nearly $250 million. [unintelligible] >> we want to activate it. it was specially designed to deal with the unique needs that female prisoners have. we have a need to expand our capacity to handle female prisoners in the federal system. given the fact the facility was specially configured, it would be our hope to activate it as quickly as we can. >> it is finished, and i would hope he would do that soon, because activation cost hardly anything compared to build. >> the need is clearly there for the expanding female

population that we see in federal prison system. >> is that a priority for you? >> we want to bring online as many of these facilities that we can, and this is one that is extremely close -- we're just about ready to open it. >> thank you very much for taking me out of the order, and i appreciate it very much. >> mr. attorney general, i have two questions -- i have many, but i will submit them for that record. federal prisons. as i look at the department's budget, almost 1/3 of the justice department money is going into federal prisons. that amount is now at $6 billion, and is rapidly approaching almost what the fbi budget is coming $8 billion. my question is, what is going

on with federal prisons? people are incarcerated -- we want the bad guys and gals off the street. we want you to prosecute and incarcerate, particularly where there are people who constitute a danger to our country or our communities. i do not know if we can sustain this growth, and i am concerned about once we put them in, it is a revolving door and keep expanding their presence with the same people. they keep coming back. could you elaborate on the department's needs? is there any recommendation you would have to contain the prison population? are we federalizing too many crimes? is recidivism the problem? this is an ever increasing part of our operations.

>> there are a variety of reasons why we see the prison population in expanding. we have about 215,000 people in the federal system. that number goes up every year. for that reason we come back to this committee asking for additional funds. there are a variety of reasons why you see people coming into the system. we are good partners with our counterparts, help them to the extent we can, so some cases that violate federal and state law and if we have serious criminals, we bring into the federal system. the point you hit on, something we need to focus on, how can we rehabilitate people so we cut down on recidivism? one of the things we talked about is the second chance act, coming up with ways we make available to people reentry possibilities so they have the chance of not being recidivist,

coming up with educational, vocational, drug treatment programs while they have been in prison. we have seen good success being done with state systems that has been shared by the pew research foundation. we have learned from them in that regard. >> i want to go forward to specific recommendations, where our federal and law enforcement to prosecute and get bad people off the street, whether terrorists or terrorizing a neighborhood, like some of the drug dealers in some of my own communities in maryland. at the same time, we do not want our federal prisons to be an incubator for more crime, where the lessons they learned when they could is not commit crimes again, but how to be better crooks. we want our presence to teach them how to be better citizens.

and then to come back to the community support system where they do not fall back into the situation that got them there. i am concerned that our federal prisons are such that we need to look and evaluate and learn these lessons. we want to work with you. you are very experienced in street crime. it takes me to the other area while you have done this fantastic job of fighting terrorism, keeping america safe. it has been stunning what our national security services have accomplished, the military, and some believe -- i will come back to streets and neighborhoods. we have communities that face crime every single day, and we talk our local law enforcement, our local prosecutors' offices and so on, and they feel they are under the gun. they need grants, cops on the

beat, and so on. do you feel that this is sufficient funding, because in the last couple of years, in 2010, we had $3.7 billion that went into state and local grants due to acts of congress and so on. now we are down to $2 billion, and yet everywhere i go in maryland, from our local police commissioners to local district attorneys, state's attorneys, as they're called in my state, people say we need those justice department grants. they give us better technology, tools to deal with violence against women. they need you. they love having you as a partner. do we have enough money in the right places to do the job to protect our communities? >> we have in the request, $2.04 billion for state and

local assistance programs, $290 million for cops, $412 million for the office of violence against women. this is a level equal to the level we requested last year. it is lower than numbers you had said. given the budget realities we face, the amount we have requested is strong on law enforcement, science, victims. would i like to have more money? yes, but the budget realities we confront and the need to stay within a budget in the executive branch have gone to this point. through the provision of this money, through the assistance we can also provide to our partners, we can i think do the job. i met with the association of attorneys general, and the

partnerships we have is an unprecedented one, and the combination of the partnership and the money we're seeking here will allow us to be a good partner. >> i will turn to senator hutchison. what i would find it helpful is two things -- if you look at your grants, cops on the beat, what was the amount of money requested by state and local people to apply for those grants, and what could you find. my time is up. i would like that for the record. the second thing is the gao report raises issues related to duplication of services, and i would like to have your reaction to the gao report on how we can streamline, get more efficiencies. i think you are already on that road.

>> we will have questions for the record, but i wanted to pursue this public integrity unit's conduct against senator stevens. the court appointed counsel after you moved to dismiss the case. the court appointed counsel to investigate the prosecution of senator stevens and found the prosecutors engaged in systematic concealment of evidence, but they were not guilty of criminal contempt. according to the summary that was put out, the full report coming later, it said -- the court said despite findings of

widespread and the intentional misconduct, the special counsel recommended against contempt charges because prosecutors did not dissipate a clear and equivocal order by the judge as required under law. the judge set upon review of the dock and proceedings in the stevens case, he concludes no order existed in this case. the court accepted to repeat its representations of the subject, that they were familiar with their obligations, they worked complying, and proceeded in good faith. does it concern you that the only reason these prosecutors escaped charges is that judge in the stevens case did not file an order specifically telling the prosecutor to follow the law? >> you have to take into account a variety of things. when i was made aware of issues that led to the inquiry that judge sullivan ordered, i made

sure the case was dismissed. i ordered the office report be done as an internal report, which has now been completed. it is in its final stages of being worked on. >> will it be made public? >> i hope we can. there are privacy interests, but i hope to get as much of the report made public as we can. it is an exhaustive study, and the people have done a good job and have made recommendations with regard to sanctions that ought to be made. i hope we will make that available. >> i am going to request that you do. >> i am not at liberty to discuss the report. we have gotten a limited number of those reports, and we are under orders by the judge not to discuss those.

i have had a chance to review the summary and portions of it and some of the findings made there are disturbing. they were disturbing when i made the decision to dismiss the case. we have done a lot since that time to come up with ways to prevent this kind of mistake from happening again. we have a training program. we have hired somebody responsible as a coordinator to make sure discovery in criminal cases and civil cases so we do not fall back into this same kinds of errors. we have talked to members of the judiciary, all to make sure that what happened in the case does not replicated. i would urge everybody to understand that this justice department, when we make that determination that mistakes occur, took the extraordinary case -- stepped up dismissing the case. >> i give you full credit for that.

four of the six prosecutors who were investigated opposed releasing the report, and their names have been redacted. i want to ask you if any of these prosecutors are still in the justice department system. >> i have to check that to make sure, but i believe all prosecutors who were involved in that case are still in the department. i believe that is true, but am not totally sure. >> does that trouble you that there would be a finding of misconduct in such a sensitive area that they would still -- that you would not let them go outside of our justice system? >> it depends on the nature of the misconduct it is that they did, the mistakes that were made. one has to look at the report that is about to be released, combined with the opr report and recommendations for sanctions contained in that

report, to look at what exactly should happen to these people. was the incident isolated? >> are you going to do that? are you going to make a decision regarding people who have clearly exhibited that they do not have the integrity to prosecute in the sensitive area? will you tell the committee what your actions are when you have made that determination? >> the actions we take -- there is no privacy act that prevents us sharing with the public what we have shared with this committee. >> i ask that you report that the committee. thank you, madam chairman. >> thank you, madam chair, and thank you, attorney general, for your service. you established a new working group.

thank you for that. i want to talk about that, but last week the former chair of the financial crisis inquiry commission observed the number of lawyers and other staff of the working group -- i want to mention that is fewer than the 100 professionals dedicated to the bank fraud task force during the savings and loan era. he suggested congress should extend the statute of limitations for financial institutions fraud up to 10 years as congress did in 1989 when it passed the federal institutions reform and recovery enforcement act. you are aware of the public sentiment of anxiety, frustration and outrage toward the fact that so few people have been prosecuted.

talk to me about the working group, the dollars you are dedicating, the increase you are asking for. is it going to be going into the working group, and comment on the recommendation that the statute of limitations, when it was lengthened to 10 years by congress then, it that is something we should do. >> first off, i will say this whole mortgage fraud problem -- scandal -- that we're dealing with is something we have taken seriously. we have brought charges against 2100 people last year in connection with the mortgage problem. the number of people, 55 federal personnel to go to this task force, that is the federal component, but one unique thing is we're working with partners

and states attorneys general, so the number of people who will be devoted to that task force will be substantially greater than that, and i suspect we will be adding people from various offices around the country. we're looking at up to five that will be intimately involved, so that number will ultimately go up. we will have adequate resources to do the job we need to do with regard to the residential mortgage-backed securities working group. with regard to the extension of the statute of limitations, that is something that i will be glad to discuss with members of this committee after i have had a chance to speak with the prosecutors on the ground to see if that is something that we need. we want to use all the tools we have and consider any possibilities we might want to acquire so we can hold accountable the people and institutions have had a

devastating impact on the economy and continues to have a lingering impact, particularly on the housing market. >> we will reif following a on the wisdom from your office that in the middle of these cases, the importance of that extra five years in the statute of limitations. let me talk about gas prices. oil prices are now over $100 a barrel. the cftc have told us inventories of oil are sufficient, domestic production is up. consumption is down, all reasons the gas prices should not be going up, understanding the turmoil in the middle east and the discussion of iran. it is my understanding that some analysts have estimated speculation may be adding 50 cents to the price per gallon of gas.

it is my understanding doj organize the price broad working group to pick determine the role speculation prep review potential price manipulation are having on the price of gasoline. what are your neck steps and what can we expect? >> networking group continues in effect. they are discussing the situation that we find yourself with these rising gas prices and the working group itself will be meeting before the end of this week. the work of that group has been ongoing and looking to see if there are inappropriate manipulations of the market. the ftc is also working in this area. i understand that are working on a report of some sort that we should be seeing relatively soon. within the department, that working group has been active

and has a meeting today -- a meeting that will happen by tomorrow. >> i would like to request that after that meeting that the task force read me and other members of the subcommittee who have expressed interest. >> we will certainly do that. >> we really would like to see that. this is very, very important. i will turn to senator mikulski. >> mr. attorney general, welcome this morning. i want to follow on senator hutchinson's questions regarding the prosecution of senator ted stevens. i think so many of us were radically shocked. i was horrified as a friend and an alaskan to read judge sullivan's comments that this ill-gotten verdict not only

resulted in him losing his seat, but in his words, tipped the balance of power in the united states senate. pretty powerful in terms of what the department of justice did to a great man. i appreciate and i recognize and i thank you for your actions in dismissing the case and in your decision to not attempt to retry and i join senator hutchinson in that. there are questions that still remain. you know that. i have a long series of them. what i would like to do is submit them to you today and ask that you respond to them prior to the release of the report which is due to come out next wednesday the 15th of march. i would appreciate your attention to that. i have a question regarding

what is happening now with the release of this report. "usa today" reported the part of justice has spent $1.8 million in defending prosecutor from allegations that they broke the law in the stevens prosecution. senator grassley was one who mentioned that it things like this is an unseemly high amount of money being spent by the taxpayers to defend what appears to be egregious misconduct again, center hutcheson has noticed -- noted the word that judge sullivan used in his report saying it demonstrated significant widespread an intentional misconduct by prosecutors. i understand that the $1.80 million went to attorney fees to defend the actions of the justice department prosecutors who were under investigation for content by the council appointed by judge sullivan. the report of that council is due to be released on the 15th. in addition to spending taxpayer money to defend your attorney, did the taxpayers also

pay for the attorneys to argue that the contents of this report should not be publicly released? you have stated that this is a matter that has risen to a level of public attention. if you can answer that question for me, and also whether the justice department supports the merits of the appeal that has been raised by mr. edward sullivan, who is one of the prosecutors at the u.s. court of appeals for emergency stay to prevent the release of this report next week. the question is whether you support the merits of that appeal, and again, whether or not the taxpayers are on the hook to pay for his attorneys to argue that this report should be kept from the public. >> i don't think we take any position with regard to what he has said about his desire to

keep the report sealed, but the justice department has indicated that we do not object to the release of the report. i think that given the issues we found there, the magnitude of the case, and the magnitude of the errors that led me to dismiss the case, that there is a legitimate public interest in knowing as much as we can about what happened, why it happened, what steps the justice department has taken in connection with these findings of misconduct. glaxo is the justice department paying for his attorneys' fees in this matter to keep this from being made public? >> i don't know about him specifically. i know that as a result of the charges that were brought against him, i think the determination was made that there would be a conflict of interest for the justice department to defend them, which would be typically how we would do it, and they were allowed to get outside counsel and under the regulations, the justice department then pays for those legal representation, which has happened in a variety of circumstances.

former attorney generals have had lawyers that have been reimbursed by but the government. i am hoping i will have to do that, but other attorneys general have very grex even now that the independent counsel that judge sullivan had appointed, even though that counsel has found that members of the stephens prosecution had engaged in significant, widespread and at times, intentional misconduct -- does the government have any recourse to recover the funds that have been paid for their attorneys these? when they have engaged intentional misconduct? you mentioned in your comments to senator hutcheson that after the office of public responsibility report that there may be sanctions that we

will see, but is their recourse? are you pursuing any recourse? it seems to me that in an instance like this where it has been made clear that peak conduct was intentional, that it was substantial, and it was widespread, that we should not be defending and paying for the attorney's fees to again allow these individuals to conduct such acts, and then to learn that they are still within the part of justice does not give me much confidence. >> certainly one of the things that happens is that because the justice department cannot represent these people and they have their own views of what happened, they want to be able to explain with counsel -- defend themselves. cut that is why the expenditure of money actually occurred and why they were allowed to get outside counsel.

as i said, that has happened not frequently, but it hasn't happened in the past, and we acted with regard to them as we have done in the past with regard to the retention and outside counsel. >> i would think that $1.80 million to go to defend these attorneys who had engaged in intentional misconduct is just stunning to me. i would like to think that there could be some recourse. >> it is important that you had the opportunity to pursue your line of questioning. the situation that has been presented by you and senator hutchinson reminding the committee is deeply troubling. we must have public integrity and an independent judiciary. regardless of which party is in the white house, we must have a justice department that we believe in and that the american people believe in. i know the attorney general will be responsive and we will take it from there.

>> i just want to thank you for those comments and agree wholeheartedly. i do think the attorney general took a major for step when he dismissed the case. that was huge. but now we must follow up so that there is no question that the people who did this, and the report will show what average shows, that they are not able to prosecute ever again, ever. >> thank you, madam chair. general, welcome to the committee. thank you for being over here. i just want to add my voice to something that was said earlier about prison overcrowding. i could go through the facts and figures on that but you know those better than any of us do. it is just a real concern. one of the presence on the short list is actually in arkansas, and in fy 2010 it was scheduled to be funded in 2014. now keeps getting pushed back and now it is in 2018.

just an example of not being able to get to some of the real needs we have. i know i am not alone in that, so i just want to voice my concern there. let me ask about sequestration. i am curious about what in the justice department view -- what will happen to doj funding and what steps you will take. >> in node justice component would be exempt from those cuts. from an operational perspective, we would have to cut funding and non personnel funding. we are estimating that we would

have to kick furlough all position types including the federal agents and attorneys who try and investigate cases. we would have to lose a substantial number of jobs. this across-the-board cut would have a devastating impact on the justice permits ability to protect the american people, to do investigations. it would be something that would just simply be devastating. my hope would be that congress will find a way to avoid this sequestration, which from my own parochial interests, which are the nations as well, to really avoid the very negative consequences that could have a permanent impact on our well- being. >> you mention these furloughs, but i assume you'd have to

suspend the funding of many of your programs that help local and state law-enforcement agencies. >> that is an excellent point. the consequences are not restricted to just the justice department in washington and our field offices. they would also be impacted by the reduced amounts of money we would be able to share with our state and local partners in terms of grants and local cops on the beat. it would be a devastating thing for this to happen. >> let me ask about personnel, there are about 1600 prosecutors and 1200 public defenders in the last fiscal year the received assistance under that program to help pay off their student loans etc. but this budget that has been submitted does not have funding for that program this year. my concern there would be that we want the best and brightest out there trying cases on both sides. this is public defenders and

prosecutors, and it is critical we have good representation on both sides. i am afraid we are going to lose a lot of talent if we don't have a program like this. i was wondering if you share that concern and what steps you think we can do to try to keep the best and brightest coming on board. >> i do share that concern. we want the best and brightest to come and take what are low- paying jobs on the prosecution and defense side. these younger people coming out of law school with the enormous amounts of debt, and i don't want them to make career choices based on how they are going to repay those loans as opposed to following their passions, and take their great skills to become members of the justice department, state and local prosecutors' offices, or on the other side, to be good defense attorneys. that is one of the things i am

concerned about. we have a tough budget and the money is not there to the extent that it was in the past. to the extent that we can work on ways to come up with creative things to do to make sure those career decisions -- especially those first job career decisions by people coming out of law school, is not a function of their financial concerns, but really a function of how they want to help build a better society. >> i don't really have time to ask another question but i would like to make an observation. the chair of the subcommittee hearing yesterday took a leadership role in a cybersecurity exercise in a classified setting, and we appreciate her leadership on that. it was very informative and interesting. i know the department of justice has been very involved in what is going on with federal government,

cybersecurity issues and everything you are working on. i also hope that you will not neglect the private sector as well as state and local governments, because they have a role to play in this as well. >> this is not something the federal government can handle by itself. this is a national security issue and also an infrastructure issue that involves our state and local partners. one looks at just the amount of intellectual property theft that occurs, so that the private sector has to be involved as well. we have to come up with a means by which all of those various components talk to one another if we ultimately want to be successful in what i think is the most pressing thing we will be facing in the coming years. >> thank you. >> i want to go back to the question senator pryor raised

about the impact of sequestered. can we have that answer in more detail in writing so everyone will have a chance to study it and go over it in programs, so we can really grasp the full consequences. >> i would like to add my voice to what you just echoed and senator pryor, that sequestration would be devastating to the bar of justice and our ability to defend ourselves, and destroy the military. surely we can find a better way to do it than that. i think you are dead on, this is just an ill-conceived idea of cutting money blindly, in my view. you were in self carolina a couple of days ago, is that right? >> yesterday. >> we were glad to have given hope to spend money while you are there. the national advocacy center in columbia you visited, what would you tell the committee about it in terms of being a value to the nation?

>> it is an invaluable resource. >> did you all hear that? >> it is an invaluable resource for the training that goes on in the justice department. i think it could actually be expanded. i am concerned we are not interacting with our state and local partners to the extent that we once did in doing training with them. we are trying to bring into the advocacy center people from the defense side as well. it is where people learn to be good trial lawyers, learn the ethical obligations. >> we appreciate your visit. it is a place where cybersecurity is the issue of the 21st century. it depends on who is involved, but a lot of local law enforcement folks probably have no idea how to handle this, and it would be a good way to educate the country as a whole. the collaboration with the university of south carolina i

appreciate. we took 200 or 300 departed justice jobs out of washington because after 9/11 we were worried about having every part of our government in one city. we moved those folks down to south carolina and columbia can and lease the building from the university, saving about $35 million. i want to applaud you for trying to be creative, to decentralize the permit justice we are ever attacked here, we don't lose all of our national assets. >> we have that relationship with the university about the rule of law component as well. quinn has been a good synergy. >> we are trying to develop a rule of law program without some -- without some basic rule of law, no country can develop. all of the lessons we have learned the hard way from making mistakes and finally

getting right. and those who have been overseas can share their thoughts about what worked and what did not. you could train before you went. the part of justice, agriculture, defense, this is a team. this war requires a team concept and we are trying to reach out to the islamic world and create partnerships with lawyers and attorneys general and judges in the islamic world so we can understand each other better. i am excited about it and i appreciate your support. justice scalia came out talking about he thought it would be wise if we looked at our federal criminal code, particularly in the drug area, and see if we could reform it. i think he is right. i think we federalize way too many crimes, creating work that could be better handled at the state level. what do you think about the idea of revamping the federal criminal code and undoing some of the over federalization?

>> when i came into office, i'd put in place a number of working groups to look at that issue. are we bringing the right people into the federal system? are the sentences for the federal crimes appropriate? >> like crack cocaine. that was sort of an indefensible sentencing disparity. >> the bipartisan effort that resulted in the lowering of that ratio was something that was long overdue and i think it was a great example of republicans and democrats getting together and doing the right thing. it was something that was morally right as well. >> the recess appointments made by president obama a while back

to the nlrb, is there a situation similar to that in history of the senate of appointing someone to a federal agency under those circumstances, that you are aware of? >> if you look at the 23-page report by the office of legal counsel, they go through a variety of precedence. they look at a loss -- look at tradition and the conclusions they reach was that given the links of the recess, 20 days or so, that the appointments were, in fact, appropriate. it is obviously something the courts will ultimately defense predict ultimately decide, but i think the opinion was accurately cry. >> i think center alexander will have a discussion about that. i think maybe it was last week we had a plea bargain could the military commission detainee who is one of the ksm close

confidence. i do support the article for terrorism trials when appropriate. one should not lecture support for military commissions inappropriate circumstances, and with your help, i think we have these things up and running. i look forward to more action coming out of guantanamo bay to get some of these people through the legal system. to all those at guantanamo bay doing your job, you are doing the country of great service, particularly the defense counsels. >> people should understand that when i send people down for military commission treatment, the result -- as i said in a speech at northwestern, many of the elements of due process that we consider vital to the american system, we have great defense lawyers down there. the military system does not get the credit it deserves for the fair way in which it deals with people and under the direction of mark martinson, i

think we will be proud of the work they do. >> thank you very much, mr. attorney general. i thank you and others for mentioning this cyber exercise yesterday. next week we will hear from the fbi can do an open hearing and then a classified hearing. this will be an opportunity to ask many of your cyber questions and go into the level of detail of the committee would like. >> thanks very much, madam chairman, and welcome, general. i want to associate myself withy comments of senator hutcheson and senator murkowski. to meet the tragedy is that ted

that elevates this to a new height. i think this investigation is really important, and i think that actions have to be taken. i just wanted to express that. i wanted to follow-up on senator brown's comment. it is my understanding that there is more oil available in the united states than demand calls for, and as a matter of fact, surplusage being sold outside. i think this would bring to special attention the issue of speculation, and i hope the study you are doing is going to take a good look at the financial marketplace with regard to its ability to impact price in this way. >> as i said, the oil and gas working group we formed last year as part of the president's financial fraud enforcement task force has been meeting. it just happens that they are having a call today at a meeting either tomorrow or on monday.

the full committee will be getting together to look at the issues you have raised. >> thank you. as you know, title 7 of the foreign intelligence surveillance act expires at the end of the year. this allows for electronic surveillance of targets outside the united states. senator mikulski and i both serve on the senate intelligence committee and we have done extensive oversight of the government use of the surveillance authorities. i live for to working with you to make sure congress can reauthorize title 7 well before the end of 2012. we need to maintain collection of critical of foreign intelligence and provide certainty to intelligence professionals in that regard. for members of this committee that don't follow this issue closely, could you explain need to reauthorize title 7 and the

efforts taken to protect the civil liberties and privacy of americans at this title is carried out? >> their surveillance authorities in the fisa a minute are critical to our national security. on a daily basis, it is a critical tool that we have in keeping the american people safe. the administration strongly supports the reauthorization and hope it occurs well before the end of the year so the certainty that is needed by the men and women in our intelligence community will have some degree of assuredness that those schools will remain there and that our fight against those who do harm to the united states can continue. >> i also want to thank you for your enormous help and the help

of the fbi with respect to national security. the fbi now has some 15,000 people located around the united states, essentially doing intelligence work. that transition has been effectively made. corrector moeller at a worldwide threat hearing indicated to us that in the past year there have been 20 arrests in the united states of people in this country planning or participating in attempted terrorist attack. as you mentioned in your recent testimony, amar farooque abdul mutallab was recently sentenced to life in prison. i also want to say that even though specific activities are classified, in your written testimony you mentioned the high value detainee interrogation group. i can say that we have seen me excellent intelligence it is

producing. earlier this week, the more principled members of hacking groups were charged with computer hacking and a fifth member pled guilty. now to my questions. i think we have to begin to look for redundancy and duplication of effort. we now have a counter-terrorism center, homeland security intelligence, and we also now have the fbi. so i hope you will take a look it that, because the dollars are precious, and we are already experiencing cuts in the intelligence budget. copper so here is my question. what are your budget reductions

in the national security and area? what will that mean for counter-terrorism and are there any gaps in our efforts? >> i think we have adequate amounts of money contained in the budget that we have requested. if you look at the amount of money or -- since 2001 we have had a 300% increase for the justice department. it might have been 400% for the fbi. even with the black budget we essentially have for the justice department and its components including the fbi, i think we have adequate amounts of money to keep the american people safe.

to the extent i feel that is not the case, my voice will be heard. >> thank you, madam chairman. >> i was thinking about a conversation we had during your confirmation. i was a law clerk, or when he was judge, and one of the things he used to say is that the attorney general is the lawyer for the united states, not just for the president. in following up on the comment on the so-called recess appointment, i want to ask a question as the lawyer for the united states, if the president calls you up and says general holder, i noticed the senate has gone into recess for lunch. i have a supreme court nominee i want to appoint. can we put him on the court without their advice and consent. what would your answer be?

>> that would not be a sufficient recess, going to lunch. >> levy said they would not be back until tomorrow. would that be a sufficient recess? >> i am asking your opinion, mr. attorney general. >> do you agree with it? >> yes. >> that means the president, not the senate, can decide when it is in session for purpose of advice and consent? >> one has to look at the totality of the circumstances in determining whether or not the senate is actually in session as that term has historically been used and the determination that was made. >> was your deputy solicitor wrong when he told the supreme court in a letter that two years ago, the senate act by declining to recess for more than two or three days at a time.

was senator reid wrong in 2007 when he really devised the plan for pro forma three days' sessions because he said he heard that president bush was about to make recess appointments? they want to make several recess appointment. as a result, i am keeping the senate in pro-forma to prevent recess appointments until we get back on track. president bush did not like it, but he respected it. are you saying that the president, not the senate, can decide when it is in session for purposes of a recess appointment?

>> what we have to do and what we have done is look at history, look at president, look at the law. you some common sense when it comes to the approach of whether or not the senate is actually in session. >> was senator reid wrong? >> with regard to that 20 days when those cause the senate had decided it was in a three-day session. was he wrong about that? >> i would have to look at exactly what occurred during that three day period, but in this instance, the determination they made was correct. >> i don't see why the president's could not look at the senate and say i am going to send up a supreme court justice and skip advice and consent. i am astonished by this and i would think democratic as well as republican senators would honor the reid formula that president bush honored.

the president made four appointments during at a time when constitutionally he should not have. >> the determination was not made by the president. it was made by the office of legal counsel and they shared that opinion with the president, and he made the decision as to what he wanted to do. >> he made the decision not to respect the senate's decision about when it is in session or when it is not, which is a blatant disregard for the constitutional system of checks and balances, and something we ought to avoid. last year the department found money to support the work against methamphetamine, and i complement the department for that. i noticed a getting increasingly harder. we have the highest number of meth lab seizures in the nation in our state. will the department again be able to try to help states that are working on this, as you were able to do last year? >> we will try to do as best we can.

what we have seen with regard to the cleanup of the meth sites, there have been a number of container activities. >> instead -- comes down to $20 or $30. the experience we have seen there is something we have to extrapolation and use in other parts of the country as well. >> thank you, general holder. thank you, madam chairman. >> the chair of the judiciary committee. >> good to have you here. if i could follow up a little bit on what my good friend from tennessee said on the recess appointment, there is an easy way out of all of this, you require the cooperation of both

sides. a suggested this in the judiciary committee, that the president resubmit the nominations and the republicans agree to have an up or down vote in another week or two weeks. even though there's more than 50 votes, my friends on the other side of the aisle were blocking having a vote. i understand the president's frustration, but the easy way out of this is simply the republican leadership would agree to an up or down vote within a week or two weeks. whatever amount time needed, resubmit them and have an up or down vote.

that takes care of all the problems. i just suggest that as an easy way out. it is not as much fun on the talk shows. mr. attorney-general, your department administers many crucial grant programs that help victims of law enforcement. the ones i have been involved in include the violence against women act. we have a reauthorization bill on the partnership program. the government accounting office has said there are duplications and inefficiencies and some of the grant programs.

will your department work to make sure that if there are any duplications, that they be removed and that we go forward, because these are good programs, but there is only so much money to go around. >> that is exactly the problem we have. we have to make sure there are not duplications. managers regularly meet to coordinate the programs their and their activities. people should not assume because you see the word victim in a number of the things that we do in the department that necessarily means the money -- that we are duplicating efforts. they have very distinct responsibilities, but we are working to make sure that the money to have is being used in an efficient and appropriate way. >> one of the things i am very proud of is a bill that i wrote on bulletproof vests. by a walk down the street in

denver colorado and a police officer came up and ask to of was, and he tapped his chest and said thank you. we have been told by the gao that there are some funds that have not been obligated on the bulletproof vest partnership grant program. law enforcement, especially in the smaller communities where they do not have the budget to buy the bulletproof vests, which are about $600. can you check to make sure these funds are obligated as quickly as possible? >> to the extent that funds were not drawn down, we are taking steps to allow jurisdictions to use that unused funding and have the time expended so we can get these bulletproof vest out to these officers. >> of would reiterate what i

told you when we chatted earlier this week when i was in vermont about your speech earlier this week about groans and targeting u.s. citizens. i still want to see the office of legal counsel item. i would urge you to keep working on that. i realize it is a matter of some debate within the administration. >> that would be true. >> keep my staff and the updated on the progress in the review of nypd surveillance of muslim americans. lastly, i wrote to you and the secretary of homeland security janet napolitano to encourage you to hold marriage based immigration project in light of the decision to no longer defend the constitutionality of the defense against marriage act if the defense of marriage act,

that it would be granted individual cases. i hope you will reconsider the administration's position. i have written to you about francis herbert who is married and legally in vermont, or states where same-sex marriage is legal but then they run up against the immigration problem. >> i will look at that case and get back with you. >> thank you very much. >> welcome, attorney general holder. the job does not seem to be getting easier. i am not blaming you, i am just

sympathizing. not so much that i won't ask for more, because we are dealing with less. we see it in my state of new jersey. 246 and gun murders in 2010, 12% more than the previous year. we have had layoffs galore, from cities that cannot afford to maintain their police force structure. when i look at things we are doing, i worry about what it is that we can do from your department and from others. what can we do to help these communities?

state budget cuts in new jersey to cut their police force at alarming rates, a third of the police force in camden, over 100 and terminations of police officers in newark. i wrote asking if you could provide a federal resources to assist our ailing cities. i as to see an increase in the budget for cops. are there other steps we can use to help protect new jersey from violent crime? >> we are certainly making sure that in terms of cost grants that we do the best we can there. we have a substantial amount money in the budget. i just spoke to the mayor of camden at a reception.

in 2011 we made available moneys to higher 14 officers, $3.9 million. we will be looking at that unique situation again this year. we are putting in task forces to help to the extent that we can as well. there are a variety of ways in which the federal government can help, given the economic situation that many cities around the country are facing. we want to be good partners in that way. camden is a place that deserve special attention, given the unique problem that we see there. >> can i ask your view on whether or not you think we are doing enough between your department, the fbi, overstate and local police people?

are we doing enough, based on what we see with the statistics? are we doing enough to say honestly that we are protecting our people appropriately? >> we have crime rates that are at historic lows, and yet i am still troubled by the number of police officers, for instance, who have been killed in the line of duty in the last two years. that is something we have to work on. i am concerned about the fact that although the numbers of murders are down, 67% of them occur by people who are using firearms. that is an issue we have to deal with. to many of the wrong people have access to guns and use them in inappropriate ways. the targets of many of those people are law enforcement officers who are sworn to protect us. we have to do everything we can

to try to protect them. >> the wrong people or the wrong blogs. the man who shot congresswoman giffords last year used a gun with a high-capacity ammunition clip. it was only when he fired all 31 rounds in his clip that people were able to subdue him. these high-capacity magazines were banned by congress until 2004. last year you said you thought reinstating this ban should be examined. what is the result of that examination? >> we are still in the process of working our way through that. we need to be reasonable, understanding there is a second amendment right with regard to firearms. reason or restrictions can be placed on the use of weapons, and i think what this administration has tried to do is come up with ways in which we are respecting the second amendment, yet come up with reasonable, appropriate firearms laws cut that will

ultimately protect the american people. >> over the past several years, the new york police department has been engaged in surveillance of new jersey's communities and universities. searching for those who might be accused of terror. governor christie, mayor cory booker, each apparently unaware of this large-scale investigation. how can that the law enforcement agency spun another state resident without notifying the authorities, without the governor or mayor even knowing about it?

>> i don't know, we are in the process of reviewing the letters that come in expressing concerns about those matters. there are various components within the justice department that are actively looking at these matters. i talked to governor christie a couple of days ago and he expressed to me the concerns that he had. he has now publicly expressed his concerns as only he can. what i read publicly is disturbing, and these things are under review at the justice department. >> thank you, madam chairman. i assume the record will be kept open. >> it will be kept open for questions. we then asked the department to respond within 30 days. centers may submit additional questions and we asked the department to respond within 30 days.

before i recessed the committee, i want to conclude the hearing the way i began. if i have listened to the questions and answers, we looked at the budget in the short time we had to review, i want to engineering the way i began, which is to thank the men and women who work at the justice department. i have been on the subcommittee along time. it has been a great blessing and honor. the scope and complexity of what our citizens and our country face and what are justice department faces, it is an amazing job, from community safety to national safety, in the last decade the expansion in the national security portfolio, and the transformation of agencies, the fbi is not j. edgar hoover's fbi anymore. everybody is out on the street, everybody who is tracking sexual predators, everybody who's doing their job, the prison guards, and all the wonderful support staff, we just want to say thank you. our country is safer because of your work, and we have to look

out for our civil service. we need an independent judiciary, we needed justice department that functions with absolute integrity. we need to know that if you have a crackerjack civil service, we also have to support that crackerjack civil service. so thank you, god bless you, and god bless america. the subcommittee stands in recess until march 15, next thursday at 10:00. the committee is in recess. >> thank you, madam chair. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]

>> we are not sacrificing their lives because their muslim extremists. they're fighting and dying because they want the same freedom that we guaranteed in our constitution. >> if we did i get them together, we're going to look

back and say we missed an opportunity.y ta >> what they have expressed our the concerns and the administration appear we are not holding back. this administration has a lead in iraq and afghanistan. we are working with the elements to bring them together. we have to build a multilateral coalition. we have to be able to work at that. it is not that easy. >> watch this week's hearings and news conferences when ever you want at the c-span video library.

>> and a few minutes, steven chu on the budget request. the new trading commission on financial regulations. then a hearing on the 2013 budget request. >> tomorrow morning, we will still focused on u.s. options in syria. the president of ave maria interstate will speak of the proposal for birth control. he can call in with their questions about u.s. international trade.

it is live on c-span every day at 7:00 a.m. eastern. > >> during steven chu's testimony on the budget request, he was asked about high gasoline prices. he said using the strategic petroleum reserves is being considered. the administration's long-term strategy is to reduce u.s. dependence on oil. this is a little more than two hours. >> i will call this hearing to order. the subject of today's hearing is the fy 2013 doe budget. we only have one witness. that is secretary chu. we appreciate you being here with us this morning, mr. secretary.

we have a lot of questions. we look forward to your comments as well. at this time, i will recognize myself for an opening statement. i would start off by simply saying that i think just about everyone agrees that america's air quality is among the best in the world. there is no question that the obama administration is focused on transforming the energy delivery system in america. the reasons given for that are, to make the air quality even cleaner, and number two, others talk about regulation that create more jobs. i might also say that i never, ever have seen an administration go after one industry the way this administration is going after the coal industry.

president obama, when he was in san francisco, he said they can build coal plants, but they will go bankrupt. even you have made comments about how that coal is. many of the people in the administration, that is fine. that is your view. many of us disagree with that. from looking at the budget that you have proposed, you are asking for an increase of $856 million. in the scheme of things, that is not that much money. we have a $16 trillion federal debt. any kind of increases are a significant in today's atmosphere. when i look at that budget, when i read that budget, it

appears to me that america is moving as fast as it can to adopt the european model for energy production. moving as fast as it can to adopt the european model for energy production. i recently have read a number of articles about the things that are going on in europe. when know that in spain they placed a great emphasis on wind energy. they have an unemployment rate of 22%. there was a udy from juan carlos university that talked about, for every green jobs created there was a loss of two jobs in the traditional industry. it looks like the epa is setting

the energy policy for america. the most comprehensive regulations relate to utilities. mrs. jackson has never been able to give us a total cost. no one has been able to give us a total cost. outside experts have testified it would be up to $90 billion. the epa says he could expect to close 14 gigawatts of coal plants. some are saying it would be re like 36 or 59 gigawatts. there was a november report that indicated ere are liabilities, there are serious issues. yet, whether it is in transportati or it electricity production, this

administration is ming to provide all sorts of grants and loan guarantees to technology, many of which have not proven to be able to deliver. we have a company that is not going to open up a delaware plant. we have better systems that are reducing their employment. my time is running out. i was just reading some the headlines in europe. eu faces 20 years of rising energy bills. when turbine's do nothing for emission reduction goals. -- wind turbines do nhing for emission reduction goals. my whole point is, this administration is moving so

fast, so determined to transform the energy sector in america that i do not think they are giving adequate consideration to the consequences of that. i am one individual representing 700,000 people. that is what i am most concerned about. my time has expired. >> thank you, mr. airman. thank you for being here. it is always a pleasure to have it before this subcommittee. i want to take a moment to commend you for your knowledge, your expertise, and your leadership in directing this important agency at a critical time in our nation's history. as you know, high gasoline prices are on the minds of every

american. my constituents and others are concerned about these high gas prices. although we all understand that fuel prices are influenced by a variety of political factors, to hear my republican colleagues -- it is the president and his energy policy that are contributed enormously to the sky-high prices. of course, you and i will agree that it does t explain why gas prices skyrocketed from just over $1.50 a gallon in 2001 to

just under four dollars a gallon . that is an argument for another time. mr. secretary, as the person who heads the energy department, i would like to hear your thoughts on how the obama administration's policies have helped the american consumers through fuel efficiency measures to promote renewable sources of energy and other forward thinking policies that are necessary to move america forward and to wean us off of imported oil. i would like also to get your comments on the record regarding fuel consumption, at

importation of foreign oil, and oil and gas production during the obama administration. the research i have seen shows that under president obama, we are importing less oil than in any other me in the last 13 years. research also shows that we are producing more oil mel domestically then we were at any time in the last eight years. in fact, presidentbama opened up millions of new acres for oil and gas exploration. thu.s. now has more working oil and gas rigs than the rest of the world combined. additionally, your agency recently reported that the average fuel demand has

actually dropped 6.7% compared to the sam time last year. yet, despite all of these, gas prices have continued to climb much faster, far earlier than in previous yrs. our friends on the other side, those who want to blame the president had a sharp eye towards the november 2012 elections, they are using this as a way to make political hay against the admintration's policies. as you will hear repeated time and time again, the constant refrain of those on the other side, pointing a finger at the president and solely at the

president. i want to welcome you. i look forward to your testimony. i look for it to use setting the record straight -- forward to yu said in the record straight. -- you setting the record straight. your comments in the past, as they have been, will be distorted andsed for political mileage. used for political gain. please inform the american people of the true benefits of having an energy policy that is forward-looking, that will help us plan ahead for the future, so that the congress will t have the sa finger pointing debate , 20, or 30 years down the

road. thank you mr. secretary. >> thank you. i recognize mr. upton of michigan. >> thank you. welcome. today's hearing on the departnt of energy because of budget comes at a critical time for energy policy. gasoline prices continued their march towards and probably past $4 a gallon. we remain dependent on unstable foreign sources of oil. this administration has blocked supplies from coming into the u.s. electricity prices have been increasing every year over the last decade. you raised some eyebrows with e comments on best prices early on and what the administration -- comments on gas prices early on and about

the administration's over all policy. many of us were stunned we have to figure out how to boost the price of gasoline to the levels in europe. last week u.s. with a year overall goal was to lower gasoline prices. -- whether you were over all goal was to lower gasoline prices. you said your goal was to decrease dependency on oil. you are not as focused on reducing prices for families and small businesses. energy households are spending a greater percentage of income on energy costs, leaving less money for food, health care, education, and other necessities. what has the president done to help us? he twice rejected the keystone pipeline project. his solution to higher gas prices appears to threaten our

emergency will supply is -- oil supplies. instead of eliminating red tape, he has imposed costly new regs on our power sector that is going to drive up electricity prices. he began to read that he supports and all of the above energyolicy. oil production opportunities remain blocked, layers of new regs,ostly rules designed to squeeze out cold. -- coal. raising questions about our long-term nuclear project. budgetsident's oposed is not all of the above. it seeks to transform energy portfolio based on unproven and morexpensive alternatives. the budget proposes to slash

funding for current energy resources well increase in funding r high-cost, high-risk energy alternatives. well we support alternative energy sources, -- while we support alternative energy sources, there are questions as to whether or not they produce a healthy overall economy. we welcome your testimony today. i yield the balance of my time. >> thank you. cretary, it is always good to see you. we love have you come before us. today, we are going to talk about the budget. we saw that the total budget request was a little over $27 billion. quote incidentally, i saw that over all the administration spent over $24 billion on alternative energy projects. some of that money has not been

too well spent. i continue to be concerned about celebre -- solyndra. i believe the project haseen mismaned. i'm gng to ask you some questions about what changes have been made in the loan guarantee program. it is obvious that mistakes have been made. some laws have been violated in regards to the subordination situation. i would hope you would be able to tell me tt things are being corrected and those practices of the past will not happen again. we are always glad to see you. we look forward to your answers. i will yield to whoever i am supposed to. if>> i recognize the gentleman from california, mr. waxman. >> there are a lot of energy

challenges and you will be asked about them by members of our committee. the american people are concerned about high gasoline prices. i think because of our dependence on oil, oil itself is leading us to that higher-priced for gasoline. oil is priced by the world market. even if we produce more oil in the united states, that is not going to lower the price of gasoline here because we have pulpit priced at what the world -- we have oil priced at what the world price is. in canada they produce more oil than they consume, yet their prices are just as high as ours. they are complaining about the high price of gasoline as well. when you hear the public say

produce more oil, they are doing what the oil companies want, but it will not reduce the price of gasoline. energy economists tell us the republican pn is not even remotely possible to reduce the price of gasoline. it will have zero effect on gasoline prices. we need to face reality. reality is oil prices are determined on a global market and no matter how much we drill here, our gasoline prices are going to rise if there is a fear about disruption from iran because of the labor unrest in nigeria. they decide to reduce the supply. the demand is increased in china and india. there is only one way we can protect ourselves from the impact of rising oil prices and that is if we reduce our demand for oil. that brings us to another energy challenge that we face.

we have to invest in clean energy to diversify and reduce our energy use. we are locked in competition with china and other countries. if a claim energy is our future and we mark -- we are not investing in that -- house republicans are calling for us to strike those investments -- we are going to lose out on jobs and the future. we need to discuss the enormous challenge of climate change that threatens our econoc strength, our national security, and the health of our citizens. rather than confront this challenge, the republicans deny the science of climate change. democrats and republicans in congress need to have -- seem to have different visions of our future. the president said we need to look at the science and energy

experts and become the world leaders in clean energy in the economy of the future. house republicans deny the science and want to obstruct the president every step of the way. in spi of these constant obstructions and attacks on common-sense policy, the administration has made significant advances. the president has acted to cut the emission of cars and trucks, doubling the fuel efficiency as -- of our fleet. as a result, our energy dependence on oil has declined. the department of energy has made significant investments in renewable energy -- renewable energy. we've seen the results. the solar industry doubled the number of american solar jobs from 46,000 to more than 100,000. the industry has added more than 35% of generating

capacity, second only to natural gas. wind components manufactured in the u.s. have more than doubled. the departme of energy is looking at our weather is asian program. eatherization program. you not hear much about these accomplished from the republicans. they want to talk about solyndra and keystone. the president of the budget did not include enough money for fossil fuels and nuclear power. we will not hear about real solutions om the republicans. they are playing politic we need to getn with thjob of makg sure america is less dependent on oil and wheat have a future and the clean energy sector -- and we have a future

in between energy sector. i yield back my time. >> thank you, mr. waxman. that concludes the opening statements. as i said earlier, we only have one witness today -- the honorable steven chu, secretary of energy. you are recognized for five minutes for an opening statement. >> thank you, chairman whitfield, ranking member rush, chairman upton, ranking member waxman, and members of the committee. thank you for the opportunity to discuss the department of ergy's fiscal year 2013 budget request. to promote economic growth and strengthen security, president obama has called for a strategy part of american energy. the president wants to fuel our economy with domestic energy resources while increasing our ability to compete in the clean energy res.

the 2013 budget request was guided by the president's -- >> excuse me for interrupting you. mr. rust says that he cannot hear you. -- mr. rush says that he cannot hear you. >> i am having difficulty hearing you as well. if the person in charge of audio visual could crank up the game a little bit. -- gain a little bit. that seems to be better. thank you. to promote economic growth and strengthen security, president obama has posted a strategy that the most -- promotes every source of american energy. the present ones to fuel our economy with domest energy resources while increasing our ability to compete in the clean energy res. the 2013 budget request is guided by the president's vion.

it supports leadership in clean energy technologies, science and animation, and nuclear security and environmental cleanup. cades ago, the energy department's support helped to develop technologies that allow us to tap into america's shale gas and oil resources. today, our investments can help invest in -- can help technology. the budget requests is approximately $4 billion. it advanc projects in areas like solar, wind, utilization, and storage. it helps develop next-generation biofuels, advanced batteries, and fuel efficient vehicle technology to reduce our dependence on foreign oil, which places a crushing burden on families and on our economy.

as the president and i have said, there is no silver bullet. we can and must pursue a serious long-term -- diversify our transportation sector, harvest american resources, and create jobs here at home. that is exactly what this budget does. $770 million for a nuclear energy program to help develop next-generation nuclear power technologies, including small market reactors. improved funding for continued nuclear waste which aligns with the recommendations of the blue- ribbon commission on america's nuclear future. as we move toward a sustainable ener future, our fossil fuel resources will continue to play an important role the budget includes $12 million as part of a $45 million initiative by the department of energy, interior, and epa to understand and

minimize potential in our menta health and safety impacts. the budget also promotes energy efficiency to help americans save money by saving energy. r&d on materials and processes to help manufacturers with cost. toaximize our technology and the efforts, batteries, -- we are coordinating research and development and applying research programs. to curb the -- the president has called for extending tax incentives, including the tax credit, the 16l3 program. competing in the new energy economy, we must harness all our resources, including american ingenuity. the budget request includes $5 million for the office of science to support basic research that could lead to new discoveries and help solve the

energy challenges. we continue to support energy- frontier resource centers in terrific problems on clean energy development. it also supports existing energy elevation pubs and supports a new hub. we are bringing together our nation's top scientists and engineers to achieve game changing energy goals. additionally, the budget request includes three under $50 million for a future project beckon fundamentally transform the way we use and produce energy. taken together, our research initiative will rev up america's great innovation machine. in addition to strengthening our economy, the budget requests strengthens our security by providing $11.50 million for the national nuclear security administration. finally, the budget request includes $5.70 billion f t office of the bar middle

management to protect public health and the environment by cleaning up radioactive waste from the manhattan project and the cold war. this budget builds on progress that is meant made by the program. by the end of 2011, the program has reduced its geographic footprint by 56%. the budget request makes huge investments to allow our prosperity and security. at the same time, we recognize the country's fiscal challenges and will cut back where we can. we are cmitted to perform our work efficiently and fectively. countries around the world recognized the clean energy opportunity and are moving aggressively to lead. this is a race we can win, but we have to act with urgency. thank you. i will answer your questions. >> thank you, secretary to. i recognize myself for five minutes of questions. i had mentioned in my opening statement about the utility max,

which is one of the big regulations coming out of epa. the thing that bothers me the most about it is that it was basically explained that the reason we add to do this was primarily for mercury reduction and some acid gas production. i remember lisa jackson talked about it. they talked about this is the reason we are going to save x- thousands of people from premature death. yet in their own documentation, it was very clear that mercury reduction has no significant benefit from utility max. any benefit came from double counting production in particulate matter. i would just like to know, were you involved at all in

formulating utility max or discussing the implications are benefits of utility max? >> we were involved to the extent that when we passed technical information -- for example, potential impact having to do with reliability and distribution of energy. we provided that formation to the epa. that was some of the concerns of the epa -- what power generating stations were -- was there any threat to the delivery system for the continued riability. >> are you concerned that epa had estimated there would be a 14 gigawatt reduction in co- production electricity -- coal production electricity and

someone else said it would be 38 gigawatts reduction? it also raises issues about reliability. the secretary of energy is responsible for the reliability of a lot of these issues. does that concern you? >> we are in discussions with the epa. we look at the mechanism and felt that there were procedures and mechanisms in place so that shouldrican public' -- something occur -- it is not taken as an aggregate for each particular sector that uses electricity -- would the companies be able to supply electricity in a reliable manner? we certainly worwith those agencies to say that there were mechanisms in place should something quite -- should

something occur. of course we have concerns about the reliability. that is one of the very important duties of the department of energy. >> what about -- i am disturbed. i think the epa must lead the american people on utility max. all they ever talked about -- even many of our friends on this side of the aisle, any time there is a public statement, they wonder what the reduction in mercury emissions as. to be. all of the data indicates there are insufficient benefitsrom mercury reduction. if epa is selling it based on that benefit and that benefit is not there, then why would you be moving forward with such an expensive regulation that will potentially affect reliability as well at the increased

electricity prices? >> mr. chairman, i cannot speak directly to the mercury center that the epa is talking aut. it is mostly and mainly because that is not the purview of the epa to protect the air. our role is in determining power distribution reliability, developing technologies to make coal so we can make in this -- we can help industry. >> i just have a philosophical difference, i guess, with you, also. we have a $60 trillion debt. you are askg up to 27% on that. that is used for their respective technology. you have asked for 30% increase on energy efficiency and

renewable energy. i was reading a biography of henry ford. he started ford motor co. with private investment. just like on fester, he had kleiner perkins putting up a venture capital there. why should the federal governnt be putting up these millions of dollars when we are in the financial situation we are in? it is very speculative. what is youriew? >> i am very supportive upper rpe. there is a summit at the end of february. there was great enthusiasm. leaders in the american injury -- industry, including fred smith from fed ex. he said pound for pound, dollar for dollar, he felt that rpe was the most effective use of government resources he had seen

in a long time. there has been strong support. many people thought that it was very important to help america get a leg up in competitiveness and help our prosperity. >> mr. rush, you are recognized for five minutes. >> i am here for you to set the record straight in regard to the levels of oil and gas production imptation, and consumption during the time provided obama has been in office. while my republican colleagues may engage in a scorched earth strategy and in that this incessant blame game and point to the administration's's policy to the single cause of rising gas prices -- does your

agencies support policies that will help america move past our dependency on foren oil and fossil fuels in general? we continue to have this debate every year. gas pris inevitably rise. mr. secretary, can you talk about the levels of oil production under president obama's administration? as production increased or decreased? have new lands been opened up for drilling in this administration? >> as you pointed out, during the obama administration, the production of petroleum liquids in the united states has increased. now i believe it is the highest it has been in over eight years.

also, as you pointed out, the fraction of the oil we import has declined 6. now it is below 50%. 48%. they are showing sig of further decline. fewer dollars abroad. as we produce more oilere domestically, that leads to job creation in america. the administration is very supportive of this increase in gas and oil >> as it relates to the importation of oil, can you discuss the amount of oil being imported today as compared to before president obama took office? are we importing more or less oil from foreign countries under this in administration? >> we are importing less. again, lest in the last 16 years, if my memory serves me

correctly. >> for the record, as american consumption of gas increased o decreased over the past year? if it has changed, what led to that change? can you discuss some of the policies under president obama that have enacted -- impacted u.s. consumption? >> speaking of gas as in galine or naturagas? >> gasoline. >> o consumption of gasoline has decreased in part due to two reasons. first, there was a dramatic decrease through the very severe recession we are slowly coming out of. there is another very important part. if we want to climb out of this recession as quickly as we can,

there is another important part. the efficiency. the use of gasoline is improving. this goes directly to help every american family in reducing the amount they spend on gasoline every week. again, the obama administration has been very supportive and helped in leading the way in improving the efficiency. >> part of your responsibility and part of your concern, i am sure, is the winning of the american consumer off of fossil -- weaning the american consumer of a -- off of fossil fuels. what policies do you have in place?

>> the policy the president has taken in terms of increasing our production of o and natural gas includes making available for ase to an increase in the federal lands made available for lease for oil and natural gas. that is continuing to increase so that the american oil and gas companies have more access to federal lands. >> my time has expired. >> at this time, we recognize the gentleman from michigan, mr. upton, for five minutes. >> mr. secretary, again, welcome greeted i learned literally in the last few minutes that president obama is personally weighing in on members of the senate to vote no on the

keystone pipeline amendment, which will be part of the highway bill today. i am not happy about that at all. for the record, we passed that bill out of this committee a couple of times with bipartisan support are you weighing in at all with any senators on this amendment today? >> no, i am not. >> i know it has been reported that oil produion on federal lands has dropped 14% since 2010. in reading from the green wire last week -- let me just read a couple of things -- domestic oil production may be at an all-time high nationwide, but the increase is primarily occurring on state and private lands rather than on federal land and waters where production appear to of dropped significantly in 2011. production of natural gas on

public lands and wers in fiscal 2011 dropped 11% from the previous year, according to the interior department. oil production dipped nearly 14%. reduction in oil production was most significant in the gulf of mexico where a deep decline of nearly 17% to 514 million barrels to 618 million barrels from the previous year. in a chart on oil and gas production in federal land and waters, it appears there was a decline in oil by 100 million barrels from 2010 through 2011. we agr that sadly because of the decline in our economy, that the main reason consumption has gone down. we did not get the growth, we did not get the jobs. in my stat we had double digit unemployment. but as i look at your own eia,

if you look at the next couple of decades, your department says we will be using the same amount of gasoline in 2030 as we are now. i presume we will have more energy efficient vehicles and a whole number of things that are there that we want, but demand cannot be the only answer. my question is will this -- with this oil production decline on federal lands, people understanding supply and demand, a report you all put out two- three weeks ago predicted that oil prices would hit $4.25 by merial day. we are one penny away fm $4 gas, at least by this weekend. some predict we will hit $5 gas as early as perhaps the fourth of july. in large part, it is because of declining production primarily

on federal land, we do not disagree? >> chairman upton, i first want to say that i and the president wants very much to do what we can to lower the prices of gasoline because it has a severe effect on americans. it affects american businesses. in terms of the federal land production, we lease land to oil companies and it is up to them to produce the oil. currently -- >> let me interrupt for a second. supposing a five-year leasing plan that would delay sales in the atlantic or pacific through at least 2017. looking at another moratorium for five more years. how does that help us? >> it is not my understanding. this is a plan -- for example,

in the gulf of mexico, the federal jurisdiction being made available -- 75% of the area in the gulf of mexico is under federal jurisdiction. it is a plan to increase. >> i was in the gulf last summer. i went out on a rig that was 120 miles off the coast of louisiana. that date. that day they pumped 110,000 barrels. there was a chevron ship sitting there. in essence, trying to tap t same vein the rig was drilling

that particular day. the frustration from so many folks that permits are not being approved -- more than a third of all our oil comes from that region. you have keystone -- literally could be 1 million barrels a day. otherwise it would go to china. it just seems we are turning our ck on independence from the rest of the world that would clearly help our consumers as it relates to their own pocketbook. i know my time has expired. i yield back. >> at this time i recognize the gentleman from michigan, mr. dingell for five minutes of questions. >> mr. chairman, i thank you for your courtesy. welcome, mr. secretary. delighted to see you here. i have a number questions for you to respond to buy yes or no. it has been a year since your loan program office approved a loan from the advanced

technology vehicles manufacturing program. that program was created to provide for the auto industry with incentives to build or expand manufacturing facilities here in the united states instead of taking those jobs overseas. all recipients such as ford and nissan has successfully built and expanded facilities in michigan, tennessee, illinois, kentucky, and other states. is the loan program office looking to streamline the approval processo applicants can be assured they will not be waiting for years to find out if their application will be approved? yes or n >> the loan program is working to improve their processing in all aspects. >> mr. secretary, i will ask that you submit something for the record on this. has e loan program office --

any of the reputation -- recommendations of the allison report to protect u.s. dollars at provide far applications? yes or no? >> we have begun to change over the past year and a half many of the things the allison report discusses. we are continuing to do that. we are doing all the things -- we will continue to improve our programs. >> mr.ecretary, i am barre much concerned about this. the lack of funding for frib within the nuclear physics program. i am told e funds allocated for the program in fiscal year 2013 budget are not enough for them to start construction this year.

as of now, the program and the project is on time and under budget. furthermore, the facility will generate 5000 construction jobs, 400 permanent scientific positions, and have a $1 billion economic impact. i noticed that in other programs within the office of science, the president is proposing to increase funding for scientific projects overseas. i believe that we should first ensure that we are meeting our project obligations here at home before sending our money and scientists abroad. do you agree with that? >> we are very supportive of the project. we hope that congress gives inappropriate amount. we want this project to continue going forward. with regard to this other

project you spoke about, it is a different part, but the thing i do want to point out is it is an international collaboration, but 80% of the funds will be spent in the united states both in laboratories and universities. >> mr. secretary, your department has invested $50 million in frib. i am concerned about the progress at frib. what is the commitment the department makes with regard to frib? are we going to let it strangle on the ve or see to it it remains funded even though we've not given it enough to commence construction this year? >> we think that frib is a wonderful project. we have asked for continued funding. hope that congress allows us to have that funding so we can

keep the project goi forward. >> mr. secretary, you know i haveespect for you, but you cannot late this off on congress. i am talking to you about what the budget does, not what the congress might do. mr. sretary, frib will have a national security implications and applications such as studying the detection of a nuclear weapon or dirty bomb. i do not think we could pursue these types of national security opportunities and applications at facilities overseas. does that not tell us we should put our money here locally rather than giving it to other countries to do this kind of crital research and programs that will have such a significant impact upon our national security? >> the funds, as we said -- a lion's sre of the funds for

the internional fusion project -- the department of energy agrees that this is a very important experiment that could perhaps a lot fusion energy for the future. >> again, mr. secretary, with great affection and respect, we are going to spend money in the united states or build a facility abroad, and the benefits that will be achieved from this will be spent abroad and will strengthen foreign scientific applications as opposed to americans. thank you for being here. i will follow this up with a letter. thank you for your present. >> at this time, i recognize the gentleman from texas, mr. barton. >> thank you, mr. chairman. thank you, mr. secretary, for being here. in my opening statement i referenced the alternative

energy budget and specifically expressed concerns about the loan guarantee program. as you know, we continue to have an ongoing investigation with regards to solyndra. the last hearing that you attended, i believe, the focus was on solyndra. you're very supportive of the way the loan guarantee program had been managed, but i think you did indicate there might be some changes forthcoming. have not been changes in the way you and your department have managed the loan guarantee program for alternative energy and, if so, can you tell us what those are? >> there were changes. limited to a few examples. -- let me give you a few examples. we know the economics of a particular industry, for example in the case of solyndra, can

change very rapidly. 40% decline in the price of solar modules, essentially a commodity in one year -- 75%-80% decline in three years. one of the things we now do on a weekly basis is look very closely at changing market conditions. we established a risk committee that includes people both within the loan program and outside the loan program, such as experts in the department of energy. i also have a special adviser on financial matters. it is an independent set of eyes to make sure we monitored closely before future all of the things that could af ct the loans, including things outside the control of the individual company. >> concerning this independent adviser you just referenced --

as he prepared and, if so, could you present to the committee for our review the st of the additional loan guarantees and the status of those? what if any of those might be danger of following solyndra in defaulting and going into bankruptcy? >there has been e other at least since solyndra and go -- i have been told there are others on the problem list. >> there are companies which we watch very closely because a wide range of issues. we also have to respect the confidentiality of any of the people we have made loans to. >> how many loans are on the

"watch list?" >> i do not have the exact number >> is it a double digit number? is it between 1-10? 10-20? >> i do not, again, recall the exact number. obviously i will advise my adviser on this matter. again, any company that we think has a chance of being subject to changing market conditions or other issues within the country weo watch very closely. >> do you think the american taxpayers should have a reasonable expectation that all of these loans should be repaid as opposed to any loan that is made is just money down the tubes anis not going to be

repaid? the history so far of the initial projects has not been good. >> first, i do say that the american taxpayer has every right to expect there is a reasonable chance of repayment for the loans we give out. i would also say many of the loans we have given out have been very good successes. loans, for example, to ford motor company. >> that was not an alternative energy loan. >> we have other loans -- eli >> i do not think they me to your department, mr. secretary. >> actually, they do. but with regd to alternative energy, there are a number of loans we feel are low risk and have a very high probability of being paid back.

>> my time has expired. we will follow up in writing and we will ask that these problem loans on the watch list be provided to the committee so that our people can review them and, hopefully, work with your administration, your agency to take steps to protect taxpayer money. >> a recognize the gentleman from massachusetts or five minutes. >> mr. secretary, there are only two tools back to bring down gas prices right now. deploying the strategic petroleum reserves, and get other countries in the world to use their strategic reserves to put pressure on the marketplace -- and excess speculation in oil futures market through commodities futures trading commission's. this has proven effective in helping to bring down prices. we have plenty of oil right now -- 700 million barrels.

it is on the table as an option. secretary got salazar and has said the same thing. -- secretary salazar has said the same thing -- you have it on the table. oil companies and republicans oppose it. none of this oil is coming on like this year. people looking for -- are looking for relief at the pump right now. some senats have introduced legislation that would prevent the president from deploying any oil from the strategic petroleum reserve until he approves the keystone xl pipeline permit. do you believe that the authority of the presint to deploy the strategic petroleum reserves should depend on the permiting of the keystone pipeline even if iran cuts off the strait of hormuz?

>> no, i do not. >> to you think it makes any sense -- in order to keep the price of oil low and not allow iran to threaten us unnecessarily? >> as you noted, the administration has said repeatedly that the strategic petroleum reserve is on the table, but it is a very complex issue. >> it would be a bad idea, would it not, to strip the president of his authority to use it unless he approved the keystone pipeline? >> i think so. >> thank you. a bill has come out of the agricultural committee and out of the financial services committee that would stop all world-making on speculation, on

margins, on limits, on gouging, on protecting the public eye in the futures oil market where so much of this is speculation being driven up, driving up the price of oil. do you think it is a bad idea to strip the -- stripped them of their authority to protect against gouging and the marketplace? >> no one would be in favorite -- favor of gouging -- >> the republicans belve you do not need the rule. are they right or wrong, mr. secretary? >> everyone is very concerned -- >> no, everyone is not concerned. the republicans want to strip out the authority to go against manipulation, to go against margins -- to deal with the margin issues. is that a bad idea? "as i said, if you please let me finish, everyone is concerned about speculation unnecessarily

driving the price of oil up. this is why the administration and one of the things that can counter speculation is more transparent information. is why the administration very focused on that. >> we need the administration to have the authority to be able to crack down on the speculation, make sure there is the transparency and no game playing. i will also say that there is a proposal out there to create an international tional gas market. there is no international national gas market. the price of natural -- natural gas in china is six times higher. it is three times in europe. it is leading to all new planning on natural gas vehicles because the price is so low and many utilities art -- there is

an application for eight new licenses are exporting natural gas, which your own agency says could raise the price up by 54%. i urge you to call a timeout to make sure we get this right. your assistance secretary made a statement last week that really disturbed me. i encourag you not to approve these licenses until we put together a plan on liquefie natural gas -- natural gas exported from our country. >> the gentleman's time is expired. at this time, i recognize the testament from texas for five minutes. >> i. the chairman for the recognition. -- i thankhe chairman for the recognition. mr. barton was asking questions about the loan guarantee at solyndra. when you came to us in november of last year, it seemed to be news to you that there were

postponement ofaos that occurred at the company. those postponements -- poponements -- you seemed to be surprised that had occurred. you said you would look into that. can you share with us the results of your investigation? what information you have uncovered as to why those layoffs were postponed past the election date? >> we turned the matter over to the department of energy. they are looking into the manner. -- matter. when they tell us what they find, we can share that with you. quite i pray that you do, but so far have you identified any of your staff that was involved in making that decision. >> as i said, we turned this matter over to the ig for an independent look at what happened. "have you been interviewed by

the inspector general on this issue? >> no, i have not. >> have you been informed that is likely to happen? >> no, i have not. >> are you willing to speak to the inspector general? >> i will cooperate with the ig. >> congress -- congressman barton was asking about the allison report. i respect the fact you are concerned about proprietary issues, but would you provide to the commiee this watch list, provide a copy of the left to the committee? >> i misread it. it appears as though the committee staff will be getting a briefing from a special adviser next week. -- on the loan program. >> is that the full committee staff or just the democratic staff? >> i believe it is the committee -- full committee staff. >> may i ask as a member of the committee that you would have that list for the briefing?

>> we will do what we can, -- >> we need your commitment that we will be able to see that list. it is important as far a congressional oversight going forward. we have all been criticized about the way things have been handled so far. i would like to be able to stop the bleeding at some point. i am asking for your commitment to make that list available to the staff. >> we have to look at -- again, we do not want to violate the company's confidentiality. the dynamic of what happens with these companies changes very rapidly. again, -- >> and if i may, the taxpayer has taken a pretty bad hit on this. while i want the companies to do well, at some point we may have to put the taxpayers needs and wants ahead of those of the company. again, i cannot see a reason why

you cannot bring that live. i, for one, am going to be expecting you to bring that list. you had the chief financial officer of your department produced a report on balances in 2010. in the purpose and the background notes at the beginninof this report, it said your approach was developed in 1996. the department did not have a standard effective approach for identifying carry over balances that might be available to reduce future budget request. where are we with that? are you prepared to produce far this committee those numbers on that threshold that might be available to offset the numbers you are requesting in your budget? >> yes. we have been working very aggressively at reducing these

balances and the last several years. >> the gao estimated that is in it -- it is in excess of $350 million from carry over programs. what is your justification for asking for funding increases for programs with significant carry over balances? >> i believe the lion's share of that amount has to do with sequestration, which means that we need a significant investment of over half. some of that has not materialized. we have the balance because the private sector does not want to call it that. there is not much we can do about that. quite the gentleman of the time has expired. i recognize the gentleman from california, mr. waxman, for five minutes. >> people are complaining about the hi price of gasoline. understandably so.

they want help. do you see any short-term way to lower gasoline prices? >> as you said, everybody is concerned about the high price of gasoline and diesel fuel. we do want to help in any way we can. as the president said, there is no single magic bullet that can instantaneously do this. we have worked very hard with all the tools at our disposal. the most effective tool is that weant to improve the efficiency and to diversify the energy we use in transportation. the boom in natural-gas is wonderful. and we are very supportive in helping some of the demand for petroleum onto a national -- natural gas. >> the republicans have said

over and over again that we need more oil. if we have more oil, we would not have this problem. then of course they go on to say it did the president of the fall we do not have more oil. the reality is there is more oil the united states than ever before. we are using less because of increased efficiency in automobiles. if we have more oil and the oil is priced at the world's price, would that lowered the world's price? >> the price of oil is very complex. it is certainly dven by supply and demand. it is also affected by uncertainty in the middle east. >> if we produce me oil, that will not help us. that will hurt us. if we produce more oil and more oil is being demanded by china and india, the world is going to

divert oil there as well. i mentioned earlier that canada produces more oil than they used, yet they are paying the same price for gas that we are paying. it seems to me you made this point, but we have to look at just producing more oil. we have to start using less and less. the way to use less oil would be to invest in clean energy to reduce our energy use. is a tough challenge. congress should be helping you accomplish that goal. instead, republicans in congress attack every proposal you and the president make. every idea. for example, that your project battery manufacturing is an industry dominated by southeast asia. the administration changed all that. you changed it by the use of

recovery act to incentivize the developments are vehicle batteries. here in the united states, we have a domestic production of the chevy volt. the republicans seem to be rooting for failure. they are attacking gm. does it make sense for us to be written agait american manufacturing? >> no, of course not. we should all be biting far very innovative products worldwide. >> it is common sense. this is the only example -- this is not the only example. the proposed clean energy standards to increase the amount of energy we get frorenewable sources. similar to what mr. barton proposed in the last congress. it is really and all of the

above a rategy. republicans do not want to discuss this idea. the president proposes to -- last year the top five oil companies made $137 billion in profs. the price of oil rose $100 per barrel. with oil at such a high price, do we need to be giving out $400 billion in tax breaks for oil companies each year to give them incentive to drill for more oil? could you explain that to me? >> i do not believe the oil industry is doing very well financially. they have a lot of incentive. >> we would be better off dealing those subsidies and using that money to develop sources of clean energy the reduced our dependence on oil, yet the republicans were -- oppose that as well. i think the president is on the right track. i appreciate what he has been doing.

i applaud his statement about w we need to move forward. >> i recognize the gentleman from illinois for five minutes. >> process, mr. chairman. -- thank you, mr. chairman. for us to move in a clean energy world, we have to pay for that. is it not true -- european gas prices for the united states? have you been quoted saying it would be good for us to ve european gas prices? >> at no time since i have been secretary of energy -- >> prior to? we all know the answer is yes. obviously that is the move towards a clean energy future based upon americans paying more at the proper i did not want to go in that direction, but my friend from california empowered me to go.

reclaiming my time. i would like to reclaim my time. mr. secretary, if the d.c. circuit ruled against the yucca mountain litigation, with the department per -- abide by that ruling? if the federal court -- do you have the staff to pursue it? >> if the federal court wanted to pursue, we will do so. >> deribed funds that could be made availle from the prior year's through the application? this will include any carryover funds made available on any i'm obligated balances from prior years bonds that may have not been spent, therefore subject to read direction. >> i would have to get back to you. we did >> would you do that for me, please? this past tuesday, the board of

commissioners unanimously sent you a letter notifying you of their intent on yucca mountain's and ask you to initiate the negotiation process recommended by the president's blue ribbon commission. i would like to submit that for the record. >> no objection. >> we do meet with the county to initiate a negotiating process? >> we are in the process now of reviewg the recommendations. we would also like to work with members of congress. the commission has said very clearly that they would likeo see congress look at the nuclear waste act revisions. >> we had great testimony here with the commiioner. on page 48, it says the importance of the local communities. we havethe importance of the local community.

we have the county sang, we are ready to go into negotiation with you, to see what you are going to bring to the arena. on page 40 it says this, " helpvering local support sustain the process." the blue ribbon commission highlights the importance of local communities in saying we will accept this nuclear waste, let's get involved in negotiations. that is what your commission suggested. we have a local countthat has taken you up on the author of the blue ribbon commission. i would hope we would talk to the good folks and get into negotiations as the commission had suggested, which is the commission you ask for. >> we have a process that can do

this. the commission says you need local support. would also ed, i think the commission said this, you need state support. >> let me quote from this on page 48, "is underway for in a local support helped to sustain the project during times when federal and state agencies had to work through disagreements." the commission said, norway, finland, spain, local communities, a very helpful in working to the disreements from the state or the national government -- communities, very helpful in working through the disagreements from the state with the national government. i think whave a local committee that is fulfilling the intent. i think the department would welcome that. the commission said two things. we have so much nuclear waste,

we need a second geological repository. >> right. they did say that. we welcome local community support. >> you will welcome the county when they come visit with you? >> we need to set up a procedure so we can deal with this as rapidly as possible. >> i would hope you would consider the county. >> thank you. i regret our ranking member from california on our side is not here. i know this is not the ways and means committee, california benefits from the high-tech industry. they have been pretty financial successful. i do not know if we are going to take ay their incentive is to produce their products in our country. let me ask questions about --

one specific question. the university of houston has been doing great work in a field that shows promise. the federal government funded the need for continuing science and development demonstrations in this field to keep the technology leadership in the u.s. and lay the foundation for the growth of manufacturing jobs. the line item for superconductivity technology funding was eliminated two years ago. what are you doing to maintain the u.s. competitive advantage on superconductor technology that will have a major impact on energy, transmission, storage, in light of the government investment, to push technology? what is doe doing? >> we support research in superconducting technology in

the office of science. we continue to do this. many of the discoveries made and the understanding, we think this has great promise. we will continue to support research. >> i will get a letter to you and ask you about that. watching what happened at a university of houston, the success they have done, i appreciate it. the president's budget includes a study that examines the environmental of effects of crafracturing. how is this different from what the epa has already been doing? the combination of intelligence is compared to what the epa has done.

>> the subcommittee advisory board felt the department of energy, in collaboration with ies, industries -- agency i would be in a good position to help develop natural gas resources safely. we want to see them deveped. we want to see them develop in a safe way. we are requesting funding to help companies extract those resources in a responsible way. >> in texas we want to expect it safely. there are some things we need to work on. there is a required posting of ingredients. they have them available. will there be. you can stakeholder in put

incorporated into the study -- will there be peer review and stakeholder in-put into the stud >> yes. it is very rapidly improving technology that we agree can be done. >> carbon captured is constantly discussed in the context that is used, it can be used as cut and control technology. the problem is it is still -- as carbon control technology. the problem is is still too expensive. can you describe activities? >> i can. there are only 47 seconds. i could do it in four hours. we are very committed and focused to reducing the cost.

reducing them greatly so one can tammy -- can continue using our fossil fuel resources. >> i know i am out of time. hopefully we can get to that point before you get mandates. >> we recognize the gentleman from california. >> thank you. i am very happy you are where you are, you have been brave enough to stand up on energy issues that were politically incorrect, plenty of the shortfal with ethanol. i am glad -- pointing out the short balls of ethanol. i am glad to hear -- shortfalls ofthanol. i am gd to hear you talk. we have 20 nuclear reactors within a mile of san diego. we cannot power are street lights with it.

there is a lot of cheap shot that go back and forth. let me try to bridge the gap and find a place where americans across the board can agree. you agree that the crisis with finding a replacement for gasoline is a supply, how clean it is, and the infrastructure to distribute it. a major problem, i am a big ethanol die, opposed to it, the environmental -- ethanol guy, opposed to it. algae is very clean, but we do not have supply and will not have supply in the long term. it is compatible with the frastructure. we have natural gas, which we have massive sources of, it is super clean, it is cleaner than propane, which is permissible to be used.

the thing we miss out is 85% of the urban hos in america are plumped with natural gas. the infrastructure is there. you had a 3 foot barrier between the water heater and a car parked in the garage. we have not bridge that gap. all the money we have spent, are you looking at what we are doing for research and development of home dispensing to allow the american consumer to be able to say, i do not want to fill up with gasoline, i am going to fill up with natural gas. what is committed to bridge in that 3 foot gap between the automobile and energy independence and the water heater? >> i am glad you asked that question.

the programs we have are in energy and efficiency, renewable energy. what we are doing about that, i share your excitement, our abundant natural gas in the united states. it looks to remain in low prices for another decade or two, it has a great opportunity to help with transportation cost. what we are doing is righ now, the barrier beyond that wall is the natural gas tank. honda sells a natural gas model. the carbon tank is very expensive. >> you are talking about the tank in the vehicle? i drove a car in 1992. i am talking about the home

dispensing pump that will be able to bring the pressure up into the tank of the car. is there anything that is addressing an aggressive attitude towards that home dispensing paul. >>-- pump. >> there is. the short answers, the commercially available, has to be able to pump 3,500 pounds per square inch. it is very expensive. it has to be refurbished for a couple thousand dollars. it is $6,000 for the dispenser. the tank we are trying to develop is something that can allow compression at several hundred pounds per square inch. we know that when you decrease the pressure and still have the range, things become very

accessible. that is what i was trying to get at. >> if we head home dispensing, the big advantage is flex fuel. the same system that burns natural gas has the ability to burn regular gasoline. >> that is true. you disney two tanks. >> right, butou -- you just need two tanks. >> right, but you do not need two motors perry >> thank you for being with us today. the national energy technology lab is funded by your department. unfortunately, the budget request continues the very troubling trend of decreasing the department's fossil energy budget. a large portion of research is in advanced coal technology. in 2010, the coal portion of the

budget was four hundred million dollars. this request is only $240 million. specifically, the president's request zeros out critical research in fuel cells and field programs -- fuel programs. some of these cuts appeared to be especially poorly timed. mr. secretary, are yoaware that the epa is preparing to issue in -- to issue a rule that is going to limit greenhouse gases. >> i am not sure of the timing. >> it is imminent. that would require coal-fired power plants to either capture their carbon emissions or utilize technology that allows them to emit less carbon to

begin with. >> i have to get back to you on the ruling the epa is contemplating. >> we cannot have it both ways. i support the effort to reduce greenhouse gases. if the administration is going to issue a regulation requiring car and capture this year, -- requiring carbon capture this year, can you explain why the budget is the lowest ever requested? >> we are very supportive. we think this is still a very important part of what we do in the department of energy. we remain committed to develop the technology to lower the cost so we can continue to use our fossil fuel perry >> if we are

going to ask for reduction -- fuel. >> if we are going to ask for the reduction of greenhouse gases and yet we are reducing the funding for the technology to do this, i think it is not fair or there is a lack of coordination. let me ask you another question. is administration has championed regulations to reduce pollution. one way to do this is using solid oxide fuel cell technology, which is being developed to the conversion alliance in the office of fossil energy. this is producing highly efficient power from natural gas and eliminates a delay in -- eliminates idling emmisions. can you explain why the funding for this program was eliminated? >> solid oxide fuel cells have

made tremendous progress. we are very excited about this. there are major and smaller companies that are heavily investing in this. we think it is evolving to the point that the private sector is taking this well. we applaud the development. most of the applications will be stationary applications. >> south korea has made it a major part of their energy plan. we just completed a free-trade agreement with south korea. are you concerned that a limited in support in the united states will drive that industry overseas? >> i hope not.

if i look for the manufacturers in the united states, there are significant players. we are hopeful the united states can manufacture these fuel cells and sell them abroad. >> i hope that is right. thank you for your time. >> i recognize the gentleman from west virginia. >> i am concerned, when the department of energy was formed under the organizational act, there were three paragraphs i found intesting. the first was it was set up because the increasing dependence on foreign energy supplies presents a serious threat to the national security of the united stes. it was also charged to provide for a mechanism to deal with the short, mitt, and long term

energy problems of the nation. we are going with grenoble's, short-term, we should be worried about cole -- renewables, short term, we should be worried about coal. secretary, i think you have gone away from those principles. i think you have allowed, some of the testimony about the use of the epa, their predictions, the closure of plants that were talked about. it was said they said only this level. based on this level, epa has been emboldened to continue to strive for greenhouse gas emissions. the others are saying, if you do

that, you of going to see closures all across america. challenging the reliability of energy across america. i am concerned whether or not you have a real interest in riegning in a rogue agency that is allowing this kind of activity without comprehensive knowledge of how other people are looking at it. i goack to your remarks he made in pittsburgh. you said, i want all of the above. i applaud that. i wish it was packed with action. i am going to go back to your statement in 2007. you said, kohl is my worst nightmare. coal is my worst nightmare. we have this. coal makes us sick, will makes

us sick, it is ruining our country, it is ruining our world. but the the facts? -- are those the facts? is that why you are cutting research money, 41% reduction in spending on r&d in coal? i am as. d. i cannot comprehend where this administration are with it. with all d respect, with all due respect, i think the doe and epa have become the worst nightmare for the working men and women in our coal fields across america. you are causing them to not know whether tomorrow they are going to have a job. i hope you go back to the requirements of the doe and look

at the short term requirement. they look at taking care of the families for the safety of the american public. >> let me try to explain what i said. that was taken out of context. al, as it iswas col being used today in china and india and around the world, in terms of its pollutants, is a big worry of mind. that is why, even before i became secretary, i was committed to developing the technologies to bring the prices down so we can continue -- >> i hope you will be able to get back to mr. doyle and explain how we have a 41% reduction. will you be able to get back to us -- we hear a lot of folks talk about how fossil fuels,

coal, is subsidized. will you be able to tell us how american companies are being subsidized? >> i would be glad to get back to you on that. >> thankou very much. >> i recognize the gentleman from new york. >> thank you. let me first say that i am one person who has followed the. i think you are doing a fine job. i think there has been a lot of political cheap shots at you. i do not think that is reflective of the job you of doing. i wanted to say that. i want to talk about an issue we have spoken about in the past, that is an open fuel stand it for cars. i believe -- standard for cars. i believe that every car should be a fle fuel car.

competition helps bring down prices. it would bring down ices. i have seen that happen in brazil. it would cost $100 or less per car to manufacture a car with flex fuel feautures. i know the president has issued an order to have the federal fleete flex fuel. >> the ability to have flex fuel vehicles, especially if the cost would be $100 or less, gives the american consumer more options. it makes them more in control of what they can do, just in case the oil price does increase. we are very conservative about the price of gasoline. one of the options we have to

bring relief is to allow them to have a diverse sources of energy for transportation. flex fuel vehicles allow that. natural gas, i am also very and visit -- and his estimate about that. you can fill it up with -- i am also very it enthusiastic about that. you can fill it up with natural gas. >> let me ask you about renewable energy investment. a survey by debit concluded that clean tech innovations are more likely to succe in the uk and they are in the u.s.. -- uk then they are in the u.s. according to ernst and young, china leads the world as the

largest source of and destination for clean energy. they attracted at $54 billion worth of energy financing. it is a 39% increase. such financing stagnated at $34 billion. your budget proposes to invest in energy and efficiency, science, and clean energy research development and deployment. it eliminates $40 billion in tax subsidies to big oil. big oil is making record profits. some people have argued that if you eliminate the subsidies, it means the government is in the business of picking the winners and losers. they say, if we remove the subsidies, we should remove subsidies from every other specific industry or business. how do you respond to this? >> i think the government over

the past decade, the past century has always looked at subsidies and tried, as a part of the congress, to decide what would be appropriate. how long, subsidies have been used in the past to encourage new industries to get started. the oil subsidies began 100 years ago. for the intent of helping this industry get started. as you pointed out, they are doing very well on their own. >> they did make $137 billion last year. i do not think they need any help from the government. 2/3 of the department of energy's budget is directed at nuclear weapons. there are some who argue those

activities would be better handled by the department of defense. how did you respond? >> i do not agree. off i think the nuclear weapons and cleanup needs a science- based approach. we had a lot of expertise. i think we should continue to have it within the department of energy perry >> thank you. -- energy. >> thank you. >> thank you for your time and testimony today. a couple of questions. we heard the impact the reserve had on the price of oil. it reduced the price of gas at the pump. >> certainly after, you are

talking about the last? >> in june, 2011. >> yes. >> is the president considering releasing it to respond to gas prices? >> that option remains on the table. >>s it sposed to be used only during times of severe supply disruptions. >> it is complicated. that is the primary use. >> do those circumstances exist now? >> the primary use is for a supply disruption. there are also issues for severe economic disruption. >> due to energy disruption. >> for example, we released it before when there was a hurricane katrina. >> do we have a hurricane now?

>> nook, we do not. >> the president said the only solution to high gas prices is decread demand. 60 million barrels of the reserve was released. the price of oil dropped to $4. supply made a difference perry >> i think the supply did make a difference. when the president bush lifted the moratorium, the price dropped $9. if it kept going down even the people knew the supplies would not come on for years. the anticipation of supply made a difference. >> that is true. >> if the man has an effect on price, don't the laws of supply and deman dictate that seoul will long-term supply and demand? >> i agree. >> if you are going to pursue short-term policies, should you not couple that with long-term

supply solutions? >> as you pointed out, the primary uses are to deal with supply interruption. >> supply, we need a long-term supply solution. >> we need a long-term supply solution. the world needs a long-term solution, as well. >> it will decrease cost. that is what you have admitted to. >> i will agree that supply matts. >> oil prices were $95. you have not replaced those barrels, have you? how the plan to replace those barrels? >> there is a plan put forward in our budget over a riod of years to begin to buy back that will perry >> you are buying back oil. -- buyback that oil.

>> you are buying back will. -- oil. william meet with secretary salazar to reinstate the prram -- william meet with secretary salazar to reinstate the program? >> i will get informed of the situation. >> will you report to us about your conversation? based on what the president said yesterday and this morning, he called a phony to get down to two dollars of gasoline. is it a phony? >> he is very clear. we do want the press to go down. >> we need to do that by increasing supply. by increasing domestic production. >> as the president has pointed out to many people, the supply in the united states is not going to -- it will affect -- it

does not control. >> you said it increased supply decreases price. >> as you know, petroleum has increased over the last eight years. the prices -- >> it did not cause gas prices to go down. you have said supply causes it to go down. >> there was a short-term -- >> because of a supply infusion. it was not applied? -- supply? >> the gentleman's time has expired. we recognize the gentleman from washington ste. >> if you would like to finish your answer, go ahead. >> very quickly, there was an

international coordinated release. it was meant to deal with these temporary disruption supply of libya. now libya is coming back. the release served its intended purpose. >> i appreciate the work you are doing on a band forms of energy. bill gates was at our consortium last week talking about the need for greater national investment. i echo that. i would appreciate you advancing that cause. i want to ask you about biofuels. we are looking at bioreactors. we are ready to go out. could yocomment? what should be in the near term? >> we think, the of idea of

making transportation of liquid fuel has great promise. the department of energy has been supporting this. we think these technologies do have, from algae, from grasses, all these things have the potential of altering transportation fuel that would go further to a less dependency on oil and foreign oil. these things can be made in the united states. >> do you like the idea of by refineries? a company in seattle as the first by a killer -- is the first bio-fueler. others are leading a consortium

to work for a bio-refinery in the northwest. what could you advise us as far as an opportunity? we will lk at that of a particular project. we will look at all the projects. -- at that i did kill the project. we will look at all the projects. -- at that particular projects. we will look at all the projects. >> there is a consortium from the genetic design a to the grower to the aeronautics company, you are going to find a network that is prepared for this. i hope you will take a good lo at washington state. we have some success down at one side. we are freeing some land ready

for development. your agencys allowing 1,600 acres for commercial development. we are excited about that. we need to transition. we are told they could be a year and a half. -- told it could be a year and a half. i hope you can take a look at that. i want to thank you, i have not agreed with everything you are doing. we have a disaeement on the yet it is you. i want to thank you. i have a 1-month-old granddaughter. i want to thank you for your effort to give her a shot to enjoy a world that looks like the one we have here today. our friends talk about something ruining the world, you are doing

something to make sure it is not ruined. the work you are doing is spectacular. you look at the companies, the most durable cells. rec, advanced nano technology, energy companies, these are spectacular off things you of doing. because of youruccess, my granddaughter is going to have a shot at having a world that looks like the one we have got. i know you are going to be catching a lot of arrows in your back. i believe a positive voice is the american one. we are going to grow this economy. we are going to give my granddaughter a shot. i want to thank you. keep it up. >> we recognize the gentleman from kansas. >> thank you for being here today.

i want the world to look great for my son as well. we have to do things that work. i am going to be asking you about where your budget is intended to spend money. it says the goal is to have 1 million of electric vehicles on the road by 2015. how are we doing >> we are going to wait until 2015. in terms of what is happening technically, i think things are developing. i remain hopeful. >> are we going to make it? how many do we have today? >> we do not have the exact number. >> less than a million. >> it is significantly less than a million. >> with the administration's

support higher gas prices to achieve this goal? >> -- would the administration support higher gas prices to achieve this goal? i appreciate you state that as your objective. the president said he would buy a chevy volt. last week, chevy announced the volt would be suspended from production. how many taxpayer dollars have gone in support of the volt? >> i do not know i know it is a great car. there is a huge investment by gm to invest in this. right now, i fl very hopeful that it will be adopted.

>> ippreciate it if you could get back to us and let us know how much money has been expended. do you drive one? >> no, i do not own a car at the moment. >> there was over $500 million in loans. you cut off the funding last may because it had not met its sales target. that was one of the reasons. they think we are looking at another -- do you think we are looking at another solyndra? >> we have milestones in our loan programs. we work with the companies and do that. we are hoping they can work through the things, the temporary blips and continue.

>> i hope so too. how much tax exposure it -- how much exposure does the taxpayer have? >> i can get back to you. >> we heard the same reassurances about solyndra up until the time there was still advancing month. we heard you were monitoring and watching and making sure that money was going to be paid to the treasury. i hope you are right a the taxpayer does not end up another $500 million short. >> we appreciate your time. unfortunately, we have four votes on the floor. we have four members who wanted to come back to finish asking members. i was wondering, would you be able to be back here for a little while? >> i just heard from my staff we

have agreed to do it. >> i understand. we appreciate it. we have some of the finest restaurants here in the building. if you want to get something to it. we will be back as quickly as we can. we thank you for your time. there may or may not be four coming back. thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> those of us appreciate it very much. as you know, the united states is blessed with huge coal reserves. i note that as technologies

beco available, coal liquification is becoming more affordable. south africa gets a third of its gasoline from coal to oil processes. the president introduced legislation to do that. my question is, what d.c. department doing to help iget al to liquid to play a vital role? >> the unitedtates has great resources. we are looking at the potential for coal-to-liquid and gas-to- liquid. the issue is the high capital cost.

the plants are very complex. when i talk to the oil companies, they say that the very high capital cost is a probm. having said that, we also want to do this in a way that does it even without capturing the carbon. it is less marginal. we would like to capture the carbon. ultimately, we need to capture the carbon. >> absolutely. these bil that the president put it in our a loan guarantee progra i am wondering if any of the loan guarantees helped any of the capital cost >> i think the one i know of,

there are a few still going forward. there is gassification and the use of carbon dioxide. there is a project going forward on that. >> that brings me to solyndra. what was happening in the chinese market, you have incated that what was happening was not anticipated in 2009. one of the questions i have always had was, that was known based on the way i heard the testimony. that was known by late 2010 and certainly by february, 2011. if you knew what was happening in the chinese market, the price was so low that they could not manufacture the product at the price that the chinese were selling their product for, why the subordination?

>> you are absolutely right. by late 2011, we knew that they were in deep trouble. by then, -- >> you knew the chinese market had made them, had made their products cheaper than they could produce their products. the chinese could sell their products for less. is that not correct? >> it is correct that we knew thatolyndra was in trouble and there was a chance for bankruptcy. when it came time decide how to do this, it was a judgment call. >> i know you have said that before. i resct the. that being said, is it not a fact that in late 2010 and by february, 2011, when the subordination was sign off o

when you look at the price of what the chinese were able to sell their product at, and the price at which solyndra could produce their product at, chinese could sell for cheaper. is that not a fact? >> that is correct. >> thank you. chairman upton recently sent you a letter on the loan program -- solyndra was to be the supplier for the first phase. they went bankrupt. why did doe feel comfortable including solyndra as the first phase of outlier when you knew they were about to fall? if -- fit phase supply air when you knew they were about to fail?

why did you go forward and say, this ought to be or supplier? >>-- your supplier? >> we were not comfortable. the initial one was solyndra. i believe the business model was a good one. i was nervous that they should line up a plan b period >> -- plan b. >> thank you. >> thank you. i would like to thank you for it testimony today and especially for waiting for us to come back, it is appreciated. i would like to ask you a few questions. as you are aware, the potential for conflict between greater liability is greater now than

ever. i would appreciate it if he could answer yes or no. question no. one. are you aware that under section 202 doe can issue emergency orders? >> yes. >> thank you. are you aware that a generator is compliance could result in the violation of environmental laws? >> i am aware of that. >> thank you. do you believe it is fair to make generator's choose between complying with an emergency order or complying with environmental laws and regulations? is that fair? >> we believe it does not have to be an either/or. our job is to make sure, to

ensure that we have a reliable source of electricity for our businesses. >> i will count that as a leaning not fair. are you aware this situation has arisen twice where a generator was forced to pay environmental fines because they complied with an emergency order? are you aware? >> i am not sure. it may have occurred. >> it has occurred. once in san francisco, i can give you details. my final question, would you be supportive of efforts to fix this? >> i am very supportive. we do not want to order that a

generator continued to be on- line and face federal fines. we are eager to work through those issues. >> i am looking forward to your support when i issue gislation. thank you for your patience. >> thank you. >> thank you, mr. chairman. thank you for coming and stings to the boat series. i want to get into- staying through the vote series. well we have been passing legislation lahood -- while we have been passing legislation to lower price of gas at the pump, the president has started talking about an all-of-the- above energy strategy. when you look at things he has done, his policies have hurt

energy production. i want to start by asking you, the president is boasting that energy production has never been higher. as if he supports that. when you look at the facts, from what we have seen, actual production on federal land, which the president has control over, is down a 11%. the gulf of mexico is down 17%. have you seen any number of similar of that to indicate what is happening in areas with the federal government does have jurisdiction? >> i have seen members i have gleaned from a speech. >> if but they delegating -- are they validating what i am seeing? let's the numbers i have seen show an increase in tea we have

seen -- >> the numbers i have seen show an increase. >> we have seen a 17% reduction. the increase has come on private land, north dakota the president is trying to shut down. it is disingenuous for the president to say he is for all- of-the-abovewhen he has used his influence to reduce production. where he does t have influence, he is trying to shut down the fracking process. i will go back to the comments you have made in the past, in pport of higher gas prices. in 2008, you said, let me make sure -- we have to figure out how to boost the price of

gasoline to thlevels in europe. >> as i said before -- >> yu said it or you did not. >> i said something very similar to that. >> the prices in europe are what >> everything i have done when i became secretary of energy was to help bring down the prices of gas. >> that has not happened. president obama said he would prefer a gradual adjustment. he said that. unfortunately, he has put policies in place that have gotten us to four dollars a gallon. $1.83 when he started. he got his wish. people are furious.

it is killing the economy. it is killing jobs. let's look at the record. if you look at the gulf of mexico, we have lost a dozen that have leftakrigs the gulf of mexico. they have left the country. they have gone to egypt. better to do business in egy than in america. we saw what the president did on the keystone pipeline. the president has implemented a policy that has reduced american energy production and supply. he has been to saudi arabia. he has to beg them for more oil. i understand you have been to saudi arabia as well. >> i have been to saudi arabia. saudi arabia is one of the few

countries -- >> have you asked them to produce more oil? >> allow me to continue perry >> i did not have the time. >> -- continue. >> i did not have the time. rather than go into saudi arabia, i have mapped out, it is a five minute walk to the white house. i would suggest going to 1600 pennsylvania aven and as the president to reduce -- reverse his policy. in the gulf, there is no consistent process to get permits. we have lost a dozen rigs. the keystone pipeline, we lost a million barrels from canada. the attack on fracking is

killing innovation. we talk to a company -- i ask you pursue the administration policies. >> the gentleman's time has expired. if you would like to try to respond, feel free to do so. >> him we are talking about immediate spare production. said a arabia it is one of the few countries that have -- saudi arabia is one of the few countries that has impeded spare production. for immediate spare production, we think that would moderate price hikes in the world oil market. >> that includes today's hearing. i want to thank you and your staff.

i want to enter a recent survey made in nevada regarding the public's view on the yucca mountain. that will be entered into the record. we will keep the record open for 10 days for any additional materials. once again, thank you. we look forward to working with you as we move forward. >> thank you mr. chairman. >> this is adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]

in 2010, congress responded with the president by passing the dodd-frank act. three key goals to the parts we oversee in the act -- bring transparency and competition to the swaps market two, protect

against wall street risk spreading out again over the rest of the economy. 3, and hence margaret at -- market integrity. transparency, while our risk, market integrity. why did transparency really matter? transparency blowers cost our investors. it does in every market. transparency competition -- it could be in the health market, the auto market, the oil market. it lowers some the cost for the people using the products. at nearly $300 trillion, the u.s. swaps market still remains the largest pool in our financial market. i see harvey here. the dodd-frank act addresses this by shifting some of the advantage from wall street to the rest of the economy.

it does that in two -- in a number of fundamental ways actually. it provides the public information, the pricing and volume of every transaction once it is completed. it does so also by providing all market for this month the opportunity to come together to transact in a transparent and open trading platform. after the transaction and before the transaction. these trading platform to me that end users, investors, and speculators benefit from seeing available beds and officers -- offers. the law goes further by providing the public with daily valuation over the life of all clear swaps. it provides greater information to the regulators. one can have an effective cop on the beat. the rules do actually benefit if they are in force. the cftc has completed 7 of 9

reforms. the commission has begun receiving information from large traders in the physical commodity market, including oil and energy markets. -- to bring light and shy of this marketplace for the first time. in addition, starting in july, the public will start to get reporting on every transaction, or nearly every transaction in what is called real-time public reporting, not all that different from what is over at the bond market place. by contrast, prior to 2008, none of this. now the public and regulators will start to get information. financial reform also means lowering risk that wall street poses to investors, consumers, and businesses across america. dodd-frank does this in three

ways. one, transparency two, clearing houses. 3, by regulating the dealers in this space because they were not regulated before under what was the assumption if they were back, they were kind of regulated anyway. that assumption did not work so well. clearing houses and of lord rest by standing between buyers and sailor -- sellers and guaranteeing each party and get the failure of the other party. though clearinghouses have to be overseen for comprehensive risk management, they work to lower risk for a long time. in contrast to this past century, there have been many bad failures. we have lived through this great

depression and the 2008 financial crisis. though clearinghouses have to be managed well and have a vigorous oversight, they are far better than the alternative -- leaving risk in the bags. dodd-frank often mandates that swaps between financial entities where 90% of the financial transaction could possibly move into the clearing houses. let me repeat that. if there is a swap between two financial entities, they are moved to the clearing house. of the other hand, nonfinancial companies that represent approximately 10% of the market, congress mandated would have a choice -- they do not have to use the clearing houses. the thought that those that were only about 9%-10% of the market, they get to choose. they also represent 94% of the

jobs. it is important to note that consistent with this congressional attempt, we have been working row by row are up -- so so-called end users do not get swept up in definitions like the clearing definition or the mortgage calculation. fundamentally, if we follow congressional intent and allow and users the opportunity to choose rather than be swept up in regulations, they are enormous benefactors of this transparency. investors, consumers, and businesses also benefit from comprehensive regulation and oversight of the swap dealers themselves. we have passed three rules to register these entities, ensure that they have better sales practices when they transact with the marketplace, particularly with pension funds in municipalities, we have also

created roles with their own risk management and internal business, but, including prior laws between their trading and research. i know you had a panel on the implications of sarbanes-oxley. this was picked up from the security side and moved over to the commodity side. some one cannot have an oil trading research effort on the trading desk and vice versa. we are gone to build on these by finalizing capital and segregation roles. financial reform further means something to investors, consumers, and businesses in america -- it bears repeating itself -- through market integrity. reforms will protect and users from fraud, manipulation, and other abuses in the swap markets as well as the birds that might arise from excessive speculation. you can actually have rules on

the road and cops on the beat. we learned that in the 1930's. market integrity is critical. dodd-frank closed a significant gap in our a party to pursue manipulation charges on the marketplace, one by extending swaps, and two by during the security and exchange commission. i am sure the lawyers in the room know what i just said. i learned it, but i did not go to law school. we also have a new whistleblower party. that also directs us to establish aggregate position limits are both the futures and swaps market place or the energy, agricultural, metals market. we had it in the energy market through 2001 and then they were backed away from.

in october 2011, we completed the role so no single speculator is able to obtain an overly concentrated position in the market. full and effective the implementation of these financial reforms to best benefit the public does necessitate funding. i cannot finish this speech by not mentioning it. ftc, we00 people at the c are only 10% greater than we were at our peak in the 1990's. in the meantime, markets we have restored the over same -- corn, wheat, energy futures, financial futures -- that part is -- has grown five-fold. we have grown 10%. congress has decided we have to take on the swaps market place, which is $300 trillion, and not

do it with the more people. that is fundamentally what progress has said to us. unfortunately, that is where we stand right now. we will continue working hard and effectively to oversee the futures market and implement reforms broadly under regulated swaps market. this year we will finish the rules of the road for the swaps market in a balanced way. but without sufficient resources, the nation cannot be assured that this nation -- this agency to oversee the futures and swaps market. rican ensure that they get the benefit of transparent markets, lower risk, and enhance market integrity. the financial crisis was devastating our investors, consumers, and businesses. dodd-frank lowers risk in the market, brings transparency to

the market, brings better integrity to the market. the financial reform benefits of the companies and the economy that provides the private sector jobs. that 94% 5. it benefits all of us as taxpayers so we do not stand behind future bailouts. it benefits everybody who has a pension fund or a mutual fund. they are able to invest in a more transparent market place. the benefits just about everybody, possibly with the exception of a few people who benefit by keeping this market dark. most of us benefit from this reform. i think that was the nature of your conference. you wanted me to say why i think this matters. to celebrate the concerns, i say not true. and users of the big beneficiaries here as long as we continue to get the congressional intent right about end users not being brought up

enough. let us not forget the greater cost over all -- the 8 million jobs that were lost, the millions of homes the were foreclosed upon, the hundreds of thousands of businesses that did not make their budget and did not make their plan. that is really what reform is all about and why it is necessary. i thank you again for inviting me. i kind of care about this stuff. i think it really matters. i would be glad to take questions from your participants. afterwards, i will be available for the members outside. [applause] >> chairman gellert has agreed to take questions. >> i am from duke university

school of law. >> i thought so. >> hopefully you'll still answer my question. the press has a lot of reports that say the result of regulation in this area will just drive these transactions offshore. i am not a commodities person. i just wonder what reassurance you can provide brigid >> it is true that -- can provide. >> it is true that risk and money do not know geographic boundaries. a click of a mouse cents at around the globe. that is why we have been working so closely with the europeans, asians, and australians on financial reform. i do think that we cannot forget the financial crisis that we set -- that we had here and the

congress moved ahead with the president to say we have to shine a bright light on these markets. the american public benefit by that. if you transact in this country, you have a u.s. park, even if it is a cross border transaction -- you have the benefits of transparency and lower risk. if a transaction happens in china, that is another matter. if it is cross border and it really affects the u.s., we have to bring that transparency. i also feel very encouraged by the progress in europe is making. japan has already passed their law. i am flying this weekend to another international meeting on monday and tuesday on these matters. i say we have got to get it right to bring transparency to the public here. we are working actively internationally. there is been good progress there as well.

over here and then we will go to the front table. >> john bodman with etrade. we heard earlier this morning that in the context of legislation drafting that sometimes mistakes can be made if actions are taken too quickly. i would say perhaps the latest example of that would have been possibly the mf global situation where money was being traded from accounts that contained both mf global's funds and customer money. do you see to try to prevent this from happening again that you should have a complete segregation of client funds and

a firm funds and, if not, how you prevent another mf global from happening? >> i am not participating in that matter. it is an ongoing investigation. in terms of the over all questions that you are asking, congress really, with a focus of the crisis, gave us a one year to complete the in implementing rules of these financial reforms. now it is nearly two years since congress passed the law, so, of course, we are taking our time. we are doing it in a balanced way. we have 28,000 comment letters and legal briefs. some are 300 pages long of comment letters. some are one-pagers, i believe. we have had 1300 meetings. we have had 16 roundtable score. we are coordinating with other regulators around the globe. we have had hundreds of meetings

-- hundreds of meetings with those regulators. we are also doing it with an eye to the american public's need for reform. with regard to segregation, that is a core foundation of the futures and swaps world. we have tightened up in december. -- in december where customer funds can be invested. it is something we needed to do. we proposed that back in 2010. some people said slow down a bit. i am very proud of the staff that recommended it. we finalized that in december. we have enhanced the clearing houses by something called "a gross margin in." we have january finalized rules for the clearing house segregation of funds i and the

swaps market place, which was a historic move with the rugby regulation down to the clearing house that did not exist earlier. i take we have made some very good progress, but we have just completed two days of public round tables. what else can we do? to some extent, a consensus forms. to the extent consensus forms, we will seek public comment on further reform. up here and then back in the quarter. >> there is some concern the big bank dealers who have hysterically dominated the over- the-counter market are going to try to dominate some of these counterparties. what is the cftc doing? >> a number of things.

these swaps markets have been rather concentrated our route something called the g14. it is a group of 14 dealers around the globe. there is a lot of things that create a -- create more access to the market -- democratization of the market. when you bring access and transparency to market, you get better competition. i think that is why there has been pushed back. there are lots of comments from the financial community opposed to this. they are being rational actors. you shift the informational advantage to the public by shining a light on the market. you provide equal access. the statute says it has to be open access to clearing houses. access also to trading platforms. that is what we have done. we finalized rules last october on the open access to the clearinghouses, significantly

broke down some of the barriers. they were, frankly co, put there at 4 risk-management purposes, but on further reflection, probably not needed in the same way. we are looking at some rules in about a month on a very technical area. it is a very important role for access. it seemed like to comment letters were 5-6-1 to do it, but you can imagine one out of five or one out of six on the other side, frankly from some of the dealers -- the rules are so critical to access -- for access to the market. those are some of the things we are doing. back in the quarter. quite i am 8 financial sector

analyst. i assert on the shareholders of rights committee. >> congratulations for all of that. >> they cut me/when i was not working. my concern is related -- they have inflated their balance sheets with the contracts and their capability in effect of this preparation of contract in -- proliferation of contacting -- i am curious what power you would accept to be able to tap some restraint from management. they are pretty abusive.

they have pretty much been able to get away with what they pretended they have been profitable by. reduce step in to clean up this mess. >> some of what you a draft is addressed in a role we finalized last week. it revolves around with the securities and exchange commission does. that which we have done -- financial reform as congress has passed said we should put in place rules about risk management, record-keeping, reporting, and fire walls. we completed these rules last week about the internal risk- management of the debt, which includes the risk management of the usual things you would hope it would include -- interest rates, liquidity risk, currency,

etc., but it also includes a supervision. a very clear rule on the road about supervision. firewalls between the trading side and the clearing side and fire walls with research. the second piece you are talking about relates much more to the securities and exchange commission authority and, ultimately the folks in connecticut who set the accounting standards. they are still in connecticut, right? yes. steve harris was here earlier. a lot of what you are talking about is also accounting. what we were able to do is say you have to have supervision and things have to be brought up. transparency in markets makes it

a wonderful thing for the accountant when they are trying to see what are the values of things on the books. because everybody benefits by the discipline of a scene where the last transaction occurred. you take a very dark market and you moved it to something like the corporate bond market where you actually have to report each transaction. that changes a lot of the ability to manage the valuations. >> and warren buffett only had like 300 of these estimates. granted he is a much more cautious investor, but he caught them financial weapons of mass destruction because there was no regulation. they were able to abusively contract. are you saying you think this

serves to constrain some of this? >> i think transparency is a critical piece of risk management. the transparency of markets shines a light of the value of the transaction you are booking either that day or last year. it is a critical piece of that. transparency helped the end users, but it also helps in the risk management of these institutions. i had a lively discussion with mr. buffett last year when a call in to tell us to keep doing what we were doing. that was encouraging. >> you mentioned at the aspiration that 90% of the contracts would be cleared in clearing houses. >> this is based on international sentiment statistics. approximately 90% of the net notional is between financial

entities. about a third of the market is between dealers. the dealer is about 55%. 9%-10% is what we call end users. not all of that 90% will come to clearing. >> some people have expressed a concern that is a loophole by could end up swallowing the rule. what steps the you think the cftc will take to get to that 90% goal? >> it will be less than 90 percent fine, but there is a part of the market that is legitimately customized. but whatever portion of those and 90. can be standardized, we will have to go to. a public comment as well. -- go throughout a period of public comment as well our hope

is that will begin sometime in the spring. the clearing house is just in the last two weeks have gotten their first draft submissions to us. we are starting to walk through that. the interest rate swap market right now -- there is a clearing house out of london that clears a quarter of a quadrillion. $250 trillion of dealer to dealer swaps. the energy swap market, the two u.s. clearinghouses and the london clearing house, clear vast, large significance psalms in that marketplace. it gives you some evidence on this market, particularly in the interest rates.

i will go here and then there. >> jeff with ib capitol. companies are refusing to comply information.'s how are you supposed to employment in a way and distribute for circulation a cost-benefit analysis as required? >> just to say a little bit more on this -- under the commodities and exchange act, not dodd- frank, we are required to look at cost benefits, not cost analysis. all of this matter is when people take these things to

court. that is part of our democracy. we, as commissioners, when we do ule, we go out into the proposal stage and try to keep public input on both the qualitative and quantitative aspects of it. as jeff said, we get -- we give some input, but opposite we do not get a lot of input. part of that is because, mentors are a little bit hesitant to give away their information. part of it might be that they do not know yet. it is a very new regime. we go through all of the comments. the chief economist has to sign off on each one of the policy

folks. the lawyers at to sign off as well. the five commissioners way in. i we are doing exactly what the commodities and exchange act tells us to do -- play it, consider it, and seek public comment on it. >> do you have a view on the best way to fund the commission? should it be funded by concessions on regulated industry? do you think that might tie the agency's interest to closely with that of the industry? >> how to better fund the agency -- would that tie us to closely to the industry? i think it is critical to be funded. i look forward to looking with

congress anyway congress wants to. [laughter] to be only a 700-person agency -- we have a very significant challenge with the budget deficit and the fiscal situation, so to go to congress and ask our a 50% increase in the size of the agency from a $200 million a defeat to a $308 million a did say, i have a deep respect for what congress and the president has to do, but i think it is a good investment for the american public. all you have to do is look at the chart. that was $700 billion. i will not say that no separate -- and no regulated swaps market would need it to avert tarp, but it is like buying insurance to have a well-funded cftc.

both republican and democratic presidents have a suggested that congress should consider a fee. at that is what they want to work on, i am ready to work with them on it. if that is not the way, i would just keep advocating with the appropriators and the congress for the funds i think are appropriate for this very expanded mission. >> vall." role timing, chairman bernanke said before the house and senate finance committee it will not be ready by july 21 with the statute provides is should be enforced. in his words, "we will not enforce it if there is no rule." what is your forecast?

the trading account was home to most of the problematic financial positions. when you expect to be enforcing the volcker role. >> it is a collaborative effort between six regulators and the department of treasury. we published eight rules for comment a little after the others this week. we frankly add capacity issues. moving through all of the matters congress has asked us to do. we just published hours in the last week or two. our comment period closes april 60. we look forward to your comments on how best to protect the public i assume we will work with the other five regulators in a balanced way to complete what congress laid out. the challenge is a well-known.

it is to prohibit proprietary trading. that is to protect the taxpayers. the committees who of some support from the federal deposit insurance corporation. that is some form of safety for the federal reserve and the fdic. prohibit proprietary trading, but permit other activities. it is how to deal with prohibiting proprietary trading, permitting market making, and not having one swallow up the other in the swap final rule. that is the core challenge. 17,000 comment letters of already come in. i see you want to get me out of here or something. i will take one last question. is there anybody else? there we go. i do not want to take up your

friday. i may be standing between you or a golf course or something. >> you are right on time. thank you very much. [applause] i was right. the country is in good hands to have you as chairman of the cftc. as a token of our appreciation, -- >> is it less than $20? >> it is a plaque and a coffee mug. we do not want to violate any rules. but you are welcome to come back anytime. prostie it's very much. >> thank you. [applause] >> i am taking the mug. anybody want a clock? it looks like under $20. is that it?

>> you never know what the clock cost. that is over $20. we will give out the clock after lunch. thank you very much. [applause] >> thank you very much. i had been asked to give you some suggestions about how to get lunch. i hope you are hungry and ready to stay. >> they are not fighting and dying in -- and sacrificing their lives because they are muslim extremists. they are fighting and dying because they want the same universal rights and freedom we guarantee in our constitution. >> i think if we do not get the international community together soon, we are going to look back and say we not only did not do the right thing morally to stop in a sense from being killed, we missed a in --

an extraordinary -- an extraordinary strategic opportunity. >> your concerns are exactly the concerns of the administration. we are not divided here and we are not holding back. this administration has led in iraq, afghanistan, the war on terrorism, libya, and we are meeting in syria. we are working with those elements to try to bring them together. it the agreement is that we ought not simply go in unilaterally, then we have to build a multilateral coalition. we have got to be able to look at that. it did not that easy to deal with some of the concerns out there. >> watch this week's hearings and news conferences anytime you want online at the c-span video library. search events from today, this year, and earlier. war than a quarter-century of politics and public affairs on

your computer at c- span.org/videolibrary. >> in a few moments, the budget for native american programs. "washington journal" live at 7:00 a.m. >> several live events to tell you about today. the carnegie endowment for international peace will host the libyan prime minister. that is on c-span3 at 9:00 a.m. eastern. here on c-span, the justice department and attorney general eric holder host a consumer protection summit focusing on fraud against seniors. that is at 2:15 p.m. eastern. >> fire j. edgar hoover? i do not think the president could have gotten away with it.

>> pulitzer prize-winning reporter and author tim wiener -- tim weiner blockages on j. edgar hoover's fight against terrorists, spies, and subversives. >> he stands alone like a statute encased in bronze. as one of the most powerful men who served in washington in the 21st century. 11 presidents. 48 years. from woodrow wilson to richard nixon. there is no one like cambrian a great deal of what we know or what we think we know about j. edgar hoover is a myth and legend. >> tim weiner on "enemies, a history of the fbi," sunday night at 8:00 on c-span's "q&a". >> this hearing look at how

tribal governments are affected by budget changes. this is a little less than an hour and a half. >> in these difficult economic times, the pri the's budget request for fiscal year 2013 reflects the continued commitment to strengthen tribal nations. -- tribal nations, and expand

health care services. however, it is important to remember that the federal government has a trust and responsibility to indian tribes. -- indian tribes, even during an economic recovery. this responsibility is especially important to remember as the sequester occurs at the beginning of 2013, which would require across-the-board cuts in a majority of programs and government agencies. this could have a devastating effect on tribal programs, which are chronically underfunded, even during prosperous times. i was especially pleased to see the people of the's budget included a recommendation to address the decision.

fixing the decision remains a top priority of the committee and the administration. fighting this will cost no money and will, in fact, be insurmountable in saving and creating jobs and bringing economic development opportunities to indian country. today, we will hear from the department of interior and the indian health service and we will hear from several tribal organizations of the impact this budget will have on tribes in their area. at this hearing, in fact, all tribal nations -- i would like to emphasize the importance of submitting comments or written testimony for the record.

the hearing record will remain open for two weeks from today. now i would like to invite our first panel to the witness table. serving on our first panel is the hon. larry -- assistant secretary for indian affairs at the department of interior. mr. mike smith, deputy director of the bureau of indian affairs. keith moore, director of the bureau of indian education. net we welcome the director of indian health services in the department of health and human services. accompanying him is randy

granell, deputy director of the indian health services. let me thank you for your patience. i have been looking forward to this hearing. will you please proceed with your testimony. >> thank you, chairman akaka. we have previously submitted a written statement, but i will summarize my statement to begin with. we thank you for this opportunity to provide the department's statement on the fiscal year 2013 president's budget request. the 2013 budget request for indian affairs within the department of interior totals $2.50 billion in current

appropriations. this is $4.60 million below last year's, which amounts to a reduction of 0.2%. as you know, indian affairs meets with tribes on a quarterly basis on the budget through the tribal interior budget council and through this informed consultation with tribes, we included in this budget request $43.80 million in program increases in priority areas such as contract support cost, rights protection implementation, and law enforcement. chairman akaka, there are some reductions in the budget. the indian affairs 2013 budget request continues to provide funding for to the zero of the department's priority initiatives -- strengthening

tribal nations and a new energy frontier. this budget request seeks an increase of $43.80 million for strengthening tribal nations. within this initiative, we plan to advance and nation-to-patient relationship by seeking $12.30 million for contracts support costs and the indian self- determination fund and indian land and water claims settlements for continued work on the navajo-scallop water projects. we also plan to continue protecting indian country by seeking an additional $11 million in public safety funding. with that increase, $3.50 million will go towards of hiring additional tribal and bureau of indian affairs law enforcement personnel and $6.50 million will pay cor staff increases at newly constructed

tribal and bureau detention centers. this request also supports the expansion of a highly successful pilot program launched in 2010 that saw a 35% reduction in violent crime -- violent crime for reservations with a high violent crime rates. the department seeks in a creek -- increase of $5.20 million for education activities. $2 million will go for tribal brett support cost, which cover administrative cost at schools and residential possibilities. to continue with the new energy frontier -- frontier initiative, the budget request includes money to support energy resource development on tribal land. of the total, $6 million is provided for renewable energy projects and the remaining $2.50 million is intended to provide

part conventional energy in support of leasing activities on the reservation. we had to make some difficult choices in this budget request. we requested $19.70 million less for streamlining measures, which we anticipate will come from savings from eliminating overlapping functions. the $13.80 million reduction will come from anticipated management efficiencies. the department's requested reduction of $33.10 million is for program decreases, including $2.60 million less our law enforcement special initiatives and $6.10 million less for information resource technology and other programs. in at -- in education related

activities, we seek a decrease of $4.50 million to reflect a slight decline in student population and we request $17.80 million less for new school construction funding. the budget provides $5 million for the indian guaranteed loan program, which is a reduction of $2.10 million from the 2012 enacted level. overall, the 2013 budget reflects eight fiscally responsible balance of the priorities expressed by tribes during the consultation, together with the broader objectives of the administration. the 2013 budget continues to focus on core responsibilities to indian tribes and alaskan natives through programs and services that are vital to indian country. this budget puppets is on a priority areas in india country

and honors the federal government's obligation to tribal nations in a focused and informed manner. the best example of this is the inclusion of the language in the 2013 budget request just as it was requested in 2012. process is very much. i will be happy to respond to questions. >> thank you very much, mr. secretary. i will call on you after i recognize senator franken. he has to be back on the floor. i asked him for any opening remarks he has. >> bank you for your courtesy. unfortunately, i have to leave in 15 minutes. i would just like to say a couple of things.

each year this committee holds hearings on many issues of great importance for indian country, but only once a year do we examine overall funding levels for native programs. how we choose the funds send a powerful message to the tribes about our priorities. in these times of tight budgets, programs across the federal budget are being forced to mate painful cuts and do more with less. sadly, native communities are far too accustomed to doing more with less. i hope that as we examine this year's budget, we will all remember our trust, responsibility to tribes, roughly about any cuts to tribal programs. the president's to fiscal year 2013 budget did some good things rated i am very happy to

see proposed increases for indian health services. contracts support cost and public safety and law enforcement -- i know these are top priorities the requested by the tribes, but the president of the budget also makes severe cuts. i am concerned about the decrease in the indian guaranteed loan program and i am deeply troubled by the zeroing out of the placement school construction. school construction funding is an issue that i bring up to this commission over and over again. there is a $1.30 billion backlog for indian school construction and repair, but this year the president has requested only $53 million and none of that money would go to new construction. the state of the schools is simply unacceptable.

the rich late reservation is in desperate need of replacement. students and teachers have to deal with leaky rooves, rodent infestations, and sewer problems. the facility does not meet safety, fire, and security standards. i want to thank deputy secretary echo hawk for coming to discuss this the other day. i want to ask my colleagues on this committee this question -- would you countenance your children getting their education in a school that was not safe, in a school that had rodents'

running around, that had mold, that has leaks? it is cold in the winter and sweltering on hot humid days. i know the answer would be no. how can we expect native children to succeed under these conditions? senator from minnesota -- i have a responsibility to every child in a state -- in my state, making sure every child gets a good education. we know what the purpose of that is. we know why we need to do that. it benefits every child. it makes them more productive. it benefits our economy. we know the reasons to do this, but there is another reason. these are children. they are beautiful children.

they are gueifts and they deserve to be educated in a place that is safe. that does not have rats and rodents. so i will fight to restore funding for placement school construction and i hope i can count on support from other members of this committee. i want to thank the witnesses are coming today. i want to apologize because it is my turn to preside. i read your testimony and look forward to watching it later. i want to thank you, mr. chairman, for giving me this opportunity and for your indulgence and for the ranking member's indulgent as well.

thank you. >> process is very much, senator franken, for your statement. let me call on our vice chairman to give his opening remarks. >> gracias a very much, mr. chairman. i appreciate the patience of the members of our panel as we went to a series of roll-call votes. once again, congress is examining a budget request all federal programs, including indian programs. we live on in the shadow of an enormous and growing spending deficit. as we see on both sides of the aisle, an agreement that there is no avoiding the problem anymore. most of not all agencies or programs would be called on to participate in the solution. we recognize the federal government has an important responsibility to indian country. public safety, education, health

care just to name a few. we all know that carrying out these responsibilities requires money. this year and in the foreseeable future, agency decisions are going to receive the ever increasing scrutiny as you and i have discussed, mr. chairman. i look forward to the additional testimony on how this budget advances federal responsibility to indian country. thank you, mr. chairman. >> thank you very much, senator. i now call on dr. [unintelligible] please proceed with your testimony. before you do, the me tell you your full statement will be made part of the record. >> thank you, mr. chairman, mr.

vice chairman, members of the committee. i am the director of indian health services. i am accompanied by the deputy director. i am pleased to have the opportunity to testify on the press the's fiscal year 2013 budget request for the indian health services. my written statement reviews in detail what i have accomplished with the funding congress has appropriated for us of the past few years. since 2000 a, the budget has increased by 29%. this funding has helped indian health services make significant process -- progress in our efforts to improve the organization as well as addressing the priorities of our work. our partnership with tribes is fundamental to improving the health of our communities. year we could -- we incorporate tribal budget priorities into

our budget request. we are making progress on reforming the indian health service with an emphasis on improving the way we do business and how we manage our staff, setting a strong tone at the top that we must change and improve, improving our financial control, finding more efficient ways to conduct business matters have been very important to our progress. for example, i was just able to demonstrate the best performance ever at an audit in 2011. our hiring has improved. -- the contract health services program is how we paid for referred care. it has demonstrated accomplishments to improved business practices and improving access to care. referred care hasre