actions that it has taken. because if that's our goal, the people of ukraine will continue to suffer and suffer and suffer. back to the ukraine desperately needs economic help, this whole incident in history started when the government of what you call the rotten regime that preceded the current government of ukraine went to our european allies to ask for help that it desperately needed for its economy and the deal that was offered by our european allies was not sufficient and in fact much less than what the russians offered them instead. and when that deal was taken by the rotten regime that you

mentioned, all of a sudden that's when it became so rotten that we no longer are the people -- or the people could no longer put up with it. the pivotal moment wags when it accepted the deal that was -- moment was when it accepted the deal that was offered by russia which our european allies were not willing to do. that ignited this situation. that's what turned the policy type of situation and perhaps the and perhaps the overturn of rotten government through a electoral process into instead the overturn of the rotten regime by violent demonstrations and nondemocratic means of overthrowing that regime. they could two years later could have kicked that guy out with a free election. they didn't wait. let me ask you about -- ok. let's hope what we're doing now is aimed at trying to end the

conflict that started in that more complicated way than black and white. what people are advocating that we send weapons -- and -- to ukraine, the defensive weapons would any of these weapons be under -- do we see any of these weapons becoming part of the arsenal of that part of the ukrainian army that is financed which i believe the third of the ukrainian army that is in conflict is financed by an oligarch, a private citizen who happened to be a multibillionaire? ambassador nuland: first of all, congressman, thank you. i'll especially take issue with some of the facts you presented here. mr. rohrabacher: go right ahead. that's fine. ambassador nuland: first of all, in the fall of 2013, the reason

that folks went to the maidan was not because money was taken from russia. it was because former president yanakovich that he was promising his people. mr. rohrabacher: have you read that agreement? ambassador nuland: i have. mr. rohrabacher: do you believe that agreement was superior to what the russians were offering? ambassador nuland: let me speak to that. so in the same period in the fall of 2013 when yanakovich was talking to the association, he was working on an i.m.f. package similar to what is offered later and what we have now. i was working, as the u.s. government's representatives to him to try to get him to meet i.m.f. conditions. i had more than 30 hours of meetings with him. and he declined to meet me. mr. rohrabacher: i only have 25 seconds before they cut me off. ambassador nuland: let me speak to the weapons issues.

congressman rohrabacher: it's not your time. they'll cut me off in 15 seconds. i hope that what we're doing is try to bring peace to the ukrainians and not to humiliate the russians and there's a lot of people -- and i understand -- i was a big cold warrior as well. our goal is to try to have peace in that part of the world, not to try to humiliate russia again and again and again. there's too many people being killed out there. and i would hope that we have -- that with decentralize, which seems to be accepted by both sides, that that strength of those -- that area of eastern ukraine can remain part of ukraine, even though you have the separatist violence going on, with promise of decentralization and respect for everybody's rights and an end to the violence, that we can end this situation and that -- that should be our goal and i would

hope that we don't get caught up in trying to re-establish a cold war with russia because we have so many people who have grudges and should, by the way, i understand that. russians during the cold war human ukrainians but our goal shouldn't be right now them pay for that during the stalin era. i'm sorry but they're going to cut me off right now. mr. royce: we'll go to gerry connolly. ambassador nuland: mr. chairman, can i? i think it's important for the record to say that only thing that united states and our european partners want from russia with regard to ukraine is to leave ukrainian territory. leave ukrainian territory with their military, with their advisors to allow the border to close, to allow sovereignty to be restored. and as we said, these sanctions will be eased when minsk is

fully implemented. my concern it is the policies of the kremlin that are hurting the russian people now, hurting them economically, having their sons come home in body bags. that's what i worry about. i've spent 25 years of my life trying to integrate russia into europe and into the international system and i worry about the fate of russia citizens as much as ukraine's. mr. royce: we'll go to mr. gerry connolly of fairfax, virginia. mr. connelly: thank you, mr. chairman. i heard my friend from california. i got to say the logic of the ukrainian government made bad decisions and therefore russia had to respond is a pretty killing message to others in europe, including the baltics and former soviet satellite states. sovereign nations get to make decisions, even decisions that may be unpopular in the kremlin and they can do so without the

fear of being invaded and their territory annexed illegally and i would hope that all of us would keep that in mind. madam secretary, minsk agreement, does the agreement include inter alia, the deoccupation and deannexation, illegal annexation of the crimea? ambassador nuland: congressman it does not. the problem in crimea will continue. mr. connelly: then i have a problem with you and your policy. you say the united states will start rolling back sanctions on russia only when the agreements are fully implemented. well, that means you've conceded crimea. is that u.s. policy? ambassador nuland: it is not sir. mr. connelly: why would you roll back -- why would you roll back

-- i swear i'm not playing with the audience. this is a passion with me. it started with crimea. why would you make a statement like that? you're saying as long as you clean it up in the eastern part of the ukraine, we will roll back sanctions. that's what you say on page 3 of your testimony. ambassador nuland: i do indeed. let me explain, if i may. thank you for the opportunity to do so. over the course of 2014 we put in place four, five rounds of sanctions with the europeans. the first two were a direct response to crimea and then in december we add sanctions on crimea which effectively make it impossible for any u.s. firms to invest there. those sanctions will not be rolled back unless there is a return of crimea to ukraine. so the sanctions that we're talking about rolling back are other sanctions that were applied in smons to actions in eastern ukraine but crimea sanctions will stay in place and the point here is to demonstrate that if you bite off a piece of

another person's country it dries up in your mouth. congressman connelly: well, you got kind of two categories of sanctions, crimea sanctions and non-crimea sanctions. ambassador nuland: yes, sir. mr. connelly: if you're vladimir putin, how seriously do you take that? ambassador nuland: well, you take it seriously because there's no u.s. investment going into crimea now and it's incredibly expensive for them to maintain. mr. connelly: i would respectfully suggest, madam ambassador, we need to re-examine that policy because it is not deterring behavior by putin in the eastern part of the ukraine. people are dying. you yourself in your opening statement documented illegal movement of military equipment across the border with impunity. and it seems to me that you've unwittingly sent a message to

the kim lynn, wink, blink, get out of the eastern ukraine and maybe it can be ok. that may not be your message but if you're a k.g.b. thug, the aggressor, in this case, that's the message he's hearing. the evidence on the ground would suggest that's the case. ambassador nuland: first of all, if i may -- and i think it might be helpful if we sent our sanctions team up to show you the breakdown between what we hold for crimea and what we hold for eastern ukraine. i think that might not be -- mr. connelly: state and -- ambassador nuland: state and -- mr. connelly: that would be great if they brief congress. ambassador nuland: when at the come back from europe. in my statement, we have begun consultations this week with our european partners on deepening sanctions if we do not see --

mr. connelly: how many violations has there been on the agreement? we have counted there have been over 300. ambassador nuland: they have been more than 100. mr. connolly: isn't there a -- there isn't much teeth? with the best of intentions, merkel and olum is trying to negotiate with nothing backing it up. wouldn't it be useful to have the united states and its nato partners at least threatening to provide defensive equipment and defensive weapons and training for the ukrainian military so that's a piece of what's behind the agreements? ambassador nuland: well, as you know, it was in the week leading up to the agreement that the conversation between us and our allies went public so it's very much in the ether here but i

think equally importantly is to be in line with europe on the additional sanctions if the agreements are further violated or there is land grab and that's what we're working on now. mr. connolly: thank you. mr. chairman, my time is up but i want to echo, i think, your opening comments. mr. royce:i mr. connolly, yes. mr. connolly: when one wonders when the united states government at the state department decides a policy is not working and rethinks it because people are dying despite the best of intentions and i hope we come to some point where we rethink our policy with respect to the ukraine and crimea. thank you, mr. chairman. mr. royce: thank you, mr. connolly. we go to mr. salmon of arizona chairman of the subcommittee on asia. mr. salmon: thank you, mr. chairman. thank you so much for being here today, ambassador.

to date the sanctions that have been imposed on russia have had really little impact on putin's decisionmaking. the administration has stated that additional sanctions are being considered but without the commitment of some of our allies, some of our european allies oto enforce those sanctions or impose sanctions as a body, the likelihood of those sanctions having much effect are not real great. are there other sanctions that the administration is considering and do you believe it will impact putin's decisionmaking in the near ferm? -- term? you stated in your opening comments that what's really impacted them is the price of oil. and that it's really brought their economy to their knees. so i'm wondering if maybe it's time also for us to consider our policy in selling natural gas to our european allies.

the process just hasn't moved very quickly and one of the reasons i know germany has been so red sent to allow us -- reticent to allows us to provide arms to the ukrainian is their heavy reliance on natural gas from russia. same thing has been true on support of sanctions. isn't it time for us to start pulling out the stops and start selling l.n.g. to our allies in europe? ambassador nuland: thank you congressman. as you know most l.n.g. goes to asia because the price is higher. under the trans-atlantic partnership if we have a trade between the europeans and the united states then they would go to the top of the queue in terms of acquiring l.n.g. it's a fair point where we could or should do more. with regard to sanctions, we have not yet changed his

decisionmaking decisively but we are having a profound effect on the russian economy and we do think it is the trifecta of sanctions, low oil prices and 15-plus years of economic mismanagement in russia. i can go through some of the statistics but i think you know them. foreign currency reserves down 130 billion just over the last year. credit at junk, inflation running 15% and 40% in food prices. so, you know, he's -- he's -- kremlin policy is under stress here which is why it is important to keep these sanctions in place. and to consider deepening them. we have, as i said, working with the europeans on what more we would do sectarilly if we do not see minsk implemented, if we don't have an end to the cease-fire violations, if we do not have a heavy weapons pullback, on and on, but also even deeper sanctions if we have

a further land grab. and we are, as i said, watching these at-risk villages and our sanctions team is in europe this week. mr. salmon: the chairman mentioned in his opening statement that we made a pretty ironclad promise to ukraine when they agreed to get rid of their nuclear arms and to date the u.s. and nato response to the russian aggression has been pretty muted at best. in fact out of the 118 million nonlethal assistance the u.s. pledged last year my understanding is only about half of it or about half of it was delivered by year end. don't you believe that there will be long-term consequences for the u.s. and nato if we fail to live up to our commitments to defend our allies? when are we going to make that decision as far as whether or not provide at least defensive

weapons to ukraine? i know that question has been asked and hopefully you carry that back to your boss because as far as we're concerned nothing's going to get better unless we step up our commitment to honor the promises that we made and my feeling is nobody's going to trust us in the region if we don't honor those commitments. ambassador nuland: thank you congressman. mr. salmon: i yield back. mr. royce: i thank the gentleman for yielding back. we now go to brian higgins of new york. mr. higgins: thank you, mr. chairman. secretary, how many russian soldiers are in ukraine today? ambassador nuland: congressman i am not in a position to give you a definitive number in this unclassified setting. you've seen ben hodges make a calculation from u.s. army europe. i would say it's in the thousands and thousands.

mr. higgings: nato -- ambassador nuland: sorry, let me also just while i have you here say that what we can say in this unclassified setting is since december, russia's transferred hundreds of pieces of military equipment, including tanks armored vehicles, raw systems, heavy artillery. the russian military has its own robust command structure in eastern ukraine ranging from general officers to junior officers, as the president said not too long ago. they are funding this war, they are fueling it and commanding and controlling it. mr. higgins: in practical terms, does that constitute invasion? ambassador nuland: we have made career that russia is responsible for fueling this war in eastern ukraine. mr. higgins: yes or no constitutes invasion? ambassador nuland: we have used that word in the past, yes. mr. higgins: if ukraine was a member of nato, under the collective defense posture of article 5, what would the consequence of russia's invasion of ukraine be?

ambassador nuland: well, article 5 would give all of the 28 allies a responsibility to defend ukraine from aggression. just to make clear that even in 2008 when ukraine was discussing with nato an improvement in its relationship, at that stage we were only at the membership action plan, which is the preparatory phase. mr. higgins: isn't in reality putin's concern about america encroachment and nato encroachment on what was formerly the soviet union? ambassador nuland: i can't speak to what's in president putin's head. that's a place i don't think i can go. what i can say is there's no justification for being concerned about countries

peacefully associating with a defensive alliance. we've said for 25 years that nato is not a threat to a russia that does not threaten us. mr. higgins: russia's defense spending has tripled since 2007. today it's involved in about a $300 billion program to modernize its weapons. new types of missiles, bombers and submarines are being readied for deployment over the next five years. spending on defense and security this year will increase by 30% in russia, representing 1/3 of its federal budget. putin has said very clearly that nobody should try to shove russia around when it has one of the world's biggest nuclear arsenals. last count russia had 8,000 nuclear weapons. he has threatened to use nuclear weapons on a limited basis -- if that's possible -- to force

opponents, specifically the united states and nato, to withdraw from a conflict in which russia has a stake such as in georgia and ukraine. that is pretty ominous. that's a pretty ominous statement. your thoughts. ambassador nuland: well, we obviously have grave concerns about the massive increases in russian defense budgeting over the recent years. it's particularly concerning given what's happening to the russian economy and to the russian people. as i said before, inflation across the country now running 15%, 17%. food prices rampantly increasing, including 40% in some areas. credit at zero. the inability of russians now to travel because they can't get homes because they can't get loans. this is a kremlin that is

prioritizing foreign adventures over the needs of its own people and that's worrying. mr. higgins: i yield back, thank you. mr. royce: we go now to mr. randy weber of texas. mr. weber: thank you, mr. chairman. madam ambassador, you mentioned earlier the body bags, the boys going back to russia, that it had to be tough on them. do you know what the body bag is, the number of soldiers they're losing? ambassador nuland: it's not possible, congressman, to have a final count because of what russia has done to mask these numbers. as you know, they have criminalized discussion of it inside russia. they have threatened mothers and wives and family members. mr. weber: so you don't know. ambassador nuland: the ukrainians assert at least 400 500 people. mr. weber: they check into it too deeply they lose benefits? ambassador nuland: absolutely. mr. weber: so what's the body count for ukrainians? ambassador nuland: as i said in my statement, close to 6,000 lives have been lost in this conflict or over 6,000, i

believe. mr. weber: how long do you think we have before ukraine becomes another crimea? that's annexed into russia? ambassador nuland: well, as i said, congressman, the entire thrust of our policy is stop where it is and roll it back. that's why we've been imposing these increasingly tough sanctions and you see the russian economy suffering as a result, providing increasing amounts of security assistance albeit on the nonlethal side. mr. weber: but the sanctions haven't stopped the body bags from flowing both directions have they? ambassador nuland: they have not and this is what we continue to try to seek is a full implementation of the commitments that vladamir putin himself just made less -- two weeks ago in minsk. mr. weber: do you trust him? ambassador nuland: i don't think that's a good word. mr. weber: i think you're wise in that regard. you said it's difficult for

russia to sustain their occupation of crimea. in your comments i recall. ambassador nuland: i didn't say it was difficult for them to sustain it. i said they were hemorrhaging money. extremely expensive for them to sustain it. mr. weber: maybe that's our problem in congress. that should be viewed as a difficulty. so they're hemorrhaging money. so you don't think that that makes it difficult for them to sustain their occupation? ambassador nuland: well, they still have, as you know, more than $300 billion in sovereign wealth. what they're doing now is using the money of the russian people, the hard-earned money that should go for their long-term protection, to prop up this puppet annexation occupation. mr. weber: so we made it difficult for them to sustain their -- to -- you don't want to use the word difficult. you made them spend money to sustain their occupation? ambassador nuland: we are declining to invest in this territory that is now occupied yes. mr. weber: so they're spending a lot of money. how do we make it that difficult and more so for them for in the ukraine?

ambassador nuland: well, as i said, as we continue to watch this implementation or nonimplementation of minsk we're looking at the next range of sectarial sanctions either to deepen the sanctions on the finance side, on the energy side, on the defense side or to add sectors of the russian economy. mr. weber: would you agree we could make them hemorrhage money in ukraine if we're destroying their tanks as they entered country? ambassador nuland: well, they have been hemorrhaging their money on weapons. mr. weber: that's not my question. if we're knocking out their tanks left and right, does that cost a lot of money? ambassador nuland: certainly money down the rathole, that's for sure. mr. weber: and we'd certainly rather have body bags going back to russia than our side of the border? ambassador nuland: we want peace and an end to body bags in any direction. mr. weber: do you think putin understands peace or do you think he understands force? ambassador nuland: again, i'm not going to get inside his head. it's not a place to be. mr. weber: ok. well, fair enough.

if you're married, like i am, sometimes it's difficult to get in your spouse's head. so let's put you over in the president's head then, can i do that? ambassador nuland: you're welcomed to try, sir. mr. weber: no, i think the comment is you're welcomed to try. is the president disengaged, not worried about this? ambassador nuland: absolutely not, the president has been the leader of this ukraine policy. he's been enormously engaged. i've been in meetings with him where he's passionate. mr. weber: he's got 21 months left. how many more body bags have to take place in ukraine before you -- before we send them lethal? and i'll just call them lethal weapons. i hate the word defensive weapons. i mean, a weapon is a weapon. so how long is it going to take? how many more body bags before we get in gear to make this decision? what do you think the president's thinking? ambassador nuland: again, these are his decisions to make. we will certainly convey to him

your concern. mr. weber: ok. your decision from my advantage point is, what kind of pressure, what kind of information are you giving fought president that says, mr. president, we need to act? ambassador nuland: congressman as i said a little bit earlier on in this hearing, i'm going to take the same position that my secretary took when he was here last week. the president has asked us for our advice. we have provided it to him. but i'm going to keep that advice confidential for purposes of this hearing. mr. royce: mr. david cicilline of rhode island. mr. cicilline: thank you, mr. chairman. and thank you, ambassador nuland, for your testimony. i want to begin by also recognizing the tragic murder of russian freedom fighter boris nepsov, who was brutally murdered in the streets of moscow and to urge our government to do anything we can to ensure the perpetrators of this horrific crime are brought to! -- are brought to justice.

i know many in this country are sending thoughts and prayers to his family and friends and colleagues. unfortunately, these so-called tragic events are quite common for those who dare to criticize mr. putin and his cronies and i think it's important that we acknowledge the extraordinary efforts of this freedom fighter. i thank you for your testimony. i want to just focus on the corruption efforts that are under way. as you well know, ukraine has historically had the distinction of being -- dubious distinction of being one of the most corrupt countries in the world. i wonder how the new government in kiev is doing. are there reforms on pace? are we going far enough? what are we doing to support those efforts? are we seeing the tough decisions that need to be made and the kind of prosecutions and firings and the development of an independent judiciary to help advance the anti-corruption efforts that was a source of so much of what happened at the maidan? i just wonder if you'd speak to some of those issues. ambassador nuland: thank you congressman. corruption has been a country-killer for ukraine. it's also been an opening for

malign influence from the outside in ukraine's business. not only because ukraine's own citizens demand it, because the democratic health of the country demands it. this has been a major focus of our collaboration with the ukrainian government. as i said at the outset, they have just over the last three months passed an enormous amount of legislation, much of it designed to tackle corruption, just to name a few things. a new anti-corruption strategy a new public procurement system, the creation of an anti-corruption bureau and national agency for prevention of corruption. strengthened anti-money laundering regulations disclosure of public officials domestic and overseas assets for the first time, partial judicial reform including a prosecutor general. more to come. the u.s. is providing some $38 million in the assistance money that you've given us for that purpose. we have advisors and trainers in many of these entities.

we're also supporting civil society for oversight and reform. other new positive developments that go to the corruption and past dirty money practices they're standing up a new patrol police. the police, as you know, have historically been subject to bribery. the new prosecutor general has issued arrest warrants, new arrest warrants for some of the corrupt officials. there's a new ombudsman appointed. they have cut payroll taxes to reduce incentives for unreported wages, eliminated eight regulatory agencies and consolidated them into one increased transparency of state-owned companies, made banking recapitalization more transparent. a lot of this is legislation on the books. we now have to see it implemented. we have to see oligarchs and everybody pay their taxes, be immune to special and sweat heart deals. we will watch like a hawk.

the ukrainian people will watch like a hawk. the people will be judged by this flokal elections in october. ukraine son the path. they have to stick it now. mr. cicilline: great. thank you. just turning to a new subject, could you speak a little bit what role the ukrainian reliance on russian energy is playing in this conflict and what the u.s. and our allies are doing to help alleviate ukrainian reliance on russia? are european allies able to separate themselves from their own energy needs as this sort of conflict continues? ambassador nuland: congressman as you know energy has long been a noose that kremlin has had around the neck of subsequent generations of leaders. this government is bound and determined to break them. our first effort was to help them get gas from parts of europe other than russia so we worked with hungary, slovakia and poland last year to start slowing gas flows into ukraine.

-- to start reversing gas flows into ukraine. we worked with the european union as they have brokered the gas deal that ukraine wut cutt which was a much fairer deal for the winter of 2014-20 15. we are now working with them, as i said, to open up, demonopolize the energy sector to help them get more of their own energy out of the ground to work on energy efficiency. if you've ever been in kiev in the winter and had government windows open, you know how badly that is needed. about third of the heat is going out the windows that shouldn't. so we're working on all of those things to break the dependence but also to help ukraine get to that place where it can be an energy supplier for europe. mr. cicilline: thank you. i yield back. thank you, mr. chairman. mr. royce: thank you. we go now to mr. scott perry of pennsylvania. mr. perry: thanks, mr. chairman. ambassador, great to see you. please don't take any of the comments personally but as an american quite honestly i am disappointed and disgusted with the ineffectual and pathetic response from this

administration regarding this circumstance in ukraine. let me start by out by saying, does the administration agree -- because we heard in other forums about grievances, legitimate grievances, so does the administration agree with the justification from putin regarding the protection of ethnic russians in any way shape or form? ambassador nuland: there is nothing that justifies the kind of violence that we've seen russia unleash in eastern ukraine. mr. perry: i agree with you. but -- ambassador nuland: however -- mr. perry: they have legitimate grievances, does russians have legitimate grievances? ambassador nuland: russian speaking ukrainians have long wanted some of the things that russia championed for them language, rights decentralization. but all of those things were on offer first from the transitional government of yatsenyuk onward and now with poroshenko.

mr. perry: history sometimes gets lost on us as we go through our days. i just want to make sure that administration is familiar and aware of the history of stalin and khrushchev in the 1920's and the terror famine and starvation of the ukrainian people and deportations and the re-establishment of russians into the ukraine and so when putin says that he's going to protect these russian-speaking citizens, with all due respect they were moved into ukraine by killing the ukrainians and it's important to know that history when we talk about legitimate grievances.

so i'm concerned -- i, too, agree we should send defensive weapons to ukraine. i'm in the agreement camp on that. so does the current posture of -- the strategic patience that i hear about, how does that fit in? how does their decision not to send defensive weapons at this point, how does that fit into strategic patience or is it part of it? ambassador nuland: nobody's been patient what we've been seeing in eastern ukraine. mr. perry: the ukrainians have been patient because they have no choice. ambassador nuland: we have sent, as you know, $118 million in -- mr. perry: defensive weapons. forget all that other stuff. defensive weapons. i imagine you've been to a war zone. i have. ambassador nuland: yes. mr. perry: blankets and all that, they don't stop bullets and tanks. you have to defend yourself. harsh words. we have to get back to you and we're deciding that doesn't help. i'm talking about defensive weapons and strategic patience where does that hinge on the other? ambassador nuland: i would note again the counterfire radar batteries we did send saved

lives. it enabled the ukrainian forces to target where firings were coming from so they could defend support it. mr. perry: with all due respect, that is the absolute minimum standard. it is not going to be effectual. that's why i said pathetic and ineffectual is valid, in my opinion. let me ask this -- can you explain the concerns within the context, the concerns about providing defensive weapons within the context that president requested hundreds of millions of dollars from this congress for moderate fighters in syria? in that context where we'll send those folks weapons, weapons not defensive weapons, but weapons and training that somehow ukraine and the people that have been there that are more like us than the other, they can't have those weapons? how do we -- how do we reconcile that? what's the calculation there? ambassador nuland: well, as you

know, the train and equip request for syria goes to the need to defeat the isil threat which is an existential threat to the homeland. mr. perry: do you find that to be a little incongruent? we don't know the syrian fighters are. today they're fighting isis. the next day we're fighting assad. don't you find that a little incongruent? have the ukrainian people said they'll fight the united states kill us? have they ever said anything like that? ambassador nuland: well, certainly we will register your strong position on this issue, congressman. i would say that $118 million in security support is not nothing. i hear you want to hear more. mr. perry: at the end of my time here, we hear sending defensive weapons will escalate the problem. not sending them, that will escalate the problem. there will not be a problem because there will be no more ukraine. thank you. i yield back. mr. royce: we go now to lois frankel. we go now to lois frankel of florida.

ms. frankel: thank you, mr. chair. i was on that trip with you and mr. engel when we went to ukraine last year. thank you for your testimony. i want to say that there is -- i feel anxiety when i hear some of my colleagues, their unflattering remarks. i'll tell you why. when we were in -- i have three questions. when we were in ukraine, we heard -- i'm going to follow-up mr. cicilline's question, because he was with us. we heard time and time again how the corruption of the ukrainian government undermined the government, which you alluded to, allowed russia's aggression to proceed. but it was not just the laws. it was cultural. and so i'd like you to, if you

could, expound, number one first of all, would you have even considered giving weapons to the previous government yanakovich, would you consider that? and is the culture or the corruption that was in ukraine which you're waiting to see if reforms take place, how does that affect whether or not you're willing to turn arms over now? that's number one. number two, could you tell me the sanctions on russia, what are the implications relative to the issues that we're facing in syria and iran? have there been any implications?

and number three -- if you could get to it -- could you tell us in your opinion what are the implications on our allies and relative to the budapest agreement if we do not resist russia's aggression? ambassador nuland: well, the last one is a big one so let me just quickly go through the first ones. our security relationship with ukraine was -- has -- went through ups and downs after independence in 1991 related to the quality of government at the top. under the yanukovych regime, our concerns not only about the military but also our concerns the human rights record so we were doing very little. with regard to our current cooperation, we're subject to leahy standards and appropriate vetting of units. one of the major lines of effort that we have going in our advisory effort with the ukrainian military is to root

out corruption and infiltration of that military. so that's something that we work on very hard. we have, as secretary kerry has made clear when he was up here and every time he's before you worked hard to continue to be able to work with russia on global fathers where our -- global interests where our interests align so that takes you to the work we do on the p-5 plus one, not as a favor to moscow to the united states but because they, too, have no interest in a nuclear armed iran. similarly, our work on afghanistan, our work to try to come to terms with the violence in syria, which has not been completely successful, but those conversations continue. we judge they do it out of their own interest, not as a favor to us. with regard to the threat to allies, we have not talked today but have in the past about the intensive effort under way in

the nato space to ensure that that article 5 deterrent is absolutely visible, land, sea and air. we have young americans, as you negotiation in the three baltic states and poland and soon to be in bulgaria and romania showing presence. we're working on new headquarters laments in other ways to be able to reinforce am them very quickly -- reinforce them very quickly if we need to. if the violent sweeps across ukraine, if ukraine breaks apart, falls, etc., i personally don't think the effort to gobble countries will end there. ms. frankel: and what -- you said before the president has -- is taking our considerations as to whether to give weapons to ukraine. what are the considerations? ambassador nuland: without getting into it in too detailed a way in this setting, just to say, again, that we are giving a

significant amount of nonlethal security support, defensive weapons to the ukrainians. the issue is whether to increase the lethality. the issue is the kinds of systems. on the one hand, it goes to the ukrainian need and desire to defend against the incredibly lethal offensive things that russia has put in since january, february on the other side -- on the other side it actually goes to whether it goes to harden or whether it escalates and is considered provocative and makes it worse. ms. frankel: thank you. thank you, mr. chair. mr. royce: thank you. let's see. i'm going to yield the chair here to mr. tom emmer of minneapolis, minnesota. why don't you go ahead and chair this. i have a meeting i'm late for.

mr. emmer: thank you, mr. chair. madam secretary, you've already answered quite a few questions but i want to run through something so you can clear this up for me. the minsk agreement, you referenced what russia had agreed to implement. could you please quickly tell me what have they agreed to implement and what have they implemented since the agreement? ambassador nuland: thanks, congressman. first a reminder that february 12 agreement was an implementing agreement on prior commitments made by both russia and the separatists on september 5 and september 19. so the full package includes obligations both for the ukrainian side and for russia and the separatists. first and foremost in the february 12 package is a full cease-fire on the fighting line, a full pullback of heavy weapons to their ranges by both the ukrainians and the russians and

the separatists. full access for osce monitors to that zone to inspect and verify to the rest of ukraine. then on the ukrainian side thereafter -- why don't we just stop on the ukrainian side. why don't you tell me if those three have actually been done in the last three weeks, four weeks. >> we have seen some progress in some parts of the fighting lines. >> we are limited on time. again, the fighting has continued. there has been no cease-fire. the heavy equipment has not been pulled back. nobody is getting access, as you said in response to representative weber's questions to figure out what the death totals are etc., you just don't have access. fighting how the fighting has continued after the most recent of february 12. you testified that the president

is engaged and that the environment will affect the calculus on the sanctions and release -- i am tired of calling them defensive weapons. they are weapons that the ukrainians need to protect themselves. russia continues to violate agreement after agreement. ukrainians continue to die. what about the environment needs to get worse before the president and his advisers adjust their calculus? you have said the environment will determine whether we need to adjust the calculus? what about the environment needs to get worse for the ukrainian people and for the environment to adjust the calculus. ambassador nuland: i don't disagree with you that it is spotty and we are more concerned today than we were yesterday. the president is very engaged.

we are watching this day on and a on. mr. emmer: madam secretary, that is wonderful and i am sure the ukrainians appreciate the fact that someone is watching. but when is it going to get bad enough that the president and this administration actually are going to follow through on promises made to the ukrainian people? ambassador nuland: again, with regard to the promises made for strong economic support and for strong security -- mr. emmer: i want to go back to disarm yourself to maintain security in the region and we will be there. ambassador nuland: we will certainly convey your concern about this. mr. emmer: thank you. the chair will recognize mr. bill keating of massachusetts. mr. keating: i want to thank you

-- i can only speak personally, but the briefings i have had including classified briefings with you and with the ambassador have been extraordinary. i am going to deviate from my question. at least once in this hearing, we have to put this perspective in because it is reality. so many of the questions have been unilateral. it is the u.s.. it's your russia. -- it's russia. the reality is that is not where our strength is. the center of gravity in all of this i think from a military perspective was described by general breedlove when he said our unity of effort with the europeans is that strength and is what putin didn't bank on. i want to give you the opportunity to discuss how important the coalition is to the success of ukraine. it's my feeling that, without that unity with the u.s., we are

not going to be strong in our response and ukraine will not have the opportunity to move forward itself. could you comment on that because it is lost somewhere in today's hearing? ambassador nuland: thank you for that, congressman. i said earlier that we in the european bureau spend as much time working with europeans on ukraine as we do working with ukrainians on ukraine because this unity is essential and because that unity is constantly being questioned and probed by the kremlin. if they can split us, that is their best line to imperil ukraine. first and foremost on the economic side, where it has been a culmination of our strong transatlantic support for the fees, are strong transatlantic contributions that have made the $17.5 billion package that we have on offer for ukraine possible now without that it would not have been in the four

to five rounds of sanctions we had done. if the u.s. had done those unilaterally, we would have a situation where european companies would have been able to back filled. if we did not match with the europeans were willing to do, the opposite would have been true. we do believe that particularly in september -- in december, the kremlin undermined it our unity and our ability to work together . it is not always as quick because it takes 29 countries to coordinate, but it does make us really strong in defense of ukraine. mr. keating: when you look at minsk and the backend we would not have preferred it in terms of russia's border issues -- and when we are having these other discussions and other questions about why can't the u.s. just simply do this -- is it important that we do this in a unified manner with europe? what would happen if we didn't?

what would happen if we just veered off the way some of these questions have been pointed today on our own and just did this? what would our prospects for success be diplomatically and militarily? ambassador nuland: again, it would have provided an opportunity for the kremlin to divide us from major allies like germany and france. one of the reasons we shout out merkel in hollande is they have hours with president clinton. without that, he might have felt he could get away with it. mr. keating: i would like to see defensive weapons in place myself but i also can't have this hearing end without commenting on the fact that we have to do this with partners and it is a dynamic decision. and if we move away from that,

we weaken ourselves. with that, i yield back. mr. emmer: the gentleman yields back. the chair now represent -- now recognizes representative mang from new york. miss mang: a fund purchased -- this deal gives him the assets to launch a new oil company with assets throughout europe. it produces about 100,000 barrels of oil per day. this is disconcerting for two reasons. one, it is the sort of business that we are supposed to be deterring. and two, it provides for russian

control over significant european energy supplies. mr. friedman is not currently subject to european subjects despite his close ties with the kremlin. do you know if he is or he might be a potential target for sanctions? ambassador nuland: thank you for that. i am going to get back to you on some of the details. but to make clear, u.s. and european sanctions have targeted russian public and government assets and entities. mr. friedman runs one of the few remaining private companies in russia and as such has had his own strong views as a private citizen about appropriate russian-european relations. but let me get back to you on how we have evaluated that particular deal. but it is not a russian government deal.

miss meng: thank you. my second question -- u.s. law currently allows for the vesting of frozen assets pursuant to i apa under certain circumstances. such circumstances include when the u.s. is directly engaged in conflict with another country or when we have been attacked by another country. in such cases, the president has the authority to make designations of the frozen assets. should we consider broadening the law to allow for vesting our frozen ukrainian assets? ukraine is in need of cash and this would be a good way to get cash into the country. ambassador nuland: i will admit you have stumped the witness. i will take that with our treasury colleagues. miss meng: thank you. my last question, i would like to get your impression on russian influence in europe. russians own media properties in

great written and russia has close ties with political parties in britain and france, mainly the u.k. independence party as well as a national fund in france -- national front in france. some of the ties, such as the energy relationships are clear. others are more in the shadows. can you shed some light on russian influence in the european media and finance sectors and give us a sense of who in the western european political landscape art process -- are close with the kremlin? ambassador nuland: this is something we are watching extremely closely. i think the russian investments in government top again to in europe are clear for everybody to see the massive that their new life form sputnik has made in germany and france, etc. interestingly, there has been a public backlash in both germany

and france to the kind of propaganda russia is trying to sell and the market share for that kind of effort has not been as big as they hoped. just as in the united states the market share is relatively small. because they want truth, not kremlin publication. the more nefarious money sloshing around, it that is what you highlight, funding candidates and potable campaigns out of kremlin coffers setting up false ngos to look like they are representatives of civil society but really they are representative to the four -- the foreign governments view. we are working together to make sure that the public in those countries know where this money is coming from. mr. emmer: the gentleman yields back. the chair now recognizes mr. tadpole from texas. -- mr. ted poll from texas.

mr. poe: like you, we are concerned. russian tanks are in that third and they are not going to leave. though west pontificated and said this is bad and meanwhile putin is still there. in the meantime, russia goes into crimea and take over crimea. now they are in western europe. when they successfully take over eastern ukraine, they will keep moving, maybe to the baltics. last year, when you are here, in may, to be exact, i asked you the purpose of u.s. sanctions. and the question -- i have the con -- the transcript here if you want to see it -- is the purpose of our sanctions to stop the russians or is the purpose

of our sanctions to make the russians leave crimea? and you answered that the purpose of our sanctions were to make the russians leave crimea. is that still the purpose of sanctions against russia regarding crimea? to make them leave? ambassador nuland: yes sir, we want crimea restored to ukraine. we have designated sanctions vis-a-vis crimea. we talked a little bit earlier in the hearing about the impact that that has had in crimea. and we will continue to keep those in place. mr. poe: so the russians leaving crimea? ambassador nuland: they have not resulted in the russians leaving crimea but it has raise the price to russian coffers. mr. poe: it may be the sanctions

and it may be also the world price and oil has dropped, which may be the main reason for the russian economy. are the russians building military installations and crimea? ambassador nuland: as you know, they have had bases historically and crimea. mr. poe: are they building more? ambassador nuland: there is significant evidence to indicate they are putting new improvements into those bases and new equipment. we can get you a classified briefing if you'd like. mr. poe: so the sanctions have not stopped russians building military installations and crimea. are any of those nuclear installations? ambassador nuland: i think we would like to speak to you about dubious capability in a different setting. mr. poe: anyway, they are building up their military presence in crimea? ambassador nuland:. yes, sir. mr. poe: that would seem to me that they are there to stay. what do you think? ambassador nuland: i think we need to maintain the pressure and we have to maintain the cost and we have to keep

mr. poe: when i talked to the president of ukraine last year asking what we could do, he replied that they would prefer that we send something other than canned food to them, which is what we were doing0 are we -- what we were doing. are we still talking about help them fight for their own freedom, giving the military eight? or are we actually doing it? ambassador nuland: we have provided $118 million in security assistance. i can give you a rundown, but it improves counter fire radar batteries, communication equipment, counter-jamming, a suite of emergency medical, all those things training, and we

will continue to look at what we can do. mr. poe: that is all nonlethal aid. are we sending any guns, bullets? ambassador nuland: no, sir. mr. poe: why not? they want to defend themselves. ambassador nuland: as we said we have continued to look at other requests from ukrainians including on the legal side, but no decision -- lethal side but no decision has been made. mr. poe: so the russians are in eastern ukraine besides being in crimea, which i don't think they will ever try to leave. other nations i'm meeting ambassadors today, are concerned that they are next in the russian aggression. what is our policy regarding russian aggression in, whether it is the baltics for other countries of the former soviet union? what is our policy to thwart that if we do have a policy? ambassador nuland: i have gone through this in past testimonies. with regard to nato allies

starting with physicians taken at the wales -- decisions taken at the wales summit we are providing concrete reassurance to nato allies all alongside the eastern edge. we have 300 young americans in the baltics, in poland. we will have new deployments in bulgaria. we are also working with those nations to establish headquarters that will allow nato forces to move quickly in a contingency. we are standing up a very high-readiness nato force. mr. poe: are we helping non-nato countries? ambassador nuland: we are. it is designed to make it absolutely clear that we will defend every inch of nato territory. we are providing security assistance to georgia and moldova, the two countries most under threat and continuing the relationship with other nations.

>> we appreciate the ambassador's time this morning. as you can tell, the committee is gravely concerned by the situation, specifically the dismemberment of ukraine. we cannot wait forever. we look forward to following up on these critical issues. with that, the hearing is adjourned. [captions copyright national cable satellite corp. 2015] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] >> each year at c-span we talked to you about our student cams documentary competition. the goal is to challenge middle and high school students to think about issues that affect

them and their community. the theme for student cam this 2015 year was the three branches and you. we asked students to tell us a story that demonstrated how a policy, law, or action has affected them or their community. and in addition to telling it through video, we asked them to use c-span programming in their video and explore alternative points of view. before we meet the -- one of the grand prize winners and watch a portion of their grand prize video, here's a little bit more background on the competition. there were five top themes among the many entry this is year. -- entries we received this year. they were education, health, the economy, equality and immigration. we received more than 2,200 entries from 45 states and the district of columbia. students were able to enter as a team of up to three or individually. and there were four categories in which they could enter, broken down by regions at the high school level, high school eastern states, high school central states and high school western states. middle schoolers competed separately.

in the end, 150 student prizes were awarded totaling $100,000. now it's time to announce the grand prize winner a team of , eighth graders from lexington, kentucky, were named the grand prize winners in 2015 for their video on the minimum wage titled "the artificial wage." their cable provider is time warner cable. here's a small clip from the winning piece by anna, katie and michael. ♪ >> sydney jones is a single mother with a 4-year-old child. she has to make tough choices every week since she has to make ends meet on a minimum wage job. $7.25 an hour. she said $15,080 a year isn't enough for her to get by. >> it is hard because sometimes i have to decide like, if my son needs underwear, i'm going to have to be late on the bill -- on a bill to buy underwear or i'm going to have to ask people to borrow money. so it is hard, sometimes.

>> sydney is not alone. according to the bureau of labor statistics, 3.3 million americans make minimum wage or below. that's 2.6% of all u.s. workers. most minimum wage workers are employed in fields like food service, retail sales or personal care such as day care. rosemarie gray makes minimum wage as a custodian. >> we want to be able to take care of ourselves, pay our bills and pay for housing and we can't do that on minimum wage. we just can't. so they have all these programs like food stamps, you know. they're going, why do you need food stamps? because you've got to eat. when you don't make enough to feed yourself and pay all your bills. you just don't. >> the push is on to raise the federal minimum wage from $7.25

an hour to $10.10 an hour, which would provide a little over $21,000 a year if the individual works 40 hours per week. it's been six years since the minimum wage was raised. some in congress say now is the time to raise it again. >> things are getting better. the problem is, they're only getting better for some. we know that corporate profits have continued to break records while americans are working harder and getting paid less. >> but some, like kentucky congressman andy barr, say raising the minimum wage will cost jobs, citing a nonpartisan study by the congressional budget office. >> if we mandate a higher minimum wage in those entry level jobs, then we would lose 500,000 to a million jobs immediately, those low-income jobs. that's the last thing we want. we don't want to create more unemployment. we want higher employment. >> representative barr says more education and better worker

training are the keys to improving the lives of minimum wage workers like sidney and rosemarie, not an artificial wage. >> now it is time for us to meet one of the students that's on the grand prize winning team her name is anna gilligan and she's joining us from lexington, kentucky. hi, anna, congratulations to your team. anna: thank you so much. host: where were you when you heard the news you'd won? anna: i was in my principal's office with my team and a few teachers and i got the call and for the first time in my life i didn't have anything to say. host: isn't that terrific. were you surprised when you won? did you feel when you sent it in that it was a winner? anna: my team and i, when we were making it, we said, let's show so and so. we wanted to get the word out and let people know. we had no idea. there's always somebody better out there and we didn't know that this was a possibility.

host: how did you choose the topic "the artificial wage" which deals with the minimum wage? anna: we were looking through the clips you had available and we're all passionate about human rights and i was like, oh, let's look at, minimum wage, you know, hey, for the people. give them more money, help them out. and you know, right there, we're like, yeah, that's what we're going to do. we want to help people. host: it's interesting, when people watch your video, and i hope they'll take time to find it on our website, you have a decided point of view the three , of you, that you speak through. was it your opinion when you started out the piece? anna: no, our opinion changed. when we first started researching, we saw the top layer. if you give people more money, they'll be happier and they can buy more things. but you know, we started to dig a little deeper, found out the

cost of inflation and people can just send work elsewhere and put people out of a job, so we decided no, it is not best for the workers and our community. host: how did you find the people you interviewed particularly those who were working on minimum wage, to interview for the piece? anna: my father had a job connection he, found them through a job fair and we were able to coordinate those interviews through a program called jubilee jobs so they were like, all right, we have three people, if you would like to interview them, they are happy to tell you their story. host: were you surprised they were willing to share their lives with you? anna: we had one interesting view, one of the gentlemen said, no, i don't think this is a good idea. and that just shocked us. so just everything about it, it was very interesting. absolutely. host: is have you worked with video before or is this your first documentary project?

anna: this is my first time, michael is very experienced and he helped out with the technical aspect of that. host: how did you put your three-member team together? anna: it was originally katie and i, because we've been friends since fourth grade and i was like, how are we going to put this together, who will help us make this a story and not just facts and i was like, michael, hey, why don't you come help us out. he was like, great. so we all worked well together. we are friends. we are all on speech team. we get along very well. host: closing question, how will you celebrate your win, both at school and what will you do with your prize-winning money. anna: starting out, we didn't think this would happen so i haven't made any plans. invest in the stock market, do something worthwhile and maybe learn a little bit. host: do you know how your

school will celebrate? anna: we'll watch this on tv and -- >> we're going to have an assembly. anna: we're going to have an assembly and all sorts of fun stuff. host: i'm sure all the other students in your school will be happy to cheer you on. congratulations to you for your big win this year. we're very proud of you. anna: thank you so much. host: in addition to the grand prize winners, there were first prize winners in each category. here they are. a team of ninth graders from sandy spring, maryland, who produced a video on school lunches. first prize in high school central went to a senior from oklahoma. her topic, public access to natural resources. another cox communications company team won in high school west, a team of three seniors from phoenix who focused on the

individuals with disabilities education act. and here's our first prize in middle school. two young ladies from silver spring, maryland, with their cable service provided by comcast. they chose medical research funding for their video. finally, one more prize. mckinley lare, our first prize winner in the high school central region also won our first ever fan favorite prize. this was student cam's first time allowing the public to preview and cast votes for their favorite documentary. you should know that all 150 main prices were decided independently of the public vote but during a week of voting with , 325,000 votes cast mckinleigh's documentary received 195,000 votes. she'll be recognized as the th year's fan favorite and win an extra $500 cash prize. congratulations to all the student cam winners and all the state of the unions who entered

-- students who entered this year. you can watch the winning entries on our website at studentcam.org. >> tonight on c-span, reaction to today's supreme court oral argument in a legal challenge to the affordable care act. the justice department finds evidence of racism in the ferguson, missouri police department, and a hearing on ukraine's fight against russian-backed separatists. >> on the next "washington journal," former undersecretary of state nicholas burns on foreign policy challenges facing the united states, including the u.s. relationship with israel, negotiations over iran's nuclear program, and the threat posed by isis. we will also talk to tom from the sunlight foundation about hillary clinton' use of personala e-mails to connect business while secretary of

state. life at 7:00 a.m. eastern time -- live at 7:00 a.m. eastern time. >> you will see a stickball set. washington was a large man. six foot. very robust, terrific natural athlete. and madison is a skinny little guy. >> this sunday on "q&a" historian david o stewart on founding father james madison, and the partnerships he made. >> his gift that i write most about is his ability to form remarkable partnerships with the great people of his era. but it also alludes to his gift to the country his talents what he was able to do to help create the first self-sustaining constitutional republic. >> sunday night at 8:00 eastern

and pacific on "q&a." >> today, the supreme court heard oral argument in the case of king versus burwell. a legal challenge to subsidies for health insurance bought through the affordable care act exchanges. we will bring you that oral argument when the court releases audio on friday. now, reaction to the proceedings from outside the supreme court. we will hear from attorneys who argued the case, and others who filed supporting briefs. this is 20 minutes. >> my name is pam hearst. h -- hurst. we are here today on behalf of all the plaintiffs. decisions made here in washington directly affect middle class families like ours and we believe it's time that those who have been hurt by washington take a stand.

that's why doug joined the case. we never imagined we would end up at the supreme court. but that just shows you how important this case is not just for us, but for others around the country who are affected by obamacare. there are millions of americans who have lost their plans or their doctors or who, like doug and i, are forced by the internal revenue service to either buy insurance we don't want or face a tax penalty. we want americans to have options. we believe there is a better way to take care of people who need help. but there is no reason to force millions of us to pay tax penalties if we don't join a government program. we elect our state and national

leaders to write laws. we do not elect to the irs. we believe preventing the irs from rewriting our health care laws is the right thing to do for our family and our country. this is why we are here. what the internal revenue service has done isn't fair, it isn't right, and it isn't legal. we look forward to the supreme court's decision and hope the court rules to protect our choice and the laws that govern our nation. thank you. >> is there a better way to cover the uninsured without some kind of subsidies? >> i'm mike carver, i argued on behalf of the plaintiffs in this case. very gratified that the court had a full and candid exchange of viewpoints. i obviously believe our case was very compelling so i'm hopeful

and confident that the court will recognize the merits of our statutory interpretation and not let the i.r.s. rewrite the plain language of the statute. thank you. >> were you concerned about justice kennedy's question? >> justice kagan and i had a candid exchange but there are nine justices. >>[inaudible] >> as i said, approximately four times, i very much want them to read the statute as a whole, because it dramatically reinforces our point principally the point that a clear purpose of the statute was to encourage states to establish their own exchanges which is dramatically undermined and frustrated by the i.r.s. rule which provides subsidies regardless of whether the states do that required task. >> how concerned were you about justice kennedy's question about

your reading of the law would be the federal government coercing the states into creating exchanges? >> right, but after the conversation i think it became clear in everyone's mind that this reading would be far less coercive than the medicaid version of the medicaid statute they just upheld in nfib and it would be a greater intrusion on state sovereignty to accept the government's positions because this would allow the federal government to union latrlly -- unilaterally impose the employer mandate on state and local employers as well as other employers in the state. >> you made different arguments about a year ago. >> last time we were arguing that the affordable care act should not be the law of the land. here we are arguing that it should be the law of the land and shouldn't be dramatically altered by an unelected bureaucracy. >> do you see any contradiction in that? >> i think it's perfectly consistent. in both circumstances i have to

accept the court's decision that this is now the law of the land. now that it's the law of the land we need it to be neutrally and fairly interpreted. that's exactly why we're here, to vindicate the rule of law. >> you say it should be the life -- law of the land but couldn't it potentially be a death knell to the affordable care act? >> not at all. you've seen the poplar press. it seems the leaders in congress are well prepared to deal with transition issues and i assume the states if they don't will have every incentive to go ahead and create the exchanges they would have created but for the irs's contravention of the law. >> how do you cover millions of americans who might lose their health insurance without some kind of subsidy or whatever you're going to call it? >> if you are arguing there is a compelling policy reason to help these people, i'm sure the elected officials at the state or federal level will listen to that and the court is not prepared or equipped to say they make policy rather than the legislative branch. >> what about the issue that the

states clearly did not feel they had this choice? >> literally bizarre. they had three years, they read the statute, the only reason they were confused about it was because the i.r.s. pulled a bait and switch on it. it said state and federal. if they had faithfully implemented the law the state -- states would have known what the deal was in the statute. it takes a lot of chutzpah to come in and say, since we changed the statue and cost 2/3 of the states not to have state exchanges that's an argument in favor of our regulation, which is what the government was saying. >> are you surprised by how the argument went today in any way? >> i'm never surprised by vigorous questioning by well informed and articulate justices because that's certainly the , norm. >> are you at all concerned about this causing the insurance system to collapse as some people fear? >> if the theory is that insurance premiums will skyrocket for everybody, that

simply confirms my political point that that would mean not only people receiving the subsidies but people in low income strata would demand that either congress or the states do this. but the difference is that it would be done through the legislative process rather than the i.r.s. hijacking the legislative process. thank you very much. appreciate it. >> i'm scott pruitt, the attorney general from oklahoma. as the attorney general in oklahoma i was a part of leading the first case on this in september of 2012. i do want to speak to the states' interests. but first i want to thank you to the hursts for their comments today, the courage it took to participate in this case and i think they should be shown appreciation for the courage they've shown. i also want to say thank you to michael. he has shown great leadership, great accruemen, great advocacy in this case. he has been a great partner. but as a state, the state of oklahoma, like 36 other states across the country, had a very clear choice to make and made a decision not to set up a state

health care exchange. this issue is not just about subsidies. as michael indicated, when you invite the subsidy into your state, you're inviting the employer mandate in your state and the individual mandate enforcement. this is a comprehensive challenge based upon a single section of law. it goes to the very structures of the federal government's ability to enforce the law. when states made the decision over the past -- the last couple of years, whether it set up an exchange or not, they made the decision understanding the policy consequences of subsidies, employer mandate penalties and the enforcement of individual mandate. the policy implications of a victory are significant. but as michael indicated, both the state and federal government stand ready to respond to whatever policy implications may occur by the court doing what the statute intended, doing exactly what the statute says which is if the state chooses to set up an exchange. the subsidies are issued, and so are the penalties. but you have 37 states who said no and that should be respected. it is not a power of the inch

-- irs to disregard the plain reading of a statute, to offer a rule that they thue was -- they knew was inconsistent with the text of the statute. that's what the case is about today. this is an adherence to the rule of law. the argument that was presented by michael and the plaintiffs and the petitioners is spot on with respect to the text of the statute and the intent and decision that the states have made. thank you for the time today. >> my name is elizabeth wydra, i represent the members of congress who authored the law and more than 100 state legislators who helped implement the law and who support the obama administration's case. i'm joined by the former acting solicitor general. >> and a partner at hogan and -- today the court did what it , does, questioned both sides. i told you yesterday i thought

it would be a good day for ethe government. i would say it was an extraordinary day for the government, with a magnificent performance by the solicitor general. questions that heavily indicated that the court is likely to rule in favor of the government. it's often hard to tell in oral argument. they're asking tough questions of both sides. but i have to say this is a pretty extraordinary day for the government. it began really about five minutes into mr. carvin's argument. my friend mr. carvin emphasizes what looks like a very strong point, the law says the words "established by state" to get subsidies. shouldn't that mean that only state-run exchanges have subsidies? within five minutes justice breyer said, hey, we're not reading the constitution, we're reading a tax code. it has defined terms and those defined terms quite clearly say that when the federal government runs an exchange it is such an exchange just like the state one and should be eligible for the

subsidies, and when mr. verrilli took the podium i think you saw that heavily hammered, the idea that this isn't an ambiguous provision, it's a provision that everyone understood at the time to provide subsidies to both federal and state exchanges. >> thank you. i just want to emphasize one of the points that justice kennedy made today which is that the law , was written by congress to provide a affordable health care to all americans and to provide first aid flexibility. ironically, it is michael carvin and the petitioners' argument that would be coercive to the states, not respect the states' choice in this matters. congress specifically aloud for -- allowed for flexibility for states to set up their own exchange or to allow the federal government to run those exchanges in their stead. we believe that if the court follows the plain text of the law, if they follow their clear precedents on the idea that you

read a law in its entirety and in its context just as tissue -- just as justice kagan made strong points about the need to read the law in context. it's clear that tax credits are available to all americans no matter which state they live in, no matter which exchange, which entity runs the exchange. we saw members of congress in the audience and they know very well what they wrofmente we -- what they wrote. we filed a brief in the case indicating to the court that everyone at the time understood the law to allow for tax credits regardless of whether the state or federal government facilitated exchanges and even opponents of the law, you know congressman paul ryan was in the audience today he was on record during the time of enactment saying there wasn't any difference between state or federal run exchanges and that what mattered was your income eligibility for these tax credits, not who ran the exchanges. so we believe it was a great day for the government and we are very confident in the results. >> just to pick up on one point

of this said mr. for really made a -- barrilli mad an important point when he said these parts of the act weren't passed mt. middle of the night. -- in the middle of the night. they were things that had been debated for months openly in committee and not a single member of congress adopted or said a word about what these challenges are saying today. this is a novel interpretation discovered, as justice kagan said, a year and a half after the law was actually enacted. it's not something congress had in mind at the time of the act. >> how worried were you by justice kennedy's question? this coercion issue. >> i think it goes to the absurd interpretation that the petitioners are asking the court to adopt. it makes no sense that congress would have written the law to coerce the states when they were intentionally trying to give them a choice and also that they would have tried to coerce the states in a way that no one understood to actually be colorsync the states at the -- coerce aning the states at the

time. it's not a good to threat if you don't articulate the threat and no one understands there's a threat. i was herltened by his taking seriously the concern to the >> i suspect the government was heartened by -- would that unconstitutionally -- more heartening was justice kennedy's question which was if congress is really trying to course the states, why would they do it in this obscure provision. that is not the way to do it. so it really does look like a gotcha game that the challengers have brought today with no gotcha at the end of the day. >> [inaudible]

>> i am the lawyer, so i am not going to get into that. >> we do have study showing that there would be substantial disruption to the health care market as a whole. economists have filed briefs saying that there would be a death spiral. the solicitor general said that it is beyond belief to think that congress would do something to fix it. >> literally, what does that mean to the average person? >> the question is regarding the death spiral that would result in the idea that costs would rise, people would become uninsured. we have experts filing briefs on this matter, literally quantifying the number people who could lose their lives as a result of losing coverage if the tax credits are taken away. >> what about exchanges?

>> read the expert briefs with the economists and those experts . everyone who has a stake in health care system, doctors, nurses, insurance companies, hospitals, have filed in favor of the government's position. >> i represent the american hospital association, and they file a brief saying that the health insurance of 9 million or more americans are at stake in this case. these are people that have never had insurance before. many people have never had insurance before and for the first time they have been able to have it. if this novel interpretation is accepted, it will be just -- it will be devastating for americans and their health. >> we do have an expert who can speak shortly about the death spiral. >> tell us again your

connection. >> i represent the members of congress and state legislators who file a brief in support of the administration. i work with the constitutional accountability center. >> i happen to be on the brief with the economists. let's explain the death spiral scenario. imagine that you have 11 million people now in the exchanges losing their subsidies and you have the simultaneous requirement that you cannot exclude people. you have to sell insurance to people who have pre-existing conditions. the healthy people, who are getting subsidies, will no longer be getting subsidies and will stop buying insurance stop you will then concentrate on people who have pre-existing

conditions and you will drive up the premium for insurance. more people will exit the market because it will be too expensive and you will raise the premium because you will have very sick people buying insurance. the insurance industry opposes this position. it will kill the insurance market. it is very destabilizing. it has been very well-established, because no exchange worked without subsidies before. we tried exchanges before and they would not work. as correctly put by the solicitor general, the federal exchanges would basically be a shell game, they would be a shadow exchange. it would be unaffordable. >> what would be the ripple effect? >> probably not, because

insurance is done state-by-state. but you are talking about 34 states and the majority of the united states. >> many insurance companies and hospitals are multistate corporations. >> you could still have insurance in states, and a lot of states have players that are only in their states. a lot of blue cross blue shield plans, for example. the insurance companies are very nervous because it would totally destabilize the system. one of the reasons congress can't easily solve this problem the way justice scalia suggested is that there is a big scoring issue. you would have to find about $350 billion to actually remedy the problem based on the way the congressional budget office scores this. there is no way of finding that kind of money to solve this problem. it is a very difficult problem, not trivial as justice scalia

suggested. there is a huge cost to that monetarily because suddenly if the subsidies aren't part of the affordable care act, you have to find the money to pay for these new subsidies. >> i am ezekiel emanuel. i thought the government did an extraordinary job. i think don verrilli was very forceful and provided a coherent explanation for why the interpretation they are offering was the right one. >> [inaudible] >> friday, the supreme court will be releasing audio of today's oral argument on health care subsidies.

on friday evening, we will bring you those proceedings in their entirety starting 8:00 p.m. eastern time here on c-span. >> the political landscape has changed with the 114th congress. not only are there 43 new republicans and 50 new democrats in the house, and 12 new republicans and one new democrat in the senate, there is also 108 women in congress. keep track of the members of congress using congressional chronicle on c-span.org. the congressional chronicle page has lots of useful information including boating results and statistics about each session of congress. on c-span, c-span2, c-span radio , and c-span.org. >> the supreme court case of king versus burwell was the main topic on wednesday's washington journal. we discussed the issue with two

reporters. this is one hour in 20 minutes -- one hour and 20 minutes. >> here is just brave and --jess braven. what is this case's path to the supreme court? >> this case originated before the first health care case to the court three years ago. this comes out of a glitch in the law as described by some people. a provision that critics say limits these tax credits to exchanges run by state governments and not those run by the federal department of health and human services. when that provision in this very large statute was discovered by a lawyer in south carolina, word

spread through conservative activist circles and decisions were made at various places to launch a lawsuit challenging the subsidies, because they could effectively disembowel this law in states that don't operate their own exchanges. the case that we have today was organized by nmc group in washington called the competitive enterprise institute. they hired a lawyer and recruited the plaintiffs, and provided the financial muscle to organize a very impressive challenge all. it comes down to a section that states that exchange: how are the plaintiffs arguing that the way this is written is harming their clients? >> that is a very interesting point, because in order to get into the court you have to allege a specific harm. courts don't exist as a kind of free riding, super legislature

where anyone can come in and complain. there has to be a specific injury. the injury alleged in this case is that they don't want to pay anything for health care. they would not have to buy health care if they didn't get a subsidy because it would cost them more than 8% of their income. that is the fresh that -- that is the threshold for affordability. the tax credit that they are getting through the law is so generous that it lowers the cost so much that they no longer qualify for a hardship exemption from the mandate. essentially their complaint is that insurance costs have dropped too much because of the subsidy, thereby triggering their obligation to carry health care. >> they are saying that they don't want to have to purchase health care insurance, but because of the law, if they

don't they get penalized. if the subsidies didn't exist they could claim that this -- they could claim that the health care is too expensive in relation to their income and they shouldn't have to pay the penalty. >> that is right. the affordable in the affordable care act means for most people less than 8% of income. this is a mechanism that the law envisions to lower the cost of health care for most people. generally these are what you would say are working people, people who make too much money to qualify for medicaid but they don't have insurance through their employer or some other means. in this case, there are some questions about whether some of these plans are eligible for insurance through the veterans administration or have other reasons. nevertheless, the theory is that but for the subsidies, insurance

would cost too much and they will qualify for the hardship exemption. >> has that question been answered and will that be brought up at all? >> hasn't been answered? -- has it been answered? we, at our reporting at the wall street journal did discover questions about at least three of these plaintiffs, about whether they were subject to the mandate and therefore eligible to be in this lawsuit. it is not one of the questions before the court. it was challenged early on at the trial level. they didn't really pursue that question, they basically accepted the affidavits saying they were qualified to bring the lawsuit. one of the justices may raise a question but it is not one of the formal questions presented in the lawsuit. >> what is the administration saying?

>> one of the words they used is absurd. they say that this section does not preclude the irs from giving these tax credits to residents of states that did not establish their own exchanges and therefore defaulted to the federal government. they claim that if you look at the statute as a whole, you will get other precisions -- other provisions that assume that these tax credits are available in all states regardless of what level of government operates the exchange. the rest of the law would not make sense if these tax credits did not apply without regard to the entity that runs the exchange. >> let's get our viewers involved. we will come back to talk a little bit more. democratic caller, you are up first. >> thank you for taking my call. this is getting to be ridiculous on c-span.

i have been watching for 15 years ever since i have retired. it is to, 3,421 -- it is to or three or 421 conservative speakers. it is just outrageous. you cannot read the act -- everybody in america knows that these subsidies were meant for the poor, working-class. >> well, how many of us have actually read the act? it is more than 2000 pages long i can't say i have. what is clear is that this is not the act that the authors believed would end up as the final version. there was a strange event that

took place during the legislative process and that was that the democrats lost their filibuster proof majority in the senate and that essentially froze the process before it was finally completed. in 2009, the senate passed a version and the house passed a different version. normally does go to a conference committee and they work out the differences. when the democrats lost the seat held by ted kennedy they lost the ability to bring more amendments and they have the choice of adopting this draft version or giving up. they chose to adopt the draft version. lawmakers willing knowledge that if they had more time to work on it, a may have ironed out some of the rough edges. >> does that mean that they left it to the irs to determine who gets subsidies? >> the irs administers tax credits. they did publish a regulation that, in their view, confirmed

that they were available regardless of what level of government. >> independent caller. >> i have a question, this is a point of fact. you have to go into a hospital to have an operation, they say do you have insurance, you say no. they say it will cost $4000 if you have cash, but if you have insurance, it is $19,000. i would like you to extrapolate on that and tell me what goes on with that. if i get out of the hospital, my medication costs $4000 because i didn't have insurance. the next month, i went online, and it drops down to $100. explain to me that. that is price gouging. >> i am not a health policy

expert, so i can't claim to know the in's and out's of this very complicated sector of the economy. but, market forces to an extent, big insurance companies negotiate special rates and get discounted rates with hospitals and providers. hospitals will have a sticker price that is much higher and if they can get it from an occasional patient who does not have insurance yet has enough money to pay retail, they will take it. that kind of discrepancy, the idea that individuals without insurance are effectively asked to pay more than people with insurance was one of the factors that advocates of the law say motivated them to pass it. >> if the court were to rule against the administration here, that those four words, "established by the state" means that subsidies can't be given on

federal exchanges, does that set a precedent for the rest of the law for those exchanges that are run by the federal government and not those established by the state? >> that does not seem to be one of the major issues in this case. one of the implications of this provision alone, being found to limit subsidies, would be striking enough. there has been some discussions about how many words are at issue. summit said six and some have said fouur. i think it is only one word, which is buy. -- which is by. if it was a different word, it would be a different argument. because it says by the state and the lawsuit says that that requires an affirmative action

by the state to create marketplace. >> let me show the viewers what lawmakers wrote in their amicus brief to the court. they say that: what are they alluding to he

re? >> in lawyer talk, they are saying that if you just read that one sentence you would think that it only applies to exchanges that the state itself created, but, if you read the whole law and look at other provisions and get a sense of what the point of this thing was, you would say that maybe it is ambiguous, but given every thing else we have to wait the interpretation. reading these different provisions of the law in some cases depends on what perspective you choose to look at. are you looking at an extreme close-up or pulling back to reveal? it is not clear which is the proper angle by which to look at the law. if you look at simply those words, the challengers have a case that looks pretty strong. if you pull back and look at other sections of the law, the government has a stronger case.

it is the supreme court's job to decide. chevron deference is a term of art used by lawyers. because ray case in the 1980's regarding the chevron oil company. the issue has to do with what happens when you have an ambiguous statute. the supreme court adopted the opinion that when there is ambiguity about a statute courts should defer to the expert agency responsible for implementing that statute and less it is clear that the agency -- unless it is clear that the agency is wrong and acting in an arbitrary, ideological, or irrational way. >> independent caller in north carolina. go ahead. >> my question is about the 1095 four. rm.

if you received the 1095 form and it was incorrect, how would you know? part two, if it is incorrect how do you receive a correct one? >> i don't know if -- this is referring to the workings of the law. >> unfortunately i cannot help you with that. i do not know it from the consumer helpline angle. i would that that the government has some kind of information at healthcare.gov. >> by the way, these questions about health care to be answered coming up here on the washington journal in about 20 minutes or so. we will be talking with mary agnes carey. we are talking about the

arguments in front of the supreme court today. you can see that folks have lined up outside of the supreme court, waiting to get one of those limited public seats. our guest will be heading over to supreme court -- to the supreme court after he is done here. how will you be covering the hearing today? >> as c-span viewers know, there are no cameras that transmit supreme court arguments. when we go into the courtroom no electronics. we can bring a pad and a pen but that is it. the way we are going to do it is that we will have three correspondents attending today. two of them will leave before the argument is over and very quickly write up their impressions and report of what took lace at the earlier -- what took place at the earlier portions of the argument. we will be logging -- we will be blogging that very quickly.

you will get a sense of the argument, we hope, within a few minutes after it ends. it will be a live feed on our website, wsj.com. then we will be covering it in the traditional ways throughout the morning and day and of course more coverage in the print edition tomorrow. >> our cameras will be outside the court. you can see sites and sounds --sights and sounds. the court is deciding whether it is a state exchange or a federally run exchange. only 16 states have established these exchanges. the audio will be released friday and c-span will air it at 8:00 p.m. eastern time.

you will be able to hear what the justices had to say, what questions they will be asking. derek in austin texas, a democratic caller. >> i feel that most americans know that the law was meant for every state to be able to implement. this whole fight is rooted in hatred against anything the president does. this was meant for people who can't afford to get health insurance. i think it is just a waste of time and unfortunately, this is going to affect people's lives if this law is taken down. >> can you talk about the ramifications of a decision here? >> that is one of the most interesting things about this case. often when you have a supreme court case it is pretty clear what the locations will be. -- what the implications will be.

this one is fairly unknown. i interviewed the lawyer that will be arguing against the subsidies, and he told me that as evidence that it is not a partisan affair, he suspects that it is republicans that will suffer the amid -- the immediate political blowback because pressure will be on them if the subsidies disappear. it will be up to republican majorities in congress and most of the states that have failed to establish exchanges. congress could fix it by simple change in one word in the law if the challenge wins. by becomes for. they could thereby make their residents eligible.

that could end up being a net negative or a positive. it is hard to say. on the political end, we don't really know. on the personal and, the immediate effect would be suspension of the subsidies. people who obtained health care through the program may no longer be able to afford health care. essentially, mr. carbon told -- mr. carvin told me they would be back where they would be in 2012. >> will the justices consider the impact of their decision? >> any briefs filed by outside organizations have raised those implications. the reality is, of course they will. it is relevant in figuring out what congress saw to achieve.

if the effect is a complete disaster and collapse of the american economy based on a very narrow reading, that will be a factor. on the other hand, the political implications, who they are sympathetic towards, those are not supposed to be factors in their decision-making. there is sort of a subtle line in looking at what the consequences are and picking favorites. >> in houston, texas, democratic caller. >> i have worked in hospitals my entire life. the last 20 years i worked in the count -- the last 28 years i worked in the county hospital. i have seen the results of people not having insurance, and the idea that they would try to take this away from people who have never had insurance is mesmerizing to me.

i think they should come and work in some of the county hospitals and see some of the people that we see that haven't had insurance. i retired now but i worked there for 30 years. it is deplorable that they would try to take away this coverage for people who haven't had insurance. >> i think that if the challenge succeeds, the court's opinion and the challengers will say they are not taking away anything, the law simply does not provide insurance subsidies to people in those states, and if it is something people in the states really care about, they can take action in their state capital, legislature, or through representatives in washington and extend those subsidies in what the challengers say be a lawful way. they are not saying that the government can't provide these tax credits, they are saying that the congress didn't.

and therefore when the obama administration chose to make them available to americans regardless of their address they were violating the law that the president signed. >> several reports have been done about the impact. here is one from urban institute that says: marie in richmond, virginia. a republican caller. >> i just wanted to make a comment about this health insurance.