o pay customers amounts that the treasury wouldn't have in their checking account to make good on and so their checks would bounce leaving those institutions in a very difficult situation rye the plans referenced in the 2011 hearing in writing? >> there are briefings that staff made to the federal open market committee when we met, when we met about what our plans would be in terms of the responsibilities -- >> i understand that but are the briefings based upon a written document? are they based on some verbal history at the fed or the treasury or a written down plan on these payments? >> to the best of my knowledge there is no written down -- >> given the fact of a plan to have a great deal of impact on calming the markets in the face of a debt ceiling difficulty, do you think it's a good idea to develop a contingency plan for

prioritization of payments in the event the debt ceiling is not raised? >> that's a mat they are's entirely up to the treasury. that is not the domain of the federal reserve. >> but you have -- you perform the functions for the treasury through the new york fed, don't you? >> with the fed's fiscal agent. >> if they asked you to do it, could you? >> it is not up to us for a plan concerning what bills would be paid. >> if the treasury asked you to create a program to put into place through the new york fed could you do it? >> i don't know that we could do that. >> do you think it would be a good idea to do that? >> treasury submits to us every day a set of payments to make. >> i understand. let me finish with this, plisz yellen. we have asked for the records from the fed, specifics related -- identified in the meeting from the new york fed.

the new york fed told us we can have have them until they get permission to give them to us from the treasury. in light of your earlier comments regarding fed independence, are you concerned about having to ask the treasury for permission to given information to congress? >> well, the federal reserve acts as the treasury's fiscal agent and in that case we take instructions from the treasury and are merely abouting as their agent. that's one of our rules to serve as the fiscal agent of the treasury. >> the gentleman's time -- >> it is not a monetary policy rule. >> thank you, ma'am. >> the chair recognizes the gentleman from delaware, mr. carney for five minutes. >> thank you, mr. chairman. thank you for the opportunity to ask some questions of the new chairman the fed. welcome. thank you for coming. i know it's been a very long day. we do appreciate your coming twice a year as part of the humphrey hawkins act testimony and we appreciate your report.

i have found these meetings very useful with your predecessor, chairman bernanke and asked him each time this question which i'll ask you which is when's the most important thing we can do -- we talk about our focus on creating an environment where businesses can be successful and create jobs. what's the most important thing we can do within our purview to help there? we have this debt ceiling clock that, well, it is not running right now but it's been looming over us. a couple of things. in your mind that congress should be doing or could be doing? >> it's congress's job to put in place legislation that best advances the, you know economic development of the country. there are broad array of -- >> what are those kinds of things? one of the thing that is frustrates me is the fact that

we have been unable to reach agreement across the aisle on a meaningful fiscal plan, you know, that gets our longer term liabilities under control and makes the kind of investments in the short term that are important for future economic growth. do you have any comments there? >> i would agree with that. i think that's one of congress's most important responsibilities. and my predecessors and i have all emphasized the importance of putting in place budgets that are responsible, not only for from a short term but particularly from a long-term perspective when we look at the cbo 75-year projections and see an unsustainable debt path. that's a great concern. >> i mean, that's the one thing your predecessor used to -- he was kind of unwilling to give us

policy advice which i think is probably appropriate, but he would always say that the focus maybe ought to be on doing the things, frankly, that are harder in terms of getting particularly health care liabilities over the long term given the demographics and aging of our policy. your thoughts on that? >> i acompletely agreet with that. the combination of demographics and aging and a health care trend that's been in cost trend that's been outstripping other prices in the economy is what leads to long-term deficits and debt that's unsustainable and so want to give advice on how to deal with that, but this is something -- >> deal with it, right? >> you have known about for decades and i think it's important to do so -- to deal with that. >> so one of the fed governors in here last week and talked about systemic risk and one of

the pieces of unfinished business from the near financial collapse is what we have or haven't done with respect to fannie mae and freddie mac and housing, mortgage finance reform. you're buying $85 billion a month of nms. do you have any advice to us as to what to do there with respect to housing finance reform? obviously, a very important part of the economy and -- >> i think the time has come. i hope that you will deal with reform of the gses. and there are a variety of different ways to do it. but i think the government should make its role and intended role -- >> more explicit. >> and make sure that whatever entities are set up to deal with housing finance that they don't create systemic risk to the financial system. >> all right. >> mortgage market is highly

dependent on fannie and freddie at this point to provide credit and uncertainties about what will happen with them i think is probably some resolution of that's necessary to get private capital back in the sector. >> so is it your view that some more explicit federal guarantee is important for the liquidity and mortgage markets? >> i think there are an array of the possibilities to take and the role of the federal government will be in the hard times in the housing market. and it's simply important for congress to decide what you want to do here and to do it in a way that doesn't create systemic risk. >> my time is running out. i want to again congratulate you on your new position and thank you for your time. >> thank you. >> the chair recognizes the gentleman of florida, mr. ross for five minutes. >> thank you chairman.

thank you, chair yellen for being here and endurance in agreeing to be here to take questions from all of us. i don't envy your job because it's quite a balance. i mean, your monetary policy has to make sure we not only allow for liquidity in the markets at a affordn affordable rate and make sure that there are those reliant upon investment income seniors predominantly, whose savings accounts can survive in this environment. and when your predecessor was here before, chairman bernanke he talked about the affect on the seniors who have fixed incomes and aren't concerned about home appreciation. more concerned about cd rates savings accounts because that's their livelihood, their income. can you comment at all of a hope or suggestions of seniors mine back home on a fixed income, dependent on not zero interest rate but a return on the investment as being able to allow them to live an affordable

life? >> so i know that this is a difficult situation for seniors in that position. and i would simply say that our objective is to get the economy moving and into a state of full recovery as rapidly as we can and when we've accomplished that rates of return will come back to more normal levels. >> do you feel that -- >> and you'll see higher returns tie reduction in the asset buying, do you have that may have a positive impact on some of the fixed income account? >> i would say the reduction in the asset purchases in part reflect importantly reflect your stronger economy. we see an economy that's now meaningfully recovering. the labor market improving. and as that process plays itself out, i think seniors can look forward to higher interest rates is our objective. >> let me quote you something. there's a commentary in "the wall street journal" recently by

e.s. browning and kritds if you don't invest in u.s. stocks, the thinking goes where else are you going to invest? developing countries are unstable. europe is struggling. cash and high grade bonds offer the tiniest of yields. hedge funds are struggling. the fed is determined to get people investing again keeping rates down and taking risks. anyone who refuses to buy stocks in other words is fighting the fed. so i guess my question is it seems that the fed's policy affecting the seniors and all investors and should we be concerned about families trying to save for college education because now they're risking or investing in morris i can options? is that what we see to come? >> well, interest rates are low. and they're low not just because the fed arbitraryily decided to set them at a low rate but because the fundamentals of the economy are generating low

interest rates that normally we think of interest rates as reflecting the balance a balance between savings and investment, the strength of those forces in the economy. and in the aftermath of the downturn, the desire to borrow money for private investment is weak. and reflection of that is low rates. if we were to try to keep interest rates above the levels called for by fundamentals we would have a yet weaker economy. it would be harder to get a job and the children -- >> aren't we always limiting -- >> retirees coming home even more than they already are to live with their parents and grandparents because they would find it even more difficult to get jobs. >> but haven't we already limited the investment opportunities? has not the fed policy already limited investment policies for many out there other than leaving for high risk

investments? >> in an environment of low interest rates, there is an incentive to move to higher yielding investments and it is important for the recovery of the economy that people be willing to take some moderate risks. >> let's ask you about the siffis. there seems to be confusion of the process involved and constitutes or designates but there must be some methodology involved. so if a firm is hypothetically speaking designated is there an action to take to be removed from that designation? >> absolutely. it's an important important for them and they have the opportunity to have very serious consideration or -- before the f-soc and to protest the status and have it reconsidered. >> time of the gentleman has expired.

the chair now recognizes the gentleman from illinois mr. foster, for five minutes. >> well, thank you mr. chairman. congratulations again chairwoman yellen. >> thank you. >> i'd like to speak for a moment and ask you a couple of questions of cross talk between wealth intuition and offshore capital flows and not usually captures in the macroeconomic model that is you get guidance from but i believe it's an overlooked effect. it is well-known and appreciated that the middle class as a much lower propensity to consume than high net worth individuals and so that policies that exacerbate the concentrationkonsconcentration at the wealth reduce comp sumpgs andnsumption and that's a relevant fact and less appreciated is what i believe is the increase propensity of high net worth individuals to move their money offshore. you can see this hurting china where the top 1% that owns the

big fraction of that country is frantically moving their money to safer locations but i believe it's also true from what i've been able to dig up and also true that high net worth individuals in north america move their money offshore with, you know, roughly a third of their investments actually go offshore. this, for example, may be an important explanation of why, for example the bush tax cuts made no jobs. it did affect the wealth distribution but instead of reinvesting that money onshore, it was reinvesting offshore. i'm just wondering. first, when you look at macro models for guidance, do you look at the wealth distribution and the affects on consumption and offshore capital flows? >> well, in terms of consumption is very important. in terms of our forecasting. and so we're constantly trying to understand what the forces are that determine consumption

and its growth over time. we have looked to see research has been done and the fed and outside the fed to try to see if we can identify differences systemic differences in marginal propensities to consume across different income groups and i would say the evidence on that well certainly aware of the hypothesis that you put forward. i'd say the evidence is not crystal clear but certainly -- >> in the case of consumption -- >> -- have made the argument that you expressed that shifting distribution of income has reduced consumption and made it harder for the economy to grow. >> i'd like to have you look and in addition to continuing to looking into that which i believe is fairly widely accepted and look at the flows because i think it is a large

effect and both -- i think both parties tend to have a one country model in their minds when they talk about changes in things like tax policy an it's more complicated than that. let's see. secondly you'd mentioned earlier in your testimony a secular shift in the labor market. i was wondering if you think or have been considering what we may be seeing as a secular shift in the housing market and i'd also like to congratulate you on the increasing attention paid to the housing in the report and i think we all learned that the housing market was a very big dog in this fight. but what i hear from realtors more and more is that younger kids or, well, what i think of as kids now less interested in -- you know, they grew up looking at tv screens they know longer want a rideing lawn mower and a big house in the suburbs and the fraction of the investments made in housing may be going down over time.

and when you see the big what looks to me like a secular shift. i guess page 16, plot 27. the big shift in the housing starts. that we may be actually seeing a secular shift in that. and i was wondering if that's a sort of thing you track because it has big implications if that's the way things are evolving in the country. >> we are looking at that. household formation has been very low in part because of the weak economy but to the extent that this shift that you have described exists, we're certainly seeing robust activity in multifamily sector that if people want to live more in apartments though not single family housing so much but if they don't want to own homes, and there's a shift in that direction, it may give growth, give rise to a greater growth in rental properties than in single family housing and we are

certainly seeing that pattern in the recovery. >> i just like to encourage you. despite your history and the banking business to pay a lot of attention to the real estate markets and their health. >> time of the gentleman expired. the chair advises all members there are votes currently takes place on the floor. the chair recognizes two more members and recess the hearing. the chair recognizes the gentleman of north carolina plt pettinger for five minutes. >> thank you, mr. chairman. chair yellen, i would make reference to your testimony that you stated that the growth in consumer spending was restrained by changes in fiscal policy. given that a broad tax increase was part of that change in fiscal policy, it seems that reversing some of those tax increases would spur dwroet and consumer spending. would you agree with that? >> well i mean, the payroll tax

-- >> yes. >> -- cut was ended at the beginning of the year. and taxes went up on a hiring households. >> that's right. >> and so, that cut into the growth of consumer spending. that's what we're trying to say there. >> exactly right. so then would you believe that if we were reverse some of those tax increases that that would spur the growth in consumer spending? >> that if you were to reverse them that they would spur growth? >> yes. reverse the tax increases. >> well certainly. >> thank you. madame chair the fed proposed a rule for comment in december to implement the dodd-frank act limitations and the fed's 13b emergency lending authority. chairman hensarling wrote to express his concern and i just want to ask today for your commitment to give a letter --

to give this letter your personal attention and to provide a subs instantive response to that letter before the rule making comment period closes out. and to also provide an opportunity for the other members of the board to similarly provide their individual views of this letter. would you do that on our behalf? >> we have put out a -- i want to make sure i understand what you're saying. we have put out a proposed rule to implement what's in dodd-frank on 13-3. >> 13-3. >> we very much welcome comments on that and we'll take them into account when we come out with a revised proposal hopefully a final proposal. >> chairman hensarling wrote a letter to chairman bernanke and in the letter he wanted to give a commitment and that for a substantive response to that letter. would you look at the letter of chairman -- >> we certainly will but as i understand, it's submitted as

part of the set of comments on -- during the comment period on 13-3 and we will collect all of the comments and then consider -- >> would the gentleman yield to the chairman? >> yes. >> since the chairman's name is being used here. madame chair i have sent a letter to your predecessor. we have concerns about the 13-3 rule making. we have waited for three years and what we see now is a rule that largely parrots the language of the statute illuminating essentially very little and so the letter goes into much greater detail about our concerns. given i wrote it to your predecessor, i would be happy to write it to you. if not, if you would give it to your personal attention. i thank the gentleman from north carolina for yielding to the chair. >> i will do so. >> madame chair just a minute or so we have left, regarding the volcker rule, five agencies involved and talked some about this already. but in this rule, there are

different positions taken by these agencies that provide for a different perspective and right now the rule that they have adopted that they have consistent point of view. what formal or public coordination can you commit to in the future where they would not agree? >> well, we tend to coordinate and plan to do so very closely with the other financial regulatory agencies. we're accustomed to working very closely with them. and i think more broadly, we will try to cooperate and ensure that there is a similar approach to implementing this rule with the s.e.c. and cftc as well. >> it's a burdensome challenge i'm sure. but we did see a recent report of the cbo we lost 2.5 million jobs through obamacare. has the fed done estimates of job loss as a result of

dodd-frank in the economy and could you give us a response if you anticipate that looking into that? >> i think it's very difficult to estimate in total what the implementation of dodd-frank will mean. on balance i feel that dodd-frank was passed to make the financial system safer and sounder and to avoid -- >> do you think it's worth that review to see what job losses occurred? >> well -- >> the time of the gentleman has expired. the chair now recognizes the gentleman from michigan mr. kildee for five minutes. >> thank you, mr. chairman. thank you, chair yellen, for being here and i know others have said this but having a daughter and a granddaughter who will now grow up in a world where the president of general motors is a woman and the president of the fed is a woman, it's something to celebrate. >> thank you very much. appreciate that. >> i wonder if you'd comment

briefly. later today presumably the house will vote to extend for another year the nation's debt limit to ensure that we meet the obligation that is we have already made. i wonder if you might comment on what affect if any you think positive action by congress on the debt limit might be and i know your staff loves it when you speculate. if you might speculate on what the affect of the failure of congress to take that action before the february 27 deadline or date set by the treasury secretary might have on domestic and global markets. if you could just make comment on that subject. >> i think fiscal policymakers should never put our nation in a situation where there's a risk of defaulting on the federal debt. it would be an extremely destructive thing to do from the point of view of our economy of our financial markets of global financial markets and even in the run-up to the last debt

ceiling crisis, we could see the beginnings of market participants beginning to worry and protect themselves and to take steps even in advance of that limit coming in to place that could cause us financial problems in the financial system. so, i believe frankly it would be catastrophic to you know, to not raise the debt limit. >> thank you for that. that's good guidance and i hope that members of congress on both sides of the aisle will listen closely to your thoughts on that. i wonder if i might take a different tact for a moment and ask you, in the report that you supplied you do make reference to labor markets. particularly in the context of the duel mandate of the federal reserve, i wonder if you would comment on two points. one, you make reference in the

document to the length of time that those who have been out of work basically the long-term unemployed, long-term unemployed have had on the economy and then you make reference also to the fact that while productivity over the long period has increased recent gains in wages and real wages have not kept up with productivity despite the fact we have not seen productivity gains recently and over the long term we have certainly seen gains far in excess of what we have seen in real wages. why are those two factors important in terms of mandate of the federal reserve? >> well, the fact that we have very long spells of unemployment almost 36% of those unemployed who are in very long spells of 26 weeks or more really suggests that the job market is not strong enough to be able to provide people with

jobs who want to work which is roughly our -- another way of waiting what our employment goal is. and so it's a mark that there's a great deal of slack in the labor markets still that we need to work to eliminate. the fact that wages have not kept up with productivity for the last number of years, we have seen a shift in the distribution of income where away from -- what's called labor share and more towards capital share. and i think it's not fully understood what accounts for that trend but it is a disturbing trend because it suggests that works aren't, even though they're more productive their wages in real terms aren't keeping up with that and so it is a very worrisome trend from the point of view of living standards. >> i think both are important and i'm glad you included them. certainly congress and other

policymakers have to consider is e i affect of long-term unemployment especially on those not employed and wages not keeping up with productivity and a minimum wage to put a family below the poverty wage is something that's not sustainable. and i wonder just before i close, if i could follow up with you some point in time. i pursued this line of questioning with your predecessor. the effect of fiscal insolvency in the american municipalities is a major issue and could have a real threat on the overall economy and certainly like to engage the fed in the question. i think it's something to take on. >> time of the gentleman has expired. the chair will declare a recess pending the conclusion of floor votes. the committee stands in recess.ts.

>> let me echo the congratulation to you, chair and thank you for coming today and spending your day with us. chair yellen, we've seen the fed take a leadership roll and exercise its authority to demonstrate significantly financial firms. we have not seen any transparency on how the process works. dug your confirmation hearing you committed to the senators that you would provide more transparency in this area. what have you done to make that process more transparent and will you commit to demanding that the fcop provide that with a clear indication of what they can do to ensure that they will not be so designated?

>> let me first say that my first meeting is on thursday so i haven't been very involved to that point. but the fsoc has come out with this set of criteria, metrics that they tear using when they consider designation. when they have designated firms, i think they have provided their web side is full of information on those firms and the analysis that was done in connection with designation. certainly if fsoc decides on additional criteria or uses other criteria develops other metrics, i think it's completely appropriate that they should be made public so that the public understands what the criteria

that are being used. and in that sense i certainly will support having fsoc provide the public with adequate analysis both of the criteria that they're using for designation and the analysis that they have done that supports the decision to designate particular firms. and i should say that those firms have many opportunities to have hearings before fsoc. it's obviously very important to them designation, and they are given extensive opportunities to appear before fsoc groups and question analysis. >> thank you. i want to talk a little bit about stress testing. you previously expressed your support for stress testing banks using extreme worst case

scenarios. wouldn't it also be appropriate to stress test the feds exit strategy for qe to assess the exit strategies affect on the fed's ability to maintain its mandate, and how increases in the federal funds rate might impact a relationship between the government's relation with trade allegations and. i'm looking at a commitment of what's going on with the fed and a withdrawal from the qe. >> we of course do extensive analysis of our balance sheet under both scenarios, about who exit would look like and alternative interest rates scenarios. and an update of a paper by a fed staffer by the name of seth carpenter and his colleagues came out in september and

provides a great deal of that analysis. it shows, for example what would happen if there were an increase in interest rates of a couple hundred basis points higher than what markets are assuming to be most likely. and that of course is important analysis and we've purposely put it in the public domain. but i must say that our ability you refer to our ability to achooe our dual mandate. i see no reason why our ability to achieve our dual mandate or to conduct -- >> one of my concerns is i consider it the effect that qe has had on the bond market. have you considered you know, the value of the securities held by the fed, what would happen in the event of an interest rate spike, you know for example what if the securities held by

the fed dropped by 2%, the value of them dropped because of interest rates going up? >> that's exactly what we have looked at eni would urge you to have a look at the carpenter paper where we analyze what the impact would be on our balance sheet and our remittances. >> time of the gentleman has expired. chair now recognizes the gentleman from ohio, five minutes. >> thank you, mr. chairman. chairwoman yellen, thank you for being here. congratulations on sort of your wreck breaking appointment to be the chair of the fed. i want to thank you for your time today. i want to thank you for your candor. i think your answers have been very honest and you haven't tried to pull any political punches. you've just told it like it was and i appreciate that. >> thank you. >> i want to ask you a couple of questions, one about the business of insurance. as you know since the mccarren

ferguson act in the 1940s, the states have really regulated the business of insurance and the federal government has had a very limited role in insurance pap and now that we have dot frank some big insurance companies are being demonstrated as important financial institutions, they come under the fed's purview. because of the limited amount of insurance expertise at the fed, it gives me some cause for concern. and i guess i'm curious i want to make sure you don't impose bank capital standards on insurance companies because frankly they have a different roll, their investments are for a purpose, they focus on the matureities based on their needs. so i'm really worried about the capital standards you might

impose impose. and i'm curious about your timetable of making the ruling on capital standards might be and second if you'll work with industry experts and the state based regulator to get their input because they know the industry better than folk at the fed. i have lots of respect with folk at the fed but because of the limited exposure on insurance i'm curious if you'll work with those state regulators and some state insurance experts and try to defer to some of their opinions. >> we have consulted with others with greater insurance expertise and of course we're building or own expertise as is appropriate. but we absolutely recognize that it's important to taylor rules to the specific and different business model of insurance companies. they're not the same as banking organizations. we recognize a number of special

issues including the long term nature of most insurance company liabilities, the fact that they have asset liability, matching practices, risks associated with separate accounts and so forth. so -- >> can you update me on what you think you time line will be there or do you know yet? >> i'm not certain exactly. >> maybe you can get back with me when you know. >> i can get back with you on what the time line is. >> that would be great. >> in spite of the fact that we understand there's special want to taylor an appropriate regime there are some limits to what we can do. the collins amendment requires us to establish consolidated minimum risk based capital and leverage requirements for these holding companies that are no lower than those that apply to

insured depository institutions. >> i understand that. if we can move on because vi a limited amount of time. >> sure. >> so you referred earlier to employment and you're concerned that there are changes in employment going on some people are moving more to part time there have been a lot of people that have given up. unemployment stayed steady at 6.6%. but i'm worried you're using the wrong look at unemployment. shouldn't you look at u 6 for your view of what full employment is because it takes into account underemployed and people who have given up? >> we're absolutely looking at u 6. we see for example the extent of part-time employment for economic reasons is unusually elevated. you see that -- >> it's going to increase. so i hope you'll take a look at what's appropriate. >> absolutely. >> and consider that. and i'm running out of time but the last thing i want to ask you about, you know and you may not be able to say this because you

may not want to think, anybody to think you're trying to grab power. but if we were going to redo our regulatory framework had another chance to look at it wouldn't it make sense to have one systemic regulator and then functional regular later regulate what you do and one that deconflicts things? we had six regulators in here last week and it's very confusing where there could be contradictory things that different enforcers of the same rule say. you know don't you think that would be a better way to regulate. >> so if there were pros and cons we certainly have a complex system and i would agree that sometimes coordination is somewhat challenges. >> chair now recognizes the gentleman from florida mr.

murphy for five minutes. >> thank you for sticking it out for us. the many of us assign responsibility for low interest rates and lax capital and leverage standards to the federal reserve and then chairman green span. i do not believe the fed caused the crisis its policies certainly helped fuel the bubble. in 2009 you said that the interest rates may have slowed the growth. would measures to slow the housing bubble have been appropriate? >> i mean certainly the collapse of housing and the bubble were devastating and at the heart of the financial crisis. so of course yes, with the benefit of hindsight, policies to have addressed the factors that led to that bubble would

certainly have been desirable. i think a major failure there was in regulation and in sup supervision supervision. and not just in monetary policy. so i would say going forward while i certainly recognize and my colleagues do that an environment of low interest rates can we can't take monetary policy off the table as a tool to use to address it it's a blunt tool. and macro pru dental policies, many countries do things like impose limits on loan to value ratios, not because of safety and soundness of individual institutions but because they see a housing bubble form and they want to protect the economy from it. we can consider tools like that.

and certainly supervision and regulation should play a roll in their more targeted policies. >> would you be willing and open to pushing to policy to prevent another catastrophe? are you seeing any bubbles out there now? anything you're concerned about? >> nothing is more important than avoiding another financial crisis like the one we've just lived through. so it's a priority of the federal reserve to do what we can to identify the financial threats. one approach we're putting in place is simply to build a financial system that is much more resilient to shocks. the amount of capital in the largest banking organizations has doubled. we do have a safer and sounder

system. and that's important. but detecting threats to financial stability, we are looking for those threats. i'd say my general assessment at this point is that i can't see threats to financial stability that have built to the point of flashing orange or red. >> okay. >> we don't see a broad base rapid or credit growth, asset prices generally do not appear to be out of line with traditional metrics. but this is something we're looking at carefully. >> i've got about a minute left. wall street reform therefore enhance supervision. is asset size alone the best way to measure a bank's systemic importance? >> no.

we have a whole variety of different metrics and we strive to differentiate within that category of 50 and above and the largest banking organizations. for example, we have singled out the eight largest bank holding companies for higher capital requirements supplementary leverage ratios those things do not apply to the $50 billion banks organization. we are trying to ta ix lor our regulations within that category and certainly below it. >> can you touch briefly on your efforts of the examination process that you're doing with the smaller community banks to make sure that you get the right information but that you're not burdening the community banks, some of your efforts? >> first of all, we formed a new

organization called -- it's a council of community banks that we meet with four times a year to understand their concerns and we have a special new committee of the board to focus on issues with community bank supervision. so we're listening and we're trying to be very sensitive and attentive to those concerns. >> time of the gentleman has expired. chair now recognizes gentleman from kentucky mr. barr for five minutes. >> thank you madam chair. congratulations on your appointment. thank you for your generosity with time particularly for those of us who are at the end of the line of questioners. madam chair you have stressed in your written and in your verbal testimony here today the feds statutory mandate of maximum employment. should the injection of fiscal policy also be to maximize

employment? >> fiscal policy has many different objectives. it affects the economy in a whole variety of different ways. and so i wouldn't have stated that that's the main goal of fiscal policy. but it is a goal that fiscal policy should take into account. >> last week, as you know the congressional budget office issued this report and that report projected that the president's health care law will reduce the size of the u.s. labor force by 2.5 million full-time equivalent workers over the next decade. that's triple what the cbo originally projected after congress passed obama care three or four years ago. in commenting on that report, cbo director elmen door f testified that it creates a

disincentive for people to work and it does this where the labor force participation rate at the loiest than it's been in 35 years. the white house responded to the bad news that claiming that americans leaving the workforce was a good thing saying that these people would no longer be trapped in a job unquote. my question to you is is a shrinking workforce a positive or a negative development for the economy? >> so it has different effects. i don't think there's a simple answer to that question in the cpo analysis that they focused on this not being a matter of creating unemployment, but of people withdrawing from the labor force. and there are some good and bad aspects to that. >> well, let me ask you the question this way.

it's the statutory mandate of the fed to maximize employment. so why would it be a complex question. why shouldn't be the goal be equally dedicated to maximizing employment and shouldn't this concern all of us? >> well, i think the cpo recognized when they produced this analysis that the effects of this act are extremely complex. and while it has effects on labor supply, the act also may have effect for example on the growth of health care costs and number of different impacts on the growth of economy over time to go in different directions. >> madame chair with a declining labor force how would that impact deficits? >> i'm not sure. >> let me move on to a different subject. just as an economist and also as

fed chair, as you assess the physical health of the nation, what is a more meaningful statistic to you. why would you choose one or the other? >> well i would look at the debt to gpa issue both currently in its projected path of time under assumptions that current policies continue. i think you can't assess the debt of an economy and how if you were looking at the debt of a house hold you would need to assess it to know what the house hold's income is, what's bearable or serviceable level of debt given the income of the house hold or the economy. what's important here is that according to any projection particularly the cbos over a longer horizon the u.s. debt is unsustainable. >> i appreciate your comment and your testimony there.

i introduced legislation that would preplace the existing debt ceiling law with a new debt ceiling that ties debt to -- that ties to new ceiling to a declining debt of cpo ratio. one final question. i often hear the argument that quantitative easing lowers the cost of the government and market for treasures. is there a reason to be concerned that qe crosses the line from monetary policy because it affect -- >> not many my opinion. i believe that the fed is focused on its plan date that was given to it by congress, namely maxable sustainable employment and priceability and i think you should hold this ampable to meeting those goals. >> the time of the gentleman has expired. the chair now recognizes the gentle lady from ohio for five

minutes. >> thank you mr. chairman and ranking member. first let me say to you chair chairwoman madam chair, that i certainly join my colleagues in congratulateing you and to also say it is quite an honor on this historic day for me to have the opportunity to pose questions to you. my first question is somewhat similar to congressman meeks and clay as they talked about diversity and minority participation. certainly as you and your staff will know in the 2013 gao report it talked about the decline of diversity representation but on a very good note, when you look at what it did to create omway, that is an avenue that will allow women in minority to be more included not only in supplier development but also in

policy making. thanks to congresswoman waters, she has allowed me to opportunity to meet with the directors throughout your area. so my question as it relates to that is, how will you help to promote and to elevate omwee at all of the divisions. >> the divisions at the federal reserve? >> yes. >> we have a very active program intended to promote diversity and bring in minority owned businesses and women-owned businesses as suppliers. we've incorporated supplier diversity language into all of our contracts. we are now requiring the contractors confirm their commitment to equal opportunity

in employment and contracting fair inclusion of minorities of women in the workforce. we're ingajed both at the board and federal reserve in a number of different programs to attract an increase in employment of minority in women and we're tracking our success in the board at the officer level we've increased our staff. i believe the last year for which we have pulled data in 2012 there are seven new officer positions and six of them were minorities. and female representation in the manager and officer ranks have also increased. we're taking many of the steps including affiliations with

recruiting organizations that are heavily minority based in order to improve our networks from which we can hire. and we're trying to understand what best practices are in this area and to move, to move forward vigorously. >> thank you. let me try to quickly shift gears. 23 your confirmation hearing you indicated that your agreement that insurance has unique features that make them different from banks and you agreed that a taylored regulatory approach for insureds would be appropriate. one of the things that my constituents are asking is how could the federal reserve develop a timetable for ruling makes of them and how would you insure that the federal reserve works with the industry and other insurance experts to develop a insurance based cap

pal framework. >> we have been working very hard to understand the special chark characteristics of insurance. we're personally taking our time to develop the standards so they can be tailored to the need of the industry. we're consulting with experts in the insurance industry and building our own expertise and we're committed to devising an appropriate regime that's different than that. we apply to banks and that recognizes their special features. i'll say again, though, that the collins amendment is constraining in terms of what we can do can capital requirements. >> let me just end by again thanking you for being so generous with your time today and having such stellar answers. i am a big fan of when women succeed america succeeds. and you are certainly setting the light for women across this

nation. thank you. >> time of the general lady has not quite expired but it has now. chair now recognizes the gentleman from arkansas, mr. cotton. >> ms. yellen, thank you very much for staying all day with us today and congratulations on your recent confirmation. >> thank you. >> at a hearing with your predecessor, mr. bernanke my mother sent me an e-mail during the meeting. she's a retired schoolteacher and my some said tell mr. bernanke that we would like more interest on our savings. this is that i hear from my constituents in my rural arkansas district. they are prudently investing in things like cds and money market accounts and falling behind because of the low interest rates of the last five or six

years and feel that it would be unwise to invest in riskier assets that are more suitable for younger people. i had some questions about that but i think maybe the best way to raise them is through this video that retired navy commander has made expressing some of the aim concerns. >> my name is joe. i served in the navy from 1960 to 1983 with three combat tours to vietnam '68, '69, '72 and the israeli war in '73. i developed defense electronic systems for 25 years. now semi retired i use my experience to help other companies grow and to supplement my retirement income. we have three children plus a foster daughter from vietnam and nine grandchildren. in retirement our financial obligations include ourselves as well as our son, 52 with down

dream syndrome living with us. and our daughter and high school age granddaughter in another state as our daughter lost her job and apartment in 2007. i am still working at age 76 because our family savings ravaged in the stock market crash. now having recovered most of our losses there's a talk of another bare market. at age 76 it is very stressful to endure the fed's easy money policies. our retirement savings will not be restored until i am age 83 assuming i can continue contributing to our retirement accounts. perhaps then i can retire. chair yellen many seniors who are living on fixed incomes are

suffering. when chairman bernanke was asked about these concerns he always changed the subject to talk about younger workers or home prices. what will you do to address our concerns and will you commit today to attend a town hall meeting of retired seniors later this year to hear from folks who share these concerns? >> i can't ask it any better. >> well, they're very well expressed. of course they are very valid concerns and i would like to see retirees earn more on their safe investments. i believe that if we get the economy back on track after all interest comes from earning returns on investments. even in a bank the bank tends to pay more for deposits and pay

higher interest when its investments are fairing better. and in a stronger economy that will be more possible. so i would very much like to see interest rates go up. he did note that he has a daughter who lost her job and i remember a retiree has children or grandchildren who have lost a job who is trying to make it possible for the daughter to regain employment and the grandchildren when they graduate from school to enter a healthy jobs market. >> and i reclaim my time? in the meantime, the seniors who depend on the fixed income instruments, is this a necessary byproduct of the monetary policy? >> congress has assigned us to

be objective for price stability. we are not at maximum employment. inflation is running below two percent long-run objective. i would say those conditions the taped on accommodative policy. >> thank you. they would love to have you hot springs village in arkansas. >> thank you, mr. chair. i have heard several object fits attached to you today. our telegenic, plain speaking, unexciting, to which i would like to add, possessing of a next ordinary amount of stamina. the gratitude is all ours. as has been noted, your current policy is to purchase treasuries and mortgage backed securities.

that has been going on for a while. in your report i note that you even call out the fact that mortgage rates are probably low work than they would have otherwise been as a result of the policy. so are you considering -- considering targeting other sectors of the economy? >> i would not say we are targeting housing as a sector of the economy. it is an important sector. in the past it has contributed a good deal to recoveries, and it would be nice to see housing get back on its feet. generally i would say policies are designed to lower long-term interest rates on a broad range of private assets. mortgages, yes.

>> why would you call it out in the report if you were not targeting it? secondly, are you saying it would not have been possible to lower overall interest rates by just purchasing treasuries? >> i would say by purchasing treasuries we would bring down interest rates throughout the economy, not only on treasuries, on mortgages as well. probably we have a slightly bigger impact on mortgage rates by buying mortgage backed securities. >> if it walks like a duck and quacks like a duck, it seems to me there is some targeting going on. here is where i am going. i have long wondered why it is the fed could not target. another sector that cries out

for it is investment and infrastructure. in fact in the 1970's, the said purchase the bonds that help build metro. i know there is a precedent for that having occurred. the fact of the matter is, the evidence about the infrastructure deficit, the incidence -- evidence for short and long-term jobs would be created. it seems to me it is just a strong a case as it is for targeting mortgage backed securities and the results and the effect on the housing industry. what would you need in order for the fed to positively consider doing this again as occurred in the 1970's? >> our desire is to stimulate interest sensitive sectors of the economy.

the federal reserve is to buy government and agency backed debt. and nothing else. >> i am not aware of authority that we would have to buy. i am not aware of what kind of government that you are aware of. we are not allowed to buy a broader range of assets come to the best of my knowledge. >> but if you are dual mandate which i support wholeheartedly and i will not have the question to ask what the world would look like if they kept the mandate but the mandate is to raise unemployment -- to lower

unemployment and why would you not put one of these large number of people to work at. what would we need to do in order to purchase fonts? what it required the national infrastructure bank? can you work with banks in some kind of direct way? where you back their purchase of infrastructure bonds. >> i am not aware of any authorities under existing law to pursue that avenue. if congress is interested in doing that, that is something you could certainly think about but i am not aware of any authority. >> the time of the gentleman has expired. if there are any members not presently in the hearing room that are listening notwithstanding the chairs generous offer to stay, it has

been quite some time after votes , the gentleman from the senate -- minnesota got in under the wire. the chair now recognizes mr. ellison for five minutes. >> chair yellen, thank you so much and congratulations. i only have one question for you, and the question is this you have made the point that there are limitations to what monetary policy can do to help put people back to work and improve the economy, but if you could prescribe what we would do to lower the unemployment rate to put the economy on a healthy trajectory, what would it be? >> you are asking me what more broadly could be done? i think congress can consider any number of measures --

>> like what? >> training measures, job creation measures a number to deal with the skills gap and other factor's that are related to stagnant rural wages. >> what about public invested? >> the possibility congress could answer as well. >> would that help stimulate the economy in a way that maybe monetary policy cannot reach? >> certainly we have a set of tools that are limited. there is much more that congress can do, depending on what the priorities are of congress. >> thank you. >> the gentleman yield back his time. i want to thank chair yellen for

her cooperation, generous operation of the committee today. >> we also thank you for your stamina. you may have to use it thursday as well come as i understand you will appear before the other body. again, we thank you for your testimony. we will excuse you at this time. the chair will do clear a five-minute recess pending the seating of the next panel. the committee stand in recess. >> on c-span this morning, u.s. house debate before the boat -- vote to raise the debt ceiling. live at 7:00 eastern, washington journal. wednesday we are live from the british house of commons for prime minister question time.

this morning, members of the privacy and civil liberties oversight board testified before the senate judiciary to many on government surveillance programs and data collection. live coverage at 10:00 eastern on c-span. the impact of extreme weather on communities will be the focus of the senate homeland security and governmental affairs to many this morning. live coverage at 10:00 eastern on c-span three. >> saturday, book tv is live in georgia for the savanna book coverage. coverage starts at 9:00 eastern with a real chairman. continues throughout the day on

canine warriors. a scott berg on will throw wilson -- woodrow wilson. this event -- the savanna book festival, part of a three-day weekend. live saturday on book tv. >> the civil rights movement and the obama era. calls, comments and tweets live from noon until 3:00 eastern on book tv on c-span two. online on the book club. read a women's history for beginners and join the conversation. go to book to be. -- booktv.org to enter the chat room. >> the house voted tuesday to extend the federal government borrowing authority. the measure was passed by 28 republicans and 100 99

democrats. up next, a 40 minute debate on the house floor. >> the last time i stood on the floor to talk about a clean debt limit increase i did so to prove that we could do better. it was an effort to lymphoid my democrat colleagues in the house and senate to heed the warnings of the president's own fiscal commission known as the simpson goals commission, which clearly noted how our economy and hard-working taxpayers would suffer under the mountain of debt washington was racking up. my position is unchanged. i in maine as committed as ever to grappling with the dip -- that to inform, strengthen and protect the entitlement programs, and most importantly, getting the economy back on track. so hard-working taxpayers start saying their pay go up and those in need of a job can one.

in fact, that work is under way at the ways and means committee where we've posted for public comment bipartisan proposals to reform medicare and social security so that they're viable for seniors and taxpayers, not only today but well into the future. regrettably, over the last three years, democrats have hardened their position. the president, senate democrats and house democrats, will not even entertain a discussion, let alone a negotiation over what reforms we can make along with a debt limit increase. they've become unyielding. democrats are totally adamant, extend the debt limit or default. that's the position of today's democrat party. don't negotiate, don't reach out across the aisle, ignore the past which clearly shows the debt limit typically passes with other reforms. mr. speaker, i remember serving when bill clinton was president. those were different times. despite our different opinions, we were able to find common solutions for the american people.

we balanced the budget, reformed our nation's welfare laws and helped break the cycle of dependency by placing an emphasis on work. today, democrats openly cheer that their law will lead to less work. i'm disappointed the democrats have walked away from the table. i'm disappointed we are not engaged in a more serious debate today. but for as disappointed as i am, i cannot in good conscience let democrat's refusal to engage lead to a default. for that reason and that reason alone, i will vote yes today. but today's legislation is hardly a solution to our looming debt crisis. that's why the ways and means committee will continue to carefully review an advanced policy to not only reform our entitlement programs providing greater protection for seniors and greater savings for hardworking taxpayers, but also policies to create a stronger economy, more jobs and higher wages for workers. it's only through a combination of such policies that we can

truly solve the problem. i reserve the balance of my time. the speaker pro tempore: the gentleman from new york. mr. crowley: i yield myself such time as i may consume. the speaker pro tempore: the gentleman is recognized. mr. crowley: i thank the gentleman for his responsible commitment to vote for this bill today. i wish i could say that a majority of his party would be responsible for -- and vote for this bill today but i cannot. unfortunately, the -- it seems the republican party is shedding part of its tea party ideology and holding the nation hostage to meet the wants of a select few. i would like to explain what the house is and is not voting on today. we are voting to ensure that our country can pay the bills we have already incurred. not new bills. old bills.

so that it's checks can continue to be mailed. so that doctors serving medicare patients will be reimbursed for their services. so that veterans' pensions and compensation will be paid out. and so income tax refund checks will continue to be processed and paid out. and what we are not voting for what we are not voting for, we are not voting for a bill to spend money. my republican colleagues will argue that this bill allows the federal government to continue to borrow and therefore spend more money. they say tax revenues come in and even more goes out in spending for government services and programs. services and programs that we all agree benefit our mutual constituents. so what is the alternative the republicans would offer instead? my republican colleagues would offer default because not supporting this bill would mean

you support default. and defaulting on our nation's debt. default would mean taxpayer dollars would still come into the government we could still cleekt -- the i.r.s. would still collect taxes but no money would go out. there would be no services or programs to benefit our constituents. they'd be shut down. if you all remember how angry the country was during the republican shutdown of our government when military death benefits were not paid? that would only be magnified under a default led by the republican side of the aisle. not only would there be no death benefits, there would be no veterans' benefits at all, no money for hospitals, doctors and nurses and the default wouldn't just affect our military and veterans. there would be no funds for food inspectors no pell grants no air traffic controllers, or any other government service because

of default. let's be clear. if you like the republican-engineered shutdown of our government, you'll love the default the republicans who would vote no today would perpetuate on the american public. this is a debt that the republican caucus helped create. you own a portion of this debt. the american people are watching this vote. they're confounded once again that the majority of the majority will vote to default. the overwhelming majority of the minority will vote not to default. i ask the american people, which party is the responsible party? the answer is clear. the democratic party will be responsible today. we will vote overwhelmingly for this bill not to default on our nation's debt, not to raise interest rates on our

constituents, not to raise the cost of money for the government to borrow either. with that, i will retain the balance of my time. the speaker pro tempore: the gentleman's time is reserved. the gentleman from michigan. mr. camp: i reserve. the speaker pro tempore: the gentleman from new york. mr. draw lee: i would yield as much time as the -- mr. crowley: i yield such time as the gentleman, mr. neam may -- mr. neal my consume. mr. neal: i listened earlier about the gentleman speaking about debt from the years out. that's nothing to do with the argument being applied on this floor. this is about the basic arithmetic of the credit card that arrives at a family's doorstep for a variety of costs. this is about paying for the war in iraq which i was opposed to but i believe we still have an obligation to pay for, including

the one million new veterans that were created that are currently strirninge v.a. system. in addition, this is a vote about paying for the tax cuts in 201 and 203 that continued through 2010 based on the mistaken notion, the theology that was applied suggesting that in fact tax cuts pay for themselves. this is about a turn around of a projected surplus of $5 trillion that instead became ongoing deficits and debt noted for the ill-conceived policies that many of our friends on the other side embraced. under the hubris of suggesting that you can have it all. when else in american history, when else have we embraced the idea enunciated not long ago by the former majority leader of the republican party who suggested that it was patriotic

in a time of war to cut taxes. lincoln and roosevelt certainly didn't embrace that position. you can't have it all. what was desirable by the republican party during those years was essentially this -- they were going to score political points on the issue of the debt ceiling. they were going to hold the debt ceiling hostage for isolated issues that placated a minority of the majority. now i know most of the republicans who have come to this floor today and i want to tell you my knowledge of them is they're very responsible when it comes to budge tiering but they're -- to budgeteering, but they're caught by the minority of their majority who direct where these decisions go. the result of our last standoff over the debt ceiling, our

credit was downgraded. look at the strength of the american dollar today. why is it in that position? i've never been anywhere where the world doesn't say, we honor the american dollar. the point that i offered a moment ago is the following. they were prepared to default on that debt for the purpose of isolated strident political views outside of the mainstream. job creation? it was held hostage. fewer jobs were created than at any time since the great depression. that is not an opinion that's a fact. now this behavior was unacceptable and the american people said so. you pay for what you spend. raising the debt ceiling ensures that we will not be a deadbeat nation in the eyes of the world nor in the eyes of our own citizenry. not long ago, we passed an omnibus spending bill, incidentally, because it will break down in the regular order here, the idea that we used to spend according to the 12 to 13

appropriation bills that guided us every year, known as regular order, where members had a chance to amend spending bills in committee and then on the floor, i must tell you that's a quaint reservoir of thought these days. now we wrap it all up and the same people that could say, well i'm going to pass the omnibus spending bill to take care of favored spending and then say i'm not going to vote to raise the debt ceiling, the argument is anachronistic. i support this measure, having voted against the bush tax cuts having voted against the war in iraq having voted against most of the policies that got us into this. but this is about the full faith and credit of the united states and it should be embraced by the entirele boddy. i yield back my time. the speaker pro tempore: the gentleman from michigan. mr. camp: i reserve. the speaker pro tempore: the gentleman from new york. mr. crowley: i'm pleased to yield one minute to the gentlelady, the leader of the democratic caucus in the house, nancy pelosi.

the speaker pro tempore: the gentlelady is recognized. ms. pelosi: i thank the gentleman for yielding, i thank him for his leadership on this important issue, to him, to mr. levin and the member os they have ways and means committee, thank you for making clear what the stakes are in this vote on the floor today. mr. speaker, the 14th amendment of our constitution declares and i quote, the validity of the public debt of the united states authorized by law shall not be questioned. that -- unquote. that has always tpwheb -- been the standard upheld and advocated by house democrats. in each of my conversations with speaker boehner, i have conveyed the unwavering support of the house democratic caucus for a clean bill to lift the debt ceiling. that means no goodies for one side or the other. there's nothing you could add to it that would say, ok, since

it's something i like, i dent mind if it isn't clean -- i don't mind if it isn't clean. i said even if you added something i cared about a grea deal, that our caucus cared about a great deal that does not make it right. because the full faith and credit should be unquestioned and it is not negotiable. i thank the speaker for giving us this opportunity. this is really important. to bring legislation to the floor that is consistent with the intent of the constitution and with the best interests of the american people. well, i'll tell you this, we have heard from all kinds of leaders of finance, from the boardroom, to the kitchen table. the boardroom tells us, the conference table then writes to us and says, we urge you to again take the necessary steps to preserve our nation's financial standing in the world and help ensure that the american recovery continues in

its current path toward restored prosperity by the uncertainty as to whether or not we will incur an historic default in raising the debt ceiling. i wish to submit this full letter to the record with the cigna tores who -- with the signators who represent the captains of finance and industry in our country. but more important than that, as important as that is, our global standing in the world. more important to each and every person in our country is what mr. neal spelled out. what this means to you. . if you're a consumer with a credit card, if we did not take this action today, interest rates could skyrocket, making it harder for families to get loans, for small businesses to invest, spend and hire. again, on your kitchen table, as you pay the bills each month, you would have higher

interest rates for your mortgage, your car payments, your student loans and your credit card bills. higher interest rates once again on small business loans that are useed to -- that are used to pay employees or expand business. significant blows would come to 401-k's as a result of the stock market reaction to our not lifting the debt ceiling. credit markets could freeze the value of the dollar -- could freeze, the value of the dollar would be negatively impacted. so there's a great deal at stake in this vote today. and, again at the time when we have to lift the debt ceiling, it is appropriate to have a discussion of spending priorities, of budgets that should be a statement of our values. but there should be no question that those debates would be something that would not just be a debate, but be a barrier to lifting the debt ceiling. that's why i'm grateful to the

speaker and the republican leadership for giving this house this opportunity to act in a way that is consistent with the constitution. when this measure passes today, congress will state unequivalentically that the full faith and credit of the united states of america is not in doubt. i thank my democratic colleagues for never waivering from this position and standing firm on behalf of all americans and i thank, once again the speaker for giving us this opportunity to associate ourselves and support the constitution and the american people. with that, mr. speaker, i yield back the balance of my time. the speaker pro tempore: the gentlelady yields back the balance of her time. without objection, the material referenced by the gentlelady will be included -- will be included in the record. the gentleman from michigan. the gentleman is recognized. >> the budget control act was signed into law on august 2. on august 5, standard & poors

downgraded the u.s. credit rating. mr. camp: and did so, and i quote, did so, and i quote the doubt downgrade reflects you are opinion -- the downgrade reflects our opinion that the fiscal consolidation plan that congress and the administration recently agreed to falls short of what in our view would be necessary to stabilize the government's median term debt dynamics. there have been some speakers who have come to this floor that said we were downgraded because of brinksmanship, we were downgraded because there were those of us who wanted to see some approach to fiscal responsibility in our debt limit negotiations. clearly that's revisionist history and the facts bear out. standard & poors's own quote was because we didn't go far enough. not because we tried to address our medium term and long-term debt. so this reinforces my point. we can't be satisfied with just increasing the debt limit.

i realize that is where we are today and as i've said, i will vote for this legislation. but as another speaker has said, they have viewed this as non-negotiable. and what we really need to do is reach across the aisle and work together to find long-term solutions to both our medium term and long-term debt obligations so that these programs, like medicare and social security, these valuable programs that serve many of our citizens are not only viable today but well into the future. i reserve. the speaker pro tempore: the gentleman reserves the balance of his time. the gentleman from new york. mr. crowley: i inquire the amount of time left on both sides. the chair: the gentleman from new york has -- the speaker pro tempore: the gentleman from new york has 25 minutes remaining. the gentleman from michigan has 25 1/2 minutes remaining. mr. crowley: thank you. i yield two minutes to the gentleman from michigan and the ranking member on the ways and means committee, mr. levin. the speaker pro tempore: the gentleman from michigan, mr. levin, is recognized for two minutes. without objection. mr. levin: well, we've been

adamant about a clear, clean debt ceiling vote. and now it's happening. it should have happened the last time. and because of the republican position, a high price was paid. jobs were lost, 120,000. the stock market plunged nearly 20%. economic growth was slowed. significantly. so this time around we're going to do the right thing. the gentleman from michigan, my colleague, the chairman of the committee, talked about working together and i want to close by suggesting now with this vote in terms of the debt ceiling, we've cleared the deck. let us now take up the other

issues of major importance to the people of this country. and one of them is unemployment insurance. as we stand here today isolated maybe by the walls around this chamber, but i hope not 1.7 million people have lost every dime of their unemployment insurance long-term unemployed. all right, we're clearing the decks. now let's pay attention to the business of the american people, in addition to full faith and credit. we should not be leaving here with 1.7 million americans out in the cold because too many people in this institution haven't been willing to listen to their stories. listen and act.

i yield back. the speaker pro tempore: the gentleman yields back the balance of his time. the gentleman from michigan. mr. camp: i reserve. the speaker pro tempore: the gentleman reserves. the gentleman from new york. mr. crowley: at this time i yield three minutes to the gentleman from maryland, the minority whip, on the democratic side, mr. hoyer. the speaker pro tempore: the gentleman from maryland is recognized for three minutes. three minutes. mr. hoyer: i thank the speaker. and i thank the gentleman from new york and i thank the gentleman from michigan. let me start by saying, this issue ought not to be subject to a debate. america the greatest land on the face of the earth, and one of the most economic -- economically successful countries in history, won't pay its bills. i can't believe there's any

american that thinks america should or would welch on that which it owes. that's not a very sophisticated argument. i can make a more sophisticated argument. but when it comes down to it, that's the issue. will america pay its bills? will it give confidence to the investor community? will it give confidence to the business community? will it give confidence to our own citizens? indeed, will we give confidence to the world? that the world's leader can manage its own affairs responsibly. i want to join leader pelosi in congratulating the speaker for bringing this bill to the floor. he brings it to the floor because he knows, as i've just said there is no alternative for america but to pay its bills. he brings it to the floor because he knows if he doesn't,

the business community is going to think that the majority party in this house cannot manage the affairs of the united states of america in a responsible fashion. he brings it to the floor apparently with some doubts as to whether or not those who have elected him speaker will follow him in taking the responsible path. my presumption is, although i don't know, is that the gentleman who chairs the ways and means committee will vote for this. my presumption is mr. cantor, the majority leader, will vote for this. my presumption is that speaker boehner will vote for this. my presums is based upon the pact -- presumption is based on upon the fact that they've represented that there's not an alternative that's a responsible one. i doubt that there are many people on this floor who have urged us to pursue a big deal

more than i have. i voted against the last budget agreement otherwise known as ryan-murray because i thought it was too small and did not move us towards fiscal responsibility and sustainability in the magnitude that it should have. having said that, however there is no alternative to pay the bills that we have incurred , that the house, the senate and the president on behalf of the american people have incurred. and because we are a great nation, we will certainly not welch on our debts. will the gentleman yield me three additional minutes? the speaker pro tempore: the gentleman is recognized for an additional three minutes. mr. hoyer: i thank the gentleman. the speaker pro tempore: the gentleman is recognized for an additional three minutes. mr. hoyer: i knew he was going to yield me three minutes.

so we come to this time with not many people on the floor. although we have demagogued this issue in the past. we both sides, let's be clear. on our side we said that the republicans cut revenues, therefore they were responsible for the debt. on their side they say democrats spent money and invested money and therefore they're responsible for the debt. the fact of the matter is, we were all responsible for the debt. the fact of the matter is, under the reagan administration, when i came to congress we substantially increased the national debt and we could only do so with ronald reagan's signature. and then under george bush the first, we substantially increased the debt, we could only do so with george bush's signature. and under bill clinton we brought the debt down for four

years running, and we ran surpluses for the next four. and of course republicans were in the house and in charge for six years. so it was a team effort, if you will. and we had a budget surplus. and then in the second bush administration, we substantially increased the budget deficit. we had two wars that we paid for none. $1 trillion-plus in additional deficit. many trillions over time. and so my friends, we come to the floor today to do the only responsible alternative available to us. but that does not mean that anybody who votes for this believes that it is not critically important for us to have america on a fiscally sustainable path. the business round table has urged us to pass this bill. as leader pelosi quoted the

chamber of commerce said not to do so will put our country and our economy at risk. and yet i fear there are going to be apparently a significant amount of people who will come and vote no. vote no on paying america's bills. vote no on giving confidence to the international community that america is in fact able to manage its affairs. there ought to be no debate, as i said when it comes to making sure we pay our bills on time. the bills congress has incurred. as i said, the business round table was quoted as saying urgent action is required on the part of congress in order to prevent a default. in fact, he said if we defaulted every american, all

315 million-plus, would feel the negative effects. why would anybody vote against such a bill? one additional minute. is that possible? are you running out of time? ok. you're running out of time. so, 30 seconds. the speaker pro tempore: the gentleman is recognized for an additional 30 seconds. mr. hoyer: i will conclude because my friend is running out of time. this is not a partisan vote. and should not be viewed as such. republicans and democrats have voted to protect the american people, provide for the national defense and provide for the general welfare of our country, pursuant to our constitutional responsibilities. having done so there is no responsible alternative but to pay our bills. that's what this vote is about.

let's show the courage the wisdom, the common sense to do just that. vote yes. the speaker pro tempore: the gentleman from michigan. mr. camp: i yield myself such time as i may consume. the speaker pro tempore: the gentleman is recognized. mr. camp: i would just point outer to my friends on the other side -- out to my friends on the other side that in recent memory there have been seven instances where debt limits were part of other major pieces of legislation. for example, in the first bush administration there was a balanced budget in emergency deficit act. in the clinton administration there were reconciliations act, as well as the contract with america advancement act. in the obama administration there was stimulus, pay as you go budget control act, so this has happened seven times. . in recent history. why can't it happen now? the difference is, you had both parties willing to come together and negotiate major pieces of

legislation that would help to address the short-term medium, and long-term drivers of our debt. what we have now is a very open admission that it's absolutely nonnegotiable. that this is a straight increase in debt limit without any of these legislations even though this happened seven times in the past. i would just say that debt limit increases are often parts of larger pieces of legislation and it would not be unusual and i think it's a sad day when the other side has a take it or leave it approach and is unwilling to come together with the republicans to find a way to bring other legislation to the floor that will help address the drivers of our debt. i reserve. the speaker pro tempore: the gentleman's time has reserved this egentleman from new york. mr. crowley: i yield two minutes to the ranking member of the financial services committee, ms. waters. the speaker pro tempore: the gentlelady is recognized for two

minutes. ms. waters: thank you, mr. speaker. once again, it's the house democrats required to take important action to protect our nation's well being. today, most house republicans will once again refuse to stand behind the full faith and credit of the united states, threatening an economic catastrophe for all americans. when republicans pushed our nation to the brink of default last year, refusing to increase the debt limit, businesses large and smalligan to cut back by slowing spending and hiring. consumer confidence fell faster than at any other time since the financial crisis in 2008. potential home buyers didn't buy homes. but despite these warnings, house republicans still want to push us to default and the consequences would be disastrous. the value of our 401k's and iras would plummet, significantly hurting those saving for retirement. for consumers, a default would

make credit cards, mortgages, student, and automobile loans more expensive. default would lead to a u.s. credit rating downgrade, making it harder for businesses to hire new employees and our cities and states to finance schools and hospitals, roads and bridges. mr. speaker, the american people cannot afford another round of republican recklessness. everyone from wall street c.e.o.'s to conservative economists agree we need to honor our debt. i and my democratic colleagues will once again do what is necessary. i urge the republicans to put americans before ideology and support this legislation to raise the debt ceiling. i yield back. the speaker pro tempore: the gentleman from michigan. mr. camp: i reserve. the speaker pro tempore: the gentleman from new york. mr. crowley: i yield two minutes to the gentleman from california, mr. honda. the speaker pro tempore: the gentleman is recognized for two minutes. mr. honda: i want to thank my

friend for yielding. mr. speaker, today u.s. congress is doing its job. five days after forcing the treasury to resort to extraordinary measures to finance our government and three legislative days before an unprecedented default. this marks the fourth time in the last three years we have been pushed right to the brink of default. everyone outside of this chamber knows we could have and should have lifted the debt ceiling long before we arrived at this point. i'm glad to see that once again we've been able to do our most basic job. but we need to stop playing these political games with our economy, our stability and our reputation. we should not be forced to wonder year after year if we're going to be able to decide to meet our obligations. we should guarantee that the only time we debate spending is during spending debates. i would ask my colleagues to help me reform this process and

install a permanent fix to end the brinksmanship surrounding the debt limit. that's why i introduced two bills that allow the debt limit to be raised unless a supermajority of congress votes to block them. this would shift the role of congress to kiss approving debt ceiling increases instead of being forced to approve them. my approach has been introduced in the other chamber by a number of senators and has been endorsed by a growing numb of economists and outside thought leaders. today i urge my colleagues to vote yes to lift the debt limit with me today but i also ask my colleagues to join me in pursuing permanent, necessary changes for tomorrow so we can eliminate this hostage taking. i yield back. the speaker pro tempore: the gentleman from michigan reserves. the gentleman from new york. mr. crowley: i yield two minutes to the gentlelady from texas,

ms. sheila jackson lee. the speaker pro tempore: the gentlelady is recognized for two minutes. ms. jackson lee: i thank the gentleman very much. as i have listened to debate on the floor of ethe house i have seen that members are coming from all regions of the united states which means that in fact this will be impacting all of our constituents. i would hope republicans would join the democrats who will vote by and large in almost near 100% to do what the federal reserve chairman, former chairman ben bernanke said, to avoid a government shutdown and perhaps even more so, a failure to raise the debt limit could have serious consequences for the financial market and for the economy. but more importantly, it will cost student loans much more to our young aspirants who are attempting to develop an expertise to contribute to this society. it could increase payments by $2,000 for 531,327 texas

students who rely on loans to go to college. mr. speaker, i don't want to do that. higher interest rates for mortgages and auto loans and student loans and credit cards. mr. speaker, i don't want to do that. families -- families re' tirmente savings and 401k's dropping as the stock market plummets, reminding us of four years ago when we had one of the worst plummets we have experienced in the last administration. 3.4 million veterans not receiving disability. i know we dent want to do that 10 million americans not receiving their social security check on time in just the first week. we cannot do that. drug reimbursements under medicare stopping and doctors and hospitals not getting paid. i know members of congress will not and do not want to do that. so a clean debt ceiling is the only direction. but we have some other options. we can do this in a bipartisan manner. we can have the democrats standing tall as they have advocated for a clean debt

ceiling but we can join with our partners and we can acknowledge the fact that the government is not broke. we can invest in infrastructure. we can as my colleague has said, congressman levin, we can extend the unemployment insurance and provide for education and provide for research and development, we can build this country, it's time now to vote for a clean debt ceiling and do it together so we can nst in america. i yield back. the speaker pro tempore: the gentleman from michigan. mr. camp: i reserve. the speaker pro tempore: the gentleman from new york. mr. crowley: i appreciate my colleagues, all my colleagues for coming down to the floor this afternoon to speak in favor of this proposed bill. i think it's note worthy to point out that only the gentleman from michigan has come down to speak on behalf of the majority today and abley, i should say. he's voting for this bill and i appreciate his support. i notice that no one took time

in opposition on the other side of the aisle. maybe they don't care as much about this issue as we thought they did. but the reality is, every vote against this bill is a vote for default. now our republican colleagues have an answer for that. they have a plan. they intend to default someday so they have a plan. it's a bill they call the full faith and credit act. we call it the pay china first act. it says in the event of a default, we will pay those people who own our bonds, we will pay foreign governments first and everyone else gets put down to the bottom of the barrel. but they have a plan. republicans have a plan in the case that we default. let me just say, mr. speaker, i think it is totally irresponsible to even have had a debate on this floor on a bill that would determine the payments of our debt in lieu of default. i think it's irresponsible. the fact that we've had these manmade brinksmanships is irresponsible. once again the republican party

and their caucus is showing that they're not responsible enough to be ruling and to be governing here in the house of representatives. mr. speaker, with that, i yield back the balance of our time. the speaker pro tempore: the gentleman yields back. the gentleman from mr. -- from michigan. mr. camp: i yield myself such time as i may consume. the speaker pro tempore: the gentleman is recognized. mr. camp: we have heard a lot of talk about how the nation must pay its bills but one major reason we're in this position is an unpaid-for trillion dollar stimulus bill that did not increase economic growth, did not create jobs, and simpley added to our debt. i know there are some on the other side who want to keep on spending no matter what the impact is on our credit rating. and while i believe that we must increase our debt limit, i'm clearly not satisfied that there are no provisions that would

help us address the long-term drivers of this debt. but i will say that it's disappointing that the democrats have walked away from the table. it's disappointing that we are not engaged in a more serious debate today a debate about policy and how we rein in what really has become runaway debt. but as i said for as disappointed as i am in that i cannot in good conscience let the democrats re-- democrats' refusal to engage lead to a default so i will vote yes on this legislation today. but it's hardly a solution to our looming debt crisis. that's why the ways and means committee will continue to move forward on reforming medicare and social security as we have with bipartisan proposals that are in legislative form published for the public to view on our website. and we'll move forward on tax reform. one that will help grow our

economy, create jobs, and help address our debt crisis by a stronger, more vibrant economy that will provide opportunity for individuals to get work, increase their wages, and provide for themselves and their families. i hoach that democrats will join me in these efforts. -- i hope that democrats will join me in these efforts. i believe it's only through a combination of those policies that can we really get to the true solutions to this very significant problem facing our country. so while this is a short-term solution to prevent what i think is essential that we do prevent, a default, it's not enough. and as i said, there's so much >> several of our viewers join the conversation on facebook. james said --

linda wrote -- we also talk with a reporter about the issue. >> we are joined by ginger gibson, a congressional reporter for politico. as the day began i do not think too many people expected the house would be taking up the debt limit bill. how did they get to this point and why? >> when most of us woke up this morning we thought there was a long fight over the next 48 hours. instead it has moved along much faster and smoother than anyone anticipated. house republican leadership had planned to an attack an increase in military benefits on the debt ceiling, saying they were losing

republican and democratic votes with that plan. instead it up what they are voting on now, a clean debt ceiling increase. includes no other policy provisions and raises the debt ceiling until march 15 of next year. >> what is at stake for supporting suspending the debt ceiling? >> when we look at john boehner's decision to move away from the attachments we saw one political decision for another. first, we want to roll out a fight in democrats for voting against retiree benefits. instead it appears he will just strike attacking democrats for voting to raise the debt ceiling. already warming up for what we can expect to see going into november criticism of democrats for increased spending and debt. democrats think it is a winning

message to vote for this. they think voters remember the shutdown, and they are pushing the idea that this is democrats being responsible tom at not using brinkmanship, taking care of the country's business. >> in terms of the bill itself, the bill simply says suspends the debt limit through march 15 of 2015. what does that mean? >> that means it is more of a deadline than an actual number. this allows potentially the house to reassess or congress to reassess the issue without allowing the treasury department to use extraordinary measures we have used in the past. we know the depth limit was supposed to expire on the viewers seven. they said we probably have until the end of the month to get it done. previous times we have seen the debt limit as opposed to expire in february and they make it

last until august or september. thoughtful not be the case. republicans are hopeful they hold onto the house. when they come back march 2015, much longer negotiating position when they have to raise the debt ceiling again. >> they are out for the next couple of weeks in the house. this presumably goes to the senate. what is in store their? >> senate democrats are likely to move the bill along very quickly . they have been calling for and support a clean debt ceiling. this is the best possible outcome. there is a possibility senate republicans try to make noise on this issue. rand paul or ted cruz holds the process of. so far no one has said explicitly that is what they will do, but there is always the possibility. could make it take longer to get it done. more likely take to -- take the

house and what they pass and wrap this up really quickly. >> ginger gibson, covering all of this for politico. you can follow her on twitter and read her reporting at politico. thank you for the update. i think you for having me. >> this morning, member states -- members testified before the senate judiciary committee on government surveillance programs and data collection. that coverage at 10:00 eastern on c-span. the impact of extreme weather on communities will be the focus of the senate homeland security and governmental affairs this morning. that coverage at 10:00 eastern on c-span three.

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government surveillance programs and data collection. ♪ >> the house last night approved a so-called "clean extension" was 28 republicans joining all but two democrats to vote "yes." it heads to the senate possibly as early as today. john boehner decided to bring a clean debt bill to the floor. the republicans this morning -- we want to hear from the gop outside of washington. you can dial-in