terms might apply in the context. press i could take a stab at that. a target -- maybe we should start with selector. the is the operative term others build on. a selector with the abn e-mail that your phone number are targeting. so you get the terrorist at google.com, whatever, that's the address you have information about, you have reason to believe that person is a terrorist and you'd like to collect foreign intelligence information flowing on that person's account. when you go up on that selector, we say go up on, or target that selector, that means we are collecting information, going to the provider, and getting information related to that person's account. we are selecting real time that particular account. that's what we mean by targeting a selector. you are using that selector. providing that to the company, the provider, to get information on that account.

or if it's a phone number, that phone number. when we say selector, it's an arcane term, it's phone numbers, email addresses, things like that. targeting means that's the one you're trying to get. they may be in communication with other email addresses or phone numbers. those are not the targeted numbers or accounts. they are incidentally acquired because they are on the other end of these communications. that's what target is the one you are going after. the statute requires that target be a nonu.s. person located overseas. that's the important determinations we are looking at. we go to great lents to make sure that target is a non-u.s. person and overseas. >> tasking? >> when you're going and saying, ok, i want to task this account, you he want to collect nfingts from that account. that's the collection -- >> you have the selector. >> you have the selector. that's when you take that selector to the company and say this one's been approved. we conclude it belongs to a non-u.s. person overseas.

and then we go to the company and get the information. >> directive? >> directives are the orders that go to the companies that say they have to comply with the lawful tasking. that's the more overarching order that goes to a company provider and says, ok, you have legal obligation to comply with taskings given to you. here are the rules and everything. that's all provided to them. > keeping target a statutory term. term like selector is an operational term to refer to something like an email or phone number. directive being the legal process by which that's effectuated. and tasking being the internal government term on how you start the collecting. >> building on that, what's the statutory rational for -- rationale about collections? if the target is the email account or phone number, what is the justification or gathering communications between two persons, maybe two u.s. persons who are discussing that phone

number or that email address but they are not themselves -- no tour from that particular email address or phone number? why is that targeting that is permissible under the statute? >> in a typical case you're right. if you're targeting bad guy at google.com, you are targeting that person's account. their communications. why vouch collection is different, it's not communications to or from that bad guy, but about that selector. so what the court has concluded when the term targeting is used, nonu.s. person overseas, targeting that selector qualifies under the statute for targeting that non-u.s. person overseas. it doesn't have to be to or fro. it can target the communications about that particular selector. >> the meaning of target then earlier, which is where you are focusing on an account, targeting means discussions about that account. >> about that selector, correct.

>> it is always focused on that account. i think the key is the misperception that some may have that -- about collection is somehow about a key word or about the person that may be behind that account, but all collection under section sub-note two whether it's up stream, about, subset of upstream, is based on the selectors at issue. > my time has expired. >> just a follow-up on that. good line of inquiry to make sure that everyone understands. so you're saying that if someone is emailing about rachel brand or about explosives, that would not be a permissible about query under your explanation? >> i'd like to --

>> you could, perhaps, get about rachel brand at -- >> i think this is an issue that all of us have need to clarify querying for collection. we are discussing now the collection of information. about is a type of collection of information. so all collection of information is based, focused on selectors not key words as you just mentioned, like terrorists or like a generic name or things along those lines. this is the same selectors used for the prism program also using for collection. it's just a different way to effectuate the collection. >> ok. i think part of the -- a large part of the function of these hearings is public education function. so i thought the questions were great to explain the meaning of different terms and to -- i'm glad you're willing to bear with us asking you questions we have already discussed with you in private, but i think it's

helpful for everyone to understand what we are talking about. along those lines there was some discussion in pat's questions about purging data that doesn't turn out to be foreign intelligence information, but can you explain how on the front end you implement the requirement that not only that the target be -- nonu.s. person reason believe be abroad you expect to get foreign intelligence information through the collection as a separate statutory requirement, how do you go about collecting that type of information? >> sure. earlier discussion we skipped right to the foreign terrorist determines. there has to be a reason one wants to collect intelligence from a particular collector in the first place. then one has to get the type of question permitted under statute. there has to be a valid foreign intelligence reason. beyond that it has to be a valid foreign intelligence reason within the am bit of one of the certifications that fist

approves annually. certifications on things like counterterrorism, encountering wmd's for example, weapons of mass destruction. so when an analyst needs to make a determination as to the valid point bens purpose for which they want to effectuate collection, they must also document that. that is documented in a targeting rationale document in advance. and those are also reviewed by the justice department and the director of national intelligence. >> this is an important point for nonu.s. persons you think about, ok, once you concluded that's a non-u.s. person overseas you can collect whatever you want. that's not the case. it is targeted not only based on the identity of the person and the location of the person, but also that you're trying to get foreign intelligence. so it's an important protection in the statute that is designed for non-u.s. persons. it's not blanket collection of any non-u.s. person overseas. it's aimed only those person on foreign intelligence.

i mentioned bad guy google.com will get you back information that's foreign intelligence. like on terrorism, proliferation, whatever it might be. >> what can you tell us in an unclassified setting about the documentation of foreign intelligence purposes or oversight. we talked a little bit about that in past questions. can you give us anything more specific? >> that you have to document that at n.s.a. called a tasking sheet. on that sheet they are documenting the foreign intelligence purpose that they are trying to pursue in going after a particular target. those are all reviewed together with the foreign determination by the department of justice. >> for every single one, that's right. i think at least the review that radge mentioned earlier is done every 30 days. the tasking decisions. foreign intelligence and the foreign -- >> if i could put that into the broader context if the question

really is at getting what's the process which that happens, even before that happens we have training for analysts how they should document this material. we have audits of our databases. comprehensive compliance program. spot neck even within n.s.a. prior to the 0-day reviews done by the department of justice, for us. there are also quarterly reports on compliance of the program. semifinal reports to the f.s.c. and congress. and annual inspector. those decisions while one very granular aspect of the program are conducted within the context of this regime. >> my time just ran out. a one additional question about -- can you do about collection through prison? >> no. >> so it is limited to upstream collection? >> correct. prism is only collection to or

from. >> i wanted to shift to a separate topic. one of the things that i found concerning and frustrating through the process of our evaluation of programs is how to both assess and articulate the efficacy of these programs. and speaking about this in your prepared remarks and i'd like to ask a couple of questions. one, how do you assess the efficacy of a particular program? how do you think we should be assessing the efficacy of a particular program? and three, it's not really a question, it's more of a comment. which is please don't give me a series ever success stories and then say that's how you evaluate the efficacy of the program, because i think that's an initial response from the government often in response to a question either from a body like ours or from the media.

how do you assess the efficacy of the program? how periodically do you do so? how would you ken urge us to assess the efficacy? >> let me start on that. i want to start by saying i completely agree with you that sort of individual success stories are not the way to evaluate collection program and it's utilityity. the way you evaluate collection programs is going to depend in part on what the particular program is for. in this case we have in fact the director of national intelligence has department -- part of our job is to try to determine the resources are effectively allocated within the intelligence community budget. so we have done studies to try to look at, ok, what are our collection priorities? how much reporting is generated on these priorities?

and where do those reports come from? what kind of collection source to the extent we can identify that? and that's one of the ways that we determined that section 702 is relevant. another is by looking at the shear nature of the information that we get, and it's utility towards a whole variety of national priorities. that's a more impressionistic approach, and yet you can see time and again in significant -- in important intelligence reports that are provided to policymakers, it's derived from section 702 collection. those are two ways that i would look at estimating the value of a particular collection. >> add on to that, with respect to this program or any program, i think intelligence professionals will tell you that any tool must be evaluated in the context of the other tools with which it is utilized. all intelligence tools are used in complimentary fashion with one another. to isolate one particular tool to evaluate the effectiveness in

isolation doesn't do us justice what's valuable and what's not. it depends on the types of dool. a program like section 702 is used for different purposes, for example, than a metta data program. one may be a discovery tool to help pursue more specific collection, and others may be used as, in fact, the specific collection that follows from that. third, there may be uses which the -- which is recognized either directing the government in certain directions or at least helping to shape the focus of the government. so i think the absolute long question is how many spots did this tool stops. you can insert the blank for tool. that is the wrong question. i think will not do justice. >> i have time for one last question. what is the view of the various agencies as to whether or not 702 is an effective and valuable

program for the united states? >> i think it is an effective and valuable program for the united states. if i could address your last question as well. i think you really in order to understand whether it's effective and useful, you have to think about what your goals are with respect to this particular program. and the goals for this program like many other collection programs are to obtain, i think, timely, accurate, informative, foreign intelligence information about the capabilities, plans, intentions of foreign powers, agents, actors, and so on. i think you would -- what you're talking about really is developing a good metric to understand whether this program is worth all the costs associated with it. so i think you'd want to look at the amount of information that you -- that we acquire, but also then obviously the quality of it. how good is it? i think you can slice that a lot of different ways as my colleagues suggested. i would recommend you be focused on. because this is a broad-based

foreign intelligence collection program, you have to look at not only -- you have to look at counterterrorism, but you have to look more broadly than that because this program is not limited just to the counterterrorism. >> i agree. definitely an effective program. i think the one point about it the ref view that bob mentioned happening within the executive branch. it's not limited to the executive branch. congress also reviews the effectiveness of this program as well as the 215 program. that's part of the rationale behind having some psychologists of various programs, when those statutory provisions expire, the 215 program twice in last two years, congress undertakes as it should an evaluation of the effectiveness of the programs. >> i fully agree that it is an effective and important program. i really want to emphasize the last point that jim made which is this program should not be considered solely as a counterterrorism program. the program has significant and

exceedingly important utility in areas outside of counterterrorism. >> trying to clear up another issue. in terms of the participation of service providers, the awareness of certificate providers of the 70 implementation, is 702 implementation is done with the full knowledge and assistance of any company that -- from which information is obtained, is that correct? >> yes. >> so early on in the debate there were some statements by companies who may or may not have been involved in the program say we never heard of prism. but whether they ever heard of prism, any company that was, -- from whom information was being

obtained under 702 knew it was being obtained? >> correct. prism is just an internal government term that's a result of the leaks became a public term. but collection under this program is done pursuant to a legal process that any recipient company would have received. >> they know that they are -- that their data is being obtained. >> they would have received legal process to assist the government. >> one thing i read in one of the statements is, under 702 you could target entire countries or regions. is that correct? >> all collection under 702 is based on specific selectors, things like phone numbers or email addresses. it is not a bulk collection program. >> you say selector would not be an entire area code, for example. >> correct. >> correct. >> on the -- going down to the constitutional -- one other set

of questions. even i have lost track now of what you have already said here versus what you said elsewhere, make aterms of where you determination that a person is a non-u.s. person outside the united states, and then you later discover that that was good faith wrong, the person was in the united states, or the person was a u.s. person, do you track that? and what do you do when you discover that? and how often do you discover -- talking just about you thought he was outside the united states and that was just wrong. or you thought he was a non-u.s. person and that was just wrong. how often does that occur? >> well, i'll refer to brad on

that sort of overarching review. if i could make a point about what happens. yes, we keep track of every time information comes to our attention to suggest that a prior intelligence evaluation was incorrect. even if it had the legal standard. every such incident is a matter of compliance matter that has to be reported to the f.s.c. and ultimately in semiannual reports, reported to the congress. third, that sets a pros test, purging process by which information that should not have been collected, if it had not met the legal standard, is to be purged from n.s.a. systems. i think brad can speak to the level of accuracy of those. >> just real quick. it's the item is detaxed and the information is purged. >> just distinction between the two different types of compliance issues. one is the rover example you mentioned. we are up on the cell phone we believe is -- belongs to a bad guy outside the united states.

foreign person. and then that person shows up in chicago. when that happens we detach the cell phone. we no longer collect communications. that's a compliance incident that's reported not an erroneous determination based on the movement. individual. so putting those cases aside, in cases where we just get it wrong, we think the email account or phone is low accounted overseas but it turns out that's wrong, or turns out that we think it's a non-u.s. person, but it is, we do review every single one to see if that's the case. and our review, and as i mentioned earlier we think it's less than one in 1,000 cases where they make that determination erroneously. >> it probably bears worth repeating initial determination is once and done. there is an affirmative on gation for analysts to reaffirm the foreign determination on a periodic basis. which contributes to the ability to make sure that determination is in fact fresh and current which contributes to the accuracy of that determination.

>> going to the constitutional issues, back to those for a has , the fisa court determined -- they must determine every year that the program is being implemented consistent with the fourth amendment. the very first time they determined that, there was an opinion that they issued, that one, am i right, not yet public? >> i think that's correct. >> isn't that a good candidate for declassify case? >> we have a lot of good candidates for declassification. in all seriousness there are -- we are -- there are a lot of documents that we have that we are reviewing for declassify case. it includes not only fisa court opinions but a variety of other documents. >> the fisa court in 2008 when they last considered the constitutionality of a program,

the predecessor to 702, the court issued a redacted but largely unclassified opinion conducting a relatively full fourth amendment analysis. and there's been some fourth amendment analysis conducted in this situation. and if you're sort of talking bout the rosetta stone kind of document, then the very first court opinion should have been explanation of the constitutionality of the program. -- i hear bob saying there's a lot of opinions out there. >> to me this one seems to be

one that would explicate at least one court's judgment on this, because it's -- >> i assume all the rest just said nothing has changed that would merit us to reconsider our very first judgment. >> i think it's among the opinions we are committed to reviewing all of the opinions of the fisa court to determine which ones can be declassified in redacted form. i immanlin this will be among the those reviewed. absolutely i don't disagree. this will be among the opinions reviewed. >> don't want to leave folks with any misimpression, the board has access to everything. so shouldn't have to assume anything about subsequent opinions. the board has reviewed everything. i just don't want what i think would be an unfortunate consequence would be for folks to take away the impression that there is a mysterious opinion that has some secret analysis. i don't think that's the case. i don't think -- >> the board does have access to it. i think the question is whether the public should have access to it as part of the debate.

>> one other thing i would add on that. 02 collection has been challenged by criminal defendants, when 702 information is being used. so we'll be filing public briefs and we can expect some more decisions in that area as well. that's another way that the constitutionality of the 702 will be on the public record. the opinions on it and briefs will be a matter of record. what whom and under substantive criteria is the initial decision to use a u.s. person selector for searching e prism based -- who decides let's do that, what's the substantive criteria? on which they make it? you don't have to go into the review process.

i know the decision will be reviewed up and down. how does that get made? what's the substantive basis? >> i can speak for n.s.a. in particular. >> just to clarify, that means if it goes to one of the other gencies, not n.s.a., c.i.a. or f.b.i., they make their own substantive decisions for querying? >> yes. the 702 program is one that all agencies operate on their own and have their own minimumization procedures which would address topics like searches. n.s.a. procedures in this regard , in this element have been made public. the standard is such a query needs to be reasonably likely to return foreign intelligence information. >> who is it made by initially? >> made by the analyst. >> who is working on that particular case.

my other question is, the president did, i understand, directive correctly, there be some changes in the treatment of non-u.s. persons as to the limits on and retention of the data acquired incidentally to bring them more in line with those of u.s. persons incidentally. . where there is no foreign intelligence value, apparently. can you tell us a little bit more specifically if anything has been done in that regard? or if being contemplated vis-a-vis 702? >> i think first of all it's important to understand the point that somebody may have been brad made earlier which is that there are already protections to some degree built into the system. protections for non-u.s. persons are not as great for u.s. persons because u.s. persons are protected by the fourth amendment. but there is a requirement we

can't target a selector unless we have reason to believe it's a foreign intelligence value. and there's sort of a general principle that the intelligence agencies -- their job is to collect, analyze, and disseminate foreign intelligence information, not random information. i think what the president has directed we go back and look at our procedures and not only with respect to 702, but with respect to intelligence in general assess whether the extent to which it's possible to provide limitations on collection resention and dissemination that more closely track those for u.s. persons. or example, executive order 12 333 provides specific categories of personal information about u.s. persons that can appropriately be disseminated. there is a list of them in executive order 12333, and the president has asked we assess whether we can apply those same

rules to person ible information of non-u.s. prns. >> right now just follow up right now, if you get incidental information about a foreign person in the course of targeting another foreign person, and you look at it, do you use the same criteria and look at the same review and say, well, he was just talking to his grandmother or something, there isn't any foreign intelligence there, and you purge it? >> any time there is not foreign intelligence value to collection by definition it would be purged. i think an important point to be made as you -- incidental collection just to explain that term a little bit, all communications have two ends. one is the target, and the other is presumably not a target. we don't know. one doesn't know. by definition it will be

incidental collection of non-u.s. persons as well as u.s. persons. constitutional protections have applied to a u.s. person. >> can i make a comment about that. >> i find it very provocative when you were answering beth's question about if you're going to assess the efficacy of a program you have to look at it in terms of its efficacy in the holistic view of all of the programs. i guess it's inevitable i would ask the question, but how can anybody except you people do that? because so many of your programs i think are just unknown even to the fisa court. they are not all fisa superadvised. and certainly the outside world doesn't know about many of them. how in effect can outside assessment be made? >> if i could address and say in response to my comment,

certainly i think we are -- i would not suggest that there should be a public evaluation of all intelligence programs. i think for example this board has access to information about other programs. i would expect any evaluation would be in the context of the other programs that have the jurisdiction to review. as with congress, as i mentioned, they re-evaluate programs on a periodic basis. the public record now indicates that there is a fairly he robust exchange between executive branch and the legislative branch on a variety of programs. i think that's where traditionally the evaluation has occurred. >> i was just going to say that we've managed to -- we've set the balance between public disclosure and the need for secrecy by empowering the congressional intelligence committees. we are required by statute to keep them fully and currently informed of intelligence activities, and we do. they know about these programs.

and they have the opportunity to evaluate them. and they do. in fact, they pass an intelligence authorization act that includes a lengthy classified annex that is very perfect scripive with respect both to reports that it requires of us and directions toose what we should -- where we should be spending our money. that is the -- that's sort of the external oversight and the way we've said, ok, we need to have oversight of these, but they still need to remain classified. >> did you want to finish -- you wanted to make a point earlier? >> several points. i think even addition to congress having oversight of it, the courts in certain circumstances, and then also the president. and the executive branch officials. we have an obligation to make sure that in addition to adhering to the law and taking care that the laws are faithfully executed to spend our time and money on programs that are effective. and not be wasting our time on things that are not. that flows to the president to

the d.n.i., attorney general, director of f.b.i. we should be focused on things that are useful and collecting information that produces the kind of intelligence information i was talking about before. the other comment i wanted to make with respect to f.b.i., our personnel only have access to the database when is they received the proper training with appropriate oversight and operating it consistent with the court approved standard minimumization procedures when they are doing their query activity. >> i want to shift to a different subject which is attorney general-client privilege. there was some press reports a couple weeks ago about collection of information that may involve attorneydown client communications. i -- attorney-client communications. i want to focus on n.s.a. minimumization procedures. which do exclude attorney-client communications but in a narrow context where the client is under criminal indictment and the united states -- basically on federal criminal indictment.

that seems like a narrow interpretation of attorney-client privilege. i wanted to see if that is the interpret you apply in minimizing communications. if it is, what impact there would be if it was expanded to that more normally accepted definition of attorney-client privilege? basic lawyers consulting with each other? to the e writen a lir a.b.a. and the public letter says more. i think one fundamental premises is that analysts are under an obligation to identify for the office of general counsel any time they encounter something that may be poe tngsly privileged. i think -- potentially privileged. all of us that are lawyers that probably encompasses everyone just because a communication is with an attorney doesn't me it is privileged communication. i can't speak to any particular

instance that may have been written about in the press, there are a couple of big picture points worth making. one is our office has historically provided a range of advice to minimize to the extent possible the collection of attorney privileged material. >> privileged just where there is a criminal indictment? >> beyond the criminal -- to the point i'm trying to make that while there may be a specific provision in the 702 procedures that addresses the criminal context, there's a reason why we ask analysts to consult counsel because the advice can often be tailored to the specifics of the circumstances. far outside the criminal realm. recognizing the import of attorney client material in context even outside the criminal context. >> talk a little bit about reverse targeting, where you target someone overseas, potentially with the view of collecting information about

u.s. person in the united states. and there seems to be -- there seems to be a quirk in the statute. it says that you can't -- you can target people reasonably to be believed outside the united states. you cannot reverse target someone outside the united states if the purpose target a particular known person reasonably to believe to be in the united states. s to that permit targeting persons outside the united states? no. >> why not? >> there is a separate position that bars targeting u.s. persons outside the united states. if you were doing that and you are trying to target a u.s. person outside the united states, you couldn't do that. >> reverse targeting procedure -- >> i don't know if you call that reverse targeting. >> there is another statutory provision that prohibits targeting of persons outside the u.s. in 702. >> reverse targeting.

>> i agree it's clear you can't target a u.s. person outside the united states. what if i find a non-u.s. person i know is in communication with a u.s. person outside the united states. is that permissible? >> no. >> because? >> you would be targeting -- if your real purpose is targeting that -- >> reverse targeting in your view is the same. the prohibition on reverse targeting co-extensive with the prohibition on targeting? >> again, i think of reverse targeting as a geographic issue. let's say you have a legitimate target overseas, but you want communications of a u.s. person or nonu.s. person inside the united states, but says you can't do that. if you have a u.s. person that you're interested in overseas, you can't use 702 to target them, either. >> if you know that person is in communication with a nonu.s. person, both of whom overseas. could you target the nonu.s.

person to get the u.s. person's communications? >> you couldn't do it for that purpose. but if that nonu.s. person overseas is val lied that you're interested in their communications? sure you can target that person. they are incidentally communicating with a u.s. person overseas, that's ok. i would consider that reverse targeting. you still have to have that much -- i don't know if that answers your question. > take a look at section 704-a-2 and that may address that kind of concern you're focused on perhaps. perhaps not. >> i wanted to get back to efficacy. our charge is to look at the balance between national security and privacy and civil liberties. i think following on miss cook's questions -- sorry, i'll hold that for the next round. >> want to go back to upstream collection. i have seen some statements in the public domain about the volume of upstream collection

vis-a-vis the volume of prism collection. what can you tell us in the public setting about that? >> i think the best publicly available information is from the 2011 opinion that's been declassified in which there is a rough estimate there, forgive me if it's not precise, about 10% of collection is upstream. on the order of magnitude. >> ok. you said in an earlier round of questioning that upstream collection -- collection from upstream is retained for a shorter period of time than collection from prism. you said the reason for that distinction is that there is a potentially greater privacy concern with respect to upstream collection. can you elaborate on the why? why the additional privacy concerns? >> a lot of this is laid out in this court opinion that's now public. i think because of the nature about collection, which we have discussed, there is potentially a greater likelihood of

implicating incidental u.s. person communication, or inadvertently collecting holly domestic communication that is must be purged. for a variety of circumstances, the court evaluated the minimumization procedures we had in place and as a consequence of that the government put forth a shorter retention period to ensure that the court could reach comfort with the compliance of those procedures with the fourth amendment. so two years those one element of the revised procedures now public. >> from what you just said, if sing a legitimately tasked about term wholly domestic communication is collected, it has to be purged? >> if one recognizes it. >> even if it asks for intelligence information? >> off the top of my head i can't articulate all the particular exceptions, but there are an elaborate set of detailed procedures that are now public

that discuss how a collection must be treated to account for this concern. and task things like data must be segregated in certain ways. where the risk of collecting the communication is higher. shorter period. wholly domestic communications are not permitted under the statute. therefore as a default rule it must be purged. eeyou used the word incidental collection there are -- you used wore incidental collection. by incidental u.s. person collection you mean that the person on the other end of the phone from the nonu.s. person abroad is the u.s. person? that's your definition. is there another definition you are aware? i think there's been frustration with the use of determined incidental in that context because it's not accidental.

it's unavoidable. i want to make sure we are on the same page. by incidental, not accidental, unintentional, this is what we are doing. >> it is incidental to the collection on the target. it is not accidental. it is not inadvertent. incidental is the appropriate term for it. >> that term has been used far beyond this program. this' no judgment intended. >> i'll hold questions for another round. >> following up on david's question, i think it goes to a broader point which is that there's a perception that this statute is complicated. there's got to be loopholes or idiosyncrasies. let me ask you, would it be the view of the united states government that it is appropriate to use 702 to intentionally target u.s. persons whether directly or through reverse targeting,

whether they are inside the united states or outside the united states? >> no. that is not permissible. >> i wanted to also follow up on a question about the -- i apologize, just for folks understanding we spent 6 1/2 hours talking with folks about just the oversight mechanisms in place and were unable to get through that entire conversation. i apologize if you have said this before today. the collection methods, procedures that you use with respect to -- those procedures, are they approved by the fisa court? >> yes. >> are those transparent to congress? >> yes. >> i think we haven't necessarily started to allude to this, but can you talk a little bit about how -- your impression of how the intel committees in

particular view their obligations with respect to oversight of your program and whether you have found in your experience that to be pro forma or in any way lacking? not quite viral, but i think the -- the response was, no, they have not. >> i have been on this job now getting on towards five years, and i found nothing about my interactions or institutional interactions with the intelligence committees to be pro forma. they have fairly substantial staffs which have a lot of experience. some of them come from the community. they know that they dig very deeply into what we do. the d.n.i. occasionally uses the term wider president bushing for the interactions we have with the committee. it's not a pro forma interaction

in any way. america online one point, on programs like 702 we are talking about today, for example we all lived through the re-authorization of section 702 in 2012. that process was not simply in connection with the intelligence committees, but i can remember nume trust briefings where we would go up for all member briefings that the intelligence committees would host for the congress. i don't want to leave the impression that it's only with the intelligence committee. particularly for a program like 702 that needs to be voted on by all members of congress. >> i want to make sure that my colleagues have time for their last round of questions. i'll save my time. >> going back to the minimumization question and specifically the incidental am i right estion

that the rule is that whether the information is inadvertently collected, that is you were tasking on the wrong selector or some mistake was made and you got something you didn't intend to get that's inadvertent, or you were correctly targeting the right account then you collected communications to or from a u.s. person these incidental, the procedures say minimumization rules say that if you never discover that it was inadvertent and never discovered that it was incidental, you never realized it was a u.s. person collection, it's deleted after five years.

you keep it for five years, you keep everything for five years, two years on upstream, five years on prism and then it gets deleted. that's the baseline rule, right? >> correct. and then on top of that is you discover through analysis, throw -- through reviewing it that it was inadvertent or incidental collection on a u.s. person, you -- immediately purge >> the difference in the way inadvertent and incidental as are you using the terms are different concepts. inadvertent refers to a collection not authorized by law. hat is purged. >> purged unless -- >> raj mentioned there are certain exceptions. i can't recite them. narrow. are fairly

incidental is collection authorized by law. at that point the rules relating to u.s. persons kick in. if you determine that it has no foreign intelligence value, you purge it. >> what's your response to the argument, fine, that means that if you think it's valuable, you can keep it. if you don't think it's valuable then you purge it. it's like -- >> it's lawfully collected. >> but you do -- if it's of interest to you, you do keep it. >> if it's a potential foreign intelligence value -- if it can be useful to providing the intelligence that policymakers need or he protecting the nation against threats, then, yes, we keep it for the required period. >> make it more concrete, if it's a terrorist overseas, he's calling a number in the united states that belongs to u.s. person, we want to keep that information.

it is incidental the fact we are getting the u.s. person number, we are targeting that non-u.s. person overseas, but he's calling minneapolis. we want to keep that communication. it's of high interest to us. >> one point i would add is just that minimumization refers to steps in the process everything from collection to review to dissemination. we are talking about one element here. there are different stages in the process. to disseminate that information a certain threshold would have to be met. >> i know it's totally embedded both in law and guideline and practice, but minimumization means different things. minimumization means keep it for five years and then delete it. minimumization means don't disseminate. identifying information. minimumization means delete it unless it's intelligence information. those are very different --

>> they all fall with the statutory definition of minimumization. i'm going to mangle it a little bit, but it's procedures that are designed to minimize the acquisition, retention, and dissemination of information about unconsenting united states persons. consistent with the need to produce foreign intelligence information. so you're going to have different minimumization rules based on the particular missions of the agency. you're going to have different minimumization rules depending on the nature of the activity you're governing. you're going to have different minimumization rules depending upon the nature of the information. minimumization is that the entire category of -- >> it is a little bit of a circular definition. which means different things in different context. >> i wouldn't say it means different things in different context. >> it's a balance. >> if i could real quick emphasize. the f.b.i. does have its own standard minimumization

procedures. i assume you have had access to those. there's a lot on the table we were talking about with respect to minimumization, i direct you those to that as well. >> judge wald. >> when u.s. person information that's been, quote bs, incidentally acquired and kept for legitimate reasons or whatever in the base is disseminated to foreign governments as is permitted under certain circumstances, it said it's usually masked. i think it would be useful for public consumption to know what the masking process entails and what circumstances it isn't masked, and whether or not the different agencies can use different criterias for masking or it's all centralized by the injustice or attorney's supervision. >> i can speak to the masking generally at n.s.a.

second party issue for a moment. is substituting a generic phrase like u.s. person for the name of the u.s. person that could actually collect. that u.s. person is a legal term. that means an individual or it can mean a u.s. company or federal i i don't think there's a centralized process. that's how we do it at n.s.a. that's how other agencies do it as well.

permit you to disseminate u.s. person information where that is not either foreign intelligence or necessary to understand that foreign intelligence. i need er words -- if to -- if it's joe smith and his name is necessary if i'm tapping into that foreign government and key they understand that it's joe smith because that's relevant to understanding what the threat is or what the information is, let's say he's a cybermalicious cyberhacker, and it's key to know the information. you might pass the name. if it was not, it was incidentally in the commune case but not pertinent to the information you're trying to convey, then that would be deleted and would just say u.s. person would be blocked out. so they were in communication with and would say u.s. person. that's how it works. more or less. and all the agencies. is that a fair description? >> the basic parameters for fisa collection are articulated in the statute. the big principles necessary to understand foreign intelligence

or evidence of a crime. that's effectuated through the minimumization procedures that each agency had. it's articulated in 12333. >> the last subpart, would those, take n.s.a. as an compasm, would those mask criteria also include foreigners , non-u.s. persons information? suppose the government of romania asks some questions which might require a romanian nontargeted person in your prism bases, would these masking procedures, etc., apply there, too? or are they just for u.s. persons? >> in today's world, masking procedures are for u.s. persons because they are derivative of the constitutional requirements -- the minimumization procedures that need to conform with the constitutional requirements. >> up to the agency to decide whether they thought it was right or wrong to give that

information to foreign government? >> there's two points to mention. one is no information would ever be disseminated unless it had foreign intelligence value. >> having made that decision. >> if i may continue. the second point is i think what the president is directing the d.n.i. to examine is what protections could be extended to non-u.s. persons. >> that's what you're working on? >> that's the issue. >> one quick comment. if you look in 50 u.s.c. 180 , i think also applies to section 702, it says, i don't think it restricts it with respect to u.s. person or non-u.s. person. no federal officer or employee can use or disclose information at all except for a lawful purpose. the information could only be disclosed for a lawful purpose. i believe that cuts across the board. >> i don't have anything more. >> i wanted to make sure i

understood both judge wald's question and response. i understood her to be asking what circumstances -- under what circumstances dissemination could be made to a foreign government. are there separate agreements and procedures that might govern in that instance? or are analysts able to simply decide they would like to provide foreign intelligence information to foreign governments? >>ure procedures, publicly available procedures have provisions with direct sharing of second party partners. i can certainly get back to you on that. but they are in a public and articulate the circumstances under which information can be shared with third party partners. they are approved annually. >> that's the critical point these are part of the minimumization procedures that have to be approved by the fisa court. to the extent we are talking about section 702. >> the minimumization procedures are only for u.s. persons, aren't they? >> yes.

that's right. >> i was talking -- >> there are general rules about when we can share fisa information. >> i want to thank the panel very much for spending the a fair amount of time with us today. in a public setting. we appreciate it. we'll take a short break and resume at 11:00 with our second panel. thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2014] >> you're on c-span live in orlando, florida. this is the valencia college, president obama is here this afternoon to talk about women and the economy and pay disparate. the associated press says this is the first in a series of regional forums planned leading up to a working families summit

in washington on june 23. so here in orlando waiting for the president. he was expected to be here at 2:30. running a bit late. we'll have live coverage once it starts here on c-span. the president before he departed washington announced further sanctions against russia for their annexing of crimea in ukraine. we'll show that to you later in our program schedule as well. comments from the white house south lawn. we discussed a situation in crimea and ukraine this morning with a former natea member. >> our first guest of the morning was a former deputy senior civilian representy from -- representative from 2009 top 2011 to nato's national security assistance force and also a senior transatlantic fellow to the german marshal. mark jay cobbson, thanks. host: can you paint a picture about nato's role what will go on in the ukraine? guest: i think in order to address that you have to understand where nato came from. this is a cold war alliance

designed as some politicians joked, to keep the americans in, the germans down, and russians out. a lot of ways we are back to the future. there is talk about what it might mean to have a resurgent russia within modern nato. i think what you see from secretary-general rasmussen, just in washington this week sneaking at georgetown and at the brookings institution, what he has addressed is really the political role of nato. this is a political military alliance. it's just not about the weapons and about the militaries. it's about the political legitimacy of action taken in the international arena. to make that simpler, what it means, it's a collective ideal. it's the values that are held by the alliance nations. i think what secretary-general rasmussen said clearly is this alliance still stands for freedom for independence, self-determination, and what putin has done in crimea flies in the face of all of that. >> is ukraine or crimea --

ukraine, is it a part of nato? guest: no. now, just to distinguish there have been some discussions about what is ukraine's relationship with nato. back in the early 1990's, nato formed a partnership, a collective known as the partnership for peace, and this -- in fact russia was part of the partnership for peace. the idea was for former warsaw pact nations and others, central asian nations, for example, to work with the alliance in terms of training collective security, but there is no alliance obligation to defend a partnership for peace nation. the idea is to build confidence and to some degree let's say a strategic level interoperability , but for the united states, for our nato allies right now, the ukraine remains a member of partnership for peace and can have discussions and dialogue with the members at a political level, but there is no obligation to defend ukraine

under the nato treaty and the cornerstone of that which is article 5 which says, an attack against one is an attack against all. that's a very important distinction for the listeners. host: what are the possible roles for nato now? guest: this is exactly what the alliance is going to discuss over the next several months. . that is john kerry, his counterparts, europe, canada, they will get to together and discuss with the nato alliance may do in terms of support for ukraine. we will see more institutional support. by that, i mean working with the ministry of defense, working to ensure -- i do not mean boots on the ground training ukrainian forces, but establishing stronger relationships to assist ukrainians with the competence

of their military to take action of their nation. -- to defend their nation. why is vice president biden in europe right now? why is it important for marty dempsey to make statements about -- we're going to be discussing on a daily basis with our ukrainian colleagues what they need. it is the psychological and moral support that is critical as a first step. you should not consider doing anything else without that. host: are trainings and supplies part of the support nato could offer? guest: certainly. >> we will take you live back to orlando, florida for president obama. [applause] thank you so much.

it is great to be back in orlando. you came toe of work. a lot of folks are pretending to work and watching the tournament. i know there must be some gators fans around here. they are an outstanding team. i have got them going to the final four. thing,uld win the whole in which case i will not win the billion-dollar -- you can only pick one winner. there are 63 colleges mad at me. i understand there are some neighbors up the road in gainesville who are not happy with me. even more tomorrow when i release my women's brackets because you cannot please everybody. we have terrific elected

officials here. i want to thank the mayor of orlando, who has been a great friend, and give him a big round of applause. [applause] to thank the president of the lancia college. -- valencia college. [applause] there he is. we have the president of the west campus, who i just had an amazing conversation with. [applause] thank everybody here at valencia for having me. a few years ago i announced a to recognizeon exceptional community colleges. school, thed, your very first school in the entire country to win this prize. [applause]

between the students' hard work and outstanding faculty, administrators who are making sure everybody has what they need to succeed, the graduates are leaving here ready for a career, ready to pursue their dreams wherever they may lead. represents what is best in america, the idea that in this country if you work hard you can get ahead. and restoring that opportunity for every american, that has been our driving focus as a country. that has driven everything i have done since i came into office. after at a moment when the worst economic crisis of our lifetimes, after some devastating losses that people had in their homes and retirement accounts or jobs -- now we have seen businesses creating 8.7 million new jobs over the past four years,

american manufacturers adding jobs for the first time since the 1990's. in american energy, we are producing more oil here at home than we buy from other countries for the first time in two decades. renewableerating more energy. the housing market is rebounding . our high school graduation rates are the highest on record. [cheers and applause] more young people are earning college degrees than ever before. [cheers and applause] as we were digging ourselves out of the economic old we were in back in 2008, we worked to lay a new foundation for america's future growth. here is the problem. there are a bunch of good things happening in the economy is starting to grow. trends that have really battered middle-class families and people who are working hard to get into the middle class for decades, those have not yet gotten better. are doinghe top

better and never, but over the past four years the average wages have barely budged. you have to many americans working harder than ever just to keep up. it is our job to reverse those trends. we have to build an economy that works for everybody, not just a few. we have got to restore opportunity for all people. the basic idea that no matter where you started, no matter what you look like -- if you work hard, you can get ahead. america has got to be a place where if you are responsible and you apply yourself, you can make it. what we focus on is an opportunity has four parts. jobs that payre good wages, whether in manufacturing, energy, innovation, technology, service industries. in orlando we have focused on growing tourism. two years ago i came here to announce an executive order to

attract more foreign tourists to the u.s. spending by foreign tourists was up by almost 10% to last year. that is a huge boost to florida. we have got to keep on taking those kinds of steps. part two, we have got to train more americans with the skills they need to fill the jobs that are actually out there, not just today but tomorrow. part three you know something about. we have got to make sure every young person has access to a world-class education, from high quality free school -- pre-sc hool to an affordable college education for all you striving young people. ur is making sure our economy rewards the hard work of every american with wages you can live on, savings you can retire on, health care that is there when you need it here it -- it. in pursuit of this opportunity -- i will work with congress were ever i can -- but congress

does not always -- [laughter] move the way we would like. year ofalling this a action. wherever i see a chance to expand opportunity for more americans, i will take it. i'm not going to wait for congress. we have to go ahead and get it done. [cheers and applause] i will give you a couple of examples. in the past few weeks i have used my authority to require federal contractors to pay at .east $10.10 an hour i signed another executive order to make sure they are actually paid the overtime they have earned. everybody who works hard deserves a chance to get ahead, and if you work more you should get paid a little more. as part of making sure our economy rewards for hard work of every american, i'm also coming here today to make sure that our economy rewards the hard work of women. [cheers and applause]

i just want to be clear. i got nothing against you men. we are working hard to make sure that you are doing the right thing, too, and you are getting opportunity as well. personal stake in seeing women get ahead. women make up 80% of my household. my mother in law always count my mother-in-law. [laughter] i personally know the challenges that women face in our economy. there are some pay particular -- particular challenges the women face. i grew up the son of a single mom. she struggled to make ends meet and raise me and my sister the right way. she could not have done it if it were not for my grandparents. the most important breadwinner in my family was my grandmother, who worked her way up for being

a secretary to being a vice president of a bank. never got a college degree, but then hit a glass ceiling at the local bank where she worked. she trained men to eventually be her boss, even though she knew a lot more than they did. when michelle and i had our girls, we gave everything we had to try to balance raising a family in chasing careers, but i will be honest with you. it was harder for her than it was for me. when she was with the girls, she would feel guilty about the job. when she was at work, she would feel bad, are the girls missing me. i know barack's messing up somehow. she's calling to check. [laughter] we are lucky and usually michelle and i get to have dinner with the girls every night and they are doing great. the highlight of every day for

me is sitting with them at the dinner table. i want to make sure that my daughters are getting the same chances as men. i do not want them paid less for doing the same job as some guys doing. when they have children, i want to make sure they are not having or in someir jobs other fashion be hampered because we don't have the kinds of policies in this country that support them. man, we allo the have a stake in this. women make up half of our workforce. ts,r half of valencia studen 56% are women. for more than two decades, women have earned over half of the higher education agrees awarded in this country. that means soon for the first time, america's highly educated workforce will be made up of more women than men.

is, our economy has not caught up to their reality yet great -- yet. we have too many women who work hard to support themselves and their families, including the 20% of women enrolled in colleges supporting children while getting a degree. they are facing outdated policies that are holding them back. that has to change. back.ds all of us when women make less than men, that hurts their families, including their partners, their husbands. their kids. they have less to get by on. nowurts businesses because their customers have less to spend. when a job does not offer adequate family leave to care for a new baby or an ailing parent, that burdens men and children. when any of our citizens cannot fulfill their potential for any reason -- it does not have to do with their talent or character or work ethic -- that is holding

us back. better when everybody participates, when everybody's talents are put to use and everybody has a fair shot. i had a wonderful conversation before i came out here with carolyn, and we had a group of other women, including dr. williams, and you should have heard these stories. i don't know if dr. williams shared her story, but her mom was blind and raised her a single mom. she had to go to school and get a job, and when her child was born prematurely, her blind mother comes down to provide child care because that's the only way they could manage it. another young woman describing what it is like when you have twins, primi babies, and she's having to quit her job because

,here's no childcare available and how she needed programs to support her even though she had a loving husband who was helping out. is a family agenda, but it starts with making sure every woman is getting a fair shot. a women's for economic agenda the gross our economy for everybody. that begins with making sure women receive equal pay for equal work. this is a simple principle and should not be confusing. [cheers and applause] it's not that complicated. today more women are their family's main breadwinner than ever before, but on average women are still earning $.77 on every dollar that a man does. women with college degrees may earn hundreds of thousands of

dollars less over the course of her career than a man at the same educational level. that's wrong. not 1958. it's 2014. that's why the first bill i signed into law was called the lilly ledbetter fair pay act. [cheers and applause] it made sure it that it was sue if theyomen to were not being paid the same as men. in the coming weeks, congress will have a chance to go even further by voting yes or no on what is called the paycheck fairness act. right now the majority of the senators support that bill, but so far republicans have blocked it. we have got to get them to change their minds and join us in this century. a woman deserves equal pay for equal work. it's pretty straightforward. [cheers and applause] and congress should not stop there. a woman deserves work price -- workplace policies that protect

her right to have a baby without losing her job. if men were having babies, we would have different policies. [laughter] that is for certain. a woman deserves to take a day off to care for sick child or parent without running into hardship. [cheers and applause] congress needs to act so that americans join every other advanced nation on earth by offering paid leave to those who work hard every day. it is time to do away with some of these workplace policies that belong in it "mad men" episode. we have got to make sure every woman has the opportunity that she deserves. when women succeed, america succeeds. [cheers and applause] i truly believe that. here, we wereer

talking about the best practices of companies that are highly successful. it turns out that if you give families -- you give your workers some flexibility so if they have a sick child or parent, they can have a little time off -- those employees are more productive. the companies do better. you have less turnover. it is good business practice. it's the right thing to do. at a time when women hold the ,ajority of low-wage jobs congress is going to get a chance to vote yes or no on whether millions of women who work hard all day deserve a raise. there's a bill before congress that would raise the federal minimum wage to $10 and $.10 an hour, which would lift wages for 28 million americans throughout the country. it would be good for business.

what happens is for customers have more money to spend. grow the economy for everybody. it's time for congress to join the rest of the country. we are calling it the 10/10 campaign. give america a raise. that in particular will help the disproportionate number of women who are in lower wage jobs guide -- jobs. members of congress will have to choose between helping women and families get ahead or holding them back. is fewerur challenge than 20 seats in congress are held by women. i think we are all clear that congress would get more done -- [laughter] if you even that out a little bit. about that.onfident in the meantime we will keep making the case as to why these policies are the right ones for working families and for businesses. over the next few months, might ministration will host a series of roundtable discussions like the one i had in different parts of the country just to hear

issues liket workplace flexibility and opening up new leadership opportunities for women. the all going to lead up to first-ever white house summit on working families that we will be holding this summer. and maybe some of you will participate. [cheers and applause] we want to hear your stories. me close by mentioning one last policy that has benefited millions of women right now. that is the affordable care act. i know there's a lot of politics around it. [cheers and applause] i know there are a lot of tv ads around it. right now, despite the fact that the west side was really bad for the first month, it has fixed more than 5 million americans -- than 5 millionre americans have signed up.

more than 3 million young people have coverage because you can stay on your parent's plan until you are 26. [cheers and applause] zero american can ever again be denied health insurance because of a pre-existing condition. [cheers and applause] not to mention, no woman can ever again be charged more for just being a woman. this is something that people don't realize. itore we passed obamacare, was routine for insurance companies to charge women significantly more than men for health insurance. [laughter] it's just like the dry cleaners. [laughter] they charge you twice as much. [laughter] the same thing was happening in

health insurance. we banned that policy for everybody, not just folks getting health insurance on the exchange. if you are getting health insurance on the job, they cannot discriminate against women in that same fashion. not to mention tens of millions of women have gained access to free preventive care, like mammograms and contraceptive care. no woman should have to put off a potentially lifesaving cure she needs just because money is tight. the roundtable i just had, there were at least three or roundtable,n that the majority of the women i just talked to had an instance in their lives where either because or a premature , theyr an ailing parent would be bankrupt had they not

had health insurance. broke. when you hear folks talking and i'm notare, using it because i've got health insurance, or unhealthy -- i'm healthy -- yeah, you don't need health insurance until you need health insurance. [laughter] it seems like a drag until you what life doesnt to all of us at some point. some unexpected thing happens, and you want to make sure you have got that support. now, none of that has stopped republicans in congress from spending the last few years focused on legislation not to help young people afford college, but they have taken 50 votes to try to repeal or undermine this law.

they say the 50th time is the charm. [laughter] 50 times. it's not just to try to improve the law. we want to scrap it so that millions of people who have health insurance, we want them to go back to not having health insurance. that is not going to happen. they can keep wasting their time trying to repeal the aca. we are going to keep working to make this law work better. every person and every woman deserves to control her own health care choices. not her boss, not her insurer, surely not congress. there is an important deadline coming up. this is the last call for 2014. if you have been thinking about buying one of the new plans on -- the majority of people may be able to buy health insurance for as little month. or less a

less than your cable or cell phone bill. i thought everyone has a cell phone. [laughter] the deadline is 11 days away. if you are uninsured, check out your note -- your new choices at healthcare.gov. if you are already covered, that helped get a friend covered. ist is part of what america about, taking responsibility for working to achieve our own dreams and coming together to help our fellow citizens pursue and secure their own dreams as well. stories ofch amazing the women that i talked with before i came out here. pointne of them at some has made a major sacrifice on behalf of their families. woman had a severely autistic son, took 12 years off

to raise her three kids, including this son, before no going back to school -- now going back to school and being able to teach once again. like mye my mom, just grandma. i did not fully appreciated at the time the sacrifice they were making. i used to complain to my mom when she was going to school and working, why are we eating the same thing every night? was doing so much, and then coming home is still taking the time to make sure that i had a decent meal. is what built this country, those kinds of sacrifices. we have got to make sure that we as a country are helping people who are so courageous and so brave and working so hard. andthose moms and grandmas young women like carolyn who are trying to start their own businesses. we have come a long way together

over these past five years, but we have got to do more to restore opportunity for everybody, whether you are a man or woman, black or white, latino, asian, gay, straight, with or without a disability. all of us have something to offer and all of us have something to offer in this american story. i'm going to keep working to make sure every single one of us have a chance to succeed. [cheers and applause] everybody. [cheers and applause] ♪

♪

>> the president signed an executive order that would allow the u.s. to penalize key sectors of the russian economy and shortly after that announcement moscow announced that nine u.s.

officials will be denied entry into the russian federation, including john boehner, the chairman of the foreign relations committee robert menendez and john mccain. ahn mccain putting out statement shortly after that, i say -- i guess this means my vacation -- the news from moscow a bit of a badge of courage from some senators. you will find more at twitter.com/cspan and look under

the members of congress list. more live coverage coming up later today. athalf an hour we will be the wilson center in washington for a discussion on the syrian civil war with the former u.s. ambassador to that country, robert ford. at 8:00 eastern tonight, bill gates will be talking about his foundation and its work on poverty, global health. here's a preview. >> you offer an incredibly bold prediction. you say that there will be almost no a poor countries are meaning by 2035. what do you mean by that? measure, which has all sorts of challenges in , but we don't have a substitute measure. the world bank codifies countries with over 1200 per person per year as moving up into a middle income bracket,

from low income to middle income. countries that are still in that low income category. by 2035, there should be less than ten. they will mostly be either places like north korea where you have a political system that basically creates poverty, a or their landlocked african geographies,re the the disease burden, disparate ethnicity mean they have not been able to bring together a government in terms of education infrastructure. if we are on this rising tide that is not recognized -- it is overwhelming how prosperity is spread around the world, from

1960, where there were very few rich countries and a gigantic number of poor countries. now most countries are middle , and poorntries countries are much smaller. just saying they will all move up passed that threshold does not mean they will not have poor people with in their countries. be a lot better on average than it is today. all that conversation with bill gates coming up tonight on c-span at 8:00 p.m. eastern. yesterday janet yellen held her first news conference as head of the fed rate we talked about it on this morning's washington journal. the author of "yellen and the fed." talk about the book, but a front page story about her, coming in

meetings that happened this week at the reserve. she became chairwoman of the fed at the beginning of february. this was her first meeting and she had a challenge on her hands. the fed has been pulling back on a bond buying program, which has gotten a lot of the market's attention, and making decisions about when to raise interest rates. the said isn at shifting a bit and investors were rattled by what she had to say. the consensus in the market was that the fed was not going to start raising interest rates until later in 2015, and when they do they will do it in small amounts so by the end of 2015, the expectation was the fed up.d not even push rates

there were messages in the tea leaves that let people to think that maybe a quarter of a percentage point higher. so caught up in the fed's monetary policy. it has been such an important driver not just of the recovery, but the stock market for the last couple of years that even tiny changes like that could over 100ks down points, and that's what happened yesterday. host: was that a surprise to people as far as the aggressive nature of it? guest: a little bit of a surprise. after every meeting the fed does, they put out a formal policy statement. sincelicy statements december 2012 have been saying they were not even going to think about raising interest rates until the unemployment rate got to 6.5%. the unemployment rate is getting close to 6.5%.

they changed the policy statement and made it a little bit vaguer. yellen had a press conference after the fact and we had a chance to grill her on some of the nuances of what the fed's timing is. what came out of it was a , a sense that they are still going to keep interest rates very low but they might move earlier than expected. that was the surprise. instead of moving in september of 2015, maybe they will move in april or june. financial markets are hypersensitive to what the fed does read -- does. host: her first showing and results. guest: she got a front page headline of the paper. host: how does she differ from ben bernanke? guest: it's a good question.

they are what economists would call saltwater economists. she was educated at yale. bernanke got his phd at m.i.t.. they are of the mindset that the government has a role to play and the central bank has a role to play in addressing economic downturn. their general framework is the same. she is seen in the markets as being more dovish. more eager to address high unemployment and tolerate a bit more inflation then perhaps bernanke would. one of the things that were surprising was that people expected a dove to fly into the fed. instead, someone with hawkish talents might have shown up. host: we will hear from her directly.

if you have questions about the fed under the leadership of janet yellen. (202) 585-3880 for democrats. (202) 585-3881 for republicans. (202) 585-3882 for independents. let's hear a bit from her from yesterday. she announced additional reductions to the federal reserve when it comes to asset purchases. about $55 billion. here's what she had to say. [video clip] >> let me return towards decisions to make another measured reduction in the face of asset purchases. starting next month, we will be purchasing $55 billion securities per month. down $10 billion per month from our current rate. after today's action takes effect, we will continue to significantly expand our holdings of longer-term

securities. we will also continue to roll over treasuring securities and reinvest printable payments for holdings of agency debt and agency mortgage backed securities. these sizable and still increasing holds will continue to put downward pressure on longer-term interest rates. support mortgage markets and to make financial conditions that are accommodative, hoping to support job creation and a return of inflation to the committee's objective. host: a lot of technical language. guest: what the fed has been doing -- you asked what she is like. you got an example of that. she is very technical. her answers are often

somewhat robotic. she is also a woman who grew up in brooklyn. you see her moving from robotic to the girl from brooklyn. in terms of what she said there, the fed has been buying bonds since -- they have done it in three stages going back to 2009. they expanded their balance sheet from $800 billion in holdings to more than $4 trillion in holdings. this balance sheet is now about the size of the balance sheet of jpmorgan and bank of america. both of those combined. they have been doing this because they believe that buying all of these bonds is helping to hold down long-term interest rates.

that traditional lever is short-term rates. banks charge each other overnight. the consumer does not feel it directly. because the fed pushes those short-term rates all the way to zero during the financial crisis, they have been looking for other ways to try to stimulate the economy. the mechanism they have come up with is buying all these bonds, which is holding down long-term interest rates and your mortgage rates. helps to hold down your credit card rates. although they always seem to be high. what's happening right now is the fed feels like the economy has gotten to a point where it doesn't need to keep getting its balance -- growing its balance sheet. they're slowing down these purchases, hoping to get to a point where they don't have to keep pumping all of this money

into the financial system. they are seeing how the economy is doing along the way. if it meets their expectations, those expectations for moderate growth of around three percent -- if it meets those expectations, they will stop buying. eventually, they will let these things mature. host: one of the things she said, the unemployment rate is not just a number for her anymore. guest: what she says is that it is not just a number. this is why we talk about her being a dove. she has emphasized quite often that she thinks about the statistics in human terms. they aren't just numbers to her. the unemployment rate represents millions of people without jobs.

she wants to do what is within her mandate to try to help those people. the other thing -- that's her broad framework. the more technical meaning when she says that is that the unemployment rate has been coming down. the fed is not satisfied with the signal they're getting. they think there are other things going on in that statistic in the economy that aren't captured in that statistic. there are more people today working part-time who aren't full-time. even though the unemployment rate is coming down, sometimes it's because people are scraping together a part-time job when they want full-time work. so the fed thinks there are still more capacity in the economy to grow a little faster to create more jobs for people before it has to get too worried about inflation and raising interest rates.

what is happening is as the unemployment -- they have been saying the rate was one of the main guideposts for when they would start raising interest rates. this is one of the things that freak people out yesterday. they said there looking past the unemployment rate now and looking at other things. part-time workers and the rates of hiring and the extent to which people who have been unemployed for a long time are coming back into the job market. they think the one number does not tell the whole story. when the unemployment rate was high, they felt they could depend on that as a guideposts because it was clear that there was a lot of unemployment and they could afford to keep interest rates low. as it gets lower, they are saying they need to be more systematic in getting a full picture of the economy and making a judgment about when

rates start going up. host: jon hilsenrath joining us. the author of a brand-new e-book. guest: i'm hesitant to call myself the author. i was involved in large parts of it. what we did is we -- when she became the chair, we built up a briefing book on, who is this person. we have been writing about her going back to the mid-1980's. one of my former colleagues wrote a story back in the 1980's about young economists of the day. they would've been in their 30's at the time. they were trying to understand the mysteries of unemployment and why it is slow to come down after a recession. he found people like larry summers, people who got on to be policy makers.

one of them was janet yellen. we went back through our records -- 40 years of our own reporting on janet yellen and the fed. if they want to know who this person is -- she is the most powerful economic policy maker in the world today. who is she? what is she bringing to the job? that's what we try to do in this book. give you an overview of who she is and what challenges she confronts and what her mindset is. host: first call is peter from new york. republican line. caller: good morning, guys. let me rebut this gentleman. my problem with these guests is

they all seem to be apologists for wall street. i encourage your audience to read the article, "confessions of a quantitative user" which explains how fed policy is hurting main street and helping wall street. janet yellen is a clone of ben bernanke. the fed says they are trying to control inflation. this is not true. what they're trying to do is control deflation. what they are doing is transferring the cost of goods and services through inflation by increasing the money supply, devaluing the dollar. the cost for main street is going up while the business

community are continuing to make money. they're laying people off. they haven't been hiring. the cost of living has been going up while family income has gone down. guest: there are a few things -- the first thing i talked about is the charge by the caller. that i and others are apologists for wall street. i guess i would take exception to that. as a reporter on a beat covering the fed, i have three response -- responsibilities. one responsibility is to hold the institution accountable. i explain what the fed is doing. these are compensated steps they're taking. -- part of steps they're taking.

part of my responsibility is to inform the public about what it's up to so that the public can make informed judgments about its own future and the institutions. the third one is to break news. on the accountability question, i think that relates directly to his point -- are we apologists for wall street? i would throw out a couple of examples. some stories we have done that have helped hold the institution accountable. in 2009 we wrote a story about the chairman of the federal reserve in new york who was a board member for goldman sachs. we looked at his trading records and discovered that he had been buying goldman sachs stock during the financial crisis when the fed was pouring money into big banks like goldman sachs and morgan stanley. because these regional fed banks are required by law to have members from the private sector.

we disclosed these traits and he resigned the next day. -- these trades and he resigned the next day. when we see instances where the institution needs to be held accountable, we do it. the caller mentioned a couple of other economic points that are worth looking at. i hear this quite often and i spent time looking at this and thinking about it. the fed is pumping all this money into the financial system. they have pushed rates to extraordinarily low levels. some very simple economic models will tell you that when the fed pumps a lot money into the economy, it will cause inflation. it cheapens the value of the dollar. we have an excess supply something, its value goes down.

that hasn't happened. you might consider that to be a bit of a puzzle. you look at the value of the dollar, it has held steady. it rose a little bit during the financial crisis. it has been mostly steady over the last six or seven years. in fact, the dollar was declining in value in the 10 years that preceded. but not since the crisis. not since the fed pumped all of this money into the financial system. most measures of inflation have also been below the two percent target that the fed has. it begs the question, why is that happening? one of the reasons for that is that inflation and the value of the dollar are not just a function of how much money the fed is putting out into the financial system, but a function

of how that money is being used. how aggressively it's being taken by banks and being lent out to businesses and households. this is something an economist calls the velocity of money. once you put $100 on the table, the people take it and let it out and put it to work in the economy. the velocity of money collapsed during the financial crisis because there was so much fear freezing up the financial system. you look at aggregate measures of debt planning. -- bank lending. they have not risen much because somebody banks got burned her in the crisis. somebody households were learning that they have borrowed themselves up to their eyeballs. that been spending -- they have been trying to cut back their borrowing. even though the fed has been pushing so much money into the system, it has been very slow to

engage the animal spirits of the economy. maybe what the fed is doing is helping mostly rich people and not everybody else. we could talk about that. that is a point worth discussing. host: this is off twitter -- "a lot of members of the house rejected fed. how will they treat the new fed chairman or will it be the same?" guest: that's an interesting question. yellen's press conference yesterday was not the first time we got to see her on a public stage. she has done three testimonies to congress since being nominated by the president. her testimony in february was really interesting because she went to the house to deliver a semiannual report.

what she did was, she went up there and said, i'm going to stay here as long as you want me to stay and answer all of your questions. it was a very astute political move on her part. it helped to disarm some of her critics. she stayed there and answered all the questions from the republicans on the committee. including junior members who don't get opportunities to have their questions answered because very often these hearings cut off around noon. she went all the way until 4:00. it was a marathon session. she is trying to engage these critics. it'll all depend on how the economy performs. if she keeps rates too low, the

judgment will not be gentle. if the economy gets going and inflation remains under control, she will be seen as a success. host: susan from mississippi. independent line. caller: good morning. the president came up with a $1.1 billion budget and he put in a new budget. i don't know how he could have a budget of any kind if he has an $18 trillion deficit. how does the federal reserve feel about the president printing money? guest: good question. what is the relationship between the fed and the federal government's fiscal policy?

we ran a budget deficit -- we should explain the difference between deficits and debt. the deficit is how much more the government spends on the military and social security and medicare than it takes in in revenues. during the financial crisis and after that, we ran deficits in excess of $1 trillion a year because tax revenues collapsed. spending on unemployment benefits rose. the deficit has been coming down in the past two years as the economy has gotten stronger. we have had these fiscal battles in congress. it has put some restraint on discretionary spending by the government. the deficit has come down. the government's debt remains very high.

it is different measures. it's excess of $15 trillion. the fed has had a very straightforward view on fiscal policy. what bernanke argued and what yellen has argued is that they needed to put in place a long-term plan for dealing with debt and the deficit. if you look at projections by the congressional budget office going out 20, 30, 40 years, we have this overpopulation retiring and collecting social security and medicare benefits. government spending is on a path looking out 10-40 years out, spending to explode. what the fed has been begging congress and the white house to do is put together a long-term

plan to hold down these deficits in the long run. but to keep fiscal policy loose in the short run because the run be economy is so weak. back right now because the economy is weak, don't raise taxes because the economy is together a forcible plan to do it over 30 or 40 years. what the white house and congress have formulated is the opposite. together spending restraints in the short run that have affect the discretionary spending, not just on the budgets of nasa but also the military, there has been a very big squeeze on military. they have done little to address these longer-term problems related to medicare and social security, which are the drivers of long-run det.