and i do this advisedly knowing it is the law of the land and i don't want to sound too pejorative, it is something i did not support, but i think the process was flawed. if we look back and look at how we got to where we are today, the process was flawed and if you have a flawed process you have a harder time getting a good outcome. . in this process, nobody ever came and said to the governors and the states, what do you think about the affordable care act? you are going to be the most dramatically improved government entity in the country, what are your suggestions, what are your criticism, what are your insights? that was a big, big mistake, not inviting the governors to the table.

and i think we could have given them some insight and some suggestions to make it better if they had done that. secondly, i think that the fact that we dropped 2,700 pages on the congress and said we're going to vote on this in three days, you know, it's just not the right way to process statute, particularly as complicated as those 2,700 pages are. we will go down in legislative history, probably not for good, was speaker pelosi saying we have to pass this bill to find out what's in it. that's just not good process. and it has spawned hundreds of thousands of pages of regulation, which is still being sought to find out, what does this really mean and how is it going to be applied to the states. and we have a boon dog will of a problem that is going to be a challenge for us.

at the end of the day for us in utah and other states that are struggling, how has our approach to health care reform and operate in an a.c.a. world, how do we fit in with the law of the land? our exchange, we have named it avenue h and it's not for avenue herbert, but the difference between the federal exchange -- we talk about the exchanges that have taken on a negative contation. an ability to facilitate people's choices is a good idea. our exchange are those different from those envisioned by the a.c.a. we focus on small business, working through them to provide access to their employees on an individual business, but through the business community and get

people enrolled in private insurance. our exchange, interestingly enough, only has five employees. the total costs for what we do on an annual basis is $600,000 a year. we aren't spending a lot of money on this process. so we have the ability to expand. but we have an administrative process, which means we let the market make the decisions. we facilitate opportunities and that's all that we do. by contrast, the a.c.a. exchange is based more on the massachusetts model. they focus on large businesses and individuals. they have a mandate that they're dealing with. and they provide taxpayer subsidy for 98% of all the people that participate in their exchange. they have dozens of employees. i mean, the size is massive.

and they spend tens of millions of dollars to operate it. so the contrast is pretty stark, as you can see. they also have an active administrator approach where they pick and say, this will be acceptable and this will not. they just don't let a free-market approach. they identify and pick who gets to be in the exchange. i do believe this, that effective health care reform cannot be a one size fits all. states are unique. i mentioned the difference between utah and florida. the uniqueness is exhibited in each state and each region. each state ought to have the ability to reflect their own unique and specific needs. again, the one size fits all mentality comes out of washington, d.c., putting us on a wrong road. now, our proposal we're making

-- and i will tell you, this has been a work in progress, some of it is out in the marketplace but some of it's not. we are going to amplify of what we are trying to do under the confines of the affordable care act and the law of the land. and we are committed to work within those confines. like it or not, it is the law. there are what we call red lines we will not cross over as a state. if our exchange, we have a right to run it as we see fit. we aren't taking federal money. there are no strings. it's our exchange. and so we are saying the things we won't do. we won't enforce the individual mandates, even though the supreme court has ruled that it is constitutional. we still think it's bad policy. for a number of reasons. we aren't going to enforce the individual mandates. and now every state should have

the option to determine for themselves if a mandate makes sense, but this state, utah, has decided it's not the right thing. and frankly, i don't want to be on the receiving end of phone calls where individuals are saying, the i.r.s. is calling me and wanting my number because i haven't signed up for the insurance program. second, we will not administer medicaid through utah's health exchange. we want to maintain a clear separation between an approach in the private sector and providing opportunities in the private sector as oppose todd a welfare-based system. not that they're not an important aspect of it, but we think there should be a clear separation between those two approaches. we want our exchange to remain focused on the core mission of creating competition and choice in the insurance marketplace. those who are in need, again, we

recognize people out there that have the access, right and need and medicaid may be the answer but it should not be done through our exchange. third, utah will not administer the premium tax credit through our exchange. there's a number of reasons we decided why not to do that. one, we pride ourselves in utah in being fiscally prudent. and i wish washington had that same pride which they certainly don't have in being fiscally prudent. only seven states in america have a a.a.a. bond rating on wall street, which tells us a lot about utah and what else is going on in the country. given the fiscal uncertainty we see here in washington, d.c.,, much of it created by a growing

mentality, doesn't seem to me and to the people of utah to be a fiscally prudent thing to do when we are already borrowing 40 cents on every dollar that we spend and in large part because of the growing entitlement mentality we have in the country. i think this becomes a very risky proposition as we go forward. i don't know how much it's going to end up it's going to cost and i don't know anybody knows how much it's going to cost us. i do know the original promise by the president was going to cost us $900 billion. today the c.b.o. estimates it has gone from $900 billion to $2.7 trillion today. it's tripled three times. and we're just starting. i mean who knows where it's going to go. if we look at the social security, we look at medicare and look at medicaid, history

says, these are going to explode and become a lot more costly as we go forward. i shudder to think what the fiscal ramifications are going to be of this going forward. so last, again, i'm concerned about the insurance costs are going to skyrocket as part of this. the promise again given to us, the hope was that premiums were going to go down. the numbers are like $2,500 and what we have found is the premiums have gone up $2,500. that is a $5,000 swing from the concepts proposed and the reality of today. we are a state that is young and healthy. estimates are that our cost of premiums in utah under the affordable care act will go up between 65% to 100% on the high, because those who are young and

healthy will have to be part of the pool and will have to have a higher burden to take care of others that are going to be brought into the overall pool. that price shock we will face in utah again, is a concern for all of us. and i think it could be a problem. in that effort to manage those risks and to live by the law, i have done things to manage that. and at least see if we can't give another option out there for the people in utah that exists. to that end, i sent a letter to president obama and asked him to take a look at our exchange and certify it as compliant under the a.c.a. and i sent a letter to secretary sebelius saying we have a good-faith effort and we started before this became a discussion topic here in washington within we would like to continue to maintain our state exchange. yesterday, i had the opportunity

to meet with secretary see bell yuss and let her know that utah's exchange is going to continue and we will continue to be doing what we ought to be doing and i suggested to her that we bifurcate the responsibilities under the affordable care act. utah will continue to operate as small business exchange and retain oversight of the insurance markets within utah. two, we will retain control of our medicaid eligibility system and make the final determinations as far as who is eligible for medicaid, including chip and using our existing system to do that. we respectfully say to the u.s. department of health and human services that if they assume the responsibility for the individual exchange and that includes the web site

portalforindividuals, including the tax credits. further, we would say that because utah is doing the business portion of the business , that there's no need to have a federal exchange doing the business. so we have a clear line of demark occasion. we are going to do the business and the federal government will do the individual side of this and see if we cannot, in fact, co-exist peacefully here and provide that to the marketplace. there are details yet to be worked out and putting this together and making sure that we are doing this in an appropriate way. but i was gratified and encouraged, when i met with secretary see bell yuss -- sebelius today, that they will look at it and see if there is something we can agree upon.

the phrase she used was, i would like to find a way to get to yes. so i'm cautiously optimistic and have a ways to go and will be meeting with them in the next couple of weeks to bring closure to this issue. now, last, but not least, let me just say this, and i would expect that all governors and all states could say this with me, one, i'm committed to health care reform. i think it's something that needs to be addressed. it ought not to be republican versus democrat, liberal versus conservative. we ought to all appreciate that we need to do and can do things better in the health care arena to, in fact, improve health care outcomes for our people. i'm a free-market guy. i'm in the category of economists and believe in the free-market system. we, in fact, are doing in utah on an annual basis a health care

summit where we bring together nurses, doctors and practitioners, insurance companies, lawyers, business people from all stripes and saying, what can we do to improve health care outcomes in utah and reduce costs. that discussion is healthy at least in the exercise we are going through to help directly affect costs. we are looking to expand our exchange to provide opportunities for all of our state employees to be part of the health care exchange of 22,000 people and their families that will be able to put on. we would like to expand the exchange to not only to small businesses, which is up to 50, and then go to 100 and larger. the defined contribution model ought to be available to all employees, all employers, regardless of their size. there are issues that we will be tackling and talking about. medicaid comes to the top of my

mind. medicaid, i think most governors will tell you is the budget buster of all. it is dramatic challenges. what originally started out a decade ago, 9% of my budget is up to 20% and the next decade is 30% of our budget. it takes away from education, infrastructure, other health and human service needs. so medicaid and the need to have flexibility is something we are go to go watch as we go forward. let me finish where i started. we need to address the rising costs of health care. i don't think the affordable care act does that. we have provided an opportunity with our health care exchange in utah is a model based on good principles that allows businesses to provide as a benefit and health with competitive forces and consumer control to, in fact, have an impact on the rising costs of

health care. it may be imperfect, but it's a step in the right direction. again, the fundamental position i'm taking and we're taking in utah is that the free market works if you allow it. and takes politicians like myself and others to be disciplined and to give time for the marketplace to work. we sometimes are so anxious to fix the problem, that we don't let the marketplace make the adjustments necessary to get the right outcome. and again as i said, if we want the best quality product, the best benefit we can possibly have for the most people at the lowest cost, that happens in a free market. and it happens from the beginning of this country's history. it has happened for all goods and services we have had and health care should be no exception. with that, i thank you for allowing me to come and talk and thanks for the invitation to

tell about the utah health care exchange and people can learn from what we're doing in utah. thank you. [applause] >> thank you, governor herbert. we'll take questions today. down in front. >> governor, thank you for taking my question. the catholic bishops have declared that the obamacare mandate on contraceptions, sterilization and abortion-inducing drugs is unjust and illegal and a violation of religious liberty that they will not obey. do you agree with the bishops

that the mandate is a violation of liberty under the first amendment and if so, will you also not comply with it? >> i do agree with the bishops. it is inherent in the signing of our liberty and utah has its own history of persecution and people trying to deny their religious liberty, it is something we are concerned about in utah and people ought not to use taxpayers' money in to something that is repugnant thing to do so we support the position of the bishop. >> very quickly. i want to thank you for the leadership you have shown. it takes incredible political courage to do what you are doing and to step back. you are good at bringing down the family perspective of what reform means at the state and federal level.

there are states watching everything you do and that's a good thing and also a lot of pressure. h.h.s. has a big incentive to spin their conversations with you and make it look like what your exchange will be in the future is truly a partnership with the federal government. many people see what you're doing, not as a partnership, but as a governor who is protecting his people and leading his state forward and allowing h.h.s. forward to allow what it needs to do. and another question very much related on the question of medicaid, states that haven't made up their mind are watching your every move, no pressure. and so the questions that they are raising with medicaid extension, you have the state of utah that is known to be one of the best-run states in the country and you have turned down federal funding. governors are hearing and

legislatures are hearing that it is fiscaly irresponsible to turn turn down federal funding. so it's likely to be a partnership for you as well. if you could talk a little bit about the two issues, how you're protecting utah's needs in exchanges, but also how you see the principles playing out. >> well, first let me say, there are always people who criticize what we do and you can't please everybody and it's important for us to develop a set of principles and goals. we did that in the beginning, principles, goals and objectives and let's not get caught up in the emotion of the moment. health care is an emotional thing and when your loved one is having struggles and looking for help, it's easy to say, where's

the government to help us? we need to stay to true principles, that will give us the right outcomes. this needs to be looked at under the umbrellas of budget. i mentioned the function the other day, they were talking about costs and why are we not, in fact, embracing this expansion and this money, you know. and i said, you know when i was a young man, i bought my first car and had a couple of different choices out there. and my dad said you can buy it if you can afford it. i think that's part of the challenge of medicaid expansion, you can buy it if you afford it. i reject the idea that somehow it's free money. it comes out of the same pocket whether you labeling it state tax money or federal tax money, it comes out of the same pocket. there ought to be a concern where we are borrowing 40 cents on every dollar that we are

bringing this country on the verge of bankruptcy. can we make some adjustments and is it irreversible? states have a responsibility, too. we can't keep going there with our hand out. it is hard for us to say, if we don't take it, that money will be distributed to somebody else. you will get the benefits, but we still have to pay it back, my kids and grandkids will be on the hook for that growing expense. there is always that temptation. we talked earlier, elections have consequences. we have to put people in place in washington that understand that this spend more, borrow more has got to stop. we have to come up with some kind of fiscal restraint here in washington. states can help. i have gone and testified before a couple of congressional hearings, i think other states

will join with us, we'll take less money. why don't you just say to us, we'll take 20% less money in utah. take away the strings. unfetter me. i will find innovative ways to do things. we don't have to have a diminishment of services. we can do more with less. government is labor-intensive. in utah today, we have fewer state employees today in 2013 than we had back in 2001, a dozen years ago and yet we have 600,000 to 700,000 more people. we are a fast-growing services. we are doing more with less. now in washington, we are doing less with more. it's just the reverse of that. we have to change that mentality and states can help lead that way. >> one-part question.

>> thank you, governor. >> question, based on what you're seeing, how do you feel the federal government is doing getting your own exchange ready? they may not meet some of the deadlines, do you think congress should push back the deadlines to get ready? >> it's hard for me to look into the apparatus of the federal government and see how they're doing. i guess i'm a little john dissed-eyed. but i think they are surprised about the lack of embracement by states or the exchange. most are defaulting to the federal government and i'm not sure that is a good thing overall for states' rights and those who don't want us to go to a single-pair system, might be

couraged to have that happen quicker. they have tower hire hundreds of thousands of people and to set that aup and understand how they are supposed to do it, again, when you got 200,000 pages of regulation that we're still trying to figure out what does it mean, causes a lot of confusion and uncertainty and i think it's going to be forced to have to delay the actual implementation of all of it. and i guess we'll remain to be seen and don't want to be too critical. this is the most how mungous change in our society since social security and f.d.r. >> question at the table. >> thank you, governor. competition in the free market for the utah health exchange. given that if somebody is making

$35,000 a year, their penalty is $60 a month. a.c.a. is projected to cost $400 a month. can you lobby h.h.s. to level the playing field. because how are you going to compete and it's costing $400? if that would do it if somebody had an interest. and what is your opinion on competition for leveling the playing field in the penalty situation? >> people have to qualify to receive the tax subsidy. so there are parameters in place. when you are willing to -- you can have 400% of poverty. people making over $100,000 and qualifying for tax subsidies. that does make me pause and say is this the road we want to go down. is this where government ought to be when it comes to health

care reform? our business side does not have the subsidy. it's for people who don't qualify for the subsidy. and if they want to go to the individual mandate and i think there's going to be pressure where people find out, hey, if i go across the street to the federal exchange, i can get some subsidy and that probably is going to have some impact on the marketplace. our business people, we know what they do, but we are trying to introduce into the private sector marketplace and have them choose. whether they qualify for subsidy or not. [inaudible question] >> then they could have choice? >> we could dangle the carrot out there which is money and we could probably change the incentive. we are reluctant to do that, though, because we think this incentive program is the wrong

way to go. why do we subsidize and think we aren't going to get more of it? if you buy, you are going to get more, because people like what you are buying. our entire welfare program has grown because we are subsidizing probably incorrect behavior. i'm very concerned and everything i look at is going to cost under the umbrellas of the budget and i'm a proud american and i'm concerned where the direction the country is going and i see no end in sight. we are $16.4 trillion in debt. >> thank you. >> we have time for just one more, very short question. we are market oriented here. i sigh only one bidder here. i think we'll go down here and

this will wrap it up. >> good afternoon, governor. just a quick question about navigators and personal assistance. will utah be hiring these navigateors and in-person assistants? and if so, how will you balance it with the professional insurance brokers, which i know the brokers are paid commission to work with employers and with individuals to help them navigate the market and how will utah being doing that, if they are? >> we are going to be passive. we aren't going to try to navigate anybody other than introduce them to the portal. they can shop. they are smart people. the different companies are part of the insurance exchange and they will give them information. they can shop and compare. you can look onto the portal and see the program is, 135 different choices, pick one that suits you.

see what the cost is. talk to an insurance broker and see what advice he wants to give you, but we're passive. we want the consumer to make those decisions. informed choice with a lot of selection, introducing compression from the different vendors saying we want your money and we'll do this for you, which will help keep the costs from rising. >> governor herbert, it's our honor and pleasure to have you here today. please thank him for his remarks and his praled -- principaled leadership. [applause] [captions copyright national cable satellite corp. 2013] [captioning performed by national captioning institute] >> coming up at 8:00 eastern, patrick donahoe announcing that the postal service will no longer deliver letters on

saturdays. utah gary herbert talking about his state's plans for the health insurance exchange under the president's health care law. on c span3, financial of the federal housing administration. president obama today announced that he is announcing sali jewell, currently the c.e.o. of recreational equipment incorporated . the made made the announcement this afternoon at the white house. >> as sali spent the majority of her career outside of washington or the majority of our interior's located, she is an expert on the energy and climate issues that are going to shape our future. committed to building our nation-to-nation relationships with indian country and the links between conserks and good jobs and no contradiction

between being good stewards of land. she has shown that a company of more than $1 billion in sales can do the right thing for our planet. sali's broad expertise and set of values i know are going to serve her well as she takes on these new challenges. she has a wonderful and supportive family who i understand enjoy the great outdoors. so they have a vested interest in making sure that the department of interior is doing the right thing and when sali's confirmed, i'm willing to bet she will be the first interior secretary to climb mountains in the antarctica, which is not something i think of doing, because it seems like it would be cold. and i was born in hawaii. [laughter] >> you can see all of this

announcement of sali jewell's nomination for interior secretary at 8:00 p.m. eastern. we'll hear from ken salazar. tomorrow morning on c-span, outgoing defense secretary, leon panetta and general martin dempsey talk about the attack in libya. the hearing gets under way at 10:00 a.m. eastern and we will have it live on c-span. >> during the presidency of her husband, james madison, british troops invaded the capitol in the war of 1812, she saved a portrait of george washington and other valuables. meet dolly madison in c-span's new original series. produced with the white house historical association, season one begins president s' day on

february 18, 9:00 p.m. >> if you go to most american history textbooks i would make you a bet if you go back to the textbooks you had in high school , take me up on my bet, but in your american history textbooks in high school, if you go to the index, you will find no mention of eugenics and/or biology books. you will find no mention. i looked at a biology book assigned at montana state university. great textbooks, but i didn't see any mention of that word. it's as if, because we, meaning scientists no longer believe in it, we no longer have to think about it. because we know it was so awful,

we can somehow pretend it wasn't part of american culture. >> part of lectures in history, saturday night at 8:00 eastern on america's history tv. >> patrick donahoe announced that in august, the postal service will stop delivering letters on saturdays and will change $2 billion. last year, the postal service lost $16 billion. this is almost 40 minutes. >> good morning everybody. thank you for joining us. today, we're going to be making an announcement about an important change to our national delivery schedule. i think anyone who has followed the postal service over the past couple of years know that we have been consistently making

changes to our delivery schedule. it is an important part of our strategy returning back to financial stability and it is absolutely necessary to make that move. before i get into the details of the announcement, i would like to spend a couple of minutes discussing the financial reasons for this scheduled delivery change. since 2008, we have seen a steady decline in the use of first class mail. it is our most profitable product and generates the most revenue. people pay their bills online, simple, easy and free. on the other hand, people do -- still like to receive hard copy statements and bills and the fact that businesses continue to send mail to the homes and that's been pretty stable over the past few years, show people do value the mail that they receive. however, they do like to make their payments online and put a

tremendous financial pressure on the postal service. the biggest issue we face is whether we can adapt to these pressures in the marketplace. the laws do not provide a lot of flexibility to adapt. and this results in a major imbalance between costs and revenue. this past year, the postal service posted a financial loss of $15.9 billion. by any measure that is unsustainable and it's unacceptable. of the $15.9 billion loss, $11.1 billion was due to the amount we are obligated to pay the treasure to fund retiree health benefits. we had to default on those payments because we did not have the funds. and you know the postal service is expected to operate like a business. we generate all of our revenue from the sale of postage. we take no tax dollars.

we don't have the ability to reduce costs in a way a private business would. and we are at the end of our borrowing authority. to give some perspective of our liquid situation, a typical large organization would either have cash on hand or quick borrowing ability. two monthso l' of cash. in october, the postal service had less than four days of cash on hand. that's a very scary situation and no situation that a business should be in. and this is why we have taken aggressive steps to reduce our costs and why we have been so vocal about seeking postal reform legislation. we faced a major hurdle to return to profitability and long-term stability. we need to generate $20 billion in cost reductions and revenue increases to close the budget gap and be able to repay our

debt, both close the gap and repay the debt. and this is why the board of governors has directed us to take every necessary step to reduce costs and conserve cash necessary to continue our operations. it's what we have been doing consistently over the last couple of years. and we will be accelerating those efforts moving forward. since 2006, we made tremendous strides in cost reductions. we have reduced the size ofure work force by 193,000 people. we have done it in a very orderly process through attrition, not through layoffs. and we reduced our annual cost basis by $15 billion. and how did we do that? we consolidated over 200 mail processing facilities, eliminated 21,000 delivery routes, substantially reduced administrative costs and right now we are reducing hours in over 9,000 post offices across the country.

i cannot think of another organization either public or private that can claim that comparable level of cost reduction. we have accomplished these cost reductions while continuing to achieve very high levels of service performance and yet with even these significant cost reductions, we still have a large budget gap to fill. and so today, we are announcing that we are moving forward with a change to our national delivery schedule. the new delivery schedule will result in about a $2 billion annual cost reduction and it's an important part of our return to profitability and financial stability. beginning the week of august 5, this year, the postal service delivery schedule will consist of six days of package delivery and five days of mail delivery. this is a new approach for the postal service. over the past few years, we proposed moving to a five-day schedule for both mail and packages but our new approach is

based on a great deal of customer input we have heard over the course of six, seven months. and strong demand for package delivery and enables the postal service to achieve significant cost reductions. what we are announcing today is not complicated. package delivery will continue monday through saturday and no changes in terms of post office hours. we will be open saturday. we will continue to deliver mail to post office boxes on saturday, which is very important for a number of businesses. mail delivery will occur monday through friday and we will not deliver nor collect mail on saturday. our decision to maintain saturday package service is driven by a number of factors. we have taken a hard look at the future of package delivery and think there is a he very strong growth over this coming decade. as consumers increasingly use and rely on delivery services especially with the rice of

e-commerce, we can play an increasingly vital role as the provider of choice and be a driver of growth opportunities for american business. americans mailing habits are changing and so are the shipping habits. people order goods online and e-commerce will drive those habits into the future. we have seen our package growth grow steadily and we expect this trend to continue. so, what kind of reaction do we expect to this announcement? people will say this is a responsible decision. it makes common sense. last several years, we have seen surveys conducted about a potential shift in delivery from -- in both packages and mail and consistently, we have seen the same result and this is true when the questions are asked a little bit differently. 70% of americans have

consistently said they would support five-day schedule for mail and delivery for packages given the financial condition of the postal service. we have not done a poll right now to get an idea of this new approach, the six-day package delivery, but we expect that 70% number to jump higher once people become familiar with our new plan. our move is as a result of research and study. two years ago the service put together a detailed plan to implement a five-day delivery schedule and looked at the impacts and we have a strongs operational framework. an important announcement is to timing. we made a commitment to residential customers to provide six-month notice to any delivery change and ensure that mailers have adequate time to adjust to schedules and begin

communicating with our employees, our unions and management associations about these changes. many of our employees will be affected as we change to this new delivery schedule and we want to give our employees plenty of time to consider and plan for these changes. we pride ourselves on being a very responsible employer and make every effort to ensure that our employees receive good information. as you might imagine, most of the projected $2 billion in cost savings will occur as a result of a more efficient network and reduction in size of our work force. we are projecting that we will be able to reduce about 45 million work hours making these changes and the key areas of cost reduction will be saturday mail delivery, saturday mail processing and transportation. the postal service has a great track record of managing through major operational changes. and we believe that we can accomplish our work force goals through attrition and will be working with our unions and

management associations. in terms of timing, we will publish detailed operational plans for our business mailers in march, next month, and will be conducting a number of educational efforts to make sure we reach all business customers. as we get closer to the delivery scheduled change in in august, we will be publishing information in post offices, putting it online and other customer contact to make sure our residential customers know. let me conclude with a couple of thoughts. this announcement today is just one part of a much larger strategy to return the postal service to long-term financial stability. the plans saves $2 billion annually, that we have a $20 billion gap to close. we are striving to raise revenues, reduce costs and gain efficiencies throughout the entire organization and making this change to our delivery schedule is a big-ticket item

and simply too big of a cost savings to ignore. in fact, i would strongly argue it would be irresponsible for the postal service not to pursue this course. second, we are implementing this approach to improve our overall business performance. there is a strong and growing demand for our package service and we need to meet that over the coming decade and that's why we are continuing to maintain six days of package delivery. our five-day mail delivery reflects the changing market demand and we are not in a financial position where we can continue to maintain six-day delivery. we are in a situation where we are obligated to make tough choices and decisions and we are committed to keep the costs of mail as affordable as possible and our new delivery schedule helps us to reduce some of the pressure on the overall finances. let me finish where i started. our financial condition is urgent.

we continue to require basic reforms to our business model and continue to encourage congress to look at our comprehensive plan. we need to operate with greater flexibility so we can adapt quickly to the changing marketplace. our announcement today is a step in that direction. thank you very much. i'd be more than happy to answer your questions but i'm going to answer the first question, is this legal? it is. the way the law is set right now with the continuing resolution that we can make this change. the good news is, the continuing resolution that governance the postal service that way expires on the 27th of march, so there's plenty in time in there if there is some disagreement, we can get that resolved and encourage congress to take any language out to stop us from moving to this five-day mail schedule. our customers said do the right thing and do not become a burden to taxpayers and our customers

said we want packages on saturday and this is the right solution for the business and for our customers. questions? >> are you saying there is a loophole in the continuing resolution that is allowing you to do this when -- i mean -- i don't know for how long congress has had the language in their appropriations bill that says you have to do six-day service. i want to ask you about that. second thing is, why didn't you do this before if you were able to unilaterally do it? and third thing is, congress has not shown a willingness to go to five-day service for all kinds of reasons. so how do you deal with the political fallout or is this just a bluff to get congress to pass legislation that you guys have been very desperately pressing them to pass? >> we feel very strongly that our customers want us to do the

right thing. and when you look at the volume of mail that we have lost over the course of the last three or four years, it's substantial. we have lost in just single-piece volume, 30 billion pieces. if you take that times the 46-cent stamp, that is $14 billion just that product alone. you have to be responsible. we don't take tax money. and i think we can work positively with congress to make these changes. last year, there was a lot of concern about post offices. we came up with a win-win after listening to our customers. they said keep it open, we'll take reduced dollars and saves us money and meets the customers' needs. we feel the same way. we want to work with congress. we are on good footing with us. this is not a hair splitter loophole kind of approach. it's the right thing to do. if there is a disagreement,

there is like five or six weeks before the c.r. expires, let's work the language out, get it off the rules and move ahead. >> you say the c.r. has language in it that does not contain language -- >> our interpretation of the c.r., the language does not bind us to five-day and that's where we are. >> ron. lisa? >> >> angela. >> you said 45 million work hours, what does that equate in terms of the number of jobs and is this layoffs or do it through attrition? >> it equates to 22,500 jobs. right now, the postal service, we run in excess of 10% overtime, almost 12% and we have not hired and using attrition to take advantage of people leaving without having to resort to

layoffs. by eliminating overtime and looking at some flexibility we have with the part-time work force and potentially working with the unions on some this will help. since the year 2000, the postal service has reduced approximately 306,000 jobs, people, new layoffs. we do not want to lay off. we are a responsible employer. yes, sir? >> just to follow up on her question, nuts and bolts, 22,500 jobs, how many people get laid off or bought out when? and the second question is in the back of your folder here, you have daily revenue and daily out-go and the revenue exceeds the out-go. so -- >> the revenue doesn't exceed the out-go.

$15.9 billion last year. >> not according to your own handout. my question is, where's the difference? >> let's talk about the jobs again. by taking advantage of natural attrition in our system, we have a lot of people leave. the postal service, interestingly enough, is a fairly old organization from a people's standpoint. our average age is 54 years olds. and it's easier to have a person work on overtime or replace them with a noncareer flexible employee. and what happens is as we make these changes in august, we will have worked up to that point. we have six months to work with mailers and our unions and management associations and our customers to get everything into place. we closed 2,200 post alpha silts and eliminated routes, people haven't noticed.

we are good about doing these things. we need to move ahead with the plans we have. >> "usa today." what kind of impact will this have on delivery times? will we still be getting mail in two days and three days elsewhere in the country? and the second question is, is there any historical experience with this? has the post office always delivered mail six days a week? >> i'm going to tell you a story, too. from a network standpoint, no change. the network will continue to run. i didn't want to get into the details here, where we accept mail in the system on saturday and sunday, customers will have that opportunity. so no changes. if you put something in the mail on friday that would have normally been delivered saturday it will be delivered on monday. if it is going across the country, it will be delivered

monday or tuesday. no changes. we have some history. the postal services has been delivering mail since 1860's. one time, probably a few people in the audience where they remember we delivered mail two times a day. i have an uncle who was a letter carrier who said, everyone was worried when we delivered mail two times a day and an italian newspaper and made -- the day after they made the change, he said, i said to the guy, sorry i couldn't deliver the newspaper, he said i don't read italian any way. the big changes we have made in our system over the years, people accept. they understand that. they understand that when you lose the first class volume that we have seen, you can't make ends meet from a financial standpoint. the choice is either change some

of the service or raise prices and people don't want prices raised. so we'll make the changes in services. >> i just want to go back to talking about the language in the c.r. that you think gives you the authority to do this. could you talk a little bit more specifically about that, because the c.r. simply funds at the last fiscal year's levels. doesn't that imply that the language is still there? >> from a high level explanation is the way we interpret it. the c.r. talks about appropriations that occur in the current year. the way that we receive money from any c.r. or any appropriations bill, it's for services already provideded. there is no appropriation that runs the postal service. all congress does is reimburse us for money that has already been spent. and that language is different within the c.r. we have no interest in like trying to catch congress in a

loophole. that's not our interest. we want to work with congress to do the right thing. right now, the opportunity exists from our estimate to make the changes on our own and if there's an argument about it, that's ok. we have six or seven weeks to change the language so when the next c.r. or the appropriation bill is done, our language is out of it and we continue on with the responsible course of action that we are proposing. yes. >> "wall street journal." what will your reaction be if the next appropriation bill there is language that says we bar you from making this change? what will your reaction be? >> part of my job is to make a very clear and consist argument in front of congress and in front of the administration that we're doing the right thing and with our business plan, we think we have done that. we have a $20 billion gap that needs to get resolved. this needs to get resolved from a legislative stand point.

if you think about it, we are on the look for $5.5 billion funding bill for the future of retiree health benefits. those things need to be resolved. we want to work with congress on things we don't have control over. i think congress will be very responsible and as we have seen shes the win-win with the small post offices, everybody knows this is the right way to go. customers have said we don't want the postal service to be a burden to taxpayers and we aren't going in that direction. >> what if customers don't accept this decision. you have done this since your inception? what if they protest? a couple of months back, you guys reversed your decision to close post offices. would you reverse this decision if customers protest? >> we have done a lot of leg work with the customers on this subject. and i quote the 70%.

i have seen surveys where it is 80% or higher. the major issues for customers have been, i ordered something on ebay or amazon and i want it delivered this weekend or can i get my medicine in the mail? packages of all sizes will still be delivered. what we'll move away from is the delivery of first class mail, period calls and catalogs. >> "washington post". are you essentially betting that congress will not move to stop this before march 27? and once the c.r. expires, you will have freedom to do what you want. but the next part of that is, what makes you think congress won't re-impose a ban on five-day delivery since all of the arguments you have raised

today you have raised repeatedly and your predecessor and congress has said let's look at this in two years in the senate. and the house hasn't shown any inclination to move to five-day delivery. if you get to march 27, are you confident that congress will not act to re-impose if the ban on five-day delivery? >> i can't speak for congress. what i would say and repeat what i said before. it's my job to lay out a good argument, a commonsense approach on why we should make this move. and the finances dictate it. as i said before, if we had the same volume mail we mad many years ago before people paid bills online, we wouldn't worry about this. we wouldn't about the prepayment of retiree health benefits. you think about the effect internet has had on everyone in this room, in terms of the news

organizations, newspapers, television, we have the same effects. and we cannot put our head in the sand and say, gee, hope this problem will go away. hope is not a strategy. >> it hasn't been accepted repeatedly. >> i can't speak for congress. but i think again my job is to be able to lay the facts out so people understand what the reality is that we're facing. the good thing about what i know the american people will appreciate is that packages will continue to get delivered on saturday and that's what people said they want. >> occasionally i've heard sentiments expressed in congress that the private center always works better. we should just then quasi-government monopoly and let the private sector deliver mail and packages. what's your answer to that

argument? >> well, here's what i'd say. the private sector has some great companies. fedex, u.p.s. we partner with them. fedex is our fourth largest customer, u.p.s. is our 10th largest customer. we do, from a postal service perspective, a very good job providing universal service that everybody in america's looking for. universal service at a universal price. it's hard for the private sector to do those kind of things. somebody would suffer. i mean, part of the argument that we've heard for years is, you know, maintaining postoffices and delivering in the rural areas. that's expensive. we're able, with a universal approach, to balance up the cost to provide that service anywhere in the country. and that's the strength that you get with the post service. the other thing you get with the postal service is an armored federal government is the level of trust and the level of privacy that is awfully hard if you're a private company to ensure. so i think those are some of the things that will keep mail delivery and package delivery in the postal service. thank you.

yes, sir. >> jason miller, federal news radio. already starting to to see some emails from congress saying they're supportive of the plan to move to five days. senator coburn has put out a release, congressman cummings. have you briefed those key committees yet? i'm going to assume you have but what was the reaction when you briefed them? and those are the key constituent to make happy because people find him them, if they are spove of, if they're not supportive. can you give us those reactions? what i can tell you is we have spoken to our oversight leadership in both the house and the senate. i can't speak for their reaction, though. it would not be rice of -- right of me to say what they said or how they feel. i'm sure that you'll see some reactions, as i know we already have seen today. we want to work with congress. we want to make sure that we work together and with the administration to get things set right for the post service. we do a tremendous job, our people do a tremendous job for this american public. and american business. and we want to be able to provide that same level of good,

consistent, reliable service going into the future and we have to change to do that. so i expect that to happen. thank you. yes, sir. >> josh solomon. so this will save $2 billion of a $20 billion budget gap. where are the other $18 billion coming from? >> let me walk you through it. there's a couple of things. number one, the largest expenditure that we have in terms of the gap is the -- for the employee health benefits. prefunding that. and we have got a number of others that we are working through right now in terms of some of the network changes that we are making. of course the six to five-day change on mail and we also have got some other law changes that we are discussing with congress and with our unions right now, around health care. these all add up. the key thing, the interesting thing to look at is time is money. the longer you delay a change, the more these numbers add up.

and that's where you get the $20 billion. what happens is, if you act in 2013, by the time you get to 2017 and 2018, that gap continues to go down. if you don't act and you keep pushing, those numbers get bigger. those are the things. health care, prefunding, health care in general, we like to own our own health care plan. we think it would be in our best interest, our employees' best interest, our retirees' best interest. it's a differential on our bottom line between the prefunding and the expense we pay of about $7 billion a year just there. thank you. yeah. >> hi. caroline with congressional quarterly. wonder what specific additional legislation you would like to see congress pass and what it is that you think that helps or hurts that effort. >> from the legislative perspective, we have to resolve the retiree health benefits payment system. we do not -- we're not asking for relief. he want to resolve it. part that have is to resolve

health care costs in the postal service, both near term and long-term. so we need legislation that addresses those two. we also need legislation that refunds money that we've overpaid into our federal employer retirement system. we're overpaid into an account by the tune of about $6 billion. we'd like to get that money back, put it against our debt. we've got some other things in from a congressional standpoint around products that we need some flexibility on. and then some additional changes, smaller changes going forward. but there's a whole docket of things that only the congress can change and those are the things that we'd like to focus on. they're in our five-year plan. >> sorry if i'm missing something but i want to make sure i understand. are you saying that -- [inaudible] gave you an opening to do this that you otherwise would not have had during a full-year appropriation -- [inaudible] prohibition against

changes in service as a frequency of service delivery? >> again, it is our opinion that the c.r. and the fact of where it's at right now, opening, i don't like to use that word. again, this is not like a gotcha or anything like that. it's our interpretation that -- the fact that we are, with the c.r. being paid for services already rendered, not appropriated, we can move ahead with this. that's our opinion. again, there may be people that disagree. that's ok. we have six or seven weeks to get it right. get it off the books and let's move ahead with the six-day package and five-day of mail. >> if you have any conversation with the letter carrier unions about this? >> i spoke with them last night. they knew where we stood on the thing. let me tell you, i spend a lot of time outside of this building in the field. i talk to our letter carriers. you know what our letter carriers tell me? mr. donahue, get to five days. reserve package delivery on

saturday. customers want that. we don't have enough mail to sustain here. they know that. our employees know. that you go on to our processing plants at night, i started a processing plant. 3:00 in the afternoon to places that a swarm of people working, very busily, sorting mail. i go into processing plants now, six and -- 6:00 and 7:00 at night, we don't even have the lights turned on in some of these places. that's the changes we have to make. people have voted with their feet to pay bills electronically. that's ok. it's a smart thing to do. and i wish you wouldn't do, that but it is what it is. and we have to make those changes. the employees are fully supportive, i guarantee you go out and talk to them, they know, they want to preserve this organization. the industry wants to preserve this organization. you're going make tough decisions and you're going to make them quickly. time is money and we have to make those. >> i was wondering about the 22,500 positions you mentioned. is that 22,500 f.t.e.'s or full

time equivalent? >> it -- here's the way we looked at it. when we talk work hours, that includes overtime. if you convert it into people, it would be 22,500. but a substantial portion is already been working on being performed on overtime, those hours just go away. what we have tried to do for the last 10 years in this organization is anticipate what you see behind me on that downward spiral. and we've been very, very conservative so that we don't get ourselves in a position where you're giving people pink slips and sending them out the door. we reduced more head count than anybody anywhere and we've done it without layoffs. we've done it the right way. >> where do you see cuts and in addition are you talking other unions besides the nalc? >> what will happen is this. we've got saturday jobs that we have for our letter carriers and saturday jobs for our rural carriers societies and some rural carriers. we also have mail processing

clerks and mail handlerses that work in the evening in our processing plants and supervision jobs. and those are all the jobs that will be affected. >> what is the prospect for litigation on this? have your lawyers assured you you can win the case? aren't you expecting a challenge from the unions? >> i would expect we get a challenge. i mean, you can never be sure that nobody's going to sue you. but, again, this is america. you can sue, we'll work it out. it's hour intention that we would be able to work with congress if there is differences, move on, get the next c.r. cleared up so there's no differences. it's the right thing to do. thank you. >> you talked about liquidity. but what is your cash on hand right now and will you need to make any more cuts between now

and -- [inaudible] for operational purposes? >> cash right now is a little better. we're going to have a c.f.o. tell con on friday so i'll leave that to joe to give you an exact number. we're in better shape than we were in october. because we just came out of the busiest mailing season of the year. we will continue to reduce -- we're in a process of reducing and consolidating 100 mail processing facilities. that's going to happen. we just had, last week, 22,500 members of our apwu, whether they're clerks or retirement people, they can retire and leave. they're gone. we can absorb the jobs in there. we continue to move ahead with the post plan. that's moving well. a lot of communication. the more you can communicate and let people know what the game plan is, they're comfortable and they know we have to make these changes. yes, sir. >> eric from government executive. you mentioned you have flexibility with part time employees? can you elaborate on that?

>> the way our craft is structured today, we've got career full-time people and then we've got what we call part-time or flexible noncareer and these are people who work and the average wage is around $15, $16. they don't have retirement benefits or anything like that. what, you know, what that group is made up of to a large extent, though, are young people. that's why we've been so focused on attrition. because when a person leaves here, they go into retirement and have cash flow and can conduct their lives in retirement. which is good. i would rather not lay off or shrink the hours of any of the noncareer people. we have no plans on doing that. what we continue to use attrition and eliminate overtime, work with unions and some other solutions going forward. >> what's the answer to the question? are you laying off part time workers? >> i'd like to keep every

part-time worker on the roll. they're young people, they need the jobs. >> just for context, what's your attrition typically in a year and how's that compared to 22,500? >> the typical attrition runs somewhere between 27,000 and 30,000. this year we'll probably have, depending on what happens this summer, we'll probably have upwards of 40,000, 42,000 people leave. ok. sounds like we're wrapped up. sorry, one last question. >> thank you. you have goten -- in terms of, again, the legality proceeding under the c.r. with this, have you gotten an opinion in-house or say from the justice department, and if so, would you make that public? >> in-house, i'll have to ask my lawyers if i can make that public. ok? thank you very much, everybody. thank you very much for coming out today and i think we've got a couple people who have got to talk to individually.

all right. thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013] >> and that event with the post master general will lead off our primetime here on c-span at 8:00 eastern. on c-span 2, also at 8:00 tonight, utah governor gary herbert talking about his state's plans for health insurance exchange under the president's health care law. and on c-span 3, a hearing on the financial health of the federal housing administration. all of that starting at 8:00 eastern. the annual national prayer breakfast is tomorrow morning. we'll hear from house members and senators as well as president obama.

the prayer breakfast gets under way at 8:00 a.m. eastern. you can follow live coverage on c-span 2. >> what i've discovered in my -- as i've gotten older and more mature is that the absolute worst strategy to achieve happiness in life is to make that your primary goal. if you make happiness actually what you're striving for, you will not probably achieve it. instead you'll end up being sort of narcissistic, self-involved, caring about your own pleasures and your own satisfactions in life as your paramount goal. what i found is that happiness is best thought of as a byproduct of other things. it's a byproduct of meaningful work and family and friends and good health and love and care. we get happiness not by aiming directly for it but by throwing ourselves into life projects, involving ourselves in fundamentally trying to have

integrity and being a good person. >> in "conscious capitalism," whole foods co-founder and c.e.o. john mackey examines how the inherent good of business and capitalism can lead to a better world. sunday night at 9:00 on "after words" on c-span 2 and find more book tv online, like us on facebook. >> if you go to most american history textbooks i would almost make you a bet if you go to textbooks you had in high school, that's if you can take me up on my bet, but my bet with you is that in your american history textbooks in high school, if you go to the index, you will find no mention of eugenics. my further bet swu that if you go to your biology books in high school, you'd find no mention of the word eugenics. i just looked at the biology book assigned by most of the courses here for intro bio courses at montana state

university, great textbooks, but i didn't see any mention of eugenics. it's as if because we, meaning scientists, no longer believe in eugenics, we don't have to think about it. it's as if we historians, because we know eugenics was so awful, we can somehow pretend that it wasn't part of american culture. >> eugenics in early 20th century america. part of lectures in history. saturday night at 8:00 eastern on c-span 3's "american history tv." >> there is no prescription or role model or cookbook for being first lady. and if you look back at the lives of martha washington or abigail adams or dolly madison or edith wilson or eleanor roosevelt or beth truman, you can see that each woman has defined the role in a way that is true to herself.

how she can help her husband take care of her family, make her contribution to our nation. >> c-span's new original series "first ladies: influence and image." their public and private lives, entrance and their influence on the president. over 44 administrations. produced with the white house historical association. season one begins president's day, february 18, at 9:00 p.m. eastern and pacific on c-span, c-span radio and c-span.org. the british house of commons yesterday voted 400-175 to allow gay marriage in the united kingdom. the prime minister spoke about the issue this morning saying it will, quote, promote marriage, defend marriage and encourage marriage. report will help that to happen. >> last night, trying to last night's vote on same-sex marriage is widely regarded as a

historic vote. does the prime minister agree with me it's a tribute to all the people in all parties and no party, behind the scenes and in public who have worked for such equality? and does the prime minister agree with me that the vote proves that the heart is bending slowly but it bends towards justice? >> i agree very much with the honorable lady. i think the last night's vote will be seen not just as making sure there is a proper element of equality but also helping us to build a stronger and fair society. i thought many of the speeches made last night were very moving, very emotional and i would pay tribute to all those people who actually made this case, some of them for many, many years, saying that they want their love to count the same way that a man and woman's love for each other counts. hat is wh

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013] >> members of parliament talk about britain's national health service. policy and whether the country should remain as part of the european union. that's sunday night at 9:00. >> during the presidency of her husband, james madison, as british troops invaded the capitol in the war of 1812, she's known for saving a portrait of george washington and other valuables from the white house. meet dolly madison, one of the women who served as first lady in c-span's new original series "first ladies: influence and image." their public and private lives. interests and their influence on the president. produced with the white house historical association, season one begins president's day, february 18, at 9:00 p.m. eastern and pacific on c-span, c-span radio and c-span.org. >> the health science committee today held a hearing on research and development and how it leads

to innovation and economic growth. the witnesses included the president of the regular polly technic institute and the c.e.o. of texas struents. congressman lamar smith on your screen chairing the one hour and 40-minute hearing. >> the science, space and technology committee will come to order. i'll recognize myself for an opening statement and the ranking member for her opening statement. the topic of today's hearing, the first of this committee and this congress, is american competitiveness. the role of research and development. this is an appropriate hearing because much of the jurisdiction of this committee relates to keeping america globally competitive. america's ability to compete depends on whether we have the present vision to conduct the science that will define the future. as the wall behind me says,

where there is no vision, the people perish. this committee's goal and today's hearing is to help define that vision and ensure that america continues to be the leader of global innovation. our first hearing today will will begin this process by examining the positive impact of today's r&d and looking forward to potential breakthrough innovations in the future. americans have always been innovators and explorers. our ancestors crossed oceans, opened fronttears and ventured to explore a new content and even travel to the moon. from the lewis and clark expedition to the international space station, from the telegraph to broadband internet, americans have led the exploration of the unknown and developed inventions of the future. in our short history we have produced world-famous scientists and inventors like benjamin franklin, thomas edison and

jonas sulk. but countless more american scientists who are not world famous nonetheless have been changing this world. you have heard of william burroughs, john bardene or ruth vinarito? according to the national inventors hall of fame, mr. burroughs invented the electronic calculator. mr. bardene delofled the transistor and helped create silicon valley in california. and we can thank chemist ruth vinarito for developing wrinkle-free cotton which is in the shirts many americans wear today, including mine. but as -- is america as innovative as it used to be? some wonder if america's greatest technologicallyal achievements are behind us and if other nations like china and india will soon surpass us or perhaps already have. some nations are creating environments so attractive to global manufacturers that companies have relocated much of

their activities on foreign soil. our global trade imbalance is growing as we export less and import more. and today this imbalance includes many high-backed products. other nations are changing their policies to become more competitive and so should we. fortunately blazing trails into new frontiers is what america has always done best. to set the stange for this congress and to -- stage for this congress and to understand where america's heading, we have very knowledgeable witnesses testifying before us today. each of them thoroughly ppedses both public and private research and development efforts as well as where our global competitors are headed. members of this committee have the opportunity to work together on policies that will help america stay competitive and today's hearing is a first step. that concludes my opening statement and the gentlewoman from texas, ms. johnson, is recognized for hers. >> thank you very much, chairman

smith. for holding this hearing and thank you also for yesterday's bipartisan retreat which was delightful. i am looking forward to these very distinguished witnesses today and hope that all of us will listen attentively. i know that we will hear from our witnesses about the critical importance of federal return and development and investments and i look forward to their testimony. as the competition for scarce resources has intensified, there's been some who would describe the research community as just another special interest lobbying group to share the pie. i could not disagree more. they should have special interests and self-interest and i hope they do. whether they're referencing to universities or high-tech

companies. but to label them as nothing more than another special interest group is at best misleading. without dismissing the value of many other investments we make with our limited discretionary budget, and there's probably no single investment we make other than education that has done more to ensure our nation's long-term economic vitality than the investment in r&d. the federal government is unique lie suited to make an exploratory research. while we have no idea what if any applications will result. but it also holds true that the financial and intellectual partners we build with the private sector to address more midterm r&d challenges, all of these investments yield

immeasurable benefits to our economy and our society in terms of companies built, jobs created and society made healthier, safer and more secure. they also have the secondary benefit of training the next generation of scientists and engineers who will contribute in all of these ways and i'm particularly pleased to see a few of them sitting out there. some specific examples of groundbreaking innovations and companies that would not have been possible without several r&d investments include the internet, g.p.s., google, the iphone and, god, what would we do without barograph codes? i expect we'll hear more examples from the witnesses and we could probably spend our entire hearing reading off such a list.

and yet i fear some of my colleagues in congress will still be unimpressed. we'll still hear arguments that the federal government's role should be restricted to so-called basic research because the private citizen can do the rest alone. not everybody has to take a cut. that is the 8.2% cuts loob looming on march 1 may hurt a bit. but are better for the country in the long run. i happen to believe personally that we can invest it in unemployment or food stamps or we can invest it in the future that will eliminate the need for both. so, let me attempt to briefly preempt some of these arguments. r&d is not simple. linear process from basic to applied to development and so on

to a final commercial product. it also doesn't go in only one direction. r&d is part of a complex innovation process with many feedback loops. there's no clear line at which the public role ends and the private role begins. and there has not been in any of our lifetimes. that is why partnerships between the public sector, namely our federal agencies, and the private sector, such as mr. tempton's company, texas instruments, are so important. second, i'd like to say a word about the consequences of sequestration. at the risk of repeating myself, we would not just be turning off the lights on many groundbreaking research facilities and experiments today , we would be eating our feed coin for tomorrow. we would know that at the end of the tunnel the lights are out.

what talented young person would see a future in scientific research after sequestration does its damage? our witnesses were asked in their testimony to speculate on what kind of breakthrough technologies we might see in the next five to 20 years. i think if any of us knew the answer to that we'd really be rich. that's the point. we don't know what direction our research might take. what unknown applications and innovations will be developed and nor did our predecessors when they invested in what we have today. we cannot afford to overestimate what the private sector is prepared to do on its own. and we cannot afford to underestimate the negative consequences for the nation's r&d enterprise of letting sequestration go forward. with that, mr. chair, i yield back.

>> thank you, ms. johnson. let me introduce our witnesses. our first witness is mr. richard tempton, chairman, president and c.e.o. of texas instruments. mr. templeton has served as texas instruments' chairman of the board since april, 2008, and president and chief executive officer since may, 2004. in addition to his work with texas instruments, mr. templeton also serves as the chair of the task force on american innovation. a broad group of stakeholders that support scientific research. mr. templeton earned his b.f. in electrical engineering from union college in new york. our next witness is dr. shirley anne jackson, president of windsler polly technic institute since 199 . she served as the chair of the u.s. nuclear regulatory commission. she also has had an extensive career working in several prestigious physics laboratories, researching

subatomic particles. dr. jackson earned her ph.d. in theoretical elementary particle physics from m.i.t. our final witness is dr. charles vest, president of the national academy of engineering. he was elected to this position in 2007 and is serving a six-year term. dr. vest also is the president emeritus of the massachusetts institute of technology and earned his ph.d. in mechanical engineering from the university of michigan. prior to his time in the academic world, dr. vest was vice chair of the u.s. council of competitiveness for eight years and a member of the president's committee of advisors on science and technology during the bush and clinton administrations. both dr. vest and dr. jackson were also distinguished members of the panel that authored the original 2005 national academy study "rising above the

gathering storm." this study recommended ways to keep america economically prosperous. before i recognize mr. templeton i just want to call attention to members on their desk, they should have an op ed from today's "politico" that were written by two of our witnesses today and which is well worth reading. it's called "a critical role in innovation" and by richard templeton and shirley anne jackson and mr. templeton, we'll begin with you. >> i want to thank chairman smith, ranking member johnson, and of course all the members of the committee for convening this hearing so early in the new congress, on such an important topic. i really am honored to be here today with dr. jackson and dr. vest, really well-known innovators and great keen insight into policy. over the last 50 years scientific and technologicalal innovation has been responsible

for as much as half of the economic growth. the united states has been a clear net global winner during this time. and while there are a number of factors that can explain that, i actually believe the investments by the federal government and basic research at our universities and at our federal labs were a critical factor in determining our success. i would point out, as we think about this topic, this phrase of research and development or r&d is used inseparabley many times and i think it's important to point out that inside of research and development there's something called basic research and to get a sense of that, it's really something that is done to discover basic principles without necessarily have a commercial purpose in mind. it could take five to as much as 15 years for that to pay off. or perhaps never. but when those basic principles are discovered and successful, they can have a enormous dividends.

for example, the space program and defense department propelled many of the advancements in the semiconductor industry. where today u.s. headquartered firms hold nearly half of the worldwide market and support nearly 250,000 direct jobs. the internet is another wonderful example. basic research requires significant funding from the federal government because they can take the long-term view and make the scope of investment needed. this funding goes to university, not to companies. i offer the committee four points to consider when you think about research funding. first, the u.s. was a winner of the first round of the innovation game. we are home to some of those most innovative companies in the world, names like apple, names like google, names like intel and we of course like the name of texas instruments on that list. the u.s. is the net winner economically because these

companies are headquartered here in the united states. and they're not headquartered somewhere else. they are here in many ways because the basic research many years ago was done in the united states. we had the best research universities, which in turn attracted the smartest people from around the world to want to go practice at those best institutions. second point, that this game is changing in round two. the relative advantages that the u.s. has had over the last 50 years have significantly weakened. today we risk that the next generation of these companies will in fact be safert -- started up and headquartered somewhere else. so there's really a few simple reasons as to why that could take place. first, other countries have seen the u.s. playbook. and they are very interested in being able to replicate it. they have seen the benefits that

it have yielded and they are busy putting in place programs to provide incentive for companies to try to start in their countries. second element that has weakened the u.s. position is that federal investment in basic research in physical sciences and engineering as a percent of g.d.p. has fallen to less than half the level since 1970. if uconn draft that by some very key competitors, key competitors meaning countries like korea or china, they are actually increasing their r&d in physical sciences as a percent of g.d.p. lastly is skills. our industry works because we have great minds. and there's two issues here. first, our immigration policies do not encourage today the best minds to come to the u.s. and in fact stay in the u.s. and also the best minds have got other choices around the world. in fact, today we educate some of these best mind and then we show them the door to return

home. secondarily is our own k through 12 stem systems are faltering and we have to get that turned around. third point i would like to point out is that the stakes in the next round, the next 50 years, are even higher than they were for the last 50 years. leadership in nanoelectronics will impact many aspects of our economy. health care, energy, transportation, safety, security and many more. china and korea understand that the country that leads in nanoelectronics will reap the economic benefits the way the u.s. has dominated the last 50 years with the microelectronics. fourth point, i think there are four areas that changes in policies need to be focused to change the outcome. first is federal funding and basic research. even in tough economic times, we must protect the investments in the future.

second, is we must make a priority for world class stem education, that's k-12 in the u.s. this needs to be a national imperative implemented on a local basis. three, high-school immigration reform. i appreciate the leadership that, mr. chairman, you have shown, ms. lofgren, on the issues and we look forward to hopefully a resolution. and fourth is comprehensive tax reform for u.s. companies to be able to compete globally. the world has changed considerably since 1986, the last time taxes were considerably reformed. we must have an environment where u.s. headquartered companies can compete effectively on a global basis because that's where 95% of the world's population is. so my conclusion, investing in basic research at our universities has been critical to america's success over the past 50 years. and i believe it will be more important going forward. and i'm certainly happen to --

happy to answer any questions. >> thank you. dr. jackson. >> chairman smith, ranking member johnson, distinguished members of the committee, thank you for the opportunity to testify before you on america's competitiveness, the role of research and development. i have to say that our graduates have been an integral part of america's promise through discovery and innovation since the university was founded in 1824. more importantly, america's health, prosperity, security and global leadership depend upon our strength, as you have heard in science and technology. our investments in scientific research and education have made a difference in people's lives. let me illustrate. "the new york times" reported that in october, 2004, in afghanistan, a mortar severely injured a u.s. marine corporal, isiah hernandez. he's an example of so many of our wounded warriors.

shrapneler to away 70% -- shrapnel tore away 70% of the muscle in his thigh and fractured his feature -- femur. he endured four years of surgeries and physical therapy to little effect until dr. steven battle axe of the magawan institute of regenerative medicine at the university of pittsburgh implanted in the corporal's thigh a new gel-based therapy called the extra cellular matrix derivinged from pig bladders. after about six weeks, the implanted mixture spurred the growth of muscle tissue, tendons and vascular muscles a rnd restored physical strength. this work is part of a government-supported research program at pittsburgh. this and much more is the kind of work that faculty and students at m.i.t. do, understanding the role of the extra cellular maye matrix and cell signaling and tissue regeneration.

developing enzyme-based coatings that kill antibiots resistant back teareria on contact. bioennearing synthetic heparin, all depended upon the federal supportive research across the life and physical sciences, chemical and biological engineering, industrial engineering, nanotechnology, big data and data analytics. life-changing, job-creating, security-sustaining scientific discoveries and technological innovations have rested on strong collaboration among business, government and academia. this three-way partnership has created an innovation ecosystem that has driven our economy's prosperity and well-being for decades. federal investments in scientific research and development built the foundations for a broad rake of -- range of industries. many leading u.s.-based global

companies, including texas instruments, generalen tech, google, and sisco systems, all trace their roots to federal research investments. as you've heard, china, india and other nations are emulating our model. by making competent investments to gain the benefits we enjoy. if we are to remain globally competitive, we must sustain and enhance the u.s. innovation ecosystem. this requires four things. first, strategic focus, to choose important and promising areas to explore and develop and match them to the talent resource, resources and opportunities we have or can attract. second, game-changing idea generation that arises out of basic research. which pushes the boundaries of human knowledge. third, translational pathways that bring discoveries into commercial or societal use.

fourth, capital. financial, infrastructural and human capital. to support the development and exploitation of promising new technologies. we need a new financial model for technology-based startups that overcomes the so-called valley of death. we need tax reform. we need physical capital. including shared infrastructure which allows new technologies to be improved and scaled for the marketplace. for example, the computational center for nanotechnology innovations, a joint effort of i.b.m., new york state and rental air, hosts one of the world's most powerful university-based supercomputers used for research by our faculty and students and by companies of all sizes to perform research and development and to tap the expertise of rental air scientists and engineers. we must draw more young

americans into stem fields. we must improve science and mathematics education for all of our children. retaining high-caliber talent from a broad -- from abroad is important. especially those obtaining advanced degrees in science and engineering from america's universities. advanced manufacturing requires that we make comprehensive education and retraining a priority. now, we remain the world leader in scientific discovery and technological innovation, but the health of our innovation ecosystem is in jeopardy. as the congress debates funding for research in these austere times, we know that there are significant challenges. but the nations that invest in research, educate the next generations and make commitments to build effective innovation ecosystems will be the global leaders of tomorrow.

thank you, mr. chairman, i look forward to your questions. >> thank you, dr. jackson. dr. vest. >> chairman smith, ranking member johnson, honorable members, it's a privilege to be here today. today the process of r&d that we've been discussing moves new scientific knowledge and new technology developments to marketed products and services at an ever-accelerating speed. it's an increasingly complicated process, it's a globalized process that's at once both highly competitive and cooperative and it's a process driven by basic research and one that would ultimately die without basic research. some examples of 20th century innovations that all began primarily with university research include computers, laser, the internet, the deployment of the worldwide web, the basics of the g.p.s. system,

the genomic revolution and most of modern medicine. i contend that there's not a job in america today that does not depend directly on one or more of just these six examples. now, predictions of future technologies have very difficult. when i graduated from west virginia university in 1963, none of us talked about going into the information technology industry because the i.t. industry did not exist. but our generation invented it and it became the dominant source of employment for engineers in the intervening years. so i am a true believer that if we invest well in basic research and education, we undoubtedly will be surprised by what the

new innovations are that actually arise. let me say three barriersen to success of our wolf system. our k-12 system is failing far too many of our young people. our current federal policies, as has been said, make it difficult for growing foreign graduate students to stay on in the u.s., yet such immigrants from the recent decades have contributed hugely as professors and especially as entrepreneurs to our system. and our federal r&d tax credit, among other things, needs to be made permanent. i was asked to comment on national academy's reports and i want to cite three that are particularly relevant to the topic of this hearing. i start with our 2005 baseline report, "rising above the gathering storm" and thank this committee for supporting the

authorization, passage and re-authorization of the america competes act that is largely based on it. our findings and recommendations in "rising above the gathering storm" are as relative today as they were when they were drafted and indeed you heard that from mr. templeton. this report offered four broad recommendations, each backed by a specific evidence and 20 specific action items. but the big picture items were move k-12 stem education in the u.s., the leading position by global standards, double federal investments in basic research and physical sciences and engineering over seven years, encourage more u.s. students to pursue science and engineering careers and rebuild the competitive ecosystem through reform and tax patent, immigration and litigation policies. the second report i would note just came out this last june

titled research universities and the future of america. a group that was chaired by chad holiday, former c.e.o. of dupont . it presented a bipartisan congressional group that requested it with 10 breakthrough actions vital to our nation's prosperity and security. one of the things that's somewhat unique about this report and we're very proud of it is that it poses -- proposes actions not just by the federal government but by state governments, business and universities themselves as well. the report recommends that the federal government should adopt stable and effective policies, practices and funding for university-performed research and graduate education. it also recommends reducing or eliminating regulations on university-sponsored research with increased costs and impede productivity. we are very grateful to

representative mo brooks who has requested the g.a.o. to determine ways in which this regulatory burden might be reduced. now what actions are other countries taking? a couple of years ago the then premier of china said flatly, quote, i believe firmly that science is the ultimate revolution, unquote. china's policies, investments and rampant progress derive from such beliefs of their political leaders. just in january of this year, the european union announced it would fund two huge science projects, each at $1 billion euros to, quote, keep europe competitive, keep europe the home of scientific excellence. today worldwide r&d investments

are about 1/3 in north america, about 1/3 in europe and about 1/3 in asia. this is a seat change. final report at the request of the department of defense, the national academys recently issued a report, the s&t strategies for six countries' implications for the u.s. it provides an overview and analysis of programs of china, singapore, russia, india, japan and brazil. finally, i would like to comment that in a lot of these discussions, and ranking member johnson really headed me off at the pass because she clearly understands it very well, there is a lot of confusion of terminology, basic research, applied research and so forth. and i'd like to use, with the chairman's permission, just a little bit of time to give you a perspective on this. basic research is the search for knowledge by scientifics --

scientists of the natural world and how it works. applied research often conducted by engineers suggests taking that knowledge, scientific knowledge, and conducting further investigations to forge it into a useful application. development moves the actual design to a mockup of a real product. so basic research gave us the electron and the structure of nadarkhani, applied research gave us high-strength steel and the original internet, development allows us to produce and market a new aircraft or a new computer system. but things are changing. today much of what we do, i like to use the term use-inspired basic research. use-inspired basic research. this is work that's driven for -- driven by the quest for an ultimate application goal but requires new fundamental

scientific and technological knowledge to get there. use-inspired basic research gave us the transistor. but it also gave us a lot of new discoveries about materials and quantum physics. today use-inspired basic research is giving us applications of new gee nomic understandings to medical treatment. now, 50 years ago most r&d was conducted in big companies in the u.s. and it followed a see consequential lynn yapyar process -- is he consequential linear process, you did a lot of basic research, got a lot of ideas, you sort of let the market figure out which one of these would be important, you then moved it to applied research, then you did development, finding -- finally you marketed the project. today industry focuses on primarily development and it most certainly does not use this seconsequential linear process. because technology moves too fast, it came before -- industry

can't afford to do much basic research where it's not clear that company will receive the payoff and, finally, the results of what we used to call applied research and development feeds so rapidly into the basic research itself that you just can't ignore it and follow this simple linear path. one of these two european projects, i mentioned, is to try to build the most sophisticated computer model in the world of how the brain works. now, when you work on a problem like that, as we do in the u.s., though perhaps not -- [inaudible], we'll find out, you learn not only more things about the brain, but you learn how to build better computers. and it just circles around and all boats rise. but the one message i want to leave you with is that the basic research is still done in universities primarily,

including this new world of use-inspired basic research with good interaction with companies and so forth. produces the indispensable feed stock for companies and especially for young entrepreneurs -- entrepreneurial companies that increasingly drive innovation, new products and jobs. mr. chairman, ranking member johnson, thank you so much for the opportunity to be here on behalf -- be here. i'll be happy to answer any yeses. >> thank you for all your testimonies. i'll recognize high self to ask questions and, mr. tempston, i'd like to -- templeton, i'd like to ask my first question to you. in the united states every year $400 billion is spent on research and development. about $140 billion comes from the federal government. those are huge amounts of money. but they also have the potential to do a huge amount of good. and so my question is, where

would you target the government's research and development funds to get the best returns and what might those returns be? >> well, chairman smith, i guess the way i would describe it is, if you take a look at the innovations that dr. vest just described, investment in the physical sciences has really been diminishing over the past 30 years as a percent of g.d.p. a lot of the studies, and that was a 2007 with a rise above the gathering storm, talked about doubling that over the next seven years. so, i think that direction is the correct direction. and then to the question which is an important one, how do you shape that or how do you make decisions of where to apply it, i think we've got some good examples that we've worked in both federal agency as well with universities, as well with companies, public companies, to

have peer-review processes to understand where are the most promising ideas. and if we had -- someone had noted, if we had an exact view of what the future was, we'd be one magical. we're not going to get. that but what we want to do is use our best minds to shape that into a peer-review process. >> thank you, mr. templeton. dr. jackson, you mentioned in your testimony a few minutes ago stem education, science, technology, engineering, math. the federal government spends more than $3 billion a year to improve stem education in our country. but we have yet to see significant results from this investment. do you have any suggestion as to what we should do improve that record? >> i do have a few, thank you. first, i would say that there are three areas we need to focus on. one is improvements in k-12 education. the second is stemming losses in the undergraduate pipeline, in stem education.

and the third, creating appropriate bridges to the next level. with respect to k-12 education, believe it or not, our fundamental -- i am fundamentally one that says, let's get back to basics. i am a theoretical physicist by background and one cannot do that without a very strong sophisticated math background. but to do that one has to be able to do calculus and partial differential equations and all that. but one can't do that without understanding geometry, trig nomtry, algebra, etc. one cannot do those things if one cannot add, subtract, multiply, divide, understand a little bit about log rhythms, fractions, percentages, etc. so the point is it is cumulative. we have to think about that as we think about how k-12 education is structured. secondly, we need to be outcomes-focused. not just in terms of testing but in terms of the ability to use concepts, to use what we learn. the third, we have to strengthen

had the teacher corps and i'm one who happens to believe that at least for upper level secondary science and math subjects, that having a discipline-based teachers is useful. and finally, we need to be able to use technology itself in a smart way. we're educating digital immigrant, late comer, but we need to be able to use that to create the right kinds of immersive experiences so you use technology to educate those in science and technology. the point about the undergraduate pipeline is that there is a much larger dropout rate than people might realize in first two years of undergraduate education generally. but including in stem subjects where students opt out of those subjects. so there are beginning to be discussions about looking at how science is taught in the first two years of the universities and colleges. and, third, when i speak of

bridges to the next level, there really needs to be work that puts the basics and applications together. that's how we can draw in young people and they're learning things without even knowing they're learning them. thank you. >> thank you, dr. >> doctor, you said in your testimony that if we invest well in basic research and egg, we undoubtedly will be surprised by what new innovations arise. what are some of those new innovations? >> surprise is the keyword but since this is one of the questions forwarded to us before the hearing, i tried to give it a little bit of thought. as mr. templeton was reminding us earlier today, it's been often said that the best way to find out what the future is is to invent it. that's what we're all about. but i'd point out a few areas that i think are likely.

one is new materials. investment in material science, engineering, works on everything from smaller, faster computer circuits to better highways to better bridges. mr. templeton's country -- company is driven by a philosophy of what's happening in materials available for semiconductors, for example. the second area is the tom by nation of so-called big data and the new generation of artificial intelligence that if we use it well will help us understand the world better, make better decisions and probably give us dramatic improvements in areas like medical diagnosis and working together with humans, by the way, computers plus humans, doing better medical diagnosis and better policy and decision making. it's likely that the rapidly advancing new generation of advanced robotics will affect

everything. for manufacturing, not just on the big, fancy, high-tech company side but on the small manufacturing side as well, and also obviously has implications to areas like defense and highway safety, we're already seeing controversial -- seeing, controversial though it may be, the growing importance of drones, which is a form of robotics, and a new generation of self-driving cars. there's a lot of reasons to be intuitively worried about that but there's a lot of data suggesting that it could build us in a couple of decades a much safer highway system. finally these unexpected things, esoteric fields leek quantum computing and biological computing that may pop up as reality one of these days, giving us much better computer security which we all know is a big issue, allowing us to solve more complex problems than we

currently can. but surprise is the big thing and i want to just underscore what my good friend dr. jackson said, all this work today by the young people crosses all the traditional disciplines and it's really these unusual or used to be unusual combinations of scientific and technological input that will give us the real surprise innovations. thank you. >> thank you, doctor. the ranking member ms. johnson is recognized for her questions. >> let me express my appreciation for all the witnesses. my question is pretty basic. i was around during the rising storm, we're in the midst of the storm, and i'm not sure how much change we've made, though we try. but the most recent research that i have read about students getting into college and then

changing from the stem interests concerned me greatly. it concerns me because the students who seem to lead those fields more frequently are the women and minorities. the growing population. what storm do we need gathering here to see if we can change the course of this? i really, sincerely feel this is the future of our nation and competitiveness. anybody who wants to try. >> since i do educate a few of them, as i said, i think we're finding that the first two years seem to be very similar in terms of how students are educated, how they're nurtured. we actually have a multigeneration approach for women in engineering where we

have faculty who mentor post docs who mentor graduate students, who mentor undergraduates. what we find is that once we him -- once the women, and this is women across all ethnic groups, by the way, opt truly into science or engineering they actually graduate at higher rates than the men. so i think there are subleties to how this all works. there remains a problem with respect to underrepresented minority males, but it is actually embedded in an issue that has to do with the fact that young men overall are not graduating at the same rates. so we're undertaking a special task force at the university to look at this question about how do we create more stickiness for students in the first two years and looking at our teaching methodology, while at the same time undertaking a particular

study about male students and what is happening with them. we do think there are lots of issues having to do with cognition and learn, how we structure courses and in fact, i'm a member of pcast and we in fact issued a report discussing some of these things. >> i would only like to add to that that we need to move our perspective back not to make an excuse, but we need to move it back to the k-12 system and build a good continuum from k-12 through the kinds of things that r.p.i. and m.i.t. and so many other schools are now trying to do. and i would add to the very, in my view correct, list that dr. jackson gave earlier. i want to emphasize one of her points and add one thing to it. i really believe that exposing kids from inner city to

countryside to suburbs to science and math teachers who have actually graduated in the field they teach. we can do this. this is the primary -- the primary a number one recommendation of the gathering storm report and have little happened to it. so the idea is very simple. we need to deploy a set of scholarships to attract young men and women to go to college, to major in computer science or electrical engineering or physics or chemistry and at the same time be certifiable as k through 12 teachers. secondly, and i hope i'm not getting a little too much to the political side, i'm a big believer that we need to adopt voluntary standards, voluntary standards across our state in stem fields just as we have in

mathematics and in english. these standards need to emphasize learning science by doing it. project base. bringing the excitement, the sense of discovery. this is what is going to attract more kids to look at things like the maker movement. it attracts kids from all over the sose yo economic spectrum. look at dean kaman's first project that's in every inner city in the country as well as the wealthy suburbs. this is the way kids today get excited. they get excited by doing. i think if we could sort of focus on those two things, we could get more people in a more dedicated way into the pipeline and then if we can top that off by improving the way we teach in universities, somewhat along similar directions, maybe we can get there. but to me, this division between where kids come from and what

their chances are to succeed, it's not america. we have to really get at this. >> thank you, ms. johnson. mr. templeton. >> i was just going to say amen. >> quick answer. thank you, ms. johnson. >> thank you. >> the gentleman from california, mr. rohrabacher is recognized for his questions. >> thank you very much, mr. chairman, let me ask mr. templeton, disease your company benefit directly from federal research projects? do you actually get direct money from the federal government to do research for your company? >> that was one of my comments to be very clear. this is about funding going into university systems for basic research, not to our company. very simple answer. >> so there is a certain amount of money that your company is supporting going to a direct research project for a

university which then your company and other companies then benefit from that research? >> no, we have a choice. we do choose to participate alongside the federal government in long-term basic research as well. very much the same vehicles, could be the nano research initiative, n.r.i., or focus centers, starnet. this would be t.i. putting funding into long-term basic research. we'll do a small percentage of that, so wore at the teable and helping to shape an opinion. >> how much fun to -- money does your company actually invest in this type of long-term future investment? >> it would be tens of millions on an annual basis. it's not a trivet amount. >> tens of millions. let me ask you this. does your -- your company manufacturers trips. >> yes. >> what percentage of your production is in the united

states and do you manufacture in china? >> the majority of our production today is in the united states. we opened our most recent wafer fab and in our industry, 300 millimeter wafers or 2-inch diameter wafers are leading edge. we opened that facility in richardson, texas, in 2007. broke ground, put it online in 2010. i would estimate that probably 40% of our chips are manufactured in the u.s. but we also, to your direct question, manufacture some chips in europe, we have a facility in china, we have facilities in japan as well. we're a global manufacturer. >> what percentage of your chips are manufactured in china? >> a very small percentage. >> 10%? >> significantly less. >> but your industry, there are major parts of your industry that are engaged in manufacturing these type of things in china? >> there are other parts of the industry that do manufacture in

china, yes. >> we appreciate the fact that your company is doing a lot of manufacturing here and we appreciate that investment. it says here we have $400 billion in this type of research that's going on. does that figure, $400 billion annually, does that -- is that -- does that calculate in what individual inventors put into the mix? or are they just not part of the calculation? >> i don't know if they are. they probably are not going to be a significant percentage, ok, as measured by dollars but about 60% of that would come from private or companies and 40% of that would be federal funding. >> we're talking about private inventors and their impact on new discoveries, how would you place them in terms of government programs, coming up with something new, corporate --

corporations coming up with something new versus the individual inventor community coming up with something new? >> i think if you look at the breakthroughs over the past few year the invention of the transscissor or arpa net that led to the internet, these were significant moves that weren't in the minds of one person in the wrourt university but a network of universities and a network of people. >> so the foundation, we do know that significant fortunes have been made utilizing that information and creating something that really was put to use in the marketplace and finally, my time is running here, but just in terms of the inventors, yesterday we heard about the investment again in

government provided the money for the direct research that ended up with somebody, in the very end of the process, was the m.r.i. i happen to know the guy with the patent for the m.r.i. and without him, there wouldn't have been an m.r.i. as well. do you think that there's been -- do you think patent protection for these innovators, the inventors, is going in the right direction or the wrong direction? >> i think in general it's moved in a positive direction over the past five years, trying to find that careful balance of what's good to protect invention but not -- move off into where patent trolls and many debates go around that doing, depending who you are, you have strong opinions. >> the chairman and i have different views on this, but thank you for sharing. >> thank you, mr. rohrabacher.

the gentlewoman from oregon, ms. bonamici is recognized. >> thank you for scheduling this hearing, thank you to the witnesses, panelists, appreciate the article in the politico, mr. templeton and dr. jackson. as a testimony -- the testimony you all presented contains many common elements, there are many top exs frequently discussed in this room, especially promoting stem education and the role of creativity and innovation in maintaining america's leadership in the global economy. when i'm out talking with constituents and industry leaders about this top exin my district in oregon, especially the role that creativity and innovation play, many of them express the importance of steam education which is integrating arts and design in traditional stem fields. innovative companies across my district, from companies like

nike and tech giants like intel rely on employees with a mind for science but an eye for design and we've discussed how integrating arts and design education into traditional science education can yield the sort of creative, innovative work force that many of you identify as essential. beyond just the benefit for the industry, bringing arts and design into stem classrooms can help keep students engage. i know, dr. jackson, you talked about drawing students in. i visited a stem -- a steam elementary school in my district that took stem and added arts and design, those kids were engaged. they were acting things out, they were talking about tying -- they were studying soil erosion and graphing things and drawing charts and planning a garden and playing with worm, they were really, really engaged in everything that they were doing. so in order to keep students engaged, i want to have a

discussion about steam. mr. templeton, you affirm that government primaryry conducts basic research while industry focuses on the d side of r&d, developing products for commercial application. in your experience at texas instruments, can you discuss the importance of creativity and design in the process? dr. best you discussed improving learns in the stem fields for students and suggested promoting exciting learning through projects and experiences rather than just boring memorization of facts. could arts and design play a role in stem education especially in the learning atmosphere you envision with your comments? >> on the aspect of creativity, the simple answer on that is yes, it's one of the things -- it's one thing to have numbers and concept bus if they can't be brought together and visualized

and turned into a product it's knowledge that will not lead to productive things. it's also a case, and if you look at steam efforts, we've recently done something with one of the school districts in north texas and i think it's got great potential for the creativity that it can bring along. i do think it's important while we look at that,backs to dr. jackson's comments of, we have to be mindful of the basics, be it the math an science principles because if we don't have the foundation in place, you can never get to some of the higher level concepts as well. i think keeping those in balance is a wonderful thing. >> thank you. >> vs. a very perspective question in my view, one i get pretty excited about, you may have to shut me off, mr. chairman. but i cannot imagine m.i.t. without its visual and performing arts component. it would not be m.i.t.

we would not attract the same kind of kids. and it's very much a part new york my opinion, of what has to happen in both k through 12 and in undergraduate and even graduate education in our universities. rising above the gathering storm, tried to emphasize we're not telling all kids we want them to become professional scientists and engineers but everybody needs to know some fundamentals today about science and engineering. my experience, you look at virtually any of the really good high schools that are succeeding, high tech high in san diego and so forth, the integration of o-- of arts into their curriculum is a very important part. i commented on the maker movement this attracts kids from left brain, right brain, everything in between and i'm frankly a big believer in the

steam movement. there's a hearing somewhere in congress coming up over the next several weeks that my wonderful friend john maida from the rhode island school of design is helping toing orny -- or nice. i'm a big believer -- >> it's from today. >> it always leaves me in an odd position because i also know that we are failing in our core stem areas so it's difficult to talk about the breadth but yes, arts and the humanities are a very important part of building creativity. >> i'm afraid i'm out of time, but dr. jackson, if you want -- >> you didn't pose the question to me but we believe so much in it that we have built an experimental immediate wra and performing arts center and it is both a very high end culture and performing arts platform and it's a research platform at the same tome that brings the arts,

engineering, sciences, computer sciences, all together and we have various venues within it but one in particular allows to do visualization. animation. simulation. acoustics. where you can simulate touch. all of this requires bringing all the disciplines together including in the arts. we have a games and simulation arts and sciences contribution lum and it uses that whole structure to animate what students do. at the same time we feel that fundamental studies in certain fields of the humanities, arts and social sciences are critically important. so we've built those up as well. but you know, it's funny, we've got intoon these bucks about what constitutes the lib rah tissue liberal arts versus what institutes science and engineering. if you go back to the original definition of the liberal arts they were in fact together.

>> thank you very much. i'm out of time and that meeting is a week from tomorrow. we'll let the committee members know if they'd like to attend. >> thank you, ms. bonamici. the chairman emeritus, the gentleman from texas, mr. hall, is recognized. >> mr. chairman, thank you very much. this is a very unusual and talented group that are giving us your time, the time it took you to get here, the time it took you to appear here before us, give us your testimony and get back to your place of occupation. i know rich templeton very well and admire him. eddie bernice and i, i'm sure eddie asked you to come here, rich. we're proud of t.i. eric johnson, james mcdermott, cecil green, all those people, created the university of texas at dallas and were very generous in giving around 1,100 acres to that university, i was a senate

sponsor of that, very proud of the university that you all have created. mr. rohrabacher asked about your support, you could talk all day about the support of that university. i'll ask you one question about stem fradge watts. i know your dream of the dallas engineering school finally became a reality in 1986 and the students that you have, and you've been part of t.i.'s history. what about the stem graduates? are there enough available in the united states to meet your current and future needs? >> well, mr. hall, thank you for the very complimentary statements about many of our founders who had deep histories at both m.i.t. and r.p.i. if you look in many ways the percentage or the amount of people that we hire on an annual

basis, we're fortunate because of our reputation that there's enough available. but the danger is that does not apply, i believe, to all industries as you go down through that. and i think that supply will be under continued pressure if we don't get k through 12 stem education turned and moving in the correct direction in the u.s. >> what are some of the key factors in motivating students? -- motivating students to pursue stem degrees? >> i think it's been touched on -- >> i had to leave and i'll have to leave soon to go back to another committee to vote. i'm sorry to touch on it a second time if it's already been asked. >> no, it's ok, i think it's been talked about, make the business come alive. if you look at many either high school students, especially if you look at women try trog

consider a career in science and technology, if you get to the undergraduate level that dr. jackson talked about, if you seing in uh -- nothing but four years of math and science classes ahead of you before you can apply it to something that makes it come to life, you lose a lot of people in that time. we look at the world of bioengineering, where you really can see the impact you can make in lives and it really brings the potential career and the impact you could have alive in young people's minds and i think that's the secret to grow or to turn that track around. >> one of the best -- and the best practices that the froth could implement to strengthen r&d and best use of taxpayers dollars, are you a witness to that? >> i pay attention more to results. if i look at the results coming out of k through 12 stem

education in the united states -- in the u.s., we continue to ranked very low on most global ranks. i think the work that we have as a nation is still in front of us on that. >> all right, i thank you. i thank you, mr. chairman. >> thank you, mr. hall. the gentleman from massachusetts, mr. kennedy is recognized. >> mr. chairman, thank you. madam ranking member, thank you for calling this important meeting. to the witnesses thank you all very much for your testimony. as a resident of massachusetts, we are acutely aware of the importance of r&d and greatly appreciate your time in only coming here today. president templeton i have a question for you that's off topic but of interest in my district in massachusetts. mr. chairman, i hope you'll forgive a quick diversion. as i'm sure you're aware, mr. templeton, texas instruments operated a manufacturing pa

silty in massachusetts for several decades. until testifies sold in 2006, the company was a major employer in the area and an active member of the local community. it remains well respected in the city and surrounding area still today. that being said, in the years since the plant was closed, the cancer rate amongst former employees has been alarming. specifically affected are those men and women employed by the company between 1953 and 1968 when t.i. was involved in the federal nuclear program. as part of the energy employees occupational illness compensation program through the department of labor, money has thankfully been made available to those workers now suffering from crippling illness. i know that t.i. has designated an internal point person for the former workers who are seeking information from eeoic and i commend you and t.i. for doing so but what i'm hearing from many residents back in the district is that have few of the thousands of former employees in

thal -- attleboro area are aware that this program exists and that there are benefits available to them. they've seen minimal outreach efforts to ensure that those in need get the help they so desperately need. i read about steve foster from taunton in the local newspaper. he's suffering from thyroid cancer, his brother has cancer, hi wife and father both died of cancer. all four worked in the plant. yet, i i worked to larry darcy, diagnosed with kidney cancer in 199. he went out of his way to credit your company for the opportunities it gave him and his co-workers. over 180 of those co-workers from the attleboro plant that he's aware of contracted some type of cancer. i tell the story, sir, not to cast blame, the human cost of this country's nuclear development in the 1950's and 1960's is not unique to texas instruments or to attleboro. but i do believe that t.i.,

along with the federal government, has a responseability to the men and women that we put in harm's way. while we can't take back the exposure to the radioactive or toxic material so many suffered, what we can do is everything in our power to make sure we ease their pain today. so, sir, i'd like your opinion on how my office can work with your company and the department of labor, department of energy to ensure that we are doing all we can to get the compensation for those who need it. to start, i'm wondering if, one, there's any light you can shed on the process that t.i. goes through to reach out to former employees in this situation or similar situations and two what my office or the federal government can do to assist you in this process? the money is there, the program is there, and the need, tragically is also there. the communication is not there and we need to fix it. >> i thank mr. ken i -- kennedy, first, we have been in close

contact with the department of labor as well as the department of energy and i think you've described the actions we need to take, which is we need to stay in contact between the appropriate government agencies and your office, we've been very active with the departments to make sure any information we could help with was available and we need to continue that and take a look if there's more that can be done, we should be doing that with you. >> thank you. which -- i would appreciate further communication with you and and the designated point person from your office to find out if there are employee lists that go back that time. i understand you have a generous pension plan, that there are health care benefits still being paid to your employee, but if we can facilitate that transfer of information to the government so they can reach out to those vedgesmark of whom don't know that there is benefit there is to cover medical bills that are now soaring into the thousands of dollars. >> we can certainly get the

right contacts to you, that b set up. >> i yield back the balance of my time. >> the gentleman from georgia, mr. broun, is recognized. >> our government is broke. many members of congress are either oblivious or in denial of that fact. we are spend manager money than we're bringing in. we are headed to a total economic meltdown of america if we don't make some changes. both parties have been guilt of -- have been guilty of uncontrolled spending here in washington. promoting science as well as research and development is extremely important for america to get back on a sustainable fiscal course. we must start making responsible decisions and choices here in congress, but with that said, mr. templeton, it's well known that the united states has the highest corporate tax rates in the world. 35% of the -- at the federal level.

when you add state and local taxes it's much higher than that for employers and job creators here in america. please discuss how the rate impacts businesses and how it affects those investment decisions including how it can be factors into the decisions regarding where to locate manufacturing facilities or how much to invest in r&d, how would business investment and overall u.s. competitiveness be impacted if we eliminated corporate taxes altogether such as my jobs act does, the jobs act will reduce permanently corporate taxes to zero and capital gains tacks to zero and i think personally it would be a huge economic boon and instead of raising taxes, would raise taxpayers' with -- taxpayers with good-paying jobs. could you please discuss that, mr. templeton?

>> i will not disagree with your final conclusion. i also don't agree with the double taxation and dialogue having many debates especially in difficult budget times. i think the conclusion you're leading to in the question is very clear. we compete against companies that could be headquartered in taiwan, for example. and some of them, because of government policy, virtually have zero tax rate. and so if we try to operate to investors in the united states market are working against some number incrementally at the 35% level and you've got shareholders that have an expectation for a company in taiwan that operate at zero, it puts a very difficult situation in place for the long-term. and even further to the point and you seem -- you have seen some of it, where companies are faced with, should they move their corporate headquarters to

different countries, if they're trying to be responsible to their shareholders. so i think that's a really dangerous slope to end up on as a country. i think that the conclusion of your points are very accurate on that. i think it also comes back to by investment -- investing in university research, by having those ideas being developed here, we do give advantages to being u.s. headquartered and what we need to do is not be uncompetitive against some of these other country -- companies and then we can get great gains from where we are today. >> mr. templeton, i believe the high tax rate and regulatory burden that the federal government has put on business an industry is what is driving manufacturing jobs offshore. and i believe very firmly that we have to bring those jobs back to america because that's what's going to got our economy going again, create those good-paying jobs, particularly in areas of science, technology, and engineering. medical science.

i'm a physician. do you have any suggestions about how we can look at the regulatory burden and tax burden besides passing my jobs bill, which i think is critical to bring the manufacturing jobs back to america, can you give us some suggestions about what we can do to look at the regulatory burden as well as the tax burden and give us help in getting these shackles off of business and industry, our job creators, so we can start having a strong manufacturing industry here in this country? and thank you for, i want to thank you for texas instruments having the manufacturing that y'all do here in this country. >> mr. broun, the simplest way i think about this is, we have 5% of the world's population. which says 95% of it is somewhere else. when we think about economic growth for our country, and for companies that are headquarters in the u.s., we have to have policies and plans that let

u.s.-headquartered companies compete tpwhrobally because it ends up creating great opportunities and great economic growth in the u.s. i think therein lies the beginning of that policy, how can our u.s.-headquartered companies be highly competitive? that brings in issues of tax, issues like today's hearing on base exresearch at universities, issues on regulation. we want to be able to operate well but we also need to operate competitively on a global basis. when that frame is in place, i think you can get to those points, those conclusions, fairy quickly. >> thank you, mr. templeton, i yield back. >> thank you, mr. broun. the gentleman is recognized. >> thank you for convening this hearing. i'll make a quick comment, as a former associate dean at university of california medical school, we did look extensively at the loss of undergraduate talents. and that clearly is tied to our

k through 12 system, particularly in lower income communities and students not being prepared. if we can hold on to those students when they get to their junior year, they do make up the gap but we lose far too many of our students there. my question, i'll direct it at dr. jackson, also, coming out of research university background, a key element that we need to focus on is the technology trf. if you have the academia and industry partner. if you could give us specific recommendations, and i open it up to any of the panelists, how we can to that better, how we can work on that partnership. >> thank you. i would say a couple of things, first, there are many mechanisms, this whole question about technology transfer, how ideas go from the university into the marketplace is a

complex one. it happens through multiple routes. there are university-industry partnerships, strail liaison programs. there are entrepreneurs who take the intellectual property and develop in the university -- they develop in the university out of the university. the university licenses out intellectual property. all of these things are pathways for that. i think there's a balance that one has to strike as a university president of the -- in terms of the focus on the basic research and fundamental learning that goes along with that and the exploitation of the intellectual property to move it into the marketplace. and we focus on both. we have a 1,250 acres technology park that's home to about 70

enterprises, primarily technology-based. we have what's called the emerging ventures ecosystem which specifically looks to look into the research, works with our faculty, finds where there is exploitable important intellectual property and then looks for the right translational pathways, whether that pathway has to do with licensing, with helping the faculty member launch a company, joint venturing, etc. we also operate as part of that an incubation program. in our case we went from having 1 fixed incubator to a virtual -- one fixed incubator to a virtual incubator. i spoke in my opening remark about shired infrastructure. a big problem for many startup companies, particularly in areas of new technology, has to do

with the so-called valley of death. they go from the sort of very initial startup phase and they may get angel investors for that, to be able to scale what they do to do pro toe typing and then ultimately get larger investment. so there has to be a way for that to happen. it's interesting that we in some ways do that through certain mechanisms like opec and the xm bank when -- and the exim bank when it comes to -- and the exim bank when it comes to doing thins outside the country. so these are some things i would say, the other is to do with patent policies. on the one hand, the new patent legislation is very helpful. it's very help to feel companies in particular. but it's caused universities to rethink, particularly the piece

having to do with first to file. on the other hand new york terms of the kind of domain within which to operate and how to ensure that, it has been helpful system of all of these kinds of mechanisms, i also believe that -- and chuck talked about making the r&d tax credit permanent. that has an effect that spurs, i think, companies to do more. but it also in an interesting way, because of that spur, can increase the interest of companies in working with universities in more basic areas. >> great, thank you. >> mr. chairman may i add to that? >> yes. >> very quickly, i learned four things about this in four years as president of m.i.t., two of them have been greatly

supplemented by what i've learned at the national academies. first of all, we need a simplified policy patent, i'm not talking about federal policy, but agreements between universities and companies at least for model scale projects. it should be a boilerplate, no negotiation kind of package an we're making some progress toward that. second what we most need with big companies, long-term strategic part for theships, sticking with it in ways that honestly the federal government can't do, there's a great example, mr. templeton's company, and a few faculty at m.i.t., it's been running for decades, not a a terribly high financial level but it's been productive. third, and not every university can do this, i would admit, but we need some large-scale partnerships, by which i mean

significant multimillion dollar partnerships between the university and the company because only then do you get real interaction with the thought leaders in the company. you can't do many of them but a few of them are important. fenally on the entrepreneurial side which is so much of what is so much of a part of m.i.t. or any of our great public or private universities, creating opportunities for young people to get coached, hands on coached, by real entrepreneurs and real v.c.'s is worth its weight in platinum. it's the real key to building up that ecostructure. thank you. >> thank you, dr. vest. thank you, trsm barrett. the gentleman from mississippi is recognized for question. >> thank you, mr. chairman. i thank the witnesses for being here today it's been really good

discussion. there's no doubt that foreign competitors pose a challenge to economic competitiveness. one of the reasons those in favor say aye doing so well is the self-inflicted wounds we have caused to ourselves such as having an antiquated tax code that real ycy -- really is pun ush, -- punishing our job creators in america as well as the job killing regular willer to reyeem that's pushing a lot of american jobs overseas and pushing a lot of businesses just out of business, killing small business as well. but one field of endeavor for american competition is still space. so my question is going to be, space -- my question is going to be space-specific. i'm pretty much a one-trick pony when it comes to this committee. america used to be in a space race with this soast union. today unfortunately america

purchased seets on the soyusz rocket at $8 million per astronaut to go to the space station we built on the now defuct space shuttle. how do you think this affect ours future? >> as many know, the space race was a very polarizing, very inspiring challenge back in the 1960's and provided tremendous investments that led to things like the semiconductor industry. and i suspect when the space race was under way, there was no one sitting around in federal labs or at an agency planning out semiconductor industry leadership 30 years from when they began that race. so you know, i am not qualified to comment about the specifics but i think wonderfully

challenging goals, ok, really help this country. realy bring energy and inspiration to invest and go try to do great things. and whether that is a space objective or things in the biomedical field that were talked about, i think those have great potential when we think about the challenge in front of us. >> dr. jackson? >> thank you. it tuns out that one of my predecessors as president of r.p.i. was georgelow who basically was the operations director who ran the apollo program that put man on the moon. as well, a numb of our graduates have been involved in more recent work in designing and launching the mars rovers. so it's a big part of our history and tradition. but what i would say is the following. there are a number of pieces, some having to do with basic

research, and i'll mention just a couple of things with that, some having to do with infrastructure questions. and then the third having to do with the overall industrial capability to do these things. on the basic research if you think about space missions, they depend on fundamental science and people want to explore space for that reason, but knowledge of it as well is important for particularly various kinds of missions including potential manned missions. it requires strength in material science and engineering. it rears strength in aerospace and thinking about new propulsion systems. you mentioned our having to use other people's rockets to get people to the international space station. we also use other people's rockets to launch our satellites. and so that's an infrastructural

question. there is an overall question about overall industrial and manufacturing capacity to continue to make and develop these sorts of technologies and i'm sure mr. templeton can speak more directly to that but these are areas that concern me as we go forward. >> before i go to dr. vest, i want to ask one more question, dr. jackson, does the space exploration, american space exploration still excite children to study science, math, engineering and technology? >> it sure does. we had a presentation at rensselear, at one of our alumni weekends, of the landing of the mars rover. that's pause our dean of science -- that's because our dean of science had two experiments on the rover and was there the day

the latest rover landed. we also had some of the engineers in who were involved with the design and development of the latest rover. and frankly, the space, we had a concert hall that holds about 1,200 people and half the people were young people and they were so excited. so absolutely. but i think it relates to mr. templeton's point, a big idea, something we galvanize around, rally around, is what captures people's imagination. >> thank you. i'm going to speak out of both sides of my mouth, first by saying, this generation has its own great challenges that it needs to be and is excited about, sustapeability and energy security and resilience, provision of health care. it's got big challenges of its own that are even more important than the space race was and we

need to give some focus to that. having said that, i'll admit i'm a space cadet. i grew up in the 19's and 1960's, lived through all this wonderful period. it is still when we survey incoming freshmen at m.i.t., space is still the largest single motivator among these kids, why they went into science and engineering. that's the reason we need to keep at it. but having said that, these programs are so big and so expensive that i think we need to find the right way to do them internationally. it -- at one level it hurts me but my logic, it doesn't bother me too much at least for a period of time we're launching humans with a russian rocket. we need this kind of synergy and integration. but i will tell you, nobody has done anything as exciting as this mars lander.

i mean, it was unbelievable. and very quickly, you may know the story of the guy who managed the actual engineering of that project and that landing was a dropout from high school who became a rock musician and eventually the sided he wasn't going to make it by that, and one night, literally, was driving home and looked up in the sky and siavii nuss. -- and saw venus. he started thinking about this. he got more and more excited. and he said, you know, this is my destiny, to get out there somewhere and i apologize for not having his name at my fingertips, he went back to community college, got a technology degree, started to work, eventually went to the university and became an engineer and ran that project. you know, that's the kind of excitement we need and we can kind of duplicate that with what

we do in education. but i was very disappointed by the short time scale of america's attention to that program because i can't imagine anything more exciting. >> i'm afraid to interpret you all. votes have been called and i'm going to try to squeeze in one more member to ask questions. let me explain the situation to everyone here. the series of votes means we will not be able to come back for about an hour. our democratic friends are getting on buses immediately after these votes to go to an out of town retreat. and i'm just wondering how many members really would come back in an hour and if they might consider submitting questions in writing, and if that's not acceptable we'll come back but if that is acceptable, i'll just apologize to you for not having time for members, does that sound all right? ok. thank you for your consideration.

the gentleman from california, mr. solwell is recognized. >> we talked a lot about startups today and i am a startup member of congress, having just arrived here. i came to congress wanting to support the innovation agenda and as a freshman and a new member in congress and a new member to this committee, i am encouraged that our first hearing is on research and development. i represent california's east bay where people understand that to do big things, you have to take big risks. and i'm excited to be on this committee because i truly do believe in science. i believe in what science can do and as our ranking member mention, the numb of innovations that are have come out of of the federal government's role in science is very important to me. i wanted to talk to you a little bit about ms. jackson and her

testimony about collaboration between government and business and also mr. templeton discussed good examples of public r&d partnerships in the semiconductor industry. in lirmore, california, we have what's called igate. innovation for green advanced transportation compleens. it's a regional public-private partner shep designed to maximize green transportation and energy technologies testimony ast partnership with the city and the surrounding communities, sandia and lawrence livermore national lab rah toirs and university of california the berkley and davis campuses. we're just starting to see the project get off the ground but one of the biggest challenges is access to capital, to have an incubator-typesetting where you can have small startups, medium-sized startups come in and do the work they need to do

to create local made in america jobs. so i have a couple of questions. is there still a real for the federal government to play? i believe you need a federal partner if you're ever going to activate a reeg region like that. two, what can we do to increase access to capital as a congress so that we can see those startups get going and create jobs? and three, how do we -- when we talk about the ecosystems of inknow veags, how do we also find those pipelines to the students where we have those businesses not just working on creating jobs but also transferring their knowledge to high school and college students who are going to be the next generation in those industries? so is there a role? how do we get access to capital? how to we educate our children? >> i'll try to be succinct. i would say absolutely there is a role. we talked about one element of

that role having to do with support for base exresearch. support for students. both at the undergraduate level and importantly where we have not talked about it, for graduate education. and its linkage to research. but importantly, you mentioned energy. green energy technology. energy tends to be a huge kind of -- there are any number of demonstration projects early in kinds of things people can do. but it's the kind of activity that requires a certain degree of activity at scale. ened so that kind of infrastructural support is very important. and the federal government can do any number of things, but one is simply to provide a safe harbor for corporate partners to come together. not unlike what you were talking about, to bring them together

with universities in precompetitive research including applied research areas. to help support shared infrastructure. that's where smaller companies that need to do pro to typing, some of the national labs are providing their major computational facilities to help companies with modeling and simulation, to be able to improve and begin to think about how to scale what they do. so it's kind of a daisy chain having -- going from the fundamental research to creating the kind of safe harbors and partnerships that can allow road maps to be developed and people to move on along the shared infrastructure as well. i'm sure i've left something out but these are some thins we try to do. we don't have the benefit of being in silicon valley. we're in upstate new york. so we don't have a big national lab. so the state has stepped in and done a lot of things and then the universities themselves have come together.

>> thank you. >> i yield back the balance of my time, if i have any. ? we have about four minutes left to go vote. thank you for yielding back. let me thank our witnesses today for their wonderfully inspiring testimony, it's been very helpful, very informative and i hope those watching this hearing either in person or on crmbing span recognize that we're talking about a wonderful future for them and their children and grandchildren if we make the kind of investments in research and technology that we should. it's going to pay a vast amount of rewards. it will improve productivity. it will improve people's scan starred -- standard of living. but thank you all for your participation today. >> thank you, mr. chairman and ranking member johnson. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013]

>> there is no prescription, role model, or cook book for being the first lady. if you look back at the lives of martha washington or abigail adams or dolly madison or eleanor roosevelt or mamie eisenhower, you can see that each woman has defined the role in a way that is true to herself. how she can help her husband for her family make a contribution to our nation. to our nation. >> the public and