someone who has been in this job for less than a year, this is a sore point with a lot of complexity and a broad mission and a large number of people they are trying to find out about. my comment would be that perhaps it is shortsighted to write off someone with less than a year in the job. host: fayetteville, north carolina. caller: good morning, i would like to make a couple of comments and some of them are derogatory. i called in on what i thought was the military and the first thing i was asked is whether i was republican or democrat or independents. i'm an american, first off. i'm retired military. every -- anyone that has done anything to recover our american servicemen, i would like to give credit.

i thought i heard why after 60 years someone would want to know or question why they would recover the bodies? anyone that thinks like that, i have very low opinion of. the american fighting man all the way from the civil war, revolution rework to current has given everything for this country. if we cannot give something back, we need to shut it down. i'm sorry for the negative comments. host: thank you. that will be the final comments for today's program. lacy rourke with the national league of pow families and juana sommers a politico have an hour,guests.

said if i met >> federal reserve chairman ben bernanke testifies before congress about the economy and monetary policy. that she was a ghoulish is subject for a biography when it donned on me that he had been at abraham lincoln's bedside but also at the bedside of william mckinley in 1901. who could this fellow be? when i opened the archive, i realize what a rich subject it was. has two bookends at either end of his

biographical shelf. lincoln on one end, the personal secretary of lincoln, lived there for four years. on the other hand his life, he mckinley, only under but the secretary of state for teddy roosevelt. even of these wonderful, iconic bookends of american history pretty realize all of the chapters in between from the civil war through to the beginning of the 20 century as a presence in every one of those chamfers -- chapters. >> the life of "john pang -- of john hay. >> at a hearing to reconfirm them is of the joint chiefs of staff, general martin dempsey

told mummers of the service committee they are not ruling out the use of forces in syria. when asked by john mccain, he declared to -- declined to offer his opinion on intervention. senator mccain put a hold on his confirmation. hours -- 1.55 hours. >> thank you. let me ask you the standard ourtions which we ask of military nominees. -- have addressed the you at hereto apical -- applicable laws? >> yes, i have. yes sir. >> you agree when asked to give your personal views, even if party infer from the

power question were >> yes. >> will you ensure that your staff complies with deadlines established requested communications, including questions for the record and hearings? >> yes read >> we you -- yes. >> will those witnesses be protected for reprisal? do you agree to provide documents, including electronic forms of medication in a timely manner, and requested by a duly constituted committee, or consult with the committee for denyinge basis such documents? >> es. >> thank you. we are going to have a seven minute first round of questions.

>> do you support finding additional ways to increase the military pressure on assad? senator, let me say that i am well aware of the human suffering and the tragedy unfolding in syria. and the effect it is having on the region. coursesquestion about of action going forward, i support a whole of government approach that applies all the instruments of national power. as for the military, we have prepared options and articulate in risks an opportunity cost to put additional pressure on the assad regime. supportthe mission equipping the opposition? >> they have a governmental approach to the increase

capability of the opposition. >> is that include training and equipping militarily? >> not to the department of defense. >> through other means? >> yes. on thefghanistan, security forces of afghanistan on track to be fully in charge of securing afghanistan by the december of 2014? >> they are. that they willis achieve campaign objectives. there are some potential gaps that they will have better clarity on it this fighting season. >> i'm not going to ask you what advice you would give to the force,nt on the residual

assuming there is agreement with the afghans after december 2014. i'm not going to ask you what the advices. that is advice you give confidentially to the president. he has a right to your confidential advice. have you given the president your device relative to the size of the residual forces? >> i have served. we have provided several options. as a joint chiefs, we have made a recommendation on the size and expressed our view one when that announcement would best meet the campaign objectives. >> would you agree that legal protections where our troops, which will be provided for if we could reach a bilateral security agreement with afghanistan, are essential to any long-term presence in afghanistan? >> i do believe that.

after december 2014 is the -- dependent on the date -- the agreement with the afghans questioned >> that his rights are. -- afghans? that is right, sir. >> i hope president karzai is listening to that. >> i have a plant office call with him. >> i hope you would make that i will not speak for others directly, it is not feel if they do not speak for themselves, but it is essential tounderstands that there has be a bilateral agreement that protects our troops for there to be a residual presence. i favor a residual presence. giving confidence to the

afghans that there will be a continuing revelation -- but i do not want to be silent in the face of president karzai's comments, which are unwise in terms of whether or not he wants a residual presence or not. he sometimes acts like he doesn't want a residual presence, even though it is clear to me that the afghan people do, and so does he. he wanted on his terms. it cannot just be on his terms. would you agree with that? >> i do. i would point out that our relationship, and our interest in afghanistan run deeper than just president karzai. >> and there is going to be an election next year. you can pass on he is not going to be a candidate in the election but there'll be an election for something that the committee members take seriously.

those statements of his matter to us. youhe guantanamo issue, do favor -- let me start over. we have in our defense operas asian language that would give greater flexibility to the department of defense to tonsfer guantanamo detainees the united states for detention and trial. to streamline the authority of the secretary of defense, to transfer guantanamo detainees to supportcountries, do those provisions? issenator, what i support that we must have an option to detain prisoners.

he cannot expect young men and women on the battlefield to have a single option which would be saying that's simply to kill. would be simply to kill print i support anything that will assure me that those young men and women will have that option. >> assuming they have that assurance, that there are places, given that condition and qualification, one which i share , do you then support the language of the bill? >> i would have to see the bill, but if you're asking me has guantanamo, the facility, tarnish the image of the united states globally, i think it has. i would welcome any other solution. defense, we have had an assessment from , a letter general providing the assessment that

demonstration -- to discriminati since there is no current military to deploy on these ?ase, do you agree you create additional analysis is needed to determine whether the necessary to determine in the future question are >> i would like -- in the future? the analysisdo before make a decision on how best to make a capability. >> i'm glad you gave me opportunity to ask. >> i have been looking for an opportunity. lex thank you. -- >> thank you. >> i would spend my next dollar on missile defense and the

discrimination you describe. e, " qualityuot has a quality all its own." i think it is wise that we are doing the environmental impact , and as we watch the threat develop, we are going to have to be cognizant of that. it may become necessary to put into place a second type. we will play that as we have to. >> you mean before making a commitment to a site, we should complete those assessments? thosere planning on doing in a relatively near term. that will begin before there is a need to make a decision. i want to say we need to be cautious and cognizant of where the trajectories are. >> they will be done naturally,

you think they should be done? what's they will be done. i agree with doing them. would -- >> i just why clear answer. before the be done site is selected. >> yes. >> it was an article today that south korea wants to delay the transfer of wartime operational control. i am sorry. i was looking for my car to. i forget that we are using them. i have got over my time. i apologize to my colleagues. >> thank you. in my opening statement, i quoted each one of you. quotes, ifuch strong ever the force is too great, we

will use and be immoral. the statement of general martin dempsey, i do not see right now, but for the first time in my career, we are asked to respond to a crisis. we will have to say we cannot. there has ever been a time in our history. way threats are so great, and diverse as they are today. >> you agree with that? >> i do. there's probably fewer existential threats to the nation. there are formal ways that middle wage states, and violent extremists can reach out and touch us. waxed you agree with that -- >> do you agree with that? is larger than the

money we have to keep it ready. >> i was talking about the threats that are out there. things were predictable back then in the cold war. thatou entities out there are going to the weapon and a capability. that is what he is talking about. that is the threat that i think is really a scary thing. the question is, you both believe that. have you shared this with the president? >> yes. >> he knows this. he continues with his approach. let me ask you a question about gitmo. you said you would welcome any other solution. i have often look at gitmo is one of the few good deals we have in this country.

yet, when you say that you welcome any other solution, what other solution is there? is there a solution that we are not entailing bringing these people into our continental united states? been seeing the analysis done at any number of solutions. there has not been any consensus on which one to pursue. i went to align myself with those that say we have to have a detention solution. >> i agree. we have coveted tension. we have something that is ready made. i understand that people in the middle east that do not like it. it has given us a better be tatian in some areas. i believe that we need to think of america first. i can recall that when the president came out talking about these alternatives that they had, they had sites inside the united states.

one was in oklahoma. i went down there and talked to charge lady, she was in of our prison down there. she had several tourists in gitmo. do they know that we have this, it is ready-made. this is a great frustration to me. we have language that is pretty good in the bill. nonetheless, can you think of anything that would not entail incarceration or movement into the united states? right now? easy answerhave an to that one. one thing i would be sure to bit morea little flexibility would be useful for us previously moral obligation to take good medical care of these detainees, because we cannot move them outside of gitmo. we have to build state-of-the- medical facilities.

it will be great to bring them back to deny states for medical attention. that kind of flexibility. >> there is not a person has not been down there more than once. one of the problems they have with the detainees is they are eating better than they have ever had in their life. run they never had even heard of before. i think that we are meeting that prayed -- that. we need to get somebody on the record. i have an aviation background pray i do not think it's enough that to know you keep your proficiency up. i applaud the decision to get back in and start retraining. in my opening statement, i was going to conduct a study as to to goch more cost is

through the retraining we're going to have to go through right now, that if we had never made the decision in april 9. have you already done that? do you have any information in terms of how much more it is going to cost now that if we had not done it to start with? >> it is a good question. that for you for the record in terms of cost prayed f you takel you is i these quadrants, it will take to increase.ills i think of in terms of time. there is a cost to mention. >> time equals risk. we had some that came right out of school, they are going to have to go back and start from the beginning. we do not have the capability of taking care of the needs as they come up.

i believe that that translates into a risk. i'm not willing to take it if i can do anything about it. -- can i add, what we're saying is that we are going to end up with two problems over time if sequestration remains in effect. the immediate robin for the next several years will be readiness. we will not be able to find the money we need to achieve the level of sequestration cuts without dramatically impacting our readiness. as the force becomes smaller, you can restore readiness because you are dealing with the smaller force. a ghost too far, too fast. >> i understand that. the proficiency of a smaller number of units can be greater. you are still dealing the smaller number of units. this is the diverse that we have right now. that is not very good idea. not that you can do anything

about it. right now that is the problem. time is up, i, my appreciate the fact that you use the word immoral. giving the path of readiness of our armed forces, when will the commander-in-chief be at a point of making a moral decisions? >> i do not think i use the term immoral. we are keeping the white house closely informed as to the outcome of the strategic choices. that includes both capability and readiness of the force. thosere the -- aware of results. people factor that in their decision-making. hopefully we will be able to find a good resolution that will allow us to go forward to plan for what the future is. >> i appreciate both of you. we have to let the people know we have a serious problem here. i think this hearing is our opportunity to do that.

i apologize if you begin a quote to you that wasn't you. >> let me assure you that if the nation is threatened, we will go. that is the point. we will go, and we may not be ready to go. it will depend on the nature of the conflict in which we were asked to go. if it is an x essential threat and we send them, there is no immorality in that. if this were some other contingency, and we were asking them to go not ready, and me had a choice to do that, that is right. >> i appreciate that. >> senator blumenthal. >> thank you. youin in thanking both of for your service over many years. dempsey, you and i have discussed briefly the purchase

of helicopters for the afghan armed services. the purchase of russian in my 7's -- and a country that is still harboring and providing refuge snowden. we discussed the reasons for that sale. very graciously, you suggested you would look into the possibility of either ending that sale, which will result in sitting on the runways of of canada stand because they lack pilots to fly peoplend they lack

trying to maintain a repair them, but i wonder whether there is something we can do to stop , subsidized by american taxpayers, provided by american taxpayers to an outline that does not have a status agreement with us that will enable us to continue providing for each of them. in connection with that question, what additional kinds of resources we should consider statusg if there is no of forces agreement. 17s, -- min my that will require us to stay committed to the fleet. there is no way we can transition at this point and put

them in anything other and that airframe. what i suggested is that if we can achieve a lasting and during relationship with that, and that lives up to the end of the deal, we will be investing in them through foreign military sales for some time. there was a likely point where we could transition them to u.s. built aircraft. -- it interim, we cannot would be my recommendation that we stay the course with the existing program. sufficientinterest to justify the national security waiver under the legislation that is currently included? >> i do sir. >> what would have to change for those helicopters to be purchased from an american manufacturer, such as any of the others that are more than capable of providing better

aircraft to the afghans? >> we have experience in making the transition in iraq, where we have made them outfitted with our craft. it starts with training. effort is unlikely to begin until we establish a bilateral security agreement. i was at a briefing that you gave on threats to our navy and. i wonder if you could comment to the extent that you are able on the importance of the ohio class replacement in terms of nuclear deterrence, and the importance of continuing with that program, and any possible jeopardy that might be impacted as a result of sequester.

are committed to the tried. i believe that is the right approach. it is the most survivable element that we have. it is very reliable. to thevery committed next class of coming down the line. we have delayed as far as we can. we need to now get into the requirements and design of this missile carrying summering. we're just committed to the program. we are going to try to control the cost. we are going to make this like all the programs we are working on, a successful program. >> you would agree that the

program really has to be spared any impasse as a result of sequester. >> i would agree with that. a i wonder if i could move to personnel issue that i know. electronic medical records system, which still is incompatible with the department of defense medical record system with the va. despite questions that i and others have asked repeatedly, under the secretary of defense and the previous one, i remain itcerned with the fact that is a goal, not a reality. i wonder if you could comment on what can be done to increase the pace of making those systems

compatible. i had thought they would be one system. $1 billion has and spent on making them one system. i ask you to comment on that. concern.e your i can show you that secretary hegel has taken the decision to into atlresponsibility , which will be that are managed. .e have done other things we relieve the burden of them having to do continual research to find at the record is complete. that is what the path -- that is the path we're on. your oversight will be an important part of of achieving that. >> thank you. my time is expired. i want to thank you both for

your extraordinary service, and unhappyrate, i remain posture.current i'm not going to let the issue go with all due respect. i understand your position re- think you for for being so forthright in your answer. >> thank you. senator mccain. >> thank you. i must tell both of the witnesses i'm concerned about the role you played over the last two years, the view of your role as the chief advisers to the president on national security, and the state of the world over the last two years since you have been holding the office you hold. , do you believe

the continued cost and risk of our inaction in syria are now worse for our national security interests? >> as a discussed, i would like to know an answer and a nice filibuster. >> i assure you, this is a regional issue. i would say that the issue in at greater risk because of the emergence of violent extremist. >> you're not answering the question. you believe that the continued cost and risks of our inaction in syria are now worse for our national security interests and the costs associated with limited military action? >> with all due respect, you're asking me to agree that we have been in active. we have not been in active. >> we have not? >> that is correct. validity ton gives

my concern. obviously, we may have not been in active, but any observer knows that assad is prevailing on the battlefield. hezbollah is there. the russians are there. the situation is much more dire than it was two years ago when you and the admiral came to office. your answer is that we have not been active. >> it is correct. --have not been in active inactive. we should take military action, or continued limited action, or significant action, such as the establishment of a no-fly zone, and arming being rebels with weapons they need, which there've not been getting. perhaps better than you.

i have been there. which is a greater cost? the action that we are taking having not paid on the battlefield equation, or doing nothing. am in favor of building a moderate opposition and supporting it. it is a decision for our elected officials, not for the senior military leaders. >> that goes back to my concern about your role as chairman of the joint chiefs. >> i understand. militarye the sole advisor. you testified this february that you had advised the president to armed units of the syrian opposition. you testified you no longer supported the position. now we read that the administration has decided to

arm the syrian opposition units. how do we account for those are let's question mark >> i would not accept the term. it based onoached the opposition. there was a time where it was evident that the extremist groups were prevailing inside the opposition. i have not been wavering. >> said storm is groups are prevailing inside the opposition? >> in february. i had that concern. why in is your answer to february, you advise the president to arm them. in april, he said that we shouldn't. .ow, we arming the rebels support that policy? >> i support the building of a moderate opposition, including building a military capabilities. here is an example of my

concern. 8, the warn on july in syria is not a simple matter of stopping the fight by the introduction of any particular u.s. capabilities. it seems to me that you need to understand what the piece will look like before we start the war. on two has been going over 100,000 people killed. we didn't start the war. we would be starting a war. we would be trying to stop a massacre that is going on. he would try to stop the hezbollah. we would try to stop the fact that the russians continue to assad's forces. what would be a great triumph for iran in the entire region? you say it seems that we need to understand what the piece will look like before we start the

war. we should see how we should stop the war before stopping the massacre? thatnator, would you agree we have recent experience where until we understood how the country would continue to , that actually situations can be made worse but introduction of military force? inu.n. i went through this 2006. i said that it wasn't succeeding, and that we had to have a surge, and only a surge could succeed in reversing the tide, and you disagree with me then. way back then. i think history shows that those of us who supported the surge were right, and people like you do not not think we needed a surge were wrong. is,ess my question to you is it in any way a good outcome

for this situation on the battlefield to continue as it is ,ith obviously assad prevailing and continued slaughter of .housands of people the destabilization of jordan, the destabilization of lebanon, and what is clearly erupting into a regional conflict. is that your answer? >> somehow yummy portray does you happy per per trade as the one who has holding back on a use of military force. >> no. reviews are very important because that is your job requests it is. i have given those views to the present. we have articulated the rest. the decision on whether to use force is the decision of our elected officials.

if you would give your personal opinion to the committee if asked. you said yes. i am asking for you and you and -- for your opinion. is undersue deliberation. it would be inappropriate for me to try to influence the decision with the rendering an opinion in public about what kind of forger dass -- force we should use pre->> your answer to the chairman about giving your personal view is circumscribed by decisions that are still being made. >> i will render my recommendations are at the appropriate time. >> when might that be? >> if the administration and the government decides to use military force, we provided a variety of options. you know that.

>> if it is your position that you do not provide your personal views to the committee when circumstances,er you have just contradicted what i have known this committee to operate under for the last 30 years. thank you. >> thank you, senator mccain. senator donnelly. >> thank you. thank you general, thank you admiral. i want to get back to syria in a second. i want to ask general dempsey, in regards to mental health services for service members, one of the things that has recently happened is that i -- they were reduced because of the sequestration, and what i was wondering is if you know there's been been any increase in suicide or suicide attempts since sequestration took effect? >> i do not have that data

available. it is a good question. we are aware of some of the reduction in services. i can take it for the record. >> great. the follow-up on that would be, other efforts in place right now to try to minimize the effect on mental health since it has such a dramatic affect on our service members? any number of efforts. it has the attentive been only the department and the joint chiefs. we need -- we are concerned great although we have prioritized care for wounded warriors, and mental health services, how that is implemented in the field can sometimes be missed. >> i was in afghanistan a few months ago.

commanders, and at the time we were on all of our metrics. everything was being -- we were where he wanted to be as we headed to the end of 2014. still meeting the plan that we had laid out? are we still being able to hold the towns that we have started to hold, are we able to turn the taliban back? is the plan moving along on schedule? is it going faster? are we meeting the numbers we were hoping to meet as we head to the end of 2014? >> i will start and see if device wants to add. i also reach out to as many people as i can possibly reach out to who can give us other views. a woman fromhad

the congressional research service who spent the last five months traveling around afghanistan, visiting with civilian and military leaders, mostly afghans, and in her report into line with the assessment that we cannot shave wascampaign -- her report in line with the assessment that we can achieve the campaign. >> if we are able to stay on that, the afghan forces have a chance to make this work. -- syria,k to serious if conditions do not change, does it look to you that in the near future, others could fall to the assad government? i apologize. i had to step out. there are many concerned

about dara. i'll be visiting him next week. got military contingency planning on going. we are concerned about dara. the conflict tends to ab flow. the conflict will always evan flow -- cap and flow. we are watching and making sure that we would have options available for the national command authority if necessary. >> what steps could have the effect that could slow down the forces? there are a range of options that are out there. the reason i asked --

>> as you look at everything, durable forces are being moved from everywhere they are located. we have options, but the ball seems to be headed the other way. lex i would not want to get into last five conversations, but it is known that where the opposition is on the run, is in the central and western part of syria. it is a difficult situation for them right now. he have -- he represents the pathway from damascus into their traditional homeland on the coast. they want that back. thelieve personally that if regime is successful in that .rea, they will move to aleppo i do not think they're going to

go to dara. we have to watch and maintain vigilance and discern where this thing is headed. i know there are contingencies, but to not take action is to take action. it is determinative of what happens. concern as tois a how long does this go on before the momentum becomes a reversible? we areere able to act if called upon to act. the current track that is being pursued is a diplomatic track. all manner of options have been discussed and are under discussion. i would not want to get out in front of the president on what choices he might make. >> you're waiting to hear? >> as we should be. , providing any options we can.

forces,gards to durable as you look at them right now, we have been concerned. see the -- how do you see this moving? >> back in april, i was very --cerned that the front there are hundreds of different groups that shift allegiances and alliances. it makes it challenging to determine what we are really looking at. the intel community is hard at it. we are hard at it. there was a time when i was fearful that the extremist jihadist was gaining strength.

that we through efforts are made to convince our allies do avoid creating a problem by empowering some of these groups, we have had some success at that. we have had some success at identifying clearly the opposition that could be built and trained militarily. this is the point i want to make sure resonates. this opposition has to not only be repaired militarily, but prepared if it achieves a position of governance inside of syria. otherwise it will deteriorate further. >> thank you for your service. >> thank you. before i call on senator wicker, there is a brief comment. >> i was told that i might have been misunderstood in my comments about gitmo. i'm the strongest support meant -- supporter of using it for

trials. billanguage that is in the , i appreciate your good faith efforts. i am against the language that nda. the >> thank you. >> general dempsey, welcome back. let us talk about the situation in egypt. disagreement in washington about the wisdom of continuing to provide assistance to the military in light of recent events. when i look at egypt, i do not see jeffersonian democrats. i believe the egyptian military has acted with professionalism and restraint throughout the three years of difficult transition since they 2011 ouster of mubarak. i believe one of the primary

reasons there has not been far more bloodshed and suffering during this time is the support united states has provided to egypt through foreign military sales. in light of recent events, some of call for the into these programs. let me tell you how i feel about this. first, we must maintain the strength of this relationship. to enable us to assist in influence egypt. the new niceties would be shortsighted -- the nice is a be shortsighted to overlook the return on investment we get. the suez canal transits, , thesegence cooperation are examples of the benefits we derive from this relationship. the egyptian military has played a stabilizing role in the transition.

our commitments under the camp david accords have yielded sustainable peace between israel and egypt. we must acknowledge israeli prime minister netanyahu's statement this weekend that the camp david accords have been the cornerstone of peace between us and our neighbors, and it has been the cornerstone of stability in the middle east. regardingee with me the importance of military relationships as enablers of u.s. foreign policy? >> i do. >> do you agree with me that we should continue to maintain the strength of the relationships? >> i do. if our government decides that they have to take some action based on existing legal frameworks and restrictions, i would recommend that we find a way to restore those as quickly

as possible, even if it meant conditioning them some way. i would strongly believe that we have to maintain our content with the armed forces. >> do you have any reason to , andve as some have feared a some. now, the weapons adequately provide to the egyptians, or that we have provided in the past have been used, or will be used in ways that might eventually endanger the united states military? thatere's an indication there'll be a concern. >> was the let the government of more seen moving toward a dictatorship? >> if i could, i would like to use his opportunity to express my conversations with my counterpart. i can tell you they believe that.

>> let me just ask you before i i made pretty emphatic statements, would you like to about the-- relationship that we have had, and the assistance that we have had with the egyptian military. >> thank you. my own personal experience goes back to when i commanded in 2008. i can tell you that they have very strong partners, a key nation in the region. passageed preferential in the suez. they have committed to the camp david accords. the israeli military considers the egyptian military a strong partner. in my personal experience, which goes back five years, they are

worth the investment. >> with regard to syria, the chairman talked in his opening statements about a post assad solution. and negotiated solution. do you agree that unless the ,@think senator donnelly was concerned about this also, unless the momentum shifts back to the rebels, there is hardly any chance for that sort of solution that the chairman seeks and is hoping for. >> i agree. i think that as the momentum absent flows, each side feels more compelled or less compelled to seek a negotiated settlement.

>> if i can, you are -- i think you answered a question from the chairman about ways in which military support could be gotten to the rebels. i think he asked about enabling other governments to support the military efforts if we are unable politically to do so. do you remember that question? >> i do. >> can you elaborate at all? >> i'm comfortable talking about it. there is any number of ways you can do it directly. the military capabilities. you have heard me say it is not just about improving or enhancing their military

capabilities. >> i understand that. that is my question. course, other nations as well. there is a significant diplomatic effort to bundle our efforts together into something that will increase the pace at which the capability could be increased. whoould you elaborate as to these alleys might be? >> i would rather do that in a classified setting. >> ok. thank you very much. >> thank you, senator wicker. to gor reid is going momentarily to another senator who is next in line. he is when to yield for one term. >> thank you.

thank you both for your public service. militaryhat you do for . i would like to first focus and continue the conversation on syria. i have great concern over the broad regional security in the middle east. particularly when we are seeing the continued influx of the jihad influence in syria. lebanon have had influence. will iran be able to do the same with regard to syria, and what can we do to prevent both the jihad haven as a stronghold haven? >> i will take this. we have been deeply involved in this issue collaboratively. you are exactly right to think of this as a regional issue.

i would add that iran has not just been a challenge to the united states and its nuclear aspirations, but also through its surrogates, its arms sales. tore is -- they are trying create a sectarian conflict to baghdad. the approach to that, the strategy that would underpin our efforts should be regional, which means we need to increase our support of lebanese armed forces. our jordanian partners. the broaderrd to question, i have heard both cautious optimism and great concern about the elections. what is your assessment of the impact of the election?

do you expect the election to change iran's policy? what is your initial assessment? >> first of all, i reflect on ruhanni has as, reputation for being moderate. he has made moderate statements but he is not in office yet. we think he will struggle against the conservative leadership that may prevent him from becoming a moderate. the watchword here is prudence. it makes sense to reach out to him, but not to do so naively. i think we are in a good position here. it is an interesting development and nobody expected him to be elected. the lives of iranian moderates.

theeed to make it -- elusive iranian moderate. we need to make it clear they can't develop nuclear weaponry. what do you see as a growing threat and a serious concern for our national security and economy? we have been working on the cyber warrior act. center blunt is in charge on the republican side. to create a national guard unit solely for the cyber security of our nation. to get people from the private sector that are dedicated to the military. they can be more cost-efficient as well. can i have your opinion on what the impact would be with a dual betus, and if that would better for our defense and

growing this talent and out -- thehere is a commitment to various roles. the service chiefs are taking a look at it. advice of the commander. this,surgence see to there really would be no role. it is really title 10, but go ahead. it is really part of our force

that's going to grow. principally, to help us defend our own networks. the cyber attacks, obviously. we ought to play our role in assisting them. ourselves in ang war. of money and it will cost a lot to develop this capability. it is not bear all the time. there is expertise out there that we want. >> we want to look very closely at if this makes sense financially. time onve been spending sexual assault in the military. one of the things i want to get your thoughts on, the military

has had a change of position on article 60 that we can take it outside the chain of command. why do you think removing it would be different in any way? have ane it would not different impact of removing article 60. we had put in place other prosecutors and an appeal process that allowed us to consider changing the authorities of the convening authority. it is different than it seems to us, taking the offense out.

>> the important thing to me is to make sure there is an active deterrent out there. becauseknows they will and prosecuted. thing that worked in the drug world for us. the commander is responsible for that. >> keeping a number of articles , you are still fundamentally responsible for command climate good order and discipline. ,he commander is responsible you have to set the climate. or they cannot be retaliated against. the only difference is the legal -- with what the ar

>> with what the army has talked about, there are 35 cases were a civilian district attorney refused to take the case. the chain of command insisted that the case be taken inside the military chain of command. there are 14 that are not yet resolved. --the remainder of the 25 i'm sorry, there are 39. a conviction rate. of those that were convicted, 25 or 24 got punitive discharges.

they are doing present time. if the army had not taken those cases, those people would be walking the street right now. they would not have the resolution that they deserved. this was done inside the chain of command. was pursued successfully. civilian or aa non-entity, they will make the same kind of decisions that the civilian prosecutors will make. >> we want prosecutions that will result in a guilty verdict. that is why being trained about what kind of cases you can win is so important. we are still having 23,000 victims that don't feel the system is strong enough to even

report. thee address cases, or judgment of the commander might have helped, we need to change the system. hope you know that we actually embraced this discussion. >> thank you for your service and thoughtfulness. you want to thank both of for being here and your distinguished service to our country. our meny meant a lot to and women in uniform. they said to me, and said so much about your leadership to go here and also at the shipyard, the civilian work force. i wanted to ask you yester day, i was deeply troubled by reports that came out about the pow

accounting command. they said that unfortunately, the leadership structure is undermining the important function with more than 83,000 of our country's heroes missing or unaccounted for. i believe that we have a moral obligation. this follows up with a recent report that says that an soernal study, it was mismanaged and wasteful that it risked descending from this function to a total failure. i would like to ask you, what are we going to do about this? do do we make sure that we

our responsibility and have been left behind. >> thank you for the hospitality last week. give them allt i the components. that thel you secretary of defense while on travel called me and made sure that i had been aware, to make hee that when i got back, wants to get to the bottom of it. and movingscouraging rapidly toward disgraceful. we'll get at it. i can tell you that he is seized with this as well. have asked the chairman,

and i wonder if -- i believe it is that important to get to some of the issues. the chairmen and ranking member of 2013, we heard testimony in the readiness subcommittee about the impact of sequestration. , we diddefense budget receive a response recently. it doesn't really answer our question on the specifics.

have you put together a contingency plan for the reductions required by sequestration? received their fiscal guidance, they are preparing that contingency right now. it will be one that addresses both the president's budget and sequestration. >> i am hoping -- can you give me a commitment? andhat we can understand discuss what it really means with our forces? back wasswer that came the first contours' of what it would look like under those conditions. important for us to keep in mind that there are five budget

planners that we're having to go through right now. we're going through what it will look like. they are finalizing what the executions will look like under the president's budget. they also develop two or three different scenarios. producelittle tough to fine detail back quickly, but the services have been given the task. need it sooner. you can do all the planning you want for the budget, but it is high in the sky right now. until the american people understand, and everyone understands what the impact of that is, i am hoping you will make that the priority. about russia, and in particular, i sought a recent

report that russia is in violation of the nuclear forces treaty. is that true? >> that is something we can't address that in the unclassified hearing, but i would be happy to talk about it in a classified setting. we watch this very closely. we believe that they are in compliance with the start treaty. i will follow up because i am not asking about the start treaty. here is where rear with russia. he was tortured and killed for bringing out corruption within the government. but they have not ruled out granting asylum to edward snowden. chief opponents

was convicted and it really wreaks of using the judicial system for him to punish his opponents. they are inat that, violation of their treaty obligations. the president recently announced that he would be considering further reductions to our nuclear arsenal. the you believe that we should do that unilaterally? don't advice is that we do that unilaterally. >> if there were going to be a unilateral reductions, would you -- >> i would not give that advice to the president. have.already preserve the triad and modernize the stockpile.

of russia,e behavior wehink it is naive to think will be able to negotiate further reductions. in light of what i just if they are in violation of other treaty obligations, i don't see how we can have good faith negotiations at the moment. >> thank you for your service. it is evident you can't do this alone. one of your duties is to -- through the risk assessment.

changing minute by minute. i will detail of what has happened in the last 24 hours. make youres would you risks a set -- risk assessment that you submitted in april? changed the one we submitted in april that ofviously the accumulation combatants. the requirements that they have submitted have actually increased notably. it is increasing risk and declining readiness. we tried to align what we are doing with national security interests because that is not our responsibility to prioritize.

what wean estimate of are doing across the globe that is being placed at risk. document, i made mention of the fact that it did not account for sequestration and once that became a reality, i would have to revise my risk assessment. to alignave to do so with the submission that we this -- just described. colleagues, in particular, they have done an extraordinary service by pointing out that despite years of effort, we have a significant sexual abuse problem and the military. we have to, as you both clearly indicated, fundamentally responsive.

one aspect is the judicial system. my experiences there are other levers that are critical to the climate and the command structure. ,hat includes evaluation emotion, and retention. if we don't focus on those areas, we will not have the kind of force or trust that we need. can you comment on that? >> in terms of promotion? day, somebodyry thinks about their responsibilities. -- and this is what they expect me to do, to stay in the forest and have that forced 60.

have thatforce and force succeed. >> we hold commanders responsible for establishing the likelihood of the sexual assault hopefully dropping to zero. there are a number of aspects, teaching people what a heinous crime is. if youbout intervening see it about to happen. we hold commanders accountable. , if they detect a problem, it is not where it needs to be an action can be taken ha.

>> keeping with prevention and the advocacy, investigation, accountability to take on this precious issue is absolutely vital that the climate comes to the forefront and we hold commanders responsible for that. >> can you comment on the level of cooperation between the command -- issa, every day seems to be another example of friction rather than harmony. >> the relationship with the president of afghanistan is scratchy. i think that is as good of word as i could describe it.

he is addressing issues of sovereignty and we are trying to close the gap on what enduring presence and commitment might look like. >> in terms of the recent discovery of contraband coming out of cuba and north korea, do you have a rough assessment at this juncture? were they trying to get the equipment in north korea so north korea could use it? tell at this to point. it would be easy to come to the conclusion under the guise of returning equipment, these are jet engines and missiles that will be going to north korea to replenish their stocks or what have you. it clearly exposes their

defiance of the international community. we're very glad that it was discovered so we can expose the world, the cynical behavior of the north korean regime. thank you both for reservists. -- your service. the russian president said that if he thought hurting u.s. relationships with russia would be a consequence of granting him asylum, he would not do it. what would your advice be to the russian president? think there are consequences across all of our relationships. i think it would be damaging.

>> the prime minister of israel said the following things about iran. he is criticizing his predecessor for being a wolf in will clothing. his strategy is to be a wolf in sheep's clothing. do you agree with that analysis and it? is there any doubt in your mind that this guy is actually a moderate? my question to you, and this will determine how i vote for you. do you believe the current president is a moderate? >> he does not have a history of being moderate. don't work, they have to know that you will be prepared to take military

action. that is the only thing that will get their attention. do you agree about the threat of military force? might be the only thing to get their attention. >> that has been the approach all along. >> if they don't believe we are going to hit them, we will move. all of the problems that we have will be dwarfed by this apocalyptic extreme regime. it would make a terrible and .atastrophic change , the to afghanistan

current commander suggested a not member force -- counting american special forces troops, it would be a reasonable number to leave behind in terms of a fall in force. >> we have said so. >> would it be a wise investment to keep them at 352,000 for a few more years rather than draw them down? >> i do. winning?ad >> the tide seems to have shifted in his favor. the tide has

specifically shifted in the central and western part of the country. >> is he waiting overall? >> i would have to pick the regime but not by much. >> the regime is winning but not by much. would they be winning without russia? i don't know if it is vital, but it is certainly helping them. >> how would you evaluate the significance of the health -- their help? you gotsaid we want tomorrow, would it matter? >> absolutely. going to fight to the death, i think. they you agree that if

said we no longer support you, it would be the ultimate game changer? >> absolutely. >> do you see russia doing that? >> no, sir. >> what is the most catastrophic outcome for us? if he wins over time and doesn't leave, having to do with the fact that we kicked him out because he had to go, what is worse for us? >> it is the policy that he must go. >> it is worse for him to stay? >> that is my interpretation. >> will he be in power next year? if nothing changes? are they all helping him?

>> i do. hezbollah andhat russia are helping assad. will he be in power one year from now? >> i think so. >> what about the king of jordan? about theoncerned demographics of his nation. >> he said it would be destabilizing jordan. if the kinghat mean of jordan is got one year from assad is in power? it would be horrible, wouldn't it? dodge court would that affect be off the rack?

-- on iraq? it would begin to fall apart at a faster rate? >> it would be a possible scenario. getting theihood of russians advanced weapons would still be in power one year from now, does that go up or down? ofm israel's standpoint, one the worst nightmares for themis hezbollah getting an advanced weapons. we will talk the second round about sequestration. can finish the first round by noon, there would be a very brief second round.

>> what i think we have made real progress on a wartime contract in, i realize we still have miles to go before we really have a handle on this. the latest incident is the military base in afghanistan. when the marines found out this was going to be built, they said they don't need it and don't want it. that was may of 2010. of 2011, contracts were issued at the building was built. occupied,ver be probably demolished because it was done according to u.s. wiring standards. it the army to take it over, would be quite an investment for them to convert the building for their use. i understand that investigation

is ongoing. need to hear from you, general, that you are committed to getting to the bottom of this. fix accountability in this instance, whoever pulls the trigger on that expenditure really needs to be disciplined. opinion, they should be fired. we have to send a signal that people say don't build it, it is a waste of money. are you aware of this situation? >> you have my commitment that we will get to the bottom of it. i can share just a bit of good news. not caught, but we have about $1.3 billion in contract and for u.s. forces in afghanistan for the security

forces. >> i'd appreciate that very much. the reason that sexual assault was talked about in the context that canada and europe have gone to a different system in order to provide more protection from victims, we have a chance to take a close look at what happened. it is my understanding those changes resulted from a concern that there was not adequate due process. is that your understanding as well? we have got a lot of research into why the five other nations went that path. it is not just because they wanted to protect the accused. they were mandated to do it by

human rights courses. other argument being made about leaving in the hands of civilians is that this would increase reporting. i have had an opportunity to this.t 176 in 2010, look at the numbers in the u.k., their numbers have gone down over the last several years. 40, and australia, they have been stable over the last several years. in israel, there had been a fact of reporting going up when it relatedt o lesser sex -- to lesser sexual offenses.

these are sex-related offenses total in the military. understanding the difference in the enormity of challenges in our military and what they are looking at in israel. 27 in 2012. there is an 80% increase when they change this, but they only got back to the numbers they had previously before the change was made. are you aware of the research you have done that this has resulted in an increase of reporting anywhere in the world? evidence that it has increased reporting. it has slowed the system down. >> you mentioned that you have inen a look at prosecutors

isolation. i have some knowledge of this. there was discipline needed in my office when i found out that prosecutors at the end take desk were getting lobbied by some of the trial prosecutors on their decision because they did not want any losers. want cases to reflect poorly. when you are a prosecutor, there is a win-loss record. peers ands among your onr upper mobility depend your conviction rate? isolate them in this decision, there could be instances where you have a prosecutor that did not want to

look at it closely. additional and formation you can share in terms of numbers? where they said military prosecutors have said no, but there are victims out there today that have justice because the commander said yes? a couple ofve you examples. the marine corps looked at 28 cases. the marine corps was able to have the conviction of court-martial 57%. longererpetrators are no walking the streets. the more startling numbers are from the army and i will repeat them. the army has looked at 49 cases.

14 of them are still in process. 35 of them have been completed. those resulted in a court- martial. 77% of these cases that civilian prosecutors would not take that resulted in serious action taken against the perpetrator. there are some that were acquitted, understandably. most that were found guilty are doing hard time and have been given a punitive discharge from the military. these are very heinous cases. old of them was a 10-year- convictionirl and a was obtained. >> this is hard. we have the same goal.

i want to say that anybody who characterizes me as someone who is protecting the pentagon, i am somehow in cahoots with the pentagon trying to hurt sexual assault victims -- with all due respect to you, i think you are terrific, but nobody would be further in front of the line to keep you until your senseless if we don't get this problem under control. not victims vs. the pentagon and anyone characterizing the head as that is doing a disservice to victims, the military, and the members of this community that spent hours trying to find the right way to make sure that we prosecute more cases effectively. weif i can take 10 seconds,

are actually very grateful for the intention that the entire committee has given to us. i want to say i look forward to our next chance to have people with experience over at the pentagon and your expertise in there. about don't need to worry me being invited. i call them. because reaching out you're calling plays on this, i was infuriated that this was somehow you guys pulling strings over here. nothing could be further from the truth. we are not going anywhere. bain a few moments, max ucus and dvid camp discuss --

and ben bernanke testifies about the economy and monetary policy. and a confirmation hearing from the joint chiefs of staff. of live events to tell you about. lookomorrow morning, they at veterans administration and defense department efforts treating victims of sexual assault. the brookings institution hosts the forum looking at the data collection. >> she was raised as her mother was raised. the home, the children, the entertaining.

that was her heritage and she did it again at the white house. the whole world erupted like a volcano. we had women that went to work and got divorced, we had a flower children and free love. i missed all that. [laughter] changed and it became a whole new concept of women. mrs. clinton today represents the new woman. letitia baldrige, she talks about the role of the first lady and what has changed along with the nation. >> the finance committee chairman on tax policy.

they were at the economic club of washington, d.c. for about 45 minutes. they focus on their plans to reform the tax code. >> for those that are still do it quietly. the chairmen of the economics committee in washington, i would those thatroduce

senatort be familiar, baucus is from montana. he is a native of montana, and educated at stanford and a law back after he got his law degree. he announced not long ago that he will not run for a seventh term. think he will feel the joys of liberation at that point. the chairman of the finance committee is now in the middle of all the things we will talk about today. mp is fromn can't

michigan and represents the fourth district of michigan. he has been a member of the house of representatives for since 2011.s when he first became the chairman, is that correct? he will serve through the end of this congress. there is a term limit for leadership in the house ways and means committee. be serving as the chairman of the ways and means committee unless there is a change at the end of this congress. returning after law school .o michigan both of you gentlemen are doing

something very unusual in washington, getting together with both parties. a bipartisan -- if there is any chance that the democrats and republicans can get a comprehensive tax reform? >> it has not been brought up since 1986. 15,000 changes to the code since then. there are a lot of provisions and it is compared to other countries.

with respect to the coast, other countries have modernized the bears. are extremely -- 90% of americans want to fill out their tax returns with turbotax. beyond that, here we are. republicans and democrats. it was different and it was very political. you were a betting man, would use a 50-50?

80-20? about above 50%. the chance of getting something through the committee in the house of representatives. that is indefensible. people do have the sense that if they knew somebody in washington, they would be paying a lower rate. there is a real sense of unfairness and people are getting a special deal. all the changes the last few years and the other reasons, we -- there really is this need for growth, and the complexity is enormous. people are afraid they are going to get audited and of a very

well may be. people concern is that have this huge stack of papers. even small businesses. there was a man come in with one retail store and he was $9,000 in tax preparations. the cost of compliance is enormous. there is a huge sort of complexity laid over the nation's that is really unproductive. it is really important we look at this. i do think it is over 50%. i know there are a lot of probablys -- there is a center working together that is important. togetherr working that's important.

they are excited about doing it and i think they believe that this country needs this. think if we can get the , it is amongng young people and very high. many of us have kids in the age group. you don't get hired. to give people the ability to start and get on the road to prosperity or success, i think that is important. tax reform is corporate and individual. you're talking comprehensive. some people think tax reform means raising revenue and others think it means revenue neutral. >> both.

>> ok. [laughter] both, okay. same bill. [laughter] >> both. >> democrats generally would like to raise revenue, is often said. republicans often say, over my dead body. how're you going to deal with the gap between revenue and no revenue? >> we meet weekly. this, it isther on a great reduction. and the house republican. -- is republican.

the bill will probably have some revenue. the house probably will not. we meet, have a conference -- >> let me ask you about the process you just mentioned. revenue-raising bills are supposed to go first from the house, and that would mean the first.ill would pay us it might be politically difficult, is that going to be hard to do? >> we meet regularly and are both graduates of the super committee. we have been talking about these for a long time. we think it is regular order. meetinghave been regularly and i met with every member of the ways and means committee. lots of listening sessions and

the members from off of the committee and on the committee. i think together we have had more than 15 hearings. in 17 years, between the senate finance and ways and means committee. how do we get the policy right? develop the policy along the way? that area, a lot of this is not as hard as you might think. it is not about how we figure out how to make that happen. >> do you agree that the house will have to go first? >> you don't agree?

[laughter] >> we agree on a result. the revenue bill, i think it makes sense for us to look at that. will that help the bill's success? >> you can argue about the affordable care act. >> we both agree that whatever avenue it takes to get this done, we are willing to try. i really like tax reform and i want a revenue neutral bill.

>> this is different from 86. president reagan was a big driver of tax reform. president obama is not pushing as strongly. >> if president obama were to be -- and i think it is good that he is aware it is. they have done it frequently. >> they let you move forward,

they won't send a bill. moreou planning to have grass-roots hearings around the country? >> yes. >> any place? >> next we will go to philadelphia. testifies? any citizen? >> they are not formal hearings. things aach is to do bit differently. we want to talk to the country, not just regular garden variety hearings. we're going around the country as well. the twinc ities, 3m, a larger

company and another smaller company. we will talk to somebody that sent us a very interesting submission. >> in washington, we call them tax expenditures. the biggest expenditures are mortgage interest deductions or charitable interest deductions deductions. bond thsoe are the big four. which of those are going to go away? [laughter] >> do you have a preference? [laughter] >> i have some, but to be serious, you probably can't eliminate all of them. should the pain be shared on all of those? will it likely go more than one?

not to cause nervousness in the room, but not everything is a tax expenditure. agreed to not take the cleant code and the slate -- >> in your respective committees, giving you ideas of what they want to see or not see. how was i going? >> not only are dave and by working together, but the ranking republican and i are working together. let's get rid of all tax expenditures, roughly $12

trillion over 10 years. start there, what's that used for? rate reduction? revenue reduction? almost entirely rate reduction. i have asked for submissions that they are starting to do that now. i expect i will get them near the end of this month. i are workingand together. and we are keeping them confidential because we want to encourage candid conversation with our members. >> they will make time for the bill? he says, max, tell me what you want me to do.

how can i help you? >> people talk about the value- added tax, something we don't have in this country. is that something you would even consider? is that not in the ballpark? >> i do not think you want another layer of taxation and the code. what i have said is that if you have something that raises the revenue that is described in the budget, we will look at it. if there is another type of taxation, or some of these other there, as are out long as the joint committee on taxation scores this, and it meets the benchmarks, we will consider that in the committee. we have done a process different than the senate. we have had 1300 submissions on that.

we've compiled that in a joint committee report. to dore is so interest what you just suggested. part of it is getting down the members and find out how much support there might be. then the last congress congress agreed to increase the capital gains rate to 20% read -- 20%. is it likely that we'll ever go up again in this reform bill? could it go down? [laughter] it is notlike to say likely to be changed? [laughter] i can try. rates could go up? >> everything is on the table.

meetingot going to get specific pre->> growth and simplicity, and revenue neutrality, those are the things that are the benchmarks we're trying to look less -- look at. >> let's look the affordable care act. your committee is done with that. the president is going to postpone implementation for one year. does that concern you? >> we just had votes on this yesterday. there was a part of this and -- a bipartisan vote to repeal the individual mandate. i think there is a lot of concern. i think there are some a democrat supporting the individual side. i think even though we had assurances that this would be implemented on time, it is not moving on time.

there are problems with it. i think this is clearly an indication. basically, this is going to destroy the ability of working americans to have health care. i think that these problems have to be admitted. we need to look at it. gilly bill that reduce premiums ,- the only bill that reduces how to get premiums down. >> medicare is said to be one of the biggest problems the federal government budget because it is growing at a large rate. are you planning to do anything on medicare in this congress in terms of dealing with the problems there. >> amiga back to the last question. david and i are on track with tax reform. theave a different view on affordable care act.

it was hopper for the ministration to delay it for one year the employer mandate. it is a big ask. i support the bill strongly. a couple of years work to get past. individual mandate is morbid -- more of an integral part of the statue. malesimportant that young sign up, so that health care is provided for everybody. time onpent a lot of implementation. i want this bill to be implemented correctly. it is here. it is not going to be repealed. let's make it work the best we possibly can. that is the course we should take.

>> on medicare? as are any solution to that in this congress? >> we announced a series of hearings on entitlements. draft on a discussion the ideas that are out there. social security, and a lot of this has been discussed for many years. bowles-simpson, cantor, i supercommittee. a lot of ideas are there. now we need to set the committee structure that will deal with the background for that. i think there is different views on how to approach that. clearly that needs to be part of the discussion. to beare going to have resolved. those might have an opportunity to come forward to help us resolve those issues.

>> it is not too difficult conceptually. .e have been on other efforts bowles-simpson, supercommittee. this is an interesting point. those efforts failed in part because two thirds of the members have no knowledge of the subject. they were not on corporations committees. they are not on the ways and means committee. two thirds of the time was educating members of the committee as to our appropriations provisions. we have had these meetings now. it is -- we tend to know what the major pieces are.

, backre is a role there to me put together pretty quickly important point is that the committees of jurisdiction are involved. they are the committees that do now the ins and outs that are involved. >> both of you have served in the supercommittee. since they cannot come to an agreement, sequestration way into effect. do you think of the supercommittee, do think they would try to come up with a solution, with a, but the same solution? >> it is interesting. two thirds of the way through the supercommittee, we were getting very far. didn't -- cochairs they had never met each other. that is part of the problem

here. they don't work together very much. it is a process. i'm encouraging all of us to talk to everybody. i am eating every single senator on tax reform. beert together burgers and twice a month. just get to know each other and talk. my point is that in the supercommittee, things get bogged down. the committee says, let them do it. they turned it over to us. , mccain up with the solution. -- notnot for drilling $4 trillion. but we then had resistance. >> other people in the congress

question >> that this small group of people impose something on the rest of the congress is not going to work. i think one of the things that was important to do. to really involve members. do not something -- i think a reconvening would be helpful. why on thec, that is piece you're mentioning, we're doing hearings, putting out tax a possibility. it doesn't mean you're going to succeed. your chances are better if you have that process. you rebuild from the ground up. you get people involved. more and poorly, have interesting parties who are part of this. >> that is a good point. only to goly members to different parts of the code.

because so many are new, or it is a wonderful learning process. as a double-edged sword. side is they don't know much. when we explain different parts of the code, we are mutually searching together to try to get the facts. it is bringing us together psychologically. we're building trust together. says, the more it is going to help her. know theumbers no -- provisions that is important to their state. no one is an expert on the entire tax code. it is important to have those opportunities to work through it , as opposed to imposing the

solution. >> would you have the same view on bowles-simpson at the commission had been adopted by the congress? people -- it was a trophic service. debttisan, address the problems. but it has changed a lot over time. there are different versions. , theyembers of congress passed not knowing what was in bowles-simpson. if they knew the details, they would get hung up. cannot justat we layer it on top of all we're doing. there was a lot of valuable work.

does the committees of jurisdiction. they want to be involved. i think that is the process we're undertaking. what has a better chance. >> when you join the senate in 1978, the chairman of the senate finance committee was russell long. -- how ise committee congress different than when you first came? is it much more rewarding uestion mark >> the committee is such the same. we work well together. not changed much. it is the congress and the town that has changed. that has some influence on the committee. workingy, we are together.

we're trying to figure out how to put those pieces together, as opposed to dd did sherry -- judiciary committees. >> when you came to congress, did they talk together more? is that a myth? >> it is not a myth. we talked more. a roomed, there was where senators only dined. only senators. it was a wonderful place to go just to see who was going to be in there. you would meet other senators that would meet. it is empty now. nobody goes there anymore. why? they are doing other things. they are going all to these lunches.

were having lunch together saying all those people down the hall they are terrible. and fundraising. fundraising pulls us apart. how we justic of don't talk enough. it is not a big a deal -- use >> is it much partisan than you possibly could imagine when you join? wax obviously, the biggest difference is that i got on the committee in the minority. now i am in the majority. it was not exactly bipartisan. the chairman had proxy voting. was able to throw the president of the room and go back and write the bills.

it was a very different time. i do think that there was more discussion. was always very friendly to me. over time, there was less of that. a tickethy there was response to my my members on the bipartisan working groups. to meet. scheduled they actually, they enjoyed working together. i do think we need to get back to that rate over time, that has eroded. the houses more one-party rule in the the senate. that is the way that this whole government was structured in terms of that. i think that given that there is a republican house and a democratic senate, able to to be signed is going to bipartisan. it doesn't take a scientist to figure that out. ist is what i think

important on this. we have had seven bipartisan trade bills signed into law. they were closely on those. i think that as a model of how we could do these other things. member, in the 1980 elections, the senate which republican. somebody said you're going to be chairman of the -- but was would tell russell long? you,act that both of unless there is waiver in the house, neither of you will be in the current position in the next congress. doesn't make it easier for you to get tax reform through? >> easy. i have much more time to devote to it. not campaigning. don't have to go out there with the 10 cup. cutin cup.

i'm doing what i came in to do. legislate. it is helping a lot. >> when you retire at the end of the congress, do you intend to teach? go back to montana? what would you like to do? wax nice try. -- >> nice try. i do not know yet. >> you do run marathons. >> i only do 50. >> are you interested in having a waiver, or would use think of running for the open senate seat in michigan? year cycles all the time. there is no guarantee you're going to know the majority after two years. the most house, make

of the two years that you have. >> let's talk about trey for a moment. the administration would like to get the trade agreement and asia. that fasto do that track authority. through?can get that >> yes. i do. bill byoing to see a the end of the month. we talked about this just yesterday. staffs, we made on issues relevant to our committees. this is clearly one. we are close to getting an agreement. >> we will work on it.

it will get done. >> is the chairman of the finance committee, you meet lots of people. business people come in. what is usually a persuasive argument to something? what you find this persuasive when you are people talk? >> like anything else, the truth. is it right? does it make sense? is it considered relevant? is it awful? >> i think both were pretty and spyro we saw. -- pretty inspired by what we saw. we saw an incredible innovation, and the great things americans were doing. we heard about how the cold was making harder for them to do that. going to the bakery, for generations running the bakery,

and how they been able to innovate. when you can take the issue, and personalize it to make it understandable, those are the important meetings. that happens in meetings. you can get a picture of that as well. that is the trips that we're going to take going up. >> i was struck. 10,000 harvard business school grads. they said that the primary problem they have is u.s. tax codes. , it is aound the world complexity. it is our higher rates. the most difficult problem they have is their tax code. >> let me address that issue. right now, some come to congress and say let's bring cash back overseas because we will have more cash in united states.

it brought back at a lower tax rate. the joint revenue committee says this money is going to come back at 835% tax rate. to comeere it is going back? it is cominging back. it probably will never come back. you're never going to get this money. how do you solve that problem? >> in the house, i put discussion drafts out. that on a is critical regular basis, companies bring back those dollars that they have earned overseas without a double tax. that is one of the areas where we are not competitive. that in a regular basis. it is out there. there is an ability to do that. we are obviously working through that. we have a lot of the back out

there. it is an area that is very complicated. it is essential for us to compete in the world. they think it is now almost $2 trillion. acme get that investment here in the u.s.? larget these multinational company's platform any edits its -- i've formed any platformed ins -- the united states. >> beer on the same page on that one. age onare on the same patch that one. >> do you have a view on whether qe3 was a good thing? whether benon

bernanke should have another term. >> that is up to ben bernanke. i think he has an a good job. i think quantitative easing has been helpful. it has been helpful to the u.s. and european banks. we are concerned that potential long-term inflation, but i think he is on a super job. my understanding he is he would rather not have another term. him, heident asked might have another term. i think he is in a good job. he makes the point that is valid , he is doing the best he can with monetary policy. >> what is your view of ben bernanke? >> i think a little differently.

i think the concern about inflation and the printing of money is a fairly significant one. again, it is not a total picture. we have a lot of work to do in the house in terms of the budget and the deficits, trying to get programs. as you look at that, tax reform is so important. if we get economic growth, we get jobs that will need more revenue. gpd lesson two percent is acceptable. we have a lot of quantitative easing. some was necessary. we're at a point where i'm concerned about the long-term aspects. >> if people are watching on c- span, and they're interested in tax reform, what is the best way to communicate with you and your things yout the

would change our ad? what is the best way to communicate with you. reformave a website, tax .gov. we are accessible. that is probably the easiest way. you celebrate your 60th birthday last week. >> thank you for reminding everyone. years old, turn 60 people, you all the time and say you look good today. you had a health issue a while ago. people would be interested to know, you doubtless non- hodgkin's lymphoma. >> thank you for asking. completed treatment, obviously kinds.re many different

the one i had was very treatable. the trip was successfully completed. i had a lot of encouragement and support. if you know anybody who is going through something like that, don't hesitate. right then that card. it does help you if you're going to that you know that there are people thinking about you. >> you have served as distinguished careers in the senate and the house. knowing everything you know about what is to be a member of congress, would you have decided to do this with your career? is it where you're happy with? what has been the most frustrating thing about having the shop? -- this job? >> i when i have any other way. it is the best job in the world. i feel so lucky. trying to make a difference, there are frustrations obviously. , they have

outweighed the frustrations. i recommend it for anybody. >> but you have had your last election. >> i have had my last election. i'm looking at my next chapter. i wouldn't change anything. had my last have election, so i'm may look at it a little differently. the thing that is most interesting is the quality of people, and the things they are doing. where you are exposed to so many different industries, and people from different walks of life. you come away with this huge theect for the freedom country offers people, and what they're able to do with it. we have a lot of needs. not everybody is successful. i don't come from a wealthy

district. important to see what this country can offer. i come back with a great respect for americans. most are not in the u.s. congress. you do get an opportunity to -- >> we are the americans. we take that for granted. we are so incredibly lucky. ignacio people -- you do not see people in other countries. we are really lucky. in scripture, to those who have been given much, much less be given. must be given. >> thank you for your years of service. thank you for what you're doing. thank you for being here today.

[applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013] >> ben bernanke testifies about the economy and monetary policy. in an hour, the armed services committee considers renomination of members of the joint chiefs of staff. the senate finance committee, and the ways committing -- discussing tax policy. journal,xt washington the political stories with stephen dinan. he will take your questions about the proposed changes to

senate filibuster rules, and the productivity of congress. also the effects of sequestration, and the white house strategy for dealing with congress and the economy. washington journal is live every day at 7:00 eastern. was aecided that he delicious subject for a biography when it donned on me that he had been not only at abraham lincoln's bedside after his assassination, but at the bedside of william mckinley in 1901. who could this fellow be? when i open the archives, i realized what a rich subject it was. really has two

bookends. , hee is lincoln on one end was lincoln's private secretary. so much of what we know of lincoln comes from his contact with them. he served only under mckinley, but after the assassination, he was the secretary of state for teddy roosevelt prettied up these wonderful iconic bookends of american history. when you look deeper, you realize that all the chapters in between from the civil war through to the beginning of the presenceury, he is a in all those chapters. in many cases, he has already written those chapters in american history. >> the life of john hay. >> ben bernanke says the central

bank can only recommend and not threaten congress to take action to reprove -- improve the economy. his second day of testimony on the semiannual report on the monetary policy. [no audio] >> good morning. i have called this hearing to order. we will welcome him chairman bernanke back to the committee to deliver the semiannual monetary policy report. after the worst financial crisis since the great depression, the

u.s. economy continues to show signs of improvement. recently, we have seen that the housing market has strengthened. 200 thousand jobs per month. the economy has shown signs of resilience, despite fiscal tightening. solid home price gains nationwide. no home construction has seen double-digit growth. home sales have also picked up. many homeowners remain underwater. numbers continue to decline. going forth, i would encourage the fed to be thoughtful in this action, to make sure these positive trends in housing continue. congress has a role to play.

to address the short-term challenges, the ranking member and i will release details this week of legislation that will get it back on stable footing, and strengthen a program important to many americans. following this effort, we will turn to comprehensive housing finance reform legislation. made.rogress has been the labor market has not fully rikard covered -- not fully recovered. .low cipation remains unemployment means remains high with college graduates traveling to find gainful employment. these trends have effects on the economy.

term, he rose in from prolonged -- erosion from prolonged unemployment will produce our country's potential. it is important we help, not hurt america's prospects, and why it is so important that congress finds reasonable solutions to the recent increase in student loan rates. -- the fed should not step on the brakes. unemployment rates high, the fed must continue to take unemploymentport rate when the time comes, it is important that monetary policy easements are gradual, do not disrupt economic growth. german bernanke, i thank you for your years of service, and

leadership, and a challenging time in our nations history. i look forward to your testimony. i turned to the ranking member. >> thank you. welcome. i welcome our federal reserve chairman ben bernanke back to the banking committee to testify at the semiannual hearing regarding the monetary policy going -- monetary policy. the banking regulators have been active on a number of regulatory fronts, including releasing final regulations to implement capital rolls, and propose relations on capital leverage ratios. chairman bernanke for dressing the concerns raised about the unique characteristics of insurance companies. a one-size-fits-all approach regarding capital roles does not

work for these types of entities. with regard to monetary policy, we have experienced a time where the fed has pushed the short- term interest-rate of 20 more than four years ago. as a result, the balance sheet now stands at nearly $3.5 trillion with an additional $85 billion every month and long- term assets being added. released minutes from the june meeting indicate members of the board felt that a reduction in asset purchases would likely soon be warranted. several noted economist of called into question whether the benefits of these purchases outweigh the risks. the negative reaction by equity indicated that some increase in the prices of equities and other assets is attributable to the balance sheet expansion, not to purely

economic fundamentals. june marked the worst month on record for bond fund outflows. the reaction indicates that markets are still reliant on government intervention. that is not good for the long- term health of the economy. i'm interested in hearing from chairman bernanke on the tapering process and market volatility. because of the stance of the fed -- i'm interested in hearing about whether or not it would improve oath effect commitment to the policy, and the market reaction to it. beyond tapering, which is simply slowing the rate of growth of the fed balance sheet ammann is the more important issue of wanting down the fed massive balance sheet. the fed has indicated that they may continue to roll over its holdings of long-term assets. it means that the balance sheet may not shrink for some time.

pty the fomc is a 3-5-year time where the fed would expect to a limited holdings of agencies. this was done for the purpose of nmi's in the extent to which the agency securities portfolio mind that the allocation of credit across sectors of the economy. since then, the balance sheet has increased in size by more than 20%, to $3.5 trillion. it has increased by more than 30% to $1.2 trillion. why does the fed see the need for such a combination -- accommodative policy to continue? will the that revises balance principles?trategy will the fed be revising the time over which it is next to

eliminate the holdings of agency securities? is my hope hope this hearing gives additional insight into the plans for the future reduction of asset purchases, and a roadmap for a return to normalized, rules-based monetary policy. thank you. >> thank you. questionse time for and opening statements, luby limited to the chair and ranking member. i would like to remind my colleagues that the record will be open for the next seven days for additional statements and other materials. i would like to welcome chairman bernanke. -- s currently serving as his first term began under president bush, and in 2006. was chairman of the council of economic advisers, and served as a member of the board of governors on a

federal reserve system. please begin your testimony. >> thank you. to present the federal reserve semiannual policy report to the congress. m r marks, i will express the outlook and turned to monetary policy. i will finish with a short summary of our ongoing work on regulatory reform. the outlook, the economic recovery is continuing at a moderate pace, despite the strong head winds to create fiscal policy. housing has contributed significant link to recent gains in economic activity. up overes have moved the last year, supported by low mortgage rates. housing sales are adding to job growth, and substantial increases in home prices are

bolstering household finances and consumer spending, while reducing the number of homeowners underwater mortgages. it is like to continue to recover, notwithstanding the mortgage rate increases. it will be important to monitor the sector carefully. conditions in the labor market are moving gradually. the unemployment rate is at 6 -- 7.6%. non-foreign payroll employment has increased. despite these gains, the jotted situation -- the job situation -- rates are still too high. meanwhile, consumer price inflation has been running below the objective of two percent. the price index rose only one percent over the last year,

ending in may. this is because of factors that are so -- that are transitory. the committee is certainly aware risksow inflation poses to economic performance. by raising the real cost of capital investment, it increases the risk of deflation. consequently, we will monitor the system, and will act as needed to move back to two percent objective over time. at the june meeting, my colleagues and i protected economic growth would pick up and coming quarters. specifically, most participants all real gdp growth stepping up or in the second half of this year. ineventually reached a pace

2015. they protect the -- they saw inflation gradually increasing to the committee two percent objective. the pickup in growth reflects their view that federal fiscal policy will exert less drag over time as the effects of the tax increases diminish. the committee also believes that the rest of the economy has diminished as the fall, reflecting using a financial stresses in europe, the housing markets, the budgetary positions of state and government, and stronger households. that said, the risk remains that fiscal policy will restrain economic growth over the next few quarters by more than we currently expect. issues willor other

evolve in a way that could hamper recovery. more generally with the recovery, we we are seeing only a moderate pace pretty economy remains vulnerable to unanticipated shocks. with unemployment high and declining only gradually prayed inflation running low, the monetary policy will remain appropriate for the foreseeable future. in normal circumstances, committees basic tools for monetary policy is the target for the fundraising. -- funds rate. meaningfullyed further. -- it cannot be reduced meaningfully further. thefirst tool is expanding federal reserve portfolio of longer-term treasury securities, and agency mortgage backed

securities. we are purchasing $40 billion for month, and $45 billion per month in treasuries. the second tool is forward guidance. within our overall policy framework, we think of these tools is having somewhat different roles. we are using purchases and the expansion of the balance sheet i merrily to increase the near- term momentum of the economy, with the specific goal of achieving a substantial improvement for the labor market. we have made progress to this goal. ourontinue to improve purchases until a outlook has been realized. even after purchases in, the federal reserve will hold its stock off a market and be investing the proceeds, which will continue to put downward pressure on interest rates, support mortgage markets, and how make broader final

are relighting -- this is our second tool. to maintain a high degree of monetary accommodation for an extended time after asset purchases in. even as the economic recovery strengthens. an appropriate combination of these tools can provide the high levels of policy accommodation need to promote a stronger economic recovery. in the interest of transparency, or dispense agree that it would be helpful to lay out more details about our thinking about the asset purchase program. specifically to provide information on our assessment of progress to date, and the trajectory of the program as the economy evolves. this agreement to provide additional information did not reflect the change in policy. regardingtee decision the asset purchase program, and

the monetary policy, depends on our assessment of the economic outlook, and the rest toward our objective. forecast must be revised when new information arrives. noted, the outcomes the committee participants all as most likely involve continuing gains to labor markets, supported by moderate growth that takes up over the next several quarters. committee participants also saw inflation moving back to our two percent objective over time. worde incoming data probably consistent, we anticipated, it would be appropriate to moderate the pace of purchases later this year. if the data confirms the pattern of improvement in normalizing inflation, we expect it to continue to reduce the pace of purchases for the first half of next year, ending around midyear.

if the economy had involved along the lines we anticipated, recovery would have gained further momentum, and implement would be seven percent, and the inflation would move to our two percent objective. as such outcomes would be consistent with the goals of the asset purchase that we established in september. i have a site that because our purchases depend on economic their moments. there by no means on a preset course. on the one hand, if conditions were to improve aster than expected, and inflation appeared to be rising back toward our objectives, the pace of asset purchases would be reduced more quickly. on the other hand, if the outlook became less favorable, if inflation did not appear to be moving back to two percent, or with financial conditions were judged to be insufficiently accommodative to allow us to attain our objectives, the purchases could not be maintained for longer. indeed, if needed, they would

prepare to use all tools, including an increase in purchases for a time to promote maximum to maxim -- employment. tool is forward guidance regarding the path of the federal funds rate. the committee is maintaining a high degree of -- after the asset program ends in economic recovery strengthens. the committee anticipates that the current exceptionally low target range for the that are all funds rate will be appropriate as long as the and implement rate remains above six percent, and inflation remains well behaved in the sense described. as i have observed, the phrase at least as long as is a key component of the guidance. there are thresholds thresholds, not triggers. reaching one of the thresholds

were not automatically in an increase in the federal funds rate target rate would lead the committee to consider whether and the broader economy justifies an increase. if a substantial part of the reduction is measured on gains oft, rather than employment, the committee would to 6.5%ely to define it as a sufficient reason to raise its target for the funds rate. likewise commit committee would be a monthly to raise the funds were if remains below are longer wrong -- long run objectives. ouration remains near objective, and inflation expectations are made anchored rate increases of the target likely to be gradual. let me finish by providing you with a brief update on progress to reduce the systemic risks at our larger firms. as governor --

adopted al reserve final rule to adopt the capital reforms. the final rule increases the quality of regulatory capital by establishing a new minimum common equity capital ratio and lamenting a comp mental -- buffer. it applies only to large internationally active aching organizations consistent with their systemic importance. in addition, we'll propose surcharges on firms that pros -- pose systemic risk. reserve is considering further measures to strengthen the capital positions of large internationally active banks, including the proposed rule issued last week it would increase the large ratios for such firms.

the fed also is working to finalize the enhanced standard set out of the dodd frank act. among the standards, stress testing and resolution planning are already in place. we are engaged in stress tests in reviewing the last -- the wave of plans in coordination with other agencies. -- we are hoping to complete by year-end. the federal service repairing treaty late and supervise non- bank financial firms. the financial stability oversight canceled as an attitude nonbanking firms. it is propose a third firm, which has requested a hearing read -- hearing. thank you. i would be pleased to take questions.

>> thank you. questions, i was the court to put five minutes on the clock for each member. bernanke, with high,ion and unemployment what trends in the data would you need to see before deciding to begin unwinding monetary policy? what unwinding too early threaten the economy and the financial system? samertainly, we face the issues that are always faced with monetary policy normalizing over a time of expansion in -- expansion. if we tie into sin, we risk not letting the economy get back to full employment. if we do it to lay, we risk inflation. there are going to be judgment

there that are -- we have laid out a three stage process for our normalization. the first is dependent on the economy strengthening. the labor market continuing to normalize, and inflation moving towards two percent. it is a process of slowing the pace of our asset purchases, and bring those to zero. we have made since financial improvements on the labor markets. we have given live -- guidelines of how that would go for pretty second stage would be a link the we are watching the economy for improvement. describe my testimony, when an a plumbing gets to 6.5%, not before, and when inflation is

looking closer to target, at that point, we would consider and raisingtening interest rates is appropriate. that would be the second stage three the final stage will be andalization of policies, eventually the normalization of our balance sheet. as a noted in my testimony, assuming that the economy remains in a slow growth mode as we've been saying, that process will be gradual. >> what explains the recent prize -- rise in interest rates, and how much more of an increase in rates could cause a recovery thealter, and what would federal reserve do to respond if interest rates spike? >> there are essentially three reasons why we have seen increases in longer-term rates. i would've the size of your main low. --i would emphasize the main

>> i would in the size they remain relatively low. saw a relatively good labor market report which was accompanied by a sharp increase. the second reason for the increase in rates is the andnding of leveraged successfully risky positions in the market. it is a good thing to have that happen. the tightening that is associated with that is unwelcome. the benefit is that some concerns about building financial risks are mitigated in that way, and make some participants more comfortable with using the tool going forward. the third reason for the increase in rates is federal reserve communications, and market interpretations of fed policy.

we have tried to be very clear from the beginning. i reiterated that if -- we have not changed policy pre-we're not talking but tightening all secretly of try to lay out the same sequence which i just described to you. we're going to move going i want to emphasize that none of that implies that the policy will be tighter at any time within the foreseeable future. you currently see as the biggest threat to the housing market recovery as we continue housing finance reform? >> certainly have to keep our eyes open to pay attention to mortgage rates inaffordability. that is our job as the fed. i think it is important for us ,o get our housing institutions to get those cleared up. to get those in working order.

i'm glad to see that the congress is now looking at reforms of the fannie and freddie. about skines to do in the game, and other aspects of mortgage markets. i think there is good clarity about the rules of the game for mortgage making, and we will see less tightness in the market for s for first time homebuyers. one of the risks we face now is that there is still a significant part of the population that is having considerable difficulty accessing mortgage credit. >> thank you. you have previously indicated that the fed wants to see

substantial improvement in the labor market before cutting off qe. in your june press conference, you noted that substantial is in the eye of the beholder. as i understood you today, you indicated that if all goes as inspector, we could expect to see this wound down by next year. >> if all goes as expected. if all does not go as expect did -- expect it, we could eat see qe continue. .> that remains to be seen

the canid one of iteration -- consideration is , and wet the and cost discussed benefits of additional purchases. >> i do not think it is easy to understand how and when we are .oing to see winding down occur targets seems like would help reduce that risk. do you agree? an issue we will continue to discuss. we have given fairly specific qualitative advice, and i did wasit unemployment o

indicative of the kind of rugrats we are trying to achieve. while reaching the threshold does not necessarily mean we will raise rates, we are confident we will not raise rates before we get to that point. that is providing reassurance to the market. >> you have indicated a of keeping them out of the market. governor said no one is talking about buying or selling securities. , andtimately we will stop

the balance sheet will come down. been allowing the roll off. to it does not delayed normalization by very much. you are not expecting the winding down anytime soon. is that correct? >> we are not planning to sell any. at some point we would be allowing them to run off and not replacing them. >> doesn't this lead to

?ncreased risk taking >> i do not think so, particularly when we are winding down. not see there is any difference between holding mortgage backed securities, which is intended to strengthen the housing market, and usual , which is intended to strengthen the housing market. not see there is any significant misallocation going on there. >> thank you. >> senator menendez. i understand this might be your final monetary policy before the end of your term as chairman of the federal reserve, and i am sure you will but i want to thank you

for your hard work and toication, and your service the country, especially during a and if crisis, appreciate your service. we seem to be experiencing a trend where our economy and employment are growing, but we have a way to dig ourselves out of the deep hole caused by the financial crisis. unemployment is down, but it is still 7.6%. the 4a true crisis for million individuals and families caught in this situation, and as you have discussed, long-term unemployment can have serious consequences that make it harder for people to maintain skills to reenter the workforce.

we still have a lot of work to do to get employment and broad- based growth. with core inflation well below the target and weak demand suggesting inflation is unlikely to be up problem anytime soon, isn't it still too soon to consider policy tightening? >> i have considered that, and i agree with unemployment still with unemployment ,eing too optimistic a measure both sides of our statutory mandate are suggesting we need cooperative monetary policy for the future, but i think we will be able to maintain that high level of accommodation through rate and by holding a large

balance sheet, and in making that transition, we are intending to keep policy highly accommodative. as the reserve has engaged in measures to strengthen the economy, some critics have would bey growth artificial or that low interest rates and cheaper credit might lead to financial instability or .sset bubbles in the current environment, isn't weak demand a greater ?oncern if consumers are pulling back on spending because of high debt burdens and businesses are holding off on investing because of weaker consumer

demand, doesn't that change relative cost benefits and risks of different monetary policies? >> it can. they held 1930's, recession was unhealthy. i do not think we hold that point of view anymore. is tryingary policy to do is return to its potential, and that would be a real we can achieve. we want to pay attention to these issues. the relationship is a complicated one. on the one hand low rates can .ead to risky behavior we are trying to address that through regulation, through oversight, and through

monitoring, and that is our first line of defense, but you a simple it is not relationship. a weak economy is bad because it less lending opportunities, more defaults, is to try toegy focus on inflation and unemployment using monetary -- to and to play codes pay close attention to financial instability and use regulatory tools we have. >> i appreciate that. been a great deal said policy.ansionary inflatio i am not sure any of the measures produced the economic

results we like to see and the consequential human results we have seen in europe, and i do not want us making those mistakes. >> we were just talking about these meetings like tricking day-old coffee -- ranking day- old coffee. do not really have any questions. i am here to thank you for your service. i know we have had some issues. i appreciate the way you handled the crisis. i think our country was under extreme duress. i do not know how many people could handle that crisis in the way you did, so i want to thank

you for that. we have had discussions about .uantitative easing i know we have had differences. is an industry of folks who watch every word you say, and people are doing to thisions as instrument or that, and i know you have to be cautious about what you say sometimes, but this is a setback. andow there has hyperactivity of the said. fed and the said almost -- fedas an enabler almost acting like an enabler. you do a pretty decent job of

staying away from it, although sometimes i wish you would do more. i wonder if you have any s.rting comment i wonder if you have any concerns over time because of the hyperactivity the fed has been engaged in. in some ways congress has been so feckless, if that is any and is thereu, any similarity to a person who knows they need to do certain , and instead relying on the fed for amphetamines and .ther things the economy needs those, i wantlate

to thank you for your service, friendshipor your and whatever happens. >> i think we learned we did not have the right tools. to create an investment bank that would not have a huge effect on financial markets. there were a lot of weaknesses. it sometimes seemed frenetic because the fed was trying to improvise in many cases. i inc. we made some progress in setting up a framework -- i think we made some progress in setting up a framework. i hope

that is the case. it is true monetary policy has carried a lot of the burden. we are likely to share that more , but i with policymakers understand it has been a difficult time to come to agreement on important issues, and i do not think you mentioned the enabler idea. i do not think it is the federal reserve's job to try to come to any particular outcome. isis this congress that responsible. our role is to figure out how to meet our mandate. think we should threaten congress with higher interest rates. i know you operate under our mandate. inc. most people would

think most people would ration the fed acts as a in our inability to act. >> are acting alone is not producing the kind of results we would like. a slow process. monetary policy is not a panacea. there is still room to address these problems. >> i think you. -- thank you. commend your service to the nation.

i witnessed your approach to that were potentially devastating to the economy. i think we would be in a much worse situation, and i thank you for that. there were a few governors in the fed talking about the housing bubble as the next great crisis, but it did not get traction. in a similar vein, some of your colleagues are talking about a huge debt that could have macroeconomic effects, slowing down home purchases, slowing down the normal course that by your late 20s, you buy a home and settle down, but also underscoring the growing inequality of income.

our solution is education. there are reports from georgetown university there is a andbetween jobs available skills available to fill them. , that icrease borrowing think will cut down on opportunities for a lot of people. theyou comment on sotential macroeconomic effect and whether we do not provide support that this could be the next big problem that we face? >> this should acknowledge the ability to build your own capital to grow your education should we good thing. there was time when a student

was unable to finance education. the fact we can do that is good for the economy. the amount of debt is large. i think it is not particularly instability.se it has a couple of consequences. there are people who have taken out a lot of debt and they are not finding opportunities, over time they will not be able to i a home and do other things they would otherwise be able to because they are paying off the debt. the answer is to have a strong economy that provides job

opportunities, which i am sure you are trying to do too. we need to make sure students are better informed about labor opportunities and different options they have. we know some of the private which do notsities have good placement rate, people build our owing. still borrowing. i do not want to step back from doing whatever we can to give young people the skills that are important. this growing inequality in income in the united states, s,es it pose economic risk

and how do we deal with it? >> it is a tough problem. and going on for a long time. there are a number of factors. the new technology they favor the most skilled workers, and they reduce opportunity for or low skills,m so i do not have an easy answer. tillnk focused enhancement, -- skill in hand and, some people would eat working to a job in

where there is an understanding this is what is needed. some more focused job oriented training for students might be helpful. i do not have an easy solution. >> i want to bank chairman thank chairman bernanke for his service. we have had a great deal of risk for the work you have done. i have a couple of questions.

one has to do with efficacy of quantitative easing. the benefits of quantitative easing might be and i think the suggestion has been conventional understanding of consumer spending would suggest .odest growth of gdp even if you attribute all of , and your own previous question, you acknowledge the nature of the impact monetary policy has on economic growth might be a matter of timing.

it might not increase economic egg to the t in total. a --onomic act to the t activity in total. s keepst and risk mounting. my question would be how to you ,uantify benefit going forward and do you attempt to quantify the risk of what you have done? that is a good question. it is quite difficult to know for sure, but the evidence is

while this is not as powerful a tool, it does have meaningful impact on jobs and the economy. did 2008 we have had times when we have you come more concerned about inflation. -- provided ated boost to go forward. there is a lot of work, and the preponderance of the work suggests it is quite meaningful. heis true no monetary policy can do much about the long-term growth of the economy. if we can get back to it more quickly, that is a net gain

enjoyed by the economy. in terms of the risk, i have --ntified the month of risk some of the risk. i think the one we have paid most attention to is financial stability, and we have tried to , andase our monitoring there is also a gone both sides because if the economy does poorly that create risk. let me acknowledge this is important. we should the monitoring other tools, but

we do take into effect these risks. >> the you attempt to quantify it, or is it the object diff? ive?ubject giv exit is ethical to know what the but we do arisk is, lot of work. we might be looking at covenant , so we monitor those so they canngs understand where there might he sectors were financial risks are building.

>> senator schumer. >> i want to thank you as well of many of myiews .olleagues for your service your quiet and strong leadership has been instrumental in keeping our economy from falling and repeating a great depression, and we are on the path to turning the economy around. 2014 and 2015 will be stronger in large part because the building blocks you put into place, even if you are no longer chairman of the fed. you have been as clear as i think you can be that the timing

and tapering of your asset purchases will be dependent on financial condition. that is logical. in june the committee predicted economic growth would grow, but economic data has been mixed. we have had many sign of wrote. -- signs of growth. our first-quarter gdp average was lowered. the economy is worth and you thought in june, but the markets are set to be tapering. if the economy did not change, with the fed the announced announcing? you have said this would continue until the fed sees financial improvement in economic outlook.

does this change your outlook? can labor markets continue to improve? fax it was only a few weeks ago. there have been data points that have been mixed. it is way too early to make a judgment. we are looking for a pickup as the year progresses. one reason the economy has been so low is because of fiscal factors. it is hard to judge how long they will last, but as the economy begins to move beyond het and fiscal strength comes more pronounced, you should see a pickup in growth. temper 18th deadline

is not immutable? -- september 18 deadline is not immutable? >> we are going to look at the data, and it is going to depend on whether we the improve it. >> does this change your outlook the risk that to labor that --- with risk respect to labor market? >> we want to see improvements, but we want to see that continue. you need to have a broader-based growth. of the conditions i described, .ne is pickup in growth >> you think we could be on the path to improvement even with this relatively weak growth?

>> it is possible. week, and weeen a have new data. >> my second question is when you might and asset prices altogether. about half the participants said it would be appropriate to and asset purchases this year, yet you said you expect asset urges us to end sometime in the .iddle of next year the level of unemployment you say represent the amount of improvement that would warrant this policy. some disparitybe between the other members and there,d if you are not there is worry.

do they inc. unemployment will be seven percent this year, or do they have different assessments about relative cost and benefit? >> there are different respect it. they are optimistic -- they could see a wind down because they are up to mystic about the theomy -- optimistic about economy. every person gets to express their view on policy the, both current and diff, -- and purse perspective. and gives good to hear

me relief. >> i appreciate the service you have given our country. tohave nobody to compare it because we have never been in the situation we are in before. you have done significant work, and i appreciate it. regardingstion growth. vince the 1980's we have changed the way we do it inflation.

we have letticism, you down. it would create some of the growth we were hoping to do. for that i apologize. the average american has been mexicans inflation -- has seen the mexican inflation. significant inflation.

we have a commodity bubble in many areas. would you comment on changing as well as what we could have done? >> inflation statistics are calculated by the bureau of statistics. their objective is to always make it more accurate. they have been overstated, not

there has been a distinction between prices being high and rising. wages are not going up much. real wages have it going down because even though inflation is low wages have an growing slower than inflation. >> consumer spending is not rising at the level they would like to see. rex that is right. it has to do with the economy and distribution of income. i think professionals are doing as good a job as a can to and if youlation,

whilet a lot of prices, they may be high, they are not much different from a year ago. in terms of what congress can , i think an effort to focus more on longer-term would be .ore to .- more effective >> if congress had created certainty in the long-term, the effectiveness might have and greater. greater.

>> certainly. thank you for the new rules. i urge you to hold fast to those. financial and the duchenne suggest we should not get ahead of europe. i think it is dangerous they have tried to characterize it as the ceiling and not the floor. those of us in charge of financials the ability need to make the judgment as to what levels of capital will in shores ability without unduly affect flow of credit. myave had calls from

counterparts around the world. explain to me why you think three percent is inadequate. he says we should do what we think is best and if we leave by example the rest of the world will follow. you agree? it is a floor, not a ceiling.-- these are made right unanimous agreement. we are prepared to do whatever additional steps are needed to make our financial system safe. i do not know if all countries will follow us thomas but and there are countries -- follow us, but ere are countries that

have fought hard for this and have taken additional debt to strength in their banking systems, and we have a but i dop position, not get will be universal. i think we will see different response is. >> most important will follow? i do not know if they will follow the same wings. -- same things. a have the key financial sector s that recognize it is andrtant to have stability, they have than willing to consider additional debt. -- steps. >> we should not shrink from doing the right things?

>> the other countries may or may not follow. we should do whatever we can to make sure the financial stability is safe. >> it is no surprise megabanks they continue, it to say regulations are killing them. since the crisis, international regulators have demanded more capital. financial times asks where are the ill effect. profitinued to set records. warnings of calamity look more

and more hollow. this reminds me that when we think about cost and benefit, industry wants us to think only about cost to them. steel companies dump waste into our rivers ammann and then they warn it will be cost lee -- costly to clean it up. those who believe in the society with rules understand auto safety might cost car, and in-- car companies more seat and other safety features, but these save the lives. banking thing with regulation. they will help prevent what we withive years ago

retirement savings and lost is,. if these are the cost aren't they worth it? the crisis was a waste of resources. we should look at the social cost and not just the cost to -- cost to thenn firms, and that is what what we are trying to do. >> if they are not quite up to this quarter, that is the price they should pay? >> we should be looking at

things that affect the economy more broad lee. , -- more broadly. >> are you concerned this result in less credit? >> i am not can earned of that. -- concerned about that. there is no evidence of that. >> does it mean less credit available? if there is not less credit, there is no real downside? rex the only downside is that if banks are finding themselves more costly to make loans, credit could start flowing .hrough other channels

>> you are not implying we are close to that jewelry should -- that situation? rex we need to make sure risks are not being offloaded into other parts. the questioning of senator brown and chairman bernanke. take you for being here and taking the time. theink you answered question. i was going to ask the question of why we came to basil reeve. -- 3. i was looking at some in sight, and it seems the and there may be risk.

-- the answer may be risk. >> we have a program for building capital. then the surcharges and higher- level ratio. in addition we are looking for wholesale funding, and we have discussed the possibility of requiring a large firms to have unsecured senior debt. we are trying to build up the buffer these firms have. >> let me change to housing. 300,000 people in las vegas receive foreclosure

notices. over 50% of the homes are underwater. what are we doing wrong, and what can we do as congress to help move and change the we have in some of these other states? i think from congress's point of view getting the financial situation working better in soms of creating that rule there is greater access to credit and more people can buy homes, because the solution is willnd a demand side so it support prices and help us it out of the housing problem we have.

rex i was here earlier for discussion of reforms. do you have a reference? >> i think it is time to move forward. >> your insight on government involvement of mortgage securities? i think a key is going to be not that much making mortgages cheaper but making sure there is a texan situations where the financial markets are in distress why they were recently. if the government is involved, i think it would be important to make sure the government is appropriately combine they did .- compensated it ensures they have enough capital to protect the taxpayer.

if it is done it would be very helpful. rex let me talk about one other topic. gold prices have dropped to around 1275 for somewhere around there. whatthe in sight as to long-term impact -- long-term impact this would have. >> gold is an asset people hold as disaster or insurance. they feel if things go radley wrong at least he will have some -- go badly wrong at least he will have some gold in their portfolio. hold gold asle

inflation hedge. you have aion is hard asset that will protect in case of some major problem. i suppose one reason gold rises are lower is people are less worried about extreme outcomes. therefore they feel less concerned about the particular outcome. >> psychologically what do they feel about the direction of the economy? >> i think it is not necessarily of had thing. people are just less concerned about really bad outcomes. it,dy really understands and i do not intend to understand it either. >> think you for your service

doing hard times. they reported some staggering numbers. profit jumped. some reports have indicated a big part of these are office have come from the angst trading act to the t. trading activity. are you concerned the biggest banks are loading up on the wrist again, or is there another explanation for the spike -- the risks again, or is

there another nation for the spike? s> we have new requirement banks have to hold against these securities. we have done stress test where we as human the financial shock hit, and we have stress test did the banks to see if they have enough capital. the other thing is we are working to put the volcker rule into place. >> the question i am trying to ask is whether this indicates they are loading up on risk ammann -- on risk, and i

appreciate you are telling me the way they try to regulate risk. yesterday the secretary treasurer said, if we get to the and we cannotar say we have an did too big to fail, we are going to have to look at other options. the secretaryith of the treasury? >> i do not know about the timing. . have said there is a strategy basel three provide additional support, but i think additional steps would be appropriate. we need to look at other

steps i have introduced as well as senator cain, another tool in too bigbox to deal with to fail. i think we have got some time on this. maybe a year longer, but we have underp this investigation. is that fair? >> we need to look at more tools. i think there is scope .or capital >> fair about. -- fair enough. the fcc announced they were stopping their investigation and had reached a settlement with the largest mortgage servicers in the country, and just last week they announced 52,048 people in massachusetts received checks under this

settlement, and aggregate total of $41 million in compton , oran -- in compensation $800 a family. income is 2/10 of one percent of the purchase price of the average home in the commonwealth of acid choose it. is my job to look out for aboutes in massachusetts whether settlements are fair. i started looking into basic and to see what they had uncovered.

so far the fed and the occ have disclosed very little of what i have asked for. how they knows the payment a are receiving are fair if the dead and the occ will not disclose details about what a uncovered in the investigation? and the occ will not disclosed the tales about what was uncovered in the investigation? >> we do not have that information for everybody, but we have it were some folks, and we are looking at how to get that information for individuals. >> we are talking about

releasing more information about what we did find? that hope to have a report will lay out all the information he have. of the information you have requested we did not collect or whatever. we will try to provide as much transparency as we can. >> i would the great full. grateful.e if they never take large financial it did to ships to trial, the resulting settlement are too weak. i know you will appreciate the slap on the wrist. i think it confident helps everyone. >> the people who have received

checks have not yielded their right. be able to ay will value eight whether or not that -- to evaluate whether or not that is appropriate. >> i have a number of western -- questions. if it is ok with you, i will submit these questions and ask you to respond. the question i have is about short-term interest rate policy .t the bank in particular in relation to , and ial institutions would love to get some further information on that, but i will

submit those in light of the .act that we have a vote rex chairman bernanke, i would like to thank you for your extraordinary service and for your testimony. this hearing is adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013]

armed services committee considers the renomination of the leaders of the joint chiefs of staff including the general martin dempsey. after that, max baucus and house ways and means committee chair dave camp discuss tax policy. later, congressional leaders host a capitol hill ceremony honoring former south african president nelson mandela to mark his 95th birthday. a couple of live events to tell you about tomorrow morning. the house veterans affairs health subcommittee holding a ofting looking at efforts treating victims of sexual assault on c-span 2 at 10:00 a.m. eastern.

the brookings institution hosts a forum looking at the nsa's data collection and surveillance programs also at 10:00 a.m. eastern. >> jackie was raised as her mother was raised. as she was same kind of wife and hostess. the home, the children, the entertaining with style and panache. after her administration, during the johnson years, the whole world erupted like volcanoes. we had women who went to work for my got the forces, demanded equal rights. we had flower children, free love. it was great or the young. i missed all of that. [laughter] the whole world change. ofcame a whole new concept women. i think mrs. clinton today woman.nts the new

>> as we continue our conversation on first ladies, the social secretary to jacqueline kennedy, reporters, and others closest to recent presidential lives talk about the role of the first lady and how it has changed monday night at at 9:00 p.m. eastern on c- span. reconfirmaring to members of the joint chiefs of staff committee chairman, general martin dempsey, told members of the armed services committee that the u.s. is not ruling out the use of force in syria. but when asked by senator john mccain he declined to offer his opinion on u.s. intervention in syria. after the meeting, senator mccain put a hold on his confirmation. the hearing is a little less than three hours with the exchange between general dempsey and senator mccain coming up in about 50 minutes.

>> good morning. the committee meets this morning to consider the nominations of general martin dempsey and admiral james brenna felda, both of whom have been nominated to continue in their current positions -- admiral james wynn felinnefeld. your service for and your willingness to continue to serve in these positions of huge responsibility. i would also like to welcome and to thank your family members, some of whom are with us this morning. our military families, as you well know, are a vital part of the overall success and well- being of our forces and we appreciate greatly their

unwavering support and their many sacrifices. ofally during the course long careers. please feel free to reintroduce your family members to our committee. we want to ensure that our servicemen and women have what they need to win wars, succeed in their missions, secure peace. our nominees have carried out their duty with energy and commitment and it is a testament to the quality of their service that the president has nominated them to continue in their positions. i have had frequent occasions to seek the view of admiral dempsey -- general dempsey and admiral winnefeld. wheren the few instances i have disagreed, i find their positions to be thoughtful and well reasoned. if confirmed, our nominees will

face a series of continuing challenges. in syria, a saud is using airstrikes, yours, tanks, all to attack the people -- assad is attacking the people. he is using chemical weapons against insurgents. he is increasingly relying on foreign fighters run iran and hezbollah to sustain his grip on power. his actions have killed more than 100,000 syrians leaving thousands to flee the country and forcing more than 4 million more to be internally displaced ,he malevolent -- displaced leveling villages. i look forward to hearing the nominees views on increasing the pressure on saud in support of the administration's goal in persuading that the current

administration cannot last that has the support of both the syrian people and an international coalition and a political settlement that will translation -- transition syria to a post-saud regime. assad regime. they are on track to transition responsibility from coalition forces to the afghan security forces and u.s. and coalition forces continuing to draw down over the next year and a half .ignificant challenges among those challenges coming -- putting this on strong footing for the long-term including through the conclusion of a bilateral status of forces agreement to ensure that our troops have the legal protections necessary for any post-2014 u.s. military presence

in afghanistan. recent statements by president karzai have complicated the associations of such an agreement and i would be interested in what they have to say about the prospect of a successful negotiation as well as the status of the efforts in afghanistan militarily. in mid march of this year, secretary hagel responded to their prerogative -- provocative behavior to improve our homeland missile defense capability including the planned deployment of interceptors in alaska by 2014. on july 5, the midcourse defense system had a flight test failure. this test failure along with an earlier failure reinforces the need to pursue a flight before you buy a which demonstrates realistic flight tests that the system will work as intended before deploying any additional

interceptors. i would welcome our witnesses comments on that issue as well. the defense authorization bill we will bring to the senate floor includes provisions that give the secretary of defense to transferibility detainees from guantanamo. i would be interested in our witnesses views on these proposed changes in our defense authorization bill. last, but far from least, we must confront the growing challenge of sequestration. although the things our military needs to do, respond to regional crises, training and equipping care of ourtaking service members and families depend upon an appropriate level of funding. the damaging effect of sequestration will continue unless addressed and reversed. the damaging effect on the readiness of our military must and vitality of our

forces. against the backdrop of these and many more challenges, both foreign and domestic, that we consider these two very important nominations. we welcome both of you today. we look forward to her testimony. i now call on senator and half -- inhoffe. >> we have another meeting going on two floors up. we have suffered a deep and drastic cut and this administration has cut from the defense budget and reduce the size of the naval fleet and cut hundreds of air force combat aircraft. they have been gutted and modernization programs are being starved of resources on the of $500 the addition

billion in cuts if we are unable to find a solution for the sequestration which is kind of ridiculous. when you tell normal people that we have 18% of our budget as the military and yet we are taking 50% of the cuts, it's totally unreasonable and a platoon of the priorities of this administration. the longer we allow the fourth to deteriorate, the more expensive it will be to rebuild. earlier this year, chairman levin and i sent a letter to secretary hagel requesting a detailed plan on how the department would allocate the additional money and sequester for fiscal year 2014. the response we received was woefully light on details but made clear further cuts in fiscal 2014 will significantly amplify the pain our military is already enduring. admiral, you were asked earlier about the impact of the budget cuts on the military

and you responded. i have to say it was a very courageous response and i am quoting now. they could be for the first time in my career instances where we may be asked to respond to a crisis and we will have to say no. we are well on our way to this unthinkable reality. recently, the department has undertaken actions internally to address critical readiness issues including the resumption of flight operations of the air force after many squadrons had been grounded for over three months. this development is welcome news and i remain concerned over the vital training and maintenance activities across the services that remain curtailed in nearly 700,000 dod civilians are being furloughed. but i find most concerning is that much of this pain has been unnecessary and could have been avoided all along. this would have provided the

department with flexibility to allocate the sequester cuts in a way that minimizes risk. all of the chiefs agreed that it would have been better, but still devastating, but not as devastating. we came back and we split their flying status again. i will conduct my own test on this and we have already looked into that. how much more does it cost now to retrain, get people back at the proficiency that it would had we just stayed with that? our actions at home do not occur in a vacuum. around the world, we see the declining effects of the absence of american leadership from the middle east to the asian pacific. aboutare growing doubts the united states among our allies. i raise these issues because there are concerns about the current state of our military as it is experiencing an unprecedented deterioration of readiness capability. i asked our witnesses what

advice they are giving the president on these matters. thene point will you advise president that the defense cuts will result in the dire scenario you've laid out before our committee in february? you said, if ever the force is unready andand so then we are asked to use it, it would be immoral. you also warned the testimony of this committee that are the defense cuts will severely limit our ability to implement our defense strategy. it will put the nation at of coercion. it will break faith with the men and women in uniform. the service chiefs are already talking about combat forces and capabilities that are starting to hollow out. we had a discussion about this. are we already a hollow force? i'm afraid to remind you of the comments made from the director who stated earlier this year,

and almost 50 years in intelligence, i don't remember that we have had a more diverse and crisisreats situations around the world to deal with than we have today. that's our problem, mr. chairman and that is why we're having this hearing today. inhofe.ank you, senator general dempsey, welcome. >> i am honored to appear before you today on this 18th day of of the the 18th chairman joint chiefs of staff. i am also thankful for the confidence you placed in me two years ago, for the continued confidence of our commander in chief and for the privilege of serving alongside admiral winne feld. i'm very thankful for the unwavering love and support and tireless service of my wife sitting behind me and not to

our three children and their seven grandchildren. yes, that is plus four since my confirmation hearing two years ago with one more due any day now to make it a total of eight. >> for that reason alone, you would love to be appointed a third time. >> quite the opposite. i would love to spend some time with them when the opportunity arises. , noticed that my nephew michael dempsey, a student at wake forest university, has joined us today and we are also proud of him as well. i amthan anything else, thankful for the opportunity to defend our nation alongside the men and women who wear its cloth. i recognize their courage and skill and i'm very must -- very much reminded of the inscription on old simon at antietam battlefield that goes like this. themselves, but for their country.

it is on their behalf and in that spirit that i'm here today. be worthyrpose is to of their service every day and in every decision, to strengthen the relationship of trust that the american armed forces have with the american people, to meet our sacred obligation to keep our nation immune from coercion. we cannot take this relationship for granted. historic transitions are testing our ability to meet these obligations. restore the foundation of power and we are also transitioning to a more dangerous and uncertain security landscape. even though the dollars are declining, the risk is on the rise. if we don't manage these transitions, our military power will become less credible than we were four -- we will foreclose and it does not have to be that way. we can and we must leave through these transitions.

we have it within us to a strong as a reliable ally. we can make our military more affordable without making our nation less secure. we need to get at least four things right. we need to get our strategy right. this means aligning our aims with our abilities. strategy is nothing if it's not about priorities. the if we rebalance to pacific region, we still have to defend the homeland from ciber, defense, and other attacks, deter provocation on the korean peninsula, assist allies across the board, said a more responsive posture for combustible violence. we must come to terms with the risk and terms to these obligations. we may have to do less, but we should never do it less well. second, we need to get the force

right. this means keeping the military ready and balanced. we have already lost readiness that would take more time and additional costs to restore. we are already out of balance due to the magnitude and mechanism of the steep budget cuts, but it's not too late to recover. remove the budget uncertainty, slow down the drawdown, help us make seemingly retractable institution reforms. we need to get our people ready which means trend fitting our profession while keeping with the military family. professionuncommon one that most value character as much as companies. it rests on a foundation of learning and leadership that advances equal and ethical treatment for all of its records.

we also keep faith by making sure they want to go to war with with the besting equipment and training. we want to get our relationships right. now is the defining moment with the national asset that is willing to contribute in their communities. in the end, all relationships rest on trust. i entered this image of my confirmation hearing to it illustrates the vein of trust that must run from our men and women in uniform back here. and right back to our communities, families, and people.

opportunityby the and i know our men and women deserve it. i'd like to say one other thing before passing it back to you, mr. chairman. i'm very careful not to presume confirmation and in that spirit and not knowing when my last opportunity will be to appear before this body, i would like to thank you for your leadership of this committee and your support of america's men and women in uniform as well as the two ranking members with whom i have had the privilege of working for the last two years. thank you and other forward to your questions. >> admiral. >> good morning, ranking member and chair, other distinguished members of the armed services committee. i'm honored to appear before you this morning and to do so along with my friend, colleague, and

boss, general marty dempsey. the military is a family business and i'm pleased to have wife,me my wonderful m behind me in the purple outfit. she has been a tireless advocate for military families, wounded warriors, and their caregivers. it is a comfort to know that i have such a willing partner. my sons james and jonathan would have been with us but they are both at athletic tournaments, a --te a small tournament baseball tournament and another golf tournament. it has been my privilege to serve the nation as vice chair for the last years and i'm honored to have been asked by the president to serve another term. if reconfirmed, i will provide advice to the defense secretary, chair,nt chiefs of staff

and others. to keep this committee informed and give my best effort within the three portfolios of policy, investment, and people. in a world growing more rather than less dangerous, at the same time we face considerable financial pressure, there are plenty of challenges in the three portfolios i just listed. in the area of policy, we have been grappling with a host of national security interests around around the world. in afghanistan, iran, the korean peninsula, with the continuing evolution of al qaeda and its affiliates. syria, egypt, other nations and within the increasingly complex cyber domain. in the investment portfolio, i was first confirmed on the same day the budget control act was enacted. we continue to cope with the financial challenges in the wake of that that are quietly eroding our readiness to defend our nation and have so impacted our

ability to plan for tomorrow. to the people portfolio, we are doing our best to manage the enormous uncertainty to which our military and civilian members are being exposed in this budget crisis. we are also expanding considerable effort to make sure we are properly caring for our wounded, ill, injured members and their families as well as finding every lever we can to eliminate the pernicious insider threat of sexual assault. these are only a few of the challenges we face and much remains to be done in all three of these portfolios. if confirmed, i look forward to continuing to serve our great nation in uniform and pledged to work with this committee on the difficult choices required to achieve a strategically shaped force to keep america safe and our interest secure. allow me to close by saying how deeply grateful i am for the energy all the members of this committee and you're able staff bring to these issues and for

your long-standing support for our men and women in uniform and our civilians. i look forward to taking your questions. >> thank you very much, admiral. let me ask you the standard questions which we ask of our have you nominees. adhered to applicable laws and regulations governing conflicts of interest? >> yes, i have. yes sir. >> you agree when asked to give your personal views, even if those differ from the party in power? >> yes. >> will you ensure that your staff complies with deadlines established requested communications, including questions for the record and hearings? >> yes.

>> will those witnesses be protected for reprisal? >> do you agree to provide documents, including electronic forms of medication in a timely manner, and requested by a duly constituted committee, or consult with the committee regarding the basis for denying such documents? >> yes. >> thank you. we are going to have a seven minute first round of questions. >> do you support finding additional ways to increase the military pressure on assad? >> senator, let me say that i am well aware of the human suffering and the tragedy unfolding in syria. and the effect it is having on the region.

to your question about courses of action going forward, i support a whole of government approach that applies all the instruments of national power. as for the military, we have prepared options and articulate in risks an opportunity cost to put additional pressure on the assad regime. >> does the mission support equipping the opposition? >> they have a governmental approach to the increase capability of the opposition. >> is that include training and equipping militarily? >> not to the department of defense.

>> through other means? >> yes. >> on afghanistan, on the security forces of afghanistan on track to be fully in charge of securing afghanistan by the december of 2014? >> they are. the assessment is that they will achieve campaign objectives. there are some potential gaps that they will have better clarity on it this fighting season. >> i'm not going to ask you what advice you would give to the president on the residual force, assuming there is agreement with the afghans after december 2014. i'm not going to ask you what the advices. that is advice you give confidentially to the president. he has a right to your confidential advice.

my question is have you given the president your device relative to the size of the residual forces? >> i have served. we have provided several options. as a joint chiefs, we have made a recommendation on the size and expressed our view one when that announcement would best meet the campaign objectives. >> would you agree that legal protections where our troops, which will be provided for if we could reach a bilateral security agreement with afghanistan, are essential to any long-term presence in afghanistan? >> i do believe that. >> any presents after december 2014 is dependent on the dthe agreement with the afghans? >> that is right, sir. >> i hope president karzai is listening to that. >> i have a plant office call with him. >> i hope you would make that clear, and i will not speak for

others directly, it is not feel if they do not speak for themselves, but it is essential he understands that there has to be a bilateral agreement that protects our troops for there to be a residual presence. i favor a residual presence. i favor giving confidence to the afghans that there will be a continuing revelation -- but i do not want to be silent in the face of president karzai's comments, which are unwise in terms of whether or not he wants a residual presence or not. he sometimes acts like he doesn't want a residual presence, even though it is clear to me that the afghan

people do, and so does he. he wanted on his terms. it cannot just be on his terms. would you agree with that? >> i do. i would point out that our relationship, and our interest in afghanistan run deeper than just president karzai. >> and there is going to be an election next year. you can pass on he is not going to be a candidate in the election but there'll be an election for something that the committee members take seriously. those statements of his matter to us.

on the guantanamo issue, do you favor -- let me start over. we have in our defense operas asian language that would give greater flexibility to the department of defense to transfer guantanamo detainees to the united states for detention and trial. to streamline the authority of the secretary of defense, to transfer guantanamo detainees to foreign countries, do support those provisions? >> senator, what i support is that we must have an option to detain prisoners. he cannot expect young men and women on the battlefield to have a single option which would be saying that's simply to kill. -- which would be simply to kill

print i support anything that will assure me that those young men and women will have that option. >> assuming they have that assurance, that there are places, given that condition and qualification, one which i share, do you then support the language of the bill? >> i would have to see the bill, but if you're asking me has guantanamo, the facility, tarnish the image of the united states globally, i think it has. i would welcome any other solution. >> on missile defense, we have had an assessment from lieutenant general, a letter providing the assessment that investing in missile defense would be a less expensive option. since there is no current military to deploy on these case, do you agree? you create additional analysis

is needed to determine whether the necessary to determine in the future question are >> i would like -- in the future? >> we should do the analysis before make a decision on how best to make a capability. >> i'm glad you gave me opportunity to ask. >> i have been looking for an opportunity. lex thank you. -- >> thank you. >> i would spend my next dollar on missile defense and the discrimination you describe. there is a quote, " quality has a quality all its own." i think it is wise that we are doing the environmental impact statements, and as we watch the threat develop, we are going to have to be cognizant of that. it may become necessary to put into place a second type.

we will play that as we have to. >> you mean before making a commitment to a site, we should complete those assessments? >> we're planning on doing those in a relatively near term. that will begin before there is a need to make a decision. i want to say we need to be cautious and cognizant of where the trajectories are. >> they will be done naturally, you think they should be done? what's they will be done. i agree with doing them. i would -- >> i just why clear answer. they should be done before the site is selected. >> yes. >> it was an article today that south korea wants to delay the transfer of wartime operational

control. i am sorry. i was looking for my car to. i forget that we are using them. i have got over my time. i apologize to my colleagues. >> thank you. in my opening statement, i quoted each one of you. there are such strong quotes, if ever the force is too great, we will use and be immoral. the statement of general martin dempsey, i do not see right now, but for the first time in my career, we are asked to respond to a crisis. we will have to say we cannot. there has ever been a time in our history.

way threats are so great, and diverse as they are today. >> you agree with that? >> i do. there's probably fewer existential threats to the nation. there are formal ways that middle wage states, and violent extremists can reach out and touch us. waxed you agree with that -- >> do you agree with that? >> the horse is larger than the money we have to keep it ready. >> i was talking about the threats that are out there. things were predictable back then in the cold war.

now you entities out there that are going to the weapon and a capability. that is what he is talking about. that is the threat that i think is really a scary thing. the question is, you both believe that. have you shared this with the president? >> yes. >> he knows this. he continues with his approach. let me ask you a question about gitmo. you said you would welcome any other solution. i have often look at gitmo is one of the few good deals we have in this country. yet, when you say that you welcome any other solution, what other solution is there? is there a solution that we are not entailing bringing these

people into our continental united states? >> i have been seeing the analysis done at any number of solutions. there has not been any consensus on which one to pursue. i went to align myself with those that say we have to have a detention solution. >> i agree. we have coveted tension. we have something that is ready made. i understand that people in the middle east that do not like it. it has given us a better be tatian in some areas. i believe that we need to think of america first. i can recall that when the president came out talking about these alternatives that they had, they had sites inside the united states. one was in oklahoma. i went down there and talked to

a young lady, she was in charge of our prison down there. she had several tourists in gitmo. do they know that we have this, it is ready-made. this is a great frustration to me. we have language that is pretty good in the bill. on the less, -- nonetheless, can you think of anything that would not entail incarceration or movement into the united states? right now? >> i do not have an easy answer to that one. one thing i would be sure to mention, a little bit more flexibility would be useful for us previously moral obligation to take good medical care of these detainees, because we cannot move them outside of gitmo. we have to build state-of-the-

art medical facilities. it will be great to bring them back to deny states for medical attention. that kind of flexibility. >> there is not a person has not been down there more than once. one of the problems they have with the detainees is they are eating better than they have ever had in their life. they have tests run they never had even heard of before. i think that we are meeting that that. we need to get somebody on the record. i have an aviation background pray i do not think it's enough that to know you keep your proficiency up. i applaud the decision to get back in and start retraining. in my opening statement, i was going to conduct a study as to how much more cost is to go through the retraining we're going to have to go through right now, that if we had never made the decision in april 9. have you already done that? do you have any information in terms of how much more it is going to cost now that if we had not done it to start with? >> it is a good question.

we can get that for you for the record in terms of cost prayed by can tell you is if you take these quadrants, it will take months for skills to increase. i think of in terms of time. there is a cost to mention. >> time equals risk. we had some that came right out of school, they are going to have to go back and start from the beginning. we do not have the capability of taking care of the needs as they come up. i believe that that translates into a risk. i'm not willing to take it if i can do anything about it. >> can i add, what we're saying is that we are going to end up with two problems over time if sequestration remains in effect.

the immediate robin for the next several years will be readiness. we will not be able to find the money we need to achieve the level of sequestration cuts without dramatically impacting our readiness. as the force becomes smaller, you can restore readiness because you are dealing with the smaller force. a ghost too far, too fast. >> i understand that. the proficiency of a smaller number of units can be greater. you are still dealing the smaller number of units. this is the diverse that we have right now. that is not very good idea. not that you can do anything about it. right now that is the problem. my question is, my time is up, i appreciate the fact that you use the word immoral. giving the path of readiness of our armed forces, when will the commander-in-chief be at a point of making a moral decisions? >> i do not think i use the term immoral. i think that we are keeping the

white house closely informed as to the outcome of the strategic choices. that includes both capability and readiness of the force. they are aware of those results. people factor that in their decision-making. hopefully we will be able to find a good resolution that will allow us to go forward to plan for what the future is. >> i appreciate both of you. we have to let the people know we have a serious problem here. i think this hearing is our opportunity to do that. i apologize if you begin a quote to you that wasn't you. >> let me assure you that if the nation is threatened, we will go. that is the point. we will go, and we may not be ready to go.

it will depend on the nature of the conflict in which we were asked to go. if it is an x essential threat and we send them, there is no immorality in that. if this were some other contingency, and we were asking them to go not ready, and me had a choice to do that, that is right. >> i appreciate that. >> senator blumenthal. >> thank you. i join in thanking both of you for your service over many years. general dempsey, you and i have discussed briefly the purchase of helicopters for the afghan armed services. the purchase of russian in my 17's -- controlled by russian and is now selling arms to russia and a

country that is still harboring and providing refuge to edward snowden. we discussed the reasons for that sale. very graciously, you suggested you would look into the possibility of either ending that sale, which will result in helicopters sitting on the runways of of canada stand because they lack pilots to fly them, and they lack people trying to maintain a repair them, but i wonder whether there is something we can do to stop those sales, subsidized by american taxpayers, provided by american taxpayers to an outline that does not have a status agreement with us that will enable us to continue providing for each of them. in connection with that question, what additional kinds of resources we should consider

stopping if there is no status of forces agreement. >> on the mi 17s, that will require us to stay committed to the fleet. there is no way we can transition at this point and put them in anything other and that airframe. what i suggested is that if we can achieve a lasting and during relationship with that, and that lives up to the end of the deal, we will be investing in them through foreign military sales for some time. there was a likely point where

we could transition them to u.s. built aircraft. in the interim, we cannot -- it would be my recommendation that we stay the course with the existing program. >> is that interest sufficient to justify the national security waiver under the legislation that is currently included? >> i do sir. >> what would have to change for those helicopters to be purchased from an american manufacturer, such as any of the others that are more than capable of providing better aircraft to the afghans? >> we have experience in making the transition in iraq, where we have made them outfitted with our craft. it starts with training. that effort is unlikely to begin until we establish a bilateral security agreement. >> i was at a briefing that you gave on threats to our navy and.

i wonder if you could comment to the extent that you are able on the importance of the ohio class replacement in terms of nuclear deterrence, and the importance of continuing with that program, and any possible jeopardy that might be impacted as a result of sequester. >> we are committed to the tried. i believe that is the right approach. it is the most survivable element that we have. it is very reliable. we are very committed to the next class of coming down the line.

we have delayed as far as we can. we need to now get into the requirements and design of this missile carrying summering. we're just committed to the program. we are going to try to control the cost. we are going to make this like all the programs we are working on, a successful program. >> you would agree that the program really has to be spared any impasse as a result of sequester. >> i would agree with that. >> i wonder if i could move to a personnel issue that i know. the electronic medical records system, which still is

incompatible with the department of defense medical record system with the va. despite questions that i and others have asked repeatedly, under the secretary of defense and the previous one, i remain concerned with the fact that it is a goal, not a reality. i wonder if you could comment on what can be done to increase the pace of making those systems compatible. i had thought they would be one system. $1 billion has and spent on making them one system. i ask you to comment on that. >> i share your concern. i can show you that secretary hegel has taken the decision to

move the responsibility into atl, which will be that are managed. we have done other things. we relieve the burden of them having to do continual research to find at the record is complete. that is what the path -- that is the path we're on. your oversight will be an important part of of achieving that. >> thank you. my time is expired. i want to thank you both for your extraordinary service, and to reiterate, i remain unhappy with our current posture. i'm not going to let the issue go with all due respect. i understand your position re- think you for for being so forthright in your answer.

>> thank you. senator mccain. >> thank you. i must tell both of the witnesses i'm concerned about the role you played over the last two years, the view of your role as the chief advisers to the president on national security, and the state of the world over the last two years since you have been holding the office you hold. general dempsey, do you believe the continued cost and risk of our inaction in syria are now worse for our national security interests? >> as a discussed, i would like to know an answer and a nice filibuster. >> i assure you, this is a regional issue. i would say that the issue in syria is at greater risk because

of the emergence of violent extremist. >> you're not answering the question. you believe that the continued cost and risks of our inaction in syria are now worse for our national security interests and the costs associated with limited military action? >> with all due respect, you're asking me to agree that we have been in active. we have not been in active. obviously, we may have not been in active, but any observer knows that assad is prevailing on the battlefield. hezbollah is there. the russians are there. the situation is much more dire than it was two years ago when

you and the admiral came to office. your answer is that we have not been active. >> it is correct. we have not been in active -- inactive. >> do you believe we should take military action, or continued limited action, or significant action, such as the establishment of a no-fly zone, and arming being rebels with weapons they need, which there've not been getting. perhaps better than you. i have been there. which is a greater cost? the action that we are taking now, which is having not paid on the battlefield equation, or doing nothing. >> senator, i am in favor of building a moderate opposition and supporting it. it is a decision for our elected

officials, not for the senior military leaders. >> that goes back to my concern about your role as chairman of the joint chiefs. >> i understand. >> you are the sole military advisor. you testified this february that you had advised the president to armed units of the syrian opposition. you testified you no longer supported the position. now we read that the administration has decided to arm the syrian opposition units. how do we account for those are >> i would not accept the term. we have approached it based on the opposition. there was a time where it was evident that the extremist groups were prevailing inside the opposition. i have not been wavering.

>> groups are prevailing inside the opposition? >> in february. i had that concern. >> that is your answer to why in february, you advise the president to arm them. in april, he said that we shouldn't. now, we arming the rebels. support that policy? >> i support the building of a moderate opposition, including building a military capabilities. >> here is an example of my concern. you told cnn on july 8, the war in syria is not a simple matter of stopping the fight by the introduction of any particular u.s. capabilities. it seems to me that you need to understand what the piece will look like before we start the war.

the war has been going on two over 100,000 people killed. we didn't start the war. we would be starting a war. we would be trying to stop a massacre that is going on. he would try to stop the hezbollah. we would try to stop the fact that the russians continue to supply heavily assad's forces. what would be a great triumph for iran in the entire region? you say it seems that we need to understand what the piece will look like before we start the war. we should see how we should stop the war before stopping the massacre? >> senator, would you agree that we have recent experience where until we understood how the country would continue to government, that actually situations can be made worse but introduction of military force?

>> u.n. i went through this in 2006. i said that it wasn't succeeding, and that we had to have a surge, and only a surge could succeed in reversing the tide, and you disagree with me then. way back then. i think history shows that those of us who supported the surge were right, and people like you do not not think we needed a surge were wrong. i guess my question to you is, is it in any way a good outcome for this situation on the battlefield to continue as it is with obviously assad prevailing, and continued slaughter of thousands of people. the destabilization of jordan, the destabilization of lebanon, and what is clearly erupting into a regional conflict.

is that your answer? >> somehow you have me portrayed as the one who has holding back on a use of military force. >> no. reviews are very important because that is your job requests it is. i have given those views to the present. we have articulated the rest. the decision on whether to use force is the decision of our elected officials. >> i just ask if you would give your personal opinion to the committee if asked. you said yes. i am asking for your opinion. >> the issue is under deliberation. it would be inappropriate for me to try to influence the decision with the rendering an opinion in

public about what kind of force we should use. >> your answer to the chairman about giving your personal view is circumscribed by decisions that are still being made. >> i will render my recommendations are at the appropriate time. >> when might that be? >> if the administration and the government decides to use military force, we provided a variety of options. you know that. >> if it is your position that you do not provide your personal views when asked due to circumstances, you have just contradicted what i have known this committee to operate under for the last 30 years. thank you. >> thank you, senator mccain. senator