and fair and wise and well thought out and that does what? that creates the most competitive tax code in the world right here in the united states. mr. speaker, it could be great. we could have a great tax code but what we've got to do is create a year of certainty to move forward. i urge the passage of this and i yield back. the speaker pro tempore: the gentleman yield back his time. the gentleman from michigan, mr. levin. mr. levin: i yield myself 15 seconds. it's ironic that the gentleman from illinois min midses adding $50 billion to the deficit over 10 years of continued -- if continued, which is your policy, would be $1 trillion. that's something you just shrug your shoulders at? i now yield two minutes to the gentleman from oregon, another distinguished member of our committee, earl blumenauer. the speaker pro tempore: the gentleman is recognized for two minutes. mr. blumenauer: thank you.

it is an interesting question, which lane are we going to choose. the study that's been offered by our friends on the other side of the aisle is bogus and i invite people to actually look at it and look at the critiques that have been offered up. but we've had a real-life experiment. because these tax rates that are being talked about are exactly what we had in the clinton years. at which time some of our good friends on the other side of the aisle predicted calamity. job loss. the economy would crash. what in fact happened is we had 22 million jobs that were created. what has happened is that when they had a chance to experiment with their vision in the bush years, when they put in place these tax reductions if they would have worked, what would have happened?

did employment even match what happened in the clinton years? no. in fact, it was barely 5% of what happened in the eight years of bill clinton. in fact, the obama administration, when it took, after the first few months when it was in office and could be credited with responsibility for the economy, has produced more private sector jobs than the entire bush admferings in eight years. -- administration in eight years. the job loss that's gone negative has been slashing in the public sector, primarily teachers and firefighters and police officers at the state and local level. mr. speaker, the strategy here is to continue punting. our republican friends are punting on the farm bill. our republican friends are

punting on s.g.r. they're now proposing a budget solution that gets us past the election because they can't face up to their own tea party extremists and they're split. may i have 30 seconds? mr. levin: i yield the gentleman 15 seconds. mr. blumenauer spak that's -- mr. blumenauer: that's what is at sfake here. i suggest we take what we can agree on, the 98% of this tax reduction, agree on that, not punt, give some real certainty and then have an honest debate about their proposal to increase taxes on the middle class at the expense of -- to be >> the senate finance committee will consider extending dozens of tax measures set to expire by

the end of the year. live coverage begins at 10:00 a.m. eastern on c-span3 and c- span.org. >> at the foot of that bridge, i was beaten. i thought i was going to die. i thought i saw death. quex in 1965, 25-year-old john lewis took part in a voting rights march from selma to montgomery on a route that would take them across the edmund pettis bridge. >> a man identified himself and said, i am major john cloud of the alabama state troopers. this is an unlawful march and it will be not allowed to continue. one of the and people walking beside me said, give us a moment to kneel and pray a.

"across that bridge" by john lewis on "q&a". >> the political parties are holding their platform hearing in advance of the summer conventions with democrats voting next weekend on their ronald platform or recommendations followed in mid- august as republicans finish their process. coverage of the party conventions begins august 10 with the reform party in philadelphia and lauglive gavel- gavel coverage from tampa. the democratic national convention live from charlotte, north carolina on monday september 3. >> the sequester would cut $500 billion from the defense budget. the white house budget director and the deputy defense secretary talked about the effect of this cuts at a house hearing today.

here's their opening statements to the committee. >> recently, attention in congress has focused on seeking information from the administration on planning and preparing for sequestration. a lot of stress in the unfortunate event that congress fails to pass a balanced deficit reduction package and avoid sequestration, the administration will indeed be prepared to issue the sequestration order on january 2 and to manage its implementation. let me be very clear. no amount of planning, no amount of planning will mitigate the damaging effects of sequestration. moreover, our planning must be deliberate so that we avoid inadvertently triggering some of the negative effects of sequestration. we want -- do not want to waste

scarce resources or disrupt critical government operations. to make this vivid, the right course is not to spend time moving around rocks at the bottom of the cliff to make for a less painful landing. the right course is to avoid driving off the cliff altogether. the implementation of sequestration would be governed by the procedure set forth in the law, and i want to emphasize the law provides bombay and agencies with very little flexibility or discretion in implementing sequestration. it would be a uniform percentage reduction at the account level which would apply evenly, equally across programs, projects, and activities. because congress has not yet made progress toward an acting balance deficit reduction, the

administration is taking a number of actions to prepare for possible sequestration. earlier this week, omb issued guidance to agencies and will engage them with agencies on matters necessary the order. i have also notified congress and the crush of the president's intent to exercise his authority to exempt all military personnel accounts from sequestration if it were to occur. regarding federal contractors, the department of labor issued guidance on though warren act clarifying that contractors are not required to issue or an act notices to their workers in advance of january 2. doing so would actually be inappropriate in light of the underlying purposes of the act. we're taking the necessary steps but as i stated, no amount

of planning will mitigate the damaging effects of sequestration. sequestration is a blunt indiscriminate instrument designed to force action -- force congress to act. august 1, five months remains for congress to work together to pass balanced deficit reduction and avoid the sequester. the administration stands ready to work with congress to get the job done. thinking and i look forward to taking any questions. >> thank you, dr. carter. >> thank you. thanks for the opportunity to be here today. i am here to-please to join my colleague and i will focus on the impacts of sequestration on the operations of the department of defense. let me begin if i may by

thanking you for your continuing support to our department and our service members, military families. not only in afghanistan but everywhere around the world. it is much appreciated. i returned on friday from attend a trip around the pacific theater where i had the opportunity to meet with our troops stationed in hawaii and guam, the republic of korea, japan, for over 70 years the presence of our servicemen and women has been a critical guarantor of peace and prosperity in the asia-pacific region. in the climate of peace and stability created by the u.s. military presence, 1st japan rose and prospered, then south korea, then southeast asia and now china and india. we intend to remain a pacific power for decades to come. we believe this region is where

an important part of our future lies. a new defense strategy calls for exactly that and that is one of many reasons why the subject of this hearing is so important to all of us. if it is acceptable i would like to ask that my full 70 submitted for the record and i will continue with -- full statement be submitted to the record and i will continue. sequestration if it is allowed to happen would have a devastating effect on defense. i will focus on the impact on the department of defense. the acting directors testimony makes clear the effects on non- defense agencies will be equally devastating. he has described the mechanics by which sequestration would work and i would refer it to my prepared statement for a more detailed treatment of the mechanics of sequestration as they would apply to the department of defense. i will briefly highlight some of the impacts of sequestration that are specific to dot but

much of what i say could be echoed by non-defense government managers and by industry managers who furnished critical goods and services to the federal government. well i can describe many of sequestration's impact on dot, it is not possible to devise a plan to implement it that some house eliminates these consequences or even mitigates them. substantially. the intent of sequester was to use the threat of a mutually agreeable cuts to both the fans and non-defense programs implemented in -- and flexibly and mindlessly to force congress to enact a compromise decker -- deficit reduction plan. it was never designed to be implemented. sequestration therefore if it were allowed to happen would introduce senseless chaos into the management of every single one of more than 2500 defense investment programs.

waste in defense spending at a time when we need to be careful with the taxpayers' dollar and efficiency into the defense industry that supports us, and would cause lasting disruption even if it extended for one year. sequestration in fiscal year 2013 would disrupt our forces and programs. over the long term, the lower spending caps in 2014-2021 would require that we modify and scaled-back the new defense strategy that the dod leadership so carefully developed a few months ago. if sequestration is triggered, its impact would be devastating for defense. given the recent announcement that the president will exempt

military personnel funding, the cuts will be about 10%. under sequestration rules, this same percentage must apply individually to literally thousands of defense programs one by one. overseas contingencies' operations would be subject to sequestration. that is a wartime support funding. supporting our combat is our highest priority. we would therefore endeavor to protect wartime operating budgets as much as possible, including the operation and maintenance accounts. this is possible to do in part because the accounts contain budget funding. these two categories of funding

merge together during execution of the dod budget. we could reduce the basic budget portions and spare the other portion. we could take similar steps as needed in other accounts, including funding. however, especially in the marine corps, this would lead to much larger impacts on base budgets and readiness of those services. we would seek to minimize the effects on readiness in the near term but we could probably not do so fully. as a result, some later units, including some to afghanistan, could receive less training, especially in the army and marine corps. under certain circumstances, reduced training could impact the readiness of other units to respond to new contingency should they occur.

obviously, sequestration would affect training in the other services, the navy and the air force as well. next, sequestration would force dod and other agencies to reduce funding for civilian personnel. we would probably have to release temporary employees and imposed a partial hiring freeze. we might also have to impose unpaid furloughs on our civilian personnel. you could imagine the effect of the output, not to mention the morale, of these employees to conduct some many essential support functions, from repairing weapons to conducting oversight and audits. military families and retirees would be adversely affected by sequestration. we could be forced to cut back on services, maintenance, and maintenance of family housing. commissary hours might have to be reduced.

funds for the health program for retirees and military dependents would be sequestered. resulting in delays in payments for service providers and some denial of medical services. >> tomorrow morning, the senate finance committee will consider extending dozens of tax measures set to expire at the end of the year. members will debate provisions dealing with the bush era tax cuts and the alternative minimum tax. live coverage begins at 10:00 a.m. eastern time on c-span3 and c-span.org. >> we did that began as a city. there was always -- only a vague region and later a county and another state called ky. we began in 1778 as virginians.

>> joined book tv, american history tv and local content vehicles from louisville ky saturday at noon eastern. literary life with book tv. on ky. the senior senator mitch mcconnell and jason gainus. on american history tv, three weeks in 1841 would be key in shaping abraham lincoln's views on slavery. tour the plantation today. the heyday of the steamboat on the ohio river. take a look. local content vehicles explore the history and literary life of cities across america. this weekend from louisville. >> in the weeks ahead the political parties are holding their platform hearings in advance of the summer convention with democrats voting next

weekend on their final plat form recommendations in detroit. followed in mid-august as republicans start their platform process at their tap the convention site. coverage of the party conventions begins august 10 with the reform party in philadelphia for by live gavel- to-gavel coverage of the republican national convention beginning monday, august 27 from tampa and the democratic national convention in live from charlotte, n.c. starting monday, september 3. >> the fbi. the national security branch executive assistant director said he agrees with the independent report on the fort hood shootings that the agency could have better handled intelligence related to the accused army major, nidal hassan. the report accuses the fbi of poor information sharing and disagreements between field offices. major nidal malik hasan is awaiting a court martial set to begin august 20. the subcommittee hearing is over

2 hours. >> those that worked with judge webster on the commission. i also want to thank the men and women of the fbi who over the years have done an outstanding job in so many areas and also the purpose of the hearing is to do what we can to make sure that we prevent this from ever taking again. i am disappointed the director could not be here. this would be an appropriate hearing for him to be here but today's hearing on the counter- terrorism intelligence and the events at fort hood, texas. thank you for your appearance today and thank you for the service to the country. on november 5, 2 basnight, the united states army maj adult son entered a deployment center carrying two pistols. he shouted "god is great" in

arabic and started opening fire. hassan has a weighted military trial for 13 counts of murder. the report was issued publicly on july 19. the report includes extensive factual findings on the fbi's counter-terrorism authority programs and assistance as well as specifics on the fbi investigation of [unintelligible] and the assessment of nidal hassan. the report analyzes the euro's actions as well as recommendations for other actions. i am concerned that there were warning signs and there were more aggressive investigations. there was a chance that this incident could have been proven -- prevented. the reason for less and less- aggressive investigation could

have been political sensitivities, maybe in the fbi. an active duty member of the communicating -- should have that was.e seriously tha at the time -- they believed at that time. the commission found that the decision not to interview hassan was flawed. i am concerned the culture and guidelines made this the path of least resistance. the webster commission makes no recommendations on changes to the fbi's domestic investigations and operations guide. of these -- if these guidelines were followed, and that failed to prevent these deaths and injuries, it may be worthwhile to question whether the guidelines themselves r problem. we want to understand what took place and ensure that agents are

empowered to prevent similar attacks in the future. i will also have questions based on the report's findings and recommendations and what steps have been taken and will be taken to improve counter- terrorism assessments and investigations. several of these recommendations have a resource implication but we want to consider in terms of the fy 13. i would urge that after this hearing, in the interim during august, the fbi come up and meet with the staff on both sides to see as we're putting together the so-called cr. what the ramifications are and what can and cannot. he should have the stevstaff met with both -- you should have the staff meet with both sides. the fbi -- i am concerned the fbi may have not provided the commission with a full accounting of its prior interactions. including the return to the u.s.

in october 2002 when the fbi dropped an outstanding award -- worn for his arrest. what -- it would not have been good if the fbi had not communicated to judge webster. i would like to recognize my colleague, for any comments he would like to make. >> we have had an opportunity in a classified session to take in this information and a chance to process it. i want to say that -- it is important that the congress to appropriate oversight in these issues but given the issues

related to fast and furious and -- want to make it clear at least for in my view that none of our work should be in terms of criticizing law enforcement. law enforcement officials are doing an extraordinary job under difficult circumstances and it is easy for us to go back and look at these things and we should create better policies going for a period -- for it. the chairman, whose father was himself a policeman, has a greater appreciation for law enforcement. i think the issues here in terms ofwha what we ought to do going forward are well represented in

the 18 recommendations the commission has laid out. as we did looking at the mcveeih case, when there are these horrific incidents, we have to look and make sure that we are doing all we can do, but there is little ability to figure out exactly what an individual is actually a two in all circumstances. i think the commission under the webster commission for the work it has done. the chairman is correct to say that obviously we do need to look at how we prioritized leads and this question between discretionary lades and it will have some discussion about the fact -- the policy has been changed.

i want to welcome you to the hearing and i will think the bureau for the work it does each and every day to protect the united states of america and it's the sense in -- and the great work you have done since 9/11 to deal with this real focus of -- to -- changing this book is to terrorism. you're trying to prevent incidents oversus catching the bad guy. i look forward to your testimony. >> you may proceed. >> thank you. good morning, chairman, members of the committee. thank you for the opportunity to appear before you today. following the tragic events of fort hood, the fbi director ordered an immediate internal review of what the fbi knew about major the $ -- nidal

hassan. the fbi identified several shortcomings in our training and we started to take corrective action almost immediately. the director recognized the need for a broader, more independent review on how the fbi handled and acted on counter-terrorism intelligence before the fort hood shootings. the director for -- former director -- to conduct the review. as has been stated, judge webster completed the report and the report has been made available to congress and to the public. the webster commission have full access to fbi holdings. the conducted more than 100 formal and informal interviews and meetings and briefings and they reviewed more than 10,000 fbi documents. the commission also consulted outside experts on counter- terrorism and intelligence operations on information technology and on violent

extremism. the commission found a number of shortcomings in fbi policies in its technology and training and made 18 recommendations for corrective action. as you know, there are limits to what can be discussed today in an open hearing and hassan is the subject of an ongoing criminal prosecution. many aspects of the information related to this matter remain classified. as was noted, we did provide a full classified briefing and will answer as many questions as we can in this open setting. next, let me summarize the commission's findings and recommendations and review the corrective actions taken by the fbi already. the committee opposing recommendations fall generally into four distinct categories. one was information sharing. operational policies, as was noted. information technology, and trading. i will discuss shortly each one. starting with information sharing. the commission found that more formation could have and should have been shared -- information

could have and should have been shared from the headquarters level. from the fbi to the pentagon. our -- review came to the same conclusion. the fbi and department of defense created new information sharing agreements regarding counterterrorism investigations of military personnel. this agreement made sure that senior pentagon the fbi continued to work closely with the military in these matters and have clear policies in place to make sure that information sharing continues. turning to operational policy. the commission recommended there be clear policies covering all counter-terrorism lead and for resolving disputes as they relate to those leads. we will get into that more as the questions come up. the internal review found similar issues with the policy. as a result the fbi has set new time limits and reinforced our

existing policy and responsibility for every one of the leads and provided additional guidance to make clear that any disputes must be pushed up to the supervisor level both in the field office and at headquarters. lastly, the fbi has provided enhanced analytical investigative resources for strategically significant investigations to make sure that all proper steps are taken and there is additional oversight. in the area of good rational technology, and include software and search capabilities in are classified data bases could have assisted the investigators in the one in san diego and the one in the washington field office. the fbi develop new software improvements to connect intelligence information more effectively and efficiently. new programs and now up and running and the fbi is providing greater search capabilities across all holdings.

the commission made recommendations to improve training for all joint terrorism task force officers related to the intelligence bases. within months the fbi had entreated -- completed training and we have since instituted a nine-day mandatory training course for all agency participants. there are additional detailed recommendations and we have publicly responded to each on our website. as we stayed on a daily basis, the fbi and its partners across the globe must identify and respond to palace terrorism threats. we do this in an ever-changing and complex environment. in recent years we have been able to disrupt dozens of terrorist plots. we know that the threat never wanes and we cannot overlook a single lead. at the fbi we accept this responsibility every day and we are committed to improving our capabilities to protect this

great nation out and in the future. with that, a look forward to your questions. >> i ask unanimous consent that he be able to sit, since board who was in his district. >> the first question, the reason that hus on first comes to anyone's attention is his initiation of contacted it becomes important to understand who the fbi thought him to be. and understand what the government knew about him at the time. according to the report, he was under full investigation by the washington field office starting in 2001. the report mentions he moved to england in spring of 2002 but does not mention his return to the u.s. in october 2002.

the outstanding warrant for his arrest was inexplicably withdrawn by the washington field office. why was the return to the u.s. not referenced in the report and why was the warrant withdrawn that he was under full investigation at the time? >> he did return in 2002. there was a diplomatic security service warrant out for him. we knew he was coming back and had information that he was coming back. the colorado u.s. attorney's office looked at the warrant and the factual basis for the warrant. it was not an fbi warrant and was dismissed simply because they did not feel they had the ability to prosecute him for the alleged passport fraud. it was not an fbi warrant and certainly if we felt that a warrant was good and there was a way we could have incarcerated

him at the time, we would have done that. that was a state department warrant. the u.s. attorneys will look at a warrant when somebody is coming back into the country to see a process can be served bid that determined there was not enough evidence to prosecute him on that passport fraud case there. >> it was very unusual and at the time it was early in the morning. there is more there than i think is obvious. why was the return to the u.s. not referenced in the report? did the judge know of his return? >> the commission had full access to all of his information. it was not an fbi warrant and we did not ask for it to be dismissed. >> of york confident that judge webster knew of his return and the fbi told him of that return? >> i am confident he had all the

documentation that would have referenced this. >> if he was under full investigation from 2001-2003, why was he approved by dod security to speak at the pentagon? >> i cannot speak for dod. i cannot answer your question. >> what was the fbi's understanding of the relationship between him and the 9/11 hijackers in january 2009? >> after 9/11, he came up in a commission report and there were allegations that he had supported some of the 9/11 hijackers. investigation was done to try to determine whether he had anything to do with 9/11. early on he was the imam of a

mosque where some of the hijackers went and then transferred to a mosque in falls church, virginia. we interviewed him after 9/11 on three separate occasions. he identified one of the hijackers as someone he knew as going to his mosque. we were never able to obtain any evidence that showed he knew beforehand about 9/11 or supported the 9/11 hijackers . >> based on history, do you think that is still accurate? >> i do, sir. >> did he meet with the hijackers in san diego? >> he was the imam of a mosque in san diego where we know to of the 9/11 hijackers went. he admitted that one of the

hijackers went to his moscow. he knew him -- win to his moscomosque. we were never able to substantiate any intimation that he supported the 9/11 hijackers. >> report comes in and the connection of any communication with him would have said that something is wrong here. report was issued on the fort hood incident. a statement praised the webster report. they also stated that we are concerned that the report fails to address the specific cause for the fourth attack, which is violent islamic extremists and. do you believe it was specific

or was it because of the court had a tax? >> i cannot say specifically. >> do you believe it played any role at all? >> he is getting ready to go to trial. i cannot comment on what was in his mind when he made that determination. clearly al-awlaki was well known within the community. he was a propagandist at that point. we know from some of the e-mails hasan saw him as a leader and an activist, but i cannot get into his head. >> have there been specific changes in the way the fbi approaches and responds to islam is extremists based on the lessons learned from fort hood?

>> there been a number of changes made, starting with radicalization. this comes from the senate committee report. we have added classes on radicalization so at the earliest stages, our agents are looking for and no -- it is then all of our basic courses for a joint terrorism task forces. there is more training on radicalization from the standpoint of understanding an individual like al-awlaki. when somebody is moving from a propagandist to being operational, where we saw him go later, there needs to be field office eyes on what we are recovering, like the e-mails.

there needs to be additional from the community from some of the interagency so we make sure there is a fuller picture of someone like al-awlaki and those that have incoming contact with him. >> there seems to be a significantly different view of his relationship with al-awlaki between san diego in the washington field office. what was the fbi assessment of al-awlaki until he contacted hasan through his website? >> that is an interesting question. we looked at al-awlaki for a number of years. in that timeframe, al-awlaki was incarcerated in yemen. we interviewed him while he was in jail. he gets out at the end of 2007 and comes on line very quickly with his website, and mocks the

very careful line between what he puts on his website and his e-mails. the interagency intelligence community begins to look at al- awlaki to determine whether he has become operational. we do not see that at that point. at that time we are just looking at him. he appears to be a propagandist. there is information and he is starting to get involved with individuals who are related to aq. our understanding is that time is he is an individual who was born in the u.s., spent time in yemen, was educated in the u.s.. for many people, he was considered an individual they went to advice for. we also know he was becoming more radical at that time.

that is the look that we had in that snapshot of time. >> who were some of the people that we know of who worked radicalized by a lot dee perry >> there are a number of other investigations -- who were radicalized by al-awlaki. >> there was a sermon is hot line. without a doubt he was part of the radicalization process. >> i know he looked at al- awlaki. >> there are a number of others. will you submit for the record who you believe for part who was radicalized? the prior investigations shake the fbi's understanding our

misunderstanding of the threat he posed? >> i think if you look at the lead that came out of san diego, that felt that they had an accurate reflection of what al- awlaki was at that time, at that snapshot of time. >> how many other u.s. government or military employees were found to have contacted all lockheed during this time? have these individuals been fully investigated and it in the hold security clearances liked hasan did? a story indicated that the fbi has conducted over 100 investigations within the u.s. military. is that accurate? >> the exact number is classified so i cannot talk about it in this setting.

it is something that we looked at very carefully. there are many investigations we are running jointly with the department of defense right now. to get your point, we believe we know who has been in contact with al-awlaki or at least potentially having listened to him, his sermons, etc. i believe we have them will cover. >> the e-mail shown in the report are troubling and the first e-mail raises the question of religious justification for muslims in the u.s. armed forces' killing other u.s. soldiers. he praises al-awlaki's religious understanding and ask for a reply. it is hard for me to understand the context of what such -- why such an exchange was found to be

benign without any investigation. does that seem unusual to you? >> there are a couple of issues here. the commission found that we certainly fell short. hasan is asking al-awlaki to make some general comments about muslims in the military from his e-mail number one. the second e-mail which is pushed forward and san diego pushes that lead to the washington field office and says all the e-mails may seem somewhat in eight, if he should be in the military it is something that should concern you. a couple of things occurred. there were additional e-mails that the field office agent was not privy to. when he looked at these two, he did a couple of things. he went to his dod counterpart.

the task force agents from the department of defense. he does database searches on hasan 2/6 -- to see if he is tied to any other terrorist group or anyone have under investigation. then he asked them to provide him their reports on him. he goes to his online files. he goes to the defense manpower data center and retrieves 30 files from dod. he retrieves his defense employee interactive data systems and retrieves about five or six of his recent performance appraisals. the agent does the checks and finds nothing else unusual about hasan.

within that month he had been promoted from captain to major. the other thing and he found unusual is that he held a secret security clearance and at the time was getting his master's degree, specifically talking about what it was like to be a muslim in the military and the conflict that occurred there. so when he looked at -- he was lauded for his research there, saying it was cutting edge and was looked at by his peers as cutting edge research. >> over his standpoint, he is looking at an individual who hold secret security clearance who has recently been promoted from captain to major, who is not trying to hide his invitation -- his identification

in any form from pawloski. -- from al-awlaki. he believes that it is in line with the research he is doing from where he sits. all his performance appraisals are positive. they state that he should be promoted, and he does not want to take a chance to move forward at that time and potentially risk the fact that al-awlaki is under investigation. again, a snapshot in time. we can go back and second-guess that task force officer, and again, i am not making excuses. i am trying to put it into context with what he had available to him at the time he made that decision. >> i have a few more questions. did the effort by -- did the fbi

questioning follow the guidelines as delineated in the operation guidelines, and if so, does that indicate a problem with the guidelines in that it discourages the greater pursuit of leads? when it was adopted, and how does it differ previous guidelines? were outside groups involved? >> i don't think so. >> when it was adopted, how does it differ from previous guidelines? the believe it should be changed to encourage more investigation of leaks, based on the circumstances? it is mentioned in the webster report.

>> i will try to get all your points. the first question, did the agents follow the guidelines and the way it was written at the time. the answer is they did. >> does that mean it should be changed to encourage more investigation of leaks? somehow as i did into this, here is an individual who follows the guidelines and the guidelines results in 13 people dead and numerous wounded. should the guidelines be changed? >> we have changed a number of things since this occurred. at the time, the lead was set as a discretionary lead. that has been changed. there are no longer discretionary leads.

it asked the agents to use the least intrusive methods possible. gives an escalation of our ability to utilize the tools congress has given us to investigate those potentially involved in terrorism. its state that we need to use the least intrusive means necessary as we escalate the tools available to us. in this case, acting under those rules, the least intrusive, the agent felt that with the database if he had checked and the information that came out of the dod files, with the fact that he used his own name and did not try to hide it his recent promotion, he had done everything it needed to do based on information he had. the way it is that right now, it gives us the tools to do what we need to do. >> so you do not think it needs to be changed? >> i believe we have the tools

available to do what we need our investigators are among the most aggressive in the world. when we armchair quarterback and second-guess, which we need to do to make sure we get better at what we do, i believe the tools of their period of a live the way it is written it gives us the ability to do it and i believe the fact that it requires us to use the least intrusive means to be able to escalate the tools you have given us, it make sure that we are walking that fine balance between protecting civil liberties in this country and making sure there is not another 9/11. >> the report faulted the decision not to interview hasan. the washington field office feared it could jeopardize the al-awlaki investigation.

the washington field office believed that an interview did not satisfy the least intrusive means test. a simple records check was clearly not sufficient to uncover the threat. what could have been done to determine whether hasan was involved in terrorist activities? are you confident that in a similar case today, two years from now or another year from now, we will wake up and a newspaper some morning, something like this has happened again. what further could have been done to determine whether he was involved in terrorist activity, and are you confident and is the fbi confident that in a similar case today, an agent would feel empowered to pursue with their

instincts -- what their instincts tell them that there was something amiss. would we take the current circumstances and are you confident that in a similar case we would not have another of fort hood? >> there are two prongs to the answer to that question. first of all, the way the information sharing set up is now with the department of defense, so at the ground level, the fbi shared with the individuals on the task force the information it had. where there was a clear lath is there was not headquarters to the pentagon sharing of information. had that happen, there is a possibility we would have seen the dod look at hasan

differently and that could have changed the complexity of the investigation. the second thing that has changed is when there is a difference of opinion between a san diego and a washington field office, it needs to be pushed up to management so they will help steer that direction. that potentially could have changed what happened. i don't think we will ever know whether an interview would have changed anything, but it would have allowed us to get a better handle on what the fbi had and what the department of defense on the ground had. >> why was it that it was not done? why did they not go to the higher authority directly? >> that is a great question and i do not have a good answer for that. it happens every single day where there are disagreements on

the complexity or tone of how we conduct an investigation. they are pushed up to management and headquarters. headquarters is involved. in this case, -- gillon >> is this the san diego office? >> that is correct, sir pitt >> was a a lack of aggressiveness on their part? >> -- that is correct, sir. >> i think san diego felt they should have been more aggressive. it did not get pushed up the san diego chain of command, which would have pushed it up to headquarters. we would most likely have said we wanted an interview to be conducted. >> a final phone call -- i commend the bureau.

the public report almost has as much information as you need. the final phone call between san diego and the washington field office included an exchange of interview and muslims who visit extremist website as a politically sensitive subject. the conversation was said to have included the comments " washington is not san diego." what has been done to prevent a reoccurrence of this? i have had a number of fbi agents come up to me and tell me they believe there is a political correctness encroaching into the part of justice and the department of interior and justice and the fbi. it was said during the same thing with regard to the final

years of the bush administration. what does that mean to you? washington is not san diego. >> i am aware of the comments you are making and the report did not find political correctness was in any way responsible for his lack of going forward with the interview. that is a snapshot of a conversation that took place. the agent on the receiving end did not recall that conversation. it is very hard for me to get into the minds of the one agent that did it. i did not believe political correctness had anything to do with this determination. i laid out the facts the way the agent did in the washington field office, what he used to make those decisions. again, it is easy to go back and second-guess. i believe an interview would have been prudent in this case, but i do not believe political correctness was the reason for that.

>> sometime during the recess i would like to have the opportunity to speak to the washington field office people who were involved. i just want to ask them,. i am making this official request to meeti am making thisl request to meet with them. i really want to know, i want to make sure this never, ever happens again, and no lead is not pursued because of fear that your career will be ruined because you do something that may save people's lives. >> thank you, and i want to thank the chairman. let me cover a number of pieces of this puzzle. right after 9/11, former speaker newt gingrich was testifying. i asked him a question, at that

point, it was about how far we needed to go to prevent future 9/11's. and i have reminded the speaker we have criticized countries like china for locking people up without charges, not having access to lawyers, so forth and so on, and what was going to be the rule of law relative to these new challenges, because our system of criminal justice in the country was basically on the notion that we would rather somebody guilty go free than someone innocent be convicted, right? so we convict -- we kind of cleaned it on protecting people's the rights -- we kind of lean on protecting people's rights and due process. but terrorism is a different situation because you try to prevent the incident and the

first place. i don't vary much by an to the notion of political correctness. i think we have an issue out around constitutional correctness, when you have an american citizen that questions whether they can listen to or read something or associate themselves in some grouping. it is pretty clear in the constitution those things are protected. and then there is a set of actions that are of concern. now, this question of radicalization is not new in the military. there have been any number of groups the fbi has to be concerned about, attempting to either get members train to the military or to radicalized present members of the military. and this has nothing to do with any particular set of dynamics. this is a concern on going. i thought congressman dicks's

question was interesting, this issue of dod and coordination is something we may want to structurally look at better, because maybe we need to create a process in which the fbi could have greater access and maybe some joint alignment with some of the investigating units inside of dod. i was out at the terrorist screening center in virginia, and the agency seemed to be working well together. the agencies seem to be working well together, and obviously a lot of good work is taking place, but we need to be mindful as we go forward that we have constitutional prohibitions, a constitutional protections, depending on one might view it.

i believe it is our right to uphold the constitution, and that each of our agencies of the government have that responsibility. when we determined political correctness, i think that it cheapens the issue. we have a responsibility to follow these rules, and we also have a responsibility to create a safe environment as possible. i want to go to what the bureau's responses to these recommendations. they have been made in a number of different categories. if you could take the time in this hearing, which this hearing is about these recommendations and how we will go forward, and respond to the recommendations, i would appreciate it. >> thank you, sir. just a couple of comments, if it is. and, regarding our relationship with dod and how it is indicated.

they have increased the number of personnel throughout the country, and the kind of node that we coordinate all of these investigations now occurs at the national joint terrorism task force with the deputy is a member of the department of defense. so that deputy is a dod person. he sees every investigation that touches the military immediately, and is the belly button that pushes that over to the put pick on rigid over to the pentagon. so that formal process that you spoke about is in place, and that would be glad to talk with you about that more offline. and it's kind of go through the recommendations. one of the recommendations surrounded training, and one of the concerns was there was not enough training done through jttf personnel, especially relating to the number of

databases the bureau has and where collection is stored. we recognize that immediately after 9/11 and bought some 3000- plus task force officers -- brought some 3000-plus task force officers to be trained in our databases. the director asked us to look further into training and step back and assess whether the training we were giving to our a.t.f. -- to our jttf as a whole was enough. we went back and looked at that and change the way we do training as a whole for the personnel. there were a number of on-line courses they took before they came on and regional training, but now that has been moved to quantico and it has gone from a couple of days to a nine-day mandatory basic training for everybody. >> this new system, and the

chairman has led the way, and we have invested tens of millions of dollars in this, this is the training through 3000 on this new system to access the databases? >> that is right, so that process will continue. the training will continue, some of the new software that we have been able to purchase, again, at the behest of the committee to help us do a better job analyzing data is also being pushed out and trained. the other issues could your earlier comments, just about the lead being covered, how it was covered, and disagreements and how those are taking place. there are a number of policy issues that have been identified and changed. it took too long and both our opinion and in the opinion of the other committees to cover the lead it to begin with. we have changed policy there.

it reiterates and requires leads to be covered in a shorter time and duration. >> in plain english, this came as a discretionary lead. we have eliminated that. there is no discretionary lead and there is a timeline to follow-up on all leads? >> that is correct, discretionary leads wert discontinued immediately. the time line for routine leads was tightened up. we have also reiterated in a number of venues and change the policy -- we have written policy where there is disagreements in the leads and that needs to be pushed up to the supervisor and the officer and the appropriate oversight group at headquarters. i think the other point, going back to the comment, is that we have also looked at other cases and decide it that not only did the leads need to be covered more carefully and closely, but they need another group to

oversee them. there is a robust analytical group back at headquarters that looks at those individuals to make sure that there is nothing that is missed in those leads as they go out. the other thing that was highlighted, and i think rightfully so, in the commission report was the i.t. system being used to look at the email. it required the case agents to go back and the analyst to go back every time there was a new e-mail to search and see what other emails were in the queue. that was fine for the way we used to do business, but an individual like lackey, that system simply was not up to par for what it needed to be. now the system has been changed so if there is an email of interest, where a court authorizes us to look at or we are able to get those emails, the system automatically threads all of those email together and

also tips the case agents or the analyst when a lead has been set as it relates to that specific e-mail address. the point is that some of those other emails that were not pushed to the washington field office would have been queued up by the system automatically selected look at them as a whole and maybe make a more informed decision. to this inill down english. go back to the first point. the point is there have been changes, and we went through some of this and a classified briefing, but there have been significant changes in the pruning of the information, the way that it is looked at and total, so you are putting the e- mail from a hasan together with others and with that sees the whole picture, not just one part. >> right, the system will allow all of those emails to be dropped and be looked at in total. >> the commission's

recommendation on this working through challenges relative to but the control and determination of leads. you say that will be bumped up stairs. so any time there is a dispute between two field agents, field locations, it will not be just settled through mulling through or doing nothing. somebody will have to make a decision. >> that is right, sir, and that occurs and has occurred every day. what we found when we went back, even though it was standard operating procedure, there was not clear cut policy that set that out. that is what has changed there. >> any of these recommendations that the bureau does not agree with? of 18? >> there are none that we did not agree with. the only one that we are

continuing to wrestle with is their assessment that this lead should not have gone to somebody from the department of defense, rather it should have gone to somebody from their home agency. our experience and my experience in running jttf is when you push a lead to somebody from that home agency, they are in the best position to understand the nuances of that agency, how to cut through red tape and get the information and cover the leads. in most cases, they are investigators from their agencies to have an expertise in investigation. we're still trying to find that sweet spot between that recommendation and how we make sure there is more oversight from the fbi. >> we have had this discussion before, and i will conclude on this point, which at some point this became a subjective matter.

so you can look at the employee file. you can see top-secret clearance, the recent promotion. and one could have saw that as a reason to be more concerned, and one could have saw that as some type of information that would say, well, there is no reason to be concerned. some of that has to do with one's view of the responsibility. so when we get to maybe ordinary what might be potentially criminal activity, that is one judgment call. when the judgment call is about saving lives, then that is where youfbi's post 9/11 roll, if would, this prevention in which pushing the envelope -- i know that you agree there should have been this face-to-face

interview. not to say that hasan may not have been able to get through that interview in a way that would have alleviated concerns, but there should have been at least eyes and a talk directly with him, in case you really were not trying to track down bank fraud or some other, you know, unrelated matter. the issue here was whether or not or something more nefarious afoot relative to a potential pallotti -- a potentiality that was not necessarily based on a criminal enterprise. i think you for your service to the country and i would be glad to yield, yes. >> in december, 2008, a question, what would he think of

muslims who have joined the military and have even killed or tried to kill other u.s. soldiers? that seems pretty stark to me. >> yes, sir. >> i don't know how you do that he is doing a master's degree or something not to justify looking into that. >> sir, i don't disagree. as you go to the next line, it says can you make general comments about muslims and the u.s. military. we to consider somebody like soldiers who have committed such acts of jihad, and if you did, what would it mean to you? i agree, when you look in context, exactly how it is, it is startling. the problem is if you put yourself back into the agent's position at the time and you look at this e-mail with what he is looking at on the performance appraisal, where it states, and

i quote, "he is going for his masters of public health. he has outstanding moral integrity. he took on a challenging topic for his mph, on views regarding military service on the global war on terror." without question, sitting by itself, i concur 100%. when you look from this aspect, it changes the dynamics of that. again -- >> but sometimes in the history of this country, we had information and did not act on it. i mean, people going to flight school to learn to take off, how to take off an airplane but not landed, and that was sent to the fbi. and nobody acted on it. at some point, you have to have some instinct, some gut instinct that something is not right

here and to follow through. pearl harbor could have been avoided. i mean, all of these things -- what is always so frustrating is you look back, hindsight, what is so frustrating is we have the information. we knew that this guy had a relationship with a known terrorist and we did not act. that is what frustrates me. thank you. >> thank you. mr. culbertson? >> thank you, mr. chairman. i cannot agree more with mr. dick's statement, and i really appreciate chairman wolf having this hearing today. i want to thank you, mr. giuliano, for your service. all of us admire the fbi and the work that you do. it is important, though, as mr. dix and the chairman has said, that we all learn from this.

it is distressing to see, the one sentence, looking at the december 2008 email, but looking at that one sentence, you don't really need the context. the statement itself is of real concern. i wanted if i could to zero in on the question that chairman wolf asked in a little more detail, if i could, sir, when the washington field office had assumed, because they were the recipient i understand -- i understand it is standard practice at the fbi that the washington field office in this case, looking at page 56 of the report, the washington field office owned the hasan lead and were responsible for its outcome

because had been referred to the washington field office by the san diego office, and the san diego office was not satisfied with the washington field office's response. the san diego agent, i believe the assessment was slim and was concerned enough that for the first time in his career, san diego officer followed up with the washington field office to pursue this because the san diego office could not understand why the washington field office would not pursue this lead and actually go out and interviewed this guy. i see from the report, mr. giuliano, that the fbi has had a policy, i cannot be stated or not, of pursuing an investigation using the least intrusive means necessary, is that correct? >> that is correct, sir. at that and it in this case, the

washington field office decided that the least intrusive means necessary was to check the records and not conduct the interview because the washington field office was concerned that might affect major hasan's military career? that was one of the factors? >> that is correct, as the webster commission went and talked to the agents, as he lay out all of the reasons why he felt an interview was not germane at the time, that was one of the comments. i do want to make a comment about least intrusive. at least intrusive has never meant not aggressive. i will tell you, and i cannot talk about it in this setting, but investigations we have across the nation and the world are extremely, extremely aggressive. this was a judgment call, and unfortunately we make these judgment calls every single day and we have to be right every single time.

as you look through it, an interview would have been prudent at this time. but it is hard to tell whether it would have changed things, but the fact the least intrusive means, it is just a way to ensure that we use the tools congress has given us in a way the are ratcheted up appropriately. that is the purpose of that. that should not have and does not mean that we cannot conduct an interview. >> sure. but in this case, an assessment was made by the washington field office that would perhaps endanger major hasan's career if they pursue this further? >> that was one of the statements. ok, and looking at the december 17, 2008 email, major hasan asked the question -- i am looking for it in here.

some appeared to have internal conflicts or may have killed in the name of islam. clearly, he is asking a question whether or not if a muslim in the military tries to kill other u.s. soldiers, is that a problem, does that fit within -- is that something that muslims faith -- what would the muslim -- how would he look at that from the perspective of the muslim faith. if major hasan -- what if that email had come from a senior fbi officer? >> sir, i think it would have raised the same concern from san diego and as with the individual in the military. i think the difference here is when you have a guy like hasan

who is doing research on that issue, and it goes on to say make some general comments about muslims and the u.s. military, it puts it into a different context. again, i am not here to make any excuses as to whether the interview was conducted or not, but it puts it in a slightly different context. >> yes, sir. if the email had been sent by a senior officer in the dea or the department of homeland security or border patrol or some senior law enforcement officer, some senior officer in the law- enforcement community of the united states had sent an e-mail to a maniac a terrorist, what would have been the response of the fbi? a similar set of circumstances, but hasan is in the u.s. law enforcement community? >> two things, olague had

thousands of people writing to his website asking for a legitimate islamic advice. that is a slightly different terrorist back them. that is number one. no. 2, if the fbi agent had been writing a thesis that was similar to what hasan did, there may have been a different viewpoint. however, i think san diego would have looked at it with just as much alarm as they did when they sent this to lead to the washington field office. >> asking the same set of circumstances, but he is a senior officer in the u.s. intelligence service or a law enforcement officer. it seems to me that the statement itself, in fact an individual is working for the u.s., for the military or the intelligence services or u.s. law enforcement, that major

hasan's position alone should have been enough to require further action on this. >> sir, again, i think that is the debate of the commission and i think they find that we should have done more, and i don't deny that. >> have you changed a policy so if you find somebody in a high- level position in the u.s. law enforcement community or in the u.s. military making inquiries like this that it automatically kicks it up to a higher level of inquiry, including a personal interview, automatically? >> sir, there are no automatics and what we do. what we have changed is if somebody and law enforcement or the department of homeland security if we saw something like this, it would come up to headquarters the same way now that it is mandatory and the investigation of the eddy, and we go to the national joint terrorism task force with another set of eyes. that has not changed. >> i should have not used the

word out automatic. i heard you now have a procedure in place when there is a conflict that is reviewed by a senior level official, and that is a change and improvement. >> yes, sir, that is correct. >> what i am driving at is regardless of whether or not he was in the military, you have policies in place that would elevate the scrutiny of an e- mail exchange like this if the individual is an officer in the the the military or the u.s. law enforcement committee. >> that is correct. it is not just email. if we have an investigation that is predicated on what enforcement on somebody who hold secret security clearance, has access to military bases, we have broadened it wider. >> thank you, the chairman has been generous with the time.

but just to follow, talk to us about what political sensitivity -- you have a reference in the report on page 60 that the washington field office indicated the subject is "politically sensitive." what types of things are politically sensitive and inquiries of this type? >> i will go back to the comments made, that i don't believe political sensitivity had anything to do with the decisions that were made here. the commission found, i think, the same exact thing. there are sensitivities as it relates to the first amendment. there are sensitivities as it relates to civil liberties and civil rights. i think our job with the powers given to us by congress are to make sure that we keep this country safe while protecting civil liberties and civil rights. it is a fine balance every

single day. i don't believe political sensitivity played any part in this decision, sir. >> we know you do, sir, and god bless you for all that you do in the fbi does. the remember any discussions about political sensitivity, whether or not it is politically sensitive or could be offensive to the moslem committee or the islamic community, without reference to a particular lead, but to what extent have you seen or heard discussions from the fbi or doj about political sensitivity or insulting or offending the muslim community? >> sir, there is varied little talk about political sensitivity and side of the bureau. the bureau is in a political organization and we try to stay apolitical. there are sensitivities as relates to training. there are sensitivities as

relates to the first amendment and civil liberties. those are things that we always look at, always strive to find the right balance between both. and as you know, sometimes finding that balance is very difficult, because there are strong advocates on both sides of the table. but where i sit in my position as the executive assistant director for national security, i am not concerned about political sensitivity in what we do to protect this nation. >> we deeply appreciate what you do in our midst a supportive of the fbi. thank you, mr. chairman. >> thank you, not -- i think mr. giuliano your misleading or overstating something. i read the report twice. on what page does is say there has been no political correctness, no political sensitivity? the commission is silent on it.

you have led us to believe the commission has said that is not a problem. sir, would you tell me the page that i missed where it says that is not a problem? >> i think my point is if you look at the reasons the committee set forth as to why the interview was not conducted, it does not say that their findings was because of -- >> but no where does this commission -- >> that is correct. >> ok, let the record to show that. i think you messed -- miss let us to another way, probably inadvertently. you indicated that the decision to drop the award was made by diplomatic security in the u.s. attorney's office, but it is my overstanding that the washington field office agent made the call to release al-aulaqi. the washington field office was conducting a full investigation of it al-aulaqi at that time and

was a pit bull case. you remember the paint ball case? >> sir, i do. >> and that person is in jail for life, correct? >> i don't know that, sir. >> well, i think he is. you may want to check that out. and there is some concern that al-aulaqi was kicking it there. when you say that was not our gang, that was diplomat at security, this is a washington agent of the fbi called to say to drop the case. he was the very agent who apparently is still with the fbi today and was the fbi agent on the paint all case. again, those two things were sort of misleading, like brushing and bump and move. they were involved. this was done at the request of an fbi agent. correct or not correct? >> that is not correct. an agent of the fbi cannot tell the prosecutor whether or not to drop the case.

>> to drop a war? >> to drop a war. >> he never called -- to drop a warrant. >> he never called? >> there was a dialogue. if a case agent has a case on somebody who is coming into the country, the system is set up so there will be a call to that case agent. >> what time was that? >> i don't know. >> sunday, early morning. >> i don't know. am i want to get to the bottom. we're going to get a hearing, and we may even subpoena the thing, but think it is important. the inference was the bureau had nothing to do with it. where if there was a call from the fbi agent who worked the pit bull case, that has -- who worked the paint ball case, that has bearing to the attorney. i could be corrected, but i think it was like, we will get this for the record.

i think it was somewhere before 7:00 in the morning, perhaps on a day when the government was not operating. sir, i think it is a little misleading. >> can we give the witness a chance to explain? >> sir, i disagree with that comment. no matter what time it was, the fbi does not have a power to tell the prosecutor whether to drop the case or not. the prosecutor makes that call based on the evidence at hand. if the prosecutor at the time, regardless of whether a call was made on not, looked at the evidence and decided there was not enough to be about to arrest that individual, as it would be in any case, the warrant would be dropped. but i assure you the bureau, if anything at that point, if we could have incarcerated al- aulaqi, we would have. >> we could go back and forth on this. it could have been the fbi said something else. >> i don't know. >> so with that, let me just go

to mr. carter. >> first, i would like to thank the chairman for allowing me to participate in this hearing. i have a different line of questioning. i have a constituency to answer to. i have a lot of questions that have been raised. i want you to tell me what i should tell these people who have raised this question. we're talking about people who were killed, many of whom had been deployed two, three, four times fighting in the war against terror, which until recently was the subject matter of why we went to war. it seems to have changed in this administration, but the previous administration, it was the war on terror. they went to fight the war on terror. they went to fight the war on terror that of of the people of

the islamic community. -- that involved people of the islamic community. now they're coming my light and saying, my husband went in harm's way for this country three times, my son went in harm's way for this country three times and he gets killed where he is stationed by a member of his own military, who begins a shooting career as a murderer by shouting. it gets investigated and a fine it is a work force of violence incident. and nobody seems to talk about, is the war against terror involved in this killing, but my husband is dead, my son is dead, after fighting for this country in numerous occasions in the war against terror in the islamic community.

and what i got from the defense department was a whole series of places where excuses were made for why did not catch this. and there you have a whole series of recommendations to change their procedures so they can hopefully catch it next time. and then the agency, the law enforcement agency. at least historically in america in my lifetime americans have looked to for the highest and best investigative procedures in the world -- not in america, and the whole wide world -- it least in my generation, anybody who said we need this investigated, it is the best? we would say, the fbi. and so the same person comes to me now and says now from the law enforcement community, what do i get? i get the same story.

yes, mistakes were made, it really is more excuses are being made as to why "procedures did not work." when did we stop having people use their brain to investigate and start having people who used procedures to investigate? have we discovered that procedures written by bureaucrats actually operates better than somebody's common sense that says it look at this, this guy is talking about shooting somebody, maybe we ought to look into this? what do i say to that woman who has lost her husband, or to that father who called me and lost his son? who can i look to in my government, my son or daughter has fought for, who will stand up and say it is our job, it is our responsibility, we failed.

and instead of coming up with excuses, coming up with new procedures. can you tell me what i say to them? >> sir, i don't think there's anything that you could say to them that will take away the pain they have suffered. as i stated in the beginning, i am not here to make excuses. we will not make excuses. they should and do turn to the fbi to do exactly what you said, and we have to be right all the time, 100% of the time. and we are not, -- and when we are not, the consequences are dire. the goal is to figure out what we could have done better. we strive to be better every single day. this entire commission report was commissioned by the director after the senate already did their review, after we did our internal review to make sure it never happens again. he is committed to it, i am committed to it, our department is here committed to it, but i

am not here to make excuses. >> you just made a statement, the consequences will be dire. what are the dire consequences as a result of the failure of the fbi? who got fired? that changed, promoted, moved? but like to know those situations. -- i would like to know the situations. >> sir, any action taken by the bureau, the boss, the director had to be held until this report is done. this report has been pushed over to our inspection staff and our inspection division which handles all reviews of how our individuals conducted themselves during the investigation. was that is done, it will be pushed to the director for a determination of what action if any. >> what kind of time schedule are we looking at on that? >> i would say between 60 and 90 days, sir. >> so i think i can tell these

people at least as far as the fbi is concerned, there are dire consequences -- your statement -- that come to the people who failed this project. >> sir, i said when we fail, there are dire consequences to the public. i do not and cannot -- >> to the public. that is a different statement. of course we know there are dire consequences. there are a bunch of dead people stacked up at fort hood right now. those are dire consequences. >> sir, that is right. my statement was where i sit, we have to be right 100% of the time, and if we are not, there are dire consequences. as we see at fort hood. what occurs here internally will be determined by our internal inspection process, and it will go to the boss at once they

conduct their review. i'm sorry i missed that. >> ok, that is a good explanation. so maybe there will not be dire consequences. i just think at some point in we alle have to decide a, know our rights, it and we are all protecting our rights but we're also protecting the rights of a lot of other people, and i don't have a problem with that. i have done that most of my life. but more and more i have people asking me, who is going to take responsibility for this instead of just telling us, oh, it is not our responsibility, our procedures were bad. if you are the procedures, you are responsible, and so is the defense department, and both of you have gotten through this, both reports, and you say there is no political correctness, but

how to why it explain to them that still would get no indication of a man with a heavily loaded automatic to walks down shooting uniform shoulders who have been to war or are on the way to war, it is not a battlefield, it is not a war action, they are not entitled to the benefits of a soldier at war, and yet they are dead or wounded or they are shot in the brain and a half to rehabilitate themselves to just a alive. all of these things have happened to these people, and nobody is even defining the enemy. -- two on't understand two of the most important agencies and governments still have not defined what happened at fort hood. even mentioning that islamic terrorism had anything to do with anything. if he yelled out, "jesus christ

d," what they have said christians were involved? at what point does it become terrorism? that is the simple question. >> airey is a difference between somebody who is tied to a terrorist group and islamic terrorist organization, which we could not tied hasan to during our investigation, and somebody who appears to be radicalized by them. to make'm not here excuses, but where the difficulty lies is when you have somebody like hasan who are listening to somebody liked al- aulaqi and trying to determine the difference between what is in their head, there radicalization and mobilization, and that is something we did not foresee. the question is whether we had moved forward and done an

interview, would that have changed the facts. >> once again, getting back to this life or father who contacted me, that would say, wait a minute, all this stuff that he was talking to al- aulaqi about, isn't this the same guy the president said he authorized a hit on because he is a terrorist and he we killed him with a groan? >> it certainly is. >> it certainly is, and once again we see hindsight is. >> al-aulaqi who met his demise recently is different from who we knew. he had not been involved, that we could tell operationally, at this point. it does not change the facts, but he was and is a different person at the end of his life. >> well, finally, i guess i better quit, but i want to say one more thing. 9/11 took place, but the

american people look at it, all they do is say, we screwed up. they were all kinds of indicators, not only from your agency but others that should have kept those people in new york alive and at the pentagon all live, but we failed. we have spent trillions of dollars to fix that problem, and we failed. who does the individual american look to to protect us? the defense department? no. the fbi? no. it was responsible? i think i am. i think most of the people sitting up here think they are. and we depend on you and the other folks involved in this

fight with us to be effective. and quite honestly, if the average american is on to be frightened it as to who this government is going to protect them from who is going to kill us after 10 years, 12 years -- >> if i could just interrupt. it is a very unfortunate incident at fort hood, but i want the record to be clear there have been many, many, many other incidences where the fbi has presented -- prevented circumstances that would have harmed american since 9/11. i don't want to say this was the next incident. this was a circumstance in which the fbi did not hire hasan. they did not give him a gun. they did not let him on this base. they made a shot at looking at this e-mail and made a wrong

call. but i think you are correct in that the dod, which had plenty of opportunities over a number of years to look at this person, right, and to make some judgments is more comfortable than the circumstance in which somebody gets a discretionary lead. so i just want to be clear that at least my view of this situation that there -- this was i think preventable. i'm not sure that it was profitable in terms of where we put the weight at, more on the dod side, then on anybody else. >> and i thank you for the comment. i realize my time has probably run out, but i want to point out

that the frustration level, at some point in time, somebody has to be able who has some authority -- and this was the commission that looked into this incident as it relates to our law enforcement authority -- if the dot should have declared -- if the dot should have declared it an islamic terrorist event and did not and that had some inputs on the law enforcement side, it ought to be part of the report. what shots from these two reports is there is nothing in it. as the chairman pointed out, there is nothing in eight to indicate that this had anything to do with -- there is nothing in it to indicate that this has anything to do with what we have spent 10 years fighting a war about. it dumbfounds me, and you cannot explain it to people who have lost their families and our being just treated as if they were casualties of the workforce. it is really hard to explain. that is why i wanted to protest.

thank you. >> well, i think what judge carter is saying, and i share his concerns, is there were 170 or more people from my congressional district who died in the attack on the pentagon, on the day of the pentagon. i rushed out and sat on the hill and watched what was taking place. we will not make this into a 9/11 hearing, and let me just back up withoutmr. giuliano, you are a good guy. everybody tells me your a good guy. i don't think that is the issue. but the washington office, somebody in washington miss the opportunity to open the laptop. we don'ten open toed,

know, maybe -- and this is not a 9/11 commission hearing, but maybe ted olson's wife would still be alive. what dr. carter is saying is people don't understand. the laptop was not opened, and or recommendations coming from your guy out of phoenix about the flight schools, and there were things that were missed. and we want to make sure that nothing is missed in the future. also, i have other questions that i want to go through, but we're going to do a letter to you on this. but i think people have to think about this. i think you were misleading on the cameramen case. the dates and times where al- aulaqi came in at 4:00 in the

morning, washington time, that is 4:00 denver time. 4:00 a.m., where is he? probably at home. 5:40, the drop the case. al-aulaqi was arrested, they dropped the case at 5:40 in the morning denver time. then he takes a flight to washington. u.s. attorney is in denver, so all of this decision was done by 5:40 denver time. wow, that is amazing. >> sir, can i make -- >> sure. >> he was coming in before that. am i am sure he did. if you go back and check, not in fairness, -- in fairness, if you don't think you were a little

bit misleading, then we went to different high school, you have different approaches. you act as though the fbi had no involvement. while the fbi cannot tell him to drop, they can give a recommendation. we will give you a letter asking you to comment, but i think dr. carter, judge carter speaks for a lot of concerns people have had. i was the author of the master commission on terror in 1998. there were a lot of recommendations. guys appear on both sides of the aisle to not think there was terrorism involved, people said why are you doing this. you found the bush administration and then the clinton administration missed some things. what judge carter and his committee wants to make sure is it is not missed going into the future. were agents or supervisors rated

on their relationships with an outside groups? >> can you repeat that? >> were washington field office agents or supervisors rated on the development of relationships with an average two muslim groups? i have had some agents tell me that they were graded on their outreach. >> the community average personnel, maybe, sir, but as a regular part of their performance appraisal, i don't know how much that would way and to an investigator's day in and day out. >> so it could be in the rating? >> i don't know the answer to that question, sir. >> could you -- >> sure. >> was al-aulaqi or hasan advert a confidential informant for the fbi, as the san diego office appears to have suspected? >> no, sir. >> we understand that the fbi has a counter violence office

with the national security branch. this was done without submitting the reprogramming administration preparation required. what does this office do, and how will the work of this office do and handling leads like that of the hasan lead where political extremism could have played a role? >> sir, it is a very small office. about how many? >> one gs-15 and less than a handful of analysts. it came out of the requirement from the white house for all of us -- the department of homeland security, us, nctc -- to try to get back to the route, mr. carter's point, of homegrown violent extremism, but going back and trying to figure out whether we can get on the front and rather than being on the back end of it. in other words, can we learn

from what we and the fbi in particular, which is what this office is set up to do, can we learn from our investigations, can we learn from somebody you has become radicalized from somebody like al-aulaqi or somebody else and push that in some way back into the community to protect it from happening in the meantime. that is the purpose of this very small office that falls directly under the national security branch. >> on page 11 of the report, there is a list of 13th pilot plots that were foiled. are any of these 13 incidents ism?lving islamic extreme som >> i'm sorry, sir, what page are you want? >> page 13, -- page 11, a list of 13 of violent plots foiled.

>> many of them are homegrown violent extremism. not all of them. >> ok. >> he did not answer. >> were any of them not islamic extremism? >> so all of them had some kind of ties to islamic extremism. i guess my point is, and maybe i misspoke, they were not all considered home run violent extremism. i stand corrected. >> ok. based on the report, it appears that the most urgent task would be timely and throw pursuit of leads and reassure employees that legitimate and aggressive pursuit of leads suggesting violent islamic extremism will not be perceived as politically incorrect and not be detrimental

to their careers. is this what the office is doing? >> so it is an office that i think will help, and hopefully the other offices help us, our investigators, better understand what is causing radicalization and what indicators there are of those being radicalized. again, i go back to the point that it is not good enough to just understand those who are radicalized. it takes more. there are many people who are radicalize to never do what hasan did. when need to understand those who were radicalized and we need to understand the mobilization silicon perfect another four code. -- and we need to understand immobilization so we can prevent another fort hood. >> the commission report recommends a written policy on the division of the port among the fbi headquarters and field entities. it's just the fbi has already

done that. is that accurate? >> yes, sir, it is. >> can you provide written testimony to that. >> i will take that back. it is classified. >> one of the major findings is a lack of clarity over the owner shot -- over the ownership of the hasan lead, or the san diego and washington field office disagreed on the formality of the lead. as a bit formalize the process of resolving disagreements, were a process kicks in? >> we put out written guidance which will go into our corporate policy the next time it comes around. it is on a cyclical basis. >> one of the most troubling revelations in the report is the lifetime that was taken to act on the lead. sandy had a field office sent to the washington field office -- the san diego field office added

to the washington field office in june to worry and it was not looked at it until february. task force officer cannot read the lead until may 27. a cold, snowy day in january, may the azaleas are out. a good deal of time has gone out. during that time there was numerous contacts between hasan and al-aulaqi. is the time taken to act on this lead standard for a lead of this type corporate? >> it would have been then, but not now under the new guidelines. >> was this to be given a lead party that was not correct? >> not at the time. >> is the delay in acting on the lead, could have been related to work for thload? >> it could have been.

the squad was working on the inauguration and subsequently the shooting at the holocaust museum. again, regardless of work load, it should have been covered center. >> what does the fbi now believe is a reasonable deadline? >> immediately within 24 hours, priority one, seven days. and from the second that it is set, it does not matter when it is assigned. 60 days from the time san diego would have sent it, it would at been completed. [captions copyright national cable satellite corp. 2012] [captioning performed by national captioning institute]

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on families earning less than $200t >> my question is as the bush tax cuts are today, what is the law? the law is that they will expire at the end of the year. so at the end of the year, what type of forecasting do you do to prepare for that? >> well, the president's plan has the tax cuts not to expire for families under $250,000.

>> that's not the law. >> let me finish. >> no, sir. what is the sflaw >> correct. >> what do you have to do? if it's the law, you have to prepare for those tax cuts expiring, correct? >> i don't really understand -- what type of preparations are you talking about? >> do you forecast additional revenue coming into the government? >> no. because the policy is to -- >> from any of the tax cuts? >> yes, we do. the top 2%. >> and how much money will that be? >> over a decade it's about a trillion dollars. $850 of the -- >> but se quest ration, you're not planning on any of it,

because somebody made the statement, and i would like you make the statement se quest ration was never intended to happen. >> but it is the law. >> i think it was the -- the root cause problem here -- >> but it is the law. >> the refusal of republicans to acknowledge that the top 2% have to pay taxes. >> was the president's budget ever voted on in the senate? >> no. >> does it concern you that in a democratic-controlled senate by harry reid, that harry reid would not even bring up the president's budget for a vote? >> what concerns me is that we have five months.

>> my question is -- >> the refusal to -- >> sir, my time. >> does it concern you and the president that the democrat-controlled senate would not in your words vote on the proposal that the united states gave to this congress? >> what concerns me is that we have five months to enact deficit reduction to avoid sequester. >> sir, i have 1:30 left andly ask you until the time runs out. would it concern you? >> what concerns me is that the vast majority of the democrats and republicans in this committee voted in favor of b.c.a., which has enforcing function for se quest ration and they have not voted on

requiring the top 2% to pay their fair share. >> i expect you to be political in your comments, but my question was, does it concern you that the president's budget was not voted on? >> my energy and my concern is how we use the next five months. >> can you explain to me then why you waited until yesterday to put out any discussions as far as what was going to be exempt from what agency -- we have had six months prior to that. >> well, let's assume that all of us agree that the energy should be put against avoiding the sequester. no one thinks it's good policy. o.m.b. will be ready in the effort that january 2 comes and

sequest ration is -- >> i would like to walk through a few points with the witnesses. it was almost exactly a year ago that the budget control act was passed. initially it was asked for a clean bill in order to avoid default. they were not the ones who were insisting on the mechanism-backed -- >> that's right, the position was that the republicans refused to do deficit reduction last summer and the threat of default led to the budget control act. >> and mr. carter, you mentioned the design of the budget control act -- led to the 1995 act that is sort of the basic structure of how sequest ration takes place. the fact is that the -- graham

rudman was on the book for a number of years and it was a bumpy ride before congress reached the point where we balanced the budget in the early 1990's. just note that when it passed, congressman graham was on the record to say it was never the objective of graham-rudman was to have the threat of the sequest ration -- and that's the precise thinking of the budget control act enacted almost exactly a year ago, is that correct? >> that's my understanding as well, yes. both in the past and recent past. >> and at the time the speaker was boasting he got 98% of what he wanted in the negotiations with the white house. in fact the speaker claimed he got 98% with a deal finally voted on and sent to the

president a year ago. i would also like to go to one point in which my good friend was trying to claim that there was not a single proposal that the white house has offered that has been approved by the senate and house in terms of deficit reduction. and i would point out in the 2011 budget plan where they claimed $5.7 trillion in savings. $1 trillion was war savings in the o.c.o. account. and i realize today the chairman now claims that's a gimmick. but the fact of the matter is we're going to spend $98 billion in afghanistan this year, is that correct? >> that's correct. >> and c.b.o. scores those savings. a-pointly by tapping o.c.o., we're closing the back door on

transgression narrow spending. so it closes the back door so that we do not in any way increase the cap. >> and the fact of the matter is there's some overlap between government products and the vst majority of the house, and what the president actually put forward. and i think we should go back to mr. graham'sed a mow in addition. it's really a mechanism to stop -- and there are working parts we can get to get to that point where we avoid cataclysmic action. >> and we're five months force-out doing what we need to do and avoid sequest ration. >> people get a we have fought two wars on a credit card and post 2014, it's not going to be

down to zero, but we will be into that process of pouring money into those savings, because it's real government that government will not be spending. as a way of reducing the budget controled -- and we use precisely one piece of how we can stholve problem. >> driven by the policies of ending the war in iraq and drawing down in afghanistan. >> i yield back my time, mr. chairman. >> you know, i would think the gentleman would know, serving on this committee, whether a republican or democrat proposes using o.c.o. funding that we're carrying out in the future for 10 years knows that it's not going to be spent, because we know that we pulled the troops out of iraq, and we will pull

all of the troops out of afghanistan. >> so we don't need to hear whether a republican or democrat proposed it. >> i would note that but certainly your caucus is on record supporting that kind of approach. ly yield back. >> mr. turner, >> thank you, mr. chairman. >> it's ban pleasure having you here in front of the armed services committee. we're not usually of the habit of hearing such partisan statements in what is really a bipartisan committee. we don't usually hear people throw around republican and democrat, but you have very, very well, i want to commend you on your broken record on your partisanship with respect to the fiction that this administration has a budget or a plan.

we have already established, although you have tried deny it over and over again, that there has been not one single vote in the senate or one member of the house or senate who supports the president's so-called budget. the lack of that support means enough to plan. we're in august. august. there's not one thing on the table that we can pick up that has the support of the house or senate that would solve this problem that comes from the president. i can't imagine what it would be like to have the title of directors of office management and budget and have had no support for a budget in congress. i probably wouldn't want to get in front of congress and blame congress instead of the fact that a you have no plan. congress you keep saying congress needs to act, but congress can't do it alone.

just as the president signed sequest ration, the president is responsible for sequest ration and having provide nod plans in the supercommittee to have an action that would have been in effect avoided sequest ration. what we're dealing with now though is two things. one, your statements on the war, and i want to ask you a couple of questions about that. we have people faced with the fact that sequest ration might be coming and contractors concerned that there will be several penalties and actions against them as a result of failure to employees that they might be laid off because of quest ration. you said no one needs to provide those notices. so let me ask you first, you

said you're not a lawyer, but you might, i know, have an understanding of the authority of the position you sit in, so let's start with your position. do you have any legal authority or ability to waive the penalties in the warren act for non-compliance under threat of sequest ration? >> no. i do not believe so. >> ok. let me go to the department of lain's guidance. we have the fact sheets with respect to the warren act. they expresley state customers who vy threat warren act division by ordering a mas layoff without providing advanced notice is liable for -- and it lists all these. then it says the department of labor. this is their document since it has no responsibility under warren, cannot provide specific guidance with respect to individual situations.

this is their document. i'm assume you go don't disagree with it? >> the department -- >> they are the experts. >> their document goes on to say the responsibility is through the united statesal cricket quarters then the actual regs, it says the department -- these are the official regulation. the department of labor has no standing therefore it cannot express opinions of specific cases. so although you won't acknowledge it, they will, 10th statement people need not provide warren act notices has no effect. it may be the desire of the administration that no one do that, but it certainly isn't reality. it's a fiction. and now into reality. >> may i respond? >> the reason why people have

to do that is because of no -- we also have no detailed understanding of what the effects of sequest ration might be. you can't provide us with one document, zphrect >> in our testimony we illustrated specifically. >> do you have items showing specifically. >> one can't do that. >> the answer is no. >> the answer is -- you have no ability to -- >> if you want to give a speech, the witness gets to get more than two seconds out of his mouth. if you just want to badger the witnesses, you can do that in a speech and not in the form of a question. >> the gentleman's time has expired. >> mr. johnson? >> thank you mr. chairman. just a few questions or just a few statements i would like to make, i'm sorry. i would thank you for joining

us and i'm sorry we dragged you from your responsibilities to this attempt by republicans to wash therapy hands of this their own mess and they blame on the president. it's an election year and governing is something you take seriously which is something more than i can say than under tea party republicans. why exactly are we here? we're here because last summer the house republicans bowing down to their tea party base refused to honor the financial commitments of the united states government and threatened to undernine credit of their own country. scrambling to deal with that manufactured crisis, congress broke through the gridlock and enacted legislation that would

impose sequest ration unless we agreed on a balanced approach to meeting our budget targets. and now, instead of working on that balanced approach, the approach every serious economist says is necessary, what do the house republicans do? they passed the ryan budget. they cut unemployment. they excuse me they cut unemployment and training programs and food stamps, low energy and cut health programs for the sick and the poor and cut taxes for the rich and loaded up the defense authorization with pork. and the east coast missile shield nuclear facilities no one wants and billions of dollars in waste far below the their potster's cherry pie and

eat it too. it's not about obama's sequest ration it's about the about doe indication of the responsibility to govern and the terrible results. now the tea party republicans during the debt ceiling negotiations insisted on sequest ration as part of the deal to keep america from defaulting on its debt for the very first time in our history. mr., what would have happened in we had not broken that gridlock and which branch of government was responsible for this sequest ration policy? and last but not least, i would like to ask you whether or not the administration is willing to meet our budget targets by adopting a balanced approach

that involves a measure of spending reductions and a measure of revenue increases? >> in terms of the debt ceiling negotiation, i think it had a bad impact on the economy during that period of time. i can't imagine and don't even want to think about the impact it would have had on the economy if we'd actually defaulted. it's unimaginable. the threat of it alone had a bad effect on the economy. the economy could barely afford more bad news. think balanced reduction is the key. further spending cuts and revenue with the top 2% paying its fair share. you're right. the top economists, all of them have at the center of their plan, balance, spending cuts

and revenue. it's the lack of balance and the insistens that we can do spending cuts only that is the root problem here that has us in a situation where we are five months out and we have not yet replaced the sequester. balanced plan moving forward is it. >> you're suggesting this very congress that asked your presence today is the very problem. >> congress needs to pass balanced deficit reduction that the president can sign into law and avoid the sequester. >> i thank you, and i yield back. >> thank you, mr. shuster. >> thank you mr. chairman and i thank the witnesses for being here today. i would like to remind everybody that the house republicans have acted. the house senate has not acted. i would encourage you to do --

to ask the president to do what he did in the cyberbill. he needs to write another op-ed and pass something. let's get into conference. but to sit here and say we have not done anything is inaccurate. we have passed a budget for the past two years. so that's snag needs to be corrected in the record here today. my question goes to dr. carter concerning a multi-year authority, the multi-year contract. what percentage of what we procure today are in those types of multi-year contracts? >> i can't give you an exact percentage. i can find it out for you. but it's very small. but they are important, because multi-year contracts can be important, because you average it out and so it is more efficient.

sequester, if it occurs, would affect the payment on those contracts in the future. so it's a partial exemption to the thing i was describing earlier about obligating funds. >> and it exposes us to -- >> in general the changes for adjustments the kind called for in sequest ration, when you negotiate a multi-year contract, you look at numbers. >> but the question is there's liability there for us? >> it's less efficient if the quantities go down. >> so has the department of defense taken into cross-question what kind of dollars we're talking about? because if we cut them down, there's still going to be a cost there. so has there been an analysis

done on the contracts? >> contract-by-contract you're right there will be tremendous inefficiencies. losing the scale to -- >> sir i understand, have you done any analysis on that? >> no specific analysis at this point. >> is that something you can shield? the f-35 is one of those multicontracts. >> if 35 is not yet at this point in its lifetime, subject to multiyear contracts, but we can let all our program managers know how to make those judgment adjustments. they are grossly nirkt. >> but will you be able to present snows >> you've got to go p.p.a.-by-p.p.a. some p.p.a.'s might have multiple contracts in them. >> is there some ability to shield some of those multi-year

contracts? >> it really has to go p.p.a.-by-p.p.a. if it's going to be by education or agriculture. >> that begs the question, are you considering that? >> we certainly are going to take advantage of any flexibility that we can find. >> that's something you should be looking at, then, right? >> unfortunately there's not much, but we'll take advantage of every bit of flex ability that we can if this continues to try to deliver the best value we can for all the other government offices. >> again, that brings me back to where we started. the house republicans have acted. and i urge you to talk to the president and show some leadership on this. at last i knew the democrats controlled the senate. so to sit here and say we have

not acted is just not true. >> you do a lot of negotiations. in order to come to the table, you have to have two reasonable parties in order to get something done. and the approach -- the -- only approach, the top 2% are not paying their fair share -- >> what numbers are the top 2%. is that people, single folks that earn over 200,000 and a couple over $250,000? is that the correct number? >> if the package that is coming before you that ensures no tax cuts for 98% of families. >> you have been in the business sector, sometimes my tax return would show over $250,000, but i don't take that money back home. >> the president showed 97% of small businesses. >> gentlemen, your time has

expired. >> thank you mr. chairman. and thanks to our witnesses for testifying here today. as the newest member of congress, i was not here to vote on sequest ration. thank goodness. had i been here, i would not have voted for this irresponsible plan. this is an irrational way to deal with the budget deficit and our national debt. sequestration represents a failure of leadership in congress and is absolutely the wrong approach to getting our fiscal house in order. it would have a devastating impact on the service members and civilian personnel and defense contractors that are the major economic drivers in my district. and it would bring serious harm to funding for border security, a priority for me and my

district. to education, to public safety to disability services and essential services for the most vulnerable in my district. if they took up sequest ration, it would cut mortgage payments. utility bills, food, clothing performs, child care by the same amount across the board. obviously no family would or could do this. while i was "not top 10" here to vote against sequest ration last fall, i'm here to help stop it. i came here with a fullal intention of working across the aisle to solve problems. i've been told countless times, this is a pretty naive proposition. but i remain hopeful common sense and bipartisanship will yet prevail.

my question is for you, dr. carter, i'm very concerned about all these potential cuts across the board to both military and domestic spending. but i'd like to focus, with your help, on the department of defense. because it's such a critical area in my district and of course others. could you please help us by identifying three critical national security priorities that absolutely must be protected whether we have deep cuts under sequest ration or some other formlation? congressman jones spoke of one that is of great concern to me, how we treat our military members for post traumatic stress syndrome. but could you give us your three top ones that must be

protected. >> the first that comes to mind is our wartime spending. those engaged in the fight in afghanistan. >> as i indicated,. there's o.c.o. funding and the bad news is only c.o. is subject to sequestration. only slight silver lining on that cloud is that the operations and maintenance part of o.c.o. and the base part of o.c.o. become one account in the year of execution so without all the gobbledygook, it means we can take money from ordinary training readiness here at home in order to keep the troops in the field is funded in a way that we really o'them.

but that makes the hit on the readiness back here at home even harder. so you're shifting the pain away from the -- which is the responsible thing to do. but you make it even heavier. the second thing i would say is it's not entirely possible for those parts not in o.c. or maintenance and we are going to have to find other ways there to provide the material and so forth that the troops need in the field. otherwise i could go on and on. but let me just take a few. think military medical care was cited already. obviously that's an area where we will work very hard within the limits of this rigid law to do everything we can to make sure there's no impact on the care we give wounded warriors and so forth. of course not at the exemption

of military personnel is one way of signifying our year long debate, so theirs are four or five responses to your question s. they are many. >> thank you for being here. mr. carter, if sequestration happens, which none of us want it to, and we're going to work hard. but it's the law of the land looks to me like there's an awful lot of contracts that look to be terminated or scoped at a time where that is a part of the sequestration. do you have any thoughts on the cost? >> the contract termination, per se, is not required in the sense that if you've already obligated money that is on contract

>> so expanse contracts. >> so you have not terminated any on account of sequestration? >> no. >> the doctor represents the government-wide -- this problem is going to be thousands and how the an sans of contracts in obligation. would you anticipate that you've got some sort of authority to deviate or do you have to go contract-by-contract? >> as you pointed out. about 2/3 of the contracting we do is d.o.d. is it? otherwise you have to go contract-by-contract and where to make options and where to consider termination, very labor intensive. >> well, have you given guidance to all of these executive branch agencies and i

mean, this falls under your umbrella of responsibility. have you started to give them that guidance or is there going to be training or -- >> i gave you yesterday, as we know the exempt and non-exempt account and importantly constructed agencies to operate business as usual. and if we get this order or it's kicking in, we will prepare agencies. >> so they will have enough workforce trained and ready to go? >> as you know, the acquisition workforce is stretched to ensure that we're moving from -- contract to competition from cost plus contracts. >> reclaiming my time, the affect on the department of defense is -- once you start doing these adjustments, terminations, whatever it is,

it triggers penalty payments andor things as well as the cost of defending, which do we know what the gross is going to be in order to net back down to $55? >> you're right. spending ever in neet that $55 billion would be inefficient. >> but then doesn't it add to the problem? >> it would mean the money spent would be significantly less. >> do you have a guess yet of what the expenditures would be? >> again, you're cutting $55 billion. the remaining money will not be as well spent because of the inefficiencies you just described. >> all right. the -- let me ask you this question. dr. carter, you said earlier that during the first quarter all these agencies get their money obligated and pushed out

and it is not sequestration at that time. mechanically, how does that work? is there some sort of mas rush and get it pushed out to the recipients or how do you cut at that point in time if everything's been sent in >> well, it is what it is. if they have obligated -- >> so how do they comply -- >> they have to meet their sequestration target to those not obligated at that date. this is the subject we will go through with our department managers one-by-one. >> so the same principle applies? >> yes. that's just how it works. >> all right. we collectively and in particularly the administration seems to be taking the attitude that the sequestration as he's passing the fifth floor, he's saying, so far, so good.

we have five months left. and i'm not sensing much leadership. and i understand the machoship thufe pound away and there's those of us that have thoughts that we have spending problems. this president extended rates and increased revenue old-fashioned way. more people working, >> mr. chris? >> thank you for being here. mr. saenz, my questions are more about clarification. you had mentioned the -- not extending the tax cuts for the top 2%. now, are you talking about on income that is earned over $2 00,000 or -- >> it's the first $250,000 per family or $200,000 per

individual. so income above that. and it's that glupe we need to have pay their fair share so we have a balanced approach here. >> what's the estimate of how much money that would raise over nine years or 10? >> over10, $850 billion. and sequestvacation $1.2 trillion but with interest savings it's really like $984 billion? >> that leaves a gap of $134 billion that would then still have to come through cuts. if we use all of the income or revenue from the elimination of those tax cuts to go strictly towards sequestration. >> the president's plan has $1.2 trillion in revenue that goes beyond that of 103. but you're right, there are also further spending cuts.

so the balance here is not simply the 2% paying their fair share, it's for spending cuts in health care and other non-mandatory health problems or non-mandatory health programs. >> so if we have $134 billion over nine years to cut that, works out to be what, $10 billion or $15 billion per year in domestic programs. is that close? >> well, you're $10 billion-$14 billion sounds correct, but we already saved a trillion. so there's mandatory dates that are on both sides that the president's budget to the joint committee -- >> and just to clarify as well, the bill that i believe we're going to vote on tomorrow

that's come over from the senate, would that still have that $850 billion in revenue? >> the senate bill ensures that no family has less than $250,000 has any tax grease and as you point out, for families more than $250,000, that first $250,000 is protected and extending the tax cut for one year while not extending the tax cuts for the wealthiest 2% consistent with the wealthiest top 2% paying their fair share. >> and just to clarify, too, because you've both said it, that sequestration takes effect january 2. >> yes. >> and becomes law or is law but becomes effective january 2, but it's really until the end of the fiscal year that each agency has to show the

savings, because like in education, their smun already spevet so they have to take it out. same with defense. if they have already obligated money through the end of this year, then whatever is left -- >> the 8%-10% cut we cited on the defense side, that -- >> right. ok. so i guess i wanted some clarification and appreciate your indulgence. thank you for being here, and i yield back. >> thank you both for being here today. and i want to thank chairman keon for his leadership. i think it's been revealing the information the american people are receiving today, very important for the american people. it has direct impact on the citizens i represent. i'm very grateful i represent fort jackson, the initial army training facility. we are very proud of the marine

corps and how they are treat there had. i now will be in the neighborhood of -- gordon and i in the medical center. so i've got wonderful people, military families and as chairman of the military personnel subcommittee, i'm very, very concerned about what i have heard today. particular, dr. carter, yesterday and in advance of this hearing, the president announced he would exempt military personnel account from the sequestration. would you describe in detail will whether these accounts would be on hold in whole minor part? >> the law gave the president until early august to make determination. he did agree accept military

focused personnel, so it would be exempt from sequestration, that means the rest of the budget has to bear a larger share of the cuts. but we certainly think that's fair and a practical thing to do. it's fair, because it's the right thing to do by our troops in a time of war. it's a practical thing to do, because the way the military personnel regulations and laws work, it would be very dot take that much money out of the military personnel account if it weren't exempts. for instance, we cannot if you are leave military personnel. but the only way to cut that size would be stop exsessions which is unhealthy for the force. stop bringing in new people. stop permanent change of station moves which means

everybody freezes in place and no one moves around. so it's particularly unpleasant, as i've said, sequester's very unpleasant. so in a bad situation, this is making the best of a bad situation to exempt military personnel. >> and actually, you said it was stupid. and that's just unimportant to for our country. and as you mentioned about furloughs and recession, it's related to something else. the exception of military personnel accounts. from sequester means even more military personnel will have to be separate to offset the pay in benefits. >> ugh, no. because the entire military personnel account is connected in this way. what will suffer

disproportionately is the readiness in which it exists, pod rndation, research development, test and evaluation, all the major accounts will suffer as a conscience consequence. >> additionally, you said in your testimony this will affect service members serving overseas. june the commandn't showed concern for the "hollow voice." do you grow with the come encontinue to? how will they ensure service members are properly trained? >> this is the kind of tradeoff no one wants to make but is made under sequester. past 2013 when these very mechanical cuts are imposed, i think that the entire leadership of the department, as it was made clear, and the

president made clear in the budget that we submitted for fiscal 13 which didn't presume sequestration but did contain his intent on this matter, we do understand that military personnel will have to be part of leading in this budget. remember, we already have in our budget, $489 million of cuts. we already took that. we did include military personnel in that, because to do otherwise, as you suggested, would be unbalanced, and would mean we have a hollow force of the same size. >> thank you. >> secretary conner. thank you for joining us today. we appreciate you taking the time. let me ask you, you have previously testified before us that sequestration would affect

various programs. can you elaborate more on that and look at how it will affect different ship building accounts. for instance, the ohio class replacement submarine where we know the models for procurement has been a virginia class submarine and has been a critical to our force in the asia pacific. we know how important that is and can you comment , too, on how sequestration would affect our ship building industrial base, specifically the suppliers and venders that support that industrial base? >> excellent question. and i share all the concerns that are implied there. the sequester does apply to each and every program, line item. some programs have programs that are lined and -- this is a

detailed pain for each and every management of each and every one of our programs, which leads to inefficiency, and your ship yard yard. our ship yards plan out their work years in advance so that they operate in the most efficient way, and that will cause us to make very inefficient ways. so as sad waste of the taxpayers procurement deloor run things this way. >> sure. how would it affect the ohio program? in your estimation? >> i can get back to you in more detail, but it will be largely r & d money. so it will affect the rate at which we acquire the design

plan of the replacement and we will work as hard as we can, but there's definitely a risk of that. >> let me ask you, in your understanding of the ship building industrial supplier base, do you think that's building with sequest ration? do you think there's a possibility that any of those small businesses would go out of business in the interim? >> i do. the bottom of the supply chain is particularly vulnerable in times of economic inefficiency, which this would engender. we work very hard to protect, particularly the small businesses that supply defense. and the reason for that is small businesses are particular levi brandt and good sources of technology. they breathe new life and talent into the defense sector, which we always need. so bere always concerned about the small businesses and will work hard to keep them in the

game. >> how difficult and costly would it be to reconstitute a small-based supplier if it were unfortunately to be affected by sequestration? >> well, we worry all the time about exactly that. and not just in the context of sequestration but in budget cuts and management day-to-day. it's very hard once you lose a specialized supply chain contributor to regain that specialized expertise, so once you lose it, it's very difficult to regain, which is why our whole industrial-based policy is such an important part of what we do in defense. >> i want to point to comments made about brac brac. there's been a lot of the and when with secretary panetta testified before us, he said specifically looking at the context of the total spending the administration's policy was to pursue a brac in 2013 and

2015, and i put in a bill that set aside brac in 2013. i was surprised when president obama visited richmond, virginia and did a sitdown interview and his quote on brac was this. as you know i don't think now is the time for brac. he said we just went through some base closings, and the strategy we have does not call for that. and i'm just wondering, was the president misspeaking there, because it was clear to me that secretary panetta said it was this administration's policy to pure sue brac and then his comment seemed to be counter to that. so i just wanted to get some clarification. >> no. the president is right. we did not build into our 2013 budget submission any savings or presumption about brac for

the very simple reason that that's not an authority we have. that's an authority on the congress. it's an authority only congress has, so it's never a prospect of any brac in 2013. down the road, if we continue to have reductions in overall defense spending, it will be a necessary corollary of that, that we will have to revisit. brac is obviously not going to happen in 2013. >> there were also no savings in the five-year window of the budget. i think the president has been very clear this is not the economic time given the fragility of the time. >> we -- >> ok. very good. >> mr. scott. >> thank you, mr. chairman. and gentlemen, thank you for being here. i did not vote for sequestration. i know commitments were made at the highest level that this

wouldn't happen and we wouldn't be sitting here today, but we are. and unfortunately for me as a man with a wife and soon to be 3-year-old boy, i'm quite honestly tired of the blame game. i'm going to live under whatever we do for a long time in this country, and i and the rest of the freshman class want to get this resolved. i would like to, if i could, talk to you about a couple of things. if you listen to the president, he's essentially said if y'all would just pass my budget, everything would be ok. well, help didn't get a single vote from democrats or republicans. so it's not my fault that it didn't pass. he wasn't supported by his own party. say with the jobs bill. as i've listened to the president come out and talk, he's talked more about the -- than anything else. i understand you said and i take it at your word that his tax bill is coming to the house. i assume we will have his total

language and you said it will generate somewhere in the range of $850 billion over 10 years. >> yes. >> we spend approximately $ -- the rule generated $47 million, so the last 18 months i've listened to my president propose corporate jet tax increases and a buffett rule if funds for 10 or 11 hours. the bottom line is this, the tax code we're living under today generated $2.567 trillion in 2007. it generates less than that today, part of it is global recession, but part of it with due respect to the president, part of it is the class warfare that he is perpetuating, and with due respect, there's a

difference in taxing schedule less income and taxing w-2 income. why would -- you're obviously a smart guy. but if you're a schedule s business owner and you're going to pay schedule s taxes at approximately 40% under the president's proposal, all you can convert to schedule c and pay him at a lower rate than what we have today, why wouldn't you convert your schedule s to a schedule c and pay a lower tax rate? >> first of all, the president presented a very detailed plan to the committee. >> but would you -- >> i operated in the economy in the clinton administration which is a level of taxation that we want to return to, i can tell you there were plenty of incentives to grow my businesses. probably about 4,000 people. plenty of incentives to grow

businesses in this type of taxed regime that the president recommends that or proposes that we return to, so the top 2% are paying their fair share. the president is also in favor -- >> the top 2% are paying their fair sharkse no family with income under $250,000 are paying more. but the president, to your point, the president is very much in favor of tax reform. so we have a similar system. >> has he presented a proposal? he has not presented a proposal with all due respect. >> there's principles. >> it's time for him and the administration to stop blaming george bush. the bottom line is we're sitting on $10 billion a day in this country. i asked this of another member of the administration, the only other member of the administration that the president is allowed to meet with in the freshman class

which represents 25% of the congress. how much -- the budget for fiscal year 2015, how will the total received -- >> it's derived by having to top 2% pay their fair share and us returning to the clinton era tax rates and ensuring deductions are limited to 10% for the wealthiest top 2%. there's other proposals for the tax piece and again, the president would lover to do tax reform. >> with due respect, the president's assumptions which -- assumes the revenue from the next period. >> i don't believe that to be the case. the president's tax proposal is

corporate and tax neutral. now you have the economy growing and picking up pace. we're not where we need to be. >> i think that's the problem the president's definition of growth and the congress' definition of growth is different. >> and the president was asked over four separate times -- >> gentlemen, time has expired. >> just to clarify something that mr. whitman brought up. i remember in a meeting with secretary pennetta in my office. i don't know if you were there, dr. carter, but the request of us was that we have two bracs going forward in this strategy. is that correct? >> yes. he was asked for authority to

begin for a brac in 2013. that would not have led to any brac activity, obviously in the process there's a commission and so forth. >> but it wasn't in our bill, but it was at his request. >> yes. >> thank you. >> mr. polatso. >> thank you, mr. chairman. i would also like consent to introduce a report be ernst & young about tax rates on high income tax pairs in 2013. can i enter that for the record? >> ok. i am going to quote from it in a second. but first of all, we ask ourselves why we're here. if we're honest with ourselves, we can look back over decades

of fiscal mismanagement by both parties. both republican and democrat and maybe one or two independents. if they were out there at the type. but we just made some poor fiscal choices year after year after year. and pointing fingers that the time is not going to resolve sequestration. you mentioned over and over, both of you on this panel that we have five months to avert sequestration. and we need to be working together. we don't need to be engaging in partisanship or playing the blame game or whether you voted for the bill or didn't vote for the bill. it's coming at us quick, like a fast-moving train, and if sequestration is allowed to take effect, we know it's irresponsible and the damage it will do will be irreversible. but you did mention the but you did mention the president's plan to raise