provided by billionaires and multimillionaires and interest groups, has been extremely effective. what happens again? what is the rationale? a congressman who you know knows better, and they will say we cannot do that extreme climate legislation, because we will lose jobs at home. it will hurt the economy. it will cost ordinary people opportunity. which you know, none of which is true. so you and i we have to change the calculus. we have to make it impossible for an entire political party that i -- to deny climate change we will witness fight that we need to win sooner than

later. every month, every year, that is why we need you so badly. to demand elected officials confront the truth. more jobs will be created that eliminating the damages of climate change and mitigating them. then will be kept by not doing anything about it. same with immigration. i recently had the opportunity to meet with lee kwan you before he died. he was the president of singapore, a brilliant guy who wrote extensively on the future of india china, the united

states and russia. he recently passed away. i was coming from mumbai india to meet with abahbed, and i got a call from singapore, what i sit down and meet with kee lee kwan yu. we were talking about how rapidly she has consolidated power in china. we were talking about how quickly she consolidated power in a said about five minutes into it, i said mr. president what are the chinese doing now? meaning what are they contemplating next? and he said they are in the united states. they are looking for the buried black box. i looked at him like you're looking at me but i can't see because of the lights. [laughter]

i smiled and i said this was when the aircraft went down in the ocean and they could not find the black box, i said, mr. president i am confused. he said they are looking for that box buried in the united states and contains the secret that allows america to be the only country in history to be able to constantly remake itself. and i said, well mr. president i'm old enough to presume to give you the answer. they will find two things in that black box. one is, stamped in the dna of every naturalized and nativeborn american is an absolute skepticism for orthodoxy. as bad as the elementary school education is, there never criticized for traveling orthodoxy in america. unlike every country in the

world including britain, france or anywhere else. that is how we make new things. we challenge orthodoxy. the second thing they will find is before the declaration, and unrelenting stream of immigration. not in trickles, but in great waves throughout the history of our country. and why that is important, mr. president, is we are able to cherry pick the best talent from every culture. i really mean this. a lot of people think hurt people sit around and a lot of poor folks in will of her on the table in their kitchen and say that sell everything we have, go to a country that doesn't want us and we don't speak the language -- won't that be fun?

the people believed to come here are the people with the best imaginations and the greatest amount of courage and the best initiative. [cheers and applause] that is a fact. that is who we are. what we are doing is robbing ourselves of the lifeblood of ingenuity, progress, -- locking immigration reform ignores 70% of the people who already agree with us. so why isn't it being done? here for the resistance there is more than one reason. it is not just interest groups. there is a deep-seated antipathy, some bordering on hate and racism that creates stereotypes about immigrants. all you have to do is listen to the republicans right now. think about it. at the end of the day what is

thwarting our ability to legislate, is the increased power and influence of special interest groups particularly focused on state legislative bodies. if we democrats have made any mistakes, we focus on only the makeup of the congress, the makeup of the senate. if the koch brothers can go into illinois and spent $250,000 per seat which is more than anyone usually raises. and change the dynamic in the state. we have to get smarter. all of the action isn't only here in the congress. i could go on, but i won't. if you could do only one single

thing, only one, to increase fairness equity, opportunity and pass rational gun control deal with immigration, what would it be? i can tell you what one thing i would do? it would be get private money out of political process. [cheers and applause] the first bill ever introduced at the time was a bill i introduced in 1973, calling for a limitation on how much could be spent in a congressional election, and a senate election, guaranteeing challengers would

have as much money as the incumbent, and capping it. i ran in 1972 as a middle-class kid who just paid off his college and law school loans with a law firm just getting on to its feet. i was able to run a campaign because i could organize people. my one in the year when nixon was running when my opponent was twice as well-funded, and was a 40-year incumbent with an 81% favorite rating. today i ask myself, if i were in the same exact position, 29 years all in the state of delaware -- 29 years old in the state of delaware, and i wanted to run with same ideas and ability to organize, could i possibly do it?

i would have to raise multiples of $300,000. per capita, delaware is one of the most expensive campaigns in the nation, weather is no television and you have to pay for 10 million people, 9 million of whom if the voted for you would be indicted. what are we doing? we're cutting off access for so many of you for so many bright young minds, the only way they can get engaged is they have to go where the money is. where the money is there is almost always, implicitly some string attached. no one buys anyone directly.

if that happens it is rare. it is also hard to take a lot of money from a group that you know has a particular position, and even if you think they are wrong, to vote no. ladies and gentlemen, i predict that one day the american people will wake up, and they will demand change. today it will require a constitutional amendment. i introduced the first constitutional amendment on this limiting dollars. when i raise it these days they say, no we cannot do that. so what do we have to do? whether running for senate, congress or president -- i cannot disarm, i have to do the same thing. we can say that our interest groups are better than theirs.

we can argue that we are less self-serving. that may be true. why do you think the middle class thinks things are not on the level? what chance do you think we have to get the kind of income tax system i have been waiting for my whole life? what you think the chances of getting that are? people are not going to supply money against their own interests. we are not bad people. i have been pushing to change my entire career. it is outrageous. people with a whole lot of money are the ones on unearned income. why are they going to give you the money.

folks we have to start in our own party. better be demanding of all of us. that we adhere to a policy that doesn't rest on millionaires and billionaires. we are good people. it is a hell of a way to run a democracy. the first place you have to start is in the democratic party. the matter how much you love me or somebody else, you have to demand of us that we demonstrate that we understand. we can do something about the corrosive impact of massive amounts of money. we can demand that the people who we support don't yield to bit -- millionaires. take their money in limited amounts.

what are we doing? i know a lot of people will read into me saying something i am not intending. i am talking about any individual. but if with cannot start with our own party to even say do not disarm in the general election and do it there. with our own party. we can get support. even if we are outspent significantly. we have you. the young and passionate advocate. if i get a chance to go on television with millions of dollars or i am able to put 2000 volunteers on the street, i take 2000 volunteers for real.

don't underestimate your ability to influence all of us. to be tempted to yield to attempt tatian -- yield to the temptation. the way i have to do it, even if it doesn't compromise will convince average middle-class people that i don't care about them and they will not trust me. we have to speak up. i know that a lot of what i just said sounds polly ann-ish to you, but i have been around longer than the other guys. i'm telling you it can be done.

it always is done with generations like yours. and in 1972, as a 29-year-old did, the war in vietnam was raging. with the women's movement you are criticized if you raised the issue. politics was as dirty and corrupt and corruptive, so the temptation of that generation to drop out was no less than the contagion of your generation to say be damned with it, it is not worth it, it cannot happen. a whole bunch of us disagree with you. and we changed things. we ended a war. we completed the civil rights movement as it was pictured at the time. we generated a genuine getting

of the women's movement. not me, my generation. if you look at what the odds were they were slim to none. the only message i want to leave you with -- you have the talent, the intellect and the passion to get us there. i don't want you to get discouraged. i don't want you to get discouraged. i promise you. if you keep doing what you're doing, if you generate and increase your numbers if you never apologize for your passion, if you only gird yourself against the temptation to rationalize, if you are willing to listen to the other side to generate consensus this can all get done . that is the only way we can make

progress in this country. in the history of the world. you have already made a great deal of difference in the lives of american people. people in this room already have. there is even more reason now to be idealistic and optimistic and tenacious then at any time. think of it this way and then i will get out of your hair. if you're ever going to be involved in public affairs, in whatever forum, this is the time to do it. things are changing. they are changing and they are going to change. no matter what you do. the question is -- how they change. there are few periods in

american history -- we call them inflection points. i remember my civics and history professor defining what inflection points where. driving 60 miles an hour down the road and you abruptly turn to the right are the left. you can never get back onto the path that you were on. that is what happened. not because of barack obama and joe biden or anyone else but because these armaments of great change. william buckley wrote a poem called "easter sunday." it talks about the first rising in ireland in the 20th century. he said all has changed changed utterly, but terrible beauty has been born. that description is more apt to today than it was then.

all has changed in the last 15 years. if we have our hands on the wheel, if we have unlikely periods of status quo, we have a chance to bend history just a little bit. it is only going to be done by you. i mean this sincerely. it is only going to be done by young, decent, passionate people of principle. that is how all change has taken place. let the conclude by saying that i came to thank you and to tell you that we badly badly badly need you. don't get despondent. don't disengage. disrupt the status quo. make noise.

[cheers and applause] take everybody on and don't ever settle for -- it can't be done. god bless you all. thanks. >> on friday, investigative journalists from europe and the u.s. discuss their findings on the downing of malaysian airlines flight 117. the crash killed 298 people. the event is life at 9:00 a.m. et on c-span two. later the senate advisory committee hosting a discussion on the digital music streaming industry. live it 12:00 p.m. et. >> this sunday on "q&a," molly

crabapple on her use of drawings to tell investigative stories around the world. >> and affiliation might be reading a book by a black panther or drawing patterns are having a tattoo. the pelican bay isn't alone in this. around and country you can land in jail for your art, your beliefs, your reading, your gender or your friends. it is not always to show finished drawings, it is to build rp with people -- raport with people. when you have a camera it creates a distance. this insect thing in your face they are taking images and you cannot see, even though you see beautiful things later. whereas, when you draw it is vulnerable. they can see exactly what you're doing. most people have not been drawn and most are delighted to be drawn. a lot of times i draw people because i like to and i like talking to them when i do it.

>> on c-span's "q&a," sunday night. >> on thursday, the senate finance committee held a hearing on healthcare.gov, the federal website americans used to purchase health insurance from the federal exchange. the hearing focused on potential fraud. it is one hour. >> this meeting will come to order. good morning everybody. in today's hearings we will address controls of the healthcare.gov website.

the committee will hear from the director of auto -- audit services from the accountability office. santo -- am i getting that right? it is close. the director's team has led in undercover investigation to test internet controls of the healthcare.gov and to review the center for medicare and medicaid services handling of this program. this investigation was designed to determine the degree to which the administration's federal help and service exchange can protect against fraudulent applications. what happens when they provide false information and toppled -- documentation and whether controls are successful in dealing with irregularities once they are found. perhaps i should say a spoiler alert before this next part. today the doctor will explain how the federal exchange failed

spectacularly on virtually all relevant accounts tested. for this investigation gao created fictitious identities to apply for subsidies through the exchange. we learned last year that 11 out of 12 fake applications were approved, without attempting to verify authenticity and and rolled fake applicants while handing out thousands of dollars in premium tax subsidies. one year later gao has reported that nothing has changed and if anything, there are more problems. the administration has known about these problems for over a year and has apparently taken the necessary steps. while they say they are balancing consumer access to the system, it is clear what is going on here. since the federal exchange was

first implemented success hasn't measured by a number of applicants that signed up for insurance. last year, when the administration reached its initial enrollment goal, critics were no longer told that we had been wrong all along and that the law was working just fine. with these findings it seems obvious, at least to me, that the administration has been preoccupied with signing up as many applicants as possible, ignoring attentional fraud and integrity issues along the way. now supporters of obama care insist that it is the law of the land and congress should work to improve rather than repeal. on the first part they are unfortunately correct. for the foreseeable future the affordable care act is the law of the land. on the second part among

congress continues to work toward the repeal of the misguided law and replace it with patient-centered reform. that puts patients and set up eurocrats in charge of their decisions. needless to say that they will not common to other is a president who shares our goal. in the meantime there's an obligation to exercise rigorous oversight and to work to protect both beneficiaries and taxpayers from negative consequences. that is what today's hearing is about. we are here to get an account on how things are working on the federal exchange and what we have heard thus far is not reassuring. he does not speak well for their management of healthcare.gov, the protection of taxpayer dollars, or the experience of an release. -- of enrollees.

it does not just expose gaps but also how these americans were trying to solve were correct applications. time after time, the team set information for verification, only to have it ignored or have the exchange respond as if something entirely different had been sent in. the fact they encountered mind-boggling efficiency at every turn, it does not bode well for the experience. i look forward to today's hearing and what i hope of be a good discussion. before i conclude i want to note that even though this was requested by the committee cms was less than cooperative. through the entire endeavor, they appeared to be dragging their feet and going past deadlines. when congress asked gia to conduct an inquiry no federal

agency should stand in the way of that work. by delaying the gio cms has delayed his committee's work and hurt our efforts. this is unacceptable. despite promises of increased transparency and cooperation this type of stonewalling is far too common. acting cms administrator was personally involved in this process. as the committee considers his nomination i look forward to asking him about this investigation and white cms has been -- and why cms has been interfering. today, we have our hands full as we hear testimony about this important investigation. i will turn it over to senator wyden. sen. wyden: on this side of the

aisle we do not take a backseat to anybody in fighting fraud protecting taxpayer dollars. one dollar ripped off is one too many. let's be very clear. the report up for discussion today is not about any real-world fraud. the study looks at one dozen fictitious cases and not one of them was a real person who filed taxes or got medical services. no fast buck fraudster got a government check sent their bank account. the government auditors acknowledged today, and i want to quote here, their work cannot be generalized to the full population of applicants or any enrollees. none of the fictitious characters stepped foot in a

hospital or doctor's office. when you actually show up for medical services, it is a lot harder to fake your way into receiving taxpayer subsidized care. grexit if you have stolen and identity, there is probably a medical history belonging to someone else that ought to set off alarm bells. if you are a real person signing up in the marketplace, you have to attest under penalty of perjury that the information is correct. if you falsify the application you face the prospect of a fine of up to $250,000. another major fraud check went unchecked in the study.

that is squaring up tax returns and your insurance application. the general accounting office calls it a key element the back end control. if your tax return and personal information do not match it stops. the study ignores that anti-fraud as well. it only looks at a part of the picture when it comes to stopping fraud. there are already methods of strengthening programs and rooting out the fraudsters and ripoff artists. part of any smart, ferocious strategy in fraud on one hand is drawing ss -- distinction between aggressively going after the ripoff artist, and the other, not harming a law-abiding american to have made an honest, and technical mistake.

the retiree nearing medicare age should not get kicked to the curb because he or she accidentally submitted an incorrect document. a transgender american should not have forms not match and lose. this is a system that nixes the health insurance coverage for some americans because of those issues. a recent talent report stated -- gallup report states that health insurance by americans is the lowest they have measured. this is the first hearing since the supreme courts land left -- landmark decision to uphold the law to make that possible. the fact is of the affordable health care act has extended coverage to more real people who use their insurance coverage to

see real doctors. at some point down the road, the gao is expected to complete the report, at that time, unless work on a bipartisan basis to drunken -- conclusions about how this committee can work together to improve american health care. >> thank you. >> the witness today is the director of audit services for the investigative service mission team. he has served in a variety of positions, including legislative advisor in the office of investigations. he has also served on the senate finance committee and the house committee on homeland security. in his private sector career, he has held a number of senior

positions in cold -- consultancies, most recently focusing on homeland security. he earned a degree in international relations and an mba and strategy from pepperdine. we welcome you and are interested in your statement. mr. bagdoyan: thank you. i am pleased to be here today to discuss the tests assessing the enrollment control of the marketplace set up after the affordable care act of 2010. as mentioned, we reported our preliminary results in july of 2014, we performed 18 undercover tests, 12 of which involve online applications. the tests were designed to identify indicators of potential control weaknesses in the

marketplace enrollment process specifically for year 2014, and to inform the ongoing arithmetic -- a forensic audit of these controls. i would note that these tests cannot be generalized to the population of applicants or and really's -- or enrollees further we shared the applications during the course of the test to seek responses. in this regard tms officials stated they have limited capacity to respond to attempts, and they must balance consumers ability for coverage with program integrity concerns. without providing details on how and when, these officials stated they intend to assess the marketplace of eligibility determination process. in terms of context, health care coverage offered through the

marketplace is a significant expenditure in the government. current levels of coverage include several million enrollees, about 85% of them are estimated to receive subsidies. they estimate subsidy cost at $28 million. -- billion dollars. a program of this scope and scale is inherently at risk for errors, including improper payments and fraudulent activity . accordingly it is essential that there are controls in place to help narrow the window of opportunity for such risk, hence the importance. with this backdrop, i will now discuss some of the results, the marketplace approves subsidized coverage for 11 of our 12 fictitious applicants. they obtained about $30,000 in

tax reddit plus eligibility for lower cost at time of service. for seven of the 11 applicants we intentionally did not submit all required verification documentation to the marketplace, but it did not cancel coverage or reduce or eliminate subsidies. i would note that while subsidies, including those granted to the applicant are not granted directly to enrollees they never the less present a financial benefit to the consumers. as part of the verification process, the marketplace did not accurately record all inconsistencies which occur when applicant information does not match the information available for marketplace verification sources. also the marketplace resolved inconsistencies based on fabricated documentation further the marketplace did not terminate any coverage for

several types of inconsistencies, including social security data. we found errors in information recorded by the marketplace for tax filing purposes for three of our 11 enrollees, such as incorrect coverage. or subsidy amounts. under the aca, filing a federal income tax return is a key control element designed to ensure that premium subsidies granted at time of application are appropriate based on recorded -- reported earnings in the coverage year. the marketplace reenrolled coverage for all of 11 enrollments in plan year 2015 later based on what it said were new applications in real -- enrollees had filed, which we had not actually made, the market place terminated coverage for six of the 11 enrollees saying they had not provided necessary documentation, however for five of the six deterrent --

terminations we installed reinstatement, including increases in subsidies. in closing, our test results highlight the need for cms to have in place effective controls to help reduce the risk for improper payments and fraud. otherwise there is potential for such risks to be embedded early in a major benefits program. we plan to include recommendations regarding controls and a forthcoming report. mr. chairman, this concludes my statement, i look forward to questions. chairman: it has come to my attention, they had difficulty obtaining 2015 enrollment data data that would allow g ao to conduct a full analysis of what really happened to enrollees of 2014. this would have been helpful to

gao in providing things like those were whose of -- those who were supposed to get dropped among other things, can you provide us with more detail about the difficulties gao had in obtaining the information. i expect them to have the most enrollment -- most recent enrollment data. i expect that they would work with you to make that happen. any information you can provide this helpful -- is helpful. >> thank you. i will lay out our experience in obtaining data, in the event getting -- in the beginning i would establish a context, why we did undercover testing was to flag indicators of potential control weaknesses, and at the same time we had designed our

forensic audit which would have relied on the enrollee database in order to map out what we were fighting in the controlled environment against the actual enrollees that i believe ranking member widen mentioned earlier. that said, we begin -- began our informal meetings with cms in april of 2014. we requested various information, we had some success . when we focused on the enrollee database we submitted a written letter requesting that database in august of 2014, and then we subsequently engaged an additional discussions with the officials as they expect concerns that what we were asking, what we plan to do with the data as well as how the data would be safeguarded. upon the suck -- subsequent

discussions through early part of 2015, we submitted another letter to the current acting administrator of april 2015. as of a couple of days ago, we have been in contact with cms who advise we should expect the data sometime next week which is good news. we look forward to obtaining the data and seeing whether it is actually what we asked for, and then conduct additional tests whether the data is useful. i apologize for the long story. >> that's fine. >> i understand the marketplace in both this good faith in not

pursuing applicants who did not submit all of the requested documentation to reconcile inconsistencies between information they provided and that available to the marketplace to government sources. could you describe would be good-faith exemption is all about, whether it has any basis in the of portal care act or its implement inc. regulations. >> the good-faith provision is basically an interpretation by cms of certain provisions. any statute itself and incrementing regulations. essentially under this implementation, cms deemed as long as an applicant submits at least one document to support their application that whatever

-- that would have engaged in a good faith effort... accordingly remain a participant in the coverage. in terms of whether this has an impact on the controls, it is essentially one of the back into controls, a document verification process -- depending on your point of view, whether that is adequate if someone is asked for seven documents and they submit one that can create a control gap and raise questions about their eligibility for participation. >> thank you. >> my time is short, i would like you to give me yes or no answers. as of this morning, can you

generalize from the 11 fictitious cases what the fraud rate would be for the more than 10 million real americans who actually receive health care coverage under the law, yes or no? >> not as of this morning. senator wyden: you said in your testimony that tax returns are i quote here, key elements of back into controls. it is a major check that would shut down fraudsters, as of this morning, did you file tax returns for these individuals yes or no? >> we did not. senator wyden: as of this morning, have you uncovered any real individuals who fraudulently obtained health coverage using gao techniques, yes or no? >> no. senator: as of this morning, have you provided hhs with

fictitious identities so they can address the problems that you say exist, yes or no? >> we have not. senator wyden: i reviewed this very carefully and given the answers that we have just heard, it is clear to me that the auditors have much more work to do before the committee can try a useful on this matter. on this point with respect to the claims that the agency has not been responsive to the request for enrollment data, i very much respect...

10 million americans identifiable information is already becoming a nightmare for millions of americans. it is my understanding that the agency and the auditors worked out an agreement on how this information could be turned over to gao and protected, i think that is good. it is also my understanding the agency has turned over some 30,000 pages of documents to my colleague, senator portman for his committee. this notion that the government am the agency in particular, cms is spending its day morning noon, night trying to stonewall on releasing this information, i think it is not accurate given the facts cited. chairman: senator, you're next.

>> a lot of us want to asked questions -- ask questions, i will at a few one of three. i will put the lead in to the record, you presented cms with potential flaws, the flaws as i understand did not get fixed. my question is simple, and your work with cms do you believe cms's attitude is and will people first and worry about eligibility later, if at all? >> from where we stand currently at -- the explanation has been that they have to balance the ease of access to coverage with program integrity controls based

on our undercover work, i would say that there are gaps in these controls that have yet to be addressed. we continue to look at it through our forensic work, as of now i think the balance would favor access over integrity. as we stand today. >> thank you mr. chairman. i think it is important that you were talking about taxpayer dollars here that we make sure they are spent wisely. marketplaces are required by law to verify application information, yet it appears from your investigation that subsequent interactions with cms that the buck stops with no one

especially since the very contractors hired to verify the documents are not required to detect fraud. it begs to question of whether you are currently aware of any effective front or back and -- and fraud detection program used by the administration? mr. bagdoyan: should be only give us a good idea of what the controls are. we will take what we have learned from the undercover test and match those of the forensic audit, and then apply appropriate criteria as well as a forthcoming gao framework to manage fraud risk, then we will have a very comprehensive view of what the environment is like. >> but you cannot make the

judgment like that. senator: based on our work today, i am not aware of that. >> additionally, has the administration provided you with any rationale as why they would enter into contracts that do not require the contractors, they have fraud detection capabilities? senator: as well as i can tell, it is to go over contracts, not detect fraud. >> you said your work is ongoing, but does gao have any recommendations on how to improve the document verification process, to actually sort out fraud as opposed to just accepting documents? senator: we are working on a

forthcoming report sometime in the fall where we hope to have some initial recommendations and those recommendations might indeed cover the matter that you mentioned. >> you do not have any hard facts right now? senator: not right now, but we did speak with officials about things that we encountered. we continue to have those can -- discussions and await explanations and that required -- regard. >> my understanding is several fictitious applications were approved and reapproved without submitting documentation to the work of place, how can this be? how can the marketplace continue dispersing taxpayer dollars without documentation? senator bagdoyan: we were automatically reenrolled without

any action on her part for all 11 applicants. we found out six of the applicants had been dropped from coverage because they had not submitted documents. we had to. at one step further we did acting again as typical consumers to restore coverage and we were successful five and six times. >> i would say these are troubling results. 11 out of 12. i would say, senator for morgan, we need to drill down and get to the bottom. i don't think you can write this kind of report off. you couple that within june, the report revealed the administration could not verify whether $3 billion and subsidies

was properly dispersed to insurance companies in the first four months of 2014. these are significant failures they need to be addressed, i appreciate hearing here, i hope we can continue this dialogue with you, mr. going on -- mr. bagdoyan. >> we will return to senator wyden. senator wyden: i want to respond, i am always willing to work with them. i asked him about whether he and proles -- uncovered any real individuals who fraudulently contained health coverage, he said no. during the two previous enrollment periods, the agency

turned down coverage because they were not able to verify documentation. i am willing to look at all of the ramifications of these 11 applicants, but let's do it in a bipartisan way. let's do it when we actually have recommendation, once again he does not have any recommendation. chairman: we are doing it in a bipartisan way, i do not think we can ignore some of the testimony. clicks thank you -- >> thank you. my friend, the ranking member talked about how hhs has been responsive, you have indicated they have not been in providing information. since you mentioned i have 30,000 pages of documents, only 20,000 have information we're talking about. i we are asking for right now is

a scheduled to submit documents. if we have time i would like to hear your response. with regard to the issue there is clearly a policy problem here, not just the fact that 11 of 12 fictitious people got through and were automatically re-upped and when some were kicked out six, five were brought back in after a phone call, when they should not have been. clearly we have a problem. the statistic example of 12 may not be significant when it comes to policy. your statement mentions the gao failed an initial identity step and other words, people were fictitious of they cannot get through. but the gao was able to proceed past this step after calling hhs , can you describe what you did to verify the identity for these applications? senator bagdoyan: as mentioned

earlier, we were able to obtain by following instructions. we contacted the contractor who did the proofing, they cannot clear it, they instructed us to call the marketplace, which we did, based on the information we obtained coverage. mr. portman: it was a phone call. his is a policy issue -- this is a policy issue, this is not just a quirk, this is an hhs policy. senator bagdoyan: we would view that as a indicator of a control cap. -- cap. mr. portman: you can get in just by no proof. in another example, you noted in

all 11 cases, they were supposed to submit all of the information for subsidies, in some cases they only submitted a few pages could you describe that rule and why it enables them to see coverage? senator bagdoyan: in terms of a legal basis, we are awaiting a response from cmf, our attorneys have been in touch with there's we are trying to get clarity. under the good-faith provision essentially the applicant is compliant with their obligation to submit documents as long as they submit one out of the hell ever many they have been asked to submit. mr. portman: again, this is not

a result of a statistical quirk it is one as planned. i think anyone who cares about the affordable care act should be concerned. it allows people to continue receiving subsidies without hhs and making a serious attempt to verify eligibility. these are policy issues being applied today as we talk. finally, your statement notes of this investigation was given with limited backstopping. can you describe that? senator bagdoyan: that essentially involves the extent to which we employ investigative techniques. i do not want to become my colleague -- speak for my colleague, but it was simple using commonly available software materials, and other approaches. mr. portman: so you did not have

inside information, you had -- you came at it as any consumer would. i think these are important aspects to your result -- report , i think from a legislative perspective it makes it more serious. the amount of confusion causing people who are legitimately trying to get a subsidy is unbelievable. h&r block says two thirds of people are having problem's getting refunds. this is not just about verification flaws s -- as you have said, this lack of controls , it is about confusion for consumers. >> >> question -- quick

question, did you attempt to find people? is it your job to find the fraudulent people? senator bagdoyan: not at this stage. >> of the 50,000 people who filed not enough data how many the defined? senator bagdoyan: none at this point. >> healthcare.gov became synonymous with failure. we had a constituent in south carolina who is trying to figure out how to get his information off of the website that was used erroneously, we could not get a response from cms. finally we had a committee hearing, we were able to get

information and help solve the problem. one of the things that concerns me most about the challenges we face is that we can -- combine subsidies, including medicaid, we are talking about $1.7 trillion in subsidies. in the year 2025, we will have about 31 million americans still without coverage. perhaps, after billions and billions of dollars subsidies have been received by people who do not deserve them, it may indicate why we still have 31 million people without insurance. outside of your investigation, how easy is it for most consumers to falsify information in order to receive higher subsidies based on your fictitious individuals? senator bagdoyan: as i mentioned earlier, it was relatively straightforward for us.

there is a lot of information out there available for people who are committed to performing fraudulent activities. >> it appears to me to be almost a reverse incentive to release controls, it seems to lead towards higher enrollments. thoughts? senator bagdoyan: i would take you to my opening statement regarding the balance between access and control, it appears a stunner limited results, that the balance is more towards access and control. our work continues, we'll have more definitive views on that in the future. >> if it is tilted towards access and controls, chances are high that someone will be able to get on as you did with 11 fictitious individuals and get coverage, even if they were

doing at home on healthcare.gov. is there anything that would lead to a different conclusion from your experience? senator bagdoyan: i think the forensic audit conducted on the entire population will give us a better picture of what happened whether there were additional flags we need to follow up on. at this point i cannot project. >> i would appreciate if i'll let -- appreciate a follow-up. the reality is it happens when you have individuals receiving subsidies that they have not earned, do not have a right to come a when it is $1.7 trillion over the next eight or nine years, with the results in south carolina in the past year is between 831% and as high as a 50% increase in premiums. that is astounding. it is ridiculous. it is unaffordable.

as the premiums climb, we have also seen the deductibles go up. your out-of-pocket are more expensive. the number of facilities hospitals or doctors available to you for that access card continues to dwindle. i am not sure what good access is because you have a card when there is not a provider. >> thank you. senator coates. senator coates: i am not surprised with anything i have heard this morning. i go to the senate floor once a week to identify, not identify but to share with my colleagues proven waste fraud and abuse in a number of ways and agencies. we have a bureaucratic,

dysfunctional government that tries to do with real intent -- tries to do more than it can handle. thank god for gao and for the nonpartisan work you do to help us point out ways in which we can help a struggling taxpayer not have to pay so much money into washington to function something that does not work. i appreciate you being here and your candidness. how we can take this for anything other than a canary in the mine, saying hey, there is a problem here, let's get after it. what really is discouraging and i need more details, you take these findings to cms and cms gives you a stall. we are waiting for attorneys to respond. cms should say thank you.

you have pointed out weaknesses that we were not aware of. we want to be efficient. we want to implement the president costs program -- president's program. they are following that mandate. this will help us because if this becomes public, public will say, one more example of the government bloated bureaucratic, inefficiency ineffectiveness, preventing people who need the insurance from getting the insurance giving insurance to people who do not qualify, it is fraudulent , i hear, well we have to go through all of this process before we implement, they should not have to wait for you for recommendation. you have told them, here is the problem. i would think they would say thank you. we will go after this and fix

these things. you have pointed out things come obviously, sure, it is fictitious. if this is not an alarm bell in terms of dysfunction, i do not know what is. can you describe more your efforts with cms to get them to say, thank you, yes, this helps us -- we see weaknesses here and we will take steps to go forward , instead of some process that will take you to the legal system and bureaucratic system that will take months, if not years of more, and more waste and fraud continuing. senator bagdoyan: our exchanges with cms have been fruitful at times, we have gotten their attention on some key issues for it -- issues. senator coates: what about these issues.

you said you went to cms and you are awaiting a response. senator bagdoyan: that refers to the good-faith exemption, we are waiting for their legal analysis. senator coates: we hear this all the time. senator bagdoyan: we are waiting for the verification process. senator coates: did anyone say, thank you for getting this to us. senator bagdoyan: i don't know if they said thank you, but they are aware. senator coates: is what you are presenting worthless? senator bagdoyan: no, they didn't say that. senator coates: thanks to gao and other investigative agencies they have pointed out we have a dysfunctional government, and we

are wasting taxpayer dollars faster than we can send them to washington, mr. chairman, thank you. chairman: senator burr. senator burr: thank you. let me say thank you. thank you to you, and all of the folks at gao. according to your testimony, people applying for coverage are required to attest the documents are not false. cms says contractors are not required to verify documents. the contractors are not equipped to identify fraud. cms has also stated there is no indication of meaningful levels of fraud. do you think cms made the statement because no one is monitoring the enrollment process in a meaningful way?

senator bagdoyan: i think the statement from cms is based on the fact that the contractor itself has not reported any fraud. as you pointed out, they are not tasked with looking for fraud. senator: you had not been asked to go look, therefore you do not find any. senator bagdoyan: at that stage -- the stage yes. but it might yield different results. senator burr: who is ultimately in charge of an sharing -- ensuring enrollment integrity? who is the one on the hook? senator bagdoyan: as a general proposition, i would say that

the tone of the top is important, whether it is the administrator responsible for cms, it is leadership that sets the controls in place, ensures they are working as intended, monitors their effectiveness and then response to any changes in the environment that may necessitate adjustments. senator burr: senator wyden came to an interesting solution -- conclusion, what you have testified on is not valid because none of the individual enrollees filed an income tax therefore you did not allow the system as designed to catch that they should not be there. your own testimony says that in correspondence between the applicant and the marketplace

on four of the individuals, the marketplace's correspondence to the applicant referred to their about tax returns -- vowed tax returns. in other words, the marketplace said four of your applicants filed returns and that is what we make the judgment on, when in fact, none of them did. he stated that in your testimony. what is my take away? not only do we have policy deficiencies, but we certainly have indications of incompetence , or intent to ignore the law. that should be concern of the committee and the american people. i hope the gao will continue with instructions from the chair to look deeply into this. thank you. chairman: senator casey.

senator casey: i want to say first, in my experience as an elected official in pennsylvania , one of the most sickening in parts of that time as a public official -- significant parts of the time as a public official, i have some sense, even though i was overseeing a group of auditors, i have some sense of the difficulty of your work, and a good sense of the reaction you get when your work is completed. i respect and appreciate what you do. i want to asking question to make sure the record is clear and then i will get into specific health care issues. i want to make sure this is right, based upon your testimony, is it possible to

make generalizations about the full population of applicants in the market place? senator bagdoyan: no it isn't, that was not the intent. senator coates -- senator casey: those of us who voted for the affordable care act we know that there are issues to correct. a number of us have voted already for improvements to the law. what is indisputable, in addition to it not being perfect , is there has been a substantial benefit conferred on a lot of americans that would not have it otherwise. i'm not saying it for your benefit, just for the record. 16.4 million people gained

health insurance coverage in the time since 2010. in pennsylvania, over 400,000 selected plans or were automatically reenrolled through the marketplace. about 81% of pennsylvanians who selected health insurance plans were determined eligible for financial assistance. a lot of examples of individuals two individuals from southeastern pennsylvania are self-employed, have two sons in college, she is worried about health coverage because she has breast cancer. they were spending over $10,000 a year on health insurance. thanks to their aca plans, they are now spending $3000 per year. the savings helps them on

college costs. i wanted to asked -- ask, do you think there are additional checks that can be imposed upon the system? checks that could help identify fraud which the gao did not test? senator bagdoyan: sure. that would be a major part of our focus for the ongoing work. as i mentioned, earlier in response to another senator's question, we will be applying to the current process, we obtained information from our undercover forensic work, that will inform and go in tandem, and once we

apply the criteria, that will be able to identify how to best on -- best respond. i cannot say one way or the other. senator casey: i know it is difficult, when you have a mandate, but also limited resources, you cannot audit or review every transaction, every part of the system. you do have to make a determination based upon risk. which is higher. senator bagdoyan: prioritize where you attack first. senator casey: i want to asked to what extent you believe the irs has a capacity to identify fraudulent -- so-called a ptc

claims. senator bagdoyan: i do not. that is not part of our scope. i believe there are other mission teams within gao that are taking a look at that. i do not know the specific aspects. senator casey: we are grateful for your work, it is difficult but it is essential. we want to make sure we get this right overtime. one of the ways to inform how we do our work in terms of legislative change or corrections is to have information from gao and other sources. chairman: senator wyman. senator wyman: is it correct that cms asked for these 11 specific cases, in gao did not

give them to the agency? senator bagdoyan: that is correct. senator wyman -- whiten: certainly you cannot fix something you do not know. senator burr's question, you could have an answer if you are able to get information about basic dishes cases -- fictitious cases. to maybe message here, and chairman hatch knows i am interested in working with him on a bipartisan level -- i think without these recommendations which we have been told they are not ready to go, it is premature , at some point i believe gao, i work with them often -- i believe it will give us recommendations.

i hope that people following this will recognize, as of this morning, general accounting office not covering any instances of real people committing fraud is part of the inquiry. chairman: it is true that your job is to look for fraud. your job is to look for misconceptions. your job is to look for things that are wrong or out of wack. that is what you are doing right? senator bagdoyan: that is correct. chairman: you have done it honestly. you are disturbed by the fact that these discrepancies exist right? senator bagdoyan: we do have concerns about the flags we have detected in terms of a controlled environment. chairman: you are expressing concerns today.

i have concerns as well. a lot on our side do not believe that obamacare will ever work. that it will continue to take a step hill with more and more costs, expenses, and fraud. this is not the only instance of fraud, is it? senator bagdoyan: i cannot comment on that. if i may try to explain our decision. chairman: i do not want people just schlepping this off like it is not important. it is important. tell us why. senator bagdoyan: it is important in terms of getting responses we need as our work is ongoing. i would respectively asked that -- ask that i explain why.

it is fully consistent with gao policy protocols and practice that we do not die voltage -- divulge any information regarding our investigative techniques to any entity so that we protect those for future use. that is our perspective. chairman: why is that? why can't you -- -- divulge? senator bagdoyan: we have sources that need to stay confidential. they are in general use by gao and certain circumstances -- revealing those would basically give up the ghost. chairman: my understanding through my service in the senate, the gao does a good job of trying to get to the bottom of problems in our society.

i think you are a good illustration of that effort. this does not mean you will seize trying to find fraud and mismanagement in the future, does it? senator bagdoyan: this work is ongoing. chairman: we will probably have you back again so we can figure out what our job is. we cannot just dismiss these types of things. we have to do something about them and hopefully we can do that with your help. we will recess until further notice. announcer: coming up, president obama visits the only no federal correctional institution. followed by his plans for changing the criminal justice system. and later the arms control discussion discusses the nuclear

agreement. announcer: on the next washington journal, font johnson looks at the highway trust fund which is set to expire at the end of the month. and what the house and senate plan to do about it. then arthur, paul butler discusses the criminal justice system. after that, david o'sullivan talks about the greek economic crisis and why greek lawmakers approve austerity measures that were overwhelmingly rejected by their citizens. washington journal, live at 7:00 a.m. eastern on c-span. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] [captions copyright national cable satellite corp. 2015] announcer: on friday, the climate change forum at the u.s. naval academy.

this weekend the c-span cities to her travels across the country with time warner cable. to learn more about lexington, kentucky, edward pictured -- richard was a state hero. >> in the mid-1940's if you had asked who was the bright shining star in american politics, a lot of people catherine graham, would have said ed prichard of kentucky. he was one of those people who worked in the white house in his early 20's. he seemed destined for great things, and then came back to kentucky in the 1940's. he was indicted for stuffing a ballot box, went to prison. that incredible promise just flamed out.

announcer: we also visit ashland, the former home of henry clay. >> the mansion at ashland is a unique situation. clay pots of an -- original home had to be torn down. he rebuilt on the original foundation. we have a home that is essentially a five-part federal style home as henry clay had with italian details and an added layer of aesthetic details added by clay's granddaughter. announcer: see all of our programs from lexington saturday evening and sunday afternoon on c-span3. announcer: on monday, president obama committed the senate says

of nonviolent prisoners. he visited the only no federal correction institution in oklahoma. the president used the opportunity to discuss his vision for criminal justice system reform. president obama: hello everyone. i will make a >> statement -- quick statement. the folks who arranged this, this is part of our effort to highlight what the challenges and opportunity we face with the criminal justice system. many of you heard me speak in philadelphia about the fact that the united states of counts --

accounts for 5% of the world's population we account for 25% of the world's inmates. that represent a huge surge since 1980. a primary driver of this mass incarceration phenomenon is our drug laws, mandatory minimum sentencing around them. we have to consider whether this is the smartest way for us to both control crime and rehabilitate individuals. this is costing taxpayers $80 billion a year. as i said tuesday, there are people who need to be in prison. i do not have tolerance for violent criminals, many made mistakes, but we need to keep communities safe. on the other hand, when we look at nonviolent offenders, most of

them growing up in environments in which drug traffic is common, where many of their family members may have been involved in the drug trade, we have to reconsider whether 30, 20 year life sentences for nonviolent crimes is the best way for us to solve theseto solve these problems. there is excellent work being done inside these facilities to provide college degrees, drug counseling, but the question is not only how do we make sure we sustain these programs in prison, but how do we make sure the same institutional supports are there for kids and teenagers before they get involved in the criminal justice system?

we have an opportunity to make a difference at the same time as violent crime is dropping while incarceration is increasing. my hope is if we can figure out what works, we can start making changes. we will save taxpayers money keep our streets safe, and break this cycle in which young people are so prone to and up in a criminal justice system that makes it harder for them to ever get a job and ever be effective citizens of this country. i want to express appreciation

of everyone who made this happen. i want to get a special shout out to the guards. they have a tough job. most of them are doing it in an exemplary fashion. this is an outstanding institution within the system yet they have overcrowding issues. i took a look at a cell with three people housed in a cell nine by 10. three full-grown men in a nine by 10 cell. there has been some improvement. now we have to but overcrowding

is something that has to be addressed. as i said the other day gang activity sexual assault, those are things that have to be addressed. we are going to be consulting to see how we can make critical reforms. a lot of this is going to have to happen at the state level. my goal is that we start seeing improvements at the federal level and we begin to see states pick up. there are already states picking up. we want to make sure we are seeing what works and build off that. bakes. -- thanks. >> [indiscernible]

president obama: visiting with these six individuals, and i have said this before. when they described their youth and childhood these are young people who made mistakes that aren't that different from the mistakes i made and the mistakes a lot of you guys made. the difference is they didn't have the kind of support structures the resources that would allow them to survive. i think we have a tendency to think it's not normal that so many young people and up in our

criminal justice system. what is normal is teenagers doing stupid things. what is normal is young people making mistakes. young people could be thriving. that is what strikes me. that is something we have to think about.

>> earlier this week president obama spoke at the convention. his remarks were 45 minutes.

>> it's good to be back. i've got some stuff to say. i love you back. you know that. whenever people have signs, you have got to write it eager. i like the picture of me. it looks very nice. let's get something out of the

way up front. i'm not singing today. i will say your board saying to me so i know there are good voices. he would rather have michelle here. i understand. i don't blame you. but i will do my best to fill her shoes. she sends everybody her love. melia and sasha as well. i want to thank your chair and president.

i want to thank your governor tom wolfe, who is doing outstanding work. the mayor has been a great friend and ally. governor malloy of connecticut who is here today. and some outstanding members of congress who are here. i want to just say thank you to all of you for your love and support but most importantly further work that you are doing in your communities all across the country every single day. it's not always received with a lot of fanfare. sometimes it's lonely work. sometimes it's hard work. sometimes it's frustrating work. but it's necessary work, and it builds on a tradition of this organization that reshapes the nation. for 106 years, the naacp has worked to close the gaps between the words of our families, and we are all created y'all, -- equal, bound by our creator with

certain unalienable rights. those words we try to match with our reality each and every day. your first entry this organization stood up to lynching, jim crow. segregation. helped to shepard a civil rights act, the voting rights act. i would not be here and so many others would not be here without the naacp. [applause] in your second century we worked together to give more of our children a shot at a quality education. to help more families rise up

out of poverty. to protect future generations from environmental damage. to create fair housing. to help more workers find the purpose of a good job. and together we made real progress. including a "my brother's keeper" initiative to give people a fair shot at life including a passage that includes health care is not a privilege for the few but a right for all of us. [applause] we made progress, but our work is not done. just about every measure chances for black and hispanic youth still lag far behind those of their white peers. our kids, america's children who so often are isolated, without hope. less likely to depraut from high school, less likely to earn a

college degree, less likely to be employed, less likely to have health insurance, less likely to own a home. part of this is a legacy of hundreds of years of slavery segregation and structural inequality that's the compounded over generations. it did not happen by accident. [applause] partly a result of continuing the sometimes more subtle bigotry. whether and who gets called back for a job interview or who gets suspended from school, or what neighborhood you're able to rent an apartment in which by the way is why our recent initiative about fair housing law is so important.

[applause] so we can't be satisfied and are not satisfied until the opportunity gap is closed for everybody in america. everybody. but today i want to focus on one aspect of american life. one aspect of american life that remains particularly skewed by race and by wealth. a source of inequity that has ripple effects on families and communities and ultimately on our nation. that is our criminal justice system. [applause] and this is not a new topic. i know sometimes folks discover these things like they just happened.

there's a long history of inequity in the criminal justice system in america. legislature in illinois, we worked to make sure that we had videotaping of interrogations, because there were some problems there. we set up racial profiling laws to prevent the kind of bias in traffic stops that too many people experience. in my first campaign i talked about how in too many cases our criminal justice system ends up being a pipeline from underfunded, inadequate schools to overcrowded jails. what has changed, though, is in recent years, the eyes of more americans have been opened to

this truth. partly because of cameras. partly because of tragedy. partly because the specifics cannot be ignored. we can't close our eyes anymore. and the good news, and this is truly good news, is that good people of all political persuasions are starting to think we need to do something about this.

so let's look at the statistics. the united states is home the 5% of the world's population but 25% of the world's prisoners. think about that. our incarceration rate is four times higher than china's. we keep more people behind bars than the top 35 european countries combined. and it hasn't always been the case. this huge explosion in

incarceration rates. 1980 there were 500,000 people behind bars in america. half a million people in 1980. i was in college in 1980. many of you were not born in 1980. that's ok. i remember 1980. 500,000. today there are 2.2 million. it has quadrupled since 1980. our prison population has doubled in the last two decades alone. now, we need to be honest. there are a lot of folks who belong in prison. [applause] if we are going to deal with this problem, and the inequities involved, then we also have to speak honestly, there are some folks who need to be in jail. they may have had terrible things happen to them in their lives. we hold tout hope for

redemption, but they have done some bad things. murders, predators, rapists, gang leaders, drug kingpins. we need some of those folks behind bars. our communities are safer thanks to brave police officers and hard-working prosecutors who put those violent criminals in jail. [applause] and studies show up to a certain point tougher prosecutors and stiffer sentences for these violent offenders contributed to a decline in violent crime over the last few decades. although there's also the case that you get to the point of diminishing returns. but it is important for us to recognize that violence in our communities is serious. and that historically, in fact the african-american community was underpoliced rather than overpoliced. folks were very interested in

containing those areas. but within those areas there wasn't enough police presence. but here's the thing. over the last few decades we have also locked up more and more non-violent drug offenders than ever before for longer than ever before. [applause] and that is the real reason our prison population is so high. in far too many cases the punishment simply does not fit the crime. [applause] if you're a low-level drug offender or parole violater, you

have to be held accountable and make amends. but you don't owe 20 years. [applause] you don't owe a life sentence. [applause] that's disproportion nat for the price that should be paid, and by the way, the taxpayers are picking up the tab for that price. [applause] every year we spend $80 billion to keep fobalings incarcerated. $80 billion. not -- now put in in perspective. for $80 billion we could have universal preschool for every 3-year-old and 4-year-old in america. that's what $80 billion buys. [applause] for $80 billion we could double

the salary of every high school teacher in america. [applause] for $80 billion we could finance new roads and bridges and air ports. job training programs, research and development. we're about to get into a big budget debate in washington, and what i couldn't do with $80 billion. it's a lot of money. for what we spend to keep everyone locked up for one year, we could eliminate tuition at every single one of our public colleges and universities. [applause] as republican senator and presidential candidate ram paul has

said, and to his credit, he has been persistent on this issue. it costs the taxpayers money without making them any safer. roughly 1/3 of the justice department budget now goes toward incarceration. 1/3. and there are outstanding public servants at our justice department starting with our outstanding attorney general loretta lynch. [applause] but every dollar they have to spend keeping non-violent drug offenders in prison is a dollar they can't spend going after drug kingpins or tracking down terrorists or hiring more police and giving them the resources that would allow them to do a more effective job community policing. and then of course there's a cost that can't be measured in dollars and cents. because the statistics on who gets incarcerated show that by a wide margin, it disproportionately impacts communities of color. african-americans and latinos make up 30% of our population

and 60% of our inmates. about one in every 35 african-american men and one in every 88 latino men is serving time right now. among white men that number is one in every 214. the bottom line is that in too many places black boys and black men, latino boys and latino men experience being treated differently under the law. [applause] and i want to be clear, this is not just anecdote. this is not just barbershop talk. a growing body of research shows that people of color are more

likely to be stopped, friss ked, questioned, charged, detained. african-americans are more likely to be arrested. they are more likely to be sentenced to more time for the same crime. and one of the consequences of this is around 1 million fathers are behind bars. around one in nine african-american kids have a parent in prison. what is that doing to our communities? what is that doing to our

\\communities? what is that doing to those children? our nation is being robbed of men and women who could be workers and taxpayers, could be more actively involved in their children's lives, could be role models, could be community leaders. right now, they are locked up for a nine -- a nonviolent offense. our criminal justice system is not as smart as it should be. it is not keeping us as safe as it should be. it is not as fair as it should be. mass incarceration makes our country worse off and we need to do something about it. [applause]

here is the good news -- good news -- don't get me preaching -- [laughter] i am feeling more hopeful today because even now, let's face it, it seems like republicans and democrats cannot agree on anything. a lot of them agree on this -- in fact, today back in washington, republican senators from utah and texas are joining democratic senators from new jersey and rhode island to talk about how congress can pass meaningful criminal justice reform this year. [applause] that is good news. that is good news. good news. that does not happen very often. it's not just senators. this is a cause that is bringing people in both houses of congress together. it has created some unlikely bedfellows. you've got van jones and newt gingrich. you've got americans for tax

reform and the aclu. you've got the naacp and the koch brothers. [applause] you've got to give them credit. you have to call it like you see it. there are states from texas and south carolina, california and connecticut, who have acted to reduce their prison populations over the last five years and seeing their crime rates fall. -- m seen their crime rates fall. that's good news. my administration has taken steps on our own to reduce our federal prison population by signing a bill reducing the 101 sentencing between crack and cocaine. i have commuted the sentences of dozens of people under old drug laws that we now recognize were

not fair. yesterday i announced i am commuting dozens more. [applause] under the leadership of attorney general eric holder now continued by loretta lynch federal prosecutors got what he called smart crime which is refocusing efforts on the worst offenders, pursuing mandatory minimum sentences 20% less often than they did the year before. you don't always have to charge the maximum. to be good prosecutor you have to be proportionate and it turns out that we are solving as many cases with just as many plea bargains and it's working. it's just that we have eliminated some of the excess. and recently something

extraordinary happened for the first time in 40 years. america's crime rate and incarceration rate both went down at the same time. that happened last year. [applause] so -- so there is some momentum building for reform. there is evidence mounting for why we need reform. i want to spend the rest of my time laying out some basic intervals, some simple ideas for what reform should look like. because we are at the beginning of this process and we need to make sure we stay with it. i will focus on what happens in three places, in the community

the courtroom, and the cellblock. so, i want to begin with the community because i believe crime is like any other epidemic -- the best time to stop it is before it starts. [applause] i will go ahead and say what i have said 100 times before or 1000 times before and what you've heard me say before -- if we make investments early in our children, we will reduce the need to incarcerate those kids. [applause] so -- one study found that for every dollar we invest in pre-k, it gives us at least that in reducing crime. getting a teenager a job for the summer costs a fraction of what it costs to lock them up for 15 years.