bang for the block. we -- balked. we are spending more money for fewer ships and tanks than we ever have. you could say that is a defense contractor problem but it is a defense contract in problem and procurement reform has been on the table -- contracting has been the problem and procurement reform has been on the table for a long time. the cuts have to be intelligent. this is not an intelligent way of making cuts. the program talking about ben bernanke's testimony on capitol hill and warnings about the fiscal cliff. we showed paul krugman's column in "the new york times" where he called ronald reagan the original keynesian in this country. here is "the financial times."

and this tweet. guest: austerity in a depression is wrong. he is right in that respect. if it were that narrow, we would not have the debate. how do you get the economy started again in the short-run while the same time dealing with the dead? the cut-off line, according to most people is between sustainability and insisting ability. we have to do things going on. we are not growing ourselves into debt. we have no growth except in debt. there is no doubt in the short-

run you need to have growth in the economy. the only fight has been how do host: another tweet. guest: actually, they are cuts. cuffit would be equally disturbing beckham kirby it from defense and nondefense programs. it would take this back to somewhere around fiscal year 2010-2011. we are operating on last year's budget which was also the year before's budget. 5% beyond that is a real decrease. security. programs. host: republican. you are on.

caller: this is kenneth. i want to say that when i was a kid ronald reagan used a program to create jobs and get the economy growing. we went from the dow jones been 707 to 7000. the money went directly into the economy. manyeally ashamed that so prominent republicans would make a deal and turn around and find a way to get out of it. they have been doing this from day one since obama took office, -- pure obstructionism.

you could tell me why people are war instead of doing the job they're supposed to do. the way you talk and act, if it was in neighborhoods we would be carrying knives. guest: we have a dysfunctional congress aired the far left and the far right have been able to dominate in the house and the senate. we've not past appropriation bills. we are not passed tax reform. the gentleman is right. it is been poor behavior by the congress or the last three-to- four years. it started earlier than that. when reagan was president we have terrific fights.

we had some of the same dysfunction we have now. it is worse now because the country is polarized and there are lots of people who have reasons for that. the fundamental thing everyone needs to remember, the middle, the independents are the least- represented and there are consequences to that. it's called "the wall street journal -- host: "the wall street journal" --

host: we are talking about the effects on jobs if sequestration goes into effect with steve bell, the senior director of the economic policy project at the bipartisan policy center. roanoke, virginia. marianne, a democrat. caller: good morning. i keep getting confused with republicans saying the government does not create jobs, and here we are looking at all of these jobs that the government creates, and now the republicans are saying we will lose 1 million jobs. it gets to the point where it gets ridiculous. it seems like everyone is lying constantly. there is a show where you had sure you could do that with obama. i am mad at the abundance and news journalists that do not

absolutely say this is not what you said or this is what you said because we are busy in our lives and we really need newscasters to do their job. we cannot just search on google for millions of articles to find in the weeds with somebody really said. so, my real question is to you about the fact the government does not create jobs, and now they say we're going to lose these jobs. can you respond to that? guest: i certainly can. fortunately or unfortunately i am what is called a rhino, a republican in name only. i worked with people that at the time were very conservative, but not with the current republican party. i can understand why you are befuddle. the government does create jobs, and if you did not believe it, but all the people that are

employed by state, federal and local governments. it does create jobs. the question is how much should you take out of the economy to create those jobs and for what purpose? the fact of the matter is this, when you get into a fight you come up to eighth problem where in a serious deflationary time where prices may start to fall you will have devastating impact on the economy. ben bernanke yesterday certainly did not signal there will not be quantitative easing in the future, and we've seen again this morning where the troubles in spain are growing and they do not have enough money to pay for that. obviously, the government needs to step in. anyone that says we do not need government is not very serious about things. host: mr. bell has worked in the

private and public sector. you also worked on capitol hill in the budget committee, and during the reagan administration he was a member of the federal thrift savings board. guest: what we did was set up the brand new retirement program for federal workers, going from a defined benefit program to defined contributions, where you put in a certain amount of money and choose the fund. it is called the thrift savings plan. host: not to take as to much of course, but there are a lot of stories after wisconsin about public sector employees pensions being targeted. guest: wisconsin is interesting, but the most

interesting is have jose, california, one of the richest cities in the united states, a democratic state by registration and they voted for restrictions on pensions in the future. we talked about government being necessary, but there are times where the government gets much too generous and the money comes from taxpayers. what we see now is simple. many states and corporations have pension funds that are not fully funded. to put it in simple terms, the our people better 45 years old working for companies or state government debt think there will get a certain pension at age 65, and in all likelihood they will not because the money is not there. what did you do if you made ado

you say i will not be here in five years so it is not my problem, or do you say we made a promise 25 years ago and we need to start cutting back now? guest: -- host: does the same argument holds for social security? guest: social security is interesting. people think of it as a lock box with their name on it. that is my money, and i will get it back. that is not how the system works. people that are paying social security right now, their money is not invested in a lock box right now. they are paying social security recipients who are 65 and older right now. the money is not been saved anywhere. we have a surplus of about $2.7

trillion and we estimate that will be gone in 25 years. aboutwe're talking sequestration and the effect on the economy. virginia breach -- virginia beach. diana, independent. caller: we are spending over $1 trillion in debt every year. i do not want to cut spending on the military. i do not want to balance it on the military, but if we just freeze spending on everything across the board the cbo would grade debt as a 7% cut in spending. are these really cuts below that? are we really going to spend spending this year? that is my question. guest: the answer is no. you will not spend less next year in all likelihood, but

there are two different parts of the budget and the lady touched on it. defense and nondefense -- the stuff we appropriate every year, they have been pretty much flat for the last three, four, five years. the things that are growing are the promises we made 25, 30 years ago that we cannot keep. we cannot keep the medicare promise we made. it cannot continue in the same fashion it is now or else as all the trustees said we will run out of money. social security and other pensions -- we cannot keep those promises to people that are pre-retirement. it is simple. there to the ways to do this. it is a simple equation. do you want to change now by 1% to keep these programs alive in

the future or do you want to wait and cut these programs 20% when we find out we can not pay our bills? the prudent person would start with tiny changes to yield the spending. as pundits call it. bell about the economy and budget cuts. twitter offers this. host: rhode island. jerry is a republican. you are on the air. caller: good morning. i have a degree in political science from the university of massachusetts but i need to be reeducated a little. the term sequestering came up quite a bit. i'm wondering if you could explain that to me, and i also have an idea rejected the

government's spending money in the wrong places? -- is the government spending money in wrong places? could we revitalize the economy by taking the old mill towns that were productive at one time and bring and industry back into a place in massachusetts where i grew up where they have buildings now, making innovative approaches to making artificial arteries, and things like that. i would appreciate if you could explain sequestering for me. thank you. guest: it had never been used in government before 1985 and what it means in simple terms is this -- they are going to take for defense and domestic programs that are appropriate every year, about 37% of the federal budget, take that 37% and cut it across the board by approximately 10%-to-50% and january 2, -- 10%-to-15%, and

january 2, 2013. it is going to be painful on the domestic side. let's not be cavalier. is going to hurt grants for education, medical research, border control. we need to cut spending. this is the most counterproductive way of doing it. we have a chance over 10 years of sequestering $1.2 trillion to actually lose money because of unemployed benefits. host: scholastic my answer this question from twitter. guest: absolutely. i did not know if anyone has been able to say it with sufficient force.

my family are middle-class and lower, mostly military. i have a brother and military retirement. i have a son in the military. i of parents that were in the military, and they did -- i have parents that were in the military and they get benefits. two of them are 100% of disabled. the fact of the matter is we are spending money in wrong places. an example, we asked to go through the accountability office and tell us how many to put it programs that are owned and we asked the congressional budget office to put together put together options for spending cuts. every year congress ignores it. so, it is not that people are not working on the problem. it is not the people do not know there is a problem. it is that in a weak economy

with a lot of people running for election five months from now, there is just not the political will in washington, d.c., as there is perhaps in san jose, california and other places -- places. host: dave. pittsburgh. democrat. caller: they just had the g-8 summit, and what we now is in 1989 at the end of the cold war the united states owed $5 trillion and the russians owed $100 billion. they listed the death of all of those countries at the g-8 and they said vladimir putin snubbed them. the action will debt of the united states is $9 trillion. they signed a $1 trillion national gas bill with china. they are not a debtor nation. russia is not.

what we are doing here is saying from $9 trillion-to-$16 trillion, that is the money they stole out of the social security. guest: the debt held by the public is around $11.5 trillion. the differences the other funds are inter-governmental transfers. medicare works in a similar fashion the reason i insist on saying $16.4 trillion is as a practical matter sometime this year or early next year the congress will face a big fight number they have to deal with

is not 11, nine or 12. they will have to deal with $16.4 trillion parent while there are different ways -- trillion. while there are different ways of looking bad debt, the most way. what does congress have to face and that is 16.4. host: jim on twitter offers this -- while they hate defense spending they lob a government- supported jobs. what to do. [laughter] host: ann. you're on the air. caller: i am an independent because neither the democrats or republicans speak to me. i work for a financial institution and there is nothing said about this, the largest is to be in the united states, the financial industry and its failure. it was not large deficits that cost millions and millions of

americans to lose their jobs over a period of short months and the unemployed rate to go up and it was much more due to the irresponsibility of the largest industry. i think the republicans have made the debt and the deficit the point of the narrative of their processing is because they do not want any focus on what the financial institutions have done and continue to do. the democrats are agreeing to that narrative, which i do not understand why they miss every opportunity when you talk about the money being spent you never talk about the money used by the financial institutions, the american people's money. host: we have about one minute and a half left. guest: there is no doubt there is an irresponsible, under-

regulated financial system in this country. it is different now than 20 years ago. yes, we used almost $1 trillion directly to bail out banks and other institutions and the than that. we had a choice. we could put $900 billion program, where we could let it -- or we could let it collapse. that was due to a situation in which the government says if you lose money do not worry. we will bail you out. if you make money, take home your one and a million-dollar bonus. that is called moral hazard. the lady is right. the worst people -- the worst thing about it all is so few

people have gone to jail. host: are you angry? guest: i am. we worked with democrats and republicans and what we did was we do not agree on this 20% or this 20%, we agree on this 60%, so instead of wasting time on extremes, why don't we get this stuff done? we were able to get that stuff done. most of those people were world war ii war korean veterans and they had more important things than getting reelected. they had been shot at. they were brothers even if they were representing different parties. we do not have that idea of shared sacrifice. most people, a broken thumb is about the most painful thing the ahead.

very few have been in iraq, afghanistan or bosnia. host: that is about all the time. the report is available on there website and hours. mr. bell, thank you for being here. guest: i very much enjoyed it. >> tonight the president boss news conference -- the president's news conference. see his comments tonight at 8:00 eastern on c-span. like coverage of the congressional correspondents dinner. live coverage will start at 9:00

p.m. eastern tonight. this past week, michelle obama and ann romney were on the campaign trail as they spoke to events on the campaign trail. we will start with and o'clock eastern with a campaign rally in virginia where she talked about women's issues. you can see but events tonight on c-span2. >> mr. gorbachev, tear down this wall. >> sunday night, mark the 25th anniversary of reagan's 198 87 speech at the byrd gate. this sunday at 7:30 pm. james blaine, this weekend on c-

span3. >> b-52 -- everyone think back to vietnam, they think linebacker operations. they think the cold war. a different kind of power associated with the be-52. >> human and confederates who fought against each other, and here they are at age 100, talking about the old days. >> we have one to the east. the gate to the west is marked 903. date reference the moment that the bomb, which was at 9:00 02. -- ni9:02.

earlier today house subcommittee held a hearing. witnesses from g a zero talk about revenue costs -- gao talked about revenue costs. >> the hearing will come to order. thank you for joining us today. this is another in a series of hearings of what are commonly referred to as tax expenditures. as most of you know, we had the opportunity to hear from colleagues in april about the merits of extending or in some cases not extending many of these tax policies.

by all accounts, it was a protective action size. i commend our chairman for his leadership and providing the opportunity then and now and in the future to examine these provisions. his leadership in setting a transparent process for reviewing the extenders is what the american people expect from their representatives. i think it is likely accurate to say that the days of simply robert-stamping and extending an entire package of extenders is now behind us, and to date we pivot to exploring what we hopefully will heater, and that is ideas for providing a framework that congress should use in evaluating these tax extenders. witnesses today will share their views on principles of the good tax policy and it the merits and

metrics against which congress should test the merits of particular provisions. i look forward to their testimony and the ensuing conversation. i would like to take a moment to thank congressman mike thompson for serving as ranking member. unfortunately congressman neil could not be with us today. i yield to mr. thompson for his opening statement. >> think it, mr. chairman, and i think i can speak for everyone when i say our thoughts and prayers are with the family of neil's district.mr. i know it is something that we all care a great deal about. i thank the chairman for

convening this hearing today. we appreciate the subcommittee has decided to begin consideration of certain expired and expiring tax provisions, as this consideration is long overdue. businesses have been desperate for certainty when attempting to make decisions that can help to grow the economy. many may view the hearing as actually increasing uncertainty for businesses and for individuals that use these tax benefits. as we learned in the last hearing, so many of these benefits enjoyed broad support. there extension should not be difficult. as we learned from the recent jobs report, our economy is struggling and job creation is still too slow in coming. unfortunately, proven job creation programs have not received adequate consideration in this congress. press reports indicate the highway conference may be soft and possibly gridlock, and provisions of the president's to

do list to create jobs have not made it to a vote. the public is losing faith in congress' ability to act quality. i cannot blame them. we have had a hard time finding agreement on a lot of things, but it is a point to remember there are things we can do in this committee pressures people are feeling and the uncertainties facing businesses. as we learned from the last hearing, so many export provisions under consideration today enjoy broad support. many of our -- bus our lead sponsors of the poor and job creation provisions, including the new markets tax credit, the r and d tax credit, the conservation ease credit, and the list goes on. we have worked on these provisions and we should now work to get them across the finish line. i appreciate the testimony from the woods is today, a valuation of temporary provisions is as

important as evaluating all provisions in the tax code. there are a number of loopholes that can be closed or provisions that provide windfalls to certain industries that should be examined, particularly close. the temporary nature of provisions should not automatically make it more palatable for termination that some provisions of the tax code that are permanent. many of these were enacted on a temporary basis due to budgetary constraints. that does not automatically detract from the merit of the provisions themselves. to date we talk about provisions that have already expired. businesses large and small rely on these provisions when making investment decisions. we have allowed almost 18 months of the 112th congress to pass without doing our job to move legislation, providing extention of these provisions. i mentioned in detail the last

hearing we had a text extender hearing, just how important some of these are to my district and to my constituents. i will not go into detail, but will mention that mr. gerlach have a bill to make permanent the conservation easement incentive. it is one of the most it successful tools we have. this will protect our watershed and ensure food security. today it has 308 co-sponsors, including the chairman, which i appreciate very much. i wish we were remarking that built up today, or better yet, had it on the suspension calendar. i could not agree more with the chairman that this committee has a duty to ensure the tax code is working to create jobs, grow the economy. it is an exercise that is necessary and takes time. so much of the rest of congress

is gridlock. this committee can act quickly and do so in a bipartisan way to extend export provisions that need to be extended and help kickstart our job creation and get the economy going. i believe such legislation should include not only jobs- creating provision that expired, but proven job provisions that were allowed to expire in two dozen 10 -- in 2010. the committee should engage in proper oversight and review of all tax provisions to identify those that are meritorious based on economic performance and find ways to strengthen them and make them permanent. this oversight should not come at the cost of it in action on import jobs-creating provisions. i hope the subcommittee and the full committee can get to do our work and get in front of these full house for the vote, and

bring to the president for a signature so we can help the economy. i thank the chairman for allowing me to read this testimony. >> they do, mr. thompson. all that and no mention of -- can i have consent for allowing submission of the opening statement. without objection. next it is my pleasure to introduce the witnesses here today, and we have an excellent panel of witnesses seated before us. today's witnesses bring tax policy and oversight experience to us. today's witnesses began with from my left to the right, i would like to welcome back dr. jim white, from the general accounting office. dr. white is responsible for gao's work pertaining to the

irs. thank you for being here. we welcome back the director of tax policy center at the urban institute in washington. his research at the center is has focused on tax reform. as he has previously served as the acting of the congressional budget office. they give for being here today. we will hear from a person from the american enterprise institute. he is alum of the ways and means committee staff. he has served as an adviser to the president's fiscal commission in 2010. welcome back to the room, sir. black to have you here. we will hear from the undersecretary for housing and community development for

massachusetts. go, celtics. being from ohio, there is an added emphasis on that. thank you for being here today, folks. the subcommittee has received from each of you written statements and they will be made part of the formal hearing record. you will be recognized for five minutes for oral testimony, and then we will have questions. >> thank you. mr. chairman, members of the subcommittee, i am pleased the her today to discuss how to to violate the expiring provisions. most are tax expenditures, so i will focus on those. that valuation principles i discuss will apply broadly. tax expenditures are credits that reduced the tax payer's tax liability from what it would have been.

tax expenditures have policy goals similar to those of spending programs. they make for economic development, energy efficiency. tax revenue is forgone and such provisions may be viewed as extending channels through the tax system. my written statements summarizes factors used to evaluate government policy, including policies such as the expiring provisions. first is the fact -- the effect of extending provisions on revenue. they reduce funding available for other federal activities or require higher tax rates to raise the same amount of revenue from the smaller base. revenue the government would have collected absent the expenditure could have been used to fund other programs, deficit

reduction, or tax rate reductions. second is the defect on equity, a comic, and compliance burden. equity or fairness is basic judgments that ask questions about who benefits from a provision and how policy makers can reach conclusions. the effect on the economy is what is called economic efficiency. like the taxing one activity chips resources to it in and away from less tax-favored activity. the effect depends on whether the activity provides greater benefit. the effects on tax payers costs to comply with a provision it depends on its transparency. can taxpayers understand the provision? what kinds of records will they be to keep? simplicity and transparent the attack ira's ability to administer the provision. the third factor to consider is whether the tax system is the

best way to deliver the benefits or whether some other tool of government, such as spending alone or a loan guarantee could provide this to benefit of lower costs. taxed its badgers at -- one goal is to prevent fragmentation or duplication among programs, not just to save money, but to avoid confusing the public. important is the choice of tax policy tool, credit vs deduction. a final factor is a measurement. too often programs are implemented with little attention. in the case of tax provisions, measuring results is complicated because bair are as administers the provision, but is not the agency with functional responsibility for energy efficiency or community development. decisions are needed about what agency should evaluate tax

provisions, who should collect the necessary data, and so on. i want to briefly to illustrate how the gao has applied these factors. regarding the credit for ethanol, we found that while the credit trades the industry during its formative years of having both the tax credit and a renewable fuel standard now is duplicative. which just congress consider modifying or phasing out the credit. reports of higher education tax assistance racist transparency questions. we found many eligible taxpayers that either fail to print anything or claim one that did not maximize their benefits. we looked at the efficiency of the research credit. while economists tend to support a subsidy for research because the social returns exceed the private returns to forms, which found the current design introduces inefficiencies because incentives are

distributed unevenly, and more than half of the credits are a windfall for research that would have been done. we suggested changes to improve the credit. we looked at whether the new markets tax credit needed resources. the credit appeared to increase investment in low income communities. we reported its complexity makes it difficult to complete smaller projects and results in less money flowing through to low income community businesses that might be possible with alternative designs. we suggested congress considered offering grants instead credits with one option being a side by side test of the two approaches. mr. chairman, accotink and ranking member, we have done other assessments come up to provide congress with factual information about the evaluation factors buy out mind. how to use the information to make trade-offs between the

factors is up to policy makers. i would be happy to answer questions. >> they do, dr. white. -- thank you, dr. white. >> thank you. thank you for inviting me to appear today to discuss the challenge of the text extenders, which might be better call this e tax expirers. if all the changes happen, they will reduce the 2013 deficit by $500 billion. about one eighth of the cliff, 65 good dollars, comes from the export tax cuts. in deciding the fate huge consider the larger problems facing our system. that system is needlessly complex, economically harmful, and unfair.

it is increasingly unpredictable and fails in its most basic task. the explorer is often the worst of the problems. some make the tax code less fair. some we get our economy. the fundamental tax reform would be the best way to address these concerns, but that is not likely seed. you must grapple with the expirers. they come in three flavors. the first are cuts and acted to address a temporary challenge. the sec it are cuts that have research -- reached a sunset review. they're not many of these at the moment. third, their tax cuts that expire according to budget rules. these appear to be the most common.

to determine which policies should be extended, you should consider several factors. as the provision address a need for intervention? does it accomplish its goal? does it make the tax code fairer? duke its benefits despite s >enue lost prov you should keep in mind that most of the so-called tax expenditures are effected the spending to the tax code. you shou hol same standards as programs. you should reform the way you repute expiring tax provisions. you should flip the burden of proof. the perception is most of these provisions will be extended. that is why they're called extenders. we should move to a system in which the presumptions is that

expiring provisions will expire. they should be the expirers. you should divide them up. they must do their best to coalesce into a single heard a judge to migrate across that annual legislative tundra. rd. should break up the her you can separate out the stimulus provisions, a charity cannot energy provisions. you should try to spread steadily expiration's over time. few export any given year, you will be able to give eacone more attention. he should cnge budget rules. pay as you go budgetinreat discipline, but has an unfortunate side effect.

10 yrs of offsets can be used a for a single year extension. to combat this, you could require any temporary provision should be assumed to last no more than five years. proponents would have to round up enough offsets to pay for those five years. you should require offsets occur over the same span of years as the extension. thank you for inviting me today. i look forward to your question. >> thank you. i think for the opportunity to discuss the expiring tax provisions. the hearing is on an important topic as the number of and the budgetary magnitude of these provisions have ballooned. some of these policies can serve

an appropriate goal. in 2001, 13 provisions were set to expire at year or the next year. a decade later, 129 tax provisions were set to expire in 2011 or 2012. the budgetary consequences of extenders has increased as well. in september, 2004, congress enacted a one-year extension of 23 tax extendrs. in 2010, a two year extension of these policies cost over $55 billion. if congress were to extend its policies and again, the cost would be even higher. let me summarize three key conclusions from my written testimony. no tax policy should be

intentionally temporary. any tax extenders should be made permanent. second, each of the text extenders provisions must be considered individually on its own merits, and against a clearly defined policy objective. each extender must be shown to meet that objective, such as promoting economic efficiency or tax equity. third, a successful a violation of the tax extenders, keeping the good, and eliminating the bad, may set a useful precedent for the bigger challenges of tackling tax expenditures broadly and ultimately tax reform. the guide be a violation of tax extenders, policymakers i believe need to be answering two questions. first, in 10th. does the intent of the provision

improve economic efficiency, increase growth and promote fairness, or achieve some other desirable goal? tax credit. one key point i would like to stress is with any text extender that is intended to subsidize an activity, special care should be taken to evaluate its net economic benefit. most subsidies will increase the subsidized activity, but that does not need it will produce such a net benefit or improve overall economic efficiency. in the absence of externalities', a credit for any given activity will lead to a misallocation of resources. a provision that encourages more of a particular activity does

not necessarily promote overall economic growth. the second question, after determining the intent policy makers should ask, is come up with the policy be effective if it were permanent? and evaluate the effectiveness on a permanent basis, regardless of the fact is frequently in the past and temporary. i will highlight four consequences i see from the expiration and reinstatement of extenders. first, text extenders distort the fiscal budget baseline and complicate revenue and deficit forecasts over the future. . second, text extenders create financial reporting problems for publicly traded company . exasperate the uncertainty facing businesses, as they do not know whether they can depend on these policies. fourth, text extenders may be

designed to encourage oversight, but they are generally extended without much consideration. the subcommittee has held a number of hearings on this topic of oversight, but a review historically would indicate that more often than not these policies are extended without review. allow me to conclude by observing that the tax base has eroded over the last 25 years. a proliferation of tax credits, deductions, as miss allocated resources. reducing the number of text extenders offers an opportunity to reduce this complexity and uncertainty and promote efficiency. i hope such an effort could set a positive precedent for the greater challenges this committee will face as it embarks on broader tax reform. thank you. >> thank you.

thank you for the opportunity to testify today. i urge you to extend certain critical programs that support economic development. some of these successful programs expired in 2011, while others were deemed not traditional extenders in 2010, regardless of their effectiveness. the new markets tax credits and others have treated hundreds of thousands of jobs and housing units across the country. these programs play a vital in encouraging investment in our committees. as we continue our climb out of the great recession, now is the perfect time to extend these programs and the critical work they support. he described each program cost impact. the first new market tax credit allocations were awarded only nine years ago, this program has

achieved excellent outcome. $45 billion invested, 92 million square feet of retail, commercial, and office space. over 300,000 jobs created. these investments in each of your districts are restoring abandoned buildings, revitalizing business districts, and creating momentum for develop. of what to provide examples for massachusetts. holyhoke is a western massachusetts city and now one of the poorest committee the in the state. new markets provided a health care center in the heart of downtown, a project that treated 350 jobs. a world-class computer technology center, $160 million project, is under construction, with 600 jobs already created. never city's are actively --

universities are supporting this initiative. the tax credits expired in 2011, but it is not too late to it extended. i ask the committee and congress to take three actions. first, make the program permanent. extend the program for five more years on an annual mckay -- on an annual allocation level. three, allow new markets to be used to offset taxes paid under the alternative minimum tax. in a short time bonds were available, less than two years from massachusetts issued near $5 billion in bonds, creating 12,000 jobs in construction. the bonds have been important, including boston, which issued $130 million in tax exempt bonds to help several neighborhoods

cannot create 14,000 jobs, and stimulating development where none had occurred in years. reinstating the program could put hundreds of thousands of people back to work nationwide. another program has created over 2.5 million units of rental housing. no other federal housing program = this record. the credit is not just a housing program. it creates jobs, resource properties, its fourth retail and commercial opportunities. it is highly flexible and it's unfortunate construction, and serves families, seniors, people with disabilities, and for homeless families. we urge congress to extend the fixed 9% credit, established in housing and economic recovery

act of 2008. congress brought consistency and clarity to the program. we appreciate your leadership on this issue. with your introduction of this bill to make the flat 9% credit permanent. these tax credits provide many important benefits. they leverage private sector funds for economic development in housing. they create jobs cannot rebuild infrastructure, and transformed distressed neighborhoods. i urge you to extend the credits on a long-term basis so we can use them to continue to build the road to economic recovery. as to consider ways to streamline and reform the tax code, please take into consideration the important contributions that these programs have made, especially while undertaking the project of

lowering the individual rates. thank you very much. >> thank you all. in your written testimony, you talked about how we should change the automatic nature of extending the extenders, which is the goal of chairman camp. can you focus on operationally from your perspective about how we should put the burden on having supporters of each extender provide us and how we should therefore proceed in separating the different types of extenders and their worry -- worthiness of staying into law? >> the last time i appeared was a good start about which was to take a category of preferences

and focus on them directly. energy provisions. you can imagine doing similar things. while the extenders list is long, and you can group into categories, and try to focus on those as a group, figure out which ones make sense. >> should supporters be providing data points? >> that would be great if they could. our friends that gao sometimes have data on this as well and can be asked to provide information. on that issue, i do not want to overemphasize these provisions. there are a lot of provisions in policy in general and the tax code that cannot get enough review. there are things that are in the permanent tax system that deserve more reviewed then they get as well.

some way of separating them out, requiring some day that and justification for what they are doing, and the other point is if you can spread them out in time. if an extender lasts five years, on average you will only have >> thank you. this is a critical issue. one is the burden of proof question. it is the responsibility of the constituents and the advocates to prove to congress the worthiness -- or is the burden on congress itself or other federal agencies to prove the policies are not working? i think we would be well served by trying to pursue both agendas. as jim noted in his remarks, there is oftentimes not a lot --

there may be oversight on the administrative side, but not a lot of a valuation by the government on the effectiveness of these programs. these are hard questions, however. simply observing that a subsidized activity -- that that activity is doing well does not prove the effectiveness of the policy itself. for any given credit, there may be lots of energy production, but that does not mean that we are encouraging that in investment or activity. rather, we may just be providing a windfall. analysis necessarily requires that you develop -- in absence of this policy, what would be the outcome? you do not have the control case. the conclusion there is that that bar should be very high. we need to set up very high expectations for the outcome.

>> thank you. some of the work thatgao -- that gao has done on the new market tax credit suggests that we should convert the credit into a grand program. i have two questions related to that. first, since 2003, the program has been about $5.2 5 billion. in exchange, it is allocated roughly $29 billion in tax credits that have resulted in a roughly $45 billion in new market investment. that is the leverage of 821. in addition, some estimates -- that is a leverage of 8 to 1. also, they estimate that new jobs are retained at a cost of 17,000 hours per job. can you elaborate on the

thegao's perspective on how that ratio would work through a grant program in the place of the tax credit program? >> yes. the question we are looking at with the grant program is the amount of money flowing through the treasury to beneficiary community-based businesses. because of the way the credit is structured, credits are allocated and then sold to investors. there is a fairly complex process for raising the funds from the private sector. in effect, tax credits are sold to them. in that process, not all the money is flowing through to these all to mid beneficiary businesses in the communities. the question we have is whether a grant would allow the same

cost to the treasury and more money flowing through to beneficiary businesses. we suggested running an experiment. divide up the funding, have summer gr reant -- have some run to a grand program, have some ground to tax credits, and see which one is more beneficial to community businesses. >> it appears to me that one of the driving factors in gao's conclusion is that tax credits are running at discount. certainly, the economy and recession have probably intensify that issue. so mr. gorenstein suggested that one way of improving that is to treat the new market taxpayer

program like the lower income housing program by exempting from the alternative minimum tax as we do for low-income housing tax credits and historic tax credits. what are your thoughts? >> he still have the basic question of whether there is some alternative designed to the tax credit that will allow more money to flow through. -- to the beneficiary businesses. a whole separate issue -- what we are talking about is how much assistance from the treasury flows through. a separate issue is the effectiveness of these programs overall. we have tried to look at that. our look at that suggests that there was some increase in the amount that investors were investing in this program. those are two separate questions. one is the effectiveness of the

money from the treasury flowing through. the other one is the effectiveness of the program overall. >> since you brought it up, and you have any thoughts? >> i do. let me get to the question of the grant obverses tax credit issue if i can. a tax credit attract significant private investment that otherwise would not be made in a low-income communities. study found 80% of investors would not have made the investment without a tax credit. asgrant program will not give you that private leverage that is so important to getting money into communities. you also not have an ongoing monitor under a grant program. convert into a grant program brings the appropriation risk.

as there is so much pressure on domestic programs, which will certainly run into that as a convert to a grant program. those are concerns we could have. the program is working well. it is becoming more efficient since the recession at the two- year recession that congress provided. we have seen yields going up and records increasing to record levels in 2011. i think a permanent expansion would build on that momentum. >> thank you for your testimony today. >> thank you very much. >> mr. thompson is recognized. >> thank you, mr. chairman. i want to follow up on the new market stuff on behalf of mr. neill. i want to know a couple of things. one, all the issues that have been explained, from

uncertainty to the difficulty of the code are clearly important. the effect of this committee's work on local tax code and the economy i do not think should be overlooked. >> we are in a unique position here. a lot of this stuff is just a math problem. it is the political side that gets in the way. that is where this committee's responsibility really needs to be stepped up. we need to get beyond some of the political bickering and a focus on what tax policy is going to improve our economy and the lives of american people. we need honest debate. i know that you mentioned in your written statement the whole issue of the provision.

-- nascar provision. it gives the impression that the tax code is full of private interest giveaways. it only keeps them from keeping one at theme park like another theme park, basically. we did the same thing a couple of years ago. it was media fodder over the errors. there was a company in san diego that made aluminum errors. offshoreoing to move because the tax code made it more lucrative for them to make the arrows in correa rather than in the united states of america because they could make them one place and assemble them here and get a tax break.

when that was fixed, it kept a bunch of jobs in the united states. we handled aluminum eras the same way we handled aluminum baseball bats. they talked about it being a giveaway to the bow and arrow makers. we all have a responsibility to make sure that the debate is honest. i appreciate your bringing that up. i hope that we can get to that honest debate to make sure that we have honest policy. on at the new markets tax credits, i think this deserves more discussion. not only is this in a -- important in massachusetts, but it is being used all over. i have a clinic on the north

coast of california that is one of the major health care providers on the north coast. they are looking to do their expansion. not only is a growth in construction jobs, it is a growth in medical jobs. doctors, nurses, nurse practitioners -- all the folks who have good jobs. you have good jobs and a good infrastructure, which saves us money in the future as well. on behalf ofmr. neill, i would like to ask you this question. he would like you specifically to comment on the gao's recommendation on this issue. could you please do that? >> as i have said before, we certainly have to look for every

way to make the new market tax credit more efficient and effective. i think the community welcomes the scrutiny and evaluations and appreciates all but the gao has done to point out areas where it could be strengthened. we do have concerns about shifting to a grant program. that would be around the issue of leveraging private-sector investment. it is critical to get the private sector involved in these distressed entities. this is a highly targeted tax credit that is benefiting thousands of low-income people in low-income neighborhoods around the country -- as he cited, in california as well. it is a program that brings oversight from that private- sector a round underwriting. this is true in the low income housing tax credit. you are getting the market discipline imposed and having

another set of values on these projects in underwriting and ongoing monitoring to ensure that the benefits continue going forward. again, new markets. the housing credits are very high, i believe. the very nature of the tax credit is a reason for that. >> thank you, mr. chairman. >> i want to thank you for the series of hearings we are having on these temporary tax provisions and a thoughtful approach taken care -- takien towards them. gentlemen, i share the oversight committee. we have been looking very intensively at a number of tax credits and administrative problems -- propensity for fraud and abuse. while it is fairly easy to look

at that particular aspect, you mentioned a number of other areas that we are looking at and some of the challenges. i am curious -- help us figure out what we should be looking at while we try to make distinctions between a tax provision that is very well written but yet hard to measure vs one that may be flawed in the way it is written -- that treats measurement problems and distortions as well. -- creates measurement problems and distortions as well. could you give us an idea of how we could approach that dilemma as policymakers? >> yes. a couple of things i would emphasize. first, as some of the panelists have discussed, first to be setting clear goals for the programs, spelling out what the affect is that you are looking for. >> would you do that in a

statute? >> it could be done in a statute. the community development program -- is focused on construction or jobs? is it focused on jobs for existing residence or new jobs in that community that might come in from the outside? a second issue would be focusing on evaluation. one issue, especially in the case of tax issues, is what agency ought to be responsible. the irs administers tax provisions, but they are not an executive-branch agency responsible for housing programs or community development programs. what happens with tax provisions is that they are administered by the irs, an agency with functional responsibilities that in many cases does not pay much

attention to the programs. defining responsibility for actual -- doing assessments of the program would help. >> thank you. do any of you want to comment further on this? >> i just want to add briefly to jim's comment. the valuation of the effectiveness of any given tax extender or otherwise needs to also occur while recognizing other programs from the other side of the ledger. we need to think about the net consequences of tax policy -- for example, towards housing -- but also spending policies. we need to put those in a single from work and make a determination. >> if i could shift gears for a moment. he said that tax policy should be intentionally pat -- temporary. we clearly want to streamline

the process, see more permanency, creed and environment of certainty. that sounds of great, but if we are going to have provisions that sunset, what is a reasonable timeframe? clearly, one year makes it very difficult. when you are doing things year after year -- several of you have elected that -- highlighted that. what is a reasonable time frame for a temporary provision? >> i think it depends on the policy itself. i know that the committee has fought in the past about how to create a temporary policy that convincingly -- that is convincing to the beneficiary is that it is permanent. in essence, how you work around the budget constraints systems yet still convinced the users

that this is something they can rely on? certainly, on the reinstating policies retroactively is to create a windfall benefits. on the other hand, looking back to 2003 when the caps were lowered on a temporary basis due to a budget process issue. at that point, it was viewed that five years would give that amount of certainty and confidence to the market. other policies were considered at that time that were much shorter and not pursue because of the importance of convincing beneficiaries or constituents that the intent is to create policy determinants. >> thank you. my time is expired. >> thank you, mr. chairman. over the years, the various industries have urged the adoption of tax provisions with

the stated purpose of incentivizing investment in certain types of energy. in selling the merits of these to congress, it was indicated that these taxpayers supports would only be required for the amount of time necessary for these industries to mature. today, very few, if any, of these industries have independently determined that the subsidies are no longer necessary. could you address the methods and criteria that congress have used to make their own of valuations as to whether or not the originally stated exact -- objectives of these subsidies have been achieved, and what the appropriate means of discontinuing this taxpayer funding would be? >> this goes to one of the hardest questions for congress or the private sector, which is the rate of technological progress. while many will be hopeful that

their technology will quickly mature and that the cost of production will fall quickly in such a way that they will no longer need the government support, these are very hard issues to ultimately predict ahead of time, how well these markets will mature. we are seeing a lot policies work their way into code on exactly that argument. we only need this encouragement for a limited date of time. altman, the industry can -- ultimately, the industry can grow to be dependent on these policies. economic activity will rely on the availability of a taxpayer subsidy. the ability to wean and industry off of these credits is proving very difficult. i would suggest that, to the extent that the committee

pursues an effort to reduce these credits, you need to be careful, perhaps, about a transition or a phase out that might see how they will step down and ultimately and. >> so a strategy for an energy source that is heavily reliant on the subsidies -- >> a strategy to come to this committee would be to demonstrate very clearly at what point they feel like they would not need a subsidy anymore and then codify that and put that into law? >> that is exactly right. if you codify the step down or phase out of that policy instead of having it go away overnight, that might make it more likely that the policy will actually terminate. >> in the investor community, an

investor would look at that and make a decision whether that investment was, in fact -- if you could tie the risk of the investments to the step down of it. it might more realistically reflect how actually feasible that industry was. mr. white, you mentioned in your written statement that, with some tax expenditures, it is difficult or impossible to determine whether a provision is having its intended effect. should congress decide to extend a given tax expenditure, what steps should it take to measuring its impact? >> as i said earlier, i think that setting goals, assigning responsibilities to an executive branch agency for doing the of violations -- that ought to be

the agency's functional responsibility, not irs. irs is a tax agency. i cannot think they should be in the business of assessing a housing or energy program. that agency then would make some determinations about the type of data that would be needed to actually conduct of valuation. right now, the only data that is collected on many provisions is stated that the irs needs for ensuring compliance with the law. the irs is not collecting information suitable for assessing the effectiveness of many provisions. >> thank you, mr. chairman. >> as a follow-up to that question on energy -- i am sure your blues -- glued to your computer screen while we had that last hearing, with members

on both sides of the aisle talking about the reduction of tax credits. we had a lot of consensus from members and supporters on this issue of phasing out the tax credits over the period of several years. that is interesting. as a side question, since this is already expired, having an impact on reinvestment. people do not know whether or not we are going to be extended. as we look at this, how does that impact policy? it is already expired and you have advocates now saying we will phase it out. >> there is no question in my mind that many of these policies have real, measurable,

observable consequences in the market. taxpayers act or do not act depending on whether or not they are getting quality. it is a determination that subsidy is desirable. one more of that activity. there are many that work that way. it is observable in the energy sector how the level of investment has decreased and decrease overtime as the credits have changed or expired. in particular, with regard to letting them lapse and then going back, or than arguing about whether you are going to back and reinstate them, that will have a big consequence to, creating additional uncertainty for that industry. to that extent that we are trying to develop a policy where washington is free and private sectors to do as they wish or

setting up a policy that encourages them, but not constantly interfering -- we are failing that test when we let credits expire and then reinstate them. >> can yield? i will yield for one minute. >> that is all i need. talking about the energy tax provisions -- we talk about all of them, not just the renewable. the deduction for gas and oil -- are talking about everything? >> i was speaking generally of tax credits for activity in a given sector, including energy. >> so the reduction for gas and oil would be when you are talking about? >> that is not an expiring provisions. >> i understand. but if you will talk about energy tax provisions, i do not know how you can talk about one side without talking about the other side. >> section 199, which applies for manufacturing income through

energy production, may have an effect on the allocation of resources towards those activities in a way -- >> similar to tax expenditures on the allocation of resources as it pertains to renewable energy. >> that is correct. >> thank you. >> i was actually trying to be helpful. >> thank you, mr. chairman. first of all, thank you for your thoughts on this issue of the new market tax credit. i share your view on keeping the program as is and growing it in terms of the amount of allocations. i think it does a fairly

terrific thing in a lot of communities. if i can, however, go back to your testimony or your gao report that its into good tax policy. i am interested in the terminology you use. simplicity, economic efficiency, transparency, as well as the relationship to other policy tools. interestingly, as we are talking about what you say and what should be taken out of the tax code as we go through this process in the hope of simplifying it, you would think, in most of the conversations we have had centered around job growth, making it more easy to grow capital and making it easy for investment economy -- you term it as economic efficiency. can you describe more fully that term relative to jobs, relative to capital formation, as a

criteria for how we ought to look at a lot of these provisions down the road? >> yes. essentially, what you are doing with the tax provision -- and this applies not just to taxes, this applies more broadly to extending programs or other types of programs -- you are shifting resources, providing incentives to move resources from one area in your economy to another activity. the question is whether there is net gain or not from doing that. in some cases there may be a net gain. the research credit, for example, it is argued that private businesses may invest in research because they cannot capture all the benefits of that research. there is evidence for some government subsidy to shift resources into basic research. tax provisions are one way to do that, but not the only way.

>> does that relate to this issue of policy tools? let's take the new markets tax credit that can be used, for example, in my district to undertake renovation of older housing stocks and turn it around for affordable housing. yet you can find a federal programs that are federal programs that may do the same sin -- thing, saidhud --say, hud program. is it better to have some entity go and file a grant application with hud and get it done that way? take a look at a situation where you might have andr r &d tax credit, or does have and get a loan to do something?

-- or just have them get a loan or something? should we look at these issues not only from the context of what would happen in the private sector, but also what is available on the programmatic side that is also available to people, and maybe even think about whether those programmatic approaches to the private sector, whether those ought to be reduced and provide better opportunities in the tax code so individual companies can make decisions without having to go through the bureaucratic process of going through a grant review, maybe get the grant, maybe not. rather than relying on the government to give them some benefit to redraw christie, have a tax code that can be more responsive -- through some bureaucracy, have a tax code

that can be more responsive. >> there are a advantages and disadvantages to using spending programs verses the tax programs. with the low income tax credit, the way that is structured, the private sector does have some incentive overtime -- over time to ensure that project will stay in compliance. that is a way to bring in some private sector management experience. another example is the system is provided to higher education. you have a title for spending program and a number of tax programs at the same time. what you would like to do is provide the evaluation criteria across the board to all those programs. one of the things we found in our work right now is that it appears that these programs are not very transparent to many people.

they are either not claiming anything when they are available -- eligible or they are claiming the wrong program. they seem to be overwhelmed by the program. it seems to be resulting in people making bad decisions from their own pet -- financial perspective. >> does anybody else on the panel have a thought on that, in terms of the relationship of current grant loan programs administered through a massive bureaucracy in washington verses allowing the tax code to be a better tool to stimulate private sector investment in our economy? >> one more point about that. grant programs are extremely important, but the low income tax credit and the new markets tax credit are the engine that drives these deals. grant programs alone are not enough to move forward on most development prague -- projects in most communities. the typically need a combination.

the biggest resource is the tax credit. i feel that if we lose tax credits or there is uncertainty, it will have a detrimental effect on our ability to do more projects and very targeted communities. >> any others? thank you, mr. chairman. >> -you for your leadership on the new markets tax credit. dr. white has been an advocate. in my district, which is urban and suburban, the fact is that if you and i drove through it and saw differences in housing policy at the federal level between a housing authority, a hud property, versus a new market tax policy that has private sector involvement and oftentimes local support from cities and counties, the

differences are unbelievable. i would love to see you all doing a study on how those different policies at the federal level impact, in the end, what the bricks and mortars are built on the ground and how that impacts communities. >> i do not think we have done as comprehensive of a look as you were asking about. i have been involved with other reviews of low-income housing tax credits. i have visited projects myself and seen that difference. i think that ultimately it boils down to the question of if you are comparing programs. also, the overall effect of the combination of programs. for example, to what extent our programs crowding out private

sector investment in the area? that would be part of that evaluation. one of the things we found in our reviews of the new market tax credit is that it did appear to increase overall investment in targeted communities. >> you probably would not answer this question. you probably could not. there is an amendment in the appropriations bill to zero outhud grants. >> i had better cut in there. thank you, mr. chairman. i think the panel for being here. this is really the next step. there is no question about the problems we have in the tax code. the uncertainty, the lack of visibility -- those have costa much doubt throughout our economy. i think this is one of the keys -- the key things we need to get fixed to what our economy turned around. there is no question.

having said that, there is a lot of question about comprehensive tax reform. that is something that many of us in this committee would like to see happen. i would like to ask the panel. briefly, we have the extenders -- if we do that outside of a comprehensive tax reform, what are we accomplishing? or should they not be part of this combination of tax reform? i think everybody who is a beneficiary of these -- make them stand up, make and say here is why this is important. let them stand on their own merit. i think that is important. so many of these are short-term because of the budget problem. these are some long-term decisions that, quite frankly, need to be made, as well as long-term comprehensive tax reform. my question is, can we do this

outside that, or should they all be part of this comprehensive tax reform? >> i think you want to do both. you want to look at the merit of individual provisions for the package of programs targeting a specific area such as assistance for higher education. then, on tax reform, you have broader issues. tax expenditures as a whole, not just the provision. tax expenditures as a whole are so large. that affects what tax rates caps could be. there is so much revenue given up from shrinking the base that tax rates on the remaining bass have to be higher or there are economic consequences for those higher tax rates. there is a tradeoff there that needs to be taken into account at a more macro level. thank you. >> i would absolutely agree.

there are a bunch of expiring provisions that ought to be permanent features of law. mr. thompson gave an example. those kinds of things ought to be performed permanently. the challenge is that legislation does not suggest that we will have tax reform before people have resolution in the near-term about what will happen to resolutions, particularly those about to expire. >> you have the opportunity to let some of them die permanently and keep them out of the next discussion of tax reform. frankly, i think the legislative climate or require that you address a whole bunch of these in another year or two. >> i would just note that many of the policies in the tax extender package are tax

expenditures. there has been a dialogue over the last two years or so more focused on the notion of broadening the tax base, killing of these tax expenditures, whether they are permanent parts of these -- the tax base today. then, with a broader tax base that is more efficient, there is the possibility to reduce tax rates, which would be pro- growth and would potentially reduce the deficit. i think that we should consider the tax extenders and the distortion area affected many of them have as we have had a debate about tax expenditures generally. >> given the urgency of the need to extend the expiring credits, i would hope that congress would move quickly on that as soon as possible and not wait for the broader package

that has been pointed out may or may not happen by the end of the session. new markets in particular -- a flat 9% risk -- fix. those are our priorities. >> thank you. >> on the issue of a comprehensive tax reform and doing away with tax expenditures to get the rate down -- you all agree that we need to do it? do you all agree that it needs to be revenue neutral? >> you do not think that we should grow the debt and the deficit to do this? >> certainly, the united states is on a long-term budgetary path that is not sustainable. >> should tax reform revenue neutral? >> i think that has to be

answered in the context of how you will reduce the debt and bring down the deficit. >> so you may answer if you want. >> if you experience it as much as i do, the phrase revenue neutral, you wonder what on earth that means. it is easy to see yes or no without -- the way i would summarize the point is that we need a tax revenue target for tax reform. my reading of the tea leaves as you look into the future, the federal government will have to raise more revenue than it has to starkly in the past, given spending pressures that will continue. >> i agree with donald's comment. we need to think about what that revenue will be to get all the spending objectives that we have.

we need to find a balance. it is a question that will need to be answered. obviously, there are significant spending pressures. >> the gentleman's time has expired. the gentleman from texas. >> thank you, mr. chairman. i will be very brief. i would like for our committee to also interject another aspect of the extenders and their viability. that is, the probability that a programmer extender, having the same ability to attract investment and the proper amount of investment in a reformed tax code where, if i am at 39% and i am an investor, i am looking at yields based on a the tax affect on my personal tax firms.

i am looking at income credits. at that point, the value of all the credits and that investment is different. if we follow through as a committee and lower the tax rate, simplify the code, in one year or two years, many of the programs that we renewed our coming back on the books and they will not have the same level of liability in the investor community because they simply will not have the horsepower to attract the investment that they will at the higher rates. i would like to inject that as in other criteria for these extenders and see if there is some -- >> excellent point. >> this concludes today's hearings. i really appreciate this. it provided an excellent testimony. i appreciate the dialogue and

even some of the questions outside of the area to which we focused. we will continue as a committee and a subcommittee to go through this process and try to determine what that -- what it standards should be extended and which ones should not be. what should be a permanent part of tax reform. we appreciate your input. please be advised that members may submit questions to the witnesses. those and the answers we may part of the official record. i thank you all for taking time. i think our members for being here today the hearing is adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]

>> tonight, president obama's news conference from earlier today on the economy and claims about the white house leaking classified national security information. he claims the house has a -- white house has zero tolerance policy. he will investigate information. you can see his comments tonight at 8:00 eastern, along with john boehner responding to his remarks. this evening's live coverage of the 68 annual radio and television correspondents dinner. coverage starts at 9:00 p.m. eastern. this past week ,ann romney and michelle obama were on the

campaign trail. we begin at 8:00 p.m. eastern with response -- remarque's fromann romney in miami. then we follow with remarks from michelle obama. you can see them both tonight on c-span2. two days of live coverage from the chicago tribune cost printer's row lit fest on book tv. gary criss and joe allen on chicago. and, at 5:00, one man was convicted of assault at age 16. his memoir finds him coming of age in prison. sunday at noon, and gail collins on the role of texas in

politics. and at 2:00, thomas mallon has a story to tell in "watergate, a novel." also, madeleine albright on growing up in sauce czechoslovakia. -- czechoslovakia. >> after having more than one year, i cannot think of a better name. it is really the heartbeat of the people. >> general counsel of the congressional black caucus on the role of today's caucus. >> we ensure that members of congress can come together on issues that affect the community at large, issues that may be played in your district. we come together to discuss solutions, legislative proposals to end the causes of problems and make sure people have a voice. >> more sunday at 8:00 pacific

on c-span. -- 8:00 eastern pacific. >> a witness from bloomberg news put -- threaten to go to court to change the way that labor statistics are released. he said negotiations over that plan are moving forward. they also looked at green jobs. committee chair darrell issa accused the labor department of inflating numbers. this is three hours. >> good morning. the oversight committee will come to order. we at the oversight committee exists to secure two fundamental commercials. first, americans have the right to know that washington -- the money washington takes from them is well spent. second, americans deserve an efficient government that works for them. our role is to protect these rights. our solemn responsibility is to

hold government accountable to taxpayers, because taxpayers have a right to know what they get from the government. we worked tirelessly in partnership with citizen watchdogs to deliver the facts to the american people and bring genuine reform to the federal bureaucracy. when president obama took office, he promised the american people to have a more transparent administration, the most transparent in history. from that point on, this was a standard the obama administration would be held to. almost four years later, more and more it seems that their own actions, the actions of this administration, say just the opposite is true. the u.s. department of labor, led by the secretary, has unilaterally changed the method by which the media access is

the bureau of labor statistics jobs data. this unprecedented action has serious freedom of the press implications. let there be no doubts, we appreciate the need for simultaneous release of the sensitive information. it has been accomplished for more than a generation to a procedure that was as affected and more acceptable to the media itself. the abrupt nature of this change, coupled with the absence of a clear explanation and a lack of public input, raises questions about who made this decision to implement this change and why did that individual have the authority of law. this is not the first time the issue has come up concerning the labor department's reach into the bureau of labor statistics. you will recall that a d theol

received -- the dol received $5 million to train workers in so- called green skills. an audit found the effort to be a otter failure and a tremendous loss of taxpayer money. failure and a tremendous loss of taxpayer money. the jobs may be needed, the skills may be viable, but they are certainly not all of a sudden green after being around for hundreds of years as professions. aside from the excuses, they have been using the guises of green jobs to ensure ongoing funding of the press and's green agenda. they have counted as a green

job college professor, environmental reporter, policy experts at any think pat -- think tank. in fact, lobbyists can be green. i have been in washington for nearly 12 years. there is a lot of green with lobbyists. none of it should be counted as environmentally green. there are 30 through -- 32 times as many corrine jobs in the septic tank and portable toilets servicing industry as there are in a solar, energy, and utility areas. more than 160,000 of these green jobs are related to school bus drivers. using these tactics to manipulate the numbers to mislead the american people is nothing short of embarrassing and a trail of the standards

that president obama established for his administration -- a betrayal of the standards that president obama established for his administration. you cannot set out false propaganda and then see where transparent. the truth is essential. we all appreciate this administration having an opinion. this chairman has an opinion that is sometimes different. we are entitled to our opinions. we are not entitled to our facts. is it any wonder that such concerns -- why there is such concern now that the secretary's department wants to unilaterally change and control how the president receives jobs numbers from the bureau of labor statistics. when invited to appear today to explain why this change in freedom of press would occur, the secretary in no uncertain

terms turned down all invitations. we appreciate those who are here as alternatives. however, ultimately, if you are the secretary of labor, the bloc should stop with you. if it does not stop there, where two americans believed it stops? it does not stop at the white house if the and -- secretary allows something to happen and does not have an answer. we will hear more about this today. we hope we will send a clear message to the administration. >> thank you very much, mr. chairman. i think you for holding today's hearing. we're focusing on two very different topics involving the department of labour and the bureau of labor statistics. first off, the integrity of the department of labor's job reporting must track the balance

between preventing the unauthorized release of key economic data and providing journalists with access to that data ahead of time so that they can prepare their stories about the broader employment situation. this balance is very important. we are the public's eyes and ears. it is critical that they have the access necessary to insure that they have a thorough and accurate understanding so that they can place it in context. a leak of this data could have negative consequences. for example, it gives certain traders sir -- early access to this data. even a few seconds could allow other powerful computer trading algorithms to manipulate markets and make millions of dollars. that is why department of labor

procedures to prevent unauthorized releases -- recently, they over hired -- hired the same entity that secures the security of our nuclear arsenal. we have found significant vulnerabilities to the department's procedures and recommend steps to mitigate risks. they also warned that attempts to break current security standards are profit-driven and done by entities with significant resources at their disposal. the department announced new controls on hardware and software. in addition, the department is

now pursuing certain firms that sought to sol -- celebrated to wall street a fraction of a second -- sali data to wall street a fraction of a second before they were released. this is the impetus for today's hearing. the department has worked with press outlets to accommodate their concerns about security. we anticipate that there will be an official announcement regarding these ongoing discussions soon. the second topic of today's hearing appears to be how the department of labor calculates the number of green jobs in the united states economy. this is the third hearing called on this topic, the third time department of labor officials

have testified before us. the brookings institution released an important report on green jobs with the following findings. first, green jobs employing almost 2.7 million americans. that is to force the size ofbioscience -- bioscience industry. second, they have expanded at -- more than the role -- rate of the economy as a whole. finally, it offers important opportunities for low-and no- skilled workers. the green economy is manufacturing and export- intensive the report has not been made

available to us under any circumstances. until the department of labor makes that report available to us, we will consider it to be a cya document. i hope the gentleman will join with me in issuing a subpoena, if they will not deliver that document. >> i will be happy if the

chairman is willing to consult with us, to talk about, and if warranted, which will certainly do that. >> i thank the gentleman. members will have seven days in which to enter opening statements for the record. welcome. mr. robb daugherty is the general manager or orders and news. welcome. lucy dalglish is the executive director at the reporters committee for freedom of the press, also welcome. dr. keith hall is the former commissioner of the bureau of labor statistics. i will work hard on this one, aha -- dianaburch bot r

furchtgott-roth is a fellow at the manhattan institute. would you please rise and take the oath. raise your right hands. the you solemnly swear or affirm that the testimony you are about to give will be the truth, the whole truth, and nothing but the truth? but the record confirmed that all answered in the affirmative to the best of their ability. please be seated. many of you are returning to testify. a couple of you may be your first time. we have members who will be coming in and out. we estimate about half an hour for your opening statements, so

try to stay as close to 5 minutes as you can. any additional material you may wish to submit to support anything he say today be included in the record without objection. you only need to summarize, because all you have submitted will be on the record. >> members of the committee, i think the committee for the opportunity to appear today and i want to express my appreciation to the committee for its engagement in this issue. bloomberg news provides news and analytics to decision makers and industry beyond finance. it is delivered to the bloomberg professional service, through television, radio, mobil, the internet, and two magazines. we are syndicated in hundreds of newspapers. we cover the world with more

than two dozen reporters and editors in 146 pier rose. we are experts at publishing economic statistics and disseminating market-with the information. media stakeholders are making progress with the department of labor in arriving at a place that will not undermine the first amendment. will not reduce transparency or create unacceptable risks. while no conclusive agreement has been reached, the movement we have seen it would not have been possible without the engagement of members of this committee in both chambers of both parties. we are thankful to senator blunt for a his engagement. on april 10, without the notice and comment period dictated it under the procedures act upon dol announced a policy shift. henceforth, reporters and editors would be required to use

only government software, government hardware, government lines, government notebooks, and government pens. all transmission would be via the internet, not through secure lives. the department of labor would own and operate the lines cannot control access, and internet connections, creating a single point of failure, because all renovations share that. although the policy change was unprecedented, it was presented as non-negotiable. news organizations were required to remove their software, hardware, and dedicated lines from the department by june 15. this proposal threatens the first amendment. the government would literally owned the reporter's notebooks.

the department of labour is required that reporters write articles on government-owned and operated computers on a regular basis, which would give the government unfettered access to notes and drafts. no administration anywhere should have access to reporter'' thoughts or notes as conditions for covering the news. the proposal -- the order also threatens national security. house, senate, and the initiation have spent a great deal of time to address potential cybersecurity threats. this is been a key part of the discussion. in the world we live in, the department of labor, to deliberately forced the transmission of data away from secure, dedicated lines, and instead mandate its transitions

-- transmissions via the internet is an unacceptable. the prospect of a deliberate destruction, potential market manipulation, are real. in august last year, the department of labor's website was down following the release of the monthly report. the unemployment rate was unavailable for one hour. if the april 10 order goes into effect, the results would be potentially catastrophic. this proposal will increase market vulnerability and volatility. people compete in nanoseconds. studies of the 2010/crash illustrate how quickly small incidents can result in major

disruptions. when the department of labor hosted a conference call on april 16, to answer media questions on the new policy, i asked, what is the problem, the think this will prevent? the department of labor's response was i think we are on to move on. operator, we will take the next question. the rationale for the new policy has set out in dribs and drabs. relying on a report by the sandia national laboratory -- dol as alleged its new policies necessary because of an authorized people planted on authorized equipment in the department of communication cost. this is an argument for existing the existing policy. the santiago report speaks of

those who opposed the department's recommendations as adversaries. that is according to a summary which has circulated on the hill. although they are willing to violate the law, violence is unlikely as an operational method. does the department believed that media our adversaries? on what evidence is such a statement based? sandia continues to state the driving recalls is the presence of algorithm traders and or their agents in the walkup facility. has the facility been infiltrated by hedge funds? congress should be entitled to that information. is it that difficult to distinguish between an authentic news organization and a hedge fund? if the root cause of the issue

drawing -- driving this is the presence of traders, why not just to expel them from the lock up? this proposal reminds us of reducing transparency, reducing the accuracy of the data, increases volatility, and poses a cyber security threat. given the refusal to extend the current june 15 date for removing equipment, the calendar will dictate how shortly seek an injunction unless an agreement is reached. an understanding has been reached amongst technical officials of news organizations and staff at labor. labor is still to get back at us with rules. until an agreement is reached, the order stands. thank you, mr. chairman.

>> thank you. >> mr. chairman, members of the committee, thank you for inviting me to testify on the new policies the labor department is planning for its press lockups. my name is robyn doherty. reuters is the largest news organization in the world. we report in 20 languages. our audience includes more than 1700 text, pda, and 600 tv clients come over a 35 million visitors to the website each month, and more than 400,000 financial professionals. 'on april 10, the labor department notified our pure chief about major changes they plan for the operation of a lockups. i will not repeat the details, but needless to say, which were

taken aback by the planned changes. they were dramatic, announced with no explanation of the rationale, and without prior consultation to the newes organizations. we believe lockups are extremely useful. they provide journalist's time to better understand the information before sending it. we fully acknowledge the responsibility of the department of labor to implement rules to guard against premature release of information. it is in everyone's interest that the department do so. we believe the procedure now in place has been effective in preventing the release of data. the department plan announced her would require us to use government equipment as a matter of routine, something we oppose. the changes would represent a

major step backward for use economic stations -- organizations. that would imperil the ability of organizations to provide such information and a reliable, accurate, and timely way. to gauge the importance of that dated to the public in general and the markets in particular, one eats that look no further than last freddie's unemployment report. our software allows journalists to incorporate new material as low as provide data to push -- that puts the material in context. this will be lost if the lock up participants must use a

department-provided configuration. it would be lost without any assurance that new procedures which decrease the probability of premature leaks. you can make an argument that it will increase difficulties with dissemination of data. we joined with three other organizations, bloomberg, ap, and dow jones and requesting a meeting with the white house to voice our opposition. we are hoping to understand the department's concerned to see if we can find a way it could meet its responsibility to prevent early release of data without the draconian changes. we have held a series of constructed meetings with officials and staff, and they have left us optimistic that we will be able to agree on policies were -- that will allow news organizations to disseminate information quickly

and accurately. we're not there yet. we hope we can complete the agreement in time for the july 6 deadline. if not we will be asking for a short delay. as we discussed other issues and reach agreement, the timing is important for us. it is now jeanette six. the equipment starts coming out on june 15 or 16th. the next report is july 6. they think is the department will to do this correctly. if we're able to reach an agreement on technical issues and go forward, i hope the department will be flexible on the implementation. thank you for your invitation to address the committee and for your interest. i will be happy to answer any of

your questions. >> thank you. chairman issa, recommend that -- they give to the opportunity to testify today. i. lucy dalglish. for more than 40 years the reporters committee has provided free services to protect the rights of journalists working with the united states law applies. i am happy to testify on behalf on the sun shine in government initiatives. it is a coalition of associations providing greater transferred -- transparency in government. we object to the changes the united states department of labour announced less than two months ago. the department's approach proposed in april makes the

release of information less reliable, less secure, more prone to errors, and inaccuracies, and less equitable in its reach the public. last month the sunshine in government initiative urged the labor department to this -- to suspend these changes, clarify concerns with the current process, and work with us to address those concerns. since then only your attention to this issue has helped bring about productive discussion between the media and the labor department. quite honestly, we are bill wilder by the department's announcement on april 10 without consulting with any of the media involved about these dramatic changes that will have a devastating impact on journalists' ability to inform the public. it took the interest of this committee to spur what we understand to be a protected discussion between journalists and the lockups and the apartment.

as you know, since its formation after 9/11, we have work with others on capitol hill and across the exact a bridge to work through problems, and we remain committed to working with the department. let me be clear. we do not wish for the labor department to maintain procedures that would advantage one media entity over another or make it easier to break embargoes. we are hopeful the labor department can address all our abilities in the current lockout procedures with ongoing dialogue. let me describe how the announced changes would undermine the integrity of the high-profile economic indicators released to the public. announceddepartment's purchase raises cybersecurity per stearns. releasing the data to an on-line connection bailout and internet hacker the target to release and change keep numbers as they leave the department. or a denial of service attack

could relate released to some or all. second, the labor department cost new approach would likely be less reliable than the current practice. currently at least two media organizations have built redundant system hardware. a circuit fails about a second certain -- circuit reroutes the traffic. attempting to duplicate these secure systems on government computers would be costly to taxpayers. last, the department's new approach would make errors were likely. without their own equipment, freeloaded spreadsheets and custom software, journalists will have to type this information relying on hand root and the notes. this increases the chance of errors. markets will react to wrong data

before any correction can be issued. no one begrudges the federal government removing -- moving quickly to address media concerns, but the labor department should explain its concerns and considered the perspective of journalists and the public before making suca dramatic procedural change. the media takes government interference with its work product very seriously. so does the constitution. in fact the first amendment obligates the government to allow journalists to operate independently from government control. requiring journalists to draft and publish stories using government-owned computers loaded with government- controlled software crosses and line the first amendment drew to separate the press from the government. we're committed to working with this committee and the labor department to find a resolution that serve the public interest. thank you. >> thank you. >> good morning.

members of the committee, my name is keith hall. i am a senior research fellow at george mason. i wish the former commissioner of the bureau of labor statistics. let me note that the bureau is an independent federal agency. as such, it is test not only with collecting and producing economic data, but also with disseminating the data to the public. there are a number of principles which any agency follows. is to disseminate the that it but a transparent and independent manner with no bias of any type. they are cast the critical level fighting field for the release

of data, meaning nobody has an advantage of getting it ahead of others. they are responsible for the security of the data, and that is everywhere. in fact, the bureau has the responsibility to decide whether or not even have a date .... i make this distinction because this is a debate -- this is not the department of labour i am talking about. news media were considered as most effective distributors of economic information to the public. wire services were the most practical distributors to media outlets, and for this reason press walks were designed decades ago to provide the most important day that the wire service reporters. wire service reporters look at the date and head of -- and head of release.

they get to write their stories on the typewriter, and when the release time came, they have already released the information. that is how a lot of runs today. -- that is how the lockup runs today. lockup continues for the most piquant not -- be it important economic data, technology has changed so that it is difficult to maintain security inside the lock up. automatic trading has made employment released data extremely viable. lock up participants may now have specialized equipment and software that links to automated

trading models. back in 2009, i read one article, this caused me concern. key economic indicators are released to markets to a small an exclusive group of news agencies. a trading model can now discuss the specially formatted data and enter into a trading position immediately before the locker -- a larger market has had time to release the news wires. this raises concerns over whether or not we have a level playing field coming out of the lockup. i have a number of recommendations on this. let me mention the second thing quickly as well. emerging technology constantly changes, and agencies that are tasked with disseminating data may be able to take advantage of new methods of disseminating data.

social media is a new method of disseminating economic data, and other agencies have access to social leader. i believe bls should be allowed to use social media without having to compromise its position as an independent provider of data free from filtering by the office and secretary, free from bias, and from perceived parts of intervention. that is the first recommendation. with respect to press lockups, having a lot agreement, and locked room, and a number of those things have not been in place and the to be put in place right away. one thing i have a problem with is tv journalists are allowed to break the law and up and leave the room and go outside before the data is released to

set up for cameras. that is a security concern. most importantly, i think that the bureau of labor statistics should be given full oversight party in conducting all its press lockups, developing policy procedures, and having the authority to establish and implement confidentiality protocols for participating organization employees. to some degree, this is not just my opinion. this is the opinion of the office of management and budget, if you believe the omb statistical policy directive statistical3 and 4, which make it clear it is their responsibility to determine whether or not there is a lock up, and they are the ones responsible for confidentiality. >> thank you.

ms. roth. >> thank you. thank you for inviting me to testify today. i was asked to talk about green jobs, and it is a topical time to be discussing this because we just got the employment news on friday, which shows the number of jobs in the economy rose by only 69,000, following an increase of 70,000 in april. the unemployment rate rose to 8.2%. while america might not be good at creating jobs, it excels at relabeling jobs as green jobs. how many jobs does our government label as green? bls decides which are green and

not, and they identified 3.1 million in 2010. americans may have to look for decades at the same job and a where a federal agency might some day designate their job agree. i would like to argue we should focus on job creation, rather than green jobs, because we have over 12 million unemployed. if people want to buy cream products because -- buy green products, they will do so. much emphasis on green has driven jobs overseas. two examples, incandescent light bulbs, the ban on in can sentence based incandescent light balls has resulted in the closing of factories. they are green jobs to china.

many solar panels, when the turbines that are required by law are made overseas in places such as china. coal is produced here, but we are increasingly not being allowed to use it. china is using our coal and producing less than 1% of the electricity from real bulls, that makes these products with coal and sends them to us, which reduces our jobs. bls decides which jobs are green, and sometimes these jobs qualify for tax credit -- subsidies. our transportation policy is based on green jobs come up with 20% of the highway trust fund reserved for mass transit. tax subsidies are giving to electric vehicles. but the company's to produce them and americans to buy them.

bls defines green jobs as jobs that provide services that benefit the environment or conserve natural resources. or as jobs in which workers are involved in making their process is more environmentally friendly. in order for a firm to be considered green bay have to meet one of five goals. energy from renewable sources, energy efficiency, pollution reduction or removal, natural resource conservation, and environmental education and public awareness. i'm interested when i came in today to see this copier. this is a cup, but it says we say energy. this fits in with number 5. people who produce these cups

would be considered to have green jobs. that has not meant a total increase in jobs in the economy. it is just a matter of relabeling. agriculture, for example, one of the main categories of workers are 36,000 organic farmers and growers, and their workers are credited with accomplishing both natural resource conservation and creating energy from renewable sources. when a farmer produces court to eat, that is not counted as a green jobs, but when he produces corn for ethanol, that is counted as a green job. with farming is possible to calculate the percentage of employment that is dedicated to ethanol or organic product use, but in other areas is not so clear. when example is wood chips used for biomass. how many workers are employed by the industry to create

woodchips? woodchips are largely a byproduct of milling, and milling is not considered a dream job. according to a labor department definition, the 33,000 would product manufacturing jobs created ellicott green because companies can sell the wood chips for by a mess. i have many other examples, but i see my time has run out. thank you very much. >> thank you. thank you all for your testimony. dr. hall, i will begin with you. you see the need for reform in the lockup. what he said earlier is a a a concern to me. the office of management and budget has a set of guidelines and makes every effort to make sure the bureau of labor statistics is independent. carl fillichio is a political appointee, working for the

secretary of labor it about a person who came up with this policy. they violated omb guidelines. this is not the independent agency intention that you work for so long and hard, and you have been very candid with us in the past. is your account -- is your job to account for the green jobs. we have enjoyed your honesty, but your honesty here says it is supposed to be one way. it was not. is that correct? >> that is correct. . bls should be -- i think the bls should be responsible for accurately reporting about jobs. mr. moss, you are one of the

company's that invested heavily in proprietary lines, aren't you? >> yes. >> you did so for two reasons. one was clearly to ensure that your story did not fail to go out, and i guess the second one is to make sure you got it out at least as fast as anyone else, if not a few seconds faster. is that right? >> we're not interested in getting it out faster than anyone else. >> but you at least want to tie the fastest? mr. dougherty is shaking his head yes. i assume he wanted to. >> we have an interest in transferring the information as instantaneously as the lock up rules will allow. >> you have an interest in not being beat to the new stand?

>>ms. dalglish, you represent an umbrella, and dr. hall said most of its essex go out on a news wire. everybody gets them at the same time. the most important are subject to this lockup historically until today. let me ask you one question. if in fact the bureau of labor statistics started pumping this all out to their internet, which it in fact be worse for their most critical information, because then the hedge fund with the best computer diagnosing what is very predictably exactly the same raw statistics would then make the decision on market interruptions and trade during those first few seconds? doesn't the plethora of

different news organizations with different opinions reporting in a different fashion, reaching sometimes different conclusions on what data, actually negate the advantage of a hedge fund because ultimately looking at any one of these services does not guarantee that anything -- does not give them the raw information as much as somebody 's opinion, and isn't a dozen or hundred opinions a better safeguard against a radical market move than a single piece of fact? >> mr. chairman, i really have to confess i do not know a lot about hedge funds operate, but i can tell you by having multiple is organizations in that lockup disseminating that information, i believe there are safeguards for the public's, and i also believe the independence of those news organizations is a benefit to the public, rather than having the government just being the only source of the information as it gets out,

whether it gets to the public, or to the hedge fund. there is value in having multiple news organizations digesting this information. >> to the news organizations represented here today, if you're given no tools, if you're given information in a short period of time to reports your given, are you not in fact and are up propaganda? the difference between propaganda and independent news, is it not the value added that your reporters can bring three there's experience or in fact the information they bring in that helps them take raw data and turn it into a opinionated, factual news? >> the advantage of the lockup at the department of labor and agriculture and agencies disseminate statistics brown the world is that it allows us to

publish information with as much context and supporting data in as many superlatives that we can. what we publish at 8:30 sharp goes behind one number. >> i would add that one important part that we did not talk about in the april 10 order that labor put out come although we are in talks about changing this, there was no internet access at all, even in the half an hour that leads up to the the law cup starting. that is important because it allows our journalists -- and one of those is to see what is happening around the world. with everything happening today in the your son, that sort of information is invaluable. >> i recognize the ranking

member for questions. good to see began. let me make sure we are clear, because i do not want an accurate information to be on the headlines tomorrow. the bureau of labor statistics is a non-partisan statistical agency, is that right? >> that is right. >> when did you leave the department of labour? >> january. >> labour or any other entity within government that is focused on the development and advancement of policy to interfere with bl's development of a methodology for labeling green jobs? >> i know, they did not. >> i understand and sympathize with the news organizations. it seems like we have a question

of balance, any time anything gets out of balance you run into problems. it appears in our procedures are not equal to what technology can be used to do with the data. it seems like -- mr. hall described the way this first came about years ago, and now technology has changed dramatically since then. would you agree with that, mr. hall? >> congressman, the department of labor has a switch that controls to medications in two and out of the room. no news headline or story can be published until the labor official literally kicks that master switch at endicott 30. >> the you have a comment?

-- do you have a comment? >> that is true. one of my concerns about the locked room that involves the struggling with technology coming out, and i do think there is a need to add a minimum review the security in that lockup room. >> i would add that is why the discussions we are having with the labor department has focused on that. we understand they have the responsibility to set up lockup rules. our view would be the april 10 announcement plan did not strike a balance. >> i am hoping that happens, and i am going to urge the secretary to move that along so you all can come up with an agreement, because sometimes i take it is a matter of people sitting down

and working out things. not everything has to be legislated. it missed a lot slower at times, if you have to depend on the legislature. according to our view on ecember 9, by keelhith hall, data from that november 2010 report that a scheduled for release, december 5, was inadvertently transmitted from the facility 25 seconds earlier. the news release states a similar early transmittal occurred on december 3, 2008, involving the data on productivity and cost. the release clarifies a wire service bureau chief informed us his outlet had inadvertently released data from the lock up facility early to subscribers on occasions and that the department of labor confirmed

this claim. the news release states that the news release was accidental. dr. hall, worked at the department of labor statistics at that time. what can you tell us about how that occurred and how were the who leads accidental, and what circumstances to allow such accidental leaks to take place? >> as i recall, the news agency was allowed access to the room without any bls technicians and they replaced a cable from their computer to that box. it turns out that cable he inadvertently by past the security on the box. on theassed the security to d box. since then we have tried to not

let people in it to the room without a technician there. >> were those leaks -- worth a detective at the time they occurred? >> they were not. >> reuters takes and barbara's seriously, and we have always indicated -- aha that resulted in unintentional release of data in late 2008. what can you add to what mr. hall said about how the leak occurred? he stated a defect in the equipment resulted in unintentional early releases. was the fault in this matter with the department or with your

firm? itmy understanding is that' is shared. we keep reconfigured our hardware. the way that it faced with a lock box led to the inadvertently said. the first release was not detected by us. second, we realize and immediately became -- made that known to the department. we work with them to figure out what the problem was. as i said, we are aware of no other issues in the three and a half years since. the department has up to 10 lockups a month. >> as a former commissioner, do you believe steps in the department of labor to improve

this attorney of that kind of data during the embargo. are necessary? >> most of them are necessary. the one aspect would be replacing equipment. that is a dramatic step. i think that was worth considering. i think that is a possible solution. i think it is a possible solution to release the data on a website and then open the lock up room. there will not be quite such a rush to move trading. i am not sure. i think it is something that should be done and should be considered and discussed. >> thank you. >> for the record, when these lapses occurred, who was president of the united states? >> i believed it was during the obama administration, but we did have a lapse -- >> november, to designate -- to

designate -- 2008? three and a half years later we had eight picks putt -- we have a fix purpose. >> appreciate you holding a hearing on this topic right now. this is an election year and i do not think anyone who follows cissus six does not realize the number one issue facing our country are jobs and the economy. that is what people are looking to in leadership to make their decision. these numbers are extremely important and this hearing is very timely. the one thing the american people agree on is congress is not doing a very good job, and the trust factor is very low. the one thing they should get are the facts on these numbers. i often wonder why we focus so much on unemployment numbers

rather than employment numbers. i wonder if anybody the panel would have any comment on why we do not look at employment numbers. >> congressman, that is an argument for allowing the news organizations to publish as much context come out as much full information at 8:30 truck as possible. -- sharp as possible. if i might make returned to a point that dr. hall may, he was talking about under unauthorized access -- >> we will get back to you. there is such a disparity in unemployment numbers, and when we talk about getting to the truth, who can lead this country, we need to provide this

tax to them. mr. moss, i will ask you, on a scale from 1 to 10, how would you relate the transparency with regard to its lockup policy? >> i am here as a journalist. i would say that it leaves a lot to be desired. the apartment as reside on the santiago report that has not been made available. you rate that?do >> based on discussions we have had with the department, everybody would have been better served if discussions had been taking place prior to april 10. >> with the uncertainty facing our country, the importance of transparency, mr. moss -- is it

correct the department is justified in changing the lock up procedure by citing the findings of the sandia national labs report? >> yes. >> have you seen a full copy of that report? >> i have not. >> is anybody in the department seeing that full report? the you believe you are adversaries to the department? >> i do not, sir. >> are you aware of any deficiences with the lockup procedures? >> this brings me back to a point i wanted to make in response to dr. hall.

dr. hall referred to one of the problems being an authorized access to the room. that is an argument for the enforcement of an existing policy, not the replacement of that policy with something very draconian. access to the room is supposed to take place with a technically proficient department of labor official and we are comfortable with that. >> the department of labor's new require ould apar government software and wearing pig is this possible under the first amendment? >> i do not believe so, and i think it raises substantial first amendment problems. as you know the first amendment is designed to allow the press the opposite -- operate independently.

when we use government-and software and you have no control over what it does and you have no knowledge of perhaps -- you do not know what they are able to monitor from your work. you do not know what they are taking, putting into it, what control goes out. it is a frightening prospect. >> to your knowledge to any other agencies require reporters to use equipment and tools owned by the government? >> i cannot think of one of the top of my head. it is possible, but i am not aware of one. >> this government ownership could be problematic for freedom of the press? >> and for the public's right to get independently gathered and digest the information. >> thank you. dr. hall, as you know the

current head of the office of public affairs mr. fillichio has not been confirmed by the senate's as a senior adviser. d your call that that position was occupied by someone who was senate confirmed? >> yes. >> and the importance of these numbers, do you think it is right that the release of this information is overseen by non- approved -- >> they do not have the authority to make changes. >> i thank you all for being here today. >> we go to the virginia gentleman.

>> thank you for being here today. i want to welcome dr. hall from the great university, george mason university, in northern virginia in my district. we are delighted to have you here. maybe i could begin with you, dr. hall. i am looking at the sandia -- listening to your testimony, and if i can infer about what you are saying, about how this process established, the lockup, and the control of data, and reporters waiting at their trusty typewriters, i think you were leading us to believe that technology may be has passed us by. about even with the best vintages government insisting on government transfer to all of their technology and government- controlled computers compromise

is the first amendment rights of the for the state. government also has a legitimate concern. after all, the media are profit- making entities. they have noticed that go beyond just the first amendment sometimes. i am reading from the executive summary of the cynthia report -- ays ia report, and it stay although they are doing due theigence to monitor facility, the opaque nature of this equipment is a major impediment to insuring that embargoed data are not released prior to authorization. in your opinion, is that a legitimate concern? >> yes, it is. >> we have to balance that with

the legitimate first amendment concerns with your witnesses on your right. might that be the motivation of the department of labor in these new regulations -- i will withhold judgment as to whether they went too far or whether better notification could have been given. that might have been there of motivation, not the boot of government on the next of media tried to strangle the first amendment. >> i support the recommendations. the only thing about the i.t. equipment, it is worth having government equipment there, but it should be studied more. i think there is a bigger policy issue here for the statistical agencies. they beat the side whether it is possible that trading prior to the lockup. >> do we even need a lot up?

there is no law to have a lockup. why not post something on the web at 8:30 and everybody can have at it? >> i think the issue for bls is we want to disseminate the data, we want to give people the chance to bright accurate stories cannot be a with ask questions, to get their stories right. that was the idea of a lot of. you're absolutely right. most date is just put up on the -- >> in france is that where you are leading us come from the typewriter to today's news world with the technology advancing. might the government have another concern and that is leaks or unfair advantage to somebody in terms of information is enormous power.

i am looking at a letter submitted by the republican ranking member of our committee in the senate, senator collins of maine, right to the secretary expressing concern about the unusual trading activity reporting in journal co -- "the wall street journal " is that a concern of government, that we do not want to give an unfair advantage to somebody who might move markets unfairly and do a damaged in a broader economic sphere? does the government have a legitimate concern? >> absolutely, and that is one of the principals, how to best create a level playing field. , we heard the testimony of your colleague on your left. when you were. bls, the d.c. and toward -- deep

you see untoward behavior labeling certain jobs as green? >> not at all. >> my time is up. >> thank you. i would yield my time to the chairman who is so well versed on issues related to this hearing. >> you are too kind. you will go along way. -- a long way. i cannot think i heard you say that this was about interference your statement, and we have a second panel, had to do with the fact that a substantial number of what dr. hall put it out, 3.1 million green jobs, are jobs that had been around for generations. is that not true? >> yes.

the federal definition of green jobs was under the energy independence and security act signed into law by president george bush, which gave bls the instructions to do this. it results in next i think the reason there is controversy about green jobs is a lot of it came out of "stimulus money." claims that the stimulus was working included those green jobs. >> it seems that way. >> one of my questions is that if i relabel all of these jobs, most of them, such as diesel

repair person preparing a boss -- bus, if that was a green job 50 years ago, wouldn't it be fair to go back all the generations and simply have this rise and fall of sustained jobs year over year. wouldn't we have found as a result that at the beginning of this recession we lost green jobs? >> inouye get the series does not tell you about the past. -- a new data series does not tell you about the past. >> but the disingenuous part is that we are not talking about the fact that green jobs include welders, septic tanks -- >> there were jobs lost in those areas. we lost those jobs and then lost them -- got them back. we supported jobs, some of whom were lost and then regained.

i will return -- this is a committee of transparency. that is why we will continue to push to not have the kind of behavior. i can not remember what the gentleman virginia used with relation to boot -- the press his starkly gets treated one way. when the press its changed to -- and the press has historically gotten treated one way. when a changes --is that when the press must push back and force the government to justify the need to do it and the right to do it under the first amendment. in this case, haven't they failed both tests? they failed to give you the specific reed -- need of why they need to do it and they have

not shown why the specifics should force you to bring in a government equipment and then have the access your tight material on their computers so they can go through the materials later if they choose to -- hasn't that caused a first amendment question as well? hasr. chairman, thedoe dol highlighted its need for security in discussions. it is based -- based on discussions we have had, suspected concerns about security can be arranged and media's first amendment rights protected. -- there are some areas where we have been close. we are not there yet. i would like to make two quick points in response to the congressman's remarks. ,egarding dr. hall's response

he said that some efforts had been complicated by non- department of labor lines. that is more important to existing policy. the other point i would make, mr. chairman, is that under the proposals we are currently negotiating with the department of labor, department of labor technical staff will be able to install equipment that is owned by the news organization. >> if i can ask unanimous consent for one more question, thank you. you have been involved in the negotiations -- > at a minimum, wouldn't the government be able to specify and approved equipment coming into the lock up area rather than, as it apparently says in these confidential findings, that they cannot now.

wouldn't this be a case for they should be able to approve it equipment in advance coming in? doesn't the government have that ability to negotiate with cans into the room, and thus never been surprised? >> yes. >> with that, we go to the gentleman from massachusetts for five minutes. >> i want to follow up on something. there was an op-ed by a former journalist, you may have seen it. he said that outfits such as bloomberg pay fiercely to subscribers who pay fiercely -- compete fiercely for subscribers to pay for split-second data. who is it that receives data, the public or subscribers? >> subscribers to the bloomberg professional service include the

public. >> it should be recognized that everything goes on at the same time. it all leads the lockup at a clock 30 -- leaves a lockup at 8:30. >> are the some incentives for people trying to get their data out a split-second earlier than their competitors? it seems there is a lot of moving money, and summoned to do that they would be at an advantage. >> the department of labor has a master switch." -- >> yes, i understand, but if one person got it out earlier, they would have an unfair advantage. >> i just pointed out to mr.doherty testified earlier. "we want to get that information out as fast as possible to our clients."

>> yes, there is an advantage. >> absolutely, but everything that we do that needs to be done within the rules. dol -- >> one of the points he made is that the department of labour is not under any obligation to give prerelease address -- access at all. there is no constitutional requirement that department of labor give that information prematurely or earlier. but i think that they do that because they think there is a value in fostering an improved public understanding of the data and a value to having accuracy during the initial commentary. you must agree with that, right? >> yes. >> returning to this question.

it is something of the dol has stated. once an agency starts a policy, an agency cannot arbitrarily change that without due process or proper notice and comment here in. >> that is not a question. the question is whether they were under any initial obligation to share it at all. the due process could go to them issuing it once, with no pre release. no lawyers will disagree on that. i agree that what you are working on is a balance so that nobody gets an unfair advantage and you also get the ability to have a better understanding and more accuracy in your commentary. you have been working with the department, had you not? >> we have had discussions that have been productive. >> my next point is that you have indicated you held a series of constructive meetings and

were left optimistic that you could agree on policies. you said that even as he prepared testimony today, you are making progress, do you agree? >> we have made progress. >> the current status is that your on an agreement of principle? >> i am not sure we -- we are getting close on some issues. >> have you agreed to a security that will still allow you to choose your own hardware and software? >> that is one of our proposals. >> will that still control physical access to hardware? >> they would install it and manage it. >> if that agreement were to go into effect, would that allow you to continue to prepare your reports appropriately -- would that be a direction in which you want to move? >> at the moment, there is no

formal comprehensive agreement. towards ando work arrive at some glenn -- >> how close are you? >> from the technical issues? i am told there are some issues that the dol has to get back to the news services on. we are working for to get back. >> to have a feeling that all parties are working in good faith? >> i do think everybody is working in good faith. >> thank you. >> i guess i will go to the gentleman from pennsylvania, mr. kelly. could you yield to me for just one second? >> yes. >> were those fruitful during the period prior to this? did you have the same level of

support? perhaps there was a final judgment? >> congressman, it is my understanding that the committee has been -- >> >> i try to look at the statistics, i know that what i did previously, we always looked at markets that were available. we looked at the definitions and the statistics. it only mattered that they had some kind of credibility. my questions comes on the green jobs initiative. i'm trying to understand. doesbls -- the bls was asked to begin counting green jobs. to believe they it were asked to begin doing this for political reasons? >> i believe it was for policy reasons. there was a good interest in

green occupations. i believe there was one to be some policy made. >> i understand that. so in order to give credibility to the policy, we had to come up with metrics that made sense. so when you talk about green jobs that were created, and you think we have actually done a great job of that? has it been a positive roi? >> part of the issue is that bls did not have policies in mind. they bank of two approaches. you are looking at green industries and green occupations. as far as the seasons at -- those two things get mixed. we were trying to make a fairly broad definition so that people could make up their own definitions -- there were a million definition's around -- and use it for policy. >> i understand that. but we do a -- when you change

the definition of what people are doing and shaded so that the answer you are looking for can be supported by data that you carefully craft to come up with the answer that you want -- that is the problem i have. i am trying to understand if we are really looking to develop policies were developed the future of the country. a guy who drove a bus before -- if he went from driving a war rate -- regular school bus to a propane gas, he -- we created a green job. we just shifted a person from one job to another. i think you want to see some kind of positive return on your investment. i get the feeling that a lot of what we were looking at was a policy that was well intended but has not created the jobs that the administration thought were green. i have no problem with that. the only thing is, i did not keep on that path if i thought that was wrong. i did not do it because i was

keeping -- using my own money. this has been very bothersome to me. how you get from one position to another position and say that this supports what we are doing? that is the problem that the american people have. if we are truly talking about creating jobs, making an environment that is more conducive to creating jobs -- this is not do it. >> i think that the first thing i would like to say is that at the bureau of labor statistics -- you can produce the best that you can not and explain it, you cannot control how people use it. that is true with all our data. my big goal is to make sure that when people use the data, they know when they are using the wrong, even if they want to use it wrong. that is an impossible to b

forls -- for bls to control. how you feel about that? >> i am an economist so i do not feel. >> let me put it this way -- as an american taxpayer, we are responsible to pay all these bills as taxpayers. i have to say how i feel. i feel at times that we are so separated from reality in this town. use whatever term you want to use. what is the result of this? do we have any positive answers? >> the whole concept is not make sense. in the transportation area -- >buses and taxis are green jobs -- buses and trains are green jobs, but taxes are not. there is no point in adding any of these together. signed cesium is, for example

-- science museums are a green job, another kind of museum is not. the american people want jobs. i do not think they might if they are green. with the unemployment rate above 3% -- a% 4 three years in a row. we need lots of regular jobs. we should not worry if they are green, blue, red, etc.. >> we're looking for red, white, and blue jobs. with that, we go to the gentleman from missouri. >> thank you, mr. chairman. let me start with dr. paul. doctor, can you describe the work that went into developing the bls methodology for counting green at jobs. what were the experts sources you consulted in the developing this methodology for counting

green jobs? >> let me say that the folks at bls are experts in conducting surveys and data -- collecting data. there are not experts in what is green and what is not. we spent a good amount of time talking to federal in -- agencies involved with green things. we saw how federal and state agencies to find green jobs. and the private sector -- the idea was to get sectors on what should or should not be included as a green giant, and come up with a definition that at some logic to it. one thing that is pretty clear is that there is no one definition. there is clearly an arbitrary -- arbitrariness to it at some point. i think it was a importance to err on the side of been

broader. the goal was to be useful. we're not thinking about definitive folks on was green and not green. >> let's be clear that the department of labor statistics is a non-partisan statistical agency. did the department of labor or any other entity focused on the development and advancement of policy interfere with the bls's methodology? >> they did not. we went to agencies to talk about what they thought should be a green job or not, but it was entirely up to bls. >> ms. roth, you evidently do not agree with the federal policy to promote renewable energy technology or invest in green jobs. as you know, today's hearing is not about that policy. the hearing titled plan says of

the hearing is about dol's reporting of job figures, which clearly includes the number of green jobs calculate. >> would the gentleman yield? >> i will not yield. let me finish my question. >> do not disparage the ladies and tanned. >> mr. chairman, can i get more time? on that topic, this is what you say, "federal and state governments relabel existing jobs in an attempt to convince themselves and the public that such jobs exist. this entire exercise is an attempt to justify government initiatives." you hurt h dr. hall

testified that the bureau of labor statistics is an independent agency not affected by policy formation. if you accuse them of engaging in an attempt to justify government initiatives, ms. roth, did you mean to accuse the bls in engaging in vice activity of promoting certain policy? >> i would say that he is my very good friend and i do not want to accuse him of anything other than trying to do the utmost good with the data, but i think before you came in i showed this chart here, which had a definition of green jobs, environmental education and training, and public awareness. it is ludicrous to say that there are more jobs created because we are drinking out of these cops instead of plain white cups. we should be concerned with

increasing employment in the united states. taxpayers spend a great deal of money. they pay a great deal of money. they should get the best value. the best value should be job creation as a whole rather than deciding which jobs are green jobs. >> madame, but you have any anecdotal evidence of where there has been this huge boom -- i know in misery we had a certain windfall. would you point to something like that and say that there has been no jobs created? you have any anecdotal evidence to that? >> issolyndra ---- there is solyndra, who received $535 million and went bankrupt. he had a hearing on that.

another company showed involvement in the highest levels of the white house in the upper approval of that loan. these are all green jobs. meanwhile, kohl is not green but employs many americans. coal is not green but employs many americans. wind and solar may be green jobs, but they result in higher electricity rills. >> what about pipelines? >> i would say this is something that should be approved so that we can bring more oil down. >> would that be characterized as a green job? >> do you think the pipeline would be a green a job? >> i am asking you. >> i do not know. i believe construction of the keystone pipeline would not be a dream job, even though it would create more jobs for our refineries. >> thank you.

>> we now go to the gentleman from new hampshire. could you yield to me for just 10 seconds? >> i might make noticed that the secretary of the count green jobs bills -- the very idea that this is not political when our former colleague is responsible for it and overseas at -- it, we have to see that it is about politics, it has always been about politics. to answer your question about the pipeline, to be quite frank, the president was standing in front of green empty pipe lines and he was standing in oklahoma. >> could the gentleman from new hampshire yield to me for 15 seconds? >> i do need to get to my questions. i appreciate that gentleman yield in the back the time. >i am glad we're having this

discussion. i wanted to address my comments and questions to ms. ross. -- ms. roth. i believe there is simple witticism in this issue. others may disagree. -- there is some politicism in this issue. but you said something in your testimony that is important. why distinguish a green shot from a job? a job is a job is a job. we're in an economic climate where we just saw our job growth over the last month at 69,000. the unemployment rate has now jumped a 10th of 1%. we have estimates that they could meet or exceed 1.5% by the end of the year. -- 8.5% by the end of the year. people at home are not distinguishing between a greened job and a job. when they are looking for is a

career. to that end, the department of labor receives a $500 million claim in stimulus funds to train workers in a green skills. i probably would not have done that had i been in a position to make that decision, but that being said, the $500 million was appropriated. we have 589 different programs that we are now training for careers in this related field. my question to you would be -- has there been an economic benefit to the screen job training -- this green job training? have we seen a benefit to our economy? >> i would say that there has been practically no benefit to the -- through green jobs

training. the inspector general testified in 2011 that there were only 1366 trainees that had been in their jobs for six months. that was a very low return. if you want to look at whether there is -- where there is low unemployment, look at north dakota, with an unemployment rate of 3%. there is a deal because of fossil fuels and natural gas development. -- a boom because of fossil fuels and natural gas development. i know of a very few green jobs development. same thing with eagle falls, south of san antonio in texas. >> of the people who were trained, but you have a percentage as to the number who were currently employed?

>> i do not have that percentage. i could get that. >> would it surprise you if it was about 50%? >> that would not surprise me. >> finally, how could we find it -- i am curious to know, of the people who were trained, how many are working for an employee that got a die loan? -- a doe loan? >> i do not have that information. >> back to that point -- we are not debating green jobs. we are debating about whether we are calling greened jobs green jobs. if he sells used sporting goods, you have a green job.

if you do aseptic trent -- septic tank empty and, you have a dream job. if you work at the salvation army recycling jobs, it is a green job. but when people say there have been 3.1 million jobs produced, aren't they talking about jobs who have been around since anyone in this room was born? those jobs rise and fall and have a very little to do with anything unless you look at them in context over a long period of time? >> that is correct, yes. sion's museums were in place beforehand. now they are labeled greened jobs so they are part of this green and job creation. same thing with top manufacturers. -- cup manufacturers.

>> the gentle lady from california is recognized. >> i am perplexed by this entire destruction. maybe the panel can shed some light. what happens with this lock up is that you get information at 8:00, and at 8:30 you release it to your clients and the public. that is how i understand it. all the time, effort, money, after -- extra effort and expenses that goes into creating this could be erased if we just had department of labor issue these statistics at 8:30. rather than get the information at 8:30, the traders on wall street did it at 9:00. what have we gained or lost as a result of that? i would suggest that this is all about what works for wall street.

i would like to ask a question of the two representatives from bloomberg and writers, mr. moss and mr. doherty -- why would anybody subscribe your newsletter if they were not getting some benefit in terms of access and information before the public? in response to one question asked earlier, he said that your information is provided to your clients and the public at the same time. could you answer for me -- why would anybody subscribe your newsletters if they are not getting some kind of advantage? >> how we send it out is one thing. everything goes out o'clock 30. how people receive and use it is totally up to them. as i mentioned earlier, the information does go out to a variety of places. it would go out to people on wall street -- and not just wall

street, the financial community worldwide. it would go out to media clients who can use it on there website. it goes out to consumers via reuters.com. the idea is how people use that information once they have it. your comment that bls put things out at 8:30 -- people would be grabbing that information and putting it out as quickly as they could. this would be without the benefit would -- of having half an hour to digest it and make judgments on the benefits. >> this is not just about wall street. our subscribers throughout the country and the world include people managing pension funds of teachers and fire fighters, universities and other places of higher education, philanthropic ventures, airlines --

>> it is all about making money, though. >> our concern is about concern -- insuring that the public continues to receive something they have been receiving for more than a decade. that the public is fully informed and able to make its decisions accordingly. >> i still would like an answer to the question -- why should i subscribe to your service if you are presenting it to your public and the clients at the same time? >> if you have an interest in net -- statistics and the full context, not just what the unemployment or pedro creation rates are, then you want a news service that provides you with as much context, analysis, and data as possible. >> to your point, people

subscribe for a variety of reasons. people can get our coverage of the white house as well. people do pay for that coverage. >> i will yield the rest of my time to mr. tierney if he wanted to ask that extra question. >> i know the chairman wanted to do that. i knew he wanted to give at least half a minute to the rest of the panel. i thank you. the green jobs act, co-sponsored with may --me, it was not about creating jobs. it was that giving people the skills and the jobs to use jobs that were -- to work jobs that were created. there have been at 100 new manufacturing plant that opened up in this country since 2009, a number of them in my district, that were telling us they needed people able to do those jobs and asking for those programs.

i make that distinction. i guess the only ones not interested in making sure that energy efficiency industry's drive is the republican party. i know the third department of defense is putting on clean energy for a variety of reasons, the department -- the safety of our troops being 1. >> pursuant to the role, you may not disparage the intent of members of either party or any individuals here. >> deerfield disparaged, mr. chairman? >> to make a comment about -- >> do you feel disparaged? >> guess i did. >> how you feel disparaged? >> for the same reason that the gentle lady went to the floor for a long time -- if the gentleman would please refrain from violating the rules of the house. >> so help me out here. tell me how you feel disparaged.

>> the gentleman may continue. >> i yield to you to tell me how you feel disparage. >> to allege that we do not care about energy when in fact what we are seeing is people entering sewage out of toilets been counted as green jobs -- >> the gentleman -- >> you disparage the republican party. the gentleman's time is expired. we now go to a gentleman's party from north carrot -- the gentleman from north carolina. >> i can not follow up those fireworks. i will not. i tried to respect my colleagues, even if they are wrong. in north carolina, r dr.oth. -- dr. roth. you may be the right person to

ask. i am deeply concerned about our statistical agencies. we should be a light for the rest of the world on how governments keep track of data, whether it is labor statistics, the census, any of these important pieces of data that we need to have a very clear understanding -- the whole thing. i am very concerned about the strength of that data and the independence of it. then, making sure that that release is done well. my colleague asked about why you subscribe to bloomberg or reuters what ever these different services are -- i subscribe to a variety of services in my office so that i can have data assembled in a way

that i can consume it better than what is on the website. putting 50 pieces of data together that are publicly available gives you good analysis. the free market works in that regard so that we can have access to that. in north carolina, we had this issue -- the governor for state level data, the governor, who is had a variety of issues, in this circumstance she released the state unemployment data in a private group. she was speaking to a retreat club and released this data before her office put it out officially to the wider public. how is that done at the state level? is there a great latitude that governors have on putting out this state-level data? >> we work with state

unemployment agencies to collect unemployment data. because we are working with state labor agencies, they themselves get the data ahead of time, before the bureau of labor statistics releases it. because they are not federal employees, we cannot really control what they do with the data. we can ask them when they write the data, we can ask them to not be critical -- sometimes they are. sometimes, as is in this case, the office may have shared the data with the governor, who then did not share it. if something is falling through the cracks because of this marriage between federal and state governments -- >> there are penalties. there is the confidential

protection act of 2002 that carries a fine of to order tickets thousand dollars and up to five years in prison for breaking -- $250,000 and up to five years in prison for breaking it. has there been any action in terms of fines or penalties for releases of this type of data? >> not that i know. i am not an expert in the law, but i believe that law governs federal employees. >> that goes to the state lat. to that regard, you served in a previous administration. do you think that this administration has been too lax in its release of the monthly employment numbers? >> i do not think there is any issue with anything with the release other than the technology has changed and made it harder to control the security of the release.

>> thank you. with that, mr. chairman, i would be happy to yield. >> i thank the gentleman. you keep talking about security. all similarly, no wireless device is allowed in the room. if they cannot accidently or inadvertently bypass controls and do not let a reporter walked outside and set up a camera -- if you do not do those things, you still have the same level of security you have always had. people, when convenient to the bureau of labor statistics, when you want them there -- otherwise, you released directly -- you put them in a room and you do not give them access to send out information until you turn the switch. i understand the technology. i spent a lot of time growing up in business and technology. this is not sound like technology where it just oozes out. it ultimately, the failure that we heard about came from

mechanical failures. >> yes. we see value in the lockup. we are not only disseminating the data, we also want people to get it right. we want a chance to reply in at -- explain it so that it is reported correctly and disseminated correctly, so there are not mistakes made. there is a real value in locked up. it needs to be done in a secure environment. the taking of equipment out of the room -- i can tell you what is behind that. it is the effort to get traders out of the lockup, automatic traders. it is a decision, in my opinion, to get the traders out of there and have the locked up without traders. that is a really critical policy level decision for statistical agencies. ina two agencies that have traders in the lockup. usda has traders in the lockup in commodity trading.

they have encouraged that for years. they are trying to encourage traders. they have much higher levels of security, they take care of things better -- this is an effort to bail on allowing the trading. >> thank you. >> i would be happy to yield john to the chair. >> i will pick up where i left off. i start on a line that i would like to continue. it is in it the bureau of labor statistics's interest to have lockups. when it is not, they simply put information out. >> yes. >> when i watch nbc, bloomberg, other services -- all the various -- i can out of business, so i used to have tvs in my office that distracted me. when i watched those, i would hear people trying to analyze your very statistics after the lockup had ended, after the numbers were out.

they were arguing, often, back and forth about whether it really meant something, how it dealt with previous revisions. you are somewhat famous for having revise sets of statistics. all of that analysis that is far beyond the numbers. whether a , as ms.speier said, there is a financial interest in watching it, or simply a businessman trying to figure something out, is going to go a different way -- whatever the reason, your facts, your statistics, in a vacuum, are dangerously useless if you do not have people who can make secondary of valuations and turn them into meaningful information with comment, dialogue, and prospective. >> absolutely. it is an important part.

that is also why we are tremendously available to the public. you can call us. i think it is important that nobody stand between us and the public in disseminating the data and describing it and help people to understand its. >> i want to close with one question. if this rule, as it were originally requested, were to take affect, in which people are put into a room with only a typewriter, a pc with word on it, and no reference data, no ability to bring in anything more than they have to have in their head, wouldn't the quality of your reporting from your major news services go down? wouldn't the differentiation of your services been narrowed, meaning, 2010 to look more like if all you had were your source material and half an hour to scratch up with you could on a typewriter?

>> mr. chairman, that would be very detrimental to the quality, accuracy, and confidence of what is now published at a clock 30. for one reason, we would not be the -- -- at 8:30. we would not be able to bring in our software which helps us to formulate tables, and other data with presentation rate. >> not just that, but the quantity of information we were able to provide would drop dramatically. we'll be doing a lot more by hand instead of things that are audited by software. >> in closing, i know there has been a lot of controversy here on how we count and what we can not as green jobs. when will have more on that. i would like to thank the representatives of the press, broadly and specifically. it is unusual to have the press before this committee. it is not a standard for us to be asking you questions. we really appreciate being able

to get the answers, but it is so important, what you do. as a businessman, i never subscribed to services. i was never worried about making a trade immediately. but the things i read in the journals and papers and so on, i knew they were affected by the quality of your initial reporting, not by the source data, but by the analysis of that data. on a personal basis, i want to thank you for pushing back to make sure that people of all aspects of life have the opportunity to have the free and differentiated press coming out of those lockups. with that, i thank you. we'll stand in recess for about five minutes we reset for the second panel. > [no audio]

>> the meeting will come to order. we recognize the second panel. he is a senior adviser for communications and public affairs. >> he has not been through a senate confirmation hearing, despite the fact that he is responsible for duties conducted during the bush administration by a senate-confirmed assistant

secretary of public affairs. mr. john alton is the acting commissioner of the bureau of labor statistics. the hon. jane rhodes is the secretary of employment and training administration at united states department of labour. pursuant to the rules of this committee, could you please rise and take the oath. raise your right hands. to you solemnly swear or affirm that the testimony will be the truth, the entire truth, and nothing but the truth? thank you. but the record request -- reflect that all members answered in the affirmative. i know that you will understand it your full statements are being recorded. summarized in the light is yellow and finished when the light goes red if he possibly could. >> mr. chairman, thank you for the opportunity to share with

you the efforts we are taking for these important data. at the department of labor, we take our security responsibility seriously, and we understand the critical role the press plays in the dissemination of this information. are directed permits but does not recommend release access to news media of principal economic indicators. should agency will act if released, we are required to insure there is no dissemination of data prior to the release time. we provide what are called press lockups solely for the purpose of the cup -- public. reporters are sequestered and given the information at 8:00 i am. they have 30 minutes to prepare the stories from 8:30 a.m. release. we believe lockups are good for journalism and a more enlightened public debate. we release all principal

economic indicators produced by the bureau of labor statistics, as well as unemployment and insurance weekly claims report. our lockups have a vault since the mid-1980s, when reporters were concrete behind a closed door and were provided with paper copies of the report. since then, technology used by the news media has of off rapidly. in 2001, the department took steps towards implementing additional data security controls in response to speculation that movement in the markets prior to a clock 30 a.m. was a result of premature leaks. -- 8:30 a.m. was a result of premature leaks. we began to hear from traders eager to know which organizations at release access to numbers. over the years, there have been different types of violations of security protocols, technological and otherwise. they have been addressed accordingly. in 2011, more than a decade had passed since the undertook a

fair review of our policies, procedures, and protocols regarding lock up street -- lockups. >> we understand there is convention -- demand and competition over providing information to the public. we very much believe that it is possible to balance our commitment to contribute to an informed public debate with an equally strong commitment to prevent the premature release of economic data. we recently announced new protocols that will give participating news organizations continued opportunities to write the stories in a secure lockup environmental taking additional precautions to prevent early release. last year, we entered into a memorandum of understanding with cintia laboratories to identify potential vulnerabilities. they are a government owned

entity that is a leader in anticipating threats and providing science-based system engineering solutions. they began their work in july and provided work in august of last year. the report included recommendations that we replace the variety of privately owned equipment with standardized equipment that will significantly reduce the possibility of data leakeds. two, secure a standardized fund data line that is off-limits to organizations. 3, require the personal effects and electronic organization -- items be stored outside. we insured that reporters represent primarily journalistic enterprises and present time-sensitive analyses to a broader audience. neither editorial nor political viewpoints were considered in the process. concurrently, i instituted

internal rules regarding staff lockups, including prohibiting non-career employees in the lockup facilities. some have expressed concerns that this would not allow them to the use of a private high- speed data lines, publishing software and computers and hardware. we met with organizations and then brought our technical experts together for discussions. these meetings have been productive and i am encouraged by the progress we have made towards a solution that addresses our security mandates as well as the media's business and goals. we're working with news organizations on a code of conduct for reporters rupert is a bit in our locked up. we are on track to introduce additional safeguards based on recommendations. in consultation with representatives and the associated press, bloomberg news, dow jones news wire, and

reuters. adjustments to protect the integrity of our data must be made on a continuing basis. i believe we have played a great foundation to move forward. thank you again for the opportunity to testify. i look forward to answering your questions. >> good morning. i appreciate the opportunity to appear today to discuss the methods used by the bureau of labor statistics to protect economic statistics prior to their official release and the department. immediately upon the initial release date and time of the statistical products, bls widely disseminates these to the product -- public through the website and an e-mail service. prior to that official release, we spare no efforts in securing confidential information from unauthorized disclosure or use. bls the is responsible for protecting two types of confidential information.

respondent-identifiable information is collected from businesses and households and is placed in confidentiality, protected from unauthorized disclosure and used by the confidential information protection and statistical efficiency act of 2002. after that collection, the information is aggregated in a manner that allows its release to the public through a statistical report while insuring that respondent identities are not disclosed. prior to this, the report is considered pre release information. the office of management and budget exercise authorities -- authority in dissemination of its output. consequently, the handling of pre-release information is governed by our statistical policy directors, particularly directed to three and 4. directed three applies to our handling of federal economic

indicators. the bureau produces seven of these. all our other data are governed by omb policy directive no. four. we have stronger policies and procedures in place to insure the confidentiality of data that the compiler, store, organize, and provide to the public. we have annual training -- for their more, the bls restrict confidential information to only those individuals who needed to carry out the program mission. policy prohibits employees from using this data for personal financial gain. the information systems that store and process confidential information have a security controls required by the federal information security management act.

personal identification cards are used for all physical access to the building and specific locations housing critical telecommunications equipment and i.t. equipment. omb directed three allows for the sharing of pre-release information in a lockup arrangement. in such an arrangement, pre- release information is given in the confines of a physical facility prior to be announced release time. participants are not allowed to leave the locker room until the information has been released to the public. no external communication is allowed during the lockup. bls uses this to provide information to the secretary of labor and the joint congress. we use the department of labor locked facility to provide secure access to credentialed members of the media. in 2011, dol, with full support

of bls, entered into an agreement withsandia letter -- with sandia laboratories. bls and department of labor are working with perches a poll -- participant organizations to create a report that satisfies the government's need to protect this pre-released data from unauthorized dissemination but also facilitate timely and informative analysis of the data by the media. in summary, the reputation and credibility of bls depends on our ability to release data to the public in a fair and orderly manner. we have strong internal policy procedures to ensure security of

sensitive pre-release information. we fully support the department of labor's communication of these recommendations. thank you again. i would be pleased to answer any questions you might have. >> thank-you. ms. oates. >> thank you. the department -- i appreciate the opportunity to talk to you and update you on the progress -- >> could you pull the microphone -- thank you. >> this is the first time in my life i have been told to speak up. >> one of the amazing things is that you project perfectly to the dais, but the wonderful man over here to the site is the only person who makes sure presence permanent. >> i will be much more attentive to you. good morning again, thanks for the opportunity to update you on our progress on the the

ability to train workers for jobs in green industries. the department plays a critical role in making sure we have it prepared for force for the economy of over the last few years, we have made a number of strategic investments. we want to make sure that businesses will have the talent they need to prosper. strong partnerships with employers has been critical to these investments from the very beginning. that is wiping the department requires that we work closely with employers to assess -- that is why the department requires the work closely with employers to be possible through the full life cycle of the grant. in some communities, employee needs have changed since the band started. we have made adjustments to continue to ensure that projects are in line with employer needs. occupations require the same

skill set, but with different employers than they had a really anticipated. the department is committed to making sure that these investments work. we will monitor progress and intervene as necessary to improve grant outcomes. we'll have a performance based process for identifying and prioritizing grantees. we provide technical assistance through mechanisms, including in person meetings and workshops and conference calls and case studies. this is implemented by our highest performing grantees. it includes many topics, including proper reporting and focusing heavily on job placement and deploy your engagement strategy. some of the grants and a degree industry took longer to get off the ground.

through strong partnerships of the businesses to meet local needs, our comprehensive communities, the investment are paying off. the department invested nearly $500 million directed by congress and the 189 greene job- training programs to help train workers for careers in sustainable manufacturing, energy-efficient construction, and other renewable energy resources. these grants still serve more than 99,000 workers. more than 65,000 have completed training. of those, 80% have received an employer or industry recognized credential. despite tough economic times, after completing their training, more than 25,000 workers have found new jobs. 81% of them have jobs. it is important to note that of

those workers will receive services, many of them were in, and workers and were not necessarily seeking new divisions, but looking to contain -- obtained credentials the will help them improve productivity with their employer and help keep their jobs. over 29,000 incumbent workers have completed training have received credentials. some incumbents workers received job training found new positions. before, workers who did not find jobs, we estimate that 99% of those workers retain their current jobs, which may have included advancement potential. the current expenditures reflect activity. as for march 31, 2012, 62% of this grant programs have ended. 68% of the total funds for the grants have been expended.

this represents more than a twofold increase. in the coming months, we won a positive trend to continue. to ensure we learn as much as possible from these investments, the department has been conducting formal evaluations. the qualitative evaluation was recently published. it included a descriptive analysis of the projects. we will keep you up-to-date on those. thank you for inviting me. i look forward to answering any questions. >> thank you. we recognize the gentleman from oklahoma. >> thank you, mr. chairman. good afternoon, everyone. let me run through a few things. let's talk about the definition of what a green job is. they feel that is solidified at

this point? we have a definite definition of what a great job is right now? >> to be honest with you, we take whatever definition is given to us and we get that info out there. our focus is really on relying on state and local areas to tell us where the employer years have been filling in that gap every year. >> the work in solar manufacturing, that is a great job. the energy and production of those, electricity, i assume that is a dream job. what about a custodian that puts in in light bulbs? >> that is not my job. my job is to make sure that if a local area need someone who can work with natural gas or -- >> you do understand where i am on this.

i have visited one of the programs. i met some great folks. in my conversation with them, they had just finished up so we were able to talk about how many people have been placed after graduation. how many of the individuals were placed in green and jobs? they hesitated and responded back to me, all the skills are transferable. that is great. the end up in a job, but they could not a single person that ended up in a green and jojob. if they are in, a pair, they will replace windows, so that is a green dog. -- green job. the challenge is not employment, the challenge is the number of what a green job is based on the

definition. the needs to be some connection -- there needs to be some direction. >> my concern, my charge when i took this job was to make sure that job training was in a blline with the needs of the employers. that is what my training providing does. we talk a little bit in your district. i was amazed at what was happening with natural gas and what was happening with that. i was thrilled that our training programs. they're getting people that they needed in the oklahoma. again, i understand this is a political debate. i hope you agree that it is my job to make sure my training programs are meeting the needs of local employers.

>> i absolutely agree. it is only in a political debate. that is the challenge of job training or are we trying to focus on a specific sector. there was this ongoing challenge. some say that they have programs that are focused on that, but they challenges in trying to place people with green jobs of the graduation. what is the definition of a green job? i was at a farm a few weeks ago. how many people do you employ in total? 12. when you train people in trying to do prepare on a farm, it is not a large population of people that are needed. many of them have formally done something else and were trained offsite to do that job. how do we get around the trading-related employment? there is a difference between

trying to employ people and target into an industry. that is the challenge. that is the push and pull. your comment about the incumbent work force. it was a great comment. half the people in the program were already trained and getting free trade for something else with the same company that helps them keep their job. that is a challenge for people. we can train people who are underemployed. how did the work out for you in terms of re-training? >> i am not sure if you are familiar with how we grant money. i did not make the decision on how to spend the money. i try to enact what congress told us to do. we changed the way that we've panel. previously, we had mostly retirees. in this changing economy, we

needed to shift that. we had two outside experts in the panel and one federal worker. i do not see the grants until they are rewarded. we are looking at the strings of the applicants. -- strengths of the applicants. six months to a year is the usual time line for when they are received -- for when they receive the grant. you need to look at what the greatest need is. in some states, it was definitely getting unemployed people trained. in other states, there was stress that employers would leave or that they would change the way they did business. they made a shot and a case that said the incumbent training

would prevent layoff. that was the most important thing in that area. a man that a strong enough that they reported it. it is something we should be spending more time with. the farm is a great example. some people who had no experience with farms before, when they found out there were three technicians per shift and that is all they would need, they were shocked. we went into overdrive to connect them with the local utility companies who are looking to green up. they were looking to hire people. we have been able to work with them to redirect some of those workers. the training was the same.

thank you. >> thank you. they did get jobs but they were trained for. the good news is, you are training for work. the bad news is the scoring had to include all kinds of things that people did not think were green in order to get some hypothetical number. that is what you said when you said that is a political discussion. >> at least we got a chance to talk a little bit. my job is to make sure the training matches the job vacancies needed. whether they are green or white collar or blue collar jobs, that is for the local areas to decide. my job, and i hope you will agree with me, is to make sure we are not wasting taxpayers' money to train people for jobs that do not exist.

>> we could not agree with you more. with that, i believe you are next. >> thank you, mr. chairman. i hope we can agree that grain to jobs are a newly emerging economy -- a green jobs are a newly emerging economy. this can help our economy in jobs. we in this committee and in this room can agree on that simple aspect. >> would the gentleman yield? >> sure. there is nothing that we could think of that is more acceptable in federal dollars spent finding people who either do not have a job or who would lose a job without training. we had a discussion of the green

versus the green in 1's pocket. -- one's pocket. that is where you and i agreed more. >> you agree that this is an important sector of the economy that has the potential for growth. >> know. the gentle lady --no. the gentle lady said she found often the the window did not create jobs. utilities have some very good jobs. they were able to get it. where we are agreeing is that you should the people into jobs that exist. we applaud the work that she is trying to do to use local boards to make sure that this money and the training people for jobs that exist. >> mr. chairman, no matter where the jobs are, it has to have a positive impact for job

growth. thank you. >> it is all your time. >> on march 13 of this year, there was a letter sent to the chairman of this committee. i am assuming you are familiar with that letter. >> i can get familiar. >> in response to how many jobs have been created with recovery act money, the secretary writes this -- you claim that the recovery act green jobs program costs 12008000 -- a calculation appears to be based on a preliminary data. it is not actively portray the costs. the most accurate method for

calculating the actual costs per participant is to combine the total number of funds expended by these grants by the total number of participants who received education and training through the grants. for the number of participants received training under these grants, this results in an approximate green jobs costs of -- if i am reading the response to the chairman correctly, dol never spent anywhere near that amount of dollars. they instead spend considerably less. about $4,000 per trainee. is that correct? >> that is correct. >> could you detail the types of

skills provided in this training programs? hard to resist the trainees? >> absolutely. we take applicants to where they are to where they want to be. for most of them, because we put a target concentration on industry recognized credentials, they are getting credentials back to the industry is saying they need. they are staying longer in training. it is costing more. for many of our participants, there were getting the entry level credentialed they needed and a higher level credential as well. >> how does roughly $4,000 keep jobs compared with the costs associated with unemployed? >> it is a savings in many ways. they're not on unemployment or

any other government subsidy. they are productive members of their community. our vision is on reemployment and getting people back to work as quickly as possible. some of the strategies we have used is on the job training. we put them to work while they were training. >> thank you for your responsiveness. finding employment is clearly a wise and cost-effective assessment. i applied your efforts for making this modest investment. >> would the gentleman yield for a question? >> sure. >> the debate you brought up in the question we sent to the department of labor versus the answer between over $100,000 per $3,000 wasd, $ estimated per trainee. which is more important?

>> i think that data is rather an accurate and incomplete. if you look at actual costs of training these applicants, it is far less than $100,000. >> if training cost $3,000 per person -- >> but you are lumping in all kinds of other costs that are not associated with the training. >> we're looking at how much is spent. >> $3,000 per trainee.

>> you're counting the of grants. -- counting the grants. that is your calculation. i do not agree with it. >> i assume we can agree to disagree. would you like to go next? you are recognized for five minutes. >> thank you, mr. chairman. there is a statistic that many plants have opened up in the u.s. in 2009. >> that is the data we have seen as well. >> that is one cross steady. there are others as well. in our state -- you are showing that states have made their own investments and have had a particular boon in clean energy

manufacturing. >> without a doubt, some states have pushed to get businesses to grow. massachusetts is an example. by caroline has pushed to get the lithium battery business -- north carolina has pushed to get the lithium battery business off as well. >> i notice partnership grants. one is a hybrid of the electrician. the particular skills that they would need in this area? >> in the plant i visited, they have been totally reform added. they use different equipment. the body stays the same, but the interior is different. they need to recruit new workers that fit the needs of that

industry right now. >> they did a particular training for a number of companies. are you finding that to be generally true? that certain companies require a particular set of skills? >> absolutely. some skills are like using a blow door are seen as entry level skills. we see a trend that the people who entered that career path went on to go to some of their centers of excellence, what we do not find. i went on to work and get good jobs in the utility industry. >> we have a lot of people in our state doing auditing. >> especially at the cape. >> especially. that takes a specific skill set. >> absolutely. and a high-tech academic skill

set than what would have been seen in the past. >> and solar panel installment. >> that is right. >> those companies, some of them are installing panels and connecting them to the rooftops. they have to help with training employees. that is a special skill set. is that correct? >> that is correct. that is exactly the trend we are seeing around the country. places that used to hire 6000 are now starting to incubate businesses and are awfully high during a fraction of the business. it is much more difficult than talking to the hr director years ago. it is becoming much more

complicated. it is harder for them to go to employers and really understand what they need. that is why we are pushing industry recognize credentials. >> you have allowed job seekers to connect to the jobs. >> that is correct. i have watched that happen. one thing is that training. the other is trying to connect people with jobs that exist. you can correct me if you are wrong, but we have found a significant number of jobs in that energy efficient area and the manufacturing area. it have been connecting people and trying to do more turning that allows more internships and apprenticeship to get them sent in, while they are still in education. is that something you have noticed as well?

>> that is absolutely right. some of the models in massachusetts are the same as in california. if you what a worker immediately to pay attention to upgrading their skills, you will have a much better opportunity to do that if you give them on the job training. they do not want to sit at home. they want to get to work. they are afraid if they sit down for too long, they will not be able to work. >> thank you. daho.e gentleman from iow >> mr. chairman, i yield back. >> the gentleman from massachusetts, he listed the number of jobs. the those jobs rely on subsidies? the boom in that industry but insulating windows, that was a stimulus program.

you were created job training or jobs were created under the stimulus package in that case. that is where the boom in the industry has been. i am all for it, but the fact is some of the jobs that you are training, the green jobs were linked hand in hand with the stimulus. they were funded and given subsidies. you were in a sense directly providing green jobs for christmas money that have provided great opportunity for business. solyndra and all of the others in one way or another. correct? >> i hesitate to say correct, sir. with all due respect, i was educated in massachusetts. i went to boston college. massachusetts has been a forefront at looking how to do

energy conservation. >> we're having a discussion about 3.1 million jobs that are constantly being counted by this administration. those jobs involve people who have power savings. we have the misleading figures because we are counting jobs that have been around for generations, you testified your today that your green jobs, what we are trying to understand is, how significant is it when they train for three by 1 million jobs? it appears that it is not significant at all. to a great extent, $100,000 to create per job, at the end of trading, you were not for some magical new jobs. you returning for jobs that

existed. it could be saw four or for a power company. you did it. i am all for what you are doing. i want to make sure that we define what those 3.1 million jobs. we are having a hard time finding them. >> i can answer making and if than a closet. clause. a lot o-- i do not disagree with you, but i think you want me to say that those jobs are all in created for credit. i hope that we do not trained for jobs to a federal subsidy. >> let me run it through some questions. we're having a green and jobs

discussion. wind turbines. >> i think -- >> to someone who sweeps the floors at a wind turbine factory -- solar panel facility, is that a great job? -- is that a green job? i asked you a question. you know the answer. please answer it. if you sweep the floor in a solar panel facility, is it a

green dog? >> yes. >> if you drive a hybrid bus, is that a great job? >> yes. >> what if you are a college professor teaching and run until studies? >> yes. >> what about any school bus driver? >> yes. >> what about the guy who puts gas in the school bus? >> yes. >> what about employees and a bicycle shop? >> i guess i am not sure about that. the answer is yes according to your definition. you have a lot of them. what about a clerk at a bicycle repair shop? >> yes. >> what about someone who works n antique dealer? >> i am not sure about that. >> the answer is yes because it is recycling antiques.

>> what about someone who opened a store to sell manuscripts? >> what industry is that? >> people sell rare manuscripts. they are used. >> that is a great job. >> does a teenage kid who works full-time at a used record shop count? >> yes. >> how about some of the cars?cturers rare trainc ars >> i do not think we classified that as >> it is yes according to your statistic. >> what about people who worked in a trash disposal yard? do garbageman have a green jobs?

>> yes. >> ok. i apologize. how about an oil lobbyist? when an oil lobby is count as having a clean job if they are engaged in the advocacy related to environmental issues? >> yes. >> thank you. with that, i go to the ranking member. >> thank you, mr. chairman. as i sit here and listen to all of this, i live in the inner city of baltimore. i think about all of the young man and women who i see every day. i will see them this evening when i go home. every job, any job that mr. chairman mentioned, they would die for.

they're not try to get to disney world. buy're not trying to expensive tennis shoes. they just want to buy a $10 pair. job training is very important. i want to applaud you. i know that you believe in what you are doing. i appreciate it. the national unemployment rate for people who is education is a .1%. school diploma is 851 for those who had a bachelor's degree was 3.9%. given those numbers, it is critical that we do everything in our power to create good paying jobs for working and middle class americans.

one of the problems facing america's middle class workers is job polarization. over the past decades, job opportunities have become increasingly concentrated in the high wage, high occupations. for those in the middle has been shrinking. at the same time, there has been a growing gap between jobs that pays the most and the least. there is a job polarization. there are steps we can do to address this problem. jobs are requiring a greater degree of knowledge and skills. in order to adapt to these changes, it is increasingly

important for workers to acquire or upgrade their skills. whether it is formal education or other forms of training. can you describe the programs within dol? can you describe the programs that have helped employees to new careers briefly? >> sure. eta is part of the department of labor. we also work with the women's bureau as well. to sum things up, we're focusing on credentials. these are industry recognize credentials that employers want. we are partnering with our friends and at education.

take someone who has worked for 20 years. it can work at a factory and make a good salary in a factory. their high school diploma, if they have one, may not be enough to get them a new job. it is ridiculous to have the jobs and the turning separately. we can help people upgrade their reading and math skills at the same time there are learning the new trade. someone who does not read very well but wants to get into health care, they do not need to learn how to read a menu. they should learn how to read medical vocabulary. those are the kinds of things. >> that is a very practical thing. there are a lot of folks who

think -- i have heard all kinds of things like people do not want to work. people who can easily get jobs if they wanted to, but there is a lack of jobs. i was listening to what you were saying earlier. training is very important. trainingately, turnidollars dollars has been slashed. you want to get a person on their feet and not a detriment to society. one thing we can do is you need to give them some kind of training. some folks think that people can just walk into a job and automatically do a job. what employers want is a trained

employee. the want someone who can come to work and do their job well. if they can have a trained employee from the beginning, i assume that would save them money. i assume that is why they want a trend employee, right? >> absolutely. and a player can lose money and by hiring someone who was not -- an employer can lose money by hiring someone who is not right for the job. >> they want to train the folks before they get there so they did not have to spend resources training them. is that right? >> that is exactly right. >> they may train in these areas, they are given skills that hopefully are transferable. in other words, they may not have a job today, but they may

get a job and it may not last that long. at the same time, they get skills. sometimes you have to tread water until you can swim. i assume that is part of your philosophy as well. if you cannot get something right away, would you want to try to do is get the skills needed so that they can fend for themselves and hopefully get a job. >> that is exactly right. the same basic competencies could be for construction as well as for the utility areas. as people demonstrate through the acquisition test performance is, they can get an industry recognize credential. it is not backed jack or jane can do a job. it is about jane has a recognized credential.

>> the fact is that they get training and are able to acquire a job. thank you. >> we now go to the gentleman from virginia. >> thank you, mr. chairman. you are the acting commissioner of the department of labour. >> correct. >> the chairman made note a while ago that our former colleague, the madam secretary of labor, there is some legislation that seems to guide jobs. just to clear that up, has the secretary of herself personally intervened to ensure that jobs are classified as such? >> no, she has not. we did a very thorough survey of whether federal statistic agencies around the world have done and what various states had

done. as mr. hall said earlier, we looked at exports and the department of energy. we came forth with a definition. we published it in the notice. we got something around 500 comments. we made some changes and came out with our final definition. and all of our responsibilities, we have some freedom and independence. >> the secretary calls and says, do not make me look bad. i am the author of this legislation. >> as the other author of that legislation, this did not start as a subset of the recovery act. it is a separate bill.

they had emerging areas in clean manufacturing and had a need for people who were trained in that area. i would suggest that there is a good showing that the global efficiency and renewable use industry internationally will grow by billions of dollars. some six trillion dollars will be invested. this country was to be a leader in that area. in my state and others, we want to be a leader in this country. you need capital and a workforce that can do it. >> what was the legislation before the stimulus? >> i think it was in 2008. >> i thank my colleague.

in listening to some of these questions, is that idea of class a find jobs in a particular category unique degree in jobs? -- unique in green jobs? quickly. an example?jobs be would it include existing jobs? >> correct. what about the criticism in our eagerness to classified every classified job as a great job? we have taken jobs long beforehand and visited them green jobs. -- consider them green jobs.

we are tripping over ourselves to define them as greens so we have a nice number. why? >> we put the numbers together in a way -- users who disagree with our judgment regarding the industry on whether it is green are not can remove the implemeemployment from our numb. it was our responsibility to look at existing jobs and decide which ones who wanted to qualify as high tech. >> what you are trying to do in the modern economy is aggregate jobs to some broad classification to better understand the nature of the workforce and what we are doing. is it growing or shrinking now?

>> correct. that is the measure will definition according to the data. >> my time is up. thank you. >> i now recognize myself. today include a portable toilet -- did they include a portable toilet? did it include people who ran recycling centers? are those considered high-tech jobs? >> not that i recall. >> it has been a kid dattended t is not the vote that counts, bu he who counts the votes. you're not a political appointee. if you were given the ability to

reduce for greater accuracy true high-tech, the number will be smaller than it was in the past. if you want to make this very focused on high-tech, which make the number smaller and reflect more directly with its high- tech? i know high-tech's a tough one. let's say biotech. trying to doe biotech, you probably would not count the person sweeping the floor. in the case of grain at jobs, we count nearly 50% of everyone -- greater than jobs, which have nearly 50% of everyone driving a transit truck, are we inflating the number beyond what is the result expectation by someone who hears 3.1 million green

jobs? >> we count greened jobs the same way we count jobs in any industry. perhaps we will assume that anteing portable toilets are a great job. we will go on. i is in you read this in the lab report. -- i assume you read this in the lab report. >> the department of labor is still operating under the conditions that they look back. it would not be permitted to release the report just yet. we are trying very hard to change that system on july 6. after july 6 or after the situation that we have where we are no longer operating under what they looked at, we would be happy -- >> are you owe refusing to

answer the question based on the assumption of the proposed role in making an analysis? >> mr. chairman, we are dealing with security issues and making that report public will be are still -- >> i am not asking you to make their report public. >> i would consult with our staff and get back to you today if it is just to the two of you. >> it is very hard to look at your rules and your negotiations without knowing what was in that report. >> i a understand, sir. >> thank you. i will ask a few questions. i am an old tech geek.

i apologize if these are questions you did not expect. was there any reason you could not have come up with a standard that for example a set of producing at your costs in line for these folks to send out, couldn't you have in fact specified as specific standards and limitations, to use their own time? is there any reason you cannot have put the burden on the editorial folks? >> mr. chairman, the way the lock up a set up, the burden is shared by almost everyone. most of the burden is carried by the department of labour. >> what is the costs of operating the lockup? what is the budget for that? >> there is no set budget. >> you do not know what the cost

and is for the lockup? >> no, i do not. we entered into a memorandum of understanding with them. we spent 70 of it. we will probably spend 20 more of it in the next phase. >> it is an ongoing contract. >> i will probably not use a certain amount of that money. >> use what you need to be secure. i do not think anyone would disagree with that part. if you have private sector willing to spend their own money to move the data, this is data in which you did not use a band with at all for hours and hours and then you need a tremendous amount. you had a fairly catastrophic crash of your own system. if you had private enterprise

willing to spend on monday, would it from a tactical standpoint, would it be better to put the burden on them whenever possible? rather than you have the taxpayers pay for their dissemination of info? >> mr. chairman, one of the things we have been exploring, i know that there are some rules were we cannot expect -- there were some proposals made by the organizations that were constituted as a gift. we cannot accept that. we are being very creative and innovative in balancing our security concerns with their business and the public responsibility to find a solution. >> we could come up with a tax. we could tax them. i am sure there is a creative way to do that.

let me close with a question that is most important to this hearing and why wanted you hear today. would you commit to this committee to state the june 15 deadline unless a final agreement is that and reset that deadline for this transition to a date sufficient to whatever is agree to? in other words, here we are less than two weeks away. if you were to implement your role today without change, i think the ranking member and i would be concerned, you said the negotiations have been fruitful. can we be confident that there will be a mutual by in? >> mr. chairman, i am very anxious for this to work. i am anxious for you to have confidence and the security of

our processes and procedures and protocols. we are exploring with media organizations and fudging the timeline a little bit. the more we can do by july 6, the better off we would be. >> translating -- the have anything you disagreed in this get together? we have no problem with the bill amendiimplementing. will you continue to negotiate additional items if we state the date? >> i would. >> thank you. >> i want to say that i agree with what the chairman just said. it seems that there is an issue of balance.

it sounds like you are acting in good faith. i think it is the right thing to do to have flexibility until you get done what you want to get done. to me, i am urging you all to try that flexibility so that no one will suffer as a result of the inability to get this worked out. i have full confidence that it will be. at the same time, it is important that we give them the comfort of knowing that they have room to do that without suffering any kind of undue hardship. >> i thank the gentleman. and thank you for bearing with

us a hearing that was somewhat unrelated and somewhat related to the subject. it is not often, but thank you for being here for both of the hearings. we stand adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]

>> tonight, president obama's news conference here earlier today on the economy and claims that the white house has involved in leaking classified information, he says the administration has a zero tolerance for leaking classified info. he will conduct an investigation into drug attacks against terrorism. you can see his comments tonight at 8:00 p.m. eastern time. also this evening, live coverage of the radio and tv correspondents dinner. we will hear from comedian wayne brady and house speaker boehner. this past week, ann romney and first lady michelle obama spoke at campaign events. we will begin at 8:00 p.m. eastern with remarks from ann

romney in miami. that will be followed by michelle obama speaking in virginia. you can see both offense tonight on c-span 2. >> tear down this wall. [cheers and applause] >> sunday night on american history tv, president ronald reagan's 1989 speech in west germany. also this weekend, our series of contenders. 14 key political figures who ran for president and lost, but changed political history. that is on sunday. >> the b-52, everyone thinks back to vietnam.

think of the history of the b- 52. cold war. a different kind of power associated with the b-52. >> unions and then federates knew each other before the civil war. here they are at 8100, sitting on the porch and talking about the old days. >> here are at 81, sitting on the porch and talking about the old days. >> the reference the moment of the bomb. >> watched local content vehicles every month on "book tv." our next up is in jefferson city, missouri. that is on c-span 2 and 3. >> of government accountability

estimated that the u.s. has given millions of dollars in aid to afghanistan. the subcommittee chair held a hearing to investigate waste, fraud, and abuse in afghanistan. in april, the republican was denied entry to that country. >> i wanted the gao to look specifically at karzai and their interests circle that have used you as funds. i was told the gao could not provide answers because of the lack of complete data on u.s. concortracts. the lack of released a poll information on firms and the

improbability for ownership interests in firms could be identified. additionally the database does not provide information on subcontract awards. it is one of those agencies that is not keeping the adequate records on who is benefiting from american aid. i want to know why. i want to know why that is the situation. if a reporter for "the new york times" can find out about karzai" family, will i approached and was told they could not do it because they only have 120 people working for them. well, as has been widely

reported, president karzai denied me entry into afghanistan as part of a congressional delegation in april. i have serious concerns over the strategy we have been pursuing in afghanistan. what has made the debate personal for karzai is this investigation and what i may call a decentralization strategy that i support and it perhaps that is making him upset as well because what reforms i am calling for could mean a great deal to the family fortune so to speak. many people in washington as well as uncouple do not want me or anyone else to look into the basket to see if all the eggs are still there. that includes the state

department which has gone all in for karzai. it also includes congress. my requests conduct investigations and search for strategies for afghanistan have been denied time and time again. i wonder if somebody will cut off the broadcast of this session before it concludes, which is what happened last time i held a hearing. to many careers are tied to karzai. so many that the campaign is out to save him. instead we are ending up trying to save him rather than afghanistan. i was told not to mention karzai in the title of this hearing. afghanistan is plagued by corruption and is tied for third

as the most corrupt country in the world according to transparency international's annual corruption per se action -- perception index. it threatens their legitimacy among their own people. unfortunately due to records kept by united states agencies and departments including news aide and a lack of access to the afghan government records has made it virtually impossible for the gao to do its job or to help this oversight subcommittee. there has been a scandal so big that it could not be hidden by the bureaucracy. that was the cobble bank case. it held one-third of the entire

banking system's assets. it was looted through insider loans that were never meant to be paid back. the bank was bailed out to the tune of $825 million according to the imf. one of the central figures in that bank scandal was a hominid given's brother who was interest free loans which he then used in part to buy a stake in the bank itself. it has been reported much of the money loaned out by the bank was used to speculate on real estate in dubai. there was not even a pretext that the capital was being used to provide capital for the afghan economy. that brings us to the u.s.

agency for international development, which will be represented here today on our second panel. contractors were involved in advising the afghan central bank on regulations and supervising the operation of the banking system at the time the kabul scandal was taking place. i am hoping its witnesses today can elaborate on why it could not do so. the u.s. used the bank of kabul for many transactions. we had leverage and we had a great deal of relationship with people running the bank. for fiscal year 2013, the u.s. aid request for afghanistan is a $5.2 billion.

since 2002, u.s. aid has awarded $15.2 billion in afghanistan reconstruction projects. a majority of staff report from the senate foreign relations committee on june 8, 2011 found that roughly 80% of resources are being spent in afghanistan's restive south and east. only 20% is going to the rest of the country. would it not be better as a long-term strategy in a civil war type situation to build up the capabilities in areas that were loyal or more loyal to you and to our country? for example the areas where the northern alliances more dominant? there is an old adage that goes, i do not need to pay my enemies

to hate me because they will do it for free. it is our friends we want to reward. there should be a distribution of aid. there should have been all along that is much fairer and more balanced than simply southern tier push for aid that we know about in afghanistan. the reports have raised questions about how well news aide has protected tax dollars and afghanistan. i was shocked to learn it was only in january 2011 that the process was created to vet non- u.s. contractors regarding whether they were a terrorist or organized crime funding risk. how many years of counterterrorism campaign does it take to start to worry about whether american funds are going

into the pockets of terrorists? part of the problem is so many contracts get passed down through multilayers of subcontractors. somebody gets the money. then comes the subcontractor. who knows where the sub contractor subcurrent -- subcontractor's subcontractor is. the work is passed on to somebody else. it is less a process of construction that a systematic process of looting protected by a elaborate shady connections -- a labyrinth of shady connections that nobody can keep track of it. everybody knows about the ties that it has or whoever they are dealing with have to the government. so they can get rich from a power plant and kabul that is

too expensive to run or one that has no electrical grid to which it can be connected or a helmet the river dam whose generator is rested as the project has stalled. we have an gone said a province where $4 million went to an afghan firm that fled to the netherlands with the money after paving less than a mile of a 70 mile road project. i am hoping that both the gao and news aid can suggest a better way to control american money going forward it through 2014 and beyond. i hope we can find an alternate strategy in afghanistan. whatever we decide to do we need to make sure the money we spend

it goes to support our objectives, it especially does not go to support people who hate the goals we have laid down and people are giving their lives for as we speak. that has not been done so far. in 2010 i was briefed on a software system that can be seamlessly inserted into all of the american and expenditures for afghanistan or any other recipient. if you insist the aide to be spent from a separate account and it paid by a check, this will track every transaction as our money moves through the local economy including the initial transaction involving our money that is made to a recipient outside of afghanistan. i think the technology exists that we can get the job done if

the will exists to try to get control of the situation. corruption must be stamped out. it would be ironic as well as tragic if one of the results of american development assistance is to provide the afghan oligarchy in which the u.s. has invested so much the means to implement personal exit strategies if things get rough. most of the karzai family and its cronies did leave the country the last time the taliban invaded and only came back when they were protected by the united states troops. in contrast the northern alliance fought to the taliban every step of the way and were on the vanguard when they fought to drive them out of afghanistan in 9/11. we do not want cowbird the allies that will take their ill- gotten gains and cut and run

rather than stand and defend their country. we need allies routed in the country, not sitting on huge foreign bank accounts and willing to take off once the going gets rough. with that said, i will yield for an opening statement of any length you would like. >> thank you, mr. chairman and to our witnesses for being with us today. this is an important hearing. it is an important part of continuing the bipartisan tradition of this subcommittee conducting rigorous oversight for u.s. reconstruction efforts in afghanistan. two years ago as i chaired the committee, we conducted a set of hearings bipartisan on our reconstruction efforts and a rock bank and afghanistan. what lessons the administration should learn in order to reduce

the rampant waste, fraud, and abuse of taxpayer dollars. you heard it the special inspector general for iraq to reconstruction. he described a blurred change of command. he emphasized the lack of institutional structure and human-resources to effectively perform stabilization and reconstruction operations. over the past several years i have been working to increase accountability, efficiency, and transparency in our overseas contingency operations. reforms have been implemented and improvements have been made on some fronts. continuing to make a real and measurable process in these areas is absolutely essential, especially as our troop levels decrease and congress is tightening their budgets across

the government. the environment in which usaid and international partners operate is difficult and complex. the work they do is critical to the u.s., vital to our national security interests and reflects the moral values of who we are. that is why regular and detailed oversight is required. our development programs help build programs that increase the political participation with women. expand health programs for women and children and help transition the afghan economy away from an over reliance on scarce natural resources. diplomats who are working under complicated and dangerous circumstances. it is our job to ensure strict accounting of all tax payer funds, i commend the chairman for calling this hearing.

i look forward to hearing from our witnesses today. >> thank you very much. our first panel will be the government accountability office. john hutton will be testifying as a director at the u.s. government accountability office working for the acquisition and sources management team. he provides direct support to congressional committees and members on a range of acquisition and sourcing issues. throughout his 44-year career, i remember you had a full head of hair that was totally dark when you first started. throughout the long 34-year career he has worked on a wide range of issues. prior to his appointment to the senior executive service, she lets such direct issues like iraq and afghanistan

infrastructure, the promotion of u.s. exports. you have had all the easy jobs that were given to you over the years. he holds two master's degrees, one in public administration from syracuse, maxwell's school, and one national security strategy. he will be willgao testimony. within to help answer questions is -- he will be answering gao testimony. with him is charles johnson, jr. he is the director responsible for the portfolio addressing u.s. international counterterrorism and security related issues. the mr. johnson was assistant director in the gaos' 'homeland

security and justice team. he spent a year detailed to the house of representatives, and security committee. he worked on border security and immigration issues. mr. johnson graduated summa cum laude a from the university of maryland with a degree in business administration. you may proceed and we will go on to a second panel in which larry sampler will be testifying. you may proceed with what time you may choose to consume. hopefully around five to 10 minutes. >> thank you. thank you for inviting mr. johnson and i to discuss the accountability and oversight of u.s. funds to assist

afghanistan. gao has issued 100 reports on u.s. efforts including those managed by usaid, dod, and stayed. to help secure, stabilize, and rebuild afghanistan. our work complements that of the inspector general for afghanistan reconstruction and the inspector general from dod, u s t id and stayed. our focus is on u.s. aid and three key areas. our reports has shown they face systemic challenges that has hindered its management oversight of contracts and assistance instruments such as grants used to carry out development programs and support the mission in afghanistan. these challenges include gaps in planning for the use of

contractors and recipients and having visibility into their numbers. while reliable data are a starting point, we have reported over four years on the limited visibility into the afghanistan contracts and grants as well as personnel working. while u.s. aid agreed in 2008 to use a common database to track required information on contracts and personnel, we found in september 2011 the database does not reliably tracked such information. other sources of information has their own limitations. usaid has taken actions to mitigate risks associated with contracts and afghanistan. under the accountable assistance for afghanistan initiative, they began vetting perspective non contractors in 2011.

at the time of our 2011 report, we recognized usaid's vetting process was in the early process and recommended they formulize a risk-based approach identifying the highest risk vendors. we made a recommendation to collaboration with dod to better ensure vendors are vetted. all of which they agreed to do. second, we have identified weaknesses in the oversight of program performance. we appreciate that the u.s. aid mission in afghanistan is overseeing programs in a high risk environment and has a -- experienced high risk -- high turnover. however, they have not follow their own performance management procedures and afghanistan. that makes the programs more

ball double to corruption, waste, fraud, and abuse. we found partners reported on progress, u.s. aid did not approve the performance indicators being used and did not make sure targets were established being used. i will now turn to our third key area and that is the accountability for direct assistance. funding that has provided one bilaterally to individual afghan ministries or multilaterally through trust funds administered by the world bank and you end. in 2011 we found u.s. aid did not complete pre risk assessments to independently managed and account for funds for bilateral assistance.

usaid had not complied with the multilateral risk assessment practices. for example, u.s. aid did not conduct a risk assessment for awarding an additional $1.3 billion to world bank trust fund. such assessments and other controls are key to providing reasonable assurances that assets are safeguarded against fraud and mismanagement. based on our recommendations, usaid updated their policies to have -- to revise their guidance on prix award assessments for the world bank and other international organizations. in closing, we have made numerous recommendations to improve u.s. a i d's management and oversight for the assistance funds and afghanistan. usaid has agreed and taken steps to assess them. robust management and oversight of taxpayer funds is paramount,

especially in a challenging environment like afghanistan. we would be happy to respond with any questions you have. >> you are just here to jump in, but would you like to add something to that? >> basically what i would like to highlight a little bit more is that the administrator in 2010 committed to this congress that would not award any additional bilateral assistance until pre risk assessments were done. we did find some cases where after the commitment was made in 2011 there were awards done without that being required. there is a new policy put in place to help ensure that does not take place in the future. to further elaborate on the world bank where the u.s. is relying on defense institutions

for safeguarding controls i would have to note that the u.s. has been working to try to enhance the u.s. access to certain information there. that is a process where they have ongoing negotiations with the world bank. >> ok. it is very frustrating to think -- you are talking about people saying what made these commitments in 2010 -- 2010 was years after we had been involved in afghanistan. how much aid has the united states given to afghanistan since the liberation from the taliban? >> i guess i will take that question. our estimate is it is closer to $90 billion. that does not include the cost of the u.s. troops.

>> $90 billion in actual foreign aid or american aid, not american military aid, but we're talking about -- >> focused on security, government and development related projects. a significant amount paying for the afghan security forces, the army and police. cox how much have we given that is non-military oriented? it is one thing to understand we had to give so much and so many ak-47s we had to buy from somebody and give them to military units there. how much have we given for development assistance and what we would consider to be humanitarian and civilian aid? >> i guess the best estimate i can come up with given the work we have looked at, it has been about $43 billion roughly.

i would estimate close to $46 million or $47 billion in terms of aid that has gone there. we did a report looking at the afghan government's reliance on donors for money. as we know they cannot afford to sustain itself. the u. s has been the largest contributor. >> i am looking for a figure. how much in civilian aid have we given afghanistan since the liberation from the tlaiban. >> my estimates -- >> non-military. >> the best number i have would be in the ballpark of $12 billion to $15 billion. there is money in the pipeline obviously, but disbursements. >> over the last 10 year. it? >> my numbers go from 2006 to

2010. that is where the search has taken place. my range would be somewhere between $12 billion to $15 billion. we can go back into the number back to 2002, but since 2006 through 2010 the numbers show $12 billion. >> since 2006. how many years had we been in afghanistan before 2006? >> we had been there since 2002. a lot of the money was security related money. the data and the reports we recently noted, the u.s. paid for 90% of the security. we pay for a 37% of the not security. there has been a shift in that area. >> ok.

am i off base by saying that when we take a look at what we have spent in the civilian sector of not harming people, not the security, but the civilian sector aide since the taliban was kicked out of the country, that is long before 2006. what i say -- $20 billion b in the right range? >> it depends if you're talking funds allocated versus -- what i gave you was disbursement numbers meaning funds that have hit the ground. it would go up closer to $45 billion if you're talking about money that has been awarded or allotted towards non security stuff in afghanistan. >> $45 billion.

>> from 2002 until 2010. basically the numbers are roughly around $22 billion on non dod funds. >> ok. >> that is allotment. >> i am getting a lot of figures here. >> will go back and give the precise figures again. >> i would just like the number between when the taliban were driven out and now. how much have we pont into the non military effort in afghanistan? -- pont into the non military effort in afghanistan. when asked for any data they had on how much of the billions of dollars we spent ended up in the pockets of the karzai family, we were told that is impossible to do.

it is impossible to know how much the karzai family profited by the tens of billions of dollars we spent there to build up their economy and the well- being of their people. we do not know where the money is gone then? >> you outlined some of the challenges we saw. there are additional challenges with how do you determine how much money went where. you hit some of the key ones about the difficulties. just knowing what to make an award, how does the money flowed out? there could be several tiers or things like that. one of the bigger challenges is trying to identify who is the owner or who is benefiting from an award. that was difficult because first of all even in the united

states it is very difficult to be able to determine who is benefiting from an award. not all companies have their information public. in the afghan context, it is important to note that some work was done that showed all firms operating in afghanistan have to be licensed by the afghan government. cigar had tried to do some work and is such challenges of determining whether that data was reliable. there is also -- the identified issues that once an award was made, on ships may change over time. being able to track that over time is very challenging. >> in a young girl live, i was probably a totally different person when i was 19. when i was 19 i found myself in

the central highlands of vietnam. i was not in the military, but we were doing special projects there. then i was supposed to go down to a town on the coast. i was to meet up with some doctors to tell me about corruption. i will never forget that because the doctors at the end of this -- item 19 years old and they have these doctors who are crying that we will lose the war because of the corruption level in vietnam. they took me out to show me the hospitals that have been set up to win the hearts and minds of the vietnamese people. they had been looted. they had been looted by the vietnamese allies and perhaps even some american people who were there to help. i will never forget that because at the same time -- a lot of

guys were treating the men coming right out of the combat zone. here they were understanding that all of this blood and the horrible price being paid by americans, yet we have so much corruption they did not see how the vietnamese people could respect us. if they could see it -- if the vietnamese people could see it, why could our government not see it? i do not think we ever cracked down on that. i think that was one of the factors that put us in a situation where when we left, we left in disgrace. i would hope that is not what we do in afghanistan. it appears we have had the same type of attitude. what i am hearing right now is that we really have not had an

accounting system to make sure what we are putting as best for this country to help improve the lives of people, but money has been diluted to a great degree. am i mistaken from what i am hearing from you? a disconsolate there has been a real attempt at serious accounting in this. >> it is interesting when you think about what normally is expected to be put into place. you have things like the federal acquisition regulations, that is pretty sound framework. it has a lot of things they can use to protect the interest of a contract. what our work has shown over time is whether you're talking contract in, state, or usaid, they all face similar challenges. the release center on three pieces.

if you cannot clearly define the requirements, you're starting off on a very bad foot. second, you have to have sound business relations -- arrangements. he will help better protect the contractor. that means using the right contract in vehicles. the certain clauses, they will help protect the interests. most importantly is the lack of trained personnel and numbers and experience to oversee and monitor the performance. when you think about it from the start, there are already prophesies that allow you to set the footing correctly. when we are talking about main agencies in those environments, a lot of problems we see are emblematic across all of it. >> there was a report in the london telegraph yesterday that taliban insurgency were

responsible for attacks that killed several american paratroopers, these insurgents were actually released from jail. they released these taliban after bribes were paid to these officials. when that happens -- let's say we have that happening. do we cut off aid to those people? to those people still receive a who have released people who have been murdering our troops. >> that is a very difficult question for me to respond to. what we try to focus on are the institutions, the agency's spending this hard earned tax payer funds anywhere whether it

is environment's we're talking about that the best be equipped to understand what they're trying to accomplish, understand the risks, and insure they have a proper framework in place, and then execution. execution is often the issue. >> are you telling us that you are satisfied with the money we are providing an aide to uplift the afghan people. that it is getting down to them and not being the put away? >> when you look at the whole body of work -- i mentioned i have done over -- what you see in many cases are similar problems where we are executing these awards and we do not know if we are getting good outcomes because we do not have good monitoring and oversight.

>> the answer is, yes, you are not certain and you do not feel comfortable the money is coming down to it. let me just suggest, the american people are war weary. we ended up spending all these years and are rock bank and now we have a government and iraq that seems to be anti american. they are not grateful for all the blood and treasure we spend and iraq did. i happen to know the afghan people. there is a large segment of afghan people, there is a gratitude and love in their hearts for the american people. i have been in their villages and fought with them.

what we have here is not shame on the afghan people. i personally resent that the iraqi people do not -- they are not grateful to us for relieving them of the pressure of saddam hussein. i am not disappointed in the afghan people at all. if we have a system that still functions that permits people such leeway as we have just been mentioning, shame on us not shame on them. >> thank you. i want to start with a question about the agricultural development teams that have been deployed across afghanistan. our national guard. one of those entities deployed.

we have heard some good success stories about what they have been able to do on the ground. i wanted to ask specifically about how we can sustain and build upon the success of stories we have heard about these agricultural development teams in your assessment of their work. >> we did some work recently in the last two years and the agriculture in afghanistan. i would concur with your point that there has been a renewed focus on the ax sector in particular. -- ag sector in particular. part of that was to elevate the civilian presence, the expertise of the usaid and others as part of teams that were going out. prior to that we did not have the right type of resources for

the whole confidence of approach to deal with it. i would say that corporate -- that report in 2010 does note the u.s. is making progress in the agriculture sector and the water irrigation sector as well. some work we did recently this february of 2011, we looked at the civilian surgeon presence in afghanistan. those findings talk about how the civilian car would be parallel to the military leadership to make certain things like agriculture were going to be a priority. >> thank you. the other one i wanted to get into was afghan national police training. there is certainly wide agreement and recognition that a fundamental element of the

future stability of afghanistan, your report addresses the critical nature of that. we have had increased funding toward those efforts, yet the department of defense does not assess the effectiveness of several policing activities and the state has yet to conduct an evaluation of its program in iraq it. can you talk about the lack of evaluation and even being able to measure how effective that is and to get beyond the quantity of the police we are training to the quality of that training? >> one of the issues i can tackle and then open setting, on the civilian police issue in afghanistan in particular, we do

note dod has done those assessments. they have contracted out in that area. in terms of civil order policing, they have committed in their recent reports that would focus more attention on civil order policing as opposed to the paramilitary training and the capability of the police to take on paramilitary types of things. they are focusing on more civil order policing in terms of assessment and that area. you are correct there were some deficiencies in that area but they have noted the deficiencies and have agreed to take steps to correct that. >> was that entirely being done by contractors? what's it is a combination of using contracts such as dyncore and our partners. right now it is a concerted effort involving the contractors and people who may be embedded with the police and the communities. >> has there been an adequate

assessment now or is that yet to be done? what we are hoping that will be forthcoming in the next report that will be provided to the congress. there is an annual report they do called the section 1230 report. we are anticipating that it should include that information. that was basically their response back to the issue we raised in our recent police training report. >> what is the date of the report? >> it was issued about one month ago. if i did not mistaken, sometime in march. we can make sure you get a copy. >> the next report your referenced is due when? >> it should be sometime in -- i think they issued one in june. it should be the end of the

year. a december time frame. december or january. >> do we expect them to just do it the way we wanted it done in the first place or are they changing the metrics in the way they are doing it? >> given the clams they have had in the drawdown combat troops, they have recognized the need to pay more attention to showing the afghan national police is focused on civil order. i think there is recognition given -- some past work they have noted as well as congress itself the more attention needs to be done in that area. now it is more nato led training mission, that has begun to be the case they all want to focus on civil order police. the plan was to withdraw combat troops by the international community. >> also related to police --

ensuring there is an adequate number of female members in the afghan national police. can you talk about that? my understanding is there were about 9% with then -- within the police and the goal of 5000 by 2013. how are we achieving that goal? >> we do not have any updated information for statistics of a female police and the afghan security force. we would be happy to undertake that worker to back to you on those numbers or we can check some of the information we get from the state department and get back to you on that. >> thank you. i would like to see that. finally, we have worked with others in developing legislation that would look at consolidating civilian stabilization management

functions into a u.s. office for contingency operations. not surprisingly, we have not had a lot of great feedback from the state department or th. i would like to see if he would comment on that concept of having joint contingency operations like that. or other recommended changes in how we can do this better. get beyond some of the traditional tension between dod and state and u.s. a id and be more effective in particular with accountability measures. >> two parts to that. what is the contingency operation. we have seen some of the earlier draft proposal language.

we have raised some caution or concern in showing some of the functions that are being considered to be rolled in, they are brought contingency operations. inl functions -- they are doing law enforcement training across the globe. some of that will have to be taken into consideration. that is one of the issues we have provided feedback on. when you talk about oversight and accountability, our position we stand readyao, to meet any of your needs whether that is a rock band, afghanistan, yemen. we have been doing a significant amount of work and stand ready to do that work for the congress. >> thank you. i yield back. >> i have a second round at this

point. i would like to ask a little bit about details. for example, the bank scandal. here is a specific. apparently this bank, the kabul bank went broke or bankrupt. $825 million was lost in this bank. at the same time, this major accounting firm that we have was actually there. they were involved in that operation to try to keep it so it would not go broke. i understand also the united states government used this bank

to deposit many of its accounts. they used it as a vehicle for aid, etc. how is it when we have such a prestigious accounting firm on the premises and we have american government officials directly involved with running accounts through the bank that the bank can just go belly up like this? there is a hundred $25 million that is evaporated? >> mr. chairman, we have not look at that. i do know that usaid within the last year or so did some work looking at contractors supporting technical advisers for that particular bank. >> we did have technical advisers. >> they were performing --

>> so how is it that the bank we have technical advisers on the scene, how can we believe our eyes and all of a sudden there is $825 million evaporated? >> we have not lifted that specifically. i can take that back to the internal controls and having the institutions and oversight from work for being able to ensure that procedures are followed be in the banking sector or any other sector. >> if i can chime in on what john is alluding to. one of the issues they've made a commitment to move toward is make direct assistance. at the same time we were trying to build the institutional capacity. whether it is financial institutions, defense, agriculture, all of these things. there were happening at the same time. security is a challenge.

corruption is a challenge as we know. the lack of institutional capacity did not exist. they have been trying to fill that while we are also trying to pump billions of dollars into the government directly. >> has there been an investigation into this bank so we know where the money went? there are reports that president karzai's brother who was heavily involved in the bank has been able to purchase property in dubai. has anybody look into the charge? >> we have not looked at it. >> who would look into it? if it was going to be looked into, who would look into it? >> i think typically, if we are doing any job and we see some things that look like it might be fraud in particular, we would then turned that over to the area responsible for that

program. that is more their core specialty. >> has it been turned over to -- >> i cannot tell you. i do not know if any other witnesses might be able to give you some insight on that. i do not have information. >> do you have any information on whether or not -- there are supposed to investigate? >> typically that is the process we use. >> in afghanistan that is what we are doing. a something comes up like this, we ask them to investigate. we have $825 million loss that you are unaware of whether or not there has been a request for an investigation? >> i would note this is an issue that came up a year-and-a-half or two years ago. this was mentioned during that meeting.

there was some investigation that would be undertaken but not by the gao. >> for investigations that may involve that one particular inspector general, there may be other tools and other support. i do not know anything in terms of specific detail. >> do you have a blacklist of afghan officials and the presidential family members who you will not do business with because there is evidence they have been involved in high-level corruption? >> no, sir. >> there is no blacklist? there is no list -- >> no list that the gao has. >> for all we know, a large number of people you are dealing with are people who are engaged

in the blatant corruption. >> when you talk about lists, we mentioned in our formal statements as well as our past work we identified there are vetting processes that the dod has used it. they are vetting contractors or grantees before they make the award and they find they have some issue regardless of what the issue is, that is information they would have in their own organization. one of the issues we came up with in our report was making sure that the interagency shares information. all of that would-be leverage for that particular contractor if he wants to participate in another federal agency program. >> if i can add on. getting back to the direct assistance issue and the decision made to move more towards direct assistance by

the international community and our own government, there was a push and has been a push to provide funding to the afghan are pakistan the governments and their local firms for that matter. as part of that as john noted in his statement, the key to that being successful is to make sure we do prix award risk assessments to determine where the vulnerability and weaknesses are. >> that means he would have to have a list. apparently you do not have a list. >> even if there was a list and they said this institution is corrupt and we have some situations where in pakistan it might have been corrupt, they could still go the direct assistance route. it would mitigate things in place like getting somebody to make sure there is not mismanaging of funds. those are things that can be done to help safeguard and it prevent waste and fraud.

>> have you studied the reconstruction done in japan after world war ii? you have not? what countries have the study reconstruction programs on that were successful. >> that were successful? in my professional work i focused on iraq and afghanistan. >> so you have never focused on a successful program of restoration. i doubt that the americans permitted japanese companies who word and corruption to continue to get contracts with the economy building measures that they are taking. i doubt that. i do not know for sure. let me just say that i understand why the american people would be horrified if they found out how loose we have been with their money. the fact is this corruption in

afghanistan -- if the united states is not willing to take it so seriously that we blacklist anyone that has been engaged in, and much less put them in jail, no wonder they do not taken seriously because we are not taking it seriously. i think after all of these years it is disheartening to hear this late in the game how loose the whole situation is. i want to thank you. i am not blaming you guys. this whole thing -- anyway. after all of these years, to hear this, i am very disappointed. thank you very much. we will have the next panel, please. >> thank you.