tv Key Capitol Hill Hearings CSPAN May 12, 2014 10:30am-12:31pm EDT
we have a diverse range with lack of production and trusts and reliable traffic in terms of stimulating the regional growth. >> if you want to be competitive and if you want to protect investments come if you want to have logistic operations, you have to have it. >> it's not only worse but it's also where the cohesion countries can finance the projects. it's a very high rate. >> if we can link the country's east and west, then this can only drive the competitiveness for everyone to the benefit of the citizens and business.
to strategically plan and implement the big infrastructure networks. and earlier this morning, the problem was raised about how advanced countries can modernize the classrooms and in our case we have some of our members states and other member states they just set up the infrastructure in the states particularly those that joined the eu most recently or recently the infrastructure is not as good. but besides that, the infrastructure plans and our member states that initially built with the national dimension and we see the interconnections that are crucial to integrate europe in order through to bring growth.
now the supply chains are not just global and therefore we need to be able to go from one part of the eu by the inland waters to air traffic. so it is to take the advantage to the interconnected countries and also to interconnect. and the same thing applies to other parts because the networks are transport, energy and communications. today we know how important this is. it estimates how if i'm not
mistaken they are connected bringing the increase of 1.5% of gdp and 20 million jobs by 2020 in the eu. even if we do not take these at face value, we should. but it is clear that there is a relationship between the telecommunications and growth and the same with energy and growth and logistics that account for 15% of the cost of manufacturers. so the improvement in the logistics bring down cost and growth and so this is the rationale. the national telecom growth
development companies have had a more national dimension and in many cases it is missing and it is more difficult to find the right to put together contractors or authorities from the two countries. this is where they have a role they have to play. and this is the most important we are told because to have this vision, to have the strategic plans and to have the certainty of where we are going to and what the priorities are set, then it is much easier to bring a private company to make the investment and it is much easier to persuade taxpayers to put the money into those infrastructures
out that are more relevant. to have these european plans are important for helping the investment. very quickly in the video the map with the nine careers in different colors these are core doors that have been able to benefit from the various modes of transport and two be able to go from one to another to the global airport to the ports or to the modal wave that would continue to reduce the cost. not only are the cost and growth imported, but we are building these and having the vision for the infrastructure for the
future and the future must certainly take account of the growth and competitiveness. this is why we are putting an emphasis so that it can be done through the more effective and more environmentally that we are trying to take advantage of the mobilization that is needed to account for the more energy efficient and also to accompany the platforms with what is increasingly important in the innovation of the traffic management system. so, this is matched with the
traffic management systems and for air traffic. now the second point that is important to have the strategic plan is because then we can put our money where our mouth is. and clearly the eu is not capable to finance that come about if can help in financing the missing links. in some countries but taxpayers care more about the confines rather than linking with other parts of the eu or other parts
of the world. so they are plugging in some honey to capitalize the investment for both public and private. and i say that the role of the financial instrument is because they not only provide the money and the security but they also provide a label if the signal of leadership and political support to those priorities. so we have the corridors that we consider the priorities and we have said that the priorities are pushing for the development of the work plans so that we match the vision and we also found out that as i said earlier there he often money is not the
only problem and sometimes it is not even the problem. very often it is to overcome some of the administrative hurdles which are if it is difficult in a single country is much more difficult for more than one country involved. so that's why at that point we follow this to the point that we call for coordinators, so it is one person with the teams that are kind of chairman of the corridor and facilitating this interaction between the authorities of concern and initially the various countries but also those to facilitate and to show the signal of the two
private investors that there is a public support and the recent strategy plans behind it to make sure that the concern makes up the work plan that is consistent with the investment so that there are fewer delays and the implementation is much smoother. i would go quickly to the other side of our involvement which is as i said, we tried to put our money where our words are and where our vision is, and we have developed with the financial institutions a toolkit of the
grants and loans and guarantees and credit enhancement instrument structures to support and facilitate the financing by the public and private partners. so, what are these instruments? first, we have the grants from the budget or the projects in the regions. clearly the budget from the countries are less capable of building some of these infrastructures and there are the structural funds that provided the transfer for much of the public investment in the priorities. even in the countries where the member states it is less advanced. we have the financing initially
for the missing link and to push the investments across the borders. so in this respect, we worked very closely with the european investment bank. the european investment bank has less cheer went to $6.4 billion purse to teacher transfer project in $5.2 billion in the strategic energy project in 4.2 billion euros. so all of that is a big contribution and the financing and the good conditions are adequate for this type of project. moreover, in cooperation between the european union budget and by investment bank so that the
first provides the other private investors so as in particular to the long-term investors for the pension funds and insurance companies so that they come into these type of projects. we also cooperate with the bank for the infrastructure development these activities also have proven important particularly in terms of the less advanced countries wit of e european investment bank that is something that other multilateral development banks
we support the preparation because again many financiers tell us that the money is there and we work with the project promoters so as to bring a project closer to make them more amenable. and i mentioned the eu but there is also some financing with the neighboring countries that connect the countries in the networks to the countries in our neighborhood so as to if goes both ways and it enables those countries to benefit from the growth and also to have access
to others. so these are in a nutshell this isn't just our approach to infrastructure but it is a good practice. in fact, if we compare the reportedly plead the european infrastructure is not ideal but very well compared to the other parts of the world. also, i mentioned earlier that one of the objectives of the european networks and infrastructure support is to help integrate the eu. we also see that for instance in hungary between 2009 and 2011, the transfers together in the
public sector accounted for almost 97% of the growth information therefore it is it really delivers the public investment in the infrastructure so it is really helpful. having said that, it is fair to say that there are funding challenges, and a clear one is the interconnected networks and the crisis that we are living today in ukraine and russia affects some of the member states and that is because of the past there wasn't enough effort integrating and interconnecting the energy systems and our member states and therefore it is no -- is now receiving much more emphasis so
that we can work towards energy security. much of the same or some of the same could be said for the telecom networks that are still very much natural and interconnections on the not yet sufficiently good. there are still some bottlenecks in the transport and the management systems are not yet standardized us of the management systems in one country need not speak to other countries and it need not speak about the different in some of the member states but that must help in building. so finally the challenge is a
scarcity of the public funds in some of the member states. they are conducive to doing that in a comprehensive way and in a strategic one. thank you very much. >> thank you doctor lecea. [applause] judith? >> thank you very much for inviting me to speak at the event on infrastructure. i will talk a bit about the british experience as a background to the private finance initiatives into the infrastructure in the uk
government and what our plans are going forward. going back to the late 1970s and 80s we had in under investment in our infrastructu infrastructure. we had a recession and i'm sure that sounds familiar. so, margaret thatcher launched a program that includes privatization of the railways and the initiative that is the most commonly used in the uk and i will explain that in a moment but the traditional procurement had led to massive budget and the ways and an example of the scottish parliament to cost
67 million infected cost of $725 million. the hospital wing budgeted $60 million. so clearly something had to change. so the private finance initiatives in the uk is the procurement of a service on the long-term basis which captures the investment by the private sector and the bank loans and corporate banks. the private sector is designed to build finances, maintain and operate that asset and the public sector pays for it with either the annual charge over 20 to 30 year period. now the advantages were that the public sector gets a reliable
launch on the surface and long-term payments. there is a risk transfer which minimizes the cost of the taxpayers. the highway agency that manages the strategic road network in the uk estimates that they have made 15% of the money savings by using the piii projects. the public sector got high-quality assets on the time and budget, hugely important. the uk has done 730 projects with a 90 billion-dollar barrier, and we are seeing those numbers of projects 85% of the projects finished on time and on budget competitive just in 2005
and a huge increase. it is worth pointing out that most of the infrastructure is actually funded by the private sector, so water, communications, airport, funded purely by the private sector. it sends that we have learned from the 20 years is that it works well. the project has to be large enough from the extensive procurement cost. there has to be a competitive setting market an into the poliy stability from the national government made mistakes when we were building new hospital wings and when the national health policy was impacted on those projects.
we also learned that there needs to be public sector governance and skills associated with that within the government, but we have also known that the private sector is better at doing this than the public sector is bringing the technology and innovation, and its focus is now not just on the ribbon cutting but it's also on the maintenance for the 20 or 30 year contract so that when it's handed back to the public sector and the privatization the asset is returned to the sector and in very good condition. it doesn't work well when the project is undergoing significant change or if the project before it's too small and conversely i think if the project is to bridge or if the
project is too complicated or if there's a potential for coming up late so we don't tend to use piii and telecommunications into that sort of thing. the government had to learn to step back from all of this, so it can't sort of have huge control and detailed at the private sector exactly step-by-step how it should do this. and also to be honest, from the decisions made in the political expediency it wasn't that piii model wasn't the right model for that project. so, we have learned from the model over the 15 to 20 years, but we did review it in 2012 and we have now initiated the second
phase in what we call private financing to and we had to do that because of the economic climate that we found ourselves if they were having to recapitalize. the result is that we maintain the core principles of the private finance initiatives and the risk transfer is to the private sector for 20 to 30 years. so why the sources of funding which includes pension funds, insurance fund the government set up a guarantee scheme of $67 billion which is intended that may or may not have happened.
we've also listened to complaints from the industry abouoftime is to procure said tm procure what kind should be 18 months with standardized contracts and more transparency. there were suspicions that the private sector was making too much money on the project so there was much wider transparency. they have a structure so we have an organization called infrastructure in the uk which is based in the treasury and it is the organization that pushes the momentum on the private financing and it provides any legislation changes were structural changes. on top of that there is a government ministerial team that
is chaired by the chiefs victory ochief securityof the treasury s other in the relevant department really holding the feet to the fire. the department into my own department of trade bait co- finance of a private finance unit and they are the ones that are in the sector and expertise in the process. we have a local partnership with the piii delivered at the local level. so that is a joint venture between the national treasury and the local government association and that helps to provide training to develop that expertise and we also have in
the strategic engagement that is about the national government having before him to speak to investors and other stakeholders so in the national national infe pattern is developed into the understanding of each other's position. and the plan we have found that it's hugely important to have a natural plan. the first one was published in 2010 and it was a fairly high-level plan. in a subsequent year we had an update and refresh or so that the latest one was published in november of last year. ..
from the uk perspective and my involvement in the private sector. so you have heard from judith and a lot of what i am going to say is going to echo what judith has said from the private sectors point of view. but i would like to first is what i mean about talking about the piii. and it also captures the whole spectrum of the alternative deliveries. in my world, the piii is around the long-term contracts which are generally for the public sector infrastructure that define and build and finance and
maintain and maybe operate, so it is typically a 20 to 30 year contract for these privately financed. so that is my world of the piii, though i do recognize it is also captures the design and build to operate and maintain the finance. that is really the design build finance to maintain with a bit of operation. i have been in the piii since 1999 in the private sector. and that has been a mix of bidding projects in the uk. i lead a consortium and also sitting on the board of the operation projects companies
once the projects have been won anoneand are operated. and those two positions gave a great insight into actually what you can feed back into the front end of the process to improve it. so about two years ago they moved to the u.s. with the investment to actually help the u.s. team to develop piii throughout the u.s.. in comparison in the market, most people do have a view of the link between better infrastructure and improving infrastructure improving the economy. but that link in terms of
improving transportation and communication structures rose and bridges into the railways, education, better schools, delivery, better power and infrastructure. but if you talk to people, there are as many views about how you think about economic benefit as there are people that you talk to. there is little doubt to me certainly that improving infrastructure will have an impact on the economy. but in my experience it is difficult to measure or forecast those benefits before you start working on a project. quite often, they are expressed in very simple terms like the benefits and the travel time for
consistency in travel time to get from a to b. without looking necessarily at the broad opportunities and the end-users and actually finding that better travel time attractive, the jobs that are created through the construction in the operation and maintenance, so it really needs to be measured through a real basket in lots of those measures. so, as judith mentioned, the piii was implemented in the early '90s by the conservative government, though it was the subsequent labor administration towards the end of the '90s 97, that really embraced the piii as a form of procurement to
take that forward in the uk. why did we start to use the piii? well, there's lots of justification. essentially, we could no longer afford the big capital cost to improve the infrastructure. the arguments run that it is the private sector could be more efficient, or the long-term contract that gives a better value for the money. i think all of those and more over right that it's the essential driver of money that we no longer have the money to be able to spend on the upfront capital cost. so i don't know whether that even rings a bell here. i suspect that it probably does from that reaction. what does piii actually deliver
and why is it attractive? well, for me if the liver's assets. it's not only delivers the shiny assets on time and on budget, it would also be maintained in a particular condition and the stated condition for the turn of the project, and then once we have handed back to the public sector to operate at the end of the term again in the stated condition. i say oh -- own. that goes back to the public sector term. so you are buying the assets, you are buying the maintenance and operations of the assets to
the stated condition or the state performance throughout the terms of the contract. just picking up the point on the time and budget, judith pointed out some fantastic statistics about our experience, and i'm sure that can be the same experience with the design of the build procurement of may the costs more money or maybe are not delivered on time. piii does deliver on time and on budget. then there's the longer-term risk transfer. so, the maintenance and in some cases operations or support operations and major lifecycle replacements to keep the assets
in the stated conditions in the turn of the project. if it isn't kept in that condition, there are payment deductions which are applied because that is seen as not actually performing the contract. succumbing you transpose both of those principles into the design build finance project that judith mentioned. so just over $1.6 billion of capital to widen the end of 25 and the two phases. to increase the capacity, but more importantly, to improve the journey time. at the time it was procured,
they said we are not going to widen this. and what we also did is a part from widening the first sections in the first 35 miles, and we are currently doing some work there on the subsequent sections, 200 miles of the m. 25 orbital plus the routes in and out of london are maintained to the stated condition for 30 years and bearing in mind that asset was existing at the time that we did the last project. so, a small amount of widening and a large amount of operations and maintenance to keep the asset into the stated condition. and that is all for the single
fixed payment index on the appropriate inflation index. but it is a constant payment stream subject to the deductions with the uk government through the agency that is paid to the project company. i thought that it might be useful to outline what i think is essential from the public sector point of you to make a successful project using my uk experience and some of the experience that i've had while i've been here. so, first of all it is a critical need for that piece of infrastructure. that goes without saying if there is no critical need, people will start to ask the question why are we doing this.
and secondly, there is not enough capital funding to provide that asset in the traditional sense of paying for it upfront. that is the basic premise that says this may be a candidate for the piii. a public champion, somebody that is in the public sector department who is procuring it so maybe one of the states who is really enthusiastic about delivering this and about talking to the stakeholders and talking to the political opponents who don't want to do it and trying to get the public alignment. certainly in my experience of public champion can play a vital
role in getting through some of the hurdles that would naturally come with politics and stakeholders. what i've had to get my head around while i've been here is the legislation, the enabling legislation to allow the states and public authorities to procure as a piii, and currently i think that there are just over 30 states in the u.s. who have the enabling legislation. ..
i think no surprises from the public sector point of view and from the private sector point of view. so in summary, my thoughts on the needs on what contradicts to a successful piii is critical need for that particular access, not enough money to buy that asset outright, but beginning. a real public sector champion, the enabling legislation which is binary, it's either there or it isn't, and that organized, transparent procurement process with the clear evaluation method
of evaluation that's going to be fair, which is going to be run to judge our competition. so my view is for all those ingredients together, and with the knowledgeable and well advised clients, and the public, the private sector will have an asset side to come and bid for that particular project, then their resources on winning it and spend their resources for the long-term. that's my kind of personal perspective, and i appreciate your attention, thank you. [applause] >> doctor, how about the user perspective? >> i was wondering if you're going to use my first -- >> well, you know. maybe next time. >> we will practice.
okay. i want to give all a bit of a different perspective. i think the reason that i was invited to this panel is, as all recent, i'm -- i work for seven years here in north america come in for the chemical industry and building basic business that designed, built and maintains and social facilities. and so i come out of a very small country where bicycle is still a wonderful motor transportation and a great way of transporting goods also. to where i now live in the u.s. and first there's one aspect, the infrastructure that is important to business that i think wasn't mentioned. we talked about cost in the past. we talked about earlier, we talked about the service, how
quickly can you be but there's another important factor which influences how infrastructure affects business and that is working capital. the moment your goods are somewhere on the road in a ship, on a plane come in a port, that capital is not accessible to you to do something your and that is externally imported. one of the first things we did was laying out our whole supply chain globally from basically port where it was made, europe are were ever to it had to be delivered, and optimizing the whole structure, how many were housed when you, what is the cost of going through the ports, or just reduce the cost and also the number of places where you store your goods, the more places you store it, the more -- you happen. working capital is extremely important and that money becomes
available to do other things with. that is investing back in other business ventures. so that is from my perspective another very important factor. the more you make it attractive and there's reason i work and live in the us is i think this is a very unattractive environment to do business, integral business. another point i want to bring back up to it was mentioned before, in the energy cost of. as i go back to 2009 when i was in the middle of the chemical industry and plants running at 50, 60% of capacity, there wasn't a lot of optimism of investing in the united states, in that industry. today, that is very, very different. now companies are looking in many investments have been reported or are in progress, but
in the u.s., it's competing in the global involvement. once we take benefit of this is not enough for us just to have energy at a low-cost. one factor, but having an infrastructure that supports building up not only that energy infrastructure but also an infrastructure that supports the business around it is going to be crucial to take benefit of that opportunity. i think it is a unique opportunity where currently the u.s. really differentiates from many other parts of the world, including europe that does not have or is not using the benefits of those at the moment. it puts the u.s. in a very good position when you use it. and that brings me to a couple of other items that have been said and what i think can be
related also. there is no business that i know that enough money to spend on all the capital targets that they want to do. so neither will public have that. and no matter, yes, you need to find ways to get money, is it the gas tax or is it through private investment, but given the amount of money that you think you have come to think what a smidgen a couple of times, to have a strategy and then they plan to fill that strategy is important. that's what could run businesses do. because like i said being in business are over 20 years i have not seen a year we didn't have more plans for spending money and investing then we have money. and you prioritize and to get the best projects up, and that
is essential. another issue i see in the u.s. is, you know, and it is related to the city, is regulations. again it doesn't matter, i mean, it can be more on one side, more on the other side by the regulation has to be predictable. you have to know where you stand. business is not going to invest when it doesn't know where it stands. there are certain things when you invest in the business you don't exactly how your market is going to develop. but you always think your product is going to be really neat but there are the aspects you want to be sure to. you want to be sure that whatever facility you have that they operate well, your organization runs will do everything you can control you want to control. in my opinion infrastructure should not be an uncontrollable. it should be a controllable. as a businessman you learn that.
you know what the backbone is that supports you. and the country does not supply that backbone or regulations, and to say, up in the air. that's a lot of discussion, and i'm talking about things, okay, we also are very active in the powerpoint area. the regulations around power plants, which makes it power plant operators hard to decide where liquid put my money. [inaudible] they're not going to come to us to help construct or optimize these facilities if they don't exactly know what they have to do. and that is doesn't cost any money. and i know that getting agreements sometimes is hard, and especially around here but it is essential for growing
business environment. which i think, you know, if we all agree which i think that's what i hear, everybody agrees that infrastructure is something that needs to get attention, that needs to be improved, find a way within the means that you have to do the next thing you can do. and just to give you a couple of examples out of a business perspective, if you solve an equation you know goes to the extreme to understand what that ends up in the middle. we build, for example, the gas processing plants for several of these companies are operating in the shale gas area, and we do that also in north dakota. when we started out, we had to basically build, get continues therefore our people to build
those plants. there was to infrastructure. we had to construct roads. you can imagine how much longer it took to build the first couple and what it did to deny. it just shows you as a business the costs associated with of having -- do with the recent of know and structure because there was no much going on in the middle of north dakota. so we didn't need it. when you needed he certainly find that it takes a lot of time and effort. another example is i was responsible for our my business, a couple plants when one of the hurricanes hit. we were basically back ready to run within two weeks. it took six weeks to get the electrical grid back up which we need to start up to run our plant. that's another -- has a look at the u.s. from an outsider come down going more towards what i said as a private person but i never lived in the country where a hurricane is an exception, but
where the electricity drops off so often. never happen. all the times i lived in holland, germany, maybe once but at least you i was a couple times a year. it tells you something about the unreliability of your grid which impact your economy. and if you look at the way it is built and there seems to be a lot that can be done to improve it because reliability, i was there in, up in canada at the time with all east fell out and i was at the top of a building at a look across the chemical valley. it's kind of interesting, you see all plants going down, flaring up and being down for such an amount of time. the amount of loss was calculated how much loss that te was at that point in time. i don't have -- but those are losses which are based on a
failing grade in which you shouldn't have in my opinion in the 21st century. those are things where you a clue been demonstrated that the american, the u.s. infrastructure that needs an upgrade. the other thing, what i think the u.s. has to rethink, there's a lot of fixing. how often do you see the same thing year after year? it gets fixed year after year. is not a long-term solution but in my -- by doing it that way overtime you spent more money than you would if you would do it by coming back to the plant, design a plant, do it well and do it so allows. there is no reason that pothole has to be there year after year after year. yes, i do it is a gift more extreme weather conditions, so the road will generate faster that's unavoidable because of the climate that you.
also, i notice panel is comparing countries. the u.s. has some specific, long distances, yet i always hear people about we don't have the railroad system like year. i come from an area from the small of the country 80 million people almost in its. you can put in a very efficient and affordable train system. is long distances it gets more difficult. you will never get to that solution because basically you're boundary conditions again are different. but you have to look at what can and what can't you use. but it's not always that you can copy what others do because the boundary conditions are simply different. and the other thing compared to europe, i also talked to some my colleagues in germany before
coming here, into this forum, and something to been very related to the infrastructure projects. germany also as a similar issues, how to invest. they spent a lot of money building up eastern germany, has very nice roads, new road systems. in eastern part but the rest in part they're also trying to find ways how to finance it. so the problem is not unique to just the u.s. of course, there's a lot of it, very much larger problem, but to me essential to business, you can do pretty simple business at a competitive cost. like i said before, the u.s. again now with this whole energy boom has a unique opportunity to have a resurrection of the manufacturing sector and everything that goes with it, if
you create a predictable infrastructure with predictable regulations you will get more of the economic growth that everybody is looking for. and then i find it kind of interesting, the germans have the name of the reputation to be a little bit pessimistic. talk them on a sunny day and to talk about will it rain tomorrow? i sometimes feel i live in germany. if you look at the opportunity that the u.s. has, what's happening with this whole -- there is a sunshine their the question is how to benefit from this as well as you can come and really basically get your act together to benefit -- penny, mentioned that several times. plan together, create as much meat as you can get. you won't get everything you need but should be able to get enough combat that will help
drive growth in this country. i'm an optimist. that's why i live here, okay? [applause] >> thank you, boudewijn. we will take just a few minutes for questions before we break for the room. i'm looking into the light but i'm hoping our microphone runners will find our questioner. >> thank you very much. i was just economic i want to thanthankthank the organizers pd penalty to the other a lot from each speaker. i have a question for the representative from the european union. you talked about the financing of this integrated transportation network throughout the european union, and one of the projects i'm working on here is trying to organize and facilitate an infrastructure bank in our metropolitan region where we have two states and a colony. of the politics are a little interesting there. and one of the things the course that crops up right away if people are very concerned
politically about how the money is raised, and particularly were its race from and where it gets spent. we don't want to raise money from our gestation is going to be spent somewhere else. i was wondering if you could tell us how you overcame that particular concern which i imagine much -- must have cropped up. >> yes. you are right, how to raise the money, how to use it. as to how to raise the money, member states contribute to the capital according to basically there gdp shares that is relatively easy formula to provide a reasonable and -- [inaudible] for financing but, of course, there is paid in capital and
most of the money used that is raised in the capital market. the bank can raise that money on aaa conditions because it's backed by the sovereign. you know, so that enables pretty good conditions that they can pass on to the project. so that's one point. small markup and, of course, some of these loans, especially priority issues are backed by the eu budget. so the eu budget provides guarantees in case of default but default is extremely rare. the bank, for some, it's too conservative in its lending.
there are extremely rare cases of default. the second part is where to put the money. and, indeed, there are several approaches. one, they should just put the money in countries where there is not enough public -- [inaudible] that's the narrow approach. projects are, in fact, decided by the board. member states appoint members of the board so they are appointees of member state governments, but in the end they work for the public and they decide on their own merit. and as i said, it proves they
have been running the show very much at an arms length of political -- [inaudible] that they have not had difficult getting loans, which is a good thing of professional manageme management. >> i thought i saw a couple of fans over here. >> good morning. i had a question or the discussion about energy production, and you know, whether we will develop the infrastructure to get that to market raise this other question for me. and maybe i could ask our esteemed moderator, janet, to give her opinion here from the u.s. chamber but also dr. van lent. wonders about is you know, the united states is actively pursuing free trade agreements with europe and with a bunch of
pacific rim partners and maybe other free trade agreements. the whole idea is to get more trade and create -- flowing. how much within congress and within the administration for supporters of that trade is there a realization or an emphasis that you've got to get the infrastructure in place to handle that trade, you're going to open up the door on the front end but it's not going to become able to shut but it's not going to come out the back and. >> i think which relate to in the case of europe is the ttip, transatlantic trade and investment -- i missed -- partnership, that's right, the partnership. it has from what i've seen in some discussions, there's a real focus both on the u.s. side and on the european side to make something happen. of course, the europeans also want to talk about the energy is
to get the lng from the u.s. to europe, especially in light of what's happening in ukraine and the russian import of gas. so there is on both sides as i see it a woman is to make something happen, but i also, and this is my personal view, it is a real difficult one because i work in the chemical industry, if i look at the regulations, control chemicals from u.s. side and on the european side, they are very different, yes. they both protecting the and both societies very well and even, i was -- when i moved to canada you have to basically register and sometimes different types of tests. spent i guess my point isn't so much whether the trade, free trade agreement is going to work
on the pros and cons of free trade agreement. it's in light of the infrastructure, if you're rushing ahead to get the free trade and the goods movement and lower the barriers to trade with them to don't have the infrastructure, the u.s. administration or congress aware that or why aren't they doing more on the back and to facilitate the trade that we? >> of course that for me is harder to answer because i'm not in the u.s. government. for example, go back again to your energy -- failed to approve the lng energies to make it happen. if they approve it then it can be done under a couple of which have been opposed to there's been a lot of applications. i don't know how long and how many in the end will be approved but i think from what -- there's a realization, also for people from congress i've spoken to that yes, they have to approve that you make it happen. >> i'll be uncharacteristically optimistic for me about congress in particular when it comes to
understand at least whether transportation infrastructure has a link to trade. i think that the water resources reform and develop an act that we should see conference report for this week, and those of you watching, you may already see it. i don't know. is going to reflect the importance of our inland waterway, coastal waterways and ports to trade. there's been a concerted effort to make sure that the resources in harbor maintenance trust fund actually get used rather than being held back at the budgetary offset. and i certainly hope with the recognition of the importance of the army corps navigation role in maintaining and updating locks, dams, levees and other navigation infrastructure, and that should be fairly obvious in particular the connection to energy i had the opportunity to go to beaumont, texas, to tour the waterway a few weeks ago. and if you're not familiar with that waterway commits no one
people think about, about 60% of this nation's crude oil comes in through that waterway and it is posted be a major export gateway for lng. so we need to keep making those connections for them. it's also my understanding that the environment and public works committee draft map-21 reauthorization but which then you are missing by not yet come is going to include a pretty significant emphasis on freight. again, recognizing that there's a connection between transportation infrastructure and those export aspects of the economy. but at the same time as we heard a lot of discussion here in terms of regulation, it's one thing to say we've got the infrastructure, it's another thing to let it be built. we see these fights in the pacific northwest over export facilities for coal, where those who don't want to see the united states producing coal are trying to stop its movement as a strategy. and also the regulations over
the construction of lng facilities, or other products. so it really is a hand in hand peace. and eye gouging enclosing because we need to vacate this room so that we can turn it over for lunch. i think this panel has been a great emphasis on the need to not only have a strategy and a plan and to come up with the financing and execution, but to look at the regulatory environment and the predictably of being able to get it done. i think the been a lot of terrific lessons learned. i'd like to ask you to thank me, help me thank the panel. [applause] >> and let me give you a preview of things to come. we need to take about a 20 minute break so the great stature at the newseum can set up for lunch but if you'd like to leave your things in the room, please put them on your chair. that will help facilitate turn that over. and i hope in the course of the
next 20 minutes or so you will take the elevator downstairs and go see dan mcnickle who is over here with the direst states to her and let him show you the 1949 hudson, mrs. martin that he has been taking around the country on the direst states to her as a way to talk about the need to maintain calm modernize and expand the nations infrastructure. so we'll see you back here for our keynote speaker tamara lundgren in about 20 minutes. [applause] [inaudible conversations] >> you can watch are your sessions from the chamber of commerce on our website, c-span.org. coming up in about half an hour the alliance for health reform is hosting a discussion about states and the expansion of medicaid. will be hearing from the surgeon general of arkansas and
michigan's medicaid director. that would be 12:15 p.m. eastern time live on c-span. >> each issue should be handled differently but have a general philosophy that i'm approaching all issues. it starts with basi the basic gi approach everything which is economic freedom is my guiding principle for how i -- from that comes for fax. one, does the commission has authority to act on a particular issue. weather has congress given us? number two, is the harm to consumers and a solution we can actually remedy what harm has been brought forward? three, is the solution tailored to the particular problem we are addressing and not regulate by analogy? fourth by all of those three elements to the benefits of regulation outweigh the cost? that's how i'm approaching each issue individually, but you to take, you tend to take each issue as they can before you with my overall philosophy. >> new fcc commissioner michael
o'reilly tonight on "the communicators" at 8 p.m. eastern on c-span2. >> trying to recent problems with the veterans administration, politico reports that defense secretary chuck hagel made some remark yesterday concerning the waiting list for veterans who need assistance from the va and the responsibility of va secretary eric shinseki. secretary hagel said the va backlog should have been dealt with years ago but he doesn't think it's a problem that started under general shinseki's term. we will be hearing from general shinseki this week. is scheduled to appear thursday before the senate veterans' affairs committee to talk about veterans health care and the reports of serious delays that were hidden from the public at a va center in arizona. you can watch live thursday at 10 a.m. eastern on c-span. >> c-span to providing live coverage of the senate floor proceedings and key public policy events. and every weekend booktv, now
weather fully out of tournament bracket, never works for me by the way, tailgating on a saturday again or simply cheering on and on the matter. for many fans college sports is way to spend time with loved ones and stay connected with old friends. where fans are known for their loyalty, students athletes are renowned for their passion and talent and look to leverage their athletic ability in pursuit of different dreams. for some competing at the collegiate level is a step toward a career in professional sports. for others and vacuum with most students athletes playing a college sport is a ticket to an education they simply couldn't access without an athletic scholarship. regardless of what student athletes play, their dreams can be turned upside down by a sports related injury.
when that happens institutions must step up and provide the health care and academic support the student needs. most institutions have joined -- done just that instead by the athletes for the long haul. some or not. no student athlete injured while representing their school on the field should be left behind because of a misplaced priority of a college or university. can the ncaa and institutions do more to protect students? absolutely. they can start by giving students a greater role in shaping policies that govern college athletics and work to help ensure a sports injury doesn't end a students career and find a responsible solution to deliver the health care injured players may need. while promoting change is often difficult, student athletes deserve a determined effort to address these concerns. does that mean unionizing student athletes is the answer? absolutely not. when you sign the national act, fdr declared a better relationship between labor and measure is a high purpose of
this epic is hard to imagine president roosevelt thought the law would when they apply to the relationship between student athletes and academic institutions yet that is precisely where we are. original drug national labor relations board recently wrote football players at northwestern university are employees of the school for the purpose of collective bargaining. the ballots cast on april 20 election have been impounded pending review by the full board. given the track record of this nlrb i suspect the board will rubberstamp the reach of directors decision set a dangerous precedent for colleges and universities nationwide. in the meantime schools, athletic or decisions, students and the public are searching for answers to countless questions stemming from this unprecedented ruling. for example, what issues what a union to represent college athletes race at the bargaining table a wooded union negotiate over the number and length of practices? perhaps begin with a good bargain on the number of games. management and union are at an impasse, which didn't athletes
on strike at 10 class and have access to financial aid? how would student athletes provide financial support to the union courts would do is be deducted from scholarships before being dispersed to students? or are students expected to pay out of pocket? we know many student athletes struggle financially. how will the shoulder the cost of joining a union? where will smaller colleges and universities find resources to manage labor unions with student athletes? a lot of institutions operate on slim margins. are the schools ready to make some difficult decisions such as cutting support to other athletic programs like lacrosse, field hockey or even raising tuition? finally how will other in a or b. policies affect our higher education system? our college campuses prepared for michael unions and ambushed elections? or administers equipped to bargain with competing unions represent different athletic programs? was to be able to make an informed decision about joining the union and sus 10 days while attempting class and going to practice? these are tough questions and
should be discussed before students and administrators are forced to confront a radical departure from long-standing i'll see. we should the concerns of players that progress is to slow the forming a union is not the answer. treating student athletes is something they are not is not the answer. the challenges facing student athletes should be addressed in a way that protects the athletic and academic integrity of higher education. the recent nlrb decision takes a fundamental for approach that can make it harder for some students to access quality education. i strongly urge the obama board to change course and the courage key stakeholders to get to work. i look forward to today's discussion and when i recognize the senior democratic member of the committee, mr. george miller for his opening remarks. >> thank you, mr. chairman. i'm glad we're having this hearing to bed understand what is happening in college athletics, to err of their legitimate grievances that have been raised by the northwestern university and around the country. let's start by setting the stage. the stodgy days with student
athletes really work quote students first and when college sports was just about learning teamwork, self-discipline and sportsmanship while getting exercise and from the competition. those days are pretty much over in high level athletic programs. during the last four decades colleges and universities through the ncaa have perfected the art of monetizing athletic play of the best football and basketball players and teams while steadily encroaching on players academic opportunities. they have created nothing less than a big sports empire. the empires consume and driven by multibillion-dollar exclusive television, radio, multimedia deals, branding agreements, prime time sports shows, celebrity coaches with seven figure salaries. our nation's thousand athletes have become commodities within his empire. they are units of production better overscheduled and overworked, left without safeguards for the health and safety, encouraged to put their education on the back burner in favor of success on the few.
some athletes have figured this out and now they're starting to ask smart questions about this whole arrangement. they want to know what happens to them if they suffer a catastrophic injury on the few believe them with a lifetime disability. will they lose their scholarship? and with it the chance for an education and a career. how much of their health care within the families need to pay out of pocket? they are reading about new studies of long-term effects of head injuries and want to know if the schools and coaches are doing all they can to prevent concussion and brain injury on the field. will their health come first when a decisions be made whether or not they are fit to play or will their team's desire to win trump to help -- health concerns of the individual player? questions about the adequacy of the scholarships and restrictions that leave them with little or no support or out of pocket and into the expenses they face. why are some of the teammates finding themselves unable to afford enough food to eat or books for the classes while the university makes millions? they want to know why so many
players didn't finish the academic programs. they want to discuss a fair transfer policy. how can policies be changed to support the players success in academics, not just athletics? the national labor relations board decision regarding northwestern university football players documents and all consuming sometimes eye-popping demand of a college football player in today's mega- profit driven ncaa world. at northwestern the daily life of a football player revolves around practice and preparation, commonly a 40 to 50 hour work commitment during the fall season with any classes or homework squeezed on topic you can see the sample schedule displayed here i believe on the screen of the northwestern players. it's over, underneath the screen, excuse me. players are expected to report to the training room by 6:15 a.m. monday for medical checks by 7 a.m., then pads and helmets and tell him. at night they meet with coaches to review intel's.
there is always be a chilly drill, condition, weightlifting, workouts and playbooks to study in between. from the beginning of the month long august training camp through the grueling 12 week season to postseason bowl play and to mid-january, winter warm-ups to february winning edge week the mandatory spring workouts a high-stakes football preparation, not academic obligations become the focus of these players lives and the obsession of the coaches. meanwhile, players were about health and safety, the financial future and the prospects for jobs after graduation. the big business empire of college sports is doing very well. its revenues are up 32% in the last six years and many universities are hiking tuition and fees turning to underpaid, overstretch adjunct faculty and cutting students services. so the ncaa and the superstar football programs are making more and more money and the athletes they depend on are getting less and less. in the end this is a classic labor dispute to the ncaa empire is holding all the cards, making all the rules, capturing all the
profits. the hardest working most valuable component in this system, the players were left with little to say, leverage and build blocking or tackling but themselves. by banding together and bargaining these athletes can when the kinds of things union workers have demanded and won acrosacross the country. a say about avoiding stress injury on the job, medical benefits and security if something goes wrong, meaningful input into how to balance their work. in this case football is their work. with the academic needs and their other responsibilities. the respectful treatment and care they so richly deserve. i look forward to today's hearing and hearing from today's witnesses about how we can do more to help protect and support these hard-working student employees. >> thanthank the gentleman. present the committee rules all committee members will be permitted to submit written statements to be included in the permanent hearing record. without objection the hearing record will remain open for 14 days to allow statements, questions for the record and of extreme dismay to reference during the hearing to be
submitted in the official hearing record. it's my pleasure to introduce our distinguished panel. and in light of my favorite voice and the very, very long resumes of our witnesses, i'm going to be extraordinarily brief. starting to my left we have the honorable ken starr, president and chancellor of baylor university in waco, texas. mr. bradford livingston is a partner in seyfarth shaw in chicago, illinois. mr. andy schwartz is a partner at oskr in emeryville california. mr. bernard muir is director of athletics for stanford university in stanford, california. and mr. patrick eilers is managing director at madison dearborn partners in chicago, illinois, come and former minnesota viking. okay, i couldn't stop. before i recognize you to provide your testimony, let me briefly remind everyone of the five minute lighting system.
the system is pretty straightforward. when i recognize you, you will have five minutes to give your testimony. the light will between, after four minutes it will turn yellow. i would hope that you would be looked to wrapping up your testimony. when it turns red please wrap up as expeditiously as you can. i've told what is before on very low to gavel that a witness but we are here to listen to you. you are here to give us the benefit of your expertise. i'm less loath to gavel to my colleagues when we get into our five minute questions, but please try to be respectful of the other witnesses and wrap up your testimony. all right, let's start with the honorable ken starr. you are recognized. >> thank you, mr. chairman. it's an honor to be here and to discuss this very important issue of private higher education, as the chair kind of recognize. i served as president and chancellor at the university. i served as president and ceo
since june of 2010. baylor university is located in waco, texas. it is a private christian university. it is ranked as a high research comprehensive university. and is a vibrant community home to over 15,000 students, including over 600 student athletes. baylor is a founding member of the big 12 conference, and established in 1994. we sponsor 19 varsity teams. ..
to do exactly that, to honor our student-athletes' performance in the classroom. during the prior academic year, mr. chairman, 86% of senior student-athletes at baylor received their undergraduate degrees. this past fall semester, our student-athletes achieved a cumulative gpa of 3.27. that's an all-time high. and 347 of our student-athletes were named to the big~12 commissioner's honor roll. so, these are remarkable times for baylor and its athletic program. yet the reality is that even in these best of times, college
athletics, including at baylor, is not a profit generating activity. it does not generate profits for baylor nor for the vast majority of institutions of higher education. the nlrb regional director's recent decision in the northwestern university case has characterized our student-athletes as employees. this is an unprecedented ruling, as the chairman noted, and our view it's misguided. the term "student-athletes" is real on our campus. we invite members to come to our campus and see for themselves. at bottom it is a relationship which provides a college education and even beyond. at baylor, student-athletes are first and foremost students and they're expected to be and required to be. we are far removed from a professional sports franchise.
we are dedicated to each and every student's welfare, including our student-athletes. now, at baylor and across the nation, student-athletes benefit from a wide array of services that are specifically designed to maximize their potential as students. and then to prepare the student-athlete for their journeys in life after college. these services and programs contribute significantly to their ultimate academic success. they include academic advising-degree planning, career counseling, many institutions, including baylor, provide very high quality academic support such as tutoring service, computer labs labs and study lo. we have study hall. student-athletes receive special financial benefits which help them complete, and these are
tooths, room, board, fees, books, and other related educational expenses. now, what is the purpose? the purpose in offering financial assistance is to encourage our student-athletes to carry on and to complete their academic work and the vast majority do. now, the nlrb has expressed a view that the legal issue of employee status is ultimately a matter of congressional intent. and we agree with that. in this instance, however, the regional director has mechanically -- we believe erroneously -- applied a ridge edly wooden test drawn from the common law, not withstanding as the chairman suggested the absence of any congressional intent to include college athletics as an employment venue. now, the decision by its terms applies only to private institutions, but it does create a dichotomy. for example, the decision
rightly notes that northwestern university is knopp sectarian. but the nlrb has been struggling in various dimensions with religious liberty on its own jurisdiction so we should reasonably expect some private religiously affiliated universities to challenge the board's authority to be regulating institutional missions expresslygroundded in a religious view. the second some more structurally significant disparate is the explicit discussion of state institutions, private universities compete with state institution and this will likely create many discrepancies among the nation's universities. >> thank you, mr. chairman. >> mr. livingston, you're recognized. >> good morning, mr. chairman. as the supreme court noted principles developed for the industrial setting can not be
imposed blindly on the academic world. while i fully support the nlras purposes in allowing employees the freedom to choose whether or not to form a union, the nlrb has recognized the problem hoff attempting to force the student university relationship into the traditional employer-employee framework. that problems apparent here. a university's primary police is to educate students, including student-athletes, student-athletes are neither hired by a college for providing services for compensation. athletes are students who are participating in programs with a dual role as both student athletes, treating these as nlra covered employees changes them from students who are students athletes to professional athletes who are also students. but even if student-athletes could be considered employees, the termes undefined in the nlra, employee status conflicts
with the prims in that act. consistent with labor agreements from other industries, a college athlete's union could negotiate over the scheduling and duration of practice time, distribution of playing time, scholarship allocation bay dollar value and player position. with a nonbargaining player, walkon, can play in games. in the broad range of stature wages, hours and other terms and conditions of employment described in nlrb precedent. they can negotiate over academic standards including minimum grade point average. class attendance requirements, the number and form of examinations or papers in any course. grievance procedure to challenge a great and even potentially graduation requirementsment and unlike the statutory requirement, a college cannot refuse to bargain over changes to its own, its conference or its ncaa rules. eventual differences in the --
in her teams practice and compete will create imbalance. if college football players are employees the nlra makes its clear they may organization in an important bargaining unit, not the most appropriate bargaining unit, because a petition for a unit will be considered appropriate unless a larger group shares an overwhelming community of interest with that group. a college would have difficulty proving the remainder of the football team shares an overwhelming community of interest if the labor union seeks to represent just the team's offense, perhaps its quarterbacks. different potential union rules mom groups win one team are modest, however, compared to what will happen when college teams compete under different work rules negotiated with a respective union. in professional sports, every team is a private employer under the nlras jurisdiction that can therefore be cover under a single collective bargaining
agreement. the major professional sports leagues have their own check temperature bargaining grandma that covers the league. those agreements provide a level playing field whether will salary caps, drug testing protocols, even revenue sharing. unlike professional leagues, the same will not be true in college football. because its jurisdiction is limited to private players, the nlrb is creating rules for student-athletes and only 17 schools. fewer than 15% of the participants. it is almost certain that the nlras regime for recognizing and bargaining with unns will not apply to the remaining 85% that are public universities governed by state laws andon the nlrbs jurisdiction. some states expressly regulate public sector employee collective bargaining. others often limit it to certain subjects or types of employees other. states have no laws or prohibit
public sector bargaining entirely. a bill before ohio's house of representatives clarifies that student-athletes at its public colleges and universities are not employees. conversely, too connecticut legislators indicate they will introduce legislation stating that their public college athletes are in fact employees. without a unified collective bargaining agreement like the nba or nfl, every college team must fend for itself with its employee athletes. athlete jim depths may be able to hire the best players. institutions with fortunes and job offers are not as robust may attract lesser talent. the resulting patchwork conflicting status will create competitive imbalances. the national labor relations act is not an appropriate vehicle to address student-athletes' concerns or disputes with colleges and universities,
athletic conferences or the ncaa. for these and the other reasons contained in my written testimony, treating student-athletes as employee is it unworkable. mr. chairman and members of the committee, thank you for the opportunity to share my thoughts with to you today. >> the, mr. swartz. you're recognized. >> chairman cline, thank you for allowing me to testify on these issues related to college football. i'm an economist who specializes in antitruss and the economics of college sports. i'm a partner with the firm oskr but am testifying on my behalf. the nlrb authorized an election for northwestern football athletes and i want to provide a few facts from the proceedingsment scholarship football athletes at northwestern devote 40 to 60 hours per week during a five, month send and 15-235 hours per week the rest of the year. they receive in academic credit. they're not supervised by
faculty, and football is not a direct part of the curriculum of their majors. i understand that it panel is focused on unintended consequence as unionizing college football so i want to explain the biggest threat to college sports from collective action is the price fixing cartel called the ncaa. i'm focused on how 351 schools, including stanford, stifle healthier economic competition threw inclusion to impose limits on all forms of athlete competition. generates passion from fans, and billions in revenues from schools for broadcast television networks, merchandize and peril companies. fbs football is a professional sports industry. fbs fast ball alone reported 3.2 billion in revenue in the most recent federal filings, d-1 basketball added 1'40"00000000.
athletic departments generate more. >> referee: -- . >> that's exactly how a vibrant business should behave. but there's an economic dark side to college sports that comes from collective action which is price fixing. the nlra and the antitrust laws work together to ensure that when sports leagues and athletes form partnerships, negotiations are fair. and either choice is valid in a unoohdownennized or more free market approach gord by the antitrust laws. given the one, sided power imposed by collusion it's not a surprising that players have turned to labor law and unionization for bargaining bauer. -- power. leagues generally encourage unionization in 2011 the nfl players sought to end their
union but the nfl win to court to demand they remain a union against the players' wishes. at an economist, i focus on the athletes' free market value, which is high. but as a union, they're focused on enhancing owed indicational safety, better medical coverage, reducing head trauma, improving graduation rates and establishing educational trust funds to ensure athletes can finish their degrees. because of time limits i'll summarize my points. because most athlete does not go on to work in the nfl, ncaa collusion effectively denies 95% ore more of conditioning athletes of their four best sports earning years of their entire career. for some those may be their four best earning years, money that would go to athletes is funneled to coaches and recruiting, college football coaches can make as minute as $7 million a year. that also deprives women athletes of title ix matching
funds. collusion simple. s the burden from a private school like northwestern to taxpayer funded pehl grants, food stamps or forcing students to leave schools to support their families them current tax code exempts from taxation the tuition and -- nothing in the nlrb ruling should change that and if it does congress has the power to make sure that doesn't happen. finally, the ncaa limits consumer choice with centrally planned one size fits all product offering. i also want to say that the student -- term student-athlete was created to dodge legal responsibilities for hate toes' safety and to -- athletes' safety and avoid economic competition but the new resources from new tv deals alone are sufficient for an orderly transition from command and control economy to market based one. americans have a legal ruth to economic markets free of
collusion. until that right is respected for college athletes of course they'll seek collective alternatives. an athlete who has bargained individually or collectively to ensure he is well fed, given real access to a full range of majors, and -- is going to be in a better position to benefit from a true education than a hungry or con cussed -- con cussed athlete forted into a dead-end major. thank you for your time. >> mr. muir. >> chairman cline, averaging member miller and members of the committee, i'm pleased to provide comments about the experiences of student-athletes at stanford university. my comments are specific to stanford and not focused on details of the case before the nlrb. i hope to help illuminate some of the larger issues you are addressing today. stanford has 7,000 undergraduate students and nearly 9,000 graduate students and the
university's recognized internationally for its academic quality. we offer 36 varsity sports, 20 for women and 16 for men. about 900 students participate in intercollegiate sports, 53% of them men and 47% of them women. stanford won the director's cup which honors the most successful program in the ncaa division 1 -- -- we believe the most important thing for student-athletes when they leave stanford is a stanford degree. 97% of our student-athletes achieved this goal, including 93% of our football student-athletes. the athletic experience is not pursued at the expense of the academic experience. or separate and apart from it. each enhances the other. one out of every eight
undergraduate students at stanford is a student-athlete so this is not a separate group, having a separate experience from the rest of the student body. they're in the same classes, the same laboratories, the statement undergraduate housing, the same exam schedules, even to take an examination on the road and the same completion requirements as other students. the regular governor of the academic enterprise begins with admission. stanford does not admit anyone who is not competent to citied academically at the university. stanford reviews each application. this evaluation occurs in the admissions office independent of the athletic department. our student-athletes demonstrate how importantly they view a stanford education by taking all steps with a year of eligible
left and enter the professional sports world. instead they remain at stanford to complete their degree. even among the few stanford athletes, student-athletes who do not complete a degree before becoming professional athletes, many do come back to finish later. the overwhelming majority of our student-athletes will not good on to earn a living in professional sports but whatever path they take their stanford experience will provide them with outstanding preparation for the world. the academic experience is solid and they teach leadership, strategy, team dynamics, problem solving and other capacities critical to discuss. discuss all these issues more extensively in my written testimony before you. i want to address a related question about how revenue from athletics is used. at stanford, football and basketball generate net revenue the vast majority of our 36 sports do not. all the revenue the universe receives from two sports isad to
support the overall athletic program, including the 87% of our student-athletes who participate in those other 34 sports. we use the revenues to support athletic opportunities opportune broad cross-section of our students, men and women. providing these opportunity is very important. let me close to by discussing how we address the needs of student-athletes. we work hard to ensure both their academic and athletic experiences are excellent and properry supported. soliciting honest feedback from students is critical and we have a variety of avenues for doing so. many of the issues identified by the union seeking to represent student-athletes are issued we're already addressing stanford. we're always open to making improvements that are within or purview and to working with the ncaa to improve its rules on issues such as minimum academic progress for student-athletes and scholarships that include
fair stipends for student-athlete expenses. i hope the strengths and benefits of programs such as ours will be considered as the national discussion of these issues continues. there's a variation on these issues from school to school and that while i've been speaking today about stanford, there may well be differences at other institutions. stanford stands ready to talk with and work with others who are like wise interested the continually improving the experience of student athletes across the country. the. >> mr. eye d -- eilers. >> thank you for the opportunity to appear before you today and present my views on the ongoing quest to improve the environment for student-athletes on college campuses. before i do so, i would like to make it clear that my comments today are strictly my own. although i was a student-athlete, at the university of notre dame, in later obtained a masters degree from the kellogg graduate school of emergenciment at northern university i do not speak for nor do i represent these
institutions. i speak only for myself. i graduated from the university of notre dame in 1989 with a bachelor of science degree in biology. i also pursuing a second undergraduate degree in mechanical engineering which i received a year later. while a student at notre dame i played four years of varsity football and also played on varsity baseball. i transferred from yale university at the beginning of my sophomore year and had a fifth year of academic eligibility affording me the opportunity to complete my second degree. a transfer to notre dame to pursue excellence in the classroom and on the football field. i felt notre dame offered me the opportunity to do well in both. while it wasn't easy, it certainly was achievable. the instruction was and remains in place to assist student-athletes to achieve at notre dame. i have a daughter who is currently a collegiate student-athlete there and i have witnessed even further improvements in the program such
as mandatory study hall for all incoming student-athletes. i'm here today as a former collegiate student and athlete. i'm not an attorney and versed in labor law so i'll leave the legal argument to the experts to my right. the impetus for today's panel is the nlrb regional director's ruling that college athletes are deemed employees which would enable them to potentially ewan afternoonize under the national labor real estates, a. the union pursuit is a means to an end. a vehicle, to implement improvements to our collegiate athletic system. i believe there is little debate about necessary logical improvements which i will describe. i believe the debate today should instead be focused on seeking the most effective vehicle to cause the implementation of these improvements. the crux of the problem is that the student-athlete should be students first and foremost. i'm concerned that calling student-athletes employees will
make the system more of a business than it already is. in my mind, we need to gravitate collegiate athletics towards a student centric model, not the other way around. i also worry about the unintended cop sequence of being teams an employee in what unionization could bring to college athletics. that said, as a former student-athlete, i support many of the goals of the national college players association and the college athletes players association that the ranking member described in front. i favor mandated four year scholarships, health insurance benefits and stipendses. i will address the transfer eligibility briefly. four year scholarship. it as a student-athlete you should be able to maintain an athletic scholarship for at least four, debatable five years from the date you entered college. assuming you maintain the school's academic and disciplinary standards.
with the goal of obtaining an undergraduate degree. the obligation should be maintained regardless of your productivity on the athletic field and even if you sustain a permanent injury. the sad reality at some colleges is the student-athlete is not performing on their field, they're athletic scholarship may not be renewed year to year. this only focus on scholarship renewable at all costs rather than striking the right balance of performance in the classroom and on the field of play. health and insurance benefits. after sustaining a sports related injury, a student-athlete's scholarship should neither be reduced nor eliminated and there should be guaranteed coverage for medical expenses for current and former players. student-athletes that sustain permanent injuries should be afforded halve inn benefits for life. i also hasten to ad that all college athletic programs should enhance their efforts to minimize the risk of sports
related traumatic brain injuries. stipendses. student-athletes should be afforded stipends so they can handle out of pocket costs associated with attending college. transfer. i if four year scholarships are mandated not at the option of each come i'm okay with the current transfer restrictions. i was a product of these transfer restrictions. i was ineligible my sophomore year at notre dame. however, if honoring four year scholarships is not required, then the one time no penalty transfer option should be afforded to all student-athletes, not just select sports. so, in conclusion, these initiatives are, in my mind, obvious and necessary improvements. the first three have monetary implications which i recognize make think more difficult to operate. however, i believe that there is clearly plenty of money in the system for necessary improvements that's been highlighted.
the national collegiate thattic association is, quote, dedicated to safeguarding the well-being of student-athletes and equipping them with the skills to succeed ton the playing field and in the classroom and throughout life. if this mission statement is true, why then haven't these goals already been implemented? i believe this problem exists simply because the fact that the ncaa is a membership driven organization, quote, made up of colleges and universities but also conferences and affiliated groups, end of quote. perhaps because of this charter appears to me the ncaa may not have been able to get consensus from its diverse membership on these issues. i don't have a solution to this problem. but i question the need to unionize to effect wait the implement indication of these initiatives. one final note. it is difficult to maintain that we truly have a student-athlete system given the relatively low graduation rates for
student-athletes at many institutions. this is not an acceptable outcome and i don't see how classifying these student-athletes as employees is going to improve this situation. so, finally, would -- was a student-athlete at notre dame, period. not an employee of the university, nor did i want to be one. conversely, i played six years of professional football, including three here for the redskins, where i was an employee and i wanted to be one. thank you. i would be pleased to answer any questions you have. >> thank you. thank all the witnesses, true panel of true experts. because you're on a roll there, i'm going to start with you, mr. eilers. guy from st. paul that guess on to do all these things. very proud of you. i know that when you were at notre dame you were part of a national championship team. and i'm just deeply disappointed you couldn't help the vikings be a super bowl team.
you mention that your daughter is playing lacrosse at notre dame. i'm -- watching her experience and your experience, i'm wondering if you were ever discouraged at notre dame from taking a class or pursuing a major because you are you -- you were a student-athlete? >> i was not and further they encouraged us to pursue our academic passions,mer chairman. >> you wisely moved to on from a bachelors degree in biology, which i also found useless, so -- if you -- i think probably most of us on this panel -- i can't speak for everybody but you mentioned a lot of issues that could be and should be addressed. injuries, for example, you had a
list of things that ought to be look at and your conclusion was that that is something that the universities, notre dame and all of them, including baylor and stanford, ought to be addressing, and that being a member of a union, a student athletes being member of an union, wouldn't help that. am i oversimplifying your position. >> i would say that i think baylor, stanford, notre dame, it is an option to provide four year scholarships. each institution provides that for our student-athletes. that's not universally adopted across the country and i think for student-athlete not to graduate from a university with a degree in hand is a total disservice. >> thank you. i think judge starr you mentioned something like 86%. can you talk about your graduation rate for your student-athletes again? >> yes.
this last year, 82% graduated and pursued degrees as well. advance degrees, graduate degrees. here's the key point. it's individual choice. what is the culture. that's the responsibility of the university. does the university create a culture that encourages the student to do the best that he or she can. there are obviously important issues to address...