i think i hope able be doing everything they can to make this process work the right way. if it does, there will be plenty of opportunities to amend that bill on the floor. >> last question. >> to the proposals -- >> they do not. the administration is trying to put themselves in the position where the penalties go away until after the election. the penalties provide quite a bit of the funding to provide the resources for people to have assistance to buy their insurance. a may be other side of that equation where are giving money away -- they may be other side of the equation or they are giving money away -- i do not

know if there are any penalties if you verify wrong. you still get assistance at that level. this year i will make about 40. you get the benefit when you may be making a lot more. nobody believes that self verification means fewer people apply. the greatest of all political moments, you try to eliminate the penalties and you do everything you can to exaggerate the amount of taxpayer dollars that go to people who want to self verify their income. none of these proposals would deal with the crux of pre- existing conditions. we think we should suspend this bill. there are too many parts of this

bill that do not work. it is like trying to ride a bicycle with one wheel. not very many people are good at that. as this thing falls apart, one piece of the bicycle falls apart, we have to get a new bicycle. this thing is not going to work and somebody is going to get hurt. people are going to get hurt, people who need healthcare and healthcare insurance, not people who need to be some -- a part of some sort of experiment that is half-baked. >> there are ways in which you can deal with the issue of pre- existing conditions. we acknowledge that. we have good solutions out there. >> thank you very much.

>> coming up, congressional hearings on the boston marathon bombings. the senators talk about the 19 arizona firefighters who died in the line of duty. a house hearing implementing the affordable care act. on the next washington journal kevin brady, chairman of the house and wayne's -- house in ways committee will discuss the decision to delay the employer mandate in the affordable care act. we will talk to eliot engel about events in egypt and syria. washington journal begins live at 7:00 eastern on c-span. >> i wanted a representative look at american life.

i needed politics, business, entertainment, food, finance come art -- finance, art. i was interested in this recurrent pattern, people who begin in very humble places and are not unlike the main characters. they reinvent themselves as something new and find a new language and a new idea that is riveting to americans. they build an empire. they cannot stop building it. it is almost like an imperative. you have to keep growing. eventually, a decadence sets in where the language becomes a parody of itself and they no longer seem to be producing something good. they continue to produce.

gingrich just keeps whiting -- writing book after book. opera is on the cover of every issue -- oprah is on the cover of every issue of her magazine. >> george packer intertwines the struggles of three americans whose american way of life has failed them thomas sunday at 8:00. -- failed them, sunday at 8:00. >> our collection begins with the beginning of cinema. the earliest film comes from 1891. it was a camera test that was produced by the thomas edison company, part of a series of experiments that edison and his engineers engaged in in the early 1890s.

where our collection begins is in 1893, the first films registered for copyright. edison exposed to negative on strips of photographic contact paper, scented into the library to be registered as photograph -- sent it into the library to be registered as photograph. the paper print collection as it came to be known was an historical accident. the name has been lost, but we're very grateful grateful for what ever library bureaucrat decided that it would be ok to register this as a photograph. >> seymour sunday at 7:00 eastern and pacific. -- see more sunday at 7:00 eastern.

>> the house homeland security committee held a hearing on the boston marathon bombings. testifying at the hearing, former new york mayor rudy giuliani and the former director of the national counterterrorism center. this part of the hearing is in our. -- is an hour. >> it is a privilege to testify before you on this important subject. since september 11, there is rarely a day that goes by that i am not asked by someone, are we safer today than we were before september 11? the answer to that question is never a clear yes or no. in some ways, the answer is yes. in other ways, we have not given it enough attention. we have not anticipated because we cannot anticipate everything. the prevailing view right now

among most security experts is that we have improved our safety and security with regard to attacks by air. we have improved our safety with regard to attacks by very large well-recognized terrorist groups. we are now much more of own herbal to attack by either single individuals or much smaller groups who are acting on their own. we have seen a few recent attacks like that, boston being one of them, little rock, fort hood, the attempted attack in times square. the air attack that was foiled over detroit. the one in boston was probably the one that is the one that got everyone riveted around the idea that the single or small attacks are something we have to worry about.

they really are not new and they have gone back quite some time. maybe in some way, it is a failing that it takes us so long to identify these things as a new method of attack. a new method of attack in boston goes back to at least 2005 in london when a very similar kind of thing happened. homegrown terrorists in england people who are uk citizens, attack the city of london. it just so happens i was there that day.

was encouraging people to do that. maybe one of the things we can examine is why it takes us so long to recognize this as a new form of attack when this is a very old form of attack. the individuals on the small groups that do these attacks largely operate on their own but usually there is some training more encouragement from a more organized or established outside group. these smaller -- some of them are all of the extremist message. with outside encouragement sometimes with support him at very rarely completely on their own. the self generated terrorists operate in ways that make them much harder to detect and sometimes just as dangerous as the more highly organized groups. they are more difficult to detect because they engage in

many fewer electronic wire communications with organizations that we have under physical or technological surveillance. or that we have infiltrated with undercover agents. a large international group that will carry out a plot almost has to trip over some of our things that we have put there to detect them. they have to communicate by phone, they have to transfer money, equipment, move people. they are most always have to deal with someone giving us information. the chances of our detecting a large well-organized plot is much greater then a young man or two young men and boston or new york planning on their own to do this. maybe they make a few contacts, but they are hard to find in the avalanche of information that comes to intelligence services every day.

one or two people motivated on their own i reading inspire magazine, following jihadist website. it would be foolish to have nor the fact that some mosques inspire jihadist terrorists. the first attack that shocked the country was inspired in a mosque in union city, new jersey by a muslim cleric who is serving 100 years in prison. these are much harder to detect. these individuals can be extremely dangerous. although they operate independent of one another, and it is perfectly accurate to describe them as independent actors sometimes that is deceiving because these independent actors are connected by a very well-defined common cause. islamic extremism.

even if no single act of theirs can do the damage of a september 11 2001, smaller more frequent attacks that can kill people shocked the country, show how vulnerable we are, can just as well serve the goal of these jihadist groups, which is to try to frighten us, destabilize us, make us become less confident in our system of government. how do we deal with the sporadic smaller groups? how do we change our approach to terrorism so we can detect them? as a threshold matter, we should not begin by stopping doing what we're doing on a larger larger groups. this has been a very effective and it would be unfortunate if we were to take some resources away from dealing with the larger groups in order to deal

with the smaller groups. this should be an expansion of what we do rather than a contraction of what we do because these groups still pose a threat to us. it may be this new method of terrorism is new to us, but it is not new to them. the old method is still very much alive and well. these large groups are planning somewhere in the world to bomb us in some kind of a spectacular way. any attempt to back off that the thought we have conquered them, would be exceedingly unrealistic and very dangerous. we have by no means conquered well-organized islamic terrorist groups. whether we recognize that we are at war with them, it is completely irrelevant. they are at war with us. are we going to recognize they are with or without us or we going to fool ourselves into a very dangerous state of denial?

the first thing we recognize about these smaller groups, we have to identify them with precision. violent jihad is hism -- find the common threads, the shared motivations and then hopefully, as early as possible, you catch the serial killer. if you go on for years not recognizing the common threads being afraid to identify the common threads, because you are so frightened of political, -- political correctness, those killings go on interminably. it is vital we identify our enemy correctly. it is very hard to find someone you do not identify correctly.

these attacks on our homeland and others have been connected by a common motivation and the singular purpose. the underwear bomber, the times square attempt, the tsarnaev brothers were all adherence to the jihadist goal of islamic domination and the murder of free people who they regard as infidels in order to accomplish that goal. analyzing the avalanche of data presented to intelligence every day, we often describe it that these people are looking for a needle in a haystack. it is not just any needle, it is a needle that has very clear identifiable characteristics. in order to confront this threat effectively, we have to purge

ourselves of the practice of political correctness when it goes so far that it interferes with our rational and honest analysis of the identifying characteristics that help us to discover these killers in advance. for example there would have been a much greater chance of preventing fort hood and possibly the boston bombings if the bureaucracies had been less reluctant to identify the eventual killers as potential islamic extremists terrorists. bureaucracy's response to the message they get from above. it requires understanding that the signal sent by a chief executive, the president governor, mayor, the head of the fbi, affects the behavior of bureaucracies.

the message conveyed from the top that it is inappropriate to label someone in islam and extremist -- an islamic extremist will make bureaucracies reluctant to pursue leads that would otherwise be pursued. you cannot fight an enemy if you do not acknowledge. if the party line is to never use the words islamic extremist terrorist, there is a reluctance to label something as the jihadist act. the bureaucracy is paralyzed by a greater fear of being wrong that they will identify someone as an islamic extremist and they will be wrong about preventing a bombing. the elevation of political correctness explains the failure to identify the major as a terrorist despite repeated indications of his jihadist views.

it led to him being promoted in the united states army. that political correctness has been extended so far that the current administration describes his act as workplace violence. this is not just preposterous, this is dangerous. it leads to all sorts of mistakes being made by the bureaucracy who realized they cannot identify people correctly without creating fear they will be in trouble. even to this day, it would be enormously helpful if the fort hood attack were described as an act of terror. the man was yelling all akbar as he was slaughtering people. we do not need to discover his motivation, he explained his vote ovation to us. we just failed -- he explained

his motivation to us. i cannot be certain that that played a role in a failure to investigate with the vigor and the intensity that in hindsight seems should have been done. it is a question worth asking. what other steps have been taken if this fear was not so great that you might make a mistake and identify someone as an extremist who was not? that is something required to pursue. expanding our defenses against these isolated or smaller groups is going to require a very different strategy. it will require a significant involvement of local law enforcement. if the genesis of this terrorism is to not -- domestic, the only

chance to detect it is if the fbi and other agencies use local law enforcement as their eyes and ears. there are only 12,000 fbi agents in the entire world. or are 35,000 new york city police officers for one city. there are 800,000 police officers for our country. 12,000 fbi agents. if you are trying to find a needle in a haystack in a community in america, the fbi cannot do it. i do not have the numbers to do it. the reality is they have to be trained in how to detect terrorism. former police commissioner, my

police commissioner in new york, has developed excellent protocol called the precursors of terrorism. things police officers can be trained to look for terrorists. over the past 15 years and over the past 2000 -- i have been in law enforcement for 2000 years. knowing back to the 1960s, i have worked with the fbi and the local police. the fbi has made tremendous progress in bringing in state and local law enforcement. it is light years ahead of what it was. the joint terrorism task force in new york city, i worked with in both capacities as the united states attorney and as the mayor of new york city. the level of cooperation is superb. i could give you one example

after another of terrorist acts they have prevented in new york. the reality is, more has to be done in order to foster this cooperation. i do not know if the fbi properly notified boston police. apparently, it did not get to the police chief about -- about the information from russia. i think there was an obligation to notify. if the fbi receives notification from the government of russia that a man is suspected terrorist am at the fbi does not know if the man is a suspected terrorist but has to investigate, where would you go immediately?

not just to notify them, but you asked for their help, too asked them for the information, to asked them to put them under survey lynn's. -- surveillance. when the man engaged in a strange act of going to russia, it should have been a massive act, it should have set off all kinds of alarms. his family left russia and obtained political asylum in the united states saying if they went back to russia, they would be persecuted. all of a sudden, you're going back to russia and nobody connected the dots. he was not going back to listen to the moscow symphony. he had to be going back for a purpose i was nefarious. those dots were not connected. that information was not passed on to the boston police and he returned.

-- when he returned. that is the area that i would examine it would be a great benefit to law enforcement. did the connection get made? why didn't i get made? -- why didn't it get made? this is not the last act like this we are going to face. i think you have some very important questions to asked. in assessing our level of danger , both president george w. bush and barack obama have warned us no matter how effective we are we have to succeed 100% of the time. the terrorists only have to succeed one time. our response to terrorism and america must be subjected to constructive criticism and

excruciating analysis. it must be free of lyrical correctness and it must be constantly reevaluated -- it must be free of political correctness and it must be constantly reevaluated. i respect what you are doing thank you. >> thank you so much for being here and thank you for your insightful testimony. >> it is a pleasure to be back in front of you. before reflecting on the five instances where our defenses were not perfect, i do want to begin with some of our successes. they are a lot more prevalent. i am always very careful saying this because the loss of 18 people is a tragedy and i do not want to underestimate back -- underestimate that.

i have met the bodies of our fallen soldiers, i have known people who have been killed by terrorists. frankly, in my view, it is nothing short of remarkable that since 9/11, we have had a total of 18 people killed in the homeland i al qaeda -- by al qaeda inspired terrorism. these were all tragic and they have enormous psychological effect on the entire country but in my view, this toll is astounding. i would venture a dangerous gas if i asked the members of this committee on september 12, 2001, how many americans would be killed over the subsequent years, not one of you would say eight teen. many of you would say 1800. some of you might say 18,000. our record is far from perfect,

but it is pretty good. the roots of the success come in many forms. incredibly successful offensive strikes in pakistan and yemen that of crushed al qaeda overseas. excellent human and technical surveillance to penetrate these networks abroad and domestically. improve screening of travelers and cargo traveling to the u.s. improved information sharing among federal agencies, improve domestic counterterrorism intelligence investigations led by the fbi. very much done in conjunction with dhs and state and local authorities. as we saw in boston, first responder after an attack to reduce the consequences. finally, community engagement

especially with the american muslim community to reduce the attractiveness of the message. concrete results of this is a long list, but the 2011 arrest in texas the 2010 disruption of the attempt to take down cargo planes by al qaeda in the arabian peninsula the 2008 arrest a 2007 attack at fort dix, and the disruption of operational to down numerous airliners. our defenses are not perfect. i want to stress that, and i say this completely a politically we have to accept that

perfectionism is impossible. we do have to have realistic expectations so we do not have partisan witchhunt after the fact. it is far less likely that we have large-scale successful attacks and it is significantly less likely that we have small- scale attacks, but even some of the examples the committee has mentioned as failures, i would note it is a layering of counterterrorism defenses which help make them not be successful. the case of times square it it is true that we did not identify him before the fact. one of the reasons his bomb failed was he knew the fbi had tripwire programs in place. if you bought a certain type of fertilizer, they would be tipped off. he bought a type of fertilizer that would not explode.

in the case of the christmas day bomber, we fail to identify the individual, but what was al qaeda forced to do? use a detonator that was less likely to work. all of that being said, what are some quick lessons i would learn from the five plot where we did not fully succeed? i think i have a slightly different view from the mayor recognizing radicalization is critical. when he to improve our training, we can be afraid to train. ideas think that at least in the case of fort hood, a failure to recognize that process in the majors violent inclinations were a factor in not stopping the flaw -- stopping the plot. in my 6.5 years working intelligence and counter and --

counterterrorism, the idea that political correctness in any systematic way affected our efforts to find locate, and either kill or arrest terrorists is simply beyond me. second, al qaeda inspired messages on the internet are here to stay and we have to do more to understand them them attract them, and disrupt them. -- understand them, track them, and disrupt them. i do believe the fbi, state and local officials need to work together more closely to allocate responsibility to monitor those websites that produce some of the radicalizing influences we have seen. i believe this is a current weakness. the shift from radicalization to mobilization is incredibly hard

to predict. if we could put surveillance on anyone -- on everyone who is radicalized, this would be easy. we cannot. he cannot with federal resources. -- we cannot with federal resources or state and local resources. detecting that tipping point is the hardest piece. in the case of carlos the federal government failed to do that effectively. it is not clear to me that there are resources in place that would've been been able to follow him sufficiently to stop the shooting at the army recruiting center. information sharing within the u.s. government has to be maintained. the case of fort hood does represent [inaudible] it was a failure to share information between the fbi and the department of defense. this has to continue to be pressed. even in light of what we have heard about nsa surveillance, i

believe this committee must continue to press the executive branch to make sure this information is provided to agencies that can connect the dots. joint terrorism task forces are critical and do excellent work. but they do not do everything. the lacking piece which may have been present in the boston bombing, those cases that the fbi cannot continue to investigate when they do not have the resources. in those cases, we must create a better system linking the fbi state and local centers and authorities to pick up the smaller pieces. although we have invested an enormous amount in state and local fusion centers they are not sufficiently tied together.

i think you have known me for the past several years to be very committed to this problem. i would urge this committee to keep the pressure on the administration, but to also provide the service you must to the american people to convince them the members of the federal government are not spying for the sake of spying and you as the committee are holding the executive branches feed to the fire to ensure your civil liberties and privacy are being. much of this cannot be spoken about in open hearings, but as much as we can, we must. without the trust of the american people, the fbi, cia, dhs leased departments will be looked at as the enemy. we cannot -- police departments will be looked at as the enemy. we cannot allow that to happen. thank you.

>> the chair recognizes professor hoffman for five minutes. >> my humble apologies for being so late. thank you for the opportunity to testify. it is a great honor to do so. the al qaeda organization is widely seen on the verge of strategic collapse. even though al qaeda may be in decline, the movements ideology continues to resonate. the movement retains its visceral hatred of the united states along with the potential to inspire and motivate individuals to engage in deadly acts of homegrown terrorism.

for more than a decade, al qaeda has withstood the greatest international onslaught directed against the organization in history. it is consistently shown itself capable of adapting and adjusting to even the most consequential countermeasures having survived for quarter of a century. the oxygen they depend upon has been its possession or access to physical sanctuary and safe haven. in the political upheaval and instability that followed, al qaeda has the potential to transform toehold in the sinai into footholds. while osama bin laden's death inflicted a crushing blow on al

qaeda, it is not clear that it has been a fatal one. they are situated in more places than it was on september 11, 2001. it may take the presence of 14 different theaters of operations. some of these operational environments are less amenable than others, others have become sites of revival and resuscitation, such as iraq and west africa. al qaeda has been able to achieve the unthinkable. radicalizing persons who are citizens of the united states and canada and inspiring and motivating them to engage in terrorist acts, whether on their own or at the direction of senior leadership.

the continuing challenge the united states will face is that al qaeda's court ideology remains attractive to a hard- core radical and is capable of drawing new enhance -- into its ranks. the latest recruits to the struggle are the tsarnaev brothers. the violence inflicted on muslims in general has been cited by many homegrown terrorists as the salient motivating factor in their politicization. this may also explain why the american invasions of iraq and afghanistan were cited as the reasons behind the bombing at

the boston marathon. there is no one path to radicalization. individuals will always be attracted to violence in different ways. they come from every walk of life. the common element in the process reflects these individuals deep commitment to their faith often recently discovered hatred of their adopted home, especially in the united states and the west, and a shared sense of alienation from their host countries. a dozen years ago, the enemy was clear and plainly in sight. it was a large terrorist

organization situated mostly in one geographic location and it was led by an identifiable leader. today, when the borders between domestic and international are blurred, when our adversaries are not only identifiable terrorist organizations, but enigmatic individuals. we built an effective fence against the previous threat. our challenge today is to develop new defenses against this individualized threat. continue to destroy an up and al qaeda its affiliates and associates and the ideology that fuels and sustains them. >> thank you, professor hoffman. it is the constitutional responsibility of this committee to conduct oversight into these matters, to get to the truth,

but to find solutions. it is the intention of this chair to issue a report of findings and recommendations to improve the system where there may be failures. mayor, i would like to asking a couple of questions. i agree with you that our inability to find the threat because of political correctness poses a danger to the safety of americans. with respect to boston, you have worked extensively -- you have a unique background you can bring to the table. you are high up in the justice department, a u.s. attorney, mayor of new york, you have seen all of the assets at play. after 9/11, the goal was to connect the dots.

for the most part, they have been very successful. the ones i have worked with have been very successful. they are all in the same rim, the walls of been taken down they talk to each other. in the case of boston, it raised some concerns to me. we had what -- we had police commissioner edward davis testified before this committee. his testimony was interesting because when i asked him, did you know about the russian warning? his answer was no. did you know the fbi had opened up a criminal investigation? his answer was no. did you know that he traveled overseas? that was what they warned us

about that he was going to travel overseas to meet with extremists and come back. the answer was no. he did not know about it and the boston police department know about it. to me, that is an issue. to make the bold assertion that even if they knew about it, chechen rebels fight alongside al qaeda, to make the assertion that it would not make any difference because the case was closed raises a whole other set of issues. i talked to ed davis. the thing is, the hardest thing for me to say is that i did not know about it. i did not know about it. my guys know the streets. the fbi does their job. my guys know the streets. local law enforcement are the eyes and ears on the ground.

you have 12,000 fbi agents nationwide. you have 800,000 police officers nationwide. 35,000 of those in new york. it seems to me -- 12 years after 9/11 and we still are not seeing that kind of coordination and communication taking place. when the fbi says we do not have the resources, why not leverage state and locals? i want to help. the boston police wanted to be at the table. they wanted to know about the russian warning. there were not that many leads and there were not that many foreign threats coming into the boston area. this is a general question, but 12 years later, what has gone wrong? what can we do to fix this? >> i do not know if it is

systemic or thing that happened within that organization. i do not know if the information was communicated so that one of the four boston police knew about this. and they did not communicated to their chief or commissioner or if it was not communicated to the police officers. it is hard to say. what i do know is if you asked me what does the new strategy have to be to deal with this new threat of isolated groups, we are talking about a large international group like al qaeda. the fbi and nsa will be the main actors in trying to find them. if you are saying to me, are threat -- our threat now are two

young men living in boston or someone living in philadelphia or new york or las vegas, the fbi is not to find them. you will only find them with the local police. in my experience of 40 years of working with the fbi and local police, it seems to me the breakdown when happens, the fbi shares a lot more than it ever did for years ago, the breakdown comes about if you really asked the fbi, they will say we cannot trust the local police. they might make a few exceptions. we can trust new york, we can trust boston, but we cannot trust a local police. they will leak the information because they are not as professional as we are. here is the reality the fbi should confront them with the police department. go to the police department and say we can share information

with ray kelly, but we have concerns about yours. we want to work with you to train them so we are confident we can share information. even the fbi has had leaks. nobody can be holier than thou. there is an obligation here that if the fbi is uncomfortable sharing with local law enforcement, the fbi has to take the initiative to confront local law enforcement and get local law enforcement in that area to straighten out whatever the inadequacy is. we can no longer deal with this by not sharing information. we will miss other boston's if the federal government does not engage local police departments in a very big way. there are only -- they are the only answer to finding these isolated single individuals small groups. i would say -- i do not know if

this is the case in boston, i am giving you my experience. when i have confronted the situation of -- very often -- we are not sure about the reliability of this particular police officer this particular unit. then you come to me in advance and tell me you are not and let's straighten it out. it is important that we share this information. that would be -- >> thank you. even at the federal level, we do not know if the fbi got the travel information on him. he has these radical ideas youtube, he has a mosque he is kicked out of. the boston police know the

streets. they could've taken taken a second look at this individual what it did not happen. i understand that 20-20 is hindsight. i know the four boston police officers cannot even talk to their police chief. >> it would not have been the boston police department. it would've been the cambridge police department, which matters because cambridge is a much smaller department. you are not always going to have a situation or the local police department is represented. to your question about what they can do, those boston or cambridge police department could've asked for for permission to share that with their chief. that is so they know where the information is going. that is a good protocol.

all too often, it means they do not asked at all. i do think that on a more systemic basis, we need to make sure every -- when an investigation is concluded, that information is shared back with a host department so the department can decide whether using its own police powers, it really should be concluded or whether or not they can do more where the fbi can't. as an attorney, there are real civil liberties issues here. in this case, we have a bomber and we say, we would have seen he was being radicalized. sharing information about someone who the fbi has investigated, they say nothing wrong. now we will let the local police have quiet surveillance? >> i would agree, but in this

case the russian warning, the thread was fulfilled. it takes it to a whole another level. it should have raised an additional level of scrutiny. i see my time has way over expired. >> finish your statement. >> i do not disagree that the travel overseas is something the fbi would want to know. it did not change the agent's conclusion. when we share this information, which needs to be done for all of the reasons the mayor says. this needs to be done in a systematic way so that the boston police, the cambridge police can say these hundred cases the fbi is done with.

do we care about them in some way? they also have to make the decision, is this ok? is this permissible under our local police authorities? that requires real oversight in massachusetts to make sure that is not being done in an inappropriate manner. >> this is an excellent panel. i think we have picked up a lot of information. after we created dhs, after the unfortunate incident of 9/11, congress also try to legislate the culture of organizations by saying, and you must share information. we told cia you must start talking little more to the fbi. along the way we ran up on something called need to know.

from an intelligence standpoint. some of us say, what do you mean by need to know? we decide when we need to share with the next organization. mayor, have you seen a lessening of that? are we still caught in a culture of telling people just what you want them to know rather than a full base sharing of intelligence? >> this confuses me because this is a situation of need to get help. it would seem to me that the fbi should have communicated with the local police, boston cambridge, whatever, to get help.

not just to let them know, the fbi was presented with a significant fact, the russians identified this man as a suspected terrorist. that could be valid information and the fbi thought that russia is misleading us. where are you going to go to get information about this? russia would not give you any more. the man lives in boston for quite some time. as a matter of help, you would go to the boston police and say, what do you know about him? that is what i do not understand. the need to know part, i think the efforts of congress, both presidents, a lot has changed to the positive. that is why this is a more unusual circumstance. 20 years ago, this would be the

more usual thing to happen. the fbi is sharing much better now than it did before. i do not have the answer to -- i do not know why they did not know -- go to the local police to warn them and to asked for their help in solving this puzzle. was tsarnaev a terrorist? were the russians misleading us? >> i think it is still a problem. people will share now, but they will share once they determine that something is relevant a terrorism investigation. that is too late. the fact is, you have to share volumes of information across the u.s. government.

there are often disputes about that. they say it is just travel information. you do not know if it is counterterrorism information until you have it in until you can compare it to other information and find between those dots. in sure people are sharing core information they collect from the very start, even if there is no indication that it is relevant to an investigation. >> do you have some comments on that? >> the main challenge is how we interject the radicalization process.

>> the chair recognizes the gentleman from new york, mr. king. >> i commend you for holding this hearing. this is going to be the rule rather than exception as we go forward. as far as lone wolves, the christmas day bomber was not a lone wolf. he was trained by qa be and sent out on a mission. -- qab and sent out on a mission. thank you to all of the witnesses for their testimony. rudy, when i was listening to

the introduction and he mentioned you being elevated to knighthood, those days we were taking the subways in manhattan -- >> i have not told anyone in brooklyn. i try to keep it secret, but the chairman added me. -- outed me. >> if we can focus on boston, the boston police have four detectives with top-secret clearance. they were never told about the letter from russia. the commission nothing about it. the commissioner went back and found that during those seven years, his police officers and

detectives had never been given any top-secret information by the >> this is cap from them. it is different in new york and nassau county. i was struck by this. add to this that, when the younger brother was in the hospital being interrogated, he said that they were on their way to times square. the fbi never told the nypd about that. it was later when we got up from somebody else that this threat was made against new york. the fbi excuse was that he was in the hospital. at that stage, no one knew who was involved in the plot. at the very least, the fbi should have said that they had been on a way to carry out an attack on times square. i'm not trying to be a monday morning quarterback but the

fact that they stonewalled us lately since the boston bombing i think that is unexceptionable. among all levels of government, the fact that the fbi is not sharing information with this committee has jurisdiction over homeland security is unexceptional. i insist that the fbi be more accountable to us. i don't mean this as a leading question but do you think that jt efforts can -- jtfs can function effectively question mark -- affect the question mark -- effectively? the fact is, had they gone to the boston police, they have so

many informants on the streets if they could have gone to them and said, "if you know anything about him." he was put out of a mosque in 2012 for radical behavior. that could have been known. that could have been brought to the fbi's attention. the fbi does not have informers working the streets at that. i did not mean that as a being question. however, without that sharing of information between the fbi and the police can we work effectively? >> the whole purpose of the jdf is to share information. any officer on that force should be cleared for classified information. this is the perfect opportunity to do that and clean up the problem that i mentioned earlier. if you go back to the earlier era of law enforcement, the fbi

was probably correct that you could not share information with some local police departments or stop were unprofessional and corrupt and were not going to handle the information correctly. this is not true today. there are probably some exceptions. with the fbi should do is make certain that they have the ability to communicate with local police. if that means going to the local police commissioner and saying that they have to tighten up their departments and solve these problems, the fbi should do that. particularly since the new threat that we are facing is one where we are looking for people in america's communities and neighborhoods. the fbi cannot do that. it confounds me. their failure -- not their failure to warn, but their failure to not ask for help. >> i think that is right.

if you are on the joint terrorism task force, you should have access to this information. in this case, the question would be, what do those police officers do after the fbi goes out and interview tsarnaev and says he is not right. let us assume that that was a reasonable conclusion. how can police pick up what the fbi no longer can cover question mark -- cover? i do not mean to be an apologist. the fbi had visited that mosque in the past. that is an important role for the fbi and others. that cannot happen here. we have to encourage the fbi and state and local authorities to

engage with mosques in the same way that they engage with all community organizations. >> the fbi never told anyone on the jttf. even after the brothers pictures were -- brother's pictures were all over the the internet and the world, nobody said anything. it is ridiculous to call before it would mask or workplace violence. i want purple hearts for those who were killed and for what. i think they are casualties in an international war. i yield back. >> the senate homeland security committee held its own hearing on the boston marathon bombings. the boston police commissioner talked about the needs of local law enforcement incorporating with the fbi. this is just over two hours.

[inaudible][laughter]>> the hearing will come to order. we have witnesses. a little less than three months ago, the city of boston -- when my oldest son went to college -- suffered a terrific terrorist

attack during the boston marathon. my son was there. i was a runner and he is a runner. he was there. he wanted to be there and be part of the celebration. the attack claimed the lives of three observers and injured 300 people. as the events of april 15 unfolded, we were witnessing the first terrorist bombing on u.s. soil since 9/11. just as we did in the aftermath of 9/11, we must learn from the marathon bombings. that is why this committee's -- committee has set out to learn from it. we will learn whether or not this tragedy could have been prevented. however, today's hearing will focus on the emergency response to the events that occurred on april 15, 2013.

we will review the preparations made by boston in the commonwealth of massachusetts. we will assess how the city state, and federal government responders when the boston street was rocked by the two homemade explosions. for more than a decade, our country has worked to promote effective emergency response systems to help cities and states mitigate the effects of terrorist attacks. in the years since 9/11, we have learned that training takes effective leadership. coordinate response helps manage the impact of disaster. by all accounts, boston had many of these things in place on april 15. lives were saved as a result. today's hearing will take a step towards identifying the lessons learned. we will look at what worked.

we will look at what we could have done better. and, how what happened in boston can help. use prepare to deal with this effectively. from the lessons learned from the attack, we have three officials who were on the ground on the day of the attack. we're joined by in emergency management expert. we look forward to hearing from each of you and working with you in the coming weeks and months to strengthen our preparedness and response systems across united states. senator coburn joins us. let me close this, my colleagues have heard me say more times than they can count that i want to focus on excellence in everything we do. the key for us is to make this better. as well as a luggable responded

-- a lot of people responded, we know that we can do better. we do take what lessons that we can to respond when appropriate. >> i apologize for being late. welcome to each of you and thank you for what you do. i look forward to hearing your comments and testimony. as well as asking you some questions about what we have done in the past and what is effective. >> thanks. dr. johnson is not really a doctor, he is a regular guy. we will introduce the witnesses and will have others show up on our side. we will have a good conversation. our first witness is no stranger

. mr. serino served as the head of the public mission. he managed 35 mass casualty incidents including -- incidents, including the boston marathon. the next witness is kurt swartz. use the under secretary for homeland security and manage the commonwealth of massachusetts. he served as the advisor. mr. swartz served as assistant attorney general and chief of the criminal bureau and massachusetts. in addition to working as a prosecutor, he has also served as a police officer in emergency technician. we thank you for joining us

today and for your service. we have mr. ed davis. he is the commissioner of the boston police department. he became the commissioner in 2006. he served as the superintendent of the police for several years. do they have a marathon and lowell question mark -- lowell? >> he was in law enforcement for 35 years. mayor thomas menino appointed ed davis as the head of unified command overseeing the response effort. i do for your service. our final witness is dr. kellerman. he is an expert in disaster management. he is a professor of emergency medicine.

he is also the founding chairman of emergency medicine at the rollins school of public health. he focuses on public health preparedness and prevention in emergency health services. thank you for joining us. i believe dr. coburn recommended you. i'm glad you could join us. now, we have four on our side and four on your side. we are rated go. you can give us your statement and feel free to summarize. stay the -- stay under five minutes. if you go over, we will have to ring you in. >> -- rain you in -- reign

you in. >> i welcome the opportunity to be here to discuss the boston marathon bombings. i was in boston in april. i was celebrating patriot's day in my hometown. as a bostonian as -- as a bostonian and if your paramedic the boston marathon gives us cause to celebrate our heritage with millions of residents and visitors from down the block and around the world. for most of my life, i spent 836 career -- a 36 year career there. i was part of the boston first responder team. i was never more proud of the residence of my town then that day in april. in our committee we saw love and compassion.

our emergency medical technicians, and firefighters, paramedics, emergency managers sprung into action. tip o'neill used to say that all politics are local. we know that's all disaster -- we know that all disasters are local. in our efforts to prepare for mitigate whatever we face. for all major events, including the marathon, i can assure you that coordination played a critical role in ensuring a well executed response that save lives. i'm here to express how fema played a role in keeping people

on the ground prepared. americans witness the strength of our committee. people came together to make that collective response more affective and efficient. this dream force is the that he might is only part of the management team. we must cap into the collective strength of our citizens in times of crisis. that april day, we saw how fema's approach to preparedness help the whole community including boston and massachusetts. through our training and community preparedness programs, we helped to make sure that the people who responded had the tools to be affective. following the event, eva collaborate with law enforcement and were ready to help when the president issued a declaration for the affected committees.

many of the capabilities were built and sustained through fema preparedness grants. i can attest to the importance in preparing for public safety. both boston and massachusetts invested in systems that were critical in the response, including emergency patient tracking systems. the system made a difference on april 15. boston invest in grant funding for mass casualty equipment. that was critical in response. we have infrared imagery. these grants were levers for on- site security protection. including the equipment used in the event.

bomb robots, ballistic helmets and vests. first responders went across the country doing exercises from fema. it made him equipped for real- world incidents. since 2000 thousands of responders have received training in emergency management institute and its partners. boston uses fema funds to integrate bomb technicians and abilities that were demonstrated in boston. may personnel were trained in how to respond to a mass casualty incident. it was no accident that not a single hospital was overwhelmed with patients in the aftermath. it was no accident that patients were appropriately treated and triage was administered in orderly manner. all of these exercises allow us

to have key personnel deliver critical relationships -- develop critical relationships. people knew each other before head. fema prides itself on improving and focusing on further strengthening to meet the evolving threats. we know that krystle campbell and the others whose lives were lost to take some solace in the fact that the of roche and years of planning that we did help first responders on the ground on that day and satan lives. we owe it to those who we lost and those two are injures -- injured, to keep improving. mr. chairman, i look forward to

answering your questions will stop >> thank you very much we're testimony. -- questions. >> thank you very much for your testimony. >> i thank you for this opportunity to share thoughts on the public safety response and the ensuing manhunt that resulted in the death of four people and injuries to hundreds. the response to the marathon bombing shows the importance of homeland security. within seconds of the bomb blast, an array of personnel may flooded with homeland security dollars, were mobilized. -- many funded with homeland security dollars, were mobilized. our trauma centers were prepared

and followed mass casualty plans to swiftly and effectively treat the wounded. at least two of our trauma centers had critically injured patients in operating rooms within 15-18 minutes. tactical and other specialized teams established mutual aid agreements and search for additional explosive devices. they secured transit systems and established security zones. a forward command center was established on the street and in a nearby hotel. -- public safety leaders communicate with the public. the alerting people through social media and traditional media. the boston police supported by the state police, launched a kernel investigation and, in a

matter of dollars -- hours coordinated. they are supported by regional and federal partners. it is a testimony to smart homeland security investments. the boston marathon passes through seven cities and three counties. it ends on boylston street in boston. for public safety officials, it is one of our greatest events. it draws one million spectators. we have resources to protect the runners and spectators. these extensive efforts are intended to ensure readiness and to respond to any and all unexpected hazards. on april 15, we were prepared.

as we've done for many years, a multi--disciplined team -- a multi-disciplined team prepared. in early april we conducted a comprehensive exercise to ensure readiness. the emergency operation center hosted and 80-person coordination center. it was staffed with represent us from the agencies from the eight cities along the course along with other key agencies. the operation center had representatives from all eight cities. it had man personnel from all agencies. we're using radio channels to

maintain effective purification. along the course, hazardous material response teams explosion management teams national guard support teams mobile command posts, police helicopters, were deployed as part of a plan. we were prepared and our high levels of preparedness were due to investments, made in collaboration with the governor over the past years, and a long- standing commitment to multi- jurisdictional training. a shrunk record of collaboration and cooperation public officials and and safety leaders. and, in unwavering commitment to homeland security by all local regions.

lessons learned from hurricanes and tropical storms and blizzards, floods tornadoes and events from water systems that resulted in 16 presidential disaster declarations since 2005. even after that, several things stand out as worse but -- as we assess our response. training exercise programs and building sustains capabilities. -- building sustaining capabilities. there are several other key factors that contributed to the effectiveness of response operations.

the response relied heavily on specialized capabilities so that we can build and sustain our homeland security. the response to the bombing was made for pre-existing mutual aid agreements. interoperability was a huge success story. the money was spent on interoperability a short communication. we benefited from sleep brand -- the -- preplanned offense -- events. we benefited from investments and regional exercise programs such as the "urban shield,"." the collaboration across agencies and disciplines was immediate and extraordinary. the existing strong

relationships between the commonwealth using center in the multiregional intelligence center and the joint terrorism task force allowed to say please and boston police to respond to the investigation led by the fbi. the support from the federal government was immediate and effective and law enforcement saw every management group including fema, hours after the bombings, including deputy serino. agencies communicated with the public through social media, reverse 911 systems, emergency alerting smart phone apps and the wireless emergency alert service.

the ensuing hunt for the suspected terrorist was nothing short of incredible. the unprecedented request on april 19 that's for communities remain indoors. in closing, i mention that we are in the process of conducting a review. at the end of this process a land will be published and we will continue to identify what worked well, where there is need for improvements, and where training exercises and homeland security investments would help. i concomitantly states that our investments made with homeland security enhanced our capability to respond to these tragic events. thank you.

>> thank you for that testimony. >> thank you, mr. chairman. good morning. on behalf of the mayor i would like to thank you for the opportunity to testify today. on that day, two bombs exploded 12 seconds and 400 feet apart. two terrorist killed three people at the scene. 29-year-old krystle campbell. there were multiple amputations. every ambulance and police transport vehicle transported people to world-class hospitals.

all my teen victims admitted in critical condition survived through exceptional medical care and the use of turning kids by civilians and first responders. the photos were publicly released on thursday. the release of photos set up a rapid chain of events. the execution of a m.i.t. police officer and a carjacking that ended in watertown. there were explosives thrown. a shootout with the bombers that led to the critical injury of an officer. one terrorist was killed and the other fled. a massive manhunt ensued in a 20 block perimeter -- 20-block perimeter. it extended through boston. there were house-to-house

searches. he was found in a boat storage in the back -- backyard. most terrorists were captured within 102 hours -- both terrorists were captured within 102 hours. i like to thank president obama and his administration, particularly the dhs and the department of justice for the assistance that boston received before, after, and during this event. the funding set a framework for multiple jurisdictions to work with one another in a highly effective manner. these agencies included "urban shield" training and collaborating on sunday -- scenarios that are similar. this associate in the efficiency

and success of the subsequent investigation. this type of procedures reveal operational issues and allow us to correct them. there were also highly trained and was in the boston intelligence center that were critical decision-making and deployment of information flow. boston received important technology that would not have been possible without federal funding. vehicles and robots -- contribute to the safety of public officers and the success of the investigation. all agencies and trainees work as soon as he as possible on the ground. it is clear that there is a need for an improvement in information sharing. policies and practices for information and intelligence series -- sharing must be consistent.

-- should be reviewed. including the restrictions that members of the chief association -- chief's association feel need to be addressed. for sample, the association proposes regular briefings by federal agencies on all threats to the immunity. this is critical as it were to prevent violent extremes attacks in this country. we're meeting with the senate intelligence committee to get help in sharing classified intelligence that i cannot address in open hearing. the other issue was the overload to the cell phone system. cell phones were rendered completely useless. it was overrun by public usage. it forced a public responders to rely on radios. this experience with satellite

phone technology shows that it is not effective. communication assistant -- assistance from the department of homeland security has made difference. we've conducted an exercise during the previous boston marathon to test and train for communications. based on what has come from dhs's assistance, mutation systems work without incident. also both went down during the crisis. in the past, personnel would not have been able to mitigate because of radio systems. i want to reiterate that law enforcement needs a calm and secure bandwidth dedicated to public safety use, exclusively. we thank congress for working with the department of commerce to implement this long overdue legislation.

this would address the problem we faced. we're successful ace on the support and assistance from the committee. i printed opportunity to discuss things that was sussed my colleagues in the nation and around the world -- to discuss things that my college in the nation and around the world will benefit from. >> i am mark kellerman. i am not from boston. >> how about south boston? >> no, sir. we've all heard that it is better to be lucky than good. first responders were both. when where, and how the attacks occur. boston responders are very good.

bystanders and runners played a key role in the minutes after the attack. prior to the attack, boston police personnel studied how london, which rated and other cities had handled their terrorist attacks. what went well? what did not go well? they incorporated that into their plan. boston's hospitals did a great job because they were prepared. everyone knew what to do. that is how disaster plans work. these observations lead to an important point. the fact that boston is lucky and good does not mean that the next american city that is it will be equally lucky or good. we do not mean that you cannot assume that other u.s. cities are compared to manage a terrorist attack of a similar or greater magnitude.

there is ample reason to worry. across the nation, emergency room crowding is as bad as ever. it compromises patient safety on a daily basis. some hospitals -- not every movie has the spirit of boston where health and public safety were together. disaster preparedness is largely a state and local responsibility. the federal government has a role to play. you asked that i comment on two areas. i will address research. rand published research funded by civilian agencies in the u.s. government. we found that the current portfolio is skewed towards biological threats. two thirds of the cities -- studies address that.

while natural disasters are focuses of only two percent of studies. one reason for the heavy coverage of one threads versus the other is that the agencies today do not have a simple way to determine who is funding what or to prioritize which questions are most urgent. as a result, we are not getting value for our dollar. our work has been focused on hhs rather than dhs. i can tell you that performance measures that focus on what is being bought and caught is not as useful as those that measure whether or not states are building core capabilities. let me cite an example.

is one thing to ask state and municipalities to self-report. it is another thing to independently determine that that phone line gets answered at 2:00 in the morning and how long it takes for somebody to get back with information. the first is a capacity. the second is a capability. extensive, pre-scripted exercises are better than nothing. they are better -- systematic learning from the world events small as well as large.

the goal is not to make hospitals look bad. it is to make them ready for when the big one happens. congress can help by encouraging federal agencies to promote teamwork at the state, federal and local level. here's my bottom line. boston responders deserve our praise. let's do more than pat them on the back. let's follow their example. boston learned from the experiences of london, madrid and mumbai. the rest of us can learn from boston. >> thank you. thank you for inviting him. i want to start off -- before i ask a question -- maybe for myself and my colleagues -- the idea, the thoughts that the stairs and casually -- terrorist

tragedy occurred and people died on the scene. printed below made to the hospital and they lived -- 300 able made to the hospital and they lived. some of them had no pulse. hopefully, they will have the support as they move on in their life. support of a different kind. the team of paid professionals volunteers bystanders, pulled together as one and it is extraordinary. we gather in the senate chamber to vote, over the head of the presiding officer in the senate and house are the only latin words that i know, from many

one. for many, one. -- from many, one. extraordinary. the road to improvement is under construction. everything we do, we can do better. i'll give you an example of one lesson from the tragedy in boston that can be exported and should be to other communities, to other cities, and, our country. mr. seorino. >> i would say make sure that the training and relationships are done ahead of time. planning is key.

every community, large or small has a vent -- evennts on the fourth of july. building those relationships on a special event because you know you have numbers of people concentrated and groups of people coming together -- for example, the fourth of july marathon -- building that and testing that. i think that taking the lessons learned from that and bring in the departments together as i mentioned, it was no accident that people went to the prison hospital and were treated on scene with tourniquets.

that is the training that happens for the special events and they were incorporated into everyday. that has been done in boston for years. it should be done across the the country. >> thank you. mr. swartz. >> i will build on that. in addition to the training and exercises, we had to translate what we do in boston -- have to translate what we do in boston into our were-case capabilities. on game day, you have to be ready to act quickly. a marathon day -- on marathon day, we had the operational capacity to respond to the worst-case scenarios. we had a agency coronation centers. -- we had a multi-agency coordination center.

across all eight cities and towns. we had resources that many people would say, why are these out there? with canines and helicopters that is expensive to deploy. that is building the worst-case scenario operational capacity. when the bombs go off, there is not a delay and the reaction is immediate. the response is immediate. i am building on the worst-case scenario planning to implement that plan and on a moments notice. -- moment's notice. >> being prepared is important. i want to talk about medication. not radio communication.

i have already addressed that in my statement. >> we're at it 800 megahertz system. do you use a similar system? >> there is = >> with cobbled together a system that works well. -- we have cobbled a system together that works well. let me speak about social media and establishing a relationship during the crisis we have a significant presence on social media where we have engaged in a dialogue with people in the

community. we use social media effectively to inform people where they can go and what happens. where they can meet loved ones. we used social media to tamp that down. we reached out to the community to get clues and video and photos. we used it to correct things that have been reported badly by the media. our point is, a substantial investment in the utilization of social media to do public outreach to the community can help in any kind of event that happened like this. were able to reach people through systems that are funded in the public sector but utilized by the public sector very well. >> dr. kellerman. >> is important to get health

care and medical community waters planning for spots. terrorism the -- in terrorism people get hurt. we have to make that work. the other thing i would emphasize is, you do not repair and then put things in a closet and lock it away the best systems are the ones that work well day-to-day. the most effective cities and systems in the country are those that are high performers everywhere. not just on the day of the disaster. >> thank you. i have been joined by other colleagues. the former attorney general, tammy baldwin. she served, with the stage and in the general assembly of her state.

kelly ayotte. and, a suggestible businessperson. -- successful is this person. -- successful business person. >> one follow-up, you spent $4.7 billion, yet you are you stillstill using an old system, why? >> the money utilized was put into rebuilding infrastructure that is there. to build a new frequency would be more expensive than that. i am not an expert in this field. i know that we have look at it closely.

the enormous amount of money necessary -- this is a system that covers 2000 square miles. services of 11,000 emergency personnel. -- it services 11,000 emergency personnel. >> our first approach over the years was to take our different systems. and as that we have regional plans and that all our systems can talk together. interoperability is a huge success story. we spent the late to make them talk to each other. it works.

as he would get the possibility of using other bands -- as we look at the possibility of using other bands, we expect that over the next 10-15 years, many of our partners will migrate to 700 and 800. >> of the capabilities utilized in the boston bombings, which are the most important in boston and least developed in other cities question mark we've seen a stellar performance here. there's no question about -- cities? we've seen a stellar performance here. that's great. >> i may be a little bit biased

about boston. one of the things that is positive in boston is -- as the commissioner mentioned -- is the communication. people are on a first-name basis. the medical community has been linked in with public safety for years. not just since 2001. it goes back before that. the ability for the medical community and public health to link together so people can understand the language of both groups. you do not see that in many places across country. it is essential. the medical community and public safety committee have to be on the same page. as one thing that i think is key. in boston, it saved lives. >> you do not think that we are

as well prepared and other cities in the medical community. >> advocate is opportunity that is gone very well in boston. we should look at it in other places. >> in the past, fema has required states to use a server sent of dollars on areas. should fema do more of this russian mark >> ally of the funding that we have developed over the last two years has been specifically to let communities decide what is best. it gives a general -- a lot of the funding that we had to -- this? a lot of the funding that we've developed over the last two years has been specifically to let communities decide what is best. they go from the locality to the state and federal government and look at those.

that helps them decide what best to use in what they have identified is their main priority in the locality. >> we do a lot of exercises and trainings. especially drills. what is the right mix of spending? a lot money is spent on preparedness. what is the right mix? to look at boston and say, "here is how we do it. " the fact that boston look at these other events around the world had to have played a key role for your preparedness in boston. have other large cities done similar things?

>> with dr. kellerman is referring to is a program that was brought to boston in 2009 that looked at how we could do that. it was a three-day event. the second day focused on leadership in public health and to look safety. we change policy that they. what we have done is a program that we have had at fema for a while. we did is add a second data that's -- second day to that. we're going to continue to expand that and go to other

cities with both a law enforcement and a help component to add to that. >> my time is expired. >> next, senator johnson. he will be followed by senator kay. and, senator baldwin. >> thank you mr. chairman -- thank you, mr. chairman. it is in these tragedies that we see the best in america. i'll never forget the determine faces of the police and firefighters from 9/11. we saw the same thing in boston. we sought -- we saw the citizens

of boston run towards the danger. it is remarkable. dr. kellerman, i appreciate your testimony and comments that this is a state and local, primarily, responsibility. they done that, -- taste on that -- based on that, give a general sense of that. >> we have a 10% increase in our budget comes from federal and state grants. the state grants are pass- throughs from several that federal -- federal. >> about 90%.

how much is state versus federal? >> the agency, as an agency, is about 50% funded through federal grant dollars. much of that is through performance grant dollars. if you look at fire services and state police, that is smaller. they're receiving project- specific grants. >> responded to the boston bombing, 90% is local. in the 10%, five percent is state. that underscores your point that 7.5% is federal spending. with that in line, being

prepared is important. i guess, mr. davis, the question i have to ask you is, how many questions -- how many cities have contacted boston to get tips and pointers and training room once you have done right -- from what you have done right.? >> there have been dozens of cities. >> we've seen association meetings. there is a valid use of them. is it being used that way? you got public safety officials coming together for training and sharing stories. how often does that happen? >> we do.

there are groups of us to travel to different countries. in 2005, i traveled to london. it was just after the tube bombings.

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>> now we get to the second problem. this has been answered by putting these combinations under the erisa rules. the erisa rules are some of the most complicated rules known to mankind. it is only a very small segment of the legal population, of the legal population, employee benefit group, that can even interpret this thing. here you may have as many as 100,000 businesses that should have some type of interpretation of -- whatever, and only a small community will be there to satisfy that. lastly five, the mandate per

se. it's a relic. it is tied to health insurance. it ties health insurance to employment. we should be going exactly in the opposite direction. we are freezing the past when we should be looking to the future. thank very much, mr. chairman. >> you are recognized. >> chairman brady and members of the subcommittee, thank you for your invitation to testify. i am honored to speak with you regarding the affordable care act. i believe my role as a franchised small-business owner gives me a unique perspective perspective that is not heard often enough in washington. franchised small businesses have been affected by the affordable care act. and i hope to express the concerns of myself and that of our industry as a whole. i own and operate 12 franchise business units.

as a former united states marine, i understand the demand for hard work. as a business owner, i have the luxury of working any 80 hours of the week that i choose. with 43 full-time employees, i am a proud participant in a diverse franchise community which supports 18 million jobs. you may recognize some of the businesses i operate. great american cookies mrs. f ields cookies and pretzel maker. i bought my first franchise in 1998 and to 2008, i was opening more than one location per year. i am a member of the international franchise association, and i am here to represent the association and the entire franchise community. government actions play an important role in my business decisions. as a business owner, i cannot make future business plans when congress plans and extends

regulations for one year at a time or changes them with only six months before implementation. while my fellow small business owners applaud the delaying of the employer mandate due to continued ambiguity of the law and his compliance requirements it does not solve the fundamental problems associated with the a.c.a. and its impact on business operations and future growth -- job growth. we have to plan in advance for changes in the law. receiving regulations three months before a new requirement goes into effect does not provide ample time for employers and small business owners to adapt their businesses to remain economically stable. implementation of the affordable care act has presented a challenge to me as a small- business owner. navigating the constant changes waivers, extensions extensions

regulations, and clarifications of an already cumbersome law has diverted my focus from developing my business and creating new jobs. i'm facing the legalities of health care exchanges, the mandate and full-time equivalents, whether it is 2014 or 2015. all of these tasks take me away from my core mission of growing my business, and there are very few resources to guide small business owners through this process. the franchise industry has two specific changes that could be made to the a.c.a. to help small-business owners comply comply without hurting our businesses. number one increase the 30 hour threshold that qualifies an employee as full-time. secondly increase the 50 full- time equivalent employees threshold that requires employees to survive coverage to full-time employees.

currently, i employee 43 full- time equivalent employees. if my business grows and i create jobs, i will also drastically increase my costs due to the employer mandate. this has an impact on my bottom line, which is my livelihood. and it is making me reconsider opening new locations. also i may be forced to reduce my employees' hours to less than 30 hours so they do not require full-time status when i do expand. with these challenges and changes, i fear that it may be a struggle just to keep the doors open on my 12 existing businesses. pi woi would relish the opportunity to grow my business but the recent regulatory burdens placed on my small businesses and the uncertain economic climate had given me reason for pause. i have to weigh the pros and cons before deciding future growth. i hope policymakers will contend -- consider focusing on the

burden small is ms. owners within the employer mandate whenever it is implemented. it is time to address the challenges that are keeping small business owners on the sidelines and from creating new jobs. thank uyou for the opportunity, and i look forward to answering any questions you may have. >> can you get that microphone? >> thank you for this opportunity to address you today. you have heard 20 minutes of criticism of the affordable care act. i have five minutes to respond. i wish i had 20 minutes, because a lot of what has been said is inaccurate. but i will try to confine my remarks. on january 1, 2014 millions of uninsured americans will become eligible for coverage into the affordable care act. the a.c.a. expands coverage to

five major mechanisms. these are the premium tax credits which will make care affordable to millions of lower and middle income americans expanded medicaid for lower income americans, which in spite of the supreme court's decision will still extend medicaid coverage to millions, provisions that protect americans from pre- existing conditions from being denied insurance or being charged premiums. the individual responsibility provisions that asks americans who cannot afford health insurance to purchase it. and finally, the employer mandate which requires large employers to offer affordable coverage to the full-time employees or risk facing a tax penalty to offset the cost the public will incur of covering employees. 95% of employees with 50 or more employees already offer this coverage. but this mandate is there to encourage employers to maintain or expand coverage. on january2, 2013, the treasury

department announced it was to line for -- delaying for one year the reporting requirements. treasury encouraged businesses is morning, and i think we heard from businesses this morning that they needed more time to comply because it is impractical to implement the mandate without the reporting. this decision raises four issues. first, was it legal? the employer responsibility provisions have an effective date of january 1, 2014. the reporting requirements apply at such time as the secretary may prescribe. the a.c.a. requires the irs to assess penalties. and the irs frequently abates chapter 16 penalties. the iris claims authority under section 7805 and points to a

long history of republican and democratic administrations delaying implementation of tax provisions when time and resource constraints have made immediate implementation impractical. the second question is whether delay -- the dlelay jeopardizes the implementation of other a.c.a. requirements. the law was never intended, exchanges were never intended to rely on ensure -- insurer reports which are supplied long after tax credits are granted to determine coverage. in the final rule released last friday, the administration set out a system for verifying information needed to determine individual eligibility. it's subscribed in my written testimony. i would be happy to explain it. it is not an honor system.

much of our tax reporting system is an honor system. this is not great furthermore false reporting carries a $250,000 fine. the third question is whether the delay is justifiable from a politic perspective. the announcement was greeted favorably by a wide range of business and insurance interests who are concerned about the complications of reporting. the moratorium should allow employers and insurers to adjust their i.t. systems to make reporting possible beginning in 2015. in the meantime, employers will know how many of their employees are getting tax credits and will have time to adjust their coverage by 2015. there is little evidence that employers will rush to exit in ploy coverage in the meantime. all the many reasons employers have for offering covers today will continue to exist home and the lack of one more incentive is not going to drive them to drop coverage. finally, the delay otherwise

impedes the limitation of the a.c.a. congress gave the administration an enormous task -- preserving our private insurance basis while modifying it to serve all americans. this congress has made that task more difficult by starving the administration of the resources they need to do this task. the administration continues to reiterate that the most important reforms, the premium tax credits and the exchanges will be fully functional by january 1, 2014. delaying the employer mandate will make the administration's job easier, not harder, and is likely to minimize the confusion for lawyers and employees. if you actually care whether a.c.a. implementation will help your constituents take action immediately to appropriate money to get the job done. if you're not willing to help with implementation, you have no

standing to complain of delays. thank you. >> i have questions. i'll get to mr. capretta. you talk about fairness in your testimony. it would only seems fair, the individual mandate is delayed as well. why should large companies be responsible but not workers? you talk about is it fair to threaten tax penalties on the uninsured under these delays? can you explain why you feel that way? >> the law requires that individuals beginning in 2014 sign up through their employer or through exchanges, or they pay a penalty of the greater of $95 or 1% of their household income that would be enforced in the tax system through what they are filing in taxes early in 2015. look at the situation we have now, where you have many employees not getting an offer

of coverage from their employers because the employer requirement has been suspended for a year. we do not know if they were offered coverage through their employer. moreover in many of these changes around the country in at least one state, one plan being offered. so the choices will be quite limited. is that the circumstances upon which you want to start imposing on lower income families a tax? they made the judgment that the employer system was not ready to be enforced in 2014. it is obvious to me that the individual mandate is not ready to be enforced in 2014. i would urge this committee and the congress to delay -- if you are going to delay one, you should delay both. >> if obamacare is not ready for businesses, is it ready for our families? let's assume it's your family.

your child is ill, your spouse needs treatment. is obamacare ready for your family? 9 >> not -- no. the cost of coverage on exchanges will be much higher than what currently exists in the individual market for health insurance. not only are we requiring the individual mandate that they purchase insurance coverage, we are requiring that at two to three times the cost of coverage available today. >> for some, health care costs will go up dramatically? >> that's correct. >> you are hearing history rewritten today. a few years ago the employer mandate was touted as one of the twin pillars of obamacare upon which this law depended upon. and every effort by republicans to eliminate the employer mandate was greeted with outrage and claiming that we are trying to gut obamacare.

today, you hear a different story. that the employer mandate, no big deal. an afterthought. it has no impact on businesses like yours. in fact, what we hear today is that this one-year reprieve is the greatest thing since sliced bread. is the employer mandate impacting your business, and your ability to hire? and is this reprieve what you seek, thie ones one-year reprieve, is that the solution? >> i think the reprieve does not do anything to address the problems of the mandate itself. and the mandate does affect me. although i am not under it right now, it does prevent me from growing my is news to become even larger. as i told you for 10 years i opened up about 1.5 locations per year on average, and i wanted to grow forever. since 2008, i have slow that

down. >> how many people are you hiring when you add a new franchise? >> each location employs anywhere between 10 and 25 people. probably about three of those people on average are full- timers. the rest are part-timers. i have a lot of first-time employees, high school or college people, or people just trying to make ends meet by getting a part-time job. so the full-timers are not as numerous. >> for you, the employer mandate is not a small thing? >> not at all. i have been nominated and selected as a franchisee of the year many time and it -- many t imes and i am very engaged with the isa and business in general but i am embarrassed to say that i have no idea about the employer mandate and where to find information. i do not know what the

requirements are. it is coming up, i know that but i do not have any information on it. i'm upset to know that i have to worry about these things rather than grow my business and provide jobs. this takes up all of my timen ow. now. mr. mcdermott said he did not spend his fourth of july whirring about the changes. i did. i worried about it. i fielded calls from other franchisees asking what this meant on the fourth of july. >> i would point too, i appreciate your being here, but the irs tax system is an honor system. at least they use $10 billion to enforce that honor system. and the claim that the administration has been starved has no basis in fact. hhs used $8 billion to trade a

bonus program for medicare advantage, to postpone the cuts before the election. i wonder if they would like to have that $1 billion back. >> can i respond to that? >> sure. >> with respect to the first question about the tax system being an honor system, certainly some parts are covered by reporting, but many parts are not. this congress repealed the 1099 requirement which was supposed to take small businesses or businesses off of the honor system with respect to reporting purchases of goods of more than $600. the cbo projected that that lost $22 billion in revenue. the tax cap in 2006 was estimated to be $385 billion of uncollected taxes. we do have an honor system for many parts -- >> what we are learning from

investigation is that our agents are spending all their time poster and political agendas rather -- pursuing political agendas rather than law. again, obamacare hhs squandered $8 billion on a program they made out of thin air and got hammered on because they squandered that. it has no claim. is it fair to demand that businesses, that workers and their families have a government mandate when you have given a reprieve for business? mr. mcdermott? >> thank you, mr. chairman. it strikes me that the issue here is basically not about the delay. the businesses asked for the delay in the government gave it to them. the real issue is whether you want obamacare or not. are you going to do it and are you going to have any kind of mandate? now,has untood that

for a system to work, you have to have everybody in. justice scalie ina in his oral questioning on this case in the supreme court when talking about the mandatory coverage said, "my approach would be if you take a hard under of the statute, the statute is gone. -- if you take the heart ouft o f the statute." you are put to a choice. bankrupting insurance companies and the whole system comes tumbling down, or else enacting a federal subsidy programs that the insurance companies would like. now, it is clear that there is a difference between the employer mandate and the individual mandate. the individual mandate is the core of the issue. if we do not require americans we are going to continue to have

people who are free riders who walk into the emergency room, get taken care of, and you and i who have insurance pay for it. $1000 a year. what the system is doing is saying, let everybody pay what we can. and i listen to mr. falk, and i'm sorry that you had such a bad weekend. healthcare.gov is on the computer. you can look in there. there is a section for small business. i am sure you have looked at it already, and you can read, obviously, so you know what is there. explain what is really going to happen to individuals when this law is implemented in january as people enroll from september, october 1 to january, what is going to happen to them? >> the individual mandate is

already being phased in. we are trying to level the playing field. the first year of the sanctions we are not complying with the sanctions -- with the regulations is $95. it then phases up over three years. we are essentially doing the same thing for businesses. you do not have to comply the first year, but you do have to get serious after that. as far as leveling the playing field, that is the sense that the administration is doing it. although i do not appreciate the way they did it. on october 1, the exchanges will open their doors. people who cannot afford health insurance, people who find it un affordable can show up at exchanges & up. there will be many insurance agents agents and brokers and navigators and community the sisters and enrollment counselors and others trying to

get into that door. i have a good friend at church who a week ago discovered that she had a lump on her back and she went to see a doctor in the emergency room. the doctor said it could be cancer. i can operate on it, but you will have to pay 1/4 of my fee up front. she is uninsured. as of january 1, she will be able to get health insurance she can afford and be able to get radical care. so that is what is going to happen. on the individual mandate -- >> holiday go about verifying whether she is eligible for a subsidy or not -- how are thyeey going to verify whether she is eligible for subsidy or not? >> i spent 18 hours on saturday reading the rule. but the way the verification system works for income, the first thing they will log into t he datahave

information from the irs, social security, homeland security. it will verify that the person is a citizen, a legal resident, and the amount of income they report of the prior year. if the income is the same, there is not a problem. if the income is significantly decreased, the federal exchange, which will operate in 2/3 of states will ask for verification. the state exchanges for the first year have the flexibility of doing a statistical sampling. so they will, for the sample of the people in the exchange, they will ask for verification of income, but the rest, they will not for the first year. it relieves the burden from state exchanges. >> thank you. perhaps we can turn to you and another line of questioning. >> thank you, mr. chairman. i tell you i hate to see a dictatorship come into this

country but it looks like what is -- that is what is happening. you raised the concern of the impact of obamacare on the federal government and our budget, and the criticism was that there was $1.8 trillion in spending, and many of the pay- fors were budget gimmicks. they claimed the class act would raise $80 billion and the administration shut it down. congress repealed it. the 1099 reporting requirement and outrageous reporting requirement on business, raised $22 billion. congress repealed that. the house and senate have voted to repeal the medical device tax because it is costing jobs and hurting medical innovation. that tax raised $30 billion. now the employer mandate is d elayed. lost $10 billion. this never goes into effect,

that is another $140 billion. with the lack of employer recruit reporting, there will be more errors and more subsidies, so the cost of obamacare has gone up and up and up. is obamacare now officially a fiscal time bomb, and can it be considered a drain on our economy and the american family? ." > yes. it was always a time bomb. it was made more so by the fact that the administration is implementing something that was not passed. as you indicated you enumerated many of the instances. there are a few more. there is a health insurance tax that was enacted as part of the law that applies only to fully insured lance, not self-insured. it is a huge to storage in, pushing a lot of people that should not self-insure to avoid the tax. another bad idea that will probably not survive the long term. you mentioned the employer mandate. $140 billion in question.

the individual mandate is tied to it. they think they will collect about $45 billion in the next decade from the individual mandate can't --payments. you now have a system where it is hard to figure out if people have enough coverage from their employer. there are a lot or people in the exchanges getting subsidies that actually got an affordable offer of coverage. finally, they cut $700 billion out of the medicare program as part of this. that has double counted the money. they spent the money on this new program and they are counting on those reserves to pay future medicare plans. the whole thing is built on a house of cards. it is not fiscally sustainable. this is one more element that shows that it was built on financing we cannot count on. >> docs like to get paid. i am not sure they are going to

under this system. i remembered when i was stationed in england in the air force, as you know, they have a system over there. i walked into the doc's office with my son, they said, "areyou you paying?" i walked in ahead of 100 people. that is the way you make health care work. i think it is a fiscal time bomb. you said that. can it be considered a drain on the economy and the american family? >> the last announcement by the administration is a concession that it was. one thing that strikes me that it is quite clear that employers are going to the administration saying, quote this is costing jobs." there is evidence that small businesses are not growing fast. they are moving people into part-time work. the administration i am sure is hearing this from lots of people around the country. if it was a bad idea to enforce

this in 2014 i cannot imagine it is a good idea in 2015. they will have a real problem justifying making this a permanent part of the law going forward. it is a burden on the economy and the administration conceded as much. >> yield back. mr. thompson is recognized. >> thank you for having today's hearing. thanks to all of the witnesses. i do not think that you can claim that anybody is excited about this delay. i do not like the delay anymore than anybody else, but i would suggest that it is better to do the delay than to get -- and to get this right that not do the delay and get it wrong. this is important stuff. i think it is important to point out that we did not do healthcare reform because we did not have anything else to do one day. we do not wake up and say

"nothing is going on, let's do healthcare reform." it was in response to a national crisis, and i do not think we can downplay that. we have folks that were not insured. we know that. we have people that were a layoff away from having no insurance at all or a sickness away from having no coverage. and that is devastating to everybody, including the business community. we had a system where we had uncompensated care costs in every hospital in every district across this country. everyone of us had millions of of dollars of annual uncompensated health care costs to our medical providers and to our hospitals. the system was broken. and that is what we tried to fix. and it is important that we get it right. it is important that we ensure

folks -- insure folks. i believe we are going to hit other snags along the way. and i do not think there is any program that is of any importance where this is not going to be the case. but i know that people across this country and people in my state, in particular in california, are working very hard to make sure the affordable care act and health care insurance are available to people who need it. mr. dennis, you talked about some business issues. what is your business? what business do you own? >> i am a senior fellow with the nfib research foundation. >> you mentioned some of the challenges businesses were facing. i can tell you without question the businesses in my district want this to work. mr. falk, you talked about the

lack of information. doesn't your association provide its members with help in regard to many different programs, including healthcare reform? >> absolutely. i have been to 15 to 20 different conferences. >> local chambers of commerce do it. other business associations do it. i have had a number of town hall meetings in my district for business folks, for small business owners to get answers to these questions. >> excuse me. >> i got a limited amount of time. it is important that we do have these answers, and it is important for all of us to make sure that we work to provide those. mr. jost do you see this dealylay

in the employer responsibility provision impacting access to healthcare insurance in states like california who have been working working diligently to set up their exchanges? >> i do not think this will have an impact. the delay of the individual mandate will have an impact. i am a consumer representative to the national association of insurance commissioners and talk to a lot of insurers and they will be very, very worried if the individual mandate would be delayed, because as weak as it is, it will keep insurance markets from collapsing once we open the door to people with pre-existing conditions and offer federal tax credits to help people get insured. >> mr. mcdermott had mentioned that one of the reasons this was postponed was in response to business request. i know you are not privy to discussions at treasury, but it is it fair to say that one of the reasons is that they have

been hearing from businesses that they needed it? >> absolutely. i included in my testimony as statement by six major associations like ahip, the employee benefits counsel that came out strongly affirming this when it was announced. >> is this unprecedented? have administrations delayed implementation? >> not at all. the administration has released a list of times when other administrations, including the previous administration, have delayed effective dates. >> thank you. >> if this is not a case for the need to signify government, i do not know what is. this law is unraveling before our eyes. i do not know how you can conclude that this is not a total fiasco. mr. falk i want to give you a chance to respond in a second. mr. capretta, you are a well-

known budget and policy expert terry give me a sense -- policy expert. give me a sense of what the administration was looking at from the perspective of what it was going to do to the economy and what it was going to do to the health insurance markets? what were the actuarial estimates? the study as to what would've happened to people with employer-sponsored health insurance once his mandate came about? the law was sold on the premise that if you like what you have got, you can keep it. so those of us who were here when this law was written this is a law that was written which was never intended to go into law. the law as written was a senate bill wheaton- -- written on christmas eve we be attempted get into conference then rewrite the law, fix it with the house and pass the final version. but because they lost a senate

race in massachusetts, because they did not have the ability to go back to the senate again and pass an improved version, they took the bill that they wrote interest on christmas eve and she warned that into law which is what we have today. -- shoe-horned that into law. what do you think the administration was looking at? we will want to dig into their actuarial models. what were they looking at happening in the employer- sponsored health insurance market? >> i think they were looking at two things. in 2009, if you read what they said about the design of this particular employer mandate, i think the treasury working with the employers and union figured out it is unenforceable because of the massive data requirements they are employing --imposing on employers. number one this thing was way too much of a burden just to comply with it. employers having to file these

forms, filling out details about the insurance they are offering. it is a massive new burden. employers are going to them saying, " you have got to be kidding me? we have to change every i.t. department." the administration figured that out. it will be a total mess. the second thing they figured out which is that they are stuck at this point. they have this subsidy system going into exchanges. and the reason the employer mandate was there in part was because they did not went -- they wanted to make sure there was not huge exits out of the employer system. they said, if you are of a certain size, you have to provide coverage. now that is gone at least for one year, and they may be stuck with it is easier for employees to dump their people under exchanges. now, i am not sure that that is what -- there is a lot of cynicism going around -- i do not know if that is the game

plan. suddenly the employer mandate creates a firewall around the employer system. and the exchanges would drive up the budgetary cost. treasury has figured out that the burden we are going to impose for one year on the employer system was so much it was going to cost jobs and be very disruptive. it was going to explode and not work. therefore, they were stuck between a rock and a hard place and they took the easy way out. >> anywhere from 20 million to 60 million people will have lost their employer-sponsored health insurance and gotten dumped into exchanges. so we have the exchanges where in some cases doubling and tripling the cost of health insurance. through regulations we are imposing much higher health insurance costs on people, but we will subsidize them with taxpayer dollars. make health insurance more expensive and subsidize it, so

the consumer does not feel the price as much hear the taxpayer bears the burden. the employer has the mandate. the employer has a greater incentive to stop offering health insurance to their employees. most employers are sitting around the table thinking, "if my competitor is going to drop health insurance and put their employees in the exchange, all i have to do is pay $2000 per person tax index in inflation versus $20,000 for the family plan." once the employer makes that decision, it is not long after the competitors will have to make this same decision and dump their employees into the exchange and costs will explode. mr. johnson walked me through the charade of the pay-fors. i cannot see that this ruling will do much more than further explode the cost of this. there is so much more i can get into but in the interest of times i will not -- of time i willnot.

>> it is healthy for us to have these discussions. mr. falk i appreciated the challenges you are facing is a small business owner. my good friend from wisconsin the same point can be made on the opposite side. i was asked last week for the fourth of july and i met with a small business owner. he says, "i'm glad there is an employer mandate. when i first created this business i bent over backwards to make sure my employees had affordable healthcare. yet now i look down the street and i have competitors. and he is providing affordable coverage for 55 employees. he thinks it is the right thing to do. it helps with recruitment and retention. in fact, 95% of businesses over 50 are providing coverage. even though there is no requirement. they made a business calculation that it is in their best

interest for recruitment and retention because it is the right thing to do. so i think the same argument can be made on the other side. mr. falk you said you have 43 employees. are you providing health care coverage for them? >> i have over 100 employees. yes, i do provide for them. i do not think the argument is there, the argument that you made. the argument is more the mandate and the reporting requirements. >> but you are currently providing coverage -- >> for full-time yes. >> let me ask a simple question. mr. roy what is your recommendation for this congress? to repeal the affordable care act or fix certain features of it? >> repealing and replacing the affordable care act would be the optimal policy outcome. >> to fully repeal or fix. >> i am for repealing or replacing it. >> repeal and replace.

>> mr. falk. >> repeal it. >> mr. jost. >> i think there are things that can be fixed. >> my father said, "son, you will face to critics in life. people who criticize you because they want you to do better and those who criticize because they want to see you fail." there is so much opposition for political reasons alone to see that this thing fails. not whether it will help small businesses are help americans throughout the country trade that is the tragedy with these types of hearings and the discussion we are having under the affordable care act today. mr. dennis, you represent nfib. every year i introduce an act that became the basis for the exchanges. when i introduced the bill there were an equal number of republicans and democrats that supported it.

now we have, mr. jost, we had seven states report back on what the rates would be for small businesses entering the shop exchanges. and they are coming in below the current rates. and it is because of what the exchange does -- it sets up transparency. empowering small businesses to have the same levers that large businesses do. mr. bdennis, do you know what percentage of your membership have 50 or fewer employees? >> 50 or fewer? probably dealing with about 85% something like that. >> i have a chart. it showed those with 40 ore more employees is less than seven percent of your members. >> 94% are below 53 -- 50 employees. they will not be impacted right now on the employer mandate. >> no.

>> what type of information are you sending out to those members? >> we have a whole series of programs where we try and disseminate information to the members, printed as well is calling and conference. we send staff out. >> i am glad you are doing it because there is a whole lot of misinformation being sent out. to scare them, and to make sure this legislation fails. mr. falk, are you a member of nfib? >> no, i'm not. sorry. >> i did not want to put you on the spot. mr. mcdermott pointed out we have healthcare.gov. there are a lot of sites that small businesses can go to to get the facts. that is what i am hearing from folks back home, "we want the facts of what is happening and what we need to do prepare."

if we could focus on that and have honest conversations ike we are trying to have today, i think all of us will be much better off -- i like we are trying to have today, i think all of us will be much better off. >> republicans want american people to have good quality healthcare. what we see this as is not about a political issue, about having the the bill failed, we see this as definitely something that leans toward socialism. socialism is known around the globe to fail time and time again. i remind my friends on the other side of the aisle, as you may remember from the 2010 debates these are the claims we were making --this is trying to centralize the healthcare system in washington which has failed around the globe. we want to improve healthcare. i have a question that i am going to give to mr. jost. i do not know what part of the law the administration is using to allow to just say that this

mandate on the employer side can be ignored. i don't why my colleagues on the other side of the aisle are not insisting that the letter of the law be followed. do you know what part of the affordable care act or obamacare was used? what are they citing to waive this requirement? >> in the blog post in reference, they cite the reporting requirements where they are going for the delay. they are not going into the structure of the mandate itself. they are going into the section that requires employers to report on what they are doing regarding health insurance. but there has been an inquiry sent by your leadership in the house to the president asking that very question. i think they have been asked by the press and have not responded yet. there has been no official response from the administration about their legal reasoning.

>> what is your personal opinion? >> my personal opinion is that well, i am not a lawyer. mr. jost is a lawyer. he can answer some of the questions. it is obvious on its face that this is not what congress intended. however they might stretch some statute and say, "we can interpret this." the employer mandate was supposed to go into effect in 2014. the. the reporting system was supposed to go into effect. it is obvious that is what was intended. i do know about whether they can stretch the mind or do something different. >> mr. jost? >> hterethere was a crs report that reference to an earlier report that referenced a legal case in this area. the irs is relying on this rulemaking authority, and what the trap case, which is the d c

circuit case, is that when the question arises as to whether an administration can delay enforcement of a law it is subject to over rule of reason where congress has provided a timetable or other indication that may supply content. in the d.c. circuit the courts have held that that does not make it a requirement. but other things that can be considered are whether it will damage health and welfare whether the court should consider the expediting delayed action or other agency activities of the higher income heating priority -- a higher priority. i think, looking at the judicial authority here, i think they have some room. >> so unions have been granted waivers. now you have done an employer

waiver. why can't you do an individual mandate waiver? >> in the first place i am not sure what you are referring to with respect to unions. there was a waiver included in the statute for a delay of the annual limits requirement. and some unions received a delay under that. although a lot of businesses did as well. >> can the white house grant an individual waiver? that is my question. an individual mandate. >> the statute permits a hardship waiver. in regulations published a week ago, the administration interpreted that broadly. there will be many people who will qualify for hardship waivers. of course, there are seven or eight other exemptions including one for everybody who cannot afford coverage. the individual mandate has been very widely misunderstood. it is not a requirement. >> why not do an individual

mandate waiver at the same time? >> people who can't afford health insurance ought to buy health insurance. they cannot wait until they get sick. >> it is mandated by the government. that is not individual responsibility or individual liberty. yield back. >> car insurance -- >> time expired. >> mr. chairman, when all else fails, you have to set up the red flags. socialism, apocalypse now. we heard it again just recently. i resent the fact that first of all, we accuse those folks who sat hour after hour in putting the legislation together of doing a christmas eve swing. month after month, listen to many people on this issue. is this perfect?

there is not a piece of legislation that was perfect. so we need change. you cannot deny that obamacare is helping millions of americans. you want chapter and verse, i will give it to you. you cannot deny that most employers offer insurance even without a mandate. and small businesses will be exempt. you have no ideas on health reform yourselves. in fact, those who put before the congress, your own party rejected. you can't have it both ways. more importantly it is better to be right and fast. . you know that better than anybody. the exchanges. things to me --things need to be corrected. mr. falk, when you say that the information is not existent.

i will give you the information. >> i did not say it did not exist. >> it's here. on the first page of the regulations, you haven't looked at anyway, is a very interesting part of this legislation -- the medical loss ratio. do you know what that is? >> no. >> let me tell you what it is. and that is insurance companies now must provide and spend a specified percentage of premium dollars on medical care, which they are never -- they never had to do before. this is critical to everybody. a lot of good things in this legislation. you are the only panelist on the left that said, maybe i would have repealed. this is all about repeal. they do not want to change it.

they want to do away with it. the election is over. the supreme court decision has been rendered. but we are going to continue to try to do away with this entire piece of legislation, which is reforming healthcare. now, mr. roy, more than 95% of businesses are small businesses. they got fewer than 50 employees. that would not be subject to this mandate. you agree with me so far? >> not subject is not a static term because businesses grow. >> do you agree or disagree? >> i disagree. >> good. 200,000 large businesses with more than 50 implore these are subject to the employer responsibility requirement. of these 200,000 larger employers, at least 95% offer

health insurance to their employees. do you agree with that statement, mr. jost? >> no. >> do you agree? >> but that does not mean all of those employees are covered. >> what do you mean by that? >> 97% of businesses with greater than 50 or more employees do offer health benefits, but not necessarily to all employees. a number of the uninsured are people employed by other firms. >> mr. jost, do you think that it seems likely that employers who currently offer coverage right now would start dropping their health insurance all of a sudden? >> no. >> why not? >> especially if they know it will come back -- >> this is what i am hearing. >> the main reason employers offer health insurance to their employees is for recruitment and retention.

employees expect health insurance. another reason is that there are tax subsidies that are there which was mentioned by mr. captretretta. if we wanted to have the largest tax increase in american history by abolishing the employer tax detections -- deductions, we could talk about that. i am not sure that many members of this committee would want to do that. >> i would. do you agree? >> i agree it would be desirable to move away from employer- sponsored system. >> thank you very much, mr. chairman. >> mr. ross. >> are we looking for perfect in response to my friend from new jersey? we are not. we offered 30 amendments when we were in the minority that were swatted away by the majority late into the night, not considered, not adopted, many of them were thoughtful attempts to improve the bill. so we are not looking for perfect. what we are looking for is even a reasonable characterization of what was promised.

what was promised to the american public by the president was, youg get to keep your physician. remember that? that is not true. the average health-care costs will go down $2500 per year. that is not true. we are looking for a reasonable a simulation of the representation to the public by the president of the united states and his administration during the course of the debate. that is long gone. that is never going to happen. now here we are. and we are debating and considering what is clearly an embarrassment. and it is an embarrassment that we could see a foreshadowing of when then n speaker of the house nancy pelosi said, "we have to opasspass this bill so you can see what is in it." wow. she does not disappoint. here we are. so now we've got a situation

where essentially the administration for years has been pumping sunshine. the administration when asked, how are you doing this? how is this great feat coming to for mission? and this committee and in public representations has said "it's great. we have got it under control. we have a wonderful plan for your life, and it is going to be terrific." now what happens, late before the holiday weekend? the administration ona a blog p ost essentially whispers, "it's not working. oops. this is a mess." yeah. but you know what? you may not be able to hear me but the whole country heard that. it was a blog post. we were admonished a couple of minutes ago to check websites?

check websites? it is ridiculous. here we are. my prediction is this -- that the obamacare statute, the affordable care act as enacted, is unsustainable. it is unsustainable because of a whole host of reasons. the architecture is fundamentally flawed. and it is an edifice that is now wavering. one of two things is going to happen. many of the proponents not all but many of the proponents of obamacare actually their hearts desire is a single-payer system and they will tell you that. they admitted that here they could not get single-payer. their fallback position was the public option. they could not get that. there fallback position was obamacare. that is their hearts desire -- a single-payor system. the other way it could go, and it is my hope that it goes in a

very different direction,and that is towards a consumer- oriented healthcare system. do we want to repeal this? you had that your -- you can bet your life. the arguments that we heard from my friend from wisconsin was that somehow the desire to see something fail is somehow un just. no. what we want is we want to see healthcare improve, but we have a far different vision, a vision that was blocked out during the debate in this committee in this room late at night during the debate on obamacare. now it is coming to for ration, and we have an opportunity to remedy this. my sense is that the public is waking up. the public has an awareness. there was a false claim and they want to redeem now that fals cae claim, and revisit the false representation that was made to them, and it is their hope that

this congress as part of that solution. i have every confidence that we can do this so that we can then patient- physicians to meet one another and have an absolutely terrific system without a government telling us what is right and what is wrong. i yield back. >> thank you. >> you allow me to participate in these very important hearings. to my friend and colleague, to join with the sunshine pulpit, and that is what all of us are we have really tried hard to improve the quality of life for americans, and we have these hearings to see whether or not the storms or impediments, to see whether we are doing the right th