respond to those recommendations within 60 days and say what the y plan to do. they're not required to meet or act on our recommendations, but are required to say what they will do about it. host: what is coming next? guest: but we are required every year to report on this program. we will continue to do work on this program. the work we will do will be similar. we will look at the processes and the performance. host: thank you. guest: thank you. host: the house is in for a quick pro-forma session then coverage of a hearing with ener. march 13, 2012, i hereby appoint the honorable thomas j. rooney to act as speaker pro tempore on this day.

signed, john a. boehner, speaker of the house of representatives. the speaker pro tempore: the prayer will be offered by our chaplain, father conroy. father conroy: let us pray. gracious god, we give you thanks for giving us another day. in this chamber where the people's house gathers, we pause to offer you gratitude for the gift of this good land on which we live and for this great nation which you have inspired in developing over so many years. continue to inspire the american people that through the difficulties of these days we might keep liberty and justice alive in our nation and in the world. give to us and to all people a vivid sense of your presence that we may learn to understand each other to respect each other, to work with each other, to live with each other, and to

do good to each other. so shall we make our nation great in goodness and good in its greatness. may all that is done this day be for your greater honor and glory. amen. the speaker pro tempore: the chair has examined the journal of the last day's proceedings and announces to the house his approval thereof. pursuant to clause 1 of rule 1, the journal stands approved. the chair will lead the house in the pledge of allegiance. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the speaker pro tempore: the chair lays before the house a communication. the clerk: the honorable the speaker, house of representatives. sir, pursuant to the permission granted in clause 2-h of rule 2

of the rules of the u.s. house of representatives, the clerk received the following message from the secretary of the senate on march 12, 2012, at 10 :11 a.m. that the senate agreed to senate resolution 390. with best wishes i am signed sincerely, karen l. haas. the speaker pro tempore: without objection, the house stands adjourned until 10:00 a.m. on friday, march 16, 2012.

>> on your screen is senator jeff bingaman of new mexico. solyndra filed for bankruptcy last year, two years after receiving government backing for a loan. they will also hear from herbert allison, the former treasury department official, who was chosen to lead the white house review of the program. this program has just started. >> it is easy enough to just eliminate government support for american efforts to compete in developing and deploying these new technologies. unfortunately, our efforts to support domestic players have been caught up with many election-year issues. my impression is overall the

program is doing what it is designed to do, that is to take on risks that private investors are not willing to take on, not the private-sector has not taken on risk. every investment the private sector has -- the government has made has followed risky investments by the private sector. private companies are selecting the companies they believe will be winners, and the garment is stepping in to help them achieve the scale necessary to compete on a global stage. although the u.s. remains one of the greatest sources of innovation, it is not clear we will reap the benefits of that innovation or even retain the advantage we have in that innovation. in the ever-changing and highly- competitive environment of technology and the research and development necessarily follows

the manufacturing, and before long the next generation of technologies are being developed overseas, as well as the manufacturing happening overseas. we a cnet scenario in industries such as televisions and concern -- we have seen that scenario played out in industry such as televisions and consumer electronics, and i believe that is the important context for our conversation today. both our witnesses have important insights on how we can best achieve the goal of the dancing clean energy in the united states in a way that could begin dancing clean energy in the united states in a way that gives the most valued -- advancing clean energy in the united states in the way that gives the most value to the american taxpayer parent and look for the rich taxpayer. i've looked forward to their thoughts of how we can best

develop those. but because of its rakowski for her comments. >> thank you, and i appreciate scheduling an important hearing. i think it is vital for our committee to conduct regular in the intensive oversight in the program in the agencies under our jurisdiction, especially when we see problems that might be unexpected, or certain serious problems begin to surface. i understand secretary chu will join us later this morning. he will be helpful to hear from him directly about what has gone on in this area. mr. herbert allison, thank you for being here and for agreeing to take on the audit of alone programs. this is one of the most complicated problems this committee will be attacking. they spend different it ministrations, different

congresses, and include three different programs. i want to save the life of the independent audit to be quite useful. it dipped -- i found the independent audit to be quite useful. it reveals the concentration risk in the current portfolio. the audit further highlights the reliance on state and federal mandates to force the creation of markets for certain products, and makes it valuable for recognitions we need to consider. if there is one shortcoming to the audit it is that it does not delve deeply into the history of these programs, which i think is essential in understanding how we have gone into some of these difficulties. we are talking about three different programs. the first one was section 17 03, from the 2005 energy bill. if you have for the 2007 energy belt, and then you have section 17 05, from the 2009 stimulus.

while there are certain similarities, there are important distinctions and differences between the three programs. i will take a quick moment, mr. chairman, to redo them. section 1703 was greeted by a republican congress and relied heavily on self payment, making any project using new or significantly improved technologies available, unfortunately is not close no single loan guarantee. then you have section 1705, created by a democratic congress, which narrowly limited eligibility to renewable in transmission projects. the close -- the program has closed down 27 loan guarantees. then you have the apm designed to appropriated -- appropriate

costs for auto makers, but just five loans have been guaranteed als loan was in march, 2011, and prior to that was april, 2010. many of the remaining applicants are withdrawing, expressing lear frustration of overd doe ability to make a decision on this. both are now dogged by questions about political influence, compliance with underlying statutes, and compliance with regulations. everyone is aware of that. some might have think we -- might think we have called on this hearing this morning to pile on and add to those criticisms. i did not want to take my time

to add to the narrative of the scandal and the controversy the department is already confronting. instead i would just offer this hard question that needs to be answered in fall -- these programs should be examined, and i think they should be improved. that is inappropriate role for congress and this committee. we did not -- that is an appropriate role for congress, and this committee. we now expect every project to be roaring success, but we did not expect them accumulation of failure so quickly. there are clearly problems that need to be sorted out and work through. your audit, mr. herbert allison, is a good first step, and i think this hearing mostest in the right direction. the program can serve a valuable purpose. right now, we have to know if the loans and the loan guarantees that have been issued through them are as effective as we had all hoped they would be.

we still have tough decisions to make, and i hope we learn enough to make sure those decisions are fully informed. thank you, mr. allison, and mr. chairman. >> thank you. mr. herbert allison is the author of the "report of the independent consultant's review with respect to the department of energy loan and loan guarantee portfolio." we appreciate your good work on that report, and we look forward to your describing it to us and making any other comments before we ask questions. thank you. >> thank you, chairman bingaman, ranking member murkowski, and members of the committee. i was appointed by the chief of staff of white house to study the department of energy portfolio of loans and guarantees to clean energy projects. i was asked to evaluate the current status of the portfolio, proposed ways to strengthen management and oversight of the program, and

recommend a system to provide early warning of problems that might harm the portfolio's value. if the scope of my assignment did not include investigating past decisions and actions because several independent investigations are underway. given a tight 60-day deadline to my team and i relied and readily available information. the department of energy rapidly provided documents and arrange interviews that we requested. we conducted our review and develop recommendations independent of the white house and of the department of energy. we chose two methods for estimating future losses. the first is the one of the department of energy must use to comply with the federal credit reform act of 1990. our second method called fair market value is used in the capital markets to estimate the discount from a loan's face value that investors would

demand so they can receive an acceptable return if they purchased alone. the methods have fundamentally different purposes, so their outputs are not directly compatible. the government met. -- method estimates the credit loss. the market method estimates broader set of costs and provides information useful in managing the portfolio, but does not estimate the cost to doe if it holds the portfolio until loans are paid off. we estimated that the expected credit loss will be $2.7 billion. we calculated the would demand a discount of $5 billion, to $6.8 billion in face value.

no financial mall can reliably predict the eventual loss on the doe portfolio for several reasons at first, these loans will not mature for up to 30 years, well beyond the limits of forecast. second, most projects are still being built and some rely on unproven technologies. if their performance will not be known for some years. third, as practice prove themselves, their risks and expected losses will diminish. fourth, the estimates of lost assumes that all projects will be fully funded and that doe will be a passive bystander, unable to influence the portfolio's risk over time, but so far, doe has found that only one-third of total commitments. they are allowed to demand more credit protection is a registered not mean target, and so for the riskier projects have not received any funding, and

others have been funded only partially. if those projects do not meet conditions in their loan agreements, doe could cut off more funding and a forecast of lost to decline substantially. for all of these reasons, our focus should be more on assuring the effective management of the portfolio going forward. doe must be inactive manager, continuously monitoring the projects, spotting risk, and limiting exposure to loss. the report recommends ways to strengthen management and independent oversight of the program, and provide early warning of potential problems. in base, our recommendations include insuring adequate funding and staffing of the program, protecting taxpayers by strengthening doe's position as a creditor where possible and having a clear policy on funding projects not meeting products --

objectives, having oversight by forming a risk management department and combining several agencies that now oversee the program, and establishing a high-level advisory board, creating an early-warning system covering market conditions, performance of all projects and loans, in the internal operations of the program, and, lastly, improving public reporting about the program. thank you, and i will be pleased to answer your questions. >> thank you very much. maybe i could ask you to elaborate some. your report indicates that changes were made in the program to better control risk, both before the program review -- or the review period -- and also

during the time you were doing your review. i guess i would be interested on -- in comments you to give us on the effect that either personnel or policy changes have made, and whether you think those midcourse corrections have been useful or adequate? >> thank you, chairman bingaman. in terms of structuring the loans, there have been improvements to the structure of the loans, beginning in the middle of 2010. the department put the loan agreements provided for more staging of funding, and also provide -- the department put all the agreements provided for more staging of funding, and that they should be provided with equity before the department of energy would be

applying loan funds, so progress could be reviewed before the government puts its own money to work. we think that the terms and conditions of these loans, by and large, since the middle of 2010, in most cases conforms closely to commercial practice in the industry. in terms of the internal management, there has been a gradual evolution of the management and oversight of this program within the department of energy. we see, for instance, several committees have been formed to oversee and make recommendations to the secretary about committing additional loan funds. however, in our view, there is still room for improvement and that is why we made these recommendations, first of all to fully staff the loan project office with permanent

professionals. there is a need for more expertise in, for instance, project finance. many positions are currently financed by consultants who are temporary employees. we believe going forward their needs to be consolidated internal oversight, and importantly the formation of a risk management department. currently, the executive director oversees the credit department, for example, the compliance department -- we believe those should be separated and there ought to be an independent view within the department of energy about the risk that is undertaken as loans are provided, and also above the ongoing dynamic changes and risks within these loans. independent oversight would be another check and balance. we think that position should have the ability to call for a

halt in funding until the secretary approves if there is a different opinion between the risk management department and the loan traffic office as to whether the loan should go forward. >> as i think you are aware, senator murkowski and i and other members on the committee have proposed a bill to establish an independent agency outside the department of energy that would take over responsibility for administering loans. have you had a chance to look and dad? do you think the general thrust of that legislation -- look at that? do you think the general thrust would make sense as an alternative? >> i have reviewed the legislation. i think all will agree there is need for professional oversight and the use of best practices

and managing and overseeing this portfolio. i think there are several questions that i might pose. these are more in relation to policy. again, my brief here was to do a fact-based analysis, but in answer to your question, one issue is if there is an independent agency within the department of energy, who is responsible for policy implementation of this program? is it the new agency or the secretary? my understanding is this agency would be completely independent from the decision making standpoint from the secretary. the law should provide who was accountable secondly, should there be a sunset provision in the bill?

the purpose of these clean energy loans is to provide funding for projects until they reach commercial maturity and funding is available in ample amounts in the public markets. unlike many other programs administered by the government, which have in definite futures like student loans and so forth, this is intended, i believe, to run only a certain number of years, so perhaps there needs to be some type of sunset provision. >> do you have anything else to add? >> as i read the bill, it would allow this agency to be able to borrow to fund its operations. this could mean that this agency would have not only equity, perhaps $10 billion, but

indefinite funding capability. is there a possibility that it might start to grow in size and begin to crowd out public sector financing? that is one potential risk. could it become an independent force in and of itself? these issues need to be carefully looked at. >> thank you. senator murkowski. >> thank you, mr. chairman. when we created the loan guarantee program, there were a number of terms and conditions that were inserted at implementation. i want to ask you three questions, i hope to 50 breeze. -- pretty brief. when condition is there be a "reasonable prospect of repayment." in your opinion, what is a

reasonable prospect of repayment? is it an 80% chance it will be repaid, 70%, is it higher or lower -- what is reasonable? >> senator, that is an excellent question. we looked at the history of that term in legislation, and it goes back a long way, but no where could we find a definition. >> how would you define that? >> that is precisely the issue. i would say reasonable prospect would probably mean more than a 50% probability, but others might defined it as a 90% probability, and with that vagueness there is room for controversy in second-guessing. i would recommend there be greater clarity to these policy goals regarding financial recovery. >> let me ask you another one

where we ran into a situation where there was some vagueness. another requirement was that the obligation is not so boardman to other financing. i read that, -- is not so important to other financing. you do you think that was they didn't anyway? >> not being an attorney, in reading it, it is quite clear to me that the point of origination, there should not be subordination. the question is, later on, if a project or a loan runs into trouble, does a lot allow that in order to preserve taxpayer assets the doe have the ability to subordinate? in commercial practice it is common where a loan gets in trouble in order to attract

additional funding. existing lenders subordinate for a better chance for recovery. i would respectfully submit there are techniques used in the private sector that are not available to the doe, and one is to be able to subordinate because it least you get something back on the investment, perhaps, and the second is to be able to contribute equity, or to convert to equity. in this case, it looks like that is ruled out. if i could speak more broadly about this, these laws confine the type of financing the government can make quite a bit. there is virtually no upside for taxpayers if these projects succeed. there is one case, tesla, where

the government did take options. apparently, the government can take equity interest as a condition for making a loan, but it cannot make an outright equity contribution. for early stages it might be suitable for the government to contribute equity to prevent a control issue from are rising. it might be non-voting, or conferred. one option would be going forward with a wider variety of options, more consideration of recovery and games for taxpayers. if a few projects were to pay off a lot, that might pay for losses in other projects. >> let me ask you one more. this is a requirement to "provide an amount sufficient to carry out a project. gulf that has to be difficult to

determine the overall -- project. talks it has to be difficult to determine the overall cost of the project, and whether funds will be there is sufficient to cover the amount before we of issued the loan guarantee. how do we finance that one? >> most of the cost will take place in the construction phase until the project begins to generate revenue. in that phase, the loan agreements provide that there must be very detailed budgets, there must be independent engineering analyses and reports as progress goes along. as i mentioned, there is phase funding, so certain benchmarks and milestones must be met. >> is that happening? >> yes. it is easier to estimate the cost. there might be overruns, and most of these loans provide for

some cushion in case of overruns. that is built in. there is frequent reviews of progress in all of these projects. what is not known is once these projects are operating, especially those without a power purchase agreement, which is pretty much a guaranteed source of revenue, in the case of the manufacturing venture of -- ventures, they have no power purchasing agreement, and how well they will succeed in a competitive market, for instance for electric cars, that is open to question. that is why we divided the portfolio into utility financing, into nonutility loans, including manufacturing of an electrical components or

cars, for example. then, ford and nissan, a large portfolio -- component of the portfolio, those are easier to analyze. much of the risk in the portfolio is in these nine utility manufacturing companies. >> senator debbie stabenow? >> thank you, mr. chairman and mr. allison, thank you for your analysis. it is helpful to us. as someone who was deeply involved in the technology program, working with our chairman, at the time when we put that into the energy belts there were a number of things happening, but also we were in the legislation we were raising

the fuel efficiency standards. we were encouraging more, smaller, fuel-efficient vehicles. i was concerned at the time that production would go overseas. that is how we came up with this particular program. in fact, it is done what we wanted it to do, at least at the beginning. when we look for motor co. retooling their michigan assembly plant in wayne, mich., saving 1900 jobs, their exit bringing jobs back from mexico related to the upper reaches they are actually bringing jobs back from mexico related to -- they are actually bringing jobs back from mexico related to the operation. when we look in a global economy where all countries wanted to advance manufacturing for good middle-class jobs, they're all providing support in some ways

through financing, tax incentives, and so on, and at least as it relates to the program, that is very much with the goal is -- providing the support to keep jobs in america. what would you recommend to make this retooling program more effective at this point? >> first of all, i would point out that these programs are intended to encourage risk- taking. that is the point, really. having risked in the portfolio is understandable. i think what is important going forward is to make sure that this portfolio is well managed by professionals, there is independent risk oversight of this portfolio, but there is ample public reporting time each of these projects and how they are doing, so the public and

congress is kept well informed. while these programs are being managed, again, there is room for improvement. i think with the recommendations that we are putting forth, if those are adopted, i think this portfolio can be responsibly managed going forward. >> speaking about the risks, i know there is concern and criticism related to the amount of rest the department has taken on the loans and loan guarantees, but i find it interesting day your report suggests that some of the risk has actually gone down, particularly with retooling manufacturing loans. you calculate the risk associated with sword and nissan decrease by 95%. i would suggest that it is in part because companies like

ford are making fuel efficient vehicles that people are buying and it has been a success story. i wonder if you could talk for other reasons for changes in risk assessment that you saw in your report. >> first of all, some of these projects have progress. ord is the best example. during the height of the crisis, all of the automobile companies, including ford, which did not need a bailout, but was also suffering at that time, but they're better remarkable recovery. it does have a major effect on the overall risk composition of this portfolio. so, i think there s projects, as i mentioned in my testimony, as they progress, the risks in that

project compliance -- the major component of risk is during the construction phase, especially to the utility-related projects, because once they are completed they will have a binding, long- term contract to purchase all of their production. again, i think in several years the tenor of risk in this portfolio should be demonstrably improved if all goes according to plan. >> thank you very much. >> senator coats. >> thank you, mr. chairman. mr. allison, i think it was important to have someone take an independent look. my question goes back to the fundamental question of what the goal of government -- role of government should be in something like this.

we have some celebrated failures and that sours the public in terms of the use of taxpayer money when they read about these failures. we are talking about estimates of several billion dollars of taxpayers' money. my question goes to what is your take on the question of the government in limiting its investment into basic research and letting the private market take more of the risk in terms of the commercialization of various projects and new innovations? have we learned some lessons from our efforts to direct money to specific industries and specific companies? there is always the question of political influence in the decision making progress. there are some of these allegations that on some of these loans there were directions from policymakers or

political directives coming down. now, we're talking about better management of the project -- process, but is the basic process broken to start? could you give me your thoughts on that? >> thank you for the question. it is an important question. i'm a big believer in the capital markets, having spent most of the years of my professional career in the capital markets. if we look back in history, and i am sure you are well aware of this, in the energy field and other fields like medicine and transportation, the federal government has played an important role in getting projects off the ground. if you look at the space program, we are starting to see commercial launch companies coming into effect and

operation, but the government had to fund the initial stage, and the same with most forms of energy. i think where there is a policy need, and this is where the senate and house of representatives have to make these decisions, there may well be a legitimate role for government financing, but he needs to be tailored to the policy goal and the risk characteristics of these projects and to a, where possible, provide mechanisms for taxpayers to benefit if projects are successful with federal money. i think there is this so called the valley of death in various phases of financing for, say, clean energy, where the government can play a constructive role. these projects need to be

carefully researched and they need to have financing structures that protect taxpayers. and there ought to be a finite life for these programs. >> well, i think your recommendations -- on the basis of what you just said would be helpful in that regard, but it concerns me when i read the inability to attract the necessary people with the skills and experience to work in the public sector to make these evaluations, particularly when they're using someone else's money. in the private sector, the bottom line is what ultimately counts. therefore, i think naturally we would get a much more keen and sharper look at due diligence before you commit the funds. secondly, it is outside of the political process.

responsibility here falls on both sides for some of these programs. we continue to read about political influence. for instance, the stepping out of this field into another, i remember talking to the head of the nih and he said that if congress would not direct how we allocate money we could be making breakthroughs in life- threatening illnesses that are very, very close, but congress keeps telling us we have to put the money somewhere else. i am afraid part of the beast that exists from a political standpoint in terms of our thinking that we have a better ability to direct where the funds go than the private sector does. that is where i think we get in trouble. my time is expired.

if i did not come to preach, the you do come out of the private sector, and i think your evaluation is important to hear. >> and your final points, senator, that is why i think it is important that these programs be reviewed periodically to make sure they are relative and ideal for the current climate and objectives that are being sought. in terms of making sure there is professional staffing, as we pointed held there is no provision for long term funding of alone project office. one reason why it is difficult to attract and retain professional talent is people do not see if they come into the government in one of these roles that this program will be funded down the road. it is funded out of origination fees, so well as loans are

closed, funding comes into the department of energy that underpins this project office. this program has loans that will be out there for 20-to-30 years. one need active professional management for the entire time -- he will make active professional management for the entire time the government holds these loans because decisions will be made along the way. to attract people, they need to have the assurance that the funding will be there, otherwise why should they joined and oversee the program? >> would that not go against the concept of sun setting programs? -- of sunsetting programs? >> what i am talking about, senator, is if you have an ongoing program where you will be making loans over time, then

i think you need to think about a sunset provision -- when do we stop making new loans? when is the private market able to finance these types of projects without government assistance? when these are made, they will have to be administered. one consideration should be should the doe sell off the loans once they are matured and there is a public market for them, or should they hold them? we presume they will hold them for many years. if they hold them for many years, there will need to be professional oversight to make sure the taxpayers are protected. >> senator white. thank you, mr. chairman, and mr. allison, thank you for your good work. it seems to me that if you look at these loans you come to the

conclusion that not all energy loan guarantees are created equal. he then compare that to the -- you then compare that to the statute that basically lumps everything together, and you say to yourself that looks like it is right at the heart of what the congress ought to do. if there is private sector investment, for example, that signals a message that people can feel more confident that this is something that can work. utility-linked loans, for example, which the pacific northwest has been interested in, insures that you already have a customer lined up. you have a customer lined up

from the get go, which should also give a measure of confidence. my question, as a result of starting with this proposition that not all energy loan guarantees are created equal, my question would be to you, would it make sense for the congress to step back now and look at restructuring the loan guarantee statute to in effect set up different categories that recognizes fundamentally different risks to the taxpayer? you would measure, for example, something that would insure that there is a market from the get- go. that could be one category. something else that was exciting and promising but did not have the same support would be a different category.

would it make sense to restructure the loan guaranteed statute along the lines of recognizing different risks to taxpayers? >> senator wyden, i think that is an excellent sought. you do have a wide variety of loans in this program. i think there needs to be great clarity about the purposes of the programs as a whole, and what they are designed to achieve. as i have said before, i do not think there is anything wrong with making risky loans as long as we acknowledge the risk in the loans. one of the causes of controversy is there are differing expectations about what this is supposed to be doing. you could have some programs like the utility-linked loans,

where the risks are much better understood, you have much less risk once these projects are built. there might be very good reasons to be supporting early-stage, innovative manufacturing companies in green energy to get those industries off of the ground. that will involve higher risk that ought to be acknowledged. that -- there should also be different funding options available. the way it is structured today is one-size-fits-all. these are loans at government rates. i am not sure they need to be of such a low interest rate to attract funding. the fees the doe can charge are

very low. maybe there is a different type or package of financing that should be available for riskier projects than, say, the utility projects were there is a conservative approach to debt restructuring. >> thank you. nobody goes into this thinking everyone will be a 100% winter, and a dramatic opportunity for creating scores of new jobs, but taxpayers deserve better to me that a program that lumps solyndra into the category of one of these link projects category. i believe we can do better for taxpayers and for some of the

most exciting technologies. senator sanders has talked a lot about the opportunities in renewable energy. we have a chance to make exciting changes if we restructure this program, and mr. chairman thomas thank you for holding the hearing. -- chairman, thank you for holding the hearing. >> thank you. i appreciate your work. the report had a section called proactively protecting the taxpayers' interests, saying the -- that was addressed. with regards to solyndra, the secretary has argued the department of energy did not violate the 2005 department of energy act when restructuring the loan. i thought it worked in a way to put american taxpayers at a

disadvantage. the secretary says the law applies to the origination, not the restructuring of loans. i do not agree. i think the energy policy active 2005 does not distinguish. with that said, would you support legislation to insure that american taxpayers will always be paid before private investors, whether it is our origination or restructuring of the loan? >> senator here, thank you for your question. if the paramount issue is recovery for taxpayers once the loans are made, based on my experience in the commercial world, i think that the department of energy should have some flexibility to subordinate, because that might be the best way once the loan has been issued on a senior basis to recover money for taxpayers

because by subordinating it might make it possible to attract additional funding from other data investors, which could help the project succeed. sometimes the project will run into trouble. there are risky, but that does not mean everything needs to be lost. there needs to be creative refinancing as a way to protect taxpayers and enhance the probability they will get money back. >> it seems to me that subordination in the case of solyndra did not work to accomplish that goal. thank you. let me ask about bonus payments. to follow all police said on taxpayers getting value for their money, several loan and grant recipients have recently filed for bankruptcy, laying off workers, and experiencing difficulties, and the media is reporting that several of these companies including solyndra

awarded large bonuses to executives as other employees were laid off. last week it was reported that beacon powers bonuses were linked to executives progress in landing the loan guarantee. what, if any protections are in place to make sure american taxpayers did not stop the bill for bonuses? -- for the bill for bonuses? >> thank you. we are only looking a loan program. i think it is important and the provisions in the slot allow for this comment to look at all the expenses plan in these -- important, and the provisions

in the law allow for this, should be looking at all the expenses involved. they may want to look at programs. i am not sure this provision is in the programs. that is something that should be considered, because i understand public consternation of people are receiving bonuses. >> that would be one recommendation in terms of ensuring the abuses like this did not take place again? >> i think that is a reasonable idea. yes, sir. >> thank you, mr. chairman. >> thank you. senator sanders? >> thank you, mr. chairman. mr. allison, thank you for being with us. in terms of full disclosure, let me be clear that i happen to believe global warming is very real. i think it is causing enormous problems to our planet today, and i think it is irresponsible

but we are not moving as aggressively as possible to reduce greenhouse gas emissions. a few weeks ago we had a press event with representatives of the insurance industry, not generally noted as one of the more radical groups in our society. they pointed out the damages extreme weather disturbances are doing to their bottom line because of global warming. it is my view that our country and the federal government should be investing strongly in energy efficiency and sustainable energy in order to reverse greenhouse gas emissions and try to protect the planet. what we are talking about is the role of government in energy, and we have been focusing on solyndra and the 1705 program. the me ask you a question. in the 1960's and 1970's, there

was a huge over-billed in terms of nuclear projects. in fact, as i understand it, about 100 nuclear facilities were terminated -- a huge expense to rate payers and taxpayers. right now, i find it ironic that some of my friends talk about picking winners and losers, but would you not agree with me that for the last 50 or so years the united states government has picked as one of its winners a very risky industry called nuclear power, an industry, and correct me if you disagree, would not be in existence without the support of the federal government in terms of the insurance program and the attempt to get rid of nuclear waste.

would nuclear industry be in existence if it was solely dependent upon wall street and the financial community? >> i would like to respond to your question, but i must confess i did not have real expertise on that question. that is a broad, deep question, as to whether the government should have been sponsoring nuclear energy. i do believe, as a general comment, that in many nations industry, and right now -- nation industry, and right now you could look in nuclear fusion, which could be a clean source of energy -- >> i'm sorry to interrupt you. i have limited time. when people talk about winners and losers, is it fair to say that the united states government has decided that one of the winners in which we should make huge investments is

a very risky nuclear power industry? >> the only comment i could make from my own experience is that in the early phases of any industry it is difficult to pick winners and losers, therefore you find financing for a lot of different approaches to solving a particular problem, and over time, one learns a lot turned >> i agree with that. the only -- one learns a lot. >> i agree with that. is it fair to say that we've seen their riskiness with solyndra maybe 10 times + with the nuclear industry which is already lost huge amounts of money? >> i respectfully would answer that i think your next witness, secretary chu, is far more qualified to answer that question. >> thank you. all that i would say, mr. chairman, is yes, we do pick

winners and losers, and probably the great winner in terms of federal subsidies is not only the nuclear industry, but the fossil fuel industry as well. we have pumped billions of dollars into those industries, and i think it is time to focus on energy efficiency and sustainable energy. >> thank you. senator lee? >> thank you, mr. chairman, and thank you, mr. allison. i agree that an audit of this program is warranted. the real question is whether the government should even be playing a venture capitalist with taxpayer money in the first place, whether in this specific sector of the energy industry, or elsewhere. i want to make clear that my concerns over the administration of a loan guarantee program should not be mistaken for

approval of the program as a whole. when companies like solyndra and beaten power failed, millions of taxpayer dollars are wasted, and it is clear, in my opinion, the government has no business being in the investment business. the apparent basis for there are types of investments that are risky and only the government can and will invest in them. if i'm understand you correctly, to be downplaying the risks of these investments, it seems little contradictory to say that government intervention is necessary because only government can do this and that it is too high for private

equity markets and to claim that it is and appropriate risk of taxpayer funds because there are adequate safeguards in place. which is that? are the risks manageable? these are policy questions that congress needs to grapple with an answer. i'm not sure that -- you can give a blanket answer to your question. you know this far better than i. congress is constantly deliberating about what is in the interest of the public in the long run, the payoffs from some initiative to the public. it may not be direct financial returns but there could be social consequences that make it toth the government's while be involved. there are numerous areas where

private financing -- i'm talking about health initiatives, for example, and that's why we're having nih doing research. there may be a legitimate role for government or private financing is not available. i do believe that these programs could be constantly reviewed to the extent that there are programs in place to see that they are still necessary. are there private alternatives available today? i believe the best allocation of resources will take place through private interactive markets. >> the risk -- is the risk manageable? couldn't be manageable from a private capital standpoint? >> that is a legitimate question. >> perhaps we should not be putting a taxpayer dollars a

risked. your report did not consider solyndra or beacon power. that is no longer part of the program. those are finished. >> there were no longer part of the portfolio. their eventual value will be determined through the courts. >> can you guess how that might have affected your report? how you report might have been different if they were still on the books? >> i would only be speculating. we would have applied the same methodologies. the process that we used in each case was independent and we took a look at at the information on each one of these loans to try to gauge the risk at this time.

we looked at engineer reports and so forth. we would have followed the same process. i would only be speculating. knowledge that certain procedures were not followed in your report. >> i believe the investigation is underway and i would be speculating about that. i have no information about solyndra that is not available in the newspaper. >> thank you. >> thank you. senator franken. >> i think that senator lee said that if the risk is manageable, we should not be putting a tax dollars at risk and if it is not manageable, we should not be putting tax dollars at risk.

did i hear that correctly/ ? i did. therefore, we should never put tax dollars ait risk. i agree with senator sanders. we have global climate change problem. we had testimony from the director of the forest service the other day who said the duration and intensity of the forest fires are caused by global climate change. and that will get worse. we're spending more and more money and there is an actual cost to the taxpayer. taxpayer money is at risk because of global climate change. the bark beetle is eating more and more of our forests because of climate change and because they do not die from severe

winters at certain elevations when they use to. it is costing the taxpayer -- taxpayer dollars are a risky if we do not address -- are at risk if we do not address and tried to get to clean energy. it seems to me that our tax dollars are at risk if we do not do something. that is what it seems to me. it seems that we need to do this as smart as possible. that's what it seems like to me. i want to follow-up on senator comments and questions. one of the -- one of the most important aspects of the loan

guarantee program is to figure out the right subsidy of these loans. if the cost is too high to a company, they might not be able to seek a loan. the technology may have a lot of promise. if it is too low, the taxpayer cannot be protected from possible loan default. in some cases the subsidy costs work underestimated and in some cases there were over estimated. can you tell us what you observed with respect to transparency? can the credit subsidy cost calculation for each individual project be done any more transparent process that the public can assess? >> we did look at the credit

subsidy process because we have to learn it in order to make your own estimates of what the credit subsidy we think should be. like any financial model, it has strengths and weaknesses given the intended purpose. the purpose of the credit reform act method used in budget is to have a consistent approach that applies to all programs across the government. it can do that. it uses the same government discount rate for all these programs. in terms of estimate the loss on these particular loans in the portfolio, you then have to calculate a credit rating. the credit rating is used to determine what the default rate is expected to be given the credit.

so what is done is to look at years of data across many different types of loans that are rated, let's say, bb. then you plug in that rate into the model. then there is a recovery rate. what has been the typical rate of recovery against the amount of the loan or the value of the assets after bankruptcy? the weakness in the model is that you are using indexes on default rates and recovery rates that apply to a wide range of loans that are not particular to the nature of these loans. there is no easy way given the novelty of these loans to calculate what the default rates and the recovery rates are going to be.

fair market value has some advantages. it will apply to an estimate of a market rate of discount to determine what discount the investors would demand in order to purchase this rate at the interest rate that it has. that also has weaknesses because you cannot apply that in budgeting very easily across the government because each discount rate would be different. i think it would be hard to of a standard budgeting process. it is important to understand what the purpose and the strengths and weaknesses of the models are. did not give too much credence -- do not give too much credence to these models. they are dealing with novel technology.

the government can control the risk and exposure in a variety of ways. it doesn't have to advance all the money if these projects are not meeting their contractual benchmarks. that is why we concluded, here are the estimates using these models as best as we can do. do not pay too much attention to that. it may be more or could be less. it could be less than is indicated by that number. it is important to manage the portfolio. you better manage it very carefully on behalf of the taxpayers. >> my time is way up. you're basically saying that there is not necessarily a scientific subsidy calculation

here for this subset, but the management of each guaranteed is of tremendous importance. thank you, mr. allison. >> senator paul. >> thank you for coming today. >> i could not speculate on that. >> were you commissions after it was public that slender was going bankrupt? -- that solyndra was going bankrupt? a billionaire gets a loan from the government and goes bankrupt. his attorney's husband works in the -- we're not going to look

at solyndra? i find that very curious. did anyone from the administration asked you not to mention all look into solyndra? >> no. >> did do have the power to looko into solyndra? >> i was asked to look at the loans that exist now. >> it says the current status of the portfolio -- you would have to look or the problems are. this seems to be so myopic. i am skeptical that he did not look at solyndra when that was the reason that you were commissioned. you have solyndra. you have beacon energy going bankrupt.

what about bright source? hat part of that? who owns bright source? another obama contributor. you know what their profit was? they lost $13.5 million. why are we giving money for a family that has hundreds of millions of dollars? this is about crony capitalism. it is about giving money to people that have their money. i don't understand. you did not look get any of the problems if you did not look the companies with the problem originated. >> senator, i aniston your

question -- i understand your question. we would have needed investigatory powers, the right to demand documents. it would have taken many months if not a year. >> then the public information that is out there on solyndra -- would that have been a red flag for you? >> i have not looked -- >> if you is the attorney for solyndra's husband worked in the loan department, does that send up red flags for you? >> i do not know the facts for that. >> if she knew that somebody now works in the department of energy and approved the loans, does that send up red flags?

your reputation is on new line. your commission to look at oversight. >> we have looked at that. we were going to do as thorough a process of reviewing the policies and procedures of the department of energy regarding the management of this portfolio. i think we did that. i think that we came to our own independent conclusions about how the portfolio is being managed. you see a number of recommendations. we gave loans -- loans could be made to u.s. companies. >> they got five of your million dollars -- $500 million. >> we did not investigate

whether the law was complied with in all cases. that was not part of our review. the entities that barred the money or u.s. companies. they may have ownership from abroad -- the entities that borrowed the money were u.s. companies. >> thank you. >> we have a second panel which is secretary chu. i suggest we thank mr. allison for is a testament and go to the second panel. >> thank you very much and we appreciate your testimony today. let's ask secretary chu to come in so we can hear is perspective and ask him some questions.

>> mr. secretary, thank you for being here. welcome back to the committee. we just received testimony from herb herbert allison about this report -- from herb allison. we would be anxious to hear any thoughts you have on the same subject. then i'm sure the senators will of questions -- will have

questions. >> thank you. thank you for the opportunity to discuss the efforts to strengthen our loan programs and to grow americas clean energy economy. the department has cooperated with congress' request to discuss our loan portfolio. mr. allison released a thoughtful report. he made some important recommendations. we took steps, many of which consistent with the recommendations to improve the loan program. this includes working to make sure our team has the number of personnel to manage the

portfolio and to protect u.s. taxpayers. we continue to improve processes for monitoring loan administration compliance, reporting, and resolution capabilities. we have put in place reviews to hold the loan of as accountable. the department takes is seriously.is mr. allison looked at the risk factors behind each loan an estimated each loan's costs. the federal credit reform act defines the cost of these loan programs as the estimated long- term cost to the government including the risk of defaults.

similar to a loan-loss reserve. congress appropriated $10 billion for title 17 and vehicle loan programs. to report finds that department of energy has estimated the cost of these risks. the long term cost is $2.7 billion, estimated by mr. allison. the purpose is to provide low- cost financing to projects that have a unique value to the nation. the loan programs have been successful overall. the department supports roughly

three dozen clean energy projects that are expected to employ more than 60,000 americans and to power nearly 3 million homes and this place nearly 300 million gallons of gasoline annually. our loan program is spurring tens of billions of dollars in investment in clean energy projects and helping to unlock private capital. the and states regained its title from china as the world's leader in total investment in clean energy. the department of energy is using all tools at our disposal so we can compete globally. improvements in technology are driving a global revolution to clean energy. to wonder $60 billion -- $260 billion was invested in clean

energy last year. as the opportunity grows, so does the competition. countries are making major investments to electric vehicles. the united states must do more than invent technologies. we must sell them around the world. to have a competitive clean energy industry, we need programs that help spur the markets. what we watch the rest of the world pass us by? can we invest in america's workers -- we can invest in america's workers or we can send money and jobs overseas.

throughout our history, the government has supported the private sector and keeping the united states at the technolog gical forefront. we can still win the clean energy race but we must act now. i look forward to working with you. thank you and i'm pleased to answer your questions. >> thank you very much for being here. let me start with the general question. medicated strolling for winning the clean energy race -- you advocated strongly for winning the clean energy race. we have several clean energy racist. one is in the development of these new technologies. rpe is working on that.

there are other efforts to achieve that. a second clean energy race might be the manufacturing of these technologies so that we create the jobs here that are going to be created in this area. third is the deployment of clean energy technologies. you point out there is a real possibility that we would essentially cede to the rest of the world the ability to manufacture technologies and decide all we can do here is to import them and hopefully deploy them. but that is a different challenge. i guess senator wyden pointed out that what we put the loan guarantee program into law, we have not separated out the

different types of clean energy or energy projects that might require some level of government support through a loan guarantee. we have not perhaps adequately segregated those out. i would be interested in any thoughts you have about the appropriateness of us going back and trying to be sure that we're doing all that we can each of these various races to be sure the united states does not drop out of the competition. >> i have listened to a portion of the testimony by herbert allison and i agree with him and the report. the report took the loan program and divided into certain sectors. if you consider where you are deploying a known technology,

there are -- especially if the project that has a utility company which is a solid utility company with a good bond rating with a long-term power purchase agreement. you have signed into a contract this utility contract will pay this about for this electricity generated by wind or solar. the risk of that loan is different than the risk of a new innovative startup company. it is less risk but helps very much in the deployment of the project. that is one class of loan. the other class or investments in clean and innovative and manufacturing, whether it is atvm or whether it is something

in the energy generation business. that might carry a different risk. the mechanism that we were taxed with using -- tasked with use it tries to assess the risk to the loans. the allison report says we were a little bit higher but essentially on par with their evaluation of the risks of those loans and the congress had appropriated the money -- that money could have been spent on other things. it could have been spent on research. but they chose to appropriated because they recognize it was an opportunity to help these industries and help create jobs. >> let me ask one other

question. mr. allison said to the important that you get the right professionals, employees working in the management and oversight of this loan portfolio. to do that, you need to have a short funding for this activity so that people consider leaving the private sector and coming to work for the department's to pursue this management's of these loans -- coming to work for the department to pursue the management of these loans. >> he noted in the report -- we had a number of consultants to give us the financial expertise and we want

to bring in to this program career people who have experience in finance in general. so we agree with that. it is important and because we have a specific grant milestones that we pay close attention, milestones that allow the loan program to give money. it is import that we follow the loans carefully. >> senator murkowski. >> thank you. thank you for being here this morning. it is important to hear mr. allison speak to the audit. it is important for you to speak to some aspects of the loan program. in the report, he states that doe she better define the

balance between policy goal and financial. i look at that and to me that is a basic managerial function and i guess i was surprised to learn that from the audit perspective, that was in fact lacking. how will you grade the department's implementation of the loan guarantee program so far? >> well, when we started, it was new. we made a lot of improvements. people continue to make improvements. we know that sometimes the industry that a loan might be embedded in might drastically change. sometimes on a weekly basis. we think -- i could not say an

official grade. one thing the report was talking about -- this goes to the department policy and the law itself. what you mean about the chance? >> as a committee, we are tasked with the oversight program. i want to make sure that it is working and that we would not see some of the stunning failures we have seen from it. based on the results of the audit, it looks to me like we need to do some changes. this is not tweaking a program but some serious changes to this program so that we do have

assurances to the taxpayers so that we do have a structure in place that provides and allows for a level of accountability. i know that senator stabenow will probably ask about the atvm program and the fact we've not seen those loans go off the door under the 2005 act. we have not seen those loans go forward. we had a lot of money go out the door and we're seeing some serious concerns. if i had to give a grade or a signed a letter grade to the department at this point, it is not a passing grade, and i think we need to be able to do much better, and i would like to suggest that you are moving forward with some policy changes.

i think we need to be aggressive about this. this is kind a follow to what i've asked mr. allison. some of the conditions that are in the 2005 energy bill. able s the reason wi repayment. it is now clear in hindsight that with solyndra, that condition was not adhered to. $75 million had to come in from private investors. we saw the subordination. taxpayers were second in line and that has cost a great deal of consternation.

did you make the determination at the time that the amounts available in a loan guarantee was closed, that they were sufficient to carry out the solyndra project? how did we get to where we are today? that's a pretty bad mark on the books. >> the lone close and there was a world of difference as to when at the time of the -- we knew that the company was in deep trouble. about what we intend to do, many of the things in the allison report, we are doing. they recommended that there be more of the risk management structure and we agree with that. we set up a different part of

the loan program that would look at the risk as future disbursement go out. that's something we did before the allison report was submitted. we're taking his advice. we need people outside the loan program per se to be part of this evaluation. that is important that we get an additional set of eyes on that. it was a rapidly changing dynamic during this period of time and during that restructuring, we knew that the chance of repayment was low. all we did was we did something that we thought was in the best interest of the taxpayer. when asked, would you be in

favor -- that would not support anything? no subordination. there has to be mechanisms to draw additional investments to give the highest chance of recovery to the taxpayer. what we did is that we were doing things that were ensure the highest return of the taxpayer money. >> my time has expired. i do think it is important that we look to some of the other aspects of the allison report that speak to the real-time control to make sure that the risks are properly managed. i think solyndra is a perfect case in point where we best on

that, with regard -- where we missed on that. to defer to my colleagues. >> senator shaheen. >> thank you, mr. chairman. yes today i held a hearing on kiersarge.re sarg we heard from secretary of the navy and we heard from the former secretary of the navy and senator john warner and also some of the top ranking officials within the navy and the marines about what they are doing to implement energy

efficiency and new sources of energy within the navy and among the marines who are on the front lines in afghanistan. we heard a couple of things that i think are important to this discussion. being able to look at alternative energy sources like grenoble's beckham be used in he field -- like renewalables that can be used in the field. there is a correlation between our dependence on fossil fuels and casualties on the battlefield. one of the things that i would hope you might address this morning and i would point out that i know the energy -- the department of energy is working

closely with the navy and the department of agriculture on biofuels, which are a critical piece to reduce the dependence on foreign oil. can you talk about the programs that we are talking about as part of the loan guarantee program relate to our national defense and how critical they are if we're going to make some of these changes on the military side of our government? >> certainly. biofuels.egin with we think that by officials of considerable promise. we think they have considerable promise in developing technologies that can compete in the open market without subsidy. that is our goal. the united states has great

agriculture resources, things that cannot compete with farmland and we think this is a great opportunity to offload some of the oil. particularly if you can produce biofuels and make it a business, $80 a barrel, something like that. the advancement of batteries is very important. rather than trucking into hazardous rosupply routes, you could have a light weight system with a lightweight battery that could be part of your supply trade. >> we saw a demonstration of

that yesterday. the solar blankets that are already in use in afghanistan and we heard about how much weight it saves our soldier and not having to support those resupply convoys. >> that is another aspect of decreasing as people attack these supply lines and some of our soldiers and employees died from these attacks. we think it is important that we develop these programs. remarkable progress with batteries. a company has doubled the world record of energy density which appears to of know-no -- which appears to have no additional cost to the manufacturer. we look across -- energy efficiency is something for the

deployed areas and in general for the military. we think this is important is stretching the u.s. military dollars. we save money by saving energy. we have a close working relationship with the department of defense on that. >> we saw some examples of that which make us less dependent and more efficient. my time is up. let me make one more comment. one thing we heard was the importance of sending signals to the private sector about the importance of these energy efficiencies and renewable technologies, that the government has a role to play in doing that that is important to

our national security. thank you, mr. secretary. >> i will call on senator lee. >> thank you. surely before you became the energy secretary, you were quoted as saying that somehow we have to figure out how to boost the price of gasoline to the levels in europe. the price of gasoline in europe is about $8 a barrel. last week in your testimony in the house of representatives, it is my understanding that you indicated it that high gas prices are helpful in some light in spurring research. i'm understand the point. that is made to the exclusion of a more compelling points.

a strong economy will always provide more capital that can be invested in research and development. i hope that you take that perspective into account. i don't think high gasoline prices help anyone. i don't think they do anything other than hurt the american people. i do not know how much driving you do yourself. you may not personally be feeling the gouge at the pump. hundreds of millions of hard- working americans do feel this. they feel this every time they refulel their cars. hard-working americans keep the to suffer -- continue to suffer. all these costs wind up getting

passed downstream. i hope the administration takes that into account. we as a people continue to be dependent on liquid fuels. we have to have a source of them and that means we have to continue a robust policy of aggressive exploration and production of petroleum and natural gas. i have seen the focus of the administration that has placed most of its emphasis in this area and some failed policies including subsidies of alternative energy projects. the recent gao audio of the low -- gao audio of the loan program

-- increasing the taxpayers' exposure to financial risks. it went on in the report to determine that they have not completely documented its analysis and decisions made during reviews, which may undermine the public's confidence. are these statements accurate? >> let me first respond to your first statement. since i walked in the door, i have been doing everything i can to do what we can to reduce -- as we see these gas prices to reduce these prices.

we do feel the pain of american consumers and american businesses when they see the prices increase. " we can do, all the tools available, we are using -- what we can do. we're offloading the dependency on oil. biofuels, electrical power. >> are you saying in a longer share the view that we no longer need to boost gasoline prices in america? >> i no longer share that view. i think that right now in this economic, slow but return, that we need to have these prices

reflect the comeback of our economy and we are worried about that. we do not want the price of gasoline to go up. let me go to the gao report. it said explicitly that the diligence that we did in our loan program was considerably more thorough the what the private sector did. the think you are referring to is that we had -- about 2007, a lot of the input was in paper form. we're moving towards making those records electronic so that you can have a more modern data system.

this is true throughout the department of energy. i like the idea that we have electronic records rather than paper records and i encourage the department to make that transition. we're doing it in the loan program. >> you think that will bring about more compliance? >> i believe the report said that because the records are here and there and not in a central repository, that it would be harder for the loan program overall to see what is going on. as part of this risk management, we're going for it and recognize that we need the repository updated so you can get instant access, and we recognize that. >> my time has expired.

thank you. >> i think it is no surprise that i will talk about the vehicle technology program. in your testimony, when he talked about the fact that to win the clean energy jobs of the future, the u.s. must manufacture and sell them around the world. i could not agree with you more. when i was able to make this program private -- this bill that passed, this was a priority for you and it was in fact implemented in 2009. we have good things to report. jobs coming back from overseas. we have incredible delays year

after year after year. we had one company that indicated after spending $25 million, their application was never completed. i am concerned about where we are right now and something that goes to the heart of keeping advanced manufacturing in this country. we're competing with companies around the world. countries are providing tax incentives and doing a number of things. the retooling loan program goes right to that effort to keep jobs here rather than overseas. we want to protect taxpayer dollars, of course. how do we streamline this process so that it is meeting

the goals it was set up to do? >> i think we are very much on the same page. we are in total agreement with regards to the loans. we believe the loans to ford and nissan saved or generated many thousands of jobs. ford alone was over the 30 tho,000. they are not a major leader internationally. this is exactly what that loan program was intended to do and that is a great success. the loan to nissan produces cars in tennessee. another great success. we do have to look at the taxpayer money.

as conditions change, we have to say -- going back to the original coven of the law, which says, is there a reasonable chance of repayment? in many instances we feel that would like to see private equity be invested in these companies. there are milestones so that we can then say, we can help you grow your business. we are very sensitive to those things and we tried to balance the line between stimulating the manufacturers with these loans and again, a big success story of the loan program, and making sure that in the newer companies, we have to assess whether there market projections make sense in this rapidly changing -- which are best to do that.

we do want to stimulate investments in manufacturing in the united states. >> and i appreciate that. at this point, it is defeating the purpose of what needs to be done. it is creating an untenable situation for businesses that are on the edge and to be able to move forward to create these new technologies but waiting three years is too long to be able to come up with those judgments. what changes would you suggest to make this program more effective, and possibly add more opportunities for companies? we have passed legislation that would expand vehicles. very exciting work is being done.

would you support something like that? more opportunities to save jobs. >> i think this is a program and i would be delighted to talk to you about it to broaden its scope. working with congress -- to change some of that money so that it could be for grants, for developing new products. that would do a lot. grants that would allow a company to prototype things that could be made in america. i would be willing to work with congress if congress deems this is an important program. that could be another way to

broaden the program. >> thank you. >> mr. secretary, i appreciate you being here. there was a $10 million prize for a light bulb that will be affordable for american families. the prize went to phillips lighting. do you know how much the average white pulp retails for in the nine states? -- in the united states? it is $50. the think a $50 lightbulbs it is affordable for american families -- you think 8 $50 light bulb is affordable for american families? >> we are not asking american

families to spend $40 or 50 dollars for light bulb. some of those led technologies in commercial use in buildings or hard to reach places are very affordable. commercial uses in traffic lights already pay for themselves. the idea was to stimulate future development. >> the present claims he and his administration are promoting fairness -- the president claims he and his administration are promoting fairness. an article explained how bunglers were given jobs in the administration. obama hired steve spinner as a liaison and spinner pressed

for a final loan for solyndra. the government accountability of was released its own audit of the loan program. they concluded they did not follow the rahm process in documenting its decisions. it seems like the administration is doing a good job looking out for friends. >> there is no encouragement for making loans. after the conditional commitment was made, he was pressing to finalize things but he was not part of the decisionmaking process. >> i would like to ask about,

additionally, the electric vehicles. the president was in north carolina giving another speech on energy, promoting electric cars last week. we learned that general motors was suspending production of its electric car because it failed to meet sales expectations. last month, we learn your department cut off funds to the electric car manufacturers because it failed to meet sales expectations. i look at electric vehicles which range from $40,000- $100,000 and i ask of those are practical solutions for families who are struggling to pay bills especially as the president is proposing increasing the tax credit for what are essentially luxury vehicles and wants to increase it from $7,500 where there was not adequate takers t o now $10,000. is raising the tax credit for these vehicles that few families can afford the right thing to

do? >> as you may know, but if you don't, the goal of the department of energy is to develop the technologies that actually will drive down the price of electric vehicles or plug in hybrids. in the $25,000 range, these vehicles would be less costly, the cost of ownership would be less than a conventional internal car -- combustion engine car -- $16,000, because you will be saving gasoline bills. you take internal -- an internal combustion car and it gets 30 miles to the gallon -- with today's gasoline prices, that is $1,400 per year which is a horrible paid to american consumers. if you get electric vehicle the $22,000, it say,

drives this amount but it is about $300 in electricity. we are very focused on driving the costs of the electric vehicles down so it is exactly what you say -- that the cost of a vehicle that the american public can afford. >> mr. chairman -- >> i have the invisible gavel here - thanks very much for being with us. before i asked a question, i wanted to agree with senator lee a moment ago on the high price of gasoline and what it does to rural america. i come from a rural state and people travel long distances to work. i would hope that some of my republican friends would work with us on what we think is one of the major causes of the high price of gas now which is

speculation from wall street companies on the oil futures market. we believe in the evidence is pretty clear that 80% of the oil futures market is controlled, not by end users, airline companies or fuel dealers, people actually use the product, but by wall street companies who are speculating on the price of oil and driving oil prices substantially up. goldman sachs themselves, one of the major speculators, estimated that speculation is adding about 56 cents per gallon of gas. do you have any comments on that? >> i cannot say to the estimate that goldman sachs has made. i agree with you that futures play an important role, for example of southwest airlines or someone else wants to level the cost of energy that they by

future, they will use the fuel. it is a financial mechanism that helps them plan for the future. futures and that sun's play a very important role in stabilizing a company's prospects. i would agree with you but when futures are traded back and forth where no one actually intends to take delivery and enters into a different -- it enters into a different as to how modifies prices, i don't know. it is not what it was meant to do. >> let me ask you this -- my understanding is that right now we have about 100,000 americans working at more than 5000 solar companies. the impression is that sustainable energy is just doing terrible and companies are not making money and we are not creating new jobs.

would you agree that in recent years, not unrelated to the work you in the department of energy are doing, that in fact we have seen a significant increase in the number of jobs in the installations in terms of solar panels and in terms of energy being produced from wind? are we making progress and create jobs in those areas? >> we are making dramatic progress since 2008. we have almost doubled the amount of renewable energy from those two sources. >> that is not insignificant them a double is not insignificant. and we are creating jobs in that process as well. would you agree with me that virtually the entire scientific community not only in this country but around the world recognizes that global warming is real and that it is significantly caused by human activity and if we don't get a handle on greenhouse gas emissions there will be enormous problems associated

with all kinds -- in the future of this country? >> yes, i agree with that. >> let me ask you this, mr. secretary -- we're talking about the role of the federal government and what plays in terms of support of various energy technologies. is sustainable energy the only technology that has received help from the federal government? >> looking backwards at every form of energy, they received financial help from the government. oil, gas, gold, nuclear, you name it. when they were emerging technologies, they received seven -- substantial help. >> i would agree with that but they are still receiving help theme in some cases, that is correct. >> for example, i find it ironic that some of my friends on this committee expressed their

distaste for loan guarantees until as they want to build another 200 nuclear power plants in this country which would not take place at all. you cannot build another one without federal loan guarantees. is that true? >> that may not be a fair statement but let me go back to the original point your driving at. after we subsidized an emerging technology and it seems to be very successful on its own, there is a good case that can be made that this industry may not need federal support to. . we think renewable energy, there will come a day, i don't know whether it will be this decade or within a decade and a half, but it is not 30 years from today -- renewable energy will be the same as any new form of

energy. it will be competitive but until that day arrives, in this day gaiter the next decade and a half, yes, it could use a little more support. you can sunset that. there are industries that are doing quite well, we can also ask ourselves if they need to have continued support. >> mr. secretary, there is a new plant being proposed forger read georgia, a nuclear power plant. >> there is a vogle power plant that is consorting with companies led by southern. i believe it is a conditional commitment of a loan guarantee of $8.3 billion. the credit subsidy is paid for by the applicant. it is a score by the cbo at 1%

but the loan is paid for by the applicant. before nrc approval, another set of two nuclear reactors which are not applying for loans -- i can't really say definitively -- >> if congress passed legislation repealing price- anderson which is a federal insurance program if god forbid there is a nuclear accident, would wall street be invest -- be prepared to invest a nuclear energy? >> i agree, i think price- sanderson -- >> that is my only point in fact it for the excellent work you're doing. i hear sustainable energy being attacked and you have an entire major industry that people want to greatly expand for better or for worse which is totally dependent on the support of the federal government and would not last two days if the federal

government withdrew support i have the chair and i think it is senator -- >> thank. have you met george kaiser's? >> i think i might have at a round-table meeting. >> more than once? >> the only one i can recall is that time at a round-table meeting. >> are you concerned about the propriety of giving money, $500 million, to a billionaire and changing the rules some so he gets to maybe get a better deal than the taxpayers? >> i am convinced, nothing i have seen in the long program or anything in the white house, that any connection that george kaiser had with the raising of money had anything to do with the loan. as you well know, solyndra was at the head of the line, picked

by the previous department of energy under a previous administration and it was the one that advanced as the one that had the most were done on that loan that satisfied the conditions of the intent of the loan. >> that is troubling that there were the best case scenario and all the criteria and they went bankrupt. what is also troubling to most of us is that giving $500 million loan to a billionaire. why would we do that? >> there were other investors in associated with the republican party. >> i would not give it to them either. >> the politics of the investors was not part of the decision whether to give a loan to solyndra. >> is there a question of propriety when someone who works for you who is married to someone who works for solyndra?

you say there's a fire wall at the beginning but you say he never corresponded with people in favor of solyndra. is that correct? >> after the loan was approved, >> is that appropriate for him to be involved at any stage? to be involved at the beginning is an excuse but he should never, ever had the word solyndra leave his lips and i think it was. >> the part of energy had rigorous standards that we enforce on any potential conflict of interest. his wife was actually fire walled from doing any business from solyndra as well. >> have you met robert kennedy jr.? >> probably, i'm not sure. >> do you recall how many times? >> since i'm not sure, >> [laughter] are you aware of the kennedy

family fortune that they are pretty wealthy, probably worth hundreds of millions of dollars and the gave robert kennedy jr. is company $1.8 billion? are you aware that someone who works for you used to work for the kennedys that was involved in the loan process? but i am not aware of that. >> i dang it that is something we need to look into. -- i think that is something we to look into. this revolving door from big business into the department of energy to get larger loans -- $1.8 billion is a lot of money -- given to a large campaign contributor of the president. looks unseemly. i don't think that is your background but unfortunately you are the head of this organization that has been giving these loans to very wealthy people who are donors to the president. it looks really bad. do you give loans to foreign companies? >> we give loans for low and cement manufacturing united states. >> what about pfister-karma? >> which gave a loan to a design

group and los angeles and another part of the lawn of they satisfied the qualifications of the law that would go to manufacturing in the united states. the money given laws is very targeted the that way. >> i understand there were struggling and the money was going to be used in finland. >> as i said before, the loans we get our for american jobs and we're very clear about that. >> no money goes to fenland? they are not allowed to use that money in finland's? >> we give the loans ford jobs in america. we are very clear about that. >>pfister-karma is not using any money in finland it? >> i can get back to on that of the overall purpose of the loan is for american jobs. >> people say windmills, even though we have paid for them and

we got them started, if you take away the subsidies, they would never make a profit. atre just throwing money windmills. i just don't see the purpose. it gets down fundamentally to what senator lee is talking about that we should not be in this business at all. your choosing $50 light bulbs and nobody understands that in america and there's a problem here. i don't think you'll win the perception or on this. my advice would be to get out of this business. let's not be involved with stuff like this. by your involvement in it, it really looks unseemly. i don't question your character. you are known for being an upright person but you are overseeing something that really does not pass the smell test. >> thank you. centre sanders now have to go and vote, i just voted.

senator paul, you don't have devoted you don't want to. [laughter] you have to play all the percentages. thank you, mr. secretary. i wanted to ask a little bit about our competition in the world on these technologies. i think it is really important that we keep pace and don't fall behind china and india and europe. as i was listening to other questions in this and the other panel, thinking of all of the above, i know the president gets

criticized sometimes when, for example, he may not approve offshore drilling everywhere. they say what about all the above? my feeling is that all of the above does not mean all of all of the above. if it does mean all of all the above, certainly, it means in ovation -- it means innovation which may r &d like rbe which is patterned after darpa which created the internet which i believe, tell me if i'm wrong, has created some jobs. >> i think you are right. >> thank you for the validation. it also includes what mr.

allyson referred to as investment so we don't have their valley of death for all of these things that are discovered at universities and where we have had some investment by the federal government but to commercialize it. that seems to me what the loan program >> is >> that's correct. i think it has been mischaracterized in appropriately as the government being a venture capitalist. centre capitalists deal with smaller amounts of money at an earlier stage. the value goes to beginning to deploy a commercial scale where a large investment of capital is needed. when these loan programs were set up in 2005-2007 and an authorized, -- and an authorized, especially at the end of 2008 and beyond, the

credit market rose. this is why many countries have some sort of financial bank of their own to allow their industries to grow. china has a very large credit line, $34 billion in one year in renewable energy and things of that nature. the netherlands, germany, england, they all have many of these type of programs. ataren't they simply looking the future? and not the far future but the near future? in terms of the competitive global environment in terms of these technologies because we know this is where we are going back >> yes, that's why they are doing this for the want their

industries in their countries to have the advantage relative to other countries. if all the countries said we will not have any sort of government financing in any country, that would be one thing. a large number of countries are doing this. we should ask ourselves in the united states what we should be doing. >> or so we want to be competitive in these technologies which are clearly going to be an enormous part of our economy and of the world economy and the world energy economy? >> right, >> kind of ignoring that seems to me to be almost willful in not understanding where the world is going. i don't mean to be harsh but would you agree with me? >> i would phrase it differently. if you look at a way of

financing as a way of igniting the private sector investment which is what we ultimately want to do, a loan program such as the one we are administering, most people agree would stimulate private-sector investment at a 10 -1 ratio. this is a good thing and losses expected from this investment are far less, we think, and mr. allyson confirms this, then what was authorized. in aggregate, while nobody -- it has been very good at stimulating profits and success. >> my time has run out but i am now the chairman. so - i yield my time. solyndra was 3.3% of this entire 1705 program. there are risks.

we had one senator -- my friend and colleague on the other side -- say about the loan program that is the risk is manageable for the these companies, we should not be putting tax dollars at risk. they said of the risk is not manageable, we should not put tax dollars at risk. in other words, which never have put tax dollars at risk according to my colleague. now, he has signed onto all of the above. i would suggest that anyone who is for all of the above and was not for the loan program is not really for all of the above. so -- i would caution them when the president is not opening

every square mile of the continental shelf to offshore drilling that the criticism that he is being a hypocrite because he signed on to all of the above -- they should be a little bit careful in that regard. you said china is doing $36 billion? >> they have offered lines of credit of $34 billion line of credit to removal or the clean energy sector. >> ok, i think it is absolutely crucial for all kinds of reasons. we should invest in claim and renewable energy for obvious reasons, for economic reasons, for climate reasons and i also

-- when i hear about the $50 light bulb and the award given for that technology, i think of what laptops were when the first laptop came out. essentially, we're talking about mainframes and what the cost of a mainframe was compared to now, everybody who can get a laptop gets a laptop. that is what that is about, right? that $50 light bulb -- are you expecting every american to spend $2,000 a year on light bulbs or whenever the question was -- that strikes me as dust -- as just disingenuous either that or not understanding what the purpose of developing that kind of technology is.

let's assume it is the latter, shall we? can you explain again about the $50 light bulb and the places where it is already being used and already saving money, that technology? because thee led's, last so long, 10,000-20,000 hours, if you're in a place which leaves these bulbs on a long time, an exit sign, an emergency exit sign, sometimes an office building, they are left on for a short 10 hours and there are high ceilings -- you have to hire someone with a crane to go up there and change the light bulb, a traffic light is another good example. they are on all of. the time in those instances, we already know that switching out incandescent light bulbs led's makes commercial sense today. the idea of that light bulb

contest was to provide for a gold going furthered down to get a light bulb that americans eventually can afford. no one expects to pay $60 for a light bulb. quite candidly, if you fill your house light bulbs like that given that the last that long, they should be a of yourwill. [laughter] >> i think we will and on that. i just wish that when we do these hearings that we did them with the purpose of getting the most understanding of what we are a. doing both from a broad level and, as i asked mr. allyson very specific thing about loan subsidies, i think that is the best use of these hearings.

i thank you, mr. secretary, for the tremendous job you are doing. >> and. thank you. our goal is to get back to [inaudible] getting to 10,000 hours. >> for street lights, that will be on a certain neighborhoods because for safety -- it can reduce a. crime there are all kinds of reasons for that. >> mr. secretary, thank you. i assume it the record will stay up, ai'm making this week. [laughter] the hearing is adjourned. >> thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]

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[no audio] [no audio] >> just a related programming notes -- on thursday, c-span will have live coverage beginning at 10:00 a.m. of a senate hearing with nuclear regulatory commission chairman gregory yartzko. the commission approved a three measurements and that hearing is thursday at 10:00 are its some are calling it the southern super tuesday, residents of alabama and mississippi are heading to the polls today to cast their vote in the primary. c-span will have live coverage beginning at 7:00 p.m. eastern

with real-time election results and we will also simulcasted portion of the politico election night coverage and give you a chance to weigh in by telephone or facebook and gonzales on twitter at 7:00 eastern. lot more on our website at c- span.org/campaign 2012. the obama administration on monday blocked a new texas law that requires voters to show a government-issued photo id at the polls. the cuts of law say it helps prevent fraud in -- and election tampering, the justice department is arguing the law disproportionately cambers elderly citizens and hispanic voters who are less likely to have a driver's license or personal identification card. we talked about it this morning on "washington journal" and it is also our facebook poll of the day. the poll is pretty much even about now.

weigh in with your thoughts on facebook.com/cspan. >> i hope as we move forward in this world there are a number of problems that we have to resolve, problems of genocide in darfur and problems with a growing people's republic of china, a growing problem with iran -- we have a lot of problems to deal with and i think diplomatic solutions will have to be the answer in the future as we start to deal with the problems coming. >> congressman donald payne passed away this past week was the first african-american to serve in the u.s. house from new jersey. elected in 1988, he was a former head of the black congressional caucus and serves on house committees on education and foreign affairs. watch his speeches from the house floor and other cspan appearances all archived and searchable on line at the cspan video library.

we will have the white house briefing coming up at 1:00 p.m. eastern. president obama announced a new trade case against china that claims to crackdown on unfair trading practices to put u.s. companies at a competitive disadvantage and he talked about the killing of a 16 afghan civilians by a u.s. soldier this weekend. on the white house rose garden, this is just over five minutes. >> good morning, everybody. before american announcement about our efforts to stand up for u.s. businesses and workers, i would like to say a few words about the situation in afghanistan. over the weekend, as many of you know, there was a tragic incident in which a number of afghan civilians were killed. i spoke to president karzai and i said the united states takes this as seriously as if it were our own citizens and our own

children who were murdered. we're heartbroken over the loss of innocent life. the killing of innocent civilians is outrageous and unacceptable. it is not who we are as a country and it does not represent our military. for that reason, i have directed the pentagon to make sure we spare no effort in conducting a full investigation. i can assure the american people and the afghan people that we will follow the facts wherever they lead us. we will make sure that anybody who was involved is held fully accountable with the full force of law. yesterday i met with general allan an ambassador crocker board in washington i have extraordinary confidence in them and the many americans who are serving in afghanistan and

to have made extraordinary sacrifices to be there. today, i will meet with prime minister cameron who is part of our broad coalition serving in afghanistan and we will have an opportunity to consult about the way forward as we prepare for the nato summit in chicago later this spring. make no mistake -- we have a strategy that will allow us to responsibly wind down this war. we are steadily transitioning to the afghans were moving into the lead. that will allow us to bring our troops home. already, we are scheduled to remove 23,000 troops by the end of this summer, followed by the 10,000 that we withdrew last year. meanwhile, will continue to work devastating al-qaeda leadership and denying them a safe haven. there is no question that we face a difficult challenge in afghanistan but i am confident that we can continue the work meeting our objectives,

protecting our country, and responsibly bringing this war to close. one of the things i talked about is making america more competitive in the global economy. the good news is that we have the best workers and the best businesses in the world. they turn out the best products and when the playing field is level, there will always be able to compete and succeed against every other country on earth. the key is to make sure that the playing field is level. frankly, sometimes it is not. i will always try to work our differences through with other countries. we prefer dialogue. that is especially true when it comes to key trading partners like china. we've got a constructive economic relationship with china and whenever possible, we are committed to working with them to address our concerns. when it is necessary, i will

take action if our workers and their businesses are being subjected to unfair practices. since i took office, we have brought trade cases against china at nearly twice the rate as the last administration. these actions are making a difference. for example, we called it an unfair surgeon chinese tires which has helped put over 1000 americans back on the job. we have not stopped there. two weeks ago, i created a trade enforcement union to aggressively investigate any unfair trade practice is taking place anywhere in the world. as the ramp up their efforts, our competitive should be on notice -- we -- you will not get away with skirting the rules. when we can, we will rally support for our allies. when it makes sense to act on our own, we will. i just signed a bill to help american companies that are

facing unfair foreign competition. these companies employ tens of thousands of americans in nearly 40 states. because of subsidies from foreign governments, some of their foreign competitors are selling products at an artificially low price. that. needs to that ans morning, we're taking additional step forward. we're bringing in new trade case against china and we're being joined by japan and some of our european allies. this case involves something called a rare earth material which are used by american manufacturers to make high-tech products like advanced batteries that power everything from hybrid cars to cell phones. we want our companies building those products right here in america but to do that, american manufacturers need to have access to rare earth materials which china supplies. if china would simply let the market work on its own, we would have no objections. their policies currently are preventing that from happening. they go against a very rule that china agreed to follow.

being able to manufacture advanced batteries, hybrid cars in america is too important for us to stand by and nothing. we've got to take control of our energy future and we cannot let that energy industry take root in some other country because they were allowed to break the rules. our administration will bring this case against china today. we will keep working every single day to give american workers and american businesses a fair shot in the global economy. we will make sure this is not a country just known for what we consume. america needs to get back to doing what it has always done best -- a country that builds and sells products all over the world and stands with the proud words "made in america." that is how we treat good middle-class jobs at home and that is how we will create an economy that is built to last. thank you very much, everybody. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]

[no audio] >> we should hear more at the white house briefing coming up at 1:00 p.m. eastern and we will have that live here and cspan pretty chinese foreign ministry reacted today defending the beijing curbs on rare earth production as necessary to limit the environmental damage and preserve scarce resources. the chinese commerce minister last week spoke with reporters in beijing about the chinese complies with the world trade organization obligations and trade relations with the u.s. here's a portion of his comments, it is about 10 minutes. >> i have two questions for the minister -- recently, the u.s. government announced it will employ a new measures in case the chinese government continues to provide subsidies for its exports and the specific measures will include the increase of import duty.

i would like to consult the minister for your views and the view of the ministry of commerce. will that be the case where the ministry will employ countermeasures? the second question -- there are some opinions that the economic reform in china is not deep enough. i want to know your comments over this and do you agree with this kind of opinion? if you agree, which specific areas do you think china should continue to deepen the reform? >> [speaking chinese] you are not only good in chinese but also very smart in combining two questions into one. i will just mention the u.s. action regarding the subsidies. i have noted the discussion at the congress.

regarding the in compliance on the part of china with relevant international rules. the focal point was on subsidies. i want to make a statement that china abides by the rules and regulations to which china has exceeded. china is a new entrant of those organizations including the wto 10 years ago and we abide by the rules. of course, we do not have the obligation to observe the domestic code of one particular country. like the other 150 members of the wto, we seek fairness and justice in treatment. regarding subsidies to wto, that has been classified as taxable

and prohibitive -- prohibited subsidies and it is a very broad concept and interpretation of those two categories of subsidies is very buried among wto members and is open to interpretation. for example, after the economic crisis hit, many state governments gave subsidies to the corporate sector, for example the u.s. administration gave subsidies to the top three car makers in the u.s. as we have heard from the g-20 summit, there should be no trade protectionist measures. after that. we should not see a surge of subsidies investigations.

the u.s. is pointing fingers. the accusations mainly are that china is not complying with rules. in which area of the chinese are not abiding by the rules, they are not clear. i suggest that we have a dialogue, hart to hart dialogue. the interpretation of subsidies, we can have a conversation on that. i can make this clear to you that the chinese central government has no prohibited subsidies provided to economic entities. china is a big country and on the national level, there might be subsidies that might be problematic i am not very understanding or i don't see where i think 2006, the u.s. is lodging about 31 cases of

combined investigations. about 20 of them are targeting chinese exports to u.s. and not prohibiting or restricting other entry to the u.s. market. those are based on u.s. domestic rules, not wto rules. based on that, china made a case to the court of appeals that the federal circuit. the itc, the court of appeals ruled favor of china. they believed the u.s. was not justified in its action to lodge those investigations because china is regarded as a non- market economy. after that, we made a case -- we made an appeal to the court of appeals to the federal circuit that by the end of 2011, the

court maintained its verdict. the u.s. was not justified in its actions. if china were in violation of the rules, that china would have been urged to [inaudible] but china did not. recently we have seen the u.s. congress passed a bill that basically enables the u.s. to lodge countervailing investigations on non-market economies. traceability was given in 2006 and before. also the exporters, the importers would have to bear the burden of evidence, approve of evidence. i think the reason movement at the u.s. congress is not

consistent with u.s. laws and it is not in line with wto rules of china is making the case to the wto and channel one the case at they wto. i hope the trade enforcement authority will correct its mistake -- your second question is about chinese reform, right? >> speaking chinese >> you mentioned a very comprehensive point regarding the chinese reform. i fully support and a great -- and agree with the points you mentioned. i wonder whether you could be more specific.

for example, the world bank has made a target for china to reform its state-owned enterprise sector. all these reforms should be incorporated into the master plan, for example, to break down the monopoly in the energy sector and for the private sector and a state-ounce sector to enter into operations in various sectors which are not encouraged in the past. i think the economic structure which is more dominated by the public sector economy or state- on the economy, will remain unchanged. it is being returned to the chinese coast. code.

we will have these sectors play a major role in the chinese national economy. when it comes to reform, opening up our party in china as a member of the wto tenures letter needs to be more tolerant and opened. . further opening up will be viewed as a means to promote reform and innovation. only by presenting our own businesses, chinese companies, into the global population and into the global marketplace to compete on a fair basis can chinese companies grow more competitive. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> with the white house briefing coming up in tents or so, -- in 10 minutes or so, there is this new trade case against china. the briefing is set for 1:00 and we will have live when it gets

under way. there will be questions, too, about the assertion's announcement on monday blocking the texas voter i.d. lot. law. we have posted the question on our facebook page about that asking you if you are for or against the voter i.d. law. we have a number of responses -- one of your is against it because she believes it will restrict voting. another view is that the only thing it will restrict our it illegal aliens and dead people from voting. cast your vote at facebook.com/ cspan. we also asked our washington journal the -- yours this morning and we'll show you some of their answers. and there had lied on the justice department moved. -- headline on the justice department's move.

"the washington times" frontpage 3 -- -- front-page story -- and then, "the washington post" had of their story this morning inside the newspaper.

our question to all of you this morning, voter i.d. laws for or against. a democrat from indiana. are you for or against that? caller: i am against. host: why is that? caller: -- host: anything else to add? caller: they are doing this to stop this black man from winning the election. host: let's go to new york.

scott, independent caller. your thoughts. caller: i am a democrat but i am also running for office as an independent and i believe that when i go to vote, i actually have to present an idea of some sort. so, i think obviously you have to identify yourself in some way, shape, or form. what the id is, is debatable. a lot of different forums -- forms. but it is reasonable to prevent voter fraud to have some kind of idea. host: you broke up there a little bit. you said, on the other hand -- caller: i think you have to present yourself with some kind of id two present yourself, but it needs to be the least restrictive and not discriminate against especially minority groups or other groups, of which, at the report -- as the report said, tend not to have driver's licenses and other

forms of id. but you do need to identify the person who has to vote. i think it is reasonable. but to make it into a one-side or other side is not the right thing, either. but you do have to conduct -- kind of present yourself in some way, shape, or form, to the board when you go and vote. and identify yourself. i think it is reasonable. host: let me bounce this off of you, because this is "the wall street journal." they weigh in on it. they write --

what do you think? caller: i respect the statistics. but again, when that person present in front of you, to make sure that that person is not using anybody else's identity, they have to have some type of form of id. i think the real solution is for all of the people who don't have either state i.d. or driver's license, how come they don't do identification drives or something like that for people who are legally able to vote. they should have some type of

reform of driveway before the election occurs. it is almost like this is a band-aid solution. one side wants to prevent other groups from voting, which is wrong. host: robin, a republican from nebraska. go ahead. caller: yes. the constitution -- the 10th amendment says the tate have priority over the federal government. i don't have a driver's license and i have a picture id. i am legally blind. and i still vote. host: you were able to get identification? caller: yes. host: was it difficult? caller: no, not really. ol state -- the state capit

at all the birth certificates and i needed a copy of that. i went to the courthouse and got a picture id. host: here is "the new york times" editorial this morning. here is what they have to say -- they go on to say that the --

that is "the new york times" opinion. randy, a democrat from michigan. caller: good morning. thank you for c-span and thank you for taking my call. this is a tricky one, because i do agree with the first democrat gentleman who called -- we have voter i.d. out here. i have to show an id. but there are only 80 people in my whole voting area -- or maybe 200, to be realistic, in my whole township. i know just about everybody. i have never grown up not knowing anybody. i live on the edge of next to know where. i have always known everybody. but i watched on this show before and i have seen -- one gentleman was third generation without a driver's license. i would never imagine in my entire life -- he lived in new york -- who would go through

generations without a driver's license. so, that really shocked me for being out here in the country. the premise that it is voter fraud -- i think it is a good -- i reject that promise because that is the wrong way to approach this. because really you can look at the justice department study from 2005 to, i think, 07, and they checked 20 million voters and found about eight cases of fraud. so, the use of that in -- they are trying to politicize something that really we need to have a good, open conversation. like the first gentleman said, open it up and make it brought on the id, because i was against -- at first i was like, what's wrong with the driver's license, until the one gentleman said he was third generation without one. we've got such a big country. i did not know how it is to live in the city. >