the first study confirms this in general. there is a huge market advantage. specifically this recommended the federal reserve warned finalized policies and procedures related to the emergency landing at doherty and established timelines to ensure . franknce with compliance. what that means is dodd frank if wind downility to that emergency lending authority.

the board has not acted on that or a established timelines to do that. will you do that as chairman, and when will you do it? think that is in the works, and we will try to get it out soon. frame in have a time mind? >> i'm not sure, but i will try to make sure. >> if i can ask you to supplement with moore's citrix on the feds attempt to act on dodd frank with regard to that. you also mentioned increased for the biggest banks.

i agree the action you supported in july was very positive. i don't agree it was enough. would you support going further withrms of leverage ratio the largest banks or not? have a verye will meaningful improvement in capital standards by going the ,pproach. frank has recommended which is capital standards. surcharge.be a they are considering a surcharge hat would add to that. they are contemplating

additional ways of reliance on the formhat could take of the capital charge relating to reliance on that kind of funding, or it could take the role of that kind of requirement. i think when we have compliance that serves as act up, remember that we also which ares test's, yet another approach to assessing whether or not institutions have the to be able to. >> i understand the other , but considering all

those, i enqueue should go further with supplementary leverage ratio. would you support that as we speak or not? i want to see where we are doddwe have implemented frank and requirements we need to put in place. >> you have said in the past, i strongly believe monetary policy is most affect if when the public understands what the do and how.ying to a lot of us agree, and many think the best way is through at thes and transparency fed. real openness and transparency. s209?you publicly support

not, what specific changes would be required to earn your public support? >> i strongly support transparency and openness on the part of the fed. i think in terms of the timeliness of that, we are one of the most transparent central banks in the world. anyuld not support requirement that would diminish the independence of the federal in implementing monetary policy. for 50 years congress has recognized there should the an to avoid interference.

i think it is important for the economic performance of this country, and we have seen it around the world. allowing the fed to be independent in determining ,onetary policy is essential and i would be very concerned about legislation that would subject the federal reserve to short-term political pressures .hat could interfere with that >> thank you. at the end of out over the federal reserve formally applied for membership. the united states has membership

byough the office created dodd frank. me why the fed should have its own membership on that board, and furthermore, why there should the of focus on that when domestic oversight challenges seem to be a higher priority. that understanding is now the federal reserve has been charged with supervising some of the largest insurance companies , thatave been designated we want to be in a position to work with regulators in other we haves to make sure internationally compatible and appropriate standards. >> they cannot fulfill that need for you? >> i'm not certain.

i think it would still be beneficial to take part in that group. concerns. iised industryuraged specific guidance for financial institutions. developedee they have guidance and metrics rather than forcing insurers into a bank ?entric regulatory model >> i do believe one side to all should not he the model for and that we need to develop appropriate models for ofulation and supervision different kinds of institutions. they certainly have unique

features that make them very different from takes. om banks. time. taking the >> you are saying a bank centric model would not work in this country? >> they are very different in terms of is this models we want to expand. to discuss the recent thesion not to release research regarding the asset management industry. while the council has publicly indicated he would release any guidance from this for public comment, it has declined to release this study. if you are confirmed as chairman of the fed, will you ensure the

council lives up to its commitment of transparency, and will the fed support efforts for studies on which they might be available for public comment? >> i have not purchase abated, but if i do so, i will take such concerns seriously. if you are confirmed, you will, and the question is about transparency. people need to have the ability to comment before they are applied. would you be willing to make that commitment to transparency? >> i will study this more closely in terms of her shoulds, but i feel it the clear why a particular fern -- firm should be designated. >> and the metrics?

i just want to thank you for your willingness to work on the issue. >> a technical question on behalf of large insurers in illinois. cost benefit analysis if we are to require them to switch , which they have warned me could cost a couple hundred million dollars. >> i am aware there is an issue around different accounting standards and insurance companies. i have not had the chance to study that myself, but i would agree this is something we need to consider very carefully and ledge to do so.

>> tank you. >> thank you for being here. i want to ask a series of quick questions. i would like to make a comment. i understand some of the concerns about quantitative easing. i would make a comment. part of our dysfunction in terms of the grant argan or an actual orget, -- grand bargain actual budget, if we were able to meet our functions, wouldn't move ahead in to the appropriate manner?

>> it is certainly the case the economy has suffered a substantial drag from fiscal policy. the dragstimates amounts to something like one and a half percent on growth. as we commented, taking account of that large amount of fiscal is growing atomy two percent and showing greater momentum. i would expect if there were less fiscal drag the economy's growth rate is going to pick up. certainly that has been a headwind on the economy and they we have tried to offset.

>> the government shutdown would cost $24 billion or potential don't provides predictability. i want some follow-up as well. disappointed in the ability to be the arbiter around regulatory conflicts. as youy would say i hope move into this role, there will institutions. it did seem to me that the ofr

report did not have a lot of clarity, and i would hope in your role -- one of the reasons i wish we ended up with an but we try toair, that wee clarity claritywe give some about how we are going to evaluate those non-bank institutions. >> i think that is a fair and .easonable object to -- objective. working been been trying to facilitate the works of those groups.

>> we would like to see that transparency, so we all know the rules going forward. one thing is we think about ,alance sheets and stimulation i know the fed pays interest on .xcess reserves i believe you are holding 2.4 trillion. we have seen other central banks start to lower those payments. would you consider extending that to get this capital back into the market place to stimulate more private capital into the market?

that is something they have discussed and the board has considered on past occasions. it is something we could consider going forward. i think they were worried if we were to lower the rate to close impair marketld anction, and that has been consideration, but it certainly is a possibility. >> i just want to ask you to look at that as well. some of my colleagues have expressed concern. >> thank you for being here today. i want to thank your family for taking the time to show support. i think that makes a difference.

do you follow prices? >> to some extent. ando you think there is economic indicator behind the rise and fall of gold prices? certainly it is an asset evil want to hold when they are very fearful about potential financial market catastrophe or economic troubles and tail risk. often we see gold prices rise as people flee. >> that was something i got from ben bernanke. i asked him the same question, and he said no one understands i don't pretend to understand them either.

prices, and i don't pretend to understand them either. >> beyond what i shared, i don't have strong views. >> you talked about the role of the federal reserve, promoting employment,maximum a safe and sound financial system. do you believe we have a safe and sound financial system today? i think we need to do more. we are not at the end of the of putting in place regulation and enhanced supervision.

>> the reason i raise the question, we had this discussion when you were in my office about community banks. goodu have a pretty understanding of what is going on out west? communityst half the banks and credit unions in our communities, making it difficult , gettingng recovery ians for small businesses. guess the question is what steps will you take to avert a culture of consolidation? extent the large banks have an advantage because they benefit from too big to fail, i -- ourur of active objective should need to put in

place would quiddity standards to put we level the -- in place would quiddity standards-- liquidity so we level the playing field. we should be making it tougher to compete and encourage them to e smaller and less systemic. that isa model different and has less regulatory burden and is appropriate to their business model. we are proposing much more onerous standards. >> i believe one-size-fits-all is a disadvantage.

do you see cause an and equity bubble in the stock market? stock prices have risen robustly, but if you look at the , theould and measures kinds of things we monitor akin yourice equity ratios, would not cede territory that suggests bubblelike ad additions. when we think about assets like somewhate premium is , whichd historically suspects valuations not in bubble territory. >> do you think there is a federal role to support the

stock work it? pre-k's no. -- to support the stock market? >> no. >> i do not think anything has come with such substantial qualifications. it's fascinating to read your writing. a number of issues have arisen in the international banking community just since the meltdown in 2000 and eight, including energy market manipulation, issues relating to .oney laundering the said plays an important role in supervision. can the fed help support public faith?

an importantat is goal and one i am happy to work toward. feel that is essential and appropriate, yes. >> i want to ask you to address on the folkmpleted or rule, which creates a wall on the hedge funds that make risky bets with private investors and commercial banks that have played in them ported role in usinesses. there has been a lot of concern the firewall will be compromised . can we count on the said to work with regulators to produce -- to work withfed

regulators, to implement it in a fashion keeping up with this goal of systemic risk. closelye working very on this rulemaking with other agencies. faithful tog to be the intent of this rule, which is to eliminate short-term financial speculation in institutions that enjoy the brick action of the safety net. the devil here is in the he tells. it does hermit appropriate hedging and market making act committees, and we are trying to devise a rule that will permit those act 70s but be faithful to the ed ted congress had here.

be faithful to it. >> they put their thumb on the scale through the ownership of , pie plants,r warehouses for key metals, and inre is certainly a history terms of grandfather commodity investments, and in terms of related activities. that there is concern the ability to influence will affect price and creates a conflict of interest that provides essentially a hidden tax on the american economy, and the fed does have regulatory powers

relating to this. we can maybe chew on this a little bit in terms of your purse active -- perspective. let's we are involved in a comprehensive review of like devotees in financial holding companies. as you indicated, we allowed some activities we deem to be to financial activities, and we are reviewing what is appropriate. in addition, congress grandfathered certain act to. -- certain activities. we want to make sure these are conducted in a safe manner, and to consider this. with respect to market it is also the

role and responsibility of market regulators to be looking marketssibility of and we wouldror, certainly cooperate. our main rule is safety and soundness. >> thank you for being willing this role at the fed. i certainly wish you well. >> senator. >> think you. in youriate this time transparency today. if you would share with all of increases youte have voted for during your term n the federal reserve. >> i served as a governor from

1994 until 1997, and we had a cycle of rate increases at that time. x i thought that was just good to get into the record. i appreciate you so much for being here. we spoke about monetary policy and one of the things that we discussed was my concern. and i think it was yours too. easy money is an elitist policy. it is the ultimate trickle down. premise thatn the you are going to have this wealth creation. the hardest wall street institution is not the best. fund managers made a lot of money.

it certainly has not trickle down to the economy. it is a blunt object. although itree that has been an attempt to stimulate and has not been much better than those at the lower end of the spectrum? >> to the extent that low interest rates have an impact on asset prices, the policy is to some extent with the stock market, which may be an example of what you are talking about. role also played in a port by helping the housing sector and losing housing prices. -- boosting housing prices. i think it has been largely beneficial to all those americans who own homes and has improved to their financial well-being. that is broad-based.

>> we talked a little bit about this in the early summer. to thinkfed began about moderating the pace at which it would make paid -- purchases. the market had a stringent reaction. the federal reserve appeared as if it had touched the hot stove and that this policy was going the wealthyffect you are trying to create. the policy of moderating. the policy was pulled back. it seems to me, and you discussed this a little bit, the fed has become a prisoner to its own policy. qe3 was goingrom to shatter the markets and take away from the wealthy fact. can you talk a little bit about some of the escutcheons that were taking place during that time? think we should be

or can be a prisoner of the market. >> do you agree that it affected the fed? >> we do have to take account of what is happening in the markets . market conditions and the effect that they are likely to have on spending in the economic outlook. it is the case and we highlighted this in our statement when we saw the picture of interest rate jump greater than we would have anticipated from the statements we made in may and june. in particular, we saw mortgage rates increase and rise in the space of a few months by over 100 base points. we had to ask ourselves whether or not the tightening of conditions in a sector where we were seeing a recovery, and a drivery that could really a broader recovery in the economy, we did have to ask

ourselves, whether or not that could potentially threaten what we were trying to achieve. overall, we are not a prisoner of the markets. i continue to feel that we are seeing an improvement in the labor market. that was a goal of the program. we will continue to evaluate that through incoming data and make decisions on the program going forward. >> thank you. i want to make sure i fully understand. you talkedstion is, a little bit about monitoring the financial markets. you spoke about using monetary policy as a blunt instrument. 2005 thatedited in the house is that housing market was bubbling in that part of the country, the question is, do you

believe that under your leadership the fed would have -- i know you only have one instruments -- what the fed have the courage to print those bubbles and ensure that we do not create another crisis to mark crisis? another >> no one who lived through that financial crisis would ever want to risk another one that could subject the economy to what we andpainfully going through recovering from. we have a variety of different tools that we could use if we saw something like that occur. , andinclude supervision monetary policy. >> you would have the courage to do that? >> i believe that i would. mostieve that this is the important lesson learned from

the financial crisis. >> mr. chairman, thank you for having this hearing. i very much appreciate your candor and transparency. i really do. i appreciate the conversation, both in the office and -- i want to thank you for giving us the same answers today that you gave in the office. >> thank you very much senator. i appreciate that. ? senator hagan >> i want to echo what everyone has stated. the depth of your background, your experience and expertise. we are very honored to have you here. thank you for your testimony. i wanted to talk about the section in dodd frank where it is required that banks would access deposit insurance and what if it, federal reserve discounts.

an plain vanilla derivatives such as equity, to push them out, to separately affiliate them. this move would raise costs without significantly reducing risks to the financial system. when i spoke to ben bernanke, he has consistently stated that the federal reserve had concerns about the swap push out rule prior to the enactment of dodd frank. they still have concerns about it today. are your views on this issue consistent with chairman bernanke's? would you share the view that it is a good idea to repeal parts of this? if that did not take place, what would be the -- what would the markets to? indicated, as you the federal reserve and other

agencies did have concerns about this role. they expressed them when dodd frank was being considered. hard toorking very address the concerns around this rule.- this we didn't wear likely to be able to do so. -- we think that we are likely to be able to do so. we want to address the concerns that people have so that it won't be necessary to repeal the rule. that is my hope. they're certainly trying to do that. >> what is your timeframe on that? once you are confirmed? >> this is something we hope to get out hopefully later this year. >> you said you could do that without changing the section in question? >> i believe that is the case.

we will be able to address those concerns. i understand the concerns. we are trying very hard. i've see share chairman bernanke's viewpoint? >> i believe so about those concerns that are there. we need to address them. we need to do so and we will. qe,ince the start of the the financial markets have responded to pronouncements by the fed. are you concerned that the markets are too driven by speeches and pronouncements from central banks around the world? if the suggestion of tapering can contributed to volatility, can we expect more volatility in the future? well, the federal reserve, and i think this is true of other central banks, we are trying as hard as we can to communicate clearly about

monetary policy and our goals. communicateg to about our intentions and how we carry out programs. this is challenging. we are i in unprecedented circumstances. we're using policies that have never been tried before. multiple policies. we are trying to explain to the to conductwe intend these policies. so it is a work in progress and sometimes miscommunication is wesible, but i think certainly want to diminish any unnecessary volatility. sometimes there is volatility because we all hear news about the economy that changes our views over the course of the economy and policy. it is natural to see a response. to diminish unnecessary

volatility, i think we have to redouble our efforts to communicate as clearly as we possibly can. that will be my emphasis. >> thank you, mr. chairman. senator to me >> thank you for being here. to go back to some of the issues that senator corker was raising regarding monetary policy. first i think it is important to stress and you are very well aware of this, but the adverse consequences that were rd at we areng -- already experiencing as a result of the monetary policy. they are problematic. we continue to have this artificially suppressed cost of funding these excessively large deficits that we run. tocontributes, i would argue fiscal imbalances. we are punishing middle-class savers for years now. people who said -- spent their

entire working class lifetimes to forego consumption so that they would have a little bit of income in their retirement. now they have no income because they have earned nothing on their savings. they have watched it gradually get a road it, even by a low level of and ration. -- inflation. we have exacerbated the problems of underfunded pension plans. these are all the things that have been occurring and continue to occur. what worries me perhaps more is the point that senator corker was getting to i think. what happens when does morphine drip starts to add? we are point, some time, going to move away from this i assume. everybody believes that. thatssumption seems to be the markets will behave very benignly when this occurs. we have seen some worrisome glimpses that maybe that is not

a safe assumption. back in june, at the mere suggestion that members of the fed might be contemplating stepping back a little bit earlier and the treasury goes back 100 basis points. yesterday, with the release of your testimony, doesn't this feel like there's something a little artificial here? yout it possible that well have many tools available, the market may not respond very well. we could end up creating a real problem as we try to exit from this. senator, you made a number of different points. i think the first point you --tioned is the low rates low rates give rise to fiscal irresponsibility. that puts pressure on congress. we have established low rates in order to get the economy moving.

that is the country's mandate to us. it is important for congress to recognize that as the economy recovers, both short and long- term rates will go up. a situation in which the government's funding cost relate is, weins as low as it must achieve our goal of getting the economy back on track. this is a very temporary situation. i believe members of congress should be looking out a few years to a time when rates are going to be higher. , that isest rates absolutely true. is a burden on people who are trying to survive on the cds.e rom -- income from there's not much they can get. when you think about how we will get things back to normal, i

would argue that we cannot have normal rates unless the economy is normal. we do not have very much investment. there are fundamental reasons here when rates are low. i think pursuing a policy of low rates to get the economy moving will best enable us to normalize policy and to get rates back to normal levels over time. of rates, as the economy recovers, we will need to withdraw monetary accommodations that we have put in place. we will make every effort to do appropriate that is for continued recovery and to maintain price stability. we will continue to communicate that plan to markets. as we've seen and as you've

indicated, it is possible for rates to jump. now, but inas true previous tightening cycles like the one we had from 1994-1995. low rates moved up over the span of six months over 100 basis points. we have tried to make sure the financial system is more resilient. we have contested and continue to do so to make sure that banks are appropriately managing interest rate risk. that is a risk that we will try to mitigate, but it is inherent in any tightening cycle. >> i know i am running out of time, but two quick points i would like to make. myould like to express concern which is the exact opposite of the concern that was raised by the other senator.

implementationhe of the vocal role -- vogel rule. i think the decision by congress to exempt u.s. treasuries it knowledge is that when you ban trading you make it less liquid and more expensive for issuers. the next rule may exempt others. that is another implicit acknowledgment of this problem. it is a problem for corporate issuers in america. i am concerned that we do not unnecessarily raise their cost of borrow him. concerned about the consolidation that is happening in small banks and the lack of new small banks. we used to routinely launch hundreds of new community banks. ic thatold by the fd there is not a single community bank that has been launched since 2010.

economyemic risk to the is way overboard. i hope you will make an effort to diminish that burden. >> i promise to do so. >> senator warren? there's been a lot of talk today about the fed's use of quantitative easing to help the economy get on its feet. is, if the regulators had done their jobs and reigned in the banks, we would not need to be talking about quantitative easing. we could've avoided the 2008 crisis altogether. i want to focus on the fed's regulatory responsibilities to keep the big banks and check. i am concerned that those responsibilities are just not a top priority for the board of governors. earlier this year, the fed reached a settlement with 13 in aage south -- servicers long lease -- long list of

illegal foreclosure activity. the settlement was for the sum of $9 million and directly affected more than 4 million families. they never voted on whether to accept the settlement. has smart, hard-working staff, but the board of governors would never delegate critical monetary policy to them. after the biggest financial crisis in a generation, the board things less than willing to delegate critical regulatory and supervisory decisions. i think we need to make raining in the banks a top priority for the board. i know the board meets regularly to discuss monetary policy. shouldthink the board have regular meetings on supervisory and regulatory issues as well? with that make it clear that both of those are clear to the

-- important to the fed? >> i absolutely believe that our supervisory responsibilities are critical. they are just as important to monetary policy and we need to take them just as seriously and devote just as much time and attention to them. the board operates under a variety of restrictions. you may know about the government sunshine rule. when you suggest that the board meets to discuss regulatory soters, our ability to do outside of open meetings is very limited. those issuesndle by meeting individually with staff or meeting in small groups. we have a committee system where committees are put in charge of

managing particular areas and making recommendations to the board. 1990's, then the board did meet regularly to discuss i supervisory issues. there are confidential supervisory information in those issues, and it is easier for us to have a meeting. i consider those very valuable. it is a worthwhile idea. i should just say that when there are delegations to staff in the board of governors, that does not mean that the board .embers are not consulted those with the expertise may have played a critical role with important input, even when there is no formal involvement. >> fair enough. but i think it is an important signal here.

i'm glad to hear that you are thinking about this and the question of the appropriate delegation and when it is appropriate. i would just like to say something briefly about that. when it is appropriate to delegate to staff and when you have to retain the board itself. because i would like to get onto one other question. >> under lock on whether certain matters the board must vote on. supervisory mergers and so forth. .ule changes typically we delegate enforcement matters to the staff in the area of supervision. >> i'm glad to hear that you want to continue to think about that. i want to ask you one other fundamental question here. is, do you think the fed's lack of attention to regulatory and supervisory responsibilities helped lead to the crash of

2008? know, i think in the aftermath of the crisis, we went back and tried to look carefully at what he should have been doing differently. been important lessons learned. we have massively revamped our supervision, particularly of the largest institutions. those organize institutions through a process called the list in which we are simultaneously reviewing all of the largest institutions simultaneously. the federal reserve system works jointly on these reviews. we no longer delegate to individual reserve banks the 2 of these of 1 or large institutions.

it has become an interdisciplinary matter. with economists, lawyers, and others involved in this. we have learned a lot about supervision. one of our top priorities now is ramping up our monitoring of the financial system is able -- as a whole. that is something we were not doing on an adequate basis before the crisis. we miss some of the important links by which problems and mortgages went through the financial system. >> thank you very much. i just want to say, dr. yellen, when you are can armed, i am glad to hear that you will make it a top priority of the federal reserve to engage in supervisory and regulatory responsibilities that help keep our financial system safe.

that cannot be something that is merely an afterthought. it has to be a primary effort on your part. >> thank you senator. i completely agree with that. >> thank you very much. governor, yound have demonstrated your rest them -- wisdom earlier. everything else is anti- climatic. when you are confirmed as the chairman of the federal reserve, it will be consistent with your record, selections, and wise choices. chairman bernanke has indicated that many times our fiscal policy and monetary policy have been working at opposite purposes. they've been trying to get an expansive policy in place.

we anticipate, and i hope we can avoid this, unemployment trends. how would your job and obviously the size and scope of your purple eel and everything else portfoliod if our -- and everything else be affected by our decisions today? >> i agree that fiscal policy has been working across hall -- cross purposes to monetary policy. i recognize the importance of theobjective of putting deficit and debt on a sustainable path. congress is worried about that and i think it is important to do so. term reductionsr- in spending that we have seen have certainly detracted from

the momentum of the economy and from demands. it makes it harder for the fed to get the economy moving and make our path -- and it makes our path more difficult. it would be helpful going forward if it were possible for deficit reduction efforts to gains in theeving medium-term horizon. those aspects of fiscal policy that give rise to concern about sustainability in the medium- term, while not detracting from the impetus that we need to keep financial recovery moving forward. wouldh a fiscal policy help you in terms of what we all anticipate is the point at which you have to begin your tapering.

basically this balance would allow you more flexibility and more confidence that when you tort to taper, it will lead a reverse in the economy. >> that is fair senator. we are worried about a financial recovery. we need a fiscal policy that has less tried and does no harm -- that would make life easier. >> let me shift gears. a few years ago -- we were discussing the possibility of default. the markets were beginning to react. that the central role treasury securities play, not just in funding the government, , thelso the markets collateral markets across the globe, were you beginning to see

in the fed, ominous signs of a potential catastrophic impact of default? do not believe that a default would be catastrophic. we did see some signs in the run-up to the debt ceiling. they suggested that financial markets were taking notice. there were preemptive protective participantsmarket were beginning to do. they were trying to protect themselves from what could have been catastrophic consequences. generally, we did see an impact on consumer and business confidence. we also saw a general willingness to make investments and the economy. >> a final point. we've been talking a lot about the size of your portfolio.

benchmarks that typically you are looking at is an inflation and deflation and unemployment. for a while, under chairman there was a big shift and deflation which would have had adverse consequences. we have avoided that. we have avoided inflation pressures. will we have not done is get the employment numbers to a level. traditional and appropriate focus, is on those measures. not the absolute size of your portfolio. is that sensible? >> that is sensible. we are focused on achieving -- avoiding deflation. we have an objective. we're trying to get the economy back to old when met.

i think we have made progress, but we are not there yet. outsetecognize from the from the accident purchase program, there are costs and risks associated with a large balance sheet -- as it purchase program, there are costs and risks associated with large balance sheet. by theks for stopping office. i think we had a good conversation. i would like to continue, if i would, with a few questions along the lines of what we spoke about in my office. i found her testimony about asset levels to be interesting. termedfore the chairman -- turned to me i looked at where the dow jones is out. 15,850.ut

an economy that thomas quite honestly, everyone would recognize as too much unemployment as an economy where .eople continue to struggle it is economy where we will continue to see where the growth will be. reale continuing to see estate wars just like we had in the old days now that is confined to cities and a certain areas of the country. we are now starting to see private equity firms who i think .re very good that is a shocker to me, having owned a few rentals in the past.

dr. yellen, i kind of look at these factors and i wish i could going on with other items. what am i missing here? i see asset bubbles. asset going to bring the balance sheet down from $4 trillion to zero even if you said over the next four years we would bring it down from for $ 4lion dollars -- from trillion 20. >> with respect to real estate, you mentioned real estate seeing, as we are you mentioned, private investors come in to invest often in the all cash in certain markets in the country.

is this evidence of an asset bubble? if you look at the markets where that's occurring, it's some of the hardest hit markets where dropped the most, las vegas, phoenix, the areas that with theiggest crashes largest number of foreclosures with houses being put on the where and the borrowers many of these housing markets where the investments are taking aace are ones where you have substantial fraction of underwater borrowers and individuals who have bought houses, whose credit is impaired, who are not in a position to be buying houses. are taking very

for cash and renting them out over a reasonable. of time. -- over a reasonable time. todr. yellen, i don't want be rude and interrupt you but i'm running out of time. i think you would agree with me that you probably would not in a public setting, but if i were to say to you, why don't you announced today that you are going to draw this down over the trilliononths from $4

to zero, i think you would see the impact of your policies on the value of real estate all across the united states, not just of the hardest hit areas. i think the real estate that i and others own would go down in value. wouldk the stock market have the same sort of reaction that it has had when chairman bernanke just suggested that there might be a phase down here. here's what i'm saying because i am now out of time. economy has gotten used to the sugar you put out there and i'm just worried that we are on a sugar high. that's a very dangerous thing out there just trying to change the bills and maybe put a dollar away for retirement. the flipside of your policies that you are advocating for are

very hard on certain segments of our society. explain to the senior citizen who was just hoping the cd will don'tsome money so they have to dig into the principal what impact you are having on a policy that says we are going to , for as far as the perceivable future, keep interest rates low. agree. savers are hurt by the policy, but if we want to get active in the normalual interest rates, i would say would need to do that by getting the economy back to normal. that is what this policy, i hope, will succeed in doing.

the savers play many different roles. they may be retirees who are hoping to get part-time work in order to supplement their income . there may be people who have children who are out of work and you are suffering because of that or grandchildren who are going to college, coming out of college, and hope to be able to put their skills to work on finding jobs in the market when it strong. when they think about themselves as savers, taking into account the broader array of interests they have and a strong economy, they would see that these policies, even though it may harm in one respect, are broadly beneficial to them, as i believe they all 12 americans.

>> my time has expired. thank you, mr. chairman. >> thank you, mr. chair, and sticking, dr. yellen, through so the end of the desk and ask you some questions as well. goal ofo get to the fed unemployment. picture on what you consider to be full employment. >> i don't have a precise estimate, but every three months all of the participants in the fomc turn at and indicate what they think normal, long-term levels of unemployment is. in our most recent survey in september, the range of opinion 6%. 5%- >> what you believe the real unemployment rate is today?

>> the measured unemployment rate is 7.3%. as discussed previously, we have very high incidence of involuntary part-time employment . we have all too many people who appear to have dropped out of .he labor force >> would you agree that it is close to or probably over 10%? >> by broader measures, if that high. >> would you also agree that right now in america we have the greatest income disparity that we have had since the great depression? widening wage inequality and income inequality going back to the mid to late 80's and it continues. >> i just want to take a minute to speak for those who are on

the lower rent due the cap the fed policy, look at the stock market, and do not have a stake as they see it, as you just explain. day, they do not see their economic condition getting any better. certainly, they don't see their unemployment opportunities getting any better especially those for low job skills. what have you done to address unemployment disparity, income disparity in this country? what would you suggest the fed to avoid long-term income disparity? >> i think you are asking about something that is a very deep that has affect other advanced economies.

timesave spent a lot of to understand what's responsible for widening inequality. many of the underlying factors are outside of the federal reserve's ability to address. >> do you believe your policies have added to the problem? >> i believe the policies we've undertaken have been meant to .enerate a robust recovery i would like to see the u.s. economy and the job market appear that it helped. as we saw when we still had trends toward widening inequality, we did have real evergains when we had an fosterr job market.

growth in the united states will help a faster job market. when the economy recovers, we are going to see firms be more willing to undertake trading where they cannot find workers. they are going to be willing to invest in people and to make capital investments who will make workers better on the job and we will see better wage gains. >> i would suggest that those at the bottom are not feeling the effects of these policies. the trickle-down hasn't happened for them. they struggle every day. see their wealth grow because they don't hold a lot of assets. anything that you can do taking a look at this broader issue because this is an issue that will affect the economy for years to come and affect our competitiveness and -- in years

to come. resources for those who did consume. we look forward to a long relationship with you. >> thank you, senator. >> senator manchin. >> you've done a great job today. i enjoyed our visit. i look at you and think there's a person involved in last time we had a balanced budget. the last time that we would have been on track to be debt-free. if you go back to those days, there were naysayers then who said we could not do it. but you off theand then we went tracks. what i'm asking is how we get back on the tracks. you and i have a little difference of opinion on this. i have a concern but you have a broader view of what has worked and not worked around the world. we spoke about japan and why you believe that what we are doing needs to be done.

month inllion a quantitative easing has not really given us the results that we desire, why wouldn't you billion adoing $200 month? why not $85 billion? i have concerns continuing it as senator your hands -- younother senator said, have done everything possible to prop up this economy and we have failed is oblivious congress to do our job. budget, weet even a don't have a budget. would think we are crazy. it would be too harmful to have a balanced budget. those of us who come from the executive branch, that's all we

understand. we had to by law. and then to even think we could be debt-free in the next generation are beyond. you think those are impossible, unreachable goals? >> it's an exceptionally important goal. >> can meet balance the budget again? >> it requires very tough decisions. you made very tough decisions in the 1990's. >> congress and the administration made very tough decisions and they did it in a way that would set a model for this congress. president clinton was elected and the economy had high unemployment. it was just beginning to recover

. the administration and congress deficito achieve reduction but to do so in a way economicd not harm the recovery so they agreed on a set and spendingses cuts, not all of which came into effect immediately. at that time, there had been a lot of uncertainty among about whether or not the government whatever balance its budget -- would ever balance its budget. fed had scope to use anytary policy to offset adverse impact on the economy but we really did not feel a lot becauseadverse impact

the economy enjoyed a long and robust boom. >> you having that experience, you lived through it, worked through it, and we have the utmost respect for the reserve, your self, and you see that we have the utmost respect for you. we just need you to speak out and help us a little bit more, challenge us to do our job. like yourself are in the know, we do not have the political will to do it needs to be done. every citizen in america has to face a budget. every one of them has to live within that budget and we are unwilling to make that difficult decision. we will go into sugar shock ready soon. hear the unbridled truth from people in the know, people who have been there, it's

not like it's the impossible dream. we have not had a budget for five, going on six years. i would like to get back to that again. i would like to think that people like you could help steer us back in that direction. be bold. >> senator schumer. you, madam chair, and thank you everyone. i want to follow-up on a question that heidi hyde cap brought up. senator manchin, it's not upgraded problem. our greatest problem is that middle-class incomes are .eclining the amazing thing is that they decline not just because of the recession but they actually 2007.ned between 2001-

the person who alerted me to this was a professor at harvard law school was elizabeth warren who wrote articles about this one before being a senator was a gleam in her eye but it's one of our most serious problems. if middle-class incomes continue to decline and decline close to 10% between 2001 and today how much it's going to be a different america. what's all of this populism about? the american people are a generous people. they don't mind if the people at the top income goes up one percent of theirs goes up 3%-4%. to you is how concerned are you about this he? what impact will this have on growth and economic attention tools to doed have this? i understand this relates to

some of our republican colleagues's skittishness about maintaining growth but given the seriousness with i regard this problem that the fed really has a dual mandate which i know you is not simply keeping inflation down and not simply monitoring the budget deficit and its effects on our trying to get jobs and middle-class incomes back again. no one gives it the attention that it needs. >> senator, i would echo my agreement with you that this is a very serious problem. it's not a new problem. it's a problem that really goes back to the 1980's in which we've seen a huge rise in income inequality. as you said, for many years, the middle and those below the actually losing

absolutely a disproportionate .hare of the gains we have not had very strong productivity growth but a disproportionate share of those to the top 10% and even the top 1%. these are very worrisome problems. there has been a lot of debate about exactly what the causes of this problem are, perhaps having to do with the nature of technical logical change with globalization, institutional changes in the united states including the decline of unions. there are many things that are involved with this problem. what can the fed to? we can change all of those

things including education, early childhood education, job training. what we can do is try to achieve a robust recovery so that we have a stronger job market and in a stronger job market, people who are having a lot of trouble getting jobs will be drawn into jobs. they will get better jobs. there will be more training. people will move up the job ladder. opportunities will increase. it's not going to put an end to or the long-term structural problems driving this but it will be helpful and i think it is the contribution the federal reserve can try to make. >> on my colleagues have criticized you for keeping rates "artificially low," but is in

the zero lower bound on the short term interest rate and summarize also artificially? but say rates were 5% today but we have high unemployment and low on inflation -- but low inflation, wouldn't you lower interest rates? if you did not do quantitative easing, would interest rates be artificially high so to speak? >> i think that's fair. if you judge what is high or low ,y the needs of the economy people sometimes talk about the equilibrium real rape. what is natural given the levels of saving and investment in the economy when this a lot of saving and not very much investment which is where we are now in a weak economy. the natural forces of the economy are fishing interest rates down and it is these forces that we are trying to go with.

if we were going to try to push rates up when the economy has that much saving and such weak , we would truly harm the recovery. weing pushed rates to zero, would ideally have negative short-term interest rates. thaturse we cannot achieve . that's when we are trying to push down longer-term interest rates. greathink you'll make a chair and/or brooklyn wisdom shines through. your brooklyn wisdom shines through. >> i never forget my roots. thank you. >> thank you for your excellent testimony. of thisthe members testimony submit any written questions for the record for dr. yellen by close of business tomorrow. dr. yellen, please respond

promptly so that the committee may proceed to a markup as soon as possible. this hearing is adjourned. [captions copyright national cable satellite corp. 2013] [captioning performed by national captioning institute]

up, president obama announces an executive order to allow people to keep their current health care plans for one year. then senator mary landrieu of louisiana unveils her plan to allow people to keep their current plans permanently. but is followed by house republicans on the effect of the healthcare law. and then house democratic leaders on the president's announcement. the 2012 safety and innovation act gives new powers to implement a faster prescription drug review process and changes

the process for medical devices. the house commerce subcommittee look up the law live friday at 10:00 a.m. eastern on c-span 2. up on the next "washington journal," a look at president obama's announcement on healthcare law to allow americans to keep their current policies of the upcoming vote in the house on the gop vill aimed on doing the same thing. our guest is congressman andy harrison maryland. sander levin is here to talk about pending changes to federal unemployment insurance. "washington journal" is live every morning at 7:00 a.m. eastern on c-span. this weekend on c-span, white house 2016. maryland governor martin o'malley for the jefferson jackson dinner followed by congressman paul ryan at a birth

day party fundraiser for iowa governor terry branstad. governor o'malley is live starting saturday at 7:00 p.m. eastern. the-span 2's "book tv," national book award finalists in fiction. on c-span 3 "american history tv," go back in time to 1996 but the internet archive's way back machine. sunday at 7:00 p.m. release ofer the sign-up numbers under the affordable care act, president obama announced an executive order to stem insurance plan cancellations by allowing people to keep their current insurance plans for one year. from "the new york times," the tradeent of the insurance group said changing the rules after health plans have already met the requirements of the wall could stabilize the market and result in higher premiums for consumers. we take a look now at president

obama's announcement from the white house. this is 50 minutes. >> today i want to update the american people on our efforts to implement and improve the affordable care act, and i'll take a couple of your questions. but before i do, i just want to say a few words about the tragedy that's unfolded in the philippines. over the past few days, i think all of us have been shaken by the images of the devastation wrought by typhoon haiyan. it's a heartbreaking reminder of how fragile life is, and among the dead are several americans. so our prayers are with the filipino people, and with filipino americans across our

country who are anxious about their family and friends back home. one of our core principles is, when friends are in trouble, america helps. as i told president aquino earlier this week, the united states will continue to offer whatever assistance we can. our military personnel and usaid team do this better than anybody in the world, and they've been already on the ground working tirelessly to deliver food, water, medicine, shelter, and to help with airlift. today, the aircraft carrier uss george washington and other ships arrived to help with search- and-rescue, as well as supplies, medical care and logistical support. and more help is on the way. america's strength, of course, has always been more than just about what our government can do it's also about what our citizens can do. it's about the big-heartedness of the american people when they see other folks in trouble. so today, i would encourage everybody who wants to help, to visit whitehouse.gov/typhoon --

that's whitehouse.gov/typhoon -- and that will offer you links to organizations that are working on the ground and ways that you can support their efforts. our friends in the philippines will face a long, hard road ahead, but they'll continue to have a friend and partner in the united states of america. now, switching gears, it has now been six weeks since the affordable care act's new marketplace has opened for business. i think it's fair to say that the rollout has been rough so far. and i think everybody understands that i'm not happy about the fact that the rollout has been wrought with a whole range of problems that i've been deeply concerned about. but today i want to talk about what we know after these first few weeks and what we're doing to implement and improve the law. yesterday, the white house

announced that in the first month, more than 100,000 americans successfully enrolled in new insurance plans. is that as high a number as we'd like? absolutely not. but it does mean that people want affordable health care. the problems of the website have prevented too many americans from completing the enrollment process. and that's on us, not on them. but there is no question that there's real demand for quality, affordable health insurance. in the first month, nearly a million people successfully completed an application for themselves or their families. those applications represent more than 1.5 million people. of those 1.5 million people, 106,000 of them have successfully signed up to get covered. another 396,000 have the ability to gain access to medicaid under the affordable care act. that's been less reported on, but it shouldn't be. americans who are having a difficult time, who are poor, many of them working, may have a disability; they're americans like everybody else, and the fact that they are now able to get insurance is going to be

critically important. later today, i'll be in ohio, where governor kasich, a republican, has expanded medicaid under the affordable care act. and as many as 275,000 ohioans will ultimately be better off because of it. and if every governor followed suit, another 5.4 million americans could gain access to health care next year. so bottom line is, in just one month, despite all the problems that we've seen with the website, more than 500,000 americans could know the security of health care by january 1st -- many of them for the first time in their lives. and that's life-changing and it's significant. that still leaves about 1 million americans who successfully made it through the website, and now qualify to buy insurance, but haven't picked a plan yet.

and there's no question that if the website were working as it's supposed to, that number would be much higher of people who have actually enrolled. so that's problem number one -- making sure that the website works the way it's supposed to. it's gotten a lot better over the last few weeks than it was on the first day, but we're working 24/7 to get it working for the vast majority of americans in a smooth, consistent way. the other problem that has received a lot of attention concerns americans who have received letters from their insurers that they may be losing the plans they bought in the old individual market, often because they no longer meet the law's requirements to cover basic benefits like prescription drugs

or doctors' visits. now, as i indicated earlier, i completely get how upsetting this can be for a lot of americans, particularly after assurances they heard from me that if they had a plan that they liked, they could keep it. and to those americans, i hear you loud and clear. i said that i would do everything we can to fix this problem. and today i'm offering an idea that will help do it. already, people who have plans that predate the affordable care act can keep those plans if they haven't changed. that was already in the law. that's what's called a grandfather clause. it was included in the law. today, we're going to extend

that principle both to people whose plans have changed since the law took effect, and to people who bought plans since the law took effect. so state insurance commissioners still have the power to decide what plans can and can't be sold in their states. but the bottom line is, insurers can extend current plans that would otherwise be canceled into 2014, and americans whose plans have been canceled can choose to re-enroll in the same kind of plan. we're also requiring insurers to extend current plans to inform their customers about two things. one, that protections -- what protections these renewed plans don't include. and number two, that the marketplace offers new options with better coverage and tax credits that might help you bring down the cost. so if you've received one of these letters, i'd encourage you to take a look at the marketplace. even if the website isn't working as smoothly as it should be for everybody yet, the plan

comparison tool that lets you browse costs for new plans near you is working just fine. now, this fix won't solve every problem for every person. but it's going to help a lot of people. it is important to understand, though, that the old individual market was not working well. and it's important that we don't pretend that somehow that's a place worth going back to. too often, it works fine as long as you stay healthy; it doesn't work well when you're sick. so year after year, americans were routinely exposed to financial ruin, or denied coverage due to minor preexisting conditions, or dropped from coverage altogether even if they paid their premiums on time. that's one of the reasons we pursued this reform in the first place. and that's why i will not accept proposals that are just another brazen attempt to undermine or repeal the overall law and drag us back into a broken system. we will continue to make the case, even to folks who choose to keep their own plans, that they should shop around in the new marketplace because there's a good chance that they'll be able to buy better insurance at lower cost. so we're going to do everything

we can to help the americans who have received these cancellation notices. but i also want everybody to remember there are still 40 million americans who don't have health insurance at all. i'm not going to walk away from 40 million people who have the chance to get health insurance for the first time. and i'm not going to walk away from something that has helped the cost of health care grow at its slowest rate in 50 years. so we're at the opening weeks of the project to build a better health care system for everybody a system that will offer real financial security and peace of mind to millions of americans. it is a complex process. there are all kinds of challenges. i'm sure there will be additional challenges that come up. and it's important that we're honest and straightforward in terms of when we come up with a problem with these reforms and

these laws, that we address them. but we've got to move forward on this. it took 100 years for us to even get to the point where we could start talking about and implementing a law to make sure everybody has got health insurance. so with that, i'm going to take your questions, and i'm going to start with julie pace of ap. >> thank you, mr. president. the combination of the website problems and the concerns over the policy cancellations has sparked a lot of worry within your own party, and polls also show that you're taking some hits with the public on both your overall job approval rating and also on factors like trust and honesty. do you feel as though the flawed health care rollout has led to a breach in the public trust and confidence in government? and if so, how do you plan to resolve that? >> there is no doubt that people are frustrated. we just came out of a shutdown and the possibility that for the first time in over 200 years, we wouldn't pay our bills. and people breathed a sigh of relief when that finally got done, and the next thing they know is, is that the president's

health care reform can't get the website to work and that there are these other problems with respect to cancellation notices. and i understand why folks are frustrated. i would be, too. because sometimes people look at what's taking place in washington and they say, not enough is getting done that helps me with my life. and regardless of what congress does, ultimately i'm the president of the united states and they expect me to do something about it. so in terms of how i intend to approach it, i'm just going to keep on working as hard as i can around the priorities that the american people care about. and i think it's legitimate for them to expect me to have to win back some credibility on this health care law in particular, and on a whole range of these issues in general. and that's on me. i mean, we fumbled the rollout on this health care law. there are a whole bunch of

things about it that are working really well which people didn't notice because they weren't controversial -- so making sure kids could stay on their parents' plans until they were through the age of 25, and making sure that seniors got more discounts on their prescription drugs. there were a whole bunch of stuff that we did well over the first three years. but we always knew that these marketplaces, creating a place where people can shop and through competition get a better deal for the health insurance that their families need, we always knew that that was going to be complicated and everybody was going to be paying a lot of attention to it. and we should have done a better job getting that right on day one -- not on day 28 or on day 40. i am confident that by the time we look back on this next year, that people are going to say this is working well, and it's helping a lot of people. but my intention in terms of

winning back the confidence of the american people is just to work as hard as i can; identify the problems that we've got, make sure that we're fixing them. whether it's a website, whether it is making sure that folks who got these cancellation notices get help, we're just going to keep on chipping away at this until the job is done. major garrett. >> thank you, mr. president. you said while the law was being debated, "if you like your plan, you can keep it." you said after the law was implemented or signed, "if you like your plan, you can keep it." americans believed you, sir, when you said that to them over and over. do you not believe, sir, the american people deserve a deeper, more transparent accountability from you as to why you said that over and over when your own statistic published in the federal register alerted your policy

staff -- and i presume you -- to the fact that millions of americans would, in fact, probably fall into the very gap you're trying to administratively fix now? that's one question. second question. (laughter.) you were informed, or several people in this building were informed two weeks before the launch of the website that it was failing the most basic tests internally, and yet a decision was made to launch the website on october 1st. did you, sir, make that test? and if so, did you regret that? >> okay, on the website, i was not informed directly that the website would not be working the way it was supposed to. had i been informed, i wouldn't be going out saying, boy, this is going to be great. i'm accused of a lot of things, but i don't think i'm stupid enough to go around saying, this is going to be like shopping on amazon or travelocity a week before the website opens if i

thought that it wasn't going to work. so clearly, we and i did not have enough awareness about the problems in the website. even a week into it, the thinking was that these were some glitches that would be fixed with patches, as opposed to some broader systemic problems that took much longer to fix and we're still working on them. so that doesn't excuse the fact that they just don't work. but i think it's fair to say that, no, garrett -- major, we would not have rolled out something knowing very well that it wasn't going to work the way it was supposed, given all the scrutiny that we knew was going to be on the website. with respect to the pledge i

made that if you like your plan, you can keep it, i think -- and i've said in interviews -- that there is no doubt that the way i put that forward unequivocally ended up not being accurate. it was not because of my intention not to deliver on that commitment and that promise. we put a grandfather clause into the law, but it was insufficient. keep in mind that the individual market accounts for 5 percent of the population. so when i said you can keep your health care, i'm looking at folks who've got employer-based health care; i'm looking at folks who've got medicare and medicaid -- and that accounts for the vast majority of americans. and then for people who don't have any health insurance at all, obviously that didn't

my working assumption was that the majority of those folks would find better policies at lower costs or the same costs in the marketplaces, and that the universe of folks who potentially would not find a better deal in the marketplaces, the grandfather clause would work sufficiently for them. and it didn't. and again, that's on us. which is why we're -- that's on me. and that's why i'm trying to fix it. and as i said earlier, i guess last week, and i will repeat, that's something i deeply regret because it's scary getting a cancellation notice. now, it is important to understand that out of that population, typically there is constant churn in that market. this market is not very stable and reliable for people. so people have a lot of complaints when they're in that marketplace. as long as you're healthy, things seem to be going pretty

good. and so a lot of people think, i've got pretty good insurance until they get sick -- and then suddenly they look at the fine print, and they've got a $50,000 out-of-pocket expense that they can't pay. we know that on average over the last decade, each year, premiums in that individual market would go up an average of 15 percent a year. i know that because when we were talking about health care reform, one of the complaints was: i bought health care in the individual market and i just got a notice from the insurer, they dropped me after i had an illness; or my premium skyrocketed by 20 or 30 percent, why aren't we doing something about this? so part of what our goal has been is to make sure that that individual market is stable and fair, and has the kind of consumer protections that make sure that people don't get a

rude surprise when they really need health insurance. but if you just got a cancellation notice, and so far you're thinking, my prices are pretty good, you haven't been sick, and it fits your budget, and now you get this notice -- you're going to be worried about it. and if the insurer is saying the reason you're getting this notice is because of the affordable care act, then you're going to be understandably aggravated about it. now, for a big portion of those people, the truth is they might have gotten a notice saying, we're jacking up your rates by 30 percent. they might have said, from here on out, we're not going to cover x, y and z illnesses, we're changing the -- because these were all 12-month policies. the insurance companies were under no obligation to renew the exact same policies that you had before. but, look, one of the things i

understood when we decided to reform that health insurance market, part of the reason why it hasn't been done before and it's very difficult to do, is that anything that's going on that's tough in the health care market, if you initiated a reform, can be attributed to your law. and so what we want to do is to be able to say to these folks, you know what, the affordable care act is not going to be the reason why insurers have to cancel your plan. now, what folks may find is the insurance companies may still come back and say, we want to charge you 20 percent more than we did last year; or we're not going to cover prescription drugs now. >> did you decide, sir, that the simple declaration was something the american people could handle, but this nuanced answer you just gave now was something that you couldn't handle and you didn't trust the american people with a fuller truth? >> no. i think, as i said earlier, major, my expectation was that

for 98 percent of the american people, either it genuinely wouldn't change at all, or they'd be pleasantly surprised with the options in the marketplace, and that the grandfather clause would cover the rest. that proved not to be the case. and that's on me. and the american people -- those who got cancellation notices do deserve and have received an apology from me. but they don't want just words. what they want is whether we can make sure that they are in a better place, and that we meet that commitment. and, by the way, i think it's very important for me to note that there are a whole bunch of folks up in congress and others who made this statement, and they were entirely sincere about

it. and the fact that you've got this percentage of people who have had this impact -- i want them to know that their senator or congressman, they were making representations based on what i told them and what this white house and our administrative staff told them. and so it's not on them. it's on us. but it is something that we intend to fix. steve collinson. >> do you have reason to believe that iran would walk away from nuclear talks if congress draws up new sanctions? and would a diplomatic breakdown at this stage leave you no option but military action? and how do you respond to your critics on the hill who say that it was only tough sanctions that got iran to the table, but only tougher sanctions will make it capitulate? >> well, let me make a couple of points. number one, i've said before and i will repeat: we do not want iran having nuclear weapons. and it would be not only dangerous to us and our allies, but it would be destabilizing to

the entire region, and could trigger a nuclear arms race that would make life much more dangerous for all of us. so our policy is iran cannot have nuclear weapons. and i'm leaving all options on the table to make sure that we meet that goal. point number two: the reason we've got such vigorous sanctions is because i and my administration put in place, when i came into office, the international structure to have the most effective sanctions ever. and so i think it's fair to say that i know a little bit about sanctions, since we've set them up, and made sure that we mobilize the entire international community so that

there weren't a lot of loopholes and they really had bite. and the intention in setting up those sanctions always was to bring the iranians to the table so that we could resolve this issue peacefully, because that is my preference. that's my preference because any armed conflict has cost to it, but it's also my preference because the best way to assure that a country does not have nuclear weapons is that they are making a decision not to have nuclear weapons, and we're in a position to verify that they don't have nuclear weapons. i appreciate all the help, bipartisan help, that we received from congress in making that happen -- iran's economy has been crippled. they had a -5% growth rate last year. their currency plummeted. they're having significant problems in just the day-to-day economy on the ground in iran. and president rouhani made a decision that he was prepared to come and have a conversation with the international community

about what they could do to solve this problem with us. we've now had a series of conversations, and it has never been realistic that we would resolve the entire problem all at once. what we have done is seen the possibility of an agreement in which iran would halt advances on its program; that it would dilute some of the highly enriched uranium that makes it easier for them to potentially produce a weapon; that they are subjecting themselves to much more vigorous inspections so that we know exactly what they're doing at all their various facilities; and that that would then provide time and space for us to test, over a certain period of months,

whether or not they are prepared to actually resolve this issue to the satisfaction of the international community -- making us confident that, in fact, they're not pursuing a nuclear weapons program. in return, the basic structure of what's been talked about, although not completed, is that we would provide very modest relief at the margins of the sanctions that we've set up. but importantly, we would leave in place the core sanctions that are most effective and have most impact on the iranian economy, specifically oil sanctions and sanctions with respect to banks and financing. and what that gives us is the opportunity to test how serious

are they, but it also gives us an assurance that if it turns out six months from now that they're not serious, we can crank -- we can dial those sanctions right back up. so my message to congress has been that, let's see if this short-term, phase-one deal can be completed to our satisfaction where we're absolutely certain that while we're talking with the iranians, they're not busy advancing their program. we can buy some additional months in terms of their breakout capacity. let's test how willing they are to actually resolve this diplomatically and peacefully. we will have lost nothing if, at the end of the day, it turns out that they are not prepared to

provide the international community the hard proof and assurances necessary for us to know that they're not pursuing a nuclear weapon. and if that turns out to be the case, then not only is our entire sanctions infrastructure still in place, not only are they still losing money from the fact that they can't sell their oil and get revenue from their oil as easily, even throughout these talks, but other options remain. but what i've said to members of congress is that if, in fact, we're serious about trying to resolve this diplomatically -- because no matter how good our military is, military options are always messy, they're always difficult, always have unintended consequences, and in this situation are never complete in terms of making us certain that they don't then go out and pursue even more vigorously nuclear weapons in

the future -- if we're serious about pursuing diplomacy, then there's no need for us to add new sanctions on top of the sanctions that are already very effective and that brought them to the table in the first place. now, if it turns out they can't deliver, they can't come to the table in a serious way and get this issue resolved, the sanctions can be ramped back up. and we've got that option. all right. roger runningen. roger, it's his birthday, by the way. so that's not the reason you got a question, but i thought it was important to note that. >> thank you, mr. president. >> happy birthday. >> back to health care. can you guarantee for the american people that the health care website is going to be fully operational for all people, not just the vast majority, by november 30? and second, more broadly, this is your signature domestic piece of legislation.

you hear criticism on the hill that you and your white house team are too insular. is that how this mess came to be? >> well, i think there is going to be a lot of evaluation of how we got to this point. and i assure you that i've been asking a lot of questions about that. the truth is that this is, number one, very complicated. the website itself is doing a lot of stuff. there aren't a lot of websites out there that have to help people compare their possible insurance options, verify income to find out what kind of tax credits they might get, communicate with those insurance

companies so they can purchase, make sure that all of it's verified. so there's just a bunch of pieces to it that made it and you combine that with the fact that the federal government does a lot of things really well. one of the things it does not do well is information technology procurement. this is kind of a systematic problem that we have across the board. and it is not surprising then that there were going to be some problems. now, i think we have to ask ourselves some hard questions inside the white house as opposed to why we didn't see more of these problems coming earlier on -- a, so we could set expectations; b, so that we could look for different ways for people to end up applying. so ultimately, you're right. this is something that's really important to me, and it's really important to millions of