tv U.S. House of Representatives CSPAN August 18, 2010 10:00am-1:00pm EDT
see whether your bank has a lot of complaints, and not to do with the current agencies do, which is throw them onto a computer database or into a box and ignore you. host: we spoke about protecting credit in this segment. can you speak more to the rebuilding of credit? when somebody has a terrible record, does the bill addressed that in anyway? guest: there are protections for people in trouble with their mortgages. the new bureau will go after firms that make it hard for you to rebuild your credit. going after credit bureaus, who have essentially run amok over this country for years, because the federal trade commission has not had the resources to go after them, is going to help people get better credit. the agency is going to provide financial literacy, going to teach people how to improve their credit. it is a tremendous victory for the american people. host: our guest is ed
mierzwinski of the u.s. public interest research group. we appreciate your time this morning. "washington journal" every morning at 7:00 eastern time. we will see you back here tomorrow. in the meantime, a look at health care and the implementation of the new health-care law. the national business group on health is having an event in town and we have live coverage for you. they are going to take a look at health care benefit changes at the largest employers in the country could it is about an hour in >> and try to help navigate these complicated transition. for the most part, we are excited about some of the changes. we think that every resident of the united states, not just every american, should have access to affordable, quality health insurance. we are ready, and have been
working with everyone else, including policy makers, to make sure that happens as soon as possible, and that care and affordable health insurance are available to every resident of the united states. i am here today to report a survey that we conduct every year. we usually do it in the summer. it is a survey -- as you know, most employee benefit surveys, including one we do, are put out in the late part of the year, so that you get results for what has happened. we started about seven years ago, doing this survey to try to anticipate what is coming up. we asked folks what they are planning to do for the following year. it happens that this year, with health-care reform, the following year is a transformation year.
we ask a number of questions about the impact of the legislation and some of the regulations. as i am sure all of you know who write on this topic, u.s. employers have long struggled with health care costs. health care cost problems have been serious for 20 years in the united states. we do know that if employers are able to use cost-management practices, and make choices about programs that will, for example, help employees and their dependents be healthier, that, in fact, you can bend the cost curve, not as much as we would like, that is for sure. instead of 10%, we would be looking at 6% or 7%. that is real money on the bottom line. we also know that the affordable care act has driven employers to rethink their strategy, and make decisions about what they're going to do now, and in the
future. we have a fairly long timeline. we have a lot of changes that will have an impact immediately, meaning 2011, starting in january depending on when your plan year is. we also have things come along in stages. employers have stepped back and said what do we need to do to be aligned with where the nation is headed? this is the first year that is occurring. this survey is quite timely. in terms of the overview of this study, which asked members to provide information for what they will be offering to their employees for the calendar year, 2011, which for most of them starts on january 1. most employers are sending out open enrollment packages, and announcing to their employees, dependents, and retirees in some instances, what their choices will be for next year. fall is usually the open
enrollment period. we had 72 large employers to respond. we only asked our large employer members, representing about 3.7 million employees who completed the survey. we asked the question of what you are basically telling your cfo you need to put in the budget for what medical claim costs are going to be. fourth 2010, we have with the estimate was, and what they believe it will be in 2011. the 2011 budget projections include any changes that might have made it not as expensive as it would have been if they had made no changes. this is what they believe they will have to spend. as you might see, from the document that you have, in 2010, we estimate that the mean for the employee survey was a 7%
increase. these are all self-insured employers. they pay administrative costs for health plans. this is all about claims. this data tells you what people are doing. they're going to the doctor. they're getting more indigene. they are being submitted to the hospital. this is not insurance profit, or any of the floss we have been hearing about in reform. this is the underlying use of medical services. for 2011, our employers are budgeting 8.9% as a mean. it is about to% higher on the mean. the median, for 2010, was 8%. the median for 2011 is 8.3%.
you probably all understand this, but the important thing is that the needy in tells you what is the midpoint for 50% above, and 50% below the number. that washes out the all liars. a meeting can be higher or lower because of certain things, but a median is to a point in de blogger continue on. with a mean of nearly 9%, we estimate that about 1% has to do with the mandated changes that employers have to include for 2011 under the affordable care act, and about another 1% of cost increases. this is a softer number because it is harder to demonstrate in the short term. we have seen evidence of hospital prices going up rather substantially. the other 1% is really building
in some of the other changes that are likely to be occurring now, and within the last year. for example, if hospitals, or others, feel their costs will go up because of the health care reform, where because of what is happening in the economy -- or because of what is happening in the economy, they are raising their charges. employers, who are the only ones who actually pay charges, or close to them, where as the government pays what it chooses to pay. they have what it calls administrative pricing. private employers might have some negotiating room, but they really do have to pay the cost shift from the public sector. it is a whole nother subject. if anyone wants to talk about it later, i will be happy to do that. one of the questions we ask is
what plan design changes are you considering in spite of, and what might be the effect of wanting to be, or not caring about being a grandfather plan? you may recall the president promised from the very beginning that if you like your health plan, you will be permitted to keep it. one of the things they did was put out rules that basically said you can not make too many changes to your plan, and if you do, you will lose that grandfathered status. if you lose that status, you need to meet a number of requirements. the theory was that if a large, self-insured employer would want to maintain grandfather status, and what make sure that it was
like the plan of march, 2010, as possible. most of our employers are continuing to make the planned changes that they were going to make. by the way, i would just make an aside on this point. there is a bit of a misunderstanding between those who run the health plans as self-insured employers, and policy makers. it goes something like this -- most employers really offer the same plan year after year, but they are always tweaking them. for example, in light of a geographic area, they might offer a product from united healthcare. you, as an employee, think that is your plan, but every year, when i get my open enrollment package there are some changes. they're usually small, but they are definitely changes. most employers think of the plan as something that has a lot more
flexibility within it, although the broad strokes of it remain the same. one of the ways they have written the regulation would, in fact, make it hard to make even some of the typical changes that are made every year. as you can see, 53% say they will be making planned changes, and 19% will make changes, but are scaling back the changes, sometimes because they're just as a tent, 19% are making no adjustments as a result of the law. i was asked the question if that was high or low. i would say that it is not likely that as much as 19% would have made no changes. maybe 10% or 15% who have made no changes, especially those with highly unionized populations, because they have contracts that usually last for three years.
if you're at the beginning of a contract, you might not make a lot of changes during that time period. in terms of changes due to the health care legislation, as you recall, even the grandfather plans are required to meet certain requirements. the first one is, and you can see this on page 6, is that if you have an overall, lifetime limit -- a limit of $5 million over a lifetime. you work for a company. when your medical claims reached $5 million, in theory, you would get no more. that is what an overall limit would be on a lifetime. 70% of our employers are making a lifetime limit changes, that is, they are eliminating it. it is probably very high. if they have a lifetime limit, many do not, but if they have won, it is really very high, for the most part. the only time you see a low
ones, is in another subject. changes to annual like time limits as another one. 37% of those responding said they would make changes because of the requirement. 26% white removed annual dollar limits on overall -- would remove annual dollar limits. the plan might have something like $300,000 in a year, and maybe a lifetime limit of $5 million, and in a given year, you might have $300,000. this is another one that would be eliminated. finally, 13% removing pre- existing conditions for children under 19. by the way, most employers do not have a pre-existing exclusion condition for children under 19, and ashley did not
even have them for adults, which comes later -- and they actually do not even have them for adults, which comes later. it could be you have a six-month waiting period. it might be that for the first six months, things would not be covered. that is probably what this number is picking up. generally, coverage for children is pretty comprehensive. there is also another part of the affordable care act that includes an opportunity for employees to voluntarily enroll in a sort of insurance program called the community living assistance services and support act. that was a provision that was near and dear to the heart of senator kennedy, and was put in the bill because he wanted it in the bill. it basically would require that
someone voluntarily pay, and there are different numbers on what it could be, and it could be $123, all month, for five years, at the end of that five years, you met certain criteria to having disabilities to daily living, you could get a cash payment of as much as $50. that would cover not your medical expenses, but some of your living, household expenses. if you needed someone to come in to help you bathe, or something like that. only 3% are going to be doing that. the statute makes it clear that employers can operate voluntarily, but you might imagine it is expensive to administer a program like that. there is some sense that it is not really an insurance product.
we could go back into some detail. as you all know, the statute changes the deductibility, and tax-freeness of retiree drug subsidies. i apologize. some of this gets really technical. a local back to different parts of the law. basically, there was a take away of a tax benefit that employers got. they got a subsidy for the retiree drug benefits, and they also did not get taxed on that. that is changing. the question was what are you going to do about it, and i think the interesting no. there is that 69% have it under review. 26% and making no changes. there is also a temporary reinsurance program for early retirees.
a lot of employers still provide coverage for those that are retiring before medicare, which is, by the way, the most expensive place for coverage for anybody. the act allowed for some subsidies for the reinsurance plan for retirees to help employees pay the bill for early retirees. 62% said they intend to apply for that. the application, i believe, can out june 1. as i recall, it is already out, and we do know that many employers have applied for that assistance. one of the top three most effective steps to control health-care costs that are you taking now, and you were to put the top three. the slide on page 10 shows you what were the most effective,
the second most effective, and the third most effective tactic. you will see that 21% ranked the most effective tactic offering a consumer-directed health plan, and 6% said the was the second most effective, and 10%, the third most effective. next, well as initiatives. 19% thought that was the second most effective. 17% thought it was the third most effective. those two together, are considered very beneficial in helping to control health-care costs. you can also see the fourth one down, disease and condition management, also has a substantial number, of being in the top three. increased employer cost sharing -- interestingly, one of the biggest concerns that policymakers had had had been on
the cost-sharing side. employers think cost sharing is important, but they did not actually see it as the most important thing, by far. i think there is a little bit of a misunderstanding between the way employers view what is happening, and what policy makers are thinking about. on that point, if you go back several years, you find employers saying they feel they have reached the maximum value of cost-sharing as a tool for getting employees, retirees, and dependence attention. at some point, they're going to get the care, and that is not what people want. on the next pitch, you can see what they are doing in 2011 in terms of cost-sharing. increasing employee contribution to the cost -- what the employee has to pay toward his or her own coverage.
63% are doing that. it could be as little as 1%. it could be going from their employers, who pay 85%, and the employee pays 15%. it could still be way below the national average, which is 80% /20%. they are increase in out-of- pocket maximums. if you hit that maxim, whenever it is, $4,000, $5,000, or $6,000 for a family, once you hit it, 100% is paid for everything else in the year. it is kind of a protection, a safety net. you can see that it is being increased, by small amounts, but it is being increased. the in-network deductible is being increased in 44% of
cases, and the out-network deductible is increased by 46%. there were increased by 40% -- 47% in 2010. employers tend to make a two or three-year plan. they try to not make too big of changes in any given year, especially because of this year with the financial meltdown and the great recession, there are a lot concerns that most people's pay package is not only flat, and may have gone down, but there is also a recognition that most households if you go back three years or so have two working people in the family, and some number of those might not have a job at the moment. you might not have not only not had an increase in your own pay, where hours reduced, but you also might have someone in the household who may have lost
their jobs. we know that from the data. there is a lot of concern about that. with the health-care costs going up around 7%, even if employers only pass on 20% of the 7%, those are really hard dollars, at a time when everyone's dollars have gone down. i think they are sensitive to that. 21% were changing co-pays, and interestingly, there is more positive attention been put on primary care. only 6% were changing the copiague for -- the call-pay for primary care. there is an intent, i think everybody's part, to reduce or eliminate cold-pays for primary care, and not just for preventive benefits. this is seen as a very important
tactic for controlling health- care costs, and, we think, increasing and improving engagement and consumerism. in 2011, 44% are offering that as an option. 20% have gone to full replacement, where you have no other choice. the details may vary. they may or may not be a high- deductible health plan. the high-deductible health plans, that technically high- deductible, frankly, are not much higher than the average house plant. it was maybe one year and a half ago that a study found that the median deductible now was over $1,000, and a high deductible was only about $1,200. there are higher, and higher deductibles for everybody.
you can see that most of the movement, probably, between 2010 and 2011, was from those who moved from offering as an option, to a full replacement. some employees had the choice lester, and this year they did not have the option. we looked at wellness programs, which has been one of the most important initiatives that most large employers have been providing in the last five years, increasingly. there are well as programs targeting obesity, and in terms of employees, 76% said yes, and 23% said no. for spouses and domestic partners, 42% have said yes, and that has been a growing number. will probably see more, assuming the regulation does not keep us from doing some of those things.
we begin to see a small, but significant number offering well as programs to children. as i am sure you all know, we have a national crisis in that regard. if you turned to the next page, you will see the kind of things that are being done for participation in wellness activities in 2011. 41% are providing a premium discount for participation. in this case, it is through health assessment. that is a really big number. 5% are offering a premium surcharge. we like carrots, better than sticks, at least so far. 70% are offering other incentives related to the help -- 17%, our offer and other incentives. you can see the numbers for tobacco cessation -- 22% offered a premium discount, and 11%
essentially a surcharge for nonparticipation. you can also see that for healthy lifestyles, usually there are other kind of incentives, and there are a lot of reasons for that, including how hard or easy it is to administer something like that. this is really good news, in our opinion. you can also see that the average amount of the incentive in a year to employees is $386. believe me, that is real money. especially in the last two years, we have seen that small changes, just as we have seen the consumers in america change their behavior across the board, we have seen that some of the benefits -- people are much more positive. their pay more attention to what things cost. if you're giving a discount or a surcharge that did not get their
attention three years ago, it is getting their attention now. in terms of pharmacy benefit management techniques to be used in 2011, 73% are using prior authorization. that means that you have to get approval, basically, for a particular drug. therapy, 53% are using that. step therapy is where you are required, unless there is a particular chemical reason for going straight to the much more expensive drug, or newer drug, or more narrow set of clinical conditions, that you use the first one first, and if that does not do what it should do, you go to the next one. you are required to do that, again, unless you have a specific clinical exception. 63% a three-tiered design, which
means generic is the first brand, the second is its formulary brand, and in non- formulary brand is the third. a mandatory mail order for maintenance medication, like if you take something for a long time. it almost linda -- literally comes automatically from the p bm -- requiring that you either used mail order, or pay the full cost for difference between what your mail order cost would be, and what you get at retail. it tends to get people's attention. mandatory substitution -- 37%. just to sum up, you can see that employers are moving ahead with the changes of the affordable care act. they are not holding up changes that they want to make to
maintain or retain a grandfather status. they actually do not think it is that important. employers are attempting to control health-care costs. they understand that are stuck paying for all of these costs, no matter what, no matter what else is going on in terms of the health legislation, they will be paying the tab for a very long time. the exchanges will not be in place until 2014, at least under current law, and large employers would not have a choice of using them until 2017. that is a long way away. that is seven open enrollment, and one and three quarters presidential election. they are increasing some cost sharing, but most employers are not increasing it very much. they are, most importantly, focusing on health improvement activities, and they would like to be able to continue that,
because that is one of the things they think is really important. they do like more and more consumer-directed health plans. they are, if they have not done it recently, during the extended eligibility audits, especially now that there having to pay for dependence up to the age of 26. there are almost no more -- no more constraints on that. it could be a child that is married, lives elsewhere, and even works for someone else. the parent -- the employer of the parent is stock taking care of that. they want to make sure that every individual they are covering is an eligible dependent. there are also generally increasing cost-sharing for non-emergency use of emergency rooms. there are some -- there are still a ridiculously high use of
emergency rooms. they're also using data warehouse is to target programs on the conditions that are targeting people in terms of making them sick. they're using data and analysis to identify what parts of the country to concentrate particular programs. my favorite is -- used to be called the stroke belt. does anyone know what that means? the southeastern part had always been called the stroke belt because of the other things, the dietary conditions usually leave -- glad to strokes. places in the mid west are places where strokes and heart attacks are serious problems. there try to concentrate programs, including choosing
healthier lifestyles, in places where there are particular problems. more employers are contracts centers of excellence. there is a program where lowe's employees needing heart surgery, and you voluntarily want to go to the cleveland clinic, then they paid 100% of all of the cost, including the travel cost. i think we will see more of that. there is a growing interest in a second opinion for conditions when someone has either a a diagnosis or recommendation. employers are actually paying for organizations to provide a second opinion, then, they are trying to find all sorts of ways they can control costs to actually improve quality and
safety of care. they are still there, trying to do everything they can to improve the health of their employees, and control costs. they know they have to do both, and will for a long time. i thank you very much for your attention and your time, and i welcome any questions on any of these topics. yes, gerry? >> for estimated cost increases, what percentage of that is health-care reform, and they jump of that is due to legislation. in theory, with more people getting coverage, we are seeing the providers are getting less uncompensated care, and lesser of the need to raise rates. how do you explain why providers are boosting rates even more? >> that is a great question i will repeat it, although i guess everybody heard it, right?
we wonder about that a little bit ourselves. i could tell you what they would say. there certainly correct. it is just a question of how iraq -- how correct from different points of view. even though the affordable care act will help us cover another 32 million people, we probably have some more around 47 million people, or 48 million people, who have no health care coverage, and it might be worse than that, because those numbers are a couple of years ago. we will still be taking care of them. the second thing, and this is really tricky, the more the patients come in the door, who are paid by public pay years, with administrative pricing, which in most instances will be below what they considered their actual cost, there is still the differential, and they will stay as long as there is that
differential, they have to make it up from someplace. we, on the employer side would say maybe we should actually be bringing down the cost of care delivery, so that we do not have that disparity. but, we have been saying that for a long time, and it has not made a difference. that is one of the things, or some of the things they might say. what we would like to see is a combination of everybody working together and saying you cannot continue to rely on the private sector to pick up the slack. we have to change. as the exchange's get set up, and as we have more and more people in medicaid, and in terms of payment, medicaid payment to the actual underlying cost of hospital or a doctor, is the worst payment, from their point of view. there is the biggest gap. medicare, there is a gap, but it is not as big as medicaid. the more people we have in
medicaid, which is one of the main ways we are quick to cover a lot of new people, denmark -- one of the bat is how hospitals believe they're not getting one of the% of their cost. >> did anybody here that? the difference between compensated care, and under- compensated care -- that is exactly it. there are people that would argue that there is none that is undercompensated. >> do you have any ideas of how many employers would lose their grandfathered status because they are making changes under the health reform law? >> well, i guess the question is whether they want -- there is a statement you have to say, that you believe you have
maintained your grandfather status. there is a step you need to take. we do not know how many, which is now that most of them are saying that if -- how many. we just know that most of them are saying that if they do not visit this year, -- lose it this year -- the number of constraints, and, by the way, it could be below the national average, you cut already pay more as employers -- you could already pay more as an employer than anyone else in the country. the figure they look at is whether you increase it. if you were going from charging them 12%, to 18%, which was to be below the national average, you would be out of compliance. we do not know the number, but we estimate it will be somewhere over 50%, and certainly, by the second year, when you have more
planning time. by the way, the plan, and this gets pretty technical really quickly, each plan someone offers is separately determined to be grandfathered or not. for example, you might offer two plans. you may have a traditional ppo that you do not mess with very much, and then you offer a more attractive plan with a savings account, etc. etc., and you did not bother to grandfather that one because you can be very creative with that. you might do more things than you want to do, but you did not want to have to say this is a grandfather plant, and we basically have not made any changes. i am overstating their, but every plant is different. most employers to offer more than one plan, by the way. >> the survey was conducted in
may and june. since then, it seems there has been a lot more information on how restrictive the grandfather rules will become and how difficult it will be to maintain that. are you hearing anything from members where that number might be lower? >> they had a pretty good sense of where this was headed. you're right. there is more detail. it also takes a while to read some of these things. now, i think where they are, is the belief is the next year will be the bigger problem for most. now, they have more certainty, and in this case, it is not particularly good certainty, it is not a certainty that pleases them, but it is more certainty. just to give you an example of what's we and -- of what we and our employers would like to see
-- if you were an exceptionally generous employer in march of 2010, you are the worst off. the changes are fixed on the assumption that you are at the national average. if you were more generous, the changes are things like five percentage points. you can not change co-insurance at all. if you're co-insurance is 50%, which would be really loud, it easily 20%, -- is 15%, which is really low, it is usually 20%. the more you did for your off yous, the worse are. everyone is sitting there saying now, we know where we need to be, they're also saying there is not enough to be grandfathered to be worth worrying about. a lot of things that are in their make sense in the small,
individual insurance market, but they are not all that difficult for most large employers. so, it is not very, in all, something that you say oh, gosh , i am afraid on when to lose my grandfather status. -- i am afraid i am going to lose my grandfather status. large employers are regulated by the labor department for their health plans. they have very, very rigorous rules they live with. i used to administer these at the xerox corporation. i can tell you, but it burned on your head. it is very demanding. it is a lot of consumer protection. there is even a statement. the statement for the grandfather plan that you have to sign, and put in your
document's open enrollment, says you should know that if this plan is grandfathered, you do not get the consumer protections you would get in the affordable care act. it would not say that you have the other consumer protections you would get. that is -- there is that kind of disparity in how these things are being viewed in the policy world, and the people that administer these plans, down in the trenches. >> i am with bloomberg news. i wanted to ask about the survey on cost-sharing. you mentioned in the list of things that employees said that they thought were effective, and that increasing cost sharing, over time, employers are finding that to be less useful. at the same time, the same
servite -- survey shows that 60% of the company's plan to reach 63% of the company's you talk to plan 2 -- 63% of the company's you talked to plan to increase the premium. how you reconcile that? >> first, it is two reasons. they will be increasing their costs because the costs are going up. the percentage is determined by to the already built-i in premium. they may charge 50%, or 17%. they might -- 15%, or 17%. they might go to 18%. they usually do small increments. responsibleple are
-- human-resources people are responsible. they want to keep employees happy. the increased cost sharing is not very much, and the increase in the premium is not very much, but those changes are frequently used to encourage people to make choices that employers would like them to make. so, for example, there is usually a big differential between what an employee pays on a monthly, or bi-weekly basis, for a consumer-directed health plan. i do not have the numbers in front of me, but our survey a couple of years ago found that 36% of our employers charged 30% more -- less than the plan.
if they want people to make choices, basically they increase the premium on and hmo and decrease it on ppo's. they're always doing things to encourage people to make different choices. sometimes, the straight forward numbers mask some of those complexities. that is one of the concerns we have about the grandfather rain. most employers make a lot changes. what we would like to see is an equivalent that would solve the problem. if you have a super-rich plan, and you just want to make small changes to it, but they happen to be some of the changes that would trigger you out of grandfather, as long as your actual equivalent is very high, then, that would be ok. that is what most employers think about -- what is the whole package?
what are the tradeoffs within the package? that, again, is one of the problems with regulation, and requirements from people that do not administer plans. they will be looking at one thing. for example, there are a lot employers that cover dependents that are not in the last -- the new list of current dependence. -- of covering the dependence. the new rules read that you did not have to be a dependent under the irs rule to be a dependent. some rules cover dependents that have no relationship, but they cover them because they are financially responsible to them. right now, that depends and would not be allowed, under the new rule, and, in fact, if they
keep covering those on usual dependents they will have to give up what makes them different from anyone in the neighborhood, and that is that you are financially responsible. there are those kinds of complexities. yes? >> in terms of more plans going in the direction of consumer- directed plans, what does it mean for the provider? what can they expect if more large employers are going in this direction? >> well, the provider should expect that they would have more people coming in with higher deductibles, and they will need to collect those deductibles, essentially. there will be higher-digit
higher cost-sharing. what we all -- higher cost- sharing. what we hope is that people will ask questions. if someone is told we think we should do an mri, or a cat scan, and the patient asks a basic question like what difference will it make in my treatment, and the doctor, or whoever is ordering it, says we would just like to have it for additional information. the patient might say i do not want it. the patient, then, has made the decision. it is not going to effect treatment, and not make any difference, because the doctor has made up what he or she is going to do, maybe the patient would say it is no longer free
to me. we hope there would be more questions. [unintelligible] >> and asking questions, and reading the ebo. we know from the plans that exist that people do that. they ask questions. we do have a lot of information on that. did i answer your question, fully? >> i will follow up. >> sure. >> part of what you were saying was that within that 63% of employers that said they will shift, past -- at least some of the premium costs, that represents a lot of different kind of changes, not just a
blunt shift over. >> right. >> the premium could be 1%, but you know there are two -- the cost-sharing, and the pricing of the point of care. the other data would suggest that it is more likely to be on the premium side, because premiums have gotten so high. we are coming out of 10 years ago, people paying very little because, among other things, the costs were 100% less. one of the things that is painful for everybody is that if you look at a chart that shows what has happened to the dollar cost, which is what we all know -- no one knows -- no one says my plan was up 6%, they say it went up $100, or something like
that -- it is not only what it is costing in absolute dollars, it is the flat, or even negative wage scale. the affordability gap is much worse, not just a little bit. two years ago, before the meltdown, and the recession, we were talking about how horrible the affordability gap was. america could not afford this. the economy is crippling. it keeps us from being competitive. then, suddenly, everything else collapses. if you could chart it, we were kind of going like this, and suddenly, it is like this because the bottom dropped out of the economy. healthcare is not touched by any of that. it is still growing at the same rate or more than it was picked it is like they are impervious to what is happening -- that it
was. it is like they are impervious to what is happening in the economy. you have any other questions, comments, thoughts? >> down the road, it might be cheaper for an employer to terminate coverage, pay the penalties that are set under the law, give employees extra money to buy coverage to the state exchanges -- do you see that scenario developing? >> i think the employers are thinking broadly in two ways. first, they know that no matter what happens down the road, they have to come up for competitive reasons, provide a comprehensive benefits plan today. they are trying to navigate the transitions as effectively and efficiently as they can. i think what could happen in the future is wide open.
wide open. a lot will depend on the extent to which we can get a handle, and actually begin to control costs, as the president, and now-gone peter orr said always talked about. also, as people move in and out of the labor market and our exchanges operating, the exchanges, themselves, become a place that people feel more and more comfortable, and the exchanges are actually doing a good job of managing health-care costs, it all of that is happening, it might look more attractive. it will also, probably, very by industry, or location, and
culture. there are places like in silicon valley where there are benefits that are not provided in other places in the country. back -- there are a bill prepared did not want people to be distracted. they want them to be nick -- they are lucrative. they do not want people to be distracted. they want them to be making money. in places like that, companies might decide to do more, because it might become a more valuable benefit -- a trade-off for cash wages. more on-site wellness senators, programs, that kind of thing. they vary by state, company, and how these exchanges worked out, and what happens between now and then. for something like a voucher program, where some people could go into the exchanges, but not all would, would be right now,
looking at a worst-case scenario. if all went in, or non went in, it would be different. i think employers are recognizing what our obligations are today, and the biggest ones are improving health, and reducing costs. they're very pragmatic. the thing about business, especially employers, they're pragmatists. they live in the real world. they're competing like crazy. for the most part, we are not winning. we know we need to do something about that. we are struggling with almost no job growth. we have had a lot of loss in jobs. there are a lot of questions about how we're going to restart the economy, and actual start creating jobs. some of these requirements play into those concerns. i have heard members talk about
how every new mandate is added onto a base, that right now, in america this year, a family of four's medical costs is over $18,000. this is just the claims cost. when you think about hiring, or creating another job, you have to think about what it costs to me to have that job, and it is the wages, pension retirement, vacation days, paid time off for holidays, and, on average, per active employee, over $9,000 in medical claim costs. we have to change all of those things, to do something about it, but there is not an easy answer in this transition. as ice began, i said this is a
-- as i began, i said this is a transformative time. most of us cannot guess what is what happened in a year, but what we know is that we have a path forward that we follow because we live in this real world, and we have to figure it out here-by-year. that is what this survey reflects in the work that we do. how we get to 2014, and by 2014, how does it look like? by 2017, what does it look like? by the way, we're putting a higher cost increases, and leaned out there in 2018 is the cadillac tax. there are employers, already, who are about to hit it. that is a lot of years forward. if they do not change that quite a lot, there will be many, many
employees and employers paying the tax. some of what is costing is the mandate. there is a little bit of a catch-22. we are hoping that every time somebody talks about a cadillac tax, they are reminded that we need to be able to control costs if we're going to avoid the cadillac tax. they wanted to control costs, but we need to be allowed to do that, and that is what we need to be doing between now, and in particular, 2018. all right. that is a. thank you for your time, thank you for being here on this rainy day. enjoy the rest of your summer. [captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute]
span. "book tv continues tonight in prime time with a look at president obama. a new yorker editor writes about the life and political career of the president. followed by a panel discussion on the books and authors that have inspired him. talk-radio host laura ling ingram and her thoughts. washington journal this week is looking into the impact of new financial regulations. tomorrow the attention turns to changes for investors. on friday, provisions and debt preventing of future financial crisis. after washington journal tomorrow, as energy an subcommittee looks at how much oil remains in the gulf and whether fishing is safe. live coverage begins at 10:00 a.m. eastern.
>> after nixon lost in 1962 in the governor's race in california, the owners offered him the job as. commissioner of baseball. nixon was flattered, but the declines, telling the owners, don't tell pat, she would kill me for turning you down. >> whether it is baseball and the presidency, or the cia and the korean war, find american history on line at the c-span video library. watch what you want when you want. >> the department officials are discussing efforts to stabilize the iraqi government before the end of the u.s. troops drawdown. iraq began to form a new government after national elections in march. the center for new american security and washington is the
host of the event. it is about an hour-and-a-half. >> direct your attention to the stage. thank you. >> good afternoon, everyone. thanks for joining us. my name is nathaniel fick, i am ceo for the center of a new american securities. it is a pleasure to have all of you here for this important and timely conversation. 90 months after the beginning of operation iraqi freedom, we sit here within a couple weeks of the transition to operation new dawn. the u.s. will have 50,000 troops in iraq on september 1, on track to end the u.s. military presence in the close of 2011. it seems almost impossible in good as compared with the dark days of 2006 and 2007 that many of us remember. yet the challenges and questions remain. the iraqi government seems
deadlocked five months after the national elections. just this week the talks and alawi brokesmalaki down today. as a bombing in baghdad of sutta recruitment center pkg -- outside of an army recruitment center. the iraqi army chief of staff had said u.s. forces need to remain in iraq until 2020. president obama has said that we have not seen the end of american sacrifice in iraq. we are here today to talk about what changes, to discuss u.s. interests in iraq and in the region, the threats to those, whether they are non-state actors or not, and how the u.s. plans to address those threats.
there is no one better to discuss these questions with them the gentleman to my left. dr. colin kahl, deputy secretary of defense for the middle east. his own public service leave from georgetown. he was formerly a professor and senior fellow. he coordinated the obama campaign's iraq policy groups and spent 2005 and to a dozen 6 as a fellow at the dod working on counter-terrorism and security operations. in the center we have michael corbin, deputy assistant secretary of state for iraqi and middle eastern affairs. this prayer service includes time in baghdad, damascus, cairo, tkelaita. he is an arabic speaker and is uniquely positioned. the format today, first we will hear from mr. corrigan and then
-- mr. corbin. how we appreciate if you identify yourselves by name and affiliation. keep it brief and please end it with a question mark. our plan is to wrap up by 2:30. thank you again. writer and the microphone over to michael corbin. >> thank you. it is an honor for me to talk about something extremely important to the state department. its designer for me to be here with my partner in abreu closely with in the last year and met in baghdad in may of 2009 when we were in the early stages of talking about some of the tremendous developments that we are working on everyday as we deal with iraq. i am also very honored that there is a large emphasis on iraq.
this subject deserves a lot of attention. i am gratified all of you are here today. i am here to give you some of the color and flavor of something the state department is highly focused on. that is the transition from a military, security-dominated relationship we have had with iraq to a traditional bilateral relationship based on many other areas besides security, but which security will be a major part. a month after taking office, president obama outlines policy objectives for iraq at camp lejeune. he said the u.s. will pursue a new strategy to end if iraq war to a transition to full iraqi responsibility. if the strategy is grounded in the clear and achievable goals shared by the iraqi people and the american people and an iraq that is sovereign, stable, and self-reliant." i want to talk about the
military to civilian transition that we believe is keyed to the administration's goals of building that traditional diplomatic, bilateral development partnership with the people and government of iraq. as the president said last week, the end of the mission on august 31 was 12 days ago, marks the beginning of this transition in some ways but it is also midpoint of this transition. when the doctor came to visit with a team in the may of last year, we talked about all the facets that had to go into this drawdown, directed by the security agreement but also by keo, a policy that was laid out in the camp lejeune speech. we started off with almost 144,000 troops in iraq at the beginning of the obama administration. we are on track in 12 days to be down to 50,000 troops.
a combat mission will end. this is significant for iraq just as the withdrawal last june from the city's with extremely significant for iraqi partners and colleagues. this shows we are both keeping a security agreement in the first case and that we are keeping to a promise to build a partnership with the people of iraq as we drawdown our relationship. this is a key message of my remarks and what we are working on at the state department. this does not mean an end to our commitment. it means we are building a civilian partnership based on traditional diplomatic tools and means of engagement rather than one that has been over the last seven years because of the circumstances in iraq, built on a security relationship. this partnership between the military and civilian extends to all the agencies that have been involved in iraq and is led by
the white house. the vice-president takes enormous interest in everything that goes on in iraq. he has visited five times. the state department is always engaged. the civilian transition is more than just two deputy secretary. the epicenter steinberg and the other deputy secretary spoke 10 days ago on the subject on how the state department is addressing this transition. our partnership and collaboration has got to be and is incensed. because what the military has been doing seven years has been an enormous sacrifice, enormous work, numbers of deployments, colin and i were in north carolina talking to the 18th airborne. they will be deploying, their core headquarters will be deploying again to iraq under a general call over the multinational training components when i was in iraq. the u.s. military has deployed
time and time again to build something in iraq. the civilians are stepping in through a collaborative transition process to help build something different, something that rests firmly on a foundation that the military has late for us. this is only possible because of the dramatic developments that we have seen in iraq. political developments, sacrifices the iraqi people have made, and the real accomplishments they have made. i saw the provincial elections in january of 2009 where people in provinces around iraq went out and voted. they went out and voted for individuals. they voted for people that they wanted to see represent their interests and provide them services. we saw incumbents and governors, provincial councils out of it.
it is a testament to what the iraqis are willing to push forward on. when you talk about the march 7 elections that took place this year, you talk about a 60% participation rate. again, iraqis choosing individuals, not voting for parties. the situation of the new expanded council of representatives, only 50 of the three hundred 25 members are returning. there is an enormous crowds welliver supports iraq for people to provide services -- an enormous groundswell of support for people to provide services. this brings me to today's discussion, is the government process paralyzed? what is the situation in iraq? the situation today in 2010 as
iraq forms of government is vastly different than the situation in 2006 when the iraqi leaders gathered together to form a government. first, we did not have an interim government that was providing services in 2006. violence was manifest in the streets. the spiral of sectarian approaches to solving issues was manifest in villages and the use of security forces, militias, the police. the situation in 2006 was very different than today. because the iraqis have chosen politics. politics has broken out in iraq. the iraqi leaders and iraqi politicians have chosen politics as a means to solve their differences rather than violence. when you look back at 2006 as to how the government was formed, it was formed on the basis of narrow sectarian issues and
interests. the ministers were not chosen necessarily on the basis of their capabilities or their abilities to function in a new government but as a representation of the larger struggle that was going on throughout the country. in 2010 as the iraqi leadership struggle to form a new government, they face the issue of two blocks that were separated by two seats in the 325-member parliament. the state of lot and iraqiya, and there was a recount in baghdad to determine if there were enough to change the results. in a situation where two blocks need to negotiate, we are encouraged by the fact that all the political trends and political leaders have said they want a representative and lows of government that includes the different trends and political
forces in iraq today. that requires compromise. that requires negotiation. we see serious compromise and a serious negotiation going on. there will be news such as we heard yesterday of the breakup of talks. there will be news of alliances formed and broken. but we believe this is a sign that the iraqi leaders are working together to form a government. they need to do this. they need to work in a serious manner that reflects the braves votes that people exercised on march 7. as we look into the future, what is going to be the basis of our civilian partnership? we have a security agreement, but security cannot be the basis of our new civilian partnership. what we are looking at is a strategic framework agreement which brings together traditional tools of diplomacy,
development, cultural exchanges, educational exchanges, working in the health sector and in agricultural sector, and we are looking at how to flesh out our partnership with the iraqis not necessarily on the basis of our goals and objectives but fundamentally on the basis of the iraqi priorities and iraqi objectives. this is where we have traditional partnerships that i have worked on in egypt and in kuwait and indonesia and other countries where i have served where we have a dialogue with the government about what the priorities will be. we have these committees under the strategic framework agreement where both sides are bringing to the table goals and priorities in order to flush out how our partnership should be managed. as we go forward with this, i would say that the economy is key. i want to give examples of how we are fleshing out the civilian partnership. it is always in conjunction with
what the iraqis are doing. when iraq had two successful eruption-free bid browns for the southern oilfields, it was a significant change in iraqi policy to or from development of oil fields. one of our provincial sites will be in basara. it is the largest city in the southern oil-producing region. we already see -- although many different multinational corporations won contracts for the oil in the south of iraq -- u.s. oil firms have the best technology in the world. our coyle companies are already slowly engaged in bosnia. we are engaged as embassies and consulates door on the world in supporting u.s. industries as it goes overseas. -- we are slowly engaged in basara.
these companies will be a vanguard of investment in iran. iraq.s go-- this will lead to the investment that is key to growing jobs in iraq. the services that we provide to these types of contractors that are coming are to help them deal with the local government, to help them deal with issues. when you are doing 0 few developments, there's the issue of unexploded mines. this is where the u.s. government can engage with private companies and helped set the stage for a successful economic development. economics is just one example. culture, education, science are going to be other areas where we have traditional cooperative tools. more fundamentally, i mentioned job creation, the iraqis to
share with us the understanding that the oil fields are not going to produce the jobs that are necessary. what is an advantage that iraq has, as the fertile plains between the tigris and euphrates have been 4000 years, is agriculture. iraq is the first country in the region i have served in where the people see and understand the importance of returning to farms and working agriculture, because even in the last years of said,, the drive from the baghdad airport to the center of baghdad was through green, irrigated fields -- even in the last years of hussein. health and education are also important. we have a strong u.s. aid program that we are using to bring in traditional developments. as we have moved from a security-dominated relationship,
we need to have the tools that we have in other countries to collaborate with the host government and, with tools that will allow education and employment for iraqis and to build a better iraq in the future. this transition that we are working on, it is important to note, it is not starting now. some people think because it is just getting the news, it is starting now. when i was in baghdad, one of wasesignificant dates january 1 of 2009 when the u.n. security council mandate for iraq ended and for us, the state department, when we opened our embassy. this is a sign of diplomatic facility, not one wing of the republican palace, a jumble of different types of units and civilians occupying a large iraqi government building.
this was a true diplomatic facility where we began immediately to do the work of an embassy like others around world we have. we had events, inviting iraqis over four different types of exchanges, using our civic facility to reach to universities and the state, hosting visitors, posted a july 4 reception. this is extremely important for platform. the baghdad embassy is a platform for our diplomatic engagements. when the u.s. troops moved out of the city's purchase security agreement last june, we stepped in in some ways to cover the security needs. some people say, how are we going to do security without the presence of u.s. troops? as of last june, per the security agreement, u.s. forces cease to operate except in cooperation with iraqis in cities, towns, and localities. that meant more dramatic changes
for us as we went around. instead of the signs on the backs of armored vehicles bedsteads day back 50 feet or risk the danger to your life, came up that said this convoy is traveling in accordance with the agreement with the civilian authorities of iraq. this is a change that shows how civilians can operate within the confines of the iraqi system and an agreement that shows us working with the iraqis in coordination. been doing orave around the country since 2005. we have come down to 16, but there's still a vibrant and important contract and location that works with the local authorities. i talked about decentralization in iraq, which is exciting for me, having served throughout the middle east. when you looked at support that provincial governments and provincial councils have sought,
this is important. the role of the prt's is something had brings me to a key part of our transition. how are we going to be placed around the country to interact with the iraqis as the military drawdown? we are working on that already. we are working on the 16 prt's transferring functions at the embassy, to branch offices. i was deeply distressed when i arrived in cairo to find that our consulate in alexandria had closed. if anyone knows egypt, it knows alexandria is not to cairo and cairo is not alexandra. if consulates serve important functions. we have not been able to maintain consulates around the world the way local people have wanted us to.
having these two consulates that we're moving forward to doing, one in the north and another in the south, will be a significant uptick in our presence in the country and will provide long- term presence that a consulates represents. in basara, support for business and support for the economic sector, support for agriculture. the only iraqi port is a short drive from there. disconsolate would have significance in many ways, but it will presumably be important economically -- this consulate. in the kurdistan region, one of the largest issues we need to address and that all the parties are addressing as they make their compromise is kurdish issues. having the consulate in the north provides a platform for us to address these fundamental issues for the future of iraq.
the other element that we have been planning a long time is the police training presence. or the police development program. having served throughout the region, this is another area where i think we have a real advantage and a partnership with the iraqis. seeis don't just want to u.s. uniforms out of their cities. they want to see iraqi army uniforms out of their cities. they want to return to a situation where the police address crimes and disputes, where crimes are investigated. unlike most terrorism situations where you never know who the perpetrators were, there are investigations to determine who did what and why. as iraq faces corruption and organized crime, the iraqis want to see police. we have been working the last year-and-a-half on developing a
police training program in coordination with the iraqi authorities that is built on the program the military work so hard on over the last seven years. we are not going to do the same thing the u.s. military was doing. we are not doing counterinsurgency. we are not working on having the basic skills the military has successfully imparted, to get the police able to deal with terrorism and insurgents. we are working on community policing, anti-christian techniques, major crimes investigation, the thing-- anti- crime techniques. it is an important program. it will not only give us a window into what is going on in iraq, but an opportunity to see things like who are local police
hiring? what are they doing to deal with organized crime networks that are operating nationally? what are they doing at their borders? it is a process where we see enormous potential to work with the iraqis. the provincial prisons and police training program are two of the tools we will use our diplomatic presence. i just came from an event hosted by an event for our new ambassador jim jafri. -- jeffrey. he will lead a staff of multi agency, multiple different civilians, which is not going to shrink but it will address the needs of a civilian transition. some people thought as the military presence drastically withdraws, the civilian presence would drastically drawdown. we cannot do that if we are going to build a diplomatic, a
traditional partnership that we are building with iraq. that is an important point that i would like to finish on. who this is a tough challenge for the state department. in my 25-year career, i have seen nothing like this. every day when i go to work, i have challenges. it is a tough task. but i think that what we are doing here is critical for the future of the state department. not just our partnership with our military colleagues and our visit to fort bragg and the 18th airborne last week is part of that, but if the state department can show it can take over in an air conflict situation with this type of diplomatic and development strategy, we have a basis to address some of the challenges that we are going to face in the future. i think this is extremely important. as secretary clinton has said, this is an enormous challenge.
we have not done is probably since the marshall plan after the second world war. this is what we are working on now. we have great partners. the department of defense and other agencies in iraq. we are lost on this task in a very successful and constructive way -- launched on this task. >> thanks, michael. i want to thank nate and all the staff. it's great to be backed. i missed tuesday's at the willard. in my former life i was a senior fellow and they were very kind to me. i would be remiss if i did not think mine been and provost at georgetown for approving the extension of my leave so that my drawdown dates coincide
perfectly with my drawdown date in iraq. the end of 2011. in the meantime, i am focused on the 14 countries and territories stretching between egypt and iran. iraq is one of those countries and the primary area of focus for me, for an area where michael and i collaborate closely. i want to provide the defense department perspective on some of these transition issues and speak a little about the common security environment under which the drawdown is occurring. pilots for to your questions. as iraq undergoes its own political transition, the u.s. is on track to meet president obama's as possible drawdown timeline by sep first of this year. when we came into office, there were 144,000 american boats on the ground. at the seconds there are 36,000 forces on the ground. by the end of this month, 50,000
forces organized around advising and assisting brigades and one advise and assist task force. consider the amount of equipment we have already moved out of iraq's. when this process started we had 3.4 million pieces of equipment in january of 2009. by the end of august we will be down to 1.2 million pieces of equipment. ahead of schedule in drawing that down. we will be there before the end of august. consider the situation as it relates to the american bases. in june of 2009 when the u.s. pulled out of the iraqi cities, u.s. forces occupy 357 basis. -- bases. that will be reduced to 94 by the end of august, and 81% decrease. the drawdown is substantial. this marks a milestone in the changing nature of u.s.
engagement in iraq. it will drawdown to 2000 forces and it will change our mission from combat to stability. it's in recognition of this change that we will also take the name of the mission from operation rescue freedom to operation new dawn. i have a mother with that name on it. i think i'm the first one to have it -- i have a mug with that name on it. we are focused on a transition to a civilian-led mission in iraq. contrary to some narrative's, this transition is not a strategic disengagement from iraq. it is not. instead, it signals a transformation in the nature of our engagement in iraq and our bilateral relationship with
iraq, is shifting the emphasis from security and military to the civilian side. at stake is not only ensuring that stability in iraq indoors as we continue to draw down and that iraqi government continues to build capabilities to meet the needs of its own people, but also to make every effort to consolidate a joint goal we shared with the iraqis, that is to build a long-term strategic partnership. this administration is incredibly committed to that partnership. i traveled to iraq with the vice-president of three of his four visits. every time he goes, his message is consistent, that the u.s. desires a long-term partnership with iraq and that no one should equate the drawdown of our forces in compliance with an agreement that we stuck with the iraqi government -- nobody should equate that with u.s. disengagement. we are looking for to building a long-term partnership and are in the process of doing that.
guards andabout the security and political environment. michaels said things about the government. let me talk a little about the security situation. we woke up today to reports of a bombing in baghdad that occurred outside a recruiting statement in the mustafa area that killed approximately 40 individuals being recorded for the iraqi army. i think the incident is a reminder that there are still groups in iraq that are capable of. -- capable of horrific and periodic, high-profile attacks. we have also seen the underlying security trend remains positive , despite the drawdown, despite the transition in our security
relationship and despite the political turbulence that has been associated with the process. the number of violent incidents in iraq currently stand at their lowest levels of the war. it remains that way for months. according to data, the number security incidents and civilian casualties and iraqi security forces casualty's and u.s. casualties for the first five months of 2010 were the lowest on record. we should expect to see spikes of violence occasionally. i would expect we might see more in the coming days as a ramadan is nearing. and also a ttacks by extremist groups to create a false negative that there are driving us out. we have an agreement with the iraqi government and a set of
milestones established with the u.s. president that clarifies that drawdown. it is because of these things the drawdown is commencing in the way that it is. that does not mean the bad guys will not try to craft their own narratives. part of their narrative will be that they drove us out. i think that combination will present an information opportunity for our adversaries in iraq to try to exploit the situation, to have the narrative conform with their view of reality as opposed to actual reality. i want to say a few things about al qaeda in iraq. al qaeda remains capable of occasional high-profile attacks. we don't know whether they carry out today's attack, although the profile is similar to their message. i think it is our judgment that it is weaker than ever. its finances are stressed. its network is trust. its leadership has been
decimated. in the last 90 days a combination of iraqi security forces and u.s. forces as either killed or captured 34 of the 42 top al qaeda leaders. the network has never been more strained than now. it is our assessment tartly that it's not correct to talk about aqi as an insurgency anymore but rather as a terrorist network. in 2005 and 2006 al qaeda iraq and various other sunni groups aligned with its were capable of controlling wide swaths of territory across iraq and they represent a big threat to the viability of the iraqi government. neither of those things is true today. what they're capable of doing high-profile attacks, they don't control territory and they don't pose a viable route to the iraqi government. that is a big change from the dark days of 2006 and 2007. most notably, and most
optimistically is the ability of iraq to roll with the punches. if you remember what it was like in 2006, you get a bombing on a tuesday with 50 civilians killed in the marketplace and then the next day 50 sunni man witchell up in a landfill with bullet holes in their heads and the cycle would be repeated over and over. -- 50 sunni men would show up with bullet holes in their heads. aqi wants to start a new cycle. they kill indiscriminately against civilians because they want the iraqi people to turn against one another. it is a good news story that the iraqi people have no intention of turning back to levels of violence we saw before. in terms of this year malicious threat, which we judge to be much reduced from days past as well. one of our principal concerns in
2008 used to be the militia of moqtada al-sadr. they have been markedly disbanded. a small subset of that army has been reconstituted into brigades that continues to carry attacks. the vast majority of them have been disbanded and their activities are focusing into the cultural, social, and political arenas. there used to be a number of special groups because they receive training and funding and support from iran, including hezbollah, continuing to do isolated attacks. the overall number of sheila melissa a tax is much reduced itia attacks.
the professionalism of the police has improved as has their capabilities. one of the most telling indicators of that is the degree of confidence the iraqi people are showing in their own security forces. the most recent polling done shows 80% of the iraqi populace has faith in the iraqi security forces. that is an important piece of data. last, we now have a viable political process in iraq that exists as an interim framework in which the questions over distribution of power and resources can now be addressed through peaceful means. iraq is a democracy. you can have situations of extraordinarily heated rhetoric, as in other democracies. a lot of that adamec is playing out -- a lot of that drama has played out.
all the major political parties remain committed to dealing with their grievances and negotiating solutions to their concerns through the political process. i think as long as they stay committed to that process, we are not likely to see a significant upturn in violence in iraq. there are more security forces and they are more capable and professional. the adversaries are weaker although occasionally still very deadly during the iraqi public has more confidence in their security forces. the iraqi public is not looking to turn back to a large scale violence. the political elite remain committed to the political process. these are the underlying structural features which makes stability in iraq a lot more enduring than it used to be. that is why we've seen a reduction in our forces. by the end of this month we will have seen a reduction of more than 90,000 forces since the u.s. took over. we will vaccine a more than 100,000 reductions in spite of
the u.s. forces during the surge where we had 125,000. we have handed over responsibility to the cities. security trends have stayed relatively positive. that is an indication that the iraqis are standing upright. still there are challenges we face in the days ahead. i will not spend much time on this because i suspect you will ask questions on this. the major challenges we have a the moment are the seating of the government in iraq. once we have the government in place, we will have to continue our efforts to make sure that the government is inclusive and living up to its commitment, especially as it relates to a former combatants on the sony side -- sunni side. the jimmy to make sure sunni political parties have an active voice in the government, and detainee's will have an active
voice. the largest area is the kurdish areas and disputed boundary areas, distribution of oil revenues continue to be a source of tension. this is one of the areas where u.s. forces continues to play a very important role. the arab-kurd border. they set up the combined security mechanisms. these are series of joint patrols checkpoints and coordination centers that stop the fault line between the kurdish north and the predominately aris south, central and southern portions of the country portionsarab south. the idea was for confidence building to lessen the prospects does small incident at the local level could escalate into a larger conflict.
in that sense, they have been extraordinarily effective. one of the ways in which the u.s. will continue to support the iraqi security forces will be to continue to support the combined security mechanisms in the coming months. let's talk little about the drawdown strategy and our transition strategy. we have already talked about a 50,000 reduction. it is telling that gen. odierno is comfortable with this transition. by the time the changes command at the end of this month he will give been in iraq 55 months. no one is in a better place to judge the prospects for stability despite the drawdown. he feels comfortable about it. the drawdown in itself -- i came into the administration in the first week of february. i was one of the first staff- level people among the political folks to come in and. brought me in.
one of the things we did was to try not to impose a linear reduction in forces. instead, we put a date on the calendar that seemed reasonable for a change of mission and production to a substantial reduction in forces. and living in a to the general to shape the drawdown by that date. that has allowed the general to have a modest drawdown in 2009, freeze during the elections and for the first 60 days after the elections, and then to accelerate the drawdown. i think gen. odierno feels that despite the political turbulence, the conditions are such spent they continue to permit the responsible drawdown on time and on target. be on september 1, forces focus on -- forces will border protection, engaged in
capacity-building efforts, as well as united nations missions. a second mission will be to continue efforts to train, equip, have advised the security -- and to advise the iraqi security forces. that includes the area near the kurdish area. third, continuing to partner in the counter-terrorism operation, to continue putting pressure on al qaeda and other extremist networks. and to continue the drawdown as per the zsecurity agreement. it is good to think of september 1 as the culmination of a transition that has been in process a long time. the most important dates may not be september 1 of this year by january 1 of last year. it was when a security agreement cayman is when it changed our relationship with the iraqi government.
we have focused on these core missions since that date. the september 1 date is the culmination of that shift from combat and counterinsurgency to what the military calls a stability operation. michael spoke about the transition. four elements, the provincial presence, and consulates, the embassy branch offices, the police develop the program. i want to mention two others. our continuing efforts to build up the capabilities of the iraqi security forces so they will be capable of providing a stable,, and self-reliance iraq by the end of 2011. one of the first things we did was i took a trip in may, this was to inform an interagency planning process in 2009 very early in the administration on what would be required to engage in this extraordinarily complex transition, not only from us to the iraqis but from the
department of defense to the department of state. we developed a methodology to identify what the essential capabilities were for the iraqi security to forces, but they will need by the end of 2011. they identified $7.9 billion of requirements they thought the iraqis would require over and above what we thought they plans to spend. they will spend about $11 billion on their ministry of defence and minister of the interior. expect them to spend at least that much next year. we still thought most of that money will go to sustaining and feeding the horses they already have. we saw $7.9 billion of additional requirements over and above that. we went back and said what are the requirements for internal defense by the end of 2011 and to lay the foundation for external defense? because iraq lives in a
dangerous neighborhood. then they came back and said the 7.9 billion of important things. 4.1 billion are especially important. we call that a minimal essentials capabilities list. we then identified a number of funding mechanisms to include congress giving us the authority to transfer some equipment from our forces to the iraqi security forces that will fill part of that. we expect the iraqi government to fill part of that. and we are asking congress for $3 billion of iraqi security forces funding. 1 billion in 2010 and $2 billion in 2011. the iraqis would contribute to topping off to meet their additional requirements for something like their desire for the f-16 aircraft. the last part of the transition is taking this enormous training
mission that used to be the multinational security transition command iraq, which had a terrible acronym, which is now even more indecipherable. deputy commanding general for advising and training. to transform that into an enduring officer training operation in iraq. we plan to have that set up sometime by the middle of next year and into the fall. it will be the successor organization to the training organizations. it will be much smaller. it will be similar to some of the more robust office of security or defense or military cooperation. similar to some of the larger ones we have in other countries. we see this as the foundation for the security component of our long-term strategic partnership with iraq. the framework agreement outlasts
the security agreement. the office of security operaticooperation in iraq's wio beyond 2011. -- our cooperation with them will go beyond 2011. thanks for having us. [applause] >> thank you both. it is telling that we have state and dod counterparts talking about this issue. when we spoke about how old we are going to sit, they did not want me between them so that they could appear together. let me start with a cynical question. how is it that this is not just a diplomatic dance under which
we have to propose to leave so that some new iraqi government, if there ever is one, asks us to stay? >> i will take it. [laughter] the terms of the security agreement was negotiated by the previous administration at the end of 2008. the terms could not be clearer. we will transfer responsibility for security in the cities, towns, and villages in june 2009. we have done that. second, remaining u.s. forces would be allowed by if the end of 2011. president obama pledged to executors responsible drawdown. he put another milestone high camp there, the change of mission and the 50,000 number. the iraqis would have to come back to us to ask for more.
they would have to come back to us. they don't have a government to come back to us. the terms of a security agreement are not suspect they are open to unilaterally if interpretation. they are or what they are. we will have to see what the iraqi government asks for once they have a government. i cannot get as to exactly what that will be. i will say this, the vast majority of the prominent political activists in iraq across the political spectrum with some exceptions, the vast majority want all to our partnership with the united states. we will have to see what the shape of that part as it looks like and what shape it takes once iraq has a government, to have that conversation petco. >> the iraqis are seeking a long-term partnership. there are models around the world as to how to do this and there are models in the arab world on the type of partnership they are seeking.
b.c. clear indications they would like to see the strategic framework fleshed out and more traditional elements of cooperation engaged. >> you have both stressed that this is not a strategic disengagement. you have given examples. yet you have both stressed that perception matters. certainly, one can make the argument that in a drawdown, there is a perception of a vacuum. and there are other interests that may want to fill that vacuum, whether they are neighbors in the region, non- state actors. what concrete steps in terms of reassuring and a severance can assure them -- reassuring them?
>> wheelworks hard to make sure the interim government had the tools, as we knew this would be a long time in terms of forming the new government, that the interim government have the tools on the security side and on the services side to be effective. it continues to be effective in making the decisions necessary for the iraqi economy and policies. in terms of a vacuum that could be exploited by foreigners, we see that there is foreign engagement in iraq. some of it is coming as a result of the election and some of it because of the political situation in iraq. we see the iraqis themselves standing up to this interference. iraqis are making very clear that they want to provide their own future within iraq by themselves. there will be foreigners. of course, turkey, iran, saudi arabia and others will have influence. there is no vacuum in iraq that can be exploited.
>> there's no doubt there's been some anxiety. the agreement was reached between us and the iraqis. a lot of the iraqis need to know that we are going to live up to our end of the bargain. living up to our commitment has increased our status as an honest broker in iraq in a number of important ways. there has been some anxiety. one of the ways we have been trying to counter that is in the near term to conduct our drawdown responsibly and to have a robust transition force so there would not be going from 100,000 down to zero in an instant. that would perhaps risk a vacuum. but we are doing it in a managed way. first we handed over responsibility of the cities. we have drawn down in a more accelerated pace in the last couple months. the proof is in the objective data.
there are spikes of high-profile occasionally. we are doing this in a responsible way. we are communicating to the iraqis that we will not abandon them. saidice president's has this. everytime i travel with the secretary of defense as well, they make it clear we are in this for the long-term as far as having a long-term partnership. the iraqis will not need tens of thousands of forces at the end of 2011. they have hundreds of thousands of their own forces, increasingly capable. they will continue to need training and assistance. i do think in that context, one thing we should be thinking about collectively in town is as we think about the current
requests we have made for money for the iraqi security forces and if there are future requests for other requirements for the iraqi security forces going forward, we need to think about in terms of two things. in terms of what it would take to build their capabilities and the second is what is necessary to signal to the iraqis that we are in this for the long term and that we have a long-term interest in developing relationship with them and getting integrated into our types of weapons systems and joint exercises and also some other things we do all throughout the region. the more we are able to signal by putting real dollars on the buildis not only knohelping iraqis 40 security forces but securing a long-term.
>> what is your vision for iraq as a partner of the u.s. in the region over the coming decades? what are we trying to achieve both how does that make the u.s. situation better than it was before? >> i think we go back to president obama's speech. a stable, sovereign iran working peacefully with its neighbors in the region. over the last 60 years iraq has played a negative role in the region. -- a stable, sovran iraq. if you look at internal problems of the kurds, iraq has been a center of destabilizing factors on the outside and we see a partnership with an iraq that may lead in decentralization. it has the best civil society law now in the region.
in terms of ngo's not having to register all their members and say whether they are receiving foreign funds, they are allowed to do that. if that law is implemented, that will be pretty unique in the region. their economic system will perhaps proceed along the lines of the big rounds that brings private investment. and there is political discussion rather than violence. >> what you are seeing throughout the gulf in particular is an emerging network of states that are cooperating to address a set of common concerns. those concerns relates to terrorism, counter-terrorism, maritime security threats, piracy smuggling, drug smuggling, the destabilizes other states in the region.
this is opening all sorts of opportunities for states to collaborate. in a region that has not seen multilateralism of any kind. i think we have seen steps forward in all of these areas. counter-terrorism and maritime and in terms of early-warning, air missile defense. iraq can play a role in the emerging network as well. iraq faces so many of the same challenges that brings it in line with so many other gulf states. we have real opportunities on the security side over the long term to invite and encourage integrated into that network. what changes in which the data might cause you to revisit the
time lines by which you are trying to achieve what you are trying to achieve? what are the metrics we should be looking at? >> first of all, ultimately, the president of the united states will make a final decision. in terms of what commanders in the field are going to look at, the warring sides are getting much worse than they currently are. if you see a collapse of confidence in iraqi security forces, that would be troubling. we see no evidence of that. confidence is going up, not going down. but confidence that brought out, that would be concerned -- but eight confidence in drop-out, that would be concerning. if you saw a substantial increase in legal assistance from regional states, that would be a warning sign. the good news is we do not see signs of any of that.
security forces are in a place where they will maintain confidence of the iraqi people and are capable of nipping any reemergence insurgency in the bud before it metastasizes. i think because of that we are not likely to see those things emerge. those would be the types of things -- those would be the types of things we really mean. >> our continued engagement means continuing to address these issues and a number of ways. with the arab-kurdish, it is clear that the u.s. will need to engage in kurdish-arab issues such as the boundary process. colin mention to the combined security mechanisms where we are working with the iraqi security forces and the cashmore got forces to build confidence. there will be metrics -- iraqi
security forces and the peshmerga forces to build confidence. there will be metrics for those. >> please wait for the mike, because we have so many cameras. >> associated press. in response to the last question on timeline and all, are you saying you cannot foresee any circumstances in which the removal of troops, gradual removal of troops, at specific dates would be -- of the process would be halted? similarly, you took today's attack as evidence that there are elements in iraq that want to create the image that the united states is being driven out of iraq. isn't it the united states being driven out of iraq, by the american public, for one thing, rising casualty rates.
i wonder if the police forces of iraq are professional. you are returning to the days when police forces in iraq acted in a traditional way. certainly not saddam hussein's time but i wonder when iraq was an example of good behavior. >> act like, what i said was it is not my call. the president of the united states is the commander-in-chief and will make the decisions based on the recommendation of his commanders, secretary of defense, and other advisers. i was indicating was that there would be a number of -- what i was indicating was that there would be a number of warning signs that i would like that, but i did not anticipate that any of those would come to bear. the rest is all hypothetical. if a meteor hit iraq six months from now, it would change things, but i would not publicize how it might change those things. -- i would not prophesies how it
would change those things. our redeployment has been in some sense self-imposed. it was the most through eight -- it was a bus through an agreement that the last administration had with the government, and these this ellicott was outlined by president obama -- and the specific condor's outlined by president obama at camp lejune. iraq is that the hot-button political issue was in the fall to dozens it -- iraq is not to the hot-button political issue that was in fall 2006. there are not polls or demonstrations or other things driving the current tempo. what is driving the current debt of is the policy positions that it -- what is driving the current tempo is the policy positions of the current administration. of course, u.s. casualties in iraq have not searched -- s
urged. last month, there were two. we have had a number of months where there have been zero or one. we are at our los casualty rates. it is still a dangerous place for our men and women, but less than before. >> saddam hussein did not use the traditional police, blue uniformed police, for his methods of control. he had other ways of doing it. there was a traditional iraqi police institution that was respected and was the predominant element in controlling crime. iraqis want to see that back, we want to see the back. we will work on that. we have got to the national police and the terms of professionalizing, and we need to do that with the local
police. performing the contents of a police in a traditional society -- performing the functions of police in a traditional society where crime is different. we're not an instrument of saddam hussein's control. >> barbara slavin, independent journalist. i wanted to probe a little bit more on the iran question, which you did not go into any great detail. he said that iraqis are resisting iranian influence, but they still lead a veto over the next prime minister will be. do you agree with that assessment? do you think that certain groups are laying vote because they are happy with the u.s. withdrawal and they do not -- laying low because they are happy with u.s. withdrawal and they do not want to interfere with that?
and why is it that the arab world still does not really re embraced iraq, particularly the gulf states? can you imagine iraq being part of the gcc? >> i think the record shows that iraq is the standing up to foreign influence. when you look to the efforts that iran has pushed over the last few years, including resisting the security agreement with the u.s., they pushed very hard to stop that, and they pushed hard for referendum for the iraqi people to vote down the security agreement, and there has been no mention of that referendum in the last year, you will see that the iranians and the parties and they have supported have been pushed back quite effectively by the iraqi authorities. remember the prime minister maliki it launched the attack against the jaish-al-mahdi in
direct confrontation with the iranian authorities that were supporting these groups. muqtada al-sadr lived in iran. he does not live in iraq. this is not just about iran. this is about all foreign influences in iraq to turkey -- all foreign influences in iraq. turkey -- there has been a dramatic change in turkey's influence in iraq. they address this not just for armed invasions. as recently as spring -- they address this not just through on the nations, as recently as spring 2008, but working throughout the government. the turks were not going to recognize the kurdish of the race in the north at all. iraq has pushed back on turkey. as work with jordan and if you look at syrian influence in iraq and the spats that have gone on, we see how iraq is standing up for itself. to show how iraq may be being
integrated in the arab world, it may have had little fanfare, but they were given the chairmanship of the summit of the arab league. this is an important symbol for iraq in terms of being reintegrated into the arab world. there were efforts in tripoli to prevent iraq from getting what it argues is its rightful the arab league summit. i think there is evidence to show how iraq is standing up to its neighbors. >> i don't think there is an iranian veto. they tried to smash the two shia coalitions together before the elections of failed. that's not been successful doing that. they had used every arrow in their quiver. i don't think that they have
overwhelming influence or hegemonic influence in iraq. that is largely because iraqi nationalism is a powerful antidote to iranian influence. there are other states that want to have good relations with iraq, not just iran, and that tends to counterbalance iranian influence. last but not least, because the vast majority of iraq's prominent political players want a partnership with us, that is inconsistent with being dominated by iran. it is an indication that the iraqis have one set of preferences, a long-term partnership with us, not at the exclusion of iran -- they want a healthy diplomatic and cultural relationship with iran, but they don't want to be dominated by their neighbors, either and they want a long-term relationship with us. the last point of are they just laying low -- i adding that is
probably misreading the situation. -- i think that is probably misreading the situation iran had to fundamentally weak decollate -- iraq had to fundamentally recalculate its relationship with iraq in 2008. they nearly brought it to an intra-shia war in 2008 and that is not in their interest. they understood that where they could dial it up, they would receive enormous pushback from the iraqi government for all the reasons i just mentioned. >> gentleman standing in the back. >> stephen biddle from the council on foreign relations. i will dial back the customary three questions to two. i'm curious about our guest's assessment of the sons of iraq program at this point, and especially the degree to which soi's leadership believes that their security can be preserved
--the united states cross a 20 draws down to zero. in the context of the status of forces agreement, there has been discussion of the state department's interest in alternative means of security for the country as troops brought down, and that the presence might involve private contractors. especially given the degree to which private security contractors are unpopular in iraq, i am curious to what degree you believe that we can secure the kind of civilian presence we walk in the country as the u.s. security presence itself draws down. >> those are great questions. i don't have exact figures in front of me, but i think it is about half the sons of iraq have been integrated either into isf
or civilian jobs. the integration process slows down in the lead up to the national election because the iraqi government came to the reasonable judgment that it was good to keep some of these guys at their checkpoints, especially in baghdad and some other places, for security reasons in the lead up to the election. we were frozen a little bit in that period. it will probably take a little -- it will probably take a new iraqi government and commitments to employ these folks in civilian or security ministries. you will not get the next major movement in terms of integration prior to the next iraqi government being stood up. on the other issues, look, there are definite grumblings. the sons of iraq leadership complained about late payments. the iraqi government has been doing better on that, but they are sometimes 30 days behind and nobody likes to be paid late. periodically some of these guys are rounded up and detained. when can conjecture about
whether that is politically motivated. i don't want to guess about that. i think of it is that some of these guys are bad guys. not the vast majority of them, but some of them are. when there are warrants out for their arrest, those are executed through the rule of law and it is but it is. in general, the little of dissatisfaction among the sons of iraq is not nearly -- bill level of dissatisfaction among the sons of iraq is not nearly the threshold where it would trigger warning signs. >> this is something that the state department is uniquely focused on. this is where we have to protect our people and he ensure that they can do this since -- and go out and ensure that they can do the missions they have done. private security contractors are not viewed with such propulsion by the iraqi people and our lack of -- with such repulsion by the iraqi people and the government like they were before, because we have the signing of the
security agreement. the private security companies to sign up with the licensing process agreed to cooperate with the ministry of interior and with the iraqi security forces and are doing for well, thank you, in iraq. they have good relations. the oil companies going into southern iraq are working with them. the problem is that they thought the u.s. presence in military presence was going to last forever and reduced to work with iraqi officials. the security contractors are a fact of life in iraq, given the security situation, and those operating in other places around the world are working with government officials. after the black water incident -- blackwater incident, we had a much tighter circles on the security contractors and that its bid reflected in the contractors operating in iraq. as the military withdraws and all the capabilities theat
they provided, we will continue with a system where we have the regional security officers in diplomatic security working with private security contractors this has been successful prepare. -- this has been successful. in baghdad, after the withdrawal from the city, all of our movements were done by private security folks. we are moving to a situation where we are already transitioning and working with iraqi authorities on a that. security is a huge expense, a mind-boggling expense, it requires changes in basic philosophy. diplomatic security tries to keep us out of harm's way and i appreciate that. we are in harm's way in iraq and we need to go out into our missions from our embassy branch offices and consulates. this is far above what we
budgeted for in the past. we have had to recalculate what it costs as we go along and look at all that the u.s. military has provided. but we are going to do our missions and make sure that we have the capability of doing that because this is so important to having this engagement with the iraqis as we go forward. >> yochi drezen, "national journal." two quick questions. does the iraqi constitution or subsequent loss past -- subsequent laws past offered any guidelines for the new government court election or formation of a government? you mentioned the very compelling statistics about iraq -- about violence in iraq, but the surge was not sold solely as a means of reducing violence,
but to create space for reconciliation and government control. instead, here we have a situation where one block is predominantly shiite and other out in large part because it was slurred by being referred to as a soon night party. -- is still as -- referred to as a sunni party. there is still the government after all these months. >> first, on the constitution, the iraqis have partially met the only goal in the constitution, that the council of representatives was supposed to meet 20 days after the election results were certified. arey did do that arnd now in open session. the president and speaker of the problem are supposed to have been elected after the 20 day period and that has not happened.
there aren't c-span.org are so -- the president and speaker are supposed to have been elected after the 20-day period and that is not happened. after going through the certification process, they want to see a government formed, and we believe there will be growing pressure from the iraqi people to have political leaders be responsible. i would say that the discussions that talks are breaking down, forming alliances, breaking of alliances, are all signs, recently, of increased seriousness by all parties in the political process, and incoming, to form a government did they realize the pressure they are under and they are in significant discussion to form a government. >> i am not sure i would frame it in terms of whether the surge was successful or not. i will leave that to historians. i think there were elements that certainly paid dividends -- a combination of troop increases
and changes in strategy, etc. separate from your basic question, which is really about whether we had true national reconciliation in iraq, i think it is a work in progress. you have seen kratovils -- you have seen periods before the election were there was a lot about accountability and the revamped de-baathification, and in the aftermath of the election, you have seen some of the rhetoric reemerge, although it is not dominant. one reason some were offended by thate minister maliki was they framed it as sunni party, and they felt he was using esoteric label to describe them. while there is -- using a sectarian label to describe them. while there is that element, the underlying political process is
the most important aspect. as long as it stays committed to the political process, the sectarian divisions from 2006 and 2007 are not likely to re- emerge. we think that there are real principles at stake about inclusion in the new government and the next government should be inclusive of the major that no-sectarian communities in iraq -- major ethno-sectarian communities in iraq will be focusing on arab and kurdish issues not only leading to the drawdown, but beyond. a number of our branch offices will be up there. i really do think that we have surprised many iraqis by living up to our commitments, that we surprised them by pulling out
of cities, surprised them by continuing the drawdown, surprising them by hitting the targets set by the president. all that has done is it means when we say things, we me -- it -- what that has done is it means when we say things, we mean it. why we're having important influence -- one way we are having important influence and iraq is that we're not seen as having one party's interests at stake, but iraq's interest at stake. >> could you tell us something about their judicial and legal system, and how that is evolving in this creation of this new country, so to speak? >> great question about the judicial and rule of law, something we are very focused on it.
when i mentioned that the police are not an instrument of the saddam hussein's repression, the judges -- iraq is famous for 4000 years of history of a judicial presence. judges were an institution that had a limited role hundred saddam hussein but were respected. we are working to -- regard -- limited role under saddam hussein or respected. we're working very hard to address one of the other challenges we face, corruption. the schedule of oil revenues and we have to keep working -- corruption -- this country will have oil revenues and we have to keep working to reduce corruption. and we see the judge's and the development of a judge training programs as something that we're working on very effectively. this will be a priority as we go forward and is a priority for the iraqis. the judges did rule that the elections were valid.
they did set up to some political pressures -- they did stand up to some political pressures. we see to it is playing a positive role in the future of iraq -- we see judges as playing a positive role in the future of iraq, but it is something that we have to work on all the time . >> university of mary washington. for colin kahl, you mentioned that iraqi security forces are not yet able to protect their own aerospace bid if 1 regional power attacks and other regional power and uses iraqi airspace, is the u.s. air force tasked with the pending that airspace? for michael corbin, is there any initiative being discussed for a multilateral initiative for the area which would include syria and possibly iran? thank you.
>> can i take the easy one first? >> sure. >> water is a significant issue throughout the middle east and a growing issue that the state department is focusing on. the secretary of state is interested in this great what we're doing now is supporting iraqi efforts to work with the turks and the syrians and iranians on getting water into, because of this very important agricultural resources that the iraqis have. all of these countries are hesitant about multilateral approaches because they want to divide the water up themselves, and they are concerned that the more players there are, the more difficult and will be paid but we see areas where there can be cooperation and we think that this is one of the tools where iraqis are concerned with iranians, who have cut off large parts of the water to diyala province that has greatly impact on agriculture there. we will look for a multilateral elements, but we know that the
iraqis have gone directly to the turks and talked directly to them. there is in progress and the stocks, has been watered let go by that -- turks -- there has been progress in peace talks, there has been water let go by the turks, and you will find ways because water has been a source of conflict without question in the past and in the future. >> you are so good at asking questions. i am not really going to comment on the prospects about 3 -- prospects of a third-party strike into iraqi territory. you can read this month's "atlantic monthly" to dig deep into that question. part of it is a commitment by us not to use iraqi territory to launch attacks against other countries. the agreement itself does not speak specifically to the scenario you are talking about. beyond that, i do not want to
invest in a hypothetical that -- i just want to talk about that. -- i just don't want to talk about that. [laughter] >> voice of america. you mentioned a lot of social and military changes that you are seeing as positive signs. what do you make of the statement that the iraqi military chief does not think forces will be up to speed until 2020? and how much work to use the needs to be done regarding the perceptions created --, to work needs to be done regarding the perceptions created in -- how much work needs to be done regarding perceptions created in the muslim world with the invasion of iraq? >> given that we are not going to stay in the indefinite future, the value of our partnership with it the iraqi military, and as we have partnerships with other militaries around the middle east, is a significant.
those include training, exercises, weapons sales and coordination, and are important for the military's of the middle east. i think the iraqi chief of staff's comments were reflecting the other institution that was clearly damaged by the saddam hussein but that is important in iraq, the iraqi military. they want to build their place as part of the political spectrum. we want to build place as part of the spectrum that has not played a role in politics, as we see with our long partnership with the egyptian military. we want to see those relationships strengthened. in terms of what colin said about keeping our commitment, this the first step in improving our relationship with the rest of the arab world in terms of what you're doing in iraq. that is why we at the state department are so keen on building the civilian diplomatic traditional relationship that we share with
so many other partners in the middle east. and the signs that we do this, as we keep our commitments on the military front, we think we're headed in the right direction. >> our goal at our strategy has been designed around trying to help the iraqis achieved the minimum set of capabilities by the end of 2011 for internal defense and the foundation for external defense. the judgment of folks on the ground training and advising iraqis is that if we get the resources we need to complete the mission, and i talked about a $7.9 billion, of which there were $4.1 billion in minimum essential capabilities, and w -- of which $3 billion was requirement of additional support from us to the iraqi security forces, and if we get those resources we are fairly confident that we will be able to keep the men among a set of capabilities for a total offense and the foundation for external defense. -- i say that -- mum set of
capabilities for internal defense and the foundation for external defense. isr platforms, being able to move troops around, small aircraft, those things. iraq is at a dangerous neighborhood, sorted by countries that it has had -- surrounded by countries that it has had hostilities with. there are concerns with iraq's airspace, which is one reason iraqis have expressed an understandable desire to have a relatively small number of aircraft, particularly uf-16's. that is sending me what to work with them. the security forces are not to be this thing that is just done. our military is not like that.
it will be a work in progress. will they be in a place where they can take over primary responsibility for the country by 2011? i think the judgment is yes. will they continue to need assistance for some period of time? until they are exporting millions and millions of barrels, they will probably need some assistance from us. >> we have time for one more. but ladies and joan, please join me in thanking -- ladies and gentlemen, please join me in thanking michael corbin and colin kahl. [applause]
>> funeral services for former alaska senator ted stevens will be held today in anchorage. he died last week in a plane crash on the way to a fishing trip in alaska. attendees will include vice- president joe biden and senate minority leader mitch mcconnell. we will have live coverage on c- span. look atontinu t president obama. "new yorker" editor david remnick writes about the life and political career of the president in "the bridge." and talk radio hosts laura ingraham and her thoughts on the administration with "the obama diaries." >> how our new financial regulations going to impact investors? "washington journal" tries to
answer the question tomorrow morning at 9:00 a.m. eastern, part of its series this week on the new law going into effect. tomorrow, provisions aimed at preventing a future financial crisis, here on c-span. on c-span2 tomorrow, the congressional budget office updates its 2010 budget projections and the economic outlook for the rest of the budget year. you can see live coverage at 11:00 a.m. at 1:00 eastern, at new orleans mayor mitch landrieu talks about how new orleans is staring at five years after hurricane katrina. you can see live coverage on c- span2. last may, a house judiciary subcommittee on crime look into fraud against senior citizens. witnesses addressed mail, telemarketing, and internet scams that target seniors. it is about one hour 20 minutes.
>> i am going to begin with my opening statement. we decided votes called, and once they begin with votes, -- we just had a votes called, and once they begin with votes, it will be about an hour and half before we come back. the subcommittee will come to order. i think it may make sense to give the opening statement when we come back. let me go, without objection, to our two witnesses who are here so that they will not have to come back. we recognize the gentle lady from wisconsin, second district of wisconsin, hometown is
madison, serves on two the committees on energy and commerce and sits on the judiciary committee, and a colleague from north carolina, mr. coble, who was a member of this committee and also serves -- who is a member of this committee and also serves on at the transportation committee. we will begin with ms. baldwin. >> thank you, mr. chairman, and members of the subcommittee, for allowing me the opportunity to testify today. i think it is appropriate that we're convened to consider and discuss this legislation during the month of may, which is elder abuse awareness month. i want to thank my colleague from north carolina, mr. coble, for his leadership on this issue. i also want to extend my thanks to your panel of expert witnesses who will follow this
panel. my own experiences on this issue began as a primary caregiver for my grandmother. that experience opened my eyes to the troubling exploitative tactics targeted at america's seniors but growing up in wisconsin, i was raised by my maternal grandparents. but i went away to college, i returned to my hometown of madison to be there for my grandmother, who by then was widowed. she had sacrificed so much to raise me, and eventually i became her primary caregiver. another time she turned 90 years old, she asked me for a little help sorting through her mail and balancing your checkbook. at first i was struck by the sheer volume of solicitations she was getting. i was also shocked by how many fly-by-night or look-alike charities were writing her on a monthly basis. their pleas for donations
looked and sounded legit, but i had my suspicions and i started digging a little deeper. i was also concerned by the amount of money my grandmother was giving to these entities. she believed that those able to do so ought to be as interest -- ought to be as generous as possible to those in need, but she had no way to determine the legitimacy of those contacting her on a regular basis. that opened my eyes to the very real exploitation of seniors like my grandmother through mail, telephone, and internet fraud. millions of americans had become the victims of similar financial exploitation each year. it is not just the isolated and lonely who may fall prey to these sorts of practices. one only need read the newspaper in my home district in wisconsin to confirm that this issue is quite widespread. over the years there have been ongoing reports about schemes were social security beneficiaries born between 1917 and 1921 are asked to send money
to organizations that promise to change federal law us to increase benefits. these organizations go so far as to ask seniors if they would like their federal money and a lump-sum or to pay them a monthly installments. just last month in madison, it was reported that an 84-year-old madison woman was duped out of nearly $3,000 after a phone scammer convinced her that her granddaughter's boyfriend was in a canadian jail and needed bail money. madison police officers reported thaty thist -- that this woman received a phone call from a woman who called her grandma. officer jacob harris joined the telephone conversation am convinced her of the need for bail money for her granddaughter's boyfriend. this elderly woman wired the money and fell victim to a disturbingly common scam. i also read that not days after
president obama signed the historic health care reform bill into law, fraudsters were figuring out how to scam seniors. a cable tv advertisement encourage viewers to call an 800 number so that they would not miss a limited enrollment opportunity to obtain coverage. there have been reports of scammer is going door-to-door as salespeople peddling obamacare insurance policies. we all know that there is no limited enrollment period for any of the coverage in the health care reform bill, and no such thing as entrance policy named after the president exists. -- as an insurance policy named after the president exists. it is difficult to estimate the prevalence of financial exploitation cases due to severe underreporting. according to a 2009 report by met life, for every report of
abuse there are an estimated four or more that go unreported. we do know some facts, though. the same study found that the annual financial loss of senior financial abuse is estimated to be at least $2.6 billion. in 2007, postal inspectors investigated almost 3000 mail fraud cases in the u.s. and arrested more than 1200 mail fraud suspects. further, the fbi has confirmed that criminals are modifying their targeting techniques to include online scams such as fishing and e-mail spamming -- phishing and e-mail spamming. mr. coble and i introduced the senior financial empowerment act with a very precise goal in mind, empowering seniors and ending all abuse, neglect, and exploitation of america's eldersburg it built on -- bu exploitation of america's
elders. in a palace agencies to support local and state ever is to combat financial fraud and empower our seniors. we seek to accomplish this in three specific ways. first, creating a centralized service for consumer education on mail telemarketing and targeting seniors. second, it award competitive grants for locally focused internet fraud prevention and education programs for seniors. finally, it declares that the week and month of may, elderly abuse awareness month, should be declared as national senior abuse fraud week, and encourages the president to issue a proclamation supporting increased public awareness. as i wrap up my testimony, i want to commend you for your longstanding commitment to america's seniors. when i saw my grandmother through the last years of her life, i made a pledge to help make sure that older americans
have the tools that they need to protect themselves from those who would prey on them. mr. chairman, members of the subcommittee, my sincere thanks for helping this through. i believe this represents one of the best examples of what a bipartisan collaborative committee process should look like. thank you. >> gentleman from north carolina. >> i would like to ask that my statement be made part of the record. >> without objection. >> thank you, sir. >> at this point we will recess the committee and return as soon as the vote is over, at least 15 or 20 minutes. recess.
the committee will not come to order. i am pleased to welcome you to today's -- the committee will now come to order. i am pleased to welcome you to today's hearing on h.r. 3040, the senior financial empowerment act of 2010. the testimony on the importance of this bill and the issues that is becoming the crime of the 21st century, elderly
financial abuse. on june 29, represented its chemical and and howard coble introduced h.r. 3040, -- rep tammy baldwin and howard coble introduced h.r. 3040. it was introduced primarily to address the need to educate and inform the public of the predatory practices unscrupulous individuals who prey upon the vulnerabilities of our elders. ours is an aging society. at one time, the elderly population with a small, and now it is significant and growing. adults aged 60 or over represent 6% of the u.s. population in 1990, and now represent over 17%. the number will continue to climb as the baby boom generation ages. this whole segment of our population owns the largest portion of the wealth in the united states. they could show at least 70% of the net worth of the nation's households, -- control at least 70% of the net worth of the
nation's households and often do not realize that the net value of their homes has appreciated significantly. they are inviting targets for those who would seek to defraud them of assets and future security and their life savings. it has been difficult to estimate the prevalence of elder fraud. cases are under reported at the definition of elder and senior varies from state to state. although we currently lack national reporting mechanisms on the exploitation of elders, it is clear that we had a real problem in this country. according to a study, a financial abuse approximated call% of all older abuse reported nationally in -- 12% of old elder abuse reported nationally in 1993 and 1994. many experts believe that the level of elder explication may
well exceed that which has been reported to authorities, because many who fall victim to financial exploitation, including mail, telemarketing, internet fraud each year are seniors who fail to report, either because of the embarrassment of the fear of being deemed incapable handling their personal affairs. with the present state of the economy, older americans are at greater risk than ever of having their financial security threatened and disrupted. fraud perpetrated against seniors is a crime that can have a more significant impact on its victims because they are often incapable of recovering financial -- from financial losses. they often don't have the years left to recover and rebuild financially. many are too old or too frail to re-enter the work place. for every dollar lost, there is unrelated costs associated with stress and health care. it goes bad people losing
dollars for everyday living. -- goes beyond people losing dollars for every living. it is increased cost to medicaid and medicare. a met life mature market study -- senior fraud abuse drugs seniors of billions of dollars every year. one estimate puts it at a low of $100,000 to a high of $1 million a year. this is a matter of urgency. financial abuse and fraud will become more commonplace as a consequence of the changing demographic in the united states. 2007 -- in 2007, of consumers reporting their age, versus 50 years of age, while almost 50,000 of the 130,000 complaints. in 2009, that number rose to
almost 150,000. action on h.r. 3040 is urgently needed. it is another tool in our arsenal of weapons to combat this serious offense. i have also raised concerns about the growing problem of identity theft. according to the federal trade commission, the consumer sentinel database, identity that is the no. 1 consumer complaints -- identity theft is the number .ne consumer complaint identity theft affects as many as 9 million americans annually. this bill, when enacted into law, will be part of a continuing effort to educate consumers of the need to protect their personal information. the consequences of identity theft and be severe. the victim was a good name is tarnished and financial loss and aesops -- the victim's good name
is tarnished and financial loss can be substantial. for an older person in the 70's or 80's, the effects are especially devastating and time can be more crucial. we have to have greater enforcement of the laws on identity theft, and that means that the fbi cannot opt out of an investigation simply because monetary loss is too little. this requires premeditation and delivered intend to cause personal harm with no regard for the victim. the penalty for these crimes already provides sufficient jail time, but penalties must also include fines to make this act financially painful for the perpetrators. penalties are meaningless if the crimes are not prosecuted. we frequently hear that one problem is that crimes are not even investigated. if the fbi's ability to investigate and prosecute these crimes is influenced by budgetary constraints, that is something we need to hear about from the fbi.
but the decisive enforcement a prosecution is needed and long overdue. in today's hearing occurred representative baldwin and rep coble -- we have heard from representative baldwin and rep coble on the financial protection act to protect senior citizens from prod through telemarketing and internet through public education and prevention. from the panel we will hear shortly, we will hear what this passage is needed and how it will not only facilitate mechanisms reporting fraud, but will for the effort to provide greater protection to seniors and the general public as a result of increased public awareness. it is my privilege to recognize the ranking member of the subcommittee, my colleague from texas, judge gohmert. >> thank you, chairman scott, and i appreciate the witnesses being here.
obviously, you have been delayed substantially because of the vote. i have a statement here that is in writing, and i would ask that it be submitted it to the record. >> without objection. >> otherwise, i am a co-sponsor of this legislation, and i appreciate some much ms. baldwin's sensitivity in putting this legislation together. it is a huge problem in america. seniors become more and more of on a roll -- more and more vulnerable, and it seems we have entered a time when people's minds to not last as long as the bodies -- do not last as long as their bodies. as my friend chairman scott said, it is going to just keep growing. we appreciate you being here and hearing what you have to say. thank you, chairman.
>> thank you. this panel of witnesses will begin with w. lee hammond of salisbury, maryland. he was recently elected aarp board of directors to serve as president for the 2010-2012 biennium. since his election to the board in 2002, he has served on insured several aarp committees -- served on and chaired several aarp committees. he served as a school administrator for 25 years and has the leadership roles in several professional associations. in addition to his service with aarp, he serves as a member of the maryland interagency committee on aging services and is vice chair of the board of mac inc., a non-profit area agency on aging serving four marilyn counties.
-- four maryland counties. he earlier was a volunteer -- his earlier volunteer service included a two-year member of the maryland commission on aging. second witness will be bob blancato. he is president of a full- forice firm wants to shif-- on strategic consultant and college and management. he is the national corp coordinator of the national justice commission. from 2000 to 2006 he was president of the national committee for the prevention of elderly abuse and remains on its executive committee paid his exhibit director of the national association of attrition and
agent -- he is executive director of the national association on nutrition and aging services. he was exhibit of director of the 1995 white house conference on aging and on the policy committee for the 2005 conference. most recently he was appointed chairman of the commonwealth council on aging by gov. tim kaine. he has a bachelor of arts degree from georgetown university and masters of public administration from american university. he is on the at the difficulty -- the advent of faculty -- adjunct faculty at the university of maryland-baltimore county. the third witness was going to be introduced by our colleague from texas, mr. poe, who was with us earlier but had to leave. latifa ring is a grassroots
elder rights advocate from houston, texas, founder of the elder abuse and guardianship task force for change, which it submitted a proposal to leaders in washington for guardianship system abuse. she recently founded the elder abuse victims advocates. she was born and raised as an orphan in north africa and came to the united states in 1974. she spent the last 30 years working with the computer technology industry and is now an independent consultant when she is not working on elder abuse issues. she has a passion for dealing with elder care issues, which stems from her own experience over the past five years caring for an elderly mission every woman who was raised as an orphan in north africa and was a victim of abuse and neglect in a private home in delaware. she is a member of the although the justice coalition and as a
member of the national guardianship a cessation and of various -- national guard and a suspicion and of various organizations that address these issues. she has a degree in biology. she is joined by mark glasser, who apparently will not make a statement but will answer questions. >> good afternoon, chairman scott, congressman gohmert. on behalf of millions of aarp members, we thank you for convening this hearing on protecting the financial security of seniors. financial abuse of older americans is a serious concern, and aarp is committed to educating our members about financial abuse so that they can avoid it. through our tuition and outreach financial security team -- education and outreach financial security team, we educate retirees about how to spot misleading info about
financial investments. we provide members with checklists about what to listen for if they wish to attend investment seminars. members can report any concerns about the presentation to aarp and their state regulators. we have long been advocates for a robust regulation of financial products to protect the hard- earned retirement nest eggs of millions of americans. to that end, we have been strong supporters of a financial regulatory reform and in particular have worked hard to ensure that brokers are subject to the same fiduciary duty that must be met by investment advisers. h.r. 34 -- h.r. 3040 is another step that encourages the bipartisan commitment to protecting older adults from financial abuse by various deceptive techniques that undermine their financial security. although financial abuse has been described as the fastest growing form of elder abuse, too few studies have been conducted
on its incidence and prevalence to revive the accurate picture of the number of the victims. -- to provide the accurate picture of the number of the victims. protecting elderly people from abuse is stymied by inadequate resources and enforcement laws designed to protect such crimes. many victims are reluctant to report financial abuse. many may not know where or how to report such exploitation and to what extent the right law enforcement agency receives the complaint. it may not have the resources to adequately protect individuals from fraud. telemarketing fraud is a major concern for older people, who are particularly vulnerable to certain types of fraud, including magazines scams, prizes and sweepstakes scams, and phishing. consumers have registered 40.4 million phone numbers on the "do not call" registry, and