assignments to workers recovering from on the job injuries. this is an hour. mr. bagenstos: u.p.s. would have granted that accommodation, because her 20-pound lifting restriction resulted from her pregnancy, u.p.s. rejected her request. if it means anything, must mean when an employee seeks an accommodation or benefit due to her pregnancy, she is entitled to the same accommodation. justice: you make it sound as if the only accommodation was

because of pregnancy. justice kennedy: unless i missed something. mr. bagenstos: on the summary judgment record, the three very broad classes of limitations that u.p.s. acome dates do at least, they cover the waterfront of everything but pregnancy but our position those three classes even if there are some conditions out there. justice: that's a necessary starting point. you started out by really giving a misimpression. mr. bagenstos: i would submit that's not right. on this summary judgment record u.p.s. acknowledges they provide accommodations but also the summary judgment record shows that u.p.s. provides accommodations to drivers with injuries with.disqualification

and u.p.s. hasn't pointed to a similar driver who didn't get accommodated who was not pregnant. just just let's accept for argument's sake, people who are injured off-duty. justice ginsburg: let's suppose one category does. mr. bagenstos: our position would be that the employer would be required to treat the pregnant plaintiff the same as those classes of employees who get accommodations. justice: it doesn't have to be read that way. it could also mean that if you give it to employees generally you have to give it to pregnant employees, although there may be special classes. i think one of the examples, if

you have your not based on seniority or position within the company. justice: let's suppose, we have a brief issue from the truck drivers and give many of these benefits to anybody and suppose

they do give a benefit to a truck driver who has driven over a particularly different mountain pass and gotten himself in some danger. the harm or the disbuilt is lifting precisely the same. it's just the source was different. you see this came from taking some truck, doing something special with it and again, it's a problem -- i don't know that source gets you out of it. what do you say about that? mr. bagenstos: as to that, the important point of that, that is an example of what may be a decision by an employer. justice: i don't know that because i don't know all the workplaces and i can't imagine that employers have different rules for different kinds of jobs. and are you saying that as long

as there's one job let's say they give them benefits of $1,000 a week, when you are hurt on this job and not on others and you have to give them to all pregnant women hole hold different jobs. the answer must be no, but the problem for that and for you is how do you distinguish your situation from that mr. bagenstos: what justice scalia's question contains the answers. justice breyer: the question i have and only other one, it did seem to me there is a way given

your theory, it's a quite easy way for you to win and that would be to bring a different impact claim and that's what i thought what they were about, but you didn't bring the disparate impact claim and therefore what am i to do because i don't know that you want to twist the disparate -- claim out of shape when you have such a beautiful vehicle to bring a claim of the kind you just articulated. mr. bagenstos: the claim is the second clause. the second clause says that women affected by pregnancy or childbirth shall be treated the same. justice: you read that as an accommodation provision and let me ask this question that goes

to whether the type of accommodations you would say are required have to meet a reasonableness standard. let's say there are two categories of employees who have lifting conditions. one consists of people who work alone and they lift all the time. a driver who is driving a truck by herself and has to lift heavy packages.

justice: why doesn't that second class fit within your reading of the statutory text? mr. bagenstos: in our view, the statutory text by drawing this distinction between employees affected by pregnancy, child birth and not so affected, can't draw that distinction and they look at the ability to work, it prohibits discrimination based on the source of the disabling condition. if you have a driver -- if an employer no driver who drives alone isn't going to get an accommodation, that's fine. because it's the same treatment we do not read this statute as an independent reasonable accommodation. justice: i'm not quite understanding why you get the source classifications into a

different category from all over classifications. explain that to me. mr. bagenstos: it goes to the statutory text. the text says women affected shall be treated the same as other persons not affected. what that text is saying is to an employer, don't consider whether this person is affected by pregnancy. that's not the basis on which you can compare this employee. and remember this statutory text was adopted in response to a previous case that distinguished based on the source of the disabling condition. treating some conditions. justice: i think you are -- you have admitted that other persons can't be read literally. you have to read things into it. and you would read into it people in the same job classification. but if you can do that, why

can't you read into it people whose disabilities have the same source? mr. bagenstos: once you do that, the second clause doesn't occupy any space and congress should have stopped with the first clause. congress was doing something with the second clause and trying to overturn the situation where you had an employer that adopted a policy that as a formal matter treated people the same way. if you weren't able to work, the general electric policy in gilbert would have given you benefits. and the court said that's not discrimination and doesn't preclude coverage for pregnancy. what this text does is says no, employers have to treat conditions as favorly as they treat nonpregnancy-related conditions. in newport news, what this court

says the act says it is discriminatory. and here u.p.s. with the three very large classes of employees that it provides accommodations to is treating pregnancy -- justice: you do assert, you have to give the benefits that you give to any other class of employees? mr. bagenstos: to any other employees. justice scalia: doesn't matter whether that class is small. mr. bagenstos: it requires some degree of interpretation. providing this accommodation or benefit to employees general and when an employer provides accommodations or benefits to large classes of employes who are not pregnant dash justice scalia: the classes that

are given special treatment is almost everybody? mr. bagenstos: we have presented examples in the record of individuals who have off the job injuries who are similar in their ability to work who have been given accommodated work and u.p.s. hasn't pointed to any driver with a similar lifting restriction of peggy young who was not pregnant. justice scalia: you can win your case with that will argument. assume that. but that isn't going to help me. justice breyer: which i'm rather

selfish about. i have to write what this statute means for a lot of cases and writing the words, what it means is if you give a lot of benefits to a lot of employees, but not to the pregnant women and you don't give it to some employees and not to the pregnant women and the employer says the pregnant women are employer, you lose. but by the time i have written that into the u.s. code nobody knows what i'm talking about. i need to know how to interpret the words such that they would do, in your view what you want them to do, which is -- mr. bagenstos: and i think the important point is, if an employer provides accommodations as a matter of policy to a class of employees who are not pregnant, who are similar in their ability or nanlt to work

and does not provide a benefit, it is violating the text -- and justice: that makes sense. you can write that down. just just the fact that you are giving in to a lot of employees. including those who only worked there for four years. seniority. so those are the words that -- mr. bagenstos: i understand and this may be -- just just -- justice: it is ok to differentiate on anything but source, which means whether it's work or non-work related. you are reading the fact that congress repeatedly said we are not forcing employers to give

benefits to nonwork-related injuries but we are going to write it. mr. bagenstos: i don't think there is any statement. what -- there are three statements in the legislative history that it draws a negative inference from. so the respondent draws a negative inference from. but to return to justice scalia's response. the text contains no distinction. known to congress at the time that it adopted this statute and general electric, gilbert contained a distincton. if congress meant to say that employers have an exception from the requirement for the requirement. did i might reserve.

>> the point of the discrimination act is to reduce the number of women. the second clause of the p.d.a. advances that interest in a narrow but important way. i say the second clause is narrow because it is not a freestanding requirement like title 7 or the a.d.a. and i say it is narrow because there is one theme that an employer can't do. it can't draw distinctions that treat pregnancy-related medical conditions worse than other conditions on effects of ability to work. justice: that wasn't the view

that the government took in the u.s. postal service policy. the government in defending a policy, for all intenths and purposes the same as united parcel service. that was the government's position. so will you explain how the government as opposed -- the postal service still retains as far as we know. the exclusion of pregnant woman. mr. verrilli: it is correct that the department of justice defended the postal service practices against charges like those ms. young makes in this case. we acknowledge that in the footnote to this court. since then however, the e.e.o.c. has issued guidance and that is a significant fact.

congress has charged the eeoc with authority to interpret this statute. justice: i thought we don't give deference. mr. verrilli: we don't give chevron deference. justice scalia: give that to me even when i'm in dissent. mr. verrilli: the eeoc sets the enforcement policy. that's a significant fact. we took it into consideration in the deciding what the position of the united states should be. justice: would your position be the same if the 2014 guideline had not been adopted? mr. verrilli: we didn't take that position before 2014. and i i don't know how to answer that question because we took the position in light of the guidance that was adopted in 2014, which we do consider to be

significant and we have to weigh our interests of the law. and did so on a considered basis and came to the considered judgment.

impose comparable limitations. justice: give me that again. and the words you added were -- mr. verrilli: on the basis of

their condition. and the reason that is the sensible and best reading of the statutory text is because this is focused on the condition and not -- justice: at the very beginning, you listed three things that you said were reasonable distinctions, the word i would like you to focus on is other workers and problem is which other workers, because it is easy to construct hypothetical cases where they treat other workers the same as the statute and doesn't others. and which distinctions are reasonable and which ones are not and how do we tell? mr. verrilli: i would like to make two points. with respect to the first, i think it's helpful to differentiate between a direct claim of discrimination

treatment versus a claim proven through the mcdonnell-douglas framework. what you've got to show is an employer offers an accommodation to a significant class of employees and that that accommodation fails the test i described earlier. have an explanation for that accommodation that would take it outside the source of the disability or limitation and there is no liability. and with respect to that example, there is a second point to be made is that person who

has to drive the particularly dangerous route might be in a different job category. justice: those type of cases >> and the pregnant woman comes in and says that's not the same thing. those are the examples that would be particularly glaring in their discriminating? >> and bring a claim but if the employer can show that the accommodation was shown to one not on the basis of a cry terion then the employers and the accommodation is fine and no violation. to get back to the point. justice: i use the example not because i'm interested in it because i think it illustrates something that isn't that isn't

i had yeoh sincratic. as here, employers will have classes of people and the cleases may be based on all kinds of different things. but this is a case where there are classes and some have the benefit equivalent to the pregnancy and some don't. and how are we supposed to tell which are the criteria that are consistent with the statute and which are not? that's what i found as the difficult question in the case and i ask it simply to illustrate. mr. verrilli: let me get to the second point and i'll try to give you a very specific response. the second point, it is true that some classes will be in and some out. that's how discrimination law

operates. if employer operates and discriminating against jofrle weight men does president make the erm discrimination any less. and here, the choice congress made is the choice to protect women who have conditions, pregnancy related conditions. they didn't choose to protect everyone who gets injured. justice: if you have a disability outside of employment, benefits for one month and it applies that same policy to the pregnant woman. mr. verrilli: the pregnant woman would be entitled to one month. justice: why isn't that

discrimination? mr. verrilli: the pregnant employee would be treated the same. justice: not a separate category of people who are entitled to benefits of one month. mr. verrilli: whether the disentitlement of the pregnant employee was based on the source of her condition. it's based on something else like seniority. justice: do you mean on the job and off the job. is that what this case revolves around? mr. verrilli: i think that on the job versus off the job that distinction goes to the source of the impairment and pregnancy will never qualify under that standard, but in this case, it's not just on the job versus off the job.

and it can include people who lose their.certification and can't drive other than pregnancy that prevent them from doing a job to include lifting and the.manual which the petitioner cites says exactly that. justice: thank you mr. verrilli. ms. halligan: you are correct. had petitioner believed that the policy that u.p.s. applied which was to provide accommodations to employees on the job but not provide accommodations to any employees she could have brought a disparate impact claim. she attempted to bring one late in the day. it was dismissed because it was not exhausted. justice: can we talk about the

claim she did bring. justice: your reading of the statute makes everything after that and you are -- ms. halligan: the reading we proposed is very straightforward. what congress said in the second clause the keywords are the same as other persons. what other means is simply distinct of what is mentioned first. employers have to treat pregnant employees the same as distinct group. and that's what u.p.s. -- justice: that is what the first provision does when it says pregnancy is the same as sex when we say because of sex, we always say because of pregnancy. ms. halligan: this explained in newport news that the function of the he second clause is to how the principles apply.

and in order to repudiate. justice kagan: not doing anything new, but only explaining the old stuff. tell me why -- ms. halligan: i'm not saying that. in a pregnancy discrimination case instead of comparing women with men because what the first clause does is so if you compare women and men in a pregnancy discrimination case where you have a policy that discriminates against pregnancy, you will conclude there was not sex discrimination because there are women who are pregnant and not pregnant. justice kagan: that's not necessary because all of the includes. yes, i was, no i wasn't. you don't have this stuff.

and you are pleading a double redundancy. everything past the semi-coal own is redundant and the keywords here other persons not so affected but similar in their ability or inability to work. that becomes redundant even in the redundancy. ms. halligan: what petitioner's interpretation and the government's interpretation would do is to rewrite those words. and this was petitioner is suggesting that if a plaintiff could identify any other single employee who was accommodated that the pregnant employee would be entitled to the same accommodation. the statute would have to read the same as any other person. petitioner and the government are both suggesting that the only restriction is the

restriction based on source. any other restriction, rank, seniority, status, outside legal obligations, but it doesn't contain those words. justice kagan: that is the question that this language raises why source, why not a seniority limitation. can i give you an alternative way to understand what the statute is doing? what you ought to be thinking about is mcdonnell-douglas. in other words, this provides -- and says an employee can find a class of people who are being given an accommodation, notwithstanding that those people are similarly situated with respect to work and employee points to that class and in a typical mcdonnell-douglas fashion, the employer comes back and says, no, there is a good reason why i'm treating that class differently and has nothing to do with pregnancy and has to do

with i treat more senior employees differently. and at that point, if the employer makes his case, the employee gets to come back and says no that is pretext in just the way we deal in every discrimination case. it is identifying the comparative in order to shift the burden to the government to come back with the reason. ms. halligan: it is highly relevant but not in the way you are suggesting. what the second clause does has laid out is to explain when you are making those comparisons, you don't look at women and menace this court did in gilbert and sets discrimination that you are actually.

justice: able to point to a class of people who are granted the disability accommodation who aren't pregnant. ms. halligan: i don't think it has any anchor in the statute. justice kagan: it gives a function for what the keywords of the statute and other persons are not so effected but similar in their ability or enact to

work. what is it doing? it points to what sets off the mcdonnell-douglas test and the employer has to come back and give a reason why it is this ought not to be teap as discrimination against pregnancy. ms. halligan: it is to repudiate that logicically, when you look at women and men and you have a pregnancy, a policy that discriminates and say that's not sex diss discrimination. this court has been clear that that is an absolute line. congress tracked that distinction in the 1991 civil rights act. and this court said it was codifying when it enacted the pregnancy discrimination. justice: the language before it have effectively overruled

gilbert? ms. halligan: it would have overruled gilbert. justice alito: would have a different result? suppose the employer has a policy of providing certain benefits for employees who have an injury or disease but not pregnancy. didn't have the language after the semi-colon. would it treat it the same? ms. halligan: i'm not sure it would have precluded using the same logic at play and that's why those words.

look at how women and men are treated. you would conclude there is sex discrimination. what this clause ininstructs when you look at a policy that discriminates on the basis of pregnancy rather than looking at women and men, because all the nonpregnant women -- justice: can i ask a question. you have already said that you don't think that the second clause does any practical worth. you can't conceive of a case where a plaintiff would lose under clause one. ms. halligan: to be clear, the reason the second clause is there to avoid a case in which

it uses the reason. it attaches significant results. it says that the second clause provides it for pregnancy. what the petitioner suggests is that the second clause permits any distinction except on the job versus off the job. that is long standing. justice: you don't know -- i would like us to go back on this very point. justice breyer: mcdonnell-douglas test i think should come in somewhere that is the woman shows, i'm pregnant, i couldn't lift, i wasn't paid anything and other people who had comparable enacts were paid. so we get to, was i qualified

like they are. and a distinction is being made? the employer said no, you're not. and we have to decide is it a pretext, is it legitimate and were they giving it to everybody else? it doesn't sound too legitimate. but that test must come in. and so how does it and does it matter if we put it under the first so-called intentional as opposed to disparate impact or muck up the law. or both parts? ms. halligan: this court has been clear that mcdonnell-douglas provides the mechanism for providing indirect evidence of disparate treatment of intentional discrimination. it is distinct where as here,

you have a policy that says on the job gets accommodation when they can't perform the essential functions of their job. anyone with an injury or condition that is sustained off the job doesn't. when you have a policy like that, you can bring a disparate impact claim. justice: the employer will have a neutral policy. justice breyer: it just turns out that this neutral policy happens to hit the pregnant women and four other people. and that's the kind of thing that we're trying to stop in this statute. so why not bring it in there in the disparate treatment part, as you say. ms. halligan: that distinction between a disparate impact claim where you are looking at the

adverse impact on a certain class of employees and has been quite -- as distinct from a policy that discriminates on its face. justice: that's what justice breyer is talking about. suppose you had a policy that said we are going to provide accommodations for anybody with a nonoccupational sickness and accident. very similar to gilbert, but without all the other facts of gilbert. it's a facial policy we are going to provide accommodations but of course presenting pregnancies and so as ar result of this neutral policy, pregnant women will not get accommodations. as i understand what you are saying, that's perfectly fine. if it's a policy that distinguishers between occupational injuries and

nonoccupational injuries. ms. halligan: that would be acceptable and a plaintiff whom believes there was intentional discrimination is they would do under mcdonnell douglas make a case by showing other employees who are similarly situated were being treated differently. they are not valid. justice: the fourth circuit did say right up front that this clause standing alone is unambiguous if a group of employees stand to benefit, if other employees stand to benefit. that's what it says. just standing alone.

ms. halligan: fourth circuit realize the two clauses have to be read together. and so to go back to your question, what an employee can do is to say the policy doesn't treat similarly treated employees the same as mimi. it treats me -- me. it treats me worse. individuals who were accommodated under the a.d.a. the government -- justice kagan: we disagree, what it tells you, it tells you what the comparetives are any class you can come with who has the same disability and isn't pregnant and the employer can come back and say we had a good reason to treat that class of employees differently. and if you buy that with respect to the gilbert distinction i

don't understand why you wouldn't buy it with respect to any other classification? ms. halligan: all this clause is telling you and congress is telling you and this court was clear that the p.d.a., both clauses were not intended to any way depart from title 7 principles. it was to correct the fact that pregnancy could be sex discrimination. justice kagan: what gilbert said was that kind of policy was legitimate and that congress came back and said, no, that policy is illegitimate. ms. halligan: illegitimate in the first clause and said you cannot when you are trying to ascertain if you are pregnant break it down to women and men.

justice kagan: i don't understand the answer to my question. with respect to a facially-neutral policy to nonoccupational sickness and health, you think that is illegal? ms. halligan: it is legal. the policy that distinguishes between occupational and nonoccupational injuries and evenly applied is absolutely permissible. justice kagan: exactly the policy that is in gilbert? there were lots of other things except for pregnancy that got excluded in gilbert. if a man had a vasectomy, if someone got into a bar fight, it got excluded. if someone had facial surgery. gilbert was much more. ms. halligan: this court and

congress clearly described the principle in gill birth. justice ginsburg: it overturned gilbert. but the result in gilbert and as justice kagan pointed out you could point to a lot of other people who are not getting this benefit. ms. halligan: the result of the petitioner and the government suggests is to say you can have any distincton you want. far more con torted. that's what -- justice ginsburg: is it true, you said that one position -- ms. halligan: not least favored nation. is there another distinct group of employees who are treated the same as the petitioner. justice ginsburg: this case was

off on summary judgment. and told us that there is not in this record a single instance of anyone who needed a lifting who didn't get it except for being pregnant. if that's the case, in fact, then you lose. ms. halligan: that is a mischaracterization of the record. the district court held squarely that the effort by plaintiff to characterize this policy has no life duty to pregnancy is wrong. the actual policy was on the job a.d.a. accommodations. justice ginsburg: this is an allege that in fact, no one who wanted a diss pen sayings. ms. halligan: that is

contradicted your honor. justice ginsburg: we don't know what the evidence is. ms. halligan: mr. martin and mr. bryan's testimony, there were many employees who sustained offer the job injuries and no light duty was given to any employees, pregnancy included. justice ginsburg: is there an employee who asked for time off because of a medical condition but restricted her duty to lift. any single employee who was an employee -- ms. halligan: there is not a name provided in the record because one was not alist edited the petitioner. but the record evidence is undisputed and many employees.

u.p.s. is in the business of delivering -- justice ginsburg: but we don't know if there they were given time off because off the yob injury required the limit they could bear. ms. halligan: the u.p.s. policy is employees who are unable to perform, would be required to take leave if their inability. and moving 70 pound packages around all day long and as the uncontraverted testimony establishes, there were many employees that prevented from doing that job. justice: i assume you disagree with the petitioner's proposition that when you take these three classes namely off -- on the job injuries, a.d.a. injuries and disapproved by

drivers, there is almost nothing left. that's -- ms. halligan: we disagree with that and nothing in the record which suggests that. it is completely without citation or support and it is completely contraverted by the testimony there were many employees who sustained. there were three narrow exceptions, but every employee as the district court held that sustained an off the job injury who couldn't come into work were not accommodated with light duty. justice: why shouldn't there be a trial on that or further proceedings. there were four people who weren't pregnant and that's all, who didn't get the benefits. justice breyer: pretty strong

evidence that the employer is discriminating. 400,000 people who were off the job and 19 people on the job who got the benefit. then you have the better case. why don't we look at the facts? ms. halligan: that would be relevant to and disparate impact claim. there was extensive discovery in this case. summary judgment was granted that establishes exactly the opposite of what you are uggetting. this is a straightforward case, but for the effort by the petitioner to bring the record into play at this late date, none of this would be something you would consider. justice: is this a dispute? is there a dispute that if the u.p.s. driver fell off his a.t.v. on the weekend and was unable to lift that that person

would not be given light duty? ms. halligan: the district court made a square finding exactly to that effect at page 56-a and 35-a and i would direct you to page five where we set forth ms. martin's testimony she never authorized an accommodation to anyone who was injured off the job. i would like to turn to the question of the eeoc. justice: there are individuals who are injured off the job that lose their.licenses. ms. halligan: and pursuant to the connecttive bargaining agreement they are accommodated. but those jobs, the individuals who lose their.certification. they are heavy-lifting jobs. the district court at page 36-a

and 59-a and the individuals who lose their license can perform any number of demanding physical tasks which ms. young on could not perform. with respect to the eeoc guidance, the guidance which was issued two weeks after is 180-degree change from the position that the government has consistently taken and the postal service that the u.p.s. looked to to obtain what the laws, the policy it still has in place today. in addition, the plose in issuing that guidance was rushed. not until 2015 that the eeoc even identified the question of pregnancy accommodations as an emerging or developing issue.

justice ginsburg: the original guideline as i understand eeoc, all we're doing in 2014 is explaining -- was it 1979? ms. halligan: they mimic the language of the statute. in 2012. the eeoc said it was liking at addressing the issue it opined in the 2014 guidance as emerging. if the 1979 guidelines stood for what petitioners suggest there would no need to be settled. i want to point out this is an area where the democratic process is working as it should and as this court said in the calfed. and state statutes that provided

prenchshal treatment was it preempted. it sets the floor. that floor is that you can't sing the pregnancy. states can go beyond that as additional and new challenges are identified. justice: democratic process to work as it should, the p.d.a. has to be given a fair reading. it has to go remove stereotypes and about ensuring that they wouldn't be unfairly excluded from the workplace. what you are saying is there a is a policy that acome dates a policy that puts pregnant women on one side of the line and you are saying that the plire doesn't have to justify that policy ala mcdonnell-douglas. that means that the statute

ignores 2/3 of the text. ms. halligan: i'm not saying there are no valid comparetives here. that's all we are saying in that regard. justice ginsburg: any group that doesn't get the benefit -- ms. halligan: if you had a policy, i'm not sure what would look like that singled pregnant employees. justice ginsburg: what category of employees? ms. halligan: it distinguishes on the job versus off the job. that is echoed in state and federal law. that is a far cry from a policy that singles pregnant women. or targeting or otherwise

primarily disadvantaging. that distinguishes is payment for employees who are injured on the job. and many have found it advantageous to find light-duty accommodations so the employees can be at work and provide some productive work for the company. justice: that is as legitimate as you could get. i see my time is up. justice: you have four minutes remaining. bag combag so, i would like to begin if i could with the facts and justice elitea did ask and we do disagree with u.p.s.'s' assertion here. this case was here on summary judgment and they go to we point to specific examples in the record of people with off the

job injuries or illnesses who were given accommodations and not accommodations that removed them from driving and heavy lifting. justice: you really think you could prove at trial if somebody is injured that they get light duty but a pregnant woman does not? mr. bagenstos: the u.p.s. managers testified about a sports injury. yes, we think so. the second point i would like to make is what the two clauses do. the first clause of the p.d.a. in newport news and calfed. so what the first clause said is where gilbert said discrimination based on is pregnant persons, that's wrong because of pregnancy.

that's not what the second clause does. the second clause is what they said goes further and overrules the holding and describing the facts, the gilbert would not be overturned because the gilbert policy, one thing we know that congress meant to say is illegal and drew lines in pregnancy-neutral ways. if you have an off-the-job injury then you get disbuilt benefits. pregnancies isn't an illness and what congress what we know congress was trying to do and this court has said is to overturn the holding there. it reprizes the rule at issue in gilbert.

so, i think the reverse. the second sentens is what does that. the second sentence is you don't worry whether it is between sexes but whether the same class of >> the first clause says you do know whether -- you do not worry if it is the same sex or not. the first clause defines pregnancy discrimination as sex discrimination. that is because of sex. that is overturning the gilbert reasoning that pregnancy dissemination is in fact sexist termination. gilbert overturns the upholding

the general electric policy. i think and are the ups rule, it would not do that. on justice breyer's question how do we deal with on a player who creates two groups of people who are not pregnant differently. i think justice ginsburg and justice kagan articulated this will -- this well. we know that he can't be something that congress intended. that is not how antidiscrimination law works. you have to treat pregnant workers just as valued employees as anybody else. and if you think it is valuable to keep these employees on the job who are injured on the job

because they keep valuable knowledge within the company, do that for pregnant women. >> thank you, counsel, case is submitted. >> coming up tonight on c-span, than affleck and bill gates testify on the need for foreign aid. then the senate armed services committee examining global threats from isis and other terrorist groups. later, president obama in birmingham alabama talking about efforts to target abusive actions by payday lenders. >> microsoft founder bill gates and actor/director ben affleck testified on capitol hill thursday about the need to continue funding foreign aid. the bill and melinda gets foundation provides life-saving vaccines to africa and poor nations around the world. lindsey graham has vowed to fight for foreign aid which could be cut by 50%.

senator graham: the subcommittee will come to order. our hearing is on diplomacy and development and national security. and we have a very incredible panel of great americans and in their own way in balancing the schedules of these gentlemen had to be very difficult and each and every one of you made a sacrifice to be here. there are other places you needed to go, but the fact to share your testimony, your experiences, your thoughts and experiences about the 150 account means a great deal. as to senator leahy, we have been partners for several years on this account. i enjoyed working with him and tim and this is one area of the government that we are trying to make sure actually works and our relationship has grown over time

and both committed to making sure that america stays involved in the world in a productive fashion. our panel today consists of mr. bill gates, co-chairman of the bill and lind after gates foundation, founder of microsoft. ben affleck, founder of the eastern congo initiative and actor. you are doing great work. john megrue, chairman of the apacks and chairman of the born-free africa and working with the u.n. dealing with the mother to child aids transmission. and james stavridis from tufts university. and worn the uniform and i look forward to your view as a military commander about this account and scott ford is chief executive officer of westrock group and i had the pleasure to see what scott has done in rwanda regarding the coffee

market. all of you are welcome and i will let the first statement be by senator leahy. senator leahy: i think what is probably the most important is that we hear from the people who are here. we talk about diplomacy development and national security. it's really relevant. probably more so than any time sings world war ii. we know what our military can do and we have this huge economic and military power, but we ought to be showing the rest of the world some of the best parts of our society.

talked to mr. gates earlier and when senator graham and i told our colleagues that they ought to pony up on money on infectious diseases, the country has 320 million americans and at least match what bill and melinda gates are doing, but it also -- we know we have some problems with development, with partnering large contractor n.g.o.'s that might take a lot of money. i'm worried if we don't see what we want to see and with the cuts in the house and senate budgets, we are going to have difficulties. we have to look at what actually makes life better for the people we're dealing with, but also for our own country. i like going into countries where the small country, we find

one of our programs is actually about the only medical team that's ever been there where they worked on land mines or the school that now has books instead of a one book for everybody. these are things that show us best as america. but i worked with senator graham over the years. he has been chairman and i have been chairman. we tried to make this as nonpartisan a bill as possible and we'll continue to do that. he's a good friend. he understands this program as well as any member of the senate, either party i served with. senator graham: contrary to popular opinion, the foreign assistance account is 1% of the budget. you can eliminate every penny we spend and not move the debt needle one inch, those who demagog that financial aid is

the root of all problems, please stop, because you don't know what the hell you're talking about. this account is designed to show who we are as a nation, it's designed to enhance our national security and it's designed to deal with enemies of mankind such as radical islam, aids, malaria and other diseases poverty. it's designed to build people up so we can live in peace with them and have a better life and make the world a better place. it's designed to have an american presence that is nonlethal. you cannot protect america by just dropping bombs on people. this account in many ways is the best line of defense in terms of africa.

we do not have a large military presence in africa, but in a bipartisan fashion, we have had developmental programs fighting aids and malaria, trying to resolve conflicts in africa and this account has been the front line. and the return on investment on behalf of the american taxpayer from this account, i will match it with any place in the budget. i have never seen what a small amount of money can do in a positive way better than here. $50 billion, and it is a large number but in the budget it is a rounding number, but the money we have appropriated each and every year is leveraged for the private sector and each one of these come if the private sector. in partnership with your government, n.g.o.'s, faith-based organizations, the gates foundation, we have created partnerships that every american should be proud of.

and the day we stop doing what this account represents is our best days are behind us. we will have chosen a path that no other american has chosen before, one of indifference and isolationism, one of we're not really responsible or the leading voice in the world. we are. and this account represents that philosophy. it is a good investment on behalf of the taxpayer. what you have received in rates of return, you cannot measure. and an entire generation of young african children saved from aids, turning the corner on malaria and in the congo, what mr. affleck has done is to take hell on earth and make it a bit better. and to mr. ford, what you have

proven that the private sector can do is astounding. thank you all. we look forward to hearing your testimony. as we speak today, there will be a vote on the floor of the united states senate for a member of the senate has chosen to reduce this account by 50%. and give that money to the military. here's what i would say on behalf of the military. they don't want this money. they want this account to survive and thrive. general matthus told me about how this account plays in the world as it is, he said, senator, if you do away with the 150 account and withdraw from the world and these programs go away, you better buy me more ammo. i couldn't say it better myself. so since republicans are in charge, we'll start from the

right with mr. gates. -- my right. [laughter] mr. gates: good morning, mr. chairman, senator leahy and other members of the committee. thank you for the opportunity to talk with you about the importance of u.s. foreign assistance. melinda and i in writing our letter for the foundation talked about what great things can happen if the united states and other countries maintain the generosity that they pass through this account. over the next 15 years, there are some amazing things that can be achieved. if we go back to 1960, we have a very dire situation. one child in five died before their fivet birthday. 2 years ago, by 1990, that rate was down to 1-10.

since then it has been cut in half to 1-20. with the right investments over the next 15 years, we will be able to cut it in half in again, 1-40. and there are many u.s. programs that are absolutely essential to this decline in child mortality and to other gains in health and development worldwide. one specific program that makes a huge difference is the vaccine alliance. this public-private partnership creates a market for companies to develop vaccines that protect children in poor countries against the most common causes of death and illness. as an american, i'm proud that the united states government is one of their biggest donors. it has helped immunize half a billion children and prevented over seven million deaths. i can assure you that the parents of those children would be glad to vouch for simple

facts, vaccines are safe and effective and save lives. another great example of this is the fight against polio. the number of countries where that disease is endemocratic has fallen from 125 in 1988 to just three today. melinda and i predict that will be self-sufficient for food production. we are seeing great progress much of it made possible by u.s. assistance. u.s. has a major impact in improving agricultural productivity in poor countries through usais through agricultural research in partnership with our land grant universities. in my written testimony, i discuss a number of u.s. programs that are delivering high returns on investment and having a positive impact to the global poor. but there is another area where

foreign assistance will make a huge distance not only for the people of the world's poorest nations, but for the people of this nation as well. as you know, i tend to be optimistic about what the future holds, but there are a small number of catastrophic events that could set back the progress of the past few decades. the most probable and most frightening of these threats is a large epidemic. as i note in my recent new england journal of medicine, i'm talking about something bigger than the ebola outbreak we have seen. ebola is not a disease that is spread very easily. what concerns me most is the prospect of an even more lethal disease which is also highly contagious. we have seen the flu pandemic of 1918 and 1919 which had a worldwide death toll of 30 million to 50 million. could an epidemic of this scale happen again?

yes, it could. and it would spread far more easily than a century ago. i have come to congress on other occasions to ask for the sustainment of u.s. foreign assistance. i have asked for this to prevent needless deaths and suffering. with ebola, and the very real progress -- prospect of an even more infectious disease, the case is now even clearer. i'm asking you to assist foreign assistance programs not only as a way to help other countries to become more self-sufficient but as a necessary means of protecting this country from a future epidemic. the place to begin is with investments in basic health services in those parts of the world that are most susceptible to outbreaks of infectious disease.

whether we are talking about preventing the next epidemic or building upon the enormous health gains, the time to act is now. the need for foreign assistance remains strong and recent events demonstrate its urgency. thank you for inviting me to join you today. i look forward to your questions. mr. affleck: it's an honor to sit here in this room and speak before you. thank you for having me here. i'm humbled by this panel. thanks for having me follow the greatest and most important philanthropist in the history of the world. but it's an honor to sit next to mr. gates who has done extraordinary things in technology and philanthropy and doing so on your way to bridge. i want to thank you deeply for

inviting me to testify. i'm the founder of the eastern congress initiative where grant -- i'm the founder of the eastern congo initiative where grant making and advocacy - organization working with and for the people of the democratic republic of congo. i want to offer a special thanks to the chairman for holding today's hearings. senator graham and others has proven time and time again to be a champion for smart, effective u.s. foreign assistance. in august 2013, amid new violence, the senator brought a delegation. this marks the largest ever delegation of u.s. senators to visit this war-torn region. thank you for your confidence in the people of congo. and to senator leahy i would be remiss if i didn't acknowledge my co-star in "batman," but i understand you are quite good.

good morning, sir. i'm here today to offer a case study on the difference diplomacy is making where investments are transforming communities in need, advancing our nation's interests and creating opportunities both in the countries we assist. even though you heard about congress and its challenges -- congo, estimated five million deaths due to violence, disease and starvation. 2.7 million remain displaced and sexual violence. but these statistics tell you nothing about congo's future or about the extraordinary and resilient people working every day. despite the many challenges, the people refuse to be defined by the country's past and those who may question the effectiveness of our foreign assistance, u.s. diplomatic and financial investment in congo are working. it accounts for only 1% of the

federal budget and 1% of that 1% is important and powerful progress. let me give you an example. in the late 1970's, congo was coffee's leading exporters. production is less than 10% of what it once was. the families lost a vital source of income. three years ago, we saw an opportunity to revitalize congo sector. we knew with the right partners, we could give them the skills they needed. our government created a partnership. together, only in two years, we

have trained and supported coffee farmers across four cooperatetives to increase the quality and quantity of their crop and maximize farmer profits. we brought in global trade specialist that keeps money in the pockets of farmers and their families. but what we have been able to achieve together doesn't end there. these coffee farmers had no access to farming or line of credit. imagine trying to start a business without any capital. you can't do that let alone another emerging economy. we brought in westrock company to scale their businesses. scott was part of that delegation that visited congo. the final public peace was getting this peace into american homes. and we brought in starbucks. they will travel to the eastern

region of congo to begin a partnership with us to develop congo as a key source of coffee. starbucks has purchased 40 tons and may not be a lot for starbucks but a heck of a lot. entirety of the cooperative's export representing millions of cups of coffee. the largest coffee company is a clear testament. this isn't charity or aid in the traditional sense. it's good business. from a relatively modest investment, farmers' income have more than tripled and can send their children to school and put food on the table and access proper health care. this public-private partnership has transformed the lives of thousands of families. all made possible because usaid agreed it could be done. but this is the beginning. it will launch an economic development fund that focuses on expanding our work not only in

coffee but other strategic crops. we will work with 10,000 additional farmers over the next four years to build their business capacity and improve the quantity and quality of their projects and secure direct access to premium markets. this work is scaleable and republically cabble and in five -- and replicable and in short five years it will have an impact on individuals living in eastern congo. none of this would have happened without ussaid and without private sector partners to operate in one of the highest risk areas. agriculture will be one of the driving investments in the country. it is a driving force. supporting the more than 60% of the people of congo, 40 million people, whose families rely on agriculture as a primary source of income. feed a third of the world's population should not struggle to feed its own people or for

basic health care. senators, the next two years represent a critical turning point. with local elections scheduled for later this year and national elections in 2016, we enter into a window of opportunity for unprecedented democratic condition. -- democratic transition. engagement by secretary kerry and the ambassador have reached congo reach this moment. senator feingold served as special envoy. his leadership and the 15 trips he made during his 18-month tenure was the very direct intervention and we thank him for his service. the u.s. leadership played a vital role. to ensure this progress does not come undone, we urge you to join other groups like human rights watch in calling on the administration to appoint a new special envoy without delay.

as we continue to make smart and effective investments, we will foster the next leaders who will carry their country forward to stand as a model for the continent. senator graham: jennifer and violet are very proud. [laughter] mr. megrue: good morning and thank you, chairman graham, and ranking member leahy and members of the committee for allowing me to come today and talk to you about something which we are all very passionate about which is foreign aid and had a chance to get to know many of you. and so i understand the kind of pushback you get here at times but i would share a business perspective on why i think foreign aid has been so effective and so important.

by way of flukes, i'm a business -- by way of introduction, i may business person and spent 0 years in buying companies and owning companies with a team trying to make them bigger and more efficient, but i'm here because it has been more than the last 10 years working in africa in issues around health care, agriculture, education and specifically the last three years, i started an organization called born free, which is fighting the transmission of--- h.i.v. from mothers to children. i follow three basic rules. i work on things that are fast doable and great leadership that i can partner with. in mother to child transmission, the statistics around that led by the u.s. foreign aid are astounding and in 2003 there were 600,000 babies born h.i.v. positive and 90% of those died

in the first five years of life and last year down to 00,000. -- and last year, it was down to 200,000. 6 % increase. this year, it will be less than 150,000, so 75% increase is unheard of in improvements in global health. i know that we can eliminate mother to child transmission. secondly i mentioned things that are doable. mother to child transmission is doable for two main reasons, one is that the science is very clear and secondly that it's cheap. and having worked on other issues like education and agriculture there are significant debates about how to solve problems, but in the case of h.i.v. medicine is very clear and now very cheap. when you invest your money and others invest their money on the ground, we know it hits the ground effectively and without any debate about whether we are

doing the right thing. the last thing i mentioned is great leadership and my experience in business it is the most important thing we go after and i talk about leadership in three areas. first on the ground in africa. we work very closely with government leaders, with health minimums sters and community health care workers all over africa and you don't get to the kind of statistics that i just mentioned, those kinds of improvements without those frontline people making it happen. and u.s. corporations, i work with many u.s. multinationals, chevron, g.e. and mack and others, who are all investing along side the u.s. government in this particular issue. and not just doing it because of corporate and social responsibility but good business. this is the fastest growing market over the next two decades and committed to making these kinds of commitments.

and last is the u.s. government and the leadership that it's providing and i have worked closely with the leaders that usaid and pepfar and i can assure you they are making tough decisions to make sure our money is spent efficiently and for me as a philanthropist, knowing that that leadership is there keeps us inspired to be able to partner with the u.s. government. i'll share one final thought and that is that we have a clear exit strategy in areas like this. this is not funding that is going to be required from the u.s. forever. three years ago, i was co-hosting a codel and in capetown and brought together some of the largest business people, health minister for a lunch and at the end of the lunch, one of the leading business people stood up and said two things.

one, they said thank you to the u.s. government and secondly they said how important our investment has been in south africa getting over the hump and starting to get at this. i said we won't need your help forever. i came back and looked at the statistics and sure enough in 2003, we were 100% of the h.i.v. response. 2008, we were 50% and now down to about 5% of the h.i.v. funding response and seeing funding response and seeing that these countries feel an obligation to pick up these investments. so i know with continued investment that we will eliminate mother-to-child transmission, and it will be one of the greatest accomplishments

of this generation, and the greatest a couple schmidt of this country, and america can be a foreign leader in that, but would i say one thing, i would say now is not the time to blink. i know there are people like myself and other panelists here and there on the ground who are very grateful that our money is well spent. so thank you for giving me a chance to talk and i look forward to answering your questions. sen. graham: all right, would you like to go next?

mr. ford: i am here because i am a member of the u.s. global leadership advisory council for --mr. stavridis: i am here because i am a member of the with global leadership advisory council and i want to pick up where some of my colleagues have left off, and to say from a military perspective how important this kind of work is. we have a very strong and capable military, so thank you to the congress for that, but we cannot create security in this 21st century simply with power we need the tools of soft power which is what my co-panelists are talking about, and it is really displayed missing -- really displayed missing -- really diplomacy in a nutshell. we can improve at how we launch

ideas, and diplomacy and development allow us to do that. so cutting this kind of work, i think, is a mistake at this time. i will give you some practical examples. senator leahy and i, before my time at nato worked together on columbia. this is an area if you go back 15 years, looked a lot like have syria does today. a complete humanitarian disaster, millions of people displaced, high levels of violence as then was describing and the congo, it was a nap salute disaster. we created something called "plan colombia," which had a military component, but fundamentally developed diplomacy and human rights and all of the soft power parts fitted together with the hard power. today columbia is a nation that has not only in proved vastly, that is in a position to

continue forward as an absolute linchpin strategically for the united states in the south american context. my time as a nato commander made me witness the same sort of effect in the balkans. if we think back to the balkans 10-15 years ago, again, it looked a lot like syria does today. 8000 men and boys were killed in a single day, and extraordinary level of violence, rape, torture, yet today in the balkans, when they want to solve a dispute, they don't reach for the rifle, they reach for the telephone to call the european union and the united states. why? because we used some hard power but combined it with the soft power tools. i will give you a third example in the current. it is what we are doing today in

afghanistan, where senator graham has served as a reservist in the active-duty arena in afghanistan working on the judicial process there, this is soft power. do we need hard power in afghanistan? absolutely, that unfortunately the long-term requires both, you need hard and soft power together, and you create smart power, and that is what i would advocate for, and to try to do defense without diplomacy and development, i will simply repeat the quote that senator graham gave us earlier, as my very good friend will tell you if you scrimp on the development and the diplomacy, you are going to end up buying more ammunition, and as secretary gates, who was in our agency before being in our agency was cool we cannot kill our way to

victory in these situations. we need hard power, but we need these tools, development and diplomacy, as well. i look forward to your questions, senator. sen. graham: senator booz man from arkansas, we like to hear from you. sen. boozman: i have to run to the v.a. to talk about opioids, but i do want to thank all of you for being here, and i am very familiar with the work that you have done, you are very great examples of using your time and resources for those who have absolutely no constituency at all. scott, it is a really good thing to see you here, scott does things for his fellow man and as a result, through his efforts and hard work, i think has raised the gdp of rwanda by 15%.

he has the worldwide ability to sell their coffee in the international market versus elsewhere, so we appreciate all you have done, as for the other witnesses. thank you mr. chairman. sen. graham: senator bozeman -- bluesman from the great state of arkansas, thank you very much -- senator boozman from the great state of arkansas, thank you very much. mr. ford: i think that this applies to our collective continental benefit, and i was the ceo of a company until we sold it to verizon in 2005, and i worked in africa before that, and i worked with the president of rwanda before that, and we

discovered that we are outliers, we had a common philosophy around the role of the state and what it can and can't do and the role of business and what it can and can't do. i will sum it up, the crux of our conversation centered around a shared belief that we can bring safety and security and political fleet of -- political freedom and even religious freedom, but it is materially limited in the ability to bring economic freedom, it is the final fruit of the tree, if you will. economic freedom that is only created in the private sector when people who have learned how to organize and manage the for-profit's nests and mentor other people in that process. paradoxically, the group that benefits the most from a free market private enterprise

system, is not the richest of the rich, they are everywhere in the world, they're actually the poorest of the poor. president you got a -- the president challenge me if i came back to rwanda that could help the poorest of the poor taste the benefits of the free market system he says, because once they do, they will not settle for a government that will not give it to them. i sold in 2009 and i went back frankly not sure if i could find anything to do in rwanda, but i thought i would honor his request and i will go look and i got to rwanda, and i found out that there was a whole host of things but i ran into the fact that 20% of the people in rwanda make their cash income from the coffee business. there were just two exporters that dominated the coffee trade. i then figured out that they

were not paying the highest price for the coffee to the farmers that they could have and that there was room for a third party to come in and pay more to the farmers and still make a profit. i have to make a profit or i don't get to sustain the work. so we started looking through how can we go into the coffee business, we really did not know much about it, we found an old abandoned, a corrupted mill, and we revitalized and we hung a nation go out and we started a business. in the first six months of our business, we saw the price that the farmers received increased 30%-50%, and that was the power of someone setting a reasonable price in terms of the cost of the product. in addition, we have invested money on helping to improve their yields, helping to improve the quality, and all of this translate directly into income, we were successful in rwanda we

extended into tanzania, and that we partnered with falcon coffee out of the united kingdom, and we extended to other parts of east africa, and we were one of the largest specialty exports out of rwanda, and now we work closely with the eastern congo initiative and we asked the united states group, eastern congo initiative, could we get batman? [laughter] and they said yes, and then we started a coffee roasting business and i am running out of time, thank you for my ability to make the plug, and starting these businesses from scratch in this part of the world gives my wife and my father, they stood with me, and everybody else said i was a madman, but we have seen $100 million of incremental income

going into the pockets of the rwandan farmers over the last six years. that is a 50% increase in their standard of living. how do you impact 20% of the united states with a 50% increase in their standard of living? i don't know how to do it and i could not believe it was possible in the private enterprise system but it was because we got there and there were groups funded, by the u.s. government and philanthropist like mr. affleck and mr. gates, and a german investment group, and all of these groups spending money, to help the co-ops on the ground get their act together, get their accounting together, to be able to function as a community under the rule of law, that is all supported by ngo's and we have been building on that to translate the income differences in the world of the rwanda and farmer. i will say this as a final

moment. i recognize in today's panel that we are just one company operating in a limited sphere of influence, i am good with that, but i hope that we serve as just an example of what american private sector actors can look like when we align with like-minded organizations. we can produce benefits that the poorest of the poor can literally taste, and i think that accrues to i think it accrues to america's credit. if you want to ask questions about that and how it ripples into american policy, i would be glad to answer that, but it is an honor to be here today and i appreciate the imitation. sen. graham: so, we will have that debate later on, and i will take some of your words to the senate. mr. gates, you have been doing

this for quite a while in your private role, if the budget cuts are enacted that we are talking about under sequestration scenario a, but we actually adopted what is being proposed under the senate today, how would that satisfy from the point of view of yours? mr. gates: i am very enthused about the progress that is being made, and it would be a tragedy as we see how close we are on polio eradication if we don't put out those resources now that could easily spread back, and the amount of money the you have from deaths to get back to get to where we are would be absolutely gigantic. if you look at a disease like hiv, millions of lives are being saved, and if you cut those programs back, there simply will not be enough medicine to keep

people on treatment. the united states has been an incredible leader there, and it is only through our generosity, though, that that other money is activated. so if we cut back, we will see other funds going away as well. there is quite more generosity on foreign aid because of the size of the economy, because of the technical expertise that we bring, and the u.s. finds itself in a leadership role that i don't think anyone would be able to step up to that, so it would be a huge setback to maternal health child health, and our lives work. sen. graham: thank you, mr. affleck, i think you have been very involved in the security environment. all of these security programs whether in the private sector or whatever, you have to have a natch -- have enough security

what is your evaluation of training the security forces as an american role? i mean, what benefit do we have not just on the hard side-side side -- soft side, but would you think you would see this as? mr. affleck: i think it is, there is a lack of a security sector, and it preys on the population itself, so people say , we are not going to pay you we you are going to have to live off the lead. this is something that requires leverage from the united states and from local, regional actors to say it includes sort of, trying to end corruption trying to get soldiers paid, and those are difficult things but one of the hardest things about that is

to train soldiers property, and we are uniquely suited to do that, and we have been doing that, and the role of unesco is doing that, particularly in light of what we are talking about, which is this nascent public-private partnership to build sustainable economic models for people, not just making a leave it -- making a living, but for people's capacity to be else, so they can contribute to their society, so they can see a ripple effect of this virtuous cycle, and that aspect of security is really important. you have areas in the north where we are working with coffee collectives that are under threat from an al-shabaab association, and when you have a state, and i am not saying anything new here, where it is failing, it is more vulnerable to that kind of extremism. and you have a state that is more prosperous, they are able to fight that better.

speaking to what the admiral said, i am certainly no expert but when people say let's spend money this way before we spend money on bombs, this kind of training that is being talked about is something that we can do. without exception. sen. graham: so the reason i asked that question for a small security investment, but for a mentor training role we can enhance everything you are trying to do in the private sector? mr. affleck: absolutely, you protect your investments, you make people confident. what scott is doing is that he is backing financing and making people want to do things they did not want to do. he is getting investors a legitimate return. in order to do that, you have

got to have a window of safety and that is one of the things that we are trying to expand in the drc, and we can create enough so that we can encourage investment in the public-private partnerships that i talked about. sen. graham: this is sort of a commercial for that, and john, if we do the ledger cuts under sequestration that is being proposed or adopted, or the amendment is being proposed today, what does that do to all of the success that you have had and the child aids commission? mr. ford: not surprisingly, the leadership --mr. megrue: not surprisingly, the leadership that we have talked to take the lead on this so when we make these kinds of investments in infrastructure and medicine and training to pull the rug out from under us and it is the magnitude of the kind of numbers

that are being proposed today, it really brings it to a complete stop. it is not the kind of thing that you can just meet her back, it -- just meter back, it just stalls it. in the case of hiv overall which is not stabilize, it is starting to drop, you will see an explosion right away, so from my perspective, and from the team on the ground, we are really worried about that kind of move. sen. graham: admiral, i know you are not wearing your uniform today, but do you think it would be smart to take the money out of this account and give it to dod, and d think the dod really wants the money coming from this account -- and do you think the dod really wants the money coming from this account?

mr. stavridis: i think this would be a bad idea, and let me put a number on this, to sustain an american in iraq is about $1 million a year for an enlisted troop. we can finance, train, and put effective afghan troops, for example, in the field as we do today, for literally pennies on the dollars, so the efficiency of this i take is very, very important to be underlined, and i also go back to what mr. gates and mr. gruber was saying, along with mr. affleck, which is the cost here that is minimal, you leverage the private sector, and at the end of the day, our security is like an iceberg. the tiny tip of it that sticks up is a high end capability, that the mass of what we can create is frankly in the private sector, so i think for those two

reasons, taking money away from development and diplomacy and putting it into defense where we have strong levels of resources would be a sick never get mistake. sen. graham: would it be possible for you to have all of the ability in coffee business without the government infrastructure that exists? today -- exists today? mr. ford: no, if you don't have a cut of if a structure, guys like me have nowhere to go. sen. graham: thank you. sen. leahy: the chairman mentioned that the budget cuts are going to go even further, and in the house and the senate the numbers were announced, and it is certainly well below the fiscal year, and they are talking about going beyond that. i'm thinking admiral, you

mentioned the colombian project as i do remember our time working on that. you may be interested in knowing that i had lunch with president tonto's -- the president down there and he prays you and the project, so i mentioned that for whatever it is worth. look at the budget from the cuts from last year. there is $50 billion to use the state department, our consulates , our air diplomats, and ongoing programs that we are committed to, treaty obligations like the human -- like the u.n., and let

me ask this question to all of you, and let's say there was $5 billion in their up for grabs. we spend it any way we want. any suggestions? we have talked about this many, any times in my office. where would you spend it? mr. gates: there is amazing numbers of ngos working on areas of health, and i'm sure they don't make any strong case for any increase that would be available, but the basic health structure in africa is very weak today, and as i said, that weakness means it is bad if an epidemic shows up, and we would not see it soon enough to go stop it, and it would spread in the global economy very, very quickly, faster than the spanish

flu did back in 1918. sen. leahy: you did an op-ed piece back in the "new york times" a couple of days ago on this? mr. gates: yes, the basic health and surveillance systems in africa must improve, and the current budget lets us do that at a certain rate, and if there were additional dollars, we would excel in -- we would accelerate that the sick infrastructure. the current policy would prevent an epidemic, but year in and year out, it is amazing to lift people up and accelerate the time at which these countirries will be self-sufficient and will be able to educate their own people and provide health, so health and eight agriculture are pretty basic things, and the formula for how you get better

-- so health and agriculture are pretty basic things, and the formula for how you get that are there is important. it is so much stronger today than 10 years ago or five years ago that the extra money could be very, very effective. sen. leahy: mr. affleck, in the congo, i have numbers -- i have read numbers about things that you say about. he said that you had seen things that pleasantly surprise you. suppose using your experience, we said, we're going to make you the czar of that $5 billion, how would you spend it? mr. affleck: first thing i would do is surrender that title. [laughter] sen. leahy: you are a wise man. mr. affleck: first, you hear it's too dangerous, can't work

on the ground. we want to support community organizations. i know i'm the little guy on the panel, the grassroots guy, so i can speak for the little guy. we saw a lot of grassroots organizations. these coffee and cocoa collectors are perfect example of that we saw with the economic development fund alone is expandable and scalable. all across this part of the country, you have many, many many n.g.o.'s, local congolese groups that are in want only of money. we can submit to the record a survey of what we did, but it's not a question of where the money could go but of need. i will say that i take that your real point is around sequestration and cutting the budget and there's two ways to go. as i said, this is a nascent partnership.

it is about having people to commit to it and believe it. it's not like you have a line of people ready to sort of sign up to this exact way of doing things. we asked them to change their practice and so on. in order to create a virtuous cycle, to have a contagion of success. that's what we've seen so far in two or three years. i can tell you that taking away those checks, pulling the sheet out from under that will have the opposite effect. there will be a vicious cycle. people will say, you can't work with them, can't believe what americans say this kind of process is never going to work, we'd rather revert to traditional aid where we stand around and hope someone -- senator leahy: i don't want to put words in your mouth but if that happened and you had to try to replicate it a few years from now -- mr. affleck: all the cost we'd spent would be gone and it would be twice as hard to try to do it again, to try to rebuild the

infrastructure, to regather the personnel, to try to reassemble what we'd built and overcome a history of mist trust a history -- mistrust, a history of disappointment and a history and frankly, people had gone elsewhere. whether it's to do more or less artisanal agriculture or in the case of eastern congo, having joined a militia or working in an illegal mine. there's a lot of places people could be working if they're told there's no longer a job for them farming cocoa or farming coffee. senator leahy: my time is about gone, i don't know if any of other three witnesses want to take a stab at this. or all three, what ever you wish? mr. megrue: sure, the area i see the greatest leverage in our investment is investing in

health care infrastructure and not in physical equipment but in talent. the africa systems are sorely understaffed. what we've seen is by providing what is essentially inexpensive talent, we can around very specific issues, whether it's malaria, tuberculosis, h.i.v., etc., their rate of improvement is extraordinary. so in states like river state in nigeria where we've seen a 300% increase in 12 months of mothers on treatment, or another state where we've seen 160% increase, that's done by inserting people that health commissioners can use to mobilize their people and train their people in the right way. mr. stavridis: senator, i'd say very quickly i'd take a significant chunk of it and do what you see in this panel using state and aid that have the bureaucracies, leverage the