tv Capitol Hill Hearings CSPAN September 23, 2013 8:00am-2:01pm EDT
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>> host: and this week on "the communicators" we welcome back the president and ceo of the american cable association, matt polka. mr. polka, what is the american cable association? >> guest: thanks, peter. nice to be here again. nice to be here with you, lynn, as well. the american cable association is unique in the fact that we represent many smaller cable operators across the country, and everyone always asks me, are there still small cable operators left? in fact, there are nearly 900 of them in every corner you can imagine, rural areas, small towns. many of them are providing competitive services even against some of the largest providers today. and what's great about these smaller companies, it's a terrific story because they're providing broadband, high-speed broadband in rural areas that desperately need broadband service. so these are the members we represent. they're smaller, they're independent which means that they're not affiliated with larger content companies or
larger providers, and what we do is we provide their voice here in washington, d.c. before the federal communications commission, before congress and any other agency here in washington, d.c. that deals with telecommunications issues that have an impact on these smaller companies. so we are their voice for the independent cable operator. >> host: so awbt -- about seven million households? >> guest: yes. we're in all 50 states, many of the territories as well, so it's quite nice to see independent entrepreneurial pioneers that are still out there in small markets in rural areas doing exactly what the same pioneers did when this industry was founded some 50, 60 years ago. >> host: well, mr. polka, you opened up by talking about broadband. has that become more important -- >> guest: oh, my goodness gracious, broadband is the service for not only our members, but when you look at the cable industry in general, the cable industry has done such a tremendous job of deploying broadband all over; urban areas,
small market, rural areas where our members live and work. and it really has made the difference. and as we look ahead, we see that our members' businesses and their future really is a broadband business when you look at the services that they provide. today we provide voice, video, internet services as well. but broadband, more broadband is really the key, and in most of our members' areas they say that the speed and the capacity and the demand for broadband in their markets is doubling every two years. so it becomes a really important issue for us as smaller providers that are providing that broadband service when we look at the washington perspective and how washington continues to regulate smaller business. and that's, essentially, what we are. we're smaller businesses looking for regulations that actually work and allow our members to flourish as opposed to be overly regulated which has a higher cost per subscriber. >> host: joining our conversation in the week is lynn
stanton who's senior editor at telecommunications reports. ms. stanton? >> thank you for having me. matt, you've been critical the way the fcc is distributing universal service support funds for high-cost, low-population density areas. and what in particular about the way they're handing out this money seems to you to be a problem? >> guest: well, it's not just the fcc. actually, when you go back historically, you can look at a number of programs that were designed to help deploy broadband in rural areas, programs which we actually support whether it's programs through the rural utility service as part of the u.s. department of agriculture and other programs. the problem is not the goal to get broadband out into rural areas. the problem is how those programs are implemented. each one of these programs, particularly starting with rus and looking back to the stimulus funds of 2009, were designed to be technology neutral meaning that anybody could take advantage of those programs. but when it came time to
implementation, the rules that were used to implement those programs were essentially the traditional rules that the funding agencies have used for decades which favored one industry over another. so our members didn't have access to the funds. when we look now at what the fcc is doing with universal service, many of the same potential problems exist which is our members, as i said, have gone out with their own private equity, sweat equity to deploy broadband in rural areas, and now they face be a situation which is what we have seen before where taxpayer funds are being used to be given to other potential competitors to actually overbuild them. and we think that there's a problem with any implementation that allows for that kind of use of taxpayer funds to overbuild broadband, cable, phone systems that already exist through private capital. and that's what we're concerned about with the fcc program as they renew and reform universal service. and, actually, the fcc has been
very, very understanding of our concerns here as we look at the challenge process that they're developing for these funds. but essentially, the problem was still the same, that the money was going to go -- is going to go to large price cap companies, some $10 billion over five years, all right? to be used in areas that are unserved and potentially underserved. well, in of those underserved areas, quote-unquote, our members are providing broadband at much higher speeds than exist under what would be the current plan. so what we want to do is establish a process by where our members can challenge what is occurring through that process so that if they are there providing broadband, they can insure through a challenge process that, actually, that funding does not occur in those areas. so that's really the issue, is implementation to insure that money is used as intended to get broadband where it isn't, but not to be used to allow for
overbuilds where our members are providing broadband service today. >> don't your members' service areas show up on the national broadband map? >> they do, today do, although that's developing. as you know, when we go back to 2009 and before, we kind of did things backwards where the map is actually now the last piece of the puzzle before or we got money out and we established a process and we developed a map. well, that's improving. and our members are very effectively working very hard with their state organizationings that are responsible for the national broadband map as well as the fcc to get their information into that map. and we're very pleased that as the fcc looks at the funding under the connect america fund that the national broadband map will be central to their decisions many terms of where funding -- in terms of where funding might be appropriate. but to go the next step, and this is where we do appreciate what the fcc is done, is they will create a challenge process where even if there is information specifically isn't
on that map, any company that could be harmed by way of this funding will be able to challenge that process by demonstrating they are providing broadband in an area where an application might be pending. >> you've also in support of, i think, the e-rate there might be some changes, i think you said? >> guest: well, as far as e-rate goes, we are supportive of this. obviously, the more we can get broadband out into schools, libraries, other places like that, that's very, very important. so we do support those programs. for our members it's always, again, question of how were the funds distributed. so our issue there is can our members be an effective part of that process as opposed to sort of being on the outside of it? and we think that with this program and the ideas behind it that our members will be able to more greatly take advantage of that program going forward. >> moving to a broadband reporting program? >> guest: yes. that's exactly right.
definitely the idea of the program is something that we support and we want to see flourish in our markets. >> it's mostly up to the schools or the school districts, isn't it, who ends up getting the contracts to provide service? is it because the money hasn't even been making it to the kinds of services that your members offer that's the problem in terms of your participation? >> guest: i think that's part of it. i think for our members it's sometimes awareness, to know that there are multiple providers in a marketplace that actually might be able to provide something more cost effectively within the means that the schools have. now, one of the issues that i think our members have faced is just the traditional bias towards particular buyers of service as opposed to a full technology-neutral class of companies. and what we want to insure is that our members have an equal shot at working with those schools to actually provide those services. >> host: mr. polka, was the 2009 stimulus important to your members?
>> guest: well, it was. and, again, as i pointed out, we sort of did things backwards went you go back and look at the stimulus. to have $7 billion of funding available through rus and through ntia in the commerce department was important, but again, our members were not able to access those funds specifically because of how the funds were implemented. and how the application process occurred. so consequently, we were more on the defensive side of the issue as opposed to the offensive side, meaning that we could actually get funds that we could use to deploy broadband. so on insuring that those funds were not used to provide an overbuild of existing broadband services compared to actually using those funds to deploy broadband. and unfortunately, i think that there was -- particularly now as congress is relooking at this issue and certainly as part of the fcc process -- they're mindful of the fact that there was a good bit of waste and
abuse in this program when you look at a number of programs across the country where there were cost overruns or programs that were not completed, money that was given back to the government. so unfortunately, i don't think the intent of the stimulus was met, and from our perspective we had a number of situations where our members did have to fight overbuilds. and unfortunately, because there was such a demand and such a movement to get this money out the door, the process, the challenge -- it wasn't very good. so our members consequently, despite the fact that they put evidence on the table to say we are providing broadband service in these areas where you're funding, no one listened. and that's unfortunate. >> host: on the other side of the equation, what's the future of video when it -- video services for your company? >> guest: that's a very good question when you look at many of the problems that are occurring in the marketplace today. as i said, you know, our
members' business is focused ahead on broadband, the services we provide are going to be broadband based, consumers are going to want to consume more video through broadband, through online services as we see now. in fact, we have many members that are actually engaging in allowing their customers to see more online viewing via their broadband plan. the issue of the video business and where that goes, i think you'd probably have to ask the big don't companies about that -- content companies about that because they're the ones that are driving the business today. from our members' perspective, we believe that the video marketplace is broken as you can look at any number of disputes that are occurring today in the news whether it's cbs/time warner or any number of other programming disputes. n., i just saw something the other day where amc was claiming that several smaller cable operators were going to be dropped from some of their services because these smaller cable operators, unnamed,
agreeing to the prices amc demanded. and it all comes down to consolidation and bundling, it really does. and unfortunately, consumers are starting to move more towards online viewing because they say i don't have any choice as a cable or a satellite subscriber, and i want more choice. we, as cable and broadband providers, want to give consumers those choice, so we're trying to work with them and give them the choices that they want. but it's a huge issue, one, that's not resolved, it's only getting worse and, frankly, you know, i can tie this all the way back to 1992 when congress first implemented the retransmission consent rules, and i can draw a line from that through the beginning of consolidation through the network and programming business to now we have these four major content companies across the country tie in bundle services, they pay exorbitant amounts for sports rights, for the right to provide sports that every consumer has to pay for whether they watch it
or not. our members tell us that only about 30% of their customers are real sports fans, that are real diehards that would pay for it. the other 70% could take it or leave it. in fact, they tell us why do i have to take all of this content? so it is a problem that's continuing. many have predicted the demise of the video industry the way it is today with wholesale programmers, content companies selling to cable and satellite operators. in my view, when that happens, there will only be one party to blame, and that's those that own the content, because they're the ones that are creating the massive bundle that we have to take today in our competitive environments and that consumers are beginning to really, really revolt against not only because of price increases, but also because of lack of choice. >> host: so what about senator mccain's a la carte bill? how does that sit with your members? >> guest: senator mccain has been certainly a champion of
someone who's wanted to give more choice to consumer. we have supported more choice going back to a rulemaking at the fcc in 2008 that looked at the wholesale programming model. and, basically, what we said -- which we said in response to senator mccain's bill -- is, number one, we appreciate the dialogue. we're glad that he was bold enough to say, look, i think it's time that we as a congress look at this. and interestingly enough, and we thank him, too, senator blumenthal from connecticut who cosponsored that bill. i think that's really important for the congress to have a dialogue about those issues right now. but we, we look at that bill and say even though you would like us to provide choice, which we would like to provide, we can't because the companies that own the content refuse to give us the ability to provide that choice to consumers. so even if it were mandated, even if it's, as in senator mccain's bill, an incentive to provide services on an a la carte basis, we can't because we
don't control the rights. what we have said and what our members have said that they could do today if, again with, given the ability to do so, is to provide services on more of a tiered level as it occurs, i believe n canada and as has happened in some other cases where you take certain genres of programming and allow people to buy the genres of programming that they would like. we supported that back in 2008 during the rulemaking that chairman martin instituted at the time and have said if our members had more flexibility to provide services more akin to what their customers are telling them that they would like, then we could probably find some middle ground. but the fact of the matter is, the content companies whether it's comcast nbcu, whether it's viacom, abc, espn, they will not let us carry their programming other than in, essentially, the expanded basic tier of service. and consequently, everything is
bundled into one large package that consumers have to take and pay for whether they want it or not. and that's really their choice, take it or not. and as we see going forward, a choice that consumers are making, starting to make a lot more often is i won't take it. i'll look for some over-the-top solution. maybe i'll just get broadband from my provider, and i'll get the video services that i want online by my be choice, not by someone else's dictated choice. and i think we're going to see more of that which underscores our members' important broadband future and the need to keep congress, the fcc continuing to provide a light touch of regulation on those services so that we can provide the level of service that's required in those smaller markets in rural areas. >> to get that flexibility, you just said a light touch regulation. so would you or would you not be in favor of congressional action to force programmers to sell
their channels on, you know, not bundling in one channel with another and making that a contractual mandate on you to buy -- >> guest: well, we certainly would like that flexibility. i'm not sure that it would ever reach that point where there actually might be language to that effect. but the fact is that consumers are already moving on their own. so we as broadband providers want to help to give consumers that choice that they want. we have many of our members today taffe considered -- that have considered instituting and building into their systems video on demand. very expensive, can be for a smaller operator, lots of equipment, new boxes, etc. where others are saying why would i do that nowadays? now when i have an opportunity to give consumers more of what they want through my broadband plan where through their broadband plan they can give consumers the ability to view netflix, hulu, amazon, prime, etc. and i think we're going to see
more of that as consumers look on their own -- again, consumers and the marketplace in that regard or, technologying are so far beyond -- technology are so far beyond kind of where we are today from a policy perspective that we're trying to meet the demand of our customers while at the same time we try to work for reasonable solutions here in washington where those are available. >> and the last congress i don't think it was reintroduced this time, there was a proposal that would basically deregulate the entire negotiating position between cable companies and broadcasters by getting rid of must carry and things like that. is that something that -- >> guest: well, it certainly makes sense. let's put it this way, every five years congress has to reauthorize the satellite home viewer act, the bill that gives the satellite companies the ability to carry out-of-market stations in some limited areas. and congress is very concerned about that because every five years if they don't reauthorize
it, over a million people could lose access to television signals. they don't want to see that happen. so they engage in a process to review and reauthorize and update the bill based on market conditions. we in the cable industry operate under a law that was passed in 1992, hasn't been looked at once in 21 years as well as regulations that extend far before that that have also never been updated that continue to give content companies like broadcast stations exclusive markets, it gives them the ability to prevent competition, and basically, allows the same kind of consolidation that we've continued to see since 1992 to give the large content companies, programming companies even more leverage over the cable dial. so we think it certainly makes sense for there to be an ongoing review. congressman scalise from louisiana introduced his bill along with senator demint at the time when he was in the
senate that, basically, would provide a sunset of cable regulations and cable laws to require congress to actually look at these laws to say what works, what doesn't. because the marketplace is moving so fast, it's our job as regulators to try and stay on top of this as best as we can. and we think that makes a great, great bit of sense for congress to actually do the work to review its laws, and it's one of the things that we're suggesting in this current reauthorization of the satellite bill. we hope that more members will consider that review that's needed for the '92 act, whether it's part of the satellite reauthorization, whether there are specific amendments related to the cable act as part of the satellite bill or agreement that there needs to be broader reform down the line where a process could be started that actually could look at sunsetting some of these old regulations like retransmission consent, like must carry and some of these others that continue to force
this cost on to consumers. so we think that sunsetting makes a good idea -- is a good idea and something that we hope more members think about here in congress as the process goes forward. >> host: matt polka, have your members been losing video customers? >> guest: yeah, there's been some loss, for sure. without question. as we have seen across the country, really more cord cutting in general. now, that's sort of the bad news. i mean, the good news is that our members of the broadband providers, which is where many of the customers are going to, underscoring the continued need for our members to provide more robust broadband services as demanded by their customers in smaller markets in rural areas. so, yes, we are seeing some falloff on video. it still remains a strong product, but definitely it's one that is gaining weight, gaining pressure because of all of the problems i mentioned before in the programming marketplace that continues to force content on
bundle and greater costs. i mean, when we look at particular ily what's happening on the sports side of things, sports is outrageously expensive. and now with the addition of fox creating its own competitor to espn, basically, you now have three large competitors for the most expensive programming out there, for the rights fees for whether it's golf, football, baseball, hockey, you name it. and that's all coming to roost as these companies compete for the rights to carry that programming and then turn around and say, well, how i will get paid is turn around and send this back down to every subscriber that takes cable or satellite. and that's the problem. many of our members will tell you that of tear entire programming -- their entire programming budget in terms of the channels they pay for on a monthly basis, you can look at maybe five or six of them, sports channels, that account for 50 of their programming costs or more. and that's just compared to
maybe another 150. so there is a problem out there. if there's good news from our perspective, the fact that these deals are not going without notice. certainly congress in hearing after hearing in the past two years has noted the rise of sports costs and how that's affecting consumers who have no choice. some members of congress have focused on the antitrust exemption that the sports leagues enjoy which gives them greater leverage when it comes to negotiating sports rights that, ultimately, consumers pay. so there's certainly awareness, and i think a greater light being shone on these problems but more definitely needs to be done in the area of choice. and, again, i think that comes to where we're talking about today with broad -- trying to give our customers more broadband choices as well as congress and the fcc looking at imposing their hand, their thoughts where they can to try to give some more choices for consumers. >> host: lynn stanton.
>> guest: yeah. you spoke of both the costs just now of the programming going up and also earlier you spoke about consumers wanting choice. do you think one or the other is a greater driver of cord cutting to the extent that it's a really phenomenon, or -- >> guest: choice for sure. we all like to choose, right? it pays to shop. even likes the idea that -- everyone likes the idea that i want to pay for what i want to consume. i don't like being told what i have to consume. and, certainly, in the video marketplace today that's the problem because, again, the bundle of programming. the cost is certainly an issue. i know story now is about a year or so ago, but i saw a story in one of the trade publications that said in the not too distant future, the cost of cable service, regular cable or satellite service could approach $200 a month for, essentially, what is today the basic level of services. not all the added services.
so we're reaching a point where cost is increasing exponentially, it seems, as well as lack of choice and choice decreasing. so i think choice is driving more of the over-the-top viewing today, but cost certainly has an impact. when i look at my children, 23 and 19, these are kids that the only reason they have cable is, basically, because of me, you know? because of dad being willing to provide it to 'em. and i'm happy to do that. but as they make choices and as their friends and colleagues and peers make choices, they're going to be looking at what can i get for my broadband with experience. that's really what i want because i've got ultimate choice there. i can choose where to go with my online connection to watch what i want to watch on a device i want to watch when i want to watch it. and that's a big driver for, i think, the younger generation and something we have to take into account as we in the cable business look at our future as a broadband business.
>> host: matt polka, very quickly want to ask you about the new fcc members that may be coming in in the fall if tom wheeler and michael o'reilly get approved by the senate. >> guest: yes. i think they're excellent choices, for sure. mr. wheeler, because of his background in industry, i think that will be a help to him. i do not think that as many have said that somehow that's going to provide, you know, one i have a leg up over another. i found that all of the commissioners as well as the staff that we've worked with to be very fair and objective and to look at issues there all sides. and i certainly expect that with mr. wheeler. with mr. o'reilly as well, someone who has worked in both the house and the senate on telecom issues, been involved in virtually every telecom issue that's been recent for sure and has spent a lot of time, a lot of background and history and experience. so i think they're great choices. we're looking forward to the opportunity to work with a full commission. at the same time, truly appreciate what acting
chairwoman clyburn has done, coming in at a difficult time to keep a commission moving forward when there is this transition. she and her team have done a tremendous job. they've been very, very sensitive in rule makings toward the unique concerns of our members which, again, is something that we particularly advocate in virtually every rulemaking about the unique impact of regulations on smaller providers because we have fewer customers per mile and consequently, any regulation has a higher cost per customer. so, and as you know, these regulations are unfunded. we have to, basically, pay for whatever technology requirement there may be, etc. but they and she have been very, very sensitive to our members, and i expect to see that will be something that will continue. >> host: and the final question comes from lynn stanton. >> broadcasters have been engaging with the online distributer of broadcast programming in a number of courts. do you view, do your members
view air owe as a competitor or a possible business model to get away from negotiations yourself? >> guest: sure. well, initially i would say i think we would say it was a potential threat and maybe still is. but, you know, as retransmission consent prices continue to increase year after year, round after round, our members look at a company like aereo as a company that's breaking the mold, that's really trying to provide a new technology to give consumers, again, something that they want at a reduced price or at a competitive price which doesn't exist today. the current model basically says the broadcaster calls the tune, calls the shots, sets the price. take it or leave it, no choice. we as a cable operator have no choice to try to get a lower cost signal from out of the market or anywhere else. aereo comes in as a disruptive technology, and i love that term, because it's disrupting the current model which i think
is a great thing that technology is doing and, frankly, provides consumers potentially a new way to receive signals, imagine that, over the air. free over the air as intended and still available today. so we look at companies like aereo as well as other providers as potential providers, as potential companies we could maybe join venture with to provide our customers more choices based on the broadband services we provide. >> host: and that's matt polka who is president and ceo of the american cable association and lynn stanton of telecommunications reports. this has been "the communicators" on c-span. >> c-span, created by america's cable companies in 1979, brought to you as a public service by your television provider. >> coming up next, china's foreign minister, wang yi, talks about north korea, syria, cybersecurity and other
bilateral issues impacting u.s./china relations. then, a joint economic committee hearing on the economic consequences of not raising the debt ceiling. and later, the senate returns at 2 p.m. eastern for general speeches until 4. no roll call votes are expected. >> we're at prospect garden here in princeton, new jersey. this is a garden ellen wilson originally designed when she was a resident of prospect house. when she's at the white house, she brings the white house gardener back to this garden at prospect house, and she says to the white house gardener, let's recreate the rose section of this garden at the white house. and, of course, this becomes the famous rose guarden at the white house. ellen tragically doesn't live to see the rose garden completed, however. she's dying in the summer of 1914. she's wheeled out into the space outside, you know, in her
wheelchair, and she watches as the gardener works, but she doesn't live to see the completion of this vision she had for roses blooming at the white house. >> meet the first and second wife of president wood wilson tonight live at 9 eastern on c-span and c-span3, also on c-span radio and c-span.org. >> chinese foreign affairs minister wang yi recently spoke at the brookings institution about the state of relations between the u.s. and china. he commented on several issues including north korea's nuclear program, syria, afghanistan, taiwan and cybersecurity. the chinese foreign minister was in washington last week for bilateral meetings with secretary of state john kerry. former deputy secretary of state and brookings institution president strobe talbott begins the event. it's about an hour and ten minutes. >> good evening, everybody.
thanks for the help. it's my great pleasure to welcome all of you here this evening for what is going to be a rare opportunity to hear from the foreign minister of the people's republic of china, wang yi. as i look around this room, i see many friends and supporters of the institution, friends of china, friends from china, and i'm grateful to all of you for making the effort to be here this evening. we also have quite a number of representatives of the diplomatic corps. i want to particularly thank ambassador sway for the help and cooperation and extended hospitality, if i can put it that way, in helping putting this evening's program together. i think everybody knows a lot about our guest of honor's distinguished career. he came into his present post in
march after spending virtually all of his career, including a stint that he spent as a visiting scholar at georgetown university as a special bist on asia -- specialist on asia and particularly a specialist on japan. as vice minister for the region -- that is, asia -- he played a vital role in getting the diplomacy involved with the north korean nuclear program on to a constructive track. and as china's ambassador to japan, he was there at a particularly sensitive time in that bilateral relationship, as i think everybody knows. and by the end of his tenure as chinese ambassador to japan, it can be said, i think, that the prc/japanese relationship was on a steadier course than it had been on when he arrived. he also served as director of
the tie won a-- taiwan affairs office in the state council. he has graced us here at brookings with his presence before, but this is his first time, of course, in his capacity as foreign minister. and we're all very grateful to have an opportunity to hear his views on a new model for great power relations between the united states and china. that is the topic that occupied a good deal of time between our prime ministers when they met at sunny lands, and it's a topic that they returned to when they met at the g20 in st. petersburg. it's also an issue that is very much on the agenda here at brookings of the john l. thornton china center and our brookings thing wa center in beijing. so both in washington and in beijing we at brookings are doing as much as we can to
improve and identify areas of cooperation between the united states and china. and it's in that spirit that we welcome the foreign minister back to brookings tonight. the minister is going to offer some opening remarks. there are earphones on your tables. the simultaneous english interpretation can be found on channel 2. and when he finishes his remarks, there will be a conversation moderated by my colleague, jeff bader, who was the founding director of the thornton china center here at brookings, also a former deputy assistant secretary of state for east asia and pacific affairs in the state department and president obama's senior director for asia at the national security council. so, mr. minister, once again, welcome. and the podium is yours. [applause]
>> translator: ladies and gentlemen -- >> ladies and gentlemen, dear friends, it's my pleasure to be here to meet old friends and make new ones. when i was preparing my speech in beijing, my colleague encourage me to speak english -- [laughter] and i agreed. but finally, i found i have no time to practice my english. so i will decide to speak my own
language, chinese. because, you know, georgetown give me, only gave me a half a year. [laughter] maybe next time i can do it. [speaking chinese] >> translator: it gives me great pleasure to be back at the brookings institution. and share with you my thoughts on the way toward a new model of major country relations between china and united states, and i will be happy to take your questions. before i start, i wish to thank the brookings institution and the president, strobe talbott, for graciously hosting in this event.
[speaking chinese] >> translator: over the past few years, i was here several times to meet your experts and scholars. as the president said just now, at that time i wore the hat of the minister of the taiwan affairs office. i was in charge of affairs related to taiwan and the reunification of china, so the topics focused on the question of taiwan. i remember that at that time many of you wanted to ask me issues on foreign policy, so my reply was always, sorry, they are beyond my portfolio. but today you can rest assured that i will not say sorry again, no matter what foreign policy questions you raise. [speaking chinese] >> translator: this is a year of great significance in china/u.s. relations. last june the two presidents
held a successful and historic meeting in annenberg, california. the most important outcome that china and the united states agreed to build a new model of major country relations. agreement is strategic, constructive and path-breaking in nature. it has charted the future course for our relations. [speaking chinese] >> translator: it will surely produce a positive and profound impact on the asia pacific and, indeed, the evolution of the international landscape. with the agreement come two questions. first, what if this new model of -- what is this new model of relations about? and second, how to make it a
reality. [speaking chinese] >> translator: president xi jinping has laid out a clear vision for the few model. in his -- for the new model. in his words, the essential features for this model include, number one, no conflict or confrontation, number two, mutual respect, and number three, win/win cooperation. this answers the first question. no conflict or confrontation is the prerequisite for the new model of major country relations between us. according to some study of history, there have been about 15 cases of rise of emerging powers. in 11 cases, confrontation and war broke out between the emerging and the established powers. however, we now live in a different world. [speaking chinese] >> translator: china and the united states and, in fact, all
countries in the world are are part of a community of shared interests. countries are increasingly interconnected. neither of us will benefit from con to frontation -- confrontation. war will get us nowhere. no conflict or confrontation means we need to follow the trend of globalization, reverse negro nexts of china/u.s. relations, address strategic distrust and build confidence in a future of china/u.s. relations. [speaking chinese] >> translator: mutual respect is a basic principle for this few model -- new model. we live in a world of rich diversity. for china and the united states, two major countries different in social system, history and culture yet connected by intertwined interests, mutual respect is all the more important. only by respecting each other's
system and the path chosen by their people as well as each other's core interests and concerns can we seek common ground while reserving differences. and on that basis, expand common ground and resolve differences so that china and the united states will be able to live together in harmony. win/win cooperation is the only way to turn the vision into a reality. there is an enormous need and vast potential for bilateral cooperation in all fields. besides, the world certainly needs china and the united states, two major countries with great influence to work together and to contribute on issues ranging from counterterrorism to cybersecurity, from nuclear non-proliferation to climate change and from peace in the middle east to africa's development. [speaking chinese] >> translator: progress is only
probable when both countries are committed to growing cooperation. moreover, such win/win outcomes should not just be men push to china -- beneficial to china and the united states, it should also be beneficial to all countries in the world. now let me turn to the second question which is more important, that is, how can we make the new model of relations a reality? indeed, this will be a systemic project that requires ideas and efforts of people from all walks of life in both countries. it also needs sustained political resolve, persistent commitment and tireless efforts of both sides. i know that many american friends say to me that this new model is great, but it must not be just a slogan. i fully agree with them.
this should not stay at the level of a concept only. it should become a reality through concrete action. american friends are very pragmatic. so are the chinese. this is why the moment i arrived in the united states in that first meeting with the press, i said publicly that i am here in the time to send a clear message; that is, our two countries should work together. let's use concrete action to advance this new model. [speaking chinese] >> translator: let's carry out specific cooperation to reflect or to enrich this new model. [speaking chinese] in the in fact, there are so many -- >> translator: in fact, there are so many areas that we can cooperate. ..
strong and stable china. this is right. as long as china and the united states can both stick to this strategic direction in their action, we will certainly build up strategic trust and strengthen the foundation for this new model of relationship. second, we need to promote practical cooperation to put this new model of relationship of more shared interest. over more than four decades since the establishment of our diplomatic relations, fast-growing economic growing in
trade has brought huge developments to each country. they have served as a stabilizer that enables china-u.s. relations to forge ahead despite wins and ways. today, trade is almost $500 billion, initial investment of more than 80 billion. according to the latest report from china-u.s. exchange foundation, in 10 years time, by 2022, our two countries will become each other's top trading partner. by then, u.s. exports to china will exceed $450 billion u.s., which means over 2.5 million jobs created in this country. the number of chinese tourists visiting the united states will grow to 10 million, from 1.5 million in 2012.
these are conclusions that the joint study by chinese and american scholars, not from the chinese side only. i believe they will get a strong impetus to the historic process of this new model of relationship. recently, china has agreed to carry out substantive negotiations with the united states on the bilateral investment treaty on the basis of pre-establishment national treatment. this shows the great sincerity and result for the chinese government. it should deepen china and u.s. economic trade cooperation. this will open up new prospects for bilateral business ties. there is also need for the two countries to tap cooperation
potential in such fields as energy, environmental protection, urbanization, biotech and infrastructure. china takes u.s. concerns on market access and ip our protection seriously, and is prepared to take measures to address them. at the same time china hopes the united states will ease its control over high-tech export to china and get fair treatment to chinese companies investing in this country. third, we need to enhance people to people and cultural exchange, and put this new model of relationship on stronger public support. state to state relations at the end of the day are about people to people relations. in today's world, public opinion has increasingly become a significant factor shaping or even defining bilateral relationships. friendship between peoples leads to nations and vice versa. therefore, the success of our
endeavor to build a new model of major country relationships hinges greatly upon the understanding, involvement, and support of the majority of our two peoples. with this in mind, we need to encourage and expand interactions in various areas, and between various groups including families, communities, schools, and ngos at the grassroots level. so that our people will understand each other better and deepen friendship. we need to strengthen cultural exchange, and as the two sides meet and interact, they will gradually achieve mutual tolerance and inclusiveness. we also need to lead public opinion in respective countries so that the voice advocating china-u.s. friendship and cooperation will become the mainstream and public support for our relations will grow stronger.
fourth, we need to strengthen cooperation in international and regional hotspots, and global issues, and put this new model of relationships on greater common responsibility. the united states is the biggest developed country, while china is the biggest developing country in the world. the two countries share ever-growing converging interests, and children increasingly greater common responsibilities on such major to issues as maintaining regional and international stability, and promoting sustainable development of mankind. joint contribution to world peace and stability and progress of civilization is what the international community expects of our two countries. it should, therefore, also be inherent feature of this new model of relationship. china is prepared to engage in all dimensional cooperation with
the united states at regional and global levels. what we seek is not the so called g2, but each complementing the other for its respective advantages. china is ready to shoulder international responsibilities commensurate with its national strengths and realities. and, together with the united states, offer more quality public goods for the international community. china and the united states can cooperate on any issues. we may not always see eye to eye, not that should not prevent us from talking to each other. as long as we truly act in a shared interest of the two countries, and for the benefit of regional and global stability and prosperity, our positions will get closer and our strategic trust will surely get enhanced. on cybersecurity, a peaceful,
secure, open and cooperative cyberspace is in the interest of all countries in the world, including china and the united states. china firmly opposes any behavior that disrupts order in cyberspace, and endanger cybersecurity. as a matter of fact, china is a victim of hacking and other cyber attacks. to safeguard cybersecurity, we need cooperation instead of finger-pointing. the first meeting of china-u.s. cyber working group made a good beginning. we need to keep up constructive dialogue and to promote the formulation of the international cyber rule to help ensure cybersecurity. on climate change, our two sides have set up a climate change working group within the framework. as china is committed to
deepening its economic -- addressing climate change meets its own needs of sustainable development in the first place. we are ready to enhance cooperation with the united states on environmental protection, energy conservation, and emissions reduction. and alternative and renewable energy take part in love in climate change negotiations in a responsible manner, and jointly contribute to sustainable development. on syria, china is firmly opposed to the use of chemical weapons by any country or individual. we believe that political settlement is the only right way out in the fusing the syrian crisis. -- in defusing the syrian crisis. with support of an early launch just destroy syria's chemical weapons. at the same time a geneva 2
should be held us in as possible, thus bringing the syrian issue back to political settlement. >> on palestine and israel, china has promoted peace talks in a responsible manner and stands ready to work closer with the united states to push the two sides to make concerted efforts on the iranian nuclear issue, china and the united states have maintained close communication both bilaterally and through c-5 plus one. there has emerged positive sector in the iranian nuclear dialogue. we should seize the opportunities to work for early substantive progress in the dialogue. this, we need to prioritize our cooperation on asia-pacific affairs, and start the building of this new model of relationship from the asia-pacific region. the asia-pacific is the world's fastest-growing and most promising region.
it is also home to most of the hotspot issues. china and the united states have more converging interests and frequent interactions in the asia-pacific than anywhere else. therefore, it is both possible and imperative that our two countries start the building of this new model of relationship from asia-pacific. just think, if china and the united states can avoid conflict and confrontation in the asia-pacific. there is no reason we cannot coexist in peace and other parts of the world. if china and the united states can respect each other and conduct cooperation on asia-pacific affairs, there is no reason we cannot work together on other issues. at how to turn the asia-pacific into the testing ground for our new model of relationship, i think the following two points are extremely important. first, time and the united states should genuinely respect and accommodate each other's
interests and concerns in the asia-pacific. china respects the traditional influence and the immediate interests of the united states in the asia-pacific. we have never thought about pushing the u.s. out of the region. rather, we help the united states will play a positive and constructive role in safeguarding peace, stability, and the development in the asia-pacific. as president xi jinping aptly point out, the vast pacific ocean is broad enough to accommodate our two big countries. the asia-pacific has been the home and root of the chinese nation for thousands of years. therefore, we hope that the united states will also respected china's interests and concerns. the taiwan question concerns china's sovereignty and integrity. it bears on the national sentiments of its 1.3 billion chinese people. right now, relations enjoy the
momentum of peaceful department. it is the common desire of people on both sides of the straits to have peace rather than bore, cooperation rather than confrontation, and exchange is rather than estrangement. gradual integration of the two sides through two-way interactions and cooperation will lead to ultimate reunification. this is a historical trend that no one can stop. for many years the taiwan question has been a liability in china-u.s. relations that undermines mutual trust and disrupts cooperation. however, if the united states can go along with the prevailing trend of peaceful development, and genuinely appreciate and respect china's efforts to oppose separation and achieve peaceful reunification, the issue was a liability. the negative factors in our relationship will be turned into
an asset and a positive factor, providing guarantee for the long-term steady growth of chinese relations, and opening prospects for all around cooperation. second, china and the united states should work together to produce substantive results in our cooperation over hotspot issues in the asia-pacific. if we can succeed in doing so, we won't be able to making the experience for strategic cooperation on the global scale. and demonstrate to the rest of the world our ability and resolve to jointly safeguard regional peace and stability. a case in point is the korean nuclear issue. china and the united states have built much consensus on the issue. it is our common responsibility to -- on northeast asia. yesterday was the eighth
anniversary of the september 19 joint statement. before yesterday, china hosted an international workshop in beijing to mark the 10th anniversary of the six-party talks. china believes that dialogue and the negotiations is the right path toward a nuclear weapons free peninsula, and the six-party talks have turned out to be an effective mechanism for dialogue. the parties concerned should we commit themselves as soon as possible to the joint statement, and work together to create the necessary conditions for the restart of the six-party talks. the u.s. position on this is of vital importance. china is ready to keep in touch with the u.s. side. we are also ready to cooperate with the united states on other regional hotspot issues, such as afghanistan. 10 days ago, the second china-u.s. collaborative
training course through the afghans diplomats was launched here in d.c. i sent a congratulatory message to the program. afghanistan is now in a phase of crucial transition. what other country can proceed smoothly with reconciliation and reconstruction concerns the common interests of china, the united states, and other countries in the region. china-u.s. cooperation on afghanistan has just started. there is great potential and room for enhanced cooperation if our two countries can work with each other and to bring out our respective strengths. we can turn the issue into a new highlight in our bilateral cooperation. ladies and gentlemen, not long ago president xi and president obama met again on the margins of the g20 summit in st. petersburg. the two leaders reiterated their commitment to this new model of major country relationship.
the building of such a relationship requires not only political guidance from our leaders but also, and more importantly, the involvement and support of people across this aside in both countries, including the continuous intellectual input from academia. the brookings institution is one of the most influential think tanks in the united states. according to my american friends, to find out what the us government will do next, one only has to look at what the brookings institution is working on. the brookings institution has always had a keen interest in u.s. relations with china, but its purpose has set up the china center bringing together many renowned expert on china-u.s. relations, a doing a great deal of work in promoting bilateral ties. i hope and i'm confident that as china and the united states build this new model, the brookings institution will continue to put a positive role and make major contributions.
as the minister said, there was concern at the outset that this might be just a slogan. as we heard from the minister tonight are some excellent ideas about how to make this much more than a slogan. it's also important that this name of the relationship not simply be an umbrella for all of the old issues and all of the old disputes. we need to infuse this new model with, if you will, the spirit of sunny land as a new determination to solve problems rather than merely repeat old positions and old talking
points. and i think minister wang has blazed the path and show us how the way to do that. so i would like to take advantage of my position as moderator today and ask the first question, if i could. and we thank you for being willing to take some questions that will doubtless be difficult and probably unpleasant. [laughter] my question is, as strobe talbott indicated, you are
almost certainly the leading expert in the chinese government the subject of japan. do you want me to complete of the question? although i must say that the gentleman who followed you as ambassador to japan also did a terrific job. that's this way. [laughter] for many of us come it is been very upsetting to see the worlds second and third largest economies have the relationships, relationship become tense and deteriorate over what too many of us on the outside appears to be for uninhabited and uninhabitable rocks. i know it looks different in china and japan, but that is the truth.
as our foreign minister and as china's leading japan expert, do you have confidence and ideas about how do we normalize relations between -- we normalize relations between china and japan in the coming months? will it require some sort of agreement about the islands, these uninhabitable rocks, or will the two countries take a broader come higher gear and look at the many important common interests that they have and find a way to rebuild a relationship?
[speaking chinese] >> translator: to answer this question i want to first be very clear that it is a china's consistent and clear position that the islands are an integral part of the chinese territory, and disposition of ours has not changed, nor should it change. china has a firm determination to uphold its sovereignty and territorial integrity. [speaking chinese]
>> translator: 41 years ago when china and japan broke their years of estrangement and achieved the normalization of diplomatic relations, leaders of the two countries reached a very important agreement, or you can call it an understanding, that is, we have different positions on this issue and we can set aside our differences and take care of it or resolve it at some later date. [speaking chinese] >> translator: this understanding has been incorporated into many diplomatic documents, and the naming of reaching such understanding is still fresh on
the minds of both japanese and chinese diplomats who are personally involved in that part of history. [speaking chinese] >> translator: that has enabled the continuous of peace and stability on the traffic islands and in their adjacent borders including an east china sea for so many years. [speaking chinese]
>> translator: however, to our regret, last you the japanese side decided to press its claim and control over the chinese territory, the diaoyu islands, by nationalizing these islands. and that move broke what existed over these islands in the past 40 years. and under such circumstances, one can easily imagine that the chinese side must and shortly need to make a response to it. [speaking chinese] >> translator: so the situation may seem very
complicated, but the whole story is actually a very simple and clear one. [speaking chinese] >> translator: then how can circumstances continued to move an undesirable direction? i want to tell you that it is because the japanese side denied the existence of such an agreement or understanding which was reached 40 years ago, and certainly this is unacceptable to the chinese side. because as i said before, this is a historical fact.
[speaking chinese] >> translator: inspite of this, we are still ready to sit down and have dialogue with the japanese side to work jointly out of the way to control the current situation. but the japanese have said to us that there is no such dispute between china and japan, and that has made it impossible for dialogue to happen.
two countries have very close people to people exchange and business ties. we are still ready to sit down and have dialogue with the japanese side, but first the japanese side needs to recognize there is such a dispute. the whole world knows there's a dispute here. i believe there will be a day when the japanese come back to this table and dialogue. [speaking chinese] >> translator: so how things will go next is not just up to the chinese side, but also up to the japanese side, too. but i believe eventually there will come a day when the two sides come together to have
series dialogue and discussion to work out a solution. spent thank you, mr. administrator, for that comprehensive answer. i would like to take two questions now, and we will see after these two questions are posed and entered if there's any more time, the minister does have a tight schedule and is heading for new york. if we can get a couple of questions. let's try secretary cohen and jonathan pollack. secretary cohen. >> thank you very much for a very comprehensive statement. about the foreign policy of china. i attended a conference recently in singapore and during the course of the conference i met with a number of your counterparts, called the asean country. issue was raised during that
time. an issue was raised during that time about the so-called nine cache lines that are drawn in the south china sea. and you mentioned earlier of course that we want to find, respect each other and accommodate these others interested in the asia-pacific region. and the issue that was raised is whether not the so-called nine dash line which had appeared in many maps prior to last june now had been just rebooted, the new maps show a solid line. and i was wondering is there any significance between the nine dash line which indicates some dispute, or some question about sovereignty and a solid on which we seem to be something quite different? >> and, jonathan?
years. north korea now, of course, insists that it is a nuclear weapons state. it continues to expand its nuclear weapons potential. and states unequivocally that it has no intention of giving up its nuclear weapons capacities. quite the contrary, it wants to enlarge them. what reasons should we have were optimism in this case? you have mentioned, of course the six-party talks, the anniversary of the september 2005 agreement in which china, of course, played a vital role. what reasons would we have were optimism about what could result from any kind of resumed talks? and how do you see the united states and china cooperating as a test case of major new model of power relations? thank you.
[speaking chinese] >> translator: well, what i can say to you is that there's been no change in china's position with respect to the nine dash line. i don't think this line should become a solid one, but if you did see such a map showing this, i would have to maybe look into it and check it. but this line, nine dash line, was drawn by the roz government back in 1948, and this is been upheld by the successes of chinese government. -- roz government. i don't think there's been any change in our position on this
issue. [speaking chinese] >> translator: second, about the korean nuclear issue, there has been much discussion about this issue, and i was personally involved in the six-party talks, acting as the head of the chinese delegation, cheering three rounds of the talks. but to our deep regret that the six-party talks have been at a standstill for quite sometime which is something that none of us wants to see. [speaking chinese]
>> translator: we are also aware of these statements that mr. pollack just referred to, which were made by the other side. [speaking chinese] >> translator: but i would also like to tell you that there has been some new developments recently. for example, the dprk has said that it is not, it does not
object to the september 19 joint statement, and it is actually ready to come back to the statement, and also the february 29 the deal it had with the united states. [speaking chinese] >> translator: the first article set out in september 19 joint statement is that dprk gives of all nuclear weapons and nuclear programs. [speaking chinese] >> translator: at the same time, the joint statement also sets out the respective responsibilities and obligations for china, the united states, and other parties concerned. [speaking chinese]
>> translator: another change on the part of the dprk recently, the dprk has said it is ready to reiterate that it would be committed to the denuclearization because they said this is a legacy of their past leaders. [speaking chinese] >> translator: to achieve the denuclearization of the peninsula is our common goal. now that the dprk side has
reiterated that it will come back to the denuclearization goal, it's time for the six parties to sit down and have series dialogue, to work out how we can achieve this goal. [speaking chinese] >> translator: one of the important items on my agenda of a visit to the united states is to discuss with the u.s. side how we can resume the six-party process, to set a reasonable threshold for the consumption of the talks, threshold that is acceptable to all the parties. who. >> translator: our position is
a clear one. we are firm in our commitment to the denuclearization of the twin peninsula. we believe this is in china's own interest and we believe it is also in the dprk's interests and the interests of all other parties, including the united states. [speaking chinese] >> translator: meanwhile, we believe this issue needs to be peacefully resolved through dialogue and negotiation. [speaking chinese]
>> translator: and the purpose of such dialogue and negotiation is to address the concerns of all the parties involved, including the legitimate concerns of the dprk. [speaking chinese] >> translator: i believe our two countries, china and the united states, are in agreement with respect to the goal of denuclearization, and resolving this issue through dialogue. [speaking chinese] >> translator: while i'm confident that as we all get ready and be serious in moving
forward our dialogue, we will be able to achieve our common goal of the denuclearization of the korean peninsula. it is also our common responsibility. [speaking chinese] i will be open to more questions. >> we will take one last question. the doctor had his hand up first. fire way. >> thank you, mr. minister, for your very informative formal comments and responses to questions. i was really struck in your speech that you characterized future he was cooperation on afghanistan as quote, it could become a new highlight of u.s.-china relations. our cooperation on afghanistan today has been very limited, and
>> translator: well, on afghanistan, china and the united states have very common important to speak we both want to see -- we both want to see a stable afghanistan after the united states troops withdraw from the country and we both want to see afghanistan succeed in its recent process, and neither of our two countries wants to see a resurgence of terrorists in that country.
[speaking chinese] >> translator: now parties are not so optimistic about the prospects of the country posted 2014. and i believe that has made it all the more important for china, the united states, and other countries who have close links to that country to advance cooperation. [speaking chinese] >> translator: well, concrete cooperation can cause a wide range of areas. just to cite one example, that
is the collaborative training program of our two countries. it is not a very big program, but it's a very positive one. [speaking chinese] >> translator: next year, china will play host to the issue of afghanistan international conference, the istanbul process. we certainly hope the united states will participate in it where we can have more detailed discussion. [speaking chinese] >> translator: with regard to the reconstruction process posted 2014 on the economic front, i believe both china and the united states can make contributions and china can make its own contribution in helping
the economic reconstruction. [speaking chinese] >> translator: and the domestic reconciliation process as a tough one. it involves complex ethnic and religious factors. but i believe on this, china and the united states can play a role, too, and we can also work together with like pakistan and other neighbors of afghanistan in this regard. [speaking chinese]
>> translator: and now all people are talking about sure yet, but probably in the later half of next year the only, the most important topic we talk about is afghanistan. and i believe it's important for us to see far into the future. the brookings institution is a very forward-looking academic institution, and i believe that it is important for us to consider what afghanistan will be like post-2014 and how china and the united states and other countries can work together on this year thank you. spent thank you, mr. minister, are providing us with a very, very -- a very productive and enjoyable evening. those of us who have worked with minister wang a few years know
him as a gentleman who is pragmatic, it was fair-minded, experienced. and i had the pleasure of meeting with a chinese gentleman who was not in the government the other day who said what he really appreciates about mr. wang and his appointment is he is tough. i think we did all of those traits displayed tonight, although the toughness is described -- is disguised by a velvet glove that he wears and projects. i would like everyone to show our appreciation for minister wang's address and his willingness to deal with difficult questions tonight. show your appreciation by giving them a round of applause. [applause]
>> we wanted america to be better. we wanted america to live up to the declaration of independence. live up to our greed, make real our democracy, take it and make it real. so when i got arrested the first time, this book is saying that i felt free. i felt liberated. and today, more than ever before, i feel free and liberated. spent that's congressman john lewis from last year's national book festival. he will be our next guest on in depth sunday october 6 and he will take your calls and comments live for three hours. also scheduled november 3, kitty kelley. december 1 christian hoff sommers and in january, mark levin. and booktv's book club continues this month with mark leibovich is his town. read the book and leave your comments on our facebook page and on twitter.
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created by the cable tv industry and funded by a local cable or satellite provider. >> next, a joint economic committee hearing on the debt ceiling. committee member virginia center mark warner called for congressional members to be fired if they don't raise the debt limit. witnesses included moody's analytics chief economist mark zandi. the government's legal authority to borrow more money runs out in mid-october if the debt ceiling is not increased. this hearing is about an hour and 20 minutes. >> [inaudible conversations] >> thank you, everyone. i'd like to call this hearing in order to be.
i'm joined by the chairman of the committee, mr. brady, as was a number of members. i thank you for being here. i would also like to welcome -- made i will wait until they come in, some of our guests. i don't think they are here yet from the -- to they come. we have a number of guests visiting us today from the republic of ireland and northern ireland. there in the united states as part of the austin college irish institutes joined up program. thank you for being here. you are in for a treat, let me tell you. a very important topic today. i'd like to introduce our witnesses. we have for so doctor mark zandi, the chief economist at moody's, and where he directs economic research. dr. zandi was an adviser to the presidential campaign of senator mccain and has provided economic advice to congress for many, many years. secondly, the honorable david malpass is the president of encima global and economic
research and consulting firm based in new york. .. >> he recently served as a member of the debt reduction task force. we've actually had alice rivlin here to testify, so thank you. also dr. daniel mitchell is a senior fellow at the cato institute where he specializes in tax reform policy. he was previously a senior fellow with the heritage foundation and an economist on
the senate finance committee. he also served on the 1988 bush-quayle transition team and was director of tax and budget policy for citizens for a sound economy. you may think it interesting that we have four republican witnesses here when i am chairing the hearing -- [laughter] but i think it goes to show this is a bipartisan issue and something that we have to come together on as a country, and there are differences among our witnesses, as we will soon see. in the summer of 2011, the united states experienced some of the costs of a protracted debt ceiling showdown as congress struggled to raise the debt ceiling. the dow jones industrial average dropped more than 2,000 points, and standard & poor's downgraded the credit rating. consumer confidence also fell sharply. during that debate i heard from nearly 20 ceos of major companies in my state urging congress to set partisan divisions aside and reach an agreement to raise the debt ceiling. the delay in lifting the debt
ceiling and the resulting uncertainty meant that treasury had to pay higher yields than otherwise would have been necessary, costing taxpayers $1.3 billion. after the 2011 debt ceiling showdown, federal reserve chairman ben bernanke told this committee in a very blunt language that it is no way to run a railroad. he's right. we now find ourselves in a similar situation. the federal government effectively reached its borrowing limit on may 19, 2013. the treasury department has taken extraordinary measures since then to postpone default for several months. last month treasury secretary lew informed congress that those extraordinary measures would run out in mid october. in other words, we have about a month left to take action that will allow the u.s. government to pay our bills. wile we are at the same time, of course, facing the continuing resolution issue of a potential government shutdown. we should learn from our experience in 2011 and not
repeat it. we have seen this show before, and it reminds me of like a bad rerun of "three's company." we don't have to have this happen. we can actually get this done. there is broad agreement that a default would cause significant harm to the economy, it would disrupt financial markets, limit access to credit and raise financing costs. it would also trigger a run on money market funds and force the federal government to renege on commitments to individuals, businesses and governments. for consumers, higher credit costs would mean less borrowing for purchases of homes, cars or other durable goods. businesses could face difficulties accessing short-term financing. a default would also require the federal government to suspend payment to creditors, program beneficiaries and others, delays in social security checks, veterans' benefits and other programs would have a direct impact on millions of americans and would negatively affect the economy by depressing consumer spending.
because a default would cause significant harm to the economy, even the mere prospect as we've learned from the past, even the mere prospect of a default can affect the decision making of households and businesses in slow economic growth. as discussed in the report t that i released this morning on the cost of debt ceiling brinksmanship, congress has raised the debt ceiling more than 70 times since 1962 and voted on the debt limit 12 times since 2002. this is part of our responsibility. it's also clear that democrats and republicans need to come together on a long-term budget plan and focus on smart, balanced solutions to reducing our debt. we've had many discussions about this right here many this committee. i'm in the room of senators that wants to go big, that believes we need to take the principles from the debt creation report as well as the rivlin-domenici report and take those and put them into action. but the place to do that is not at the last minute on the debt ceiling issue. the senate and house have each
passed a budget. the president has been reaching out to democrats and republicans about the need to move forward on a budget deal. many of my colleagues, including senator mccain and senator collins, have joined democrats to say we need to go to conference and agree on a budget that will allow us to address our fiscal challenges in a bipartisan way. while we have to do more to move the nation forward toward fiscal responsibility, it is important to note that congress has already taken steps to reduce deficits by at least $2.4 trillion over the next ten years. but the vast majority of the savings to date come from spending cuts. if sequestration continues, the ratio of spending cuts to revenue increases will be 4 to 1 which is not the ratio even suggested by the national commission on fiscal responsibility and reform. the senate-passed budget also called for a roughly even split between additional spending cuts and revenue increases. in addition to addressing the
budget and raising the debt ceiling, there are a number of actions congress should take to make sure that our economy continues to grow. one of them, i will tell you, is passing the immigration bill. $160 billion in debt reduction over ten years, around $700 billion in 20 years. you look at the farm bill, $24 billion reducing the debt over the last farm bill. you can go through a number of things that i think would make a difference to the economy and make things positive for the economy. brinksmanship on the debt ceiling is not one of them. it will move us backwards and not forwards. i thank you, to our witnesses, and look forward to hearing from you. mr. brady. >> vice chairman klobuchar, distinguished witnesses and our guests from the republic of ireland and northern ireland, welcome. on this committee we often jest that minnesota's delegation tends to dominate the joint committee. i just want to give warning as an irishman, i have brought my
reinforcements today. [laughter] vice chairman klobuchar and i agree, the political brinksmanship over raising the debt ceiling is costly to our economy. i just wish president obama felt as we do. his declaration this past weekend, quote: what i haven't been willing to negotiate and i will not negotiate is on the debt ceiling, represents the unflexible brinksmanship that the american people deplore. despite the recent decline in the federal budget deficit, future projections are troubling. add to that an ever-growing national debt, medicare whose main trust fund runs empty in 12 years and social security that had to borrow nearly $150 billion last year from foreign investors and the fed simply to make payments to our seniors. as dr. zandi noted in his testimony, the long-term fiscal outlook remains disconcerting. this bleak outlook hurts middle class families, and the 20 million americans who can't find a full-time job today in the weakest recovery since world war ii. that's why house republicans
have reasonably and prudently passed a bill to take default off the table and invite the president to sit down together today to find a bipartisan solution that puts washington on a responsible fiscal path lu pro-growth -- through pro-growth tax reform, ending wasteful spending and taking steps to extend the lives of medicare and social security. children born today in america owe nearly $50,000 as their share of the national debt. in other words, they owe a lexus to uncle sam. washington doesn't change its spending ways, by the time they reach 13 years old, they'll owe another lexus. and when they graduate from college ready to begin their career, they'll owe yet a third. of course, young people don't buy luxury sedans for uncle sam. instead, they pay the price for in this generation's spending addiction through a sluggish economy with higher taxes and higher interest rates. so if they are able to find a job, they'll have lower wages
and keep less of their paycheck to pursue their american dream. for the first time in our history, we can't be confident that the next generation of americans will be better off than the current one. that's unacceptable. admittedly, the debt ceiling is an imperfect vehicle to control the growth of federal spending. i'd prefer the congress and state legislatures amend the constitution to limit the growth of federal spending and require a balanced budget except during war or emergencies. however, the debt ceiling remains an effective tool for congress and the president to reach bipartisan consensus on measures to limit the growth of federal spending and reform entitlements. both parties -- democrats and republicans -- have used the debt ceiling as a responsible means to shore up america's financial house. the omnibus reconciliation act of 1990 came about through debt ceiling negotiations through
congressional democrats and president bush. and the budget control act of 2011 came about through debt ceiling negotiations between house republicans and president obama. it is irresponsible to give the white house another blank check. instead, it's responsible to limit the growth of federal spending and secure the future of entitlement programs in exchange for raising the debt ceiling. if now isn't the time to tackle washington's spending addiction, when is? perhaps brinksmanship is just another word for long overdue intervention. one offed's witnesses, dr. mitchell, summarized good fiscal policy in a simple golden rule: private output should grow faster than government spending. in other words, main street should grow faster than washington. i agree. some advocates of big government claim that modest savings from the recent sequester are decimating government services and threatening economic growth. the reality is that since the
recession ended, real federal consumption and investment spending has grown faster than real gdp, 6.4% compared with 4.6. the sequester is merely asking this 500-pound federal government to lose 10 pounds. what ails our economy is not too little government, but too much. therefore, i'll soon reintroduce the maximizing america's prosperity or the map act to limit the growth of federal spending through new, innovative spending caps, noninterest spending as a percentage of potential gdp. using noninterest outlays as a numerator in the spending cap forces congress to limit what it can control, program spending, through appropriations bills and changes in entitlement legislation. but not what it can't, interest outlays that are determined by past spending decisions and the fed's monetary policy. using potential gdp as the denominator eliminates the boom
and bust and spending caps tied to gdp, the growth of gdp fluctuates with the business cycle allowing blowouts, spending in boom years and forcing deep cuts during recession. using potential gdp provides a more stable, solid path for federal spending over time. vice chairman klobuchar and i might not agree on what the right level for a spending cap, but we should be able to agree on the right metrics; noninterest spending as a percent of potential gdp is that right metric. i look forward to the testimony of today's witnesses. >> thank you very much, chairman brady. why don't we begin with dr. zandi. >> thank you, vice chair klobuchar and chairman brady, i welcome the opportunity to be here today. i am an employee of the moody's corp., but the views i expression today -- express today are my own. i'd like to make four points in my oral remarks. first, the treasury debt limit must be increased by the last
two weeks of october. by my calculation, the day the limit will be breached is probably october 18th. that's a day when treasury has to make a payment to medicare and medicaid providers. it's, of course, very uncertain because of the timing and size of tax payments, so i don't know that for sure. i think the latest possible date that the limit has to be increased is november 1st. that's when a social security payment has to be made. so in the last two weeks, it's a very important -- it's very important that you raise the debt limit by that point in time. the second point, if you don't raise the debt limit in time, you will be opening an economic pandora's box. it will be devastating to the economy. now, let me first say i wouldn't take any solace in the fact that financial markets aren't going to react up until the day that you need to raise the limit, as
senator klobuchar has said. we've seen this show before, and each time the show ends with you signing on the dotted line just in time. and financial markets fully expect that you will do that this go around. so i don't expect to see much going on in financial markets up until the time that the limit is going to be breached. if you don't do it in the time, confidence will evaporate, consumer confidence will sharply decline, investor confidence, business confidence, businesses will stop hiring, consumers will stop spending. the stock market will fall significantly in value, borrowing costs for businesses and households will rise. the other big hit to the economy, of course, is that the treasury will have to eliminate its cash deficit, only spend what it is receiving in cash. by my calculation, in november that's about $130 billion. you annualize that, that's 9% of
gdp. that comes right out of the economy. we'll be in the middle of a very, very severe recession, and i don't see how we get out of it. there is no monetary policy response in the current context. we're already at a zero interest rate. i just don't see what policy policymakers will do. so point number two is you have to do something by the debt limit, d-day. point number three, to address the debt limit, i would not add to the near-term fiscal austerity. we have a significant amount of austerity this year, you add up the effect of the spending cuts and the tax increases, it's about one and a half percentage points of gdp. that's the most fiscal drag in this economy's had to digest since just after world war ii during the war drawdown. so just for context, the fiscal policy was just neutral with respect to the economy, zero. given that the economy's growing 2% with the drag, we'd be growing 3.5% right now, so
that's quite significant. now, the drag will stay under current law next year and the year after, but it is still quite significant. i would not add to it in your attempts and efforts to address the debt limit. so that's point number three. the final point, point number four, is that it's entirely appropriate and desirable for you to address our long-term fiscal problems. they are quite significant and daunting. under current law, under reasonable economic assumptions we're going to have a big problem a decade out. you move into the second, into the 2020s and 2030s, the deficit will rise sharply, and the debt limit will become unsustainable. so it's very important more you to start focusing on that -- for you to start focusing on that. that may be a bridge too far in the current context because, again, you have to raise the debt limit by the last two weeks of october. so at the very least, i'd be focusing on reform toes to the budget process in terms of adopting things that will create transparency with respect to budgeting longer run, things like adopting generational
accounting, fiscal gap accounting. i'd extend the budget horizon past ten years so that we can start doing some entitlement reform and really see what the impact will be in the longer run. and finally, i would repeal the debt limit. it's very counterproductive, and you can't -- if you can't manage that, there are some reforms to the debt limit that can be implemented to make this much more effective and a lot less destructive. let me finally say i think our economy is on the verge of some very strong growth. the only missing ingredient is a decision, a reasonable decision in a timely way on the budget and the debt limit. if you can do that, we're going to be off and running. thank you. >> very good. thanks for ending on that good note and the opportunities that we have. thank you. mr. malpass. >> thank you very much. el low, vice chairman cloak hard, chairman brady and members
of the committee. thank you for the invitation to testify on the debt limit. i'll try to have some upbeat thoughts as i go along as well. it's vital that you discuss this issue of the debt limit increase and its vital economic and legislative issue. the national debt already exceeds the nation's annual output, and the administration is now requesting that congress increase the debt limit above $17 trillion. as providing -- as part of provide aing this increase, i think there should be an honest national debate on federal spending priorities and an agreement with the president on constructive spending restraint. there's huge economic upside for jobs, investment, the stock market and the dollar if you could lower the federal spending path or rewrite the debt limit to make it more effective. the federal government is spending nearly $3.6 trillion every year and is planning to increase spending rapidly in coming years even with the sequester and the underfunding
of national defense. some of the spending is successful and adds to the nation's well being, but another portion of the spending -- several hundred billion dollars -- is not successful enough to justify the taxes and debt used to pay it. this has created a spending and debt crisis that harms the economy and undermines investment in jobs. the crisis is particularly acute because several categories of federal spending will need to increase over the next two decades as the baby boom ages and requires more government services. given this demographic and interest rate cycle, spending and debt should be at lower than normal levels now in order to prepare for the coming increases. in addition, the maturity of the national debt held by the private sector should be longer an normal. instead, the fed's bond purchases have materially shortened the effective maturity of the national debt, and both spending and debt are at record levels even though the
demographic bulge is just beginning to hit the federal budget. this leaves fiscal policy completely out of sync with long-term economic growth. the debt limit provides a good opportunity to address this crisis. in negotiating the next increase, congress and the administration should take steps to downsize current spending and slow future spending growth. it's also vital to improve the allocation of spending, less successful government programs should be reduced in order to make room for new programs and for more spending on successful programs. in my august 30th "wall street journal" column, i advocated a menu approach in which the various parties suggest numerous methods to reduce spending and then negotiate a compromise. i've advocated replacing the debt limit with legislation to establish continuous spending restraint that strengthens when the debt-to-gdp ratio rises above its ceiling. i was privileged to work for senator bill roth on in this
committee in 1990 when he wanted to create a 50% debt-to-gdp limit. unfortunately, a debt ratio, the debt ratio is now more than double that, and it take many years of -- it will take many years of continuous spending restraint to restore a more pro-growth debt level. in the ideal, there should be a downward glide path for the debt ratio. a new law would set gradually lower debt-to-gdp limits which, if exceeded, would require congress and the administration to reduce their spending commitments or face escalating procedural restraints on spending. i disagree with mark on one point. in making budget decisions, one of the confusing issues is whether austerity is bad for growth. austerity or fiscal consolidation encompasses two separate economic policies, government downsizing on the one hand which causes more growth
and is private sector downsizing on the other hand which causes recessions. many of the reform programs undertaken in europe that have been labeled austerity programs were harmful because they were built on private sector austerity, not government downsizing. the austerity often took the form of higher value-added taxes, wealth taxes and increases in government fees. as the u.s. examines its options, it should aim to reduce ineffective spending. it drains the private sector because it requires new taxes or debt. an open washington discussion of spending restraint -- even a contentious one using a menu of options as i've suggested, would receive a very positive market reaction. so in conclusion, the u.s. is stuck in a new normal of very slow economic growth, high unemployment and falling median incomes. federal spending and debt trends are weighing on growth and investment. the debt limit provides an
opportunity to break out. the administration and congress should create a menu of constructive restraint and agree on a package. movement in this direction would create a very positive economic and market reaction. changes made now -- even if they take effect in several years -- would bring immediate benefits by improving the debt outlook. thank you very much. >> thank you very much. dr. marron. >> hi, thanks. this is a real treat to be here. vice chair klobuchar, chairman brady and members of the committee, thank you for inviting me to discuss the debt limit. it's a particular pleasure for me to appear today before this committee since it gave me my start in public service more than a decade ago. i'd like to make six basic points today. first, congress has to increase the debt limit. a failure to do so will result in severe economic harm. treasury would have to delay billions, then tens of billions, then hundreds of billions of dollars of payments. through no fault of their own, federal employees, contractors,
program beneficiaries and state and local governments would find themselves suddenly short of expected cash, creating a ripple effect through the economy. a prolonged delay would be a powerful anti-stimulus tacked easily push our economy back into recession, as mark said. in addition, there's a risk that we might default on the federal debt. now, i should emphasize that i expect the treasury will do everything in its power to make debt service payments on time if it's pushed to the limits, but there is a risk that it won't succeed. indeed, we have precedent for this. in 1979 treasury accidentally defaulted on a small sliver of debt in the wake of a debt limit showdown. that default was narrow in scope, but financial markets reacted badly and interest rates spiked. if a debt limit impasse forced treasury to default today, the results would be much more severe. interest rates would spike, financial institutions would scramble for cash and savers might desert money market funds. anyone who remembers the financial crisis should shudder at the prospect of reliving such
disruptions. second, treasury doesn't have any super-extraordinary measures hidden away many a desk drawer if the debt can limit isn't raised in time. pundits have suggested the treasury might invoke the 14th amendment, minting extremely large platinum coins or selling gold and other federal assets, but administration officials have said that none of those strategies would actually work. third, debt limit brinksmanship is costly even if congress can raises the limit at the last minute. as we saw in 2011, brinksmanship increases interest rates and federal borrowing costs. the bipartisan policy center estimates that that crisis will cost taxpayers almost $19 billion in exrah interest costs. extra interest costs. brinksmanship reduces confidence and, thus, undermines the economy. in 2011, for example, consumer confidence in the stock market both plummeted while measures of financial risks skyrocketed. finally, brinksmanship weakens
america's global image. the united states is the only major nation whose leaders talk openly about self-inflicted default. at the risk of sounding like vladimir putin, such exceptionalism is not healthy. [laughter] fourth, as in this committee knows well, our economy remains fragile. now is not the time to hit it with unnecessary shocks. fifth, as the cbo confirmed yesterday, the long-run budget outlook remains challenging. deficits have fallen sharply in the past few year, but current budget policies still create an unsustainable trajectory of debt in coming decades. congress should address that problem, but the near-term fiscal priorities are funding the government and increasing the debt limit. finally, congress should rethink the debt limit and, indeed, the entire budget process. borrowing decisions cannot be made in a vacuum separate from oh other fiscal choices. america borrows today because and previous congresses chose to spend more than we take in, sometimes with good reason, sometimes not. if congress is concerned about
debt, it needs to act when it makes those spending and revenue decisions, not months or years later when financial obligations are already in place. when the dust settles on our immediate challenges, congress should re-examine the entire budget process, seeking ways to make it more effective and less susceptible to dangerous after the fact brinksmanship. i've completely failed at being upbeat, so let me say that i think, actually, all of these challenges are soluble with good-spirited working together, and thank you for inviting me to appear today. >> thank you very much. dr. mitchell? >> thank you very much, vase chair klobuchar, chairman brady and other members of the committee. i have five points i want to make, i'm a centrist. i'm between mark's four points and donald's six points. first, it's very important to understand that our chief fiscal problem is excessive federal spending. deaf creates and debts are undesirable, of course, but they're simply ways of financing government spending, and the other ways of financing
government spending -- higher taxes and printing money -- they're also undesirable. in other words, we should look at government spending on things that it's not very efficient at doing. that's sort of the underlying disease, and deficits and debts are symptoms, but so are higher taxes. second, the best way to gauge good fiscal policy as chairman brady indicated is to try to control government spending so it grows slow or than private sector economic output. if you do that, you're shrinking the burden of federal spending as a share of gdp over time, and you get a very positive self-reinforcing cycle in that ratio of government spending as a share of gdp with the numerator shrinking and the denominator is growing. if you don't do that, if you allow government to grow faster over an extended period of time, then the private sector sooner or later -- it might be five years, it might be fifty years -- but sooner or later you're going to wind up like greece because it's a mathematical certainty that if government for a long period of time grows faster than the
private sector, you get in trouble. why? the private sector's your tax base. and if government is always growing faster, no amount of tax increases in the long run are going to solve the problem, and that's assuming that you identify fiscal balance as the problem rather than the overall burden of government spending. third, i want to say something very optimistic. it is possible to make rapid progress with even a modest amount of spending restraint. consider what's happened the past two years. for the paris time in five decades -- the first time in five decades, the government spending in nominal terms has shrunk where government spent less last year than the year before and less that year than it spent before that. and what has happened during that two-year period? well, the burden of government spending has fallen from 24.1 president of gdp to 21.5% of gdp, and for those that focus on red ink, it's worth noting that that resulted in our deficit going from $1.3 trillion to $642 billion.
and, indeed, if we maintain some sort of fiscal discipline going forward, it's amazing how quickly we can make progress. if government grows just 1 a year, we balance the budget in three years. if it grows 2 percent a year, we balance the budget in four years, and if we let government grow 3 percent a year, we balance the budget in seven years. indeed, it's worth noting what happened many canada in the 1990s. they had a five-year period where goth spending grew 1% a year. this was mostly under a liberal party control in canada at the time. in that five-year period, they went from having a 9% of gdp deficit at the start to a small budget surplus at the end. and it's worth noting that, of course, their economy grew faster, not slower, as the burden of government spending fell. my fourth point is that an increase in the debt ceiling is not feeded to avoid default. -- needed to avoid default. it's needed to avoid some of the complications with payments to providers, state and local governments and all those things
donald mentioned. but when you have annual interest payments of $230 billion roughly and annual tax revenues approaching $3 trillion, you don't need to be a mathematical genius to realize that the treasury department should be able to manage that and avoid default even though, as i said, it would be a messy process for other parts of the budget. indeed, i even quote donald in my testimony. but since he's here, let me go ahead and cite two other people, stan colander said, quote: it's worth taking a few steps back from the edge. a default wouldn't be automatic because payments to existing bondholders could be made the priority while payments to others could be delayed for months. the economist magazine said, quote: even with no increase in the ceiling, the treasury can easily service its existing debt. it is free to roll over but tax revenue covers monthly interest payments by large multiples. the only caveat would be if, for some reason, the treasury
department didn't want to pay interest on the debt, and i don't think that's realistic or likely at all. my final point is that a fight on the debt limit might be worthwhile as some sort of good fiscal policy outcome. and let's look at greece as an example of what not to do. there's nothing akin to a debt limit in that country. but imagine there was. and imagine that a group of lawmakers, say 15 years ago, dug in their heels and said, no, we're not going to allow more red ink. that probably would have caused a lot of turmoil at the time, but if the net result was to force greek politicians to restrain the growth of spending over a multiyear period, then it's quite likely that the people of greece would have been spared the economic and fiscal misery that they're suffering right now. let's close wan analogy. yesterday -- with an analogy. yesterday's long-run fiscal outlook from cbo says that a status quo approach guarantees fiscal chaos. in other words, we're in a car. we don't know whether we're going to hit that cliff in five
years, twenty-five years, but if we don't take steps now when it's relatively easy, we will eventually cause a crisis. so i suggest that we should begin to stay away from the clear, perhaps by adopting something near switzerland's debt break to impose annual limits on the growth of government spending. thank you very much. >> thank you very much, dr. mitchell. i wanted to first touch on this concept that if we just let this go, that we're okay. i guess history, for me, means something when you look back at what happened in 2011 costing taxpayers $1.3 billion because of the higher yields that had to be paid, and this is in our report, the fact that we had the dow drop 2,000 points, the fact that we had our credit rating downgraded, and from what i've heard from these credit rating agencies, we can expect this to happen again at great peril to our economy just as you've pointed out, dr. zandi.
we have this possibility of actually gaining ground right now. vis-a-vis the rest of world. and so could you respond to some of the other witnesses here in terms of what they saidsome and i think dr. marron also noted even a small lapse of the debt ceiling in a certain area created some major problems. >> yes. i think the 2011 experience is, obviously, very instructive. i think the difference between the experience we're going to go through over the next few weeks and then was then investors really had no road map, didn't really -- didn't have a good sense of how congress would behave and whether you'd come together at the end and sign on the dotted line. and it came pretty close, and it did create a lot of angst, and markets fell and confidence eroded. it's costing us even to this day in the form of a higher interest rate. but in the current context, i think people and investors are fully anticipating that at the
end of the next few weeks when we reach that day of reckoning when there's no way for the treasury to use extraordinary measures to navigate around the limit that you're going to act. and that's why you're not seeing anything in financial markets -- >> do any of the witnesses think that the president will sign a bill or the senate will pass a bill that either defunds obamacare or delays the funding of obamacare? because that is what's attached to the house cr, one of them, and then to the -- right now to the debt ceiling proposal. >> right. >> and so, you know, that is my concern when we talk about brinksmanship, is that that's what's there right now. and i completely understand using a discussion of the debt ceiling as a way to talk about our debt, and i have been supportive of the efforts of the gang of eight and these other groups and have sported their -- supported their work and would like to move forward and thought that speaker baner and the president weren't that far apart in their negotiation cans at the end of last year which would have meant we would have had a much more long-term approach to
debt reduction than the kind of band-aid we got at the end of the year. i just wanted to turn -- >> madam chair, you asked what could the senate do, and i think the senate could respond to the house with alternative versions of spending restraint. the house is looking at it saying we don't want to spend money on this, so it's incumbent on the senate to come back and say, okay, we disagree with that, but we'd like to see reductions in spend anything this other area so that you get a negotiation process going. the market would respond very favorably to that. if your response was one of reasonable offers of spending reduction. >> well, i think when you look at the cr, there isn't a set number right now on the cr, and i think that negotiations on that number could occur. but the issue is that we're not even there because what we've been told is we can't get this bill unless we defund obama care. and i just wanted to go to one last point here, dr. marron, about the business community. you've worked with the business
community, and i was remembering back in 2011 a coalition of business leaders urged congress to put aside our interests and come together for the good of the country. a great nation, like a great company, has to be relied upon to pay its debts when they become due. and then it went on to discuss the negative effects on business. i personally, as i mentioned, some of our most conservative ceos sent a letter saying i know there may not be an agreement on how to do this, we think this has to be done, but the debt ceiling is not the place to play games in terms of the effect it's going to have on our employees and our businesses. could you address business concerns? >> sure. i mean, so i absolutely agree. the united states federal government has the full capability of paying its bills as it comes due, and we ought to be kind of carry out our obligations to the beneficiaries who are relying on us. we ought to be a good business partner for the businesses that
rely on us to pay for the services they provide, and we ought to pay our debt on time so we get the lowest possible interest rates and don't disrupt financial markets. we have the capability, it's in our own interests, and it is the moral thing to do. for all those reasons, i think we ought to be sure we paid our obligations on time. >> that's very good, i stayed within my five minutes and next, chairman brady. >> thanks. one, thank you all for testifying today. you're well respected, the points are really well made, and we appreciate it, very timely. so let me ask a question. does anyone believe the president and the senate democrats' position that we will pass a debt ceiling limit without any checks or balances on spending? anyone here believe that's going to happen? maybe that's the other, the lipside of this brinksmanship rhetoric. i appreciate the point that this is, the debt ceiling's one of the few remaining opportunities restrained expansion of federal government.
and vice chairman klobuchar said the same in 2011. now it's time to have the vote tied in with getting some progress on the long-term debt to the country. and i think that's where republicans and democrats actually agree going forward. so very briefly, mr. malpass, you made the case that it's economically important to restrain growth. so what are one or who of the most key elements congress ought to be focusing on that restraint, in that area? >> i think it's useful to have both sides offering their vision of how to restrain spending. so, you know, there are ample areas. i've seen senator enzi was in new york on monday and said there were $900 billion of spending restraint that's available to congress. we've seen in the recent ag bill a huge amount of extra spending that's going out in that direction.
is each of these is going to be painful, and so i guess my bottom line is that congress should and is almost required by its responsibility to prioritize spending so that there's a concept that some of it is less vital than others. >> and you're thinking both continuing within discretionary funding, because there are still spending that's less of a priority there and as well as the steps we take to make social security and medicare solvent for future generations? >> yes. in yesterday's cbo numbers, they showed the rapid growth of entitlements in the outyears. so it would be very market-positive if congress began talking about ways to slow the growth in entitlement spending. it would set the u.s. apart from other countries in its ability to adjust to the aging demographics. >> so our government's financial outlook is getting worse, not better as we sit here today? >> yes.
the data -- because of the trend path in spending, the debt is going to mushroom. and so it's vital that steps be taken now to find ways to have an open discussion of ways to slow down that growth in spending. >> thank you. dr. mitchell, you take a controversial position that a short-term default would not be nearly as damaging as the consequences of our long-term financial insolsolvency. i know the house has already passed legislation that takes default off the table, that requires the federal government, treasury to pay the bonds as they come due and full interest. looks like we're getting set to do that again on friday. you know, do you think that's one avenue that helps reassure markets in the short term so that we can actually focus on solving together -- republicans and democrats -- the long-term problem we have? >> well, i don't think that default is on the table at all
for the reasons i mentioned earlier about nearly $3 trillion of revenue coming in and only about $230 billion of annual interest payments. so unless the treasury secretary wanted the u.s. to default -- which i'm sure he doesn't -- it's just not realistic. my argument is that whatever short-term controversy and fiscal mess as donald was talking about because of the payments for other things other than interest payments on the debt, that would be a relatively small price to pay if at the end of the day we made the reforms that avoided the kind of true hi horrific -- truly horrific, catastrophic fiscal problems that you see in european countries that never did have an action-forcing event like a debt limit that enabled them to get control of spending. so are we willing to incur a little bit of headache and hassle and fighting now to avoid a much, much bigger fiscal crisis at some point down the road? and if i knew when that was, i'd be one of these rich wall street guys, but all i know is it's
going to happen if we do nothing. >> so you're saying the most dangerous and risky path is continue the unrestrained spending and ignore the problems with our entitlements. >> yes, if you look at the cbo long-run fiscal outlook, it's very clear that the entitlement programs left unreformed will be an enormous burden on our economy. and even if a couple of trillion dollars of revenue just floated down from heaven, that wouldn't change, in my mind, the argument that we need to make medicaid and medicare and social security more structurally sound with the kinds of reforms that people have been talking about. >> as i yield back, i recall a hearing here two years ago when we asked experts, republicans and democrats, what's the true debt ceiling of america. what is the point where investors lose confidence. and from all parties the answers were relative the same which is -- relatively the same which is we don't know, it's sooner than you think, don't wait to find out. act as soon as you can.
vice chairman? >> thank you very much. representative maloney. >> thank you very much. and i'd like to welcome all the panelists, especially mr. malpass who's from great state of new york and a former candidate for the united states senate. we appreciate all your testimony. this morning president obama urged ceos to call on congress to avoid the debt ceiling showdown and the damage it would do to business and the economy. he described the financial brinksmanship that was taking place, he called it terrifying and it shouldn't be tied to ideological arguments which is what's happening in congress. in a general sense, do you have any reports or maybe you could get it to me in writing if not right there of the damage that it did to our economy in the 70s and the other times that we've just gone up to the brink? how harmful is it, and this uncertainty, certainly, has a terrible impact on businesses. senator klobuchar talked about the letters that came in from
american business urging us to work together and avert it in the past, and we don't seem to have the same type of voices from american business now as we've had in the past. why do you think that is? and that american business isn't weighing in with the letters and the phone calls that we've gotten in the past? maybe they just believe it's not going to happen, your point, mr. zandi? but in a general sense, your response to this. >> very nice to see you, and and i used to live in your district and value that. my sense is markets have examined carefully the actual dynamics of debt payment since the 2011 -- during the 2011 incident. and so what i'm seeing and hearing right now is no real market concern about either a default or a technical default. so my thought would be that this is going to be less of a market reaction throughout the period
because, in a way because we went through the experience in august of 2011. >> dr. stanty? >> i -- zandi? >> i think we've become desensitized. we've gone down this path a number of times. >> same old same old. >> yeah. and each time we had the brinksmanship, there's visit roll, we hit each other over the head. but at the end of the day when it comes down to brass tax, we come to an agreement, and there is 100% certainty in the marketplace right now that that's the movie we're going to see. if we don't, and, in fact, i would argue in a couple three weeks, say we get into the early part of october and no one is fashion aing a narrative or a storyline with respect to how this is going to work out, then the markets will start to react. because they're going to say how's this all going to play out. and a couple, three days before d-day, october 18th or october 21st, the markets are going to react very violently. so it's going to be i'm okay,
and then it's going to be i'm not okay. and you're not going to be able to get that back in the box. >> and then -- >> madam, if i may note in july and august of 2011 the bond market reacted, actually, favorably to the risk of default. meaning the yields fell sharply during that period of time. so from a bond market standpoint, it tends to run into the treasury market. the bigger the risk is of a stalemate in washington. >> now, now, just a point of clarification, very important one, the treasury yields fell. every other yield rose. so borrowing costs to businesses, borrowing costs to consumers, to households because of higher mortgage rates, the spreads widen -- >> the spread as well -- >> chairman brady also talked about tying deficit reduction to any of these negotiations. but tying it together creates another type of up certainty for businesses and investors, and
this uncertainty would jeopardize economic growth. but we do need to reduce the deficit, and senator warper has been so effective -- warper has been so effective of -- warner has been effective in pointing that out. but have we swung the pendulum too far? the cb be o came out with a study last week saying that sequestration was costing 1.7 million jobs in one year and that the severe cuts are hurting the economic growth that then expands economy. and so the whole type of indiscriminate spending, i tell you, i just got out of an election in new york city, i've never seen it so bad. 45% of the population is near poverty line or poverty line. people are afraid of not being able to even stay in their apartments because of the recession, downturn in the economy. the 40 billion now, we're going
to have it on the floor, cuts in the snap program where people don't even have the food they need. so is the cuts getting too close? some people think it should be a one-to-one, but it's now more like a four-to-one of spending cuts to revenue increases. and is this, is this -- how much more deficit reduction is needed to put the nation on a sustainable fiscal path? and how should we balance between spending cuts and revenue increases? have we reached a point where we're overall hurting the economy? and i'd like to to is ask dr. zandi, you know, he's an economist who gets fired if he's wrong. [laughter] if when you work for a think tank, you don't necessarily get fired. but if he's wrong for moody's -- >> yes, they will. i only have to be right like 53% of the time, and they'll leave me alone. i think the fiscal austerity, the spending cuts and tax increases that you speak of in
the near term is overdone. if i were king for the day, i would smooth that in over a long or period of time to allow the private economy todigest that fiscal drag. so we're navigating through it. it's painful. our economy's very lackluster. unemployment's still very high, it's not coming down quickly enough in large part because of the austerity. but nonetheless, i think ideally it would be better to smooth that in over time. clearly, we needed to bring down the deficits, we need to get the deficits down at least to stabilize the debt-to-gdp ratio, but we're doing that awfully quickly and taking a big chance in the process. >> any other comment on it? all right. >> thank you very much, representative. representative duffy. >> thank you, madam vice chair. thank you, panel, for being here today. you know, i didn't necessarily run for congress in 2010 to come
here and raise the debt ceiling. i came here to reform the way we spend, reform the way our government works. but i've got to the tell you, i'm willing to raise the debt ceiling, i'm willing to take that vote and get some trouble back at home as long as we engage in a reform of the way we spend. i'm willing to vote if we reform our entitlement programs. but for the panel or my friends across the aisle to say, listen, we just want a straight debt ceiling increase with no real reform, i think you are going to be hard pressed to find colleagues on my side of the aisle to actually vote for that. so when we talk about brinksmanship, we all have to come to the center, and my good friend, senator klobuchar, might say, well, listen, we're not going to give up on obamacare and whether defunding it or delaying it. but we'll come to the table, and we'll actually look at our spit element system. we'll look at the way we spend. but we have to end gauge --
engage in some form of a dialogue where we can meet in the middle. and i think brinksmanship is one side where the president says, hey, i'll negotiate with syria or the russians, but i won't negotiate with republicans on the debt ceiling. that's brinksman ship. in 990, as you guys recall, democrats held the bush administration hostage over the debt ceiling. same goals, different tools were used, but same goals. just to look back, you guys are well aware of a quote from march 16, 2006, from a famous senator. he had a floor speech where he said increasing america's debt weakens us domestically and inte nationally. leadership means that the buck stops here. instead, is shifting the burden of bad choices onto the backs of our children and grandchildren. america has a debt problem and a failure of leadership. america deserves better. therefore, i intend to oppose
this effort to increase america's debt limit. you guys all know who that, gave that famous speech, right? president barack obama. and so when we talk about brinksmanship, i'm not in favor of that. but i'm also in favor of a group of men and women from both parties and both chambers coming together to find solutions to this problem. and so i guess, mr. zandi and mr. marron -- i'm slaughtering your name there, i apologize -- do you think this is a one-sided solution? are you here testifying today that we should just increase the debt limit without any negotiation on reforming how we're spending? that's not your position, is it? >> well, what i'm here to say is that you need to raise the debt limit. i mean, there's no options. otherwise it's disastrous, and it's counterproductive to your own goals because it's going to result in a recession, bigger deficits and raise the debt.
both democrats and republicans have debated the debt limit since it's been around since 1962 or whenever it was put in place, so it's been used by both sides. but that doesn't make it right, you know? you can only put the gun to your head so many times before someone's going to pull the trigger, and it's to everyone's detriment. maybe this is the best time to say, look, this is just not the way to run a railroad. >> l and maybe to this point, i think the panel's all agreed, there's long-term consequences for the fiscal course we're on. one of the problems is our entitlement system and the be long-term issues that that brings 10 and 15 years down the road. my question is, where is the plan coming from the president what -- that says, listen, i may not like paul ryan, i don't like the house budget, but relate me tell you my plan that's going to bring us on this pathway of
sustainability where we can come together and negotiate. i haven't seen that plan yet. i mean, the budgets that come out, they never balance. they never, ever, ever balance, the president's budget doesn't. i don't know if they're political documents, but at some point if we're going to negotiate outside of the debt limit, we need to be able to have an honest conversation. and be you can't get people to honestly talk about these problems, i don't know how we come to a resolution unless you get a deadline that says we're all going to come to the table, or there's going to be big problems. does anyone agree with that? mr. malpass? >> no, i agree. and i think there's not enough emphasis on the upside. there's been a lot of talk about how, about brinksmanship or the idea of going up to the end. but in reality i think it's going to come up to voters that there ought to be a presentation from members of ideas about how to restrain spending. and involve a national debate
that begins to make progress on this. we've got a gigantic spending problem in the federal government, and it's time today to start down in this path. you know, in this has been going on year after year where you always say, well, next year we're going to deal with some kind of way to restrain spending. i think right now is as good a time. markets are in very healthy condition, so it's a good time to have this debate. >> congressman, if i could add one thing. the president has never proposed a plan that balances, but one thing that concerns me is that he did say the value-added tax was, quote, something that has worked for other countries which does make me worry that he sees europe as a role model to follow when, certainly, the events that we're seeing with the welfare state's collapsing in european countries should be a warping sign to all of us that we can't allow government spending to -- it's already climbed since the end of the clinton years to total government spending in the
to now 37-38% of gdp. and if we allow it to claim to european levels -- 45 -- >> and before i get gaveled down, i would just note that i think you make a good point with regard to some countries that are going through fiscal problems today. fifteen years ago, i bet they do wish they had aimit people held them accountable -- >> and i want to take you up, senator warner's done so much work in this area, but we want to get ouren senate budget and the house budget to conference committee. so if you can join us, that is where we can have this discussion, and and that is why senator mccain and senator collins have joined us in saying let's get them to conference committee. that is the place to have this discussion and not with a few weeks to go on the debt ceiling. so with that, i turn it over to senator warner. >> thank you, vice chairman. you know, i haven't been here that long, but i have been in business a lot longer than i've been in politics, and it is, it's stunning to me that anybody
that would claim economic expertise would say that messing with the full faith and credit of the united states of america is a responsible action. i mean, it's mind-boggling. in -- i'm going to make a couple comments here. there's been no major industrial nation that has ever gone through a significant default and recovered. i mean, argentina did a decade ago. maybe not a major industrial nation, but depending on the estimate thes, 40-60% of net wealth in that country disappeared in a few days. a few weeks. the analogyies back to 2011 when our first absurd actions around here when, yes, perhaps the money moved to the t-bills a bit because we looked only slightly less worse off than europe.
and we still had a few remaining bullets of extraordinary actions on monetary policy that have all been spent now. the fed acted today to extend one more time actions that can only go so long because of our inability to do our basic job. we ought to all get fired if we don't raise this debt limit. and, again, i respect my colleagues and people on the panel who say we need to control spending. we absolutely do. and i've laid out a series of plans with republicans and democrats that make major changes to entitlements, but i find it stunning to me that there are people that think that. simply one side of the balance sheet without looking at historic norms as well. with an aging population and even with the entitlement changes that are needed, any
notion that we're going to be able to drive spending down to 18, 19%gdp with an aging population and increasing medical technology so divorced from reality that it is, you know, it's not a budget that has, i think, again, much merit. i desperately think the challenge here has been about how we find revenues. i think the new year's eve deal was a bad deal and a huge missed opportunity to do the more major economic entitlement transition and changes that need to be made and the relatively marginal amount of revenue that's needed to be made. we took $4.5 trillion out of the regime, because both parties were part of this. tax cuts. nobody's talking about putting 4.5 trillion back in the revenue stream.
simpson-bowles, roughly about 1.5. gang of six, about 1.2. we're talking about putting a third of that back in the revenue stream along with major entitlement changes. that's a negotiating point that would be valid. i would argue, i mean, again, memo to congress going forward, i would simply say. when we set up the so-called budget control act we set up, let's think of the stupidest thing we could do at the default mechanism to make sure we didn't can allow that to happen. it's called sequestration. and i would ask any of my colleagues of either party to come with me to nih or to hampton roads where we have so many of our military installations and see the cancer that is eating at the insides of both the people who are making long-term commitments to public service, our nation's readiness or from a business perspective. the house budget, which over
about a 10 or 11-year plan takes domestic discretionary spending from 16% of spend when you can't count tax expendtures down to about 4%. i've spent my clear investing in businesses -- my career investing in businesses. i would never have invested in a business that spent heads than 5% of its revenues on training and equipping its work force, investing in its plant and equipment. and in a global economy, staying ahead of the competition, which is r r&d. and yet that is our business plan at this moment in time. it is a business than that i would have never gotten accepted, candidly, mitt romney would never have gotten through bain capital. so i urge and accept candidly that a lot of the folks on my side of the aisle have not been willing to go as far as we need to go on entitlements, and let's have that discussion. but anybody who says on any historic basis looking at the
past 75 years of those five or six years when we've had balanced budgets, when those revenues have ended up between 19.5 and 21% that somehow we're going to get back to a historic 18 revenue line that is going to be sustainable with anything approaching what the american people have come to expect is, again, divorced from reality. so i appreciate the chair and the vice chair holding this hearing, but i guess i would have the say -- and, you know, both sides bear plenty of blame. but the notion that the greatest nation in the world with the dislocation in europe, with china slowing down, with india's economy almost grinding to about 4% growth, with countries like turkey and brazil that we saw as growing, with the uncertainty that we see -- and i will acknowledge i have been a bit of a -- [inaudible] i know i've been called on my side, you know, we got through the debt limit, they didn't
crash. we got through the stupid fiscalcliff. but i tell you, i think this time we're playing with fire exponentially greater without any other tools to react. my apologies to the panel that i went past my time -- >> oh, it was more than worth it. thank you, senator warner. it was very good. thank you. >> thank you. >> all right. senator coats. >> well, i appreciate the passion of my colleague, and i know that he spent an extraordinary amount of time and effort trying to pull together bipartisan support for putting together the larger plan which would incorporate a number of factors that could have put us on the path to fiscal health. and i was not the central part of that, but i was a part of it, and i think the chairman was also. and a number of efforts have been made, as you know, over the
past three or four years relative to how we achieve the so-called deal that reassures investors around the world, reassures the financial markets and sends the message that they've finally gotten their act together and that even though this will require a long-term effort to get to where we ultimately want to get, just coming together in support of something of that magnitude -- which would include probably tax reform, a significant comprehensive tax reform -- which would include entitlement, structural entitlement reform puts them on glide path to continued sustainability which it's not on now be which would have incourt corporated -- incorporated both rev knew and incorporate -- revenue and meaningful spending. replacing sequester with something far more efficient in
terms of how we separate the essential functions of the federal government. that we all want and know we need to support. from the, well, this would be nice to do but we don't have the money to do it, and once we get it, maybe we should take it up. why are we ever doing that in the first place? but despite the everetts, whether -- efforts, whether it's the gang of six, the committee of 12, simpson-bowles, dom any chi-rivlin, all the effort, the dinner party group that i've been a part of, they've all come up short. and they have not do -- and what has happened, it's led us to a series of crises. whether it's debt limit crisis, whether it's the funding of next year's government crisis which we're facing here in just a week and a half, it has not removed that cloud of uncertainty that exists over, you know, you talk to ceos, business people whether
they're small, medium and large, essentially kind of frozen in place in terms of hiring, in terms of expanding, in terms of research and development, in terms of looking to the future. now, the discouraging part of all this is despite all these efforts, it appears that there's no real early solution in place. congress has divided on how best to go forward versus revenue, verse is the spending. the public is divided in terms of what we think they want us to do. i think it's fair to say that the current administration is holding to a formula which cannot be accepted by the congress. and so despite this, we've
stumbled through. i think everyone acknowledges that we could have been doing much better. my question is stepping away a bit from the debt limit, anticipating that probably we're going to keep doing these kinds of things for the next three and a half year withs, we're going to have a new president in 2017. based on your knowledge of where we are, what we've done so far -- some of it constructive and helpful -- but likely what we won't do going forward for the next three and a half years, what is that new president going to face when he sits down with his team, his economics team and say, okay, where are we, is and what kind of situation are we in? are we going to have to continue to rely on some outside, precipitating factor like what happened in europe, a greece or a crisis or a spike in interest rates that's going to drive us to some type of compromise
solution? i would just like to get your thoughts on that, and why don't we start with dr. zandi and go down the line, and that's my only question. give the panel a chance to address that question. >> i think if you can, congress and the administration can come reasonably together and pass a budge, fund the government d budget, fund the government, extend the debt ceiling and do nothing else, nothing else, the economy will kick into gear, and in 2017 the next president will be facing an economy that's pretty chose to full employment. pretty close to full employment. i fully agree that we have long-term fiscal problems. entitlement reform is necessary, tax reform is necessary. but the key issue, the only missing ingredient to a much better economy over the next few years to really get things rolling here and get us back to full employment is for you all to come to terms and just sign on the botted line, and we will be off and running. >> prior to -- >> senator coats, we're just
going to give each witness like 30 seconds like dr. zandi took to answer, if that's okay. thank you. >> thank you. some quick points. it would be a missed opportunity right now to pass this opportunity by. i think critical is small steps. if there were simply one program that you knew of in the vast government that there could be bipartisan consensus on that it could be downsized, that would go a long way. that would be a starting point. it's something we're not doing right now. so by the time you get to 017, if -- 2017, if you assume things stay as they are now, that means there won't have been a single program that you can identify that needs to be downsized. that means u.s. growth will be slower. we'll have millions of people unemployed or who haven't found a job because of that inaction going on right now. >> dr. marron? enter so, clearly, we'll miss many opportunities to do larger things. a couple things that will pass, one emergency that's going to
come in the 2016-2017 time period is the disability portion of whose trust fund will likely run out of resources, so the new president in 2017 may face that as a pressing, new, immediate if fiscal challenge. and one thing that will happen is a lot of the uncertainty around the implementation of health reform will presumably be resolved by then. not all, by any stretch, but we will learn a lot in the next few years about how health reform does or doesn't operate which i think will be very important information for thinking about health care going forward. >> i'll say something on optimistic. in the last two years since we've frozen government spending, the deficit has fallen by more than 50%, and the burden of government spending has adopted by a couple of percentage points of gdp. and before the next president comes in, if we simply lower the growth of government, the new president will have a balanced budget and be in a much stronger position to start considering some of the entitlement reforms
to deal with the long run. i think there is light at the end of the tunnel if we can make sure the trend lines are correct in terms of growth of government versus the growth of the productive center of the economy. >> madam chairman, thank you. >> very good, senator coats. if you want to stick around and ask dr. zandi your second question, you can ask it. senator murphy. >> thank you to our witnesses. sorry i'm a little bit late to get here but glad to be here for senator warner's very passionate case, ultimately what our approach has to be to get beyond government and budget setting by manufactured crises. i look at it at a little simpler level, making a distinction between policy and process. when i go to the gas station, that's policy. i've made a decision that i need gas in the tank, and i'm going
to pay for that, and maybe as a consequence i'm not going to go out and get an ice c with my kids that night. the process is when i stick the card in the machine to pay for it. that's not a decision i make, that's just a consequence of decision i made when i filled up the tank of gas. and i guess, you know, as i listen to people prognosticate as to how this thing may play out, that there's some suggestion maybe we will do a continuing resolution and then a couple weeks later potentially abrogate american debt obligations, the hypocrisy is stunning. within weeks we would make a policy decision to spend more than we are taking in and then just a handful of days later, essentially, refuse to pay the bill, the equivalent, i think, of essentially filling up your tank and then driving you off. my question, though, is about what this all means for the flow into the united states of foreign investment. i was in europe, i'm chair of
the european subcommittee on the foreign relations committee. i was there earlier in the year, and if you want to feel good about america, go to europe. today look at the american economy with some degree of envy because they see rates of growth that are better tan what many of those countries are experiencing, they look at demographic trends that are very positive in the united states compared to the aging populations of europe. of they look with some envy upon our energy sector as we're starting to achieve a greater degree of numbering independence. and they scratch their heads because one thing they don't understand is how based upon all of that relatively good news, especially as compared to europe, we haven't figured out the one thing that stands in our way as mr. zandi has said is our ability to get control over these long-term liabilities. ..
if we continue to be trapped in this cycle? >> i think the evidence is it undermines competency, the ability to pay out obligations, and investors are demanding higher interest rates. that's the evidence we've gotten since 2011 event. even a small about, that adds up to a lot of money because we're talking trillions of dollars in debt. so it's incredibly costly and your thing actually saved us
from an even greater cost is that the rest of the world is in worst shape. in their political budget issues are much worse than our own. >> i guess that's the context of my question, it is that given the potential return on investment in other first world ng 20 countries, does that still create to put money into the american economy not withstanding the crisis, or do we still have a chilling effect above and beyond some relative competitive advantage we have against the rest of the world? >> we can't keep going down the rest of this path. if we don't we'll have a problem. >> any other comments? >> i would just say from where i said i think the primary risk of the showdowns is mostly borne by americans. particularly if we had a government shutdown or if payments don't go it. as mark says, obviously is there some aspect of this that weakens the confidence in our system,
it's clearly a significant risk. but really i think most of it is about americans. >> just to wrap up, senator klobuchar, i think, dr. zandi, your comment is spot on. we have maybe not born the full brunt of this because there has been a lot of space landings any other place, but to the extent europe does make a turn or other places too, that hurts us even -- >> actually, evidence of that, there's a couple of economies have gotten it together. canada is a good case in point. australia is another good case in point. they benefited enormously from the capital flows that had come to their country. >> thank you. >> very good. i want to thank our witnesses today. we've had a very good attendance. a tribute to all of you as witnesses as with the importance of this issue but as i was sitting here, not that i wasn't listening to every word of my colleagues but i did look at ipad and i noticed the story
just posted on the star trek and that the trend -- the twin cities economy grew the fastest pace in nearly a decade last year. u.s. commerce department reports tuesday that real gdp, total value grew i 3.9% adding more than 7 billion economic activity. so that's the news that is out to be i think that's what dr. zandi was talking about when you were talk but how we are on this cusp of some real economic expansion. and even think when dr. mitchell, you talked about some of the work that has occurred on bringing down the debt, that is held to at least make people understand that the congress is serious about doing something. that being said i would just end with this. we are on the cusp of opportunity i don't want to go backwards by seeing the economy into a downward spiral. and i would much prefer to do the kind of work we could get in a conference committee or the kind of negotiations that were going on at the end of last year with speaker boehner and the president and others and the work that's been going on with senator warner and a group of us
on the debt reduction then have something, some political positioning going on on either side on this debt ceiling. and that's why last words. do you want to say anything here? >> i appreciate you holding this hearing. it's timely. our panelists, really articulate and it seems to me with the fed continuing to pump this monetary morphine into wall street, now is the time for us to go fiscal act in order because the clock is really taking. this is a perfect opportunity. >> very good. thank you, everyone, and this hearing is adjourned. [inaudible conversations]
>> president obama is expected to speak at the united nations tomorrow, a meeting of the general assembly, an annual visit when the president will be able t to great iran's of president he'll be speaking there, hassan rouhani. the president will have a chance to greet the new iranian president. we will have his speech from the u.n., the president's, that time still to be announced but we will have it on our companion network c-span. spent on capitol hill today the senate will be in at 2:00 eastern. the house will be in tomorrow. on today's washington job we got a preview of the week ahead. >> here's a headline from the front page of the "usa today." clock taking on shut down with obamacare at center stage. that budget battle that's taking place this week on capitol hill.
to discuss more about and timeframe for votes on that want to bring in the white house, the "national journal"'s congressional correspondent. billy house, thanks to getting up with us this morning. >> guest: good morning. >> host: talk about the timeline for this potential shutdown and some of the votes that are going on this week showing our readers now "national journal" story from last week come inside vendors plan to avoid a government shutdown. what is the timeframe here we're talking about? >> guest: the initial procedure votes could begin as early as wednesday morning, with the filing of cloture as early as today and the senate meeting a motion to begin to proceed. this could stretch out throughout the week with a couple of procedural votes, and then perhaps in the senate a final vote on a how it will handle the house, last week's house passed bill that does
include a funding of obamacare along with continued funding of government. the end of this month expiration of the current funding bill. >> host: isn't looking like it will go right up to that funding deadline again? >> guest: it does seem that the house itself does not get back to washington, does not formally get underway until thursday morning. but house members arrived wednesday. they probably won't receive anything back from the senate until this weekend. of course, the deadline is next tuesday for when funding runs out. essential government operations, nonessential government operations are no longer funded, and less there is at least new temporary spending bill passed. >> host: isn't by talking on this asian terms of coming up with a sort of compromise? you're talking about the house getting the bill back from the senate over the weekend and a
tuesday deadline. that doesn't leave a lot of room for negotiation. >> guest: no, it doesn't. it puts speaker boehner in the house in a kind of tough position if he were to get a bill back from the senate on monday or sunday evening. people have to decide how to proceed. and as part of that if a bill is brought back to the house that does not include obamacare funding to have to decide whether or not to rely on democrat votes if he can to help them get it passed, if he loses enough conservative votes the wanted to help obamacare. or he would have to decide on some other procedure or decide to let the government shutdown and blame it on the democrats. that's probably not likely. i wouldn't call it compromise but house republicans by thursday, or maybe friday morning, may even vote on another track, i debt ceiling bill that would allow government to continue borrowing beyond what has been tuesday to be an exhaustion of the current limit
in october. they would add to that bill as well a defunding or delay of obamacare along with other provisions. that may not be a compromise, but it may be another way for house republicans to save face and say well, we thought this battle with obamacare battle on spending bill, but we are now continue our fight with the debt ceiling. >> host: what's the timeframe on the debt ceiling? mid-october is when we see that debt ceiling number? >> guest: exactly. about october 18, mid-october treasury says they anticipate the current 16 points $7 trillion ceiling will be hit. so congress and the white house will have to decide whether, well, the white house refused any to just be but the congress, republican congress members say they have to have a say on that and plan, and will force a vote on whether they can even be raised or delayed for a year.
>> host: billy house at the "national journal" congressional correspondent. you can follow him on twitter at house in session and see his work at nationaljournal.com. thinks are getting at this point with us this morning. >> later this afternoon, a look at human trafficking will be at hearing of the senate homeland security committee at 2:30 p.m. eastern time on our companion network c-span. >> broadband is the service, when you look at the cable is in general and the cable industry has done such a tremendous job of deploying broadband all over. urban areas, small market, rural areas, where our members live and work together really has made a difference. as we look ahead, we see that our members businesses and the future really is a broadband business. when you look at the services that they provide. today, we provide voice become internet services as well. but broadband, more broadband is
really the key. and most of our members areas, they say that the speed and capacity and the demand for broadband in the market is doubling every two years. >> ahead of the american cable association, matthew polka, on issues facing independent cable operators. tonight on "the communicators" at eight eastern on c-span2. >> we are in prospect garden in princeton, new jersey. this is a garden that alan wilson originally designed when she was resident of prospect house when alan wilson is in the white house, she brings white house gardener and i care to this garden of prospect house. she says to the white house gardener, let's re-create the rose section of this garden at the white house. and, of course, this becomes the famous rose gardens at the white house. she tragically doesn't live to see the rose garden completed, however. she is dying in the summer of 1914. she is wheeled out into the space outside in her wheelchair
and watches this garden work but she doesn't have to seal the completion of this vision she had her roses blooming at the white house. >> meet the first and second wife of president woodrow wilson the night live at nine eastern on c-span and c-span3. also on c-span reader and c-span.org. >> next, a look at states and the implementation of the health care law. this was during a house hearing that was held jointly between the oversight and government reform subcommittees on economic growth and health care. the chair, darrell issa. by next week's states need of health care exchange is in place for people to buy insurance and also offers subsidies for those people. and for those who are not insured, they are required to buy health insurance by the first of the year, or pay a penalty. the hearing is two hours and 40 minutes.
>> [inaudible conversations] >> the meeting will come to order. i want to begin this hearing by stating the oversight committee mission statement. we have secured to the and the prince of. americans have the right to know that the money the washington dixon and is well spent. second, americans deserve an efficient, effective government that works for them. our duty on the oversight and government reform committee is to protect these rights. our solemn response but if the government accountable to taxpayers because taxpayers have the right to know what they get from their government. we will work tirelessly in partnership with citizen
watchdogs to deliver the fact american people and bring reform to the federal bureaucracy. this is the mission of the oversight and government reform committee. in the past month, i have person spoken with the data told his high school graduate son having a difficult time fighting the job the item for more than 29 hours. i have spoke with mom who brought me her late twentysomething sons insurance paperwork, which notified him that his health premiums will increase in just over $200 a month to just over $800 a month starting in january. i've talked to a family struggle with the family business because they cannot afford the mandates, but they also cannot sell the business they worke work so haro build. the high-risk pools hit the max in march of this year, prevent anyone else from entering the high-risk pools. no one disputes that there were concerns with u.s. health care system that predate obamacare. chief among those concerns is the rising cost of health care that was crowding out other items in family budgets and contributing to massive federal budget deficit. obamacare was designed to fix
three problems, reduce the cost of medicine, provide universal coverage for every american, and increase the quality of health care in america. americans were told over and over again if you like the doctor and their insurance, they could keep them. after decades of work, union members are furious at the changes to health benefits and the traditional 40 hour work week. want a law passed by congress for years ago, invitation of the law has been mired with one from after another. according to report by the congressional research service, the administration has missed about half of obamacare is required deadlines. a compressed timeframe and a lack of clear federal requirements related to the federal data services hub is a major i.t. challenges to open the exchange is one row at october 1 this year. two months ago the administration delayed obama cares employer mandate and several requirements. although i believe the employer mandate is bad policy the effect of this unilateral delight by the administration will be exchanges will have greater difficulty verifying whether
individuals have an offer of coverage at work, thus exposing taxpayers to the risk of significant spending on subsidies for those not qualified to receive them. and for those individuals that receive them, a tax burden that would be quite a surprise to them. everybody okay? moreover, the administration only delayed the employer mandate. individual citizens are still liable for the penalties are just businesses are no longer liable. state leaders from across the country have complained that the administration has not responded to the questions and concerns. since many states that part-time legislatures that are only in session during the spring, hhs is failed to issue timely guidance harm's state of belief in the law and better protect its citizens from harmful aspects. today we're pleased to the testament of multiple state officials involved in much of the day-to-day work and preparing their respective states for the start of obamacare. we have with us today different witnesses. i will introduce some of those. lieutenant governor of kansas jeff colyer, was also a
physician. florida state representative matthew hudson, secretary of the department of health and hospitals from the state of louisiana, kathy kliebert, and the attorney general for the state of south carolina, ellen wilson. yesterday, the democrats threaten not to participate in an endless we invited eight democrats witnessed. since roman the minority party only selects one witness and even the majority party only had four witnesses for this hearing amazing like a fairly audacious request. but we didn't want members of this committee that is formed to do office work to walk out and filter this series struggle that states our expense as a result of obamacare. so we made the unprecedented accommodation to let them invite the same number of witnesses as the majority. members shouldn't walk away from the states struggling to intimate obamacare. we should listen to the concerns and find solutions. one area that would be exported is the navigator and a sister program. one witness said today, attorney general wilson along with 12 other attorney joe sent a letter
on august 14 asking questions about the navigator outreach program. as is the pattern of lake undiminished nation has not yet responded in fact i spoke yesterday with health care leaders in my own state and they inform me that they cannot get answers from a just. the navigators they speak to in my state still have no idea what is happening and we're only days away from october the first launch date. the signs were largely based on transcribed interviews with top hhs officials and internal hhs documents produced to the committee. the report shows the navigator and assister programs are rife with mismanagement and struggle to put them together in at this point and have a real possibility a large number of americans could fall victim to fraud and identity theft. top hhs officials admitted the administration failed to convict any analysis about whether or
not issue require all individuals are by navigator or assister or possessions to pass a background check and be fingerprinted. as a result the federal government will not be able to provide consumers with a list of individuals officially certified as navigators and the sisters. hhs officials been several marketing activities and appropriate, such as door-to-door solicitation and direct phone calls but not taken steps to ban those. hhs allows navigator and assist organizations debate employees based on the number of individuals they enroll which increase -- we have multiple issues here, every program and the federal government needs oversight. that should also apply to the newest programs in government like obamacare. while billions are spent, is readable to ask if it's going well and come wishing what it was designed to do.
i recognize the distance ranking member, the gentleman from california, for her opening statement. >> mr. chairman, thank you for the opportunity to comment on this hearing. let me be frank. this is not a hearing. this is theater. i wish it was just a little more entertaining. this is a bad script with a bad ending because some of my colleagues on the other side didn't like the way presidential election turned out, didn't like the supreme court including chief justice roberts finding the lofty because additional and are simply desperate to rewrite the play. >> it's time to take the makeup and the costumes off and get real. the transport is the law of the land and there will be no rewrite. no matter how much you would like to rewrite the ending. i'm sickened by the efforts of some who try to sabotage this law at every turn.
and in some city elected officials are not even subtle about it. they don't even try -- under the guise of public interest. take the duly elected entrance commissioner of georgia who was caught on tape bragging to an audience of republican campaign contributors and activists. let's play the video. >> the problem is obamacare. we've got to now determine what we can do to solve that problem. let me tell you what we are doing. everything in our power to be an obstructionist. we passed a law that says that a navigator, which is a position in that exchange, has to be licensed by our department of insurance. [applause] the obamacare law says we cannot
require them to be insurance agents. so we will just require them to be a licensed navigator. basically, you take an insurance agent and a few erase the name and write navigator and -- [laughter] >> he said he is doing everything in his power to be an obstructionist. people and the example of the georgia republican legislature which invented a new requirement that obamacare navigators be licensed. is insurance department would just make up has require navigators to pass the insurance agents test, just to obstruct them from conducting outreach to uninsured people. the only justification for this new requirement is that it helps abstract implementation of obamacare. unfortunately, he is not alone.
the only witness in the majority come to witnesses the majority chose to invite are like georgia commissioner doing everything in their power to be a obstructionist. florida state representative matt hudson, we thank you for being here, is no particular expert on state concerns about the ada implementation. mr. hudson isn't so busy grading concerns and barriers to implementation. recently introduced a bill suggested and the state legislators a guide to repealing obamacare, posters behind me which was published by the american legislative exchange counsel. alec, a koch brothers funded entity. not every republican tolerates the obstructionis obstructionis. in cans, elected entrance commissioner, sandy crater, struggle to implement the affordable care act even as governor provac challenges the constitution out of the affordable care act come returned to 32 mind dollars federal grant, help us date set
of extended and called the affordable care act an abomination. senators mccain and coburn have both criticized the republican colleagues were working to bring on a federal government shut down, just to stop the funding for aca implementation. senator coburn called it quote dishonest, unquote. sadly, this is a concerted campaign to deny people affordable health care being conducted by certain republican elected officials but it is being orchestrated by entities like alec come and financed by billionaires like the koch brothers. i strongly believe in the importance of congressional oversight. it is our job to make sure that the laws of this land, laws passed by congress are carried out effectively and efficiently. but this committee is not engaging in oversight. it is not interested in getting to the facts and single law properly implemented, or identifying improvements, or
technical fix its. this committee has just undermined the law and encourage the obstructionist who are throwing hurdles in its way at every step of the process. mr. chairman, this effort has become a theater of the absurd. while i appreciate have not accepted some of our witnesses to try and convince the audience that there is some estimates of balance here, your play will not make it to opening night and will be relegated to the dustbin of theatrical failures once the real show begins to run. i sincerely hope this is the beginning of the end of the serrated to undermine a law that has been found to be constitutional. and i would like to remind my colleagues we are sworn to uphold the law and the constitution. and that is a duty i take seriously. it's time we actually do our job. i want to welcome louisiana state representative katrina jackson, center brad of south carolina, and senator eleanor
sobel of florida. thank you for joining us today. and come here on your own dime. >> i'd like to recognize the chairman of the subcommittee on economic growth, mr. jordan, for his opening statements. >> thank you, mr. chairman. thank you for putting this important hearing together where we can hear from folks on the front line. let me just say in response to the last statement, everyone in the country knows this law is not ready. yesterday, warren buffett said scrap the bill. last week afl-cio voted instead repeal it. max baucus, democrat -- not republican jim jordan, not on this -- max baucus says it's a train wreck. howard dean said it will lead to rationing of care. not exactly republicans there. james robinson it will hard-working americans but it
will finally change the 40 hour workweek which will and it's already doing that. even the president knows this bill needs delayed. that's why he delayed it for big business. we just want to say that life for the rest of america. it's unbelievable. it was unpopular when not one single republican voted for it and democrats passed the bill but is unpopular been. it's even more unpopular now. all we are saying is, this argument is unbelievable, i don't know the democrats have introduced a bill to fund the government. we're going to hear from people in the front line today who know how hard it is to try to implement this legislation to in ohio, think about this. headline in an ohio paper. in ohio, seventh largest a, 11 million people, not one single net the gator, not one -- single navigator. we are 13 days away from the exchange starting. not one.
720 state. you think this will work well? you don't think this needs delayed? this is unbelievable. of course, it needs delayed and the american people understand d that. they are just ask their representatives, republicans and democrats to recognize that fundamental fact. this hearing is about highlighting that fundamental fact. i would ask the chairman if i could enter -- i didn't read my statement and i just reacted to what we heard the for. this is as clear as it gets. my time in public life have never seen something this obvious make this much common sense and had that much opposition to doing it. unbelievable. mr. chairman, i yield back. >> we will have the ranking member of the subcommittee for his opening statement. >> thank you, mr. chairman. jordan and lankford for calling this hearing. all across this country some state legislators and other elected officials are obstructing the affordable care
act law, the law of the land, and undermining enrollment in health exchanges. just this week, florida governor rick scott issued a directive and in navigator grantees from operating on the grounds of county health departments. this is particularly abstracted because county health departments are precisely where floridians with questions about the health care exchange is my turn. he also stripped florida's insurance commissioner of its ability to review insurance rates and protect consumers from unfair or excessive premium hikes. the quote rate review, unquote, provisions of the affordable care act require insurance companies to justify any proposed health insurance premium increase of 10% or more. last year this provision alone saved 6.8 million consumers an estimated $1.2 billion in health
insurance premiums. this is working. in fact, every witness invited by the majority here today represents the state government that is openly obstructing implementation of our affordable care act. these witnesses did not have concerns about implementation. they are creating concerns and barriers to implementation, and they are proud of it. one witness, state attorney general allen wilson, works under south carolina governor nikki haley, who said, quote when it comes to obamacare we didn't just say no. we said never. we are not expanding medicaid just because president obama thinks we should. and we're going to keep on fighting until we get people like senator tim scott and everybody else in congress to defund obamacare. another witness, sector of the department of health and hospitals, kathy kliebert works under bobby jindal who said, quote, we don't think it makes any sense to implement obamacare
in louisiana. we will do what we can to fight it. our constituents deserve better than this. and one such constituent is right here with us today, stacy ritter, a resident of pennsylvania, my host a. stacy, if you here, would you stand up? there she is. welcome, stacy. she came here on her own dime. she's here at her own expense, and she's here to tell you either on or off the record her compelling story. but i'll tell you what it is right here. it's in her written statement. unfortunately, the majority has not allowed stacy ritter here to present her statement but i'm going to read an excerpt spent would the gentleman yield? i suspect i am the majority. we have an unprecedented number of witnesses here from the minority. the condition is one, they were selected by the minority, not by
the majority. so there were four witnesses that we selected. the ranking member sent me a letter yesterday asking for an additional eight. but in order to get them all on one panel, we have the largest than we've ever had, and all three of these witnesses were selected by the minority. cycle the gentleman was mistaken in that portion of his statement. >> reclaim my time. here's what stacy had to say. thanks to the aca, the girls -- talking about her two daughters -- she has two daughters with a rare blood disorder known as mina did last -- myelodysplastic syndrome to what she said was thank to the aca the girls can no longer be discriminate against if i were to lose or change jobs. thanks to the aca we no longer worried about reaching lifetime caps on coverage. thanks to the aca to my girls can remain on my insurance into
their 26, giving them time to finish college and find a job. there are millions of americans like stacy ritter could have needed the affordable care act for a very long time. and mr. chairman, i'm going to ask permission to insert stacy ready entire statement into the record. >> without objection. >> in fact in 2007, nearly 10% of pennsylvanians reported they were unable to see a doctor when necessary due to the cost. between '03 and '09, families in pennsylvania saw their health insurance premiums increase by 45% to an average annual cost of $13,229. single policyholders experienced a 38% increase over the same period. of those who do of health insurance, 53% are covered through their employment, public programs such as medicaid and
medicare, and sure 31% of pennsylvania's population. and 5% of residents purchase individual private policies. this leaves nearly 1.4 million, 11% of the state's population uninsured for health care. pennsylvanian children are uninsured at a rate of 8%. defeated the devils to 16% for children and household with incomes less than 139% of the federal poverty level. non-elderly adults, those younger than 65 that live in these lower income homes are uninsured as -- at a rate of 32%. and a quarter of the non-elderly hispanic population lacks health insurance. non-elderly blacks are uninsured at a rate of 17%, and 11% of the non-elderly white population is uninsured. over the next six months, as the health exchanges stand up, pennsylvanians, like stacy ritter, will finally be able to get the help they need for
themselves and their families. our job is to conduct oversight and not cheer while state officials indeed the implementation of enacted federal law. i yield back. >> recognize the chairman of the full committee, chairman issa, for his statement. >> thank you, mr. chairman. i want to thank both the chairman and ranking member for holding this important hearing. as i said earlier we have a very large panel and other ford to getting to that panel. there's an old expression here in washington, when asked about a tough situation people often say, well, some of my friends are poor. some of my friends are against it and i want to be with my friends. now, i've never said let's defund and eliminate all of obamacare without viable replacement for many other things that the affordable health care act chose to do. along with every republican in congress at the time i voted against the affordable care act
because i felt there were many things in their that were overreaching and that were very lopsided. so let's understand that a think every member on the dais and every member who testifies today would say that there were problems in health care before president obama came into office. the affordable care act attempted to say it was going to tackle many of those problems, and some of them we agree on. people with preexisting conditions find themselves unable to leave the job. the unemployed college graduate, or for that matter, the returning veteran not eligible for retirement but find himself unemployed and out of the military trying to figure out where he or she is going to go to get health care. there were many groups that were falling through the safety net of detectable access to health care. we need to deal with that. very clearly, america's problem is not that we don't have some
of the best health care. it's that we have the most expensive health care. one of my concerns is the affordable care act does little to make it affordable except through subsidy. attacking the real causes of our health care costing more than any of the first world nation is something that we must work on. ms. speier who is fairly new when the affordable care act was passed said something today that i'm taking some exception to, not a personal basis because i don't think she meant it, but she said that this law is the way it is and nothing is going to be changed. well, bad law happens. the affordable care act, for example, mandates that every member of her staff in every member of, every staff member of anyone on this dais is to be thrown off of the federal workforce is health care system, put into an exchange and not reimbursed. in other words, the affordable
care act cut by five, $10,000 the benefit for people making as little as 25 or $30,000 a year as staffers here on the hill. i'm sure if ms. speier were asked on not voting for that, did vote for. it needs to be fixed. we cannot have the men and women who would like to serve members of congress find themselves working for a deadbeat employer. that's real. it in the act. it was in the act from the senate so maybe we in the house can say we can fix it but it is there. now come in the act is implementation that has a lot of bureaucracy. including state exchanges. the anticipation was that all states would quickly come together and want to have state exchanges i want to have the subsidies that came with it. but i believe what we've seen is a legitimate disagreement between states that did not want to have a limited subsidy that
will probably be faced down or out and leave them holding the bag with all the regulations that come with a federal program. more important, this committee has held a series of hearings, and i think the chairman, both the chairmen, on the implementation problem databases, privacy and so on. these are not intended to kill an existing law. their intent to make it clear that if it is to go into effect, should go into effect at a time that it can be effective. nothing will kill obamacare faster than in fact a series of horrific mistakes, losses of private or sensitive information or denial of care, or in fact cost overruns. so i, for one, and not one of those people who said i'm going to kill obamacare. as chairman of this committee with my subcommittee chairman, we have seen serious problems
our witnesses will talk about her coldly by putting all seven on this panel, we give an opportunity for people who have concerns about the invitation of the affordable care act, and those who believe that we are ready to go live in a matter of days to have an appropriate debate. i'm pleased, and i think the ranking member, when he made his selection to choose people from responsible positions where they're looking at the act and not the benefit of the act but of the act but the actual act and whether implementation will be done properly and on time. i share with the chairman's opening statement that, in fact, if the president wants to delay one part of a mandate, congress has to ask, are we ready to go live? lastly i think for all of us on the dais, we understand that some parts of the affordable care act are already low. they are already implemented. it is a question of implementing
these large expensive programs with for example, a database that is today not contested but in a matter of days supposed to go live with all of your personal information transfer from the irs and to health care information attitude on a daily basis. that is something we should be concerned at. so i join with the ranking member in welcoming this large panel of distinguished individuals who do not agree on everything, but hopefully they will be my friend and agree that we've got to get it right. if that means ms. speier changing some part of the law, so be it. let's work together on making this an affordable care act in every way we can when we debate whether or not we can afford some aspects of it. mr. chairman, thank you for the indulgence. i yield back. >> recognize the ranking member of the full committee for his opening statement. >> thank you, mr. chairman. i was very heartened by the
words of the chairman of the committee, and i want to thank all of you for bringing us together today. i want to remind all of us of something that we may have forgotten. this is the law. hello. this is the law. it has been passed. chief judge roberts of the supreme court said it was constitutional. it is the law. and every two years we, every member of this committee, we put our hands up and we say that we're going to uphold the law. that's where we start. and so i am so appreciative of what the chairman just had, but
the 41 times that we are voted on this, it was not to replace it. no. it was to kill it. period. to kill it. 41 times. and so i want to thank you, thank you for accepting the witnesses we requested. i want to thank the chairman of the committee. i think you. the our elected officials from south carolina, florida and louisiana. after -- i want to thank all of you and i appreciate your service. unlike the witnesses invited by the majority, these officials have tried to intimate the affordable care act even in the face of obstruction coming directly from their own governors. trying to implement the law. unfortunately, this systematic
effort by some republican officials to obstruct implementation of the affordable care act. these officials have openly, it's not a secret, come on, now. pledged to fight implementation, harass entities attended to conduct public education and outreach. and adopted legislative and braved the tory maneuvers to sabotage the affordable care act. that's a fact. last week, chairman upton sent letters to 51 state navigators organizations demanding that these organizations turn over huge amounts of documentation to the committee on energy and commerce. as norm ornstein said, and i quote, this is intimidation and another effort to sabotage. it's not replacing anything. not improving anything. trying to kill it. some republicans state officials have taken a page from the same playbook. west virginia's attorney general
at morrissey recently sent letters to navigator grantees in his estate demanding answering dozens of question. one recipient subsequent returned $365,000 in grant money that it had applied for and one. other states are acting the same way. the problem is that there are tens of millions of people who desperately need the affordable care act to succeed, including in these very states. and as our witnesses testify, i want you to tell us what happens to them. what happens to the people in your state who are sick and cannot get care? and they need members of commerce to do our jobs and help us to be responsible oversight. and, finally, i would like to produce ms. lurie. would you stand up? a resident of virginia here and the victim of a stroke.
she suffered in college. you may be seated as those asses of other series health problems. ms. lori is here today on her own dime. like millions of other americans, she has what insurance companies called a preexisting condition. when the chairman is talking about the good parts of the law, one of the things went to keep in mind is that you have to have a whole law to make it work. spent will the gentleman yield speak with no. i want to finish my statement. ms. lurie travel -- i want to talk about this lady who traveled here who has been ill. ms. lori traveled here today to tell her story to congress. in 2005, this is her story, and i quote, i decided to leave my job at a large employer to pursue my dream of owning my own business but however later that year i needed emergency gallbladder surgery and suffered obligations. at that point might ensure rescinded my coverage and left me with $50,000 in medical bills
during my first year in business. if the affordable care act had been in place then it would have been against the law for my ensure to drop me from coverage. i'm looking forward to opening of the health insurance marketplace in virginia this october and the availability of the new health insurance premium credit that could potentially make my health insurance even more affordable. i'm also very appreciative that i no longer have to worry ever again about being denied coverage due to my preexisting condition being charged exorbitant premiums that i can't afford or having my coverage dropped if i need another hospital visit. ms. lori, i want to thank you for coming, by telling us about your personal life and business. you speak for millions of americans. i asked her statement be entered into the record, mr. chairman. mr. chairman? >> no objection spend as i conclude, the truth is that
nobody read believes debasing was intended to help make the affordable care act look better. i must say that i believe that chairman and what he said, but not everybody is where the chairman is. that's what we've had 41 votes to kill the. republicans have taken more, 40 votes to repeal obamacare and replace it with absolutely nothing. everyone knows what this hearing is only about, trying to end obamacare. this week house republicans are threatening to shut down, shut down the entire government unless the affordable act is completely defunded. republicans want to eliminate health coverage for tens of millions of americans, return the keys to the insurance companies and go back to the days of discrimination against people like ms. lori with preexisting conditions. ladies and gentlemen, i have said it before and i'll say it again, we can do better. the chairman is right, there are things we can do to improve this, but -- this may be hard at this is america. we do hard things all the time.
we can do this because people's lives are dependent upon it. with that i yield back. >> mr. chairman? >> yes spent i just point out the gentleman talked about the law, implementing the whole law. was be present implementing the whole lot when he gave the delay to big business? i mean, the great -- it's a great speech. give it to the president of the trinity. he's the one who said big business gets a delay but the rest of america doesn't spent come on, now spent well, that's -- >> mr. chairman? >> yes, sir. >> he knows what the president was trying to do was try to come again, a lotsd will the gentleman to be let me answer the question. >> you got seven minutes. i just got -- >> go ahead and answer the question. >> yes. again, the president, again, i said it before. this is hard. and business asked for, said
they could not get certain things. the president gave them that we would. a lot of the problems we have in the law is because of things that happen when we are trying to pass it. and tried to compromise -- but again, the chairman of the committee is right. you are right. there are things that could be better, but that does not mean we scrap it and throw it out. because people will die. they will literally die. and you know what. >> i was making -- the gentleman was making the fundamental point, he specifically said, and we can we do that, specifically said the whole law. and i just want to know if it's the whole law, h issued be the whole law and we shouldn't give them special privileges to big business which the present it without even having congress vote on it. >> mr. chairman? i take no special privilege but as a member of the committee i know that we have witnesses who can do with some of the
challenges that everyone is concerned about, the individual mandate, the corporate mandate, the time is a but and so on. i hope we can get to it. i join with the ranking member in one sense. this is an important hearing. we will disagree on the purpose of it perhaps, but i think that as we hear from our witnesses, both sets of witnesses, i think the witnesses will speak for the real intent of veering and i look forward to getting to it and a lively debate afterwards. >> money of opportunity for that as we tried to determine limitation to what are the real effects on the ground. with that, members what seven-eighths is that statements for the record. i now recognize our first panel of the day. jeff colyer is the tenet governor of kansas and also a physician. >> and we normally swear in all the witnesses. are we going to do that? >> we are. i'm going to introduce them and swear them. we can't have a good hearing
with a good swearing in the middle of it as well. [laughter] brad hutton is a state senator from the state of south carolina. honorable allan wilson is the attorney general from south carolina. katrina jackson as a state representative from louisiana. kathy kliebert is the secretary for hospitals in the state of louisiana. eleanor so is the state senate for the state of florida and matthew hudson is a state representative from the state of florida. pursuant to committee rules all witnesses must be sworn in before they testify. and by ms. speier's demands as well. i'm just getting. we do ask you to rise and raise your right hand. [witnesses were sworn in] thank you. you may be seated. let the record reflect all the witnesses have answered in the affirmative. thank you for the. we will have some good discussion with this. please limit your testament to five minutes.
you have the clock and for neither will start us as you begin. please note we need you to build to push a button to make a microphone life. we will need you to get as close as you can to make sure we can your every syllable that you say. so with that i would like to recognize our first person, lieutenant governor. >> thank you, mr. chairman, ranking member's. minus jeff colyer. i'm honored to be the lieutenant governor of kansas. i'm also a practicing physician who, every day, this past week for example, as operator on people without insurance. we take care of them every day. so this is something that's very personal to me. like most states, kansas is facing problems with the affordable care act but it is a drag on kansas businesses. a july 2013 gallup poll suggested that small business owners reveal about 21% business owners say they're going to hold off on plans to hire new
employees because of the affordable care act. and in kansas that trained as a different. wherever i go the biggest concern here is the uncertainty about what the aca is going to do to small businesses. in any development since my testimony was written last week, in effect businesses such as much or i'm a sole practitioner. just yesterday we had some contract for $3400 to rewrite all of our compliance manuals to fit in with the aca. all it does is continues the same hit the requirements that we had before but we just have to have a new form of documentation on that. into something that doesn't change what we do but it certainly cost us from new equipment, new jobs and from taking care of our patients. and so i think you will see this everywhere in a lot of different places. another 10 then -- another kansas person says he can grow his company beyond the 44, 45 full-time employees because he needs to avoid the mandate that
requires companies with more than 50 employees to meet the aca's requirements. his situation is not unique. the affordable care act is a drag on the economy like ice is on the wing of an airplane, preventing it from taking off. this is damaging to everyone, especially the middle class. now, there is some of the issues on operability. one places where the states and federal government interact to determine eligibility for medicaid and for the individuals on the exchange. our state a significant advance in doing that and we have a very good, very strong working relationship with cms and a very positive one. as recently as the timber six, i said in my testimony we've now heard on september 13, there are a number of additional technical updates that keep disrupting the time to completion of this. it appears there's going to be an additional update coming up even before the october 1
deadline. so that's going to make it very difficult for every state to do that. we are doing our best that there is. but then there's also this contradiction that is determining eligibility. for medicaid, kansas and every other state, they've got to look at a person's real income. and if they don't verify that, we will lose federal funding for our medicaid program. it's very hard for the taxpayers have confidence in a system where, on the exchanges, we have an honor system in the first year to verify income. and so it is really a strong dichotomy of that. i think undermines a lot of confidence in the system. another issue that we have is dealing with the education and outreach by the federal government. just recently as when the navigator program had the contract. they're supposed to be set up in order to know how the system runs and we just learned who the navigators are going to be just a few weeks ago. and yet the system is still not
able to go live today. and so if they could even practice and be fully formed. kansas has not passed a number of laws about the skills of the navigators are anything, partly because we didn't have all of the regulations that have come down. there's also an issue of race. it is going to be very expensive of course. one of the things come in the state of kansas, our exchange is only going to have two insurers on the entire exchange. two insurers. that is not more competition to that's less competition. and, in fact, in kansas you have more choices in medicaid than you do in the federal exchange in the state of kansas. and so we look at a number of the price issues and things like that, and it is going to be a challenge for people. only, as a physician i see this everyday. i visit with my colleagues, we worked together. we serve the uninsured. we have done that before.
i've been doing it for 20 years. we will continue to do it in the future. this is not going to solve those issues. this is not going to make health care more affordable. in fact, this sets a new bureaucracies like the $3400 that i have spent just now. it doesn't make health care necessarily better. we can do a much better job and it is best last to the state. thank you. >> thank you, mr. chairman. i think the distinction members along the opportunity to address the issues of the affordable care act and how it will affect my roll south carolina district the the affordable care act would allow 350,000 to 400,000 south carolinians to obtain health coverage. with the medicaid expansion of an additional 2000 south carolina adults would be covered. it's appalling some chocolate officials continue to pursue efforts to block as a citizen who are receiving health care coverage. i'm pleased to be seated by our fine, hard-working attorney general from south carolina, a
friend of mine, and like me, he is privileged to be an elected official. but from its privileged place as an elected official and a child of an elected official, ellen wilson has enjoyed taxpayer subsidies health care for most of his life. he's never had to worry about having a doctor to see you when he gets sick. yet when it comes -- to obtain much-needed health coverage, he willingly leaves the opposition without offering any alternatives to their claim. when i go back to the state senate in january, i'm going to be facing the first bill which is a republican filed bill that will nullify obamacare. in a chamber which is presided over by calvin come with going to debate notification in the south carolina senate. you know, we tried that in the middle 1800s but it didn't work out too well for sven, and it's not going to work out too well this time. what we are looking for is solutions, not roadb
comprehensive insurance, premiums should be lower. we look forward to a time when all of our citizens can enjoy the coverage that's enjoyed by general wilson and myself. some could be covered by expanding medicaid, others by purchasing affordable coverage through the exchanges and yet others through tear employment. their employment. it is this inclusive approach that will allow all south carolinians to be covered. full implementation will benefit tax pairs. the cost for -- taxpayers. the cost of treating the uninsured falls now on taxpayers and employers. once the expansion is implemented. once everyone is covered, medical costs can be more easily controlled, and premium rates should fall. as more people have health care coverage, more providers are going to be needed. the expansion will result in an economic boost to south carolina.
the training of new providers will allow our technical colleges and our universities to grow. we've had a university-based research study done in our state that says that we can expect 44,000 new jobs from the full implementation of the aca. the salaries from these employees and the expanding services will generate millions in annual earnings and, ultimately, new revenue for the state. this is in addition to the billions of dollars that will flow back to the state from the federal government over the next six years. health care in south carolina is 20% of our economy with over 1100 different occupations. health care sectors in our state employ 250 south carolinians. these are good paying jobs, jobs built on caring for our neighbors. it's a vital part of our economic sector, and these are jobs that cannot be outsourced. the affordable care act is a huge net benefit not just to those with pre-existing conditions, but to our taxpayers, our hospitals, our
doctors, those who will be newly employed and citizens who will see their premiums reduced. quite simply, south carolina needs to accept the benefits being extended to our citizens if for no other reason than it is the right thing to do. thank you. >> attorney general wilson. >> thank you for this opportunity to address the committee. i want to deviate from my introduction briefly to say that several remarks were made that aren't accurate earlier, representative cart wright mentioned that i was under the governor, that is not accurate. i'm an independently-elected official in south carolina. to my recollection, that that quote that was attributed to me was not made by me. as attorney general, i am not in the implementation process. i am here as an advocate for the consumers of south carolina. also, i am on goth health care, as -- government health care, but after 17 and a half years and a combat tour in iraq, i believe i'm entitled to be on
tricare. my testimony has nothing to do with merits of the affordable care act, it has everything to do with the first obligation of government. the security and safety of the citizens as well as sharing with congress the need to kin definitely suspend -- indefinitely suspend until privacy protections are provided and legally-mandated deadlines are properly met. despite the president saying last month we're all on our way to implementing the affordable care act, important deadlines are being missed, and more importantly, security concerns are being dismissed. "forbes" last month noted that the administration has missed more than half the legally-imposed implementation deadlines. in order for the aca to adequately determine eligibility of consumers for exchange subsidies, it must create a data hub that connects databases from seven different agencies. last week centers for medicare, medicaid agencies confirmed the
data hub complies with federal standards. however, the hub has not been independently verified or properly audited by the inspector general. more troubling is the fact that senior hhs testimonying officials lowered -- technology officials lowered previous standards this year by saying let's just make sure it's not a third world experience. when it goes live on october 1, it may not be a third world experience, but it will be a con man's all you can eat buffet be overflowing with sensitive information from the agency databases that fall under the hub. this information in the hub should be guarded as be it were gold in fort knox, not haphazardly. the the hub should be at least required to exceed minimally-adequate protocols which have allowed the records of more than 20 million veterans to be compromised during at least eight hacks of the va's unencrypted computer system between 2010 and 2013. states are also victims of similar attacks. more than 3.6 million south carolinians were put at risk when hackers obtained our social
security numbers during a major security breach at the south carolina department of revenue. such attacks make the hub's insufficient security testing that much more troubling. however, that is not our primary, immediate concern. last month's letter that was sent by the ags and myself of 12 other states was prompted by the fact that hhs is not requiring groups receiving roughly 67 million in navigator grants to conduct background checks on individuals who will be entering sensitive information into the federal data hub. the vice president of a navigator group which received $1.2 million in grants for south carolina said last week in the state paper, it's like girl scouts selling cookies. if you go to the shopping centers and set up tables to capture people as they come and go. the fact is, it's more difficult to help girl scouts sell boxes of cookies than it is to become a health care navigator. while groups like the girl scouts require employees to complete background checks, there are no such checks for
navigators. this is despite the fact that hhs exchange regulations require sensitive information including but not limited to health, income, employment, tax and social security information. the only requirement for navigators is that they complete 20 hours of online training, less than most states require for a driver's license. this weekend newspapers across the country ran headlines such as rollout of obamacare spawns slew of scans, con artists are busy dialing seniors and other consumers. last week the department of insurance in our state issued a consumer alert due to the proliferation of online, in-person and telephone scams. the first obligation of government is maintaining the safety and security of its citizens. ironically, the implementation of a federal program designed to provide health care to all americans puts us all at severe risk because it is riddled with scams and security breaches. americans should not have to barter their privacy and financial security for health insurance.
thus far the administration's implementation of the affordable care act undermines the ability of the federal government, the security of its citizens. until hhs answers our questions and rectifies this matter by properly safeguarding americans' personal information, congress must suspend implementation of the aca. thank you. >> representative jackson. >> members of this committee, i serve in louisiana's state legislature as a member of the house welfare committee, joint committee on the budget and the committee on appropriations. the united states supreme court has emphatically stated what the law is relative to health care in the united states of america. in upholding the patient protection and affordable care act. however, we sit here today continuously debating this law instead of working together to
insure that this implementation is beneficial to all states and all citizens of the united states. in a state where almost 900,000, some 20% of louisianians are uninsured and the health care budget has been cut by 10% each year for five consecutive years, we cannot afford to decline any portion of the affordable health care act. our governor advocated for us cutting one of the most vital health care services offered to any state's constituency, our hospice care, to take care of the problem. as a state representative who represents louisiana's citizens who have entrusted us with the duty to insure that we do all we can to represent them, i cannot in good conscience, in good moral conscience advocate for the repeal or defunding of the affordable health care act. for in doing so, i would fail an overwhelming number of the
constituency in my state. the secretary of the louisiana department of health and hospitals who sits next to me today will neglect to mention that she herself and her department published a report that reflects up to a $367.5 million savings while offering health care to over 400,000 of our uninsured citizens, almost half on the uninsured roll. our independent, nonpartisan legislative fiscal office arrived at an even higher number in savings to louisiana and its citizens, almost $550 million. dhsh will stand before you today on behalf of louisiana complaining about the difficulty in implementing this act. however, they've wasted countless time supporting measures such as one that we voted down last session in this current year which would have required us to take a vote of
referendum of our people by two-thirds vote in order to enact any portion of the affordabling act. affordable health care act. louisiana spends over $600 million in uncompensated care yearly, mainly through dish dollar that is we continuously request from the federal government. we are one of the top five states who receive -- [inaudible] independent reports reflect that the affordable health care act will save the federal government approximately 50% of all dish dollars from around this nation. and by the time -- that's the long-term savings. the immediate savings in 2014 show approximately $500 million in savings to this federal government. louisiana's economy, just like many other states, has suffered during these tough economic times. full implementation of the affordable health care act offers an injection of $26.8 billion in our state's economy.
and it will create over 47,000 jobs in the state of louisiana. it will further aid businesses by contributing greatly to a healthier, more productive work force. the federal insurance exchange is beneficial to those currently paying insurance premiums by creating a more competitive market and driving down the costs of insurance premiums for everyone. somewhere in louisiana and all across this nation there are younger versions of you and myself who aspire to matriculate in institutions of higher learning without having to worry about whether they will have insurance or not. the affordable health care act offers them access to the american dream, something that most of us have already been through. by allowing them to remain covered under their parents' premiums, their parents -- who are mostly middle to upper class citizens who have paid for those premiums -- in each of our great
states just like ms. ritter who sits here today, there are families with children or sick parents who have been diagnosed with life-threatening conditions and have been told that they have reached their mandatory maximum of benefits. i say to you today, our good conscience tells us that we must respond to their need, and the affordable health care act has done so. but if you don't believe me, a great writer once penned our great lord and savior jesus christ, when he told us that what we do to the least of these, we also to to him. it is time to do what's right. >> secretary kliebert. >> good morning. thank you for the invitation to highlight how the patient protection and affordable care act has presented major problems for louisiana. my name is kathy plea bert, i'm the secretary of the the president of health and hospitals in louisiana.
i've served the department for over 25 years, primarily working with individuals who have behavioral health challenges and those individuals with developmental disabilities. since the affordable care act was signed into law, we have repeatedly shared our concerns with the law itself and with its implementation. pleasure over the past -- over the past few years, we have seen our fears become reality, and our decision to not establish a state-based exchange in louisiana validated. as a complex project with often-delayed and frequently-changing guidance, it is not surprising that many states and even the federal government are narrowing the scope of their day one exchange capabilities as we near the mandated launch. though this law was passed over three years ago, much of the critical guidance and regulations have only been issued in this past year, and they continue to change. for example, cms released if june what they claimed to be the final version of guidance that will govern interactions between the exchange and state medicaid
programs. however, we have since learned that new changes are forthcoming which will require reprogramming efforts. create corral questions often take three to four months for a response, wasting precious time and resources that easily could have been avoided and cannot be afforded as we near federally-mandated deadlines. we've also faced conflicting messages and confusing misinformation. in just one example, we recently experienced confusion about whether pregnancy was considered a qualifying life event for women to enroll in the exchanges outside of the designated open enrollment period. the federal government's own web site recently changed the definition of a qualifying life event, removing the event of becoming pregnant and now stating that it is the birth of the baby that qualifies the woman for coverage. after seeking clarification, we've received multiple and
conflicting answers from hhs officials. the screen shots included in my written testimony taken just a few weeks apart illustrate this frustrating inconsistency. we are also troubled with how hhs is conducting education and outreach in states with a federal exchange where they've assigned much of the responsibility to federally-funded navigators. named only weeks ago, these groups have had barely a month and a half to prepare. there is almost no oversight or standards for how today will work, and their training requirements have actually been scaled down by hhs. we also have serious concerns about the call centers that will provide much of the direct consumer assistance. we learned from a press release that a call center will be operated in the small town of bogalusa, louisiana, but operations are only starting this month meaning their employees will have less than a month of training before launch. just last week we were alarmed to hear that a constituent who
called the exchange hotline was told that many states are expanding their medicaid eligibility. he was told to first call the state to see if he may now qualify for medicaid, even though louisiana has very publicly stated it will not expand medicaid eligibility. if the federal call center employees are not equipped with such basic information, how are they to be expected to help individuals navigate this enormously complex program? we've also been frustrated by numerous technical issues that have resulted in duplicative efforts for states, particularly as it relate toss the application for both medicaid and the exchange and the new federal data services hub. for example, we asked cms for the ability to link directly to the single streamlined application being built at the federal level rather than duplicate those efforts at the state level. we were told that each state was responsible for building its own application based on the federal version which was not made available until april of this year. we then made multiple requests
to cms this summer for its online application source code in order for our contractor to verify louisiana's version. it was never provided to us. in march federal officials promised to provide states with a no-cost solution to meet the newly-mandated gross income standard for medicaid eligibility. however, we learned in a june conference call that we had the responsibility. we anticipate that it will take our contractor more than 5,000 hours of work to meet all the related mandates for a total cost of $750,000. to frustrate matters further, we learned last week the federal solution was finally ready -- far too late to be useful. i've only highlighted our major concerns. we expect more problems to arise as october is just two weeks away. while these facts raise serious questions about whether implementation of the exchanges should be delayed, we continue to believe the best solution for our nation and our state is that
the entire law be replaced and repealed, repealed and replaced with a more affordable and market-driven solution that gives states the flexibility to design programs that best neat the finish meet the needs of their individual populations. thank you. >> senator sew bell. >> good morning chairman lank ford, chairman jordan, ranking member spear, ranking member cart right and members of the committee, thank you for extending me an invitation to testify today on the federal implementation of obamacare. concernsover state government. i'm excited and eager to elucidate the problems we have encountered and address opposition to the implementation of the affordable care act in florida. my name is eleanor sobel, and i represent the 33rd district in the florida senate. i was first elected in 2008, and i serve as chairwoman of the florida senate's children, families and you elder affairs
committee. i also serve as vice chiropractor a of the ethics and elections committee as well as vice chair on the senate select committee for affordable health care as well as a delegate for the national conference of state legislators. in an overwhelmingly predominant-republican senate. i wish i could be here with better news telling you that the state legislature managed to put partisan politics aside and expand coverage to millions of uninsured individuals. unfortunately, as you may know, this is not the case. regular session, our spring session concluded with the legislature being unable to pass on a bill to explain coverage. i'm here to also tell you that the state of florida is actually punishing its people by putting up roadblocks and barricades to obtaining quality, affordable, accessible health care. the message some of florida's republican leaders are sending,
would you believe, sounds something like this: health care is a privilege, not a right, and don't expect help from the government. another message that's going forth is we are here to put up barricades and obstacles and to create public chaos and misinformation all in the name of political warfare. the florida house, senate, governor and cabinet are divided, split. the senate was just to move forward with obamacare. we came up with a bipartisan bill in the florida senate that was a public/private partnership that actually would cover 1.5 million people in florida as well as use the $52 billion of the money from the federal government to help implement the program. our senate president gaetz has also made overtures to work with
secretary kathleen sebelius. however, the house, governor and cabinet are irrationally and ideologically preventing the execution and implementation of a policy that the citizens of florida so desperately require. florida has the second highest percentage of uninsured residents in the nation at 25.3%. florida has rejected again the $5.2 billion over a ten-year period of federal medicaid money which would have served 1.5 million floridians. the florida house will not go along with the senate's public/private expansion plans, and governor rick scott often contradicts himself saying he supports medicaid expansion, and then does an about face by trying to defeat implementation of obamacare. i want to focus on the two most important florida sandbag issues that i've encountered in the implementation of affordable health care in florida.
sanbag number one -- sandbag number one, what is the best way to defeat a program and to make sure no one knows about it or understands how it affects the well being of its citizens? just recently, governor scott has implemented a policy that would prevent the departments of health from carrying out much-perioded education to the uninsured claiming that health care education would be allegedly violating hipaa laws. this is a desperate attack to prevent access to people who need health insurance the most. sandbag number two, last session the florida legislature passed a bill that handcuffed the insurance commissioner to use his authority to negotiate lower rates for premiums for two years. affordable insurance is a key part of obamacare. although florida has agreed to a marketplace, the federal government could only be rates are reasonable or unreasonable but can't negotiate lower rates. we need the insurance commission
to provide the lowest rates possible so people would sign up. hopefully, tax credits will reduce costs and make insurance affordable. we must find a way to put aside florida's differences and move forward with the affordable care act. we must move forward with this very, very important act and rectify florida's political stalemate. thank you very much. for your consideration. >> representative hudson. >> good morning, chairman lank ford, chairman jordan and members of the committee. thank you for inviting me to speak with you today. my name is matt hudson, and i'm honor today represent district 80 in the florida house of representatives. i chair the house health appropriations subcommittee, serve as vice chair of the select committee on ppaca and co-chair the state legislature's
health committee. i'm also a florida realtor. remember when you bought your first home? you saved money, found a home you liked. and then what if your realtor had handed you a contract, and you had to review it, and three of the pages were blank? and then when you questioned it, they said, trust me. i'm positive none of you would have invested your money that way. i'm positive that the citizens of florida expect their government to make well-informed decisions, not based on federal promises like, trust me. but that's exactly what the aca has forced us to do. what we do know doesn't look very good. the aca will make our health work force shortage even worse, and it has led to skyrocketing premiums. it has kept states uninformed and puts consumers' privacy at risk through the insurance exchanges. and its medicaid expansions threaten patients' health and taxpayers' bottom line.
the aca will make our health work force shortage even worse. by 2020 we will have a national shortage of more than 90,000 physicians and 1.2 million nurses. if -- in florida about 13% of our physician work force is retiring in the next five years, and we are currently already short 753 doctors in our 248 primary care crisis areas. a massive influx of government-subsidized health care recipients -- because of the aca's insurance exchanges and medicaid expansions -- will make things much worse. because of the aca, patients will face even longer wait times and worse access to specialty care. costs will, obviously, spike as the demand for limited health care services will dramatically increase. the aca will drive patients' premiums higher. we were promised the aca would let us keep the plan we like and
the doctors we trust, but the premium increases resulting from the web of few regulations and mandates make that an empty promise for millions of floridians. the florida office of insurance regulation projects that our small group and individual market premiums will rise an average of between 5-0%. 40 president. will these folks have to choose between high premium and fear of government-run health care or no coverage at all? where is the promise in that? washington isn't providing answers about insurance exchanges or protecting citizens' privacy. as florida weighed whether the state or the federal government would build a state-based exchange, we had questions that needed answering. these questions were included in a three-page november 2012 letter from our house speaker and our senate president to hhs. they did not respond until january. after our exchange decision deadline. and the response was just three brief paragraphs that did not answer any of our questions. based on the final hhs rules for
federally-facilitated exchanges, florida made the right decision in rejecting a state-based exchange. still the timeline and hhs' noncooperation made an informed decision process impossible. what we did know is that the exchange applicants will have to hand over social security numbers, birth dates, employment information, tax returns and much more. all the information needed for identity theft. and we took action. florida passed a law that required the registration of exchange navigators which included background screenings, disqualifications for certain crimes and penalties for improper actions. medicaid expansion is wrong for patients and taxpayers. medicaid is already a problem across the nation. access is limited and outcomes are poor. the only randomized, controlled trial of medicaid ever conducted found no improvements in health when compared to the uninsured. still, the federal government continues to push medicaid expansion in florida. we rejected a medicaid expansion
to add another million people to the medicaid rolls because we knew access problems would get much worse. and it has been difficult to estimate true costs of expansion. in florida official cost estimates for medicaid expansion range from less than 30 billion over a ten-year period to nearly 55 billion, and then as we learn more about expansion, cost estimates for florida's portion went from 1.4 billion to 3.5 billion. and even these estimates assume that the federal government will be able to keep its funding promises despite carrying $17 trillion in debt. states deserve answers to these questions. washington is notorious for passing laws and leaving states to figure out how to make them work. in the case of the aca, we deserve to have our concerns heard. thank you, members of the committee, for giving me the opportunity to talk to you today, and i look forward to your questions. >> thank you. thank you to all of you for your testimony, both written and oral as well. we appreciate your participation
in this. i seem to get a feeling we have two different views today. [laughter] finish the difficulty is one group is talking about the dream of what these benefits might someday do and what they might actually occur one day, if everything works. and another group that's dealing with the reality on the ground. and it's not the dream of what might one day become, but what is currently, right now. and the problems we face. we have a challenge dealing with this law, to say the least, but implementation is very often the state and the employer and the individual damage. and as every individual has to figure out some way to determine whether their employer has provided them qualified health care and determine what does that mean or whether they qualify for a subsidy and if they get that guess wrong, they'll be penalized on their income tax later for getting that guess wrong.
or if their dad works somewhere and they take out insurance and get the subsidy, if they'll be penalized because they took the subsidy that because their dad's employer should have covered them and all of that convoluted mess that has become this. we cannot ignore employers like ibm, walgreens today on the front cover of the newspaper as they're shift to their insurance, did not shift their insurance because they thought it was the right time. they shifted their insurance because they're dealing with the aca. unions, as they continue to step up and say there are major problems and issues, we wish these would be address dod. there is the dream of what we hope it will be and the reality of what's on the ground. we have the responsibility to deal with the reality on the ground and to get questions and to be able to work through what is the solution at this point. attorney general wilson, you wrote a letter august the 14th with other attorneys general and asked some very specific questions to hhs.
do you recall some of those questions and issues that you asked in august? >> yes, i do. in fact, i have the letter here with me. i believe it was provided to the members of the committee, but we can provide that -- >> we can have that in the record. >> our concerns -- and, again, i'm not here today as an implementer, because that is not my role as attorney general. i'm here as an attorney for the state and the citizens of south carolina and as a consumer advocate. and the questions we outlined in the letter dealt with screening of personnel, guidance to program personnel of the navigators, so to speak, the monitoring of personnel, other areas of concern were two bears the liability -- who bears the liability? is it the exchange, is it the individual navigator, is it the sponsoring group that receives the grant funds? what notice to consumers are they going to get? fraud prevention and remedies, we had questions about penalties as well as supplemental state regulations, back the states do
without running afoul of preemption issues in protecting our citizens? so our questions, we sent this letter to hhs. we're still waiting on an answer -- >> no response at this point? >> no response at this point that i'm aware of. >> okay. lieutenant governor, you seem to be a person that's trying to obstruct something that's going to help people and take care of people. yet you speak of taking care of people for free. and caring for the folks. you also speak of $3400 just last week in additional compliance costs in your office, and i can't imagine what that is multiplied around the country, millions of dollars of additional compliance costs that's been added to it. my question for you is, what could the state of kansas do to take care of their people? have they already done something to be able to take care of their people that need health care? >> this is not a simple answer.
there's not just one single answer. but let me give you a couple of examples. the state of kansas, unlike almost every other state, we've gone through an overhaul of our entire medicaid system. we did not throw anybody off our system, we did not cut rates, but we're able to save a billion dollars, and by competing it out, we actually are giving everybody three choices where they didn't have choices before. and in that bidding process, we actually got additional services for people, and they're starting to look at long-term health care outcomes. in the state legislature, we passed a bill that got rid of mandates so that people could have a choice on a more affordable insurance option. now, in the state of kansas we have worked on this in a whole variety of areas, medical homes, indigent clinics and working on this in a very comprehensive way. >> so there are state solutions that you're proposing in in this. >> absolutely. >> walking through this. and i'm going to be real close on time, to let everyone know,
the five minute time because of the number, and we have two different subcommittees together, i'm going to try to stick right on the five minute time, so with that, let me recognize mr. spear. mrs. spier. >> mr. chairman, thank you. and i will abide by your time frame as well. let me just say i was very impressed to hear that the chairman of the full committee now is of the opinion that we should be fixing the affordable care act, not repealing it. unfortunately, i regret that he's not here right now because last year he was a cosponsor of h.r. 2 which was, in fact, a bill to repeal the affordable care act. so he's had a change of heart, it appears, based on his comments today, and i'm pleased to hear that. let me start by asking each of you, do you receive health insurance as government employees through your states? just raise your hand if you do.
so everyone except for the attorney general. you receive yours through tricare, is that correct? >> that is correct. >> all right. i know why you receive it through tricare, because with tricare -- which is what my brother has -- you pay $500 a year for health care. >> [inaudible] >> it's pretty remarkable that that that insurance is available -- >> would the gentlewoman yield for a second? >> no, i'm not going to yield. i have very few seconds in my opportunity, and so i think we're all just going to be able to ask our questions. so let me ask can you all this -- ask you all this: the presentations that you have provided today, particularly the republican representatives, were pretty remarkable in that they were elaborate, they were footnoted, and i'm curious when were you asked by the committee to participate in this hearing?
>> about a -- what, wednesday or thursday of last week. i think thursday. >> okay. attorney general? >> a week or two ago. >> week or two ago. all right. and secretary kliebert? thursday? >> thursday. >> and representative hudson? >> mid last week. >> mid last week. >> wednesday or thursday. >> so pretty impressive that you've been able to put together those kinds of statements with footnotes. i mean, that's something i did when i was in college, and i didn't do it very well. i guess my question to you is, kid -- did any of you have any assistance, anyone help you develop your statements? >> sure. actually, when my staffer and our staff, we were literally working at this, footnoting this at one a.m. on monday morning. >> all right, thank you attorney general wilson?
>> yes, my staff. >> all right. secretary kliebert? >> yes. certainly my staff that's involved in implementation and in our medicaid program as well helped. >> representative hudson. >> yes. florida house health policy staff. >> all right. to your knowledge, did any of them do this in conjunction with alec, the the american legislative exchange council? they're very similar. many of them drafted in a way that would suggest that there were, there was collaboration. >> no. >> no? >> not to my knowledge, no. >> no. >> no. >> all right, thank you. let me then move forward with the 1:33 that i have left and ask a couple of questions. bobby jindal, who is the governor of louisiana, recently said -- let me see if i can get to it -- he said we don't think
it makes any sense to implement obamacare in louisiana. we're going to do what we can to fight it. ms. jackson, in your opinion, is it a significant challenge to the aca implementation when the chief executive of a state state is so strong-willed in their commitment and interests in not implementing the the law of the land? >> it has been one of the most difficult challenges. passing himself as an official basically prohibiting the implementation. every letter sent to the department of health and hospitals from any health and welfare committee member or any legislature has been met with delay, and sometimes we've been told that it was not part of the public records request. it's also difficult, if i can, when you have a secretary of the department of health and hospitals, with all due respect, who's only been there six months
and trying to implement a major prioritizing along with attempting to on santorum this implementation. >> i thank you, and my time has expired. >> thank you, chairman jordan. >> thank you, chairman. the reason i asked if the gentlelady would yield, and my guess is the reason he has tricare is because he wore the uniform of our country, i believe he even served in combat, is that correct, attorney general? >> yes, that's correct. >> well, we appreciate your service, and you're simply getting what you're entitled to. lieutenant governor, let me start with you. you are a physician and elected statewide. do you think it makes sense to delay the affordable care act? >> yes, it does. >> okay. attorney general wilson, you represent an entire state as well. your job is to look out for consumers. you've asked questions of hhs and cms. they've yet to answer your questions.
do you think it makes sense to delay the affordable care actsome. >> from a security and a privacy interest standpoint, i do. and one other comment, i would like to know what plan under tricare allows me to pay $500 a year, because i pay nearly $200 a month. >> yeah. your wife would too. >> my wife wants to know where we get that plan. >> let me go to you, senator hutto. am i pronouncing that right? hutto, i'm sorry. so based on what you said in your testimony, you probably disagree with guys on either side of you. you think the affordable care act should move forward, and the law should be fully implemented, is that correct? >> that is correct. i won't tell you that it'll be seamless -- >> so let me ask you a couple questions. was howard dean wrong when he said the independent payment advisory board is essentially a health care rationing body? was he right or wrong? >> i don't think it's going to be a rationing body, no. >> was the head of the teamsters, james hoffa, wrong
when he said that this law is going to result in, hurt working americans and fundamentally change the 40-hour workweek. was he wrong? >> i think he was. >> he doesn't know what he's talking about? >> we're going to have to work -- >> was the afl-cio wrong last week at their convention when they said fix the bill or repeal the whole darn thing? were they wrong? >> yes. >> they're wrong too. was senator baucus, head of the senate finance committee, pretty accomplished public servant, when he wrong when he referenced this bill was a train wreck? >> that was taken out of context, but, yes. >> he was wrong too. and warren buffett yesterday, probably most people would say a sharp individual, was he wrong yesterday when he said we should scrap the entire bill? was he right or wrong? so far everyone's been wrong and you're the only one that's right. >> that's not what i'm saying. >> the president's hometown
newspaper three weeks ago, lead editorial, final paragraph of the editorial said delay the entire law. chicago tribune, endorsed the president both times he ran for office, both times he ran for president. were they wrong when they said delay the entire bill? >> that's their opinion. >> their opinion? i'm asking if they were right or wrong. >> i think they're wrong. >> this is amazing. because you're right and everyone else is wrong. let me ask you this, does it make sense -- you still think this bill should be implemented when kroger announced last week that 11,000 employees and their spouses would no longer be covered? is that a good thing? >> that is not a good thing, but i'm sure -- >> united parcel service announced recently that 15,000 workers, their spouses and families would no longer be covered? >> it's going to be a good thing when hundreds of thousands of new people are covered. >> let me just turn to the attorney general. when -- you deal with protecting consumers in your state, so when a company says, when they offer a product and they have a
guarantee and someone purchases that product and the guarantee is not met, the consumer gets a chance to take the product back and get something new or get their money back. but what we have here is we have the guarantee that the if you like your insurance, you'd be able to keep it. and we just know kroger, ups, university of virginia, trader joe's and a whole bunch of other companies who are saying you will no longer be able to keep the product you thought you were going to keep. that, to me, is -- if for no other reason, that's why we should delay it. because the guarantee that the president and everyone who supported this bill said was going to be in place is no longer in place. would you agree? >> yes. >> all right. mr. chairman, i yield back. >> mr. cartwright. >> thank you, mr. chairman. and thank you to all the witnesses who came here today to share your expertise and your insights on the implementation of the affordable care act. an exciting time in america,
october 1st. it's time to start getting signed up for the health care law, to make sure we get the word out. it's healthcare.gov, get right on there, enter your information. it's going to be easy, it's going to be interesting, and it's a new dawn in american health care. i want to start with you, attorney general wilson, and i want to thank you for correcting my misstatement. you work with governor nikki haley, not under her, and i appreciate that. and, in fact, i also want to thank you for your military service. i don't care if you're democrat, republican, pro-aca, anti-aca. if you deliver military service like what you did, you deserve the thanks of all of us. and i want to expand on our discussion of governor thicke key hailey -- governor nikki haley. were you attempting to distance yourself from her remark about the importance of te funding
obamacare -- defunding obamacare in congress? were you trying to get away from that remark? >> no, representative. what i'm trying to do is i'm trying to appear today here -- i am an elected firm, but i'm trying to wear the state's lawyer hat. i fought obamacare in the court all the way to the u.s. supreme court. in fact, the supreme court agreed with the states and nfib on every issue except for the fact of whether the mandate was a tax or penalty. but we lost the fight, and so now if it's the law of the land, my job is now as the lawyer for the citizens of south carolina and as a consumer advocate to insure that their information is protected. >> well, general, you were a prosecutor, you know what a yes or no question is. yes or no, do you agree with governor haley when she says everybody else in congress needs to defund obamacare? >> i believe it is good policy, yes. >> you agree with that. and is that why when you were engaged in the fight in the supreme court arguing that the aca is unconstitutional, is that
why you made public comment publicly comparing the aca to committing robbery? is that why you did that? >> i don't recall that comment. i don't dispute that i made it, but i don't recall it. >> all right. i want to switch over to you, senator hutto. you made the comment that my brother, congressman jordan's quote of senator baucus was taken out of context. and congressman jordan has not been bashful about doing that, talking about the train wreck. the full context was that senator baucus said and meant that if aca is not implemented properly the way it's meant to be done, it could turn into a train wreck. is that your recollection? >> absolutely. and i think what he's saying is we need to work together to make sure it is fully implemented correctly. >> thank you, sir. and i want to jump over to you,
senator sobel. it's a pleasure to have you here, senator. all the things that you've done to help seniors and health care in florida. i want to remind everybody that senator sobel has been talked about by the south florida sun sentinel as, quote: a strong voice in tallahassee for education, health care issues and senior citizens' services. so welcome, nice to have you here, senator. and you, you've heard about what we've been talking about here. this hearing's about challenges facing aca implementation. this week it was reported that in florida governor scott issued a directive banning navigate canners from operating -- navigators from operating on the grounds of county health departments in florida. senator sobel, in your opinion was this move intended to obstruct implementation of the affordable care a act? >> yes, i believe so.
these health departments have the kinds of people that actually need health care. they go to these health departments because they don't have a private physician, they don't have health insurance. and by not allowing them on the property -- and some of these properties are owned by counties, by the way, broward county owns its own property. they worked out a compromise that they could work outside and sign people up. but that's not good enough because you cannot get to people who don't hope is up on that day -- don't show up on that day but showed up in the past. and this is a tremendous, a group of people who desperately need health care, and governor rick scott is denying them that access and information. >> thank you for that. i yield my time. >> thank you. chairman issa. >> thank you, chairman.
general wilson, i heard your testimony. i apologize, we have a classified briefing going next door on another program of interest with. of interest. but you said something a moment ago, this is the law of the land, right? but you have an opinion that there are some aspects of this law that were defective in how they did things, and let me just run you through one of them. under the act currently my state, ms. speier's state, the poorest of medicaid recipients, it's a 50/50 deal. federal government throws in 50% on medicaid, state pays 50%. under the affordable care act, for the first three years it's 100% paid for by the federal taxpayer. afterwards, it's supposed to go to 90%. now, isn't it a legitimate concern of states that a promise to pay more for less poor
people, less needy people at 90% where the more needy can people are being reimbursed at 50% is -- and 100% for the first three years is inherently likely unsustainable, that, in fact, the bargain in the act that we had to pass before we could read it created a situation in which some of these things are simply not believable? is that correct in your assumption? >> that is correct. >> and in your state of south carolina, wasn't that one of the reasons that the governor had concerns, is that it's all going to be sugar from federal government for the first three years, and then after that it's at the whim of a congress that's borrowing a trillion dollars a year, right is. >> >> that is correct. >> now, in the case of the recent release of 2400 private e-mails, personal e-mails -- sorry, personal social security numbers even before the act was implemented, isn't that one of
your concerns is that this highly-personal information, the question of what your social security number is, but the question of whether or not, you know, you're being treated for venereal disease, or you're, you have a persistent illness of some sort or whether you're a diabetic, all of that is exactly the kind of information that you're charged to make sure does not become public since that's historically private information. >> yes, that is correct. >> now, the conversation about people coming into county health centers and so on, isn't compliance with hipaa, making sure that only doctors and cleared medical professionals have access to this kind of information as to what you or i or anyone else is receiving, a medical concern, isn't that legitimate concern of basically letting a salesman into a hospital or medical facility? >> that is correct, and that is a concern i had about hipaa not applying to potential navigators that are helping people enroll in the exchange. >> but these navigators will, in
fact, be gathering exactly the information that hipaa is supposed to prevent from going into people not very specifically cleared, true? >> it is very potential, yes. >> well, ms. speier perhaps paraphrased what i said, and i want to make sure that we get it correct here. i think that the affordable care act currently will be a train wreck. it doesn't answer serious questions about cost and privacy. now, i was saying, and, ms. speier, i want to make sure i'm clear, there were problems when president obama came in that had not been addressed; rising cost of health care, a interesting cliff that causes people to choose to be -- no not earn more than a certain amount because if you earn less than a certain amount in america, you've got 20 or 30,000, maybe $40,000 worth of benefits that come to you. when you earn a little more, you lose those benefits. the affordable care act, in my
opinion, even exacerbates that more because of the nature of the means test asking so on. -- testing and so on. so do i want to address the issues of cost of health care, access of health care? absolutely. and i would make it clear, and any member on the dais can get more information from our staff, we have been working on a change to fehbp to make it compliant with the exchange systems, if you will, that are envisioned in the affordable care act. we are responding to at least as to the two million federal workers and the eight million covered individuals the reality of a law. but don't confuse my votes repeatedly to repeal as either only wanting to repeal or somehow not being against the affordable care act. e believe that -- i believe that a bill that was 100% partisan, voted on without a single republican vote or any real input that was we had to pass it
before we could read it and that has material flaws which are numerous, in fact, is a bill that should be started over again. now, having said that, i appreciate our panel, and i'm going to continue to hear what you have to say. and i would note because the chairman -- the ranking member's not here, i want to thank all the witnesses. i've checked, and all of you came here without the federal government paying you a dime the come here. so since you all came on your own dime, i'd like to add to the list to thank you. and with that, mr. chairman, i yield back. >> mr. cardenas. >> thank you very much, mr. chairman. my first question is to mr. hudson. in your submitted testimony, you stated, and i quote: these provisions require insurance companies to accept all applicants even if they wait until today get sick before applying for coverage. and the insurance companies are now prohibited from charging premiums based upon likely costs. is that accurate?
>> thank you. yes. >> okay. are you referring to the guaranteed issue and community rating provisions of the affordable care act? >> yes. >> okay. thank you for clayfying that -- clarifying that. personally, i cannot understand why you would oppose these. a recent analysis estimates that between 50 million and 129 million non-elderly americans have some kind of pre-existing condition. without the ratings in the affordable care act, these pre-existing conditions would put them at risk of not being able to obtain health insurance if they're self-employed or experience some other change in life circumstances. i think, for example, we heard the story of -- [inaudible] story, she was here earlier which the ranking member cummings described in his opening statement is
illustrative of the importance of the consumer protections in the affordable care act. due to her pre-existing condition, a heart condition that she had suffered from since 1990, ms. lowery has been unable to obtain consistent health care coverage since 2005. in 2005 when her insurer rescinded her coverage and left her with a $50,000 medical bill. thankfully, she was able to obtain insurance through a high-risk pool established by the affordable care act and was covered when she had a heart attack this past may. i'm grateful for that. she's able to be here with us today, and, representative hudson, in the state of florida somebody suffers a heart attack and they do not have insurance, what is the likely scenario from that moment forward? i would assume that if somebody has a heart attack, let's just say an ambulance shows up, what's the likely scenario after that when the ambulance shows up and is tries to, you know, attend to somebody without
insurance who just had a heart attack? >> thank you for the question. i would think it would be is same in your great state of new mexico -- >> no, i'm from california. >> excuse me. another great state. frankly, ems would try to revive that person, and they would transport that person to a hospital. in my state, that is prohibitively challenging as i have eight counties without hospitals. >> okay. now say that person were fortunate to arrive at a hospital and then their condition was, in fact, adhered to, say they revived that person, say that person had some kind of surgery or what have you, then there comes a big list of expenses. what would happen to that list of expenses when that person without insurance ended up showing up at a hospital due to a heart attack? then what would happen with the bottom dollar, the bottom line of that expense? what would, what would likely occur with that expense? would the state eventually end
up picking up some of that cost? perhaps the hospital would absorb a portion or all of that cost? what is the likely scenario, you are the chairman of the -- excuse me, what chairman are you the -- >> it's the statehouse, and it's appropriations. >> okay. so what would likely happen to that dollar amount whether it's $40,000, $90,000, $120,000, whatever? >> likely what would happen is that patient would be treated, would be stabilized under your act and then sent home after they had been stabilized. the cost of the care could be incorporated under charity care for that hospital, it could be facilitated by dish funds or low income pool funds. >> okay. so to my point, ladies and gentlemen, it's -- the affordable care act is trying to find a solution to all of those situations in the great state of
florida and the great state of california and every state in the nation. what the affordable care act is trying to address is the overall cost and who will bear that cost at the end of the day in trying to provide a system that actually is better than the system that we have today. because i know exactly what happens when that occurs. the person who actually had the heart attack does not bear the burden of that, and the insurance companies in the state of florida or california do not inherently bear that burden. it will eventually be a taxpayer system that will bear that burden and/or a private or public hospital that actually adhered to that patient who suffered a heart attack and got administered some health care. ..
so if china understand correctly, the affordable care act which costs hundreds of billions of dollars of tax payers' money replaces the idea that taxpayers play money didn't you make the point that the tax payer is going to pay it under the affordable care act in voluntarily and the tax payer is already paying it? people are not feeling to get care under the affordable care act. you simply have tax payers paying for the entrance in
addition to somebody if they go to the hospital. >> that's an interesting interpretation. that's not what i said. under this system if we implement the affordable care act, what we are going to have as more americans with health care coverage and true access to health care unlike what we have today. thank you. >> for implementation of the 41 million americans still not covered. 41 million americans. i'm from the great state of georgia. that's my commissioner that you see up there on wall. i couldn't tell if that was you were the ranking member that put that up there. what i'm going to tell you will not surprise you at all. he loves people and he cares about people, which is why he got involved in public service and ran to be our commissioner. it's a constitutional.
he talks about how to get coverage, how to get affordable care. and she said obamacare is actually the problem and i'm going to do everything i can to obstruct it from creating those problems. i have a high deductible medical savings account. my policy was outlawed by the president's health care bill. i can afford to buy a more expensive policy but a lot of folks in georgia but they can't afford to buy something. but i want to ask you will representing different states and different opinions what is it in the president's health care bill that you like that's going to be valuable for your constituents back home that you and your state and your governor and your insurance commissioner batt dewaal couldn't have done on your own if you thought it was the best plan for your state, what is it if you need it for the benevolence of the federal government? what permission did you need from washington to implement
some of these things that are going to pay off from your constituents back home? if i could start with you, governor. >> nothing. solutions are best where it is local and all of our states have different problems and different solutions. we have a number of solutions that we can do here in the state if we could implement some things but there are so many strings attached that it gets in the way of a lot of things prevents us from getting better outcomes. >> i went to school in south carolina. my understanding is a modest health care plan that i had in college is now out walt so students will no longer be able to have that. but what is it that south carolina is going to benefit that you couldn't have done with your insurance and governor? >> we are looking forward to not using the emergency room as the
medical home for so many people and the money we are going to get from the federal tax dollars hour citizens get is going to help us implement that. i talk about that regularly but i don't have the dollars to spend accept the dollars your constituents see that i turn around and give back. i'm glad the folks see that as a glass half full that some of those dollars will come back. mr. attorney general is their anything that's going on in south carolina that you need it to get permission in order to implement? >> i am a strong federalist. i believe the problems can be solved by the states with few exceptions. but i've looked at the numbers. it's been a year but it would have been cheaper for the federal government to cut a check to every american who didn't have health insurance as opposed to basic recreate this huge goliath of the bill it would have been cheaper to give it to people without insurance. >> but in all fairness, president clinton and newt gingrich, republicans and
democrats came together in 1996 with hippa for the federally regulated plans. the states are pretty smart folks and have people running the programs so we won't get into their business. i would ask you, reverend jackson, and 1996 we said let's leave it to the states. the states will loan their constituents more than we do. is their something that you were unable to do to serve your constituents that you need our permission in washington to get done? >> if you heard any of my testimony today, i talked specifically about our state governor and the department of the health and hospitals advocating for cutting hospice care for those on injured patients. we could even provide hospice care. and to the extent that we were trying to regulate the interstate commerce then of course you know the states are limited number regulation of the commerce with most insurance companies and that argument has been made at the supreme court. >> so when you were thinking
about what you can and can't do are you saying you don't have enough money to get these done and what is taxing other americans and you will be getting more than your fair share? >> not at all. what we count on is the money that we sent to the federal government and that louisiana pay is would be distributed in a manner that we could take care of all our citizens just like other states count on as well but we do pay federal taxes to that extent. we are afforded or should be afforded our rightful share of those federal taxes. >> there is no question at all that and i suspect that is something that you will find a good bipartisan support on it. madam secretary, is their something that louisiana really needs the permission to get done? >> i am beginning to be more passionate and myself about providing the uninsured care for our citizens. however, i believe several things. one, we have done a very good job of providing care. we had a state charity system and we have recently changed
that to a public-private partnership which has eliminated the two-tier system for the uninsured. we don't use emergency rooms as our medical homes. we have opportunities for people that would seek outpatient care as less follow-up care after the of received inpatient care if needed for the uninsured person in the state. the implementation of the affordable care act would be detrimental to those that we are trying to help in the long run. >> that is what we believe in georgia as well. i look forward to sharing our ideas and you all sharing your ideas with us. if we have 50 different projects going on we are going to find at least one that serves america. >> we would love to have a flexible outcome driven carry and we believe that we can do that in a system that we have without having the complications of the implementation. >> thank you madame secretary and mr. chairman. >> representative? >> i would like to yield my time
to the gentleman from pennsylvania, the ranking member of the subcommittee on the growth and regulatory affairs. mr. urquhart right. >> thank you, congresswoman. and senator, i want to return to you. you are from florida and i am from pennsylvania. my commonwealth we have a figure of uninsured citizens of almost 12%. that pales in comparison to the 25.3% uninsured in your state. so obviously in your position with your set of values this is something that you have been worrying about, something you have been working on for many years. am i correct in that? >> yes, sir. >> i want to follow-up. senator do you believe that your governor scott is investing the
resources necessary to ensure that for the residents have the information they need to enroll in affordable quality health care in the affordable care act exchanges? >> thank you very much for that very good question. i don't believe that there has been anything budgeted or used by the governor to inform people about the affordable care act. >> so we all know that getting on healthcare.gov is easy for some people but the man not be as fast on computers. they are the people that need us to go the extra mile to make sure the understand how to sign up. is the for the administration doing everything it needs to be giving to help those people? >> the floor of the administration is not to my
knowledge doing much or anything to educate the people about this program. and i believe the best way to destroy a program is not to get the information out to the people who actually need that information. so, it's become a pass to make this program a success and to have people get the information they need in a way that they understand. islamic lets you and i give governor scott some help, shall we? tell us what should governor scott be doing to ensure the implementation of aca goes smoothly? >> first of all, i think that he should allow the health department to allow the navigators on the premise and to work with the people in the health department.
i also think that he should be establishing a website in the state which we might have won but nobody knows about it telling people about the affordable care act. i believe that he should be speaking about that and his conferences, press conferences as well as sending out information that is now available. none of that is happening. >> switching gears for the moment, the rate review provisions in the aca require insurance companies to justify any proposed rate hike of 10% or more. last year this provision saved 6.8 million consumers in this country an estimated $1.2 billion in health insurance premiums. unfortunately, in florida the legislature recently passed, and governor scott signed
legislation stripping the insurance commission or the authority to review health insurance rate hikes. congressman joe garcia, my colleague has called this a cynical attempt to undermine the protection for the florida consumers in order to sabotage the implementation of the affordable care act. senator, do you agree? >> yes, i do agree with the handcuffing of our insurance commissioner. at this particular time, he can only -- well first of all previously he could have negotiated the rate. right now he can't say anything or do anything for the next two years. >> so what is the point of just doing this giveaway to the health insurance companies? >> well i think the underlying premise is that the rate would be so high that people wouldn't
sign up and you lose the affordable care act. but the insurance commissioner has indicated and rightfully so that there are tax credits to be had so the rate cut of 30 to 40% rate that he's talking about of an increase will be mitigated with the tax credits he will get for signing up. but the headlines are 30 to 40%. >> and it's misleading. thank you very much, senator. >> thank you. >> thank you, mr. chairman. mr. chairman, the committee has obtained an internal memorandum from may 28, 2013 detailing serious concerns about the devotee to certify and register the navigators and the sisters in the obamacare consumer outreach program. the memo reads we are becoming increasingly concerned about the
ability of the cms to certify every one who will be involved in the consumer system assistance process. i would like to enter this memo in the record. >> without objection. >> leaders another top official testified that the hhs decided to leave the responsibility of certifying and registering to each navigator organization. hhs rejected the option of the list of all certified navigators and sisters. the lack of the list exposes consumers to significant risks since consumers that call the hhs hot line will be unable to verify if a person offering to provide them information about obamacare is working for legitimate organizations. were you aware that there is no way for citizens in your state
to contact hhs to verify if a person offering information about obamacare is working for legitimate organizations? senate governor? >> that's a very troubling aspect because people want to -- there's going to be a lot of confusion over all, and we need good information and we need time to get good information and we need to be able to verify that. >> attorney general? >> yes. >> okay. secretary? >> yes. >> mr. hudson are you aware of the poll but was released last week that 68% of americans believe that obamacare will harm their health care? 56% of residents believe it will harm their health care. are you familiar with that? >> yes, sir. i have seen the headlines on that. >> i am going to just twist things around a little bit. you said you were a realtor,
correct? if i understand the realtor's job, you bring the customer and that is thinking of buying a home, find out what kind of home they want, look at the listings, show them the listing may be a photograph, correct? you sold a home to somebody -- >> i sold many homes to the first-time home buyers. >> what about somebody that never walked into the home? did you get to look at all of the rooms? i think they are in slabs a lot of them. before a person buys a home and they get to walk in and go into each room and test the appliances -- >> if i could add i would never sell a home to someone that didn't know what they were bargaining for because frankly that is one of the single largest investments in their life, their personhood, their
entire family and doing so is reckless and inappropriate. >> before they buy that home, you give them the documents -- you go over the purchase agreement and tell them what they are getting and what they are not getting, correct? >> that is absolutely correct as well as another number of disclosures that will help them understand the purchase that there will inform and knowledgeable. the days of the caveat oregon and should be in the affordable care act as well. >> so, you would let your customers read the contract before they signed it, correct or at least have their attorney or representative read the bill, correct? >> you are absolutely correct. >> senator, you disagree with that and you think that we should as legislators vote for something that we didn't have the opportunity to read before we voted for it. >> it is a complex wall and it's
going to be tough. we need to roll up our sleeves and implement it. >> it's not on the floor but basically it is called read the bill act. you wouldn't be a co-sponsor but i suspect you would be, correct? >> absolutely. >> i yield back my time, mr. chairman. >> with the gentleman yield to me i think we have 20 seconds or so. >> i yield back. >> you had mentioned about the conflicting message on pregnancy has that been resolved yet or are you still waiting for details? >> we are still waiting for details and it affects us because our policy decisions in terms of that population it affects how we move forward on that policy, but we haven't heard back. >> would the gentleman yield? >> can you will launch a
settlement? will the gentleman yield? >> mr. secretary, isn't the reason why there is and a willingness to allow someone to acquire insurance once they know they are pregnant because they don't want people to gain the system and not access the insurance when the insurance is available to them and they choose instead to just pay the tax. >> i'm not sure in terms of the rationale to it all we want is an answer to whether or not there is a qualifying conditions so we can make our policy -- >> says there's an individual mandate if everyone actually takes up the insurance, then there wouldn't be in issue about the life changing the event because he was already have insurance. the only time would play a role is in fact you choose not to take insurance and instead take the $300 fee, correct? >> correct. spec is it the gentlelady's provision that we wouldn't get
prenatal care of the plant because someone didn't pay the penalty? >> the point is an individual mandate is trying to make sure that we will take personal responsibility. that is one of the precepts of the republican party, personal responsibility. we are going to provide a health care opportunity for every american to access of care. and we are going to keep the cost down. but if you choose not to, and this is a free country, if you choose not to then you can pay a fee which means that you are not going to access the healthcare, but that is a choice. so if in fact you to become pregnant and you will be paying out of pocket. we of course want you to have prenatal care. if your indigent, you will get prenatal care. but if you are making $7,500,000 a year and you choose not to have health insurance and you get pregnant, while you have an offer to have health insurance and you chose not to access it. i think that's why you are
getting a question as to whether or not it is a life changing event. >> we want a definite answer so that we can move forward on any policy decisions we need to make as a state. >> just a quick clarification they don't pay a fee they pay a tax. >> before my time starts counting i would ask unanimous consent that the extra one minute and ten seconds provided my good friend and colleague from georgia be extended to me. >> that was in response. u.s. question of the last second and i mean to allow that person -- >> i think the chair. by the way, my friend from georgia mentioned newt gingrich. do you happen to recall the reason the speaker of the house opposed the clinton health care initiative? the single most important reason he objected to the 1993 initiative. do you recall?
it was a lack of the universal mandate and individual mandate. intellectually was that a liberal think tank that came up with the individual mandate? >> it was not. it had been turned on their head. it was a conservative think tank. now it's socialism. you introduced legislation in hb 1193 to prohibit a person from being compelled to purchase of insurance objecting to the individual mandate, is that correct? >> that's correct. >> you just testified that as a realtor you believe in full disclosure so that a consumer is fully aware of the pitfalls of the purchase. >> that is correct. >> when you introduced yourself, did you happen to mention that it was modeled almost
identically on something provided by alec? page 12 pretty much mirrors your legislation. were you aware of that? >> if you are referring to something called the health care freedom act, that was actually sponsored by the -- >> no, sir. i am referring to the model bill on page 12 of the brochure provided to the conference i think that you attended. did you not attend the conference that was discussed? >> i don't have that a book in front of me. >> so you were not aware of the fact that your legislation happens almost identically to mimic a model bill that he was encouraging state legislators such as yourself to introduce to the respect of legislators? >> is that your testimony? >> there are a number of pieces of legislation that are supported by a wide variety --
>> were you or were you not were aware of the model on page 12 that is almost identical the mirrored in the legislation that you introduce? >> yes, sir that is correct. >> i would like to finish my answer to get on the question whether you are aware or not in your answer as it were did you read that to your colleagues because you just said how committed you are and the full disclosure when you introduce that bill that you were modeling it on the national conservative movement founded by the brothers and that this came from their legislative initiative to the >> when we had discussions on this, the term did come up. >> mr. attorney general, you talked about your view about state rights. south carolina has a long
tradition of that issue. i'm just interested in your philosophy of the law. when adel -- when you lose in a legislative battle and something becomes law even though you voted against it and then you lose through the legal system up to the supreme court and the supreme court upholds the constitutionality of that law do you think is the attorney general is still okay because you don't agree with it is that your legal philosophy? >> that is not my legal philosophy. >> would you take issue with this gentleman that maybe that is not a very good legal statute? >> you use obstruct very broadly. my concern is that it can be constitutional and still be bad policy and the supreme court disagrees with me and that doesn't negate the fact that obamacare is still a bad policy
and we have the duty as the representatives to continue to try to improve it as long as it is going to be felt all of the land and that is what we are here to do today. >> couldn't agree more. >> about obstruction is a different matter. mr. chairman i think i have extra time and i yield the balance -- >> actually you have none. i -- the witness was responding to his question i've been very careful and with that i recognize you. >> question for the lieutenant of fire and secretary clyburn and mr. hudson, senator representative hudson. does obamacare raise premiums in your state and does it raise insurance premiums in your state? do you know? >> we haven't had the full
release of what it does to premiums across the board and federal government hasn't released the information for us. however, we have an example when we have gone to the website and all of the examples show a dramatic increase in cost. >> madame secretary? >> up to 200%. again we don't have all the details in terms of what it's going to mean for every different type of population. but we do have the data that indicates for some groups it will go up to a 200% increase to the >> representative? >> like my colleagues before me, we lack a tremendous amount of the actuarial value to make a discerning judgments and continue to change we can project and they are not good they will go up to the estimate lieutenant governor does obamacare reduced prices in your state.
in the scope of plans people can choose and also in the number of insurers. >> madam secretary, same question. >> we believe there will be changes in our medicaid plans we now have five choices. it can reduce a level of choice. >> representative, do you have an answer to that question? >> it will definitely reduce the choice. >> what is the overall view of the citizens of your state with regard to obamacare, governor? >> the kansans are overwhelmingly against it. they see the economic impact and how it affects the health care. >> madame secretary? >> we have had several polls as well as debates within the legislature that indicate that overwhelming there is and the will to move with expansion or
towards some of the implementation of the affordable care act. >> representative hudson? >> floridians are absolutely opposed to it and recognize in our state like other states that the vlore areas will be disproportionately affected the lack of choice and access and tremendous challenges of work force which makes things impossible to implement. it doesn't work well on this side. obamacare has problems, delays and will lead to higher insurance premiums and greater burdens on business. can you tell us how all the wall is impacting the citizens of your state, how are the delays impacting the state's ability to comply with the new requirements as well? so the question is twofold. the ability to comply the individuals impact.
>> it isn't something i'm qualified to comment on. my opinion is that it will adversely affect other citizens and our state. my one follow-up, representative, is that i am begging the congress if they want to criticize the criticizes of obamacare and me and other folks that share my view i welcome that part of the american process but look at the questions we are asking as consumer advocates and that independent of obamacare and let's look how we have a duty as officials to protect the citizens and i think right now we are getting into a debate on the merits instead of how to make it better going forward and i am begging congress to look at the questions. >> lieutenant governor, can you describe a the regulation process and how it's impacting khamsin citizens and the kansas government as well? >> there are some issues of
transparency. here it is two weeks before and we don't know what all the rates are. we are getting a new software updates. we have a new software update coming sometime before october 1st. so even if the navigators can't be trained up to date on that, we are having to work overtime to try to comply. >> considering that the president of the united states after whom the bill was named is the person who's done the most to delay the implementation of obamacare. do you think it's appropriate to say that the obstruction is coming from outside of the white house? >> no i wish they could block a number of other areas as well. >> i yield back. >> i would like to ask about the
role of the navigator's will play in helping the uninsured to sign up for benefits under the affordable care act. in my district i have 400 people to come out to try to find out more about this. the attorney general i talked about making the government work. they came out because they wanted to take advantage of the law. and the lawyer i trained to look at the law and the legislator to a poll that. according to the memorandum released this morning by the minority staff of energy and commerce, navigator grant recipients will have nearly 1.1 million uninsured people in the exchanges and in medicaid the expect them to for that an additional 3 million people through public education efforts about the benefits of the affordable care act. moreover according to the
memorandum, many of these organizations are experiencing precisely the type of outreach necessary to get people enrolled in the exchange's. they have linked families in need with public and private benefits for which they are eligible such as food stamps, medicaid, disaster assistance, the medicare part b. ebenefits which a number of people on this side of the dial were against but yet when it became by law we did everything in our power to make sure our constituents were informed of its. the low-income subsidy for the part b benefit. finally, according to the memorandum that strong and effective privacy protection in place in the navigator program all grant recipients must abide by the law and prohibit the use for disclosure of personally identifiable information or face criminal and civil penalties. many of the grantees that adopted additional privacy practices for their staff.
above and beyond those required by federal regulation that have a proven track record of responsibly handling financial health data in the course of their work. ms. sobel, i think we can agree that it's a heavy lift. i'm not saying there are not any legitimate privacy concerns or we should examine the issues of the data security and navigator training. but do you think that governor scott's decision to ban navigators from operating on the ground of the county health department was a necessary or even remotely proportionate response? >> thank you for that very good question. i basically think it is a road block and they overreacted. there are standards in place for
the affordable care act about navigators' as well as florida having in place criminal background checks and another stand is that the state put forward. i think that this is an effort to stop people from enrolling. it's just unfair, it's not right and it hurts a lot of people who need the information. >> i told my constituents i said it's one thing to have opportunity and it's another thing to go about it. then to be able to take advantage of that. do you believe that this and many of the other regulations that the republican state officials and legislatures across the country have imposed on the navigator is motivated by the desire to delay and obstruct enrollment in the exchange's i think ms. jackson, could you answer that?
did you get my question? i said do you believe that this and many of the of the regulations by the republican state officials and the legislature's across the country have in post motivation to delay and obstruct the enrollment in the exchange's? by the way i might add they just came over the wire that the republican conference and speaker bonner said this morning talking to the republicans in congress every member in this room is funding obamacare while letting the rest of the government operate. >> by every as a practicing attorney and legislator in the state of louisiana so much obstruction of this somewhat reminds me of what i've learned in my history lessons about the civil rights structures and the right to vote that was given to the minorities. they begin to obstruct those. and in louisiana we have seen that example with the affordable health care act. and it's a major obstruction.
>> i read in a staff report from the commerce committee. >> absolutely. without objection. >> thank you mr. chairman. i'm going to be quick because i have a number of points. first, mr. attorney general, just so that you know on wednesday, september 11th, 2013, the house committee on homeland security subcommittee on cybersecurity infrastructure, protection and security technology had a hearing on this very subject around the data hubs where we are with the implementation and in your testimony you talk about deadlines not being met. those were on the record responses that were provided by the auditor, the oig who oversees this, and the result was the deadline was met. so while we want to have talking points that say something else,
the reality is different. mr. chairman, i attended a trust this saturday, and one thing that was made clear to me is there is more work to be done on the implementation of the affordable care act. the outreach is necessary, the education is necessary. the fact that people need to understand this is in large part about expanding care under medicaid and expanding benefits under medicare and adopting a new market place under the exchange. i want to say our governor who happens to be a republican who was part of the lawsuit with other states to challenge the constitutionality of the affordable health care act at the time i served in the state's legislature about his director
of health and human services to continue to work on the implementation of the bill until the outcome of the supreme court's determination. and because he made that decision, nevada is the head of the mark on the implementation of our marketplace exchanges. they have agreed to expand medicaid. our navigators have been recruited and trained and are ready to do their job. and this is from a republican governor who didn't agree with the law. but he understood his job was to implement heuvel law as it was adopted and upheld -- adopted by congress and upheld by the supreme court. so, in my state i have far too many constituents who would benefit under the affordable care act to not see it implemented. is it perfect? no. does this congress need to do
its job to make the necessary adjustments? yes. and i'm glad to hear that mr. jordan shares my concern and those concerns of labour particularly the afl-cio on a provision of the bill that does need a congressional six. and i've asked him even though he's not here if he would join me in bringing forward legislation so that we can fix that and other provisions. let me ask my couple of questions. senator, what happens to the millions of americans who now have health coverage if the opponents of the aca are successful? >> if they are successful, people could lose the coverage they have now but we hope that won't happen. >> representative jackson, how would it affect your constituents it suddenly they have to worry about insurance companies rescinding their insurance because of pre-existing conditions cracks
>> i think we will be in the same boat we were in a year ago when then governor asked us to defund hospice care. we would begin to look for solutions that really weren't solutions and our constituency wouldn't be offered any health care at all. and if it offered health care very minimal and forced to go into emergency rooms when there are by your need situations in health care. >> more than 32.5 million seniors have already received one or more free prevent that services because of the affordable care act. can you express to the subcommittee the importance of the services to your constituents? >> absolutely. and if the bill is repealed, i believe there would be greater hardships for less than using these. it's shameful to reveal any part of the benefits that have already passed. >> so mr. chairman, i know there
are those of the other side that have a different opinion about where we are on the affordable care act. but after hearing from my constituents, small-business owners, those in health care in my state i believe that it is time for us to stop having these continual efforts to defund the affordable care act and it's time for us as congress to do our job in implementing it and moving forward and i would use my home state of nevada as an example of how republicans and democrats, the governor, the legislature and members here in congress are working to do our job and not obstructing the affordable care act. thank you mr. chairman. >> you are recognized for closing comments. ranking member. >> mr. chairman, thank you. first of all let me say to the attorney general willson come on too and jerry grateful to your service to the country. i was trying to make the point of all of us here have the great
luxury of having a government sponsored health insurance plan to benefit from. and the hope is that for the 45 million americans who have no insurance whatsoever that the affordable care act will place them on equal status with all of us. let me also point out there is a script that is being used that isn't accurate and when people talk about the affordable care act that's costing us so much money, that couldn't be further from the truth. in fact, the very non-partisan congressional budget office has said that we will save $1.3 trillion over the next two decades with the implementation of the affordable care act. now, as a country we spend 18%
of our gross domestic product on health care. 18%. more than the next ten biggest spenders in the world including japan, germany, france, china, the u.k., italy, canada, brazil, spain and australia combined. and you might think will we get better health care. but the fact of the matter is we do not. in fact, we ranked 38 in the who rankings of countries in terms of the quality of their health care. we rank number one in spending and for the eighth in overall health care. now the reference made by my good friend mr. jordan and by others on the of the side of the all about the comment made by max baucus is taken out of context. and you made reference to this. i would like to point out what was really being said by senator
baucus. the was $554 million requested by the president in his budget for promotions and advertising and education on behalf of the affordable care act. our good friends on the other side of the nile chose to strike that funding completely, and was with that backdrop that senator baucus said that without promotion, without education but there is going to be a train wreck relative to the implementation because people aren't going to know about it. so when we use the term train wreck, let's use it accurately as it reflects senator bachus' comment. and with that, i would like to point out finally that the hand-wringing that is going on here is all well and good. the truth of the matter is that starting october 1st there will be six months in which people
will have the opportunity to enroll. they will have the opportunity to enroll until march. lots of the kinks will be worked out during that period of time and i think that it would be better for all of us to not be the obstructionists' that some have suggested. i would like to invite governor snyder from michigan, the republican who says and said it very well it is ball of the land upheld by the u.s. supreme court and is being implemented. some believe that fighting it is good politics. i believe that finding a way to make it work for our state is good government. >> with the gentlelady yield one minute? >> i certainly would. >> i just want to thank all the witnesses for being here today. we may disagree. but the real deal this we are talking about our fellow americans. we are talking about our brothers and sisters, our
neighbors. and there are people who -- and i was dressed in white high said in my district this weekend talking to some of my constituents. there are people who really need this. i tell the story about when we voted for the affordable care act. i got to the floor of the house for hours early. i sat on the front row and i have only one prior. i said god, don't let me die before i vote. and the reason i said that is because i knew it would save lives. i knew it would affect generations yet unborn. i know it would allow some mother to be able to save her child. i knew it would have a tremendous effect. we have to make it work. i'm tired of people saying this is hard. a lot of things are hard. we are america and we are better than that. so i am looking forward to all of you working with us not about the funding and not about destroying but trying to make it
better. i yield back. thank you mr. chairman. >> i would think the witnesses for coming and being part of this dialogue. this is overlap as far as implementation. you are the one on the phone trying to get answers and writing letters trying to get answers, dealing with implementation on the ground. many of you will be on the first line of that phone call trying to be able to get things resolved. in my state the capitol of the leaders together last week from all the different agencies that have any connection and they had a long list of all of the unanswered questions and they want to get everyone together so they can find out what everyone knew and get all those answers so everyone can share. what they did instead is what the leaders together and listed the questions that none of them had the answers. all of them assume someone else knew this and they just one of sharing it. none of them knew what's coming on. so again, the focus of this is going to be great is very
different when you have to implement and when it is coming at you. i would commend to anyone's reading on this committee and outside of this committee the navigator report one was done by this committee dealing with the issues of fraud and the exposure areas that we have that are a risk to consumers. we have a hearing on the hub% of the questions that should be asked about security because a lot of americans information is about to be exposed. but with of the navigators and all that is happening in the days ahead and as we have seen the reduction of time that's now in the training on what is there there are serious issues. we do have come and i know the ranking member mentioned we are 38 in the world on health care. i would say in my district in central oklahoma we have more advanced cancer care in oklahoma city than in all of the u.k.. we had a hospital open in
oklahoma city that is a straight fee based hospital and they were surprised to see the first thing that happened was the comedians started coming for health care. 25% of their business our people from outside of the country that come to that hospital from all over the world. and when people are sick and the need advanced care they are coming here to get that. the term medical tourism didn't exist years ago but now many of our communities see it as some of the finest hospitals in the world are located right here. and the challenge is to be put that medical advancement at risk by limiting reimbursements, limiting access to that, controlling how it's done in the days ahead and the medical the invasion that is currently occurring slows down and that we suddenly become equal with the rest of the world rather than leading the rest of the world and medical innovation and device manufacturers and drug development and such. we have to continue to press on
to that. this is a bill where there are major problems. i heard over and over again it's the law of the land and we should leave it. we are not doing dhaka with no child left behind. we see that there are major issues on implementing that and we have now reached the time and where almost every state is under a waiver. no one here is saying we need to implement all of no child left behind. it is ball of the land and we need to demand every part of that is implemented. why? because there are major problems with the law and we can see it based on how it's implemented and so the weavers have gone everywhere to try to free everyone up from what is happening on a child left behind. we see the same thing occurred with the affordable care act. waivers for certain employers and for different groups and people because the problems continue to double lummis. right now the house and senate are dealing with what do we do to replace no child left behind because it has become such a
problem. and in the days ahead, we will finally come to the point of saying there are so many issues and so many problems with implementation we've got to look at what we can do to replace this. i look forward to the day when the states are allowed to experiment as my state has to come begging to the federal government to do things to take care of the needy in my state. there's a program called ensure oklahoma which has been a fantastic program to serve people in my state of great need that we continue to expand and now we have to beg to allow that program to continue to go forward. when health care is controlled from washington, d.c. it is about numbers. when it's controlled in state and local areas and counties and districts with a great need, and i have many rural districts in my state, it's about neighbors and families and of real lives. so, at the end of the day, hopefully we've got some questions to the table that we can get resolutions on and hopefully we can continue to focus on families and lives.
thank you for being here and being a part of this conversation. with this, we are adjourned. bus service for not only our members but when you look at the cable industry in general the cable industry has done such a tremendous job of deploying broad battle over urban areas, small markets where the members live and work and it really has made a difference. and as we look ahead we see the future is a broadband business. when you look of the services they provide the provide voice and video internet services as well as broadband and broadband is the key to most of our members areas. they say that the speed and the capacity and the demand for broadband in the market is doubling every two years. >> of the head of the american cable association
the senate gaveling in and about ten minutes. before they do we will get a preview of the week ahead. >> here's a headline from the front page of the usa today the clock ticking on the shutdown with obamacare at center stage that the budget battle that is taking place this week on capitol hill to discuss more about that and i want to bring in delhi house, the national journal congressional correspondent. thanks for getting up with us this morning. talk a little bit about the timeline for this essential shut down in some of the votes that are going on this week showing the readers now the national journal story from last week inside of the plan to avoid a
government shutdown. what is the timeframe that we are talking about? >> the initial procedural votes can begin as early as wednesday morning with the filing of cloture as early as today in the senate meeting the motion to begin to proceed. this can stretch out throughout the week with a couple of procedural votes and then perhaps in the senate a final vote on how it will handle last week's house passed a value that does include the funding of obamacare along with a continued funding of government passed the end of the month expiration on the bill. estimate at this point is it looking like it is going to go right up to that funding of the deadline? >> it does seem that the house itself does not get back to washington and doesn't get under way until thursday morning.
but house members are life wednesday. they probably won't receive anything back from the senate until this weekend. of course the deadline is next tuesday for when the funding runs out and that a central government operations are no longer funded unless there is a temporary spending bill passed. >> is anybody talking on this issue in terms of coming up with a sort of compromise you are talking about the house getting the bill back in the senate over the weekend and the deadline that doesn't leave a lot of room for the negotiations. >> it puts the speaker in the house in a kind of tough position if he were to get a bill back from the senate on monday or sunday he will have to decide how to proceed. and as part of that if the bill was brought back to the house it doesn't include obamacare funding. he will have to decide whether to rely on the democratic votes if he can to help him get it
passed if he loses enough of the conservative votes that wanted that obamacare or he would have to decide in another procedure or letting the government shut down and blame it on the democrats that is unlikely. as for the compromises i would call with a compromise with house republicans by fears they or maybe friday morning will vote on another track, a debt ceiling bill that will allow the government to continue borrowing beyond what is anticipated to be an exhaustion of the current limit in october and they what add to that bill as well the deily of obamacare. that may not be a compromise that it may be another way for the house republicans to save face and say we fought this battle, this obamacare battle on the spending bill but we are now continuing our fight with the debt ceiling. >> what is the timeframe is it mid october when we see that
debt ceiling number? >> october 18th of the treasury say the anticipate the current $16.7 trillion ceiling will be a hit. congress and the white house will have to decide whether any decision has to be made. but the member of the republican congress and members say that they have to have a say on that and they plan to and will force a vote on where that could even be raised or delayed for a year. >> billy house is the national journal correspondent. you can follow him on twitter. thanks for getting up with us this morning. the senate about to gavel and starting with general speeches. some tweets before the senate comes in.
live now to the senate floor one c-span2. the chaplain, dr. barry black, will lead the senate in prayer. the chaplain: let us pray. almighty and merciful god, father of all mercies, thank you for your exceeding by great and precious promises that inspire us. you keep your promises to supply our needs, to sustain us with your lov