you talk to you new commissioner this afternoon and discussed his investigation, it's not only to have him investigate what ms. lerner and herger per doing to the conservative folks in the tax- but also the request that was made by lots of folks with regards to liberal groups and not investigating those. i have sent you personally about 3000 documents in a request to investigate one and last week to ask for the investigation to take place, and that was three years ago, and was never given anything but a stonewall the last three years. i think this investigation should be broader instead of just looking at conservative groups but the lack of action investigating liberal groups. as the gentleman from new york said, the oversight that was supposed to be provided with in regards to those activities. one of the questions that came up in terms of civic designation -- i know the

definition is very concerning to them from the standpoint that a while ago you made the comment -- and i think it was in your testimony yesterday also with regards to size. thatlso made a comment perhaps the risk in the activities they take should be taken into consideration. do you have a preference, whenever you look at designation for banks, whether that should be size or whether it should be based on the risk of the activities? >> i think size is one of the characteristics that suggests risk but certainly not the only

one. you could have a large institution that is very well capitalized and entirely safe and you could have a medium- sized institution that plays a role in the financial marketplace that is far in excess of its size and creates more risk. i think it has to be a balanced approach. >> i appreciate that, because i think that is the direction we need to go. following up on the chairman's question, regarding the kinds of questions the irs should be able to ask the citizens with regards to compiling tax returns and investigating their activities. are you intending to go through the types of questions that are on some of these forms to try to winnow out some of these unnecessary and very actually obtrusive questions with regards to getting into the private lives of individuals? >> i think that in terms of the facts we have seen in regards to this set of determination on the 501(c)4's they clearly went to an unacceptable place and i make clear we need to fix it. it will be the job of the irs

commissioner to take the lead on that. something i will continue to pay attention to, being respectful of the line between treasury and irs and not reaching into the administration of the tax system, because i do think it would run the risk of politicizing things in the way it should not. >> will you take him this message this afternoon when you talk to him to say this was brought in our committee today, that the kinds of questions you ask are more than intrusive and there needs to be a streamlining of this process to get back to your finding out the facts -- >> correct, i will share the message, and my own view is we should only ask for the information that is necessary, and not more. >> thank you very much on that. following up on one thing of concern to me regarding fsoc. your organization has the responsibility to respond to emerging threats to the stability of the united states financial system. i fail to see in the report recommendations on things that happened to actually minimize

those threats or find a way in the future. the london whale, i fail to see where they promulgated new rules. the qe program, nothing that ever even mentions that. at what point are you going to support winding it down? are you going to continue to support the quantitative easing program? my concern is, in response to some of the questions, you said it needs time. mr. secretary, it is kind of like a doctor waiting for the cancer to take over the patient. if we don't start something pretty soon on some of these things, it's not going to happen at all. >> briefly, mr. secretary. >> i think if you look at the report and the recommendations, it identifies the areas that fsoc believes of greatest risk. it lays out in the next year things we should be looking at and it should be in evolving

list. take wholesale funding. that is a big risk. i think we do identify the big systemic risk. >> the chair recognizes the gentleman from minnesota, mr. ellison. >> thank you, mr. secretary, and the chair and ranking member. i just want to make a comment. first of all, whenever you are dealing with institutions that involve human beings, things go wrong. thishing went wrong with situation. as a person who is probably on the liberal end of the political spectrum, i don't like the idea that some tea party people got more scrutiny. i want it even. but i will say this, the president denounced this, you have publicly disapproved of it. there has been an apology issued, which is shocking, because you never see that. i think somebody ought to at

least say there has been an apology and the president has promised to make sure steps will be put in place to not have it happen again. i just want to say that because i think that the truth is, you can't take the politics out of politics. no doubt somebody will try to turn it into election gold, no doubt. but i think it should be our interest in this body to make sure that if you are a 401 c4 organization that you are in fact are a social welfare organization and if not you cannot get the exemption. there was more scrutiny on some of the tea party groups, but as i read the record in the press, they all got it. that does not excuse anything, but it does mean to me that there are groups of various persuasions that are applying for this kind of exemption that should not be getting it because they are not actually social welfare groups and are

political in nature. i am hoping that you ensure that is not a political test, but anybody actually trying to electioneer should not get this as a nation. just want to say that. >> congressman, i totally agree there should be no bias, there should be an even standard. i am not aware of any bias in favor of groups on the other side. if it were the case, it would be wrong. there has to be an evenhanded unbiased system of administrating our tax code. >> i just want to say that you all have said you are going to do something and i trust that you will. please, keep it up. i have a question of kind of a particular nature. president obama's last three budget submissions, the treasury department requested congress to enact legislation to provide permission for state and federal regulators of money service businesses to share

information. are you aware that has happened? >> i am generally familiar. >> i ask unanimous consent to enter into the record the financial crimes budget request for fy 2013-2014 -- with no objection. last month, mr. duffy and i from wisconsin, mr. paulson, my good friend from minnesota is no longer in the committee, i introduced the money remittances improvement act. it incorporates the request for the president's budget. i am eager to see the bill passed. my hope is it increases availability of affordable remittances to people in somalia, because i have a large community from that region. in minnesota, we have about 33,000 somali americans and they need to send money home.

of course, we want you to protect the public from people who inappropriately use the money wiring system. but i believe there is no better foreign aid than remittances, and i hope the treasury recommendation can recommend the bill and help streamline the regulatory system. i just want to add this. some bankers in my district have told me that the accumulation of regulation makes it expensive for them to facilitate these transactions, that they do want to facilitate. u.s. bankers have agreed to try to make a way to do it. at the end of the day, streamlining and consolidating some of the auditing would be helpful. >> without objection, the gentleman's materials will be entered into the record. >> we would very much hope some form of the provisions we proposed, similar to the proposals you have made, are included in the legislation. adding the balance right is very important. making sure we screen out payments for bad purposes, for terror finance, is critical.

but having a system in place that remits legitimate remittances, either state or federal law that ensures that, would be very important. >> the chair recognizes the gentleman from wisconsin, mr. duffy. >> thank you, mr. chairman. mr. secretary, thank you for being here today. when did you become aware that allegations the irs was targeting conservative groups, when did you become aware that targeting was going on? >> congressman, i testified several times a day yesterday on this and i am happy to do it again. i learned of the fact of an investigation was underway march 15 but i did not know any of the details. >> i want you to try my question -- you are aware there is a scandal going on right now in washington about the irs

targeting americans. you are aware of the scandal? >> i have been testifying on it for two days. >> regarding the scandal, when did you become aware that the targeting of groups was going on? >> i just answered your question. >> you did not. >> i first saw the report a week ago. >> i am not talking about a report. when did you become aware, in your capacity as the chief or any other capacity, that there was targeting going on of americans? not asking about a report. not asking about the ig. when did you become aware there was targeting of americans from the irs? >> congressman, i had no facts that i was in possession of -- >> i did not ask you that. when did you become aware of the irs was targeting americans? >> i was notified that there was an investigation underway. >> mr. lew, i am not asking you about an investigation. i don't care. i know you found out about the

i.g. investigation on march 15. everyone knows that. that is not my question to you. my question is, when did you learn that the irs was targeting different americans because of political views? >> congressman, i had no knowledge until the date i was describing. people can make new all the allegations, but i had knowledge only -- >> the first time you knew about the targeting of americans from the irs is when you read the i.g. report. that your testimony? >> you asked me when i knew, and i answered when i knew. >> you did not answer the question. i am asking a specific question that you and our president has dodged. the president's testimony, he received the same question and what he said, let me answer specifically. i learned about the i.g. report

on this date. i am not asking you or the president when you heard about the i.g. report, but i want to know when you learned the irs was targeting americans? when? >> i am telling you when the facts were available to me. >> outside the i.g. report, that was the first time i am asking you when did you learn that the irs was targeting americans? when did you learn it? not asking you a specific fact, not about the i.g. -- when did you know the targeting was going on? >> you are not going to like my answer, because i learned about it when i learned about it. >> i did not know about the investigation -- >> i am not asking about the investigation. >> belongs to the gentleman from wisconsin -- >> i would ask the witness not be badgered. >> i would ask the witness answer the question. >> i am answering the question.

>> you are dodging me. the bottom line is, you knew before the i.g. report came out that the irs was targeting americans. that is why you are answering the question the way you are and that is why the president -- >> mr. chairman, regular order. >> the time belongs to the gentleman from wisconsin. >> let's try it again. when did you learn that the irs was targeting americans? >> congressman, i said so many times that it is unacceptable behavior and i learned march 15 that there was an investigation without facts and i heard the facts friday. >> i reclaim my time. it is evident you knew before march 15 because you keep answering my questions -- you do not want to lie to congress -- that you knew about an investigation.

>> i did not have any facts until the date -- >> i am not asking you about facts. when did you learn, mr. lew, that the irs was targeting americans? give me a date? >> i learned about this in the dates i told you about. >> that americans were being targeted or the i.g. report? >> i am not aware of any of these facts until the date i told you about. >> the time of the gentleman has expired. the gentleman from california. deepcretary, take a breath, you have earned it. >> i want to focus on a different tax scandal, our failure to collect taxes from a multinational corporations. apple computers, just the apple on top of the iceberg. it appears as if they have less than four percent of their

assets, less than four percent of their sales and less than four percent of their payroll in the republic of ireland but have 65% of their profits attributed to the emerald island. that is damn effective tax accounting. one view put forward by the chamber of congress is we are just never going to be able to tax multinational corporations, u.s. corporations that earn money abroad are just never going to be paying taxes in the united states. and we should not even try, just let them repatriate the profits, because we do want the profits repatriated. the other approach -- and i do not know if you are familiar, the approach california took for many decades, the worldwide unitary approach. i wonder if i can count on you

and your staff to take a look at that. you can be hated by the chamber of commerce, but you may achieve that on your own. and others. but it is actually a system that they cannot evade and will allow us to collect taxes on the appropriate percentage of worldwide income of all the multinational corporations that do business in the united states. >> congressman, if i could comment briefly. when we laid out principles of tax reform last year, we tried to address this issue in terms of approach. we see business tax reform as being very important to lower statutory rates and make the united states a more

competitive place to have businesses call home. but it is also a way of addressing this issue. what we would do is we would put a minimum tax in place -- somewhat of a hybrid system, you pay a minimum tax, then you can repatriate it with no tax above that, if you pay the minimum tax on your foreign earnings in the first instance. there are some other ideas. we have something of a hybrid system now and this would make it a little bit more closer to what you describe. >> the worldwide unitary system is completely different, i think, than what you are describing. it is a system that california ultimately made optional because we faced such incredible pressure from the worldwide business community. but the federal government is a little more influential in world business decisions, and this would eliminate the 482 audits and shenanigans and substantially increase -- i think the best estimate is $1.2

trillion the next several years. i know you spent last year trying to produce 1.2 trillion dollars from many sources over a 10 year period. as to the other tax issue that is being discussed here -- i always wanted to be on ways and means and attend a hearing on on tax issues. 501(c)4 can spend unlimited amounts of secret money influencing federal elections but they are subject to certain limitations. and i hope that we will and force those limitations as the law requires no matter how politically difficult. at the same time, we've got to do it, obviously, impartially. now, when a ship sinks out of negligence, you might be inclined to fire the admiral of the fleet, but the captain of the ship and even the officer of the deck should have effect on their careers. do you need additional narrowly crafted legislative tools so that those who are not presidential appointees of the irs, which is everybody but two, can face appropriate

personnel action for the mistakes made in this case? >> congressman, obviously the rules that governed the treatment of federal employees are the same for most agencies of government. it is a broader question than just -- >> let me just change -- only in the irs that you have a circumstance that many top managers are civil service. the question is -- >> one of the things i asked the new acting commissioner to do is to look at questions, structural organizational issues, to see what changes we need. i do not want to jump to a conclusion not having had the view but i am happy to look at that. >> the chair recognizes the gentleman from north carolina, mr. mchenry. >> thank you, secretary lew, for your service to the government.

back to the irs question, a few more questions. when you are white house chief of staff, i assume you are just as then as you are today. is that fair? returning to the scandal within the irs, the irs targeting conservative groups. >> i was not aware of the issue -- of this investigation or of the facts we have come to know. it was not on my radar at the time. >> you are not aware of the i.g. audit at the time. >> i learned about the audit march 2013. >> were you aware of an internal investigation of the irs prior to that? >> no, i was not. >> you as chief of staff, did you hear news reports about the irs targeting conservative groups? >> i was not aware of any facts at the time -- >> i am asking a separate question than you are answering. i have heard the answers given prior to that. i do not want to talk over you.

what i do want to restate the question. at the time you were chief of staff, did you read or hear of the allegation that the irs was targeting conservative groups? >> i do not recall paying attention to this issue -- >> no, no, i understand. paying attention is one thing. >> i do not recall any articles that i read on the subject. >> ok. ok. you don't recall anything. therefore, you could not have pursued any allegations. >> if i did not recall having done it -- obviously one has to have -- >> i am asking a question -- >> if i were aware of there being something being investigated in this way at the agency, i would have stayed out of it as chief of staff.

>> just to be clear, you would not have picked up the phone and called chicago and say, by the way, just to put it out there, we are in a presidential election here, we have a scandal at the irs -- hold on, let me finish -- you would have picked up the phone and say, this might be a political issue that the president might have the answer, and i don't know, a presidential campaign. this is something fairly common to where the chief of staff communicates with the campaign, i assume. to ask this question is not absurd, sir. >> if i was not aware of it and had no conversations at the time, you are creating a narrative that does not exist. other you did that on issues as a good chief of staff. this is not new. >> you deal with many, many topics with many, many people, but you are asking me about a specific subject. >> if i could just say -- >> you created a narrative -- >> my time is limited, sir --

>> you should give me at least 30 seconds to respond. >> sir, you have not actually responded to any of these questions in a meaningful way so 30 seconds will not actually apparently mean anything because you are reciting the same lines over and over again. while you were chief of staff, did anyone at the white house or in executive office of the president suggest the irs or treasury, that irs should focus additional scrutiny to conservative groups? >> not that i am aware of. >> ok. we are just asking to understand how things pan. while you were chief of staff, did the white house or executive office meet with or communicate with members of congress regarding these letters that members of congress sent on the left is a target conservative groups on the right, raising concerns about the targeting of conservative groups? >> not that i am aware of. >> not that you are aware of. to remind you, sir, in march of

2012, the associated press and "the new york times" ran stories about this allegation. you were then chief of staff at the white house. is it your testimony here today that you were never aware of those allegations raised in those two news organizations? >> i already testified, i have no recollection of it. >> when commissioner shulman of the irs testified before congress in march of 2012 and these questions were posed to him he said "there's been a lot of press about that." your testimony today at white house chief of staff is you did not know. is it malice or incompetence? >> if you just give me the 30 seconds i think i deserve to respond. >> it would be inappropriate -- i asked unanimous consent the gentleman have 30 seconds.

>> the time of the gentleman has expired and the chair will take the liberty of without objection offering the witness 30 seconds. >> thank you, mr. chairman. >> gentleman has objected. the chair recognizes the gentleman from massachusetts, mr. lynch. >> mr. secretary, first of all, thank you for your willingness to -- why not i yield you 30 seconds and you can finish? >> i think the fundamental issue here is, there is a separation in the administration of our tax system so it is supposed to be insulated from political involvement. it would be inappropriate as white house chief of staff and secretary of treasury to try to put any little pressure on our tax system. i never did, i never would. that is why i did not pay an awful lot of attention over

questions about the taxes because it is not something i would have intervened in. there is intentionally a separation so the tax system will not be biased. i think what the president has made clear and i made clear is this behavior is unacceptable, we have to find out the facts, we have to take action and we have to make sure it never happens again. but, please, let's not get into a world where we start having the white house jump into the administration of our tax system, because that would be a cure well worse than the disease. >> thank you. theairness, i just think circumstances here have sort of politicized it anyway. when the irs conceded the fact that they did use political terms such as tea party and patriot and any group critical of how the government is being run. those were the standards they were using. i guess the circumstances invites this type of accusation.

i would like to ask you more about what we have been doing in this committee. two weeks ago, this committee passed a set of bills amending title vii of dodd-frank. i believe those provisions undermine the reforms to the over-the-counter derivatives market we achieved in dodd- frank. a gao report estimated the cost of a financial crisis was about $22 trillion and the opaque and largely unregulated derivatives market was at the heart of the crisis. now not even five years after those dark days we are in this committee, i believe, planting the seeds for the next crisis. and before any of the regulations mandated under dodd-frank to reform the

derivatives markets have been finalized this committee has passed what are being alled technical fix bills to prevent the reforms from ever happening. i read last week that the former chairman sheila bair talked about the original push- out provision of section 716, and mr. secretary, i know you sent a letter prior to the committee's markup urging us not to advance the legislation, calling it premature, disruptive, and harmful to the implementation of key derivatives reform. can you explain why these bills, in your opinion, are disruptive to our economy and meaningful wall street reforms? >> i think it is very important for regulators who have been given authority to implement

these provisions and for that process to be completed. some of the concerns that are raised are actually going to be addressed to him as i understand, as roles are forthcoming. the first two years of dodd- frank's history, the fight was should it be repealed or implemented. it slowed down the implementation process and then at the end of two years there were concerns that there was uncertainty because the roles were not yet in place. our first responsibility now is to make sure we get all the rules in place, get the certainty and we are now at the point where the financial industry that actually like us to complete the legislation. we just need to finish the work. i am committed regarding the entire implementation of dodd- frank, really keeping the pressure on all of the different parties as chairman of fsoc to keep making progress. isannot say exactly when

completed but well underway and we will make progress this year. >> i see my time is just about expired. i yield back. >> the time of the gentleman was about to expire. the chair now yields to the gentleman from michigan, mr. huizinga. >> i appreciate, mr. chairman, and you being here. maybe we can use a slightly different section of the briefing book and hit a few other issues. i was hearing your answer to my colleagues about implementation and the uncertainty being out there. i got to tell you, i don't buy it. it is pretty clear that this administration would veto any attempt that -- as much as i would desire eliminating dodd- frank and starting over and

fixing it in a different way, it seems to me this administration would be pretty clear on a veto message on that. how in the world that would stop you all from implementing the rules? i would say it is probably because this monster is so massive and has so many problems with it that you realize you cannot go in and implement it the way it is currently written and frankly two weeks ago we had nine bills that moved through, and all but one were on a bipartisan fashion fixing derivatives. last year i had a bill signed into law by the president that was fixing an issue with the cfpb and privacy. we had a hearing on conflict minerals and some of the issues that are there. these are bipartisan fix is trying to address this problem. and i will note that you sent a letter opposing all nine of those bills that were passed. again, eight of those nine were

passed in a bipartisan fashion. how you could blame congress or one side of the aisle or the other for a lack of progress seems to be a stretch to me. you had mentioned on libor, and your quote -- i wrote it down -- you said a tremendous violation of trust. i think you are sensing a lot of frustration, not just here but the general public, there is a feeling and frustration that there is not trust and that things have been politicized in the budget process and the regulatory system. i've got a specific one that just came to light to me that i thought was interesting. omb --i know it is not under your current bailiwick, but give me insight, if you could. omb has decided fasb, sipc, all the regulatory advisors and those kinds of things, they are subject to sequester.

under section 109 of sarbanes- oxley, it distinctly says these are not federal dollars. these are user fees that are coming in and fees paid into these organizations, and the frustration is it seems as if any time this administration has come to a fork in the road and the one direction is making some very tough difficult decisions -- i understand it. we are having to do it in our own personal offices, personal lives. every business in america i am aware of is having to make the tough difficult decisions, making it work -- or politicizing it and trying to make it painful. it seems like the administration has gone but the painful route. setting down the white house for spring break, faa, whatever it might be. just to give you a little sense, that is the sense of frustration. i know it is sort of an archaic element and you may not be

specifically aware of it, but why the omb would come in and tell these organizations they are somehow subject to sequester is baffling. >> i can't address the specific facts around those decisions, but i do know omb has been calling the issues on a straight basis. you either do or don't get covered. the real problem is the sequestration was designed to be a bad policy to force congress to act. so, no one should be surprised -- >> but the obama white house -- point out some of your colleagues section 109 of sarbanes-oxley. page 13 of your report -- housing. my background is real estate, construction. i, too, am baffled as to what hud and fha continues to work congress and other stakeholders. there has been radio silence, other than the white papers,

from this administration of what we are going to do and what direction we will go with our gse's. that, in my mind, needs to change. take 15 seconds if you want to address that and what we are going to do. >> i do not know if i can do it in nine seconds. it is an important subject. >> how can you claim you have been working with us, when you have not been? saved by the bell. ok. >> the chair is also curious. the time of the gentleman has expired. i wish to alert all members that in agreement with the secretary's schedule, i believe we will be able to clear four more members and then we will excuse the secretary. the gentleman from colorado is recognized. >> thank you, mr. chair. thank you, mr. lew. you stayed cooler under fire than i was a moment ago. i want to thank my friend, mr. lynch, for granting you the 30 seconds to explain your position, because i would have

given you the 30 seconds. i think this committee is better than the badgering i have seen you undertake or you have had to face today. so, let's just talk, since we talked so much about 501(c), i think we ought to read what 501(c) 4 says. an organization described in section c or d shall be exempt from taxation under this subtitle -- such exemption is denied under section 502 or 503 4. -- civic leagues organizations not organized for profit but operated exclusively for the promotion of social welfare. local associations, employees, membership of which is limited to the employees of a designated person or persons in a particular minister pahlavi. net earnings of which devoted exclusively to charitable

educational or recreational purposes. so, the irs has an obligation to look at exemptions that people request. most people are paying their taxes. most americans are out there paying their taxes, but there are certain people who seek exemptions under 501(c) 4, but they have to be scrutinized. they have to be scrutinized impartially, but they have to be scrutinized. there was an article this weekend on the "denver post" saying the colorado conservative group related to be targeted is operating without any tax-exempt status and spent more than $1 million last year against the democrats, public records show. i was one of those democrats. that was the recipient of some of the ads apparently of this organization. in a editorial by "the post"

this weekend by curtis hubbard, i want to read one section. so-called 501(c) four social welfare groups have increasingly been -- been putting money into political campaigns. spending increased from about 40 million in 2004 to upwards of $150 million in 2008, according to the central -- responsive politics. but the real boon came after the supreme court's citizen united ruling in 20 10, as the group's campaign spending soared beyond the 300 million in 2012. much more is believed to have been spent of the groups are only required to restore it on spending in the 60 days leading up to the general election in 30 prior to a primary. many 501(c)4 nonprofit social welfare organizations are simply friends for political operations that provide anonymity to donors and with anonymity comes a lack of accountability.

so, the irs, in my opinion, whether an exemption for this or some other kind of exemption, has the responsibility on behalf of the taxpayers to look at these things. do it impartially, obviously. that has been much of what the conversation has been about. but this typically here, when it talks about civic leagues or organizations operated exclusively for the promotion of social welfare. not for political purposes. so, despite all of this tempest we are in right now, sir, i would ask the irs continue in an impartial way to look at these particular exemptions. so, that is just my point on that. i think one of the reasons we are so off on this subject is because since barack obama took office the stock market has doubled them a unemployment has dropped, inflation is low, real estate is selling, so let's not talk about those things, let's talk about this, this potentially to people in

cincinnati in the let's devote all of the time to that. one of the things that came up last week that particularly disturbs me is a bill the republicans are pushing which prioritizes the country's debts. the country has, since its inception, paid everything equally. now we want to start prioritizing, which means we are not going to pay somebody. i hope, mr. secretary, under your watch, we pay everybody. i would like you to comment on that bill. >> i could not agree more, there is no distinction between the faulting on one or another obligation. if you are in default, you are in default and prioritization does not solve the problem. you need to extend the debt limit. >> thank you. >> the time of the gentleman has expired and the chair recognizes the gentleman from new york. >> thank you, chairman, mr.

secretary, for being here today. i know it is contentious and not an easy day for you. but i am going to start with going back to it and let the area and then will move onto other substantive issues. what -- when is the last time you spoke to the four individuals testifying in the other committees today -- russell george, wolin and shulman? >> i have never spoken with lois lerner, i met with russell george several weeks ago and i -- my deputy, i see him every day. i have not seen doug shulman since sometime before he left the irs. >> the few conversations, was anything about the testimony or the situation, the scandal? >> i -- i have testified already that russell george informed me there was an audit underway, so i spoke with him about it then as he reviewed a number of pending -- pending

matters. he did give me a heads up it could be troubling but i did not know in what way. i have not spoken with him. he may have been in a staff meeting after that, but i have not spoken with him since. >> you clearly testified you did not want to get involved in an investigation, and i think that was the proper and prudent policy to have. stating that, there were people in the white house that knew there was an investigation, knew there was a problem. there were people in treasury that new prior to you and the president finding out. in retrospect -- again, not saying you had to take action -- but do you think you should have been notified that there was a problem? >> congressmen, i really believe that on a matter like this, the general practice is the right one, which is the secretary is not brought into

the conversation on an ig report until there is a final report. reports go through changes -- >> if i may, mr. secretary. but prior to the ig report, wasn't there an internal investigation at the irs? >> i -- obviously while i have been a treasury there has not been anything -- >> i am asking in general, now that you are secretary, what is your policy going to be? you have a new commissioner that you spoke about. >> i will be meeting with the new commissioner this afternoon. >> will you be telling the new commissioner that if something like this arises, you want to be notified? >> just to be clear. as a general matter, the secretary needs visibility of the general management of the irs but the treasury secretary for all kinds of appropriate reasons does not intervene in the administration of the tax system. there is a fine line.

it very important to honor the line. >> but i am specifically asking you that if there is a problem, something that arises -- this is probably one of the biggest scandals in the history of the irs -- are you going to advise your commissioner that it is your policy that if there is a major problem going on, you want to be advised? does not mean you take action because maybe for political reasons you would say, just as the attorney general did with mr. corzine, he recused himself, but he knew what was going on. >> if i or the president had known some of the facts earlier, you would be asking what did we do? it is a fine line to preserve information and -- >> i agree. >> i think we will have to work our way through, and an agency like the irs that has a delicate balance being part of treasury and -- >> i am just asking you. i am not saying whether it is good or bad. i am just asking what your

policy is going to be now that you have a new commissioner. in light of what happened, what would your policy would be? >> to hold the irs accountable and make sure the irs holds people accountable for their behavior and to make sure we find out what happened here in terms of the breakdown in management and communication of the irs, and to look to see whether there are systemic problems. i will work with the new commissioner to make sure i have visibility into that which is appropriate, but i will stop short of intervening in the administration of the tax system. >> i want to move on, but again, intervention is different than knowledge. i asked that three or four times. you just will not answer the question. that is fine. we will move on. i am hearing about the treasury is thinking about floating variable rate notes. i have a big problem with that. is that true, first of all, the treasury is considering floating variable-rate notes? >> i just wanted to double check.

there is a proposal that is out from several weeks ago. >> my time is expired. >> the chair recognizes the gentleman from delaware, mr. carney. >> thank you, mr. chairman. thank you for having the hearing and thank you, mr. secretary, for coming in and for your answers to the questions. i am going to try to focus -- first, a comment about what you said. as a former secretary of finance at the state level whose responsibilities or included tax administration, i certainly appreciate your hands off approach to that administration of taxes and understand why it is necessary for the political appointee in a place like treasury or where i served. i would like to ask a few questions about your role as chair of the fsoc. the first one is, we hear a lot -- we hear it in the committee and from folks on the other side of the aisle and from people who come in, that too big to fail still exists.

what would you tell folks who say that? >> congressman, i think the challenge we have is to be able to get to the end of the implementation of dodd-frank and then answer the question by saying too big to fail is over. that is what the policy of dodd-frank, our policy in implementing dodd-frank. we are not yet at the finish line. youe is a challenge -- if take a snapshot today and look ahead. if you look at the debate that has taken place over the last number of months, there are different approaches to what additional actions are needed. there is authority in dodd-frank to turn a number of dials to different levels in terms of capital requirements, leverage requirements, and until that process is complete it will be a little challenging to answer it in the present tense. i certainly hope and intend the answer to be that too big to fail is over. >> our former chair and ranking member, mr. frank, would argue that orderly liquidation authority effectively ends too

big to fail -- >> it makes it so we do not have the authority to do it. >> right. second question, you have been asked a little bit about housing finance reform, and your report talks about allowing the gse's to wind down and try to get more private capital into the mortgage market. we had a few weeks ago had a presentation here in committee by a guy by the name of jim milstein whose work with on the details. there was a paper reported to the committee about a year or two ago that described at a very high level three options. mr. jim milstein put the meat on the bones of what was option number three, a hybrid where there would be more limited federal law, specific guaranty reinsurance actually like the fdic. have you seen that proposal? if you have, what did you think about it? myi have seen it and asked staff to do an analysis of it.

we are in an ongoing process working through what the next steps should be, and we welcome the contributions. >> i would love to see your staff analysis of the concerns and issues raised. it is very intriguing to me. i met with mr. milstein and his staff, he was here in front of the committee, and it seems to work out. basically option three, included in the treasury white paper a couple of years ago. >> the challenge as we go forward will be to strike the balance so we maintain access to mortgages, 30 year mortgages, and avoid having -- back in the place where they fell back on an implied guarantee created the financial crisis. >> that was exactly his advice, to be careful about the transition to where we are today. more than 90% of mortgages being federally insured, which is a really had situation. >> indirectly --

>> lastly. letterngress, i sent a signed by other members encouraging treasury to be a little bit more aggressive with foreclosure prevention programs that you have. the one most affected in our state, the state of delaware, is hamp. our local officials at the state housing authority have used it, and it has been very effective in helping people keep people in their homes. i would encourage you to do that. i would ask -- to resend the letter -- or talk to your staff on your approach to foreclosure prevention. >> congressman, i think we have made progress but we still have a lot more to do. i think both hamp and harp have done a lot of good directly but also indirectly created a set of practices that the private sector has stepped into. we have seen millions of

homeowners be able to refinance or restructure. we have more work to do. we've got to take advantage of this time a when interest rates are low to make as much progress as we can for middle-class homeowners. >> thank you very much. look forward to hearing more about it. >> the last member to be recognized will be the gentleman from indiana, recognized for five minutes. >> thank you, mr. chairman, and thank you, mr. lew for being here today. this audit started a multiyear ago. you were chief of staff at the time. usope that you will give confidence as we move through this and as more details come out that as the leadership of the white house -- that if this is one of the biggest scandals that this administration or the irs is dealing with, that you

should have known about it. leadership expects to know what about these things, and if you say that you only knew of the facts on march 15, i hope that you are asking the people below you why did and i know about this? because i read in a report that you said you were outraged when you heard of the fax. if this is the biggest scandal this administration is facing, you should be outraged, and i would hope that somebody below you is going to face the consequences because leadership really should step up and find out why i didn't know. now, i would like to talk a little bit about what we see on the wall here on the debt clock. mr. secretary, march 13, the president said we don't have an immediate crisis in terms of debt. in fact, for the next 10 years it will be in a sustainable place. under president obama's budget proposal, can you tell me how long it will be until the budget balances?

>> congressman, i think, as you know, the budget does not balance in the 10 year window and it is not what he went -- meant by sustainable place. it would bring the deficit as percentage of gdp and debt as a percentage of gdp act in a sustainable range. if anything, we are overachieving on deficit reduction right now given where we are in terms of the current year and immediate economic needs. so, the goal should not be to balance the budget right now. the goal should be on a path where we have sustainable -- >> what year should be our goal? >> i don't think the year is most significant. ishink the path we are on most significant. >> for my 11 and seven-year- old, when can they expect the federal government to balance the budget? >> i think the test is are we building an economy for the future, are we running our fiscal policy so that we have a deficit and a debt that is sustainable and are we addressing it in a fair and balanced way.

the president has put together a budget proposal to do that -- >> are you suggesting we raise taxes to balance the budget? >> a fair mix of spending reductions and loophole closings that would give us the ability in a fair and balanced way be on a long-term path to fiscal sustainability. >> we have already raised taxes that i want to talk about what really i think is holding up the economy, and that is the health care law. as i talk to folks around northeast indiana, they consistently say i don't have any certainty. i don't know what is going on. it plays right back into irs issue because of the irs -- it is going to be one of the main agencies of administering the healthcare law. is that correct? >> it is one of many but hhs will be the main. >> by the irs will be involved. do you think the confidence in the irs -- as they administer and start to roll out the healthcare law, will it be

increased at all or more skepticism? >> i have said over and over again that it is a top priority to restore confidence in the irs -- >> do you know sarah hall ingram? >> i do not know her. >> she was head of the tax exempt office during where we understand the targeting of americans and now she will be the head of the rolling out of the healthcare law. should you know her? >> typically i deal with treasury staff who deal with others with the irs and policy matters. but if i can correct the fact that just described, my understanding -- and facts matter and we have to make sure they are correct -- her responsibilities at the time when awareness of this became known was working on the affordable care act. >> so you know of her then. >> i know of her.

>> do you think it would be appropriate for her to remain in the position as now head of the rollout of the healthcare? >> if the facts are she was not in the position -- taking day- to-day responsibility of this at the time in question, then the question is, is she doing her job on the affordable care act effectively. the new acting commissioner i am sure will look at that. >> i can tell you, the american people are not trusting of this administration right now. >> the time of the gentleman has expired. i would like to thank the secretary for appearing today. thank him for his testimony. without objection, all members will have five legislative days in which to submit additional written questions to the chair, which will be forwarded to the witness. toould ask our witness please respond as promptly as you are able. without objection, all members will have five legislative days within which to submit extraneous materials to the chair for inclusion in the record.

before adjourning pursuing to the committee's organizing resolution -- mr. ross is hereby transferred from the subcommittee on oversight and investigations to the subcommittee on housing and insurance, and in pursuant to the organizing resolution mr. rothfus appointed to serve on the subcommittee of oversight and investigations and subcommittee on financial institutions and consumer credit. this hearing stand adjourned. [captions copyright national cable satellite corp. 2013] [captioning performed by national captioning institute] >> the most fundamental difference between left and right is both look at the economic ladder. those on the left seat to reach down and physically take people and move them up the economic ladder. that is almost always driven by noble intentions and yet it never ever works of. the only way anyone has ever climbed the economic ladder is to pull himself or herself up one run at a time.

>> many -- nearly all of you will experience failure, some of the crushing failure that you will recover and learn from you have to be all the better because once you have had a failure that is your only good option, to take something from it. neverew of you will recover from your failures and statistically speaking between two and five of you will spend some part of your life in prison. isevery spring c-span this college and university campuses across the country. you will hear stories and advice from a new graduating class. tonight at 8:00 eastern with senators al franken and ted cruz, congressmen james cliburn -- off on friday, congressmen nancy pelosi, paul ryan, and peter king.

>> another class of 2013 graduation today at the naval academy . we'll show you their remark but we want to show you a brief portion of the speech today. he addresses sexual assaults in the military. >> our military remains the most trusted institution in america. when others have shurked their responsibilities our armed forces have met every mission we've given them. when others are distracted by petty arguments our men and women come together as one team. we must acknowledge, even here, even in the military, we see how the misconduct of some have ripple effects far and wide.

in our digital age, a single imagine from the battlefield of troops falling short of their mission can go viral and secure e our efforts to peace. those who commit sexual assault, they are not only committing a crime but they threaten what make ours military strong. they have no place in the greatest military on earth. so class of 2013, i say this because you're about to assume the burden of leadership. as officers, you will be trusted with the most awesome of responsibilities, the lives of the men and women under your command. when your service is complete, many of you will help lead your

communities, american companies, you will lead this country. if we want to restore the trust that the american people deserve to have in their institution, all of us have to do our part. those of us in leadership, myself included, have to strive to remain worth offthe public trust. as you go forward in your careers we need you to carry forth the values you have learned at this institution because our nation needs them now more than ever. we need your honor that inner compass that guides you not when the path is easy and observe but when it is uncertain. it tell you the difference between that is right and that which is wrong. perhaps, it is the moment when you think nobody is watching. never forget honor, like character is what you do when nobody is watching. more likely it will be when

you're in the spotlight leading other, the men and women who are looking up to you to set an example. never ask them to do what you don't ask of yourself. live with integrity and speak with honesty and take responsibility and demand accountability. you can see the president's naval academy speech at c-span.org and we'll show it to you tonight here on c-span. >> what happened in the senate for three conservative years, we years and consecutive we did not consider a budget resolution. there were years when budget resolution did not pass but three consecutive years, this is the fourth they finally passed one in the senate.

this was supposed to be done by april 15, so congress is required to pass a budget and complete that process by april 15 and here we are. it is no wonder that everything has gotten so distorted and out of whack because of the sequestration and the automatic cuts. we get major debt piling on us. we get $16.8 trillion national debt. we're in uncharted territory without question. >> olivia snow about fixing the congressional grid on sunday night at 9:00. book ekend on c-span2's tv. stewart entive chris ys that it needs to be

upgraded. despite substantial improvements through the years more can be done to warn people of potentially deadly storms. they testified at the hearing about the tornados in oklahoma that left 24 people dead. representive stewart chairs the hour long hearing. >> the sub smee will come to order. welcome to this hearing entilettled restoring the leadership in weather forecasting. in the written testimony you will see the testimony for the witness panels. let me say that diverting from prepared comments for a little bit that our thoughts and

prayers are with the people of oklahoma. i think this tragedy highlights the importance of real-time forecasting. i would like to thank our witness panelists for traveling here today. while this was scheduled several weeks ago the tragedy in oklahoma once again, underscores the importance of this issue and should encourage us to tackle these questions today. it is unfortunate that the noaa is unable to testify in person, however, the ranking member and i have have discussed we will be asking acting administrator to submit answers. we need a world-class system of weather prediction in the united states. one as the national academy of science has put it that is

second to none. we thank the employees of noaa and their partners thought the weather enterprise for the great strides that have been made in forecasting in the recent decades. the reality is we can do better. it is not enough to blame failures on programming or lack of resources as moore, oklahoma demonstrated, we have to do better. the good news is we can. superstorm sandy made clear of what many knew for years our model for years has fallen behind europe in predicting weather in the united states. the weather improvement act that we're be discussing today will restore the u.s. to the leader in the field and data assimilation techniques. the people of moore, oklahoma

received a tornado warning 16 minutes before the twister struck their town. tornado forecasting is difficult. the lead times for storms has become gradually better. it will prioritize investments like real estate dart, technology being developmented in the noaa in oklahoma which has "the potential to provide revolutionary improvements in lead time and acura i can, reducing false alarms." it can move us toward the goal of warding off the forecast. this bill established a priority mission for all of noaa to improve the forecast and protect life and property. every year it can have an impact on the large portion of the economy with hundreds of billions of dollars in consequences. the weather foreexafting improvement act is based --

forecasting improvement act is based on recommendation here in congress. it could encourage noaa to conduct cost benefit assessments to ensure we're getting the most bang for our buck. the director of the national weather center at the university of oklahoma explained noaa needs to do a better job of conducting assessments on cost and value. this draft will remove barriers including upstream data options and forecasting capabilities from a private sector. as david crane, president and c.e.o. of a company looking to develop satellites, a commercial approach can provide the data needed for years earlier with

minimal cost and risk. we can em fies weather research to protect life and property. 1/3 2, noaa barely spent of the budget on research as it did on climate research. as noaa's advisory board stated last month, noaa will fail in this mission. unfortunately, noaa is unable to testify in person this morning but we'll provide -- they will be providing the sub committee on comments on forecasting improvements and we look forward to their feedback and their future testimony on this and other topics. i look forward to discussing the critical issue with our witnesses today and learning how we can restore u.s. leadership ing. ather forecast

with that, i yield my time and recognize the ranking member for an opening statement. >> thank you very much. welcome to our witnesses. i want to thank you for appearing here today to provide your insights regarding weather data and weather forecasting. our thoughts and prayers go out to all of those in the devastating tornado that swept through the state of oklahoma. we've all been moved by this event and the efforts by the community. sh a painful reminder that we're all vulnerable to unexpected disasters and how critical the national weather service is. that leads us to the purpose of today's hearing. noaa has an expansive mission, to predict the weather, to ddress climate and adaptation. to carry out auto of these

missions noaa must mansion a broad set of scientific challenges and incorporate the research into the daily lives of our citizens. r nation has experienced harsher climate from severe droughts and record-breaking events we receive constant reminders of accurate and weather predictions. good weather predictions doesn't just happen. it also requires us to conduct scientific research to understand the physical processes that drive long term and short term weather conditions. unfortunate, the legislation we're considering today includes little or no acknowledgment of noaa's other mission, particularly with its regard to climate and ocean research.

my colleagues may not agree on every issue sacrificing these critical areas will only weaken us for the future. understanding the climate is as critical to public protection as understanding the weather. it is unfortunate that noaa could not be here today. they received 10 days ago and it is my understanding that the copy of the draft bill was given to the agency and that did not give them enough time to evaluate the bill and be ready to testify. , ey released their road map additional there are four outside reviews of n.w.s. and noaa in the last year. two by the national academies of sign and one by the public administration and one done for the noaa science board.

this addresses key issues, the eed for noaa to activity tap the modeling activity in the research community. the draft legislation does not address all of these issues be they need to be considered. it would believe appropriate for this sub committee to receive these reports before we mark up a bill. we can move forward if we have a omplete hearing. the work of noaa are so important that we're invoking a rule to ask for a second day of witnesses and i'm attaching that letter to my statement and i appreciate the chairman's cooperation in that regard. i'm sure we can work to find witnesses who can help us craft strong legislation thatological

improve weather forecasting for the nation. thank you very much for appearing before us and i look forward to an informative discussion today. hank you and i yield back. >> regarding your question, once you have provided us where w a written request we'll review it. if there are members who would like to submit their additional statements your statements will be added to the record at this point. i would like to introduce our witnesses. our first witness is chief executive officer for ccuweather and incorporated. served as a ofessional member of the

istorical society. our next witness today is mr. -- he has been in large companies and key to satellite and media. has worked to develop space infrastructure, earth observation and information management systems. as our witnesses should know, spoken testimony is limited to five members after which the members of the committee will have five minutes to ask questions. >> i'm sorry. thank you.

thank you for inviting me to speak today and for to the family and friends of those who lost loved ones on monday in oklahoma and those who suffered injuries and other loss, i only offer my con condolences and i hope today's hearing will improve warnings of severe weather. the united states has the most violent and challenging weather on earth. tornados, hurricane, lightning, hail, floods, to name a few. the united states has more tornadoes than any nation. we have four times the number than all of europe. on monday, noaa provided about 16 minutes of warning before the tornado touched down and actually over 30 minutes before it reached moore. the agency and the people of the national weather service did an outstanding job. there is no doubt without the warnings the toll would been

worse. huge progress has been made since the 1950's but we can and must do more relative to severe weather. people should not live in fear in the america's heartland, its cities, and along its coast but enhanced modeling, perhaps we might have known hours in advance exactly where the tornado would form, writ would touchdown, how monstrous it would grow and its exact path. imagine trying to give people an hour or two in advance to move out of the path of danger and have them watch the tornado from a distance? it is a pipe dream? 50 years ago weather forecasting was more art than science. a tornado might form in the night and no radar was there to

help a forecaster spot a hook echo. a storm like hurricane sandy without satellite would have thought it move out into the ocean to have it return like a surprise, much library the 1900 ne in galveston in that was a surprise because here was no eyes in the sky. s it's a unique and special partnership and a benefit to the nation. the united states government collects data from local and remote platform, run forecasts models and makes special warnings. weather companies and academic research institutions use this information and collect and desim nate data and make weather . recast some for the public

the joint partnership helps to save lives and helps to prevent property damage. it has a name, the public/private partnership. it has been held up from federal agencies and a repeat executive executive order. the private weather warning would save 88 lives in a single electric message, it would not have been believes but it happens now repeatedly. the government is in a position to enshurp and enhance the data and the warnings for the public

aimed at the protection of life and property. these activities require research and development, strans for of knowledge between government agencies and the private sector. this is needed with regard to highce radar technologies, performance computer networks and other government appropriate activities. we all need to protect this functionality and the research that keeps this enterprise ahead of the curve. special focus during sandy of the model that did a better track of the storm than u.s. models did. relying on other countries for beth -- better weather models places the united states in a weak position. whether research and development and the creation of operation of

corner infrastructure remains a matter of government urgency which the act will help to address. thank you for your tomb. -- time. >> thank you. >> chairman stewart and distinguished members of the sub committee. this is the first time i've been to a hearing such as this. it is a privilege for me to be here today in the absence of our colleagues and former noaa administrator. the admiral sends his regards. we pass on our condolences and thoughts of those in oklahoma as well. the u.s. weather forecasting capabilities is need n need of repair, not just because of shortcomingses or deficient weather models because of the

explosive growth and the resulting delays in new satellite programs. the traditional collection block new instruments in more potent, lower cost improving data sensing instruments. that is damaging our nation's bility to predict. the genius of american innovation has had technical market solutions for many years. a few working cases already exist. at nasa, inseat of operating a fleet of costly space shuttles, they work with other governments. the commercial satellite based communication industry provides 80% of its bandwidth globally.

the industry also provides the government much of the industry outside of the intelligence communication. with these analogs in mind the focus would be better placed on achieving data quality and excellence wreathen than owning that data infrastructure. the added irony that the cost of has plummeted over 20 years, except not in the wider space domain. the benefits of mobile technology that we all carry are sheltered from forecasting weather. our company will advance a small satellite observation -- observing model that starts with g.p.s. we believe a private company can deploy such systems for a fraction of the cost of the government. working with private sector

companies can deliverle path breaking skipes and lower government's cost for weather data. we want to emphasize today, our government and as a consequence is facing a weather data crisis that can be rebelieve that will unleash the resourcefulness of the american enterprise. in doing so, the government will foster a free market in satellite weather data creating a new economy that would be supported by weather data community that will stock our shelves with the best products and services. we highlight the following comments in the bill in general recommendation. in section three regarding forecasting renovation, it mentioned little about the private sources or the potential role of public/private partnerships.

section six does not mention the role of the private sector for these efforts. it also could. in section eight, we believe that overall procurement reform is needed that could include, shift the focus of federal agencies away from the ownership of weather structure. open competition, government could articulate and implement form by having new data that enables agencies to retract the services they need now from private companies that can provide them. this will energize capital and aid the need of products and services. establish specific programs within air air force and noaa eginning in f.y. 2015. reforms. satellite

these recommendations and actions are necessary to ensure that the u.s. is never lagging behind any country in forecasting. opening up the government through changes to procurement to very economical and reliable data sources that meet the standards of noaa, air force, and other users will be what infuses innovation. he results of this change to ensure public safety and help participants now economy mansion vy at risk. other examples are available on our website. we'll be happy to provide any follow-up comments. i will be happy to answer your questions. thank you.

>> thank you. i thank the witnesses for your testimony for your dedicated service to your nation. i remind everyone limit your questions to five minutes. i will open the round of questions. i ask unanimous concept to , so ordered. i think your testimony illustrates something they pointed out in my opening comment that we can do better. the inknow evacuation and the technology development that your company represent is encouraging to us. i've done scary things in my life. i was a military pilot for many year, i do a lot of rock climbing, i taught six teenagers how to drive.

but i've never been as scared as i was once night in texas when we lived in the plains of texas and a storm around us and to hear the tornado warning siren go off. it is a terrifying and helpless feeling because there is not much you can do other than pray the storm misses you and jump in the bathtub, which isn't comforting, actually. you mentioned the 16 minute warning that we had. 16 minutes is significant but i would ask, what is our goal? how many minutes could we achieve? how many hours could we be able to provide warning? theftically.pper what technology could allow us to do that? then i would like to follow-up with superstorm sandy if i could, recognizing that technology for tornado warning is different than for hurricane

warning. if you could, what is a realistic goal for us? what technologies will help us get to that? > well, i would suggest in looking at hurricanes and looking at tornadoes, there's an interesting comparison. because we can see hurricane, because they are large and they move relatively slowly over large land and sea areas, we can evacuate people. that prime objective is to determine the besting path and get people out of the way. we see people all the time of people who are going to "ride out the storm." we think that is foolish. with tornados we do the opposite. we expect people to ride out the storms in their bathtubs. that is not acceptable. the only reason that's the case

ecause we cannot yet scientifically determine far the exact pathce and where it's going to go. what we need to strive for is having sufficient lead time for people to get out of the way. if you are not there you can't get hurt. we can't stop the build frgs being destroyed. what is the lead time? i don't know. it seems to me that an hour or two hours is plenty of time for people to get out of the way. the science is not there. i don't know how we're going to get it there. i think that is what research is required to do. >> do you have anything to add to that? >> sure. i'm probably not the best one to answer giving the warning minutes before a storm. the technology we wrk with is i call the longer term forecast

realm. within a portfolio of capabilities and the ability to do things faster, if you're right before the storm or days before the storm. the kind of technologies that we work with have been proven to -- the example of the g.p.s., which is the technology we're focused on. there are studies that show a portfolio observations can help four days in advance. it can give you eight hours of additional time. eight hours. if you go out eight days it can help with 15 hours of additional time. that is on the long end. on the portfolio of predicting and planning for severity and weather patterns, knick we can do to be efficient and faster at

any part of that time is going to be extremely helpful to weather forecasters. >> i want to come back to you and back up. knowing that technology is emerging and we can't predict exactly until we test it and deploy it. with the current technology that you know as underdevelopment or ing tested, is it reasonable to say we can double the warning time and give people a half hour or more than that? >> i think we could. the 16 minutes was in advance of when that storm actually touched down. people on the far end have more warning. it was on the ground and people knew it was coming. as you can see even 30 minutes, which was the case at the far end is not enough. people don't know what to do. it is interesting because in our business, i mentioned about a

plant in mississippi that we protected and we do this all over country. we have specific sites that we can forecast for with regard to where a tornado is moving inal path. you can't do that publicly because you have large communities and people don't all have shelters and places to go. so it needs to be enough lead time. you can probably double with improvement on current technology quickly. the lead time has increased significantly in the last 20 years. >> ok, thank you. i'm a little bit over my time. thank you to both of you and to the ranking member. >> thank you very much. thank you for your testimony. you spoke specifically about the bill so i'm going to ask this question to you be if mr. myers wants to weigh in that's great too. section two of the legislation makes weather-related activities

the top priority in the managing programs. which of the six noaa line offices would you consider to be relevant? > that's a level of detail regarding with the structure that i'm not familiar with. i've been in this position for six months. the portfolio we address is one of weather data, -- data that serves the weather community, the space weather community, as well as the climate community. to the extent we can help our customer balance and address those needs, we will respond to that as a service company. >> thank you. do you have any opinion about the six noaa line offices would be real la vent and prioritize weather-related activities under

the legislation? >> the ones that deal mostly with the national weather o.a.r. and obviously i know i've seen over time and a good provision in the bill is the need for the agencies to correspondent, special the , ather service -- cooperate special the weather service. >> i have other colleagues on this committee that represent coastal areas and, in fact, we're having a lot of conversations at the oregon coast about tsunami evacuations. so my constituents rely on the

cean economy for jobs. with noaa's research on the sea program, their lively hoods could be at risk. if weather forecasting is a top priority what would happen to the climate and those programs and all the other work that noaa does? i want to pose that question because there's a broad mission and we need clarity about weather-related activities being the top priority in all line offices. i have another question for both f you. they are the lead on climate mitigation and they do important work on oceans, great lakes, so some have commented that the division between the weather

forecasters and the research done leads to the o.a.r. doing work that has no utility, so how do you view the proposal? does the research need to be pulled out to consolidate all of the weather work in one place. would you support that? improve g that could the way in which the research is conducted as it relates to the critical needs of improving forecast to protect life and property i would support. whether that is the best decision, i can't sit here and tell you. but things that move in that direction are useful. >> do you have an opinion on whether the research be pulled out and be moved? >> after some of what mr. myers

has said, it is about being the most effective and efficient in terms of structure, i can't speak to that. i think the thing i would say is that there are different functions that the organization plays out. there are operational weather, which has heavy emphasis coming from n.w.s. we are supportive of all the areas of if weather enterprise that our data and other forms of data will support. >> thank you. one more quick question. , the issue to restore modeling predictions and that plan is supposed to be issued in six months of passage and then annually. i mentioned two reports that have been done and other reports have been done, the national weather service worked for more

than a year on such a plan. do we need another study, do we eed it annually? my time has expired. if you could do a brief response. >> that structure and how to organize one self to meet these needs is something i can't speak to. we look towards a customer. >> my time has expired. >> rerecognize that you're not experts and that's why we look orward to hearing from them. >> thank you very much, mr. foreman chairman. i remember when i was about 6 or years old. my family came from north dakota

my mother'svisiting sister. it was very dark and there was a storm and there was a radio and the radio said there was a tornado. tornados might be happening and we felt absolutely helpless. we had no idea and we crawled a cellar is is into where my aunt had these little jars that she made. we spent the night in this cellar underneath the floor. we had no idea where the tornadoes -- how close they were but there were tornado warnings out there on the radio. we have advanceed so dramatically since then, however, it is -- wal sat

through hurricane hazel. . dad joined the marine corps we went through two hurricanes at the same year, i remember. it was pretty incredible. gentlemen, there's all this talk about the weather getting worse now than it used to be. is that experience from your companies and your perspective, you're around weather all the time. do we have worse weather now ith sandy so much worse than galveston, as you mentioned, which was a horrible loss of life? or are we just more aware of the weather now? >> i'm not sure if i can answer that. i know my grandfather always told me that the wipters have gotten milder and when he was a boy they were much worse.

i think you're thinking of and cane hazel in 1954 connie and diane in 195. clearly, when we see events like sandy and events like moore, oklahoma we conclude that things are getting worse because where we are and what we see tends to influence us the most. i don't know if anyone has statistics that can demonstrate that is the case. as i said in my talk, america really in a sense has the worst weather in the world. >> yeah. >> so it's variable, the nature of it from hurricanes to tornadoes to droughts, to what have you. we need to focus on, i think more that what we have and more than other nations do.

>> well, there's been a lot of talk a climate and weather around here. i remember a lot of people were saying people were concerned about the weather but nobody does anything about it. now we're being told we are affecting the weather and the long-term climate, which some of us are very skeptical about. , whatever it is we do know for example, in galveston, how many people lost their lives in that hurricane? 5,000. >> a lot. >> yeah, so we're talking about the fact is with modern technology and space assets we've been able to save thousands and thousands of lives that otherwise would have been

lost. i think we can be proud that our ountry has invested in this. and i remember just one last note, i remember when i first got here, vice president gore had a meeting with all of the weathermen that he could put together and there is a legend about this that he had them gathered at the white house for a conference talking about weather. and they were supposed to be talking about global warming but there was a huge storm front that came through while they were there and the rain was pouring down. but only about two of the weathermen bothered to bring an umbrella to the meeting and i don't know what that all indicates but i think we should pay a lot of attention to the weather. o thank you very much. >> thank you, sir.

your five minutes for questions. >> i'll be out there selling umbrellas. >> this is a question for both gentlemen. as we consider how to authorize weather research, who would you recommend the committee hear from? we have testimony from you, weather experts or stake holders should we take testimony from? >> i would think the scientist scientific community in terms of research. i think there are models for how other countries look at this do main that maybe useful to hear from. and i think the wealth of private industry. we come from -- our two companies come from two different parts of the valley chain. my company produced some of the best weather data on the planet.

mr. myers company will use that data downstream to inform citizen and enterprise. there are a variety of people in between that could be useful from a private enterprise perspective to hear from. >> i would agree with that. when you look at the american weather enterprise, we always think of it as a three legged stool comprised of the government assets, the weather industry in a broad sense as was just described and the academic and research community. and i think it's appropriate to hear from all of those with regard to this to get their viewpoint. >> so you do not consider yourself of the academic and research community? both of you are the authority from which you are able to speak is not academic or research oriented? >> no, i can speak from an

authority of commercial data service provision and the technical aspects of satellite delivery and collection of that data. >> and we're a weather information company and we don't view ourselves as heavily into the research aspect of basic modeling and things of that ature. >> but you both have a respect and es steam for the research and scientific community, especially those who are recognized experts in the field of climate and weather research? >> indeed. our company is founded by a gentleman who is a j.p.l. for 30 years. we are engaged as a company with an organization called the laboratory for space fizz six in

colorado which is part of the university. so there is no question we are as a company drawing on the research, expertise in scientific community and research community to build our company. > do you know your founder's view on global climate change? does he take the scientific consensus seriously or not seriously? is he a skeptic or non-skeptic? >> i cannot speak to that. >> would you say it's worthwhile to hear testimony from noah on this bill? >> i would think it would be quite necessary and appropriate to have the customer who we are dealing with who is involved in this domain leading the domain in the united states to be heard from. >> i yield back the balance of my time. >> thank you dr. brown.

>> thank you, mr. chairman. mr. myers, thank you for accuweather. i've got my app here on my phone and i depend upon it greatly so thank you for the service that you provide. >> glad to hear that he. thank you. >> i'm a pilot though i'm not currently flying, i'm also a hunter and fisherman and i like to follow your weather forecast and what you have there. thank you very much. dr. cliff mass professor of tmospheric studies wrote quote the politicization of climate change also has had a major impact on government resource allocation with funding going into climate change research while other areas such as weather prediction are poor cousins.

climate research gets more than 100 times the computer resources provided to weather prediction. with the latter having huge benefits for people today. no administrators have pushed the climate agenda while down playing weather prediction. this needs to change unquote. and i could not agree more. mr. myers and mr. kishner do you gree with this position? >> well, i know cliff and he tends to state things rather mphatically. i agree that i think we need a reallocation between climate and weather resources. i don't know if i can ascribe reasons why we have an imbalance

the way we do so i'm not interested in weighing into a political debate on climate change and the causes of it. whether or not though as many as do support the concerns over climate change state that weather events have become more severe. and i'm not saying i agree or adopt agree, but if that's the case, that suggest that we really should be allocating more resources into looking at what is happening on the weather front and so i think it's perfectly consistent with anyone's climate position that more money needs to go to weather research whether it's

because there is change that is affecting the weather now or those people who believe that there isn't but we still have severe weather issue that is we've got to address. so i think it's actually something that all sides of the political spectrum and the climate area should be supporting simply by the very nature of what people believe limate is causing. >> i'm not intimately just due to time not intimately familiar with all the workings of oah. what i can say from being in this business six months is the national weather service has primary focus tending to day-to-day weather rediction. i think there is a broader question though that i think is worth talking about is what role does weather prediction in the short term, medium or long term play in a strategic role in our economy.

and ultimately we believe that weather is of strategic interest to supporting our economy, industry, infrastructure and our ompany in response to that broad belief has developed and will cont to develop products and services that will address the day-to-day operation al weather interest which are forecasting to the next ten days and beyond. space weather is that weather that is further from the ground but deals with the sun ejecting coronal mass and climate. our particular technology is both for weather operational weather and for climate operation is absolute and it's establishment of temperature, water pressure and water vapor, air pressure and water vapor. it's unique. it does this in such a way that

calibrates all other form of data for operational weather. our focus is to provide a sweep whether you are talking about the short term or long term. >> i agree with dr. mass. we've got to put more funds on weather research than we are on climate change. i think we are allocating those funds in an improper way. thank you, mr. chairman. >> a vote has been called and in order to provide all members to ask questions i'd like to ask the witnesses if they'd make themselves available after a short recess? > yes. >> the committee will recess subject to the call of the chair and without objection so ordered. >> the committee sands in ecess.

>> the committee will come to order. we've lost some of the members who wanted to have the opportunity to ask you questions. questions o submit and we ask that you respond in a two week period.

>> >> thank you mr. chairman. i really don't know exactly where to begin. my wife and i have this conversation from time to time. a good job to have would be a weather forecaster because you can be wrong so much of the time nd still get paid. i want to ask you guys about your satellite systems if you will, some of the more technical aspects i suspect. first of all, let me get into the monetary side of it maybe. are either of you aware of competition from foreign companies from foreign countries where they would come in and put up a satellite or a system like an accuweather where they can do the kinds of things we do? what is the pressure, what kind of pressure is there on y'all to be your best and do your best? is there pressure in the marketplace?

>> i'll certainly respond to that. depending on what industry we're talking about. i come out of the communications satellite world where there is a lot of global competition that overlaps regions. in the weather do main so far as i have seen there is less pressure per say coming for satellite systems. they tend to be over particular egions or countries especially the kind that are 22,000 miles way that are staring at a particular region. the polar orbiting systems, the lower earth or bit systems that cover the globe, to my knowledge here are certainly other countries or con soshesyume that have those kinds of systems. the europeans have those types of satellites. what we would love to see is more intense competition, intense commercial competition.

not state funded but privately funded. and that is part of what my company is here to talk about is how -- in this world, how do we evolve to a model where the weather satellite community is privately funded, not necessarily on the balance sheets of the taxpayers. and we're looking for hopeful that our customer can migrate to a world of looking to commercial provision of services to do that. today there say data buy provision, there are data buy policies that exist. but those data buy policies have to do with buying something that exist today. my company has a system it's

planning to deploy which means my company needs to go to the marketplace and raise capital and talk to customers about something we need to start building today that won't be available due to technology for 18 to 24 months. what we are looking for is ways to change the procurement approach that allow us to get contingent commitments to say i will take the data that you are going to provide that meets the specifics of noah or air force or other agencies but give that commitment today so we can begin to build our systems now. that would feed competition certainly in the united states. i'm sure we ultimately like competition and want to deliver the best service on a highly competitive basis and we believe we will do that if we have that procurement structure in place. >> accuweather is a downstream user of satellite information and we're happy to see competition in the area.

right now we receive satellite information mostly from government around the world including of course the u.s. satellites which we read directly. the weather industry itself in the united states is very competitive and worldwide that is true as well. there are a number of robust weather companies in korea, in china, japan, and in europe at this point and we compete with them on a worldwide basis. so i think the competitive landscape is good. i think it's a huge advantage that the united states has though that the american weather industry is really ahead of the rest of the world and some of the things that we're talking about in terms of enhanced research, i think we should get leveraged in a great way because there is such an industry so it

does not only benefit the government and the ability for the government to issue warnings, but it benefits all those downstream who can make use of the information and the modeling and what have you to provide specialized services and public services on web sites and mobile device and so forth to the public. >> i see i'm out of time. i have other questions. are you going to go round two? >> hopefully. >> we don't anticipate doing that but you're free to take additional time. >> thank you. let me ask this question then, so having said that he about the pressure to be as good as you can be and looking forward to see what kind of policies we can put into place to make sure the taxpayers are getting the most bang for their buck, a couple of questions, the first is technical about a satellite if you are looking at a hurricane coming off the african coast for

example, what kind of time degree of predictability, can you predict with any degree of certainty, three days, five days, seven days? >> it depends on the weather regime that is occurring at that particular time. some storms are more predictable than others as a result. so i can't give you a definitive answer to that. >> can you give me a window, is it three to five days or one to three days? >> the further out you go, the bigger the cone. we've seen the cones the weather service uses. >> surely you've got statistics, how far back does your data go saying we have a degree of success predicting these events,

30%, 60% going back 10 years or 20 years. >> there are statistics that go back that far and generally they indicate that the predictability has increased significantly. that the cones have narrowed. the accuracy going out has increased. i don't have those statistics here with me to refer to but they have certainly improved significantly. >> what i might add is that as i said earlier, the technology world that we are in is predominantly about evaluating you and gathering data that is going to tell what you is going to happen. other technologies such as satellites tell you what is

happening now in near term warnings. the two examples i mentioned earlier and one in addition. the technology we work with has been proven or it's been studied a and in and in and in a and a and within noaa as well as other organizations that that data can tell you four days out thata and you and you something is going to happenand you and a and eight hours sooner.a and in an in and in and in an simulation you can

see a storm that without it he 78ld not see 54 hours, hours, 102 hours. there are mechanisms that enables with other data -- it is not alone -- with the other data we have -- you can see things further advanced that you would not have been able to see about -- without it. see in the ability to forecast that in a portfolio of analyzing whether you would want to grab every minute you could. >> recognizing time is short now. >> thank you for your indulgence mr. chairman. >> since we had additional time to the minority side would you request additional time for questions? >> no. >> thank you to the members for their questions. the members may have additional questions and we ask to you respond to those in writing if that's the case.

the record will remain open for an additional two weeks for comments and questions from members.i would like to note that my ranking member and i have had the opportunity to discuss a request for a house rule 11 hearing. we have agreed to hold the hearing. i look forward to inviting a representative from noah as one asfrom noaa oneof our witnesses to be a part of the witness panel and we will work with all parties to schedule the second hearing on this topic at the nearest available time. as a result of that the minority has agreed to a straw request for the rule 11 hearing. with that this hearing is now adjourned. name a the most fundamental difference between

left and right is both look at the economic ladder and those on the left seat to reach down and physically the people and move them up the economic ladder, and that is almost always driven by noble intentions, and yet it never, ever, ever works. the only way anyone has ever climbed the economic ladder is to both himself or herself up one rung at a time. >> nearly all of you will willience failure that you recover from, and learn from him thethe -- and be all better for it, because once you have a failure the only good option is to learn something from it. very few of you will never recover from your failures, and statistically speaking, between two and five of you will spend some part of your life in prison.

every spring c-span visits college campuses across the country. tonight at 8:00, senator our franken and ted cruz, james clyburn, and senators saxby chambers and tammy baldwin. then the paul ryan, nancy pelosi, peter king, elizabeth warren, and mark warner. 's " washington reussl" will include fleming on life in the military. then a conversation with .ilitary.com randy plunkett theirss has finished legislative work and are often now for the work.

. house leaving, the changed how loan rates are calculated, tying them to the 10-year treasury note rate. the senate spent the week on the farm bill setting ardor culture and food stamp programs. they will work with the measures when they were come >> when they return on june 3. president obama traveled to annapolis to speak at the u.s. naval academy commencement ceremony. you can see his complete rocks at -- his complete remarks at www.c-span.org. >> our military remains the most trusted institution in america. when others have shirked their responsibilities, our more armed forces have met every mission they have been given.

when others have been distracted by petty arguments, our men and women come together as one american team. and yet we must acknowledge that even here, in our military have seen how the misconduct of some can have effects that ripple far and wide. , a singleital age image from the battlefield of troops falling short of their standards can go viral and endanger our forces and undermine air efforts to secure peace. likewise, those who commit sexual assault are not only committing a crime, they threaten the trust and discipline that makes our military strong. that is why we have to be determined to stop these crimes, that have no place in the greatest military on earth. 2013, i say this because you are about to a

sermon the burden of leadership. as officers you will be trusted with the most awesome of responsibilities among the lives of the men and women under your command. and when your service is complete and you will go on to help lead your communities, and america's companies, you will lead this country, and if we want to restore the trust of the american people that they deserve to have in their institutions, all of us have to do their part, and those in leadership have to strive to remain worthy of the public trust. as you go forward in your careers, we need you to carry forth the values you have learned at this institution, because our nation needs them now more than ever. innerd your honor, that compass that guides you when it is hard and uncertain about that

tells you the difference between that which is right and that which is wrong. perhaps it will be the moment when you think nobody is watching, but never forget that honor like character is what you do when nobody is looking. more likely it will be when you are in the spotlight, leading others, the men and women who are looking up to you to set an example. do what you doto not ask of yourself. live with integrity and speak with honest tea and take her spots ability and demand accountability. cleveland loses his bid for reelection, his wife tells the staff -- carewant you to take good of the furniture and ornaments, because i want to find everything just as it now when we come back for years from

today. >> they did return to the white house, winning the election in 1890 two. we continue our series on first ladies monday night at 9:00 on c-span, c-span3, c-span radio, and www.c-span.org. >> the nominee for commerce secretary does the five 04 the -- commercents committee. she is chairman of the trans union credit bureau. for the past two years she served on the economic recovery advisory board. the hearing is about two hours. [captions copyright national cable satellite corp. 2013] [captioning performed by national captioning institute]

>> good morning. this hearing will come to order. toouse we are confronted i incredibly important and busy , it wouldacing us never occur to senator thune and i to do what we ought to do, which is give our statements first and make you wait. so what we are going to do, if it is alright with you, is ask each of you to give your statements and then we will give our statements and then we will ms. pritzker. thank you for allowing us to come here today to introduce the nominee the president has offered to this committee and the congress for the important position of secretary of commerce. i know you are leaning in our

direction, mr. chairman, because of your wonderful illinois-born wife and your connections to our great state, and we thank you for that. but it is that you are in the leadership, and i do not want to mess around with you. [laughter] first. will be a mr. chairman, it is an honor to introduce penny pritzker. she is here that her family wit whom she will introduce. what you see when you consider her is not only decades of business and civic experience, which make her a strong candidate for this position, but also a warm, compassionate, worsen who has given back to the community in illinois and across the nation. fiveritzker has built businesses from scratch, served on numerous report for us, and have been an effective leader of major corporations. she ranks as one of the most influential women in a report

america, that is quite an achievement when you consider the glass ceilings and other obstacles which women face. her lifetime up his express includes her current role as pritzker realty group. she serves on the board of artemis realty earners, previously serving on the boards of wrigley company and lasalle bank corporation. her decades of experience will serve her well in leading the agency. her business experience is only enhanced by her service to the community in illinois and across the country. she has led initiatives that improve education and help connect people with job opportunities. she leads skills for america's future, a program that gives to others to prepare workers for 21st-century jobs and help them

find employment. she is an ardent supporter of is thes. ms. pritzker member of the american academy of arts and sciences and former chairman of the board on the museum of contemporary art in chicago. the president appointed her to a counsel for jobs and headed a business and served on a board. processt think in the of serving so many charities and boards and managing so many businesses that she would be a busy person. she is. for and she trains compete in ironman distance triathlons and in her spare time. 's business know- how make her an excellent candidate to serve as secretary of commerce. her humanity and warmth only underscore those characteristics. contributions to

the business world and illinois are appreciated. it is my pleasure to introduce to this committee ms. penny pritzker. i fully support her nomination and look forward to working for her as she becomes the secretary of commerce. >> thank you, senator. chairman, i want to say i am very and easy astec for penny's nomination. i see her as a voice for business that the president will have to feeheed. let me point out a few things that the senator mentions, that she started a new business from the ground up that already .mploys 3500 americans i have a letter for you that what i am -- that i would like

to summit for the record by the former chairman of the fdic, william isaac, that i think will help you, and say to my republicans -- that will be included. hope that this voice for business becomes our next commerce secretary. >> great. you two distinguished senators have a choice. you can listen to senator .ockefeller and senator thune we appreciate that offer. >> that is the correct answer. >> senator thune and i will give our opening remarks. and then what we will do is what we did yesterday, and that is other colleagues on both sides

will not give opening remarks, but all question times will go for seven minutes, so you can do quite a lot with that. all right? yes, sir, mr. chairman. >> i would like to call this nomination hearing to order. it is an important one. we are meeting today to consider a distinguished nominee to be the next secretary of commerce. we have not had a strong secretary of commerce in quite a wild. .- in quite a while ms. pritzker's nomination comes at an important time during our nation's economic recovery. while we have the lowest levels of unemployment in four years, too many people are still out of

work, and the across-the-board budget cuts imposed in march are creating a new drag on the economy. our nominee understands these challenges. your decades of experience in the private sector -- investing in and managing numerous companies -- have given you the skills to manage a large and that is what you will get, i very large department. you come from the business community and understand their needs. but your long track-record as a civic leader is also going to serve you well in this position. as many already know, you served on the president's council on jobs and competitiveness and the president's economic recovery advisory board. you also served as chairman of the aspen institute's skills for america's future project, which

has fostered partnerships between more than 40 employers and 200 community colleges across the country. each of these experiences will be important to your task at commerce. the commerce secretary is in charge of 12 different bureaus with more than 40,000 employees. but to do the job well, you will need to reach far beyond the people under your direct management. the department of commerce serves very different constituencies that touch all corners of our economy. remarkably efferent, from the arctic ocean to telecommunications, everything. you will need to appreciate the immediate financial challenges struggling fishermen in the

northeast are facing, while managing and conserving the nation's fisheries for the future. you will need to find ways to improve the resilience of coastal communities who face increasing threats from storms sea level isl rise. rising. some believe in that. you will need to work directly with businesses and communities, partnering with them to create jobs and expand opportunities. collaboration between the public and private sectors is one of the centerpieces of the department's work. whether it is the creation of cyber-security standards or the development of manufacturing hubs for small- and medium-sized businesses, the private sector has to rely on and trust the commerce department's work.

this trust is crucial to the long-term competitiveness of the u.s. economy. ms. pritzker, we will be depending on you to continue this collaboration and strengthen it where necessary. one crucial area of public- private collaboration is the development of the wireless economy. this committee is closely following the department's efforts in this area. expanding the spectrum available for wireless services and relieving the so-called "spectrum crunch" will be vital to jobs and growth in the nation in the years to come. at the same time, smart spectrum policy includes protecting vital not all operations. federal operations want to give up any of their spectrum. you will be running into the department of defense on that, and good luck.

i expect that the department will continue to work in close cooperation with federal agencies and the private sector to open up more spectrum to meet our nation's spectrum needs. finally, the commerce department manages our nation's severe storm warning systems and this has beenlites. a troubled area for us, especially with satellites. the terrible tragedy in oklahoma is a stark reminder to us of the vital role that the national weather service plays in extreme weather events. in severe conditions like we saw in oklahoma earlier this week, minutes matter and are the difference between life and even as we face the sequester, we expect to come to

a grand bargain, we have not, so sequester is part of the lives of all of us. we need a new weather-ready nation initiative to commit -- to improve communications in face of offense and to build community resilience in the face of increasing vulnerability to extreme weather.you have had a very full life am a highly successful life. i am one who believes in public service. you obviously do because of all of the boards that you belong to that deal with youth training and jobs of all of that. i look forward to your system running and hearing from my colleagues, especially my ranking senator thune. thank you, mr. chairman. i want to welcome her to mike committee.

ms. pritzker has an extensive background in the private sector and i look forward to hearing how she will apply that experience to achieve positive results at the department of commerce and for the nation's economy, should she be confirmed. the department of commerce is tasked with promoting business, facilitating job creation, and spurring economic growth. unfortunately, our nation's unemployment rate is still at an unacceptable level -- 7.5%. in december of 2007, the unemployment rate measured at 5%, and it peaked at 10% in october 2009. clearly, much work remains to get the unemployment rate back to pre-recession levels -- particularly when you factor in the 21.9 million americans who are unemployed or underemployed. despite positive reports in other areas of the economy, job growth remains very slow and so far in 2013, monthly job growth has lagged behind the monthly averages experienced last year. we in congress must make jobs and the economy our top priority, and that means we must strive to do what we can to unleash the great american entrepreneurial spirit. we need to remove needless and outdated regulation and reduce burdensome tax rates for

businesses of all sizes. we must craft policies that spur the private sector to take risks to create jobs, and we must also seek to restrain the government's inclination to intervene in the marketplace. in other words, we should let the free market choose economic winners and losers, rather than having the government do so. that is why i believe it is critically important to have a secretary of commerce who has a strong record of accomplishment in creating jobs in the private sector, someone who knows the challenges and how to overcome the barriers the private sector faces in creating jobs. i believe the next commerce secretary must be a strong advocate for trade and open markets for america's farmers and manufacturers. the next commerce secretary must also work to create a more business friendly environment. it is no secret that the obama administration has been criticized for adopting a negative attitude toward business, which i believe contributes to some of the economic problems we've observed over the last several years. there's significant uncertainty in the private sector, and many within the business community are wary of the obama administration's predisposition to have the government intervene

in the free market and its failure to adopt pro-growth policies. i believe we must have a cabinet official who is strongly committed to economic expansion, trade promotion, and policies that strengthen our competitiveness. so, i look forward to hearing ms. pritzker discuss her priorities with respect to these issues. i am particularly interested in hearing about ms. pritzker's experiences serving on the president's council for jobs and competitiveness. i'm also interested in ms. pritzker's views on making more federal spectrum available for commercial use. the commerce department is uniquely situated to play a role in this matter, particularly with one of its agencies, the national telecommunications and information administration, ntia. should ms. pritzker be confirmed, i would ask that she focus some of her time and energy on dealing with this issue, especially with respect to freeing up the 755 to 780 megahertz band.

i hope that we can work together to resolve this issue, because if we are successful, it will ignite a great deal of economic activity across the country, assist in funding a nationwide public safety network, and ultimately help to ease the nation's debt by bringing billions of dollars into the treasury from the auctioning of this valuable spectrum to the private sector. finally, i would note that some concerns have been raised about ms. pritzker's role with, and position as a beneficiary of, an offshore tax haven, as well as her role in the failure of superior bank back in 2000 and 2001. i have been in communication with her on these matters, and would appreciate her continuing to work with us after the hearing to answer all of the questions i and other members of the committee may have, before we report her nomination. should she be confirmed, i hope that ms. pritzker will be a strong voice on the president's cabinet for lowering regulatory burdens, lowering taxes for businesses large and small, and promoting job creation in the private sector. on a personal note, ms. pritzker, i want to thank you for your willingness to serve our country. while i don't expect that we will see eye-to-eye on every issue, it is important that we have individuals with experience in business who are willing to put that experience to work in the service of our nation. thank you again for holding this hearing, mr. chairman, and i look forward to ms. pritzker's testimony.thank you.

thank you, senator thune. the floor is yours. members of the committee i am honored to be under consideration for secretary of the united states department of commerce. with me today is my husband, my rock and my best friend, as well as my son who just graduated from college and my daughter rose who just returned from her first year at college. over the past few weeks i have had the privilege to meet with many of you to discuss the department and how we can work together to give entrepreneurs needusinesses tools they to create jobs and keep our economy growing. take you for your valuable time, insights come and perspectives. american entrepreneurship is at the heart of my family's

history. my great-grandfather came to the united states from czarist russia, dirt poor at the age of 10. he taught himself english, worked several jobs, and earned his law degree at night, and opened a law practice at the age of 30. why father was the founding president of hyatt hotels. when i was a child he took me to work with him at the motel on weekends. i would play on his adding machine and help out with inspections of our property. as an entrepreneur and a business soldier, he has been my inspiration. my father died when i was 13, so in high school as my interest in business group i turned to my grandfather. on his 80th birthday my mother said i could give him anything i wanted as a gift. i decided to write him a note on my green stationery.

in it i asked him why he only talked to the boys about family business. when i was interested in businesses as they were. he said to me him a penny, i was born in 1896. how am i supposed to know that young women are interested in business? he gave me a book on accounting and taught me the basics that summer and i was hooked. i attended college at harvard and received my mba and law degree simultaneously from stanford. and i began working with my grandfather, my uncle, my cousins in the family business. in the 27 years since then i have worked as an entrepreneur, both starting businesses from scratch, and growing existing ones. it is not always been easy but i have learned from both my successes and my failures. for example my first startup involved residential communities for seniors.

the initial team consisted of me, a secretary, and a lighter. i'd most entrepreneurs, i found the first few years to be terrifying, particularly when the early 1990's recession hit. i held myself to high standards, suggesting to my uncle that he fire me if i could not turn things around weakly enough. through hard work, we survived and grew and the company remains successful today, employing thousands of people. since then i have been involved in sectors ranging from the hospitality to manufacturing to real estate to financial services and more. i have found and co-founded five companies each have created thousands of jobs across the country. i have sat on five corporate boards. my role in civic life has been both local and national in scope. at the local level i have served as chair of the chicago museum

of contemporary art, as a member of the chicago board of education among and as co- founder of my family's foundation, which enriches the lives of chicago lost children to education, health and fitness, and arts and culture. on a broader level, i have served on the boards as a council on foreign relations, stanford and harvard universities, the kennedy center for the performing arts, and others. over the past few years i have served on the president's council and jobs and competitiveness and the recovery's economic advisory board. both of which have helped to stabilize our economy and support jobs growth. launchedrom this i skills for america's future. this initiative promotes partnerships between employers and community colleges to address the skills mismatch. in our first local model,

launched last september, skills for chicago future, we have secured commitments to hire thousands of unemployed chicagoans. if confirmed, i intend to leverage the sum of these experiences as an entrepreneur, as a business leader, and as a citizen deeply committed to american embeddedness in my service as commerce secretary. i should note that i have had first-hand experience with the commerce department over the years. for example, the information from the census bureau was the foundation for the decisions i made when starting the senior living company i described earlier. moreover, i know that thousands of businesses get the information tools and support they need from the commerce department each year. this includes patents for new products, support for small manufacturers, help for exporters who want to break into new markets, assistance or

entrepreneurs from underserved communities him a support for fisheries and coastal economies, dissemination of timely and accurate weather forecasts, and much more. overall, my vision is that the commerce department will continue to use all its assets to protect, promote, and anticipate what america needs to , competitive and innovative in the 21st century. i intend to serve as an active and visible part of the economic team. i will bring both concerns and ideas from the business community to the forefront. i envision the commerce department maintaining its government-white leadership in areas such as manufacturing, attracting businesses, innovation, and exporting. theseartnership in all of efforts will be crucial. i actively seek you or input, , and your

expertise. i believe strongly that we must ensure that american entrepreneurs can continue to pursue and achieve their dreams. if given the honor to serve, i will work every day to support these entrepreneurs as they create jobs and build our nation's prosperity. i will continue to uphold the core values and deep sense of patriotism that has been passed down to me. finally, let me say if confirmed i look forward to working with the dedicated and driven public service of the commerce department. thank you, and i look forward to your questions. >> thank you, and i will ask the first one. .t relates to cybersecurity

it is embarrassing, i think, for congress because for four years now, all the defense and intelligence people have declared it the greatest national threat to our security, not al qaeda, not others, but cybersecurity, coming from computers. we made computers in the mid- 1990's, and now we use them, and now they are threatening us. we are trying to put together a bill. there are three committees that have jurisdiction. we are one of them. the department of commerce plays a key role in a wide range of cyber security efforts. including setting international standards. will be conducting technical research and working with his assist to improve risk management. is leading the

effort with the approval of all parties so far, because not nist, it isple note an extraordinary place. they are leading the effort to develop a framework with industry to protect our most critical infrastructure from cyber attack. that is a tricky subject. critical infrastructure. if confirmed, what priority will you give to the department of cybersecurity work and how will you bring the full range of departments's capabilities to the problem? >> senator, thank you for that question. i understand the threat of cybersecurity. it of the businesses have been involved in experiences 3.8 billion cyber incidents a month.

that is three times what it experienced three years ago, and the complexity of those incidents is 50 times greater than it was three years ago. i fully appreciate what we are up against here. if i am confirmed, i will work ita, theith nist, full commerce department to make sure we help develop a cyber develop aas well as close working relationship with the business sector to make sure we are addressing these cyber security threats. >> thank you. i would say to my friend, senator thune, i had a good talk with the chairman of the appropriate committee handling cybersecurity in the house, and we have had lots of conflict over here about what is

voluntary, who sets the standard, or you have to meet a certain standard, all this thing. as he spoke i said, every word that you have just said to me. i agree with. i have never met him before. it is going to meet, but i think for the first time we see a real opportunity of having a bipartisan cybersecurity bill that will be a miracle if we do it. it is the greatest national threat. i will ask one more question. this is on forensic science. i have a fascination or forensic science, and i am finding that some of my fascination is misplaced, that the more studies nist ison, and important in this, that our system is badly in need of renewal. there are a lot of people who are in prison who should not be

in prison, there are a lot of prison who are not in prisons that should be in prison, because forensics, through programs we think is absolute, a follicle of hair, bang, it is guilty. it is not that easy, and we are discovering that now. is of aforensics right norma's importance so if confirmed, what do you see your nist tosupporting increase the reliability of forensic science russian mark > -- ? --friend excited and forensic science is of enormous , and it has significant implications on outcomes in our justice system. i appreciate how important it is to get it right because there

are consequences of using forensic science. if i am confirmed, i will use -- i will work not only with nist but the entire department to make sure we bring to the forefront the best scientists and we will work closely with the department of justice to bring that forward as quickly as possible. >> it is stunning, isn't it, that for a couple of decades we have thought that it was an absolute science, it was just clear, you look to the microscope, you saw what you saw, and you made your judgment, and it does not work that way. it is not talked about much in public discussion, but i think getting forensic science where is ofds to be up-to-date a norma's importance, so i appreciate your answer. senator thune? >> the outrage over the actions taken by the irs against conservative organizations underscores how critical it is

for government leaders to scrupulously honor the public trust. my question is, what if anything can you pledge to this committee regarding your commitment to safeguard the trust that would be bestowed on you as a cabinet secretary echo >? >> it is important i bring my core values to the table if i am confirmed as secretary of commerce, and for me, being known as someone who is trustworthy, someone of high and hegarty and high ethics, is what i strive to be. and so i hope i will set the department commerce if i'm confirmed such that the trust the taxpayers, all americans can have as well as the senate and the house and the work of the commerce department is something you will have full faith in. >> have all watched this week with what happened in moore, oklahoma, and our hearts and

out to those who were struck by that tornado. the are grateful the warnings and alerts issued by the car most departments's national weather service helped save lives. every learn first hand department agency is making tough choices in the face of necessary budget cuts, so it requires are for planning and prioritization. it no longer an option to do that. can we have your commitment that if confirmed you will ensure budget cuts are made in ways that prioritize funding for the public safety missions like the delivery of timely warnings about severe weather? >> the work of the national weather service is vital as we know to not just property, but two lives, most importantly to the lives of americans. said inseen this as you oklahoma, we have seen it in hurricane sandy, in the floods that we have been experiencing in the midwest. they remind us of the critical issue of saving lives that the

national weather service does. if i am confirmed, i will work with the national weather service to make sure that the impacts of our budget do not impact the critical mission that the national weather service provides. x can you pledge us that you will work with us committee to find efficiencies and ways to stretch taxpayer dollars further when it comes to the responsibilities tha of the commerce department? >> i have learned to touch dollars, so that is something that i have experienced in. the first thing that is required is put in place good leadership throughout the organization that shares the same approach, and then work with that leadership to be able to identify ways that the commerce department if confirmed can be as effective, but more efficient. >> as i mentioned, some have

criticized the administration eating antibusiness. in 2010 a chairman of the business roundtable said the administration was fostering an increasingly hostile environment for investment and job creation. if confirmed, you would bring a track record of entrepreneurial activity to private sector as well as service on the job's counsel to the position of secretary. if confirmed, what will you do to foster a more pro--business attitude within the administration and as a follow- up, can you provide actions that you will use successfully to create jobs in the private sector? >> when the president asked me if i was interested in taking this position, we discussed clearly his desire that i served, if confirmed in this position, as a ridge between the administration and the business community. a role he saw that if i could play that role as part of his economic team am a that he felt

that the relationship would be improved. that is something i look forward to working very hard on. in terms of the examples of when i have created jobs thomas senator, i started a senior living company that today employs 35 hundred people. i started an investment firm that today employees dozens of people. i have started in under her of businesses as well as grown businesses, and grown the number of employees. frankly when i think about my job as a business person, the thing that made me most nervous was to try and make the best decisions i could because i knew how many lives were impacted by those decisions. and the ability to be not just a business leader, but a job creator is something i've been very proud of and something i will bring that experience to the role if i'm confirmed as secretary of commerce. >> thank you. . need to ask this question there has been a lot written about this.

with regard to the failure of the bank in 2001, it was a bank that was one of the leaders in subprime lending. some of your defenders have stated you had no active role in the management of the bank or seven years prior to the failure. but according to reports issued, concerns were raised by the office of thrift supervision about the mortgage aching practices at this early as 1993 when you were still chair of the bank's board. others have pointed out that you serve as a board member on a holding company and committee until its failure. could you just tell us what role you played at the bank in the years leading up to the superior bank tossed failure in 2001? >> thank you for giving me the opportunity. my uncle j and a friend of his bought a bank in 1989. it was a failed rank. i was never an officer. i was chairman of the board from 1991 until 1994 when the primary activity at the bank was

to clean up the balance sheet of the bank which had a lot of problem loans. i stepped down as chairman of the bank and the bank maintained its own separate and board seven years before the bank failed. regulators concluded in 2000 that certain assets were overvalued. holding company, what one looks at is the balance sheet and the financial system -- statements and deals with subsidiary is of the company. when the problem arose my uncle had passed away. i stepped in on behalf of the ownership of the 50% ownership of my family to try to salvage the situation. unfortunately, those negotiations failed and the bank failed. and so then, thereafter, i went to the fdic file interiorly and the family only 50% of the bank,

but voluntarily went to the fdic -911, andthis was post i come from a family that is very patriotic, and i said to the head of the fdic, this country has been very good to our family and we need to make the situation right. we would like to negotiate something to make this right for the depositors. suedhat negotiation and and my family voluntarily agreed to pay $450 million. i was not on the audit trinity -- audit committee of the board. that is something that is not right, and it was the right thing for us to do, because both for the depositors and for us as a family. ,> let me follow up if i might mr. chairman, so ultimately there were a number of uninsured depositors who had claims they lost over a hundred thousand dollars of savings, including one who deposited her

entire retirement account with superior a month before it failed. my question is, what do you have to say to those depositors who lost it can sums of money, because of this denture, and what lessons did you learn from your experience that will inform your role as secretary of commerce if confirmed? >> i regret the failure of superior bank. it was not an outcome or situation that i feel very badly about that. the lessons i have learned are really about good management, good governance structure, the importance of diversification and risk management, transparency and having a solid governance. >> ok, thank you, mr. chairman. r? senator warner question mar committee will

recommend you and you will be who to serve as someone has a background in business, as a voice that will be needed in the administration and help us -- help the economy recover and focus on greater job creation. i want to raise a couple of quick questions. willone of the areas that not readily fall within the department am a but down a bit is the national telecommunications and information administration, and part of that was a spectrum management. the president has laid out a goal to try to get 500 megahertz spectrum available over the next 10 years. i would like you to speak about how we can make sure we can keep that on track, and one of our challenges is to make sure arehat our federal entities more responsive in terms of spectrum sharing and trying to

make sure that we take full opportunity and get full economy-wide value of these public assets. if you would speak to that issue. >> i support your belief in the effort to try to find the 500 megahertz of spectrum to make available for commercial use. it is my understanding at this has found -- is ntia has found 500 megahertz available. spectrum sharing is a high prayer during an something that if i am confirmed we will look and see how we can find or spectrum that can be made available for commercial use. i appreciate how important it is that we have spectrum available for the explosion of

the wireless world we are living in. >> i might just add, there are some spectrum in that 755 to 780 megahertz range, that we could move quicker on. i will not ask you to speak to that today, but we are starting to get into the weeds already. we should take what we can while we can and move forward on that. another area that you will have at least oversight over is the patent and trade office. we are concerned of the increased amount of litigation in the patent field and areerned that entrepreneurs victims more and more often of patent --we have seen industries,y in m

massive allocations of capital to create patent arsenals that could be better utilized in terms of innovating and breakthrough technology rather inn building up arsenals what could be frankly litigation wars. i do not know if you might want to have some general comments but what we can do to try to make sure that we get better ideas into the marketplace and try to decrease what i think is the dramatic increase of patent realation, not geared at innovation protection, but just about trying transfering wealth between large entities. innovation as far as an

entrepreneurial, i know how time to market and speed to market is so important. the legislation that you passed in terms of patent report is extremely important in that way. in helping the patent office become more and more efficient. in terms of the large amount of litigation that seems to be of extremely important in that way. in helping the patent office become more and more efficient. in terms of the large amount of litigation that seems to be emanating from various nonproducing organizations, that's a real challenge and something that i need to look would confirm. >> two more, and this is more editorial comment than a specific question. the commerce department has a wide array of programs. i candidly believe this is an agency that is ripe for program consolidation and review. e need to be thinking smarter.

i personally believe that we ought to give the president and future president that any governor has had to do executive reorganization. i won't open that can of worms at this hearing to give the pre future president that any governor has had to do executive reorganization. i won't open that can of today. hope would be hope would be th come in with a fresh look at entrepreneurs, a business pernetti's look -- person's look and look where we can get better bang for the buck. i might just, again, editorialize and highlight one area that we worked on and we have an opportunity to have a brief conversation about. we do a very bad job in this country of supporting insourcing of jobs back into america. most of that economic development is done at the state and local level. i have been trying to get this administration for years to actually look at how we might support state and local economic development efforts at a federal level to bring jobs back into american for a whole host of reasons, companies are looking at bringing manufacturing and other

production jobs back to this country because of, particularly in rural areas. my hope is you'll, one, as my time ticks down, look at streamlining all programmatic areas within the commerce department, and two, work with me and other members, this is bipartisan legislation i have congressman frank wolf in the house, at how we can do a better job at the federal level to support insourcing of jobs back into this country. >> well, senator, i think insourcing say great opportunity particularly as to energy costs falling in the united states and our strong rule of law, our terrific labor force and our great patent protection. i look forward to working with you on that. >> thank you, mr. chairman. >> thank you, senator warner, i should warn my colleagues that the floor is not behaving properly and they're talking about a 12:00 vote.

we're trying to do everything we can to get them to push it back, but what i would suggest dias here e of the that we cut our seven minutes down to five minutes and the other side of the aisle will have seven minutes. senator fisher. >> thank you so much, mr. chairman. i will try to take five to help out here. the senator asked you about find be efficiencies. when we had the pleasure of meeting and having a good conversation, i also brought up about looking at streamlining the department, looking for efficiencies and asked if you had any examples at that time. have you thought of any specific examples or maybe in different program areas where some uld look to find

efficiencies? >> senator, i commit that i am very interested in focusing on this. i have to confess that i've been tied up having the pleasure of meeting you and all of your colleagues, i have not been able to dig in yet, but i do look forward if i'm confirmed of having the opportunity to do that. >> that will be great, thank you. >> thank you. >> also, we have a manufacturing sector here in has faced y that challenges for many, many some years. i believe that we have to level the international playing field if we are going to ensure that our manufacturing sector is competitive. i think we have to look at regulations. as ave to lock at trade well. would you agree with that? >> senator, i agree completely. i think that leveling the playing field, making sure that our good american companies are

able to play globally on a level playing field is extremely important. >> would you commit to looking at those regulatory policies? i believe especially the trade policies that we have in this country so that we can ensure that we have a more level playing field? >> senator, if i'm confirmed, i will spend a lot of time focused on trade and regulation. >> thank you. is pen to believe trade vital for not just manufacturing, for ag products as well and i see that has a definitely area for growth and job creation, so i appreciate your focus on that. senator warner was asking you about spectrum and as you know from our discussion, that's an important issue, i believe, for the country. o we have to look at spectrum.

there has been some discussion on how accurate the cost estimates have been with regards to spectrum. i believe department of defense in the past has estimated that to ould cost $4.6 billion clear that 1755 to 1850 band and ntia estimates it's going to cost $15 billion. how are we going to have more accurate estimates with that? do you see any way forward? >> senator, i must confess, i'm not precisely familiar with that particular band, but i think that something, i know ntia is very focused on and if i'm confirmed would work with a that we're ti getting the best costs if we

use to share spectrum or spectrum. i endorse that endeavor. so if confirmed, we will push the organization to make sure that we look carefully and that the information is accurate. >> thank you, thank you very much and i look forward to working with you in the future. >> thank you. >> thank you, senator. >> thank you, mr. chair. >> that's all? [laughter] i'm helping. >> you are, sandra fischer, if he leaves, this will be a disaster. senator scott. >> thank you, mr. rockefeller. we were always prepared to work in a bipartisan in reducing the time that we are questioning ms. prits kerr. we hit on a couple of topics that i thought was important to the future of america.

one was fair trade. we had a robust conversation over china which i think is an important part to be considered from currency issues to backdooring parts of our free trade agreements that have already been passed. one issue that comes to my heart very quickly are the issues we face in south carolina. i believe south carolina is part of the solution to our future for a manufacturing base. if we as americans do not continue to make things that are tangible, we have a very long road ahead of us. myself and mr. warner will be working on the subcommittee of competitiveness, innovation, export promotion. i hope we will have many opportunities to work with you as well when you were confirmed. you can make things again. i look at the book ends, we have b.m.w. in the greeneville market, boeing in the charles market and the second highest concentration with companies

like michelin, bridgestone, continental coming to our state as well and expanding. as we consider the topic of insourcing, having jobs come back to america, we can look no further to u.t.c. and otis elevators that now have a presence in florence, south carolina, with 400 jobs that have been ensourced back. my question to you is i would like to hear from you as it relates to your thoughts on how we can further promote u.s. industry and encourage more foreign investment to come to places throughout the country, of course, specifically, south carolina? >> well, senator, i support your enthusiasm over american manufacturing. my family has been in the manufacturing business for over my uncle who ran that effort used to bemoan the fact that we had lost so many manufacturing jobs and that the implications for the united states were not good because, as you know and you're well aware, innovation comes from

being close to the factory floor. think it's something like 72% of private are indeed dollars are from the manufacturing sector and 90% of new patents are from the manufacturing sectors. so bringing manufacturing jobs back to the united states is a high priority for me if i'm confirmed as secretary of commerce. i think that we sit in a very competitive, we today as americans are extremely competitive with our low energy costs, with our terrific labor force, with our great rule of law, with our patent system, i think there is an enormous opportunity to really grow and encourage companies to put a new plant in the united states and if i'm confirmed as customers secretary, that is something i will work very hard it to advocate for. >> the second question really helps us bridge the gap and create more opportunities as relates to our ability to track

more investment to our country and it has to do with the enforcement of our trade laws. we certainly see that the enforcement of our trade laws is one of the common challenges that we face from things like transshipment of u.s. goods to iran, to protection of our pharmaceutical companies intellectual property to imported goods. secretary of commerce, if you were confirmed, how would you prioritized the enforcement of our trade laws? >> senator, i think you have highlighted the variety of challenges around our trade laws. we have both incoming import challenges and with some of our trade laws as well as export challenges, but i think that the commerce department, if i'm confirmed, should focus on both. we can't just afford to focus on one and not the other because we need to create a level playing field for american corporations globally. a inal question, more of

comment, an opportunity is to use the notion of the synergy of our economic assets, having one of america's greatest ports in charleston give us the ability to tract the industry like the b.m.w.s and boeing, the infrastructure needs, the transportation needs, transit or port of charleston or other ports, with the ships coming through the panama canal starting in 2015, 2016 will provide a robust opportunity for us to move forward on meeting our expectations of doubling our exports over the next few years. i would love to hear your comments on the economics synergy. >> i agree with the economics synergy. if you think about it, only 1% of american corporations actually export today and 58% of them only export to one country. so if we could work both in

terms of supporting infrastructure creation, but also at the commerce department, if i was confirmed, working with those companies, what if they were to export, what if we had 58% exporting to two or three questions, what if 2% of american companies were exporting, think of the job creation opportunities associated with that. i think that's a great opportunity for our commerce department. if i'm confirmed, i would definitely focus on that. >> thank you, mr. chair. >> thank you, senator. senator blunt. >> thank you, chairman. i wouldn't have thought i had gotten this done before i had to leave. i'm glad to get a chance to, one, welcome you to the committee, and, two, welcome what you potentially bring to the commerce department. i actually think the acting secretary has done an admirable job under difficult circumstances and i think that this important department need somebody who is confirmed and

in charge and ready to attack hold. i'm hopeful that we're going to see that happen here pretty quickly. on transshipment which senator scott mentioned, actually, it's an issue i have been pretty involved in because we have had veral companies that the chinese or someone else, both of these cases i'm thinking of s chinese, were not in compliance with trade compliance with trade laws. they get a sanction against them and somehow these same products come from somewhere else in a different box. the commerce department has as a matter of stated policy said that it will not addresseevation of duties through transshipment. so we got a bipartisan bill that was introduced in the last congress, the enforce act, whether it's that or whatever else you need to address this

problem, i hope that you'll look into this and find out why that would be the stated policy of the commerce department. maybe they just think they have got too many things to keep track of. this is a problem that many members of the senate want to work with you to help solve. >> senator, i'm familiar with the transshipment problem, but i'm thought familiar with the statement from the commerce department. so if i'm confirmed, that would be something i would look into. >> good. let's go back to another thing that mr. scott mentioned was manufacturing. you mentioned some of the advantages we had. could you talk a little bit about the energy potential in the country today and how that might have an impact on manufacturing? >> well, one of the most significant, senator, one of the most significant inputs to the cost of manufacturing today is energy costs. given that the falling costs of energy in our country, this is an enormous opportunity for

chemical companies and other significant users of energy as they're manufacturing products to place their plants here in the united states. that would be something if i'm confirmed that i would work very much to encourage and endorse and support to have happen. the manufacturing jobs are good jobs and jobs that we want to grow in this country as well. the importance of being close to the manufacturing floor is something that improves the opportunity for innovation. >> that's good. as we mentioned the other day when we were visiting, i think that there is no more local cost-based good energy policies than the secretary of commerce. i'm glad you are headed in that direction in your thinking as well. trade tax, the rule of law, another thing i might mention as i try to not take advantage is travel, something you know a

lot about. senator clobe klobuchar and i have been very involved on the travel issues. we created something that is called brand u.s.a. when i was in the house, and it has great potential, but clearly needs somebody in the department paying attention to be sure that everything they do is justified. foreign travelers are the low hanging fruit for our economy. again, you probably know more this that than anybody in room. your sense of how important travel is to the economy and particularly foreign travel, if you want to say anything about that. >> senator, i appreciate you're asking about that. fortunately, the united states s lost market share in the long haul travel business. that's something that we need to regain. when i was on the president's jobs counsel, i spearheaded the evident to reduce the wait times which were ridiculous from some of the most major

countries that -- where the citizens want to come and visit and travel throughout the united states. we were able to point out to the state department that if you're a foreign traveler coming to the united states, for some countries, you have to be interviewed for a visa. the interviewers more than pay for themselves. they bring in through visa fees around a half a million if you' ach, so if we interviewers, we would be able to increase travel. as you're well aware, senator, those are good -- the travel industry creates good jobs. i think the average traveler to about ed states spends $6,000. for every family of five that wants to come to disney world, that's $30,000 and that's creation of a

new job in this country. it's is a really terrific opportunity. as for brand u.s.a., i think brand u.s.a. is a really exciting opportunity. i believe there is half of the money comes from the private sector and have comes from the government to promote travel to the united states. that's something we should be out promoting. we are good at this. it's something that is a great source of exports as well as a terrific job creator. so i look forward to working on that. >> foreign travelers stay longer than domestic travelers. they spend more. when they leave, they almost like us a whole lot better than they did when they came. this has all kinds of positive reverb raises. you understand all of the impact of this throughout the economy and look forward to working with you on that assuming you're confirmed. >> thank you, senator. >> thank you, chairman. >> thank you, senator blunt and know senator klobuchar. >> i note they're even happier if they visit branson,

missouri, could create more posts and more correct? i want to thank you so much ms. ker. i appreciate your knowledge. i thought you answered that well so i'm not going to go after that again. i appreciate that. i think you know this is a huge opportunity for our country to gain jobs, tens of thousands of jobs for every point that we gain back with the international tourism market. we are finally headed in the right direction. when we talked, i spoke about the ability of the commerce secretary, particularly someone with your background to really being an advocate for business as a whole, not just the things under your agency, but that i see this need that we have right now for someone to look at, i suggested to you our top 15, 20 exporting industries and figure out, while they all have some things in common, they each have individual things that can help tourism, the vase

wait times, you literally can go through the list and find unique things. i wondering if you can comment on that, the bigger role the commerce secretary could play and you could envision yourself playing? >> senator, if i'm confirmed, the role of being an advocate for american business is one that i would take absolutely seriously. i think it's one of the main reasons that i am really interested in this job and was interested in this job and i think the president felt that i could bring all of the experience that i have had in a variety of businesses and my ability to relate to businesses as you said, there are many, many industries and the ability work on helping our companies not just to export or to gain technology so that they can continue to innovate or to get access to a patent more quickly so that their time to rket is reduced, those are

areas that i look forward to having the opportunity to focus on. >> thank you very much. you mentioned exports and i think that the, part of this is the foreign commercial service. i hope you'll be committed to continuing that. we would love to see it expanded, every time we get some new business for one of our small or medium-sized businesses that can't afford to have their own trade expert on morocco, but can have a lot of business there. we actually have a trade surplus from morocco. we have a good thing going and one of the best things to invest in. senator, i completely agree with you, i think the foreign commercial service is one of the great assets of the commerce department, among many great assets and one that if i'm confirmed, i would look forward to working with and encouraging their growth and their continued outreach with

all american businesses. >> some of my colleagues asked you about manufacturing. i just had a hearing on the joint economic committee on women in manufacturing. we had three women in business as witnesses. as the recent book >> lean in" has pointed out, there is a lot of room for women to grow in business. across manufacturing, women hold 17% of the board seats and 12% of the executive officers and 6% of c.e.o.s. then you go on the frontline workers, the share of women manufacturing industry has been declining, actually, even though we're seeing an upsurge in hiring since 1990 and is now 27% at its lowest level since 1971. these are really two things i'm getting at. as you know, we have job openings right now in manufacturing in states like mine that have a 5.4% unemployment rate and the manufacturers are trying to get women to go manufacturing into arguments that this is no longer your grandpa's

manufacturing floor anymore. so we have that side of it. we have overall in business, you are someone that has been successful in business, but how we get more women into the bedroom and running companies. >> well, i think there are two things that i would like to comment, senator. one is i spent significant time focused on the skills issue and the skills mismatch in our country and making sure that americans are well trained for the jobs that are open. in terms of making sure that we have more women in manufacturing, it starts with ncouraging more women to get a stem education. i have been on the board of stanford and harvard, i have been very much a proponent of that. you see much greater mentorship occurring, which is a significant part of how i think that we can end up with more women in leadership in the manufacturing is mentorship and

education. i look forward to working with you on that. >> one last very quick question. the commerce department and the economics and statistics administration as you know provide critical up-to-date information about the social and economic needs of communities and that all sounds like a bunch of gobbledygook. people aren't away that business leaders rely on this for data so they can do business. it's a tool for market evaluation. i want to get your commitment because i know these kind of surveys can be under attack at times. your understanding that they go to very good use to help the american economy and people in business? >> senator, i'm well aware of the importance of that data that's collected because some of the businesses that i have founded particularly, for living our senior business totally relies on the kind of demographic and income data that is collected in those surveys, where we locate our properties so that they can be

successful because no one wants to -- you don't want to build the property and not have it be successful. it depends on that kind of critical data. i have an enormous appreciation for that work and will continue, if i'm confirmed, to effective hat that's data collection. >> thank you. and thank you for the commitment earlier with senator warner to continue the strong patent office. we have one company, 3m that literally has so many patents, they have a patent for every employee. it's very important for our tate and we want to continue that in a strong way as well as the patent troll issues for litigation. thank you. >> thank you, mr. chairman, ranking member thune. secretary nominee pritsker, thank you for your nomination and thank you for you and your family for your willingness to serve. i and several in the committee

on a hole are confident that the breadth and depth of your experience in the private and public sector will be a tremendous added bonus to the commerce department at this time in our nation's history. you'll be taking over the department at a critical time in our economy. i hope you'll use all your experiences to create jobs and expand economic opportunity in the nation. from our conversation the other resume, our impressive i know that you're well prepared to lead the department, which is encouraging. it's important to us in massachusetts because we have some challenges right now, one of which you and i spent an extensive amount of time talking about and it's surprising that no one on the committee that i now wish to engage you on the fishing industry. he fishing industry in massachusetts is 300 years strong. it's not just the boats and the men and women who serve on those, but the seaside businesses that are important to us, but are also struggling ecause of changes in the

fishing economy. fishermen in the northeast are living under 77% cut in the fish they can catch. you and i discussed this last week. as i mentioned to you, there are some challenges, some of which are manmade and that the fishing industry in my neck of the woods believe that they haven't had a good partner in the commerce department and no one in particular in recent years. i talked to you about the need for commerce and noaa to have a much more comprehensive and thoughtful and inclusive fan with our fishing industry to help save this industry and bridge a gap towards a brighter future. so i want to ask at this time if you're willing to make a commitment to work with those of us who represent the great and proud fishing industry in the northeast to plan for a brighter future and to address the realities that we're facing ght now and help us find a

way forward collaboratively. we believe that's been missing. >> senator, i have great respect for the fishermen all over our country and particularly those i have an affinity for entrepreneurship. any fishermenlso in family businesses him and i come out of a family business. i appreciate the challenges that the fishermen are facing in the northeast. as if i am confirmed secretary of commerce, noaa needs to improve its relationship with fishermen and businesses in the northeast so there is more understanding, better communication, rater

transparency, and more trust that needs to exist so that if decisions are being made there is an understanding of what exactly is the data. senator, i look forward to working with you on that. we discussed that, and it is something that is important to me. >> i would invite you to come to meet withford, our fishing community among municipal leaders, who are so supportive of the industry, and i will be happy to host you. >> thank you. >> i would like to raise a topic of cybersecurity. as a business leader your self, and you mentioned the cyber hits that your current business has received, and billions, you know the importance of this issue, one of the issues as we grapple with this in congress is what is the best way to move forward constructively, around the issue of the information

sharing between the private and the public sector, and it seems to be a particular sticking point. i am wondering, what is your viewpoint on that issue, both as a business owner and as someone who will be charged with leading the commerce department? it is important to begin the dialogue with the business community and explain to them what is at stake. each business understands what is at stake for them individually. what is at stake in terms of our infrastructure, he said businesses may at times take for granted and talked about how we need to come together, and it is important to have a seat at the table, the framework structure that is being the dialogue around creating a framework invite the private sector to be involved, and they need to take advantage of that, and that is something i will promote and advocate for. duringll encourage you

your visit to massachusetts, you might want to visit with our ,igher education institutions where you will find a wealth of experts in the area of cybersecurity. they will be willing to work with you to find a way forward. with that i will yield the rest of my time, but i thank you for your willingness to serve. >> senator collins, some of us are feeling hurt because you declined to invite any of your colleagues to come up and look at your fishing. yesterday and today you were clear, but just sitting here to be helpful. >> i am pending hand written notes. go. am ready to i am not sure they want us there, but i'm ready to go. welcome to your family. having been in business i can tell you there are many pluses that comes to bringing the

private sector experience to the public sector round, but also you have faced the challenges of being accountable for some of the things that have happened in the private sector and people bring up all sorts of things. by first question is, our state, afl-cio, and many have a boycott of the alaska national -- and they are concerned about animal wage jobs as a way to keep the workforce at a lower rate. some concerns about safety and workload issues. on of the things you will face as secretary is how to maintain and get a high-wage job into our economy. do you want to comment on the former or how we do the latter and i look forward -- >> i have been in business for 27 years, and the corner success of businesses him a you have to good-- you have to have a

balance between management and labor. there is no success in business between a good relationship between management and labor. it is extremely as i saidthat management and labor work closely together on issues of good jobs and creating sustainable jobs. >> this notion of subcontracting to keep minimum-wage jobs is not something you support? >> no, senator. >> as far as high standards for safety and workload issues? >> senator, the high standards for safety -- absolutely. the work force is part of one's business family. and you have to have a business that operates in a way that works for everyone.

management, labor, all the stakeholders. to become a safety and security in one's labor force and management is absolutely a number one priority. >> one issue i would love to see you take a leadership role on within the department and one that you and i get a chance to talk about and one in which i think you could bring a huge private sector focus to that would be very helpful is this issue that the chairman brought up in his opening statement about a weather-ready nation. to think that noaa was getting information from europe because they were further ahead, four days ahead of what sandy was going to be. that is because they instituted new technology and use a model which basically analyzes the storm and information data in a

new way and presents it. what do you think you can do to bring this to a weather-ready nation? i know that there will be more supercomputing time. this is an issue where we have to keep competitive. and the last couple of days showed us the difference between knowing 15 minutes ahead of time and an hour ahead of time is a huge difference. so what do you think you can do to help us modernize that? >> senator, we are reminded over the last several months the importance of having a top-quality weather service.

between hurricane sandy and hurricanes in oklahoma, the flooding in the midwest, we have all seen how our weather can threaten lives, as well as property, but lives. if i am confirmed as secretary of commerce, making sure that our weather service is best in class is something i would find a high priority. >> and so do you think that could include working with the department of defense? part of the issue is that they have great satellite technology information but it is secure. what i am looking for is your leadership ability bringing agencies together as well and figuring out how to -- get the best information in to public officials hands so we can do a better job of helping people prepare. because the technology is there to know the power of the storms. >> senator, one of the things i prided myself and my business career is working in partnership with others. in terms of the weather or many other aspects of what the department is engaged and, if i am confirmed, that would be something i would take seriously

and work hard to achieve -- good partnerships with other agencies. >> the late ron brown 1 said that he was secretary of commerce but if a member of congress was calling him, he guaranteed it was about fish. i have the same concerns and want to know what your thoughts are on the bristol bay pebble mine which is in alaska that has basically, it is at the head of one of the largest fisheries which is basically the headwaters for puget sound salmon. we want to be sure that you are adamant about good science leading the way to protecting against undue development that might impact those fisheries. >> senator, i know the importance of salmon.

you and i talked about that earlier -- to your state into our country into my dinner plate at times. and finding a balance of nature that we get, we protect the salmon is very important. to me, i do not know the specifics of the mine situation, but if i am confirmed that will be something i will look into. >> i am interested in whether you have a good science engaged in the process. >> absolutely, senator. the importance of science and technology used throughout the agency is important in that area. >> thank you. senator begich, to be followed by senator mccaskill. >> thank you very much, ms.

pritzker, for being here. thank you for taking the time to meet with me two days ago. i appreciate your willingness to be subjected to all of these processes and to be a public servant. i know that takes sometimes. i want to follow up on fish, because as you know alaska produces the wild-caught american fish products, 50% of fish. we have a huge interest economically and otherwise. i agree with my colleague that the calls you get will be about fish. you'll think there will be about agreements and trade and tourism, but they will be about fish. we will go through the rewrites. that is something we will be engaged with you on. let me ask you and we're going to -- you are going to lose some of your national marine fisheries services, eric schwab

who is now stepping down. there has been a lot of issues to make sure that we have leadership there and in noaa. i guess our commitment to you will make this a priority as quickly as possible, because of the work that we have to do on the reauthorization bill and the fisheries issues that are in front of us right now. >> senator, one thing i know from my 27 years of business is it is important to have good expertise around me. and so what if i am confirmed, i will want to make sure that the agency has the best in class folks in those positions, because i know how important the fishing industry is and to you and to many of your colleagues here, and something that i will commit to, i will make sure we have the right people in place to work with you on this. >> and the key to me is as quickly as possible. >> absolutely.

>> it is getting us nervous as we move through the reauthorization. let me also -- we talked about satellites. you are learning quite a bit about your role. you would manage satellites. there is a group of independent review from the aerospace executives the call the program dysfunctional. i just want to make sure that you are committed to looking at this program. it is a multibillion-dollar program. timing is critical. makes a difference on our weather forecasts. so we do not have to depend on other people. will you commit to make sure that you will spend the appropriate time to dive into how to make the system better than it is today? it is around allocations are getting the resources for them and helping us understand what we should be doing to help make that better.

>> senator, i thoroughly appreciate the critical mission of our satellites. we've seen how important they are to protecting life as well as property over just the last week, let alone with the horrible tragedy in oklahoma, let alone with hurricane sandy and with the floods in the midwest. making sure that we have best in class technology and that we can understand what is going on with the weather and be able to get that voice out and get the information out as quickly as possible as well as accurately as possible is very important. if i am confirmed as secretary of commerce, it is something that we will make sure to focus on.

>> one area, also, on satellites, the weather. since 2010, the national weather service has lost 300 positions. in the present fiscal year 2014 budget, he eliminates another 103 positions, an 8% reduction. there is a hiring freeze in place. in alaska, this is creating problems. we are in flood season. we are about to hit fire season in many parts of the country. in alaska, we have been missing entire shifts worth the people. now they are bringing people in on overtime. you know that running a business when you start doing overtime there are costs -- fatigue and other costs that are hard to measure until something bad happens. then you realize they were working too many hours or the fatigue occurred. can i get a commitment from you that you will reexamine the decision of the hiring freeze and how they are handling furloughs and the weather service? to me, i have run businesses. i ran a city. this is not the best way to do it. it is going to have a negative impact on the product we need

for situations like oklahoma or sandy. >> senator, i share with you your concern to make sure that we have the appropriate staffing. and i am aware that noaa is working to mitigate the impact of the staffing challenges and budget issues on its critical mission. if i am confirmed as secretary of commerce, making sure that our weather service is appropriately set up and operational is a high priority. >> let me go to another issue -- this is a selection. this is one, we talked about this on the arctic oil and gas issues, that noaa the supplemental draft out right now. it is, it was issued a few weeks ago. the definition, when you look at it, it defines it as if the drilling program is to limit each company to only one drill

well at a time in the theater, meaning two areas of theater, one rig, one well total. that is not going to work based on the 600 leases we have. by that action, you can determine the outcome which is nothing will happen. i know we talked about this -- i am not asking for your position because you need to be confirmed first -- but would you give some assurances at least here did you will work to ensure that the people that have lease is up there can fully utilize those leases under the environmental conditions -- but not be -- backdooring it by collapsing their ability to move forward. we need them to look at that entire air shed at one time. would you commit to look at the

broader picture in making sure that we do not do something that negatively impact going forward? >> i know how important oil and gas exploration is to your state and the country. it is something i would need to look into. i am not familiar yet. i will look into it and look forward to working with you on that. >> fantastic. on that note, i will say that when you start to talk about a mine in alaska, we would encourage you to talk to us also. i appreciate my colleagues' interest in this issue. there is only one state that has the strongest interest -- us. >> i will try to make sure that all stakeholders have a voice. >> very good. as the chairman knows, we invite you to alaska. >> appreciate that. >> senator mccaskill?

>> thank you, ms. pritzker, for being here today. i am aware that for a lot of good reasons, a lot of americans have a cynical view of the federal work force. and us. they look at people who work for the federal government writ large and make assumptions that many times are unfair, that are federal employees that their bureaucratic bozos and not working very hard and making way too much money. i have got to tell you i find it refreshing to find someone who is stepping up like you are in this position. i think it is pretty obvious the -- that

you are not coming to this job for a paycheck. i think it is pretty obvious you are not coming to relax and soak off the taxpayers. you're not coming because you see this as an easy challenge. i think you are really coming because you have a desire to serve this country. and your business background is one i can think conserve this country very well. the president has proposed to do away with the commerce department and combine the commerce department with small business administration, ustr and other agencies that have various intersections with business in this country. proposing to do away with part of the federal government is difficult. and i would ask you, do you have some ideas on how your service and 'in this job could help prove that cold forward in terms of identifying some strong, bipartisan arguments that could be made? one of the problems is we have a lot of committees that deal with various agencies that are not

excited about the idea of us trying to avoid some of the duplication and overlap. i am wondering if you had given that any thought. and based on your business background, when sometimes streamlining and selling and merging are essential, because you have the discipline of the bottom line. unfortunately, we do not have the bottom line discipline in washington. i wonder if you have ideas about that. >> senator, i appreciate your inquiring. i support the president's desire for reorganization authority. i know his objective is to try and make the government more streamlined and more effective and efficient. i am not exactly sure how i personally if i was confirmed as secretary of commerce could assist in that effort. if congress were to give the president that authority, i would work to support and try to

give him my best advice which is what he has asked me to do in this job. in terms of, in the meantime, as the commerce department is set up, if i was concerned, i would look to try and figure out how we can streamline and be more efficient with the current set up. >> i would look forward to working with you on an ongoing basis, particularly when you find issues of duplication and overlap. my colleague, senator coburn, has worked hard on this duplication issue and it is a real. some people on my side of the aisle to not want to confront it. but there is duplication. just look at the broadband issue. in agriculture and in commerce. two programs and with the same goals, but two different sets of

personnel and rules dealing with the pots of money in both places. i would love to work with you is that -- is you identified how we can back away a little bit. >> i look forward to working with you on that. >> the other thing i want to mention to you is i have discovered there was an idea a while ago about creating a federal work force called senior executive service. and senior executive service was created ostensibly to develop a great talent in the federal government to compete with the private sector. the idea is these would be highly qualified employees with a broad background and knowledge, that they would move around the government basically with a lot of excellence helping us to do a better job performing the services we must. i do not think that has actually come to pass. i think that most of the senior

executive service in the federal government is not moving much. i think many of them are burrowed in in agencies. it has come to my attention that they continue to get very, very large bonuses, even in this economic climate. i have put in a piece of legislation to stop the bonuses for the senior executive services employees. the average bonus is 5 figures. they are healthy bonuses for the government. i think the average bonus is $16,000. the salary for this people ranges between $119,000 and $180,000 a year. these are the creme de la creme. what i found troubling is that in some agencies everyone got the bonus. it was pro forma. you got the bonus.

i would ask you to take a look at ses in the commerce department and the legislation i have introduced would prohibit those bonuses from being given in the environment sequestration, because we have line employees that have to take days off without pay. and then we have this upper crust of federal employees that are still getting five figure bonuses. and that does not make sense from a business perspective. so i would love you to take a look at the ses'es in the commerce department and look at the bonus procedures and get back to my office as to what you think. gsa reformed it on their own. they have quit doing it when we discovered this. and i would love to see the commerce department follow suit. >> thank you, senator.

i am not familiar with ses, but i look forward to learning about it. i know from my private sector days that bonuses should be earned if one has performed and not if otherwise, and certainly at a time of a tight government budget we need to watch every penny and make sure it is appropriately spent at this time of tight government. >> welcome to the pit. thank you. >> senator cruz? >> thank you, mr. chairman, and thank you, ms. pritzker for coming by my office this week and a visiting. i enjoyed the chance to visit. >> me, too, thank you. >> i would say at the outset in a bipartisan note i want to echo the comments that senator mccaskill raised about looking at the bonuses. i think that is an area that additional close scrutiny is certainly warranted. i would like to begin by talking about a topic you and i talked about in my office, which was

free trade. and in the course of that conversation, as i understood what he said, you said you were enthusiastic, unapologetic he advocate of free trade. is that a fair characterization? would you elaborate? >> i am a believer that trade agreements can be advantageous for american business. if i'm confirmed, i will look for to working with our u.s. trade rep to expand our trade agreements, so that our businesses and our -- can grow and grow their employment population. i think -- and create jobs for people in this country, good jobs. so i am hopeful that the european trade negotiation and

that with asia can be something that if we could get a good agreement can be good for american business and good for american job creation. >> thank you, ms. pritzker. as i shared with you, i have been disappointed that the current administration has been less than a vigorous in pursuing in free trade. if you are confirmed, i hope you will be an effective voice for making the administration far more vigorous going forward. a second area that we talked about that i would like to discuss is the area of regulation. as you know, my top priority in office is restoring economic growth in this country. i think that is the most critical element to ensuring our long-term strength and to also expanding the opportunity in this country for the least well-

off among us, to climb the economic ladder and achieve the american dream. and we talked quite a bit about the impact of overly burdensome regulation and how that can harm businesses and especially small businesses that they're just starting and struggling and generate 2/3 of new jobs. yesterday in confirmation hearings in this room, the nominee to be secretary of transportation, i had a similar conversation with him and asked him at the time, if he would commit in his first 100 days to working to identify at leastand three regulations that are overly burdensome and to working with me and with this committee to modify or repeal bills. indeed, his response, i liked very much.

in that he suggested that three might not be enough and he suggested instead 10, which i accepted that as a friendly amendment. i would ask you if you would make the same commitment. >> you and i had this conversation and agree, as does the the president that it is extremely important that we look at our regulatory environment which has become where we put regulation on top of regulation and see how can we streamlined so that is effective and also so that businesses can grow and be innovative and can create jobs and economic growth. so i am enthusiastic and would look at the commerce department. i am not sure the regulations in the commerce department are as vast as the regulations of transportation, but i would enthusiastically work with the organization to find opportunities to streamline regulation.

>> terrific. i appreciate that. you also suggested in our conversation and that the concept of zero-based regulation, rather than piling one regulation and another and continue to grow unwieldy, that we ought to start from zero and ask what regulation is needed and sensible. i very much agree with that notion. and so i would welcome, if you would perhaps elaborate on the concept as he shared when we visited. >> in business one often is required to start again, if you will, or look at the situation and obtain zero-based budgeting and say, let's take a fresh look at the situation. i think that is what the president was getting at with

the executive order, to try to look at the cost benefit of what we have got and streamline our regulatory structure. a zero-based idea is to start from scratch and say, what we try to accomplish with the regulation and how do we do that most effectively? precisely, how one accomplishes that is not something i an expert at, but i look forward to learning and trying to help with that effort. >> very good. i look forward to working with you on that and hope if you are confirmed that you can provide a voice in this administration for pulling back the regulations that i think are so damaging economic growth and killing jobs and really impacting in a negative way a great many americans who are struggling. the last topic i want to discuss briefly is the topic of spectrum. as you know, right now the vast majority of usable spectrum is owned or shared by the

government, 60% to 70%. last year's spectrum act requires the ntia to promote the best possible and most efficient use of the electromagnetic spectrum resources across the federal government. in my view, the federal government ownership of assets, be they spectrum or land or anything else, should be the minimum necessary to protect our critical national interest. and spectrum, in particular, i would like to see as much of it as possible placed in the private sector to allow entrepreneurs to put into productive use it to generate jobs. do you agree with that approach? and would you agree to work together to try to assess just how much spectrum the federal government needs and how much of that can be sold at a

significant profit to the government to the private sector to be put to productive use? >> well, senator, i support the president's goal of having -- he has tasked the agencies to look for 500 megahertz of spectrum. the ntia has found 100 megahertz of spectrum for commercial use. i support the effort a finding as much spectrum as is possible to be used for commercial use, balancing of course, our national security and other needs. and that is something that if i am confirmed i would work closely with the head of ntia to make sure that we find that spectrum. >> very good. thank you. >> i look forward to it. >> thank you, sir, very very much.

ms. pritzker, i have two questions to ask. about 8 months to a year ago, all over washington, by which i mean at the white house in here and a couple other places, we were celebrating something called firstnet. and i mean, there were virtual cheering sessions at the white house. everybody was so pleased. they loved the idea because it involved the voluntary option, it would not cost the taxpayers a dime. we finally got the house to agree to push them up to $7 billion.

it is about $11 billion it would cost. the whole, none of it comes from the taxpayers. it is the perfect storm. one problem -- and of course the reason for this is, as you know, the firefighters. it goes back to the kuwait. we landed in kuwait, nobody could communicate with each other. i served on the intelligence committee. i live in tha situation of stovepipes will people will not share. the first thing we passed after 9/11 in this country, the first law was embarrassing. we passed a law which allowed the fbi in the cia to talk to each other. not that they would do anything, but they have to be allowed to talk to each other. the world has changed. rapid response, real time. so we came up with the idea of firstnet as a public safety spectrum. firefighters, police, law enforcement, fbi, emt, if you are a firefighter you can see with the technology that would

be a hand-held devices by first responders all over the country the same hand-held device. not yet completely done, but they could see how many bodies were in the burning building. did there appear to be serious injuries so they could then send photographs on to the hospital, where the person was being taken said they would be prepared. it is such a common sense idea. it is desperately needed. it.this room when we had the hearing. it was nothing but first responders. they are just totally -- they want it. we are not getting it. again, no tax money is required, but obviously it has some problems. and we created this firstnet.

a guy named sam ginn. he runs it. 15 people on the board. but we have not been able to see enough movement. now, maybe that is in the nature of things. something that vast, that the engineers and the architecture of the whole approach takes time. i do not know, but i do not want to accept that. i want to hear feelings of improvement, of moving forward. at best, to spread this out across the nation i would think would take maybe a decade. i mean, all of the towers. it is an enormous project. but it is what our country needs because, as i believe the climate is changing, and you know -- one of our problems in oklahoma, i think they passed a rule -- i am not sure if i am right -- in their state

legislature that you did not have to build a basement. that is not right. and firstnet would not change that, but you understand the concept, the urgency of public safety with so much tragedy and disruption. as well as the possibility or probability of attacks by americans on our own country. they can do with computers with the chinese can do with computers. not everybody is affable that way. so all i want to know is that if you are confirmed, that you will set mind, body, and soul to firstnet, to working with them, to understanding the problem, understanding why more is not happening and there may be a good reason for that. maybe i am just impatient because i am not an engineer,

structural or otherwise. if i knew that you are confirmed as the secretary of commerce, we are watching this very closely. i would feel quite good. will you do that? >> senator, i share your commitment to firstnet. it is a good, practical, great idea that will benefit the first responders as well as people who are in distress. so if i am confirmed as secretary of commerce, something i will make sure that the board of firstnet, which is in charge of the implementation, that we work with them so they understand the urgency and the need to implement this as effectively and efficiently and as quickly as possible. >> good. thank you very much. senator? >> all right, mr. chairman, just you and me. we have to wrap this up. the unpleasantness is about over for ms. pritzker. for a minute here, i will channel senator grassley.

some have criticized the fact you are a beneficiary of offshore tax avoidance schemes, and that it is hypocritical for the president to nominate a cabinet member who benefited from offshore tax havens when he has criticized that practice. how do you respond to that criticism? >> senator, i am the beneficiary of a family trust that was set up when i was a little girl. i did not create them up or control them. i have asked the trustee to appoint and remove themselves and to appoint a u.s. trustee. but i have complied with all of the disclosure obligations, etc., that have been required of me in this process. >> let me ask you one other quick question if i might. one of the areas under your purview is going to be the administration enforcement of anti-dumping laws.

and the law is intended for it to prevent domestic industries from being destroyed by imports sold here at low prices. the commerce department determines the precise amount of duties and the price of dumped imports. and estimated $500 million in anti-dumping duties and build an agricultural imports from china have remained uncollected. and even though their payment is secured by specialized single entry customs bonds that were issued by well-known u.s. insurance companies, the question is -- will you commit to provide congress with a full accounting of all shipper bonds that secure the imports from china? >> senator, i am not familiar with exactly what you're discussing. i know what anti-dumping is, but

i will look into it and i will commit to working with you on this issue. >> there are a number of honey producers in south dakota that would be happy to hear about that. a lot trans-shipped honey from china. the enforcements available do not get effectively utilized, so we would welcome your help with that issue. >> making sure that not just honey producers and that our american companies are on a level playing field and our laws are not being skirted is an important objective. if i am confirmed, i will work on that. >> thank you, mr. chairman. i want to thank you, ms. pritzker, for this hearing. i think you have one of the three toughest jobs in washington. i know you do. i put the president and dod ahead, but i cannot think of anybody else.

and i also want to thank you and thank your family members. i want to thank your husband for helping me to stand up. a big and strong guy. was not hard for him. and i also want to thank our audience. we did something we have never done before and that was just because of the importance of this nomination. we opened up a whole other room, a defense armed services room. and they are sitting there watching television of this. and i think that is very, very important. i very much appreciate our audience. i'd very much appreciate our colleagues. and i very much appreciate you. i wish you well on this. you will certainly have my vote.

and so that's that. >> thenk you, senator. hearing is adjourned. >> thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013]

>> learn more about your senators and members of congress with the 2013 --gressional directv directory. also cabinet members, supreme court justices, and the nation us governors. fordirectory is $12 95 shipping and handling. congress is on a weeklong memorial day break. the house approved a bill to change the way interest rates are calculated for students. it will tie the rate to the 10- year treasury note. the senate spent the week on the farm bill setting agricultural and food stamp policy for the next five years. senators continue to work on the measure when congress returns on monday, june 3.

>> what happened in the senate or three consecutive years did not even consider a budget resolution. i served on the committee for eight years. since 1974, there have been years in which a resolution has not passed, but three consecutive years, they finally passed one in the senate, but the house and senate have not recognized -- reconciled their differences. statutorily, congress is required to pass a budget and complete the process by april 15, and here we are it is languishing. they have to bother with it. it is no wonder everything has gotten so distorted with sequestration, the automatic cuts. piling up. we have $16.8 trillion national that. we are in uncharted territory.

>> olympia snowe on fixing the congressional deadline, sunday night at 9:00 p.m. this weekend on c-span. president gavee an address at the naval academy in annapolis. an topic he discussed was increase in military sexual assaults. here are some of his remarks. >> our military remains the most trusted institution in america. when others have shirked their responsibilities, our armed forces have met every mission we have given them. when others have been distracted by petty arguments, our men and women in uniform come together as one american team, and yet we must acknowledge that even here, even in our military, we have seen how misconduct of some can have effects that ripple far and wide.

in our digital age, a single image from the battlefield of troops falling short of their standards can go viral and endanger our forces and undermine efforts to achieve security and peace. , those who commit sexual assault are not only committing a crime, they threaten the trust and discipline that makes our military strong. that is why we have to be determined to stop these crimes, because they have no place in the greatest military on earth. so class of 2013, i say this because you are about to assume the burden of leadership. as officers, you will be trusted with the most awesome of responsibilities, the lives of the men and women under your command. and when your service is complete, many of you will go on to lead your communities,

america's companies. you will lead this country. if we want to restore the trust of the american people that they deserve to have in their institutions, all of us have to do their part, and all of us have to constantly strive to remain worthy of the public trust. in youro forward careers, we need you to carry forth the values you have learned at this institution. our nation needs them now more than ever. innerd your honor, that compass that guides you, when it is hard and uncertain, that tells you the difference between that which is right and that which is wrong. be the momentl when you think nobody is watching, but never forget that honor, like character, is what you do when nobody is looking.

will be when you are in the spotlight, leading others, the men and women who are looking up to you to set of example. never ask them to do what you do not ask of yourself. live with integrity and speak with honesty and take his possibility and demand accountability. hisou can watch all of address at the naval academy in about an hour. we will have that here on c- span at 7:35 p.m. eastern time. >> the most fundamental difference between left and right is that both look at the economic ladder, and those on the left seek to reach down and physically take people and move them up the economic ladder. that is almost always driven by noble intentions, and yet it never, ever, ever works. the only way anyone has ever climbed economic ladder is to

pull himself or herself up one rung at a time. >> nearly all of you will experience failure. some of you crushing failure that you will recover from, and yet learn from, and, yes, be all the better for it, because once you have had a failure, that is your only good option, to take something good from it. of course very few of you will never recover from your fares, and statistically speaking, between two and five of you will spend some part of your life in prison. [laughter] for the next two weekends you will tell stories and advice or a new graduating class. tonight 8:00, with with senators out franking and ted cruz, congressman james clyburn and senators saxby chambliss and tammy baldwin. and then at 8:00 30, paul ryan,

nancy pelosi, peter king, flores.h moran, wilbill >> i want you to take good care of the furniture and the house and not let them get broken, because i want to fight everything as it is now in the comeback against for years from today. >> they return to the white house winning the election of 1892. frances cleveland, live monday night at 9:00. michael donley and chief of staff mark welsh briefed reporters today at the pentagon. they talked about sequestration spending cuts, the f-35 joint strike jet, operations in the asia-pacific region.

>> good morning. good morning, everybody. to welcomeileged michael donley and the air force chief of staff to the pentagon briefing about the state of the air force. i would be remiss of i did not mention today is likely his last presss briefing. he took the job as secretary during a difficult time and has worked over the last five years to lead the air force. he has been at the helm leading the world's greatest air force during two wars and countless military operations. at the nuclear enterprise and establish a program of record. he has been a champion of our

airmen and families, that with spouses, engage in support groups, and visited members around the globe. he is a steady and humble public service for those of you who , one ofn him in action incredible dedication. he is a leader committed to shore >> to ensure that the air force will stay strong. we want to thank you for your service. i want to go over the standards real quick. identify your name and affiliation. we are scheduled for an hour here. we will see how the questions go. but the secretary -- mr. secretary? >> good morning. i would like to say a few words about the situation in oklahoma to convey our thoughts and prayers have been with the people of moore, oklahoma, and

the surrounding area, which is near tinker air force base. the aftermathith of monday boston devastating tornado. in the wake of this tragedy, we are very proud of those who have come to the aid of their neighbors am including the local first responders, as well as airmen and sailors at tinker air force base and members of the oklahoma army and air national guard and many others. we thank them for their service, their continuing service, in this time of need, and in that community. general welsh and i have testified before congress on the air force budget proposal for fiscal year 2013. a dynamic environment. have reiterated our concern about the impact of sequestration on the force structure and the readiness and the modernization of our air force. the ill-effects of sequestration

are already taking a toll on our air force. 12 combat coded squadrons have stopped flying and important training has been scheduled. reductions will delay maintenance, increased costs, and create backlogs. the impending civilian furlough will hamper as further. it will impact morale and reduce productivity across the air force. we have been consuming air force readiness for several years and will continue to focus the resources that we do have available to meet combatant commander requirements but with a steep in late fy 2013 budget reductions brought on by sequestration, the readiness hole we have been trying to dig out of just got deeper. we are facing a readiness crisis from which it will take many months to recover. the modernization challenge facing our air force is pervasive. if unaddressed, it will

seriously undermine our ability to accomplish the missions the nation asks us to undertake. last year in programming the air force share of the first $487 billion in defense reductions in the budget control act, the cancellation or delay of modernization programs accounted for 65% of total air force reductions across. this year, each program was reduced by more than 7% in the recent sequestration. looking ahead, if there continues to be resistance to core structure changes, to base closures, too constraining growth and compensation, and given our current focus on trying to improve readiness, it is very likely that out year reductions in the budget control act would require further disproportionate cuts to our modernization programs. as advanced technologies proliferate around the globe, these cutbacks in modernization

would put at risk the air force capabilities this nation will need in the decades ahead. despite our near term and long term concerns, we're working to ensure that our most significant or force priorities remain on track, including the fifth generation f-35 joint strike fighter and the kc 46 tanker, and the long-range bomber. i want to highlight an important milestone in the kc 46 tanker program this week. on wednesday we announced the preferred and reasonable alternatives for the forma training unit and the first to the main operating bases. this was a disciplined and deliberate process that started with 54 bases and narrowed that down to nine which yielded three good candidates and selections for our initial kc 46 basing. final basing decisions are

expected for these bases in the spring of 2014. before turning to the chief, i would like to take this opportunity to thank our airmen, the active-duty guard reserve and civilian personnel who are the living engine of our air force. i am so proud to serve with them. over the last decade, they have served our country in operations around the globe. they have controlled the skies to protect america's homeland and have responded to people in need following natural disasters. our total force has performed magnificently. now our nation asks for even more. the draconian budget choices we face during this extraordinary year have forced very painful decisions.

>> thank you folks are being here today. the human toll in oklahoma that the secretary just mentioned, our thoughts and prayers go out with everyone who is been affected. the air force base at tinker was completely destroyed in the storm, so it hasn't had an weact on us as well hearing are so all very sorry. usual, people have come together and showed a commitment.

both army and air national guard and countless volunteers have been on the frontlines lines of this recovery effort. both search and rescue efforts as well as providing to all those affected. to all these great airmen, thank you for your selfless service during this very difficult time. it makes us very proud. our air force fully understands that the americans are working through a deficit problem and we are working to become a part of the solution. we are wanting to get to the bottom line and maintain our air force as the best in the world. operational requirements have really outpaced our resources

over the last few years. continuousing combat missions. we have put many missions on the back burner to sport the current fight. , and nowt control act full sequestration has driven us over the cliff. that is where we sit today. we have entered into a. from which we must first recover before we can think about what else might be possible down the road. bombers and fighters flying at reduced rates or not at all. 50 of ourferred over

-- and we have had to do pay cuts. we are still the best air force of the world. our great airmen will rely on their experience and dedication to succeed in any mission we are asked to. but our decreased resources will impact as overtime if we cannot get back to normal. modernization isn't optional. the biblect to be in air force and future. we have to figure out how to make that happen while maintaining our air force along the way. are allent initiatives important. our current and future forces

desperately need them. only about one third of our than 65-year-old tanker feet will be recapitalized. there is much more to be done if we want to keep our global reach and global power. impact willn's impact software development to some degree. 35 is something we need to keep ahead of the others. willature of the program save us a lot of money along the way, just like the f-16 program

did and the national fighter program. formingy 22 f 35's our the backbone of our training fleet. they have flown over 1200 sorties so far. that this program is on the road to success. we are grateful that our international partnership thinks the same. america is a in an air space and cyberspace future. secretary donnelly and my job is to make sure the air force is capable, credible, and that we have security objectives.

we want the best balance of foresight and readiness. thankfully, we are blessed with 690 thousand fantastic men and women will provide that. on their behalf, mr. secretary, as you enter your final months as the leader of the world's final greatest air force, i want to thank you for your rocksolid leadership. your dedication, your personal mentor ship. i would also like to thank you for bringing your wonderful wife to our air force. she has been a joy and then taking care of our airmen and their families from the first day. mikee a great airmen donnelly.

ladies in dublin, can we answer any questions for you?? first of all, what is going on in india and the u.s. as far as the air force is concerned -- concerned? what do you think of the future? the chinese military and their air and space developments are being followed very carefully. their activities in the cyber arena as well.

we do track this on a regular basis. talk about the relationship with india which is very poor in. that is one of the key focal points for our pacific commander. i hope to meet the indian air chief here within the next few months when he travels to united states and i think that meeting has been arranged, so i can talk to him about this relationship. recently we had to cancel a red flight and suicides which they paid in,g to produce and we were very sorry about that. we want to get that back on track as soon as we can because that will be beneficial for all of us. what about collaboration on

the f 35? is that still on? the modernization of the indian air force, india is on the list of buying those. her believe india has made friend choices. but we will get you an answer for that. inhas india shown interest the f 35 and is the u.s. interests in that? >> let me get you a >> and answer for that. >> when you talk about sequestration driving the air force into the red, is it your understanding that the members of congress understand the gravity of that? i think the members of congress are very smart people.

very difficult problem. we all understand that. everyone is looking for a solution. we are doing the best we can with the resources we have the this point time. i think the members of congress are looking for a solution so that the best defense could be invited over time. say the air force cannot execute all of the missions the united states expects of it right now? we are executing all those. my concern is into the unknown. we are funding the known, and taking risks in the areas of the unknown. theuld be a problem for us longer this goes, and the less our people have in training compared to before. congress doesn't seem to be

and a hurry to fix the situation. , and go past september sequestration continues, what is your next step? atwe are looking right now every modernization program, every acquisition program we have, and determining which are the ones we can afford to continue. we are looking at the reality of s.xt year's expectation we're going to that discussion with all of the commanders and joint chiefs to make sure everyone understands. hoping for a

budget solution that provides the ability to plan ahead. that would mitigate some of the major concerns. we are involved in an ongoing discussion with our strategic management review. we are looking at the impact of budget reductions at various levels including sequestration, which include continuing into fort -- 2014. 2014e not just looking at but also the next 10 year. . anyway you slice it, the impacts are significant, and negative.

be structure impacts, modernization readiness .mpacts across the military we are working through what that would look like in more detail. specifically with ray -- respect plan, thee financial execution plans, at levels potentially be low the president budget. could you give us some idea of what the danger is? int would be most at risk the early months of next year? >> i think our beginnings --

biggest concerns is that the readiness situation would persist. to start digging out, create a ram for improvement. perhaps not at the beginning of 2013, or 2014, maybe ended 2015. the negative situation we are in this year would continue into 2014, we argue know that. ,f sequestration coastal 2014 and extends through the fiscal year, we would like to figure out a way to mitigate that. and we are not there yet. rest ofspeaking for the the leadership, we would like to be in on the strategic decisions that inform how we resourceresorts -- planning for the next decade.

situation,the worst without change in the next decade, we don't have a solid set of top lines to work against. ,ust moving from month to month from quarter to quarter is not the way we would like to operate. to ours the reference sound top lines that we need in the. -- department. rdf 22 that were deployed to korea still there, or have they returned to japan? if they are still in korea, how do you anticipate the impact echo >> we will have to double check that. i think they are back in japan. i will get you the answer. with everything on the table,

i wonder if you might address ity for nucleare forces in sequestration. you all have what i would off then b, and dust shelves when it comes to modern raising the bomber. you could do modernization a little more cost-effectively? >> the short answer is that the the nation and possibly afford on this is the national level of decisions that the president is going to make next year.

the structure issues will not be sorted through in terms of how we would implement the new programs until probably summer of 2014. i will check that date for you. with respect to how it impacts planning, i think it is little has affect on bia bcm structure. we are going ahead with a long- range strike armor that will focus is on conventional capabilities but also nuclear capable. we are moving forward on the bomber side. that is independent, in some respects, from the nuclear decisions that are still pending. >> do have ways in which you could execute both of those

modernization programs cheap we -- more cheaply? >> yes, there are ways to address different aspects of the nuclear enterprise. so thereots of options are many programs the ball. the folks are focused on the size of the nuclear enterprise of the balance modernization. >> are either of you at the aint where you are growing

concern that a competitor may misjudge our ability to respond, should we need to? because of the sequestration cut, and the uncertainty? >> it is very important as we undertake all of the very challenging fiscal issues confronting the nation and military, that we continue to engage our allies and partners around the world to collaborate on international security in various regions. we will continue to ensure , gettive partnerships ahead of international security problems, and do that in a team- based coalition approach.

and of our military political partners is in a different place. they offer different capabilities, they offer anderent real estate, different places of modernization. we work with them in regional context. i think we share a common goal of getting ahead of object where we can come .ddressing conflict we do this with partners. it is very born to us. i would hope that someone, before they made that calculation, would consider the risks. ando through the situation

yes there is a great opportunity for someone to make that unwise decision. south korea is planning to acquire next generation fighters. would you find it a problem if use those and allied operations are exercises? oure continue to support south korean allies in their selection process providing the data they need to make her decisions.

,here are competing aircraft and more than one american platforms involved in that. our job is just to provide information they they need to make their decisions. they are strong partners and think they will remain so in any situation going forward. >> i would like to get a little more this question about the f 35 if possible. we have been told for a couple of years now that it was something that the department needed to get its arms around. it was a problem. this does not reflect that. cost, same cost

per flying hour. how should we take that? does the department have its hands around this problem? what are some of the fixes to get the cost down? i would also like to ask where you guys are on ioc? just to start off, i am sure the chief would have some comments as well. on your last question, we will make an ioc notification. we owe them a report by june 1, and that is on track. , and working through that it will go to congress next week on time. was the omsuestion cost. n issue, but to be a

i will offer you the answer that there is no finer answer then we continue to work on it within the program. to shareue to try costs and mitigate costs between how we structure can't tracks -- contracts and contractors aboard. or are lots of issues and opportunities they continue to work. it continues to be an issue that we will look at, and we will continue to try to arrive that cost down. >> the disconnect, it seems, is that we continue to be told , media and those who would want to buy the aircraft, but the documentation does not reflect that. is not justhis

rhetoric, how to we reconcile? that are data, that will be reflected going forward. trying to drive down the costs where we can. there are questions internally to the programs about how we do andstical support operations cost going for. a number that locks in for the life of the program, but it continues to adjust as we find more efficient ways to operate. could i get your assessment of the cost per flying hour of the f 35?

wrecks i think what has been going on for the last year has been trying to come to an agreement on the person of the numbers. of peoplea lot involved in this discussion, and we have normalized to a couple of numbers. the number may continue to adjust itself slightly, but that gives us an idea. that number is down from the original estimate, which is a good thing. we are also getting more are not actually flying airplanes, that will interest a better feel for the long-term costs. we are not flying in a fully operational mode yet, we're just starting the training programs. that data has to mature just like any other program. we don't know for sure until we

sustain it for a while. it is still being developed, and once we get more fidelity, we will have a much better feeling for the cost. cost difference, my is that there has been a deal for 1/10 of the cost. what is your thoughts on that? >> we have seen that deal. describedhat it was as a complete offer, or estimate of what the full cost would be.

there were operational implications for the proposal. bringing down you choose and using those sensors. that would have operational implication. i will just tell you it continues to be an issue on the hill. the continues to be debated inside the department, and we continue to try to get the best fidelity and best understanding of operational comparisons between platforms. >> >> i am from "the new york times." a lot of people said the pivot to asia was an emperor without clothes. rhetoric without reality.

anti-access is clearly a problem in asia and the persian gulf. what is your assessment of current stealth-jamming missiles to deal with the problem? do we need new tactics are problems? -- new tactics? >> i will let the chief deal with the tactical problems. we're sustaining the presence across the asia-pacific that we have had for decades now. we will get the numbers here to clarify. i will try to remember some of the top of my head. 43,000-46,000 airman in the pacific.

we will get you the numbers, tom. we continue to be engaged in the pacific. the f-22, its time in the theater, about 60% is in and around the pacific theater anytime. we have done a routine feeder security packages up and down the pacific. we have patrolled bombers in that region on a regular basis. this work continues. the department has announced the first location overseas for the f35 will be in the -- [indiscernible]

we're focused on potential challenges in a number of theaters around the world. the capabilities we are developing for more contested in environments and a lot of areas around the world. in the middle east and the gulf and potentially in asia and other areas as well. we are developing a more effective capabilities across the air force told used in the asia-pacific. >> the threat sensors are getting longer ranges and becoming more capable. we have to worry about that globally. the pacific makes us look at the problem in terms of range. how do you become more interconnected so you can plug into a network or system that is already in place? that is what the capabilities

mean to us as an air force. we need to look things like speed and stealth and how they affect killed chains. that is the business we're in. disrupting or accelerating killed chains. speed compresses killed chains. in mix it harder to execute. confuses our complicates the killed chains. they are good things. none of it stands alone. a big question is what this stuff really mean in 2035 or 2020? -- 2040? it points us towards developing capabilities that operate in that kind of environment. in a push to develop or strengthen existing partnerships because there are new partners available in the pacific. there are capabilities that we can help them develop and there

are things we can learn from our partners. it pushes us towards a different kind of training. something we have to do to get back to full spectrum readiness. >> yes, sir. providing the necessary air power. what kind of presence of the u.s. will have after 2014? >> i will let the chief address that. i will provide a set up for this. an important mission is to help train the emerging afghanistan air force.

helping deliver the capabilities that they will need for the future. they are rebuilding and air force. we're interested in the development of new pilots and of a professional afghan air force. they are coming up to capability ramp. they have shown increasing capability with the mi-17 in particular. we hope to get the c-130's into afghanistan. >> i was in afghanistan a couple of months ago and i went to the training bases. i think our role will be to continue to continue to train the afghan jet air force. we will be part of the solution.

i was struck by the talent level of the air force. their expertise in executing the mission is not insignificant. most of the people being trained to not have a lot of expertise in managing an air force. the infrastructure management, those kinds of things that they didn't do because there were much under when the air force was running in the past. they are trying to learn that now. they have no problem flying

airplanes and helicopters. they are good at it. >> yes, sir. >> i want to get a quick update, of the nuclear operations. i understand that is underway right now. can you give us a snapshot of where things stand? >> at large? the exercise? ok. it was the 17 and we had 19 crewmembers who were not on full missile status. four of the 19 as of today work reinstated. -- were reinstated. the others, completed the training. the leadership is happy with how