are not enough doctors. because in fact the affordable care act expanded the number of residencies for the very basic care, for the family practice programs. so i'm not quite sure i understand what they're arguing. in addition to that, access across this nation for millions and millions of people is provided in clinics. these are the community clinics that a large population attend those community clinics for the basic services an most of those are the medicaid population and the very poor that are not yet enrolled in what will be the expanded obamacares, obamacares program. . what do the republicans offer us. the ryan republican budget would cut by more than a third for support for the clinics, closing thousands of clinics across this

state, across the nation and in my state, where people get access. so please, do not come down here and argue for an hour, half an hour that access is being delayed where on the one hand, you are cutting the money for access. that is what the republican budget does. it reduces the residencies and reducing access to clinics by cutting more than a third the money that is there to buildup the community clinics where people get care. in addition to that, i'm going to take a deep breath here and don't want to get wound up too tight about this issue and ask my colleague to talk about the medicare portion of this. mr. tonko: absolutely. we didn't hear anything about what would be lost in the process of their cuts or their

repeal of the affordable care act. and representative garmeppedy, you are absolutely right. there is much that has been gained by the american population. health consumers across this nation with the affordable care act to close the doughnut hole, make prescription drugs more affordable for our consumers out there, for seniors that require this medication, prescription drugs to stay well or to stay alive. far too many are balancing their household budget by reducing their intask of prescriptions against the advice of their medical community. it is immoral and unnecessary and has been addressed by the affordable care act. so 5.3 million seniors today are drawing 3.7 billion in benefits. that is something that could be taken away if the republican

majority in the house of representatives had its way. now, this is a wellness aspect. this is part of a formula that allows people to be cured, to be healed, to be allowed to live in a quality of life that then addresses their very needs. and so, i think it's necessary to point out what would be taken away from already the benefits offered, and there are more to come. but as we know, they are rolled into the operations of reform over the next several years. but suffice it to say, the screenings, the annual check-ups, flu shots, no co-payments, no co-insurance, no deductable is required, these are huge benefits that are

offered. we heard about adding to the cost curve of the health care. we have heard about taking away the benefits that have just recently arrived at the doorstep for consumers across this great nation, and why would you want to play politics with the very fabric of quality of life with the people that we represent collectively by undoing progress? this is a rekurring theme. they want to voucher out medicare that came to us in the mid-1960's that addressed the present difficult built of senior households and the quality of care and quality of life in those households. why would want to take that progress away? it is heart wrenching to listen to some of this insensitive,

callous dialogue on the house floor that renders the public that we are here to serve without benefits that have just recently arrived through the success of the affordable care act. and representative, garamendi, it is something that needs to be echoed out there from this house floor and shared with the constituents of this great nation in a way that allows them to better understand what is part and parcel to the affordable care act, a monumental piece of success. is it perfect? no. we aim for perfection and we are stuck with progress. but there is many a benefit that is part of the affordable care act. and witnessing an aattempt by the republican majority to turn that success into failure. mr. garamendi: you are quite correct. it's not just an attempt, there have been 33 votes on this floor

by the republican majority to either terminate completely or to get rid of in part the affordable health care act. what would be gotten rid of? the ryan republican budget would terminate medicare as we know it and give to every american who is not yet 55 years of age a coupon that says, this coupon is worth 70% of the cost of insurance. go get your insurance when you become 65 from a private insurance company. no longer would medicare be available to those people who will be 6 . those who are 55 to 65, it makes it impossible for medicare to go forward on a financial basis because it takes away the younger people. i heard something on the floor and i said wait a minute. some statistic that was tossed

out a few moments ago, more people die on medicare than die on regular insurance. yes. medicare is for the elderly. medicare is for the elderly. yes. they do get medical care, but eventually they get old and yes, i will, too. beyond medicare and i will die on medicare and i'm so grateful to have medicare available to me when i become 65, because i know i have a solid insurance program. i know i will be covered and my younger brother and sister will become covered when they are 65. they will have quality care and get what? they will die on medicare. that happens. you are on medicare for the rest of your life, it may be for a year or for years, but you have a guaranteed benefit that is available to you. if the ryan republican budget and the effort to repeal

medicare is lost, well, let's see, nearly 13 million americans will benefit from 1.1 billion in rebates from their private insurance companies that are presently overcharging them. h mmp h. 86 million americans including 54 million americans on private policies and 32 million americans that are on medicare will lose their free preventative services. you want to reduce the cost of health care you have to make sure that people stay healthy. and how do you that? blood pressure. you want to deal with blood pressure. it's very commeep. if you get your medicine, but you have to find out about it, so you need that free check-up. diabetes, stroke, all of those things can be prevented if you know what's coming. what are we talking about?

32 million seniors will no longer have a free check-up. in august, just a week from now, women will begin receiving pre-coverage for comprehensive women's preventive services, pap smears. you want to repeal that? that's what the republicans have voted 33 times to do. repeal the free check-ups for women. 105 million americans will no longer have a lifetime limit -- 105 million americans will have a lifetime limit once again. today, they do not have a limit. if you are 30 years old and have a private insurance policy and you get cancer, you will hit that lifetime limit immediately, not under the obamacares

program. mr. tonko. mr. tonko: one of the things you talk about the influence on focus of women's health care reminds me of the pre-existing conditions that are precluded now as a rationale for denying insurance. pre-exicing might mean asthma or cancer rerecovery or cancer struggle. but it can also mean in a gender-related bias, being a woman. that is used as a pre-existing condition. being a woman a pre-existing condition. so the benefits to women as you outlined in the direct services, the screenings, the mammograms and the like and the other portion is being born a woman

can deny you insurance. and they are asked to go shop, this is saying that compared to today's standards, it's the senior digging much deeper into her pockets. it's the senior digging into another pocket to be able to afford his medicare voucher portion. and that's unacceptable. that is playing to a special interest. and that's what i believe the espoused virtue of this deny, this repeal is about. it's about playing to special interests that don't want to be told that there is a transition here that there is a new day in america for health care consumers and that the heart has been poured into this to be more sensitive, to address a moral compass that this nation has uniquely embraced, that we are a compassion nature society and make a difference out there,

that we are solutions-bound. and that's what the affordable care act was about, presenting a new approach to health care, providing more freedom and opportunity to our seniors, to our children. if you're 26 and under, staying on your parents' policy. these are the formula for success, formula for success that allow us to go forward with much more dignity and success, cost containment, affordability, accessibility. these are the dynamics of reform and why would you repeal something here other than to respond to special interests? mr. garamendi: exactly so. for eight years in the early 1990's and 2000, i was the insurance commissioner in california. i wish i had this law, because i have held the insurance companies responsible. now, my attitude about them is they always put profit before

people. the affordable care act has the patients' bill of rights and this is the insurance discrimination that is eliminated by law. and you spoke of a couple of these issues. discrimination against a woman? they can get pregnant. the insurance companies would not cover or would charge more. those days are offer. also a young child, there are about 17 million children in america with pre-existing conditions that can no longer be discriminated against the insurance company and have to be able to get insurance. 17 million children. one of whom is the son of my chief of staff, born with kidney failure. he had insurance and immediately lost insurance because he had kidney failure and today as soon as he is able to get his

parents' insurance policy because they cannot discriminate against children, he will be able to get insurance. under the old law, repeal of the obamacares law and he will be denied insurance because there is an end to the patients' bill of rights. the patients' bill of rights guarantees that insurance discrimination is over. so what do they want here? what do the republicans want from americans? big question. apparently, they want more money from the doctors and that's certainly necessary in some cases. apparently they say they want government out of health care. does that mean end medicare? apparently yes, because the republicans have voted twice on this floor to end medicare as we know it. you will get voucher and not get guaranteed middle insurance.

they don't want community clinics and voted on this floor to cut about a third of the community clinics in this nation. apparently they talk about access but at the same time, they refuse to fund the residencies for family care, for the basic health care providers that we need in our hospitals, in our communities. and apparently, they want to eliminate the patients' bill of rights. . we also heard on this floor a few minutes ago, a half hour, 45 minutes ago, that the nonpartisan congressional budget office said that because the supreme court eliminated the mandate that states have to provide more medicare coverage, medicaid, medicaid coverage, there would be fewer insured. true. that's true. texas has refused to increase

its medicaid program. well, that's texas' decision and hime sure the governor, -- i'm sure the governor, legislature, will have to address that. but the fact here is that the medicaid coverage actually provides the opportunity for some 17 million americans to get insurance. that do not now have insurance. and if we provide the clinics, if we provide the residencies for the doctors who would be able to care for them, they will have access. and i can assure you that if we also do the preventative services, we will see a decline in the number of severe cases, people will not get so sick that they have to go to the emergency room, they'll get care early and with the drugs that are necessary they'll be able to avoid the very expensive illnesses. that's in all of our benefit. you mentioned vaccinations. these are all ways of reducing costs. so, here we are. once again debating something that is now the law, that is

proven, proven to provide services to americans, whether they are seniors or whether they are young, whether they are children. it works. and it's working for america today. mr. tonko: if i might ask the gentleman from california if he would yield. i believe there's a whole lot of political posturing begun going -- going on with the medicaid decision by states. and, you know, you're hearing a lot of talk about, well, we're not going to pay for that portion because, well, while it may be 100% in the near future, it may go to 92%, 90% into the long distance future. and they don't want to pay anything for the new installment of the medicaid plan. well, today we're paying, it's not like it's against an absolute that costs nothing. if you have the poor, uninsured, underinsured, in any given state, there's indigent care,

there's charity that is addressed in rate payer dollars for insurance coverage sake, because that is going to be incorporated into the overall actuarial plan, or you're paying for it through taxpayer dollars and for a much more inefficient system. to have the poor and uninsured and underinsured go to emergency rooms, visiting a different doctor team every time they visit that emergency room, or perhaps a different emergency room, to not provide the stable, standardized care, acceptable notions of how to provide a predictable outcome, you're going to pay needlessly and wastefully. this is about networking people to a system that provides a stability, a standard that will enable them to have a clinic, have a contract that will cover them and make certain that all of us are strengthened by it.

and guess what? the business community, we talk about competitiveness, we talk about a sharp competitive edge for america's business community . as they enter into the international sweepstakes on winning contracts and that translates into providing jobs and profitability for our business community, well, part of their cost of doing business is to have health care for their workers. many want the health care coverage for their workers but simply cannot afford it. and so the exchange opportunities that are part of the package of affordable care act enables them to cut their cost. it's taking their experience, their actuarial experience of 10, 15, 20 workers in that small business and putting them in a pool of millions of workers that enables them to shave the peaks and enables them to take those catastrophic situations, one

person in that their plan of 10 impacted by catastrophic situations can cause their premiums as a company and the co-payments of their workers to skyrocket. but if they're enabled to join this pool of effort -- pooled effort, it provides for a better outcome for everybody. so there is wisdom and thoughtfulness poured into the reform elements of the affordable care act and it's done again with that american heart, that spirit, that sense of compassion for the worker, the sensitivity toward the employer and putting together a package that has everyone responded to in a way that speaks to a long overdue bid of success. the last industrialized nation, representative garamendi, to go to war -- toward a guaranteed health plan. so, long overdue, and now to have it pulled away from the

american consumers of this nation is a very troubling notion. mr. garamendi: mr. tonko, thank you very much. next monday, did you know, next monday is the birthday, the annual birthday, of medicare? next monday. 1965 it went into effect -- 1965. it went into effect in 1965. ever since the republicans have been trying to terminate it. they tried it this year but the american public knows better. they know they want to live long enough to get to medicare because in medicare they have the guaranteed benefit. they know that wherever you are in the united states, whether wrure in vermont or in california -- whether you're in vermont or california, you have the same quality policy that will cover most of you what -- what you need. if you want more you can go out and buy that, that's call thed -- called the advantage program, and you get to choose your doctor. it's not a government takeover at all. in fact, it is a financing mechanism so that every senior

in america can choose their own provider. they get to choose their provider. they can go wherever they want to go to get their medical services. and if they don't like the doctor, they can change. so the government is not saying where you can go. in fact the government is financing the system so you can choose whatever provider you want to choose. it's a common policy across the nation. and it is efficient and it is effective and the republicans are trying to destroy it. we won't let that happen. bottom line, we will not let that happen. and there are serious cost containments in the current medicare program and in the affordable care act act. and i'm just going to -- affordable care act. and i'm just going to end with this and we'll get to what we want to talk about which is the jobs programs. the congressional budget office today estimated that the affordable care act over the next 10 years will reduce, will reduce the deficit by $109 billion. and in the 20 years going out,

because of the cost containment in this system, the affordable care act will reduce the deficit by over $1 trillion. now that's worth engaging. that's worth us doing and simultaneously provide far better health care to americans and far better access to health care wherever they may need it across this nation. it's a good thing. and we may want to stand up here and say, obamacare, i'm going, you're right. obamacares. cares deeply about the very health of every single american. and that's why the affordable care act is in place today, was founded -- found to be constitutional, does reduce the deficit, and does provide quality health care and choice, and choice of where you want to get your medical care. mr. tonko: my colleague from california just indicated that there would be a deficit -- favorable deficit outcome

because of affordable care act. mr. garamendi: exactly. mr. tonko: what else reduces the deficit? putting people to work. putting people to work, the american jobs act. plain and simple. it's about addressing the deficit and providing for the dignity of work and the enhancement of services that strengthens the fabric of our communities, our states, our nation. so, the american jobs act, according to experts, is a phenomenal plan. we've heard the republicans say, we have some 30 bills that are about growing the economy and producing jobs, when in fact when put under the test, when reviewed by some very sound organizations out there and professional economists and analysts, it would do precious nothing, that it was not the formula, not what the doctor called for, if we can say on that -- stay on that health care-related theme, but the

american jobs act, well, you know, listen to some of the experts. the chief economist at moodies -- at moody's analytics, who by the way, mark zandi, was the former economic advisor for senator john mccain, and what does he theorize? that anywhere from 1.9 million to two million jobs would be the outcome of the american jobs act. something that not only produces the jobs but would reduce the unemployment rate by at least 1 percent -- one percentage point. that's a major significant factor. and what also happens is that when you produce those two million jobs, you're addressing the g.d.p.. the g.d.p. by at least two percentage points. growth in the g.d.p., reduction in the unemployment, reducing the deficit, putting people to work, strengthening the economy, providing purchasing power, at a time when businesses are saying the best thing you can do, get

us customers. a healthy economy, putting people into the work mode, creates customers. it creates purchasing power. it creates a strength in the economy. two million jobs. how can we walk away from a proposal? oh, i know why. because there were those who spoke before cameras reaching all of america saying, anything this president offers we won't do, our goal is to make him a one-term president. my friends, that is putting partisan politics, petty partisan politics ahead of the interests, the better interests of the american public. where is that american spirit? where is that sense of patriotism? where is that sense of responsibility, of leadership in this house and in the u.s. senate that needs to go forward with the american jobs act?

representative garamendi, i know we've been join by another colleague and it is just great to share this hour with you. to talk about the progress we can taste that would lift every community in this great nation. mr. garamendi: i was reading one of the hill -- one of "the hill" magazines and they said that the speaker of this house starts off his weekly press conference by asking where are the jobs? well, the jobs, mr. speaker, were proposed last september by president obama called the american jobs act. two million jobs minimum could have been created. this is one of the great woulda, coulda, shouldas of our time. we could have people back to work today and in doing so reduce the deficit. there's so many different pieces of this. so, mr. speaker, the american jobs act are where the jobs are. you talked about a piece of it. i'm going to just pick up one more and then i'm going to turn to my colleague from oregon, mr. blumenauer. this is one that speaks to the

american homes. what's going on in the house where we live? many of those homes are run down. they have problems with insulation or they don't have any insulation at all. they leak energy. well, the president proposed, as a piece of the american jobs act, that we could provide construction jobs, really low-skilled construction jobs in rehabilitating the american homes. this is not a new concept. this has been going on for some time. and it's been used repeatedly to upgrade homes in the united states and simultaneously save energy and save dollars for the american public. one piece of it, construction jobs could have been put in place. so the other one, and i'll just let -- and then i think mr. blumenauer, if you're not ready yet -- ok. i'm going to pick up another one then and turn it back to you, mr. tonko. my daughter's a teacher.

my seasonal in s a teacher. they've -- my son-in-law is a teacher. they've seen their classroom grow from 20, 22, to some 32 people in the class. now, this is a serious problem for the teacher, making it more difficult to provide the quality teaching that's necessary. my daughter's a great teacher. my son-in-law is too. but it's much more difficult, the class size is increased by 1/3. the american jobs act would have put 280,000 teachers back into the classroom. now, if you happen to be a second grader and you're not getting what you need to learn, then that's going to carry on through the remaining years of your schooling. and so 280,000 teachers could have been brought back into the classroom, had the affordable care act -- excuse me, the american jobs act passed. mr. tonko? mr. tonko: yes. they are both significant bits of legislation. so it's good to interlace the

american jobs act and the affordable care act. to the 280,000 teachers, you know, i think it's very easy to state that the human infrastructure in our school systems across this nation are a critical component to quality education, that personal relationship of students to teacher, the exercise of self-discovery, who am i? what are my gifts? what are my talents? what are my passions? that is exercised in the classroom. that is a spirit that prevails. it's a magic that happens in the classroom and that sense of self-discovery, you know, part of our goal here is not only to enable these students to understand who they are, to draw forth the soul of the individual, it's to -- it's to provide the opportunity for our work force of the future. that fourth grader,

hypothetically, that was impacted by class size or the lack of a teacher for certain subject areas, that's something that child will never gain again. what you lose in that given year is lost throughout the development. . and it is important for us to make certain, every bit of learning experience is granted our children so that they understand where they can best contribute to society, where their gifts can be utilized and part of that development of the workforce of the future, workforce of the present, training, retraining dollars that are part of the american jobs act, absolutely a critical piece of the infrastructure. and the tens of thousands -- this chart will say retain thousands of police officers and firefighters. we know it's tens of thousands. element of public safety. a quality of life component, making certain that our core

communities have the given work force of firefighters, of police officers that will enable us to respond to public safety measures. these are a core bit of principles, along with veterans that would be hired with benefits that are significant. that element was done under pressure, under scrutiny, under growing public sentiment. think of what we did all of these and additional services with our veterans who are returning home and in need of employment. these are the facts. these are the dynamics that are introduced through the american jobs act that would allow for the deficits to be addressed san at the same time to have services responded to, essential servicees. you know, it's all we have talked about the belt tightening, eliminating waste, fraud and abuse.

and of after that exercise, it's important to slide that into an investment zone so that the result is cut where you can so as to invest where we must through investment. absolutely critical. the investment in jobs, the investment in teachers, firefighters, public safety elements, police officers, our veterans' community and items like an infrastructure bank bill, frark that we will talk about. mr. garamendi: education, the most important investment any society will ever make is the education of their children and re-education of their work force. in the american jobs act there are 280,000 teachers that would have been in the classroom but not there today because there hasn't been movement on this floor to debate even in

committee or take up on this floor the american jobs act. many of the schools across america are run down. their laboratories and classrooms are old, don't have air conditioning. the american jobs act provided money for 35,000 schools across the united states to be upgraded and be rehabilitated so that 250,000 would have been created right there. before we go any further, you are worried it is going to increase the deficit. no. it would not. mr. tonko, you spoke earlier about when people go to work, the economy gets going and money is circulated and taxes are paid. the other part is american jobs act was fully paid for by ending unnecessary tax subsidies to companies that don't need it. specifically, the oil industry. the wealthiest industry in the world would lose its tax breaks that amount to over $16 billion

and that money would come back to pay for americans going back to work. there are other things. the wealthiest 2% would see their taxes go back to where they were during the clinton period. this is how the american jobs act was going to be paid for. mr. tonko: we are talking about the jobs created that impact the unemployment rate, that impact the reduction of the deficit. in contrast, the ryan budget, the republican plan for this house that has been adopted by republicans that are in leadership and running for president, would, in contrast, according to the economic policy institute, the cuts in services would result in a reduction of $1.3 -- 1.3 million jobs in the first year and 2.8 million jobs in the second year.

so that cut in jobs, the cuts that was part of the republican budget plan adopted by this house, would grow the deficit, because if we are arguing that employment reduces the deficit, unemployment, in contrast to the american jobs act, will drive up the deficit. you know, it's going back to the failed policies of the past. we fought two wars that wire never put on width r -- that we never put on the bigot. did we think there was president going to be a crash, didn't we think that behavior wouldn't come with a price? of course. and it was the loss of 8.2 million jobs and loss of as many

as 800,000 jobs a month and bringing america's economy to its knees and draining trillions of dollars from households that trusted that they are invested with the private sector and financial industry was going to return them lucrative dividends. we saw the failure of those policies. why would we go back down that road which seems that the republican budget is all about. mr. garamendi: if you look at what the ryan republican budget would cut education and other services by 33%. instead of investing in our children and investigating in our work skills, they would cut it by 33%. in transportation, the ryan republican budget would cut transportation funding by 25%. even when we know that our infrastructure gets a d because

of potholes, the bridges are failing, so why would you cut the transportation budget by 25%? if you want to put americans back to work, you don't do it that way. you did talk about the moody analytics already, doesn't work. i'm on the house armed services committee and we heard testimony last week from the c.e.o. of look heed-martin and c.e.o. of eads and also from two other witnesses and they said this, you cut the budget for defense and you are going to lay off two million people. that is part of the sequestration. top c.e.o.'s saying don't cut the budget because you are going to lose up to two million jobs and yet for the last two years

our republican friends have been trying to cut the budget, not in defense, but in everything else. arguing that that will somehow create jobs. however, testimony received last week from the c.e.o.'s of four, three large american corporations and one small american corporation said if you cut the budget, we'll lay people off, creating unemployment. if the american jobs act puts people back to work and it is fully fade for, mr. tonko. mr. tonko: you have made mention of modernizing our schools and that part of the american jobs act includes the investment in the revitalizing our schools, some 35,000 schools across this nation. and the statistics are there. people document historically

what investments in refurbishing our schools have meant. and for every $1 billion of investment, we can grow some 9,000 to 10,000 jobs. that's the start of the story. and so what we have here is the modernization of schools that would create some 250,000 jobs. but as i said, that's just the start of the story. what happens after that? maintainance costs, operating costs reduced because you might have energy efficiency embraced in that restructuring and will have better, more efficient weather-type situations, more couple situations for students in which to learn. mr. garamendi: you might have bat rooms that work and have a place where kids want to be and have a school that has a decent paint job, air conditioning, kids will want to be.

we have schools in this nation that you wouldn't want to be or i wouldn't want to be. >> typical danger zones. poorly upheld infrastructure. the 250,000 count and would benefit the economy. but these operating costs that are reduced and they talk about that it could be in the neighborhood of $100,000 a year. think about what you could do locally. that might mean two teachers or might mean 200 more computers or might mean 500 textbooks. it's a way to invest by balancing those savings with the investment in children and our future and our presence because our children represent our future and our presence and respect toward our children and

again, theser i think in keeping with the old american spirit, the pioneer spirit to enable us to dream bold dreams and to encourage our youngsters to pursue these career paths and to develop, again, the work force of the new millennium, where we are going to be asked to compete in a global marketplace where there are investments going on around the world and now isn't the time to cut our commitment to our chirp, our society and our competitiveness as a business community. so it all comes together in a very structured sense, in a very come puerto ricans i have plan. mr. garamendi: there is one additional piece to this puzzle and that is the democrats have been putting forth for the last two years a project which we call make it in america. this is the rebuilding of the american manufacturing sector. 25 years ago there were 20

million americans employed in manufacturing. these were the middle-class jobs. now there are just over 11 million. we have seen the hallowing out, the outsourcing of american manufacturing jobs. there were actually policies in place before the democrats in 2010 took control of this and ended tax breaks for american corporations who outsourced jobs and reduced taxes by sending jobs overseas. we ended $12 billion of those crazy, unnecessary, destructive tax breaks. and now the president has suggested that we put in place the remaining $4 billion in those tax breaks, ending rewarding companies for outsourcing jobs, turn it around and reward companies for insourcing, bringing those jobs back home. i have a piece of legislation that is getting some legs and

moving along and it is part of make it in america. our tax dollars have been used in the past to buy solar systems, wind turbines, trains, buses, light rail vehicles. my legislation says if it's our tax money, then it's going to be spent on american-made equipment, bringing our tax dollars home so we buy american. so we make it in america once again and once we make it in america, america will make it. mr. tonko, you have introduced some pieces of legislation and maybe you want to talk about those, but we can rebuild the american middle class by rebuilding america's manufacturing base. that's where you create wealth. maybe in the food services and maybe in the manufacturing of wine or manufacturing of food or automobiles or light rails or solar systems. we can do it, but we need to

have in place smart, government policies. and i beg my republican colleagues to look at this. make this an american idea, republican and democrat idea so we can rebuild the american middle class by making things in america once again. . . mr. tonko: the campus of choice across this nation, the associate's degree, a very important material to have in one's happened, we're going to rely heavily on those degrees and community colleges need our assistance. they're also there as the operational center of retraining programs. but what about investments in technology, investments in research, investments in alternative energy supplies -- mr. garamendi: mr. tonko, excuse

me for interrupting. before you came to the house of representatives that was your work in new york, wasn't it? mr. tonko: absolutely. i was energy chair at the state 'sem -- assembly for the last 15 of my 20 years but then went over to nyserta. we made certain that we would incubate these ideas, these innovations, the cutting-edge technology that translates into jobs. research equals jobs. i have advanced legislation that would slide subsidies that are given to the profit-rich, the historically profit-rich in the tenure of capitalism. our goal here is to not feed the profit margin of our oil companies but to slide these subsidies over to cutting-edge technology, renewables, providing for consumer behavioral transitioning that enables us to grow american independence in the energy

generation business. why are we sending tens and hundreds of billions of dollars over to unfriendly nations to the united states for our dependency on fossil-based fuels? when instead fact we could encourage renewable -- when in fact we could encourage renewables here and energy efficiency. utilizing that as our fuel of choice to make certain that we reduce demand, that then reduces bills, that then allows the competitiveness of our business to be all the sharper. those are the sorts of things in which we want to invest and it's the going forward from that point -- how about our infrastructure bank bill that would leverage public and private moneys, that would stretch our opportunities to respond to that deficient infrastructure of which you spoke? these are important measures. this is the sort of cutting-edge opportunity, the investments, the pioneer spirit again. we can learn from our american story. there have been those golden moment when is we hit bottom, there were those golden moments when we were tremendously

challenged, and we rose to the occasion in tough times. primarily tough times, by responding with a tough agenda that said, look, true grit here will get us to the finish line and it happened. it happened with medicare, it happened with the erie canal of which we often speak. mr. garamendi: social security. mr. tonko: again, social security, absolutely right. the president lifted this nation and made certain that all families would have at least a foundation upon which they could grow, upon which they could live in this society. it addressed again the dignity factor which has made us unique as an american society. caring about our fellow man, caring about the men and women of this great nation in a way that created an american society , seans of community. we the people, talking of us in a community sense, a neighborlyness, neighborhoods

and societies speaking in a compassionate way, caring about one another. that's when we're at our best. mr. garamendi: if we're going to be caring about the american worker going back to work, we also need to be very cognizant of international competition. you spoke earlier about the need for our work force to be competitive, which is the education process. k through 12, vocational education, community colleges, exceedingly important. but also important is that there be fairness in the international trade situation. that we look for fair trade, not just free trade, but fair trade. and one of the things that we really must address is the threat of china's unfair trade practices. the chinese currency is undervalued and as a result of that they have a 20% to 25% advantage. you eliminate that and the american worker will be competitive. and we have one of the pieces of legislation in the make it in america package that the democrats are putting forward,

forcing china to end its currency manipulation. and when it ends its currency manipulation and allows the value of its currency to rise to appropriate parity, we will be able to be competitive. you can bet why the chinese don't want to do it. they want that unfair trade advantage. that's one of the pieces of legislation that we've put forward. now, when the democrats controlled congress a year and a half ago, we pushed a bill out of here that would force sanctions on china if they continue their currency manipulation. since the republicans have taken control of the house of representatives, that legislation has died, has never even come up for a vote on the floor. it ought to come up for a vote. we need fair trade practices, we need to use our tax money to buy american-made equipment and supplies, we need to educate our work forces. these are investments in america's middle class.

this is how we can restore the middle class of america. it is part -- the health care is part of it also. you talked earlier about health care and availability of health care for working men and women. we also need to make sure those jobs are there. the american automobile industry is instructive on this count. it is instructive in that the u.s. government and the leadership of president obama actually allowed the american automotive industry to continue to even survive. losing the stimulus program -- using stimulus program, the president stepped forward and said, i will not allow the american automotive industry to die and he put our tax money behind general motors and chrysler and those companies are now thriving and it's not just those companies. it is the thousands upon thousands of manufacturers across this nation and others

who supply all of the parts, all of the services. think where we would be today if congress had not given the president the power and if this president did not have the courage to take up saving the american automobile industry. presidential politics come here, mr. romney says he would not have done it. ok, president obama did it and the american automobile industry is strong and vibrant today and the american middle class are back to work. mr. tonko, we must be about out of time. mr. tonko: yeah, we're down to our last four minutes. i always find these discussions to be interesting because there's also this rhetoric out there about 30 bills that have been advanced by the majority in the house and that it's the salvation that's going to produce jobs and get america working again. well, major analysts are reviewed that legislative agenda and say it doesn't do what they

contend it would do. and it doesn't produce the results we -- results. we would love it to be the case but it doesn't produce the result. they said that we are really in need of legislation that will advance jobs. tonight this discussion about providing the tools, putting additional tools into the kit that makes american industry competitive, speaks to our humble beginnings. so many people travel to these shores. their journey was about the dream. a noble dream. an american dream. that they were going to make it here. that was our humble beginning. and we enabled people to experience several rags to riches scenario. and we allowed for generations to continue to grow and prosper and build upon the success that preceded them. today sadly our middle class is

weakening. household incomewise. the next generation may be the first to go backward. the president is trying to move us forward with great resistance in this house to reject progressive policy. and we say, let's build upon the success of the past. let's reach through those moments though, shining moments when we were challenged as a nation and produced the best outcomes. that can happen again here if we open up to what's best for america and not resort to petty partisan politics that want to deny a presidency, that want to deny opposition, that comes forward with constructive qualities to do it in a better way, to build the consensus. we need to move forward on behalf of the nobleness of the american dream. and so with heart and soul poured into the efforts here, in this house, we can achieve. we can achieve and grow that middle class, purchasing power enhanced for the middle class,

opportunities for our middle class, a strong middle class means a strong america. let's go forward and again, representative gar mendy, thank you for leading us in this hour. mr. garamendi: mr. tonko, thank you very much for your passion on this issue and thank you for your compassion for the american people. we can make it. we can make it in america. we need good, wise policies to do that. and you can't do it by cutting, cutting and cutting. you have to do it by investing, investing, investing. the american public understands. they really do understand that we're a great nation. there's no greater nation in the world. we need the kind of policies that will put americans back to work and to keep them healthy. i want to thank those of you that are listening for this hour 's discussion on health care and on jobs in america. mr. tonko, thank you very much. mr. tonko: it's a pleasure. gar mr. speaker, we yield back our -- mr. garamendi: mr. speaker, we yield back our time. the speaker pro tempore: the gentleman from california yields back. under the speaker's announced policy of january 5, 2011, the chair recognizes the gentleman

from oregon, mr. blumenauer, for 30 minutes. mr. blumenauer: thank you, mr. speaker. i appreciate the opportunity to be here this evening following my good friends and their interesting discussion. i wanted to spend a couple moments this evening talking about reform. reform has been a major focus of my public service career beginning as a citizen volunteer, working as a state legislator, a local official. i was pleased to be part of innovation in my native state of oregon, in areas of tax reform, transportation innovation, environmental protection, land use and government structure. i'm pleased to have been able to take some of the lessons that i learned in oregon here to our nation's capitol, working in congress in areas of energy, bicycles, flood insurance, health care reform. for me that's exciting and

energizing. that's what makes me a little disappointed to say the very least in what's happening in this session of congress. it's sad to see that today in the house the focus is not taking the affordable care act, where the questions of its constitutionality have been settled by the supreme court, and moving forward to accelerate its implication, its implementation, instead the efforts are to slow it down, to repeal it, to put sand in the gears. not without a constructive alternative, mind you, but just to be against the reform that's on the books. it's depressing to see repeated attacks on environmental protections, something that americans care deeply about, that makes a difference to the quality of life of our communities, the strength of our economy, the health of our families.

it has been unfortunate that we were given by this congress, earlier this year, what has been described i think appropriately as the most partisan transportation bill in history and certainly the worst, undoing 20 years of transportation reform. luckily it collapsed under its own weight but we were left with a pale two-year extension and we're soon going to be right back where we started. now, we're watching more recently efforts that deal with agriculture in terms of the re-authorization of the farm bill. an opportunity to reform, to be able to save money, to improve the health of our citizens and the economic viability of america's farmers and ranchers. instead the bill that has passed

out of the committee in the house would concentrate even more subsidy in the handed of fewer wealthy farmers and short circuit the needs of americans who eat, people who care about animal welfare, about the environment, and most important about the welfare of the vast majority of american farmers who sadly have been shut off. it looks now that the bill is so precarious that it may not even come to the floor of the house. back tracking on efforts to rein in and reform military spending, where just last year there was an agreement, a bipartisan agreement to deal with reducing the deficit that was balanced between spending for military and nonmilitary accounts, and now we see people retreating

from that goal and the military appropriations bill that passed despite aggressive bipartisan efforts to rein it in is moving forward as a lost opportunity. what's in that -- it's in that context, mr. speaker, that i wanted to discuss the issues that surround the postal service. it's not by any stretch of the imagination that i'm in the interested in changing how we do business. i think that's important across the board, i demonstrated that with my past work and my -- by word and deed in what i do politically. but it's interesting that we're now watching, it's often -- i often find myself in agreement with some of the editorial positions from "the washington post" and "the new york times" but they're moving forward with urgent effort to move legislation that would dramatically scale down the postal service, cut a large

number of facilities, suspend six-day service. assuming that those are the only alternatives available for us going forward. as i say, i'll be the last person to argue that we should not be doing things differently, but it seems to me it's pastime for taos take a step back and talk a hard look at this so-called postal crisis and at potential solutions and their implications. mr. speaker, it is important to note from the outset that the postal service has played a vital role in the development of the united states. it is -- it dates back to the beginning of our country, the first postmaster general was benjamin franklin. the service was established 236 years ago. the postal service actually has

been involved, when we let it work a variety of innovations. there are those concerned today with the advent of email, that it is somehow -- that it has somehow made it impossible for the postal service to move forward in this climate. it's interest this epostal service has been able to survive the telegraph, the fax machine, it has in fact been part of the innovation, airmail service was part of what the postal service did to help launch the aviation industry in this country. and we have today a pattern of development of the transcontinental railroad service, and the nature of the postal service itself tying together american communities. part of what i think is important for us to focus on is the role that the postal service plays in rural and

small-town america. it's an important part of rural and small-town america in oregon and around the nation. and these communities are facing times of economic stress and isolation. the post office plays an outside role. many people revel in the quality of life. it's very desirable in many rural and small-town areas where great traditions -- with great traditions but it's no secret that for many communities and the people who live there, it's a struggle. they have high unemployment as young people leave and the population ages. there are real challenges in terms of connectivity. how people -- this is an area where broadband access to over 26.2 million americans, three

quarters of them live in rural america. now, i think it is important moving forward, dealing with the changes to the postal service, to think about the expectations in this part of america that often gets lots of rhetoric but not the attention it deserves. postal service in rural and small town america provides services in terms of people being able to get access to not just mail services and a sense of community, tying people together, a sense of identity, it is a source of good-paying, family-wage jobs that play an outside role in this part of the united states. it is important in terms of being able to access immigration, passport services. these are items that are in some instances difficult for people in rural and smalltown

america. and also as we are watching the explosion of online shopping, which is playing a larger and larger role in the american economy, it's even more significant in rural and small town america. the postal service often provides that last mile for transactions that take place via the internet. increasingly, for senior citizens who rely on mail order pharmacy services to be able to get their scriptions through the mail. looking at the wide range of activities that make a difference for rule and smalltown america, i think it's important for us to consider what the implications are going to be for them. for those who say, well, wait a minute, they'll just have to pay the price because we are facing a funding crisis in the

post office, it's bumping up against a $15 billion debt limit, bills are coming due, and we have no alternative but to move forward with dramatic reductions in service, including saturday service and closing facilities. it's important to reflect on what is the nature of the current funding crisis that faces the post office. sadly, it is largely a manufactured crisis, the impending funding deadline is simply a result of the legislation in 2006 which was a compromise, a reluctant compromise, but it included a provision that would require the postal service to prefund its health insurance costs for

retire yeses who haven't yet been hired. -- retirees who haven't yet been hired. 75 years in the future. and require that funding to be made over the course of 10 years. well, thinking about that for a moment, mr. speaker, this is actually a device that is not necessary, no other business or government agency is required to do it 75 years in the future. and in part of the charm for the people who devised this a few years ago was it actually artificially reduces the federal government's deficit. because these payments are credited to federal accounts even though the post office has been an independent agency since 1971, operating without

subsidy, these moneys are credited to the federal treasury and are used to try and disguise the true size of our deficit. there is no reason to accelerate the prefunding of this obligation of 75 years to make it occur here in the course of this 10-year window. mr. speaker, i think it's important for putting in context the point that this is an artificial crisis. the post office, if it weren't for this extraordinary, unnecessary, and unprecedented prefunding requirement, would actually not be hemorrhaging red ink. in fact, it's very close to being self-sufficient. and it does so despite the constraints that congress has placed on the postal service.

because bear in mind, even though it doesn't get support, the congress has kept a very short leash on what the postal service can do. it doesn't have the flexibility to run like a business, to adjust its pricing. to be able to adjust its product mix. to take advantage of the fact that there's a skilled work force of over half a million people and more facilities around the country than mcdonald's and wal-mart and starbucks, combined. we don't give them the freedom and flexibility to move forward, to take advantage of that platform. now, you don't have to be very creative to think of ways that we might be able to work together to be able to slightly modify the services that are provided, give them more flexibility on the

implementation of their service. it is important, i think, to be able to think about what this connectivity means for the american public. if we somehow eliminated the postal service, turned it over to the private sector, cut down more dramatically in terms of what is the offerings -- of what its offerings are, does anybody think we would be able to send a first class letter from the florida keys to noem, alaska, for 44 cents? the post office moves about 40% of the mail in the entire world. others will say look at germany. it's been privatized. well, look at germany. germany is a country that is smaller than montana, bigger than wyoming, to just put it in context of size. it's very densely populated.

and it's still -- it still charges more than 10% higher than we do in the united states and they are competitive internationally. globally. the german postal service is doing business in the united states, competing with fedex, our postal service, and u.p.s. it's an extraordinary resource that i think is worthy of consideration of what we've got and but howe we do it. mr. speaker, as i stated from the outset, i happen to believe in reform. i believe that we need to do business differently. whether it is how we deal with our farm policy, our military policy, tax reform, health care, i would hope that in congress we can return to the days where we actually had regular order, where we discussed things like this in committee, that every bill wasn't a partisan vehicle.

and when there was give and take and challenging one another in terms of ways that it could be done better. listening to a wide variety of opinions. i say by all means, allow a wide variety of opinions to come forward, to talk about the future of the postal service. i think that's healthy. i welcome that. and i have spent a lot of time talking to people on the postal rate commission, i've talked to leadership in the management of the postal service, postal employees, people who are customers and competitors of the postal various. i want to explore these issues. i'm absolutely convinced that the interests involved with the postal service, broadly defined, including its unions and employee, understand there's going to be more change taking place in the future. but there are some adjustments,

where there's probably more capacity than we need, there will be changes going forward, we want to be careful and selective about what we do. but i go back to my point about the impact that that's going to have on rural and smalltown america. i want to make sure that the changes that we undertake don't make great difficulty for people who don't have the access that some of us who live in metropolitan areas have. people who are connected to the internet. people who have ready access to other resources. i think it is important that when people are talking about reducing the sixth day of service that they think about the implications for the individuals who depend on that, for many people who work and who get packages that are important to them, being able to have them delivered on saturday is important. and particularly when you look at holidays that go over

weekends, the difficulty of delivery of things like medicine, it's not a trivial question. and the fact that the postal service is in a sense a partner with some of its private sector competitors, cutting back on that service, what it does with those competitive partners and with those people who are marketing through the internet, through the mail, this needs careful consideration. it's interesting as people dive into the numbers behind the elimination of saturday service, you're eliminating 17% of the postal capacity and it would only save 2% or maybe 3%. and it would be cost -- and there would be costs associated with that. it's interesting. i would like us to think about what it does to the business model if you're going to eliminate 17% of the service and you save a couple percent in operations.

particularly as i mentioned that we constrain what they charge and we have an artificial financial barrier with the 75-year prefunding of health care. i think it's important for us to respect what we've got, think about the alternatives and have a discussion where the interests, whether they are direct mail, they are marketing, they are online shopping, where people in terms of the pharmaceutical industry, senior citizens, rural and small-town america, let's talk about this. find out not in a declaring war against postal employees, but working with them in a cooperative fashion to find out suggestions that they have in terms of moving forward. and looking at what this tremendous resource that we have, what the value is.

it has been -- i'm in the state of oregon where all our ballots are done by direct mail. it is a way to improve efficiency, lower costs for local governments, broader application of mail-in ballots would improve the security, the efficiency and cost savings. we barely scratched the surface of that. there are deep concerns and i note that we had a somber observance today about the death of a couple of our employees, guards who were gunned down on this day in 1998. . we lived through air asconcerned about anthrax and opportunities that may be involved with bioterrorism and scares about pandemics.

it may well be in our future that there would be great value to having a network that reaches 150 million addresses six times a week with the scaled work force that can turn that around in a matter of hours. you don't have to stretch your imagination very far to think of acts of disease or terror or that network may make a difference. we are finding oftentimes in communities that it's the postal worker who is alert to problems in a family and someone who is not showing up. they are eyes and ears that just don't do volunteer projects but connect people. let's think about the value of that network before we start to unravel it. i will conclude where i began.

i think everybody who is privileged to serve in this chamber needs to think about how we do business differently. i think we need to be open to arguments, questions, evidence, to be able to queeze more value out of the public dollar, to use the resources to protect the vitality and live built of our communities and build partnerships and relationships. and i welcome the discussion that we're having with the postal service in the media and here in congress. i would hope, mr. speaker, we could do it in a way that is thoughtful and broad-based. i would hope we would be able to look at what the postal service has provided for 236 years. i would hope we would think about the value of the work force. it's not just over half a million family-waged jobs that

makes a big difference in small town and rural america, but they have a skillset and they have other values, some of which i just mentioned and others yet we haven't explored. and last but not lease, before we make changes, we ought to make sure we know they are going to get what is advertised, because despite all the rhetoric, we have the lowest cost, most efficient postal service in the world. nearly 40% of the traffic, doing it very cost effectively despite the fact that congress in its wisdom has tied the hands of its postal service, dictated rates and changed its course repeatedly. i would hope we could do a better job working with our partners there and the people who depend on it to make this part of the area where we figure

out how to do business differently because there are opportunities to not only save money and take advantage of this resource. it ought to be done thoughtfully and soon and i appreciate the opportunity to do it this evening and i yield back. the speaker pro tempore: the gentleman from oregon yields back his time. the speaker pro tempore: under the speaker's announced policy of january 5, 2011, the chair recognizes the gentleman from texas, mr. gohmert, for 30 minutes. mr. gohmert: thank you, mr. speaker.

it has been a great deal of wailing and gnashing of teeth that five of us signed to five inspectors general, five departments of the u.s. government. we sent separate letters that were quite factual, set out things that were footnoted, documented as true and simply asking inspector general -- inspectors general of the different departments if they would investigate about

potential muslim brotherhood effects within those departments. i have been amazed, out of five letters to five different departments, each one of them different, each one of them dealing with facts that were in each particular department, we have been met with this frenzy from some quarters, including some of the mainstream media to demonize people that are just simply asking questions that actually used to have a mainstream media that were asking questions. and when you look at the fact that in 1995, the prosecution of

defendants charged with involvement in the 1993 first world trade center bombing were tried. and as the prosecutor, the federal prosecutor in that case, a brilliant guy named andrew mccarthy has set out in one of his articles, which proved -- we introduced evidence and proved beyond a reasonable doubt that the intention of these people, these radical islamist groups was to bring down this country. and as andy has properly asked, since we proved beyond a reasonable doubt to a great group of jurors in new york about the effort of these

radical islamists, islamic jihaddists to bring down america, what's happened since 1995 that all of a sudden this administration says, oh, no, forget what was proved beyond a reasonable doubt the new yorkers in 1995 and then upheld, you can't believe that. don't look at the factual evidence behind the curtain, for heaven's sake and look at what we are telling you, and there is no muslim brotherhood involvement in america and no muslim brotherhood effect or influence in this administration. but there is deeply troubling, because we know from the holy land foundation trial in dallas

that was well tried in 2008 and convictions on over 100 different charges and they established -- the named defendants proved beyond a reasonable doubt about the charges of their support for terrorism and they also named numerous parties as co-conspirators to support terrorism. and the justice department was involved in that. the attorney general's office was involved and they have proved beyond a reasonable doubt that there were muslim brotherhood groups who were supporting terrorism in america. at least they proved beyond a reasonable doubt that the

defendants were involved in supporting terrorism and then basically might be deemed or called a preponderance of the evidence that others who were not indicted but named, such as care and the islamic society of north america, and in that case, the evidence was plused to establish that the islamic society of north america is the largest muslim brotherhood front group in america. and some of us who simply signed a letter asking questions -- look how about doing an investigation to see what the influence of the muslim brotherhood is in this administration? because previously, including through the prosecution in november of 2008, the largest terrorism support allegations in american history, it was

established the muslim brotherhood is alive and well and having influence in america. and yet the islamic society of north america's president has been a guest at the white house and, in fact, someone -- because they regularly don't do their homework were to check as i have in the past, don't know, but it was in the past couple of years, but if you check with the white house web site, the number two person in the deputy national security adviser is given a speech to a-d-am-s. the all dulles area muslim society. and the transcript of his speech

and it's on the white house web site and the number two deputy adviser thanks the president, the president of the named co-conspirator supporting terrorism for the wonderful prayers he gave at the celebration in the white house the august before. the celebration that concludes rama dan. so we know the president, according to the largest muslim brotherhood, gets invited to the white house to do prayers for their celebration and we know that dennis mcdonald thanked him for the wonderful introduction at the all dulles area muslim society.

so it is a little troubling not only that this influence is there, but when five members of congress raise a question, how about an investigation to see what this influence is, because we know minds are changing, although the evidence has not changed that was introduced in 18995 and -- 1995 and 2008. our good friend down the hall, senator mccain, chastised us. and yet, if you believe quotes and sometimes you can't, but he was quoted as saying at the beginning of the trouble in egypt, that he was and he was using the word opposed to any support for the muslim brotherhood, well, if that was the word then, the word now is

altered, because it appears that he sees no problem with what's going forward and if he does, then my apologies if he now objects to any assistance to the muslim brotherhood, but it's my impression that he didn't have a problem with this administration's help to egypt now. . when we see the thing that was gone on this thing that was been introduced and proved in court in the fifth circuit saying, no, you cannot strike those names from the pleading because there's sufficient evidence to establish that they were supporting terrorism. no so -- so no, you can't strike those named co-conspirators from the pleadings. and somehow five members of congress are the bad guys for saying, well, let's investigate, what influence has this group had -- and i know

from back in my questioning of the secretary of homeland security last october, when i was asking if it was true that there were members of the muslim brotherhood who were part of her counterering violent extremism working group that advises homeland security on how to deal with what some of us would call radical islamic jihad but which homeland security now calls violent extremism, apparently not wanting to offend people who are wanting to commit radical islamic jihad on our country, but i asked her in that hearing in october last year about that and she points out that she has another individual in charge of the

countering violent extremism working group so she doesn't really know if they have muslim brotherhood members as part of that. and i asked her this question, all right, are you aware that the president of isna, my aye ma'am majid, is a member of that working group, correct? secretary napolitano -- i can't answer that, but that is an accurate statement. so she doesn't know whether the president of what's been established in court as the largest muslim brotherhood front group in america is part of her advisory group at homeland security. of course it was interesting in our hearing last week, she also indicated that there had not been a terrorist that has been

-- that had been allowed into the white house with the egyptian group and when we had been reading in the paper that there, of course that may not be a good source because they're mainstream papers, but we've been reading that there was a member of a known terrorist group that was allowed into the white house and that he used that platform to lobby for the release of the blind sheikh, who had assisted in planning the 1993 world trade center bombing. so i thought it might be helpful, mr. speaker, tonight, to just touch base regarding the timeline that "investors business daily" sponsored, it was an editorial, it was dated july 19, 2012, posted at 6:46

p.m. eastern time. and it can be found at investors.com, mr. speaker. but it's entitled "how obama engineered mideast radicalization." it goes through and after a few paragraphs it sets out a timeline for things that have happened. i hope my friends who have been so quick to condemn and ridicule who should know about these things in dallas, or the holy land foundation trial, where muslim brotherhood ties were established, they should know about the proof at the 1995 first trial of the defendants that do that. and i would think that they would be welcoming since there are many people who are not

aware of what the evidence was in those, they would welcome input from someone as well-versed as the prosecutor from the 1995 world trade center trial. so this is from "investors business daily," an editorial, it says the obama record, after angry egyptians pelted her motorcade with shoes chanting leave, secretary of state clinton insisted the united states was -- wasn't there to take sides. too late. quote, i want to be clear that the united states is not in the business in egypt of choosing winners and losers. even if we could, which of course we cannot. unquote. hillary clinton intoned earlier this week. of course the administration could and it did, co-lewding

with the muslim brotherhood and one of its hardliners, mohammed morsi, sits in the presidential palace where he refused to shake unveiled clinton's hand. this administration favored islamists over secularrists and helped them overthrow mubarak, the reliable u.s. ally who had out-- who had outlawed the terrorist brotherhood and honored the peace pact with israel for three decades. the brotherhood in contrast has backed hamas and called for the destruction of israel. now the administration is dealing with the consequences of its misguided king making, officials fear the new regime could invite al qaeda, now run by an egyptian exile, back into egypt and open up a front with israel along the sinai. the result, more terrorists and

higher gas prices. in fact, it was hillary's own department that helped train brotherhood leaders for the egyptian elections. behind the scenes she and the white house made a calculated decision and took step by step actions to effectively sell out israel and u.s. interests in the mideast to the islamists. the obama administration secretly helped bring islamic fascists to power. consider this timeline. again, this is "investors business daily" online," the timeline, it says 2009, the brotherhood spiritual leader, sheikh yusef, writes a letter to obama urging terrorism as a direct response to u.s. foreign

policy. 2009, obama travels to cairo to deliver an apologetic speech to muslims and infuriate -- infuriates the mubarak by inviting banned brotherhood members to attend. he snubs -- obama snaubs mubarak who is neither present nor mentioned. 2009, obama appoints a brotherhood tied islamist as u.s. envoy to the organization that supports the brotherhood. the islamic -- this the organization of islamic concerns, the o.i.c., is -- this isn't in the article but it is composed of 57 states. 57 muslim states make up the o.i.c. that's what is being referred to there. 2010, state department lifts visa ban on tariq ramadan,

suspected terrorist and egyptian-born grandson of brotherhood founder hasan abana, 200, hussein meets with ramadan at american-sponsored conference attended by u.s. and brotherhood officials. 2010, hasan meets with the brotherhood's grand mukti in egypt. 2010, obama meets one-on-one with egypt's foreign minister, ahmad abul ghett, who remarks on tv, quote, the american president told me in confidence that he is muslim, unquote. 2010, the brotherhood's supreme guide calls for jihad against the u.s. 2011, they call for difes rage, unquote, against mubarak and other pro-western regimes throughout the mideast. 2011, riots erupt in cairo's

square, crowds organized by the brotherhood demand mubarak's ouster and storm buildings. 2011, the white house fails to back longtime ally mubarak, who flees cairo. 2011, the u.s. sends intelligence czar james clapper to capitol hill to whitewash the brother's -- brotherhood's extremism, he testifies that the group is, quote, moderate, largely secular. calidari, exiled from egypt for 30 years, is given a hero's welcome to tarir square where he raises a banner to jihad. 2011, clinton east special coordinator for mideast transitions and longtime associate of brotherhood apologists gives brotherhood and other egyptian islamists special training to prepare for the post-mubarak elections.

2011, the brotherhood wins control of egyptian parliament, vows to tear up eyipt's 30-year peace treaty with israel and re-establish his ties with hamas and hezbollah. 2011, obama gives mideast speech demanding that egypt give up land to palestinian and refuses to visit israel. the administration has now said if we give him another term, the next four year he is will go see israel. back to the article. 2011, justice department pulls plug on further prosecution of u.s.-based brotherhood front groups, identified as collaborators in conspiracy to funnel million os hamas. 2011, in a shocking first, the state department formalizes ties with egypt's brotherhood, letting diplomats deal directly with brotherhood party officials in cairo.

april 2012, the administration quietly releases $1.5 billion in foreign aid to the new egyptian regime. june, 2012, morsi wins presidency amid widespread reports of electoral fraud and intimidation by gun toting thugs including blockades of entire streets to prevent christians from going to the polls. the obama administration turns a blind eye and reck nighs him as victor. he vows to instate sharia law and also promises to free jailed terrorists. he also demands obama fee world trade center terrorist and brotherhood leader omar abdul rah man, ample k.a. the blind sheikh from u.s. prison. june, 2012, state grants visa

to banned egyptian terrorist who joins a delegation of brotherhood officials from egypt, they're all invited to the white house to meet with obama's deputy national security adviseor who listens to their demands for the release of the blind sheikh. by the way, in the hearing last week, when i asked our secretary of homeland security about that incident, widely reported, even the mainstream media was reporting it, that a member of a known terrorist organization was given access to the white house, she indicated that it just wasn't true. apparently not knowing the news that was happening just across town from her department. in any event, become to the article, -- back to the article, july, 2012, obama invites morsi to visit the white house this september. the muslim brotherhood's sudden

ascendancy in the mideast didn't happen organically, it was helped along by u.s. president sympathetic to its interests over those of israel and his own country. that's the "investors business daily"" editorial from july 19, 2012. i was shocked to previously find out that it was not until 2009 that our f.b.i. sent a letter saying they were suspending their relationship, one police it referred to the word partners, with care, care being a named codefendant related to muslim brotherhood activity and related to support for terrorism abroad. and i was shocked that it didn't -- it referred to the convictions in 2008 holy land foundation trial and the

evidence introduced at the trial, but what shocked me is they waited until after a conviction when the justice department was the one gathering this evidence. they've been gathering it for years. i was amazed that they seemed surprised, whether or not they were surprised they didn't do anything to sever ties with care, which has been the -- seems to be, with the aclu the most influential in getting this administration to purge its training documents for our -- for the people that are supposed to protect us of anything that might be considered offensive to someone who was a muslim brotherhood member or islamist. . now i visited with muslims abroad. i believe i consider massoud,

whose brother was assassinated within 36 hours of 9/11, i consider him a friend. he nouse about sacrifice. when the state department would not -- they said they could not spare the security to get me and anyone else to a meeting with our muslim friends who have fought with americans, buried their loved ones, like americans have fighting in afghanistan, these are our friends and told our state department, it's fine. i talked to him and sending a security vehicle and i'm willing to put my life in his hands because i trust him. he is a muslim friend. and any way, they told them i was going, after finished

meeting with our troops and after i meet with our troops, i was advised we ranged for an american security vehicle to take you and we contacted mr. massoud to let him know we will get you to the meeting. we should never be afraid of muslims, but we should be afraid of muslim extremists that want to take over our country and destroy our way of life. it is critical that our intelligence, our justice department, those who are supposed to be protecting us, even in the white house that they know the difference between our muslim friends and those who want to subvert the democracy in america. and make no apologies for that. i can't. i took an oath to defend this

constitution. i can't apologize for loving america enough that i will recognize those who are muslim friends and those who are not. with that, mr. speaker, i yield back. the speaker pro tempore: the gentleman from texas yields back his time. does the gentleman have a motion to adjourn? mr. gohmert: i move that we do now adjourn. the speaker pro tempore: the question is on the motion to adjourn. those in favor say aye. those opposed, no. the ayes have it. the motion is adopted. accordingly, the house stands adjourned until

mr. perlmutter: thank you, mr. speaker. i stand here with a lot of sadness with my friends from the colorado delegation. we're pretty -- we're democrats

and republicans, a pretty tight knit group. we had a terrible incident in aurora, colorado, friday. you are well aware of it. 12 people were killed. 58 were wounded. and it is with sadness and grief that we come before you today. as our governor said at the villingle -- vigil on sunday night, we will remember these 12 and those who were shot. but there was a silver lining in this very, very dark moment in the history of colorado. and we saw bravery and selflessness and heroism among the people that were in that theater that night and any one of us can tell you stories of how people, to complete strangers, were willing to give up their own lives to save the

life of the stranger next to them. and, you know, in times when it is difficult like that, you want to find bright spots and there were many. another bright spot was the courage demonstrated by the aurora police and the fire department and the f.b.i. and the a.t.f. in the face of what was a monstrous action by this guy. in colorado we consider ourselves to be pretty tough. auroraans, the way we were -- where this act took place, pretty tough. it hurts. we all hurt. but we're resilient and we will get through it and the stories that some of those who are injured are sharing actually really do lighten the day. and know any one of us would be happy to talk to you all about

that. but there has been a tremendous outpouring of sympathy and condolences and compassion from all of you. and i know i speak on behalf of our entire delegation to thank you for thinking about us and where we live in our community, because we are in this together and we just thank you very much. so i ask that all of you stand with me and our delegation in a moment of silence to honor the memory of those that were killed , the wounded victims and all americans during this time of healing and as i said once before, and as our governor said, we will remember these people who were hurt and we will help them all along the way.

>> coming up, president obama and republican presidential candidate mitt romney speaker of the veterans for foreign wars convention. later, richard corder a followed by house debate on a bill sponsored by ron paul to require an audit of the federal reserve. president obama defended his foreign-policy record monday at the veterans of the foreign wars convention. he said he kept his promises to end the rock band war responsibly.

his remarks are -- iraq war responsibly. >> he was born in hawaii, raised with midwestern values and educated at columbia and harvard. he served in the state senate for eight years before becoming a senator from the state of illinois in 2004. he would co-sponsor numerous co- sponsored legislation like the gi bill and insurance supplements for the seriously wounded iraq bank and afghanistan warriors. he would attend the legislative conference session and appear on the stage 40 dead years in a row as a candidate for our nation's highest office.

then he appeared before us again when he got the job when he would exchange diplomatic notes to the russian president to revitalize the joint commission on pow and would go on into -- signed into law another top priority, advance appropriations for the department of veterans affairs. he said he would take care of veterans, service members, and their families and he has been true to his word. [applause] mr. president, i would definitely be remiss not to add our profound appreciation for all of the superlative work that the first lady andthank you so much. please, please, everybody have a due for troops-- thank you for

these two extraordinary ladies. now, distinguished guests, please welcome the 44th president of the united states, barack obama. [applause] >> god bless you. thank you so much. please, please, everybody have a seat. commander denoyer, thank you for your introduction, and your service in vietnam and on behalf of america's veterans. i want to thank your executive director, bob wallace; your next commander, who i look forward to working with, john hamilton. and to gwen rankin, leanne lemley, and the entire ladies auxiliary, thank you for your patriotic service to america. [applause]

i stand before you as our hearts still ache over the tragedy in aurora, colorado. yesterday i was in aurora, with families whose loss is hard to imagine -- with the wounded, who are fighting to recover; with a community and a military base in the midst of their grief. and they told me of the loved ones they lost. and here today, it's fitting to recall those who wore our nation's uniform: staff sergeant jesse childress -- an air force reservist, 29 years old, a cyber specialist who loved sports, the kind of guy, said a friend, who'd help anybody. petty officer third class john larimer -- 27 years old, who, like his father and grandfather before him, joined the navy, and who is remembered as an

outstanding shipmate. rebecca wingo -- 32 years old, a veteran of the air force, fluent in chinese, who served as a translator; a mother, whose life will be an inspiration to her two little girls. and jonathan blunk -- from reno, just 26 years old, but a veteran of three navy tours, whose family and friends will always know that in that theater he gave his own life to save another. these young patriots were willing to serve in faraway lands, yet they were taken from us here at home. and yesterday i conveyed to their families a message on behalf of all americans: we honor your loved ones. we salute their service. and as you summon the strength to carry on and keep bright

their legacy, we stand with you as one united american family. veterans of foreign wars, in you i see the same shining values, the virtues that make america great. when our harbor was bombed and fascism was on the march, when the fighting raged in korea and vietnam, when our country was attacked on that clear september morning, when our forces were sent to iraq -- you answered your country's call. becausyou know what americans must always remember -- our nation only endures because there are patriots who protect it. in the crucible of battle, you

were tested in ways the rest of us will never know. you carry in your hearts the memory of the comrades you lost. for you understand that we must honor our fallen heroes not just on memorial day, but all days. and when an american goes missing, or is taken prisoner, we must do everything in our power to bring them home. even after you took off the uniform, you never stopped serving. you took care of each other -- fighting for the benefits and care you had earned. and you've taken care of the generations that followed, including our newest veterans from iraq and afghanistan. on behalf of all our men and women in uniform, and on behalf of the american people, i want

to thank you, vfw. thank you for your outstanding work. [applause] of course, some among you -- our vietnam veterans -- didn't always receive that thanks, at least not on time. this past memorial day, i joined some of you at the wall to begin the 50th anniversary of the vietnam war. and it was another chance to say what should have been said all along: you did your duty, and you made us proud. and as this 50th anniversary continues, i'd ask all our vietnam vets to stand, or raise your hand, as we say: thank you and welcome home.

every generation among you served to keep us strong and free. and it falls to us, those that follow, to preserve what you won. four years ago, i stood before you at a time of great challenge for our nation. we were engaged in two wars. al qaeda was entrenched in their safe havens in pakistan. many of our alliances were frayed. our standing in the world had suffered. we were in the worst recession of our lifetimes. around the world, some questioned whether the united states still had the capacity to lead. so, four years ago, i made you a promise.

i pledged to take the fight to our enemies, and renew our leadership in the world. as president, that's what i've done. and as you reflect on recent years, as we look ahead to the challenges we face as a nation and the leadership that's required, you don't just have my words, you have my deeds. you have my track record. you have the promises i've made and the promises that i've kept. i pledged to end the war in iraq honorably, and that's what we've done. [applause] after i took office, we removed nearly 150,000 u.s. troops from iraq.

and some said that bringing our troops home last year was a mistake. they would have kept tens of thousands of our forces in iraq -- indefinitely, without a clear mission. well, when you're commander-in- chief, you owe the troops a plan, you owe the country a plan -- and that includes recognizing not just when to begin wars, but also how to end them. so we brought our troops home responsibly. they left with their heads held high, knowing they gave iraqis a chance to forge their own future. and today, there are no americans fighting in iraq, and we are proud of all the americans who served there. [applause] i pledged to me it a priority to take out the terrorists who had attacked us on 9/11.

and as a candidate, i said that if we had osama bin laden in our sights, we would act to keep america safe -- even if it meant going into pakistan. some of you remember, at the time, that comment drew quite a bit of criticism. but since i took office, we've worked with our allies and our partners to take out more top al qaeda leaders than any time since 9/11. and thanks to the courage and the skill of our forces, osama bin laden will never threaten america again, and al qaeda is on the road to defeat. [applause] i pledged to finish the job in afghanistan. after years of drift, we had to break the momentum of the taliban, and build up the capacity and the capability of afghans.

and so, working with our commanders, we came up with a new strategy, and we ordered additional forces to get the job done. this is still a tough fight. but thanks to the incredible services and sacrifices of our troops, we pushed the taliban back; we're training afghan forces; we've begun the transition to afghan lead. again, there are those who argued against a timeline for ending this war -- or against talking about it publicly. but you know what, that's not a plan for america's security either. after 10 years of war, and given the progress we've made, i felt it was important that the american people -- and our men and women in uniform -- know our plan to end this war responsibly. [applause] and so by the end of this summer, more than 30,000 of our troops will have come home. next year, afghans will take

the lead for their own security. in 2014, the transition will be complete. and even as our troops come home, we'll have a strong partnership with the afghan people, and we will stay vigilant so afghanistan is never again a source for attacks against america. [applause] we're not just ending these wars; we're doing it in a way that achieves our objectives. moreover, it's allowed us to broaden our vision and begin a new era of american leadership. we're leading from europe to the asia pacific, with alliances that have never been stronger. we're leading the fight against nuclear dangers. we've applied the strongest sanctions ever on iran and north korea -- nations that cannot be allowed to threaten the world with nuclear weapons. [applause]

we're leading on behalf of freedom -- standing with people in the middle east and north africa as they demand their rights; protecting the libyan people as they rid the world of muammar qaddafi. today, we're also working for a transition so the syrian people can have a better future, free of the assad regime. and given the regime's stockpiles of chemical weapons, we will continue to make it clear to assad and those around him that the world is watching, and that they will be held accountable by the international community and the united states, should they make the tragic mistake of using those weapons. [applause] and we will continue to work with our friends and our allies and the syrian opposition on behalf of the day when the syrian people have a government that respects their basic rights to live in peace and freedom and dignity.

because we're leading around the world, people have a new attitude toward america. there's more confidence in our leadership. we see it everywhere we go. we saw it as grateful libyans waved american flags. we see it across the globe -- when people are asked, which country do you admire the most, one nation comes out on top -- the united states of america. [applause] so this is the progress that we've made. thanks to the extraordinary service of our men and women in uniform, we're winding down a decade of war; we're destroying the terrorist network that attacked us; we're strengthening the alliances that extend our values. and today, every american can be proud that the united states is safer and stronger and more respected in the world.

and all this allows us to fulfill another promise that i made to you four years ago -- strengthening our military. after 10 years of operations, our soldiers will now have fewer and shorter deployments, which means more time on the home front to keep their families strong; more time to heal from the wounds of war; more time to improve readiness and prepare for future threats. as president, i've continued to make historic investments to keep our armed forces strong. and guided by our new defense strategy, we will maintain our military superiority. it will be second to none as long as i am president and well into the future. we've got the best-trained, best-led, best-equipped military in history. and as commander-in-chief i am going to keep it that way.

[applause] and by the way, given all the rhetoric lately -- it is political season -- let's also set the record straight on the budget. those big, across-the-board cuts, including defense, that congress said would occur next year if they couldn't reach a deal to reduce the deficit? let's understand, first of all, there's no reason that should happen, because people in congress ought to be able to come together and agree on a plan, a balanced approach that reduces the deficit and keeps our military strong. it should be done. [applause] and there are a number of republicans in congress who don't want you to know that most of them voted for these cuts.

now they're trying to wriggle out of what they agreed to. instead of making tough choices to reduce the deficit, they'd rather protect tax cuts for some of the wealthiest americans, even if it riskbig cuts in our military. and i've got to tell you, vfw, i disagree. if the choice is between tax cuts that the wealthiest americans don't need and funding our troops that they definitely need to keep our country strong, i will stand with our troops every single time. [applause] so let's stop playing politics with our military. let's get serious and reduce our deficit and keep our military strong. let's take some of the money that we're saving because we're not fighting in iraq and because we're winding down in afghanistan -- use half that money to pay down our deficit; let's use half of it to do some

nation-building here in the united states of america. [applause] let's keep taking care of our extraordinary military families. for the first time ever, we've made military families and veterans a top priority not just at dod, not just at the va, but across the government. as richard mentioned, this has been a mission for my wife, michelle, and vice president joe biden's wife, dr. jill biden. today, more people across america in every segment of society are joining forces to give our military families the respect and the support that they deserve. and there's another way we can honor those who serve. it may no longer be a crime for

con artists to pass themselves off as heroes, but one thing is certain -- it is contemptible. so this week, we will launch a new website, a living memorial, so the american people can see who's been awarded our nation's highest honors. because no american hero should ever have their valor stolen. [applause] this leads me to another promise i made four years ago -- upholding america's sacred trust with our veterans. i promised to strengthen the va, and that promise has been kept. in my first year, we achieved the largest percentage increase in the va budget in 30 years. and we're going to keep making historic investments in our

veterans. when richard came to the oval office, we talked about what those automatic budget cuts -- sequestration -- could mean for the va. so my administration has made it clear: your veteran's benefits are exempt from sequestration. they are exempt. [applause] and because advance appropriations is now the law of the land, veterans' health care is protected from the budget battles in washington. [applause] i promised you that i'd stand up for veterans' health care. as long as i'm president, i will not allow va health care to be turned into a voucher system, subject to the whims of the insurance market. some have argued for this plan. i could not disagree more. you don't need vouchers, you

need the va health care that you have earned and that you depend on. [applause] so we've made dramaticinvestments to help care for our veterans. for our vietnam veterans, we declared that more illnesses are now presumed connected to your exposure to agent orange. as a result of our decision, vietnam-era vets and your families received nearly $4 billion in disability pay. you needed it; you fought for it. we heard you and we got it done. [applause] we've added mobile clinics for our rural veterans; more tailored care for our women veterans; unprecedented support for veterans with traumatic brain injury. all tolled, we've made va health care available to nearly

800,000 veterans who didn't have it before. [applause] and we're now supporting caregivers and families with the skills and the stipends to help care for the veterans that they love. of course, more veterans in the system means more claims. so we've hired thousands of claims processors. we're investing in paperless systems. to their credit, the dedicated folks at the va are now completing one million claims a year. but there's been a tidal wave of new claims. and when i hear about veterans waiting months, or years, for your benefits -- it is unacceptable. and we are doing something about it. [applause] we're taking all those folks who processed your agent orange claims -- more than 1,200 experts -- and giving them a new mission: attack the backlog.

we're prioritizing veterans with the most serious disabilities. and the va and dod will work harder towards a seamless transition so new veterans aren't just piled on to the backlog. and we will not rest -- i will not be satisfied until we get this right. and today, i'm also calling on all those who help our vets complete their claims -- state vas, physicians and veteran groups like the vfw -- to join us. you know how this can work better, so let's get it done, together. we're also focused on the urgent needs of our veterans with ptsd. we've poured tremendous resources into this fight -- thousands of more counselors and more clinicians, more care and more treatment. and we've made it easier for veterans with ptsd to qualify for va benefits. but after a decade of war, it's now an epidemic.

we're losing more troops to suicide -- one every single day -- than we are in combat. according to some estimates, about 18 veterans are taking their lives each day -- more every year than all the troops killed in iraq and afghanistan combined. that's a tragedy. it's heartbreaking. it should not be happening in the united states of america. so when i hear about servicemembers and veterans who had the courage to seek help but didn't get it, who died waiting, that's an outrage. and i've told secretary panetta, chairman dempsey and secretary shinseki we've got to do better. this has to be all hands on deck. so our message to everyone who's ever worn the uniform -- if you're hurting, it's not a sign of weakness to seek help, it's a sign of strength.

and when you do, we'll be there and do more to help -- including more counselors and clinicians to help you heal. we need to end this tragedy, vfw. [applause] and we're going to work together to make it happen. so, too with our campaign to end homelessness among our veterans. we've now helped to bring tens of thousands of veterans off the streets and into permanent housing. this has to be a core mission, because every veteran who has fought for america ought to have a home in america. and this brings me to the last promise i want to discuss with you. four years ago, i said that i'd do everything i could to help our veterans realize the american dream, to enlist you in building a stronger america. after all, our veterans have the

skills that america needs. so today, our economy is growing and creating jobs, but it's still too hard for too many folks to find work, especially our younger veterans, our veterans from iraq and afghanistan. and with a million more troops rejoining civilian life in the years ahead -- and looking for work -- we've got to step up our game, at every stage of their careers. so today, i'm announcing a major overhaul of our transition assistance program. we're going to set up a kind of "reverse boot camp" for our departing servicemembers. starting this year, they'll get more personalized assistance as they plan their careers. we'll provide the training they need to find that job, or pursue that education, or start that business. and just as they've maintained their military readiness, we'll

have new standards of "career readiness." in addition, by making the post-9/11 gi bill a priority, we've helped more than 800,000 veterans and their families pursue their education. and i've issued an executive order to help put a stop to schools that are ripping off our veterans. [applause] i've directed the federal government to step up on jobs. since i took office, we've hired more than 200,000 veterans into the federal government. we made it a priority. and we're keeping track -- every agency, every department: what are you doing for our veterans? i've challenged community health centers to hire thousands of veterans as physicians and nurses. and as we help local communities hire new police officers and firefighters and first responders, we're giving a preference to veterans. we're also fighting to get more vets hired in the private sector. with new tools like our online

veterans jobs bank, we're connecting veterans directly to jobs. we're helping thousands of veterans get certified for good- paying jobs in manufacturing. we succeeded in passing tax credits for businesses that hire our veterans and our wounded warriors. and this morning, i signed into law the veteran skills to jobs act -- making it easier for veterans to transfer their outstanding military skills into the licenses and credentials they need to get civilian jobs. if you are a young man that is in charge of a platoon or millions of dollars of equipment and are taking responsibility, or you're a medic out in the field who is saving lives every single day -- when you come home, you need to be credentialed and certified quickly so you can get on the job. people should understand how skilled you are. [applause] and there shouldn't be bureaucrats or runarounds.

we've got to put those folks to work. last summer, i also challenged the private sector to hire or train 100,000 veterans or their spouses. michelle and jill biden have been leading the effort, through joining forces. and so far, thousands of patriotic businesses have hired or trained more than 90,000 veterans and spouses. and our message to companies is simple: if you want somebody who gets the job done, then hire a vet. [applause] hire a vet. hire a vet and they will make you proud just like they've made america proud. and we're fighting for veterans who want to start their own businesses, including more training in entrepreneurship. it's one of the reasons we've cut taxes -- 18 times for small businesses, including veteran- owned businesses. and the effects ripple out, because vets are more likely to hire vets.

so today, we can point to progress. more veterans are finding jobs; the unemployment rate for veterans has come down. yes, it's still too high, but it's coming down. and now we've got to sustain that momentum. it's one of the reasons i've proposed to congress a veterans jobs corps to put our veterans back to work protecting and rebuilding america. and today, i am again calling on congress: pass this veterans jobs corps and extend the tax credits for businesses that hire veterans so we can give these american heroes the jobs and opportunities that they deserve. so, vfw, these are the promises that i made. these are the promises that i've kept. where we still have more to do, we will not rest. that's my vow to you. i've got your back.

i've got your six. because we have a solemn obligation to all who serve -- not just for the years you're in uniform, but for all the decades that follow, and because even though today's wars are ending, the hard work of taking care of our newest veterans has only just begun. just as you protected america, we're going to pass our country to the next generation, stronger and safer and more respected in the world. so if anyone tries to tell you that our greatness has passed, that america is in decline, you tell them this: just like the 20th century, the 21st is going to be another great american century. for we are americans, blessed with the greatest form of

government ever devised by man, a democracy dedicated to freedom and committed to the ideals that still light the world. we will never apologize for our way of life; we will never waver in its defense. we are a nation that freed millions and turned adversaries into allies. we are the americans who defended the peace and turned back aggression. we are americans who welcome our global responsibilities and our global leadership. the united states has been, and will remain, the one indispensable nation in world affairs. and you, you are the soldiers, the sailors, the airmen, the marines and the coast guardsmen who have kept us strong. we will honor your legacy. and we will ensure that the

military you served, and the america that we love, remains the greatest force for freedom that the world has ever known. god bless you. god bless all of our veterans. and god bless the united states of america. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] ♪ ♪ ♪

♪ >> wednesday on washington journal, congressman henry cuellar discuss relations with the new mexican president. he talks about the site of tax cuts and about sequestration. later, washington journal's spotlight on magazines featured the editor in chief of -- he will talk about his article. it is live at 7:00 a.m. eastern on c-span.

>> wednesday, treasury secretary tim geithner is before the house schedule services committee, expected topics beatrix the annual financial stability oversight canceled -- council report. live coverage starting at 9:30 eastern on c-span 3. >> if you cannot disagree, even disagreed vehemently without taking it personally and hating the person on the other side, you want to find another job. >> justice scalia reflects on 25 years on the bench in interpreting documents. sunday at 8:00 on east -- on "q &a." >> madani spoke to the veterans of foreign wars -- mitt romney

spoke to the veterans of four wars. it called for a special counsel to investigate. he outlined his policy on the future of u.s. involvement in afghanistan and iran. his remarks from reno, nevada, are 25 minutes. ♪ texting be so much. -- aspects -- > > it is a source of pride for us to stay combat veteran from massachusetts serving as a national commander of the vfw. great job, cmdr. the auxiliary president,

incoming national commander in john hamilton, executive director bob wallace, distinguished guests and members, thank you for your generous welcome. i want to start with a few words about the tragedy in colorado last week. we have since learned that among the victims were four people who served or were serving our country in uniform. today our hearts go out to the families. an air force veteran, an army veteran and member of the air force reserves and in a veteran who died shielding his girlfriend from the spray of bullets. the loss of four americans who served our country only as to

the tragedy of that day. all americans here are grateful for their service and the saddened by their deaths. we mourn them and we will remember them. the vfw is now over 2 million strong. it has a special place in america's heart. some of you thought recently in iraq or afghanistan. others are old enough to have marched were stilled by orders of franklin roosevelt. whatever your age, whether you are republican or democrat, whenever he served, there is one thing you have in common and we did you answer the call of your country in a time of war. -- in common -- you answered the call of your country, in a time of war. whenever america has been

tested, he stepped forward. you come from our farms, our great cities, our small towns in quiet neighborhoods. many of you have known of violence pickett to that your neighbors could no peace -- so that your neighbors could know peace. it is an honor to address you today. [applause] our veterans are part of a proud tradition that stretches back to the battlefield of lexington and concord. now to places like kandahar. our men and women have added proud achievements to their service and president obama appointed some of them yesterday in his speech. anytime our military accomplishes a vital mission, it is a proud moment for our nation. but we owe our veterans and

military more than an accounting of our successes. they deserve a fair and frank assessment of the whole picture of where we are and where we want to be. when it comes to national security and foreign policy, the last few years have been a time of declining influence and a missed opportunity. consider some of the challenges i discussed with you at the last national convention. since then, has the american economy recovered? as our ability to shape world events been enhanced or diminished? have we gained greater confidence among our allies in greater respect from our adversaries? has the most severe security threat facing america and our friends, a nuclear-armed iran, become more likely or less likely? these measures of the ultimate

test of american leadership and by these standards, we have not seen much in the president's first term that inspires confidence in a second. the president's policy that made it harder to recover from the deepest recession in 70 years. exposed to the military to cuts that no one can justify. compromise our national security secrets. [applause] and in dealings with other nations, he has given trust where it is not earned, in seoul where it was not deserved an apology where is not due -- insults where it was not deserved and apology where it was not due. [applause]

from berlin to cairo to the united nations, president obama has shared his view of america and his place among nations. i have come here today to share mind. i am an unapologetic believer in the greatness of america. [applause] i am not ashamed of american power. i take pride that throughout history, our power has brought to justice where there was tierney, peace with was conflict and help with there was affliction and despair. i do not view america as one more place on the map or one more power to the balanced i believe our country is the greatest force for good the world has ever known and our employees is needed today as ever before. [applause]

and i am guided by one overwhelming conviction and passion. this century must be an american century. in 1941, henry lee was called on his countrymen realizing their strength to create the first great american century and they did. together with their allies, they won world war ii. and america took its place as leader of the free world. across the globe, they fought, they bled, they lead. they shoulder the world's the extraordinary courage of the american heart -- they showed the world the extraordinary courage of the american heart. that remains unchanged today but

sadly the president has diminished american leadership's. the world is dangerous, destructive and the two men run into the the commander in chief lifespan face the challenges we face. let it bodman in the night, we must remain -- like a watc hman in the night we must remain vigilant. we had the strongest economy and military in the world. if by necessity we must employ its, we must wield our strength with resolve. in an american sentry, we lead the free world and the free world leaves the entire world. if they do not have the strength of vision to lead, other powers will take our place, pulling

history in and -- in a different direction. a just and feet -- peaceful world depends on a strong and confident america. if i become commander in chief, the united states of america will fulfill its destiny and its duty. [applause] now our leadership depends on our economic strength, on our military strength and our moral strength. if any one of those older, no skill of diplomacy can compensate copper -- can compensate. the strength of our economy is in jeopardy. a healthy economy is what underwrites american powerplant. when growth is missing,

government revenues fall, social spending rises and washington looks to the -- to cut defense spending as the easy way out. that includes our president. today we are months away from an arbitrary the budget reduction that would saddle the military with 1 million -- $1 trillion in cut. it would impair our ability to meet and deter threats. do not bother trying to fight a serious military rationale behind that unless that rationale is wishful thinking. strategy is not driving the president's massive defense cuts. is the secretary of defence pierre more that these reductions would be devastating. -- his own secretary of defense and warned those reductions would be devastating. put they would weaken an already stretched system.

if i am president, i will not let that happen. [applause] this is no time for the president's radical cuts in our military. look around the world. other major powers are rapidly adding to the military capabilities. some with intentions very different than our own. the regime in tehran is closer to developing nuclear weapons. the threat of radical islamist terrorism persists. weapons of mass destruction proliferation. we are still at war and still have uniformed men and women in, for it. all of this and more is going on and yet the president has chosen this moment for wholesale reductions in -- with the biggest announcements

in the last date of the union address on improving our military was that the pentagon will start using more clean energy, you know it is time for a change. [applause] we are not the first people to observe the spirit it is reported that bob gates, the first secretary of defense, i just another security problem. and this administration. after house secret operational details of the kasam of bin laden raid were given to reporters, secretary gates told the obama team to shut up. he added a column for au pair -- a colorful word for emphasis. lives are at stake but the administration failed to change

its ways. more top-secret operations were leaked, even some of involving covert actions in iran. this is a national security crisis. democrat senator dianne feinstein asked today, chairman of the senate intelligence committee, said, i think the white house has to enter stand - 0- understand that some of it is coming from them. this conduct betrays our national interest. it compromises our men and women and it demands a full and prompt investigation by special counsel with explanation and consequence. obama appointees who are accountable to the attorney- general should not be responsible for investigating the leaks coming from the white house. whoever provided classified

information to the media must be exposed, dismissed and punished. the time for stonewalling is over. [applause] it is not enough to say the matter is being looked into and leave it at that. when the issue is the political use of a highly sensitive national security information, it is unacceptable to say we will report our findings after the election who in the white house perpetrated these secrets? it did a superior pauperize it? these are things americans are entitled to know. the president believes that the buck stops with him, he owes all americans a: prompt accounting of the facts. -- and prompt accounting of the

facts. let me be very clear -- these events make the decision we face in november all the more important. what kind of white house would reveal classified material for political gain? i will tell you right now --mine will not. [applause] the harm that is that when national security secrets are betrayed extends to the trust that allies place in the united states. the operating principle of american foreign-policy has been to work with our allies to deter aggression before it breaks out into conflict. that policy depends on nurturing our alliances and standing up for our values. if the president moves in the opposite direction. it began with the abandonment of that -- with our friends in poland. they were told at the last hour

that the agreement was off. as part of their policy. missile defenses were sacrificed as a unilateral concession to the russian government. it that gesture was designed to inspire good will from russia, it missed the mark. the russian government defended the dictator in damascus. i can only guess what putin makes of the obama administration. he got to congratulate -- a congratulatory call from the oval office spirit then that exchange picked up by a microphone that president obama did not know was on. he told putin to give him space. why is that flexibility with russian leaders is more important to him than transparency for the american

people? [applause] now the president did have a moment of candor the other day. he said the actions of venezuelan dictator hugo chavez have not had a serious national security impact on us. in my view, inviting hezbollah into our hemisphere is severe, serious and a threat. i will recognize it as such. [applause] but at least he was being consistent. this is the president who faltered when the iranian people were looking for support in their struggle against the ayatollah. that uprising was treated as an inconvenient problem for the president of policy engagement instead of a moral opportunity.

that misjudgment should never be bp did. when unarmed men and women find the courage to stand against their oppressors, they should hear the voice of an american president affirming their right to be free. kabul we leaving this evening on a trip abroad that will take me to england -- i will be leaving this evening on a trip abroad that will take me to england and elsewhere. i will tell you what i think of this administration's treatment of one of our finest friends. president obama is fond of lecturing is real's leaders -- israel's leaders. he is undermine their position which was tough enough as it was. even at the united nations to the applause of israel's enemies, his boat as if our closest ally was a problem.

the people of israel deserve better. the chrous of accusations and threats at the united nations should never again include the voice of the president of the united states. [applause] their values and causes that depend on american strength and clarity of our purpose and the reliability of our commitments. there is work that only america and our allies can do. hassanal powers that only we can deter and challenges that only we can overcome -- hostile powers that only we can deter and challenges that only we can overcome. i will have a solemn duty as commander in chief to our men and women in uniform. the troops, their families and

the american people -- give them a clear explanation of our commitments. i have been critical of the decision to withdraw search troops during the fighting season against it by some commanders on the ground. the president would have you believe that anyone who is disagreeing with his decision is arguing for endless war. it is a politically time to retreat. as president, michael in afghanistan will be to complete a successful transition to afghan security forces by the end of 2014. i will solicit the best advice of our military commanders and affirm that my duty is not to my political prospects to -- but the security of the nation and safety of our troops. [applause]

we face another challenge in a rising china. china too often disregards the rights of its people. it is selected in the freedoms it allows and with its one child policy, it can be ruthless in crushing the freedoms it denies. in trading with america, it commits a flagrant hypocrisy patent violations. it it's up -- it manipulates its currency to maintain an unfair advantage. it is our mutual interest for china to be a partner for a stable and secure world. we welcome its participation in trade but the cheating must be brought to a stop. the president has not done it and will not do it and i will. [applause] we will need that clarity of

purpose and result in the middle east. america cannot be neutral in the outcome there. we have to clearly stand for the values that represented economic opportunity and human-rights and we must stand against the extension of iranian influence. egypt is at the center of this drama. it has the power to tip the balance in the arab world toward freedom. this -- as president, i will work with partner nations deeper place conditions on their assistance. unifying our common purpose doubled foster the development of a government that represents all egyptians, maintains peace with israel. the united states is willing to help egypt support peace and prosperity but will not be a composite in oppression.

there is no greater danger in the world today than the prospect of ayatollahs in tehran possess a nuclear weapons capacity. with all the talks and assurances, can anyone say we are further from this danger now than we were four years ago? the st. ayatollahs -- the same thatollahs who chanted "deart to america" will not be talked out of their contempt for our country. sanctions must be enforced without exception, cutting off the sources of wealth. negotiations must secure full access for inspections. as it is, the iranian regime claims the right to enrich nuclear material for supposedly

peaceful purposes. this claim is discredited by years of deception. drawn. luinine has to be there must be a full suspension of any infringement -- enrichment whatsoever. period. and at every turn, iran must know that the united states and our allies stand as one in these critical objectives. only in this way can be successfully counter the threat that iran represents to us in the world. i pledge to you and all americans that if i become commander in chief, i will use every means necessary to protect ourselves and the region and prevent the worst from happening while there is still time. it is a mistake to think that firmness in american foreign

policy can only bring attention or conflict. -- bring tension or conflict. the surest path to danger is always weakness and indecision. [applause] resolved that it is moves events in our direction and strength that keeps the peace. i will not surrender america's leadership in the world. we must have confidence in our cause, clarity in our purpose and resolved in our minds. it is very simple. if you do not want america to be the strongest nation on earth, i am not your president. but with his cousin to the military, you have the president today. -- with his cuts to the military, you have that president today. this century began with terror,

war, economic calamity. it is our duty to move towards freedom, peace and prosperity. the people here today cannot hold the torch as high as they have in the past. they are getting older. it is our turn. we have to seize that torch they carried with such great sacrifice. it is an eternal torch of decency and freedom and hope. it is not our torch alone but america's duty and honor to hold it high enough so the whole world can see it. i love america, i love what america represents. i love the sacrifice america has made for freedoms throughout the world. this is a critical time for our nation, a time of toys -- of choice. we will have another american

century with freedom blossoming and prosperity for all our citizens here because i believe in america. i believe in you. i salute you. together we will make sure we keep america the whole of the earth. thank you so very much and god bless the vfw and the united states of america. >> wednesday on washington journal, we will discuss u.s. relations with the mexican president. then a member of the house financial-services committee. he talks about the fight over tax cuts and to fight sequestration. washington journal's spotlight on magazines it features the editor in chief of reason.com he will take your calls about his article. it is live 7:00 a.m. eastern on

c-span. >> and the brookings institution hosted a discussion. it represented the obama campaign and rich williamson from the romney campaign will speak with marvin cowell. 2:00 p.m. eastern on c-span 3. >> this weekend on american history tb --- >> what exactly is the nature of the clash? is this a clash over policy or personalities? >> truman and macarthur. on the relationship that led a president to relieve a general at the height of the korean war. saturday at 8 eastern. sunday, more from the

contenders, key political figures who ran for president and lost but changed political history. this week, adelaide stevenson. he said they had a bad case of hereditary politics. his grand father was a vice president and great-grandfather twice against eisenhower. this weekend on c-span 3. consumer financial protection bureau director richard chordate responded to lawmakers tuesday regarding their concerns with the bureau's rule making process and consumer credit access. he says the goal is consumer protection and access to credit for all who need it. he testified for two hours before the house oversight subcommittee on financial- services. >> of the committee will come to

order the subcommittee on tarp. our healing -- hearing -- are they be stretching consumer access to credit? we have two panels. the director of the consumer financial protection bureau. we have four individuals from think tanks and the private sector. the tradition is to begin with the oversight committees mission statement. we exist to secure two fundamental principles -- americans have a right to know that the money washington takes from them is well spent. and americans deserve an efficient government that works for them. our duty on the committee is to protect these rights. our responsibility is to hold government accountable to taxpayers because they have a right to know what they get from

their government. we will work tirelessly in partnership with citizen watchdogs to deliver the facts to the american people. this is the mission statement of the oversight and government reform committee. i will now recognize myself for the purposes of an opening statement for four minutes. today's hearing will examine how regulatory actions of the cfpb can restrict access to credit. as well as the metrics and tools the bureau employees to consider the availability of credit over the course of its will making and enforcement work. the american people deserve consumer protection regulations that discourage and discipline financial fraud, without compromising access to credit consumers for small businesses. as our country continues to

exhibit sluggish job growth and the possibility of slipping back into a recession, it has become more important than ever to ensure that our markets encompass adequate liquidity and credit for american businesses and families. his appointment earlier this year has already resulted in a lawsuit that if successful, could invalidate all of the cfpb's actions since his employment. such legal wrangling and their regulatory actions creates uncertainty that may restrict credit as financial institutions praised for full implementation of dodd-frank. mr. cordray has been a great public servant. we may disagree on policy but he has a strong reputation.

the equipment and the process of appointment raises a lot of concerns outside of that. his own testimony before this subcommittee had not helped to alleviate much of the concern about uncertainty as he and the bureau had been vague in regards about the definition of abusive practices by market participants. since the subcommittee last met with him in a generic, the cfpb has proposed rulemaking that will increase the regulatory burden for financial institutions and consumers without conducting a thorough cost-benefit analysis. the bureau's consideration of the qualified mortgage will has been met with dismay from lenders and experts to believe the rule could make consumer borrowing more expensive/

many experts also believe that the rule could make it harder for consumers to compare more -- mortgage opsins and reduce consumer choice. i would urge mr. or dray to consider these consequences as the housing market is beginning to see some daylight. it is already resulted in a reduction of services for consumers. the citibank of texas has stopped offering the service and estimates that 4000 other community banks will exit the transfer business because of the rule. in light of these consequences to certain regulatory actions, the bureau should join other independent regulators that have taken steps to improve their

cost benefit analysis. the sec has recently undertaken efforts to implement a cost-benefit analysis of the likely economic consequences of new regulations. with our fragile economic situation, now is not the time for aggressive shortsighted will making by the cfpb. today's hearing represents our commitment to ensuring that government regulators strike the proper balance between protecting consumers and ensuring there is a sufficient access to credit. that is the purpose of today's hearing. i thank mr. cordray for returning before this subcommittee and his willingness to submit to oversight from congress. with that, i will now recognize the making member -- the ranking member. >> cfpb congress created the

epergne in the wake of the finance a crisis when it became obvious to everyone that credit markets were not working for american consumers. lenders were able to take advantage of consumers by selling them faulty and deceptive and financial products. this lending poisons be financial system and contributed to the credit crunch and market meltdown. we created the cfpb to protect americans against these fraudulent product. the accumulation of faulty products is at much a risk to the system as a whole as it is to the borrower and lender. i'd like to read from our mission statement. to make markets for consumers and services were for americans, whether they are applying for a mortgage, choosing a credit card are using any number of other consumer financial products. markets work best when access to

credit is enhanced when regulators reduced the risk of fraud and deception. i would like to welcome you back to this subcommittee. this is the 4th hearing to focus on the cfpb. in january, he testified that upon your swearing in as the rector, the cfpb got authorities to bring enforcement action. early this month, the cfpb announced its first public enforcement action did on july 18, the cfpb down at the vendors of capital one bank engaged in deceptive tactics to mislead consumers into paying for add-on products. they were ordered to refund approximately $140 million and pay an additional $25 million in penalties reported action is important to ensure that they

are held accountable if they violate law. this is exactly what we created cfpb. i am glad to see if protecting consumers and cfpb taking action on student loadn debt. the total balance is $870 billion. that is greater than the total credit card debt and auto loan debt combined. americans over the age of 60 currently 0 $36 billion in student loans. the sheer amount of debt in demands attention. in july, the cfpb rolled out a tool to help students to a fallen behind on payments. this is a welcome step forward

in an area that has previously received too little attention. and the sport to further engagement on the student loan debt co issued. i yield back. >> members will have seven days to submit. we will now recognize our first panel. mr. cordray is the director of the consumer financial protection bureau. it is the policy of this committee that all witnesses be sworn in before they testify. you have testified regularly before congress but if you will please rise and raise your right hand. do you solemnly swear that the testimony you will give will be the whole truth and nothing but the truth? thank you. let the record reflect the witness answered in the affirmative. we will not again -- now begin

with five minutes of testimony that a round of questions. you have five minutes to summarize your opening statement. green means goi. . red means stop. >> thank you, chairman, ranking member and members of the subcommittee. thank you for inviting me back to talk about the importance of credit. at the consumer financial protection bureau, we know that access to credit means access to opportunities. where does allow people to buy a home and spread the payments over years. -- mortgages allow people to buy a home and spread the payments over years. these products can help people achieve their dreams.

unfortunately, the crisis of 2007 and 2008 caused investors to flee lending markets. most of these markets have recently shown some signs of improvement. credit card originations are growing at a modest pace and we are seeing more significant growth in auto instead of lending. it concerns us that many consumers today are shut out of certain credit markets, especially the residential mortgage market. lending standards are quite tight. this is meeting it tough on consumers and on the broader economy. at the consumer bureau, we are working to help change this for the better. the dot frank reform -- the dodd frank reform lets us ensure the markets for consumer financial products and services are fair, transparent and competitive. we are to insure that all

consumers have access to these markets. credit to create opportunity and we think these goals work in tandem. we worked with the industry's rate regulate it, but the best solutions to problems. we want to increase opportunities for consumers. this means we are coordinating and also reduce unnecessary burdens and are holding small business review panels to gather input from small providers in particular, such as community banks and credit kenyans. the act specifies that we must consider the effect of our rules on access to equipment. we did that i consulted with the industry and consumer groups. we work hard to consumer the evidence when analyzing issues. before we propose a rule, a team of attorneys and market experts to evaluate its alternatives in terms of their potential

consequences. this team conducts quantitative and qualitative research wherever possible. they analyzed the death and review relevant studies. -- they analyze data and review relevance study. they help us understand how the market works and how it will might affect consumers and providers. our work on the ability to pay mortgage will illustrates how seriously we take our obligation to consider a rex on credit availability. later this year, we will finalize roles to -- rules to make a determination that borrowers have an inability to repay the loan. in implementing this statute, we want to fulfill its purpose of ensuring consumers are not sold mortgages they cannot afford. we will seek to defined below or

risk loans carefully so that it the market stabilizes, every segment of the market is competitive and investors will have an incentive to participate in lending. we will strive to craft a sensible rule that works through out the credit cycle will being attentive to how fragile and risk averse the market seems to be today reported the recently reopened the comments period to be as transparent as we can and to see of lenders have a more pertinent data to share with us. through these additional efforts, we hope to muster the best available evidence to help us decide how to implement the statute. in sum, we are aware of the market is waiting to see the precise shape that the rules take. we are a working to put in place regulations by the deadlines congress said. we are being as transparent as we can.

we want to help provide the mortgage market with the clarity we need to help improve performance. our goal is to make consumer finance a products and services work better for americans, the honest businesses that serve them and the broader economy as a whole. an effective marketplace means access to credit which is essential to provide opportunity that consumers need. thank you and i look forward to your questions. >>thank you for your testimony in service. and your long career in service. i now recognize myself for five minutes. i know you are aware of this but national bureau of economic research outlined that half of the american people could not come up with $2,000 within 30 days to meet some unexpected challenge. that is proof positive of the

depth of this economic downturn thealoso the limitation in credit markets. 25% of american people are un- banked or under-banked. we see limitations with credit products available to the american people. in your estimation -- how do you resolve this and what obligation does the cfpb have to ensure access to credit products? >> thank you for the question. it is something we have been focused on in a number of our field hearings and other events where we get outside of washington. we have been considering the

payday lending industry, the overdraft issue and prepaid cards. there are various means by which the short term for credit is being met. there has been -- we hear it from people all over the country. we hear from them as they submit stories to us that they need short-term access to credit. one of the really great insights that is embodied in the consumer financial protection bureau is that we are overseeing large banks and also nonbanks so we do not have a bank-centric view of this. if people have to survive on products like payloads, we care a great deal about that because we have to oversee those providers as well. so for the un-banked and under-

banked, it is very important to us to understand what those needs are, how they can be met better and buy products that did not further deepen the hole that many americans find themselves in as they tried to meet their needs day today. it is the focus of quite a bit of our efforts so i appreciate your attention to it as well. >> said the answer is yes, the cfpb has an obligation to ensure there is access to credit for the average american? >> yes. >> we discussed this before. inherent in regulation is both the costs and benefits. it depends on a point of view on said regulation on whether or not you think we should focus more on the cost for the benefit but whether or not you're

regulation is proper and good or improper and destructive, you need to weigh both the cost and the benefit. as you go through ongoing rule making, the costs and benefits, will they be accounted for? is that a major concern you have? >> the answer briefly is yes. it is a major concern for us. for a number of reasons. at a minimum, it is legally required that every time we adopt a rule, we have to consider under our statutes the burdens, impacts and benefits of the rule. we have to size those up. it the burdens are not outweighed by the benefits, it is not the kind of role we should be going forward with. i think that is common sense. if you're doing more harm than good, you should not be doing what you are doing. but it requires a careful assessments.

sometimes these can involving three -- involve lengthy analysis. the courts require the ability to review very careful analysis on this subject. it's for all those reasons, it makes sense for us to do that. it is essential and did we do not do it, it puts our rules in jeopardy. >> is there a link between over regulation and the lack of credit availability? >> i think if you look at the history of these times, the thing that has most restrictive credit to consumers and has most hamstrung lenders has been a credit freeze, the credit crunch, the financial collapse and the ensuing recession that started in 2007. that has been what has dried up credit. sensible regulations have been

in place might have averted that problem. you can say the same thing going back to the 1930's. it was a financial collapse and instilling a depression. did they dry up credit because it got created in 1933? i do not think anybody would think that. >> i certainly understand that. you are not exactly answering my question. bernanke determine the causes as both fed policy and bank failures. i understand that. we understand the storm we have just gone through. the concern i have is getting insight into your world view on regulation. i understand your view that enhance regulation is better than less regulation but what i am asking is, is there a point

by which overregulation does restrict access to credit? >> what i would say is in better regulation is always better than worst regulation but that is in the eye of the beholder. regulating an entire market rather than part of a market which is what was done before the crisis is not a good recipe for success. i would agree with your question which is can the pendulum swing too far in the wake of a crisis like this? can people overreact and can they potentially compound the problem. that is always a possibility. it is important for us to be thoughtful and careful about what we are doing, not just assume that because it is meeting a problem that existed before that everything that everybody could think to do is necessary and helpful.

i find that coming here and having these sessions is helpful for shaping our perspective. i do think you cannot look at what happened in 2007 without realizing that we need common sense reforms. i would also agree that the pendulum swings too far, you could compound the problem. >> i appreciate the fact that rather than telling the line i have heard over and over again that the huge fallout of the financial crisis was due to a lack of regulations, that regulation, that was the driving force of that. i appreciate your willingness to be precise when you were discussing that. i recognize the ranking member. >> tandy -- thank you, mr. chairman. let's talk about that more. there was a lack of regulation

to a certain extent that got us into this mess there were aspects that were not there that helped create this crisis. >> i intended to say it was both a lack of regulation and that regulation in a different respects. if you look at the mortgage markets before the financial reform law was passed, only part of the market was regulated. that leads to irrationalities because you have certain players in the market to let held certain standards and others who are not. that encouraged a race to the bottom or the irresponsible lenders were crowding out of the responsible lenders like community banks and credit unions. you can define these things various ways. that was due to a lack of regulation in a significant parts of the market and reflected that the regulation

because and a complete system will not work because it will encourage some to do things other people cannot. the very things you are trying to constrain among regulated entities. i think there was a combination of things. >> demented community banks. -- you mentioned community banks. i think he would acknowledge there is not necessarily a level playing field. our concern is how you handle that regulation, how to handle the concept. this is a different business model. complexity matters more to them. how do you balance that with community banks? >> if this was an issue that comes up over and over again for us.

we always make a point to have a roundtable with community banks and hear from them. i find very helpful sessions. they are pretty candid with us and talk about some of their anxieties and fears. some of those fears are misplaced. we did not enforce the law or examine in the institutions with less than $10 billion in assets. let me talk about their concern about the regulatory regime and how complicated that can be for them if they have at your employees to spread that burden over. i feel sensitive to this issue. as i have said and as we demonstrated, the first rulemaking we undertook was the remittance will not be finalized an inherited. we issued a supplemental proposal to consider setting a threshold below which institutions would be exempt from complying with that role if they do not do remittance transactions in the ordinary

course of business. we are going to set a threshold on that. it exempts some institutions from the role -- the rule. we were persuaded by the notion that smaller community banks have a model of serving their customers in the community where most of them live and reside, they are very high touch with their customers and did not necessarily have to be held through all of the same requirements and standards that larger institutions that are more remote from the community would be. that is something we will bring to our thinking about all of our rules. it is a case by case matter, obviously. also something we hear quite a bit about in the small business review panels we have been doing. that is a special requirement that the bureau has imposed.

no other baking agency is subject to that additional process. it has been useful to us. we are getting in sight from the process and it is helping us write better rules. we are also finding that it is advantageous and we have begun to see the wisdom of congress in imposing that requirement. >> there are several panels that apply to those issues and you could fill those requirements. >> i have also committed to creating a special advisory board of community banks and one for credit unions. we are getting close to announcing that which i will help give us insight. we did not have day-to-day contact. or law enforcement authorities against them. it is important to find other ways to make sure we have that strong line of communication.

>> i yield back. >> i will not recognize the vice- >> thank you, mr. chairman. i want to follow up on something you said. correct me if i am wrong. you have no legal authority against him in the banks and credit unions. not to me sounds like you are on one side and small banks are on the other side, as if there is a relationship that is more negative as opposed to one that is more positive. was that your intent in that remark? >> certification, that is not my view. -- sir, that is not my view. it is hard to characterize enforcement authority as anything other than enforcing the law against someone you are

finding in a potential violation. we do not have that authority to examine community banks either. we do have the authority to write rules that could affect the community banks. that is where we are trying to make sure we take a lot of input and are sensitive to the difference in the business model, which i tend to agree is a different traditional positive working business model that did not in any way lead to the financial crisis in this country. you want to make sure the pendulum does not swing too far. that is something we should be mindful of. we are trying to be mindful of that. i find that all of you might -- remind of that helpfully. >> small communities throughout the state rely on the positive relationship between the individual, the small business

owner, the job creator, with that bank. the reason i asked this, as i have met with that group of people, the small business owners, when i say small, someone who might employ 100 people. it can go up as 500 people. i am talking about the individual has maybe 15 employees who are telling me now that they do not have access to credit. they are not saying it for the reasons you are saying. but they are expressing to me is a concern of an over-regulatory burden. i want to try to figure out -- how do you deal with this when you're a small-business owner

cannot get credit because the credit unit is saying, we are small. we have stifling regulatory responsibilities, stifling regulatory burdens that are really stopping us from taking that reasonable risk to lend money to a small business owners of the can expand. how do you deal with the creation of this new entity? the responsibility of new regulation, but also take into account that part of these regulatory burdens could in fact have a negative impact on job growth and economic growth and on job creation. >> we try to take account of that by getting a lot of input from the entities. i want to go back -- >> you have not put together -- you said you put together a

group of community banks. >> it is not required by law, but i thought it would be helpful to have that. >> will you do that before any new regulation is put into place? >> we will do that within the next month or so. we are doing it right away. >> will it be before though? will it be before any new rule ered by the cfpb?ir >> let me get back to -- small businesses were constrained and were able to get loans in the wake of the financial crisis of 2008. that is when the credit freeze occurred -- all through the rest of 2008 and 2009.

dodd-frank was not even passed at that time. cfpb was not even created at that time. now it continues, the fallout from that. but we have only finalized one rule at this point and it relates to international money transfer is. the notion that we have created this amends burden of smaller institutions is absolutely incorrect. >> it is the uncertainty that people have. there is great concern with new rules on top of existing rules that i continue to hear from business owners and from community banks and credit unions. i go and visit every time i am back in new hampshire. i consistently hear this. it is an issue that i have been asked to bring back and ask you about and suggest to you if you are going to great advisory group of credit unions and community >>, that they have

real input and not just -- to many banks, but they have real input. that is the point i wanted to make that you were hearing and the people that ever present in new hampshire. i see my time has expired. i yield back. >> the ranking member of the full committee is recognized for five minutes. >> thank you. director cordray, it is good to see you. mark a. calabria makes it very curious assertion in his testimony. he wrote, "as an educator, i would say that the cfpb has slightly increased the costs of consumer credit by at least two full percentage points." had issued any regulation that could cause the tremendous input

that cato witness is asserting? >> as i said, the only rule -- two rules at this point. what role was a transfer rule. it was finalized in february. it does not take the effect until next february. no of the rules have been finalized. when you describe this as an educated guess, i would put the emphasis on "guess." but i did not think there is anything tangible at this point in time. >> do you see this coming? the percentage points? anything you can see? >> we think much of what we are contemplating an thinking most of is required by congress --

>> by us? >> yes. it would include the function of the mortgage market. that is something that we know that the mortgage market helped create the financial crisis. improvements in the mortgage market should be good for consumers and for lenders. credit went up because of the crash of the financial system. that is what drove up the credit. that happened in 2008 and entered in 2009 and endured in 2010, all before dodd-frank was enacted. all before the consumer bureau was created. that is the real timing here. >> i am not sure what mr. calabria got his numbers from. i will be sure that he will let us know. last week, the house committee held a hearing on the dodd- frank wall street perform and

consumer protection act. one person testified. this is what was said, " cut the dodd-frank and other financial reforms are credit lending has increased in recent years. have you heard similar accounts from other financial services? the think this is an isolated assessment? -- do you think this is an isolated assessment? >> i think it varies by institution. there was an awful lot of non- bank, non-credit union shadow lending and shadow indicia lending going on. there was a financing of non- bank lending. a lot of it was securitized.

a lot of it was you make this loan and you sell it to someone else. money was, essentially from wall street. most of that has dried up. that is a vast amount of lending in that sector. there are many who think that he needed banks have not been lending. they are lending. they are adhering to the same traditional business model we had before. the find it harder to get financing themselves. if that they are subject to capital reserves that can be a restraining. they are still plugging away with the same business model that has worked for decades in this country. what has happened is that some responsible money is drying up. that has been hard on a lot of people. it is a fairly natural adjustment coming out of the financial crisis we had in 2007-2008. >> he said something else.

he said there are times a we need to update disclosures. we welcome these regulations. we welcome it transparent institution. this is our mission. i know not everyone would say that, but she did. i am wondering for transparency, how did you see that affecting lending? quarks with everything that is updated and simplified, there is a transitional costs that occur -- >> with everything that is updated and simplified, there are transitional cost in the record. we are helping to stave off the financial bets that we saw crash the system in 2007-2008. it is better for consumers. it makes the market work better. it makes it a positive way forward. >> thank you, mr. chairman. >> ever recognize the gentleman from pennsylvania for five -- i

will recognize the gentleman from pennsylvania for five minutes. >> i appreciate your cooperation with us on this issue. i want to follow on some of the issues that have been identified by some of my colleagues. i too spend a significant time back in my community talking with largely small business owners and small institutions -- banks and credit unions. these are things that you have identified in your testimony as not being inside or outside the scope of the problem that a lot of outline years, the non-bank lending participating. what i am concerned about is the regulation that now it tends to deal with the issue reaching back and really affecting some of these institutions. let us take a point that would

be consistent with most of these institutions. many in my area out of 100 employees, maybe one compliance officer out of them, i spoke to a compliance officer. the fact of the matter is, we talk about the timing of the activities that are coming out. the small bank is dealing with the basil requirements. there was documentation that went out. to when did 50 pages of documentation. it identifies --250 pages of documentation. it identifies what they need to do. we had qualifications come out for what is a qualified mortgage. this was something small banks have been doing for years. the paperwork that identified 250 pages.k is about again, all of the fine print,

that is 250 pages. it looks to me like a litigator's dream. the real concern that i have in talking with my small community bankers was we took the 10 pages that was part of the lending act and the realistic settlement procedure act. i am distend implications of trying to make it simpler for the buyer -- i understand the implications of trying to make it simpler for the buyer. the borrowing needs to understand what is before him. for the banker, 1099 pages of regulations, 1,099 pages that one single compliance officer

will have to go through to understand what it means to be able to interpret a document which has been in existence for years and interpreted many times by the law. how are we going to take this and draw distinctions so that these bankers are not pulled into this regulation? i am concerned we will drivability of the small banks to continue to service the community. one of the bankers that i talked with was discussing the fact that when you have 100 people, you are very tight with regard with what you can task each to do. there is enough cash on hand to consider one are two new employees in the company year. did they hire lending agencies that can go out into the community and negotiate loans? or did they hire a compliance

people? in both cases, it was compliance people. we are spending money on oversight, particularly in institutions that may not need the same degree of oversight as though who were the abusers in the process. tell me how we will approach the ability to try to beat fair and effective in the engagement with the small community banks so not to jack up the very objective of creating credit in the first place? >> i appreciate the question, congressman. the question has been much misunderstood in the role in the truth and lending act forms. it is something congress has been complaining about for 20 years. it wanted the forms simplified. it is much more than 10 pages. it is something that is now being accomplished by the bureau

for the first time in 20 years after 20 years of failure. the notion that there is 1099 pages rule is not a correct statement of fact. in that ruleisis the details the efforts made to reach out to smaller institutions and to brief the panel and so forth. much of it is the killing the costs-benefit analysis. -- detailing the costs-benefit analysis. you cannot complain that the bureau does not engage in a sufficient and detailed process, and then complain when we have a lot of pages in the analysis that you told us you want. it is not a right that the bureau that thdoes not do enougd then complain when we do the outreach.

>> is this a guidance than? it will be directed to the small community bankers that will have to look at this and interpret the 1099 pages to be able to determine what the terms of the act means? >> the have had extensive input into the forms. >> what is the purpose of this? what would a small degree do with this document? we know with 1099 pages, there is an expectation? litigators will expect this that they have read and understand the implications of everything within. >> only a small portion of that is the role. there is a detailed analysis that congress says it was to require before write a rule. before the detailed analysis and present it, it is something that is required of us to justify their role.

again, to complain that the agency needs to be careful and thorough in its process of developing the proposal -- it is a proposal and not the final rule. then to complain that it is too many pages, you cannot have it both ways. we are told over and over again that they prefer specificity. they do not want us to write a short rule. it is counter intuitive. they do not want to have a short rule where everything has to be interpreted and go into the courts and have been interpreted through litigators and hiring lawyers. >> i do not want to step on your appreciation. i appreciate -- my concern is that justice will provide more litigation. you yourself were a former government attorney. the ability to look at specific cases and then fine

distinctions and asked why we did not apply those particular circumstances create a litigator's dream. >> again, a short rope that is general and vague will leave a lot of things mushy. there will have to be many things the will be litigated. this is the only way to get things resolved. they want us to avoid that. they want us to be specific. being specific means greater length. it is a challenge that we are working through. we have got a lot of input from the small providers you are talking about. they are thinking about how the rules will affect them and thinking about imposing -- all to millie, you are the referee. -- ultimately, you are the referee.

we will take this and put back. -- input back. >> thank you. a thousand pages will making seems a little more than on the excessive side. mr. welsch from vermont. >> thank you. mr. cordray, i remember your first appearance before the committee. any change in the heart about this issue? >> sometimes they prefer a more specifics. nailing everything down so there is specifics. >> i understand the concerns expressed.

i think congress -- we are mixing up some of the issues. on this question of the dodd- frank regulation, there are two issues. one, i think all of us recognize that what makes sense is quite a bit different than our small community banks that did not contribute to the problem. all of us would much prefer to not have the regulations be over broad for the banks doing their local work and did not cause the problems. they should not get swept up. second, one of the questions here are on the big banks and whether they are too bid to regulate. j.p. morgan had an exposure to trillions of dollars.

instead of regulating, would it make sense to require them to put more cash into the transactions so that there be a very compelling institutional in test to minimize risks? i say that for my colleagues. that is one way to try to deal with these institutions that are too bid to regulate. the third point is that my understanding and in the institution it will be there to protect consumers from some of the practices that could hurt them. i have talked to small things.es and turn thingheard i am sure you heard from individuals on how confusing it is for them to deal with banks or parents to deal with student loan forms. i want to go over a couple of things. i think you are terrific. the cfpb created a new student

loan to help parents and students figure out the costs of college. that is really good. tell us a little bit about that and what its reception has been. >> sure. institutions across the country represent millions of students who have their shopping sheet. it is a uniform version of what financial aid you're getting. it helps you understand what it will costs and what payments schedule you have out of college and whether you would be able to afford it. what rights you may have it in you have trouble repaying the forms and -- the loans and the like. most people if they have a young person in the family has recently tried to get a higher

education, they need to know very clearly before they make the decision what they are getting into and have their regrets. >> in addition, your settlement with capital one revealed rip- off practices and your success in getting returns to consumers. is your organization working to simplify by credit card context of folks -- so folks have it simply and understandable? >> we are trying to do that. the industry is beginning to see the merits of that as well. we're not proceeding by a compulsory will making. we have modeled forms that were proposing -- and moving in that direction.

the idea is to keep it simple. they can absorb 60 pages of a credit card agreement. -- can not a soared 60 pages of a credit card agreement. >> tell us what the rules are. simplification works in their view as well as for the consumer. any comment on that? then my time will be expired. >> from my background at the county and state level that if community banks are able to compete on a level playing field with the larger banks, they will do better. they have superior customer service. that is what people really want from a financial institution. i think it is important for us to keep up playing field level. we need to recognize, as it was noted earlier, that compliance burden falls more heavily on a smaller institution. we can lighten the load to an extent are exempt them at times

that are appropriate. >> thank you. thank you, mr. chairman. >> the gentleman from michigan is recognized. >> thank you. i will yield my time to the chairman. >> certainly appreciate that. mr. cordray, in april of 2012, the cfpb outlined their views on failed lending and how to pursue actions related to that. you are familiar with this memo? ok. in this memo, the cfpb adopted a document. it takes an tent out of the viewing discriminatory -- intent discriminatory actions.

is that right? >> we adopted the same position taken for 20 years. a new agency had not yet spoken on that issue. we do join our fellow regulators in this impact as the law of the plant. >> you are familiar with the press reports about the city of st. paul's court case and the department of justice pressure in this city of st. paul to withdraw that a law suit. >> i do not know how familiar i am with the details of that. i am kind of an outsider on that. it is not one of the cases that we enforce. i do now it was resolved. it was all through a settlement. that was my understanding.

>> icommittee is investigating whether the city as a pulp was pressured into a settlement. the department of justice is concerned that the court would have struck down this as a legal doctrine. >> i see. that would require overruling prior decisions. >> have year and a bigger stock and contact with the fastes assistant general perez? have you had any contact with the assistant general perez? >> i happen to know him. he is related in a marriage to a woman i used to work with. that is when i first heard his name. we have had dealings with him in

our agency with fair lending matters. there has probably been a fair amount of context and the work that we do. >> i would ask you to submit for the record those contacts and whether or not they have entailed discussions of the use of disparate impact in dealing with their spending practices. >> i am sure staff would be happy to work with their stuff on that. >> as it relates to all of this, because disparate impact involves showing no intent to discriminate, lenders have no way of knowing the whether or not their practices could be subject to future fair lending suits. do you think that adds to

uncertainty? is there any way for the cftc to alleviate those fears? >> i think it has been the law of the land for more than 20 years. to the extent it is adding to uncertainty, it has not really changed in the last 20 years, maybe 25 years. this is the same test use in employment discrimination cases as well. i think it was adapted into the fair lending context more than 20 years ago. i think it is established law. i do not know if that is adding to uncertainty. i do not know if it is whether the established law would be changed. it is always in the prerogative of the supreme court to change the law if they see fit to do so. i guess that would be subject to uncertainty if that were to occur. >> thank you, mr. chairman, for

calling this hearing. welcome director cordray. i was reading the testimony of one of the panelists to come and that is the cato institute. on page 3 he says that the spread of rates on credit-card loans has remained wide since the end of 2008 in part because of price adjustments made in response to provisions in the card act. he failed to acknowledge the federal reserve's footnote. he was talking about a report that i have here in which the federal reserve says, the widening of these spreads is due to the restrictions the card act placed on issuance ability to impose certain -- protecting

consumers. i would like the unanimous consent to place on the record the federal reserve's full statement on this. highlighting the fact that i just said. >> without objection. >> it also goes on to say the copy in such abuses such as raising rates retroactively on balances, giving the consumer the power to opt into higher rates if they so approve, stopping certain tricks and traps of changing the rates of charging the on interest that has been paid and other things that were happening, i would say that the card act has gone a long way toward protecting consumers from abusive, unfair, and anticompetitive actions. that in some cases the industry has raised rates in order to raise their own revenues. i would like your comments on

that. i would also say the card act has giving consumers more choices to go to providers that have a lower interest rate. would you comment from your own experience of how the card at is impacting issuers, consumers, the overall economy? i can say from my point of view i do not get complaints from consumers any more about their credit cards. they seem better able to manage their credit. there are fewer people walking away from their credit cards and leaving that burden on the shores and that it over all has been a success. your comments on what you are finding in your new position. congratulations on the transparency bring to consumers. >> on the card at the particular we gather issuers and had information for them early in our time to assess how the

card act had affected the credit-card industry. we judged based on the evidence we were able to amass it has had a positive effect on the industry, a positive effect for consumers. it is not unduly constrained access to credit card credit. those initiations are growing a tremendous amount of solicitation going out on the market. i think they have adapted to that. i did not quite understand, but i guess he will submit for the record the notion that the card act would have given that it did not pass until 2009, i am not sure how all the dates work together on that. in any event, in our view the card at from what we have seen so far has been successful in reining in some of the excesse'' that have been hurting consumers but at the same time the credit card issuers have been able to work with that have implemented

it successfully and are initiating a tremendous amount of credit card availability of credit for individual consumers in the marketplace as we speak. as you notice, delinquencies have been down. >> delinquencies are down. still there is over one trillion dollars in credit-card debt and our nation which speaks to many americans being in debt. do you believe overtime the credit-card act will bring down that indebtedness? >> id may. i do not want to speculate too much on the cause and effect. i think the crisis has brought down credit card debt as the savings rate has jumped up again and people have been paying down debt. i also think we should know that credit cards are a tremendous convenience for consumers. the ability to engage in a transaction without having ready

cash because credit cards are the medium and the means of assuring those transactions is very important for people. has created a amount of convenience for consumers that they appreciate and value and they are able to pay for. they should pay for it in a clear eyed way. they should understand the credit and risk of a credit card amount. much of that has been achieved through the card act. we view it as a success. we will continue to monitor its effects. we are taking credit card and plans on our web site and compiling those and taking a look at those. i would say that there are many areas we are not getting complaints are and then i think before we would have received a tremendous amount of complaints on. >> 2000 responses to the fed's questions during the review process. thank you for your hard work. >> thank you for holding this hearing and thank you to mr. cordray for being here this

morning. my first line of questions has to do with retrospective analysis and whether or not the cfpb is conducting any retrospective review of its regulations in order to determine the consequences on the consumers as well as any regulated entities. >> retrospective analysis -- this is one of the things i testified in front of the committee before and others. i think this was missed by the regulators previously. is something which should be attentive to. you can keep adopting individual roles and in each case it is well meaning and in each case there are reasons why it would make sense that would be protective of people. you can kind of forget overtime about the aggregate burden the rules create and you have more and more -- how much does that do for people. but i do not mean to be rid it. i have never seen five minutes

go by so quickly. -- i do not mean to be rude. you are acknowledging that they should be done but they are not being done? >> one of the things we did that we are not required to do is we is launched a streamlining initiative to launch all the rules we inherited. we are not invested in them. we asked people to give us their input and what could be streamlined, cut back, eliminated without hurting consumer protections. and what was good the same protections be delivered at less burden for institutions. we have a lot of good and put on that and we are digesting that and will be looking to streamline reads. >> my concern is you are looking at the entity's affected by this and you are making sure that those -- that is really my concern, not whether it is coordinated or a in the aggregate. whether these rules are affecting the either the consumer or the affected entity

by dodd-frank. is that being done or is it considered -- will it be considered? >> as we go forward with new rules, yes, that is a consideration that we have and are required to undertake. we are conducting small business review panels so that we hear directly from small providers and get their input at a very early stage while we are still formulating proposals. that has been useful for us. if we were not sure what to make of that to begin with. i think it actually has been processed. >> if i could for the purposes of this hearing this morning, would you commit to adopting formal procedures that will for retrospective review of all of the cfpb rules including a review of how the rules are affecting credit access? >> i see. i should have said this earlier. in our lot -- i am glad it is in our lot -- we are required to

after five years considered whether it is having the impact we intend for it to have. whether they are unintended consequences or burdens we did not appreciate at the time. we will be hearing from the institutions. we hear from them all the time. at a minimum every five years we have to do that. it will not just be a- accumulation of rules overtime without regard to what that does for institutions. i think that is what you are getting at. >> i am concerned that there is not going to be a look at these -- these new rules have gone into place because of dodd- frank, whether the cfpb will agree to make sure the rules -- you understand and do a retrospective review, not going forward and figuring out how to go into the future, look at what has been done. how they are affecting not only a consumer but also the agencies

that are being affected by this law. >> in terms of our corner of the world, we both are engaged in a streamlining initiative looking retrospectively at royals we inherited. with every rule that we proposed not only do we get tremendous input as we work through it, at a minimum every five years we will engage in that retrospective analysis of the rules. i do think it is built into the process for us. if i am not quite satisfying your line of questioning, we would need stuff for to see what you would like from us. >> i would like to see a five- year commitment. also is it too long period of time? >> foursome it may be. for others it may be even to quit. i think it is probably a good compromise. it is hard to draw those lines. >> i see my time is expired and

i did not get to my last two questions. >> thank you. we will recognize mr. kelly from pennsylvania for five minutes. >> thank you. thank you for being in front of us again. we printed out this "get to know your borer," information. -- borrower" information. the people i talked to when i go back to pennsylvania are small banks. today's hearing was the cfpb restricting consumer access to credit. 40 pages of this are the cost- benefit analysis. the rest of it these people have to know. for the small banks, we may say, they will be ok. they're going to get through it. i have gotten to the point where

too big to fail means you are too small to survive. if anyone suggests there are any way is the small banks and lending institutions can go through the same process and come up the same on the other and is ludicrous. where i come from, we rely on the small banks. the credit unions. i am looking at this and i am talking to people who i grew up with, went to school with, our wives know each other, our kids know each other and they have to sit down and get to know who their barges or is and what a qualified borrowers is. does this make any sense to anybody? these are common-sense reforms that will make it easier. it is not making it easier. is making it more difficult. access to credit cannot be done over a long period of time. people need it now. if you need a transfusion of capital, you need it now. when you go to the small banks,

they say, i am not sure i can do that for you. the reason they are doing it is because they are not sure that they can survive what we are putting them through right now. i am not blaming you on this. while the patience are waiting for people to do the diagnosis, they are dying. access to capital is critical to small businesses. we are talking about an environment where we are trying to get job creators back on line. they do not even know if they can borrow money anymore. my covenant changes every quarter. my collateral changes all the time. what used to be acceptable collateral is no longer acceptable collateral. the people i used to go to say, sorry, we cannot help you because we are trying to sift through the regulations. while this may have been well intended to start with, where you are sitting, please tell me

-- it will be easier for access to credit or harder? easier or harder? >> first of all -- >> easier or harder. for small banks to lend money right now. >> the reason it has been difficult -- >> i am just asking you easier or harder. i do not need -- i do not want you to build me a watch. >> since 2008 it has been harder. >> banks are merchants. they have money on the shelf to lend to people. that is what they do. when we make it harder for people like me, small businessmen to have access to credit, if it is harder to get credit that is harder to stay alive. in an environment where we want people to survive and we want people to take the job, go out and borrow the money, they cannot go to traditional lenders because lenders cannot sift

through this. >> that is not because i do not believe, sir. since 2008 it has been harder for smaller banks to lend because we had a financial crisis and a crash. >> i existed in that world and i know how hard it is to survive in the real world. only inside this beltway do we come up with solutions that are so difficult nobody can pull the trigger anymore. the purpose of this hearing was, are we restricting consumer access to credit and the answer is, yes. we are making it so hard for small banks and credit unions to lend money the rest of us are tap dancing around the outside. they are going out of business. >> would you like me to respond or listen? which would you like to prefer. >> i would like this administration to listen because they have a deaf ear when it comes to what is going on in the private sector. i can appreciate where you come from. in my business we go into hand- to-hand combat every day. i do not need 1100 pages from a

guy i have known all my life to tell me if i am qualified or not. that is the purpose of this. there is no answer to it. it is government red tape keeping this economy from recovering. i came out here to fight for people in the private world and that is what we have to continue to do. >> the gentleman's time has expired. if you want to respond idb the time. >> we are not asking anybody to give you a 1100 pages. this is making forms simpler and clearer so people can understand the risks of credit. that should be good for the system. we did not do that in 2006, 2007, 2008. all of these institutions were hurt and many of them failed. we now need to improve the process. when you are telling me and what i need to hear from you is, as we improve the process, do not make things worse for these institutions.

we are trying to be mindful of that every day. people who want us to go to a very thorough rulemaking process, it becomes a lengthy process. the one to complain it is a lengthy process and is a lot of pages. the rule part of that is a small part of that pile. the forms are going to be simpler and more uniform. that is what we try to accomplish. that is something congress has been asking for for 20 years. we are now able to do that. i hope that is a step forward. i am interested in your input and we are happy to hear it any time as we go. we hear from the same institutions you hear from. >> while we debated they are dying. >> we will now recognize for a second round of vice-chairman. >> thank you. i am not sure that congress has been asking for 1000 pages of guidance to a rule. i think maybe what congress has

been asking for is a term used by mr. welch and by you as well -- simpler process. while the form might have been contracted to one or two pages, the guidance with that form in many circumstances appears to be 1000 pages. that i think is the concern community banks and credit unions have moving forward. will the guidance along with these forms be so large that they have a choice between dealing with a regulator as they hire a compliance officer or hiring somebody backing grow or expand their business. when you say you want to listen to our input. our emperor would be that if you are trying to make our -- if -- our input would be if you are trying to make things simpler that is a good goal, but the guidance also needs to be simpler. that is what you are probably

hearing from both sides of the aisle. i want to read from testimony that will be given later by mr. fletcher. he represents the credit union's national association. page three of his testimony says, every dollar a credit union spends complying with these changes is a dollar that is not spent to the benefit of credit union members. he goes on to say that because credit unions are member own financial cooperatives, the entire cost of compliance is ultimately borne by credit union members. my concern is that additional compliance, over regulation will feed into a credit union or a small community bank's inability to let in the future. can you talk to me again about

how you will balance what you view as congress oppose the mandate to the cfpb. the reality of them needing the direct access to community banks and credit unions. >> one of the ways in which we are trying to balance that is by getting direct input from the community banks and credit unions to understand their circumstances. i know from my dealings with them that there are quite a number of credit unions in particular that involve very few employees, may be less than 10. it is our view that where we can potentially exempt them from burdens that we should look for the opportunity to do so. they follow a traditional business model high touch with their customers that does not

necessarily require making it subject to all the things we do for more remote banks. that is something we are trying to do. keep in mind as we draft regulations and figure out how they should apply. we are keeping a very open line of communication. i think we hear from the same institutions that you hear from. i invite the committee to come see us and we see them as we go in around the country. we are trying to be mindful of this as we go. at the same time, the cost of a failure of compliance was a financial crisis, a crash of the system that killed a lot of banks and credit unions that folded up because you cannot operate in a system when credit is not flowing anywhere. that happened a denture 2007 and 2008 long before the cfpb came on the scene. >> was it the entire system or

the individual actors? right now the cfpb seems to be going after the entire system rather than necessarily individual bad actors. >> that is a good question, but i think it is a combination. there were a lot of bad actors. many of them were enabled by a system that allowed them to operate fairly freely because we work regulating the mortgage market and not regulating part of all. i think obviously what you are suggesting is we want to vigorous enforcement of a lot to weed out the bad actors. at the same time the question is, what additional regulations are needed. are they really needed? >> let me clarify what i am saying. i do not have it in front of me but i read earlier somewhere that part of the focus of dodd- frank -- congress has directed the bureau to identify and address updated, unnecessary unduly burdensome regulations to

redo -- reduce regulatory burden. i would love it if you focused on that because i do continue to hear from community banks and credit unions about -- i am talking about smaller individuals helping those people who are our friends, neighbors who live in our communities. i am glad you mentioned the size of credit unions. we have 7200 credit unions. half of them are 10 or less. ec 300 a year merge into larger credit unions. that is the hub the consumer get greater flexibility to the market. -- that does not help the consumer get greater flexibility and access to the market. i yield back. >> i will now recognize the ranking member.

at >> thank you. just to review, we are concerned about community banks and the unique roles in our communities. what do you see the exact role your agency has in addressing the issues that they were created for as it relates to community banks, and how that is different from larger banks. >> our job is to protect consumers. in the financial marketplace, which is a difficult marketplace for the average consumer. we intend and wish to do that in a balanced way. we want to make it possible for consumers to better understand the decisions they are making. allow them to make more informed decisions because the consumer will make the best decision if they have the information to do so. as for the providers, they have to be able to provide credit. that is important.

they have to be able to do it and easily understandable way. the conditions under which smaller banks and credit unions operate are very different i think. that has been my experience from the largest volume banks that we immediately oversee. they have $10 billion in assets or more and a multitude of employees. what we are trying to do is to balance both a regulatory regime that is taking account of the problems that consumers had had in these different financial markets, but is also trying to understand that of community banks and credit unions are very high touch, good customer service to their customers, that they may or may not have to be subject to the same requirements as the larger banks that operate

at more of a distance, someone more of an anonymous and volume and a statistical driven models of lending. that is a balance we need to try to strike and we are trying to strike a particular with lots of input from institutions affected. >> so far, what have you put in place as it relates to small banks? have any other rules passed? >> we have only had two final rules. one was a status quo placeholder while we consider a matter further. the other is a remittance rule finalized in february and is not take effect until february 2013. it has not even gone into force for any institution yet. all of the rest of it is anxiety and concern and hypothetical. none the less i take it is very

real and a lot of banker's minds. we are trying to understand it. we have tangible rules that have been put into effect. there has been minimal impact on institutions today. >> thank you. i yield back. >> we will now recognize the gentleman from pennsylvania. >> i do accept the objective of trying to simplify things. it reminds me of trying to build a gas grill. we all have been through that once. you know, here is h24a. this is the blank form. a blank loan instrument that shows the requirements of section 1026.37 that implies there is about 1000 other sections before that. this provides two variations of

page one, four variations of page 2 and and eight variations of page 3. then i have to go back to 1026.37. the complexity of this is overwhelming. that is not where -- i think i want to use a couple of the minutes. many of the local bankers are concerned about the definition and whether we are going to get into new kinds of litigation possibilities. i wouldon the definition regardg where the will be a safe harbor interpretation or whether or not there will be a presumption. my reading is that in addition to the actual information, there are a series of evidence that will be introduced about the nature of that track jackson -- a transaction.

>> the qualified mortgage will -- rule which was something that car to little attention was paid to in the early debt to the fund into crisis and that too many bad mortgages being held that failed that brought down the financial system, the idea here, congress has required this will be adopted. the federal reserve put forth an initial proposal. we are working on finalizing. the idea is there will be a realm of qualified mortgages that if they meet certain characteristics, there does not have to be in the attention to repay because the features of those mortgages themselves should accomplish that. with the other mortgages outside of that definition, the

nonqualified mortgages where they will have to document attention to the consumer's ability to repay, it has been conveyed to us clearly by people across the spectrum that if the qualified mortgage relman has gone -- is drawn to nearly, that could upset the mortgage market. that would be a notable example of the rule itself potentially restricting access to credit. we are very concerned about making sure we do not do that. we have backed up our timing on this rule to consider it further. we did quite a bit of data from fhfa about mortgages. there is a law that if you gained significant new data, you should give people an opportunity to comment on it which we have been doing. >> do you expect much lending outside of the category of

qualified mortgage? >> it is hard to know what may happen in the long run but what has been conveyed to us is that in the short run, the next three years, there is unlikely to be a lot of lending done outside of the qualified mortgage circle. therefore it is important for us to be more inclusive in terms of what comes within that circle. that is all input we are digesting and try to take into account as we finalize that will before the end of this year. there is a provision in the bill that talks about the three day window in terms of changing during the course of the transaction requiring a new disclosure. i am this current -- concerned they may get to a point where you are getting towards the end of the transaction, what could be the normal discussion in the course of a negotiation about who may be responsible for

fixing a basement or something, could change the terms would require a new period of disclosure which minstar steps process again -- which may start the process again. will there be flexibility to allow their to be some movement within the terms of the transaction without having it be triggering a whole new set of disclosures? >> nag you are talking about a different role which is -- now you are talking about a different role. part of the proposal there is that people not be ambushed to the closing table. that they get these disclosures three days before the close said they have time to review it. you know how the pressure comes at the closing table. there is all that information and much of it is required by state law and the lending

institutions themselves for protection. people are being pushed to sign, read it and not understand it. if people can have the information three days before, that gives them a better ability to understand and engage the transaction they are entering in 31 to minimize the impact the debt could have on tying up a transaction on the expected date. we are trying to get input on this to the proposal stage which is where we are now. your comments -- which is similar to others, we think it is important for consumers to have some time to look at this. it is the biggest single transaction they are likely to engage in and did they do it on

their last bases where they do not quite understand what they are getting into, they could make bad decisions that will haunt them for the rest of their lives. >> i hope you look for -- flexibility for that. one more issue -- the implication on small and medium- size institutions with requirements for machine readability of documents and the cost that may be associated with new information systems that will have to be attained to do that. i am hearing a lot about that question. auspex -- aspects -- >> we are too. >> the gentle lady from new york. >> i have to comment because i have been sitting here listening. there are two tones that really concern me. one is condescension.

that the american people and consumers and small businesses trying to consume services from banks cannot do it without the federal government or without 1000 pages directing them. . it is condescension and is a 180 degrees from what this country is about. we do not need the government to take care of us. this is the most well-informed consumer worklld out there with the internet and people doing legal services online. yes, there are bad players, but this regulation and this whole approach looks at all of the institutions as if they are the enemy and they are the cause

of this meltdown we had in 2008. it is what government does best. it is one big hit footprint. we cannot choose the offenders and the ones who heard the consumer versus the whole industry. that has always been my argument about government. it does not have the ability it is 1000 or 2000 pages and a whole industry and it impacts everyone. the condescension that we cannot do it without the federal government i find particularly offensive. i think the american people are far more sophisticated than the federal government gives them credit for. >> i do not think there's anything condescending about my attitude towards these issues. i have been in these meetings in the community where people have lost their homes, lost their jobs because the financial meltdown. this is a very real human problems for people.

they are tragic problems. that is where the system that espy. so the notion that everything is working just fine and is that the federal government out of the way is not of the neck to be squared with the facts. there is nothing condescending about my attitude. these are people's lives. people have been had affected by what went on. they were innocent bystanders. many people paid a flea on the mortgages and found their homes of the water because there were 10 other foreclosures in their community because of that lending. people need us to fix this problem. we will work hard to do it. i will do it with your input, thoughts and perspective and try to keep them very much in mind. >> i am sure we could debate the rest of the morning of what caused the meltdown and apple k dd -- and that dodd fran --esn't handle faniie and

fannie and freddie. in january, we asked -- as we get into the term abusive, i will read you testified to in january. we have determined this is going to have to be a fact and circumstance issue. it is not something we are likely to be able to define in the abstract. that was when we asked you about the definition for abusive practices. do you recall that statement? >> i do. congress defined the term abusive. it is in the dod freank fact. congress told us what it means. congress said something, we accepted and follow law. in terms of how to apply its to

individual circumstances, it has to be done with an eye for what those circumstances are. >> the cfpb examinees' emanuel defines deceptive and unfair practices and yet there is only a paragraph on abusive and that is what led to the question in january. my concern was that vagueness -- that has a chilling affect when you cannot define what abusive practices are, how are the lenders supposed to know what constitutes an abusive practices? in my mind, the uncertainty. and apple have on the industry, i have seen it all the time. i will yield back. >> mr. cordray, an outstanding

job you have done as the director. for the law this time, we have had the consumer product safety commission that could give us confidence that if we bought a toaster it would not blow up and down our faces. we have not had that same confidence when it came to credit card, mortgages and the like. credit reporting agencies have been mystified to the american people. they are not government entities. they are independent and get their numbers and the way they come up with their numbers says a lot to the consumers about whether they will get credit or not. 700 used to be great could restore -- credit score and now it is not good enough for most. the fica score is unclear what scores are being used. many agencies have different

scores depending on what product is being anticipated or what you are paying for that score. my first question to you, you pointed out last monday in detroit -- no single federal government agency could access all of the information necessary to generate a complete picture of what was happening inside these companies. isn't it true that your supervision of credit reporting agencies have a potential to create a huge positive impact on some individuals' ability to access credit? >> i appreciate that ankle on things -- that angle on things. we found that there are many people who do not fully

understand or maybe are unaware of how much impact on their lives a credit reporting agency has. they are keeping score, a file on you on the time. every billion paper did not take, what you pay later on time. -- every bill you pay or do not pay, whether you pay late or on time. it can affect things like whether you get hired for a job. that is a part of background checks now increasingly in a lot of workplaces. to the extent we can deliver more transparency, more accuracy in credit report files, that should be good for consumers and for lenders. they pay for this service. they paid for the credit report information. it is not accurate, then lenders are harmed by that because they are making arms -- loans on terms they would not have used

had they had acted information. it is a very good point that as we can work with the credit reporting agencies to make sure the process as far as they should be, that they are accurately pinpointing an affirmation and maintaining it and that they are cleaning up errors that consumers bring to them in their file. that is good for consumers and lenders. >> on july 17 in a column in "the washington post," for years consumer advocates complain that the information collected often includes errors. under the fair credit reporting act, in the business must correct inaccurate information. however, surveys have shown in getting information removed can be an exasperating experience. let me tell you, i have personal experience with this issue. it takes years. it should not take the years to correct inaccurate credit

reports. is this something he will be able to address now having jurisdiction over the credit reporting agency? >> we will. i have had experience with that as well and we had legislative efforts in ohio that i was involved in. people bought in there's huge boxes hold all the information and contact they had to try to get things corrected on their credit reports. in many cases because they were victims of identity theft. it still can take months or even years to get this resolved and a lot of hours of time stuck into this and lots of frustration. so i do think that we are going to be working with the credit companies on three areas concerned. the kind of information they receive from others which often can be inaccurate or polluted in various ways, how they maintain and assemble the information and what kind of error resolution procedure is in place for

consumers said they do not have to go hoops to fix problems they did not create themselves. >> can i ask one follow-up question? >> go right ahead. >> in california, we passed a law that required that if an employer would access your credit report as an applicant, you had to be notified of that. do we have a federal law that does that? >> that if someone is axing -- accessing your credit report, you have to be notified? >> if you are an applicant for a job and an employer is accessing your credit report. >> i do not believe that is addressed in federal law. i could be wrong. >> we have a lot of federal statutes. i now recognize myself for questions. the head count at the cfpb is

roughly at this point around 1300 people. is that about right? >> we are actually not at that level. i think right now we are more like 950. >> 942 was the 2012 estimate. i was not sure if he moved into the 2013 out -- outlook. the fdic and the ftc have the chief economist. you have a similar position within the cfpb? >> we have a research division that is composed of various people, including economists. we also have a market division which also engages in a lot of analysis but maybe with something more of a direct practical operations of the industry and how they work and

how different markets for products worked. those are two different sources of an affirmation for the rest of that bureau. -- sources of information for the rest of the bureau. i do not know that we have something we designate as chief economist. we have economists at different levels, including those who supervise others. maybe you could characterize as someone in that hierarchy as the chief economist. i do not know that we have used to that title. >> who has the final sablan u.s. a cost-benefit -- the final say when you have a cost benefit analysis? >> we have an experienced and regulations team, many of whom came from the federal reserve. we have the research and the market's people. we tend to work in a cross team bases on a cost-benefit analysis

because it is time consuming and somewhat elaborate. we want to make sure we get it right. in terms of how old -- how that its processed through the bureau, that would go up to the associate director for the division which we call our research markets and regulations. they combine together. i would have signed off on all of that. >> that is a different process than what we just went through with the sec try to make sure you have a group of economists that actually have the opportunity to do a cost-benefit analysis before final rule making is issued until the public has some proper knowledge of that. i understand you do not have much clarity on what the process is. in terms of being two hours in on your testimony.

your process that is similar, that would be the counterpart to the what the sec or fdic does. >> we developed our process after consulting with other agencies because they had years of experience with cost-benefit analysis. we tried to learn from them both what they did that they thought worked and what they understood had not worked very well. and we drew up our process accordingly. i do not know that it mirrors what is done at other agencies. there is probably some uniqueness in each of those processes. >> would you provide for me in a written response outlining this procedure and practice? >> i would be glad to do that. >> i certainly appreciate that. in terms of behavioral economics, what utilization -- how does the cfpb utilize

behavioral economics? compaq >> we are trying to build behavioral economics into what we do. we are trying to not make judgments in the abstract and academic way but about how consumers actually believe and how our rules and other activities should take account of what kind of things consumers actually do. industry does this very well. they have been attentive to the new behavioral economics. they think about that as a market product. they think about that as a design product and the kind of products they are looking to deliver. it feels like we need to keep up with industry. we also need to be practical about how horrible actually apply. it is one thing to write a will in the abstract -- a rule in the apps check but if it is not

coordinated with how consumers behave, it is not very helpful. we are doing a lot of consumer testing around the forms and the combination of the truce in lending act reforms. a lot of testing with consumers to try to see what they are ticking away. what they are understanding, not understanding, what they are getting. there has been some disagreement about this, to take the apr and put it on page 3 of our form rather than a page one because it found consumers were typically confused by that. it was in practice not as easy for them to understand as many people thought would be the case. we are trying to respond to what consumers actually do, to what they actually know and understand. >> your use a behavioral economics is to one form -- to

inform regulators how consumers make decisions. there is also attention with a net in that -- within that in that there is a substantial part of the haverhill economic theory that would tell you you need to limit choices -- behavioral economic theory that would tell you if you need to limit choices. decisions versus limiting products is a great concern from my perspective here on the hill because it should not be a regulators policies and procedures that leads to limiting choices for consumers. it should be to inform how consumers make decisions so the regulator understand that not

for the unregulated to prescribe that limitation of options for consumers. do you agree or do you disagree with what i have just said? >> i think what you just said is a great insight and it is something we wrestle with. much of what we have been doing has been targeted addressing clearer, simpler, straight forward disclosures said the consumers can know what choices they are making. are there times where certain acts -- and i tend to focus on products. i share some of your skepticism about as banning products. but the statute speaks to is as addressing acts or practices. so the enforcement action that was completed had to do with deceptive marketing of products.

we have really not been thinking in terms of banning products. to the extent that that may be some portion of the behavioral and economics school of thought, i would confess i am not an expert. i am learning about it. i had been learning many things since i took this position. i do not know that is a focus of our attention so much is trying to understand consumer behavior, some of the things that are not necessarily obvious or rational. for example, there is a greater concern about losing it and then there was about obtaining it in the first place. some constraints were consumers may tend to doubt meeting downplayed things that occur more in the long term -- to downplay things that occur more

in the long term. i do not tend to think, i do not think we are approaching this from the standpoint of limiting choices. but i am not sure i fully understand the entire school of behavioral economics. >> i appreciate your humility in that answer. i just want to understand your from a reference for this process. if i can close by asking a couple -- if you can keep it brief. this question of abusive practices. do you have an intention to lay this out in rulemaking in a formalized the way on what that definition is and how the bureau

sees it? >> i am not close minded on that subject. at the moment, we have no present intention to launch a rulemaking on that issue. we are pretty tight after the remainder of this year. we will be hard-pressed to meet those deadlines although i believe that we will. we have been examining institutions are around the procedures. i do not know that we to date have identified specific a piece of practices although much of that is in process. i do not think we have an intention to launch an adhesive rule making at this time. >> so the answer is no >> that is correct as of this moment. >> would you commit to a process for a value waiting -- let me restate this. would you commit to formalizing

the process for a value witting credit access and will making an examination? >> it is part of our process now. >> but would you commit to formalize in that process? >> i am not sure what you mean. i see. we have an examination emanuel. it borders on alongside -- we have an examination manual. it borders on the long side. we had given guidance about particular products examined around those modules that are also on our web site. they are publicly transparent for institutions and others to assess. our rule making process is very stylized in terms of the law. we have the proposal stage, -- we have the proposal stage, --