tv Tonight From Washington CSPAN June 10, 2010 8:00pm-11:00pm EDT
be doing. thank you all. goodbye. [captioning performed by national captioning institute] [caations copyright national cable satellite corp. 2010] >> a senate heariig looks into the gulf offmexico oil spill's effect on local communities. then admiral thad allen. members of the house and senate meet to look at the financial regulation bill. . .
in the united states. as you will hear from the testimony from the state and local officials, hundreds of miles of coastal wetlands have been affected. some unalterably. we ay never know the extent of the loss of animal life or the damage to wetlands or the level of the damage done to the fish. 51 days out from the beginning of this ordeal, the impact of the deepwater horizon oil spill is anything but modest. there have been 413 oiled live bird, 250 dead turtles, and
two mammals died. there is a photo of dolphins swimming through the will. 31 other mammals currently being tested. over 78,000 square miles which is aboutt35% of the gulf of mexico federal waters is closed to fishing. fishermen, shippers and other businesses have been forced to rely on payments from bp to supplement the income they would have otherwise occurred. responding to a spill of this+ size, which is the largest in american history, which has required enormous intergovernmental cooperation. the coast guard declared the deepwater horizon, a spill of national significant. the declaration set into motion several operational plans,
including the national response system, homeland security presidential directive 5, and the national response from work. a massive effort to organize many different federal resources, including the department of homeland security, the u.s. coast guard, epa, in addition to coordination, these plans govern the interaction between federal, state, local, and private sector entities. it is critical there is clarity of responsibility and a clear understanding of roles that each level of government. i intend to ask the federal, state, local, and private sector witnesses to assess the effectiveness. bp's efforts to stop the flow of oil through top kill and junk shots failed.
they are collecting several thousand barrels of oil a day. these are positive developments but little comfort to gulf coast residents who are forced to watch the shoreline turn black and brown from oil inundation. one of the most important questions we asked today is how do you intend o clean p this heavily inundated area and how much progress has been made in the cleanup to date? bp has committed ittelf to payinn individuals harmed by this bill. i mentioned over 78,000 of fishing water is under limits. the seafood industry produces over $2 billion yearly. americans will have to rely on a claim by bp to put food on the table or the mortgage. the hardest question of will. at what point will bp be no
>> thank you, mr. chairman. thank you for inviting me to come by this morning and i hope i can return your graciousness by speaking briefly and then leaving it to you and the subcommittee to go forward. i look forward to hearing the results of this hearing. i think it is a very important hearing because obvious to all of us right now, it has taken painfully long for the oil spill in the gulf on deepwater horizon to be stopped, but long after it is stopped, the people, the community, the state and local
governments of louisiana, alabama, mississippi, and florida will still be dealing with this consequences. it is very important that you have focused your attention as a subcommittee on this part of the problem. i want to thank senator landriue for theeeffective, pioneering work she has done on disaster response and the subcommittee and are charles'')s and persistent advocacy in this case for the people of her state -- her tireless and persistent advocacy for the people of her ssate. i was thinking debt we learn things when we come from our various states to the senate. when i arrived here 22 years ago, thought that the top person in a parish was called a prieet. [laughter]
then i found out than in louisiana, that person is called the president's, but if i may extend that a little to you directly, he played a role here in this crisis that really has been very instructive. some of the parish priest i have been honored to deal with, and you have been a passionate advocate for the people of your parrsh. it is an honor to have you and the others here. i will say just a few things. first, this is not the first ttme we have faced such an environmental catastrophe involving oil in our country. this is now the worst catastrophe of its kind that we have ever faced. obviously the exxon valdez in 1989 was at the time, the worst oil spill of its kind, and we debated then some of the very same issues that we are debating today.
the fact is that we adopted some legislation and response, and it has had a positive effect, particularly with regard to prevent oil spills in vessell on the surface of the water and in responding to accidents when an oil spill actually does occur. unfortunately, we did not take all the steps we might have then. it seems to me as we look back+ that we failed to build a system that the plan for and respond to other risks in this particular one we are facing here which is- an uncontrolled blowout in a deep water well. i think as the senator and i and others agree, when we start talking about this, we have to acknowledge there have been thousands of wells dug, and the
safety record overall is an impressive one. we depend on the oil that comes from those wells to move our country and power our country. but the obvious fact here is that the minerals management service did not require adequate safety and response measures from the oil companies at deep water level, and this is what we are facing now and what we have to fix as quickly as we can. there are a lot of lessons to be learned, but i ttink one that is clear to me, and i think it is why it is so importtnt that the chairman conducting this hearing today is that state and actively involved in their response planning for disaster generals lee, and specifically for oil wells -- fort disasters
generally, and specifically for oil wells. after this terrible breach is closed and the oil stops flowing out of those pipes and that well, the people of the gulf are going to be living with the consequences of it, and what you can help us today in doing is to tell us exactly what we can do, which is what we want to do, which is to stand by you as we help you back to normalcy. thank you very much for giving me the opportunity to sayythat, and i look forward to hearing from you about the results as of this hearing. >> of our next order it is what i would like to do if possible is limit this to 3 minutes, but i understand some people may need a minute or two extra.
>> i will try to do mine in two minutes, if i could. i think the scope outlined by you and the ranking member are right on point about what our committee should be focused on in this hearing and moving forward. iialso want to knowledge of the leadership of senator lieberman. this committee did not even exist in the aftermath of katrina, but when homeland security was reorganized, but the chairman and i agree that a committee thaa would give voice important in handling these disasters. senator pryor, you stepped up to lead this committee and senator lieberman is request, and i am very greek -- very grateful. it will be extremely helpful to the outcome of this issue. secondly, i hope that these parish president's and the director, these men who are on the front line of katrina and
rita, watching their parishes flood and tteir people suffer. they are now on the front line again. they have been heroic in their efforts to try to give voice and explain the many dimensions of this iisue. i hope today that will be given an opportunity to ttlk to senator liebermmn about the balance necessary between what you said, the need for oil and the jobs that they represent from their parishes, but also the need to have a clean and pristine environments or fisherman can operate. i hope hey will give voice to that and talk a little bed about the six month proposed moratorium, what that might do to devastating what jobs are left. i look forward to their testimony. >> i am here because i care, and i want to hear what everyone is
testifying to. i want to thank you for your leadeeship. i think everyone is anxious to get cracking. p> center burris. >> thank you, mr. chairman. i am also grateful to you and the ranking member. i am on homeland security, and i just want everyone to know that not only is the coastal states going to be suffering, but i represent the state of illinois, and we are sending what help we can down to the coast. i know that there are national guardsmen coming in in helicopters, the assistance they are giving. there is another effect on this which deals with our urban areas. it is going to impact is tremendously in our restaurant business and various businesses, so i have concern about what is going to happen down there in the future, and surly want to
give deference to the distinguished govvrnmental leaders -- certainly want to give deference to the distinguished government leaders who are here. we must be sure that we treat this as a national crisis. the gulf states are getting the brunt of it, buu all of us will suffer from it. based on that, i feel it's important for me to be here as my schedule will allow to bring a message not only to the gulf states but from middle america that we will be impacted, and we want to support our colleagues on the front lines the best e can with everything we have got to overcome this problem. thank you. >> as usual, mr. chairman, you are insightful to burrowing and on what needs disclosure. i bring to the committee today
the effect on local and state government, oil is now entering florida waters. the orange mousse has come into perdido pass, perdido bay and the peridido river flows into te bay and then out into the gulf of mexico. florida was not notified. the emergency operations center in pensacola was not notified. this all occurred yesterday. the coast guard is doing a great job but they are stretched to the limit. those guys are working 24 hours.
they barely have time enough to sleep, and it all the more calls for the command and ontrol structure so that mistakes like this don't keep happening. our local and state officials, as well as their senator, are not only bewildered but we are livid that the command-and- control ii not there so that communication is not coming to the state and local government. it reminds me of some of the things i heard mr. nungasser the past several weeks, as he was talking about the oil and that orange mousse coming in on the wetlands of louisiana.
they were not lees, because the winds took the fresh oil to thee louisiana wetlands. the winds blessed us for at least a while because it kept it to the west, but now it is moving to the east into the northeast. when the wind shifts again to take it to the south, and it gets into the loop current, it kkys and of the east coast of florida n the gulf stream. you are clairvoyant in what needs to be examined, and just know that you have some folks in florida that are mad as wet hens right now. we have to get this command-and- control straightened out, where communication is going to everybody at the local level. >> thank you, senator nelson, and thanks for your comments. i want to thank all the members
for being here. what we have now is three panels. a war first panee is the local government witnesses. the second panel -- our first panel is the local government witnesses. the third panel is british petroleum. what i would like to do is quiikly introduce each one of you all and allow you to make your opening statements. i would love you to keep your statements to 3 minutes a possible. we will have lots of questions, -pso we really appreciate you al being here. let me introduce the mayor of the town of grand isle, louisiana. he has been the mayor there since 1997, as i understand it. >> 1995. >> he will discuss the impact the oral spill has had on his community and the inability of the community to engage in cleanup efforts due to the approval process required to begin any activity. we want to hear more about that.
next will be the president of placquemines parish. we met when i was down there after katrina. >> i have been in office 3.5 years. >> we were down there and saw the impact that katrina had on your community then. you will discuss the financial impact of the oil spill on your community and your local businesses, and last but not least, marc cooper, the ddrector of the louisiana governor's office of homeland security and emergency preparedness. thank you all for being here. mayor, if you could go first. >> good morning, senator. i am the mayor of grand isle, on my seventh term.
grand isle is about 60 miles southeast of new orleans. it is the only inhabited barrier island of louisiana. in the summertime, we get about 250,000 vacationers, combine to sports fishermen, bird watchers, and visitors coming to enjoy our seafood. most residents are some fisherman or employed by the oil and gas business. we understand what it takes to get the jobbdone, because our livelihood depends on it. if the votes breakdown, or the net net stair, we know how to fix them. -- if the boats break down or the nets tear, we know how to fix them. in grand isle, we provide 7
it is completely down. i am looking at a picture that brings tears to my eyes. we have been watching this oil coming through our passes, which affects by parishes. we have been working hard to come in and block the passes. we have come in with ideas. we came up with the idea of sand berms. trying to protect our people, trying to stop oil from coming on bourbon street. we came up with an idea to come in withhthe deeper passes. i tell the president of the united states if he gives us $1 million a day, we can come in and block these bypasses with barges. we only have 45 days before a
major hurricane gets into the -pgulf of mexico. i keep looking at that oil and watch it every day, every morning, coming through the passes. our cajun heritage has taught us to work hard, and we are very resilient. watching my mother and father lose everything in 1965, telling the people everything is ok, is material things. sen the anywhere in the world and give me 10 days, i can ake a difference with hurricanes. right now, my hands are tied. i am dealing with an oil company. we have no say so. we try our best, we have the best equipment that can come to our towns, i can tell you one thing, we are not goong to give as of yesterday, we are
bringing barges to my town. i will be back tomorrow morning meeting in grand isle to show the coast guard exactly where to put it and make sure that we protect our people. everyday, i have a mom whh comes to me and ask how she will get food to her kids. i have 37 application standing by at the community center this morning waiting on a $5,000 check. you have a deckhand on a boat tickets $2,500 may be, and the boat owners are still waiting for $5,000 check. you have a marina waiting on a check for their electricity bill and water bill. i am not going to cut their gas off. that is the things we are going through. the booms do not work, and mr.
senator from florida, this is a wake-up call. what you said earlier, what we went through ssven reduce several weeks ago, you are just opening your eyes this morning. we need some help. we need you all to push. we need some money down there. our people do not want a free check from the government. they do not want ood ssamps or sba loans.+ they want to go out in the water and put float booms to scoop up that oil. as we speak right now, it is coming through our passes. when i get back tomorrow morning, i will have one of those passes blocked and have four left. i guarantee you, i am going to make it happen. i am going to block the five passes, get out of there in 45 days, and i will stop with low pressure and protect five parishes. we are not waiting.
we do not want to be on food stamps. we are not used to that. we do it -- we want to go to work and save our communities. i still lavish riverboats -- i still have eight shrimp boat. you are right, what i see ere is destroying the best seafood in the world. i gave my credit card before. i have said some families. i made $513 a week as mayor. i have my own family to raise. i just talked to my secretary, anddi can promise you, i will not let them starve on my
island. maybe that is why have been reelected seven times. mary can vouch for that. she has always been there for us. my good friend feels the same way. i am going to meet today with the president at the white house at 3:30. it looks like every time the president came, bp got closer to meet. i am hearing there are maybe navy ships on the way to come and scoop up this oil. please, please send us some help. i can remember my father and grandfather having an american flag, and i asked my grandmother why they had the american flag on the wall. she said your grandfather is the best fisherman. tomorrow i will stop at their
tomb and tell them i want to phat i serve for my people. on behalf of the residents of grand isle, we are strong. i am reminding you iss45 days before major hurricane. it is close. we just need your help. it is like a war and we are on the front line. i want to thank you so much. >> thank you for being here today and thank you for that very touching testimony. >> we appreciate the opportunity here today. i wrote a nice speech, and i threw it in the garbage this morning. i represent 25,000 people.
i will talk witt because i have a lot to say. more coastline than any other paris. today over 3,000 acres of my parish is destroyed, not 30 miles like the coast guard says. i started out to go into a lot of detail on some things, and last night on a plane, a gentleman what to the back of the plane and handed me this piece of paper. he said i work with the coast guard. i am a coastguard official. he said i am back home in washington, and i wrote this down for you to say and tell somebody until they listen, because it is not getting done. he said i have been down in the command center in houma for over 35 days. the problems at the incident command center that result in a slowing down of this response, agency reece -- requests must go
through two levels of approval, first the request was go to the ico command approval, which typically takes less than a couple of hours. the final level approval comes level approvaluhc. sometimes it gets approved the next day or the day after. most requests take over five days. this timing is unacceptable for an effective response. when the [unintelligible] spilled into the mississippi river in 2008, the ceo of the command poss had full authority to obligate and engage funds. why is this not happening now? the current federal projects is $150 million, causing it to almost be depleted. there is more than $1 billion in the osltf principal fund. why hasn't congress allow the coast guard to borrow from ttis
fund as it did when the barge broke in louisiana? the lack of action by congress is forcing the u.s. coast guard to ration the little money they have left, therefore slowing down the response. i don't know if that is true, but if it is, shame on us. i am not here to place blame on anybody, as i have done in the past. i am here to move forward, and it has got to change. or we are going to lose coastal louisiana. i still don't know who is in3 is it be he? is it the coast guard? when i get mad enough at a meeting, the coast guard stands up and says i can make that i throw a bp official out of my office, he comes back the next day to prove something. i have spent more time fighting the officials of bp and the coast guard aad fighting the oil. the paris presidents have come
up with every logical answer. please do not rely on the boom in florida. it is not working. it is a joke. it washes up on the shore and then we have oil in the marshes and we have an oily boom, so we have two prrblems. we have to find somebody to put in charge that has the guts and the will to make decisions. we are going to maae some bad ones, but we will fix them and move forward. right now, it took the president of the united states to come down to approve the [unintelligible] to put in the mouth of the river. when you work 20 minutes any rest 10, not much work is getting done. sometimes it feels like the contractor has more influence than bp and the coast guard. when the guy with red hat stands
up and says we are not going to do that, obviously not, because his guy is on the payroll. any equipment that comes into the parish, he is not getting a percentage of. right now they are building a camp for 1500 people. i tell you there is nothing in plaquemines parish for 1500 people to do. the people that were sent out to clean up one island were trampling the nests. we have people in charge that do not know what they are doing. we have laid out a plan to be closer to the front line to catch the oil, and we did. the oil still sits in a marsh, and every day, more and more pelicans dive into that and get
coated with it and die.+ i have a package for each of you. thousands and thousands more birds will die. hundreds and hundreds of turtles and see live, everyday we leave that muck out in the marsh. we came up the next day with a back implant and have been begging to get it approved. kevin costner's machine, i don't care whose machinery used. we have to suck it up. there are overseas ships. we have had people come from all over the world to see me because bp will not see them, with a pipe that will go down 500 feet and get those larre areas of oil and move it to the surface. why are those ships not deployed? we could gettmost of them out there. the president had to approve the jackup plan. although we do not want to see it on the florida beaches, it is easier to clean it up off the
beach than from the marshes. they said it would never get to the marshes. well, it is there. i ask you, please don't make flyovers of plaquemines parish. you have to go down there in touch it.+ there is absolutely no life. everything is dead. i will make a prediction. we will lose more coastline from this disaster in louisiana then we lost from katrina, rita, gustav and ike combined. as soon as the grass and cane poles into the water, the land i consider to three weeks later and say we are doinn everytting possible -- i can sit here three weeks later. i do not know who to blame anymore.
it took the president coming down to get the boom project -- the berm project approved. i don't know if it will take him comeedown to get the suction equipment. we put vacuums on a barge and took it out there in showed that it sucks up the oil. there is other equipment out there. you have the parish president's running the whole show. bp could fire up their contractors because they are doing nnthing but destroy our marsh. this is an emergency. to work 20 minutes and take 10 minutes of, would we do that in a war? because we are in a war here. what we say lay down your guns because the sun is over 90 degrees? let's take a break? we are letting the rules and regulations and the contractors ndp stand in the way of us
saving our coastline. we showed yesterday the governor went out and show that the vacuum equipment is working. hopefully by the time i get back this afternoon, we will have an approval for that process. if what this gentleman told me on this piece of paper is true, then shame on the coast guard. they are rationing their money and saying we might not do that because we need this. i do not want to point fingers, but there is a lot of money -pbeing spent, more than that burma will cost. that is not going to benefit fforida, louisiana, mississippi, or alabama won big in keeping the oil out. it is being spent on hotel rooms, flyovers, all the things that look pretty but does not do anything, does nothing to help us clean up our marsh.
i don't know if you saw the video of the cruise wiping the blades of grass. that was an absolute insult. there is over 100 natural products hat could be played -- sprayed to energize the marsh, and even though oil. bp is not looking at any of them. you would think as big a company as they are, they could multitask. for the first two weeks, i heard we haveegot to stop the leak, then we will worry about the fisherman. i hope the guy that writes the check to the fisherman is not the uy -- maybe it is. that is absolutely ridiculous. important thing. everything should get attention and be worked on at the same time. but knows we have enough people on the payroll to do that, but they say 24,000 people. i know i am out of time, and i
will just leave you with this. thomas paine said a century ago, lead, follow, or get out of the way. so tell them to get out of our way of they are not going to help us, because right now, they are the main problem. thank you. >> thank you for your testimony. >> key state agencies were directed to be involved in cleanup efforts. the governor met with paris leaders to assist them in impacting their parishes and to address the economic issues facing the parishes and their citizens. it said it -- the department of natural resources and a permanent terminal qualities trustees under the of pollution
state in response to the cleanup. state agencies and local governments have used their expertise to develop innovative modular process is to protect their coastlines which are nimble and quick to deploy. however, unlike other disaster the tate does not have the authority to independently conduct the response activities. this has led to a great deal of frustration, as just dated, as we have attempted to interface with the process for response. as of june 7, over 13 coastal parishes are affected and we are trying to get the exact number, over 100 linear miles of louisiana's coast and coastal marshes are confirmed to have been impacted by the deep horizon oil spill. this is measured in linear miles only. it does not reflect the depth of the inclusion into our coastal marshes. the impact of oil on the beach is vastly different than the effects of oil in the marshes, especially in terms of
environmental impact. large areas of fishing grounds3 recreational fisherman. less than 20% of our shrimpers are able to harvest, and large regions of oyster harvest areas are closed. other areas -- chemical manufacturing, transportation and logistics, oil and gas exploration will be affected. much of the coastline already affected are currently threaten is part of a fragile coastal marshes and wildlife habitat system. damage to these commercial and terminal systems may require and recover and could greatly disadvantaged louisiana's economy for years to come, and could jeopardize louisiana's reputation as a sportsman's paradise. most importantly, it has the potential tooseverely damage if not destroyed a culture.
the south louisiana culture is strong and rooted in fishing and other water related industries. entire communities have been established around these3 damage to these commercial entities could displace people, never to return, and their ccltural ccntribution could be lost. a moratorium on deepwater drilling will exacerbate the impact to louisiana. we estimate upwards of 10,000 jobs could be lost if people believe if deepwater drilling is curtailed. bp is a part responsible for response and cleanup. state and local governments develop plans to influence the actions of bp and coast guard as to stated. a more current analysis up those critical areas that need protection, and implement from a bottom-up approach, but have having no plans implemented. these response plans require timely implementation.
for example, the dragging of barrier islands. implementation has been frustrated by non responsive regulatory process. it cannot be overemphasized that the coastal wetlands are not only an environmental concern but a significant economic driver for the state of louisiana and the nation. several requests to the federal government for assistance and while the response -- the overriding message has beennthat the oil pollution act does not authorize the federal government to respond to a large scale patastrophic oil spill with disaster programs and assistance. we are primarily concerned with the assistance to individuals thaa can be provided by federal agencies that are in the stafford act emergency. but the official beginning of hurricane season this month, it has become increasingly clear that should a storm drain to collide with the huge oil spill, there were be unexpected and exacerbated consequences to tte waterways and coastal
marshes and coastline and inland areas of our state. we are requesting that the movie proactive in identifying potential response issues like prayer approval of 100% cost of debris removal of areas that might be impacted by contaminated oil. louisiana continues to recover from hurricaae katrina and rita, the largest in u.s. history, and hurricanes gustav and ike. this is the largest internal impact we have ever seen. governor jindal north of paris is willing to early in trust the care of our marshes and citizens to a third party. state and local governments will continue to be aggressive to protect the interests of our state and its citizens. the bottom line is this. because of the resiliency, 42,
and the battle experiences of our people, louisiana will recover from yet another catastrophiccdisaster. this is vital, not only for our state and the entire gulf, but for our nation. the challenges insure that our partners -- plans or scalable and responsive based on the need, and that bp is perceptive in forward leaning and doing everything that is possible to protect and restore our coast and the livelihoods of oor people. thank you. >> mr. cooper, what i might do is open my questions with you. we will probably do two rounds here. we will do two five-minute rounds and try to move to the questions as quickly as possible. mr. cooper, let me start with
you, and you mentioned at the stafford act. is louisiana in the process of requesting assistance under the stafford act? >> no, we are not. at this point, the reason i brought that up is that, i want this say up front that we have a great partnership with dhs, fema, and the coast guard in planning for hurricanes. ww also what happened during katrina. part of the issue is that we are used to responding to stafford time disasters where the response is from the bottom up. as opposed to the top down, and that has been a frustration. also when you put plans together, we know that everything is not always been to go as planned.
we need to be able to change plans at a moment's notice, and that is not what we are seeing with this disaster. that is why i brought that up about the stafford act. unemployment -- disaster unemployment insurance is something we were not able to activate in this disaster as well as crisis counseling. there is goinn to need to be a lot of that, as well as other assistance. our concern is that if the system could be more flexible, we would see a better result. what you have seen since 9/11, since katrina, we have seen emergency management in ball. this act goes back to 1990. there has never been a catastrophic oil spill like >> one of the challenges here is you have a private company, bp, who ultimately has responsibility for most of this,
but then you also have the federal government is very involved in the response. just tell the subcommittee it can about how your state has been able to coordinate with the federal government and with bp in some of the challenge is there and some of the gaps there that are not working very well. >> one of the challenges is, with the stafford act, we are used with -- used a chain of command and unified command. when it goes beyond local capabilities, you asked the state for assistance. when it goes beyond the state, u.s. for famous assistance. the challenge has beee that there is no unified command. you have command and robert, you have command in houma. you have bp both in houston, texas. you have staging areas where there is command. part of the issue is just a
identifying where that demand is. sometimes decisions take a long time to be identified. >> when you are getting approval, was that from the federal government or from bp? >> that was from the federal government, holding b.v. accountable for paying for that. we appreciate the president for proving that. something we do not have an arkansas. you have an oil spill coordinators office. as i understand it, that used to be a cabinet level position. >> with the governor did is move that to a cabinet level position. there are a number of resources that the state police have. >> in your state government, are you the one who is responsible for coordinating, or is it the
state police through the oil spill coordinator? tell us how that chain of command works. >> the state is required to establish trustees, and i name they include the department of internal -- the part of walleye and fisheries. >> the oil spill coordinator is the primary contact chris marks that is correct. >> i am going to turn it over to senator ensign and let him ask the questions. >> i want to thank all of you for your testimony, and as emotional as you got, i thought you weee pretty restrained. i did not hear any expletives, and i can understand i am sure you have uttered a few of them out there. it is quite understandable. can somebody walked me through
who has to approve the berms? it took the president -- has to approve the suction, the suction units you guys have shown on shore. maybe to put them on the board is and get them going. what we threw some of these it sounds like you are having trouble knowing who can approve it. >> the coast guard man on the ground says he can approve it, but then he goes to bp and it goes through the b p chain of command. i think when we scream loud enough and it's up to averell allen, the coast guard pulls the trigger. if funding is a roblem, early on in a conference call with admiral alan's, they approved me the reason they would not approve the berm is because they did not believe it would do enough good to keep the oil out. no. 2 was because of the cost, and they have imited funds for
this recovery. that scares me, and should not be limited funds. we should be making bp but the money up. we should be throwing everything in the kitchen sink at this. skimmers. there are 100 skimmers in a warehouse, we are not getting those things out there to pick up this oil before it gets to florida and other states. it is sitting out there and nobody is picking it up. . .
>> maybe when you have trouble getting something approved, we should just put some bp executives in the oil. >> shock cousteau's son went for an hour and a half and could not find anything. i suggested we take him out there and throw him overboard and see if there is black stuff dripping off of him. there is a new guy in charge of
bp, and i said, "what do you not see out here?" our crew is out there putting it out every day. they're not picking up the oil, so we just keep adding to it. there are no skimmer's out there, not thh day before or the day before that. >> the day before yesteeday around 5:00 in the evening, some shrimpers or -- were out in at the mouth of the river. the people it's about 25 of them in a task force -- bp put bout 25 of them in a task force.
one of them climbed up the mass. he told me he wants to come home. he has been going for five weeks. he has been watching television, and he is watching the place he makes a living. the fishermen want to come home. he said, can you please bring us home? there is no oil there. maybe between about -- maybe between the 25 of us in the last eighttdays we have picked up maybe a quarter of oil. apparently, bp does not believe that oil moved at night. shrimping is 24 hours a day seven days a week. they have left their families, and they are scared. they are scared to tell bp representatives that we need to go to where the oil is at. we want to save our own community. now, the task force behind the
island is from venice, louisiana. there is a place where locals can work in the areas. the bottom line, the bp representatives of the road the boat with us, just picture you or your son or your grandson playing ping pong, and there are about 500 balls coming at you at once. that is what it looks like from the bay. there are 500 ping pong balls of oil coming, and only one shrimper out there. >> it sounds to me, based on what everything i am hearing, that the local folks note the area the best. you know the solution in the best. more of that command and control needs to happen, perhaps even like what we did senator landrieu during the war.
we had a local troops helping local commanders on the ground. perhaps we neee to set up something like that so that you guys do not have to go have the president come down to get some of these things done. it sounds like you have a lot of solutions that could prevent a lot of this stuff from happening. >> i will follow up on that point, because that is where i wanttd to jump off. i do not think we need any more testimony about the contract in process being absolutely broken. we saw this. we have seen it before. we saw it after the catastrophic katrina. we are operating under a different law with some of the same principles raising their ugly head again. the people that are on the ground either up to their chin in the water, or up to their knees in oil in this case, do not seem to have the resources or authority to get the job
done. mr. chairman, ranking member, i cannot tell you how important this partiiular subcommittee is, which is hy i argued to form it, to staff it, because i figured some time we might need it again. well, we need it now. this subcommittee of homeland security is focused on giving local government a seat at the table. this is a county of 10 doesn't people who represent -- 10,000 people who represent probably some of the largest, most valuable wetlands in the country. i want to welcome the council member from jefferson perez -- jefferson parish. up here, washington knows the difference. down there, we do not care.
one is a republican. one is a democrat. they could be brothers in this fight. one message to washington is let's not make this in any way political. this is a national disaster. it needs to be handled in a much different way, and we have got to do it. our economic and environmental future depends on it. i also want to ask a question -- billy, you have had experience both in the environmental community, you also know something about the oil and gas industry. could you please juss, a minute on the importance, or lack thereof if that is your view, of a balance here as we move to clean the oil, contain the oil, get it off of our march, but how we have to do that recognizing that half of our family fishes,
the other half is in the oil business. >> absolutely. oil drilling affects a lot of our people. it is going to be a double whammy. the business community in south community came up with 866 man plan, and we presented it to -- with us 66 man plan, and we presented it to the president. 33 men go on for seven days and the other 33 go on the next seven, you swap out. i have spent hundreds of nights offshore in the oil business. the company man has an agenda. he has to work that rick. he has got to make a buck. that is a dangerous situation. we saw this catastrophe.
it is not the first time there were disagreements about the mud and what is going on, is it safe or unsafe. i have seen in the argument personally myself on shore. you put a federal agent out there that has the right to say, "stock." -- the right to say, "stocp." and you make it safe to come on. we all know that people asked to be removed from that rig because of unsafe misspelness. there are a lot of good retired engineers that would love to step up to the plate. the answer is one person from the right to shut down the rig. overseas, the half a million
dollar device that a lot of people say, and i am not an expert, they say it could have prevented this tragedy. half a million dollars for a writ and we do not require them. -- forever rig and we do not -- 4 upfor a -- and we do not reque them. we ask the president to look at these solutions. >> i know how i have gone over my time but i have to ask the mayor, you have been at the forefront of the fight for revenue sharing since this started 20 years ago. it has been going on a long time. you know the history. and the chairman of the offshore industry started offering louisiana 37%. we wanted 100%. we lost it in court. we have been trying desperately
to tell people that of the $5 million produced by this industry offshore but the federal government gets, we get nothing. louisiana would not have gotten one penny of the hundreds of thousands of billions of dollars of taxes the would have been generated by this oil. could you just comment on what you would do with the funding if you had it? >> president obama came through and visited the island last friday. i remember looking out the back side from grand isle to the north side. he asked me what a tower was and i told him it was in short drilling. -- in shore drilling. when you look at the gulf side, you see a bunch of it jacked up
rigs. just talking to the people in the area and my colleagues, just this one report is the largest port in the united states that import oil into the united states. talking to the president last friday, you're looking at 37,000 jobs. there is no way in the world we should sttp drilling. i looked at the president and i told him, if we are all in class and the teacher is a sin -- is the fussing you, you should not punish all of us. he told me they're going to stop the whole and bring it back. -- stocktop the hole and bring t
back. i told my chief of police and my councilman that the new board as of june the second was being dropped down. i am not an oil man, but i know one thing. when the fishing was bad we could work in an oilfield. we need to continue drilling. we have exxon mobile. after katrina, president bush called and askeddhow many gallons of oil we had in it the tank. you could see the ships at the facility, the ships coming in right at debt port that port.
it is very imporrant that we work like brothers and sisters, we clean up our mess, and we continue drilling. >> i am trying to get to the gist of the conttol and command, who is in charge. what is the recommendation -- do you have a recommendation? during katrina, i saw a man come on television and say we are going to do this and we are going to do that. and do you have someone like that down there? >> we need somebody on the ground to kick some butt and
make this happen. we have lost the battle but we can win in the war. we can save our heritage, but it has to happen quickly. we need someone with authority to mobilize all of the equipment necessary, wherever it may be, to do what ever it takes to keep the oil out, to do what ever it takes to pick it up, and to have the heart and the compassion to do it. whether that is somebody from the coast guard -- i do not think there is a person from bp who has a that will and that direction. >> [unintelligiblee >> absolutely, and the president pold admiral allen that he wants people on the ground who can make decisions. >i am still sitting at the table with bp and the coast guard, and
they are looking back and forth at each other while the oil continues to come in. i am with you. i believe one person that is responsible, and we get this thing kicked. we can do it, and we are willing to help in any way shape or form. i will turn over all of my duties as parish president, i will spend 100% of my time on this. >> you are making the recommendations. evidently, the recommendations are hitting the bureaucracy. >> they cannot make bp do it on a local level and it takes five days to get up to admiral allen. that is the problem. somebody on the ground has to be able to make strategic, financial conclusions quickly.
we cannot wait now, of three weeks, to make a decision. we need to get in the room and say, what is the best way to go after this? we need to attack it with all forces. if admiral alan says a guy has authority, they are not using it. they are not using it to solve the problem. >> i also have a little bit of experience in decision making and government. somebody has to take charge of this thing. i do not know what authority we have. i do not think we do, even as homeland security. let us move today to put somebody in charge down there.
>> senator, you have hit the nail on the head. what is the problem? the problem is command and control. i want to give you an example. a week ago i went to the incident command in mobile,+ alabama. they have jurisdiction over mississippi, alabama and florida, all the way over to the big bend area of florida. now, what i was told was pepper -- was that the coast guard was 51% in command and bp and the rest. then i was told that really the coastguard is 55% in command. well, that is the problem. nobody is in charge. now, there is a way to solve this, and i do not want to sound likeea broken record, but the finest command and control capability in the world is the
united states military. and you have got to give somebody with a clear chain of command that also has the capability of bringing together disparate parties, private- sector and public-sector agencies, and directing them to do, of, cleaning up a problem, and hhve some authority to make it happen, and have the resources, and that everybody knows that it goes straight to the commander in chief. until you do thhs, you're going to continue to have the same problem that you're having. you're goiig to continue to have the same problem that florida had yesterday', not even being n the information . loop, when in
fact, the orange sluce is coming into florida waters. you can lead a horse to water but you cannot make him drink. how much more of this do we have to say until a command and control structure is changed? you cannot leave bp it control of this becaase they are not going to get it done. and you cannot have this kind of delay that is going over and over until somebody with authority, such as admirable allen, approves it, or when they come to their senator and something gets done because we start rattling the cage. this is the long and short of it. this thing is going to go on for some time because as much oil as is out there in the gulf, just think of the far reaching
effects when the wind starts shifting and it goes in other -pplaces. you all are just brown. i would hope that someone would be listening to the pleas of these local fishermen, and the pleas of the local officials through their senators to change this command structure. it does not mean that the military have to be in charge. it is setting up the command structure and having people responsible for that command structure. you cannot split 51%, 49%. that just does not work in a situation like this. otherwise, you have got -- which you all pointed out -- people out there wiping off the place of the marsh grass. and that does not do anything. >> it makes a contractor a lot
of money. >> amen. >> thank you. >> we said we would do a second round with this panel. i would like to keep it very short perio. we will keep it open for people to submit their questions in writing. let me ask you just more of a background question on louisiana. we are not a coastal state so i do not know how this works, but does the state of louisiana -- do you have any role in monitoring the oil rigs that are out there working off york post or the companies that are working off yorur coast? >> there are companies that do not really monitor -- all of the
nonprofit that ms arce startedd right after the -- msrc started right after the exxon spill that watch for oil leaks and contamination. for another day msrc group was heavily funded. i did a response group in texas that was done a first-class. it was heavily funded by the oil companies after exxon, which has absolutely no assets. they are down there, but in name only. they are not equipped for this. that needs to be looked into by this group because they were not ready for this. the warehouses were empty that
used to be full of booms and so on and so forth. >> they drill in international waters and that is why we do not have that authority. >> thht is what i was wondering. i just did not know. >> could you clear up something about the berms in the barrier islands? do you need any more approved? >> yes, sir. in red are the ones not approved. in green are the ones approved. >> why are sooe not approved? >> that is a good question. the corps of engineers is still answering questions about the environmental impact of current flows and ridiculous questions. we hope to get started on six and have them approved before these other six are finished so that we can move right to them.
we have to build a whole thing to keep it out. >> isn't that a huge -- this is a huge issue, this getting to the marshes, isn't it? >> if we would have built this when we asked for it, those pelicans that died, we could have collected all of that oil offshore, and those four hundred pelicans that are dead, that could have been prevented. >> to be clear, this is not something that bp can do, the federal government has to approve this. >> the federal government ordinarily would pay for it, but when the president of bp saw it, he agreed to pay for it. >> what is the status on the -pnational guard? how many are there and what are they doing? >> i do not have the exact number, but over 1000 have been
deployed. they are doing a number of things. they are assisting in building land bridges. we have seen some pictures of that. >> but you need a lot more down there is the bottom line. >> keep in mind that we are starting hurricane season. we talk about not having enough resources or personnel to respond to that. iffa hurricane were to come hit louisiana or any nearby state, is going to further it into the marsh lands, and if there are not enough personnel or resources at this point, how are we going to have enough if we get hit by a hurriccne? that is why the national guard is the go to. they are doing a number of things, and thee would certainly take on more of a role if a hurricane or to hit. >> there are backing -- there
are in a vacuum -- there are vacuum trucks out there vacuuming up in the oil. >> we altered the coastal plan to make these firms and that were small enough, yet big enough to give us a fair chance of keeping the oil out of our marshlands. >> i hope the administration is listening so that they can get some people on this and get that approved. >> the parishes to the west need protective measures so that of a hurricane comes through they are protected as well. >> just a couple of quick points. the burns that are in place now
ber -- ms -- berms that are in place now are there because of the president directed they be put there. i think we should give obama credit where credit is due. the coast guard is the military. they used to be in the department of defense until we in congress moved them when we created the department of homeland security, so this is an issue we have to discuss about now how to figure this out, whether the coast guard should be considered the navy or the army. i do not know, but we have resolved today that the command structures are broken. to fix this, we need more discussion. finally, and didn't bp give
every state $25 million? and if so, could yyu just briefly say how you are spending that money? did everyone get that amount, mississippi, alabama and florida? >> i am not sure about the other states. in our state, each parish got $1 million. >> and each county did. are you going to send any of that to the parishes? >> absolutely. we want to make sure that the paaishes are supported. but what we do not want to do -- we have the funding available to assist us as well as the parishes. we want to make sure that bp is responsible to the parishes. >> billy, have you spent all of
your millions? >> we are about halfway through it. we are spending in rescuing animals, putting out booms, and then we have also built a potato bridget to protect the oyster beds -- potato bridged to protect the oyster beds. >> you bought a boat that has been very helpful, which is good. we have got to get more money flowing down to the locals, and i will wait for my next question. >> iijust have to say, we have got to get somebody in charge down there. >> i do not care who is in charge. i want somebody with some authority, and it cannot be bp. by the way, the coast guard was
not a part of the department of defense. it was a part of transportation. when we reorganized the department of homeland security, we put them in there. now, it is fine to have the coast guard in charge, given the fact that they have so many other responsibilities around the world. if that is what the decision is, that is fine, but the present system is not working. the decisions are not timely.. the resources are not produced, and as a result, you have a big mess with no command and control. that has got to change. correct thank to our pat -- >> i want to thank our panel for
being here today. we are going to keep the record open for a few days, so you may get some written questions. thank you for your time. we are going to move on to the next panel. thank you. [cappioning performed by nationnl captioning institute] [captions copyright national cable satellite corp. 2010] >> on tomorrow morning's "washington journal," the american energy innovation council, a group of executives calling for more government research into clean energy. they will discuss the oil spill. that begins at 7:00 a.m. eastern time on c-span. >> mr. gorbachev, tear down that wall. >> 23 years ago, president reagan spoke those words in
berlin. watch the entire speech+ saturday, on american history tv, on c-span3. >> a u.s. coast guard admiral is overseeing the respond to the oil spill. more than twice the previous government estimate is now believed to have been spilling into the gulf every day. this briefing is about 23 minutes. >> our briefing today will be given by andmiral thad allen. we will have an overview of five or 10 minutes, followed by questions and answers. please state your name and affiliation when you start. with that, i turn it over to the
admiral. >> good morning. my update will be brief this morning because we really want to talk about two things, two letters that we sent to british petroleum in the last 72 hours. the first letter is regarding claims and data information. i have tracy waring with me who will be speaking to that. the second letter was regarding spill containment and spill control, will containment and well controlled. we -- ll -- well containment and well controlled. we are trying to bring in redundant capacity for the enterprise that is out there right now that will be joined by two more forces that are badly needed in the next week or so. we will be directing bp to bring another production capability
inside, and that gets back to the redundancy better that we sent. a meeting was held yesterday at my request with tiny hayward to talk about claims processing. -- tony hayward to talk about claims processing. we met with members of the white house and my staff to talk issues with claims, dated transparency, and the way forward. tracy will give you an update on that right now. >> as admiral allee indicated, we conducted meeting with top bp claims officials to be sure that bp's claims process is more transparent, prompt and responsive to the unique needs of the community and citizens that have been impacted by the oil spill. during the meeting, we directed bp to provide clear information on the entire life cycle of the
claims process that they have produced and to ensure that we have greater accountability ffr the american people. we discussed a number of crucial issues during the meeting. i am just going to highlight a couple that i think are very important and crucial to the impact of individuals and businesses along the gulf. one is a pressing concern about the leegth of time is taking to pay businesses that have been impacted by the oil spill. we indicated, and they recognized, that their previous approach of waiting until basically after the book is closed each month to calculate losses will not work. it will not get done quickly enough to help businesses that are struugling on the ground. they have indicated that they will implement and are implementing a more expedited claims process for these larger- lost business claims that will take into account the ability to allow for these businesses to
pay their expenses for the upcoming month, as opposed to reflect the last month. that is an important update that we received from bp yesterday. we also discussed earnings and the fact that many of the impacted industries in the gulf, for example, the shrimping industry, workers make the majority of their money in a particular season, in a short span of time. we indicated to bp that we want them to make sure that they are not simply providing a month of wages calculated by divvding an annual salary by 12, but rather verifying that they can calculate the damages to those individuals bassd on the earnings that they get in that short amount of time. they have aasured us that they will do that. probably most importantly, at yesterday's's meeting we agreed to move forward with a meeting today with folks who work
through their contractor and to maintain in their data that they keep on claims that come into their system with our team to ensure that we can make some changes to better explain to the american public what claims are being paid, what the status is of pending claims, and ensure that they are being paid timely and fairly. finally, bp's senior person for claims operations who joined us yesterday is going to participate in a series of meetings with me across the gulf over the next several days to discuss individual and small- business claims processes with each of the states, and to allow the states to bring their concerns forward, and again, to try to get better clarity, understanding, and to ensure that individuals, families, and small businesses in the communities are getting what they are due by the responsible party, and that we can help put the our responsibilities in
ensuring that they do that. >> we will take any questions that you have for us.3 when did you ask for that? was before or after the cap was in place? >> and we made several requests for that. regarding the high resolution video, one of the challenges we had was trying to do volumetric estimates between frames. there were limitations on the satellite feed. it was low quality. they keep that on a disk when the vessels are actually operating out there. in some cases, they had to have that shift in. some of the delays were because of the shipping. it is coming together. as you might imagine, it is
really complicated. we have invited ssveral teams of to take a look at this from several angles, literally different angles. we are trying to figure out how the oil might be determined. one uses overheed satellite imagery and ssnsors from an asset aircraft. what they do is actually look at the reflectivity on the water. it is different from the water itself which allows them to take a measurement and assess the total out there. the other team is looking at the oil coming up from the leak site. there are two different ways to look at that. one is to analyze the video itself and make assumptions about what is in that stream. there is oil, natural gas, water and sediment. the oceanographic institute is looking at it right now. they have sensitive acoustic devices down there and they are trying to get across section of the volume using sonar
apparatuses. they are using a lot of mathematical data and crunching it right now. >> are we talking weeks? >> we were hoping to have it available today. it is kind of the proverbial room where you throw seven pieces under the door and say, do not come out until you have it done. we want bp to have the capacity to get the system -- to keep the system going if one section of shutdown. it was always part of the plan that is part of the way to deal with the oil. >> [unintelligible]
>> there are resources from other countries that are available, and we are using them. we are using resources from norway, canada, and other places. in some cases, we're just having to trannfer the equipment down. nobody has come to me with a but any capability we can bring in, we are willing to. in some cases, it is the skimmer itself. to my knowledge, what we have brought in is equipment rather than the vessel itself, but we can get you a detailed list. >> regarding the video, did you get any resistance from the bp with turning over that discount -- that disc?
>> early on there was some question about who owned the video and who had access to it. a firm called ocean during -- oceaneering had the access and had to get it back to us. >> they did not stand in the way of you getting it? >> not to my knowledge. there was an issue early on about who owned the data anddwho could release it. >> any more questions from the room? >> you said that some things used in saudi arabia and other things will not work here. why is that? >> the spill is a very large, concentrated, monolithic spelil.
this bill is not a large, monolithic spill. -- this is bispill is not a lar, monolithic spill. at any time, there could be anywhere between 25-30 vessels working on the cleanup. there is no tanker that has been outfitted to do that right now. the tankers would have to be modified and we have some technical issues about what that would entail. just in general, it is not quite the same set of circumstances, not the same environment, not the same type of spill. >> the operator will start taking calls on the telephone.
>> the first comes from abc news. >> in florida, officials held a newssconference at which they expressed concern that there were only informed after the fact. command and control has to be straightened out. what is your response? >> first of all, i have flown over that area. i am very familiar with both the strategy we have a right now and our strategy to make more permanent booming there. our plan right now is to allow vessels to leave when there is less chance of oil coming in.
there is not a 100% guarantee that oil will not get through. i do not know the exact details of the report you are talking about. i will be happy to release a statement later on when we look into the details. as i said, i have overflown it myself. there is a fairly robust system in effect. we will look into it and released a statement. again, we have a robust strategy there. >> the next question comes from bloomberg news. >> bp said this morning that theyyplan to flare all of the oil. is that a significant change and did you approve of that change?
>> i do not think it is a change. we originally listed the capacity as 5000. we think it could go to 10,000. it was always a plan to flare the oil. the way i described it was confusing, that would be my mistake. >> of the next question comes from the dow jones newswire. >> going back to the flaring of the oil, that sounds like another environmental and financial disaster. why would you approve that? >> flaring the oil on a mobile drilling unit is no different than flaring in the oil that has been corralled by. a boom. we're trying to remove if any way we can.
>> the next question comes from >> i have a question about the low rate calculation. on may 16th, the estimate was 12,000 or more barrels per day, and that it would continue to flow on annupward bound model. yesterday, as you said if you can get the capture to 28,000 bar. per day, that is where you would want it to be. since they said that 25,000 was in the upper end of their boundary, is the government unprepared for a much higher rate, and why is that? >> we put the capability we had
in place to be able to handle the flow. we said this in a letter to. we ask them to tell us -- in a letter to bp. we ask them to tell us how they are going to handle capacity. we expect to have a response in the next 24 hours. >> what is your impression of the plan? is it adequate? are you pleased with it? >> it meets the redundancy and capacity requirements that we need, we want to make sure we understand how it is going to be executed. this will allow us to create a riser pipe that is basically suspended below the water, held up by of billy at one end and an anger at the other -- a buoy at one end and an anchor at the
other. >> what happens when you disconnected? >> there is probably going to be a release, and we are going to have to deal wwth it. is the nature of the response ann the limitations on the production platform down there. having a large hurricane come in at that stage is not going to be good for anyone. the vessels are there. shuttle tankers will be much more seaworthy. it will be an issue of how heavy the weather gets. >> our next question [inaudible] >> can you hear me? >> yes. >> on behalf of the american people, we are very disappointed in the way this is being handled. is there any way to reassure the
american people about what is going on? we think it is a big bust and that there are a lot of problems there. get it together. -p>> i am not sure i understood the question, but i will make a comment. regarding the response, i do not think it is well known by a lot of people in the united states, and it is very complicated. our first response, which was mandated by the oil pollution act, was that the coast guard would be the federal operator. it puts the responsibility on the responsible party to identify problems related from the spills. would people have to identify our the capacity out there.
they have to be able to respond to a worst-case bill is an area. that is what was mandated in law by the exxon valdez. that is what was put in place after the deepwater horizon spill. we've since gone way over ttat in the amount of personnel we are bringing into this fight. this has gone far beyond, geographically, anything we anticipated. >> the final question comes from the washington post. >> just the general question, our other american or other oil companies involved in any way in the cleanup and in trying to figure out how to cap the well, and if not, why not? >> first of all, british petroleum plus the engineers and technical experts consulted
widely with other industry partners. in fact, the recommendation to try and use a dispersant application of 5,000 ft. down in a sub-sea environment, which had never been done before, was actually recommended by an industry partner to vp. i think there is a significant collaboration going on out there. is in everybody's interest to get this tting capped. i do not think there is any intellectual discrimination between british petroleum and any other company. >> you said that you are willing to entertain and jones waivers. who would they come from? >> they could come in a variety of ways. i will give you a good one right now that we are working on. the state of louisiana is looking for as many dredges as they can bring in to do ua
berm project that has been funded. if there was a shortfall, we could bring a foreign dredges in, but that would require a jones act waiver. i told louisiana if we get to the point, submit a waiver and we will consider it. >> do you think bp will go bankrupt? >> i have not consider that as yet. >> on it tomorrow morning's "washington journal," the american energy -- in-lin >> our c-span monitoring+ supervisor is on the bus to tell us a little bit about the vehicle.
tell our viewers a little bit about the histooy of our bus program. >> c-span has had a bus program going back to 1193. it goes all the way back to douglas brinkley, and a book he wrote called "the magic bus." he took 17 student across the country on a bus on a six week tour to understand history hands on. seven months later, the first c- span of buses was launched in november of 1993. we weet to schools across america who are partnered with our cable affiliates. in 1996, a second bus was launched, and we continued with the education outreach. in addition to community outreach, the buses were fully functional media's duty as.
-- media studios. today marks a new day for us. this is our brand new digital bus. it is totally different from our other buses. it is a hands-on, multimedia demonstration center. >> why did you launch this new vehicle? >> the older buses were outfitted as production studios. they had a lottof space for it the switcher, the audio board. we wanted to bring the bus into the 21st century. this vehicle has interactive kiosks, laptops, an area where you can sign up for c-span resources. it is interactive, hands-on, itself guided. it gives our users and visitors and different experiences with our resources, whether it is
television, on-line, or the radio. >> how long did it take to create the buzz, and who did c- span work with on this? >> it was about a four month endeavor. we purchased the bus in december of last year. creative mobile interiors, a company in ohio, worked with us to design the inside. it was a company-wide effort. our engineering department and i.t. department were part of this. it came out april 30th of this year. >> where does the bus go now? >> after today, the bus will head to chicago for a literary festival. from there it will go to denver for an education conference. >> what locations will it be visiting? >> the last four or five years, we have had an education
outreach initiative. that was our focus. the last four or five years we have branched out. we go to universities, a civic organizations, a large book festivals, and educational conferences. we are meeting students, teachers, people that might not be familiar with c-span, and breaking out and letting them know about our resources on board. >> how long will you be on the road? >> roughly 10 months out of the year. in between our large anger events, like booker festivals -- book festivals, we will go to high schools, libraries and civic clubs. >> up next on c-span, the members of the house and senate meet to begin working out differences in financial regulation bill.
following that, an update on the gulf of mexico oil spill. that will be followed by a news briefing by admirable -- admiral tha allen. a group of business executives has called for more government research into clean energy. with representative billspill%- cassidy. that is live beginning at 7:00 a.m. eastern time on c-span. . .
acknowleddement and the recognition that the house side. we will begin the opening senate's on the house side -- opening statements on the house side and i will nominate chairman frank as the chairman of this conference and perceived the order we laid out for opening statements to be made pot of our colleagues, those of you who are interested in making statements. if the mistake at the outset that this is not a terribly common occurrence to have conference committees like this this conference committee is on -pc-span. this may be the first time we ever actually had a census -- a committee conference on c-span. the text of the base deborah will be considering over the coming weeks is on the website banking.sentate.gov. there is a side-by-side comparison of the two bills posted.
you can certainly have a look at the bill and a side-by-side comparison of the two pieces of legislation through the two bodies. i will make a few opening comments and turn to senator shelby. we will go back and forth based on sincerity -- based on seniority. let me begin by thanking all of our colleagues that have been involved. this has been a long couple of years as we have gone to thomas hearings and meetings, formal and informal, to determine what course to follow to resolve the financial services reform that the country so desperately needs and anxious to have. i think the public responses to this over the number of rigs have indicated strong support for the products to support. not universal but strong. colleagues for the job they have done.
i went to thank my colleagues on the banking committee, republicans and democrats, who worked long and hard on this pr. >> i think all of my colleagues for their work they have done over these many months as we try to tackle the tough questions and how to create a financial regulatory structure to protect our economy for years to come. we know what is at stake. the financial crisis has devastated millions of our fellow citizens. we know that the gears. and they deserve being repeated. 8.5 million of our fellow citizens have lost their jobs over the last several years. 7 million homes have fallen into foreclosure or near foreclosure. millions more were told that their retirement savings are
wiped out, some instantaneously. there has been is directing loss of wealth in the nation. trillions of dollars of lost wealth and income that will nevee be made up. bossed home values may never come back. retirement savings are gone in a flash. there is a lot of ttlk about the doubt. we will see the stock market comeback in my view. we are seeing some positive signs. portfolios to be strengthened again. for a lot of middle-class families across the nation, they will be feeling the blows and loss of these four years and years and years to come. these are problems we cannot simmly walk away from. we must act in this congress. the central question we must address in this bill is how do we restore the faith and confidence of the american consumer? the core strength of the american economy is that people over the years have had faith in our financial system. that faith has been shhttered in this crisis. the fundamental job that we have
is to do our best to bring back confidence and sense of optimism back. to do that, this legislation focuses on four major areas. there has long been agreement on these areas between both parties. the bill would protect consumers from products such as some pride mortgages that led to the crisis in the first place. it will and bailouts ensuring that failing firms will be shut down without relying on taxpayer bailouts and threatening the fragility of the economy at the whole -- as a whole. it will create warning systems so there is always somebody responsible for looking out for the next large problem as it will certainly come. it will ensure that all financial practices are exposed to some level of transparency so that exotic instruments like hedge funds and derivatives to not work in the shadows that businesses caa compete on a level playing field. most importantly, it will restore our financial security so that our economy and create
jobs, awful their -- offered middle-class families a chance to rebuild. we can produce a final bill that will incorporate the strongest elements of both packages and it will become the foundation of our financial regulatory structure and -- structured for decades to come. it book continued to be the envy for the world. barney frank and i have agreed to continue to this conference the open, delivered, and transparent process. we have advanced this legissation over a number of months. there has been and continues to be a debate from the origins in committee to the debate on the senate floor. we extend our hand to the members of both party and include their ideas in legislation. you ccn go back all the way to april of 2009 when our staff first presented our ids at how we would likk to go forward with
legislation. swiss have held dozens of hearings to death and many of you have participated in some degree. after i presented the first discussion draft of our proposal in november, i signed bipartisan working groups to attack the major issues in our bill. i until a new proposal that incorporated many oo those bipartisan ideas through those working groups. beyond that, i have worked every day to keep my colleagues informed every step of this process. this bill is the product of collaboration of many colleagues before debate even began on the floor of the u.s. senate. that debate lasted nearly four weeks and some 60 votes were democrats and republicans. one of the many that passed was the in shelby-dodd amendment. we were able to and bailouts, one of the most contentious issues of our proposal. this conference represents an extraordinary time in the banking committee. we are currently part is putting
into conference is at once. this bill and the house foreign affairs committee and the iran sanctions legislation. the last time the conference was held was 2003 for the fact tax. only one of two completed in the four years that my good friend and colleague from alabama was chairman of the committee. continuing that spirit of bipartisanship, the minority is as relevant as they choose in these discussions. i welcome constructive input so we work to finalize the essential reforms we need to ensure the long-term stability of our financial system i do not want to see this bill weekend at all. chairman frank and i present this before you. it is essentially the senate bill would valuable additions from colleagues from the house. the text is not the final word. it is a jumping off point for what i expect to beea serious and thoughtful debate conduct this is a conference committee. there are parameters in terms of what is and not within the scope
of the conference. what is and is not germane. i would expect changes to be made in the coming days. it is our intention that this conffrence is done as openly as possible. we want people to know how we are proceeding and people have a right to know what we're doing, as well. we are continuing to place this debate before the public which strengthens the case for our strong financial of reform proposals. many expected the bill to be watered down. that is not what happened. the issues were debated on the senate floor and colleagues voted to strengthen the bill and add reforms. it is our hope this conference is the same result. a warning to those who hold hope that we will let our built the weekend by last-minute lobbying blitz is, this bill made so strong over the course of last year will not the weekend in the last throes of this debate. this is a strong bill and it is time we get it to the president for his signature. as we sit here today, the rules
of wall street have not changed. the same turmoil we saw in 2008 could emerge again. consumers can still be misled into abusive products. the shallow baking system still operates in the darkness. taxpayers may still be on the hook as major instituttons threaten to bring down the economy once again. the uncertainty in the economy continues. not just in the recent volatility of the stock markets and the continued strength in the capital markets but in the difficulty in perspective -- a prospective home buyer faces when getting a mortgage or a recent college graduate faccs in finding a job. for those who think these problems can only appear off month in a generation or longer say there is no urgent need to act. when did not have to look as far as europe to see the threat of financial instabilitt. we will complete our work in a smart indeliberate fashion so
that chairman frank and i have committed to work with our colleagues, democrats and republicans, over the coming days and weeks and weekends if necessary to reach an agreement on a good piece of legislation, a strong piece of legislation, that restores confidence and optimism and security and stability in our nation. failure is not an option. with that, i see the arrival of my colleague and friend from massachusetts. chairman frank, let me proceed before turning to my colleague for an opening statement. to have to wait on this? >> i want to nominate my friend to be the chairman of the conference. i will not make a long winded speech. i think you haae done a great job and i think you will be a valuable and orthwhile chairman i therefore dominated -- i therefore nominee barney frank to be chairman of the conference. >> thank you. >> is there any debate about the nomination?
the ayes have it. congratulations. here is your gavel. [laughter] >> i will put forward as a major qualification for this job my impatience. i think it will serve as well. p votes on theefha bill. i will go back and get one last vote and we will then go back and i assume proceed with the senate statements and then the house statements. to echo with the senator said, this will be an open process. people have conversations in various ways but we are both committed and all of us will agree, nothing will be put into this final bill that is not openly debated and subject to amendment by the conference process and voted on.
the conference is a unique american institution. we are the only part of the world that has general -- genuine bilateral listen. there is no decision making mechanism in a binding way the way there is and other entities to make decisions. that requires a degree of give- and-take and conciliation. i believe we're all committed to making that work. thank you and i will be back after every self any doubt that i am against oil spills. >> >> we are in the same situation. before the senators go with their opening statements, could i very briefly make mine. >> i have made my statement. >> i recognize my friend and
colleague and chairman -- former chairman. >> thank you. will have profound effect on our economy and the living standards come. much has been made of the ball straight vs made straight narrative by some of my colleagues. it has been my experience over the years that wall street tends to take care of itself. whatever congress decides to enact into law. in other words, ball street does not need democrats or republicans to protect its financial interests. they will do that on their own. there is a history of that. what congress needs to do is to make sure that wall street is functioning and support main street ability to create jobs and grow the economy. we should also ensure that wall street is ever again the beneficiary of a taxpayer bailout. unfortunately, i believe the drafted bill before the conference committee undermines the former and virtually ensures the latter. before we are done, i would like
to see this conference produce a report that will protect consumers and and bailouts for good and promote economic growth and strengthen our financial system while preserving its competitive edge in the world. if we accomplish these things, it does not matter to meein the slightest whether wall street likes it or not. i would be happy to support it. before thoss goals to be realized, the senate and house bills each require significant changes. before proceeding to some but substantive concerns, i want to talk about the process that has3 our host today has emphasized his desire to make our deliberations open and transparent. he reiterated that. in response, the senate republican colleagues and i wrote to chairman frank and dodd expressing our strong desire for a completely open and transparent conference. i do not believe we ever received a response to that letter. perhaps we will today.
at this time, i would like to ask unanimous consent that are brought letter be made part of the record. >> unfortunately, it appears that we are off to a rocky start because the basic text before the conference was negotiated and compiled behind closed doorr without any republican in fact, we only received about two and a half hours ago. i suspect and i hope i am wrong that there have been a number of private meetings with legislative language has been courted and drafted without any public access or republican input. it appears to me that the only facet of this congress that will be public is when the republicans get our one and only chance to amend what is already been decided by democratic colleagues behind closed doors. we both participated in many conferences over the years and i fully appreciate the position any minority party that reaches
the stage. i believe if we continue to proceed in this manner, ann further assertions of openness and transparency will be a fiction and meetings like this one will only serve as political theater. while i have no illusions we will have this process is how to unfold, we should at the very least be honest with the american people about what is happening, where it is happening, and who is making those decisions. i would like to say a word about our time line as well. the new york times reported that chairman frank was urged by the administration to produce a conference report by june 24. that is from the time the president is expected to leave for toronto for a g-20 meeting. such a target is ambitious. while we mmy complete our work, i would hope that we could all agree that our schedules should be dictated by the needs of our financial system, our economy and the american families and
businesses that will be touched by this legislation and not by the arbitrary time lines or the president's travel plans. before this bill can achieve the goals that i have enunciated, i think it is to be changed versions of this legislation are incomplete and unnecessarily overreaching. both the senate and house bills the heavy lifting to future study and will writing by a host of new and existing regulatory bodies. most of those regulators are the same ones who tragically ailed us in the run-up to the recent financial crisis. but the remind my colleagues that one of the main objectives of this legislation was to plug regulatory gaps and streamline our regulatory structure. yet we still have the fed, the fdic, the occ3 them will expand and power and scope. these bills also add new letters
to alphabet soup. so much for streamlining. this legislation reflects a series of deals made by the executive branch along with the existing financial regulators who failed to do their jobs during the last crisis. the bill we are considering is filled with undefined terms leading up to the film regulators to deeermine whether a company is a threat to the financial stability of the united states or is in danger of default. therefore eligible for special resolution proceedings. these are just two of the vague and undefined ttrms with in this bill. i am sure there are others. the most egregious example of why this legislation has to do with absolute neglect of any series treatment offthe government sponsored enterprise as we know as fannie and freddie. there were intervaa players and the collapse of the housing
market that precipitated fear, panic, lack of trust and aaa ratings and ultimately the freezing of financial markets and economic activity around the globe. the ensuing crisis led to the destruction of millions of jobs for americans and the evaporation of trillions of dollars of household wealth and retirement savings. to date, the bailouts have cost the merican taxpayers roughly $150 billion. i believe it is simply a failure of will that nothing is being done to reform the gse's cap all losses. the open with the american people about what you are refusing to address this core issue. another major component deals with the creation of a massive new consumer bureaacracy all along with a separate title 12 which i believe is it liberal
activist dream come true. and provisions will compel financial institutions to provide free services to selected community groups pontiffs paul census model that . because the democrats' new bureaucracy is an enormous reach across every segment of our economy and a massive expansion of government influence on our daily financial lives, republicans only ask that this budget be subject to congressional oversight and reviewed by the regulators charged with ensuring the safety and soundness of our banks and banking system. the democrats' response was a unanimous know. the american people have been clear.
they do not want a massively intrusive and continuously growinggand overly expensive government. we all do favor consumer protection. this legislation promises to be more interested than protective. aside from the consumer regulations, and other means or this will slow economic activity is the trend for derivatives. the legislation would send financial trades overseas. it is about magnifying. because risk management will now be significantly more expensive, we an expect lower business investments which means fewer jobs. i do not understand why we would want to increase costs for ordinary and users of derivatives such as her home heating provider or makers of candy bars to name a few.
many end users will find themselves subject to clearing mandates and capital requirements and extensive dealer-like conduct requirements. as a result, main street businesses will face higher costs that will ultimately bb borne by the consumer. the treatment of derivatives in this legislation will work as an anti stimulus plan pooling resources out of the economy and hurting growth and slowing job creation. this result would be unacceptable to me and should be unacceptable to the congress. most of the house bills differ on how to handle limitations on the proprietary trading activities of financial institutions. sometime in the future, regulators are to consider implementing a vague notion called the volcker rule which i call the volcker concept. it is merely a concept because there is no rule accepted. despite assurances from high-
ranking treasury officials that clarity would be provided on what constitutes proprietary trading and what does not, no such clarity has been provided. this is an area that should be addressed with some specificity. this bill will grant discretion to the regulators who filled us the last time around and hhve yet to account for past lapses. the legislation offers concepts but no definitions punts on the hard decisions. as everyone here that has been paying attention to the causes of the financial crisis is aware, the rating agencies favored to their fees and market share over their franchise reputation as highly creditworthy would prove to be junk securities. the legislation introduces concept of increased oversight and speaks out against conflicts
of interest. what this will mean is presently unclear from the bill. perhaps more hearings on these matters would have been helpful. the aaa ratings assigned to mortgage-backed securities and a book many in the shadow banking system to effectively create money and fun the operations of financial institutions to the tune of trillions of dollars per day. as interval as rating agencies were to the recent financial crisis, i think it borders on malpractice not to address rating agencies more seriously. from the beginning of this process, i have maintained the same position. we need to determine what went wrong and whether it could of been avoided and whether anybody should be accountable for their actions and if we need to change the law to prevent such a crisis in the future. i have said many times throughout the past 18 months that i believe we have not done the necessary diligence for such a significant legislative
undertaking. every member of this conference and knowledge that fact. we basically subcontracted our work to the financial crisis inquiry commission which we all know it does not complete its work until the end of the year. the legislation more often than not cause for long adjustment periods and periods of study and more time. this is the time we should be using to determine the best way forward to ensure the future vitality of the economy, the competitiveness of our financial system and the financial well- being of the american family. throughout this process, i have encouraged my democratic colleagues to focus on the root causes and resist the urge to exploit the crisis to enact a wish list of extraneous special interest positions. it appears that the majority is going to impose their will and this bill will become law. the american economy will once again become the laboratory for another grand democratic
experiment in grand -- big government. i am afraid that the prognosis of the economy is not good in the significant changes are made. >> thank you. i want to thank the chairman and other colleagues who have worked so hard to bring it to this point. i strongly support this important legislation and the reforms it will bring to our financial system. i have long advocated for comprehensive and effective financial regulatory reform. we held many hearings and the oversight committee investigating the causes of the financial crisis. we examined the collapse of lehman brothers and aig, a conflict of interest that affected the credit rating agencies, the unconscionable packages awarded at countrywide, merrill lynch and citigroup. and the mistakes made by alan greenspan and other regulators.
those hearings showed government regulators were asleep at the switch while wall street banks drove our economy off a cliff. change is necessary and i believe this legislation to strengthen the federal government possibility to prevent and respond to future crises. there are a number of issues that are important to my current committee, the committee on energy and commerce. we have consumer financial protection, regulation of electricity and other energy markets. i strongly support a new consumer finance protection agency that is independent, has strong role making and enforcement authority and has broad jurisdiction over the entities that provide financial products and services to consumers both for the house and senate. our challenge will be to produce a consumer financial
protection agency that has all of the tools it needs to be successful. our economy and our families across the country are suffering from the abuses of wall street. our job is to prevent these abuses so the economic security, hard-working americans will never again be held hostage to run away corporate greed. if we do not pass legislation, will be in a situation where we have delegated the authority to the private sector, to wall street, to the very people that have got us into this problem to keep doing what they think is appropriate rather than what is appropriate to the est interest of the american public. i look forward to working with mike -- my fellow colleagues and looking forward to getting successful legislation and i hope it is bipartisan. on occasion, it has happened.
thank you. >> before barney comes back we have a vote in the senate coming up so we will cover as many as these as we can and switch to your side, as well. i will turn to my good friend arkansas. senator blanche lincoln. >> thank you. i want to thank chairman bob, as well and all of our colleagues in the senate and house. i cannot overstate the significance of what we are here to do today. financial market reform is the single most important factor in our long-term economic recovery and it will be the foundation of our nation's financial future. i am glad we are beginning with a base tax that is well over 99% of what we had in our senate bill. only small technical corrections that are there and we are excited to begin with that
product. everybody recognizes the importance of the task at hand. nobody more so than the hard- working families of each of our states and districts as well as3 street and the important role that this place on their behalf. in 2008, the economy was on the brink of collapse. the greed and excess on wall street spiraled out of control and small businessss were left to pay the price. america was held captive by financial systems that were so irresponsible that its failure almost destroyed our economy and our way of life. since 2008, which have been wrestling with how to fix our broken financial regulatory system. i would like to thank those individuals who have been working on this legislation for close to two years on the outside, the treasury, the regulators, and all those who are fighting for reform. there is so much common ground here, i am very optimistic that
we are only weeks away from makingghistory and i look forward to quickly resolving our differences. we have a historic opportunity to reshape how the business of finance is conducted in the u.s.. not only to do with here but to provide the leadership and example globally. to ensure both prosperity in the coming decades and studied -- and safety for consumers. to ensure that we as a nation lead the world as an example, to ensure that our regulatory system matches the 21st century innovation that exists and is able to adapt and keep pace with the innovation of the future. we are here to tackle complicated problemssand find resolutions. crisis, the american people deserve historic reform of their financial system which we are poised to deliver. i will mention a few pragmatic ways in which we can assure that wall street no wonder benefits while main street suffers. at the heart of financial regulatory reform is the over-
the-counter derivatives market. within a decade, this market exploded to $600 trillion notional value. we must bring transparency and accountability to these markets. clearing exchange trading are at the heart of reform. mitigating risk, reducing leverage and enforcing transparency. it is critical that we maintain those provisions in the final bill. the senate bill also requires real-time transparency to the robust transparency, the markets will not function and the regulators cannot do their jobs. information is power and real time transparency gives this power to those on a straight and across america. it also requires swap leaders to put pensions and university
endowments before their own. senator shelby and becky -- rep baucus are well aware that swap dealers have taken advantage of miss fatalities all over the u.s. including jefferson county alabama. the senate version addresses this problem by helping o provide demint street the same protection that other investors -- investors already receive. we also have to ensure that we adequately addressed institutions that have been deemed too big to fail. under our current system, there are a handful of big banks that are simply no longer acting like banks. five of the largest commercial banks account for 97% of the commercial bank notional swap activity. that is a huge concentration of economic power. in my view, banks were never intended to perform these activities in the first place. it is this economic activity
that contributed to these institutions growing so large that taxpayers had no choice but to build them out in order to the senate bill includes a provision commonly referred to as section 716 which seeks to address the too big to fail by accomplishing two goals. first, giving banks back to performing the duties they were taking deposits and making loans for mortgages, small businesses, and commercial enterprises. secondly, separating out the activities that helped put these institutions in peril. this provision makes clear the derivatives dealing is not central to the business of banking. section 716 per habits swapping of entities which would include fdic insurance and access to the federal reserve discount window. this provision would require a
bank which qualifies as a swap dealers to push out it's what -- swap the debt into a holding company. this does not prohibit banks from using swaps to hedge their loan portfolios nor does it prohibit a bank from entering into a swamp or a rich getting a loan with a customer. this provision will ensure that our community banks on wall street will not pay the price for reckless behavior on wall street. of economic activity for citiese aad towns throughout our grrat couutry and i know because i see them on the street in town squares of arkansas. they do not deal in risky swaps that put the whole financial system in jeopardy. they perform the day to day business of banking. making the smart and conservative decisions that banking institutions should be making. community banks were forced to pay for a problem they did not create and they are still paying that price.
in 2009, we saw 140 banns failed. the cost of fdic insurance premiums are skyrocketing for community banks. higher insurance rates mean less lending. small businesses could crawl the job -- could grow the job that our nation desperately needs. individuals and small businessee are also paying the price. the ftse reported that into the asinine, the bank industry reduced lending by 7.4%, the biggest decrease since 1942. i am a strong believer that we will build an economic recovery from the ground up and small and business -- and a small and medium-size businesses and not getting the capital they need, something is wrong. the economy simply will not recover unless we free up lending.
americans are demanding transparency and accountability from thhir government and from their financial system. we are here on their behalf and i know we all take that responsibility very seriously. america's consumers and businesses to serve on ron -- deserve strong reform and the most honest and reliable financial markets in the world and i look forward very much to working with all of my colleagues today to reach that goall >> thank you. we are going to try to hold to the time limit set. i will recognize the senior chairman for five minutes. the gentleman from alabama. >> thank you. republicans are glad to be here to share our views with the american people. the legislation we are considering is not based on the tradition of opportunity, innovation, competition in personal responsibility.
the president tells us that government cannot and should not replace businesses as the true engine of growth and job creation. however, the policies of this administration and this legislation and does manage -- diminish the role of government -- diminish the role of companies to make decisions for themselves. if you take away the opportunity to fail, you take away the opportunity to excel. just as in the past, if this is all been cloaked in the language of protecting us by empowering the government to decide many of the basic aspects of our lives. the american people need to know that the jury will street you claim to be performing actually supports critical parts of this legislation. it is wall street, not house
repuulicans, who support the majority belloc authority guaranteeing mega banks will only get stronger and more powerful with the bailout authority this institutionalizes. calls -- cost to this bill. the pocketbook of americans will suffer. borrow 90% of the fair value of a failed firms consolidated assets. as this graphic shows, for thee six largest financial institutions alone, this would amount to more than $8 trillion. it is difficult to imagine a greater cost than this or greater exposure to the taxpayer. nonetheless, there is one. the cost to our citizens of
freedom. nobody argues there is no role of the government to use legislative authority to protect individuals. consumer protection is important. the question is how and to what extent of that legislative power be exercised? in one legislative scheme after another, it decisions but the government are being substituted for what should be decisions by individuals. the american people have the choice to make. will we continue to be in asian organized around the principles of free enterprise, free government, a reliable -- relied on a entrepreneurs and rewards determined by success and failure in the market? or will we followed the majority approach and move further toward a managed economy, expanding government bureaucracy and perpetual subsidies to the majority's political allies at the expense of the taxpayer? we made the strongest and largest economy in the world. our economy is more than twice
as large as the next largest and greater than the next four combined. our strength is our people, not our government. it is my strong belief that a vast majority of americans want a future where they can use their own efforts to create better life for themselves and their family. that is when we are at our best when people aad not the government are ultimately in charge regardless of the outcome of this conference, that is the future we republicans will work to achieve. i hope that he will join us. >> the next is the ranking republican senator. [inaudible] >> without objection. >> i knew that would make you happy.
let's make no mistake about it. everybody in this room wants to make sure that at the end of the day we come out of fear that the conference bill that addresses the issue of too big to fail and does not allow the economy of this economy -- of this country to get back into a situation that we saw in 2007 and all the way into 2009. there are some provisions in this bill that certainly treat main street financial institutions exactly the same as wall street institutions that are not only going to have a negative impact on the financial community but it will cost jobs within the financial community and outside. our economy needs more opportunities for all businesses to grow and prosper. time and time again, it is the small and medium-sized businesses that create the lion's share of the jobs after a major economic recession. we need to foster and incubate these small and medium-size businesses right now. we need to ensure -- ensured the
we commit capital and insure the risk of a version. there are businesses that are ready to expand but cannot get adequate access to capital because lenders of saying it is too risky and regulators will not allow these lenders to help. if anybody in this room can tell me what this bill does to improve main street businesses, i dare say you cannot but i can think of several things that will make the situation on main street much worse. derivatives are risk-management tools used by every industry in the country. most of them are not systemically risky and have nothing to do with the financial crisis. why do we want to subject them and their customers to the increased costs of clearing their transactions? there are any number of examples that we could give with respect to the use of derivatives. one is the municipal gas
authority of georgia. they use derivatives to protect their customers for market price to fluctuations. they have estimated that a derivatives clearing requirement would increase costs by about 25 cents per million btu is. this is the equivalent of doubling the cost of interstate pipeline transportation and would essentially raised distribution rates by 10%. clearly, this would translate into hiiher natural gas rates for 243,000 customers in georgia, alabama and tennessee. increased costs can be justified if they are accompanied by positive benefits but i have yet to have anybody explain to me what benefit we get from making the municipal gas authority of georgia clear their derivatives transactions. there is another situation regarding a natural gas company in the state of arkansas. in exploration company estimates
that for 2009, under the provisions in the bill passed by the senate, it would have drilled 240 fuel wells resulting in a loss of 1500 jobs and a $1.60 billion loss in economic activity in that state. with unemployment approaching 10%, we should be more mindful%+ of this impact before we rush to unnecessarily regulate businesses that had nothing to do with creating the financial crisis that we find ourselves in today. mr. chairman, as we go through this, as we look forward and republicans in the house and senate to working with the democratic friends to produce a bill that will in fact address the egregious circumstances that took place on wall street but we need to make sure that we do not over reach to not just a main street but into the manufacturing sector, and to the energy sector and into every other sector that uses financial
tools to provide quality products to consumers around the world. those products being manufactured in the u.s. and very honestly, if we do not made some significant changes in the senate passed a bill which is the base bill we are talking about, that is exactly the result that will be achieved. thank you. >> the gentleman from pennsylvania become the chairman of the subcommittee is recognized for five minutes. >> thank you. today, the house and senate begin our long anticipated conference to harmonize versions of the wall street regulatory reform. feelings of anger, frustration and rage justifiably hang over this proceeding because of the recklessness of financial whiz kids, the greediness of wall street bankers and the shortsightedness of our economic regulators. congress must respond by fundamentally changing the way
that wall street operates. well excess consumption may have fueled the fire, the blaze had become a devastating inferno because of wall street's exotic financial instruments and excessive risk-taking. because we were pushed to a catastrophic cliff, congress had to take drastic action. our work in shirt that average americans could continue o use their atm cards and small businesses on main street could continue to pay their workers. critics invoke the work bailout to discourage the emergency action taken in late 2008. the stabilization of an economic system really amounts to a rescue, not a bailout. fair minded experts agree that the troubled assets relief program and other similarly targeted assets have saved the american way of life. while we have not yet recouped all the money, we have recovered much of it. we also have solid plans for
collecting the rest. once we pull back from the economic precipices, congress immediately began working on a plan to comprehensively perform the roles of the road for bankers, securities brokers, insurers, and hedge fund -- hedge fund advisers and a power regulators with new tools. in this regard, our most important task will be to end the too big to fail problem. mike too big to fail amendment prevents financial institutions whose demise threatens the entire system because they are too large, interconnected, concentrated, or risky from ever reaching such a precarious position. for this mechanism to work properly, the simple majority vote by the council in the house bills must prevail over the senate's multilayered and complex to third majority vote requirements. the enactment of a strong bocor rule will help to end the
problem of too big to fail. its provisions bar proprietary trading and private investments in hedge funds are a surgical version of the glass-steagall act. together, they will essentially resurrected the barrier between commercial and investment banking that resulted in a stable financial system for 70 years. while we will still allow banking and insurance activities, the federal insurance office will effectively monitor this sector. in the house, i worked to better protect investors and to greet the strengthen the powers of the securities and exchange commission. while the senate bill contains some of of reforms, the final package must include many more. for example, we must have the strongest possible fiduciary standards for every financial intermediary providing advice. under chairman sir pirro's
leadership, and poor man's -- -- under chairman shapiro's leadership, performance has been enhanced. we will thoroughly examine the deficiencies of the current system and identify what further reforms it must undergo. finally, we must significantly increase the viability of rating agencies whose overly optimistic reading -- ratings of garbage. this will change the way they behave and ensure that they effectively perform their function as market gatekeepers' going forward. in closing, this conference marks the culmination of a long and thoughtful series of hearings, markups, and floor debates. as we work toward a bicameral and hopefully bilateral consensus -- bipartisan
consensus, we hope to make this package as strong as possible. >> the senate has a vote coming up. i am going to call on senators nest so they can make their vote and we will continue. this will require a constant process of mutual accommodation. >> just a point of procedure. will we be going in order? >> with the gentleman object to letting the senators go first. could we will let the senators go first. >> i just have 10 different questions about procedure. i will present you with that letter over the next few days. just for the record. >> the senator from vermont. >> thank you. i do want to congratulate the chairmaen of putting this bill
to the u.s. senatt. it is no small feat. senators lincoln and dodd and majority peter harry reid -- fixing the econnmic system is unequivocally in the best interest of every citizen in the country. it is time to rein in wall street to the benefit of main street. this financial crisis taught us to -- taught us that the look the other way regulatory processes that were in vogue can investments but our entire economy. we need more transparency and oversight of wall street. we eed to prohibit financial
institutions from growing too big to fail. i am hopeful i final bill will include provisions that i have been working on as chairman as the san -- chairman of the senate judiciary committee. the whistle blowers who helped3 the american people and they have access to information about the complex operations of large financial institutions that the federal agencies regulate. the agricultural committee derivatives section will bring in 600 trillion dollars derivatives market out of the dark and into the light of day. the days of back room deals will put our attire economy at risk. we will allow legitimate commercial interests like electric co-ops and so on to conninue hedging theer business risks.
it will stop wall street traders from artificially ddiving up prices of gasoline or diesel fuel or heating gas and other commodities that are under speculation. we need to keep this and user exception. we need to end government bailouts of these risky swap endeavors. we have seen the harmful effects of loopholes that have been enacted over the years. limiting their liability for such things s oil spills. the supreme court narrowly voted to cap the liability for an earlier oil spill. they see yet another supreme court that opens the way for corporate interests to drown out the voices of real people. directly to the point of legislation, we see the frenzied trading of complex derivative investment schemes. they have all the trappings of games played on paper by the
rich and wealthy on wall street. that is the way it looks like on the outside. to the everyday american who plays by the rules and buy homes to live in, not merely to flip, will invest -- or invest in their child's education or put away money for retirement, if the problem is the derivative schemes are made with other people's money, not theirs. the magnitude it has is to threaten to bring downnthe entire economy. that is not a game. it is risking the livelihood of millions of american families and this is everybody's economy, not just a few who are going to make millions of dollars on it. we are on the cusp of a major victory for the american people. the bill will rein in wall street abuses and government bailouts and give every american consumer protection
deserve and expect. i believe cleaning up these wall street abuses will build confidence in the economy and build toward economic recovery. i appreciate the courtesy of covering us on our votes. " the senator from idaho. >> thank you. i think there is probably broad agreement that this legislation should and bailouts and the legislation should aim at the excesses and the economy because the collapse we have seen in the mortgage industry and the credit markets. yet i am concerned it does not do that. the financial regulatory reform legislation that the conference will consider and will directly affect how small and large businesses operate. it will dramatically expand the government's involvement in the economy, restrict the availability and limit the choices available to consumers. as we know and our constituents experience on a daily basis the
havoc from the 2008 crisis, access to credit and jobs and in many cases, fate and the ability to washington to do any good all remain lacking. we should examine all of this legislation very thoroughly and take only the very best parts and ordered for to make sure we perform our financial markets without harming access to credit and job growth. as many of our colleagues have stated, we are not starting on a good note since we just received the basic text a few hours ago. we are told this is largeey the senate version that as i understand it, there aae 300 new pages that were not in the it is hard to be sure because it is not identified. there is no red line copy and we are now left to try to figure out exactly what is the new bill that we are considering. it would be very
IN COLLECTIONSCSPAN Television Archive Television Archive News Search Service
Uploaded by TV Archive on