yet, the u.s. government, the worldwide security richmond, and industry spent a lot of money to make sure that they were not successful in another time. . . money. let me ask you about how tsa has responded to these threats. i wonder if i can put the question this way -- there is a public confidence and public appreciation problem for tsa. i wonder if part of that is because the public might get the sense that you are primarily a reactive agency. they have the printer cartridges. someone tries to like a shoe on fire, we have to take off our shoes. there is a liquid threat, and we have to take our liquids out. it seems like we are one step behind.

is that fair? >> i think it is in the 10 year history from the standpoint of trying to develop the predicted intellence we did not have on 9/11 where actions could be taken to detect and deter. >> do you net? >> we are much better situated. there is no guarantee. in terms, there is no 100% guarantee. i am a strong proponent of that. a risk-based intelligence approach to aviation security. to that point, i think we have to focus on how we can take the intelligence that is so much more robust and with improvements in technology, how can we make better decisions in terms of pre-screening people so

we can expedite their physical screenings? i think the one size fits all construct after 9/11, we have to treat everyone as a possible terrorist. we have progressed with the technology and intelligent. we have moved away from the one- size-fits-all construct. we saw the two million passenger who has gone through a project. -- pre-check. we can pre-screen them. we are operational in 19 airports. 35 by the end of the year. i know some people have been through the pre -check. i think it is helping redefine the image of tsa. a number of other things we're

doing internally. to move away from the one-size- fits-all construct. >> i want to take a step away from aviation security and asked about the procedure. most people in this room travel a lot. they would eventually qualify. if wwere to look around, we are a pretty much in the script. i wonder if -- a pretty homogenous group. i wonder if you are concerned about a two-tiered system exacerbating what we have in this country, the sense that the insiders have the game rigged. that there are two systems and that is hurting confidence in institutions. >> only slightly. i am focused on how we can do it in the mt efficient way.

the focus is, how can we make sure that everybody has the hiest level of confidence that when they get on a plane, there is not a suicide bomber or something in a checked bag that could bring the plane down. most people look at the aviation security and have high confidence. everybody agrees on that. that is a goal we need to focus on. the question is, how do we best ecute on that mission? i have heard a lot of opinions of -- from a lot of people on how to do that. there are some great ideas. i welcomehose ideas. it really gets to, we have differentiated between passengers for a long time. when i traveled, i would go to the ticket counter and show my credentials. they would give me a form to fill out. i wouldhilip outcome but it

would sign it. i would take it to the exit leg. -- i would fill it out. they would sign it. i would take it to the exit leg. i would get on the plane armed. i thought, it cannot expand that? we started with the airlines. if you have been flying for years, it is possible you are a terrorist. it is much less likely. we are not in the businessf eliminating all risk. we are in the business of managing risk. as we try to do that, the more we can learn about somebody ahead of time. what that allows us to do is spend more time on those who are selected. as others have mentioned, it is the unknown. we know everybody's name, date

of birth, and gender. beyond that, not much. and that you are not on the watch list. i want to make sure that we can focus on the unknown. while improving the physical screening experience for the passengers while expediting their screening. >> we will let the chips fall where they may. let me come back out of left field and ask you on the other side, as part of the risk-based security intelligence, do you profile on the basis of ethnicity, country of origin, religion? if not, why not? >> the short answer is, no. we do not do that. >> why not? >> we try to determine everything about aerson as possible based on their

willingness to share. because of the constitutional system, we do not do that. other countries are very successful in using profiling. there is a fair amount of debate on that question. would we be better if we profiled? i do not think so. one of the things i saw when i first came over, a terrorist has no face. the idea it may be someone from 9/11, it could also be a 24- year-old son of a prominent banker and a foreign country who is african who may not meet somebody is profile. what profile do we use? is it the israeli model? if the fit this category, the better plan on the three hours. -- if you fit this category, you

better plan on three hours. that works under israel's laws. 11 million passengers a year. we have 12 million zero week in the u.s. the scale of it, the professionalism, the work force, having already served in army for two years. the bottom line is, we do everything we can to differentiate, not profile, based on intelligence. >> when you think about the risk-based security you are trying to install, looking forward, when you think of the data capabilities that are coming on line, how did those two meld together? hug you apply the risk-based model? -- how do you apply the risk-

based model? >> it is all voluntary. when i talk about the strategy, it is based on a voluntary system other than the watch list. if you make a reservation for an airline ticket, you are agreeing to have your name put against the terrorist watch list. that means what the focus is on trying to identify, not only what the airline has in terms of frequent flis or what we he because somebody has signed up for a global entry program. it is one way you sign up. even if you are not a frequent flier, if you want to sign up you do that through the global entry program. you just need to have a passport. given those structure is, what we are looking to do is expand the tsa's pre-check concept more

broadly. i mentioned the 2 million passengers as of yesterday. lo tre people going through more pre-check deciated lanes so we can focus on higher risk. recognizing there is n guarantee. >> you want to get peop into the pre-check line, because you know who they are. >> the more we can do that -- two years ago, i looked at, i did not see the current contract as sustainable long term. either from a resource perspective or an engagement with the traveling public. those who control our budget. that is what this is all designed to provide more effective sharing. >> let's talk about the insider threat. in this country and in britain,

we have had examples of people who are employees of the airlines or airports who have been involved in plots. given the sheer scale, the number of employees involved in civil aviation, what is the nature of the insider threat? how much cooperation the you get from airlines and airport authorities in addressing what seems to be a pretty big vulnerability? >> it is a concern for everybody in the industry. it is something we focus on to try to identify somebody who may pose a threat. that is where we are largely dependent upon the entire community, the law-enforcement community, which has come in the past, identified insiders before the airlines. i can think of several examples.

those who may have connections with others who are a concern. that is based on someone who has said, you'd better take a look at this person at this airline or airport. that is something that happens on a not-irequent basis. when we are talking about a glob supply chain, a global passenger chain, the one weak link can be a challenge for all of us. >> how you address that? in the united states, you have better partnerships with the airlines. how do you address the potential we clink? a baggage handler in pakistan or russia or wherever? >> that is the challenge. we do it through the parership

with the aviation security counterpart. also, being informed by security intel services. the example, going back to the cargo plot, being shipped out of yemen. whether there was an insider, that is still debatable. it was outstanding intelligence, in this ce, by another service, that gave the tracking numbers for those two packages. but for that intelligence, those packages were on route t chicago. it is that type of information nalziing nd operat that is critical for us. the same thing goes for the insider threat. the belief is that the host a

service would identify and take appropriate action. if not, it becomes a challenge. >> it raises the question of cargo. you touched on it earlier. this is another area where it seems there is a significant vulnerability. you cannot examine every piece of cargo going on an airplane. how'd you address the cargo vector? >> it is a vulnerability in a different way. there is a whole different screening protocol. in the u.s., all cargo and all checked bags are checked through explosive detection equipment. that is the confidence we have in the u.s. if that equipment only identifies a couple of explosive chemicals -- depending on what type of

equipment you are talking about. hundreds overseas. here in the u.s., it is calibrated to detect the most common types. what we found with the underwear plot part two, a different type of explosive had been used in the previous one. we have gone back and read calibrated all of the equipment. even working with r canines to have them trained to detect this different type of explosive. when we look at the international -- the global supply chain, the issue is, what is the capability of the coast airport in terms of detecting explosives? we just signed an agreement with the eu where we recognize the

eu national security program. instead of the tsa going to inspect and validate the cargo program, it was a huge of the taking. the eu took on the responsibility of establishing a national program. we recognize that. that is a way we move forward in partnership to say, how can we love all our resources and not try to be the one agency or department that does all things at all places at all times with all people. >> aouple more and then we will open up the questions. the tsa is still a very young organization. it came from a career in the fbi. compare and contrast.

i wonder if you have a moral problem sometimes. everytime you turn on your comput, it is a do not touch my junk stored. -- story. the poster kids for everything that everyone resents. had the force this organization going forward? >> -- how do you fge this organization going forward? >> the tsa is just 10 years. there are a lot of challenges. that is through training, for example, all officers are going through tactical communications training. they had not had. it is customer service.

we were talking in terms of what targets. how can you be escalated -- you de-escalate the situation. the human response is to get agitated right back and say, i am in charge. the offices are just about done with that training. we have also started tsa academy at the federal law enforcement training center. we started the first class is for supervisors. we have over four thousand supervisors, some of whom had not received any leadership training. they had not received any mentoring, training. immature organizations -- we also do not have an office of profesonal responsibility,

opr. deconstruct after 9/11 -- the construct after 9/11 was a direct heading each airport. they would give out discipline based on what they thought was appropriate. there was no standard system. i brought over an opr trainer. we set thaup. use the reports about someone being fired, that is under this construct. all of these things are designed to encourage better customer engagement, passenger engagement. >> last question before we open it up, this is one front in the struggle between nation states.

the united states and multinational killers. who is winning? >> clearly, we have had success, the u.s. government, in terms of not a repeat of 9/11. since 9/11, imagine the shoe bomber. -- you mentioned the issue bomber. two russian airliners were brought tdown. 90 people killed. we look at the liquids plot from the u.k. in 2006. the cargo plot. the most recent underwear plot. the detection capabilities depend on where the person would have gotten through t global airline system. we have these threats.

the question is, how can we keep it situated to mitigate or manage risk without trying to eliminate risk. everyone assumes risk. they are assuming some risk. the idea is, how can we mitigate or manage the risk. >> just to follow up, we have foiled plots. ere are other consequences. the money, you mentioned. tens of billions of dollars. the sense that america has lost some kind of pride or some kind of personal autonomy. the fear that the shadow that we live under. are they accomplishing the goals they have of disrupting our society? >> it is a debatable point depending on what perspective you want to take. clearly, there have been

significant changes since 9/11 to how we go about preventing another catastrophe. there is a huge interest in doing that. i think where people disagree, people can always disagree, on how do we best do that. i think the answer is not going back to pre-9/11 days. its rking smarter, more efficiently. what we're doing with the security initiative, those of you with children 12 and under, ose of you who know people 75 and older, for those people 75 and older, we did a fair analysis with great help from the bureau. to say, where are terrorists? based on age, we made the decision to do expedited things

for children 12 and under. members of the military, they are part of the pre-check program. we will be expanding that. the great facilitator of that. we have all of these initiatives to try to move away from the one-size fits all. to give the public greater confidence. >> ok. let's open it up to questions. there are microphones at each side and in the back. let's starright here. if you could identify yourself. fire away. >> good morning. i am with ibm. when we think of tsa, we think of the airports. i heard a story that someone had been stopped on the road.

is that someone you are planning to do more of? is it connect to airport security? are there any of the things you anticipate doing? >> something is not right with that. we do have a visible protection response. they partner with state and local law enforcement. some 97% of our budget is focused on aviation security. a small amount is focused on surface transportation. buses, trains, passenger trains, trucks, things like that. what we do is partner with the local agencies and state agencies to do the teams which are designed to be random, and predtable -- unpredictable

shows of law enforcement. we know from the fbi, the briefings, in the u.s. and the u.k.,errorists are deterred by three things, a visible police presence, canines, and cctv. we know from the london bombers, cctv, they did not care about. one of them looked at that camera. he said, it did not matter. he was going to be dead. it was like, so what. we will do surveillance. in washington, d.c., if they see no police presence -- next tuesday, there may be a team that has 10 to 20 people.

>> airport security, do you need to redefine that out wher i was in libya, saudi armory's looted. -- i saw the armories looted. >> it is not an issue in the u.s. that we have seen. we do not know of any in the u.s. it is a concern. perimeter security, from time to time in the u.s. -- in utah, we had a pilot who was wanted for murder. he was able to get into a small regional jet. he was not able to take off. he caused some damage. >> you need to beef up the perimeter security. >> the airport have the responsibility for it. we help them with it.

we set the standard. they do it. >> next question. my daughter lives in london. she tells made the bricks use irish of identification. -- brits use iris identifi cation. >> in certain airports they do. any metric is good. proving that the person who has access is that person. it is not a help for what that rson is thinking. i use the example of an investigation i worked on in the fbi. the flight took off from jfk. it crashed on the coast of rhode island. i helped lead the recovery effort. the bottom line was, we found

the forensics that showed why -- the explosion. the co-pilot took the flight down. there were 30 egyptian officers on board. the belief was he wanted to kill those officers. iris scans would have proven he was the co-pilot. it is why we have moved to known crewmembers. the most known and trusted people on the flight. if we cannot trust them, we are in trouble. over 27 dozen times a day we do trust our lives to the flight crew. we want to expand the use of biometrics. it can bvery costly. the question is, who pays for it? is it on the u.s. tax payers?

the employees pay for it? >> you like it. >> i love it. it is a question of the cost. >> how about over here. way in the back. what's good morning. i am with boeing. we are in support of risk-based screening. you like to have something that is more like global entry and less like frequent-flier. people can get into frequent- flier programs without a background check. what are you doing about trying to look at a hybrid of global entry. i know you do not want to make it $100. a lot of business travele are willing to pay money.

if they are traveling within the u.s., to get into a system and do the background checks and be able to do that. what a year looking at with respect to some type of hybrid system? th background checks, fingerprints, things th are not in a frequent-flier program. >> we're working on that. the expansion of the security provision, particularly as it relates to pre-checks. we have been in discussion with several companies including one airline that are proposing something where they would bear the cost. the question is, is it a fee that the u.s. would be charng? all kinds of things, it takes years. what we're interesd in is private-sector proposals. that looking at some melnow,

would do that. the passenger would bear the cost. we see that as a key enablers for the expansion, the broad expansion. >> it does raise the question, the two-tiered system wheryou can buy your way into better treatment. you can buy your own government. >> $100, that is for five years. $20 a year. if the fly once a year, even if you never fly. at $20 a year, it is hard to argue that is an onerous cost. that is our position. >> fair enough. this gentleman right here. >> good morning.

good to talk with you again. a question for you on funding. it is a challenging environment. two things. one being the explosive detection systems that were deployed after 9/11. they are 10 plus years. there should be recapitalization effort. if you can give us color on the funding issue. the air cargo screening. funding for deployment of systems. you have to forfeit 50 airports. -- have 450 airports where they might be deployed. if he could give us some information on that. >> the recapitalization is a key issue with the life cycle coming to what was originally proposed as the useful life cycle. what we are finding is some of the equipment is doing well

beyond the life cycle. we did a budget presentation on monday. the budget year goes into effect october 1 a year from now. there will be continued funding. it is a questionf what level. same thing with what we e doing in terms of the air cargo. the funding is there, it has been. it is at reduced levels. as is the government budget in terms of being reduced. i do not know for 13 or 14 yet. the belief is that those key technology enablers will be maintained. they have to be, otherwise we grateful abilities which is not good for anybody. >> -- we create vulnerabilites

which is not good for anybody. >> did you get support for your budget request? >> yes. it is interesting. there is a lot of focus. on how we can do a better job. when it comes to a budget, there is support for those things we described. when it is all said and done, there is a realization, these are key issues we need to make sure we did not greet vulnerabilities on -- create vulnerabilities on. >> fallen upon the budget question, it seems the other side of the coin is taking an internal look at the 21 levels of security. which ones are the most effective. can you speak to that? >> for those who have followed,

we talk about 20 different levels of security we have. 17 of which are primarily tsa responsibilities. the intel is one of the key ones. for the last year, there has been an efficiency review at tsa. all the things we had been doing. one example is our behavioral detection officers. they engage or observe passages. a classic example, a bdo would have beenseful, on christmas day, 2009. he was walking to his date with his bomb. what i would have loved it is to have an officer in plain clothes off to the side. a uniformed officer walking towards him.

he sees the canine, bought officer, what i would have loved is to see, how does this person respond to that? does he continue walking, knowing that there is probly vapor coming off? the officer might observe something? that is the whole premise. in two airports, we have taken that to the next level based on some best practices to do what we call a program. some of you have been through boston logan. you have had a brief conversation with an officer about your travel and plans. the whole idea is, how can we learn more about people. it is not so much about what your answer is, may be intrusive to some people.

you can decline. it is more how the person responds. critics say, you have not cut any terrorist. that is true. we are not aware of any terrorists trying to get on flights. there was a report a couple years ago that said, the program does not work because there have been 19 or 20 terrorists, 24. these terrorists, almost all, we're not bomb throwers. the finance there is going to raise mey to send back to whoever. that person is just a businessman or woman who is going to do their work. it is different from a terrorist who is going to blow up a plan. there are different manifestations.

that is one example. we do a number of different things we are looking at to try to provide the mt effective security. the review is still ongoing. along with the review of our headquarte structure. we have done some real reorganizing to create better efficiencies. a realization that our budget is less than it was last year and will probably be less next year. >> this gentleman right here. >> another budget question, what do you see happening to the level of the 60,000 strong labor force? >> 60,000 is not only the front line for us, the management for that, it also includes federal air marshals. they are a part of tsa. and all of the different

components. we have 47,000 security officers. about 14,000 of those are part- time. if you travel a lot, when it is really busy, monday and friday, we have a part-time workforce to cover those times. on on a wednesday, it may not be so busy. we do not have as many people's back at that time. that is one of the responsibilities we have. one of the challenges is to try to professionalize the work force, more part time, people may say, that makes more challenges. it is not that simple. some of our offices are part- time, some are full time. right now, the budget is focused on becoming leaner, more efficient, how we deploy that

workforce. there is no discussion about reducing the size. there have been questions about -- i had a hearing six or seven weeks ago where the chairman of the committee of oversight ask what we would do with a smaller workforce. my response was that would be a challenge. >> you feel you are immune fm work-force cuts? >> i would not say immune. our current budget envisions full staffing. 14 looks, that is all -- yeah. what's next, rht there. -- >> next, right there. >> i am very concerned about the protocol.

i assume it is a lot different than a regular airport. as the former owner of a plane, it seems like you got in and just took off. >> the general aviation area is under review. we are not talking about the 1%, we are talking about the 1% of the 1%. when you fly on your own, whatever it is, the fact is there are different levels of security. we have tried to address that through rulemaking. we work closely with industries. there is a rule in process that will address a sign, which come of vulnerability, perimeter security, locks on the plainnes. when that is published, we will get comments and move forward.

in it is in and nobody's best interest to have an airport -- it is not good for the industry, the airport, anybody. the industry has been very responsive in terms of voluntary issues. we identify it vulnerabilities. here is what you should do, generally. it is not in the form of a regulatory action. . time,see from time to that can be an issue. the access to the large, wide bodied planes with extra fuel, that is our highest concern. the fact that somebody might get into a small cessna, that is not a good thing. from an over all u.s. government and industry perspective, what

is a return on investment from time to lock down every airport as we do for commercial aviation? that is part of the dialogue. >> you are willing to tolerate a greater risk due to potential consequence? >> it is a recognition that we cannot guard against all things, all places, all times. we can do more to try to do that. the cost to the taxpayers and the industry would be high. there is the question of, what is our return on investment. >> the people affected have a lot of clout. >> they may. everybody in this mill you has a lawyer. i hear a lot of lawyers. [laughter]

then i wake up and start the day. [laughter] that is my opinion. some are very vocal. >> be right back here. this lady here. >> i am the spouse of an active- duty marines. my question is, i have had the opportunity to fly from japan here, i have noticed that they did not require us to take out shoes off -- our shoes off because they have a device we can go through. if we have bottled water, they are able to put it in a device that can detect what they are looking for. why do not have this? is this in the works? >> let me start with the liquids. the issue with the liquids came

in after the 2005 plot. we have bottled liquid scanners in the u.s. we have nearly 1000 of those. it does cause additional time and processing. it slows down the checkpoint for passenger and causes additional rk. we can do that. we do that for medically necessary liquids. those that can exceed the 100 milliliters, 3.4 ounces. we are working with the industry and technology to improve that so it can be a more expedited fashion of doing that. we are working with the eu in terms of trying to facilitate the flow of those liquids and particularly perfumes and liquors. tamper evident bags.

i have a meeting on monday with the eu and canadians and australians. that is one of the issues we will be discussing. on the issue is, there is different technology. there is not technology that allows for the full range of security screening other than for metals -- metal objects. in terms of explosives, whether it is c4 or tatp, there no good technology that aows for the efficient detection. it is a policy matter. in the eu, s theyhoes to stay on -- they allow shoes to stay on. with our high confidence

passengers, you are allowed to keep your shoes on. we are working on expanding that. right now, we are in the process. it is not there. >> why do we have to take our shoes of domestically? what is the risk? >> it depends on whether there is another richard reed who has decided, let's exploit something that was tried previously. probably, it would probably be on a regional jet. the question is, what risks are we willing to take? if it is that flight that is blown up because of somebody with a shoe bomb, and you are on it, that is not a good thing for you. as we saw with the liquid plot, oftentimes, it is not just

looking at onetime. we're looking at multiple flights and multiple venues for the maximum effect. if you have wanted, that is a terrible thing. if you have won two -- 1, 2, 3, 4, 5, 10, that is a problem. we get tere we have high possible conferencing technology or we get to the person and the technology then we make different policy decisions. >> ok. a few more here. the gentleman here. >> i know this is a topic on aviation surity, but i would like to address the issue of real security. i am always pleasantly surprised how relaxed and easy it is to get onto a train at union station.

it is so easy for summit to put a bag on a train, get off the train and have -- for somebody to put a bag on a train coming get off the train and have the train blowup. what would do differently if there is an explosion on a seller gone to new york? >> that is a good question. it gets to the heart of where the risks. from what we have seen overse, from the madrid bombing, what we have seen in india and pakistan in terms of rail -- there have been more people killed and injured in rail attacks than in aviation over the last 10 years. so the focus is what could we do differently? there is a lot we could do. there has been a fair amount of discussion. we could do similar screening at

the railways as we do checkpoints. there is not a lot of appetite for doing that. what makes real trouble so efficient and easy and positive is the idea of published schedules that are predictable. but then you have the open architecture. the ability to get on and travel basically unhindered. you will probably see viper teams working with amtrak. but those qualities are what make a day attractive target to terrorists. getting back to the other part of your question. i think it is because 9/11 involved aviation in the u.s., that is our major sector. as we look at rail safety, there are a lot of things thatre done, could be done more, but at

significant cost and that is a public policy debate that congress and two administrations have decided not to invest heavily in that area. >> this gentleman right here. if seems like the benefits pre-check have an artificial joint. is there a thought about changing that? >> we have addressed several folk if your pre-chat then you walk through a metal detector as opposed to the head -- the body scanner. to explore different where is that may include the body scanner as part a pre-chuckling. it is more difficult to do that.

-- pre-check lane. it is more difficult to do that. it is not resolved yet. >> i want to follow-up on the body scanning, particularly the back scannerevice. we are a country that is over- tested medically. there is concern about radtion exposure that we have in all kinds of places. how do respond to critics who say, in particular the back scanner device, is expensive -- is excessive to exposure of radiation to the public? >> before deployment been continuing, done by whether it is john hopkins, fda, some other studies that have been done saying that the exposure is so minimal but it is the equivalent of flying a 30,000 feet.

on a cross-country flight, how much radiation you get, the three-minute exposures would you get when you go through ait. you'd have to go through 5000 times in a year just to make that minimum safety standard. you have to go 15,000 times in one year. they are receiving much more naturally occurring radiation. the whole idea between having twtypes of technology is trying to get beyond the current technology to get to a breakthrough technology to detect a small thread with the dust alarm revolution possibility and not be dependent upon one technology and one manufacturer exclusively.

out of the 750 or so we have around the u.s., all have been or will be converted to automatic target recognitions. >> to cloud the private area. >> manner woman, midgetman or woman, it will be the same. >> do you -- man or woman, it will be the se. >> do you store these images? >> no. >> promise? >> yes. [laughter] >> on the question about by country, you answered about individuals. does that mean that mogadishu vs. barrett vs london, there is no change in white -- vs beirut vs london, there is no change in what you pay attention to? >> in terms of travel patterns

and histories and things like that for non-u.s. citizens we may look at it. it is not profiling, but if you have been to yemen six times -- the times were bomber is a good example. he had been from where he lived in connecticut and new york five times over the past several years -- he is from pakistan. is that an issue? not necessarily. but they would be added to the tch lists as a selectee or derogatory intel and they will be made no fly. in terms of generics, iis more -- it is not profiling

based on ethnicity or race, but based on behavior patterns. >> so the trip wire would be repeated trips to pakistan, for example. >would it be repeated trips to ireland? quite possibly. we know there have been. -- >> possibly. we know there have been. the whole risk-based german intelligence is just like that -- risk-based driven intelligence is just like that. is this summit we should be focused on based on travel patterns or history or something like that? -- is this someone wehould be focused on based on travel patterns or history or something like that? we are clearly a beneficiary of the law-enforcement community and the homeland security infrastructure. we are a hybrid agency.

we have some law enforcement and federal air marshalls. we are a hybrid because we are also a regulatory agency. >> right back there. i would like to revisit the congressional help you are getting. the stories are somewhere between 88 and 108 subcommittees and commtees in congress and that oversee this. knowing that you're not going to criticize the congress having an oversight role, being an tsa astrator anin the being a regulator, having to report to so many and how you resolve it? >> well -- [laughter] obviously, congress has a key

role in providing oversight. all of those things the t are important as their representatives of the american people. we have to respect it. we spend a lot of time ipreparig for briefings that are really important for us. we had the chairman of one of our appropriations committee come to one of our facilities where we test all new technologies prior to it being deployed. in the post-9/11 narrett, getting something in pushing it out, that is not -- post-9/11 and, getting something i

pushing it out, that is not the way. some jurisdictions have tried to bring us in. but the deputy secretary is here and speaking later. i think she can probably speak far more comprehensively for the department than tsa. we appreciate trying to engage -- some of you have called witnesses on panels alongside tsa or a second panel and that provides some of that perspective and concept that they might not have otrwise. >> we will take a couple more questions. i want to follow-up on one thing in particular. that is a surgically implanted explosives, how do you detect and stop it? >> that came from yemen last summer, the summer 2011, where

they were looking at ways to defeat our current regimen, including the body scanners, which would depict or pick up anomalies. the intel was that they would in plant explosives in people so they could get through any type of security. fortunately, we have not seen that. there has been some follow-up reporting on that from the summer of 2011. we have worked with our international partners. ithere are some things you have to be doing, some of it within guidance and some of it with regulatory action. that includes making an assessment and resolution of any concerns for somebody who may have had recent surgery. it becomes a very challenging

proposition. >> it would defeat her current machinery so you have to look at the intelligence to defeat it. >> the two things that we would have on a surgical implant, there would possibly be some type of a port that the initiator could be injected through with a syringe and do it that way. but the other possibility is to avoid detection, somebody behaving strangely and have a typical tap down. >> we have time for a couple more. >> yesterday, there was a number given saying that there were

over 800,000 people in the united states with top-secret or elevated clearance or more. by definition, they have had pretty good background checks. given that you now have the pre- check population that you don't have to worry about making counterintelligence targets and treat people differently and in the interest of trying to maximize the energies of the staff you have, has there been any consideration using all of that background on ose people, many of which are in this room and have frequent-flier status, to reduce the time you spend on that particular population? >> yes. in fact, we have taken that up and we are in agreement with general clapper to have current members in u.s. government employees, something that is on

an agency-based decision. we have t or three agencies that are included. other agencies are joining. is all voluntary. -- it is all voluntary. it is optional. the beauty of it from my perspecte is that the information that that person is a traveler is imbedded in the bar code. the member othe intel community -- the security officer at the checkpoint knows whoever you are. there are no interested groups of people and individuals that we want to continue expand to. that is where the private industry input will be critical.

>> ok, the last question. >> i wanted to find out what you learn specifically from the british case, the ba worker getting specific e-mails that were admitted in british crts asking detailed questions about where does he work, what kind of access did he have to cabin crews and made a big point of discouraging him from meeting to join him in yemen. but there was a very interesting amount of court records on that. i was curious if you had any comment. >> yes, the situation is that he was looking for a trusted insiders. and through a couple of cutout, he found it in british airways and they had an exchange of

information. to your point exactly, he did not want kareem to be an operative himself, but to be recruiting others. that all was identified. with some help of the u.s. community, the recruitment effort was identified and the propriate steps were taken. and the two people that he contacted were handled within the system. to me, that is another example where intelligence is a key to enable us on the front before anyone is able to get to a checkpoint or have an insider opportunity to do something b. >> do you have the sense that they are very hungry to get inside? >> absolutely. yes. that is the challenge. not so much in the u.s., but overseas. >> thank you very much.

thank you once again for your service. best of luck to you and you team. [applause] >> republicans meeting for their convention on august 27. a week later it is the 7.ocrats' turn on september some of the scheduled speakers in tampa, john mccain, condoleezza rice, mike huckabee, and scott walker. the announced keynote speech will be given by chris christie. they will also hear from paul ryan. a reminder to get all your campaign 2012 information on our

website, lists of endorsements, information fromt c-span.org/campaign2012. >> if you want to come to america illegally, did not waste your time coming to the desert. again in an america -- get in an airplane. the total number of undocumented has been going down. have we solved the problem? we had the problem solved by having our economy crater. if they cannot find a job, they go back, because america is not a good place to sit around and think the state will support you. somebody has to create the business that he is going to go to work for, and the numbers show immigrants -- because it is

a self-selecting thing -- it cannot be easy to leave australia, come to the other side of the world, and everything you know, and start from scratch. that is what people are willing to do. immigrants will be more aggressive, more risk takers. that is why they come here. >> you can watch the entire discussion tonight at 8:00 eastern on c-span. witnesses told a senate subcommittee that holders of student loans issued by lenders need to have more options for refinancing their debt. one of the witnesses was the chief operating officers of the student loan co. sallie mae. lending standards in the private

sector grew increasingly lax for 2008. a report says defaults on private student loans exceeds $8 billion. this hearing is nearly two hours. [inaudible conversations] subcommittee of financial protections comes to order. thanks to senator for the good work he does with the subcommittee and senator reid and senator akaka thank you for joining us. my staff particularly appreciates the relatiohip in making the subcommittee hearings work.

june 29th of this year the congress passed the student loan package essential legislation that not only ensured funding for our nation's infrastructure and highway system, but also including extension of the current student loan interest rate of 3.4% for staff staff ford loans. the pass of the legislation s important for 7 million undergraduate students nationwide. some we figure 382,000 of them loving in ohio. without the extension the student would have faced an additional $1,000 in student loans. i spent a lot of time in community colleges and four year and private constitutions in my state in cleveland, cincinnati, and dayton. talking about hearing the number of stories om students sharing with me their fears of graduating in a bad economy without the legislation at high levels of student loan debt. other share the experience of

family members and friends who are paying off the loans years after graduation from college. this isn't surprising earlier this year student loan debt knows as we have heard repetedly student loan debt outpays credit card debt. it's a problem that effects people of all generations not just the student b the family sometimes even the grand part parents. according to a report eleased by the federal reserve bank of new york it has risen 58% since 2005. borrows in the 40st are the most likely todefault. parents and grand parents who may have cosigned must are the burden of the younger generation. it's clear more must be done to ensure future generations are not saddled with high level of student loan death while helping borrows pay off their student loans. that's why today's hearinghich will focus on the challenges facing borrows in the private student loan market is so

important. a small portion relatively of the overall student loan market american consumers owe more than $150 billion in outstanding private student loan debt. the numbers have increased 14 percent of undergraduates in 07 have taken out a private loan up from 5% in 2003 and 2004 about and continues to increase. it is troubling private student loans it is the riskiest way to pay for college. they come with a variae interest rate ranging from 5 to 18% with no limits on origination and other fees. potentially unlike federal student loans, private loans are less likely to come with affordable payment lns or e loan forgiveness or deferment options or cancellation rights. i'm proud to have fought for the inclusion of the prite student loan as part of the dodd-frank legislation. for the first time in history

private student loan borrows have a place to file complaints have aned ad a -- advocate inside the government. i'm concerned that too many bore rows are ot receiving the system they need from the borrow, the consumer protection bureau published a report in the private loan market on the consumers who use the loan. what was ease many borrows took out private loans without fully understanding the terms. now many of these borrows are saddled with thousand of dollars of debt with limited option. hopefully the hearing will allow us to further i hep with. ! trying to work with their seicers. i conclude with a story a girl

from ohio and the struggles struggles with private loans. he graduated fromcollege in 2009. he applied to join the base corp. he almost had to turn down the once in a lifetime opportunity because of the unwillingness of the lender to defer her loans. she came to on of constituents to ask for help for the work of the staff. the lender finally agreed to defer the loans. she was able to go abroad. it brought her home sooner than expected her loan concerns remain. he strug les to make the payments that top $400. the balance hs jumped to $22 ,000 with $30,000. without inrvention the loans will continue to grow. we need to think about her and people like her as we make the decision. i'm hopeful the hearings will helpove us closer.

i'm glad we're here to talk about private student loan market to me it's more important we look at the entire picture. we have been reading in the news lately student borrows have nearly $1 rillion in outstanding student loan debt. but we need to remember as chairman just mentioned 7% of the loans are private student loans. other 93% are loans that are back by the taxpayer. i think all of us know the real problem we need to consider the rising cost of college tuitn and the amount of federal student loans students are borrows. i miewght add on one hand the federal government wants to help solve the problem and they continue to mandate medicaid. for every percentage we spend on medicaid we spend less on

legislation. education. that's the driver why students are spending so much. the federal government took over the loan program. i'm convinced it's not benefiting students. there are income forgiveness programs on the federal loan side borrows dn't have to pay back the full freight. sticking the taxpayer with the unpaid burden. i think it's important for us to understand the whole picture not focus on a tiny fraction of the marketplace. i'm pleased that sallie mae is here to talk about the progress they have made to encourage to borrow more responsibly. i look toward to the testimony from witnesses. >> thank you. senator acabbing akaka. opening statement? >> thank you very much, mr. chairman. good afternoon. panel lists thank you for being here today, all of you i'm

pleased that congress is continuing to monitor leading practices regarding student loans. a quality education must include an understanding of economics and personal finance so that all americans will be prepared to make a sounded financial decision. i look farred to hearing an update from the consumer protection bureau on the work that we have done to improve consumer financial marketplace thank you for your testimony today. i hope your insight will help the committee work to ensurin students have safe options for obtaining financial support for their college educations. thank you very much, mr.

chairman. >> thank you senator akaka. one point i wanted to make that the reason the hearing perhaps senator narrows than you might want. we don't have the jurisdiction over federal loans the way we do private. i'm certainly willing to work with the whole issue of student loan debt. whenever it comes from. this is serious. i'd like to introduce the first witness. rohit chopra student loan ombudsman consumer financial protection bureau. immediately prior to the opening of the agency he worked at department of treasury on the implementation today. he hold a ba from harvard and university of pennsylvania. welcome. >> thank you. chairman, ranking members within thank you for holding the hearing today. to prosper in the ghoabl economy our work force needed skills to innovate a highly gettive

environment. the rapid growth of student debt raises concerns that warrant attention. student loan debt has crossed the $1 trillion mark. now college is still a greet investment. graduates have lower unemployment rates and earn higher wages. there is another side to the story. overt past decade, real wages for college graduates have declined. the growing college wage premium is largely explained by faster falling wages nondegree holders. the cost of college has not been falling rising faster than inflation, wage growth, and health care cost. growing cost declining wages and job market uncertainty have lead to more diselt and risk. the story of distressed borrows reveal the impact of the financial crisis in the significance work that lies ahead. prior to the crisis private student leing rapidly increased like the mortgage industry, lacks lending practices practices are much

less common today. loans are cosigned and have significant disclosure requirements. it like the mortgage market there are stull opportunities to make improvements. private loans lack repayment flexibility. in 2007 congress and president bush enacted the college cost reduction and access loans which allowed borrows to remain current on the low in the income based repayment pam. it doesn't impact private student loans. private borrows experience challenges when attempting to restructure eir loans. due to capital market conditions and unusual status in the bankruptcy code. even the most responsible borrows have sought to better manage their debt burden. we see them stuck with high monthly payments because they can't easily refinance. the in march the cfpb launched a student loan complaint system. many brrows have sought and received help and lenders have

learned more about the borrows experience. we work closely with the department of education on a know before you owe financial aid shopping sheet released this morning we developed online tools used by tens of thousands of consumers how to navigate their student loan repayment options, avoid default, and honor their commitment. the cfpb opens this continue our work with the other agencies that may play a critical role. while student debt might not suppose risk like mortgage, it would be imprudent to dismiss it can act as a drag on economic recovery. consider borrows facing high rates and high payments who are dutifully meeting these obligations. without a refinance option, they struggle to reduce the payments even though they have build a solid credit history. what might be the consequences?

take the mouses market. first time home buyers are the important source of demand and data reveals that adults in home buying age cohorts are living a home with ther parents and seeing reduction in the home ownership rates. in addition to home ownership will da that reveals low participation in contribution rates to retirementplans which can challenge their future retirement security. congress andederal agencies have taken steps to increase liquid i did in the function of the market race. the current conditions may have a long-term impact on the economic vitality of borrows today. many are unable to secure adequate credit accommodation to manage their debt burden. policy makers have paid significant attention to conditions in the mortgage market. but give the potential impact of student debt on the broader economy, the situation demonstrates the need for

attention. they will continue the work to make the loan marketplace work better for borrows, schools, and honest lenders. we look forward to working with congress and policy makers to ensure that ecnomic mobility is still within reach for those who borrowed to invest in an education. i look forward to your question. >> thank you, rohit chopra. a couple in your student loan report. you note the average interest rate. the private student loans of 7.8 percent. we know with the federal reserve monetary policy action that interest rates ithe country are pretty much at record lows. talk to me about the differential. why so much higher for student loans? what does it mean in term of studts not being able to take advantage of those low rates. what, if any, can we do about it? >> one unique once someone takes

on the credit profile can significany change over time. while an 18-year-old might be considered higher risk, by the time they're a graduate and gainfully employed and theying for a few years, they might be a lower credit risk. and what we see is not many refinancing opportunities to be allocate price to risk. and when markets are not appropriately allocating prices and risk we doot see a well functioning market. so borrows may be paying higher rates than what justifies their risk profile. >> why are there not refinancing opportunity miss. >> it's not clear exactly, but historically the market developed as a consolidation market, so essentially multiple loansyou can consolidate into a sing payment. it had to do with the way the

federal family educational program was structured. but partially due to capital markets conditions, but we just simply do not see many lenders actively competing to find borrows who may be able to refinance. >> is there a lack of knowledge on the borrows' part to not think about the issues of refinance. >> yes, i think that's right. >> if they were, answer fa that's. if they were more knowledgeable -- are you suggesting there would not be the opportunities to refinance because there's not enough opportunities in the market? >> yes. it you're right, i think many borrows simply don't know that refinancing is an option. we do hear that many of them are dutifully paying on time for months and years and unable to manage their debt better. currently there is not a large of amount of marketing or

offering of refinance. it's generally marketed to people so they can reduce the number of loans they he to a single payment. not necessarily to compete down the price. a more competitive market amongst lenders would serve to benefit the entire marketplace. >> okay. let me shift for a moment. you know you in your testimony you know the deral agencies have interviewed in e private student loan market citing unusual circumstance. the federal board of governor exercises the authority to establish the term asset back security loan facilities which facility the issue of wide range of abs including those backed by private student loans. is there a role for federal student loan in providing relief? >> i think all federal regulatory agenciesarticularly ones that monitory the capital markets have role to play to

make sure that the market is liquid and well functions. i wouldn't necessarily characterize it in relief. but increasing and ticks so pricing is more fair and connected to risk. we have seen in the mortgage space the fhfa has sought to create the conditions for responsible mortgage borrows to refinance. as i said before, more responsible student loan borrows see their credit profile dramatically improve over time. but the market simply may not be liquid enough to appropriately price their risk and allow them to have wer payments. we look forward to providing any expertise to the federal reserve board of governors and others as they monitory conditions. >> thank you, rohit chopra. >> thank you. thank you for being here. yoknow well the relationship between the investment and higher education at the state level and how that's been

diminishing. but in many cases in most cases, actually, because of the tremendous burden of investing in medicaid, which, you know, we made happen in the big way at the federal level. that has a direct relationship on what tuition levels are for students. that's one of the main drivers of why so much student debt, is it not? >> it's certainly true that the constrains state budget which many of which were badly batteredded started? starting in 2008 as well as other policy interventions and there has been cuts on a real basis to state higher education. so we have to not just address the underlying cost of higher education, but also to make sure that financing market the are working properly. >> it's fascinating here. we are we are dealing wit an issue over the last several years we have help create and exacerbate and exacerbate over time. i want to point that out.

indian that your agency a new agency is advocatinghat on the private side that students just have the ability to danger their loans through bankruptcy is that croarkt? >> no passenger's side actually -- actually a little bit different that that. presentedded to congress on friday analyzed about a million $5 million records of data starting from 2001 and going forward. we expect that the 2005 changes to the bankruptcy code would have lead to lower prices and greater access but immediately following the legislative change, we did not see a price decrees. we actlly saw price increase. larger capital markets conditions we think largely explain volume and access to credit. so the director of the bureau about secretary of education ask congress to take a second look gin that borrows for private student loans may not be able to

restructure their amortization schedule like in federal loans. >> so you have asked congress to take one of the first actions of the consumer bureau is to ask congress to look at allowing students of private loans, not the public loans only the private loans to file bankruptcy as a way of getting out from under the terms and condition of those private loan, is that correct? >> so -- yes, have asked congress to take a second look. we are happy to provide more expertize. >> i understand what you're saying. i think we have read the report. i find it fascinating one of the first things that you would do as a consumer protection agency is gets to consider letting students, again, only on the 7 percent private loans not the 23eu9 percent public loans be able to file bankruptcy which is one of the most damaging things that a consumer can possibly do. i just would like for people to take note of that.

i think you understand on the private side, they do not have the flex able you do on the public side. on the private side, through pry determine lenders will not allow them to do many of the things on the public side. >> yes. in fact we have been working closely with lenders to identify areas where certain guidance can be n-win situations for both borrows and lenders. >> yeah. >> lenders said they feel constrained by the guidance. we think there's opportunities for capital adequate sei asures to be met while still allowing the market place to function. >> i think you can see now why so many of us thought it was a terrible idea to have the consumer agency separate the lentders. we have the problem. basically you're giving guidance that is very contrary to what the safety and soundness regulators are saying on the

other. it's the exact conflict. it is fascinating to me in one of the first things that come out of consumer agency web see the conflict that on the private side, the regulators will not allow the private lenders to have at flexibility, give them the flexibility to work through the issues, and therefore they have contrary guidance. i just i think it's pretty fascinating we're havingthis hearing. i think it's fascinating that you're noted a vote caption that on t public side students be able to file bankruptcy, and i just i think this is speks to possibly some of the political nature of the consumer agency that so many of us were concerned about in the beginning. >> on the federal loan side, there actually is a chapter 13-like option for borrows which avoids the damaging partings of going to court and hurting your credit history. a borrows who is unable to make

the payments is able to elect the income-based repayment option. caps their payment as a percentage of the discretionary income. that is a great, low-cost model for borrows we think is a way to whether the unique circumstances of a student loan product given labor market uncertainty. i would say that our relationship with the regulators is actually been extremely productive. we have actually been able to find opportunities where we're identifying ys to promote innovation and ways that the whole financial system can actually prosper. our work on private student loans with other regulators is going to be seen by lenders as one that is win-win for the whole marketplace. >> i hope that's the case. i appreciate very much you being here. i look forward to hearing sallie mae's testimony in a moment. >> senator reid? >> thank thank you very much.

first thing i want to do is commend you for connecting the dots. let me say for not just this huge debt overhang, but the effect it will have on buyi a house for the first time being an entrepreneur and starting a business. reserving money for retiment inspect to me, is one of the most daunting challenges we have to face. we have a whole generation that can't get started until their mae in thei mid 30s and doing things that can or would assume would be 0 done in the mid 20s. that's a important point. cond, your responsibility is give the nature of the organization is solely with respect to the private sector lenders now the public domain, is that clear? >> '. yeah our authority as the rulemaking authority relates largely to private student loans on the origination side. >> right.

it's notice to say that a lot of the insights so you drawn could be applied to the public sector? >> yeah. senator said it's important for us to look at this holistically. in the recently released report, the treasury's office of financial research briefly discussed that student debt burdens could significantly depress demand for mortgage credit and dampen consumption both may be polical drivers fo recover i are. look at it ho listically one of the first a, is working with the department of education to actually improve the financial aid information and student loan information people find. we are allowing schoolings on a voluntary basis to present a simple one-page financial age shopping sheet which give the them their loan options as well as what they're estimated payment might be after

graduation and already so many schools across the country have embraced this. we're happy to enter this for the reord. >> one of the major issues, of course, is the escalading cost of the college edcation. even though you focus on the private lending sector you looked at public and private institutions. there is acceleration to private university to? >> yes, there has been cost increases in increase burdens for debt across institutional sectors, and they're not responsible for public programs like medicaid or anything else what is driving the private institutions to increase their tuition so dramatically? >> i'm the wrong person to answer about specific economics of college cost. we're a bit more focused on the finances. generally speaking, we have seen over a period of many, many years escalatg cost of college

across sectors in access of inflation. in particularly, we have seen debt burdens be very high in the for-profit college sector utilizationization of private loans were particularly high. >> that goes to a quick technical question. i asked this because i don't know the answer. are there prepayment penalties included in the language of some of these private loans? >> the truth in lendi actually bans prepayment penalty for private student loans. one would anticipate would help facility at a time a ratr robust refinancing market borrows would not penalized for trading one note for a less expensive note. it has not beared true. >> thank you. that's a very helpful classificaon. the other issue among several that i have, let me pose this one.

is there a correlation between school and the number of private loans. one of the things that you have suggested you have now format everyone can check it out, but this lack of competition, this sort are essentially some schools steering students to these private loans and is there any kind of relationship between the school and the private lender? >> so in 2007, at the ate level, state attorney general identified certain unsavory relationships between schools and private lenders, but the 2008 higher education opportunity act has largely changed that. we see a uch better relationship between schools and lenders. in fact, we believe that involving schools more in the process by requiring servicer of student loans of private student lones helps schools better counsel their students on their

full range of options. the only marketplace that remains where there is a arrangement between prite lenders and schools is that presents some risk that's worthy of attention is certain lend ago -- arrangements between the propry tear school sector that are helping with driven the come plins. >> if i may, just a clarification again, you point out that there isa quasi bankruptcy remedy under public lending which is to go in and make an income-sed repayment. that does not exist on the private lending side, and the issue here is not, again, i'm asking the question so correct me. the issue is not that someone can't file bankruptcy. they can't danger the loan in bankruptcy. is that the technical issue?

>> correct. the private loans loans are treated differently compared to credit card debt and others. >> because it's federal statutes. >> correct. the 2005 changes. private lenders have increasingly told us they are looking for ways to offer more reyment flexibily. we think it's a great opportunity, and again, we hope engage with lenders and den rnl regulators to -- lends themselves. >> thankou very much. thank you, mr. chairman. >> senator akaka. >> thank you very much, mr. chaian. mr. chopra, the report you presented today suggests that the students have taken out too much debt through student loans because of predatory lending

practices. you have also noted that students should consider takes out additional student loans in order to avoid excessive credit card debt. can you please elaborate on the appropriate role of private student loans? >> sure. the total debt market has reached over a trillion dollars. it's important to note that education induced indebtness is certainly far hgher. many families utilize home equity lines of credit, credit cards and other products to ensure they can pay for the cost of college. and generally speaking, a student loan is going to be a safer bet than let's say a credit card which is going to have an immediate repayment requirement which might be challenging for a full-time

student. there's certainly a role for private credit in many market. don't get us wrong there. but we do want people to make more optimal borrows decisions over all. we think some of the steps to make the whole market more transparent with the shopping sheet is a good first step. >> thank you for that. i understand that cfpb often hears from students who are strugglings to repay the student loan complaint system. . .

the report that by one, adding private loans be certified, financial aid officers can provide the opportunity to get the full range of options. ovided the opportunity to give the full range of financing options and many times financial aid officers are able to use professional judgment to adjust loan amounts so that our words are able to meet their tuition obligations while still borrowing responsibly. and you are right that there is still ways to make sure that the

private loan market can meet th demand at a fair price. >> i must commend you on your remarks that cfpb had then working together with the department of education. and i wish that more departments and agencies would be working together on common goals as well. so, thank you so much for what you are doing mr. chairman. >> thank you mr. chairman. senator hagan. >> thank you mr. sunday -- chairman and thank you mr. chopra. on these report that cfpb recently released on the issue of institutional bones may direct you by the for-profit schools to the students, it is advertised as a way for students to fill the gap in their tuition at the david exhausted federal

loans or pell grant money and then i think part of what i heard you sa in answer to an earlier question had to do with the rule also which we might ask you to elaborate on. ma of these institutional loans offered by some of the laest for-profit institutions have interest rates as high as 18% and in addition to serving on this committee i serve on the education commite and the department of ed and they help committee have looked at a number of these different for-profit schools and one in particular has an interest rate student loan that is 15% but they also have a default rate of 18%. another school has interest rates, and these were in 2009 in 2010, these interest-te numbers, at 18% with a default rate of 55%. so it looks like the for-profits are offering the student loans

with high interest rates and yet a low expected repayment rates, which i think speaks directly in some cases to the aggressive recruiting nature of some of the schools, that they are really not that concerned because the default rate is so high as long as it means that student is in fact enrolled and federal dollars have been collected. does the cfpb have plans to study these types of loans further and are there any recommendations that you can offer that will address the institutional loans made by the for-profit colleges and universities? >> in recent years, there has been financial reforms that have indicated a couple of principles that might be worthwhile here to mention. one is the concept of skin in the game so the dodd-frank act actually requires that lenders retain some interest even if they were to tell them to

securitize pools ofassets. another is considering the ability to repay. in the mortgage market lenders will be required to consider whether a mortgage borrower can actually repay. >> that's a good idea. >> in general when an entity is able to come out ahead, even when they expect upfront that the customer will likely fail, that may be a sign that the competitive market forces aren't really working and that incentives are distorted. i think that there'll has significant expertise in the area of institutional lending and the role that 9010 might play so we will continue to monitor that market closely and as you have mentioned before, we have also looked in this set your at the recruitment of veterans and servicemembers as it relates to compliance with 9010 and then my colleague has

probably petraeus has been quite outspoken about this and we continueo work with other agencies to monitor this. >> speaking of the010 ruled the g.i. bill doe not include the 90% so in most of those cases, the federal part, the federal bone position assistance is much higher than the 90%. >> what you are saying is correct. we are currently experiencing a rapid increase in the number of veterans returning from foreign conflicts who are enroing in higher education, so i think it's in the interest of all of us to ensure that they can continue to be an economic engine as they were after world war ii but also that they did not unnecessarily take on high-cost credit when they have in enough is that they have earned. >> and especially when you look

at e high expected default rate needs to be taken into consideration. >> yes, all aspects of how the marketplace works or something that we closely monitor ensure that the market is fully functioning and that there is compliance with consumers. >> one of the recommendations made in a recent report stes that congress should require the institutions of higher ed work proactively to protect and inform the private student loan borrowers. would it be like no before you all or should it be up to the school to protect and inform the borrowers or should the lenders take some responsibility in ensuring that the borrowers have a clear concise and accurate information regarding their student loans? >> so everyone has a responsibility and borrower certainly need to take the responsibility for the commitments they take on. but the point about the financial aid office is an

important one. currently, most lenders are requiring loans to be certified by the schoo to simply verify that the student is actually enrolled, that they have not already over borrowed. very common sense underwriting principles, which was certainly not well observed in the years prior to the financial crisi where capital markets conditions created the incentives for originators to make substantial fees without really having the borrower having the ability to repay. >> thank you. >> thank you mr. chairman. mr. chopra, how are you? >> very good. >> very well. let me ask you, i heard your response to a question with reference to borrowers who field trapped in their present interest rate and are not able

to refinance at a lower ra and i think your answer to the question was there was not enough competition. is that correct? >> if might not simply be that. there might also be issues in the service infrastructure where borrowers may not know that they are able to make certain changes to their loans. so i think it is market conditions as well as financial education and the servicing. >> do we have -- does the bureau have any ideas or suggestions as to either how we create greater market competition or greater inflows of information for individuals so that they can exercise their rights? >> sure, think we have a strong role to play in educating borrowers about their ability to -- what their options are when they may not be able tonight their payments and we have already released a number of web tools another partnerships so that students know how to manage

their debt better, but one thing we do here is that even if they want to rinance, there simply is not that much opportunity for them. it's something that many mortgage borrowers think about when they want to refinance, but the current market conditions often constrained them and the processes that do so can be paralytic. >> as someone who has been a strong advocate in a different context in being able to allow mortgage borrowers to refinance at historically lower levels, it seems to me that we should find the wherewithal to be able to achieve this, and continued to have people be responsible borrowers to be able to meet me of their debt load at the end of the day. we would like to maybe pursue that a little bit more with you as well as how do we stimulate

creating competition so in fact the marketplace itself will find itself more robustly engaged when rates fall. how about the part of your report that noted that about 40% of private student loan borrowers had not exhausted their federal student loans and in that respect obviously before you go androv from the private sector wouldn't it be more desirable to maximize that which is available to you on your federal student loans limits because those are at lower rates than generally in the private marketplace? >> infected to count people who even apply for federal loans that number goes north 50% i believe so yes one of the key issues is that we put forth in the report is involving the financial aid office more in the process and giving much clearer information. there has been an abundance of fine print in quite small font

that has invaded so many of our credit card agreements, mortgage agreements and all other things. there is a lot of work that we try and do to simplify disclosures. we find that this actually is lower costs for smaller financial institutions to provide and much more clear to borrowers because you should not need an attorney and a magnifying glass to understa your obligations at age 18. >> so the question is, is there a way to enhance -- i mean you mention some of the web sites. are there other fraternities in which we can get you no financial aid departments to be more robustly engaged in saying heres the ability if you qualify before you consider taking out a private sector loan that will be more costly. you should consider the federal loan. >> in ct most lenders will strongly agree that federa loans should be looked at first

and many of them communicate that to their borrowers of getting financial aid officers the opportunity to actually counsel the student before the student loan would help. we actually heard reports from lenders, schools and groups about that. >> finally i listen to my distinguished friend and colleague, senator corker, expressed his concerns about the interface between the bureau and regulators and i wonder in the process of doing this work to just find prudential regulators were doing the type of consumer information and advocacy that the bureau has been doing in this particular regard? >> we have a very explicit mission on financi education and also to assist borrowers with the completion of financial aid applications. their primary role of courses to

ensure the cital adequacy of the financial system and they do work with us on financial education work but we have placed a major emphasis on that because we believe they can ensure a more robust marketplace across all consumer financial products. >> thank you. >> thank you senator menendez. senator corker one more question and then we will move to the next panel. >> first of all you are obviously a very intelligent person and it sounds like you have done a lot of good work and i want to thank you for that. i meet with students who are 27, 28 years old, people who used to be students and have huge amounts of debt if you look at the amount of money they' making and you just wonder when they are ever going to havea real life because they are working two or three jobs to pay these loans off. i frustration really is that the hypocrisy around all of this. on one hand, we hear especially during the election cycle, talk

about student lending and student loans and i assure you there are students that have huge amounts of loans that never may be repaid or may take 20 years and we advocate policies that drive up tuition rates. on the privacy side that senator menendez was referri to they are seeking flexibilityut the prudential regulators are hesitant to give them the flexibility's that you have on the public side soyou know there the hypocrisy that goes with his whole testimony today. not you, but the difference between the consumer agency in the prudential. then we have the law that says that student rates are going to be up 3.4%, just pull it out of the air. so those loans are all comers, regardless of any kind of credit status. no collateral, no payments made for four years. is there any way you as an

intelligent person could possibly imagine that the federal government is going to come out on loans like that and are we not again to demonstrate tremendous hypocrisy and that what we are really doing is piling up debt down the road to the same tudents to have to pay off? is there anyway that when an agency is taking all comers, there is no collateral being put up, no underwriting taking place, no payments being made the entire time they are in college. is there any way think federal government could possibly come out to the good on 3.4% loans? >> the rates set by congress are a bit outside our jurisdiction but i will say that the market for the global competitive market is very very fierce and across all indicators, having a highly-skilled workforce has very real economic growth

potential and investing in a way that is strategic such that people who may not have the means can access education, there is a significant upside to that. it is absolutely hard to underwrite that type of loan and in many cases, you see that, how can you anticipate whether someone is going to be able to repay five years in advance when perhaps if they entered in 2005 the entire global capital markets collapse. so it's a difficult problem but insuring that the workforce is built with skills is something that needs to be a priority as well. so we have to balance all of these and we look forward to working with the. >> i think your answer is no financially but there are other benefits. >> no, it's in i don't know. >> thank you. >> thank you mr. chopra very

much. i will call the second panel forward. i ink senator corker there is plenty of hypocrisy to go around when i see what state governments have done when we are in college and schools like ohio state were considered state universities and now we consider them state-supported or even state assisted and we can blame it on medicaid or we can talk about a attack structure or a whole bunch of other issues but that can come later. will introduce the three members the panel if they are beginning to be seated. deanne loonin staff attorney with the national consumer law student and director vince elc borrowers system project where she provides direct representation to low-income student loan borrowers. in her role ms. loonin says attorneys represent low income consumers and teaches consumer law to legal services private consumer attorneys and other advocates. ms. loonin received her b.a. from harvard radcliffe college and her j.d. j.d. from the university of california at her glee. jen mishory is a funding member

and depu director of a nonprofit nonpartisan organization that represents the interests of 18 to 34-year-olds is deputy director. she directs the our east that for the organization. she serves as a consumer advocacy represented at the department of education's 2012 night issued rulemaking on student loans. ms. mishory holds a b.a. from -- and a j.d. from georgetown. jack remondi is chief operating officer of sallie mae and is responsible for the company's loan servicing information technology credit and underwriting and marketg and communications divisions. prior to his current position he served as vice chair and chief financial officer where he create -- helped sally make -- he received his bachelor of arts degree at connecticut college. thank you all three for joining us and for your public

we actually have clients who are still suffering and under the burden of student loan debt throughout their lives, having taken up the loans later in life or in some cases, parents having cosign for their children. most of our clients have federal student loans. but what we saw happen up to the

credit crisis is that we were seeing a lot of our low-income a lot of the loans that were made at that time or, unfortunately, destined to fail, and they did fail. a lot of people who took out loans, they were never going to be able to pay back. i saw loans of that time from my clients with interest rates upwards of 20%, 25%. variable rate loans with very high and origination fees as well. some of the same rationales for

making those loans in the mortgage market, we heard in the stephen market, too, that these would benefit for low-income borrowers. instead, what we have was it was taking opportunity away from more borrowers in a push market. fortunately, the market has changed. we do not see those third-party subprime loans for most of our clients any more. there has been a correction because of the failure really of the market, and that is why it is such an important time right now for policy makers. there are two broad themes of want to emphasize, and there's more detail in my testimony about why this is such a critical time. the first theme is that the opportunity is now to shape the market that is going to re- emerge. there are more responsible lending practices going on now. but we want to make sure that the same things that happen before do not happen again, even if that means that it is small

and private student loan market. that is better for a lot of our clients if it means they will not be stuck with these unaffordable loans. the second theme that we spend a lot of detail on in our testimony is that we need to figure out ways that preserve -- provide the need for those who were harmed by the predatory practices of the past -- that provide relief. the lenders have moved on, for the most part, but the bar hours have not been able to. their feet -- but the borrowers are not able to. their futures are shadowed -- sadr in some cases, these are my clients. but on a private loan side is that there is so little flexibility on the part of the lenders. we talk with the private lenders all the time. we try to negotiate modifications, income-based payments, things like that. generally, the relief that is available is very short term

relief. unfortunately, it is short-term relief but these are long-term structural problems. we understand that there are some barriers. it was mentioned that there are problems with the provincial regulators. that is what we hear. we do not know it that is really the problem that is preventing the lenders from offering broader relief. and if it is, we want to hear more detail in five ways to be flexible about this. in some ways, just like is happening in the mortgage market, and heating some of the lessons we have learned from the modification programs in the mortgage market that these have to be flexible, affordable modifications, and also some principal reduction because that will make it less likely that the borrowers will redefault. also looking at the possibility of cancellations in extreme situations like death and disability. some lenders offer this at their

discretion, but the idea is to have a more standardized, transparent policies of borrow weres know what to expect in these extreme situations. i have more detail in my testimony including policy description, and i am happy to take questions about those. >> thank you very much, ms. mishory. -- ms. loonin. ms. mishory, thank you for joining us. >> young and in supposes a non- profit, non-partisan organization that seeks to make sure that our perspective is heard whenever decisions about ourrspective is heard in our decisions about a collective future of being made. this spring we released a report detailing the experiences of high debt or worse with private student loans. the report analyzes subset of an on line survey of about 13,000 borrowers. additionally young individuals

completed a 40 city national -- our interaction with young people make it clear. borrowers are struggling, students are confused and as a private loan market rate emerges students need more guidance and protection. as as been detailed already away to the pipeline rket has shifted significantly in the past 10 years. more predatory lending led to significant increases in in the prerecession private market. after the credit market dried up the lending standards tightened in the market merged and consolidated. recently there've been signs the private student loan market may be on the rise. for example sallie mae is excting growth in new loans for the second consecutive year. private lenders have begun offering new fixed-rate loan options. as the student loan market expands and evolves again stakeholders must assist borrowers and set up a the next generation of cartilage grow or -- goers for the next future. borrowers have encountered an

array of typical lease amidst the parcplace pergola students have responsibly to responsibly to do their homework the sheer complexity of studenloan terms and the fact that many young students are making their first major financial decision necessitates the key institutions involved take aggressive steps to ensure that students are informed. unfortunately this is not happening enough right now. for exame about two-thirds a private loan borrowers in our survey said they did not understand the major differences between private and federal loan options. this is problematic given that federal loans often have better rates, better repayment terms based on income, give temporary relief when the borrower faces unemployment, have more standard iced payment requirement. current love requires disclosures providing provide better providing federal options and some private terms that these are often too little and too late. at the same time 80% of our worse in the survey turned to their schools as trusted sources of information on these loans. at those options are the right answers and they are not involved enough.

roundtable participants at the high school level also voiced similar problems. career and college counseling in high schools are understaffed and often undertrained on these issues. we also hear frequently about significant problems after loans into repayment as borrowers attempt to -- repayme and loan terms. for example the sender in cleveland ohio has abo $90,000 in private loans. when she was struggling she said sallie mae did not process a request to make payments and she was denied a deferment when her husband lost his job. repayment terms are nearly impossible for an experienced borrowers to anticipate on the front end or tooth bite in while in repayment. oneanother borrower richer went to the peace corps after graduation she said he was able to do for r federal loan but not $46,000 in private loans. her mother agreed to help make payments while she was gone. a few months before bridges returned in 2000 or grandfather

passed away. the turn of events that ensued led to one missed payment in my more. after that second missed payment she was told that the loan was charged off in the full amount came do. she said useful the only way move it back into regular payment would be to pay 60% of the balance upfront. that's over $27,000. currently she id she pays $300 in monthlyayments and that nothing has been put in writing. she did not get villages unable to check or balance on line and she continues to receive calls from that thing. after three years of these monthly payments she told us that all five separate loans still show up as delinquent every single month so her sober credit score has predictably plummeted. she tells us she has no hope of coming up with a lump sum required to rebuild her financial future as none for monthly payments count towards that lump some. in the wake of the great recession in the minds of borrower started to do with

unemployment link with these defaults in high debt and millions more attempt to navigate the private loan market we must act. the department of eucation uses an on line hours to inform struggling borrowers about the new options which is a resource that we have sent many borrowers to already. we also must take aggressive action to effect future borrowers as estimate as the maker choices but the lender should be required to obtain certification before private lands. marking the tears shampoo clear explanations of the payment terms and be available earlier. we need to ease the application process improving independence from parents of the borrowers receiving no help from the family can access the fuller said of federal loans and fully understand the difference between private and federal loans. particularly with the new options on the table. for example as a future teacher getting a masters degree on a

fixed-rate private loan he or she will often be better served taking out a federal loan due to other terms such as flexible repayment or the ability to defer during times of unemployment. as a private loan market evolves impotently reemerges they must ensure the new borrowers are fully informed and have access toair lending terms and current are worse -- thank you very much. >> thank you very much. mr. remondi thank you for being with us. >> good afternoon chairman brown, senator corcoran members of the subcoittee. my name is jack remondi i'm the chief operating officer sallie mae and i thank you for the opportunity to testify today on the educational loan. private education loans help families fill the gap between their own resources financial aid grants and the total cost of their college or university of their choice. they are not for everyone. they were never intended to replace federal aid and in fact

they were originally called supplemental loans indicating their stated purpose. in most cases higher education as a family commitment which are private education loans are designed to support. last year over 90% of or private education loans had a cosigner tip of his apparent. are loans provide important protections that benefit the family including extensive disclosure, just rate in repayment option embedded tuition insurance and disability loan forgiveness. but the best protections inherent in any loan including private education or federal student loans his quality underwriting and planning before on borrows. or free agent vacation planner helps families know before they go. by assisting them with the following important steps for turning access into success. pick the right school and most importantly consider lower-cost

options, create a financial plan that covers the entire cost of completing a colge degree not just one semester. make loan payments to keep borrowing costs down and student loans without a degree in mean loan payments without the higher earnings to support them. during the application process we disclose monthly in total payment information and present customers with a side-byide choice of interest rate and payment options available to them. customers reive multiple sclosures that quantified expected monthly payments in finance charges highlight the availability of federal loan programs encourage the applicant to shop for lower-cost options and outline the right to cancel the loan. after disbursements our customs receive monthly statements that to detaitheir loan balance and accruing interest. customers elect stupid differed yment while in school are reminded of the positive impact that in school payments would have on the total loan costs. the most recent findings of our

how america pays for college study shows how effecte these disclosures and reminders are. private education loan, private education loan borwers 90% filled out the fafsa the first up to picking out a student loan. among all education loan borrowers are pages 3% borrowed only private loans. and two-thirds of our customers and making payments while the student is in school allowing them to save thousands of dollars in interest charges over the lifef the loan. sallie mae has pioneered new products and procedures designed to help families make informed decisions. for example we advocate school certification as an important safeguard. we will not disburse alone until the school certifies it. and until recently nearly all borrowers deferred loan payments while in school. in 2009 sallie mae became the first lender to encourage school payment because they saved the bar were thousands of dollars in interest charges over the life of the loan.

are in school customers who opt for either interest payments are a fixed payment of $25 a month can save an estimated 30 to 50% in and total interest costs. the results are encouraging. even in these tough times and the stories we heard today are certainly important to hear but they are not the norm. 90% of our loans in repayment our current. and still we recognize that the recession has supposed real and significant challenges for many americans including some of our customers and because our success depends on our customer success we actively assist borrowers experiencing difficulty by understanding their individual circumstances. to customers who need help we offer a mix of repayment products in counseling and collection programs that give them the best opportunity to manage their debt obligations. these options incle reduce monthly paymen, interest only

payments, extended repayment terms, temporary interest rate reduction and ifppropriate, forbearance. all scale to the customer's individual circumstances and ability. since 2000 we have modified $1.1 million in private education loans to help our customers. nonetheless loanodifications and other efforts are sometimes insufficient and for this recent reason sallie mae supports bankruptcy reform that would require period of good payments that his perspective so as not to rewrite existing contracts with customers and that applies to federal and nonfederal education loans alike. we would also be interested in increasing the options available to default to borrowers specifically federal rehabilitation program allows them to cure the default and repair their credit. if a customer makes the required -- the default is removed from their credit history. for all of the consumer loans

however the fair credit reporting act does not allow students a second chance. so there is no provision to rehabilitate private student loans. for some time we have been discussing the promise of providing this option to private education loan rrowers and would certainly recommend that congress consider it. in sum, market forces and legislative changes some of which were developed here on this committee have combined to make private education lending beer understood by students and families, better underwritten and more targeted to provide needed financing that can help america's families achieve their education dreams and create the opportunity for a brighter future. thank you. >> i want to interrupt this hearing just for a moment on the senate floor and on the house floor and by the gate of the capital senator mcconnell and senator reader marking the 14th anniversary of the murder of thewo capitol hill police officers on july 24 at 3:40.

officer jacob chestnut an detective john gibson were shoving line of duty and if i could ask for a moment of silence in the room. thank you all. thanks to all three of you for your testimony. i want to start with ms. loonin. you made a rather telling statement. mr. chopra in the beginning comments on the first panel spoke about the difficulty in refinancing and potentially students are our worst know enough about this refinancing opportunities and refinancing opportunities if you will. what types of relief or free financing opportunities are currently available to private student loan borrowers and i would like to hear ms. loonin's answer and also the other two

briefly if you would comment and then at the same time elaborate on any sort of barriers or federal rules that may impinge lenders ability to provide those relief options to those borrowers. >> thank you senator. right now what we have been ble to see working with our clients is there are very few private loan refinancing options even available. a lot of our clients are lower credit score may be because of that but we also hear from borrowers through our web site our web site and others who are looking, prime borrowers who are having same problem so i would say there are very few products and opportunities out there. as far as barriers, one point that i wanted to make especially on the isue of the regulators have come up numous times. i think it's very telling the number of options that sallie mae for example is offering so

clearly it is possible to offer some of these options and i was like -- if they are hearing from regulators that they can offer something but one of the problems that we find is that there is this haphazard nature to the option, that some of the lenders will for example offer or they have programs where they will offer cancellations for death or disability in some time we will call a clients and they say they will have them in the same lender will say that they don't. in terms of barriers it's a little bit harder for us to know exactly what those problems are because we all want to work together to figure those out. >> and ms. mishory or comets? >> similarly the borrowers who have come to us have increasingly to express frustration at the inability to work with their lender to find

better terms and have not found other options in the marketplace. mr. chopra earlier mentioned education of our worst as well. if their optionse also need to make sure that students and borrowers know about those in so that is anotr issue as well. >> i think as rohit chopra scribed the a couple of factors here. these are principally in sallie mae's case family education loans in the and the price we charge for this based on the highest credit score of both apparent and the student so to some extenthey are already gaining the benefit of the parental cosigning on that account based on the interest-rate at the time. the second is that the loans are variable. the most finance -- fixed-rate loans made in a higher interest rate environment being refinancing to a lower interest rate environment. very rarely do we see interest

rates or loan products being refinanced because a credit profile has changed in such a dramatic way to change the overall interest rate structure and i think because of those two reasons you see a very limited marketplace for private education loan consolidation refinance activities. see what can we do about it? >> as i said i think it most cases those loans will be offered at the same terms and conditions as they are offered at today because they are based on the parents creditworthiness and ased on the variable into straight so as interest rates have come down since 2008 all the interest rates on our student loans have been coming down with the a fall in the short-term interest-rate. >> interest rate. >> what steps can we take do you take an dividual responsibilities are sure we take in congress to make sure that students are aware of the differences between these loans and federal loans, not just the

initial interest rates but other kinds of terms of repayment and other problems that might arise during the repayment process? why don't you start again. >> so there are changes in truth in lending as you know to the disclosures. they are more extensive than they have been in the past and there were some very positive changes their but we hope that congress will take look at the timing of some of the disclosures as well so the borrowers can get the terms of their actual loans earlier in the process and not just the a sample of what they may be getting. as we know the private loan products and vary quite a lot. the certification process as a number of people have alluded to here and mr. chopra talks about in his testimony as well, we think is another opportunities to make that mandatory program.

some schools use that opportunity to counsel borrowers as well and they think the think that is an opportunity right and to give a lot of information before the student is actually signing on the dotted line. >> ms.ishory your response on that? >> i would also add in addition to the options that ms. loonin listed, on the bus tour we talked to a lot of juniors and seniors trying to figure out their next steps and thy were confused and they didn't have clear options on where to go. school counselors often are not prepared to talk about differences in loans and how to finance their collegeducation so i think a lot eds to be done in college counseling offices but we need to be teaching some of these financial literacy skills even earlier so families can prepare their education. >> mr. remondi? >> i think as we heard in the cfpb report there is more disclosure today on private education loans and there is on

any other consumer lending product out there period. we do provide all of this information to the borrowers as they are going for the application process so they get a rate and their credit is approved and they get their actual rate. they have a 30-day term to accept the offer without any changes that we would make and then they also have 30 days after the loan has been funded to cancel the loan. each time in a process they are encouraged to consider lower-cost federal loans and to shop for lower-cost options. i think i'm the one hand we are providing enough a lot of good disclosure today. i think to the other participants comments here one of the pieces that could improve dramatically as helping students and families know before they go. figure out what thecan afford to spend on a college education, pick theight school that matches the nancial abilities of the family along with the prospective earnings that they can gain from that career and

pick up off the full cost of education. the number one reason students default in sdent loans and this is true whether it is federal loans education loans is the kit does not graduate from school. they have the debt burdebut they don't have the economic benefit of the ecation. if we can help families plan better through that process and be more prepared before they go we would have a better educated consumer and i think better results from the federal program as well. >> you agree with mr. chopra's statement that we shouldn't need anattorney and a magnifying glass? >> he made that statement on all loans, not just to gloss but in our disclosure you are required to have a certain size of print font -- he was referring to the credit card statement that we get when you get your new credit card. [inaudible]

>> thank you offer your testimony and i do appreciate that we have three folks in different backgrounds that are trying to solve the problem and again and now officer concerned. we see people that are unable to make payments or are paying a life for their education. ms. mishory what are some of the predatory lending instances if you will that you are seeing out in the marketplace right now? >> i think as was discussed fortunately a lot of them have improved over the last couple years. we certainly saw over the 2005 to 2007 era of lots of direct consumer marketing and a lot of students taking on burdens that they did not need to. so i think that we have seen a lot of improvement. i would say we still see marketing materials that are

unclear to students. in each picture that marketing materials show the terms and they show the terms in a way that students who don't have the ability or the experience actually understand them. >> so it's more an issue of just people understanding what they are getting into and maybe it being explained in clear language. it's not necessarily that people are out there purposely trying to take advantage of students. >> i would say that again is a lot of panels discussed the market certainly is improved over the last couple of years but that leads to the problem of folks at already have flown to today to go on and also ensuring that going forward as the market changes we make sure that students know what they're getting. >> mr. remondi with all the loans that you will make i am sure there has to be data that shows people who go to certain colleges are more likely to pay back their loans than others. regarding while april 2 ok across our country and see

certain outliers where people go to a particular institution and they have more difficulty paying back their loans in others'? >> we have over 7 million borrowing customers that we have the wealth of data that goes across federal student loan programs in the federal marketplace and they are absolutely our differences in repayment success rates and therefore the flipside of that -- >> when people are making loans to students who attend these institutions are they taking those kinds of things into account? >> yes think what happened over the last couple of years is that people weren't aware of some of the changes that were coming in the economic environment. more recently people, lenders are trying to take into consideration the overall success rate of students at a particular institution. we cannot make private education

loans to students at every school in the country so we have an approved lender or approve school list that we used to determe whether not the borrower is eligible to participate in our program's. >> on the federal side we are making loans to students. >> the federal program also as a cutoff based on the cohort default waiter cdr but that is a very high default rate standard and i believe it's 25% for a couple of years and it's only measuring the incidence of defaults in the first two years after repayment. >> office with the private lenders have to think like that because unlike us we just can't make up the numbers and go ahead and kick you can down the road for future generations. [inaudible] >> you let me ask you this question. it possibly fathom mobile been an institution can make

loans at 3.4% to all commerce, no collateral, no credit checks, no payments made for years and come out and away that is net positive on the basis of the loan? is that even within the ream and to an institution whether they actually have a lotof students attending those institutions? is that fathom a global -- fathomable. i know i've demonstrated an attitude here but obviously mrs. loonin great testimony and i appreciate your work in this gard and you are talking a little bit about how the private sector side has certain constraints, sometimes prudential regulator's place them in some of them are not as

tight as some of them abdicate as you mentioned earlier. but on the private side they actually have to survive to the next year. they actually have to make it an insolvency way on the public side and in an election year we can just make things up and they can decidehat we want to try to get votes from students and young people by doing things that we know make this even more insolvent as a country that we can just do that. can you understand why there might be differences between what the private stor is doing that has to exist into the future and the public side which we can just print money and borrowed money from other people and do things that make us more insolvent during the time of elections. can you understand why yo have different types of lending arngements taking place? >> i can understand and i should say save say the loans that i saw duri the heyday of the predatorlending where the worst products i have ever seen

and i don't think there was any caution put into those when ose -- they were landing to students and schools back then at rates that i've never seen before also and those were some of the loans had failed at the highest rates. so we are talking about it now because the market has changed a cousin of the crash you are right about that. that is actually still frankly problem. >> and for any entity doing out there -- out there doing things you just mentioned we ought to do a thing we can to put them out of business, i cannot agee more. i'm really just talking abo us, and not you guys. i thank you for what you do. i continued to be appalled at their ability to be irresponsible and candidly as i listened to mr. remondi it sounded like they are trying to be responsible.

i don't know if you all would take any issue with some of the things that he just discussed regarding sallie mae's policies. would you do that? >> i can say this. i agree that they are trying to be responsible now and i do have good working relationships with their customer advocate office at sallie mae. a very respectful relationship and unfortunately but unfortunately for a lot of our clients they are still mod able to offer anything but i do think a lot of the projects they have created going forward to show much more responsible lending practices. >> thank you for your help as advocates in making that happened and just in closing, mr. remondi only institutions and i know there was an effort by the administration to make it so and it might've been a good policy, so that you know if they private entity had students that were attending and they were

borrowing money that there had to be certain outcomes they a or they could no longer participate in certain governmental programs. it sounds like there may be a number of public institutions around the country that we made me to look at in that same way. would you agree disagree? >> yes, mean there are good schools and their bad schools and they're a for-profit and not-for-profit. in terms of educational outcomes for their students. >> and i guess as far as consumers go equally bad outcomes for students if they borrow money in a responsible way from a responsible entity whether it's public or private. they could end up attending one of the schools that is not equipping them to perform the 21st century. there is a issue there also. >> an awful way we might deal with that? >> i think that having information available to students so information about the school's graduation rates, information about the default rates of students who attend those schools is a gd step in

that direction. i would go back though to my earlier comment that says a lot of this is trying to address how to make a decision about the current semester. i have the tuition bill on the kitchen table. what do i do? i think more students and families nd to think out the total cost. how my going to get from the first year of college student graduation so actually get the economic benefit of the money i am investing. >> for the people that you are dealing with, it's very important to yo as lender that they sit down at that kitchen table and try to think through the entire process through graduation because otherwise it going to end up creating a loss for your institution. is that correct? >> that's correct and that is why we offer our investment planners of free web sites tool to customers and noncustomers alike. >> are we doing that with the federal loan program to your knowledge? >> no, we are not.

>> so we have a lot of students that borrow money from the federal level and don't have this type of input, the federal level that don't have this input on the front end and the innocents again us here, not you guys and certainly not not any of the witnesses trying to overcome some of the predatory issues, we here have a policy that may be in fact be harming ople throughout their lifetime. is that correct? >> we are certainly not making information available to those customers in all of the disclosurexampthat were provided today certainly do not exist in the federal student loan program. >> do you know why that would be the case? >> it is exempt from the truth in lending laws. >> yeah echo i think you can understand my frustration with the hypocrisy in this institution. >> i guess i share senator corkers -- views about the hypocrisy.

when we should know more about the student and you suggested mr. remondi someone coming for a student love should know more about what of the are the graduation rates of the school of for-profit or not for-profit schools, two-year five-year or public or private and should also know what kind of placement rates, all kinds of placement, job placement counselors and job placement offices they have that these for-profit or not-for-profit schools and with the rate of getting a job, the rates of job placement are. i think all of that should be in this picture so there's plenty to go around. senator akaka. >> thank you very much mr. chairman i want to tell the panel that i really appreciate your presence in the sharing of your experiences in the sdent loan programs.

we have heard from you today information that includes expanding the role of colleges and universities in working with private lenders. however, since 2008, average tuition at private, not-for-profit schools has gone up almost 10% and tuition at public four-year schools has gone up 15%. these increases are surely leading students to take out additional loans. schools both determine tuition and help students find ways to pay their tuition. i would like to hear from the panel, what can be done to

ensure that schools continue to provide advice with the best interest of their students in mind, and do you see a need for a mutualthird-party to offer advice to students? .. >> unfortunately there are a lot of students going to school who file more because the cost is more. it is a complicated problem, what is driving the cost. one thing that i think is important to look at is accountability, something that the center was just talking about, accountability across all sectors of education for outcomes, for completion, for

job placement, because the ability to repay the loans, frankly, even at some of the higher cost institutions, is very much dependent on what the outcome is of the education. if you succeed, particularly in the federal programs with there's a lot of flexibility and options, most likely it is going to be a situation where the borrower is going to come out ahead and it is good for the to be a situation where the borrower is going to come out ahead it is good for the economy and all that as well. as far as having a neutral third party adviser, i'm not sure at what point of the process that you're talking about specifically. i think it's always important for borrowers to get neutral advice. i think the schools themselves sometimes you have conflicts of interest where they want the student to come to the school. they're selling their products in a lot of ways and my be

difficult in some schools to give mutual advice. on the other hand, a lot of financial aid ficers do a very good job now of providing a kind of good faith, something that ms. mishory mentioned this to get that information out before they get into the school doors in that it gives schools with counselors and that should be as neutral and objective as possible. >> m misry. >> yeah, i would absolutely agree the cost of college is a huge issue. we hear about it from other students we talk with. you know, families are struggling to figure out how to afford to pay for college and the sloan -- the issue of student a dad is related in the cost of college is what hi impact this debt. i do think there are larger issues we nee to look at,

public institutions are no longer affordable like they used to be. as someone for mom's generation paid a third of what i pay to go to a public institution. we need schools to be accountable for their money did you receive and there is not that many ways in which we should. we need reformation and the kids to look inside the school down the street, you know, a lot of students default to his only, you know, kids two years out at 50% employment rate. if i go across the city, kids ving 80% eyment rate. go to school across the city. we don't have that and they desperately needed. >> mr. remondi. >> i would agree the cost of college has risen dramatically. i ink the sticker price is a lot different than what the consumer pays en we have the team debt burdens grow at a more

rapid pace than the tuition level. so the average student is graduating with about $26,000 at the back of which is 2% more for the year over the last 10 years. one of the challenges they face is the economy coming out of school at today's difficult for students to get a job either in their field or the pay level they were except dean when they started and that is creating some of the issues. but again, going back to the concept of know before you go, if students understand the dynamics, how much is going to cost to complete their education while at the graduation rate is at its core, what the default rate is, they can make better, more informed decisions in that process. >> will ask a final question here. mr. remondi, as the recent scandal over libor had any effect on how sallie mae sets

lending rates? d have you thought about the possibility of using a different measure for rates that name? >> our inrest rates are set using the libor index. we have not seen any issues or problems with that. the allegations made to date have said that libor was set artificially low, which as i was sure would've been to the benefit of the barbers. >> thank you very much, mr. chairman. >> thank you, mr. akaka. want to thank you, ms. mishory and mr. remondi. if you hav

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> this evening on c-span2, a documentary by ken burns. and we will focus today on the military on q&a at 7:00 p.m. eastern, also on c-span2. >> if you want to come to america illegally, do not waste your time going across the border into the desert. it is dangerous. just get in an airplane. fly here and get your of the set. the total number of undocumented in this country has been going down for a long time. we solve the problem by having our economy crater. people do not come here to put their feet up and collect where fare -- welfare. they come here to work. if they cannot find a job, the go back home, because america is not a good place to sit around and think the place is going to

support you. somebody has to create the business that they will work for. all the numbers show that immigrants, and i think -- rupert is an immigrant. it cannot be easy to leave australia, come to the other side of the world, literally, give up your friends and family and everything, everything you know, and start out from scratch. that is what people are willing to do. of course, immigrants are going to be more aggressive and be risk takers. that is what they come here. >> mayor bloomberg is joined by the news corporation ceo rupert murdoch. you can wash their discussion tonight at 8:00 p.m. eastern on c-span. >> secretary of state hillary clinton recently concluded an 11-day trip to africa, visiting six nations, including the newest country, south sudan, as well as kenya and her last stop,

however, where she visited the university of the western cape and talked to students about the global partnership between the u.s. and south africa. secretary clinton has stated she will not seek a second term in 2012 if president obama is elected. from cape town, this is 40 minutes. >> when it was suggested that i deliver a speech in south africa, and we ask the south african embassy in washington, there was only one answer. the university of the western cape. [applause] of course, it is in most fitting institution, despite the ambassador's prejudiced. [laughter] because this distinguished, diverse, and story university

has played such an important role in berthing a new south africa. at a time when apartheid was deeply entrenched, the faculty and staff of western state took a great stand against division. over the years, they were in the vanguard in the struggle for justice, even giving thought to a new constitution. which has known both the despair of apartheid and the birth of new freedom, was once called it the cape of storm before became the cape of good hope. i first came to south ever cut in 1994 for the inauguration of

nelson mandela, someone who is, of course, a great leader and a hero to many, including myself. i sat at the inauguration and watched as jets from the south african defense force streaked across the sky, their contrails and tinted with all the colors of the new national flag. for decades, those jets had been a powerful symbol of the systems of apartheid, but on that day, they dipped their wings in salute to their new commander in chief. for those of us who witnessed the ceremony, it was a searing moment. there was a man who had spent 27 years as a political prisoner not far from here now being sworn in as president. journeyident mandela's

represented something even larger, his country's journey, the journey of your parents and grandparents and great grandparents, a long but steady march toward freedom for all its people. being president at the birth of this -- of being present at this was an experience that not only i but the world will never forget. from now 18 years removed that iconic moment. if you are a student here add uwc, you are probably just a toddler back then. a few of you might not even have been born yet. you did not just grow up in a democratic south africa, you grew up with a democratic south africa. today, your country is different from the one i visited in 1994,

and so, too, are the challenges you must confront and the opportunities that are there. in this pivotal time, the united states of america is committed to supporting you. as president barack obama said so memorably in ghana in 2009, the nations of africa need partnership, not patronage, not strong men but strong institutions. and the united states seeks to build sustain partnerships that help african nations, including this one, to fulfill your own aspirations. i am here on a trip that has taken me from west africa to east africa to the horn and it out to the south. in each place, i've seen america's partners taking charge

of solving of problems. in south sudan, the new government of a nation only a year old made a courageous decision to restart oil production for the benefit of its people. in uganda, i met with soldiers fighting terrorists in somalia and in working to end kony's reign of terror with the lord's resistance army. in malawi, i met not only a new female president, but also a group of remarkable teenage girls building their skills and confidence and a group of village women improving their incomes and their families' future is through banding together in a dairy cooperative. at every stop, i have described how the obama administration's comprehensive strategy with africa rests on four pillars,

which the archbishop just mentioned. first, promote opportunity and development. second, spurring economic growth, trade, and investment. third, advancing peace and security. and fourth, strengthening democratic institutions. we are working with your country on all four of these. i just finished the second strategic dialogue between our countries with foreign minister. during the year, many officials of both of our governments across many agencies worked together on important issues, and then we meet annually to review progress in our cooperation. let me give you just a few brief highlights that help paint a picture of the depth and breadth of our bilateral relationship. today at the clinic, united

states signed a document with south africa that marks a major transition in south africa's continuing fight against hiv/aids. south africa will become the first country in africa to plan, manage, and pay for more of your own efforts to combat the epidemic. while the united states will continue to provide funding and technical support through our program. we also brought a delegation of leaders from american companies like fedex and chevron and general electric that are looking to expand their work in south africa. they met with their counterparts from the south african business community, nearly 200 representatives looking to strengthen our ties commercially. we launched a new $7.5 million public-private partnership to improve teacher quality that

brings together our governments, foundations, and businesses. we announced the start of an opportunity grants program that will help disadvantaged south african students study in the united states. we established a global disease detection center that will be jointly led by health experts from our two countries. we established a new program to help judges and court systems more effectively combat gender- based violence and in to help south africa support other countries in the region trying to do the same. and later today, we will complete an agreement with the city of cape town to provide high-speed internet access in one province. there is more to be said, but in short, it represents the work

we're doing together, work that goes to the heart of our relationship. it is aimed on improving the lives of people, working to eradicate the disease, ameliorate and end poverty. working with you to help you solve the challenges you face. but there is a different aspect of our relationship that does not get nearly enough attention, and that is how we can work with south africa and in all the nations of africa to solve those challenges and problems not just within your borders but across the continent and throughout the world. our shared mission is essential to our common security and prosperity and into the fundamental character of the world of the 21st century. this is about your world

>> consider some of the problems we face today. an anemic global economy, trance national crime and terrorism, climate change, disease, famine, nuclear proliferation. none of these problems can be solved by any one country acting alone or even by several countries acting together. each one calls for a global network of partners, governments, businesses, international and regional organizations, epidemic institutions, civil society groups, even individuals all working in concert. and there cannot be a strong global network unless there are strong african partners. now i've often heard it said that african problems need african solutions. well i'm here to say that some of our global problems need

african solutions, too. [applause] and new nations on this continent can carry as much weight or be as effective partners and leaders as south africa. [applause] you are a democratic power with the opportunity to influence africa and the world. you have led on non-proliferation at the international atomic energy agency and own climate change at the durbin conference. you have led on economic cooperation owe g -- 20. you have led on women participation. and a woman will soon become head of the south african

commission, a first in that organization. [applause] >> now all of this is good news for the people of south africa, this continent and the world, but respectfully i say that we, and you, can, should and must do more. two days ago i had the honor of visiting president mandela and his wife at their home. the man who did so much to shape the history of a free south africa has never stopped thinking about the future of south africa. you, the young generation, are called not just to preserve the legacy of liberty that has been left to you by madeba and other courageous men and women, you are called to build on that

legacy to ensure that your country fulfills its own promise and takes its place as a leader among nations and as a force for peace, opportunity, equality and democracy, and to stand up always for human rights at home and around the world. this is a journey that my own country knows well. although america and south africa are certainly different nations with different histories, we have a deep and abiding connection. like you, americans know what it takes to begin healing the wounds of oppression and discrimination. we have had leaders, and the archbishop quoted one, our first president, george washington, but also truth in read frisco douglas, abraham

lincoln, martin luther king jr. and others, who both inspired us and challenged us to live up to our values, to keep faith with the ideals set forth and enunciated at our beginning. we know this work is hard. it is not ongoing, it is never-ending. but like you, we are compelled by the arc of our nation's history to stand up around the world for the values we ascribe to and advance at home. now discussions about the rise of emerging powers like south africa usually start and too often stop with people simply saying with great power comes great responsibility.

it is worth considering what this really means. some critics are quick to say when america says emerging powers have great responsibility, they mean great responsibility to do whatever america wants. well, i do believe that because of your history, south africa has own obligation to be a constructive force in the international community just as the united states does. but that obligation has nothing to do with what america or anyone else wants you to do. it has everything to do with who you are. here in south africa you achieved something that few countries have ever done. you proved that it doesn't take an all-out civil war to bridge the divide between people who grew up learning to hate one

another. you showed that the rights of minorities can be protected even in places where the majority spent decade and decades living in oppression. you reminded the world that the way forward is not revenge, but truth and reconciliation. of course you know better than i how much work needs to be done. south africa faces daunting, economic, social and political challenges. but you have laid the foundation for a society that is more prose prius, more inclusive, more peaceful, more democratic. and the world needs you to contribute much because you already have accomplished much. for nations like ours, the united states and south africa,

doing these things that reflect our values, our histories for our own people, can never be enough. we have to look beyond our borders. so let me highlight some of the ways the united states and south africa can work together to promote opportunity and development, spur economic growth, trade an an investment, advance peace and security and strengthen democratic institutions. first, opportunity and development. even as south africa responds to your challenges at home, you are supporting your neighbor's efforts to fight poverty, to improve health, to create conditions for more sustainable inclusive growth. you are working with the government of malawi to help farmers use their land more efficiently and raise their incomes. you are supporting south sudan

in efforts to train judging and strengthen their judicial system and so much more. the united states and south africa can share our experiences, pool our knowledge, leverage our resources so both of us get more and better results. for example, we are partnering with the university to train leaders from the public and private sector in other african countries in developing agricultural strategies. this is the kind of partnerships we want to see more, not just with south africa, but others who are becoming donors instead of recipients. nigeria has released food supplies to help its neighbors. we are only limited by our imagination. but of course our goal must be

opportunity for all, development for those most in need, of lifts themselves and their families and communities out of poverty. if that remains our goal, there are limitless ways we can collaborate together. the second pillar of our strategy, economic growth, trade and investment, is another where the world looks to south africa to play a constructive role in promoting a global economic architecture that benefits everyone. now of course that is easy to talk about, and the devil is always in the details. whether we are discussing unfair tariffs or the speed of trade liberalization or ownership requirements. we both want domestic and international rules that protect our work erstwhile

attracting investment from abroad. we both want clean and sustainable growth that does not pollute or water and our air. we want transappearance and a level playing field free of corruption. we both want to create jobs at home while promoting a global economic recovery that as president kennedy said lifts all botas. that is why the bumings remains committed -- the obama administration remains committed, before the act expires in 2015. [applause] >> we are pleased that congress acted last week to extend the third country fabric provision through 2015, which already enormous benefits for entrepreneurs, especially women, in many of south

africa's neighbors and also create jobs in the united states. president obama will sign this bill as soon as it reaches his desk. but measures like the african growth and opportunity act will not reach their full potential, and africa will not reach its full promise unless african countries break down the barriers with their neighbors. as we have seen from north and south america to east asia, everyone benefits when neighbors open their markets to each other and take steps to spur regional trade and investment. but unfortunately, there still is less trade among the countries of subis a heroin -- subsaharan africa than necessary other region of the world. now the region looks to them to help lead the effort to tear

down the barriers that make it easy tore export goods half way around the world than to your neighbors on the continent. president zuma is picking up the mantle by championing an ambitious north-south infrastructure corridor, enlisting governments, the private sector and regional coppingses to realize the vision that has so often remained elusive. the highway from tape down to cairo. with south africa in the lead, perhaps i will be able to come back in a few years and actually drive it. [laughter] the third area of our shared agenda is peace and security. now south africa and the united states have not always seen eye eye in this area, particularly at the height of the crisis in libya and other places.

but the differences we have between us this these moments are over tactics, not principles. and that should not obscure our many shared goals, from supporting the political transition some somalia to combatting piracy, combatting violence and extremism, to reenforcing the peace between sudan and out sudan. in one especially crucial area, south africa has set the standard for the world, stopping nuclear proliferation. as the first country to voluntarily give up nuclear weapons, south africa speaks with rare authority. you can most convincingly make the case that giving up nuclear weapons is a sign of strength, not weakness, and you can help

ensure -- [applause] and you can help ensure that any country that pursues nuclear weapons programs will invite only more pressure and isolation. this means south africa can play an even greater role on issues like curbing iran's pursuit of nuclear weapons or preventing nuclear materials from falling into the hands of terrorists. and south africa is supported by and supports africa's regional institutions in advancing peace and security. we have worked closely with the african union, which has emerged as an increasingly active force in addressing security challenges from somalia, so mali, to sudan and south sudan, and i think the a.u. for all their efforts led by former president embeki, to

help broker the oil aagreement reached by the two sides last week. regional organizations like sadic and others are engaged as we speak in peace and reconciliation efforts in madagascar and other places. more inform alarrangements like the international conference on the great lakes region are bringing leaders together to tackle the conflicts in the congo. south africa plays an important leadership role in all of this. now the fourth area is protecting human rights and democracy. americans and south africans alike pledge ourselves to the proposition that all people everywhere should live with dignity, pursue their dreams, voice their opinions freely, worship as they choose.

we want to see all of that come to fruition. now living up to these principles is not easy. no country's record is spotless, including my own. right now many democracies in the global south, including south africa, are engaged in a vigorous debate. on the one hand they want to promote democratic values and respect for human rights in other nations. but on the other hand they are wary of intervention that bears on the internal affairs of those other nations. ultimately we are all called to answer the question about how we live up to these principles that we share, and there are no easy solutions. one country may not answer that question the same way as another.

but we all have to recognize that anyway, in any place where human rights are abused and true democracy denied, the international community must apply pressure to help bring about positive change. no one understands that better than the people of south africa . so we welcome south africa's support last week at the u.n. general assembly, condemning the assad regimes brutal reign of terror. we hope this can be another other of cooperation on one of the more urgent questions of our time. the human rights council and other venues, we look to you to help lead the effort to help protect universal human rights

for everyone. when old friends become corrupt, a decision by south africa to stand on the sign of freedom is not a sign that you are giving up on old allies. it is a reminder to yourselves and the world that your values don't stop at your borders. and i particularly appreciate the leadership role that south africa and other southern african democracies like zambia and boss swan bought swan -- other countries are looking for advice and models. you can point to a university like this one, which insisted on the freedom to teach whom ever and however they saw fit. you can point to the independent trade unions that stood up for works' rights and the civil society groups that

provided legal counsel and other essential support. you can point to the courageous journalists who insisted on telling the truth even when it invited the government's wrath. here in africa the international community has made it clear that the people of zimbabwe have the right to have their votes count inside a free and fair election. things to presidents zuma and others, a draft of a new constitution is nearly complete . now these same leaders can help accelerate progress toward finalizing and adopting that new constitution to a credible referendum and holding a free and narrow election monitored by the international community. [applause]

and if zimbabwe's leaders meet these commitments, the united states is prepared to match action for action. [applause] so in each of these four areas, development, economic growth, peace and security, democracy and human rights, south africa already embodies so many of the values that the world is looking for. and we look forward to deepening our cooperation. but let us remember, no country's influence is a birth right. not america he is's -- not america's and not south africa's. [applause] we have our own work cut out for us to keep moving toward

and trying to achieve the unachievable more perfect union, to live up to our values, to use our influence and power to help others achieve their own dreams. and if south africa is to achieve the full mesh -- measure of your own ambition, you, too, must face and solve your own challenges in health and education, economic eequal, unemployment, race relations, gender-based violence, the issues that you live with and must address. these are areas that we, too, face. we stand ready to work with you, but only the peel of south

africa can make the decisions about how you will solve these problems and overcome these challenges. only south africans can fight corruption. only south africans can prevent the use of state security institutions for political gain . only south africans can defend your democratic institutions, preventing the erosion of a free press and demanding strong opposition parties and an independent judiciary. only south africans can truly preserve and extend the legacy of the mandela generation. but you will also be called on to define the very nature of your citizenship and your country's approach to your fellow citizens and the world. you will decide whether south africa moves forward and not

backward. you will decide whether south africa seeks to erase old dividing lines in global politics. you will decide whether south africa seeks to set aside old suspicions and instincts and embrace new partnerships tailored to 21 century challenges. our own partnership between our people can grow deeper and stronger if we remember our respective histories and the obligations they impose if we keep focused on the future and move toward it together. nearly 50 years ago robert f. kennedy, a united states senator, attorney general and champion of civil rights, came to capetown and gave a heart-felt speech about south africa's place in the world. he painted a vivid mict of the

future he envisioned, one where every nation respects universal human rights, promotes social justice, accelerates economic progress, liberates all people to pursue their talents. south africa, he said, can play an outstanding role in creating that world, and he called in particular on the young people of that time, saying this world demands the qualities of youth, not a time of life, but a state of mind, a quality of the imagination, a predominance of courage over schmidtity -- timidity. one of my personal heroines, eleanor roosevelt once said

human rights really starts in the places close to hope. it is easy to pledge ourselves to the abstractions of human rights. it is harder, much harder to reach deep inside of our hearts and minds to truly see the other, whether that other is of a different race, ethnicity, religion, tribe, national origin, and recognize the common humanity. i have been in and around politics for a long time. it's easy to lose sight of the common humanity of those who oppose you. you get to feeling that your way is the right way, that your agenda is the only one that will save the people.

and all of a sudden you begin to de-humanize the opposition and the other. the greatest lesson i learned about this came from nelson mandela. when i came to that inauguration in 1994, it was a time of great political conflict in my own country. my husband was president. people were saying terrible things about us both, personally, politically, every way you could think of. and i was beginning to get pretty hard inside. i was beginning to think who do they think they are? [laughter] what can i do to get even? after that inauguration that i

described in the beginning, i along with other dignitaries from all over the world were invited to a great lunch under a huge tent at the president's house. i had breakfast there in the morning with president declerk, and i came back to have lunch with president mandela. [laughter] there were so many important people there. our delegation was led by our vice president. there were kings, and prime ministers, and presidents and just a glittering assembly. and president mandela stood to greet us all and welcome us to that lunch, and he said, "i know you are all very important people, and i invite you all to our new country. i thank you for coming. but the three most important

people to me here in this vast assembly are three men who were my jailers on robin's island." i sat up so straight. i turned to the person next to me and said what did i say? he said that the most important people here were three of his jailers. he said i want them to stand up. and three middle aged white men stood up. he called them by name. he said had -- said, "in the midst of the terrible conditions in which i was held for so many years, each of those men saw me as a human being. they treated me with dignity and respect. they talked to me. they listened.

and when i walked out of prison, i knew i had a choice to make. i could carry the bitterness and the hatred of what had been done to me in my heart forever, and i would still be in prison. or i could begin to reconcile the feelings inside myself with my fellow human beings." that is the true legacy of president mandela, calling all of us to complete the week he started, to overcome the obstacles, the injustices, the mistreatments that every one of us will encounter at some point

in our lives. that is truly what south africa is called to do, to continue the struggle, but the struggle for human dignity, the struggle for respect, the struggle to lift people up and give children a chance, every boy and girl, to fulfill his or her god-given potential in this beautiful land that has been so blessed. it is a burden being an american or a south african because people expect you to really live up to those standards. people hold us to a higher set of standards, don't they? and we owe it to all who came before, all who sacrificed and

suffered to do our very best to keep working every single day to meet those standards. but we mostly owe it to our future. many things have changed since robert kennedy came to capetown and nelson mandela left robin's island, but some have not. the world we want to build together still demands the qualities of youth and a predominance of courage over timidity. so in that spirit let us work together so that the values that shaped both our nations may also shape a world that is more peaceful, more prosperous and more just. thank you all very much.

[captions copyright national cable satellite corp. 2012] [captioning performed by national captioning institute] >> the road to the white house winds its way through tampa and charlotte over the next few weeks. republicans meeting for their national convention starting august 27. a week later it is the democrats' turn as they gather in charlotte seven 4. watch c-span for every minute of coverage. some of the scheduled speakers in tampa, john mccain, conned lease rice, mike huckabee and scott walker. the announced keynote speech will be given by governor cris christie, and paul ryan. for more information, go to our website. you can get political posts from campaigns, reporters and viewers, all at

c-span.org/campaign2012. >> both he and bob mcdonald were almost instantly thrust into the spotlight in 2009. he is brash. love him. last month he asked a reporter are you stupid. he is not afraid of taking on either democrats, teachers unions, what have you. that is what you need at a republican national convention. earlier in the primary season you had a very divided represent party. by the end you really need

someone to rev up your base and get you ready for the last two months or so of the campaign. >> when you were reporting, you wrote that governor christie is viewed as a rock star among republican conservatives. are they looking for him to set that sort of tone in the convention? >> in an interview with "usa today," governor christie actually said he was going to focus more on mitt romney's accomplishments and his time as governor of massachusetts and work at bing capital, rather than attacking barack obama. it is kind of an interesting choice in that you would think governor christie would be tapped to be the attack dog, which i am sure he will be in part. but it also might present a shift in the tone and strategy

of the romney campaign. >> a keynote speech at a convention is often seen as a springboard to a politician. what is the sense of the governor's larger political aspirations beyond new jersey? >> well, he has been cagey about that. he is at the top of governor romney's vice presidential pick list. he is not ruling out a presidential run, but it is not in any of his plans at this time. i think his name has to be up there for 2016 along with people like jeb bush, who was mentioned as a vice presidential contender this year. it seems like he is rather ambitious, but also understands maybe it is not quite his time yet, which is how he phrased it

when he said he wasn't going to run this time around. >> the other news from the republican national committee was the selection of senator marco rubio yo of florida to introduce governor romney. is this viewed as a consolation prize for governor rubio yo because he wasn't selected as the vice presidential pick or are there other plans for senator rubio yo? >> that is an interesting question. i'm not sure i would describe it as a consolation prize. to introducing the nominee at the republican national convention is a big task certainly. i just think the romney campaign sees rubio yo almost in the same mold as paul ryan. he is young, very telegenic. he is very conservative. he can reach into the hispanic community, which is very

important in florida and in tampa where the convention is being held. >> he is a top person for governor romney regardless of whether he was given the keynote address or introducing governor romney. >> david sherfinski, thanks for joining us. >> thank you. >> if you want to come to america illegally, don't waste your time going across the border and the river. it is dangerous. just get in a plane and overstay your visa. the total number of undocumented in this country has been going town -- down a long while. we solved it with the economy crater. america is not a very good place to sit around and think

the state is going to support you. in the case of your son, somebody has to create the business that he is going to go to work for. all of the numbers show, and rupert pointed out, he is an immigrant, it can't be easy to leave australia, come to the other side of the world literally, give up your family and friends, give up everything you know, and start out from scratch. that is what people are willing to do. of course immigrants are going to be more aggressive and more risk takers. that is why they come here. >> mayer bloomberg is jointed in this event by rupert murdoch. you can watch their entire discussion tonight at 8:00 eastern on c-span. >> next, the alliance for health reform and the robert wood johnson foundation hold a panel discussion on public

access to oral health care and what is included under the new law. from earlier today, this is just over 90 minutes. >> i want to welcome you to this program about a very much neglected health policy in the united states, and that is oral health. you probably heard and will hear more today about the fact that the most common childhood disease in the united states is denial cavities. poor oral health is linked to serious physical conditions like diabetes and heart disease. but that connection is not very

widely recognized. in fact, i was listening to a presentation about denial needs a week or two ago, and the speaker felt compelled to remind the audience that -- and these are her words -- the mouth is part of the body. we have had a lot of reminders about the sorry state of oral health in america from the institute of medicine, from g.a.o., from former surgeon general david saxer, from former h.h.s. second lou sullivan, from the kellogg found dation and others. in short, plenty of gaps in our document takes in the system. we are going to take a fresh look at the problem and at some policy options being considered to deal with it. as we were talking just before the program started, nobody is more pleased than jay

rockefeller, our honorary chairman, that we are discussing this topic today. there is a story that he tells about coming to the little town of e m23 ens, west virginia, as a vista work back in 1964. i actually had someone in our office transcribe what he said a couple of months ago in describing that experience. these are his words, "when i arrived, i was shocked to learn that there was absolutely nothing school-age children living there could get in the way of denial care. they had never been to a dentist, never heard of a dentist. there were no several services available. you saw teenagers whose mouths were already beginning to go bad. we worked to get a bus to bring children to this grade school in charleston to receive denial care. i remember that after the

dentist checked some of those young teenagers over, he said jay, it is a nice thing for you to do for them, but it really is much too late. if you don't get the baby teeth right, anything else that follows is going to be bad and get worse. the senator has been working on denial access issues ever since, and the alliance is proud to focus on those program problems today at this briefing. we are very pleased to have as a partner in that brief the robert wood johnson foundation, which has been helping america enjoy healthier lives and get the care they need for 40 years. i have a button to prove that. you can't see it, but it says 40. and thanks very much to dr. david crowell and his colleagues at the foundation in thinking through this topic and

pulling this together. he is a pediatrician. he is a team director and senior program officers for human capital at the robert wood johnson foundation. we are please to have him co-leading. >> thank you for coming today. we appreciate that the alliance is taking on this topic and that you are all interested in this topic. oral health is an integral part of overall health. now if we believe that to be true, and i do, that seemingly ho-hum statement holds in it an abundance of challenges and opportunities. the challenges. well, in many ways as the statement says, are the same as overall health. there are racial, ethnic, geographic access, financial challenges. there are issues are

determining and maintaining quality of care, and there are work force controversies. the opportunities, however, are great. one really great opportunity, and i would really like to see it, is that all conversations or health and health care will naturally include oral health. while we have taken the time to have a specific alliance forum on oral health, it would be really nice to see future alliance forums that talk about medicade, talk about financing, fill in the blank. remember that original health is a part of that. oftentimes it is forgotten, and not just by the alliance, but even by our foundation at times. as we continue to recognize that factors influence health are expressed at individual, family and community levels, we can develop collin alpolicies to improve oral health and

health care. another opportunity is that funding schemes for prevention and treatment of disease will naturally include oral health. that is important for us to remember. right now we fail miserably in medicare where we don't have coverage for denial health care for disease and coverage. we don't do as good a job as we should. and then finally, and perhaps most importantly, and if you learn nothing from me today, it is this. that there is a great opportunity in remembering that all makes and models of patients, providers and policy makers can play a roll in improving oral health. i hope you will leave the forum with that in mind as you go out to your work, whether it be as a policy maker, policy influencer, or a patient. thanks very much for your time, and i enjoy listening to the rest of this forum. >> great.

thank you, dave. a couple of logistical items. there is a lot of good information in your pacts, including boy graphical information about our speakers. there is a sheet that lists further resources that you can use for further edification. all of that is also online at our website, allhealth.org. as of monday you would be able to look at a weapon cast of this briefing on the website of the kaiser family foundation, which we are grateful to for providing that support. there will be a transcript available in a week or so on our website. and if you are watching on c-span at the moment, you can go to the alliance website, that is allhealth.org, and you will see the presentations and

the rest of the background material if you happen to have access to a computer, at the same time. you can see on the slide behind me that there is tweeting going on about this briefing and at this briefing with the hashtag oral health if you care to join in one way or another. i want to get to the program now. we have a great lineup of folks with a lot of different experiences to share with you. as soon as i get to my proper space in the notes, i will introduce our initial speaker, lynn mouton. lynn mouton is a dentist. i got confused because we shuffled the order -- you don't

care why i did that actually. so i am going to stop and just say that he is a dentist and the chief dental officer for the centers for medicade and medicare service. he is a founder of the prevent abuse and dental reflect programs, acronym panda. and before joining c.m.s., he spent 16 years in private practice, 20 years in state health departments. he serves as the american dental association's national spokesperson on family violence prevention. we are very pleased to have you hire with us today. >> thank you, he had. i think you are the keeper of the clicker? >> i am. >> thank you. i want to thank you the alliance and robert wood johnson for putting together this briefing today. it gives us a chance to not only highlight oral health

issues, but also to talk about some of our successes. i'm sure some of you have talked about the c.m.s. triple aim of better health, better health care and reduced costs. this particular briefing gives us a chance to not only reduce the things, but gives us inroads into addressing them. we have an oral initiative. we have two goals specific to dent industry. the first being we are i can by 10 percentage points the amount of medicare and children who have received a dental service in a year. it is 10 percentage points, not 10%. so it doesn't mean going from 20% to 22 points. it would men going from 20% to 30%. it is not only a national goal, but a goal we have set for each

of the states. this information is based on what we know as a form for reporting data in the united states. the baseline for this goal is 2011. we anticipate we will be addressing this goal hopefully nationally and in the states by 2015. the second goal is to increase by 10 percentage points the portion of these children who receive a dental seal apt on a permanent mole are tooth. as you hear other speakers talk about it. you understand that the combination of dental sealants on appropriate children and water floor dation flouridation is a goal. we will be phasing in the goal as the data come in for this year. the oral health strategy will

help address these two particular goals. first of all, we have the opportunity to work with states on developing an oral health action plan, and we will talk more about that in a minute. it's my pleasure that i get to work with the various states and they're medicade and chip programs in providing technical assistance and peer to peer learning as they develop these action plans and moving in order in addressing the two goals. we obviously work a great in outreach to providers. without the providers there is no oral health care. we are also working on outreach to beneficiaries. we will have a second learning lab, an oral health web ner, dealing with outreach to beneficiaries, and some successful programs that will be held september 26 at 2:00 p.m. eastern time. my contact information is available at the end if you want more information about the webinar. please contact me.

we also get the opportunity to work with other partners in other areas. not only the oral health committee but in various other programs as we work with the c.d.a., indian health service and other areas as all of us are working toward oral health issues. the state action plans that we are asking the state to develop on a voluntary basis to help us address oral healths issues. we asked them to address this action plan and goals by 2015. addressing these goes is not something that a medicade state agency can do on its own. it requires bringing in all the state partners, all of the advocates. all interested in improving oral health for our children. >> we are going on aligning

efforts not just through this state action plan, but also through state orioles health plans, which all of the states have developed, some of them at the behest of the center for disease control and prevention. there are healthy people 2020 goals. we are fortunate that each iteration of the area has goals. and we work with murca and the child health bureau addressing oral health in the states. >> the action plan template we have produced offering to the states as they develop their action player, has several different parts to it that helps us in describing the issues and also in how we can make these improvements. first of all we are asking the states to identify existing

access issues and barriers. we of course understand that every state it different, there is no way to develop a national action plan as each of the states worked through their individual issues, their individual problems, their individual resources, and frankly, their individual politics. we want them to describe in detail the state's existing oral health delivery system, providing day on providers. that is not only dentists, but non-dentists as well. we appreciate the contribution of dental high general ises and other midwest of the team. when we are talking about fluoride varnish application and rick assessment on young children. we want the states to talk about what they have done for oral health improves, things they have done, the results,

their analysis and evaluation of the effectiveness of their programs. we want to know what has succeeded, and we also want to know what may not have been quite so successful. we would ask that the states compare their form 416 data against hedis measures. they talk about whether a person has had an annual dental visit. reimbursement rates are always at the top of the discussion. i was a medicade dentist for many years in private practice. i know what it is like to get paid if cents on the dollar for care. state budgets continue to be an issue as we are funding medicade treatment and delivery. at the same time i think there are things that can be done at the state and national level that will help address these issues. specifically when we start talking about eliminating

administrative barriers, it makes it easier to participate in medicade. we want the states to talk about what they have done to deal with the placement of dental seal ants. a proven method for preventing tooth at the kay. to describe their systems. without the providers, there is no dental care. and finally to describe the status of the use of electronic health records. electronic dental records are coming on, but under the affordable care act we will be moving closer and closer to electronic health records. what might they do to address the specific goals? we want them to describe the activities under way or planned for implementation, to describe the goals and how they are going to achieve them. providing specific days on these activities, which of course then will give us the opportunity to share that

information with other state programs as well. and again, to describe barriers to success. not everything we try always works 100%, and that is all part of the learning process. these lessons concerned can be extremery valuable as other state programs model what has witness done or modify it to their own uses. the template provides examples of successful promise. reconfiguring reimbursement rates, and showing some of the state examples where they have done that. and a chance to develop and improve collaboration and partnerships because state medicade programs don't work in isolation. they work along with all the other partners in a state that are addressing oral health issues. so the technical support we are

providing from c.m.s., working with them specifically on their partnerships and collaborations. i had the opportunity to visit with one of the state programs last week, who is taking on the initiative of building a state health coalition in a state where one does not yet exist. ref an opportunity through the partnership for alignment project, which has often been called the sand box project because people want to learn to play well in the sand box together. not making light of it, this project is an effort that will put public health pranls and medicade programs in closer partnership and collaboration, to share ideas and ways they can improve access to oral health for children. we are working with the medicade chip state denial association on a best practices project. a formal process with criteria

and grading, not to just recognize promising programs, but going through a rigorous evaluation to decide what are best a practices for state medicade programs. and we are working with the states to connect one state with another to share these successful models. i was asked to highlight one part of the affordable care act, which talks about the demonstration projects for alternative dental health care providers. part of section 5304 talks about communicate dental health coordinator and advance practice dental hygienists. you can read the list. because we all realize there are problems with access to dental care. there are parts of the population that have a hard time if not impossible time accessing dental care. we need to look at these other models that may be useful in

addressing these issues. what the affordable care act does is call for demonstration of these models where they would be proven one way or the other. there are in the act an eligible list. it includes dental in the act, there is a list of eligible entities. it obviously includes how your education, dental schools, health departments, and such. it says these programs must be accredited by the commission which accredits all dental and hygiene programs in the country. i appreciate the chance to talk about these issues and what cms is doing to address them. please feel free to contact us anytime as you were either at the national level or the state level as we all work to improve oral health for children and, yes, for adults and the elderly. thank you. >> now we're going to turn to

dr. monica hebl. she practices general dentistry in milwaukee, and she is the elected chair of the american dental association's council on access, prevention, and interprofessional relations. she's also a past president of the wisconsin dental association and has been involved for her entire career in extending access for dental services for underserved populations. thank you for being with us. >> thank you very much for allowing me to address you this afternoon. as you have already heard, oral health often takes a backseat to medical, and good oral health is integral to all overall health. i appreciate the time you're taking to learn about oral health issues. it will take a paradigm shift for oral health to gain enough factors to achieve lasting improvements in optimal oral health for all. the ada is working hard to increase the focus on oral health issues by partnering with

many groups and organizations involved in oral health. you just heard a little bit about my background, but i would just like to put a little flavor on it, local flavor. i am a private practicing dentist, so this is an unusual experience for me -- a little nervous. i got involved in dentistry as a 14-year-old dental assistant in my mentor's office. i still work at the same practice along with my brother- in-law. in 2000, we moved from our central city location to the northwest side of the city, and we chose to remain on three bus lines so we could continue our mission to continue the legacy of taking care of those in need. we devote about a third of our time to assistance even though it is economically challenging. we also produce it in charity care programs. i have been involved in organized dentistry since i graduated from dental school,

and i worked tirelessly to improve access for the underserved. it is difficult, complex problem that requires activity on multiple fronts. there is no silver bullet dissolving access. -- to solving access. poverty, geography, lack of oral health education and transportation, language and cultural barriers, fear of dental care, and the belief that people who are not in pain do not need to seek care are some of the factors that affect a person's ability to access care. it will take a collaborative approach of all stakeholders to approve the nation's oral health. ada as many programs and activities to address the access issue. recently, we made it a priority to tell every with others, to leverage our activities for greater gains. i am going to highlight a few of these programs. the cdc named one of the significant public health achievements in the program. the decrease in disease is

significant. it is unfortunate that we're spending so much time and energy fighting for such a great public health measure. we have worked with state and local dental societies, as well as pew, to ensure the high quality side of the information is available for those were fighting for fluoride on a local level. here is a map that shows you just how hot this topic is the 43 states have some type of fluoridation activity, and a lot of it is protecting it. even though medicaid programs are chronically underfunded, efforts to improve access by streamlining the administrative processes of medicaid programs have achieved increased access for patients and participation by dentists. states that have successfully improved their medicaid programs usually have many stakeholders working together, and by doing so, they achieve greater gains in excess. -- in access.

and we're thankful for that focus in cms. collaborative efforts that include increased reimbursement, education, care that is ongoing instead of episodic, and involve public-private partnerships yield the greatest results. each state medicaid program is different, and each state has different issues to solve. here are a few examples of reforms that demonstrate gains in taxes, but i am going to only highlight one is due to time constraints. michigan's healthy kids in is a partnership between the state dental association and the commercial dental plan. the streamlined administration and reimbursement is the same as the commercial plan. access for kids enrolled is approximately 70% for seven to 10-year olds. efforts to expand the program are under way. there many volunteer programs that ada members are involved in throughout the year.

we recognize that volunteer programs are not an adequate health care system due to their episodic nature. therefore, in 2006, our give kids a smile efforts changed from providing care on one day to establishing a dental home. ada is increasingly involved in their professional activities, because we realize the advantages of expanding the number of health professionals capable of assessing oral health and the importance of linking dental and medical homes in an effort to reach kids before they have the disease. there is increasing activity across the country in the area of er utilization due to potential cost-savings. one successful program in michigan, calhoun county, is modeled by habitat for humanity. they provide care free of

charge to low income individuals who perform community service. this has led to lower costs for hospitals in the area, and it is a win-win-win for the community. oral health education is prevention at the most effective level and has the greatest potential to yield the best results in improved oral health. ada is proud to be part of the partnership for healthy mouths, healthy lives, a coalition that has resulted in the launch this week of an ag council campaign with an oral health messages. the message will encourage brushing two minutes, to rise today. -- twice a day. there are other successful messages that you might remember including the crash test dummies. it is exciting. we're very excited to see the results. we are in the evaluation stage of our pilot to create a community dental health

coordinator. this new team member is a different approach, and it is modeled after community health workers. the goal is to break down many barriers for patients and provide a link between the patient and the dentist. there will educate patients and help them navigate the system. in addition to tasks like helping them find in home, secure child care, and arrange transportation. they will also be of to provide limited, mainly preventive, services, rather than focus on treating disease. the cdhc is based on some of the ada's key principles of breaking down barriers to care. education, disease prevention, and maximizing the existing system. in addition to the ada website, we're launching a website for the public. mouthhealthy.org. i would like to thank you very much for allowing me to be a part of this panel, and we look forward to working together on

initiatives moving forward. >> thanks very much. we're going to go now to julie stitzel, a manager for the children's dental campaign on the states where she focuses on workforce issues. pew directed a really heavy amount of attention toward improving kids' access to oral health services. they have issued reports including on how well kids oral health needs are being met. we're happy to have her with us today. >> thank you. you have heard repeatedly that dental care is the single greatest unmet health need among children in the u.s., five times more prevalent than asthma. a lot of times when talking

about health care reform, we focus on medical. it is board to focus on in as well. our research and advocacy efforts focus on four efficient cost-effective strategies. one is ensuring that medicaid and the children's health insurance program work better for kids and for providers to make sure that insurance translates into real care. the second is water fluoridation. the third is increasing sealant programs for kids who need it most. the fourth is expanding the number of professionals who can provide high quality dental care to low income kids. a lot of you might be familiar with our work. we released two state reports that essentially used eight benchmarks to evaluate oral health access. if you have not looked at where your state stands, i highly recommend it. these are the grades from our most recent report, making coverage matter, which is defined on our website. a lot of folks in this room have

used these reports as policy levers to increase oral health access in your states. earlier this year, pew released a report on the emergency room utilization for preventable dental conditions. we examined a large sample of emergency room data collected by a federal agency called the agency for health care research and quality. we then suggested the national number of emergency room visits by identifying the specific hospital codes for dental problems that are considered to be preventable. unfortunately, this data is not available from all 50 states for two reasons. first, not all 50 states to mandate that hospitals submit their discharge records. but also, some states, er data, but they're not required to interpret it or report it. here is an example of our overall findings. you also have a copy of this.

what we found was preventable dental conditions were the primary diagnosis in more than 830,000 visits to the hospital emergency room nationwide in 2009. children accounted for nearly 50,000 of those er visits and many of the visits were made by medicaid enrollees or the uninsured. so states are paying a high price for the significant number of children and adults seeking this type of care in hospital emergency rooms. it could have been prevented and injured and more effectively elsewhere. -- and treated more effectively elsewhere. it is -- what is really tragic about this scenario is that the kind of care that folks are receiving who go into the er with a toothache generally will not provide lasting relief. you traditionally do not have a dentist in the er, and their responses to describe a pain medication or an antibiotic,

and in this is not actually solving the problem. so it is the wrong care at the wrong place and in the wrong time for desperate patients. the more than 830,000 visits to the emergency room represents a 16% increase from this number in 2006. that is the bad news. the good news is that there is a real opportunity to save money, because these visits, again, are totally preventable. we know that getting treated in an emergency room is much more costly than the care delivered in the dental office, and states are bearing a significant share of these expenses through medicaid and other public programs. two examples. in florida, a dental-related visits to the emergency room produced charges exceeding $88 million in 2010. about one out of three emergency trips were paid by medicaid. in washington state, dental

problems were the leading reason for emergency room visits by people who were uninsured. and here are more examples from the report that showed that essentially taxpayers and consumers are paying a high price for this and complete care delivered in the emergency room. why is this happening? well, it boils down to access. the current system is not working for everyone. this chart is from the american dental association. while it uses the 2000 census data, it shows that roughly one-third of americans lack access to dental care in the u.s. this is in line with what we're seeing from the 2010 data. the logical next step is to look at the dental safety net. well, the dental safety nets are at capacity. they are only able to trade 10% of this third of the population that is left out of the system, so something else needs to

happen. in addition, many people lack dental insurance. and even if that is not a problem for you, a lot of people have trouble finding a dentist. many people have to drive 20 to 30 miles to access a dentist. currently, more than 40 million americans live in an area with a shortage of dentists. what can we do about it? as you heard, there is no silver bullet when talking about increasing access to care. it is a pretty complicated situation that requires multiple solutions. but a lot of states are taking a look at evaluating the existing make up of the dental work force by talking about allied providers. i do not know how many of you guys are new to the dental world, but when i first started, i thought allied providers were just one provider, but it is a larger umbrella. we talked about the committee

dental health coordinator. we are going to talk about the advanced dental therapy program in minnesota. but there are multiple models we're talking about when we say allied providers, including the dental health a therapist in alaska and the advanced digital-practitioner across the u.s. it begs the question, why are we having this conversation now? in addition to research showing that this is a viable solution to increasing access to care, we cannot afford not to. while it is clear that states are bearing the cost at the consequence of folks not having adequate access to care, and in certain circumstances, the consequences can be much more dire. a lot of people who are not new to the dental work are familiar to the tragedy of the maryland boy. this is continuing to happen in my home state of ohio. we recently had an unemployed dad who passed away at 27

because he did not have access to care. this map is constantly changing, but it gives you an idea of which states are talking about work force. the blue states have authorized new providers. alaska, minnesota. the green states are states where pew is working, states where kellogg is working, states or the american dental association is working, and states that have taken the initiative on their own. i commend them for doing this, because it is not an easy conversation to have. i also appreciate the alliance and the robert wood johnson foundation for making this a focus today. if you like to keep up with the information on what we're doing at the pew dental camping, please sign up for our in news and views. the information is right there. we're happy to share what we're

doing monthly. here is my contact information if you have additional questions after this briefing. thank you. >> terrific, thank you. finally, we will hear from christy fogarty who is a licensed dental therapist, one of the first two people in the nation to receive this recognition. she started as a dental assistant and then became a licensed dental hygienist. last year, she finished two years of training as an advanced dental therapist and received a master's degree as an oral health practitioner. she works in minneapolis, and some of you may have seen her featured in the recent pbs documentary on oral health work. >> thank you so much for having me here and allowing me to share the minnesota story and what we're doing there, the project we have going on up there. i am going to cover a few topics rather briefly.

i will talk about the advanced dental therapist and what we do and talk about testing and training. i will tell you about where i work and the demographics i serve. and a little bit about the model that we are developing. i have been practicing for about a year. i am also a licensed and dental hygienist and a licensed dental therapist. that serves me well for this community. i will talk about what is going on in the future and what we're looking at in minnesota. i will talk briefly about what it dental therapist is, in mid- level practitioner. much like a nurse practitioner but in dentistry. i can do just about any kind of feelings. i can do extractions of primary teeth, baby teeth. i can do stainless steel crowns. i can do a root canal on a baby tooth. and i can do maintainers.

their two types of therapist in minnesota, dental therapist and advanced therapist. dental therapist are required to have a bachelor's but many have a bachelors. advanced dental therapists are required by legislation to have a master's degree. at metropolitan state university, where i attended school, is the only school that teaches advanced dental therapy. when prerequisite is that you're an experienced hygienist. i had to have worked at least 2,000 hours. i had 13 years of experience, and was probably right in the middle of the level of experience. after i complete 2,000 hours, which is like a residency, i will become an advanced and dental therapist. the board is trying to figure out what they will do to test

me when i hit that number sometime in november this year. the biggest difference between the two is this a revision level. -- supervision level. dental therapists have to be in what we call in direct supervision. a dentist needs to be on the premises at all times while different types of procedures are being performed. once a become an advanced dental therapist, i can do general supervision. i can do everything within the scope of practice, but i can do it without a dentist needing to be on site with me. that is a huge event is -- a huge advantage, especially when talking about mobile dentistry. if i can get to patients who are not in the same building as me, it will open up care significantly. one thing i always like to make sure is that people understand that might do allow center allows me to do a lot of things by legislation. what dental therapist and

advanced their tests cannot do a simple cleaning, the cannot do para work. i can do both. you want to do as much as it possibly can. it is not uncommon for me to do a stainless steel crown, a couple of fillings, clean teeth, and do sealants. for the training and testing that we go through, i went through 27 months in a master's program, metropolitan state. in my scope of practice, i am tried to the level of a dentist. this talks about the 75 pages that dentists are licensed to do. there are six pages that i can do. their three i can do as a high dentist. in 27 months, for the scope of practice i do, i have trained very highly. i am trained by dentists. the testing we are given is the

same testing a dentist does. . after i received my license, and i was able to get into a management practice agreement. where i work i am in collaboration with nine separate dentists. there are different separate levels of supervision they give me. they see my work, and most of them want to know what i'm doing. a little bit about us. last where we provided care to about 28,000 children. this year we are on track for 30,000. we have programs at about 200 sites statewide. the majority of our care is not done at our headquarters.

it is done at community centers, permanent sites we have established. you can see we take anyone with any insurance. we have a sliding scale. we turn away no one. we see children under the age of 21 and pregnant women. we also work with children with special needs. i see a lot of children with autism, wheelchair bound, the whole spectrum. we also at the headquarters can provide quiet rooms where we can decrease stimuli and help children who struggle to get care, to be cooperative with the care. we have surgeons -- dentists who do surgery and hospital care. we have one dentist who comes in twice a month. since december of 2011, i have

seen 900 patients. you can see the demographics there. i like to tell one story because it brings home why i do what i do and why i believe so much we need to work on access to care. when i first started therapy, working in the clinic, there was a 2-year-old little boy with a sad little face. he was in so much pain. he had fallen the week before and bumped his front teeth. his mother spent the entire morning being told we do not take public assistance insurance. you have heard it is expensive. they would have given him an antibiotic and told the mother to try to find a dentist. she was grateful our clinic was willing to see her son.

i worked with my collaborative practice dentist and determined that the teeth needed to be extracted. it was pretty awful for him. he had not slept, and he was in pain. you can imagine for a child how awful that was. his mother was so grateful to get him out of pain, and because i am a hygienist, i think about preventive care. i said, please come back next week, ke sure there is nothing else going on. a week later, i am in the hallway and i see this boy come around the corner, a grin with a big missing tooth, and he takes off on a sprint and wraps his arms around my leg. the mother said, you are the person who took the pain away. this is why i do what i did. the mother was grateful for the care, the child needed care,

and if cuts had occurred, it would have gone so more awful for the child instead. excuse me. a little bit about the finances. this shows a manager that gave a presentation about dental therapy. one person raised their hand and said, that is great. you saved about $1,200 a week. it reduces the number dentists we need. how do you get a grant funding, funding for paying her salary? how do you pay for her? we were confused by the question because he had not put his light up yet. -- this slide up yet. the slide shows i produce more than the majority of dentists in

our office. there are key reasons. i work in the headquarters. two, amazing dentists who let me work hard and complete a lot of work. because i am not disturbed by a therapist asking for my checks or during exams -- i will not be able to do that until i'm advanced -- that helps a lot as well. my boss says this is an unfair slide because it shows you are the third highest producer in the practice, but the reality is you should not be compared because your scope of practice is not the 75 pages i was talking about. it is 6. it is an important set of pages, but the dentist would have an advantage in production because there are more expensive procedures they can do.

this is the highest i have ever had. i sit in third, fourth, or fifth every month. my numbers continue to rise. i was the fifth highest producer in july. the question that he got, you do not need grant money. you need to work them into the practice in a proper way. for the future, i continue working toward my 2,000 hours. what i actually did not mention, minnesota had an a- minus. the question that i get a lot that is important for people to know is, what has acceptance been like? i thank god every day for nurse practitioners because it is

easy to explain what i do. havee year's practice, i had one parent say i prefer my child to see a dentist. the acceptance rate is extremely high. you're talking about a population that needs care, and they are so grateful to have the care. it is an important message to get out there, that this is one great tool. there is no silver bullet. you need a great toolbox to solve access to dental care, and i say dental therapy is a great wrench you can use any type of work. -- any time that works. thank you. >> thank you. we get to this part of the program, and you get a chance to ask our panelists what you want to get out of this conversation. you have the opportunity to ask questions orally, and you can take out the green card in their packets, write a question,

hold the card up, and we will bring it forward, get a chance for that person to respond to it. i invite dr. krol to join in the questioning. i wonder, as we're getting started, if i could ask dr. hebl about the give kids a smile program you were talking about and the effort you described in 2006 to focus on continuity of care and establishment of a dental home. how do you do that in a volunteer situation? >> training opportunities and best practices so that programs

that provide care on the one day and found ways to get dentists to accept the patients ongoing, it was a train-the- trainer kind of thing, and dentists are generous. if they build that relationship, a lot of them are willing to take those kids on. >> ok. question for julie. i was looking at the map that you were displaying about the impact of the emergency department visits, and i wonder if there is much of a variation from state to state among the states that you were able to get data for. you had 800,000 of these visits a year out of a total number of

visits, like 140 million, and some of these percentages are just stunning in the context. >> we were only able to gather data from 24 states, so is not all 50 states, but the general takeaway is that people are utilizing emergency rooms because they do not have access to care. it is an issue. >> ok. >> a question for dr. mouden. what are the efforts to broaden the provision of dental benefits for adults? what do you see on the horizon? >> as we learned after the supreme court decision recently, we are in a position where states can provide dental

services for adults under medicaid or not. that has not changed. we are concerned that once an underserved area, a child with dental services until they turn 21, and now we just cut them loose. unfortunately, we are in a position that it is up to the states individually to decide whether or not they will provide adult dental services under medicaid and with competing priorities of state budgets, it will be a concern. >> have there been discussions about the benefits in medicare? >> in my office, there have been those discussions. [laughter] as i get within a couple of years of that magic number, it is amazing when people turn 65 in this country we no longer care about their oral health. flippant a little

about that. this tremendous unmet need we have of seniors and their oral health is a huge discussion for budget issues. i can only hope that maybe medicare will catch up by the time i get there. >> a question for christy and may be julie. can you talk about the process that minnesota went through to get this legislation passed? >> it is like making sausage. you do not want to see it. it was like that. i had a lot of great advocates out there working hard, and the best thing minnesota did is prior to going to legislators and presenting their case about why it is so important -- if you look at julie's information, minnesota was not the state most in need of dental

care. we created a huge collection of people. one of the biggest advocates we had was a pediatrician. he said if dentists do not fix this, we will have to fix it, which do not the best solution. the best thing we did was creating a band of pediatricians and dentists and a broad spectrum of people to say we agree this is something we want to try, we want to expand the dental work force, and this is how we want to do it, and we need your support. >> it was not easy to have a conversation, because you have a lot of perspectives, and it is important to understand where people are coming from to respect where they are coming from and try your best to build some sort of consensus so that it is not just a policy win, but you have an infrastructure in place to sustain that policy and have lasting change with respect to access.

>> before the legislation was presented, metropolitan state university had an entire program approved by minnesota. the education piece was already approved. as soon as the legislation was passed, it was a ready to go. >> if i could follow up, you folks did have a wonderful evaluation of children's dental health policies, and as i understand it, maryland made major improvements. they did not show up on your map here with respect to dental therapists, but what did they do and how did that happen?

>> with maryland, and julie might be able to talk about what they did, they focused more on -- let me touch on the benchmarks. of the benchmarks we used, three focused on prevention, and one focused on work force and other on medicaid reimbursement rates. maryland tackled more of the prevention and the reimbursement rates on access, not necessarily the work force plans, but others might be able to add to that. ok. >> a follow-up on the number of students. how many students are enrolled in the program? what is the pipeline? how do things look going forward? >> the first cohort i was in was seven. we're small in numbers.

the second cohort is halfway through. they are four. my understanding, their first class at minnesota was nine, and the second class was seven. we're looking in the 20-member range in the next 12 months. >> other than minnesota, can they practice in any other state, including alaska? >> minnesota is the only one that has dental therapy as part of the state statute. it is part of our dental practice act. someone on the panel can speak more authoritatively. i cannot practice in any other state. we have had several people moved from other states move to minnesota, including one of the first from the university of florida.

we cannot practice in any other state now. >> a question, which grows out of the presentations as we heard them. it is directed to dr. hebl. what is the american dental association's take on advanced dental therapists like christy, and are they in the ada's view of providing proper precare at the proper level, and how do you feel about minnesota becoming a model for other states? >> i knew i was going to get this question. the ada believes that with the

scarce resources available to improve access to oral health, we believe more can be done to fix the current delivery system. we have demonstration projects all over the united states, and healthy kids in michigan is just one. there are a few other successful programs. we believe that providers are there. we need to fix the system around them. we caution against a rush to create new work force models that are allowed to perform irreversible surgical procedures, especially with the scarce resources. they could be directed toward dentists providing the care. it seems upside down to me to have the sickest people treated by the highest trained. i do not think a 2-year-old

with an abscess is a simple operation. -- extraction. it seems like i have been inundated with some difficult extractions. primary teeth, the hardest extraction i have had in the last two weeks. a woman who i took a tooth out that had a bleeding emergency. we would like to see dentists be involved in not cutting soft tissue. we think it can happen. all this working together to make that happen instead of diluting the message and have this divisive issue. >> do we need more dentists as well? >> there are 20 new schools in

the pipeline, and when you look at christy's training, that is six years of training, and medical school is 8. it takes a long time. i do not know if that is necessarily going to be an immediate help, and we need help now, so we should find ways so we can involve all the people, members of the team, and use them to their fullest capacity. we have hygienists and dentists who are not busy right now. it is an economic issue, and when you work in a subsidized system, you can make things happen, and we need to figure out how we can make the health care dollars for oral health work in the system that exists. >> we have some folks who are standing at the microphones.

we would ask them to keep their questions as brief as they possibly can and to identify themselves. >> i'm with the institute of social medicine and community health. i think dr. mouden mentioned medicaid pays 20% of the private pay rate -- >> let me stop you there, because i was speaking for my personal experience. that is not a national data by any means. >> my question is, how could medicaid as a federal agency allow states to pay so much less than the private insurance market or the private-pay market bears? the medicaid statute says the medicaid program is supposed to ensure equal access, and that usually means paying a rate

comparable to private pay, i am surprised that states are allowed to pay less, but i am curious what percentage of dentists choose not to take medicaid patients and why that is not allowed as a licensure issue. shouldn't states use their licensing authority to ensure that dentists are making these services available to their population in their areas? >> i will give those a try. what you have asked about is two state issues. there is something called sufficiency in the medicaid program, where access is to be equal to what is available in the private market. that is a state issue which is dependent on budget. the second thing you asked

about is licensing. very much is the issue. whether any health care provider, be it hygienist, nurse, otherwise, is required to take public assistance programs is a discussion that i do not think i am allowed to have. >> anyone else? go ahead. >> i am the executive director of the association of clinicians for the underserved. thank you for an informative panel. i have worked on this issue of oral health for a number of years. it was the first topic that brought together people across disciplines to look at early childhood care. my question is directed to christy. what is the cost of your preparation for your advanced dental services, and what are the opportunities for some state and federal loan repayment in the future? >> that is a good question, one

that is a struggle in minnesota. the answer is education becomes -- i already had a bachelor's in dental hygiene. ofre talking about six years education. we have an educated hygiene workforce right now doing work. it is not another six years. just the dental therapy program at the metropolitan state is about $70,000. shentist i've worked with, was about $350,000 in debt. we are among the most expensive professionals to be trained, dentists and hygienists. it is an expensive practice to train. the second answer to the question is i was able to apply for loan forgiveness. however, it is a national

program, and i qualified because i am a licensed hygienist. dental therapists are not eligible for the program. unless you go through a program that starts in a foundation of hygiene, you will not be eligible. >> do we know anything about the total cost to the program as opposed to the cost to students? in either case, whether we're talking about this or any of the other professionals. >> i do not have the numbers, but i can get them. >> do you have any idea? >> if we can get those, we will post them on our website. >> yes. >> i am a reporter. my question is basic, and i apologize. i would like to know why is there a shortage of dentists. what are the factors? why is the answer to getting more therapists and why not recruit more people to become dentists?

>> do you want to start? >> it is a mal-distribution. there are not enough dentists in rural areas because you cannot sustain a practice. we just had a pediatric dentist that had to sell his practice to a hospital system because he could not compete. he does not get the subsidization from the government. he could not keep dentists employed. they would leave and go somewhere else. i think that is where i was talking about, the system we have with 20 new schools opening, we have the capacity, and baby-boomers are not

retiring like they were before the economy downturn. the professionals, hygienists that are already on the ground that we could expand the scope of what they do and utilize them to their fullest. even dental assistants. we think the capacity is there. it is just where they are located is the problem. >> also, 40 million americans live in an area where they do not have access. the research shows that is the fact, and the reason we believe dental therapy is a possible solution is because it makes economic sense. pew released a report that showed that adding dental therapy -- at the time it was a theoretical model -- but

christy is proof it does not affect the bottom line of the private practice. our model focused on private practice. the reason is because it increases access to care the population that is currently left out of the system. >> i am with a group that represents the american dental association. thank you for holding this briefing. i want to respond to something that was said to call into question the safety of the irreversible procedures provided like advanced dental therapy. more than 50 other countries for nearly a century have used non-dentists for these irreversible procedures, and studies say they can effectively provide these services.

there is rigorous research that demonstrates that non-dentists can deliver care and irreversible procedures. i have never seen the study that shows anything contrary. i do not know if dr. hebl has studies to share with us. >> my response would be that whether we have christy out there, anybody, unless we get people to those places and teach them that they to teach prevention and they need to brush and floss their teeth, it almost does not matter who is out there. >> i agree that oral health

literacy needs to be improved, and i think advanced therapists like christy, they know when a person needs to be referred to a dentist. because there are not enough dentists, we need to supplement the care provided by dentists. >> thank you. >> thank you very, very much, robert wood johnson, for organizing the session, and for all the speakers. i would like to change the direction of the discussion a little bit. my perception of what we talk about is who gets to hold the drill to fill all that we could have prevented. this is so unfortunate. we know -- and this has been stated by at least three of the speakers -- how to prevent tooth decay, and that is the disease we're talking about. we can prevent tooth decay. we are focusing on who is going to hold the drill.

why aren't we sharing more information with the general public, especially low-income people without literacy, they do not know this disease can be prevented. we have data in maryland that demonstrates that low-income, though educated, do not know what fluorite is, never heard of sealants that have been used for 75 years. it seems to me where we should put focus is on trying to educate both health-care providers, because they do not know the correct information either, as well as the general public. which brings to mind a question for dr. helb.

on your slide where it said what the new campaign is about, and ada put several million into that, it's toothbrushing two times a day for two minutes prevents tooth decay. there's no evidence. you have to put fluoride on a toothbrush. that word is not even used in any of the documents that are available to the general public. this would be a major step ahead if it even used that word. thank you. >> sure. >> the ada was part of that huge coalition, and the group that does that does a lot of research in focus groups, and we

had to take a step back a little bit and take off our hats, wanting to try to control that message and trust them they knew what they were doing in the marketing world and that this was to their focus group research, that this was an appropriate message to get, what you are talking about. i agree it seems like, is this going to work? they did a big part of this campaign to measure the results, and if it does not get results, it will not continue to happen. it could be tweaked, and that marketing firm that does this is the same one that did the messages of the little baby in the crib, e-trade, and they put

out some effective campaigns, so i'm hopeful this is the first up and we can get to the point you are talking about. yeah. >> a couple people have talked about prevention, both fluoridation and the sealants. where is that in a national policy sense? is it covered by any of the medicaid programs? do the private insurance companies provide that service where there is the opportunity for progress? >> medicaid is support of sealant programs, which is why application of sealants is one of our oral health goals. we cover the provision of fluoride treatments, including fluorite varnish and varnish provided by physicians and

nurses, especially on toddlers. whether there is a national program on communal fluoridation, we leave that to our colleagues at the cdc. i am thankful to some of the private foundations that have helped support community water fluoridation across the country. >> at pew, that is one of our areas of focus because we know 74 million folks are on the private water systems and do not have access to fluoridation. we are working to create the national home base with the website ilikemyteeth.org, which provides a tool kit for folks who are interested in fighting rollback attempts or increasing fluoridation.

it is a tricky topic because the antis are effective in planting a fear factor that you have to then come back with science, and you lose people that way. finding the right balance, communicating education and providing tactics so people can effectively keep their water fluoridated or get their water fluoridated is a challenge. >> could i add on that? i jump around. i recognize what you are saying. and i agree with that. here is a major problem. with all of the bottled water available, including in here, most people are not drinking tap water, and a large part of it is because they do not know that fluoride is in it and it is good for them.

we need major educational campaigns about water fluoridation and get it from the tap. it does not do any good to have water in community water fluoridation if it is not being consumed. you've got to drink it. you cannot just wash the car with that. >> is there a national oral health plan or a national strategy for oral health, and are there opportunities for groups like the u.s. national health alliance or other organizations to help push a national oral health agenda? >> the oral health coordinating committee, made up of the representatives from federal

agencies, is discussing now what could be called a plan, but we tend to not use that word because there have been too many. whether it is called a strategy or whatever -- getting the different agencies to work together in a combined effort to improve oral health and access to oral health care. beyond that, we have the healthy people goals, our fourth iteration, and we continue to seek oral health a major focus of healthy people. now healthy people 2020. we want everybody represented in this room and everybody else watching to take this seriously. they are not just high in sight, there are things that can be done with \partnerships, federal, state, and vocal. >> we have a repeat offender here. >> i had a couple of follow-up

questions. based on my previous question on why dental care is not readily available in certain low-income areas, the question is then, does that mean dental care is too expensive for most people? the question is why? if we have more therapists as part of the solution, who can only address a few of the procedures, not the full spectrum of dental care -- so if a low-income person needs more advanced care, it is expensive -- how do they get access to that more advanced care? what is the affordable care act doing addressing affordable care? what kind of larger solution is there for low-income people to have access to the full range of dental services, not just a small piece that dental therapists can provide? how do we get care to everybody, the full spectrum of care?

>> under the aca, we have essential health benefits that would be covered under the various insurance entities, whether it is the exchanges or private-pay insurance. it will be a basic package that includes dental benefits. >> i will take another small stab at it. that is why prevention is so important, because this is a disease that does not have to happen. while there are those out there that need expensive care, if we can change the perceptions and the home care and the attitudes and get people to go for preventive visits and ongoing care, we can get them healthy so their costs are much less. that history industry always

been an industry where there are out-of-pocket costs. it has been treated as a discretionary income kind of thing, and this is why the downturn in the economy has been so tough for private practice because people can put off going to the dentist, going to the eye doctor, and the advantage is that there is transparency in the cost of oral health care as opposed medicine, where there is not a lot of transparency. that is an advantage. we do not think it's transmitted to the medical world as well. it is why so many people need to figure out how we will do this and how we will find it fair and effective and make sure the most appropriate person is treating the most appropriate patient. >> the aca act gives $11 billion for community health centers.

>> the demonstrations that dr. mouden was talking about are included in the aca, but they are subject to appropriations. >> that is correct. they are not yet appropriated. >> we're getting toward the end of our time with you, and i would ask to listen to the exchanges and questions and answers that you bring out your green evaluation form -- make that the blue evaluation form -- and fill it out so that we can try to respond to the topics and the kinds of speakers and kinds of formats you would like to see in these briefings. >> can someone explain the difference between the dental therapists, the different types, which are limited to a state,

and expanded-function dental assistants who seem to have some similar-work scope, but are widely used and accepted by dentists and organizations? >> i can take a stab at that. nationwide, assistants, hygienists have different scopes of practice. they can allow certain types of procedures to be done. prior to being a therapist, i was what is called a restorative expanded functions dental hygienist. a dentist can go in, prep the tooth, and then i do the filling.

it allows the dental team to a work more efficiently and open access for dental care. there are those types of allowances in lots of different states. not all states allow it. another thing i am is i am a collaborative practice dental therapist, which means i work as a hygienist. i may go to school and place dental sealants without a dentist being present. that is under the collaborative practice agreement that is allowed in the state of minnesota. that is what they are talking about. it varies from state to state, which is appropriate. >> the difference is the cutting of hard and soft tissue. a dental therapist can cut the tooth and do the surgical part of it, and an advanced dental assistant just restores it and does not cut.

>> i want to come back to the question of rates and compensation, and there are a couple questions. one is for christy. the slide showing you the third- ranking producer in that practice -- what is the mix of payers? are there any private insurance numbers in that list? >> we have a small amount of private-pay patients. we have a large number of people who move in and out of the system dependent on employment. the majority of patients are on some type of public assistance program. we have a sliding scale.

>> what percentage -- how able are you to respond to the level of need for folks in vulnerable populations, either without any coverage at all or coverage through medicaid? >> you mean in the practice? >> in terms of the number dozens of minnesota and in need of those services? >> we have 300 sites. we go over all of minnesota. i have been 60 miles south of my home. we had people going all the way north to the iron range. that is 500 miles from our home where we can go into a community for three or four days. it is not ideal. it is not a dental home, but we try to be consistent in getting there at least once a year for people can have access.

we have a permanent home in duluth and st. cloud. does that help? >> we try to go to the people because of one of the biggest obstacles to access is getting to the dentist. we try to go to them. >> somewhere there are 47 million people who are not served by your kind of an agency or any other. >> correct. thank you. >> what about the national health service corps and federal resources that flow from it? you mentioned your connection with your colleagues. >> i apparently said too much. i know very little about the national health corps. there are loans available for practitioners going to those

underserved areas. i know there are hundreds of national health service corps sites looking for oral health care providers. >> i see that vacancy number is much lower than it was before the economic downturn. amazing what a recession will do to those programs in getting people involved. one of the things that happens is you do not find out if you get that loan forgiveness until after the fact because they put it in hopper. also, if you take the amount of the forgiveness and you have a dentist providing the services, if you took the write-off for the medicaid program, it basically is a wash. we always say in wisconsin we need meaningful loan forgiveness programs to make a difference.

>> i think what we have demonstrated today, if nothing else, is this is a multifaceted area of inquiry, opportunities, and challenges. what you have heard today is a rich description of both the challenges and some potential options for dealing with those challenges. i want to thank our colleagues at the robert wood johnson foundation, particularly dr. krol, for allowing to get us into a topic that we did not go into enough. i want to thank you for showing up on a beautiful august day and sticking with this discussion, and i want to ask you to join with me in thanking our panel for a basic discussion of a very complicated topic.

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> if you want to come to america illegally, do not go through the desert. fly here and overstay your visa. the total number of undocumented has gone down.

we saw the problem by having our economy greater. people come here to work. if there are no jobs, they do not come here. america is not a very good place to sit around and think the state will support you. someone has to create the business that your son will work for. the numbers show that -- it cannot be easy to come to the other side of the world, give up your friends and family, and everything you know, and start from scratch. that is what people are willing to do. immigrants will be more aggressive. that is why they come here. >> mayor bluebird is joined by news corp. to rupert murdoch. -- mayor bloomberg is joined by

news corp. ceo rupert rock. >> what is more important t? our honor. it is the kind of nation that we are. it is if we can deal with economic questions, not limited to them. all things do not flow from wealth or poverty. we know this. all things flow from doing what is correct. >> look at what is happening. we have the lowest rate of unemployment, inflation, and home mortgages in 28 years. look at what happened. 10 million new jobs, over half of the high-wage jobs.

workers getting the race they deserve. >> c-span has aired every minute of the national convention. we are counting down to this year's convention. watch every minute of the democratic and republican conventions on television, radio, and online. starting monday, august 27. next, a discussion on the recent book, "the new new deal: the hidden story of change in the obama era," which chronicles the impact of the stimulus program pushed by president obama and passed by congress in 2009. it is 45 minutes. >> now on your screen is michael grunwald, the author of, "the new new deal: the hidden story of change in the obama era." do you agree that the recovery

act was the beginning of the end of our economic problem? >> it was the beginning of the end of our economic disaster. in the fourth quarter of 2008, gdp dropped at a nine% annual rate. that is a depression. we would have lost an entire canadian economy in january 2009, we lost a hundred thousand jobs. that was the worst month. that spring, we have the greatest improvement in jobs numbers in 30 years. it improved from cataclysmic to bad. it was the end of the catastrophe, but 2% growth that we are having today is not fantastic. it is better than -9% growth. >> was the recovery act successful?

>> it has achieved what it was supposed to. it was called the american recovery and reinvestment act. it just started the recovery. it created about two or 3 million jobs. it was better than it would have been without it. what i realize in the book is the reinvestment part. this was the meaning of what obama meant by change we could believe in. you would have to speak -- spend $800 billion. this was a historic downturn that will last for a while. it would need a stimulus for a few years. this is the time to do the things he said he would. things like energy, where they .ut in $90 billion

education, race to the top. health information technology, $27 billion into taking this pen and paper medical system where your doctor can kill you with his hand writing, but in a few years, every american will have an electronic medical record. in addition to the standard middle-class tax cuts. aid to states. it did what it was supposed to do. >> the phrase shovel ready. >> obama said some of this was not as shovel ready as we thought. that is misleading. it was as shovel ready as they thought. things like cutting checks to

states for sending of senio rs money. that went out quickly. that that money into the economy. some of the other projects -- the highways, the subways, the world's largest solar farm, the wind farm, thet sola health i.t. stuff -- took longer by design. the obama administration had every one of its spending targets on time. >> in your book, you write -- obama and his aides thought a lot about the new deal while assembling the recovery act. in some ways, it is an apples to bicycle comparison. while president fdr forge the

new deal through a barrage of sometimes contradictory initiatives enacted an adjusted over several years, the stimulus was squeeze through calmest -- congress before most of obamas appointees were nominated. the recovery act was just a bill on capitol hill, but it was a big bill in constant dollars. it was more than 50% bigger than the entire new deal. >> it was a big deal. i was in south beach, the public policy paradise. i was not part of this washington group thing. if i was here, i doubt i would have wrote this book. this was seen as a $800 billion joke. you could not talk about it without rolling your eyes and staggering. it was considered uncool.

the president joked that he had saved or created four turkeys. he does not use the word stimulus any more. i saw there was $90 billion for clean energy, unprecedented investment in other renewals, and the smart grid, and everything. this was a game changing thing. what else is there? it turned out that all of these campaign promises that obama made -- people did not pay that much attention to because they were interested in his race, his pastor and his ads. his agenda was the standard democratic agenda of reversing the bush era. no one focus on what he wanted to do policy wise.

he went ahead and did it. >> you have probably seen as ad we have seen. this is from mitt romney. >> where did all of the obama stimulus money go? friends, donors, special interest groups. where did the obamas dilemma us money go? -- stimulus money go? windmills from china, electric cars from finland. 79% went to overseas companies. i am mitt romney, and i approve this message. >> i am a reporter. i have been a mainstream media reporter for 20 years. i follow facts. that that makes my head when to explode.

talk about so when dry -- solyndra, which is a non- scandal. the wind turbines from china makes me crazy. because of the recovery act, the domestic content of u.s. wind turbines have doubled. it may have tripled. this was an interesting bill rather than an outsourcing bill. it is an example of humor demagoguing. some of this money went to foreign companies. it does not matter whose corporate name is on the shirt. the jobs created in america. it is a ludicrous argument. i understand the politics that it sound like cronyism. the republicans subpoena 300,000 pages of documents. i spoke to the people who made the solyndra decision.

there was not in the political pressure to make the loan. it failed because solar that cheap. it is unfortunate story. the idea that this discredits the rest of the recovery act -- before the stimulus, independent experts predicted that 7% of it would be lost to fraud. they put the toughest investor -- investigator on this. he busted jack ingram off. -- abramoff. he said he was flabbergasted. you have to be excited about this not being the big criminal boondoggle full of cronyism. >> back to your book, critics

often argued that while the new deal left behind are conic -- iconic monuments, the stimulus bill will make a monday mmonday legacy. it lacked a theme. it is creating its own icons -- a zero-energy border stations, battery factories, and ego from the coast guard headquarters, restoring old icons, the brooklyn bridge and the bay bridge and the emperor of everglades. >> its main legacies will be changed. obama talked about not just getting the economy out of the gutter, but this new economy where you have a better

educated work force, lower health-care costs, less dependent on fossil fuels, using energy in ways that do not borrow the planet. a more fair tax code where the middle class pays a little bit less. better transportation. this was a huge down payment on just about all those priorities. the one campaign promise that is not in the act is the idea he would change washington and do things in a different way. he governed as a work the system insider. he realized those that do not pass congress to not make change. >> campaigning in iowa on wednesday -- here is the president. >> we need people who are working to ensor's to create jobs here and higher american

workers so we sell american products around the world stand with the words, made in america. that is what i believe. on energy, governor romney said that he wants to get rid of the tax credit for wind energy. he does not believe in it. he says the sources of energy are a imaginary. he needs to come to i want to find out that there are 7000 jobs in the state that depends on the wind industry. they are the future. stop giving $4 billion to taxpayer subsidies to old companies that are making money every time you go to the pump. invest in clean energy that will secure our future and create

jobs. >> in 2009, when obama took office, this was after the financial collapse, and a lot of these wind and solar companies rely on these tax credits. because no investors have any tax liability because they did not have profits, the industry's shut down. when the turbines were left in the field and finished. the federal government's energy forecast we have 25 gigawatts of wind. by 2013, they said we would have 40. it has 2012, and we have 50. we have done more than they said. it is all because of the recovery act rescuing those tax credits and turning them into

cash grants. the great debate is about the extent of government intervention and the economy, the screen in-your policy where they work on trying to in source. we have had this debate over this bizarre world stimulus where we talk about crony capitalism and condoms and stuff that was not in the stimulus. it was kind of like this bizarre world thing where i was writing about a bill on time and under budget and pretty well managed. it was making the change that it was supposed to do. i was the only one. vice-president by iden made fun of me by saying i take all of your articles to bed. i did not get into journalism to write the kind of articles that

joe biden would want to cuddle with. i didn't like debunking myths. i like falling facts. this story was headed in plain view. >> michael grunwald is with " time" magazine and the author of his second book, "the new new deal: the hidden story of change in the obama era." it is your turn to talk with him. we will begin with a democrat in newark, new jersey. caller: 780 billion is a lot of money. i am trying to figure out -- he mentioned fraud and abuse. i like to know -- is there any -- nobody can trust anybody

with $780 billion and expect them to do the right thing. guest: the guy who was overseeing this was a former secret service. he is a hard ass cop. he said this is the most scrutinized the money in the history of the federal government. you can go online to recovery .gov and see what is being spent in your neighborhood. there was the money being spent in a congressional district, which turned out to be typos. vice-president biden said, every word he see -- there is a reason that people bought 5% of this would be lost to fraud. if you are a crook, you would be

an idiot to steal this money. host: republican, was virginia. where does the federal ght to ent have the rihgt redistribute wealth and invest in private markets? why did they not allow private in a tree -- energy to invest? it has always been said because of the cuts, if you allow the market to fail, and people like myself can go buy these homes, and the market could turn around and start right back. when the federal government six its nose and a place it does not

belong, people like me do not have a chance to invest in these places. the market will rise and fall. to take my money and distributed -- we distributed it into general motors is wrong. i would like to know what gives them the constitutional power to redistribute america opposing money. guest: that is an important idea. that philosophy -- president hoover's treasury secretary had a line about liquidating real- estate to purge the rotten out of the system. there are people who hold those police. in my book, they are represented by the former governor of south

carolina. he is a principal conservative. he thinks we should have had a depression. we needed more pain. if that is what we needed to get through to fix the system, we should have done that. the problem is depressions suck. they create a believable human suffering. they create unbelievable deficits. and people do not have jobs, they do not pay taxes. you create this vicious cycle where things go down the hill. you had to act. that had bipartisan support. governor stanford try to turn down the stimulus money. he had to fight the republicans in his a legislator. he failed.

how come the private sector was not allowed to invest in it? if you read the book, you have it backwards. one of the ways -- there was money given to thousands of companies. one of the ways that day vetted these companies was by requiring them to put their own skin in the game. the matching funds were 50-50. clean energy, you raised $100 billion in private capital. that is the idea of the stimulus bill. republicans and democrats agreed that when the private sector has gone dark, the public sector needs to jump start it by putting in money that will start sucking in the economy. in 2008, every republican and

democratic president of canada had a sales plan. from the's was the largest. the republicans voted for a $750 billion stimulus with tax cuts and spending similar to obama's, which was $787 billion. clearlyever differentiated. host: ryan said he erred in seeking stimulus money. what was romney's role? >> he is taking a lot of gr ief. democrats trashed the stimulus

bill. then they claimed credits for the project in their district. this is hypocrisy. range and not have denied that he did try to get that money. i do not think it is awful to vote against something and call it bad, but try to get the benefits for your district. there was a fight in the republican party while this thing was being put together. the republican leadership realized their path back to power was no. they had to oppose everything the president stood for. no matter what it was, even if it was a bill with tax cuts and health information technology. they realize in a couple of years, if the economy is bad, and we have said no, that could be our ticket back to power.

they were clever in that way. that is what was happening. michael pence argue we should not be trying to do a new new deal. let's just do tax cuts. said we have republicans who like to vote for some highways. they like concrete, or they are moderates. they do not want to be seen as being against everything. let's have the $715 billion stimulus. paul ryan voted for both. he voted for the ideological version, the political version, and trashed obama's version. >> richard is an independent from north carolina. caller: you sound more like a

democratic talking head or strategist than a reporter. i have been sitting here listening to you for 10 minutes. you have not said one thing positive about the republicans. you have not said one thing- about obama and his stimulus package, which has been a failure. the unemployment has increased, the money that went -- was supposed to go to these shovel- ready jobs later obama and minutes they were not shovel- ready. as far as a solyndra, there were several solar panel companies that went under that obama put money into. gm is still in trouble. the automobiles turned out to be an automobile that was overpriced.

it self-destruct spirit it catches on fire. economy -- hea's is poison to the economy. i do not think he cares that much about issues. he is an agenda-driven. he is trying to restructure the government under a global system. guest: i am a reporter. i am interested in facts. it does not look like the call the window of fact if it clubbed him over a head. there are not a lot of nice things to say about republicans in the book. they were politically shrewd.

republicans were able to distort this bill from the beginning. they have this relentless message that they would make this look like a big government mess. you are wrong that i do not have anything bad to say about obama. i've read some stories in this book that the white house will not be happy about. i mentioned how there was no political pressure on the solyndra case -- i do not want to correct your backs on that. there was alone where there was inappropriate political pressure. president obama promise a country -- company in ohio that he would help this company. the department of energy rejected their application for a loan just like solyndra's. the guy who rejected it was called into the white house situation room.

the president made a campaign promise on this. the guy said he knew. what is going on? he explained why they were rejecting the loan. even if they gave them alone, they will not have enough money to build their factory. if you are sure, you better be sure. the guy was sure. they let him reject the loan. the white house has gone out of their way to help the company in other ways. i hold no brief for the president. i came at this as a report to a. the facts do not add up. i do not try to judge overall where the economy should be better than it is or whether it should be at 6% or 5%. everyone would like a better economy. what i did was look at the facts about this recovery act and how it has been reported. even if you read the book, you

may learn some things about what is actually in it. >> the white house went to lengths to stage manage obama's visit to solyndra. can you confirm that the greatest will be wearing their normal everyday work clothes? we want to make sure we have the construction worker field. yes, confirmed, along with the american flag, coffee and doughnuts, and a robot that would display a solar panel. the team wanted a solid background behind obama. --

that is a little bit from a chapter. this is from john in north carolina. barbara is a democrat from detroit. caller: obama has done an excellent job. for all of the bills he has put through, republicans have stopped anything to further getting us out of a desperate situation. if he had not built out the big three, we would have been devastated in detroit. totally devastated. because he bailed them out, we are picking up jobs. we stick together. we work very hard. he should be taxing the private

sector. the private sector will not develop jobs. it will be a hoard and hide. romney should disclose more tax papers that he has. host: her stimulus comment? guest: obama had a large political theory that washington was so broken, so nasty, and so partisan. so obsessed with minutia and trivia that until you fix washington, you could not change america. he won the election. the economy fell off a day cliff. -- a cliff.

he had to decide if he would get things through the old way. he proved himself wrong. you could make a lot of change while washington was broken and nasty and ridiculous. the recovery act is the proof. it is the big things on energy, education, health care, and the way the economy is structured without making a lot of progress. some people not like what obama has done, but the idea but-- he has not been sitting around, twiddling his thumbs. the recovery act was an ugly process. there were deals cut. he had three republicans whose votes he needed to. he could not offend democrats. you have the president of alaska

demanding this and that. the president of pennsylvania. it was dicey. we will give you that and this. it does not always look good. big things happened. the story of the stimulus is kind of a microcosm for the story of the obama era. his enemies, policies, achievements, difficulty marketing those achievements. if you paid attention to what happened in the stimulus, nothing else that happened during the presidency should have been a surprise. there were a few liberal economist who said it needed to be bigger. 387 left leaning economists

wrote a letter demanding obama and congress pass a $400 billion stimulus. obama get twice that. $50 billion stimulus phillips to get to the senate six months before. -- failed to get through the senate six months of war. more tax cuts would have put more money and people's 6 po ckets. more public works wod have put more construction workers on the job. there was not political appetite for one more penny than obama could have gotten. i entered the people from the meetings, including some people who bought the stimulus should have been bigger. you had three republicans and a half-dozen democrats, where is

lincoln was not going to go for more than $800 billion and neither were others, how are you going to get this through congress? the economy was collapsing. they needed to do something. this was an emergency. it did not seem the time to argue over a few billion dollars here or there. afterward, obama did get back and quietly get another $700 billion worth of stimulus. it would have been helpful if it would have been bigger. you would have lost your public- sector jobs. over the obama era, the u.s. has lost public sector jobs while gaining a lot of private sector jobs. you have to deal with the democracy you are given. you got as much stimulus as you could. >> sam, republican, illinois. caller: i have firsthand

knowledge of the windmills. over the past few years, we have were males that are everywhere. -- windmills that are everywhere. the company is doing a bid from spain. guest: the factories are in the u.s. caller: the companies are from spain. these things make people sick. they kill birds. they only produced 5 per cent of what the estimated. it is a big scheme. these companies from spain cannot afford those systems. they are letting their windmills and rust out. you always have to have a

backup. this is a ponzi scheme that has moved over to us. we think that when will do something for us. guest: i guessed the wind industry has its critics. the spanish company shut down most of its u.s. projects in 2008, a couple in illinois, texas. the day the stimulus past, the chairman of the company invested $6 billion in the united states projects. that money was being spent in the u.s., regardless of whose name was on the corporate polo shirt. if you do not like foreign companies doing business in the united states, that is a legitimate position to have. it would be a lonely economy. we welcome foreign investments. we want foreign companies to

come here and create jobs. that would be the argument. host: gary tweets -- next call from minnesota, independent. caller: i have been listening to everything. i did not like you to meet one of the callers who spoke his view. if the government has no right to take my tax payer money and pick and choose what energy company or what industry will survive. that is for the private sector. you are talking about the stimulus dollar, which it was supposed to go to help people, create jobs, help the home

owners who were under water. it mostly went too stupid things. like a visitor center that was opened, or a wind mill built at some place that was closed. a botanical garden in hawaii. it is very clear that this administration only cares about the public sector. teachers -- they never talk about anybody other than teachers, firefighters, police officers, but never about anyone house that they are fighting to get their jobs. it is only those people -- as an independent, i also sit on a township board in minnesota. i have talked to a lot of people.

we do not like hearing this divisive administrative -- administration picking through the month to help. host: thank you. guest: this idea that the stimulus invested in the public sector. the original new deal created these armies of public-sector workers at these alphabet agencies like the tva. the obamas and listed not do that. it put the money into the private sector. it did not grow the government. over the obama years, government has shrunk by about half a million workers. your point about putting the money into the private sector. this is the question of picking

winners and losers. that is a legitimate debate we should have. it is unfortunate we have been demanding this -- the meeting -- debating this imaginary stem was where the money has gone to cronies. oh, has a thing for the solar industry. -- obama has a thing for the solar industry. obama did not pick winners and losers. he picked the game. the game was clean energy. his reason for picking it was he felt the u.s. is too dependent on foreign oil, that we are too dependent on fossil fuels that pollute the debarment -- environment, we are too dependent on about how energy sources and that when the price of oil goes up, our economy goes into the tank. clean energy industries present

a real economic opportunity. he did not just invest in solyndra or solar manufacturers, or solar. he invested in solar, wind, geothermal, making internal combustion engines more efficient. biofuels -- just about every type. electric vehicles, all kinds of technological and entrepreneur ial approaches. the history of innovation has involved the government. that is how you get the internet, the biotech industry, some seating done by the federal government. the idea is you get these companies going, let them compete against each other and the market will decide who wins and loses. some will win.

if 100% of the country succeeded, that would mean something was going wrong. the government was propping them up after the initial investment. you get your money, you have to prove you deserve it, as opposed to the usual entitlement mentality. i qualify. i comply with regulations. hand me my check. you have to show that your project is worthy. it has economic benefits. you have a solid business plan. they will bring in investigators to look at it. they will make choices. some will go bad. people would yell at them. this is opposed to the usual way. [unintelligible]

some companies that get tax breaks will end up going under. it has always happened that way. these give more attention because they are high-profile cases. >> tomorrow, executive director of the independent women's forum joins us to talk about women voters, followed by a discussion on deportation in the train at. since the federal government accepted applications to do for emigration, our final test will talk about new estimates that increases the loss of the 2009 auto bailout to $25 billion. auto bailout to $25 billion.