"courier-journal" sunday said the city of louisville is thinking of doing it by itself. it would cost 1400 jobs in the city of louisville. 50% of these jobs come from young people who, in the obama economy, or having a heck of a time finding work. i cannot think of a worse time for killing jobs. there are times when an increase in the minimum wage would be appropriate, but not in this kind of a time with jobs recovery. >> i have not heard whether the senator was for or against the minimum wage. when he went to california, he was against it. suddenly he is for it. you were consistently against helping people in kentucky actually earn a living wage. let me respond to the false allegations regarding the study the has been done.

90% of those who are on the minimum wage are older than 20 years old. >> senator, let me allow bethany spencer from owensboro to tweet, do you think the minimum wage is a livable wage? >> the minimum wage is largely an entry level wage. 50% of those who earn it our young people who begin a career. they do not stay at that rate for very long. but if you engage in this kind of minimum wage increase right now -- and this is a liberal staffer who used to work for bill clinton, who runs a congressional budget office, who he says you will destroy between half a million and one million jobs, 50% of young people. it is not the way to grow our economy. the reason things like this are being contemplated is because of this slow recovery we have had after the recession of 2008. everything the administration has done has made the recovery worse -- the borrowing, spending, taxing, overregulating. the last thing we ought to be doing in my view is destroying jobs for young people. >> secretary grimes, how do you counter that argument? do you think the minimum wage is a living wage?

>> i do believe that we must work to increase the minimum wage so that it is a living wage. the studies that have been done in kentucky -- that is what senator mcconnell has lost sight of. being in washington for 30 years can do that. the studies that have been done here in kentucky, they show if you increase the minimum wage, you would help to increase income for 30% of kentuckians, create thousands of good paying jobs. >> would it not be a job killer? >> what the cbo report says -- and he will not tell you -- is the full story. it would help lift over a million americans out of poverty. the way we grow the middle class and put hard-working kentuckians

back to work is by giving them a living wage. i don't fault senator mcconnell for becoming a multimillionaire on the backs of hard-working kentuckians. that is what america is about. he has gotten rich while keeping to keep kentucky poor. >> i cannot let that stand. that has been given four pinocchios for that as well. >> are you not a millionaire? >> she knows that is a result of inheritance that my wife got when her mother passed away, and she has consistently gone around all over the state and suggested that i have somehow enriched myself at public expense. her family has made more money off the government in the last 10 years than i have been paid in a salary in all my time in the senate. that is an outrageous suggestion. she knows it is wrong. she has been given four pinocchios and repeatedly for continuing to say that. >> the votes speak of

themselves, 17 times voting no on the minimum wage. he is not for giving kentuckians a minimum wage. i know the mama who gets up at 6:00 a.m. to work two jobs because not only does she have a senator who doesn't think she deserves equal pay for equal work, but she is not earning a living wage. we have to change that not just for the women of kentucky but for the women of this nation, the workers in kentucky and the workers across the nation. >> let me remind everyone if you are just tuning in that this is ket and you are watching a debate between senator grimes and senator mcconnell. in the kentucky u.s. senate republican primary in 2010, who did you vote for? >> trey grayson. >> let me ask you, what is the difference in a tea party republican and establishment republican? >> that is a very good question.

the tea party movement was spawned by kind of a popular uprising against the spending, borrowing, and taxing of the obama administration. it produced a lot of energy and enthusiasm for our party, which i think led to a lot of success in 2010. we have had some spirited primaries around the country since then, just like the democrats have had in kentucky forever. it leads to a stronger party in the general election. i had a primary myself this year. i do not own the seat. i have to earn it. i think it produces no bad outcome any more than democratic primaries have produced that -- bad outcomes for them and governors races over the years. >> i assume most people who have followed the u.s. senate race in kentucky have heard you both speak a lot about issues. if they have not heard you speak, they have seen an ad or two on television or on the radio.

i do not know if they have heard you talk a lot about how what you believe contributes to what you think might be the philosophy or the role of government that you have. talk to me about the fundamental role, the proper role of government in people's lives, secretary grimes. >> i do believe that government has a place to help make the lives of kentuckians better. we are a superpower in the world, and we have two objectives -- to advance our economic interests and to protect our u.s. homeland. that does not mean that we have to be the world's police. i think we have work that we have to do with battles right here on our home front. here in kentucky, they include helping to put thousands of kentuckians back to work who, under senator mcconnell, 30

years in washington, have found themselves in dire circumstances, unable to put food on the table and gas in the cars. it begins my making sure the women of kentucky get equal pay for equal work, something that senator mcconnell has been against. it begins by making sure our seniors -- my grandmothers -- that they have a senator who strengthens and protects medicare and social security. >> you see that as the role of government in people's lives? >> i believe government has a place to make the lives of kentuckians better. we have to have a senator that knows kentucky through and through, not one that is out of touch, but one that knows the people of kentucky and their struggles. >> senator mcconnell? >> equal pay for equal work has been the law since the civil

rights act of 1964 and 1965. the job of the senator, in my view, is to protect to the maximum extent possible this great country and its framework. the framework involves, bill, they can sure people have an opportunity to realize their ambitions, which means that too much government can frequently be a deterrent to opportunity. that is something we have to watch to protect against, when you have an explosion of spending and debt and taxes and regulation like we have had over the last few years. it depresses the economy, making it less likely our young people can find work can begin to dig their way out of all of this. in the senate there is an opportunity to save and protect jobs almost every day. in paducah, for example, the cleanup at the paducah infusion plan, the new conversion plant

that is being built there, advocated and supported by the guy you are looking at. enrichment, the chemical weapons cleanup is employing hundreds and hundreds of high-skilled people, stepping in at lake cumberland this year, when they decided a little fish was endangered by raising the water level, solving that problem so we could get tourism back up and running this year. it is a combination of protecting the opportunities people have, bettering their lives and creating jobs on a virtually weekly basis by preventing things that kill jobs and appropriate funds that create jobs opportunities. >> senator grimes, could you give me one specific from your jobs plan where the federal government would enhance people's lives in kentucky.

>> part of what is seen in kentucky is that our unemployment is above the national average. we are running a 90,000 jobs deficit. under his watch, middle-class kentuckians are continuing to struggle. each of the areas just mentioned -- jobs are lost, not recovered. my jobs plan calls for making sure we actually grow the middle class the right way. we can help kentuckians' lives improve by making sure that we fight for early childhood education, we fight to give businesses a tax incentive to provide child care services. we fight for veterans to receive the proper treatment when they come back from serving this country and the benefits that they deserve. >> and you are confident the federal government, if you are elected, would participate in those ideals? >> we fight for the vital infrastructure projects that kentucky needs and deserves. eastern kentucky, western

kentucky, i-66 and 69. these are projects that the kentucky senator should be fighting for. >> none of that is factually accurate. the biggest problem we got in the country that affects kentuckians in a dramatic way is this job-killing obama administration, which my opponent supports. they have crushed the economy. this is the slowest recovery after a deep recession since world war ii. normally when you have a deep recession, you have a quick bounceback. it did not happen this time, and the reason it did not happen is because all of the government excess we have experienced in the obama years, and it has been particularly acute in our state with the war on coal. the congress in the first two years of the obama administration, when it was entirely controlled by the

president's party, passed the stimulus, obamacare, dodd-frank and all the rest, could not give cap and trade through the congress. now he is trying to do it through the epa. this is an administration- created depression in eastern kentucky. giving barack obama another vote in the senate, continuing this democratic majority in the senate, is not going to do anything to improve america's economy, and certainly not kentucky's economy. >> we will address coal and we will address the economy. senator mcconnell, one in four kentucky children live in poverty. why? >> because we have not had the kinds of growth and opportunity -- i keep saying the same thing over and over again -- but the economy is very sick. even though unemployment appears to go down, the number of people looking for work is the same number of people you had in the carter administration.

it is the labor participation rate. it tells you a lot of people have dropped out. we need to lift people up. the only way to do that is through a vibrant private sector. this administration has been a disaster at getting our economy going. it has been doubly acute -- because of the assault on the coal industry. >> we hear reports from economists that there are strong job gains nationally in 2014, on pace to be the best job growth since the 1990's. the unemployment rate is below 6% for the first time since 2008. 10.3 million jobs, over 55 straight months. doesn't this speak that things are on the uptick? >> not by much. it is a very tepid recovery, the most tepid recovery after a deep recession since world war ii. it is not providing enough lift.

and then if you add on to that this devastating assault on the coal industry by the epa, and it explains why kentucky is lagging even in this slow economy. we are slower than the rest because of the assault by this administration on our state. >> secretary grimes, let me ask you to address the poverty question, one in four children living in poverty. and i asked the question, why? >> the jobs plan -- it is a statistic that needs a senator to address it, not just one that after 30 years -- >> how would you address it? >> that is what united states senators should be fighting for. our jobs plan is an action- oriented jobs plan that works for our families and veterans, cultivating what is unique in kentucky, training our workers not just for today, but for

tomorrow, invigorating appalachia and offering better wages and negotiating a better deal. we do this not only by fighting to strengthen and protect our good coal jobs, but making sure we diversify our economies in eastern and western kentucky, something our jobs plan that was developed with kentuckians from both east and west kentucky acknowledge has been a failure under senator mcconnell. we have to have someone who wants to make sure to invest in the infrastructure projects we need in kentucky, the science, technology, and math programs. we have to havfe someone who wants to bring eastern and western kentucky online, not someone like senator mcconnell who wants to vote against on the best bills to bring in that growth. >> she did not mention a single program except the minimum wage. the minimum wage increase that she advocates is going to cost us a lot of jobs for young people.

a much better way to target the low income people you are talking about is the earned income tax credit. the way to deal with that underemployment problem, a much better way to do it without killing any jobs is the earned income tax credit, which is already a part of the tax law and ought to be grown and expanded. >> let may stop here, bill. that is amazing to see the senator say that the earned income tax bill is something that should be grown, because he supported budgets that actually slashed it. his record is against the earned income tax credit. >> i don't have any idea what she has talking about. i have been a long supporter of

the eic and the child care credit. >> he supported bills that slash it. >> in a large budget vote there are probably things in there that you can pluck out that anyone of us might not prefer. but when you put together a budget, and secretary grimes has not had this experience yet, but when you put together a whole budget, you will not approve of absolutely everything in there. what the budget is designed to do is put an overall cap on what we are going to spend. you cannot serve in a legislative body and not occasionally cast a vote for something that you are not crazy about because there are other things in the measure that you like. >> senator, secretary, let's talk about the affordable care act. secretary grimes, you have said of it you would like to see it streamlined and fixed. i believe that is a quote. let me begin by asking this question, a tweet from john valentine in louisville -- "has

obamacare and connect been a boon or a bane for the majority of kentuckians?" >> the website can continue, but in my view, the best interest of the country would be achieved by pulling out obamacare root and branch. let me tell you why. in order to provide subsidies for the uninsured -- roughly 40 million of them -- 85% of americans had health insurance. obamacare took $700 million out of medicare, the program for the elderly, and used it as a piggybank -- $700 billion out of

medicare, the program for the elderly, out of the last 10 years, and subsidize people -- that was mistake number one. number two, the medical device tax, and the health insurance premium tax. over on the consumer side, you have lost jobs, the cbo estimates 2.5 million jobs will be lost, higher premiums, higher deductibles, higher copayments. a lot of catastrophic impact on the nation's health care system, which could have been avoided by not passing this 2700-page bill that put the government in charge of america's health care. that was a big mistake. with regard to connect, it is a state exchange that can continue it. with regard to the medicaid expansion, that is a state decision. in our state, the governor decided to expand medicaid. >> you would support the continuing of connect?

>> it is a state decision. i think it is fine to have a website, yeah. >> well, it has also ensured -- 85,000 of those are in the private insurance market. >> those people, in all likelihood, now are paying more for less. in the hospitals are now experiencing a new kind of uncompensated care, people who now have insurance but the copayments are so high, they still cannot pay. the federal government is now telling health insurance companies what they can sell. >> on a couple of points, and secretary grimes, we will ask you to respond in a couple of minutes. on the cbo report of $716 billion, that is spread out over 10 years. and $400 billion, according to the research i read, is due to changes in annual updates on fee-for-service payments to

hospitals and other facilities like home health. they are a value-based reference in payment to medicare. >> that is washington talk for a cut. i have had 70 hospital town hall meetings over the last two years. our hospitals are being rimracked by these reductions. these are the people who take care of the elderly, and they are being rimracked by the obamacare medicare reimbursement reductions. i was at a couple of meetings with a home health care organization in the last couple of weeks. they are not going to be able to provide as many services because of these cuts. so let's make sure we understand what we are talking about. a $700 billion raid on medicare, a program for the elderly, in order to provide subsidies for people who are not old and not poor enough to be on medicaid, that bill is a huge mistake.

>> one other point on job loss, didn't the cbo reports say the decline in the number of full-time equivalent workers or people not being employed at all, and others working fewer hours? isn't that how some have interpreted, and i think you said, a job loss? >> 2.5 million fewer people will be working. i don't think that is a good idea for the country to have more joblessness, particularly as a result of this bill, which was a huge step in the wrong direction. i think it is the worst piece of legislation that has passed in the last half-century. >> and it is substantiated by facts that premiums are going up all across the country. >> yeah. premiums are going up, the deductibles are going up, copayments are going up.

i am sure there are some people who are getting insurance who did not have it before. most of the people who signed up are medicaid eligible people who are signing up. but on the private insurance market, it has rimracked the private insurance market. >> but it is 85,000 people, though. >> how many got insurance after their old policies were canceled, and their new policies are not as good? >> how would you vote on a bill to repeal the affordable care act? >> i have said this is a matter of standing up for 500,000 kentuckians, over half a million kentuckians. there is work we have to do to fix the affordable care act, but we have a senator that realizes what the realities are in kentucky, and the fictional fantasy land that mitch mcconnell is in -- we have over half million kentuckians who for the first time ever are filling

prescriptions, they are going to the doctor, and getting checkups. i will not be a senator that rips that insurance from their hand. >> would you give me one specific area where you would either streamline or fix, in your words, the affordable care act? >> sure. extending the grandfathering clause. if you like your doctor in your plan -- and your plan you should be up to keep it. we need to mean that. there is more work that has to be done, but it requires a senator that wants to stop the partisan politics and trying to score points on -- over half a million kentuckians lives are better as a result of governor beshear's expansion of medicaid and the state-based exchange. there is work we have to do, but we need a senator who wants to work in conjunction with the

state of kentucky to get it done. >> let's move to a topic that came up a minute ago that has garnered quite a bit of interest during the campaign. there are plenty of coal miners in east kentucky who have been out of work for two years or more, and i will bet some of them are watching tonight. how will you help them after this election, senator mcconnell? >> here is the problem. we have already discussed it at some length, but it is worth going back to because it is one of the biggest problems we had stayed right now. the administration has issued two regulations through the epa.

they are after this industry. they want to shut it down. if you look at the rest -- and we know with the mission is. it is global carbon emissions. no industrialized country in the world is going to do this. germany, for example, which used to be the greenest country in europe, is now importing coal. the indians have called greenpeace a threat to their economy and said they have no interest in reducing carbon emissions. the chinese are building coal-fired plants. the australians just repealed their carbon tax, which is their version of what president obama is trying to do in the united states. even if you felt that this was a cause worth pursuing, our doing it all by ourselves is going to have zero impact. so what we need to do in congress -- and we have not been able to get any votes because harry reid will not let a single vote on coal to occur -- is begin to restrict the funding

of the environmental protection agency so they cannot go down this path. >> a quick follow-up question -- is this a place that a world power should take a leadership leadership position and be the first to take action against -- >> the president has been trying to take a leadership position, but no one is interested in tying their hands behind their back and creating more problems for their people in pursuit of a goal they do not -- >> you are not looking for the united states to be the first one? >> our job is to look out for kentucky's coal miners. this administration has engaged in an assault on our coal industry. if the american people change the makeup of the senate and give me a chance next year to set the agenda for the country and for kentucky, we will at least be voting on efforts to

rein in epa. let me say one final thing. i believe the reason harry reid won't allow any votes on coal is because he is afraid they will actually pass. i will guarantee we will vote on those kinds of issues. >> secretary grimes, how will you help coal miners if you are elected? >> i am helping them right now, trying to push our current senator to support commonsense measures that would protect the health and safety of our miners. like the legislation proposed by jay rockefeller and senator manchin, to push to make sure that the health care coal protection benefit act is supported by kentucky senators, all things that have not happened yet. i am proud to stand shoulder to shoulder with the united mine workers in kentucky and across this nation. they have endorsed me because they are ready for a center that will have their back and fight to make sure they will get the

benefits they are due and deserve, not have to fight, as they are doing right now, the current senator, to get the black lung benefits that they deserve, the protection that helps make it easier for our minors, their retirees, the widows, and those families to get those benefits. senator mcconnell has told you here tonight he wants to repeal, root, and branch. we have to work across the aisle in a coalition effort to build, especially with other energy producing states, the effort to make sure that senator reid or whomever the majority leader is listens to those here in kentucky to make sure that coal has its rightful place as a prime american export. the voice of mcconnel is still not being heard in washington, especially to the benefit of our coal miners. >> secretary grimes, what is

your position on climate change? do you question at all the scientific evidence and research that lends itself to the debate going on with climate change? >> i don't think you have to be a scientist to recognize the realities of what is happening around us. it did not stop senator mcconnell from having an opinion on how to move the economy forward. it should not stop you here. i recognize the reality of global warming. i do believe that we have to take a balanced approach. fighting to protect the good jobs we have here in the state, especially coal jobs come with solutions we need to make sure we lead the world in a better place for my nieces and nephews and the children i hope you had -- i hope tored have some day. or mccall's watch, kentucky has gone without the funding that we need to make

such technology affordable. or mcconnell'se floor watch. >> do you believe clean coal and isogy is working viable and there is a demonstration of that somewhere in the united states? >> i do believe it exists. >> where is it? >> west virginia, the research and development they are doing there is tremendous. we have to have a senator who wants to fight for the research and funding to bring it back to kentucky to make it affordable. i will be that senator. >> you have answered this. you have also talked about the .conomy a do you still hold the position you are not a scientist? do you believe we should even be discussing climate change?

there are a bunch of scientists who feel this is a problem and maybe we can do something about co2 emissions. -- ae will wrote recently lot felt we were moving toward an ice age. the main thing to understand here is the job of the united istes senator from kentucky to fight for coal jobs in our state. this administration has destroyed 7000 of them. it's not surprising that secretary grimes would have the support of the umw way. umwa.the under this administration, we've used this -- senator mcconnell fails to see he has a role in all of the jobs that have been lost here in the state. this happened on your watch.

you've been there 30 years and you don't want to take any response ability for the loss of the jobs here in the state or the lack of benefits are minors and families are having to fight for. pass whats did not the president is doing. defeated, when your party controlled both the house and the senate by a large majority. this is a barack obama war on the coal industry through the epa. congress did not do any of this. >> and a failure on your part to form the coalition necessary. that is the story and complete context. you can't read one line of the cbo report. you have to read it in full context and what senator mcconnell's resume shows, the only person -- it's not our ers. the only person washington -- in

washington who has been benefiting is senator mcconnell. we mentioned this before that atstarted our conversation the university of kentucky and the institute for world journalism enough in teaching a course this semester about you. one of their simons was to write out a question. this is from anthony pendleton, a junior from lexington. debt has had a record high. experts say student loan is that -- student loan debt -- what should be done to fix this problem? >> we just passed a new student loan bill on a bipartisan basis in 2013 that stabilizes the loan rates. the reason this young man has this problem is because the economy is so poor.

we are in a situation here where young people get out of school having gone into serious debt and then can't find work. unless we get this economy going, this problem is going to persist. bill, aent supports a big tax increase and i think that's exactly the wrong thing to do in this environment. the governor's decision to to themedicaid leads legislature reducing the funding for education. that is passed on to the public universities and they raise student tuition. health care costs are also driving tuition up and compounding the problem further for these young people. >> secretary grimes?

's senator who just gave you watch can versus someone who is kentucky through and through. somebody who wants a self-promotion from his party. thatleheartedly believe the filibustering effort senator against the recent bill this year to actually reduce the student known that facing our students was wrong. senator whoave a realizes we have 360,000 students here in kentucky were being crushed by the burden of student loan debt. i sat across from a woman who made the right decision. she went to college but she now has is to loan payment higher than her mortgage. she has a great paying job, but she does not have a senator who wants to back her. he won't even consider allowing the bank to refinance to loan

that. -- student loan debt. i support the bipartisan legislation. it is supported by countless public ends. -- countless republicans. to make sure we are putting our students and graduates first. >> it's not supported on a bipartisan basis. it passes the debt onto the federal government. we have added more debt during the obama years than all the presidents from george washington to george bush. debt to thedd more federal government load. that is the biggest the service we can do to these young people. what we are leaving behind for them is threatening their future. every generation of americans has gone to their grave believing they have in fact left behind a better america than

their parents left for him. that is now in doubt and this massive debt hanging over the future has really compromised the chances of our young people for filling their dreams of living the kind of life they had hoped to live. have amassive debt we reason to not send him back. november 4 has great significance for you. 5, kentucky and all over this commonwealth will get up come a good way job if they have one, pay mortgage, try to beta family -- try to feed a family. they want to know which of you they can trust to provide a decent standard of living and equality of opportunity. i believe that kentuckians

feel my record. a record of being an independent thinker, putting the partisanship aside and putting people of the state first. that is what my job's plan is all about. this racely one in with a job's plan after 30 years. we have yet to see any ideas from senator mcconnell. this is about making sure we put hard-working kentuckians back to work and we fight for them to earn a living wage and we fight just the to have not right, but in forced equal pay for equal work. that we fight for our seniors to strengthen and protect medicare and social security. >> very good question. who can best look out for our state? i think i have demonstrated that i have the leadership qualities to do that. a recent poll of congressional

staffers cold me the hardest working member of the united states senate. we have a chance here to have the hardest working senator for another six years. >> thank you very much for being here. sam youngman is joining us on the phone. now on the phone. what about her answer last night? was it effective? guest: i think we're all a little bit surprised, given the amount of time she had. with her advisers to come up with a more palatable way to answer this without giving senator mcconnell fodder for tv commercials. the larger commercial is does it not affect swing voters?

beenrn kentuckians have bombarded with ads drawing ties between alison lundergan grimes and president obama. if people do not make that connection, they are not going to. will this hurt her with the base? the position on the issues. host: last night's debate was the one and only debate. did anyone win? guest: i do not think so. au can lose a debate -- campaign at a debate. come mcconnell, would he across as condescending or would .ave a moment i thought that he managed to

keep his cool throughout by avoiding that pitfall. , it islundergan grimes coming to a head. she has talked about who she is not. she is not mitch mcconnell and president obama. you have to tell voters who you are. host: where is the latest polling? guest: we are lacking for polling. has a smallnnell but steady lead. poll,ll, the bluegrass last week showed alison lundergan grimes with a two-point lead. it is a big change from what we have been seeing. is a close race and will probably continue to they. host: isn't president obama a

factor in this race? guest: nationally the environment is somewhat poisoned by his low approval ratings. they are even worse in kentucky. his approval ratings are around 30%. mitch mcconnell knows that. he is use that as the essential facet of his campaign to cloak alison lundergan grimes in this veil of unpopularity. what we saw in may, look like he was having success doing that. we won't know if he is ultimately successful until election night. host: what is mitch mcconnell's popularity like? guest: marginally better than president obama's. he is not a well like politician. he attributes that to his

leadership role. kentucky is fed up with washington and that is reflected in his approval numbers. the biggest question will be answered will be what do you dislike more? host: sam youngman >> be a part of c-span study 14 coverage. follow us on twitter and like us on facebook to get debate schedules, video clips of key moments, debate previews from our politics team. c-span is bringing you over 100 debates and you can instantly share your reactions to what the candidates are saying. the battle for the control of congress. stay in touch and engaged by following us on twitter and liking us on facebook. in about 15 minutes, we will bring you a house oversight committee hearing.

officials from the inspector general of the labor department, the epa and homeland security and the air force will tell us what they are doing to address the misuse of government purchase cards. live coverage begins at 1:00 p.m. eastern. here's a portion of today's washington journal on campaigns when he 14. -- 2014. we will turn our attention now to campaign 2014. thank you for being here. what is the role you are playing ? we have seen so much terrible antichoice legislation in the house and we are also focused on the governors races. that is really where we are seeing a lot of the damage done in this country.

there is a lot of energy out there. host: what is happening on the state level? guest: since 2010, we have had a houses that are restricting contraception, restricting a woman's right to choose when and how and with whom she has a family. both of these are coming through these statehouses. seven in 10 americans support legal access to abortion. we only have governors for support. we are just seeing the constitutional right shrink and shrink at a state level. not only of what it represents

nationally on all these issues, for 2016.hat it means >> what sorts of resources do you have? how many people? is it money? how do you do it? we do contribute to campaigns where elected officials carry our values forward. the world of post-citizens united politics, there is a lot to contribute for politics. done it in colorado and wisconsin and minnesota. whenf the things we see is their words become so crazy, -- who will take enough time to come with me and make sure the truth gets out.

>> it is a little over 300,000. how do you get your message across? people spend money for a reason. because it works. >> absolutely. we have been able to run very sophisticated programs that goes right to the voters we know make a difference in these elections. enormous number of voters who believe senators in the cases are focused on wrong priorities, when they spend their time and energy and political capital restricting rather thances, actually job creation, for example buried we have done sophisticated mail programs, and we are on the phones every day funneling our members into these , good old politics, making sure these politicians records are exposed.

they cannot hide from the issues. and they have to answer the question. we went to wisconsin with an advertisement about seconding -- setting the record straight. he has done more to restrict legal access to abortion and many governors in the country. he is trying to back away. he went up and said, no, it is ok, i will let you choose. we had one of the members in wisconsin who wanted to set the record straight. we went up with that advertisement today. >> what are you doing? number of measures dealing with personhood. explain that and how you are trying to push back. >> there are three ballot , oneres about personhood in tennessee, one in north dakota, and one in colorado.

these are extreme antichoice , granting the same legal rights as full citizens here. many of these measures if not most all common forms of contraception that completely outlaw entirely. they interfere with interview different.s not that we are trying to get that truth and information to voters, particularly voters who might be motivated to go to the polls if they know what is at stake. it is television advertising. a lot of it is door to door and it takes a little while to explain these things. >> are you concerned president obama's popularity is a drag on getting democrats who are pro-choice out to the polls? year like this,

republicans tend to vote more than democrats. >> i am not so concerned about president obama specifically as i am about overall congress as a whole. for both parties. i think that does make it a bit of a challenge to get people to go to the polls to vote. you have voter suppression laws and you have to go to people and say, it is ok. but i do think people are engaging more at the state level. that has been my feeling. their understand the role governor has. that is heightened now. know aree things we that the issues we work on, contraception, the fundamental right of women to make decisions about how we have families and those are driving issues.

we know they go to the polls here that is our focus. we do it through phone calls and door to door. that is how we incentivize people to get to the polls. going to politicians obsessed with abortion, you say. guest: absolutely. said the sameave about tom udall, democratic colorado. his campaign, he is talking about women's access to birth and access to abortion. the sender is on the right side of the public on this one. there are a couple of issues with that narrative. we are seeing more international press than being in colorado. one is that women's access to

our own health care decisions is not a single issue. you're talking about an issue that, if we cannot make our own choices, there is no such thing as economic equality, no such thing as job security, if we cannot have access. what the voters of colorado understand is that this is a fundamental issue, different than a single issue. what our ads seek to point out is you have governors like governor brown who has literally pursuing entire tenure an ideological agenda to outlaw those choices for women at the of other priorities in the state like the education system, like jobs creation. hashe extreme that he actually spent over $1 million in taxpayer money defending his laws, which are at laws with most people. we're talking about women's issues in campaign 2014.

the president of nave i'll pro-choice america, ilyse hogue. -- here he iste in becoming a new type of republican, most creating an example when it comes to women's issues. guest: he will say whatever to get to office. he still has his name on federal which would outlaw contraception, and yet, on the flip side, he is saying we will make contraception available over the counter. the fda has not even said that is possible yet.

i think he is trying to confuse voters. and also not discuss the fact that if he could even records -- reconcile those, which is almost impossible to do, he is still asking women to pay twice. there is still an economic penalty for women who would have to buy birth control over the counter when in fact it should be covered by our insurance. i see that as a very old style of outfits to pander on both sides and get elected and pursue your own agenda. the washington post this morning -- - host: can he? guest: i think he can. it is a challenge, it is a

challenge to make people feel like their vote matters. i think he really well. womenk that point that make the difference in colorado is something we see all over the thetry, which goes back to problem of defining our fundamental health care satiate -- issues, our fundamental decisions about family reading -- family rearing. it affects over half of the population in a way that links to everything else in our lives. >> is the strategy working to focus on women? when you have a tight race in colorado and wisconsin for the governor's race. it is tight in kansas as well. in florida, the republican is up in the polls a little bit. is it a strategy that is working? i do not think people will know until election day. you cannot win without women. meansg women to the polls appealing to the fundamental things that matter to us in daily life here it that does mean family planning and legal

to abortion. that is not all it means. pay,ll talk for equal those things go hand-in-hand. we cannot have economic security without reproductive health. host: robert is waiting, and independent. caller: good morning. when you have to say the liberal politics -- policies have brought ebola here? we will move on. that is not our topic here. outside of washington, a republican caller. caller: thank you for taking my call. i support women. i feel terribly sorry for women who are pregnant and did not want to be pregnant. and yet, so many times, everyone is told the easy answer is to have an abortion. i know planned parenthood would support that. i wish those organizations would really start putting out the

truth that there is really no such thing as having protected sex without consequences. there are dire ones. when was the last time a woman gave birth to a toaster oven? never. it is always a human being. some live longer than others and some are smarter than others, but always, from the moment of conception, it is a human being. it is the way that things go, unfortunately, that in order for that to survive, the woman must carry that life for its time. that is quite a burden and i recognize that. ok.: jump in. guest: thank you for the question. there are a couple of pieces to what you said. we also support accurate sex education.

all of the studies show that abstinence only sex education does not actually work. it increases on intended pregnancy rates. i think robert feels the way many feel. i think that is legitimate. sex outside of procreation, constance szczecin, abortion. what most people agree on, which is critical, is that they would rather their family retained that decision in conjunction with their own faith and dr. rather than people telling their families what to do. our phone minds are open. i'll in with your comments or questions. charles, a republican in tennessee. nice to hear from you, c-span. the republicans, we do not really care.

i mean, i do not understand. let women call in if they have not been able to get an abortion. are there children that were supposed to be aborted? some of them have to travel forward miles round-trip just to get basic health care and access to abortion services. ist we have seen in texas that 7% of women will attempt to self abort. then underscores a point that we whenby global data,

abortion is illegal or difficult to access, the number of abortions don't go down, the number of injuries to women and death due to go up. we are on the precipice of that in our country. we see more restrictions on abortion says the early 70's. maintaindemocrats control of the senate, what is your priority list for them? legislationve introduced into both houses that is modeled on the civil rights act. the voting rights act actually. it would address the state attacks on reproductive freedom. it would say that no woman should be punished because of her zip code, because of where she lives, in terms of access to abortion and contraception. that would be a federal priority. we are seeing too much damage done at the state level. the will of american people is not being served i these extreme governors and extreme statehouses.

the woman's health protection act is a very big priority for us. as i said, we are really focused in the states on undoing some of the damage that has been done over the last two years. host: legally, do you see another route at the holly robbie -- hobby lobby decision? guest: we are pursuing state based versions of the not my boss's decision. chambers and at the federal level. i think we will see more court cases. we will see more cases coming up from the states exactly about what you're caller asked about, which is access. the constitution guarantees access without undue burden. certainly, most people believe there is a significant undue burden put on women seeking their constitutional rights are now. host: georgia, republican. whatr: i wanted ask about

the lady felt about male birth control? guest: i think no birth control is fabulous. i think anyone who has any ability to access family planning tools means that every child is wanted. lived isy life being empowered. which is what we care about. if you have access to family planning, men and women around the world, we see that not only do they individually thrive come of it families thrive, even countries thrive. up hereountries gdp go in. colorado, james, what do you think about this issue of access to birth control and the personhood amendment? theer: all of the races, governor's race, the senators race, and the congressman -- it

is working for them. it appears to be. host: why do you say that? caller: i saw the debate that c-span aired. when the comment came up come over the issue of cory gardner's 182,iative in congress -- hr he denied the whole thing. but i have read the bill that he brought. >> good afternoon. i would like to welcome everyone to the subcommittee on government operations. this is the subcommittee of the house government oversight and reform committee.

for this hearing on october 14. member, mr. connolly for being here and negotiating and working to make this hearing a reality. it has not been a simple process. we had planned to conduct this hearing at least two times before. -- time they a limited illuminated votes that week. schedule.me, we had a this is a convenient time for this hearing. conduct as many oversight hearings as we can. i think it is an important responsibility. that only to this committee but to congress to see how taxpayer dollars are spent. thank the ranking member for his cooperation and this isnce in making

top priority. the interest of the american people and the taxpayers who pay the bill. the title of the hearing today is -- involves gym memberships, gift cards, hair salons. is actually examining the misuse of government supplied credit cards. hearing, wethis cite a principle statement of the purpose of our hearings. there are appropriator's in congress, and authorizer's in congress who write legislation. everything outside the constitution is created by law or funded by congress. about 1808, the founding fathers er of thise forbear

committee. had various names for that purpose. it is one of the few governments that i know of on the planet that has an additional check on how money is expended for programs that are authorized by the government. it is an important responsibility. the public has the right to know how their money is spent. it is our duty to see that that money is properly spent. opening little statement of principles and purposes of the committee, i want to again turn to the order of business. the opening statements from myself, the ranking member, mr. connolly. -- recognizet

witnesses. we have five witnesses today. we will proceed with questions. i appreciate our witnesses appearing. hearingose of the whole is to look at the way credit cards and micro burgesses -- purchases are made. we formed a program 30 years back to allow the use of credit cards. the program allows the government issued credit card for small purposes. is administered by gsa. we did a hearing trying -- prior to 2012 looking at the abuses and misuse of credit cards in anticipation of trying to improve that process. the program gives federal departments and agencies, and

employees the flexibility for these small purchases, which are currently capped at $3000. one of the key benefits of this program -- the credit card program, is it allows the government to avoid administered of costs and paperwork. well it does simple find the process and save money, it does have some serious drawbacks. in 2008, the government account ability office published a report that expose the federal government to fraud, waste, abuse, and also loss of assets. that is quoted from that report. andress responded to this some other very serious audit findings by passing a bill that some of us were involved in in 2012.

governmented the charge card abuse prevention act of 2012. this hearing is actually a follow-up to see what has taken place since we passed that law, and how effective it has been. this act, among other things, required tighter controls and also allow departments and agencies to fire employees who whene in fraudulent use using government cards to make purchases. directs the inspectors general to engage in annual reviews of the program. we will highlight and focus on one of those reviews in this hearing today. this act does not apply to the department of defense. however, today, we have invited one representative of the military -- the air force -- to testify how they avoid fraud in the agencies purchase card program.

we also hear from the air force about whether they need a statute like we have. the government charge card abuse prevention act, which again we passed in 2012. but exempted the dod. we will question as to whether we think that title of law needs to be imposed on dod. today, i expect here from some of the civilian agencies about the effectiveness of the act. one of the reports that we are -- actually,r here this is part of what this hearing is called for. had an march, we have delay in conducting this hearing. in march, the office of inspector general of epa issued , entitledt ineffective oversight of

purchase credit cards results in inappropriate purchases at epa. aig in hear from epa that regard. we will find from that the epa did not provide effective controls required by the 2012 law. the ig found that half the credit card purchases sampled improper, ored, erroneous purchases. --fact, again in that report it is quite startling. epaof the reviewed transactions were not in policies, with epa according to the law. that dhs spente

$12,000, all purchases and charges at one particular coffee shop in california. , weve a little starbucks are not supposed to show any labels. they bought $12,000 worth of thisucks coffee at california location in 2013. this is just the coast guard in that one starbucks, pretty heavy bill with this credit card. to more than $31,000 that dhs spent at that starbucks. again, looking at different reports that have been filed. a recent report suggest that the bureau of land management used government charge cards to buy

$800,000 in gift cards. this is another recent report, the office of inspector general, the u.s. department of interior. agency thather again has gone wild with these micro-charge card purchases. the bureau is not with us today, but we intend to follow-up with them, with that agency and any others that we see abuses. another example of the abuses in the department of labor, the inspector general's office is with us today to discuss serious abuses they have found in their offices that audited the job corps program. reportld focus on this for just a moment. it is a model for how and ig should operate and interact with

the department over which it has oversight. department office of inspector general received a request for an audit and a review of the job corps in my home state, and the city of miami. that's from the department of labor management. related to allegations that the miami office was abusing this credit card purchase program. detected individuals using government prepaid debit cards for their own personal gain at that miami office. they also found similar abuses across the u.s.. miami, the cards were used for nearly $100,000 worth of trips to the hair salon, clothing stores, and payment of personal phone bills. work atult of the oig's

, threeartment of labor miami employees were terminated and referred to authorities. two other employees resigned. his demonstrates how the system should work. we gave some pretty strong authority in that 2012 law to act. however, again, the department of defense is not covered by the act. i think it is the governments largest purchaser. preliminary some review and found some serious abuses in dod the need to be addressed. this committee has examined similar instances of abuse of taxpayer dollars in 2012. the oversight committee and transportation and for structure -- infrastructure committee held

hearings on the gsa las vegas conference. anza jammer 25th, not too many days ago -- on september 25, not too many days ago, the gsa employee responsible for organizing the extravagant las vegas conference that caught everybody's eye. everybody recalls this guy thumbing his nose at us in a hot tab. it took all that time to after thend go falsely filed travel vouchers and statements that mr. nearly had made. he represented to gsa on several instances that his travel was for official purposes. many of his reported business , for were, as we saw

pleasure. the individuals in miami and mr. neely are the rare bad examples of federal workers in the federal workplace. the vast majority of federal employees are honest and hard-working, dedicated individuals. i hope today's hearing will reminder that we need to do a better job monitoring this credit card program, and also, act as a to badal deterrent actors. late -- make no mistake, congress, inspector general's, your managers, all of us in congress will hold offenders accountable. the american people work hard to send their taxpayer dollars to washington. they expect and deserve to have

accountability and responsible use of their tax dollars here. if the 2012 law needs additional reform, we will reform it. if agencies failed to hold the law, we will hold them accountable. congress needs to be informed so that we can take the appropriate action. i am hoping this hearing will achieve that goal. sending, again, this is not republican, democrat political issue. ,his is a fiscal responsibility and proper conduct in operations of our federal government and agencies. has worked in lockstep, has never faltered a moment. he assisted in this effort to go after people who abuse the law. he is joining me in sending a letter to gao requesting an

update to the audits and investigations they have previously conducted on the purchase credit card fraud. mr. connolly has signed on to this request, so it is from both of us. without objection, a copy of that letter will be made part of the record. so ordered, without objection. connolly fornk mr. his steadfast commitment to, again, going after abuses where we see it. his strong support of federal employees. we try to make certain they are rewarded and recognized. this is a small, quiet hearing today, it is important. i think him for his commitment. i think the witnesses for their purchase a patient --

participation. let me recognize the distinguished member, mr. connolly. >> thank you. thank you for the two years we've had the opportunity to work together. we have absolutely worked on a bipartisan basis in the subcommittee. i appreciate that. the commitment of your staff and my staff in making that happen. how themodel for broader committee and committee structure in congress can work. we don't pretend we don't have disagreements. but we have been able to find common ground. i appreciate your leadership in that regard, and your friendship. mica.you chairman i think we are the only show in town today. >> a small but important activity. >> i was greeting our panel and

telling them how lucky they were to be part of the only show in town on the hill. the subcommittee is addressing an issue of federal financial management that boasts broad bipartisan agreement over the desired outcomes. reducingramatically incidence of waste, fraud, and abuse involving government charge cards while ensuring agencies are identifying abusers and taking it over it -- appropriate enforcement actions. to build trust and public institutions, it is vital for public servants to conduct themselves in a manner that reduces both real and perceived risks of such waste, fraud, and abuse. when i served on the fairfax county board of supervisors, and as its chairman for five years, i made it the policy of my office never to use or possess a purchase card. anyh not only eliminated risk of waste, fraud, and abuse, but carried considerable value when enhancing community trust

in a local government. the vital characteristic that may be difficult to quantify emma but i think is absolutely essential for good government. subscribe tosarily that for the entire federal government. but it has something to commend it. implementhat agencies correct actions in response to the ig recommendations is an important facet of congressional oversight. i look forward to receiving a progress update this afternoon. thoseition to reviewing three ig reports, i also look forward to learning more about how the air force is improving its charge card program after examining one specific and $4000 $24,000ent -- procurement of high-quality espresso machines intended to serve service members on a daily basis. while this was certainly not a small dollar charge card purchase, it garnered negative press attention due to the cost alone.

i hope our air force witness can provide us with necessary context to fully understand why the purchase was made to these machines, and the cost associated with it. we must also examine the effectiveness of our efforts in congress. i look forward to reviewing the able mentation -- and limitation of the act from 2012, which the oversight committee considered and favorably reported on in 2011. it is important that our subcommittee provided context that we don't throw the baby out with the bathwater. moving beyond specific cases of abuse that make my own blood boil, to truly safeguard taxpayer dollars, one must understand that evidence derived from nearly 16 years of experience with federal charge card programs seems to indicate that an authorizing credit card

,ses for micro-purchases congress actually facilitated a more efficient procurement system that continues to achieve actual cost savings and cost avoidance is that outstrip the estimated cost associated with abuse. gsa, taxpayerse benefit from charge card programs because they cost agencies nothing to obtain charge card services. the use of the cards is generated more than $1 billion in growth agency rebates over the past decade alone, resulting from provisions requiring the credit card companies to pay rebates, also known as refunds, to agencies based on the amounts charged to the cards. it is vital we not overreact in response to outrageous, but isolated incidents of abuse with broad, one-size-fits-all restrictions that revert our

federal procurement system back to the pre-1998 era, which featured higher legislative organs and more cumbersome bureaucracy resulted from agencies being unable to use charge cards as a low-cost method to streamline acquisition. as the office of management and budget noted in a government wide memorandum, reminding agencies of the obligation to consider small businesses when making micro-purchases, the majority of the approximate to her 60,000 purchase cards in circulation are in the hands of frontline civil servants to officially support mission delivery. 260,000 purchase cards. andnot minimizing the risk the audits in front of us over the last decade that identified inadequate and inconsistent controls with respect to both purchase and travel cards. in fact, that is one of the reasons i enthusiastically supported the government charge card abuse prevention act.

i further recognize that while the majorityfied of those recommendations in passing that bill, as the findings reveal, much more work remains to be done. i am prepared to join with you mr. chairman, in the inking additional legislative resident -- remedy if that is what is required. nature of this conduct often results in consequences. they go far beyond the pure dollars wasted. in my district, constituents often raise concerns that in our response to that outrageous $800,000 boondoggle, the government may have swung the pendulum too much in the other direction -- preventing effective to medication between public and private sectors, inhibiting interagency coordination, and perhaps even having a chilling effect on the innovation from networking.

untilnot rest significantly enhanced internal control standards to lessen the risk of waste, fraud, and abuse. for the disgraced minority of those who abuse government charge cards, we must ensure the consequences are consistently ed, and appropriate to the relationship of the severity of the abuse. it is vital that we enhance enforcement to ensure justice is carried out. and to ensure credibility on the part of the federal government and with its taxpayers. and also, do right by the vast majority of federal employees who are hard-working, honest civil servants. for that, i look forward to this hearing and testimony. thank you, mr. chairman. memberink the ranking for his statement. all members may have seven days to submit opening statements for the record.

let me turn now to recognize our panel. i will introduce them at first. we have jenna kaspar. she is the director of contracts and assistance agreements audits in the office of inspector general at the u.s. epa. lewis is the assistant inspector general of audits at the u.s. to permit of labor. is the richards assistant inspector general for audits at the u.s. department of homeland security. mr. john lyle is the deputy assistant secretary for contracting at the united states air force. is the deputy director of air force services at the united states air force. thank all the witnesses and welcome them today.

i don't know if you have come before our subcommittee before, but this is an investigation and oversight committee of congress. in accordance with our rules, we do swear in our witnesses. if you will please stand, i will administer the oath. raise your right hand please. do you solemnly swear or affirm that the testimony you are about to give before the subcommittee of congress is the whole truth, and nothing but the truth? recordthe witnesses, the will reflect answered in the affirmative. i welcome you, thank you for coming today. we don't have as many members today, since we are not voting. but we try to limit you to five minutes, which if you have to go over, i think today it will be ok. we do have copies of your -- thatts that we are

were prepared and submitted to the committee and will be made part of the record without objection, so ordered. you can, again, try to make some major points to the panel this afternoon. clock, but the again, we will try to give you as much leeway as possible. all of fivehrough witnesses, and the mr. connelly and i will direct questions to the witnesses. with that, firstly recognize for the purpose of her testimony, , with the u.s. inspector general's office of the epa. welcome, and you are recognize. pull the mic up as you testify, so the can hear you. >> good afternoon. thank you for inviting me to appear before you today.

the government purchase card program was established over 30 anrs ago to provide streamline the federal acquisition process by providing a low cost efficient vehicle for obtaining goods and services. the government charge abuse prevention act of two dozen 12 designed to prevent abuse of government purchase cards. employeeshe ep had assigned cards. over half were cardholders that transmitted purchases. had 1000 czech writers, totaling more than $500,000. act saide card abuse the inspector general is to conduct periodic inspections to identify risks of illegal or

improper or erroneous payments. they issued a report on the management of purchase cards. the objective of the audit was to determine whether the use of purpose cards -- purchase cards, whether the epa had significant -- sufficient controls. that the epa'snd oversight is not effective to ensure purchase cardholders comply with internal controls. $152,062 introduction come we found improprieties. issues to from small using cards for primitive purchases. they included cardholders did not verify receipt of purchased items, cardholders did not obtain approval prior to making purchases, cardinals and

approvers did not apply closer scrutiny to purchases like clothing, entertainment, and light refreshments. there were transactions that in our opinion were more egregious than others. policies provide for the purchase of light refreshments. the epa provided fortified advertisers, chicken tenderloin, fresh fruit, pasta salad, cookies, soft drinks, and punch. much more than just light refreshments. the total cost of the food was $2900. in 13 of 80 transactions we reviewed, cardholders did not follow requirements related to research and transactions. -- restricted transactions. in three instances, cardholders purchased gym memberships that required prepayment of services totaling 2806 to seven dollars. were forese purchases family memberships, not just the epa employee.

our audit found the approving officials did not review purchase logs for 14 of the 80 transactions. for one transaction, the approving official incorrectly assume that since he is preapproved the purchase, he did not have to review the purchase card quarterly. consequently, he was unaware that the funder and cardholder amended his prior approval to for just an additional item for $805 for personal use. conclusion, 75 of 80 reviewed transactions were not in compliance with epa policies. these transactions were undetected because epa approving officials and purchase card teams. this saves money by preventing erroneous purchases which would be especially beneficial in the current budget environment. , duringve transparency the past year, the oig has started to publish reports on its own compliance with logs, regular shoes, and procedures.

ever, the oigs initiated a detailed log of its own internal controls over purchase cards. we plan to make that report public very soon. mr. chairman, this concludes my prepared statement. i was to think that that the the subcommittee for your robust interest in our work. i would be pleased to answer any questions you may have. >> thank you for your testimony. we now turn to mr. elliott lewis , assistant inspector general for audits, office of inspector general, u.s. department of labor. welcome. >> good afternoon. you for the opportunity to discuss our april 2014 audit that identified wasteful spending due to the misuse and mismanagement of prepaid in the cards and government travel cards in the job corps program. our audit concluded that more were$900,000 of funds

misused or wasted because job corps lacked basic internal controls over prepaid data card and cards used to pay for student travel. job corpsillion program provides residential and nonresidential education training and support servic to approximately 60,000 disadvantaged at risk youths, aged 16 to 24 years old, at 125 job corps centers nationwide. student travel cost more than $20 million annually. .ob cordray student travel receivedtment allegations of misuse a debit cards at one of it centered. we conducted an audit to determine whether travel expenses claimed by job corps centers were allowable. in may of 2009, job corps centers began issuing prepaid that it cards -- debit cards rather than cash so that student could pay for check badges --

baggage. it later expanded that to pay for student meals. during the audit, we reviewed records for nearly 18,000 cards with a total value of $6,000 to see if they complied. we found that approximately 35% of the cards were misused to purchase items such as consumer electronics, clothing, wireless telephone service, and various online purchases. these improper purchases occurred at 98 of the 104 centers reviewed. at the miami center alone, over 1800 cards were misused to make it proper purchases, totaling more than $96,000. the operator of the miami center generally agreed with our results and terminated three employees, while two others resigned. job corps and most of the other centers we reviewed a knowledge that prepaid debit cards have been used to make more than 600 -- 6000 purchases, totaling. we cannot always determine who

made these purchases because of lack of medical control over the cards. the audit found that even as debit cards were properly used, they were not cost effective. we found job corps paid more than $100,000 in merchant fees for the 18,000 prepaid debit cards purchased by centers from december of 2009 to march of 2013. in addition, unused cards could be returned for a refund, the partially cards -- partially used cards could not. we identified 4000 cards with partially remaining balances. job corps lacked isaac internal controls of these cars. job corps did not place procedures in place to monitor the cards, nor did job corps monitor the use of the cards. reviewed the use of

government issued travel cards to pay for student travel. job corps centers were retried to use a government travel card in order to obtain contracted airfares. we found many instances where cards were canceled or suspended because job corps had not insured that the card accounts were paid. when they were unable to use their government travel cards, a were forced to print -- purchase commercial travel. over 400,000orps dollars, the cost savings lost from paying commercial airfares. as a result of the audit, we made several recommendations for job corps to improve internal controls, processes and oversight. we recommend a job corps take corrective action to ensure that government travel cards are not suspended or canceled. the department responded it has taken steps to address these issues and will take additional actions to improve the oversight. the department stated it has eliminated the use of the

prepaid debit cards. it is important the job corps ensure that all of its funds are spent efficiently, and effectively in support of the program. although travel is not the largest of job cores cost, this audit ensures that job corps can do more to ensure travel funds are spent wisely. we will follow-up on the department's actions in response to our recommendations. thank you for the opportunity to testify today. i would be pleased to answer any questions that you worry members of the subcommittee may have. >> thank you. we will hold questions. we now turn to and richards, the assistant inspector general for audits at the office of inspector general at the u.s. department of homeland security. welcome. you are recognized. >> good afternoon. thank you for inviting me to discuss our work related to purchase card programs. my testimony today will focus on

efforts to assess the program and recommend ways to decrease the inherent risk of purchase card use, as well as the permits progress on and lamenting those recommendations. 2013, dhs purchase millioners spent $439 and over 900 million transactions. when used properly, purchase cards decrease administered of cost, increased securement efficiency, and provide an audit trail. purchase cards are a low-cost procurement and payment mechanism that eliminates the need for paper purchase orders and expedites vendor payments. the inherent or natural risk of purchase card misuse is greater because of the number of dollar,ers and the low which are subject to fewer reviews and control. this increased risk was purposely accepted to reap the benefits of a simplified procurement process. that is, less cost, and quicker

response. over the last decade, the dhs oig and gao have conducted audits and investigations addressing the department's use of purchase cards. based on that work, we reported a week control environment and breakdown in key control have exposed the adjusted purchase card fraud and abuse. in short, which is card guidance was inconsistent and inadequate staffing and ineffective monitoring also contributed to the week control environment. dhs has agreed with our recommendations, and taken actions to improve its control environment. to this end, dhs has taken actions to ensure cardholders and approving officials have required training. cardholders do not exceed signal purchase limits or monthly limits without appropriate justification. and that cardholders comply with document asian requirements and approvals before making purchases.

dhs has taken steps to improve the post from an audit process to target reviews of --stionable actions transactions, such as those taking place at regional stores, atms, restaurants. in a fightts, we had numerous examples of potentially fraudulent, improper, and -- transactions. -- transaction were reviewed and actions were taken when necessary. we reported that dhs had an adequate framework to manage the purchase card program, but that the department needed to improve compliance with regulation and implementing internal controls. in other words, the internal control design was strong, but more vigorous adherence to the design is still needed to rid. new controls are in place, including the periodic risk

assessments to be conducted by our office and annual reporting requirements on the state of charge card internal controls and the status of outstanding audit recommendations. that legislation, and the results of our 2013 risk assessment, we are currently conducting a purchase card on it -- audit to determine if we have made process -- progress in implement an internal controls. we evaluate a sample of transactions to determine if controls are working as designed. we plan to publish this report in 2013. -- 2015. consistent application of controls and oversight by management minimize fraudulent purchases. but the inherent risk cannot be eliminated. cardsheless, purchase give the government flex ability and making purchases and save money on transaction processing. actions provide reasonable assurances that provincial fraud -- potential

fraud is minimized. chairman, this concludes my prepared statement. i welcome any questions you are the wrecking number may have. -- ranking member may have. >> we turn to our next witness. john lyle, the deputy assistant secretary for contracting at the u.s. air force. welcome. you are recognized. >> good afternoon. thank you for the opportunity to testify. have summative my complete testimony for the record, and based on your request, i will provide a brief summary of my testimony. we are committed to ensuring proper spending controls are effectively used in the government wide purchase card program. when used in place of written purchase orders, the gpc allows us to appreciably reduce the

saveh of payment charges, $70 per transaction in administered of cost, and obtain rebates that further our ability to execute the mission. saved3, air force units $105 million on 1.5 million $14.7ctions, and received million in rebates on total extend the tours of $1.2 billion. for a variety of tried-and-true systemic and human controls, we are confidently able to monitor the activities over 26,000 cardholders spread over 10 air force major commands, for field operative agencies, and three direct reporting units -- both to mystic and overseas. in a calm pushing this, we strongly endeavor to work with the office of secretary of in our industry partners at u.s. bank and be some to augment the ability to protect

taxpayer dollars against fraud, waste, abuse, and misuse. the air force leads the department of defense with 96% of cardholders registered, and the purchase card online system. it is an automated tool that audits 100% of all gpc transactions. it flags 3% of the high risk transactions for manual audit. since 2002, the air force audit agency has conducted eight audits on the gpc program. audits, used in conjunction with other internal control measures like data mining reports, ad hoc and scheduled inspections, and a host of checks and balances which separate the roles and functions have proven invaluable in approving the view series stewardship of the program. opportunity tohe

testify today. i look forward to your questions. >> mr. chairman, can i ask mr. lyle where he is from? >> maine originally, i spend a lot of time in massachusetts. >> you are pretty good with the r's. charge card. i'm from boston, we struggle with r's. >> we will have to get an interpreter. deputy director of air force services. did you have an opening statement? you are recognized. >> good afternoon. asnk you for the opportunity i respond to questions regarding the purchase of espresso machines and accessories in japan. we appreciate the leadership and support the subcommittee continually provides on matters

affecting the readiness and quality of life for our airmen and their families. we remain vigilant for the need to continuously exercise tight fiscal stewardship. resource management in air force services is somewhat unique, because we are responsible for funds appropriate by the congress as well as not appropriate funds. salese generated through and things charge, such as the purchases of goods and services share ofrce services the army and air force exchange service dividends. services notforce appropriate of programs migrated from the government purchase purchase card to

gain further manpower, efficiencies, and increase rebates. is used tochase card make purchases for supplies and equipment. in regards to the inquiry into the purchase of espresso machines, and accessories for an air base in japan, for us press a machines, along with accompanying accessories resource using not appropriate in a baseinstalled coffee shop and the base and listed club. and purchase was authorized approved by the appropriate installation officials, and executed by local service contracting office with a corded -- in according with procedures. pricing was determined fair and reasonable, based on requirements and competition. to manage andue

monitor use of not appropriate funds generated throughout the air force and assure these funds are properly used for all airmen and their families to enjoy. we look forward to your continued partnership in delivering the best quality of life to our airmen and their families. again, thank you for the opportunity to be here today. i look forward to working with you. i welcome any questions you may have heard. >> thank you. we will get right into the questions. since you brought the subject up about the air force base in japan come over the purchase these three espresso machines for a thousand dollars apiece. this is not appropriate it done -- nonappropriated funds. because there was a press account. some of them were anecdotal. it raised everyone's eyebrows. $8,000, that was at one location. it was not taxpayer money.

i want to make that clear. was a card used and then paid back? >> yes sir. from the not appropriate funds side, we had contractors at the installations. combine all four of the machines for the purchase, it exceeded the naf threshold. to our partners on the inappropriate side. >> the press reports, we get them. right now, there are millions of americans working hard trying to put -- trying to pay their bills come up their kids through schools, pay their taxes. we are trying to separate fact from fiction when it comes to some of the credit card gone wild stories that are out there. yours is an example where there was a legitimate expenditure, the press account was not correct. am i right?

>> that is correct. >> we want the whole truth and nothing but the truth. the proper expenditure of taxpayer dollars. coffee, youe are on saw the starbucks. buy mcdonald's i and try to get the senior coffee for one dollar when it is on sale. this is more expensive. i'm not promoting any products. >> i would like to do that but i'm too young. >> you get free refills. aside, we are absolutely startled when we saw at one starbucks in california, $12,000 worth of purchases. are you aware that those purchases to lace -- took place on government credit cards? >> your staff shared the list of

purchases with us. we have begun to makr luminary inquiries. -- preliminary inquiries. we will include those transactions is a separate test. >> we have, from that one starbucks, credit card or justice of $12,000. i don't begrudge coast guard people or dhs people where it is legitimate business, possibly buying some coffee. >> the coast guard has provided some initial information on their look at those purchases. >> you don't dispute what we have? >> no. looking at other dhs entities, there was $31,000 that we found in starbucks across the other entities. that jumps out at you. $12,000 in california. >> the majority of those purposes -- purchases were to

furnish coffee on cutters. when they were operating at sea. >> there may be a legitimate purchase requirement. but for the rest of dhs, that's anyone thousand dollars that we have been able to identify. if you can document that, it's justified, we'll begrudge -- >> some of the purchases seem to tolegitimate use of the card galleyshe kitchens or on board ships. we will be looking at all of these purchases that you provided to us. as part of the audit, we will be looking for those types of purchases where the vendor's ,ame, such as this coffee shop would jump out at u.s. something you would want to look at. >> that jumped out, $12,000 at

one location. variety of coast guard stations. my wife even had one of the coast guard cutters named after her. we are very proud of the coast guard and their service. but that kind of catches your eye. --have four to $39 million $439 million in credit card purchases dhs wide. we have three in surgeon general march, for the epa, this year. , the department of labor, the dhs said earlier this year was a part of what we were reviewing today. report, ms. casper, you testified -- you testified

that over half the sample purchases, there was something wrong. is that correct? >> yes. testimony,s, in your you just testified that you found about 35% of the purchases with a credit card were abusive. or noncompliance. >> that was just with a prepaid debit cards. estimate on credit cards? >> the issues with the credit themselvesavel cards were actually cases where they should've been using the cards and were not. so we lost government airfare. we lost $400,000. abuse, even with a new law in the epa. debit cards or credit cards, at

least 35% in your review. you have forwarded $39 million. -- $439 million. you did not speak to what you found as a percentage of abuse. is it possible to kindly that? -- calculate that? >> in 2013, we did a risk assessment. it was a follow-up from work we had published earlier. we didn't test individual transactions. i cannot at this time estimate any numbers of purchases that would have been inappropriate. again, we are sorting through some of those figures. almost $.5 billion. you had how many credit cards issued? >> the department currently has 9700 or just card users.

-- purchase card users. >> there is poor management, poor controls that was a done a fight. >> yes, sir. >> we would have to assume that a significant number of those purchases were not compliant. i think you spoke about, actually, the lack of compliance or lack of training or whatever -- actually, it sounds like a lack of management or administrative oversight and thattion of employees causes this. is that what you found? >> we've done a number of audits on this topic over the last number of years, and we have over the audits we've done