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. 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 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. outng sure we screen 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. whengarding the scandal, 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. your. lew, i am not asking 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 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. knewottom line is, you 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? manyngressman, i said so 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. >> secretary, take a deep 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. theview put forward by 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 home.sses call 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.

at the federal government is 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. unlimitedn spend 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. ofwhen commissioner shulman 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. in fairness, i just think the 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. provisionshose 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. aftert even five years 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? important it is very for regulators who have been

given authority to implement these provisions and for that process to be completed. are of the concerns that raised are actually going to be addressed to him as i understand, as roles are forthcoming. not all, but the legislation is premature because we have not yet had the opportunity to complete the process. 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. i cannot say exactly when is 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. thatgot a specific one 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) (4) social welfare groups have increasingly been putting money into political campaigns. spending increased from about 40 million in 2004 to upwards of $150 million in 2008, according to the center for responsive politics. but the real boon came after the supreme court's citizen united ruling in 2010, 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. 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 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 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 matters. itdid give me a heads up 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 i.g. report until there is a final report. reports go through changes -- >> if i may, mr. secretary. but prior to the i.g. report, wasn't there an internal investigation at the irs? >> obviously while i have been a treasury there has not been anything -- now am asking in general, 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 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 jurisdiction 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. there is a challenge -- if you 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? >> i have seen it and asked my 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. gothe challenge as we 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. last congress, i sent a letter 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. i hope that you will give us 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? youongressman, i think, as know, the budget does not balance in the 10 year window and it is not what he 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. i think the path we are on is 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. i would ask our witness to 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] >> c-span recently talked to

members of the fema disaster response team. they talk to residents who were affected by last month's tornado. >> i was in the field registering survivors. i would like to explain the process. get they unregistered, they a registration number. they get a contractor, who is an inspector. survivors to the do our inspection.

. within the next day or so,, we make sure we explain the process. then they get their act in the --l and make sure they feel fill that out. we have purposes of from the will address them to utilize the recovery center with questions and concerns. we are the first groups on the ground. our main concern is the

face. we are going to stay as long as possible in oklahoma. guest: -- >> have you had an inspector come to your residence? >> no. i will stay here until tomorrow. letter inl receive a the mail saying you are ineligible. out toutomatically sent find out if you have insurance. fema make sure the insurance goes through. when you get your papers, you

800 number to call. after that happens, you need to call that number. after that, you can find out if you are eligible for any assistance. at that point, maybe they will start helping you. the time, the direction -- the duration, you should have that in 7-10 days. i guess we have to go to the post office to get our mail. also, you will be getting an phone call.

it is very important. whatever your insurance company gives you for a settlement, it might not be enough. you might be eligible for a low interest loan. it is important. it keeps you in the process with the month. if you decide not to take the loan, that will be fine. important that you take care of that. it takes about 20 minutes to fill that out. the disaster recovery center is in your church. we will help you with that package, to fill it out. how long will they be out there? >> from 8 to 8. >> thanks for coming out and

clarifying a little. >> next, your calls and comments live on "washington journal." after that, president obama's speech on counter-terrorism policy at the national university. of the supremer court bar. that is the supreme -- a select group of attorneys required by law to appear in front of the supreme court. i have over 10 years of practice and have argued 18 cases on a wide range of important federal all cases. i teach at stanford law school in california and harvard law school in california -- in massachusetts. i have been called the nation's premier supreme court advocate. business in the legal

cannot like that. i do not know and i do not care. think people who do a lot of serious things in this town take themselves too been seriously. i do not think i walk on water. i enjoy what i do and i think it is a privilege. i do not mind making light of what people in this job do. we are not the greatest thing since sandwich spread. if we cannot have fun, what is the point? -- compostingn c-span's "q & a ." federal government is spending on intelligence in classified operations. alk on whyo

humanitarian action can feel and backfire. ♪ on theood morning morrill day weekend here in washington and around the country, the nation remembers the veterans who paid the ultimate price in their service. tomorrow, the president will pay tribute at the arlington national summit -- cemetery. we will have live coverage. the morrill day was first called decoration day. it began in may, 1868. it is when general john logan called on the country to remember veterans who died in the civil war. to do so every day -- every monday in late may,