senator wyden? >> thank you. you essentially lay out the two scenarios in your testimony. the first, the congress does nothing to change current law, the bush tax cuts sunset. amt patch collapses and the budget control acts in effect spending cuts kick in. bad for the economy, good for the deficit is essentially where you. the second one is your alternative scenario. and it blocks most of the spending cuts required by the budget control act. something like this, according to your analysis makes the deficit much worse, but it's better for the economy. so that leaves us with these two scenarios that are singularly unappealing and probably compounded by the fact that if the congress does nothing, you have this kind of meltdown in the lame duck session of 2012, much like the lame duck session in 2010. so it won't surprise you -- i want to ask you about the third scenario, and pick un -- up on senator portman's point with respect to tax reform. on this, i understand your answer and respect it that you couldn't do a full kind of quantitative analysis of a third approach. so i wa

. >> senator wyden is next, but he's graciously allowed senator roberts to ask one question so he can get to his agriculture committee. then we'll go to senator wyden immediately following and then senator coburn after that. >> i thank the ranking member or the vice chair. i apologize to my colleagues for breaking ranks. i think you're accustomed to that anyway, so. madame secretary, nice to see you, kathleen. >> senator. good purple. >> thank you. didn't quite get the job done the other night, but we tried. we're talking about basketball, mr. vice chairman. >> all right. >> go wildcats, tom, i'm sorry. certainly not sooners. at any rate, you've been to children's mercy, you've been a strong supporter when you were governor, i really appreciate that in kansas city. they received the children's hospital graduate medical education funding. i think a large percentage, i believe, a number that was quoted to me, was 80% of the doctors at this hospital trains with these dollars stay in the surrounding area, which is obviously a very good thing. my question is, the recipient hospitals are tr

chairman. >> senator wyden? >> thank you, mr. chairman and secretary chu. you've been a patient soul. there are pretty diverse views with respect to energy. folks who care about wind and solar, folks who care about coal and nuclear. so there is a wide variety of opinion. and i want to ask you about an area that i think would be unifying and something that i think you in particular could champion. and that is energy storage when you look at energy storage, this is something that makes wind and solar, for example, more economic. but it also is hugely beneficial to base load technologies like coal and nuclear, because it can help them meet their peak electric demand. and it also helps the transmission system operate more efficiently. so you've got something that is crosscutting in terms of technology, literally benefits every corner of the country. in other words, i can't find a corner of the country that wouldn't benefit from it. and yet we haven't been able to get in place a clear strategy to tap the potential of the energy storage. a couple of years ago, dr

>> senator wyden brought up the issue that i was going to start with on the air guard. so i don't expect you to say any more than what you said to him but i would like to make a comment about your answer. and that would be this, is that you probably correctly quoted the secretary of the air force, that it was, that the active duty had taken probably as much as he can. and so something had to come from the guard. but we got the distinct impression with our meeting of the iowa delegation in regard to the des moines 132nd fighter wing being removed. that, that while the last time they went through cuts, the air force did it and now it was the guard's turn. as opposed to being what senator wyden, having data-driven. we asked for a lot of this data. but we're not getting anything. and we heard from the national guard burg, of which fighter wing to cut. after the decision had been made to take the cut out of the air national guard. so we're looking for the statistical basis, the data basis, whatever it is and we're having a hard time getting it. we'd like to have it. and not

thank you. >> senator wyden? >> thank you. welcome dr. chu. i want to ask you first about natural gas pricing, particularly with respect to american business and american consumers. i've been a supporter of natural gas, it's a cleaner fossil fuel of course as a huge boon for american business, steel, plastic, chemicals and our consumers. i do believe there are substantial questions that have to be addressed before our country starts allowing significant natural gas exports. you made some statements a few days ago that are troubling to me, and i want the kind of walk you through it. as you know, under the natural gas act, your department has an obligation to evaluate whether natural gas exports are in the public interest. so you are, in effect, the regulator. the comments you made the other day suggest to me that you've sort of made up your mind. you were quoted here as saying, and i'll just quote you here, exporting natural gas means wealth comes into the united states. now, that's not what we've heard from our businesses like steel and chemic

because one of the problems we have in terms of weatherization, if ron wyden here wants to reduce his fuel bill in his home and knows that retrofitting will do that, but he doesn't have the up-front money, if we can get him the $15,000 he needs to cut his fuel bill by 30% and pay it back by the reduced amount of money he's spending on fuel, we're just lending him money, he's paying it back. what ideas do you have about how we can get middle-class working families that up-front money so they can weatherize, lower their fuel bill and save money in the long run? >> well, a number of things. first, usually one is most motivated and has the capacity when they are buying a house. and we have in the tool box, i think it's hud has energy mortgages, not widely appreciated, not widely known. one way to stimulate that is to encourage lenders. lenders, they ask for a person's income. they want to know if they can pay their mortgage, of course. they ask for the property taxes because that's the cost of owning the house. they ask for a lot of things. they ask for a structural engineer because they

i don't think senator wyden is in favor of poisoning children. is that the kind of rhetoric while the conference is meeting? it is ahmadinejdine designed to outcome? i think the fakes speak for themselves. >> senator reid reaching out to you at all on the document they're working on on the payroll tax alternative? is there any possibility of consensus coming out of the senate between the two of you? >> well, we have a conference that's a real conference. we think conference ought to the function and ought to reach an agreement. and you heard from two of the conferrees who are anxious to get an agreement. we don't think the we ought to just say to the american people, we're not doing anything the rest of the year, by the way. we're just taking the year off and all we're going to do is campaign. it is a bipartisan agreement that we need to extend the payroll tax holiday through the end of the year. now let's get about it. all this name calling and obstruction, you know, a lot of talking about obstruction. the majority is the obstructing the senate,

this is something i know senator wyden and i have had an opportunity to be in discussion about. let me ask you in my remaining time about adg

this is something i know senator wyden and i have had an opportunity to be in discussion about. let me ask you in my remaining time about a budget increase, a $2 million increase in natural gas technologies r&d. it's my understanding that this effort would fund an initiative with epa and usgs to look at the impacts of fracking. we had -- the president's advisory committee came, reported to us, had a pretty comprehensive i felt report. they presented 20 specific recommendations for how any impacts can be mitigated. so i guess the question to you is what was the flaw in that advisory committee's report and recommendations that you felt were insignificant and now warrant a second investigation that we need to increase the

landrieu, mccaskill, mikulski, both nelsons, pryor, webb, and former energy and commerce member ron wyden from oregon have all co-sponsored legislation with a number of republicans. so we believe actually that this vote, if it's allowed to occur in the senate, could pass along similar lines maybe 2-1 in the senate as it has in the hous

the blue ribbon committee was here, and senator wyden talked about this and whether it would be a great place for a site. do you have an answer for this? >> we'll keep separate the civilian and the nuclear waste sites. we are considering -- i'm not sure where in the status of -- but the whip, first, it's for low-level radioactive waste. and so one would need to do some studies to make sure that that would be safe for the high level waste. and so we need to do something along those lines. but i'm glad you pointed out whip, because this is a success story. it's been there operating for about a dozen years. there have been no incidents. the local people are -- they feel confident we're running this in a very safe way and it's -- it's good for the local economy. good for the economy, the state of new mexico and so again, this is something where which can show that we can develop repositories for nuclear waste. which as the acceptance of the local people. >> if i could follow up on that, i'd appreciate it. and as the clean-up goes on, shifting over acreage to the local community there for en

i want to at least concur in the comments of senator wyden on the shortage of drugs. that's unacceptable from america that these drugs are not available. i certainly understand your need for notification. there are manufacturers not being totally forthcoming on these issues. we have to make sure that the supplies are available. i think we have a responsibility to act. i hope that we will find a way consistent with the philosophy of our country to make sure that those types of shortages do not exist in the united states. i want to talk about the fda budget. of course, you mentioned the fda, their budget only gets a modest increase under the president's numbers. more disturbing to me is the nih budget, national institutes of health are frozen in the budget you have submitted. we rely on nih to give us the answers to a lot of the medical mysteries that are out there and to provide the foundation for research that is important for innovation and job growth in america. and i've been to nih many times and have talked to the scientists that are working there and know the num

my colleague, senator wyden, got him talking about this. i tried to follow up about whether the waste isolation plant in new mexico might be an ideal place for hanford waste. do you agree with him on that? >> first, we're going to keep separate the civilian nuclear waste issues. i think they're -- that it would be prudent to treat it differently. we are considering -- i'm not sure where in the status of -- but the whip, first, it's for low-level radioactive waste. and so one would need to do some studies to make sure that that would be safe for the high level waste. and so we need to do something along those lines. but i'm glad you pointed out whip, because this is a success story. it's been there operating for about a dozen years. there have been no incidents. the local people are -- feel confident we're running this in a very safe way. and it's good for the local economy. it's good for the economy of the state of new mexico. and so, again, this is something where we can show that we can develop repositories for nuclear waste which have th

landrieu, mccaskill, mikulski, both nelsons, pryor, webb, and former energy and commerce member ron wyden from oregon have all co-sponsored legislation with a number of republicans. so we believe actually that this vote, if it's allowed to occur in the senate, could pass along similar lines maybe 2-1 in the senate as it has in the house. yesterday i received a letter that is literally signed by 360 different organizations from -- i got to imagine every member's home state that asks us to include this epa regulatory effect relief act of 2011 as part of the conference agreement. what we've got now is, as some before me have said is deceptive. the thing that struck me when i got here is that when we were looking for savings in the house and the senate does it and both parties do it, but we're looking for savings eight, ten years down the road. and we count that as saving money. well, the truth is, we don't know what's going to happen eight years down the road. in fact, the congress eight years from now will decide what's spent eight years down the road. we don't have a clue what's going to h

landrieu, mccaskill, mikulski, both nelsons, pryor, webb, and former energy and commerce member ron wyden from oregon have all co-sponsored legislation with a number of republicans. so we believe actually that this vote, if it's allowed to occur in the senate, could pass along similar lines maybe two-to-one in the senate as it has in the house. yesterday i received a letter that is literally signed by 360 different organizations from -- i got to imagine every member's home state that asks us to include this epa regulatory effect relief act of 2011 as part of the conference agreement. they cite about jeopardizing critically needed jobs and how it could cost literally billions of dollars without a delay that again epa asked for themselves. it talks about serious legal uncertainty, particularly with the january 9th, 2012 court decision overturning epa's stay of the march 2011 rules as yet another example of the continuing marchias of uncertainty regarding the rules. inadequate time for epa to finalize the rules, let alone even read the thousands of comments that are coming in. this is about

my recent work with senator ron wyden would attempt to em ploit a bidding process. do you still enact that? >> we're working very hard to try to fill that gap as well, mr. chairman. in the analysis that we did, for example, your proposal last spring, we were able to incorporate the effect of competition and other factors through the cost of insurance through the medicare around private sector today, but we did not have the tools to try to analyze how the flexibility of the providers that insurers would have in your proposal or proposals like it or how the price pressures people would face would affect the dynamic path of spending of time and that's what we're working to. do again, we're working with our panel of health advisers, getting their insights as well as our own work, but we're only partway along that road as well. >> here's the point i'm trying to make. the work you do with respect to medicare and held care spending because as you mentioned health care is the big driver of our health care in the future, these gaps in the tool kit need to be filled. look, i

a lot of the republicans want to work with in the senate on budget issues people like senator ron wyden people like senator joe manchin so i think that the portrayal of the senate as kind of a gridlocked house were nothing to get passes a little and i mean we see it all the time right when it comes to certain legislation i mean we always mention it defense appropriations bills whatever passing the patriot act or extending it there is managed to come together that but however people it's still it is a place where it's easier to get something done just about anywhere because there are so many things attached even if you want to get something passed democrat republican you are serving a lot more people than just yourself or your constituents you have lobbyist and you have people so i think that i agree sometimes that it's played out that nothing can get done but really it is a very difficult place to get and obviously i don't agree with the statement that you have to shake someone or shoot them or whatever but resorts but i was there john i love it and did in fact send a public apology aft

the base reduce the rates you're seeing active elop being among democratic members of congress ron wyden senator from oregon i k hagen senator from north carolina so will it happen in alexion year while i'm outside your favor of this i think this is a good plan i would love to see something that's not just revenue neutral this is revenue neutral i'd like to see some of that actually raises the corporate tax rates you know states up to something close maybe even thirty percent lower than the o.e.c.d. average i mean you know we're well well below fifty percent of what was so what is lowering the corporate tax rate just i would like the idea of some of the corporations that profit off the commons you know to better xterm allies in their cause they're dumping pollution into our air that are making use of our education our educated citizens that are that are making use of our current system that are making use of our currency they're taking all these things that you and i are all paying for their tax dollars and then up in a damn penny towards it i'd like to mr payen some revenue neutrality t

. >> senator wyden? >> senator cantwell. >> thank you, mr. chairman. mr. secretary, i appreciate that the budget has tax provisions in it for the new market tax credit and energy tax credit and low income housing tax credit, all things that i think are stimulative to the economy and important for economic development. i'm curious about two aspects of that. one, things that need to be done now and i'm assuming you're probably still a new york filer but states that have income tax -- >> i hope so. >> -- ability to deduct their sales tax, their income tax from their federal liability, states that rely primarily on a sales tax. do you believe they should have the same benefit and do you think they should have certainty to that benefit? >> understand your concern about that question, fully understand it and i guess it's possible when congress gets around to thinking about comprehensive individual corporate tax reform, we have to look carefully at that stuff but we don't have any plans to change that now. but of course, i am sensitive to your concerns. >> do you

now i'm curious though there is you know while sopa and pipa are dead right now ron wyden had last year introduce something called the open act which at first didn't really go anywhere some people laughed it off but now it's help on paper dead it seems more and more like it just might be a possibility and this is something that the tech giants out there that google that facebook twitter that linked in actually support so you know what do you think of it. well and i want to be very clear sopa and pipa if we're going to use the dead metaphor then we have to think of them as as somebodies as the undead because they are not their heads have been cut off unfortunately these these bills go they've been shelved and they've certainly the representatives behind them have certainly been sort of shamed by the public but they are not dead and we still have to be very very proactive open you know which was talked about for many many months comes at fighting this much more intelligently then. even came close to because it was written with some actual technologies at the table but we need to go a step

senator wyden? >> thank you, chairman nelson and chairman bernanke. i want to ask about the shock to the economy that you have been discussing. you talk about the pace of the recovery being slow coming and particularly for the millions of people who are hurting, unemployed, underemployed and this comes together as part of a sluggish expansion that's left the economy vulnerable and shocked, so i can see plenty of shock on the payroll tax debate down into the quagmire talking about two months or another short-term effort we mentioned here up to read another mentioned the question of sequestration and to me that alone puts a very negative spectacle and the lame-duck session in the 2012 congress would see the same sort of flailing that you did after 2010. so my first question on the shock issue. doesn't it searches of our economic system has all of this delay and the inability to get decisions on the payroll taxes or others isn't that in and of itself a shock to the system in terms of what it does to business confidence and predictability and certainty? >

. >> thank you -- senator wyden. >> thank you, mr. chairman. you essentially lay out these two scenarios in your testimony. the first, the congress does nothing to change current law, the bush tax cuts sunset, and the budget control act in effect spending cuts kick in. bad for the economy. good for the deficit is essentially where you go. the second one is your alternative scenario, congress extends the bush tax cuts and a.m.t. patch while it blocks most of the spending cuts required by the budget control act. something like this, according to your analysis, makes the deficit much worse but it's bert for the economy. so that leaves us with these two scenarios that are singularly unappealing and probably compounded by the fact that if the congress does nothing you have this kind of meltdown in the lame duck session of 2012, much like the lame duck session of 2010. so it won't surprise you, i want to ask you about the third scenario and pick up on senator portman's point with respect to tax reform. on this i understood your answer and respect it

senator wyden has a disclosure amendment that is similar to senator shelby's. we're working with both of those offices right now to try to work those out. so this -- i don't know how ths all of a sudden became a partisan debate or a debate about the bush administration or anything. this is a debate about good government and how we can best assure the american people that, regardless of whether public officials are in the executive branch or the legislative branch, that they are putting the public's interest ahead of their private interest and that they are not profiting from insider information, nonpublic information, that is not available to the public, which they are using inappropriately, if in fact that is even happening, for personal gain. so, i did want to clarify that the bill, as reported from committee, does apply to the executive branch as well as the legislative branch; that the statement made by the senator was inaccurate in that regard, and that we have amendments on both sides of the aisle that we're working on right now to extend the disclosure r

senator wyden has one last question. >> madam chair, thank you for your courtesy. director clapper, you know, the supreme court ruled last week that it was unconstitutional for federal agents to attach a gps tracking device to an individual car and monitor movements 24/7 without a warrant. because the chair is being very gracious, i just want to do this briefly. can you tell me as of now what you believe this means for the intelligence community, number one, and two, would you be willing to commit this morning to giving me an classified response with respect to what you believe the law ought to be? this goes to a point you and i have talked about in the past. i strongly feel that laws and their interpretations must be public, and then of course, the important work that all of you are doing, we very often have to keep that classified in order to protect secrets and other well- being of your capable staff. so, to the parts. one, what you think the law means of -- as of now, and would you give me an unclassified answer on the part of what he believed the law actually

it went through cuts, the air force did it and now it's the guard term as opposed to what senator wyden is having the data driven. so we asked for a lot of this data but we are not getting anything. and we heard from the national guard bureau of which fighter wing to cut after the decision had been made to take the cut out of the air national guard. so we are looking for the statistical basis, the databases, but never this come and we are having a hard time getting it and we would like to have it, not just chuck grassley the the whole delegation to meet my second point would be to read a statement and not have you comment because i gave you a letter that's going to have the basis of what i want to talk about, but just so you know this isn't something that i give little concern to. for the last three years, we have in my office we have read each year 120 audits done by the inspector general, and you want to remember we paid about $100 million a year in this area. so my letter is about 16 of the 120 of its of the last year. we have uncovered a egregious waste and misconduct at the dod. th

>> senator wyden that comports with the intelligence community assessment.ecision is made to press on with a nuclear weapon and there are certain things they have not done yet to event wait that, that would be based on a cost benefit analysis starting with the supreme leader's world view and the extent to which he thinks that would benefit the state of iran or conversely not benefit. so that's, i think, precisely where he is and it will be done on a cost benefit basis and we don't believe he has made that decision yet. >> what could convince them, in your view, that their hold on power is being undermined by their nuclear effort? >> well the, i think, you know, a restive population because of the economic extremist that is the country of iran is incurring, if you look at the plunging value of the real, if you look at the two indicators i think are important, extremely high unemployment rate in iran, this i think could give rise to resentment and discontent among the populace and there is not to say there haven't been other examples of that elsewhere in the r

senator wyden. >> i wanted to talk, mr. secretary, first about the guard and reserve. you and i have talked about this in the past. in my view, there unique expertise, particularly the ability to adapt rapidly to mission requirements, is one of the reasons we ought to be especially careful at this time of making tough actresses with respect to what happens. -- tough choices with respect to what happens with the guard and reserve. you are going to get four separate studies to provide in- depth analysis. the company's military members, those on active duty. what the studies are going to find, all of them, is strong evidence about how much less expensive the guard is compared to the active duty. the question, mr. secretary, for you this morning is what it make more sense to wait until you have accurate model to compare costs before you go forward with disproportionate cuts to the air guard? what we have tried to do is look at the air force, look at the guard, and it seems to me that while all the choices we have in front of you are tough ones -- there is not an easy one t

. >> the concern is that the funding is pre-anemic inthis is something senator wyden and i have beensking about. let me ask about a budget, a $2 million increase in technologies, and it is my understanding is this effort would fund an initiative with epa and usgs to look at the impact of frankicking. the advisory committee reported to us and had a pretty comprehensive report. they presented 20 recommendations on how any impacts can be mitigated. the question to you is, what was the flaw in that committee's report and recommendations you felt were insignificant and warranted a second investigation that we need to -- it is my understanding that the board's rendition are already finalized. most of their proposed directives fall on the states not on the federal side. why are we doing a second run on this? it raises some concern by some that there is an effort to find a smoking gun about bad news about fracking, and that is why we are trying to get a second investigation. why has the funding increased? >> the committee you are referring to is this a -- is the subcommittee of the advisory

. >> senator wyden. >> thank you chairman nelson and chairman bernanke.e economy that you have been discussing. you talk about the pace of the recovery being slow, particularly for millions of people who are hurting. and that all of this comes together as part of a sluggish expansion that's left is the xhiz vulnerable, so i can see plenty of shocks. another one mentioned the question of sequestration, and to me that alone puts a very negative spec cal out. doesn't it serve to have all this delay and week after week of bickering, and able -- isn't that in and of itself a shock to the system. >> well, policy uncertainly is one of the things that businesses complain about. we face the same issue as regulators. and obviously to the extent that greater clarity can be provided, actual be helpful to the economy. >> is it fair to sdrip that as yet another shock to the system. to me, everybody -- everybody i've trying to do is try to figure out how to force action early. because when you don't, what you're most likely at a time when you have the sluggest expansion

senator wyden has one last question. >> madam chair, thank you for your courtesy. director, it was unconstitutional for federal agents to attach a gps tracking device to an individual's current monetary movements 24/7 without a warrant. because the church has been gracious. i want to do this briefly. can you tell me as of now what you believe it means for the intelligence community number one. and two, which should be lined to commit this morning it's giving me and nonclassified response victories that to what you believe the law authorizes? this goes to the point you and i have talked about. i see now, i strongly feel that lies in their interpretations of the public and of course the important work all of you are doing it very often have to keep that classified in order to protect secrets of the well-being of your capable staff. just two parts. one which is the law means knowingly commit to giving an unclassified answer on the point of what you believe the law actually authorizes. >> sayer, the judgment rendered was as you state it was in a law enforcement contact

wyden: mr. president, when we went to college, usually things were different. often a student took out a loan, but those loans were manageable, and usually there were jobs waiting. today, too often that's not the case. in fact, the students today who take out loans will leave school sacked, on average, with $25,000 worth of debt. and they're going to be trying to get into a labor market where there are more than four unemployed americans for every available job. mr. president, it has been noted that for the first time, student loan debt exceeds credit card debt and that now totals over $1 billion. now, clearly investment in higher education today is an economic imperative. education is the great equalizer. it enables upward economic mobility, and it breaks down class structures that impair many countries' ability to grow their economies. a highly skilled and educated work force is the basis for a healthy economy. and it is the lynch partnership to our -- linchpin to our economic future. in every major economic decision our people make, they try to evaluate, mr.

but chairman ryan is working in a bipartisan way with senator wyden, the gentleman from oregon, on this same idea of premium support. instead of mandating it -- and of course it was mandated for those younger than aged 55. everybody else was held harmless. the idea is to say, let's everybody choose and decide. it's their option. do they want to stay on medicare as we know it, the legacy program, or would they prefer to go to the doctor and the hospital of their choice with their own premium support. so i just wanted to mention that. and i'm looking forward to having a dialogue with the aarp and 35 million seniors that they represent. back in 2003, my colleagues weren't then, but i was, and had the opportunity to vote in favor of it as a physician member for the medicare part d, prescription drug act and aarp supported that. and yet our democratic colleagues on the other side of the aisle, many of them came down and tore up their membership card of the aarp. we are going to work with them and i thank you for yielding me time and i yield back to the gentleman for closing purposes. mr. ben