Skip to main content

tv   Tonight From Washington  CSPAN  December 12, 2012 8:00pm-11:00pm EST

8:00 pm
one of the most attractive and livable cities in america. he worked with the general asystemmably, then-governor ed whitcom to merger the governments of indianapolis and marion county to provide common, essential services more efficiently, a concept then called "unigov." it wasn't without controversy because of dick lugar -- but because of dick lugar -- but because it did lugar's vision, careful careful initiation's ana decisive actions indianapolis model for other cities across thes t nation., but the law took effect in 1970 indianapolis population rose 7 from93 400 to 76,000 to 793,000e moving from the 25th largest city to one of the nations second largest cities literally overnight. when i think of the numerous
8:01 pm
positive changes in indianapolis overee the past 40 years, i see the fulfillment of the vision ow then mayor dick lugar. now the midwest has a way of producing men and women of sense and decency. not all of us fall in that category. sometimes bear his question buto we do have individuals who have ability to see through the heart of the matter and to resolve and find a way to resolve the such scale is extremely valuable in the united states senate. a body by that very design issee supposed to foster compromise between legislators on issues before the nation.ression t and so it was a naturalayor, progression that following his success as mayor, dick lugar's best job would be serving hoosiers as a sen united statess senator. since 1977 senator lugar has represented hoosiers and served our nation admirably. without question senator lugar
8:02 pm
is the type of lawmakernd and leader who worked hard to bringp boths parties together, find common ground and pass neededug- legislation. and through -- that his contributions are manyserv inclg his long valued service on the agricultural committee senator lugar's most important role in the senate has to be his a leadership of the senate foreign relations committee. as a two-time chairman of committee he has been one of the most influential on foreign-policy in the united states and its history. he has worked tirelessly on policies and legislation tothe promote arms control, control to dismantleuc nuclear arms and amg address the global food crisis l among others and among his manyf accomplishments in the field ofr foreign relations is his signature piece of legislation that no doubt will be the cooperative threat reduction program more commonlys known asj nunn-lugar.ons com
8:03 pm
senator lugar joined the foreign relations committee in 1979 any travel and he traveled to the former soviet union on multipleo occasions h to gain a betterure understanding of how the united states could secure and dismantle weapons of mass destruction. his experiences led him to champion the landmark legislation that successfully resulted in the deactivation of nuclear t warheads. taking this world a safer place. today that nunn-lugarivated prom has deactivated more than 7500re nuclear o warheads that were one aimed at theit united states, a contribution to which americans never give enough thanks. over 36 years in thised dk institution senators from both sides of the aisle have it considered dick lugar a trusted resource when it comes to foreign-policy and many other important issues. w he has been a consistent resource for those who can seek thoughtful answers in twon
8:04 pm
difficult political questions. when i first arrived here in 1989 senator lugar and i operated the unique joint office arrangement in indiana sharing office space and staff in our state. many of our colleagues were surprised by this arrangement but dick lugar and i'd tell theal hoosiers that they we getting twice the service for half the price. all those who work in thision chamber can learn from dick lugar's passion for public d service, his sincere desire to reach acrosses the aisle to finu commonni ground and his uniquebr talent for forgingingi coalitios and bringing people together to accomplish big things. a tribute to senator lugar would be incomplete without c of hisng the support wife charlene, his four sons and his extended family. public-service demands -- putsrt
8:05 pm
demands on our families and their sacrifice andny support plays an important role in any senator success. it's been an honor for me to work withworkh senator lugar url i'm thankful for his service to indiana into our country. senator lugar, marsha and i wish you and charlene andha your famr nothing but the best as youyou' begin this next chapter in yourr life. you have dedicated so much of your service toe our country. you ways in which you will be continuing tog t do that is a gt benefit to our nation and to our state. i'm certain that we will continue to learn from your lifetime a lifetime of public service. i know my colleagues join me in thanking senator lugar for his many years of dedicated and distinguished service and it has been a pleasure to serve with the senator from indiana under your leadership and without mr. president i yield the floor. >> federal reserve chairman ben bernanke continued to warn congress on the white house of
8:06 pm
the dangers of going over the so-called fiscal cliff. >> the white house was very controversial as most americans were. there was competition and he submitted a design for a palace. it was not particularly awe-inspiring and in fact in 1821 a european diplomat told the congress that it was neither large nor awe-inspiring but the
8:07 pm
answer the congressman gave said, the building served its purpose. if it were larger and more elegant perhaps some current president would become its permanent resident. said chairman ben bernanke announced monetary actions that the federal reserve will try to take to sustain the economic recovery, including keeping interest rates low. mr. bernanke spoke to reporters after the fed's open market committee meeting. this is an hour and 15 minutes. >> it's been three and half years since the economic recovery began. unfortunately however unemployment is remaining high. about 5 million people, more
8:08 pm
than 40% of the unemployed for six months or more -- and millions more have been able to find only part-time employment or have stopped looking entirely. the conditions now prevailing in the job market represent an enormous waste of human and economic potential. a return to broad-based prosperity will require staged improvements in the job market which in turn require stronger economic growth. meanwhile apart from temporary fluctuations a largely reflected swings in energy prices it's likely to run at or below the federal markets to present objective in the coming quarters and over the longer term. against the macroeconomic backdrop of higher unemployment and subdued inflation the -- the committee took several steps, first it decided to continue his purchases of agency
8:09 pm
mortgage-backed securities initiated at the september meeting at a pace of $40 billion per month. second, the committee decided to purchase longer-term treasury securities initially at a pace of $45 billion per month after a skirt program to extend the average maturity withholdings is completed at the end of the year. and continuing its asset purchases the committee seeks to maintain downward pressure on longer-term interest rates and the financial -- thereby promoting hiring and economic growth while ensuring that inflation over time is close to her to present objective. finally the committee today also modified its future rate policy to provide more information to the public about how it reacts revolving economic commissions -- conditions. after discussing our discussion to continue asset personages. although the committee's announcement today specify the initial ugly pace and composition of asset purchases
8:10 pm
we did not give specific dates in which the program may be modified or ended. instead the pattern of future asset purchases will depend on the committee's evaluation of incoming information in two respects. first, we expect to continue asset purchases until we see a substantial improvement in the outlook for the labor market in the context of price stability. in assessing the extent of progress the committee will be evaluating the range of labor market indicators including the unemployment rate, payroll employment, hours worked and labor force participation among others. because increases in demand and production are normally precursors to an improvement in labor market conditions we will look carefully at the pace of economic activity more broadly. second the committee will be monitoring economic and financial developments to assess both the efficacy and the possible drawbacks of an asset purchase program. federal reserve's asset participants over the past two years have provided important support to the economy.
8:11 pm
for example by helping keep mortgage rates historically low. the committee expects this policy to continue to be effective to remain manageable but as the program continues we will be regularly updating those assessments. in a future evidence suggest the program's effectiveness has declined for potential unintended side effects or risks become apparent as the balance sheet grows, we will modify the program as appropriate. more generally the committee intends to be flexible in varying the case of securities purchases in response of information bearing on alec or perceived benefits and costs of the program. unlike the exclusively quantitative criteria associated with the committee's forward guidance about the federal funds rate which i will discuss in a moment that criteria the committee will use to make decisions about the pace and extent of its asset purchase program are qualitative. in particular continuation of asset purchases is tied to our
8:12 pm
keeping substantial improvement in the outlook of the labor market. because we expect more over time about the efficacy and potential cost of asset purchases in the current economic contest, we believe a qualitative guidance is more appropriate at this time. hinted a statement the committee also passes forward guidance to clarify how to expect his targets are the federal funds rate to depend on future economic development. specifically the committee anticipates exceptionally low levels for the funds rate are likely to quote at least as long as an employment rate remains above 7.2% inflation in years one and two ahead is no more than half a percentage point above the longer-run goal and longer-term inflation expectations continued to be well anchored. this formulation is a change from earlier statements in which or guidance of the federal funds rate was expressed in terms of the date. for example in a statement following the september and
8:13 pm
october meetings, the committee indicated that it anticipated that is accepting low levels are likely to be warranted quote at least through mid-2015. the modified formulation makes explicit the fomc's intention to maintain accommodation as long as needed to promote a stronger economic recovery in the context of price stability of strategy we believe will help support household and business confidence and spending. by tying future monetary policy to economic conditions this formulation of our policy guidance should also made monetary policy more transparent and predictable to the public. the change in the former committee's forward guidance is not in itself a change in the committee's expectation about the likely future path of the federal funds rate since the october meeting. in particular the committee expects the thresholds for unemployment will not be reached before mid-2015 and projects inflation will remain close to
8:14 pm
7% over that period those given the committee's current outlook for guidance introduced today is consistent with the committee's earlier statements that except with low levels of the funds rate are likely to be warranted at least through mid-2015. let me emphasize the 6.5% threshold in the unemployment rate should not be interpreted as the committee's long term objective for unemployment. indeed the economic projections submitted in conjunction with today's meeting the central tendency of participants estimates for the longer-run normal rate of unemployment is 5.2 to 6.0% however because of changes in monetary policy affect the economy with a lag, the committee believes it likely will need to be moving away from a highly accommodative policy stands before the economy reaches maximum unemployment. waiting until maximum employment is achieved before beginning the process of removing policy accommodation could lead to an undesirable for overshooting of potential output and compromise
8:15 pm
the efficacy's longer-term objection of 2%. as the fomc statement makes clear the committee anticipates policy and revenue guidance of the fully consistent with continued products that -- employment and inflation remaining close to the 2% objective over the longer-term. although the modified guide should provide greater clarity to respond and dated by monies puts monetary policy and autopilot. disregard let me make several points. first, the committee views its low rate policy as likely to be appropriate at least until the specified thresholds are met. reaching one of those results however not automatically trigger immediate reduction in policy accommodation. for example if unemployment were to decline to slightly below six-point represented time when inflation and expectations were subdued and projected to remain
8:16 pm
so the committee might judge an immediate increase in its targeted federal funds rate to be inappropriate. ultimately in deciding when and how quickly to reduce policy accommodation the committee will follow a balanced approach in seeking to mitigate inflation from its longer range goal and deviations in employment from its estimated maximum level. second, the committee recognizes that no single indicator provides complete assessment of the state of the labor market and therefore will consider changes in an employment rate within the broader context of labor market conditions. for example in evaluating the decline in the unemployment rate, the committee will also take into account the extent to which at the time is associated with increases in employment as opposed to say, increases in the number of discouraged workers and falling labor force participation. the committee will also consider where the improvement in the unemployment rate appears sustainable. third, the committee chose to express the inflation in terms
8:17 pm
of inflation between one and two years ahead rather than in terms of current inflation. the committee took this approach to make clear that it intends to look through purely transitory fluctuations in inflation such as those induced by short-term ternationally tradedices of commodities and to focus instead on the underlying inflation trend. in making its collective judgment about the underlying inflation trend the committee will consider a friday of indicators including measures such as median tram and core inflation, the views of outside forecasters and the predictions to the statistical models of inflation. also the committee will pay close attention to inflation expectations to ensure that those expectations remain well anchored. finally the committee will continue to monitor a wide range of information on economic and financial development to ensure that policies conducted in a matter -- manner consistent with
8:18 pm
their mandate. is worth noting that the goals of the fomc asset purchases and federal funds rate guidance are somewhat different. the goal of purchase program is to increase the near-term momentum of the economy by fostering more, data financial conditions while the purpose of the rates their the rates guidance as to provide information about the future circumstances under which the committee would contemplate resisting accommodation. i would emphasize the decision by the committee to end asset purchases whenever that is reach would not be a deterrent to tighter policy. while under that circumstance, its policy stance would remain highly supportive for growth. only at some later point with the committee begin actually removing accommodations through rate increases. moreover as they discuss today the decisions to modify the asset purchase program and to undertake rate increases are tied to different criteria. in conclusion, fomc's actress at
8:19 pm
the airport of our ongoing effort to support economic recovery and job creation while maintaining price stability. as i have often stressed however monetary policy has its limits. only the private and public sectors working together can get the u.s. economy fully back on track. in particular at a critical that fiscal policymakers come together soon to achieve longer-term fiscal sustainability without adopting policies that fail the ongoing recovery. thank you and i'd be happy to answer your questions. spain mr. chairman steve from cnbc. i have a lot of questions but i will offer a few here. why are there different targets for qe and for the funds rate? what does that achieve? secondly, what good is a target if you have to reference a calendar date. you pointed out in the statement that it's different from the
8:20 pm
calendar in october. do you have to keep doing that from now on and thirdly -- then you have another paragraph after that says, it's not just targeting something else though it's unclear what that these targets are if you have to reference the calendars date and the next calendar date it's not really targeted. >> well, first as i said the asset purchases and the rate increases have different objectives. the asset purchases are about creating near-term commitment creating growth and job commit in the near-term and the increases in the federal funds rate target when they ultimately occur are about accommodation. they are two very different objectives. secondly, the asset burgesses are a less well understood tool. we are learning over time about
8:21 pm
how efficacious they are and at what cost they may carry with them in terms of unintended consequences that they might create and we see what else happens in the economy that affects the level of unemployment for example that we hope to achieve. for that reason i discuss discussed in my opening remarks, we decided to make the criteria for asset purchases qualitative at this time because we have a number of different things we need to look at as we go forward. rate increases by contrast are well understood and we understand the relationship between those and the rate increases and the state of the economy so we have been able to give somewhat quantitative more specific guidance with a respect. with respect to the dates, the transition date, we wanted to make clear that the change in guidance did not happen to be the case that it doesn't change
8:22 pm
by mid-2015 expectations. going forward we'll drop the date and rely on the conditionality and that has a think a very important advantage which is that if news comes and that the economy is stronger or weaker, than the financial markets in the public will be able to adjust their expectations for when policy -- will occur without the committee having to go through a a -- of changing their date so i think that's beneficial. does that cover your question? 's theme is your chairman, what prompted the committee to make the decision at this particular time to specify targets, and by
8:23 pm
taking an unemployment rate that is quite low compared to currently, does that shift the balance of priorities in terms of a dual mandate, closer, more in the direction of reducing unemployment rather than inflationary pressures? >> a very good question. we took a change today after a good bit of discussion. we had a very substantial discussion of the thresholds approach at our last meeting and we felt it was ready to go, ready to be put out. while there are different views and aspects of the threshold approach, there is a lot of agreement that having a more explicit connection between rate policy and the state of the economy was more transparent and more helpful to the markets into the public then art date-based guidance and therefore there was a general view that at some
8:24 pm
point at least that we should switch to that kind of guidance. so we do hope that it will be more helpful and give markets more information about how we will respond going forward. it is not a change in our relative balance towards inflation and unemployment, by no means. first of all with respect to inflation we remain completely committed to our 2% longer-run object if. moreover we expect our forecast in the summary of economic projections are forecast is that inflation will remain despite this threshold of 2.5 that inflation will actually remain at or below 2% going forward. and finally, the thresholds that we have put out are entirely consistent with their long-standing views on what the rate path has to be, what the path history has to be in order
8:25 pm
to achieve improvement in the labor market while keeping inflation close to the target. so i think both sides may be well served here and there is no real change in policy. what is it is instead is an attempt to clarify the relationship between policy and economic conditions. >> are your economic projections all the more importantly that you specify these targets. is it difficult to put forward these projections now given the uncertainty over the fiscal cliff? how sort of classic are these? >> are you talking about the ftc projections? clearly the fiscal cliff is having effects on the economy, even though we have not reached a point of the fiscal cliff potentially kicking in. it's already affecting
8:26 pm
businesses hiring decisions by creating uncertainty or creating pessimism. we saw what happened recently to -- which fell because of concerns about the fiscal cliff. so clearly this is a major risk factor and a major source of uncertainty about the economy going forward. i would suspect, and although the participants don't all make this explicit but i would suspect what they are semiin their projections is the fiscal cliff gets resolved in some intermediate way whereby there is still some fiscal drag but not as much as by the entire fiscal cliff. so i think that is probably the underlying assumption that most people took when they made their projections but you're absolutely right that there is a lot of uncertainty right now and if the fiscal cliff situation turns out to be resolved in a way that is different from our expectations i'm sure there will
8:27 pm
be changes in the forecast. [inaudible] >> thanks very much mr. chairman. could you talk about the decision to maintain -- 85 billion a month represents a ramping up of that policy because you are now simply adding on the side of the balance sheet and also you know, you talked about maintaining the asset purchases for substantial improvement in the labor market and you said you wanted to take a specific approach of 6.5% inflation threshold. could you talk about what sort of -- made you change the pace or slow the pace of purchases? >> the first part of your question was -- >> is this an additional stimulus? >> i think this is a
8:28 pm
continuation of what we said in september. you recall in september, we expressed dissatisfaction with progress in the labor market. at that point we began the 40 billion-dollar per month of mbs purchases and he said that unless we saw substantial improvement in the outlook of the labor market we would undertake additional asset purchases or other actions and that is what we have done today. we have have follow-through but what we said we would do in september. i don't think we have relative to the last month i don't think we have specifically added to accommodations. the reason is that at least in my view and i think many of my colleagues, that what matters primarily is the mix of assets on the balance sheet on the access side of the balance sheet so what is important is the fact that we are acquiring treasury securities and mbs, taking those out of the market and forcing investors into other closely
8:29 pm
related assets and that is where the stimulus comes from, not so much on the side of the balance sheet per se so in my judgment the amount of stimulus is more or less the same and continues to follow-through from what we saw in september. in terms of criteria, again, what we have done is we have announced an initial amount of $85 billion a month of purchases. we are prepared to bury that is new information comes in. for example if the economy's outlook gets noticeably stronger we would simply begin to ramp down the level of purchases but again the problem with giving a specific number is that there are multiple criteria in making this decision. we will be looking at the outlook of the labor market which is very important that we will also be looking at other factors that may be affecting the outlook of the economy.
8:30 pm
for example i hope it won't happen but if the fiscal life occurs, as i have said many times, i don't think the federal reserve has the rules to offset the defendant in that case we obviously have to temper our expectations on what we can accomplish. likewise we need to get the efficacy and cost of our program and if we find, we expected to be efficacious but if we find it's not working as well as we hoped in various costs are emerging that we had not anticipated that would have to be taken into account. we ourselves don't know precisely what we will find and substantial improvement of obviously as long as the cost and other concerns do not emerge we are looking for something that is substantial in terms of a better job market.
8:31 pm
>> peter cook with bloomberg television. mr. chairman if i could follow up on your last response. given the fiscal cliff is a possible that a policymakers were not to agree to some sort of deficit deal with the -- by the end of year big over the fiscal cliff that the size of the asset purchases could indeed grow in response to that and more specifically you coined the phrase fiscal cliff and i wanted to get your take on whether you still feel it's the most appropriate language to describe what would happen at the beginning of the year of? there are some americans who may be alarmed by the language in some economists say it still -- and you feel it's appropriate given the fiscal contraction in the deal? >> the first part of your question is, if the economy actually went off the fiscal cliff, the ceo's assessment and outside forecasters think it would have significant adverse effect on on the economy and the unemployment rate. on the margin we would try to do a week could. we would perhaps increase a bit
8:32 pm
but i want to again be clear that we cannot offset the whole impact of the fiscal cliff. it's just too big given the tools we have available and the limitations on our policy toolkit at this point. in terms of the terminology, people have different preferences about what they want to call things. i think it's a sensible term because i think the fiscal policy provide support to the economy. is fiscal policy becomes contractionary the economy will go off the cliff. i think there's reason to be concerned about this. i don't buy the idea that a short-term descent off the fiscal cliff would not be costly. i think it would be costly in effect we are are already seeing costs.
8:33 pm
why would the confidence dropped so sharply this week? why is it that small business confidence dropped so sharply? why are the markets volatile? why is business investment among the weakest levels? i think all of these things can be traced to the anticipation and the concern about the fiscal cliff and i think we don't know exactly what would happen but i think there is certainly a risk that should be taken seriously and therefore it's very important that the most helpful thing i think congress can do right now is to find a resolution that on the one hand achieves longer fiscal sustainability which is absolutely critical for a healthy economy but also avoid derailing the recovery which is currently in process.
8:34 pm
>> john from "the wall street journal." mr. chairman i want to sort of square up some numbers with a the threshold you announced today for when rate hikes might start at 6.5%. the canadian assessment of the longer-run unemployment rate is 6% or perhaps a bit lower. the longer-run it equilibrium funds rate is at 4% according to these rejections. suggest when the fed does start raising interest rates down the road it might have to move fairly quickly to give equilibrium to set funds rates. specifically is that the case of more generally can you talk about what is the framework that you set up today about the exit strategy you had laid out some time ago and whether that is changing? >> it's a good question. first of all, we don't have a precise estimate of the long-run state of the employment rate. the estimates that were provided in the summary of economic
8:35 pm
projections today as has been the case for a while, is 5.2 to 6% so it could be well less than 6.5% so that gives us some time. my anticipation is that the removal of accommodation after the takeoff point, wherever that occurs, would be relatively gradual. i don't think we are looking at a rapid increase. of course that depends on where inflation is and other conditions but the path that we are leasing these numbers on is one that assumes first of all that, as you anticipated, assumes an increase in the funds rate first occurring sometime after unemployment goes below 6.5% to does not necessarily assume a rapid increase after that. what we said in our statement is we take a balanced approach.
8:36 pm
in other words once we get to that point, we may or may not raise rates at that point and we will look at the situation. but assuming inflation remains well controlled, which i fully anticipate, i think the rate of increase in the rates would be moderate. this is consistent, the exit strategy that we put out, is consistent with our statement today because the exit strategy was primarily about how we would normalize the balance sheet over time and at this time we have not made any changes in that and we believe that some increase on the size of our balance sheet is consistent still with that general sequence that we laid out in the minutes a year and a half ago. that being said, the balance sheet grows enough we may have to reconsider the pace or timing of that but i don't see any changes that would radically
8:37 pm
change the time to normalization or the time to exit. >> thank you. i'm going to continue the question trend and first on the fiscal cliff, it sounds like you are for a fiscal balance of consolidation and support for recovery but people in congress can do that in the next two weeks do you think -- consolidation is preferable to going over the cliff and then on the monetary policy access today can you put a little bit more color on how you set the threshold and what the alternatives were and how you weighed various alternatives about the policies? >> sure. i am hoping that congress will do the right thing on the fiscal cliff. you know, there's a problem with kicking the can down the road. it might avoid some short-term impacts on the recovery but it
8:38 pm
could create concerns about our longer-term fiscal situation and i don't want to do that. so i think that best interest of the economy would be to come to a two-part solution if you will. part one is to modify fiscal policy in a way that doesn't create enormous headwinds for the recovery in the near term and part two is to at least take important steps towards achieving a framework at least bike which perhaps further negotiations the congress and the administration's can achieve for a sustainable path. both of these are very important. i don't think what we can consider these negotiations if both of them happen. [inaudible] >> i think they are equally important. on the threshold numbers, these numbers are based on substantial
8:39 pm
analysis done by staff here and at the reserve banks, trying to assess under so-called optimal policy were the best policies we can come up with, what would the interest rate path look like and how would it correlate with changes in unemployment and inflation and? when we do that analysis, what we find is that the best interest rate path that we can determine based on our models and analysis which is obviously imperfect, has rates remaining low as unemployment drops below 6.5% and putting it a half a percentage point above the 2% goal is a protection against any problem with price stability but our forecasts adjusted inflation will not go there.
8:40 pm
inflation will be consistent with their longer-term objective. [inaudible] >> it's we got the information about the economy if possible but i consider it relatively unlikely and this is one of the advantages of this approach over the date taste approach. when information comes and that the economy stronger or weaker than we expected that would require a change in the state but it doesn't necessarily require a change in the threshold because that adjustment can be made by markets simply by looking at our own forecast of when unemployment will cross the line as an indicator of inflation. [inaudible] >> scott from cnn, sir. when you were appearing on 60 minutes, one of the things that happened was that you visited your old hometown and you talked
8:41 pm
a little bit about how the economy had affected people that you grew up with and affected the people down there. there are a lot of just regular people like that who are out in the countryside wondering what really happens to them if we do go over the federal cliff? taxes go up and spending goes down. do they need to look for a recession and our employers really going to cut that unemployment do you think? what do people out there really need to worry about and prepare for when it comes to actually going over that fiscal cliff if the folks in washington can get their act together? >> well i come from a part of south carolina which has been economically challenged for quite a long time and remains so. certain parts of south color alina have developed pretty strongly about the but the part that i come from both the aqua
8:42 pm
cultural manufacturing has a high foreclosure rate and people are having a hard time there and i visited there a few times as chairman. so part of the reason that we are engaging in these policies is to try and create a stronger economy, more jobs so folks across the country including places like the one where i grew up will have more opportunity to have a better lifestyle. so it's a jim import and i think it's very important that we not just look at the numbers. we need to look at the unemployment rate and say every tenth means many many people are represented there so it's very important to try to keep in mind the reality of unemployment to foreclosure of weak wage growth etc. so we always try to do
8:43 pm
that. and i want to, it's always a delicate balance and you don't want to scare people. i actually believe that congress will come up with a solution and i certainly hope they will. but, as many analysts, not just the fed, have pointed out, if the cliff were allowed to occur certainly sustain for any period, it could have a very negative effect on hiring, jobs, wages and economic at dignity, investment and of course that would be felt by everybody but certainly by those in areas like where i grew up that are relatively -- economically would no doubt feel it. it is exceptionally urgent and important that congress and the administration come to a sensible agreement on this issue.
8:44 pm
>> sir, had a follow-up and i'm not going to ask you whether we are in a bond bubble but obviously the new guidance that you have given in the fomc statement is going to give a lot more clarity to people who own bonds about when they might start lightening up bear pond portfolio and changing the composition of what they own. were concerns about information about the bond crisis and things happening in a big hurry in terms of some sort of a bubble popping, was that a consideration in adding this transparency? >> i wouldn't say it was an important motivation for adding transparency. it is a fact that this greater clarity will help markets better predict how bond yields will
8:45 pm
behave. as we go forward in time if the economy continues to strengthen as we hope, as the exit comes closer for the federal reserve, then you would expect to longer-term bond yields begin to rise and the more information we can provide to the markets about conditionality under which the fed would consider the combination of better information they will have and that will allow for an adjustment so i think that is a product that aspect of this communication. i wouldn't say it's a major region. the major reason is to give the markets and the public more transparency about what is determining our policy but that is one potential advantage. >> robin harding from the financial times. mr. chairman you said a moment ago the threshold was based on analysis of policy.
8:46 pm
in the optimal policy that -- laid out in her speech a few weeks ago assured interest rates occurring in early 2016. is that the policy that the fed is now following and secondly if i may you referred to a number of inflation forecasts in your introductory remarks. in that case how will we ever know the inflation threshold has been hit? thank you. 's bees. >> so that kind of optimal policy path that vice chairman yellin shows is indicative of the kinds of analysis we have done. where provided for different scenarios and different assumptions about models but the general or of that interest-rate path i.e. that it stays low until unemployment is in the vicinity of 6.5 for little or
8:47 pm
and then rises relatively slowly which goes back to the question asked earlier that it doesn't involve a rapid removal of accommodation after that point is reached. that is consistent with that kind of analysis, that type of analysis that was not the only thing we looked at but was informative in our discussion. you will note also in that kind of policy path of the type issue discussed that inflation stays potentially a two or very close to two. in terms of the inflation forecast, what the committee will do on a regular basis is included in its statement its views of where inflation is likely to be a year from now. for example currently we expect inflation to run at or below the objective in the longer-term. the intellectual exercise, if we maintain low rates along the
8:48 pm
lines to justify this policy, would we expect inflation to reach that level? now it's very important that the public, the media, the markets find our projections credible obviously so for that reason, we will be referring extensively to publicly available information such as various measures of inflation and in my opening remarks outside forecasts, the break events from inflation protected lawns etc., so if our outlook deviates in any sense in a significant way to what these are saying at a minimum it would be incumbent on me and the rest of us to explain that but my expectation is that our projections will be broadly consistent with the public
8:49 pm
views, public information and so i think we can manage the credibility issue. but again, just to be clear, the protection that matters for our determination is the one that the committee collectively comes up with. say you have articulated more clearly than ever your commitment to reduce unemployment that you have also said you were not actually doing anything more to achieve that goal. you expected to be three years of away and anticipated progress that inflation is not a factor. what is the limiting factor? why is the fed not announcing additional measures to reduce unemployment? what would it take for you to get that? >> well, we took, the question was whether this was new relative to september. i think september was the date where we did do a substantial increase in accommodation. at that point we announced our dissatisfaction with the labor market and the outlook or jobs
8:50 pm
and said we would take further action if the outlook didn't improve and what we have done today is really just following through with what we said. so i would say you are like manna from the perspective of september, that we have in fact taken significant additional action to provide support for recovery and job creation. the reason, one of the considerations as i talk about is given that we are now in the world of unconventional policy that has both uncertain costs and uncertain efficacy zoran certain benefits, you know that creates a more complicated policy decision than the old-style leftist changing the federal funds rate. though there are concerns that i've talked about in these briefings before, that the
8:51 pm
balance sheet gets large that there they were the potential risk in terms of financial stability and in terms of market functioning and it takes these risks very seriously and they impose a certain cost on policy that doesn't exist when you are dealing only with the federal funds rate so what we are trying to do here is balance the potential benefits in terms of the lower unemployment and inflation at target against the reality that as the balance sheet gets bigger, that there is greater cost that might be associated with that. [inaudible] given those actions it will still be three years until you achieve your goals. is a message to people who are
8:52 pm
unemployed basically that we are doing all that we can in the conclusion that this is the most we can expect? >> first of all again, the projection you are looking out is based on -- these are not a committee collective projection. these are 19 separate participants making their own assessments based on their own views of optimum policy so for example it includes those folks who think we shouldn't be doing anymore purchases and their forecasts are included in there as well so it's not exactly an apples-to-apples comparison. but it is true that if we could wave a magic wand and get unemployment down to 5% tomorrow, obviously we would do that but they there are strains in terms of the dynamics of the economy, in terms of the power of these tools and in terms of the fact that we do need to take
8:53 pm
into account the possibility of other costs and risks that might be associated with a large expansion of our balance sheet. >> just following up on that last question, how helpful would it be to see as part of the fiscal cliff resolution some near-term stimulus? the president is proposing that. how helpful do you think that would be and whatever happened to your southern accent? >> on the second one i would like to think i am bilingual. when i go home sometimes it comes out pretty strongly but i won't try to do that here. so i try to be careful as you know not to give views on specific tax and spending programs. obviously those are the profits
8:54 pm
of the administration and congress. the attitude i have taken has been bad at minimum congress should try to do no harm, that they should try to avoid policies that significantly slower derail the recovery at this point so i think that is the critical thing along with the long-term objective of achieving a sustainable fiscal path. now given that asic recommendation, congress can consider variations. for example if they believe that they can achieve this mob -- strong credible future path for fiscal policy that would give them the to do something a little bit more expansionary in the short-term but those are judgments i think that the congress has to make about whether they can simultaneously continue supporting fiscal policy while maintaining the
8:55 pm
credibility that they will be addressing our structural deficit problem in the longer-term. that i think is really question for them and for their staff. >> looking over the past year or several years, how would you evaluate the fed's accuracy in making economic forecasts and how does that affect the ability to make monetary policy decisions especially as it connects to the threshold? >> i think it's fair to say that we have overestimated the pace of growth and total output growth, gdp growth from the beginning of the recovery. we therefore had to continue to scale down our estimates of output growth but interestingly, at the same time more accurate
8:56 pm
and not perfectly accurate but somewhat more accurate in forecasting unemployment. how do you reconcile that? i talked about that in the remarks he gave at the new york economic club recently by before thanksgiving and i think the reconciliation is that what we are learning is at least temporarily the financial crisis may have reduced somewhat the underlying potential growth rate of the u.s. economy. it is interfered with business creation and investment in tech illogical advances and so on and that can account for at least part of a somewhat slower growth. at the same time though, of course what's monetary policy influences not potential growth, not the underlying structural growth for many other different policies and things like that but monetary policy affects primarily the state of the fiscal cycle, the amount of excess unemployment for the
8:57 pm
extent of recession in the economy. there i think we have also perhaps underestimated a bit the recession, but much closer there and i think therefore that we have been able to address that somewhat more effectively with quite accommodative policies. that being said of course we have over time as we have seen disappointments in growth and job creation, obviously as we did in september had the added accommodation and we continue to reassess the outlook. i think it's only fair to say that economic forecasting beyond the quarters is very very difficult and what we basically are trying to do is create a plausible scenario which is
8:58 pm
likely and base policy on that but be prepared to adjust his information comes in and the outlook changes. that is inevitably they will. >> thank you mr. chairman. economists have long believed that tanks cannot affect unemployment rates in the long run and we have seen a move toward central banks mandating low inflation. can you explain if the fed by tying its unemployment threshold whether that is consistent and if it's consistent how is it superior to simply having a threshold for inflation only and with the approach be possible if the fed had only a mandate for low-inflation? >> well, it's entirely consistent with your view with a the point that you made so let me just reiterate it. as we stated in fact in our
8:59 pm
january set of principles, the central bank cannot control unemployment in the long run. i would add a caveat, a little bit of the caveat here which is that very extended periods of unemployment can interfere with the workings of the labor market, and so if the fed were not to address a large unemployment for a long time it might in fact have influence on the long-term unemployment rate but as a general rule, as a general rule i think this is the right baseline. the long-term unemployment rate is determined by a range of structural features in the economy and a range of economic policies and not by monetary policy. so that being said, what our 6.5% threshold is as i said in
9:00 pm
my opening remarks, it is not a target and what it is a guidepost in terms of when the beginning of a reduction in accommodations could hit. it could be later than that but at least by that time. no earlier than that time. so it is really more like a reaction function or a rule if you will. i am ready to get a phonecall from john taylor. is not a taylor rule but it has this same the same feature as it relates to policy to observe holes in the economy such as unemployment and inflation. so what it basically is doing is saying how will it evolve over time as the economy evolves? ..
9:01 pm
is likely to evolve. [inaudible conversations] >> thanks. >> as long as it's correct. >> mr. chairman, cbs news. i'd like to hear a little bit more about why you made this announcement today, specifically tieing federal funds and your policy to the 6.5% number. i'm sure you have some sort of theory about what you hope changes in the economy as a result of this announcement. if so, what is it?
9:02 pm
>> well, we think it's a better form of communication. we think it's by using the threshold, which ties rates to economic additions we're more transparent about what can determine our policy in the future. the date base guidance, it served a purpose, but it had the problem that whenever economic outlook changed, the committee was faced with a question whether we should chase it. we did a change it a couple of times. it was a floons parent process. nobody understand why we made particular change. we were not providing any kind of fundamental information about how it's linked. i believe, essential, that this approach is superior. i'm not saying it's the best possible approach. there may be other things to do in the future. we looking for ways to improve the communication. i think it's more transparent
9:03 pm
and will allow the markets to respond quickly and promptly to changes in the outlook by adjusting when they think rate increases will begin and therefore it will act to some extend like an automatic stablizer. if it worsens, and leads markets to think that the increase in rates is further out in the future, that will tend lower longer term rates and be supportive of the economy. that has an automatic stablizer. it offsets adverse shock. it's a better form of communication. we discussed it at the last meeting. and frankly, begin that it's relatively complex change it seemed like it would be a good idea to do it at meeting where there was a press conference, so we decided since we're ready to go, why not make the change earlier and get the benefit earlier.
9:04 pm
>> did you see a level of uncertain any the -- business community you hope to solve by the announcement. >> at the moment, i think that the expectations of the business community and federal community happen to be pretty well aligned. if you look at the financial market indicators, the future of federal funds rate path, it's pretty consistent with the mid 2015 date base guidance we have been viving. i'm not saying there's a major inconsistency what the business community was expecting and the markets were expecting and we were expecting. it wasn't the issue. the problem is that looking forward, that what happens if there is a significant change either if the better or worse in the outlook under the date base guidance that require the democratic national committee determine what the new date is to make that change in a
9:05 pm
nontransparent way. but under the threshold based guidance, the market of the business community can make that calculation on their own, and adjust that their estimates of when rates will begin to increase based only on the own forecast and not have to wait for the federal market committee to give them a day. drn date. we think it's a better approach. [inaudible] mr. chairman, "bloomberg news." by mid 2015 the recovery is nearly six years old. the average post war recovery has been a little less than five. we're already banking on a long exec ticks. you expect it's going to be a 0 percent. the balance shoot is potentially $4 trillion. if the business cycles runs out of steam and you are at 0 percent interest rates. does the fed no longer have a
9:06 pm
forceful response in that situation? >> well, the fed will always '00 keep -- you know, we've innovated. we can provide new ways to work on the economy. it's certainly true, there's no doubt that with interest rates near 0, and balance sheet already large, that the ability to provide additional accommodation is not unlimited, and that is just a reality. and that actually is an argument, for being a little bit more aggressive now. it's an objective to get the economy moving, to get mom tom, that protects the economy against unanticipated shocks that might occur and gets off the zero earlier. so exactly for those reasons the risk that arise when the policy interest rates are close to zero, and the greater difficulty in providing additional policy
9:07 pm
support, i think that's an argument for being somewhat more proactive now that we still have the ability to do that, and try to get the economy, you know, back to the healthy condition. [inaudible] hi, chairman. my question pertains to the rule. regulators earlier which year seems cautiously optimistic they would finalize a deal. it seems unlikely at this point. they are calling far two-year implementation delay on the rule. given the fangtd it's been a lengthy process can you tell us where things stand at this point. how much close closer are we to a final rule? have they been to be work out the differences and when we might actually see a rule. >> we've made quite a bit of progress. we've had, i think i recall 18,000 comments or something
9:08 pm
like that. it's been a lot to look at. there are a lot of concerns that arose even from, you know, foreign commenters about the effect on the bond market, et. cetera. terrorist been a lot of work do. i think there is quite a bit of agreement. i wouldn't say a final agreement. but key points among the regulators at the engining juncture, if congress gives other instruction, we'll fof that. we haven't received any different instruction. it's our intent to get it cone early in 2013. [inaudible conversations] >> peter fox business, mr. chairman since your last press conference we've had an election. one of the election governor romney said he would not reappoint you to a third term as chairman, president obama did not weigh in on the issue. he won re-election. if the president were to call
9:09 pm
you, and say, ben, your country needs your continued stewardship at the federal reserve. we need you to stay, and finish the job to see this through. would you consider it? would you do it? and by chance if you had any conversations to that effect with the president or anybody on his team. thank you. >> so to answer the last part, no, i haven't had any conversations. i think the president has quite a few issues he needs to be thinking about from the fiscal cliff to many other appointments and so on. from my own perspective, i really don't have anything to add from the last press conference. i'm very much engaged in this difficulties we are discussing today, and i am not spending time thinking about my own future. i don't have anything to add there. [inaudible]
9:10 pm
mr. chairman? >> thank you. >> the questions taken the rule in to effect, one having to do with the cpi on the debate with the baner plan about change cpi not as an venture as a economist, is there a lodge in going that? do you think it's a move that should be done separate from the politics of it? again the economist and the labor market you talk about the importance not looking at the 6.5 threshold the broader conditions with, the big debate. the nemesis talking about being beamed to mars. what is happening in the job market, in your mind, are we creating jobs? is that why it's coming down? or the disagree of discouraged workers? what is your sense of how quickly it's fallen because of new employment? >> so on the first question, cpi versus the technical issue it's
9:11 pm
technically better, according to most economist, it allows for changes in the mix of goods and services that people actually consume. more effectively; however, whether it's more appropriate for say, social security, indexing or not i think that's ultimately a political decision. i suppose a rejoinder that need the cpi or the -- be a good measure for the cost of living for social security recipients. so those are the kinds of questions that congress is going have to deal with. second part of your question was? >> the debate over the extent to which unemployment rate has fallen. yes. well, you know, you can see the comparison by looking, for
9:12 pm
example, at the household survey, which gives estimates of how many people are added to the labor force, how many added to the employed, how many people leaving the labor force. it's true indeed all of it in the last reading over the recovery, part of the decline in unemployment has come from participation rates as people leaving labor force. some of that deline in participation appears to be due to longer run factors. aging and changing patterns at work among women, so those things were probably not directly related to the recession, for example, but i beyond that the trend has been additional labor decline. which presumably is linked to the discouragement about the
9:13 pm
stated labor force, so that certainly is part of the issue. that being said, obviously, there has been a good bit of job creation. you can see that in the payroll establishment survey, so i think there's no doubt the labor market is considerably better today than it was two years ago. there's not any question about that. but it's also the case that many indicators of the legal market remain quite weak ranging from the number of long-term unemployed people who have part-time work who would like full time. wage growth, obviously, is very weak. and i could go on. so it may be that the labor market is even a bit weaker than
9:14 pm
the current unfloiment rate suggests. i think that it is never the less the case there has been improvement since the trough a couple of years ago. [inaudible] katherine from "national journal." how concerned you that markets will have to take in order to get lawmakers to reach a deal in the fiscal cliff. what do you think of it? is in a wall street-washington disconnect? >> interesting question. i certainly hope that markets wouldn't have to tank. i don't -- want to have confidence not just in markets but in businesses that households as well. and the best way the fiscal policy makers can achieve that is by coming to solution as quickly as possible.
9:15 pm
respond to news on negotiations but on the other hand, it's it true if we look at the experience, it's a formative experience of the debate in august of 2011 that both confidence and markets remain pretty -- close to the point where it looked like it was actually a chance debt limit would not be raised. and then, of course, there was a pretty sharp shock particularly to confidence about the time of the, you know, of the final debates, so it's not unusual to see markets being complacent.
9:16 pm
if things go well it would be good news. maybe right now marketses are thinking on average of possibilities. again to reintegrate, i don't think that any policy maker including the feds should be responding to markets should be doing is making policy, you know, based on fundamental. and doing what is best for the economy. >> hi, i'm steve. with the federal government borrowing roughly $1 trillion a year and now with the fed, on pace to buy roughly a trlt
9:17 pm
dollars a year in bonds, are you concerned about a public and possibly global perception that accommodating not just growth federal borrowing needs. are you concerned about what it might do to the feds' crebilityd and the crebilityd of u.s. financing in general and the credibility of the dollar as the world's leading currency. >> just a couple of facts: we're buying treasuries and mortgage-backed securities about half and half roughly, so we're buying considerably less than the treasury is issuing. and we're over the share of outstanding treasuries at the federal reserve owns is not that different before the crisis. while our holdings have increased so has the stock of treasury in public hands. it's not quite evidence there's
9:18 pm
been a radical shift there. we've increasing our balance sheet now for some time. we've been clear that this is a temporary measure. it's a way to provide additional combination to an economy that needs support. we have been equally clear we will normalize the balance sheet and reduce the size of our holdings, and whether by letting them run off or selling assets in the future. so this is, again, only a temporary step. it would be different matter if we were buying them and holding them indefinitely. that would be -- we're not doing that. we are clear about our intelligences. and -- intention and i think up until now the credibility has been good.
9:19 pm
there's no strong evidence that there are any increase inflation for the matter. looking is the or have survey and economic forecast and so on. so this is one of the things we have to look at, remember i talked earlier about the potential cost of large balance sheet that there's no understanding on the effect on the size of the balance sheet. that's one of the things we have to look at. as to this point, there is just no evidence that people are taking it that way. and i guess it's worth pointing out, of course, we have been focused on the united states here. we're not the only central bank that has increased the size of the balance sheeted, the japanese, the british have all zone the same. and much to the same extent the fraction of gdp. i think the sophisticated market
9:20 pm
players and public understand that this is part of a collective need, a need provide additional accommodation to weak economies and not an accommodation of fiscal policy. [inaudible] >> last but not least craig market watch. theresomes to be growing evidence that some of the purchases [inaudible] >> the question to restate the question is about the spread between the mortgage rates that the pub pays and the yields to mortgage-backed securities that banks may hold. and the question is is that spread widening so that the full
9:21 pm
benefit of the reduction in deal could not be passed through. that's the question. i wanted to make sure everybody heard it. [laughter] you could answer. [laughter] our am -- analysis suggest it is takes time. the first two points is that while we don't expect 100% pass through nbs yields to mortgage rates are imper imper call. we had a lot of work done on the issue suggests that over time the great majority of the decline in yields does get passed through to mortgage rates so we do anticipate over time that the full benefit or most of the benefit will be seen by retail commerce.
9:22 pm
indeed we had seen a significant deline in september for the mortgage. what is confusing the issue there are other things happening in the economy, which are effecting the spreads. so for example, there's higher -- there's a number of things happening in the economy will all else equal to raise the spread between mortgage rates and nbs yields. that's unfortunate. well what we can try to do is encourage good policy. that will reduce the perceived risk to the banks making the mortgage loans.
9:23 pm
but again, i think mosts things, like these, for example, are not in our control, again, taking all of those issues is confidence it does seem to be the case that over a period of time. not immediately. over a period of time they do find their way through to morning customer -- mortgage customers and there by strentden the housing market. thank you very much. [inaudible conversations] you can learn more about the fiscal deadline by going to the special web wage. you see the live twitter feed. that's at on capitol hill today, maryland
9:24 pm
congressman alleged that the players union is trying to back out of a deal to test players for human growth hormone. it's next on c-span2. and then remarks from senate budget committee chairman who is retiring from the senate in january. tomorrow a look at hurricane sandy's impact on small businesses. we'll be officials with small business administration and the mayor of new mexico. -- t.j. the town has a number of businesses that have not reopened since the storm. live coverage starts at 10:00 a.m. eastern on c-span3. my inspiration was the idea i wanted to explain how deal it happened. we do know the story of the cold war, we know that the documents, we have seen the archives and described relationships between roosevelt and stalin and churchill and true man.
9:25 pm
we know the main event from our point of view. we read them and written them. what i wantedded to do was show from a different angle from the ground up bhap did it feel like to be one of the people who were subjected to this system and how did people make choices in that system and how did they react and behave. it's interesting one of the thing that happened since 19789 is the region that we used to call eastern europe has become differentiated. it's no longer these countries no longer have much in common with one another except the common memory of communist occupation. >> more with the pulitzer prize winner ann on life in soviet east germany from the end of world war ii through 1956 from the historical narrative subtle night at 8:00 on c-span q & a.
9:26 pm
this hearing is an hour 45 minutes. committee will come to order. the oversight committee exist to secure two fundamental principles, first americans have a right to know that the money washington takes from them is well spent. and second, americans deserve an government that, woses for them. our duty on the oversight and governor reform committee is to protect the rights, our so lem
9:27 pm
responsibility is to hold government accountable to taxpayers. because taxpayers have a right to know what they get from their government. it's our job to work tirelessly as citizens watchdogs to deliver the facts to the american people and bring reform to the bureaucracy. our committee's resources are limited. but in one area, we have focused for more than six years. than is taking drugs and dangerous substances out of professional supports. we do so on a bipartisan reason and basis. question codo so what professional sports do what the sports do and what children aspire to do. we cannot take professional sports in isolation because ultimately it trickles down to the young ones.
9:28 pm
when we began our work on a bipartisan basis on steroids in baseball, steroids have become common in at high school level. today, i believe, is dramatically reduced but not eliminated. on their own with some push from congress, the national football league signed a historic union agreement that banned human growth hormone from professional football. they did so with a time limit that would have in fact put it in play last season. we're now finishing this season, and no such implementation occurred. this committee on ranking member cum cummings and myself encourage them to work out the differences and supported each of their agreements to try to bring the contract in to appliance. we're here today because in fact
9:29 pm
it hasn't happened. because america's watching and because ranking member and myself are concerned that the injuries particularly head injuries and continued playing professional sports and professional football in all football played at all levels in no small part is based upon the strength of the players hitting each other. human growth hormones will be a part of the. it's a tough sport when played honestly of people of good solid training and physical conditions. we need not make it tougher or more dangerous by the use of the abandoned substances. this committee is here today to hear from the parties who can in fact help us with the science. and from one well known player,
9:30 pm
who knows the science personally has impacted on him time and time again. it's our hope that this hearing will move the parties closer together or at least have the american people clearly understand that in fact it needs to happen, and much of the science has been not just done but redone in support of it happening, and that if we are to have the kind of clean game in americans love this has to be an element of the testing. so with that, i want to thank all of our witnesses. i particularly want to thank the ranking member. it's been one of the expamples where there's bipartisan behavior and nonpartisan behavior. never have we had a closer tie than the ranking member and i have. >> i want to thank you, mr. chairman, for your words. i agree with you totally. i want to make sure that the
9:31 pm
league understands this, that our peers understand this, the union understands there. there's no daylight in the chairman. and we congress we look up to professional athletes and to which they go to emulate the role models. let me tell you about some of the young people in my district 40 miles away in baltimore. many of whom come from very challenges backgroundses and from difficult home situations. they have dreams about making it
9:32 pm
maybe being a congress man. i see their smiling faces at graduation, i see them on the bus stops at 6:00 in the morning trying to get to practice. i see them all coming home late from practice. they tell me about earning the late hours, doing homework dead tired. they are dedicated, smart, and they have amazing potential. but that potential is a very significant word. i often said that our children are the living messages we send to a future we will never see. the question is whether we will send them there with diabetes, or we will we send them with heart disease? will we send them there with mental problems? some of these young people dream about becoming young
9:33 pm
ballplayers. exceeding beyond their wildest expectations. when they see a freshman become the heisman trophy winner. they feel that is within reach. but i meet these young people, i share the same advice my participants gave me, that there are no shortcuts in life, they f they want to be successful entrepreneur, best selling author or the probowl play for the baltimore ravens. stlaip to put in the growth when they reach the goals. when they see the role model in sports using illegal drugs to try to get an edge, when they see the professional league looking the other way, refusing to test and going easy on abusers. they think they need to use the substances to compete. i much credit commissioner good dealing for his efforts not only for protecting players. he's also been one who has been pushing to make sure that this
9:34 pm
happens. as he said that to chairman and i, i want to make sure that's clear. he's been very adamant about this. these young people, they start thinking and have high expectations, and they're reaching. hcg is a dangerous drug with short term and long-term risks. let me read a few. hyper tension, diabetes, arthritis, bone spurs, spinal problems, disfigurement, an cardiac dysfunction. these come directly from a scientific journal published in april of this year. i ask the study be placed to the record. >> without on jackson. >> thank you. there's no serious dispute in the scientific community that the test for the hgh abuse is effective. this test, which has been in place for the past decade is actually designed to be conservative in order to avoid.
9:35 pm
if one of our witnesses who testifies today you are more likely to get struck by lightening than get a false positive on test. there's noticeably that on [inaudible] what mr. chairman said 2011 a year ago the nfl players' association entered in a contract testing play fors the drug, quote we be the first week of the 2011 regular season, end of quote. as we know, it passed without any hch testing. and now the 2012 season passed without it. despite their commitment, lawyers for the players association now say they did not trust the test. a lot it has been used for years on olympics athletes, major league baseball players and a host of other athletes. they argued that the nfl players are somehow different. they claim their bodies are not the same of wrestles, runners,
9:36 pm
weight lifters and thousand of other athletes tested regularly. they said they need more time to study the issue before doing what they agree to do. to me, it seems obvious the players' association is running offer the clock. they agreed to the health care h testing they are trying to back out of the contract. today we will have the opportunity to hear directly from medical experts and whether he exam the claimers of the players association. finally, let me address one point that has been raised which is why congress is getting involved in this issue. i'm sure that the chairman agrees with me that this dispute should be resolved by the nfl and the players' association. we wish it would be or would could be. they have a contract and they should learn when they refuse to do so, that's sends exactly the wrong message to the kids we go on to protect. that is when it becomes our
9:37 pm
business. finally on a personal level, i worked on the issue for most of my life in the publics service. i have helped formation of baltimore in 2007 called "powered by me." it has reached more than 30,000 young athletes, coaches and parents warning them about the dangers of the substances. the group's directer has spearheaded effortses to prevent young athletes from being brainwashed by the mantra of, quote, oning -- winning at all costs. i'm thankful he's testifying today. i cannot tell you how grateful to you, mr. chairman, i look forward to moving forward and another thing that keeps coming up. people keep being asked the question why are you having things perts here today. why not the nfl and the players? and i told people, and you can talk about it later, i guess, it may be very well, with the first
9:38 pm
with several hearings. we want to get the signs out. with that, mr. chairman, i want to thank you for your courtesy and i yield back. >> i thank the gentleman. -- not recognizing the only football hero today. that was only because my understanding they threw a flag and thought he was hit. >> a point of clarification. i was a place kicker. not an actual football player. all the more reason not recognize him. >> thank you. >> we'll go with it at the end. >> we were being bipartisan. i want to remind the ranking member we share the baltimore ravens. i was born and raised in cleveland. [laughter] we welcome our witnesses. mr. dick butkus leads it that encourages student athletes
9:39 pm
without the performance-enhancing drugs. welcome. bow very important to the today's hearing. dr. larry, larry bowers is the deputy directer of institute of health. mr. michael ettlinger is directer of powered by me. and saint joseph medical center, and linn goldberg is head of the division of health performance and directer of the human performance laboratory at the oregon health science university. will you rise and take the oath. raise your right hands. this is the moment you have
9:40 pm
waited for. do you swear or affirm the testimony you're about to give will be the truth, the whole truth and nothing but the truth yes. >> let the record reflect all witnesses answered in the affirmative. as the ranking member said, today really is about the science and a lead in to what if necessary will be a series of hearings until the issue is resolved. so the panel i'd asking since the entire opening statements be placed on the record, if you run short of time, as former chairman used to say, green we know it goes. yellow mean goes fast through the intersection and stop means don't run it anymore. so if you'll come as close to that five minute as possible. we appreciate it. doctor? >> good morning, issa, ranking
9:41 pm
member. >> the other thing, these microphones in order to get people behind you in to the conversation you have to get as close as possible. >> thank you. >> good morning chairman issa, ranking member cummings, and distinguished members of the committee. i'm here today to describe our understanding of the state of science pertaining to the nonmedical use of human growth hormone when i'll refer to as hgh including the effects and discussed prevailing method for detecting illicit use of hgh in professional sports. hgh is a natural product of the pa too tarry gland with the central role of human development. much of the current understanding about the efforts of hgh on the human body comes from decades of studying and treating patients suffering from growth hormone disorders. and i -- the long history of
9:42 pm
supporting the research to understand and treat the devastating effects of deficients or excessive function of the growth hormone system. human growth therapies became a mainstay of modern medicine particularly after development in 1985 of a safe and reliability sort of hgh, a synthetic protein produced by dna technology, that has identical to that as the primary derived hgh. hgh can stimulate tissue growth, linear growth, and metabolism. it promotes fat loss and increases lean body mass. the fda approved hgh for a number of clinical indications associated with growth hormone deficiency in both adults and children. in in patients with growth hormone efficiency the hgh administration improveds a penalties of exercise capacity,
9:43 pm
and some studies have suggested that it improves mood. given the well documented ability of hgh for tissue buildup and burn fat, some athletes began abusing it in an attempt to enhance the performance. further increase creasing the appeal for competitive athletes is the fact that it stimulates the production of another hormone that inhibits break down of proteins. there are claims that inhibiting protein break down can help prevent some of the mug l and ten come damages that results from the use of steroids. the effect is unproven but it may be explain why it's often used in combination with steroids at high dozes for several months. a phenomenal that is frowned complicate our understanding of any potential consequences of the nonmedical use of hgh. studies performance today have
9:44 pm
found little or no evidence that increased lean body mass that can result from using unnaturally high doses have any effects on power or aerobic capacity and help the individuals. nonmedical use of -- might decrees performance and muscles which promotes fatigue, cramps and soreness. based on well documented evidence of the side effect of the hgh administration to adults with growth hormone deficiency. athletes who abuse it are putting themselves in serious risk. points to a worrisome list of
9:45 pm
possible adverse con consequences including development of the some of the features as well as risk for development, diabetes, drug induced hepatitis. renal failure, joint pain, carp tunnel syndrome and increase fatigue. available information suggests that athletes who dose themselves for hgh are taking serious risk for the health and may not realize that there is no scientific every day that the practice will improve their performance or resilience in competition. provided a challenge that the technical obstacles have been
9:46 pm
overcome with a development of several testing approaches. and i see . >> thank you for bag good stewart of time. my name is doctor larry bowers. i would like to thank you for the opportunity to testify about the science behind growth hormone testing. i have been involved in the development of tests for the abuse of growth hormones since 1999. you saw it recognized the national apt doping agency for paralympic in the united states. you saw the mission is to protect a preserve the athlete
9:47 pm
and the integrity and well being of support through the elimination of doping. since the inception you saw there has been advocate for clean athletes. when they approved this, they stated it was only to be distributedded for conditions specifically authorized by secretary of health and human services making the potentially dangerous off-label using such as performance enhancement illegal the growth hormone test will be developed by the research community. it is a blood test that is used to defected the prohibited use of growth hormone on limited basis since 2004 and worldwide since 2008. tests measures the ratio of the form of growth hormone found in synthetic products to other
9:48 pm
forms of growth hormone that are naturally released by the gland. the ratio is independent of the amount of growth hormone in the blood. you're just as likely to have a ratio of.8 at low concentrations of growth hormone as you are to have a ratio of.8 at high concentration. when you take synthetic growth hormone. the ratio increases dramatically. the method has been the subject of four publications, has been the subject of numerous conferences and working group meetings that have involved growth hormone experts. one has been given the responsibility for harmonizing and improving tests by the world anti-doping code and the convention which was approved by congress. it's a conservative threshold or decision limit was established
9:49 pm
for this ice ice so form -- testing positive are complacial to the chance that the same athlete has being struck by lighten during the lifetime. mr. chairman, the conservative nature of the threshold has been worn out by nearly 13,000 growth hormone tests that have been performed globally. there have been 11 positive tests and 8 of those individuals admitted use. the remaining three cases in various stations of arbitration and appeal at this time. in addition, major league baseball has conducted a approximately 1700 growth hormone eye so form tests and for the major league players during the spring training. one major league tested positive and admitted growth hormone use.
9:50 pm
since 2008, you saw the house conducted 13,087 tests of the tests 99 percent were well below the decision limit that has been established. it's been suggested by the nfl players association and the nfl players sufficiently different from other elite athletes with regard to size and ethnicity that an additional population study be done. in my scientific opinion an additional population study is unnecessary. each of the concerns that have been expressed have already been raised and answered by the growth hormone experts. does the current test take the size of athletes in to account? yes. and it was determined that the size of an individual has no relation to the ratio of growth hormone ice forms measured by the test. does it take in to account differences that may be
9:51 pm
attributed to the race orth necessity? yes and the conservative approach i considered reflects that consideration. does it take in to consideration the effect of strenuous exercise on growth hormone aye so form yes. yes they are affected by exercise it was been determined it's minored and disappears witness thirty minutes a the the end of exercise in conclusion, i would like to point out the people that rerequesting the methodology and validity of the test are lawyers not scientists. the test has been not only put in to use in olympics sport but in maybe league baseball as well. the experts who work in the growth hormone field every day both inside and outside of the antidevelopping community have universally accepted and recognize the test is scientifically reliable and appropriate for the detection of
9:52 pm
growth hormone abuse in the sport. once again, i would like to express my thanks and appreciation to the democratic national committee -- committee for having me here to testify. >> thank you. >> thank you issa, and members of the committee. i appreciate you holding the hearing. the nfl and players were taken in a position on hgh and the agreement. let's get on with it. the hgh testing process is proven to be reliable. it's time to send a clear message that performance-enhancing drugs have no place in sports especially the nfl. as a sports guy, i know you need great offense and defense to win. the defense is tough leagued testing and continued contract on the drug suppliers. the offense education and practical guidance. for the last 70 years my son mat and i have been playing
9:53 pm
offense. we reached out to thousand of active teens across the country encouraging them to play clean. that means eating well, training hard, playing with attitude. instead of using performance-enhancing drugs. we have made some progressive, but our work is far from over. today we have about 400,000 teams who report they have experimented with performance-enhancing drugs. many in middle school and one-third are young women. we discovered that five or six teams have never received education about performance-enhancing drugs or the consequences. once teams here -- hear they are illegal mess up your body development, and ruin their chances to play at the next level. they make smart decisions. now our work is to equip teen athletes and parents and coaches with programs making it easier
9:54 pm
to train we need to make it easier to do the right thing. plus, every year we have another million or so teen athletes who need to be educate along with the parents and coaches. none of or work on on offense will matter unless we have a strong defense. the nfl, the player agreement on hgh is a great playbook. let's get on the field and execute. the well being of our youth is riding on. they are paying attention to what happens in the nfl. thank you. >> thank you. dr. goldberg? >> mr. chairman and committee members, thank you for inviting note hearing. we're practically in the position professor of medicine at the oregon health and science university. i have been researching how to prevent performance-enhancing drug use since 1987. my team of researchers found reason they use drugs are not same thus require different
9:55 pm
approaches. so we developed two supported programs. drug testing for high school athletes. other experts can testify as to the accuracy of the growth hormone test i'll focus my testimony on younger athleteses' drug use and the potential messages professional supports might send to the youth. more than 55% of high school students participate in school-sponsored sports and male and female athletes report using performance-enhancing drugs. there are no reliability estimate as to the prevalence of human growth or mean used also
9:56 pm
the potential harmful effects of high doses of hgh are not known. the disease may mimic the disease intake may mimic the disease excess growth hormone produced by a tumor. further more, it's not yet clear if the human growth hormone by itself is an athletic enhancing million athletes believe it works and use in combination with steroid and other drugs. one that enhances the performance and two, there's a need to test the lead athletes so many are users. teens don't always respond to adult messages as they are
9:57 pm
intended. the cbc estimates over one-half million high school students report steroids use. this means there are steroids users in the nfl and major league baseball, nba and nhl combined multiplied by 100. the most profound performance-enhancing drug problem by numbers of users is among the student not the pros. drug testing may weed out users for professional sports it's critical to prevent drug use and the own study of student athlete drug testing there was no effect. so if drug testing is an athlete's own school does not deter his or her use, why would testing in professional supports deter drug use? the way to reduce it by young athletes is to implement programs proven to work. recognizing this the nfl is
9:58 pm
doing just that. the nfl youth football fund has sponsored this over 0,000 young athletes throughout the united states. more over they provided funds to foundations to better inform students and parents about drugs. it's important to stress that congress passing the control act in 2004 authorizing 15 million per year for six years to enable the hhs to distribute signs-based programs to prevent the steroids use. also funds were authorized congress did not appropriate funding. -- to help educate chirp about steroids. however not one penny was appropriated. instead there were multiple high
9:59 pm
profile hearings on steroids and prominent steroids court cases costing the government tons of money in failed attempts to convict two major league baseball players. according to the gao on well over one billion wasted on the antifederal drug campaign [inaudible] appeared to make it worse. drug testing may be needed in the effort to keep professional sports more drug free and fair. testing elite athletes will not prevent drug use among teens. if congress things kids using it is a problem do something about it. notion of hgh testing testing in professional sports will track l down causing them to be drug free is not only naive. it may send a message you need too use drugs to succeed. programs that work are available because congress approved but not appropriate funds who would
10:00 pm
like to give our athletes in the programs back to the federal government so schools can use them. thank you. thank you for inviting us. congressmen, cummings i name mike. we have been around for five years. more than that i come from a different place here today. i'm recovering addict in clean 40 years and also a competitive marathon runner. proud to say i've run the boston marathon eight years out of the last ten. i work with kids every day. i love sports, i love working with kids and i hate what drugs are doing to the kids. we are addicted in our society. we have an addiction to winning. winning at all costs. the kids i work with tell me that they will do anything to
10:01 pm
win. .. when they get to high school where it's competitive and winning is really important, they go to the hard stuff, and that's when they start looking for hgh, steroids, anything they can get hands on because they
10:02 pm
have to win. we have enablers, coaches, parents, who support this, who watch this, who need to get involved. we are in denial as we are with other addictions because we love winners. the message to our kids is that you have to win. now, we have seen with other addictions that we have to have an attack that's three-prong of education and treatment and end forcement. the education, you've heard, there's programs out there that work. what we have not talked much about is treatment. people that use these supplements will get addicted whether it's just psychologically or physically as well. we have to get them help. finally, an enforcement, what we have certainly found in other drug issues is that drug testing is important.
10:03 pm
drug testing does two things. it helping to detour some athletes from using, and it also helps us identify those who are chronic users who then we can identify and get help. testing is critical, not just for hgh, but for any substance that we can identify that will help us make our sports and our athletes play safer and fair and drug free. that's the message. we look at the message that these kids get from their role models. we know the professional athletes are role models. they know they are role models. just in the last couple of weeks, we have watched tragedy after tragedy in the nfl. there are lots of other people who dieded in car crashes, in domestic violence cases, and carry weapons, but it was not on the news the way it was with the
10:04 pm
nfl and professional sports. that's how powerful it is. that's the message that goes to our children. we have to attack this the way we have every other addiction because winning can't be everything because there are not all winners all of the time. sometimes you lose. we have to teach that. what you heard up here with the panel, everyone agrees we have to work with parents. we have to work with coaches. we have to send a new message, not a mixed message, but a new message that you play safe, you play fair, you play drug free, you do the best you can, you use your god-given talents, and if you win, great, and if you lose, great. you tried. you did your best. that's the message we need to send. we are proud of the work we've done. we certainly thank our congressman cummings who helped us giving us guidance and
10:05 pm
support for five years. we reached 30,000 kids, but there's a lot out there we need to reach, and i think what was said is true that we just have to get to as many kids as possible. i want to thank you for inviting me and supporting our efforts. thank you. >> thank you. i now ask unanimous consent that the gentle lady from wyoming be allowed to attend and participate in the hearing. without objection, so ordered. >> thank you. >> by the way, she'll be joining the committee in the next congress so this may be the only time i have to waiver her on. i'll now recognize myself for a brief round of questions. first of all, dr. goldberg, i share with you your concern that we have to do all of these other things. i hope today that we can all focus this portion of it. it is not uncommon that congress authorized and then doesn't
10:06 pm
appropriate. i've, hopefully, mr. butkis can illuminate on what players, owners do on spending far greater money hopefully making up for the stinginess of congress, which is not famous right now, but a trillion dollars of deficit right now, might become famous. you looked at the decades of the human growth hormones testing and other substances, and when people say it's like being struck by lightning, i want to make sure i understand. is there a chance that we will get a false positive on the margin, on a football player, if we begin testing all of them? >> well, no test is perfect, but, again, in 1400 tests we've done, there's not been a single false positive test. the odds are extraordinarily
10:07 pm
low. >> and my understanding of the contract is there's an appeals process in union protection, if, in fact, someone claims false positive. you looked at other athletes and so on. are the protections, in your opinion, sufficient, if there is an accusation of a false pos sieve? -- positive? >> yes, i think the adjudication process is the appropriate place to discuss a particular test result, and there's opportunity to deal with issues there, yes. >> thank you. a lot changed since your time on the gridiron, but i suspect you're acutely aware of all of the positions, trainers, people who administer on and off the field in professional sports. in your opinion, is that well regulated, and, in fact, already, if you will, creating an environment in which there's
10:08 pm
tremendous enhancement of the players? i asked this for a reason. this committee is also concerned about the injuries, both at the professional and collegiate level. isn't it true that, in fact, without human growth hormones, really eradicate it, and steroids, don't we also have in the nfl probably the greatest level of legal enhancement that anyone could possibly message whether it's fluids or the actual training or every other piece of science available, but legal? >> well, i would hope so. i can only go back to the years when i was playing -- >> you were pretty enhance. we have to know how. >> well, a thing inside my chest, i think it was. you would think that the owners and the nfl, with the amount of money they are paying today would have the best doctors
10:09 pm
available for their people. unfortunately, i don't think that was true back in the 60s back when i played because there was a lot of friendships, and, i don't know, i go as far as to say if i was maybe went to a different doctor, i might have been playing a couple more years. you got to understand what they are doing today with all of the advancements of nutrition and training techniques and everything else, you would think that each nfl team would make, you know, would make the effort to get the best possible. you know, when i was playing, we could never go to another doctor. people, players today, they can go anywhere they want, any specialist they want, and they usually do. i would think that to avoid injuries and everything else, they are going to happen, but if
10:10 pm
you train properly and eat well like we tell the kids, and play clean, you can get just as much out of the sport as you can. >> well, now, dr. goldberg made an opening statement that i think is worth asking you to respond to. if, in fact, the nfl lives up to the contract of players living up to their contracts, do we send a powerful message, in your opinion, that could reduce or eliminate the pretense, if you will, at the college level, and hopefully the high school level for using these kinds of drugs knowing that the testing will prevent it for sure when they get to the pros? >> well, absolutely. i mean, where have you been? the nfl is a very powerful group. i mean, i'm hearing from the
10:11 pm
public a lot these last couple years, and why would a kid come to me and ask for an autograph or talk about the bears? i'm 70 years old. you mean to tell me that my playing in the nfl doesn't have 57b effect on -- an effect on the kids today? come on. >> thank you. >> what they do in the nfl by testing and, believe me, i believe a lot of them want it, nobody wants to be playing and have that shadow hanging over, well, did he or didn't he take this, the juice? did he or didn't he? i think they all want it, a majority of them want to do the testing. why it's all up, i don't know. >> i might only make one comment, and you can respond, and equal time to the ranking member. the value of graduating from high school as a star and going to college, if there's testing in the college for steroids and human growth hormones, and you can cut from the team because you can't perform the next year
10:12 pm
the way you did before, it's minimal, basically, one year in college doesn't get you there, and the same is true if you get to the pros, and, suddenly, you're tested, and you can't perform the way you did the year before. could you comment a little bit on essentially, the disincentive, if you know you will be tested at the next level, why use it at the previous level, just to get that one year? >> well, i testified in texas for high school testing, and a lot of the results were, realm, there's a hundred thousand kids tested, and only two turned up positive. well, it would have been more, but because of the testing so i believe it's good for high school kids to be tested. it's a deterrent, i would think. now, i have to be educated, and that's what we try to do, is educate the kids that, listen, you want to try this stuff? you want to try this stuff and have a mustache, girls r and
10:13 pm
talk like a guy? guys, you want to play at the next level because you mite get by in high school, but they'll nab you in college. why would you risk that if this is your real goal? again, i go back to educating them. i mean, who -- who is to say if i was a player back then, and i thought, well, this gives me an edge and everything else, i wouldn't do it. i hear about it all the time in different sports. they do it to have a great year, low and behold, huh, it's the last year of the contract, and next year, they sign a big one, and they go right not toilet because they get off of it. i think it is a detouring factors for high schools. >> i thank you. i now recognize the ranking member for his questions. >> i want to follow-up on chairman's questions. first of all, i want to thank you. you said you're 70 years old?
10:14 pm
>> right. >> there's so many things you could be doing, but you decided to touch the future, and i just want you to know i really -- we all appreciate that, and that leads me to this, you know, in my direct, the kids -- i live in the inner city of baltimore, and most of the kids in my neighborhood, they'll never get to an nfl game. you know why? can't afford it. when you hear about these players, and i -- i mean, more power to them, making millions upon millions of dollars, agree to take a test, agree, now, and two years later, no test, and
10:15 pm
complaining about the science, and you just heard the doctors, and what they said about the science, you know, i'm -- i mean, what do you think that sends to -- i mean, and you're trying to convince kids not to go that route, but what message do you think that sends to the very kids that you are trying to help? >> well, the mdges is like they stated, it's in the hands of lawyers rather than scientists. i really believe the majority of the players, if not all of them welcome the test. i mean -- i mean, i would, not because i wouldn't take the stuff, but it's just that i want to know that i'm playing on an even field here. there is big rewards like you say, with the money, endorsements, and everything else. i mean, when i see a mother
10:16 pm
talking about her kid, and i try to talk to a 10 #-year-old kid, and they say ask them how to be a pro and how to eat, and i turn to her, and, ma'am, i don't want to bust your bubble, but johnny has one chance in a million to make it. let him play for fun. oh, no, he's going to make it. you got to educate, not only the kids, but the players, the coaches, and the players. we all know that. getting back to your question, i think the majority of them want to be tested. they agree to the agreement, so whatever the ramifications are that they are worried about their reliability, i think the gentlemen up here have, you know, have certainly made is clear. other than that, i don't know. i really think they want to play on an even field. i know i would. >> ensuring the health and safety of professional athletes, ensuring fairness and integrity
10:17 pm
in the game, but we also are concerned about the millions of young people that participate in middle school, high school, college athletics across the country. what message does it send to young athletes that plays sports when nfl players don't get tested. i mean, what is that saying? we talked about being addicted to winning. are you -- from what you know, and listening to the doctors, and i'm sure you have done your research on this, do you have doubts about the accuracy of the tests? >> no, i don't have any doubts about the accuracy of the tests. i think we've all done our homework to know about it. the same with other testing that's done. i think the importance, you know, when dick was saying about reaching parents and the attitude of parents who believe every child is going to be a star and the reality is that
10:18 pm
kids lost the fun of playing sports because it is about winning, and that pressure starts so young that these kids are looking for an edge, a little skinny kid is looking for an edge because he's been told by his parents or coach that you better bulk up, and they look up at the colleges and the pros, and they see their role models one getting busted, two getting in trouble, you know, three getting injured over and over, and they look at that, and, yeah, that has an impact, but they also look at the fact that their way of getting there might be through drugs because that's going to get them the scholarship. that's going to get them out of the -- out of the ghetto. that's going to get them out of the neighborhood. that's going to get them their chance, and they are willing, and this is what they say, you know, if winning is everything, they'll do anything to win. that's what's -- that's the scary part. >> one last question.
10:19 pm
dr. bowers, i keep going back to what you said about lightning and the chances of being -- what did you say? the chances of an athlete who is not used synthetic growth hormones testing possible comparable to the chance of the same athlete being struck by lightning? >> correct. >> that's incredible. so what you're saying, then, is, and i think you said 11 folks have been found -- >> that's correct. there's been 11 positive tests out of 13,000. >> and so are there any other tests -- i know there's two tests now, any other tests in the pipeline that could be more accurate? just curious. >> i wouldn't make the distinction of accurate. all of the tests are accurate.
10:20 pm
the isa forms test i described, the limitation of it is is it has a short detection window. basically, two days after you take the drug, it's undetectable again. the other test that's been in development, the biomarkers test probably december tect -- detects the hormones eight to ten days afterward. they are both accurate, but tests different times after the person takes the drug. >> thank you very much. >> thank you. we now recognize, i was not a player, just a place kicker, mr. chavetz. >> thank you. >> you have not looked at the end of the season, you are still always on the roster. >> well, i -- the most important statistic for a kicker is we never lost the game by margin of my missed kicks, otherwise, i'd be in arizona or california at this point in my life, but it was a great experience, and it's a great sport, and america loves it, and there are a lot of kids
10:21 pm
that look up to the people that engage, and to mr. butkus and others and playing the roughest sports around, the public enjoys it, but we have to send the right message to the youth. mr. chairman, ranking members, and the five teching here today, i appreciate your passion and willingness to tough on the issue, the importance of the issue that we in the country and others don't go down the wrong direction. i do i want to make sure, though, that we inform the public of the distinction between the synthetic human growth hormone injections that artificially raise hormone levels keeping them unnaturally elevated for a period of time, versus, perhaps, a dietary supplement that produces optimum levels of relief that flows tots
10:22 pm
body's natural rhythms, and i think the testimony here today does reflect in part the distinction of the human growth hormones and the other more natural levels of hgs, and, in fact, there is a company in my state of utah that wants to make sure we're distinguishing the differences, and i ask nms con -- unanimous concept to insert that into the record. >> without objection, so ordered. >> thank you. two things. one is in your testimony, an additional testing is needed, and they agreed to the studies. i don't think that's necessarily applicable. the other part of it is, question, is so the tests that you are performing, have those been pure reviewed, by who, and
10:23 pm
how were they peer reviewed? >> so peer review takes a number of forms. one of the ways can be publication. i mentioned the tests, four publications about the tests in literature. that's one one form of peer review, the other is scientific experts around the table, present data, have them talk about it, and go forward with the recommendations, and that also has been done with growth hormones over the last, like i said, since 1999, we started -- >> but specific to the tests you're doing? >> yes. those -- that -- all of those things have happened specific to the tests that i've talked about. >> and have you given all of that to the nfl and the players' association? do they have access to that? all of that? >> yes, they do. >> my understanding is that perhaps they don't, and so for a point of clarification, for the record, my understanding is you'll provide all the information we just talked about to both the players' association
10:24 pm
and to the nfl? >> we offered to go to talks with the player representatives and showing the data we have, asked any questions they have, and they never took us up on it. >> anything you wouldn't show them? >> that i have accessible? >> uh-huh. >> no. >> okay. i thank you, all, again, and i appreciate this. it's an important topic, and i hope they continue to execute. thank you, mr. chairman. >> would the gentleman yield? >> sure, sure. >> i just want to sort of come back to what mr. cummings started on. if you were to look below the current level that you, the threshold, the very conservative threshold, is it likely some of those would not test positive, are, in fact -- in other words, i want to understand not only is
10:25 pm
it a lightning question, but isn't it true that in some cases, because it's such a short window, basically, somebody dopes three days before, you're seeing it, but you're not considering it a false; is that correct? >> that's correct. i mean, the threshold has been set intentionally very high, and when you do that you accept a number of what would be false negatives. people are using it, but you say you are willing to exclude that so we don't get anyone having a false positive. >> a quick follow-up. it means under the current testing, they can juice in the off, off season and get away with it? this is a relatively limited testing period in which they are really only tested during the playing season, if you will; isn't that correct? in other words, it's not year round testing. >> i'm not totally familiar with what the nfl does, certainly,
10:26 pm
for usad, 90% of the growth hormone tests are no notice out of competition. >> right, your random tests. >> yeah. >> this one, i understand, is less aggressive. with that, we go -- well, let's see, all the way -- there we go, we go to the gentleman from missouri who was patiently not leaving. >> thank you so much. thank you, mr. chairman, and thank you for conducting this hearing. let me -- recently, the nfl players' association raised questions about the science that underlies the hgh tests arguing that it should not be applied to nfl athletes. this hgh test has been used at the olympics in 2004. correct me if i'm wrong, but recognized as a scientific leader in the field; correct? >> yes, that's correct.
10:27 pm
>> and despite the variations and size and body type that exist among nfl players, there are olympic equivalents that span the full range. for example, a six-time probowl wide receiver, randy moss, is six-feet-four, weighing 215 pounds, a gold medal sprinter, bolt, at six-foot-five, and 210 pounds, and, in fact, the sports reporters in the room may remember that bolt was flirting with the idea of trying out for the nfl. mr. butkus, i don't know about you, but i don't see a relative difference between the two athletes, do you? >> nope, not really. >> so what it is that the nfl players are talking about here? why is it are they saying that
10:28 pm
there's a distinction or that they have a -- that size and body type are difference? >> i really don't know. i'm just saying that there are represented by their union, and, you know, one false positive can mean a guy's reputation so, again, like i say, majority, all of them want to be tested. >> another example is 2012 weight lifting bronze medal, and he at six-foot-four, 223 pounds, roughly the same size as the probowl lineman larry allen, who was six-if-- six-foot-four, and 224 pounds.
10:29 pm
i don't see a difference between the athletes. what do you think? >> i agree. i can add more to that. if i look at the top 1%, the highest growth hormone test results that we've seen, three sports that were involved were bobsled, a driver, cycling, and three track and field sprinters. none of them are particularly big individuals so the highest test is not correlated at all to the size. can you talk about the test for growth hormones and research that went into the development? >> i can. the search for test for growth hormone abuse started back in 1996. it split into two different paths, one of which is the tests discussing today, the isa forms test, and that test was based on the fact that when people were
10:30 pm
given growth hormones mopes, it discriminates or classifies people correctly into users and nonusers. the other test, having recognized that a two-day window was probably not going to be the best solution for us, the other is a markers' test, basically, an indication of the effective growth hormones mope on the body, and so since those affect tests longer than growth hormones actually there, the window of detection is much broader, and those are the two tests that are currently under development. did the trials include a wide range of individuals with a wide range of body types? >> yes, it did p. >> has the tests gone through the peer review process, and what were the results of that process? >> so as i mentioned, the -- the isa forms test had four
10:31 pm
publications related to the test itself. plushed in the peer reviewed literature. the biomarkers test had more than 33 publications laying the background for the test, all, again, in the peer reviewed research. quite a bit of research was done in the last, what, 15 years? >> thank you so much. mr. chairman, just yesterday, in fact, the committee received a letter from scott blackman, the ceo of the u.s. olympic committee stating that, quote, begin the stringent review process, the usoc has the utmost confidence in the testing methods to detect hgh, and i ask unanimous consent to enter this into the record. >> so ordered. i thank you. now to the distinguished member from tennessee. >> thank you, mr. chairman. thank you, gentlemen, for joining us today. i want to take this just a
10:32 pm
little bit in a different direction than we've got here so far. as a practicing physician for 20 years, before coming to congress, i think that we're kind of overlooking, to some extent, the source of the problem here, and to my knowledge, hgh is not something you can get at the gmc. it has to be prescribed from a physician. i know from my experience, and i had parties -- patients coming in, off the growth charts, hitting puberty, and discussions occurred whether it's appropriate to use the hormone, and generally, that is a promise referred on to an encronnologist. what's confusing is why is this so readily accessible, and who are the doctors providing this for the wrong reasons, and why is the punishment not starting there, and maybe we don't have to worry about it. i know bad things happen as long
10:33 pm
as there's bad people or players in the game. can anyone enlighten me on what the punishment history has been for positions prescribing hgh? >> they can get them from the internet. you put in "buy hgh" or "buy steroids," and you can get thousands of hits, and send for viles, steroids, human growth hormones, and whether they are steroids is questionable. many of them are phony, but from eastern europe, you can get them, readily available. >> without a doctor's prescription? >> without a doctor's prescription. >> okay, so there's -- yes, mr. gimbel? >> the other issue here is,
10:34 pm
athletes are going to health food stores, gnc stores, buying tons of muscle supplements which is regulated, and in surveys that have been done randomly over the years, many of the products have had hgh and anabolic steroids in them. we just don't know. the facts is these products are working, and they are working so well my assessment and other professionals is something is not right. it needs to be regulated. we've got a whole industry from energy drinks up to what you buy in the stores or on the internet, is not regulated. it's a real kind of a russian roulette crap shoot when it comes to what kids buy, more from the internet and the stores than from their doctors. >> you can't get hgh from a pill.
10:35 pm
you can get anabolic steroids, and there was a study of u.s. supplements in 2003, published that 18.6% of supplements, 40 supplements analyzed, had true anabolic steroids in them. therethat was not in the label,t because they are not regulated, they can put them in to make them work. >> okay. i know cree teen is a big problem. i have a son, mr. butkus, playing line backer, and 140 # pounds, as you said, not going to the next level, but as much as he and the other teammates wanted to continue, and i told him the perils of them, and yet at halftime, they are laying on the sideline getting cramps stretched out, and in college football, players go into the locker room at halftime getting ivy fluid, not something common in your day, but this dee hydrates, causing muscles to
10:36 pm
cramp. as a father, i could not persuade my son from taking this. it's a big challenge. how do we do a better job that i know you've been working on? >> i guess we have to keep on pounding the pavement and educating them. the parents, i come across a coach who had to have a meeting with my parents and my 9-year-old. i said, really? about what? he said, well, just before the game, the parents make him go in the parking lot and shove down energy drinks at 9 years old. i'm saying, i'm trying to reach high school kids, you mean to tell me i have to go to grammar school now? or the case of telling that story to another bob warner coach that came by, and he said that's nothing big. i actually caught a mother giving a 9-year-old a laxative so he could make his weight at 9 years old. >> wrestling, that happens for sure. as a point of personal
10:37 pm
privilege, i got over my grudge against you. growing up in south dakota, i was a vikings fan, and i was not upset when you were retired in 73, but that was 40 years ago, and i got over it. >> that's probably why you've been so successful. >> thanks. [laughter] >> forty years is all it takes. [laughter] you notice i have not got over losing to the browns to baltimore, but 40 years might do it. >> with that, we now go next to -- i want to make sure we get this just right, mr. quigley who was here at the start. >> thank you, mr. chairman. those watching this know that the house has a long history of having hearings about performance enhancing drugs in
10:38 pm
sports. what struck me is it used to be that major league baseball was behind, and now it's the only major sport tested for hgh. if the mlb association and the commissioner and the teams can agree on this, it makes no sense to me that the national football league can't as well. anybody on the panel who wants to help -- the way you take hgh is in the sequence; correct? so you're on this for awhile, and then you're off this for awhile? i'd like a little nuance here what that means in terms of why one of these two tests is preferred given what you mentioned earlier about the fact that there is a gap where the tests only last for a short period of time. >> well, there's not a preference for one versus the other. they are compment ri. when we get them both validated,
10:39 pm
then we use both of them. a good example was we had the biomarkers tests used at the games in london this summer, and two athletes in power lifting tested positive by the biomarkers test and did not test positive by the isa forms test, and the reason was they admitted to using growth hormones eight days beforement now, unfortunately, since the olympic games, one of the companies that was supplying the kits that we used for the biomarkers tests have taken it off the market, and so until we can validate another procedure for that particular test, we can't use it. >> is anyone doing the biomarkers test now at all? >> the only lab that was approved to do it was the london
10:40 pm
labs for the olympics. to my knowledge, there's no other labs approved to use that test. >> again, back to what i mentioned before, the sequence in which an athlete would take human growth hormones, this is a period in which they go on, and there's a period in which they naturally go off, and how does that affect the timing of testing? >> well, again, both of the tests are used in no advanced notice, random, or out of competition testing. testing on game day, for example, doesn't make sense to me. i would be doing my testing away from that when people are training at a time they don't know they are going to be tested making both tests most effective. >> they take this for how long a period, and then how long are they off of it, typically? >> it -- the answer is it depends, but they would take a cycle that might be every day
10:41 pm
for several weeks, and then stop. any time you got them in the period of time they were taking it, the test would probably be positive. there's some athletes who we interviewed say they take it for wait loss. those people use it slightly differently than what i just described so it would be more difficult to find them, and if you were going to schedule a test in advance, for example. >> yeah, but who advises the athletes? who is out there that are the master minds? how do they find athletes, or vice versa. admit, some sophistication in understanding how to take this -- if at all, safely, safely, and then in what sequence? >> well, one of the things we found over the years is that there's a lot of money involved here, and there's lots of companies who are interested in getting to athletes and selling products, and teaching them how
10:42 pm
to do itment you may it. you may remember years august, the sickle with the labs, and every time the government ban a certain chemical in a steroid, they would go back and change it because, again, it's supply and demand, and it was a market for the product, people willing to pay, and there's an underground. there's trainers, people who teach athletes how to do things the wrong way because, again, the goal is to play as long as they can, be as strong as they can, as far as fast as they can, recover from their injury. there's a lot of money at stake. there are people who teach them. we found whether it's a trainer, whether it's a coach, there are people that will teach the other side as much as we're trying to teach how to do it the right way. >> thank you, mr. chairman, i also represent wrigley field, and look out over it from my house, and you didn't have to be a fan of the bears, vickings, or
10:43 pm
packers, or whomever to appreciate what mr. butkus did on that field. i appreciate it. >> thank you. i recognize the gentleman from south carolina. >> thank you, mr. chairman. science, mr. chairman, is the reason some of us went to law school so i am not going to be asking any questions rooted in science. >> though the gentleman is not that kind of lawyer. >> no, sir. i was not. i'm not any kind now, but i want to ask questions concerning reliability because if memory serves me correctly, you can be suspended from the nfl for criminal offenses, and i wonder if there are any studies on the reliability of jury verdicts that the players' association insists on before you can suspend someone for suffering from a criminal conviction? hearing no response, i think you
10:44 pm
can be suspended for certain tackles or certain conduct on the field which requires ascertaining someone's intent, whether or not they had a malicious intent to injury before you can be suspended, and woppedzer if the players' association is insisting on some test studying the relittle of ascertaining people's mall las or intent. >> that was not going on when i was playing. there were no rules. >> i'm not aware of any tests now where they have sign -- scientifically tested the ability to ascertain intent when they go to tackle someone, but here's the big issue to me. you can be suspended for trafficking an hgh. that would be a crime. you can be suspended for that;
10:45 pm
right? what test would they use in court? if you're suspended from the conviction, and that test is good enough for the players' association, why can't you be -- that same test be good enough in this realm? not all at once. is there a different test you'd use if there was a prosecution for an nfl player for trafficking an hgh, and we all agree they could be suspended for suffering that conviction sks right? how is the test that would be used in court to determine whether or not it was hgh any different from the test that's proposed now? >> well, there's a slight difference, but i agree totally with your comments that it's inconsistent and seems appropriate that you'd do the test that you'd redo. >> well, mr. chairman, i think that there was a clause in the
10:46 pm
cda over the next several weeks, the two parties would develop specific arrangements to implement testing with the goal of beginning testing by the first week of 2011 regular season. has anyone been able to determine what the intent of the players association was when they agreed to the los angeles? was there a test they had in mind when they agreed to that? is the chairman aware? is there any test they find acceptable? >> if the gentleman would yield -- >> yes, sir. >> in the previous season, the ranking member and i had a proposed deal in which they would simply collect the samples so that when they agreed to this, eventually, they would at least have a collection of socially retroactive evidence. we had an agreement. they left. the agreement fell apart. they refused to even have the collection. i guess i have to tell the
10:47 pm
gentleman that one of our frustrations is they would not even agree to eventually have a test once they agreed to it, and that's one of the frustrations is that ranking member and i personally met and thought we had an agreement, and it then got redone by one side to the detriment of the players' well being. >> well, i'll close with this, mr. chairman, because i just can't unlock this conundrum. you pick your favorite players. mine would be dallas cowboys, but pick your favorite player, can be suspended from the nfl if they suffered a conviction for trafficking an hgh. after a court case, after due process, if they are convicted, they can be suspend. how is the test that would be used to lead to that conviction different from what is proposed in this setting? if it's good enough for that way to be suspended, why is it not
10:48 pm
good enough for this way? is the science different in a courtroom than it is outside the courtroom? >> not that i'm aware of, no. >> i would welcome the opportunity to ask players' association that question, but i won't get it today. i would yield back. >> i thank the gentleman. i thank him for the insightful questions. with that, we go to the gentleman from the north of virginia, mr. conley. >> thank you, mr. chairman. thank you to our panelists for being here today. mr. butkus, aassure you, 70 is the new 40. >> cool. >> like 62 is the new 30. better be. you talked tactfully, your awareness as a professional athlete, you are and have been a role model for a lot of young chirp, and you took that
10:49 pm
speedometer to heart. -- children, and you took that responsibility to heart. among your colleagues, among those who a current players, is it your understanding most players understand that and take it seriously? >> i would hope so, but i can't say it's across the board. i would only say that as far as i'm concerned, football is -- meant everything for me, and, you know, it's sort of -- it's payback time. it's give back. >> yeah. >> and that's what we try to instill. we use the awards for the most outstanding linebackers as a vehicle to play clean. anybody that's eligible gets a letter from us, take the pledge that you will play clean. that's all we can do. you know, we reached millions of kids, and that's just one of the ways of giving back. i don't know.
10:50 pm
it's been tough, though. i would pick one of the most difficult things. because of what was side about the deal about winning. >> yeah. yeah, because, you know, mr. cummings talked about kids in his district, in the baltimore area, many low income, can't afford to ever go to an nfl game, but they are aware of nfl players as role models, and if they are taking drugs, you know, the rest can say until we're blue in the face, no, stay cleent, don't do it, but if their role models are doing it, did destroys the whole point. >> i believe so. >> the title of the hearing is "hgh testing in the nfl: is the science ready?" i'm glad we're having a hearing that empowers science. dr. goldberg, is the science ready? >> well, that's really up to
10:51 pm
doctor bowers and the validity of the test. i mean, we look at the sensitivity and specificity of testing, and this is a test, the way larry describes it, it more like testing for alcohol. it's difficult to find positive tests, but when you find a positive test, it's probably a true positive so that's what is important. if it's to weed out all users because it's cycled on and off, much like anabolic steroids are, half the time when you test, you're not going to find it because you're -- if you're testing only how frequently you're testing, will determine whether you're going to pick up anybody or very few people so if it -- if an athlete feels it enhances their performance, and that's the reason they are playing in the nfl or any other league, they'll take that chance
10:52 pm
to use it, and i would rather play in the f enrings -- nfl than drive a truck in idaho. >> if i understood you correctly, the incident of false positives is next to nothing? >> that's what, i think, larry -- >> [inaudible] >> yeah, that's correct. as id said, there've been worldwide, 13,000 tests done, 11 positives. eight of the 11 admitted use. the other three, you know -- >> if i'm understanding your testimony and that of dr. goldberg, we don't have a lot of false positives, but what we do have is an under statement of the use of hgh because was regularity of testing, the
10:53 pm
randomness of it, the timing of it, so as a matter of fact, the 13,000, whatever the number, understate the widespread use of hgh; is that right? >> i would agree with that. >> you would agree with that. so the science is not so much the question or, and you have not commented on that, and dr. goldberg passed that on to you, mr. bowers, comment on the accuracy of the science. is -- are we ready? is the science ready for this testing in the nfl? >> yes. i mean, there was a question before, i think, about the peer review of this. i can tell you i organized a meeting in 2004 of the 75 people that attended, 20 were growth hormone experts with no association with ports, and based on the recommendations of that meeting in 2004, the test was implemented in the olympics in athens in 2004.
10:54 pm
there's been peer review, people looked at it, discussioned it, and have confidence in it. >> thank you, thank you. mr. chairman. >> i thank the gentleman. would you yield for a second? >> of course. >> i think the gentleman makes a great point that this test, at best, will be a little bit like police out on the freeway with radar guns. the vast majority of people drive over the speed limit and do not end counter a police mep, but on occasion, they do, and the accuracy of the radar gun, sadly, is quite good. [laughter] >> mr. chairman, i'll also add to that. if you are chad, it is not a defense in the court of law to say, welsh everyone else was doing it too. >> exactly. the gentleman's correct. >> over here. >> wait -- wait, oh, yes. >> can i comment -- >> i was not looking -- >> that analogy is a good analogy with the speed in
10:55 pm
everyone else, as you know, will slow down when that person is caught on the side. >> nothing slows you down more than the flashes lights with the other guy. >> down the road, three more miles, and they are all speeding again. >> the gentleman is correct. of course, no one in the audience today is suggesting that police stop looking for speeders. with that, we recognize the gentleman from arizona. >> thank you, mr. chairman. mr. butkus, look up at the monitor, and there's a quote from london fletcher, middle linebacker for the washington redskins. hopefully the nfl and nfl player's association implement the new testing endorsed by the international anti-doping firs. next slide. shows another quote from antedny gonzalez who agrees with fletcher. it's a huge step for the league
10:56 pm
and other guys are in favor of it too. a lot of rules are safety oriented, and this is as important or more important than anything else. go to the next slide. it's a quote from the tackle, tieson who said, "if guys start get busted, obviously, there was a need, and i don't anticipate there's a large flux of guys caught because i don't see it being a huge problem, but there's really only one way to find out, and that's to start testing." for you, my question is many of the players seem in favor of it. >> yeah, i mean, i have not taken a survey, but i would believe they are. >> it seems to me that really it's applicable here, just do it. you know, if there's enough players, you know, you overrule your players, you just do it. >> well, you know, they've got a union, and they are remitting
10:57 pm
their players on what they think is right, and, in this case, you have a player representative from the falcons saying that let's move on with it. let's get the testing done, and another one said there might be a surprisingly few that'll come up positive so you're right. why -- i don't know the answer to that. i -- again, i think they all sound like they want to play on the even playing field. >> seems to me like we ought to be having their voices heard. >> i probably -- probably more so than mine. >> i give no quarter. i take it another step. i applaud you how you look at yourself as a role model. there's a counterculture, and i think that is exemplified in a comment from charles charles ba. the dialogue intense, but so articulate. i disagree with a lot of
10:58 pm
pro-ballplayers. i'm around enough of them to know that it's also about me, me, me. >> true. that goes along with mr. gimbel says, win, win, win at any cost. like i said before, football, i mean, since i was 9 years old, and it's been very good to me so i'm just -- it's a way to pay it back, and as far as the other statements, i don't try to be a hero, but i don't know what happens, but if people are going to listen, there's something positive that i may say or help kids with, then that's -- i take that obligation to do it. i mean, believe me, i don't feel great sitting here doing this. i'm a former player, but what we got to do is think about the kids, and i realize that kids are looking up. to say they are not is, jesus, look at fantasy football, i
10:59 pm
mean, come on. what other event in the world stops -- besides something tragic, than the super bowl, come on. >> i agree. >> you know? so -- i don't know, i'm just doing my little part. i appreciate what you're saying. >> i appreciate a lot more the nfl players take notice and pick up the role of leadership and personal accountability and personal responsibility to the role. >> one more question to you. have we seen any other studies that kids that do hgh and some of these other enhancement drugs, are they much more prone to be doing illicit other drugs? ..


info Stream Only

Uploaded by TV Archive on