Skip to main content

tv   Capitol Hill Hearings  CSPAN  January 26, 2012 1:00am-6:00am EST

1:00 am
at the border? >> the ahead and finish. >> out is not involved it that. >> year recognized for three minutes. -- you are recognized for three minutes. >> what concerns about me it's getting it back on track. the >> canada is a strong friend, maybe one of the best friends of america in the world. canada had been trying to get this project done for over three years. is it true that canada submitted their application for this keystone xl pipeline back in september 2008? >> the trans canada company
1:01 am
submitted it. >> the president said this time and time again, he did not have enough time. he had 20 months. if you look at their original keystone pipeline, it was approved back in 2008 after less than two years of review. it does not take 40 months to review project like this. at some point in time have to decide if you are going to fish or cut bait. that is what congress decided in a bipartisan way. it is one of the few things we actually came together on an agreed, mr. president, stop wasting time, stop delaying the project for political purposes and make a decision, yes or no. back in august of last year, it all said this is something you should do. when asked about improving the keystone pipeline in 2010, then
1:02 am
you get to august of last year, were you all came out with your report and basically said this is something we should do. we don't see any real problems with the keystone pipeline. there would be no significant impact. that was the state department on keystone back in august 2011. what happened after that? in november, there was a big rally at the white house. you have and daryl hannah i got arrested, a lot of radical laverne list said do not approve the keystone pipeline and threatened his re-election. three days after this rally, the president reversed his course and said we will push the decision on keystone until after the election. he is the one who gave the arbitrary date, not because of environmental reasons, because of political reasons. the radical environmentalist did
1:03 am
not want this thing approved. canada said, we cannot wait this long. china wants to do something. they want to participate with us. instead, the president said no, we don't want the job, let china get that oil. then we go to the statement by the prime minister of canada who said they are profoundly disappointed with this decision. >> we are down to three minutes because we have votes on the floor and we are running out of time. >> we have been repeatedly told that we need to get over the concerns about pollution and the environment because the oil coming through this pipeline would enable us to reduce over dependence on oil imported from unfairly middle eastern nations. the transcanada application states that the pipeline will serve the national interest of the nine states by providing a secure and reliable source of canadian crude oil to meet the growing demands of refineries and markets in the united states. however, citing plans by gulf
1:04 am
coast refineries with whom transcanada had entered into long-term sales contracts to re- export diesel and other fuels based on the keystone crude to latin america, europe, and beyond. nearly all of these refineries where the keystone crew will be sent are located in port arthur, texas, which is designated as a foreign trade zone. this means that these refineries -- they would not even have to pay u.s. taxes on these exports. earlier this month, the canadian prime minister said that when you look at the iranians threatened to block the straits of hormuz, i think that just illustrate how critical it is that supply for the united states to be not american. but in december when i asked the president of transcanada whether he would agree to ensure that the oil and refined products they hear in this country instead of a three exporting it, he said no, sitting right at
1:05 am
this table. in other words, if the permit for the pipeline is legislatively mandated by this bill, the u.s. may just become the middleman for shipping products made from some of the dirty as crude oil on earth to foreign markets around the world. secretary john, does the process the administration is following to determine whether keystone xl was then the in -- the national interest, whether the project would reduce dependence on middle eastern oil? >> that is one of the considerations. >> if the republicans had not force the administration to deny the permit because it was not given enough time to review it, the administration could have issued a permit the required the keystone oil to be sold only in the united states. isn't that right? >> i am not sure ofdax . we would have to study that. i don't think we can restrict
1:06 am
exports big cracks that could be in the national interest. is that correct? to keep the oil here? >> we would have to study it in regard to exports. >> could it be in the national interest to keep the oil here? >> it would certainly be a consideration. >> we never got a chance to look that. the republican legislation provide explicit authority to issue permits -- does it contain that provision? >> i did not see that. >> i do not see that there. >> make no mistake, i think this is a pipeline -- >> [unintelligible] we are going to have to go down to 2 minutes, because we have four minutes left on the floor and 312 people have still not voted and i want everyone to have an opportunity to say something. >> i will be quick. we all know the benefits of the
1:07 am
keystone xl pipeline. 20,000 jobs, energy for canada, national security and energy security. as a formal naval -- former naval aviator, we flew through the straits of hormuz. i have a new perspective on iran. we all know that iran was threatening to close the strait. stopping 30% of the world supply of oil from getting to market. i cannot expand upon this enough, but that is a very real threat. the streets are narrow, about 9 miles wide in some places and they are shallow. if a vessel would sink in the middle of the straits, it would be blocked for months, if not years. in fact, three of our 11 nuclear-powered aircraft carriers have been deployed to
1:08 am
the region because our commander in chief sees the threat as real. the state department has a history of approving new pipelines in the interest of national security because of political tensions. but it -- most recent example is the problem in the mid -- midwest part of the united states. let me read you a section from the record of decision for the alberta klipper pipeline. the prostate has determined review of the alberta clipper project an application that the alberta clyburn project would serve the national interest. a time of political tension and other work major oil-producing region of the country by providing additional access to approximate stable and secure supply of crude oil with minimal transportation requirements from a rival allied trading partner of the united states which we had free trade agreements that further augment the security of the energy supply.
1:09 am
why is the situation now different? yes or no, mrs. jones, is the situation now more dire than it was when you approve the alberta klipper pipeline? yes or no? >> energy security is still a major priority for this country and this administration. however, we did not reject this project on the merits. it was an issue that we did not have time. those considerations to raise would be considered if we had the entire it theater had time to conduct a process we feel the american people need to have for this pipeline. >> your time has expired. >> with all due respect, you changed your mind. >> to some quick questions and perhaps you could just respond in writing to us rather than take time. could you submit to us in chronological order the process when it began in september of
1:10 am
2008. why in god's name it would take a three-point five years? private-sector firms would be fired for taking that long to go through process. can you get back to us as to whether the railroads in montana and north dakota and oklahoma, are those captive railroads? i don't know whether they are or not. do you understand the term? >> we will have to get an answer back to you. >> i am asking if for the record if you would get back to us on that, whether or not these are captive railroads. can you also respond to the editorial that was in the investment business daily that on november 16, in which the editorial board there is trying to -- suggesting that there could be a link between the railroad systems and this
1:11 am
decision, especially given that it is a political decision. we all know that. anyone who posts on this until after the election is already crying out this is a political decision. since they are linking get to two major individuals, global figures, i would like to understand your response back to that, or perhaps even the person that made the ultimate decision to cancel this project, because it was not based on the time frame, we understand that. i think the american public is going to come to understand that. if you would get back to us in writing, i would appreciate it. >> is job creation the number one national interest? yes or no. >> yes. >> does this balkline create jobs? a yes or no question -- does this pipeline create jobs?
1:12 am
you recommend not moving forward with the pipeline? flea acted at odds with the number one national interest. >> we were reviewing the job situation and the economic issue is part of the process. >> i want to go back to this final internal impact statement from august 111. among the other alternatives, it considered a no action alternative. yes or no. >> yes. >> expressly -- >> there's more to that. >> the part of state does not regard the no action alternative to be preferable to the proposed project. the reason you concluded that, all things considered, transporting the oil in a state of the art pipeline is better than shipping it by rail, truck, and cargo ships, better than shipping it from the middle
1:13 am
east. yes or no. if we delay this, if the white house delays it, we run the risk of no pipeline at all. your delays run the risk of no pipeline. he said jobs are the no. 1 national interest, and yet you said to the white house, we don't want to do this. >> we have to work with the pipeline where we have the route. >> you just said no to this. these delays risk of the killing of this pipeline, so you end up with no pipeline, which is not in the preferred interest as the the parlous state has already said. if you do this, you are going to have none of the jobs. you will kill the jobs. you have none of the energy, and china wins. >> i have one question, miss jones, are you liking any information that you were constrained for time about how this impacted a particular private company?
1:14 am
are you interested in how this might or might not affect any private company, relevant to your decision at all customer >> no, sir. the issue is running through nebraska. >> the issue of how any private company would be impacted is irrelevant to your decision. >> we are looking at the routing as explained. >> it suggested they must have a financial interest in this transaction. this notion that they have an interest there has been shredded. there are many intervenors. the alberta federation of labor, the communication energy and paper workers of canada. this is a silly concept and i want to make sure the record reflects it. it makes no indication of whether any company has an interest in this pipeline at all. with that i yield back my time.
1:15 am
>> i am sitting here curious. the state department keeps talking about studies in nebraska, but isn't your job supposed to determine what the impact is because it is international on the international relationship with our friends in canada? >> because we have the authority for the permitting -- >> i understand you have the authority for the permit, but you got all this done by the agency that would normally do that. it is your job as the state department to focus on the relationships with our foreign friends and not interfere in internal decisions made by other agencies. >> our job in this situation is to look at the entire pipeline for the impact it would have on the country. >> so everything these people did was worthless. >> no sir, that is important analytical information. >> well then, why do you have to redo it all? i really believe this was a political decision. you are not supposed to comment on that, and i understand that.
1:16 am
i believe the president had to delay until after the election. i believe that is what the evidence shows. i am not asking for comment. it means more jobs in the u.s., more profits to the u.s., more taxes paid to the u.s. and more u.s. supply available. all those things are good things, and because you are from the state department, i would say that we have damaged our relationship with a good ally and a close neighbor and friend. to me that seems counter to the purpose of the state department and all this would indicate that everything you all are doing is counter to the interest of the united states of america. i yield back. >> that concludes today's hearing. i want to thank the two witnesses for being with us today and the record will remain open for 10 days for additional documents. some questions were submitted to you all and i would appreciate you getting that information
1:17 am
back to us. thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> in a few moments on c-span, the ceremony for congresswoman gabrielle giffords, who resigned from congress today. in february -- federal reserve chairman ben bernanke who said he does not expect the fed to raise interest rates until 2014. after that, president obama's speech today at a manufacturing plant in iowa. then mitt romney offering his response to the president's state of the union address. >> i do believe that the west with all of its historical shortcomings -- they have to be admitted. for all the shortcomings, the
1:18 am
west still today represents the most acceptable and workable universally workable political culture. >> in 1991, the united states was the only global superpower. today, how to restore its status in the world, from former national security adviser is a big new prosinski on his strategic vision. did fdr used world war ii as a cover to create a more powerful executive branch? that is saturday at 11:00 p.m. sunday night, the new privacy is no privacy. gloria andrews on how your rights are being eroded by social networks. but tv, every weekend on c- span2. >> i had arrived in paris. i walked into the hotel lobby, met general mcchrystal for the first time, and he looked at me
1:19 am
and said, so you are the rolling stone die. i don't care about the article, i just want to be on the cover. >> michael hastings wrote about nato forces in afghanistan. >> i said well, sir, it is between you and lady gaga. he replied, just put me and lady gaga in a heart-shaped tub. i thought, this is a different kind of general. this is going to be a different kind of story. >> several months later, as a result of the article, and general mcchrystal was fired. sunday night at 88 -- at 8 eastern on "q&a". >> the senate intelligence committee holds its annual hearing tuesday on the global threats to the u.s.. witnesses include james clapper, the director of national intelligence, david petraeus,
1:20 am
head of the cia, fbi director robert moeller, and officials with the homeland security department and the national counter-terrorism center. live coverage on c-span, c-span radio, and on tuesday at 10:00 a.m. eastern. >> gabrielle giffords resigned from the house of representatives today, just over a year after being shot in the head in tucson, arizona. she entered the chamber with congresswoman debbie wasserman schultz at the house was wrapping up the boat. members gave their real speeches. [applause] -- members gave a farewell speeches. [applause]
1:21 am
1:22 am
1:23 am
the speaker: any member wish to change her vote? >> does any member wish to change their vote?
1:24 am
the speaker: on this vote the yeas are 338. the noes are 70. 2/3 of those voting having responded in the affirmative the rules are suspended, the bill is passed, and without objection the motion to reconsider is laid upon the table. the house will be in order. members could take their seats. the speaker: for what purpose does the gentlelady from california rise? ms. pelosi: mr. speaker, i ask unanimous consent to speak out of order.
1:25 am
the speaker: without objection, so ordered. ms. pelosi: all of us come to floor today, colleagues of congresswoman gabby giffords, to salute h her as the brightes star among us, the brightest star congress has ever seen. when she came to congress and in her service and leadership here, gby giffords brought to washington and the capitol the views of a new generationf national leader, from this floor she has spoken out courageously and led boldly, at times that demanded both.
1:26 am
since the tragic events of one year ago, congresswoman giffords has become an inspiring symbol of determination and courage to millions of americans. she has brought the word dignity to new heights by her courage. congresswoman giffords' message of bipartisanship and civility is one that all in washington and in the nation should honor and emulate. as gabby said in her video, which moved us all so much this weekend, we cano so much more by working together.
1:27 am
in that vain, mr. speaker, i want to thank you for the courtesies extended to enable this extraordinary ceremony to take place today. thank you, mr. speaker. s with your permission i'd like to acknowledge gabby's mother who is with us today, gloria and her father, spencer, who is watching from tucson. gloria. we thank you and we thank commander mark kelly, a hero in his own right as a astronaut, a
1:28 am
hero in his own right as a astronaut, and commander of a mission, but also our personal hero for the care and love that he has given to gabby over this past year. oh, and before that to help make her as gloria and spencer have the person that she is. i join all, i think all of our colleagues join us in thanking you, gabby, for the honor of calling you colleague and wishing you and mark much happiness and success. you will be missed in the house of representatives, but your legacy in this congress and your leadership in our nation will certainly endure. so thank you for being who you are, for lifting our country at
1:29 am
a very important and sad time and we wish you again much success with great gratitude, of admiration, and affection. we salute you congresswoman gabby giffords. es the gentleman seek recognition on my privilege to yield the floor to the distinguished majority leader of the house, representative cantor. mr. cantor: i thank the leader. mr. speaker, a little more than a year ago america witnessed a heinous attack on congresswoman gabby giffords, her staff, and
1:30 am
the citizens of tucson. this attack to six innocent lives, including gabe zimmerman's. injured 13, and shook all of us in the congressional community and in fact our nation to its core. this attack was a stark reminder that even in this country where freedom of speech and public demonstration are the corner stones of our democracy, citizens and public officials can faceiolence and danger. we will never forget those who lost their life on that fateful day or the brave efforts of our law enforcement community members and a very special intern who responded in the emergency. mr. speaker, i know i speak for all of my colleagues when i say we are inspired, hopeful, and blessed for the incredible
1:31 am
progress that gabby has made in her recovery. gabby's courage, her strength, and her down right fortitude are an inspiration to all of us and all americans. as gabby leaves the house today, mr. speaker, she's decided to focus her injuries on recovery, but she has refused to give up her fight for the people of her beloved arizona and her country. and as such, today, we will vote on her legislation to help secure our nation's
1:32 am
southwestern border. gabby's bill gives law enforcement greater authority to penalize those who seek to do us harm by engagin in illegal activity along the border. i commend gabby for her commitment to work on this and her unwavering commitment to a safer, more secure america. for the past six years congresswoman gabby giffords has served arizona's eighth distct with dedication and dignity. i want to recognize her accomplishments here and thank her staff and their exceptional service, dedication, and, yes, courage, during these difficult times.
1:33 am
mr. speaker, i especially want to recognize her chief of staff, pia i know having met with pia personally, her having worked with our office, she has demonstrated incredible dedication to her co-workers, to you, gabby, and, mr. speaker, she has demonstrated unparalleled leadership for the people of the eighth district of arizona. that i know they are and we
1:34 am
are very grateful. on sunday, mr. speaker, i received a call from captain mark kelly, as we all know gabby's husband, who informed me of gabby's decision. mark has been steadfast in his support of his wife and forever by her side as her bes friend and partner. though gabby may be leaving washington today, i know this won't be the last we see of her or mark. we wish you, gab, we wish mark together the best as they continue the process o gabby's recovery. i will say once again, mr. speaker, congresswoman gabby giffords' strength against all odds serves and will continue to serve as a daily inspiration to all of us. thank you, mr. speaker. i yield back.
1:35 am
the speaker: the gentlelady from california. ms. pelosi: thank you, mr. speaker. i thank the leader. now pleased to yield to gabby's friend, distinguished minority whip of the house, congressman hoyer. mr. hoyer: i thank the leader for yielding. i thank the speaker for ensuring that we would have this opportunity to speak to our friend, gabby giffords. i thank the majority leader for his comments. none of us on this floor are talented enough to summon the rhetoric that all of us feel in our hearts.
1:36 am
we he young men and women arrayed on the fields in iraq, afghanistan, and other troubled spots in the world. they are fighting for freedom and democracy. and too many of them are injured on those fields. our beloved colleague, gabrielle giffords, was injured on the field in the exercise of that democracy. and in being injured, she has become aexample for us, for all americans, indeed all the world of courage, of clarity of purpose, of grace, of responsibility, of a sense of duty. which she exercises this day.
1:37 am
i love gabby giffords. i was honored when she first ran for office before she was elected to go to her district as i have done for so many others in this country, to stand by her side, to walk down the streets of her community with her, to see in her the beauty not only of person, many of us see the outward vissage of us all, but gabby's beauty is in the heart. in the sl, in the spirit. the h representatives of america has been made proud by this extraordinary daughter of this house who served so well during her tenure here who felt so
1:38 am
deeply about her constituents and cared so much for her couny. gabby, we love you. we have missed you. mr. speaker, i don't know whether you were able to hear that response as gabby looked with that extraordinary smile, the twinkle in her eyes as she said to me and to all of you, and i miss you. do any of us doubt that that is the case? pia, we are blessed in this house to be served by extraordinary people of which you are a perfect example, a
1:39 am
pele who love us but love their country even more, who serve our constituents so extraordinarily well, who evidence every day care for us and care for the wor that we do which we could not do, pia, without pele like yourself and all of yr colleagues that we call staff. thank you. mr. speaker, god has blessed gabrielle giffords and he has sent a blessing to all of us in
1:40 am
e person of gabrielle giffords, and god bssed gabby as well with an extraordinary mom and dad and an extraordinary partner in life. mark, we owe you a debt of gratitude. our country owes you a debt of gratitude. i look forward to thday when you and gabby will be returning here, return to full health and full ability to serve. gabby, america thanks you. it thanks you for the example that you have given, of overcoming adversity and doing so with the spirit unparalleled. god bless you and god speed.
1:41 am
ms. pelosi: mr. speaker, i know that every member in the house would like to associate himself or herself with the remarks of our distinguished majority leader and democratic whip, especially in regards to gabby, of course, but also pia. it is something that every day we have the chaplain or the guest chaplain come to the floor and ask god's blessing on this house. one of those blessings to us has certainly been the leadership and the life and service that will continue for many years to come of congresswoman gabby giffords. we focus on her. she is our friend. we look at her remarkable recovery with great pride. she also carries in her need
1:42 am
for recovery the sorrow of so many others who lost their lives today. so the apparent physical recovery that we see is something even more than we could ever imagine for the challenge that congresswoman giffords has faced. god gave her a very special mission. he gave it to gabby giffords because he knew she could carry that burden because he had blessed her with so many, many gifts and a very loving family to make her the person that she is. how fortunate we have all been to be part of her life until now and hopefully for a long time to come. she will miss us. it is -- so now it is with very mixed emotions, mr. speaker, that i yield to gabby's very good and close friend, i say mixed emotions because we want her to stay with us,
1:43 am
intellectually known, gby has made the right decision. hopefully it will be libating for her in many ways. but that she goes without knowing the close ties we all feel personally to her. and , mr. speaker, it is my honor to yield to a very close friend of gabby, a leader in this house, congresswoman debbie wasserman schultz. the speaker: the gentlelady from florida is recognized. ms. wasserman schultz: if i could ask my colleague to join me at the well. thank you, mr. speaker, and madam leader. mr. whip and majority leader, i couldn't prepare anything this
1:44 am
rning because i knew i would not be able to hold this together very long. i am so proud of my friend and it will always be one of the great treasures of my life to have met gabby giffords and to have served with her in this body. we have all been through such a tumultuous year. the nation has been through a tumultuous year. no one more tumultuous than gabby and her family and her constituents in her beloved home city of tucson, arizona, and i know being ab to be gabby's ice today, knowing her as well as i do, the one thing that has not been said is that gabby wants her constituents to know, her constituents whom she loves so much in southern arizona, that it has been the greatest professional privilege of her life to represent them, that
1:45 am
she loves them as a fifth generation tucsonian, that her public service has meant a great deal to her and that this is only is a pause in that public service and that she will return one day to public service to represent them as she has so capablely for the last 5 1/2 years -- capably for the last 5 1/2 years. and let me just say a point of personal privilege for the last year it has been one of e honors of my life and the most important thing to remember that no matter what we argue about here on this floor or in this country that there is nothing more important than family and friendship and that
1:46 am
should be held above all else and i will always carry that in my heart and even though i know we won't see each other every day, gabby, we will be friends for life. for life. i'm so sorry. my privilege to read this letter on behalf of gabby and her mily and her constituents. january 25, 2012. the honorable john boehner, speaker of the house of representatives. dear speaker boehner, in 2001 strongly holding the belief that there is no higher calling than serving my country, i went from selling tires in my tucson family business to being a freshman representative in the arizona state house, and for 10 years i served in the years legislature, in the united states congress and after
1:47 am
marrying mark, as a proud military spouse. always i fought for what i thought was right -- never did i let pass an opportunity to join hands with someone just because he or she held different ideas. in public service, i found a venue for my pursuit of a strong america, by ensuring the safety and security of all americans, by producing clean energy here at home instead of importing oil from abroad and by honoring our brave men and women in uniform with the benefits they earned. i found a way to care for others, and in the past year i have found the value that is unbreakable even by the most vicious of attacks. the tragic january 8 shooting in tucson took the lives of six beautiful americans and wounded 13 others, me included. i'm sorry. not a day goes by that i don't
1:48 am
feel grief for the lives lost and so many others torn apart. christina taylor green, dorothy morris, john roe, phyllis, dorwin and gabe zimmerman. each in their own way they committed their lives of serving their families, community and country and they died performing a basic act of citizenship that's at the heart of our greatness as a nation. they will be required always by theicountry and by their congress. i don't remember much from that terrible day, but i have never forgotten my constituents, my colleagues or the millions of americans with whom i share great hopes for this nation. to all of them, thank you for your prayers, your cards, your well wishes and your support. and even as i have worked to regain m speech, thank you for your faith in my ability to be your voice.
1:49 am
the only way i ever served my district in congress was by giving 100%. i would add it's 150%. this past year, that's what i have given to my recovery. thank you for your patience. from my first steps and first words after being shot to my current physical and speech therapy, i have given all of myself to being able to walk back on the house floor to reprent arizona's eighth congressional district. however, today i know that now is not the time. i have more work to do on my recovery before i can begin serve in elected office. this past year my colleagues and staff have worked to make sure my constituents were represented congress. but if i can't return, my district deserves to elect a u.s. reprentative who can give 100% to the job now. for that reason i have submitted the attached letter of resignation to arizona governor janrewer. amid all that was lost on january 8, there was also hope
1:50 am
and faith. this past year it is what i have often come to, hope in a our government can represent the best of a nation, not the worst, faith that americans working together in thei communities, in our congress can succeed without qualification, hope and faith that even as we are set back by tragedies or profound disagreement. in the end we come tether as americans to set a course toward greatness. every day i am working hard. i will recover and will return and we will work together again for arizona and for all americans. sincerely, gabrielle giffords, member of congress.
1:51 am
1:52 am
1:53 am
1:54 am
miss pa lossy: mr. speaker, in appreciation once again for your courtesies enaing this to happen, i yield back the balance of our >> just before the tribute to congress, gabrielle giffords, health board, members debated her last piece of legislation. the bill would impose tougher penalties for people convicted of smuggling drugs across the u.s.-mexican border in small planes that avoid radar detection. the bill passed unanimously.
1:55 am
>> i rise in strong support because itbecause it would addr increasing use of ultralight aircraft in the smuggling of contraband across our borders. we also move this bill today in honor of congresswoman gabrielle giffords, the sponsor of this bill. she ably represented arizona's eighth congressional district since being elected to the united states house of representatives in november of 2006. in fact, our offices were next door to each other when she first arrived in congress, and we had an opportunity to walk and talk and share some stories. i learned from her that she came to congress for the right reasons. she is concerned about her constituents and cares and loves this country deeply. so we got to know each other just a little bit. one of her foremost concerns has been the safety of her constituents. this bill is but one way in
1:56 am
which she addressed those concerns. working together with her good friend and tireless colleague, representative flake. i'm delighted that we can move this bipartisan bill. we look forward to the day when gabrielle fully recovers. the use of ultralights which are small, slow, highly maneuverable, single seat recreation air vehicles is a proven way to smuggle contraband. these planes fly at a very low altitude, and do not even have to land. they simply drop their bundles of contraband at a predestined point and fly back undetected. a sheriff in new mexico was quoted as saying that we need the ability to detect smugglersers' flights before they cross the border to track them and give us a good indication of where the dropping -- where they are dropping their contraband so we
1:57 am
can preposition our response teams. this legislation provides the tools to stop these smugglers from using ultralight aircraft. first, the bill adds ultralights to the definition of aircraft for purposes of smuggling, and stiffens the penalties for using this type of aircraft to smuggle contraband. secondly, it enhances the ability of u.s. customs and border protection to detect, track, and halt illicit trafficking across the international borders between the united states and mexico and the united states and canada by calling for a collaborative effort between the department of defense, customs, and border protection. for these reasons i'm in favor of expanding our abilities to combat smuggling and support this bill. i reserve the balance of my time. the speaker pro tempore: the gentleman reserves the balance of his time. the gentleman from michigan. mr. levin: i yield myself such time as i may consume. the speaker pro tempore: the gentleman is recognized. mr. levin: i rise very much so
1:58 am
in support of the ultralight aircraft smuggling prevention act of 2012. it's concurrent resolutionly important in two respects. -- it's crucially important in two respkts. it's clear we need to act, it's important of itself. every year hundreds of these aircrafts are flown across our borders. they are carrying drugs. smugglers favor them because they are hard to detect. they are inexpensive. and they can often avoid radar detection. and so the problem is that under current law, under current law immigration and customs enforcement, i.c.e., and the prosecutors don't have the authority to charge the
1:59 am
users, these offenders with the existing statute. and so they can seek the higher penalties or lower the burden of proof. this bill, and this is the second significants -- significance, it was introduced by representative gabby giffords, and it would close this loophole. so i think for all of us colleagues and friends this is a special moment. this legislation was characteristic of the devotion, the dedication, the hard work of representative giffords. representing so ably the people of her district, the people of her state, and the people of our entire nation.
2:00 am
gabby giffords has been a spectacular star in the congressional galaxy. and we say as friends with love and affection we know that that star will continue to shine brightly and it will inspire us all. gabby giffords will be sorely missed, with you the example of her dedication -- but the example of her dedication, of her vitality and her courage, all of this has set an example that i think hopefully will lead us to undertake our duties with the same devotion as she has given to her work here and at home. i reserve the balance of my time. the speaker pro tempore: the
2:01 am
gentleman reserves the balance of his time. the gentleman from washington. mr. reichert: mr. speaker, i understand that their side may have some additional speakers. we have one additional speaker. would yield to mr. levin to continue with further speakers on his side. mr. levin: thank you, the gentleman from washington. it's my pleasure now to yield to another distinguished gentleman from the state of washington, a member of our committee, distinguished member of our committee, mr. mcdermott. the speaker pro tempore: for how much time will the gentleman be recognized? mr. levin: three minutes. the speaker pro tempore: the gentleman is recognized for three minutes. mr. mcdermott: i ask unanimous consent to revise and extend my remarks. the speaker pro tempore: without objection, so ordered. mr. mcdermott: mr. speaker, i urge members to support h.r. 3801, which is the ultralight aircraft smuggling prevention act of 2012. this bill as you have heard will help prevent drug smuggling across our borders and it does it really in three
2:02 am
ways. it amends the current law to give our prosecutors the authority to charge smugglers who fly ultralight aircraft in the same way as they charge smugglers who fly conventional aircraft. second, the bill adds both an attempt and a, quote, conspiracy provision to the aviation smuggling law. that means our prosecutors will be able to seek higher penalties when it makes sense. and finally, the bill directs the defense department and the department of homeland security to collaborate in defying equipment and technology that could be used by our customs officials to detect these aircraft. this is a common sense piece of legislation that address as real problem and in a way that deserves broad bipartisan support. very similar bill passed the congress -- passed the house in the last congress by a vote of
2:03 am
412-3. so this is a broad bipartisan bill. i expect this bill to pass with the same kind of bipartisan support today. what's unique about it is that it comes on the day when gabby giffords is going to resign from the congress, the woman who brought this bill to the floor. i want to congratulate her not only on this important piece of legislation but for the impressive record she developed over the five years that she was representing the eighth district of arizona. we all know gabby's spirit well. she has an office down the hall from me and i occasionally walk from office over here in the times when we came over to vote and got to know her on a newman basis, and she is truly a wonderful woman. and we will miss her. she had a bright future before her here. and it's sad to us that she's leaving, but it's important for her to take care of herself.
2:04 am
i'm a physician, a psychiatrist, and i have seen cases like hers in the past, and know that the possibilities for rehabilitation are very good. but it takes time. and running political campaigns and doing the kinds of things that you have to do in this business doesn't give you much time to take care of yourself. so we want gabby to go home and take care of herself and return to her highest level of ability because she has much to offer the people of the state of arizona and her husband and the country. so it's with a great deal of sadness that we say goodbye to her, but on the other hand we are very happy for her. and we very much urge everyone to vote for this bill. thank you. the speaker pro tempore: the gentleman's time has expired. the gentleman yields back. the gentleman from washington. mr. reichert: mr. speaker, at this timis time i'd like to yie
2:05 am
the gentleman from arizona, mr. flake, and also take a moment to recognize him for his continuing efforts and doinged determination to ensure the safety of our country's borders. the speaker pro tempore: for how much time is the gentleman is recognized? mr. reichert: three minutes. the speaker pro tempore: the gentleman is recognized for three minutes. mr. flake: i thank the gentleman for yielding. i rise today in support of this legislation. it's been described it will help, it is needed on the border to close this loophole. to make sure we can better protect that border. i also want to pay tribute at this time to my friend and colleague, gabby giffords, for bringing this bill forward. for her work on this over the years. i have traveled to the border many times and meet with those property holders there. particularly the ranchers. that she knows so well, that she has worked with over the years to develop legislation
2:06 am
like this and the other legislation and initiatives she has pushed to make sure that we have a secure border. she met with these groups and then committed to have conference calls routinely to make sure that she was hearing their concerns. and she did so. over a long period of time. and i can tell you those who reside at the border, those who live there, who have property there, who work there, who have been there for generations, appreciation so deeply the work that she has done over these years. i want to pay tribute also to her family, especially her good husband, mark, for these difficult and challenging year for supporting her and for making sure that she had what she needed and that she is recovering. what a wonderful story they have together and will continue to have. and also want to pay tribute to gabby giffords' wonderful
2:07 am
staff. this has been a challenging year for them. and they have done everything possible to ensure that the people in the eighth district have received the representation that they deserve. they have worked long hours under difficult circumstances and made sure those constituents were well served. i was down in sierra vista earlier this week and -- last week and spoke to many of her constituents who recognize the efforts of gabby and her good staff in this difficult time. we of the arizona delegation will miss her in congress deeply. we are so appreciative of the service that she has rendered and we know that she will continue to serve whether in the future as an elected office or whatever capacity she will continue to serve the good people of arizona and this country. with that i yield back. the speaker pro tempore: the gentleman yields back.
2:08 am
mr. reichert: i continue to reserve, mr. speaker. the speaker pro tempore: the gentleman continues to reserve his time. the gentleman from -- mr. levin: it's now my privilege to yield three minutes to a gentleman who has been very much involved in issues relating to this bill, mr. reyes of texas, three minutes. . the speaker pro tempore: the gentleman is recognized. mr. reyes: like my friend and colleague from washington, i, too, rise in support of this legislation, h.r. 3801, as a former federal law enforcement officer, retired border patrol agent, border patrol chief who had the opportunity as a co-chair of the border caucus to work very closely with gabby giffords. and it's a real privilege to be able to support this piece of
2:09 am
legislation which, as my colleague from washington mentioned, has previously passed the house and it's my understanding has already passed the senate. so i urge all my colleagues to support it. i, too, would like to pay tribute to gabby giffords because not only did i get a chance to work with her on border issues as members of the border caucus but also as members of the interparliamentary group and wanted to make sure that we know that we're not counting out gabby. i think those of us that know her, those of us that have had the privilege of working with her understand that she is determined to make a full recovery. we all will miss her but we certainly agree with the decision she has made along
2:10 am
with her husband, mark, and her family that she needs to take some time to fully recover. so we haven't seen the last of gabby giffords, i believe. i think whatever the future holds for her she has made this a better place because of her work, because of her thirst to seek out the facts. this piece of legislation is just one indicator of the work that she has done on behalf of not just her constituents and not just her state but work done on behalf of our nation to keep us safe, especially post -9/11. so i hope today we have a unanimous vote of support for legislation that, yes, is needed because i've been on the
2:11 am
border with our border patrol agents and i.c.e. agents and have seen some of these ultra lights that this legislation addresses. but more than that, because we have to continue the fight against these drug cartels and these drug trafficking organizations. so i urge all the members to vote yes and wish gabby and her family well and proud to have worked with her. thank you, mr. speaker. the speaker pro tempore: the gentleman's time has expired. the gentleman yields back the balance of his time. the gentleman from michigan reserves the balance of his time. the gentleman from washington. mr. reichert: i have no additional speakers and i continue to reserve my time. the speaker pro tempore: the gentleman reserves the balance of his time. the gentleman from michigan. mr. levin: i now yield two minutes to the gentlelady from texas, ms. jackson lee.
2:12 am
the speaker pro tempore: the gentlewoman is recognized. ms. jackson lee: i thank the gentleman from michigan, and i thank the manager of the bill and rise today to support h.r. 3801. i serve on the homeland security committee and know the importance of emphasizing, utilizing resources in a partnership and in fact passing a law, an authorization for that. we all know there's a firewall between a civilian government and its department of defense, and that's why i think this bill is particularly astute and particularly important, authored by our friend, gabby giffords. i thank her for her thoughtfulness, to ensure that as we put assets together we have the act of law to ensure that it is properly done. as a member of a border state
2:13 am
or a resident of a border state, having been to the border many times, having walked the border from california to texas, having been on the border at night, having been on the border with the customs and border patrol, i can see what these assets can do to help stop the scourge of drug cartels and drug trafficking and certainly make sure that those who come into this country come in for the right reason. but i also had the privilege of serving as part of the region that we are associated with in the structure of this congress and served on the steering and policy committee with our friend. i consider her a gift that keeps on giving to this nation, and i really do believe that as she per sues her own health issues -- pursues her own health issues, as she continues to espouse those issues that she did when she was here, i think america is a great country and she's an example of that and her husband, mark, who served so well in exploring our universe. we in houston owe her a debt of
2:14 am
gratitude for you could not imagine the love and affection of houstonians who never met congresswoman giffords as she healed in our community. and so i would just like to -- mr. levin: an additional 15 seconds. ms. jackson lee: so i'd like to say thank you to her and wish her well. she is an american hero because of the courage and certainly we acknowledge those who lost their lives and those who were wounded on that tragic day but what a symbol that this congresswoman represents, this american represents to all who seek a better place. i ask our colleagues to enthusiastically support h.r. 3801. i yield back. the speaker pro tempore: the gentlewoman yields back. the gentleman from washington. mr. reichert: still no additional members seeking time. i reserve. the speaker pro tempore: the gentleman reserves the balance of his time. the gentleman from michigan. mr. levin: i guess we'll wrap up. i do show as i look about and
2:15 am
think of this institution, it sometimes can be quite impersonal. i think for all of us today this is a very personal moment, and i think all of us join in saluting gabby and mark. i yield back the balance of my time. the speaker pro tempore: the gentleman yields back the balance of his time. the gentleman from washington. mr. reichert: i thank you, mr. speaker. i keep my closing statement short. this obviously is an important bill to this country, for our nation's security and is especially important on this day when our good friend, gabrielle giffords, has presented her resignation. i urge all members to join me in support of
2:16 am
blacks the house passed a bill in a 408-0 vote. >> ben bernanke held a news conference today. that is coming up next. in just over an hour, president obama's speech at the manufacturing plant in iowa. after that, it mitt romney offering his response to the state of the union address. then another republican presidential hopeful new talking grit campaign a in florida. he said he wants to build a permanent outpost on the moon. >> i do believe the west for all of the shortcomings. i am discussing these shortcomings. they have to be admitted. they represent the most
2:17 am
acceptable and workable political culture. >> no. 1991, the united states was the only global superpower. today, how to restore its status in the world. he speaks of his book "strategic vision." also this week in commented fdr used world war ii as a cover to create a more powerful executive branch? said and added 10:00, how your rights are being eroded. >> april 15, 2010 i had arrived in paris. i walked into the hotel lobby. and met general mcchrystal for the first time.
2:18 am
he said your the rolling stone guy. i just want to be on the cover. >> i said it is between you and lady gaga. as trying to make a joke. he replied, just put me in a heart-shaped tub. i felt like this is a different type of general. >> he had been fired. they continued the story and talk about the new book. it is sunday night at 8:00 eastern. >> the senate budget committee holds a hearing on the outlook for the u.s. and global economies. the chair of the budget committee and jeff sessions is the top republican. the hearing is live at 10:00
2:19 am
a.m. eastern on c-span. later, they release the fiscal 2013 budget. the associated press reports there will reduce military spending by $260 billion over five years and reduce the number of soldiers by 80,000. that is tamaras briefing. he will be joined by martin dempsey. it started to o'clock p.m. eastern but live coverage here on c-span. >> ben bernanke today said the fed is unlikely to raise interest rates before 2014. the key interest rate has been closed near zero. this is just over an hour.
2:20 am
>> good afternoon. welcome. in my opening remarks, i will review today's policy decision. then i will discuss the kids insisconsensus statement. finally, i will place this in the context of our assessment of the appropriate path. i will be glad to take your questions. as indicated in a statement to support a stronger recovery to help ensure that inflation over time is at levels consistent with our mandate, the committee expects to maintain a highly accommodative stance for monetary policy. they decided to keep the target range at 0214%. they anticipate it from the
2:21 am
funds rate until late 2014. ate 2014. to provide support for the recovery, the committee will continue the program that we announced in september to extend the average maturity of the federal reserve holdings of securities. following careful deliberations, we have reached broad agreement on a statement that sets forth our longer run goals and policies strategy. this statement should not be interpreted as indicating any change in how the federal reserve conducts monetary policy. its purpose is to increase the transparency of predictability of policy. there is widespread agreement that clear and transparent communications facilitate where at and -- well-informed decision making by households and businesses. reduce uncerinty, increase the effectiveness of monetary policy and enhance the accountability to the public. the statement begins by notg
2:22 am
the committee's firm commitmen to fill our statutory mandate of promoting maximum employment, stable prices, and moderate long-term interest rates. since monetary policy actions tend to influence prices with a lagging, our decisions to appropriately reflects the longer run in goals, our medium- term outlook, and our assessment of risks including risk to the financial system th can impede the attainment of our goals. the committee has the ability to specify projects specify its longer-term goal for inflation. the committee judges that inflation at the rate of 2% measured by the annual change for personal consumption
2:23 am
expenditures is most consistent over the longer run with our statutory mandate. over time a higher inflation rate would reduce the public's ability to make longer-term financial decisions where a lower inflation rate would be assoated with an elevated probability of falling against inflation which can lead to significant economic problems. clearly, communicating to the public's 2% goal for inflation over the long run should help foster long-term interest rates. it will enhance the committee's ability to promote maximum employment in the face of significant economic disturbances. maximum employment stands on equal footing with price stability as an objective of monetary policy. the difference with price stability is the maximum levs of employment is largely determined by non monetary factors that affect t factors of the labor market including demographic trends, the pace of
2:24 am
innovation and a parade of other influences. because netary policy does not determine the maximum level of employment the economy can sustain in the longer term, and since many determine maximum employment can change over time or may not be miserable, it is not feasible for any bank to specify a fixed goal for the longer run level of employment. although the committee cannot freely choose a long run goal for employment, it can estimate and use the estimate to inform its policy decisions. the committee conside a wide range of indicators recognizing such assessments are necessarily uncertain as subject to revision over time. for example, and the latest set of projections that have been distributed to you, the lagered run of unemployment have a tendency of 5.2% to 6.0%.
2:25 am
roughly unchanged since last january but higher than the last interval in several years ago. as i noted, the level of maximum employment is not immutable. it could be increased by effective policies and such as education and training that improved workforce skills. if the assessment pointed to an increase in the maximum level of employment, our policy strate would be modified aim at the higher level. in setting monetary policy, we aim to deviate from the employment of our assessment of the maximum level. these dual objectives are generally complimentary. for example under present circumstances in which the unemployment rate is elevated and the outlook is subdued, the committee judges is consistent with both objectives.
2:26 am
in some cases the committee follows a balanced approach for these two objectives. potentially different time horizons over which inflation and employment are projected to return to levels just consistent with our mandate. in other words, the committee always treats its primary objectives of pressmen stability and maximum employment subjectively. it is to determine the size, social cost, and expected evolution of deviation of each objective from its level. i will now turn to the economic projections, that is five board members and 12 reserve presidents submitted in conjunction with today's's meeting. the projections from 2011-2014
2:27 am
and over the longer run are picted in the figures distributed. the longer run projections shown at theight of each figure represents participants assessment of each rate can very -- the variable over time and in the absence of further shocks to the economy. incoming information suggests the economy has been expanding moderately. the committee expects the pace of economic growth to be over coming quarters -- to be moderate over coming quarters reflecting ongoing drags in the housing sector and tight conditions from smaller businesses. specically, participants' projections to the growth rate in 2012 have eight central tendency of 2.2% to two points 7%. ahead -- 2.7%.
2:28 am
looking further ahead, economic activity is expected to expand gradually with improving financial conditions and the continuation of a highly stance for monetary policy. they have a central tendency of 3.8% to 3.2% and their projections have a tendency for 3.3% to 3.0% for 2014. a number of recent indicators point to some further improvement in overall labor market conditions but the unemployment rate remains elevated. in lig of the anticipated modest pace of economic recovery, the committee expects ov coming quarters the unemployment rate will decline gradually toward its mandate consistent levels. in the participants' projections to the unemployment rate in the
2:29 am
fourth quarter had a central tendency of 8.2% to 8.5%. at is little difference of the latest reading of 8.5%. with economic growth expected to pick up somewhat over time, the unemployment rate is expected to decline to 6.7% by the fourth quarter of 2014, still well above estimates of e longer run a normal rate of unemployment. i will turn out to the outlook for inflation. the prices of oil and other commodities have generally flattened out or turned downward over the last couple of quarters. consequently consumer price inflation which surged in the first half of last year has been subdued in recent months. survey measures and financial market indicators imply that larger expectations have remained stable. over coming quarters, inflation will run at or below levels
2:30 am
consistent with the mandate consistent rate of 2%. specifically to inflation projections have a tendency of 1.4% to one pl% for 2012 and remain subdued at around 1.5% to 2% through 2014. as a further step and of enhancing the clarity of our communications, the community decided to publish the program monetary policy. each hedges most likely -- if the economy of also as expected. the underlie the projections of growth of unemployment and inflation that i just described. importantly, these policy assements should not be viewed as unconditional pledges. rather just as with our economi
2:31 am
projections, these policy projections reflect the information available at the time of the forecast and are subject to future revision in light of financial condions. in the chart labeled appropriate timing of policy, each shaded part reflects the number of participants who judged the initial increase in the target federal funds rate would a properly occur in the specified calendar year shown below the bar. six participants anticipated policy firming commences in 2015 or 2016 while five others expect 2014. the remaining just policy liftoff would be appropriate in 2012 or 2013. more details provided by the chart labeled apppriate pace of policy firming. in that chart, the participants regarding the level of the federal funds rate at the end of each of the next several years and over the longer run.
2:32 am
for example, based on current information 11 participants expect the corporate level funds rate at the end of 2014 will be at or below 1% while the sixth participants anticipate higher rates of that time. those judgments are reflected in today's's meeting statement in which the committee indicated economic conditions are likely to warrant an exceptionally low levels of the federal fund rate least until 2014. as i have noted we are also proceeding with the program we announced in september to extend the maturity of securities there for fostering a more accommodative a financial conditions without changing the overall size of the federal resee balance sheet. the committee regularly reviews the size of our security holdings and we will adjust them as appropriate. in particular the commiee recognizes that hardships imposed by high and consistent unemployment and an underperforming economy and is prepared to provide further accommodation if employment is
2:33 am
not making sufficient progress toward its maximum level or if inflation shows signs of moving further below its mandate consistory. thank you for your patience and i will be happy to take your questions. >> thank you. mr. chairman, we had several months of economic data that has been stronger than most forecasters expected. employment was over 200,000, the unemployment rate has come down to 8.5%. there seems to be little mention of this recent strength in the statement. do you harbored doubts about the recent strength in the economy? are you making an additional quantitative easing to achieve the growth rates that you have even forecasted here? >> there has been some encouraging news recently. we have seen slightly better performance in the labor market,
2:34 am
industrial production has been relatively strong. there are some positive signs, no doubt. at the same tim we have had mixed results in other areas such as retail sales. we continue to see headwinds emanating fr europe comg from the slowing global economy. we are obviously hoping that the strength we saw in the fourth quarter and in recent data will continue into 2012. we will continue to monitor the situation. i do not think we are ready to declare that we have entered a new stronger face at this point. we will continue to look at the data. as i have said in my statement, we continue to review our holdings in our portfolio holdings, securities.
2:35 am
we are prepared to take further steps in that direction if inflation is not moving toward target. that is an option that is certainly on the table. i think it would be premature to say definitively one way or the other. we continue to look at that option. if conditions warrant, we will consider using it. >> thank you. i am a little confused by these forecasts. can you help me understand what we are looking at? it seems that you expect at the end of 2014 unemployment will be at or above 7%, inflation will be at or above 2%. people in your -- people think that is a good time to start raising interest rates again. is there any tolerance for above
2:36 am
trend inflation in the service of catch up growth? hat we me first observe have in fact been very accommodative in the past couple of years. we kept interest rates close to zero. we have done two rounds of asset purchases. we have announced today an extension of the period in which we expect to see rates very low. our maturity program is still ongoing. we maintain an accommodative the pathf policy at this point. i wod further say that i think it is important to emphasize we are not willing to mechanically take the interest-rate projections that participants provide and build policy off of that. it will still be necesry for the committee to exercise collective judgment to consider the cost and risks of additional policy actions to discuss the
2:37 am
uncertainty about the forecast and other factors come into the -- that come into the policy decision. now, with all of that being said, if inflation is going to remain below target for extended periods and progress is very slow, i think your explicit question is right. there is a case for additional policy action. we want to continue to observe the situation, but we are prepared to look for different ways to provide support for the economy if in fact we have this unsatisfactory situation. >> congratulations on the inflation target. that is a big achievement for you, i am sure. i would like to ask if you can explain a little bit the way you think inflation is now working in the economy.
2:38 am
the 2012 central tendencies is kind of low. along with that question, i would like to know where you think full employment is in the near-term like in the next year or two given the structural impediments that many people have been talking about. >> there are a number of factors that make us expect inflation to be quite low and enter the next couple of years. certainly, we are seeing a reversal or at least a flattening out of the commodity price increases that caused headline inflation to rise earlier in 2011. future markets in our own estimates with a slowing global economy suggesting that most likely commodity prices will remain well controlled over the next couple of years. on top of tt, we have a very high rate of unemployment, pressure on wages is quite restrained. putting that together with
2:39 am
strong productivity gains, the cost of production are growing very slowly. expectations of inflation seem well anchored. they have been on the low slide relative to recent history and recent -- adapter recent months. inflation looks to be at or below the 2% target going forward. with respect to the maximum employment measure, which provided a -- we have been providing for four years as long as we have been providing the economic projections and estimates of the long-term stable rate of unemployment which is currently -- is currently 5.2%. that ihigher than it was a couple of years ago. it reflects a structural impediment and other changes. we are concerned that long the
2:40 am
about rigid large amounts of long-term unemployment are causing some workers to lose skills or labor force attachment. for a while, it will likely increase the so-called natural resource sustainable rate of employment. there are a number of factors working in central that location. clearly at 8.5% i think we are comfortably above anybody's estimate. for that reason, we still consider the labor market to be obviously quite flat. >> thank you. mr. chairman, how much nfidence do you have in the ability to forecast the economy and inflation every year? how much confidence do you have in the interest-rate projections
2:41 am
that the fed has made public, particularly the ones that go up to 2014 and beyond? if i may add a follow up to that, there seems to be an asymmetry in these dots. there seems to be a few that view that matters the most is the view of the chairman. when we look at these projections, are we looking at the most expected path of interest rates because the airman view is an represented exclusively here? >> on your first question,ur ability to forecast three or four years out is obviously very limited. there is no question about that. nevertheless, we have to make a best guess. it is certainly possible that we
2:42 am
will be either too optimistic or to pessimistic. we will have to adjust both of our policy expectations spirit .hat being said that being said, at the zero bound policy rates is still binding. even if the economy were strong beer, the low interest rates would still be valid. they would still be appropriate. unless there is a substantial strengthening of the economy, i will think there is a pretty good guess that we will be keeping rates low for some time from now. we do not identify the specific individuals who provide the projections. ong other reasons, we want to make sure people, ready to talk and not wedded to a specific
2:43 am
position. that is why the committee makes a selective decision after using as input of tse projections which are circulated before the meeting so they can see what their colleagues believe. as far as what individual members to believe, we certainly have other vehicles for expressing our views. all of us give speeches. all of us give interviews. i give frequent testimony. there are plenty of opportunities to get a sense of what they believe. again, we felt this information which presents both diversity of views in the community ensures you were the tenancies lie would be useful. i might add to that the chairman's term is not infinite. at some point there would be a new chairman.
2:44 am
there is a lot of continuity collectively. the average bank president is there for as much as 10 years. the governors' terms are 14 years. even i the chairman changes, it remains continuous. as we talk about interest-rate in 2014,he fact that there is wide ranging agreements that it will be low, it should be more confidence. that is not dependent. >> the fed set statuary goals meet employment. if there's a conflict between the two, they would push for flexibility rather than full
2:45 am
employment. over time, it was the best contribution they could make. today you would to some pains to say you put them on equal footing. there might be circumstances in which to put one above the other. following up, do i take it if inflation were to move above the level that he would tolerate that in order to make further progress on unemployment? >> yes, we treat them symmetrically. we cannot control where an inflation and an employment are. there are times where it will move away from their desired levels. in those situations, the speed at which i think tolerate might be to strong. we always want to get back to the desired level. turn wouldedily would
2:46 am
depend on what is happening with the other variables. for example, if inflation did go above the target by a modest amount, we would certainly try to get back down to target. but on of lemon or very high, and employment would be more cautious and slower. that is why -- but if unemployment were very high, employment will be more cautious and slower. thats why it depends on how far away the two key variables are from their objective. >> if you have not had a good time in the republican presidential debat. i was wondering if i could have your comments on what you heard.
2:47 am
some of the analysts said one of the reasons for the hostility is perhaps a lot of the republican ones have the ability to invest with their funds. can you talk to them as well? if republicans take back the white house in november and ask you to resign, would you? >> i'm not od to get involved in political rhetoric. i'm going to stay away from that. i have a job to do. as long as i am year, i will do everything i can to help the federal reserve achieve price stability and maximum employment. i will not be thinking of the hypothetical situations. we think about all these issues.
2:48 am
we also impose a cost on savers to have a lower return. we do hear about tha we do think about that. their response i would make is that -- the response i would make is that the sabres are depended on a healthy economy in a bird to get adequate returns. -- in order to get adequate returns. if our economy is in really bad shape, and then they will not get the returns on those investments. what we need to do, as is often the case when the economy goes into a very weak situation, then lower interest rates are needed to restore the economy to something closer to full employment and to increase growth. that will lead to higher returns for investors and savers.
2:49 am
that is how we would explain it. we recognize that savers are getting a lower return. one reason why it is iortant for us to maintain price stability is that at least it minimizes any loss due to inflation that they might suffer. >> hi. shifting a little bit, i would like to take it back to the rolls that you really is back in late december. it was a step to put forth a considered the heart of dodd/frank. there were provisions left out including liquidity requirements. there is global consumption needed on those rules. was hoping he could expand a little more on the decision
2:50 am
specifying the conditional capital requirements for those things that were not deemed available. and if you could talk about what the core issues are in deciding whether the additional capital should come in the form of a surcharge and what it might look like. you are referring to the 165- which will focuss on the largest banks. it is a complicated role. -- rule. our position is that we would like to get feedback about what the press approaches -- best approach is. we will be considering that as they put together a girule.
2:51 am
the notion of the surcharges is that banks that did not pose significant threats to the system stability should not have a significant surcharge. our view is that if the largest banks, the ones whose failure would endanger our financial system, should be subject, first because we need to have been be safer than smaller banks. we want to try to equalize the cost of credit they face. a bank gets an artificial subsidy it can borrow at. its the cost of funding to
2:52 am
different banks. we will continue to work with them. the basel committee has provided some sense of the range of what the surcharges will fall into. they're working on defining the criteria. you can assume it will be a continuous range between the $2 billion bank and the largest banks. we're getting reactions and comments. we hope to come back with clarification on the role. we're also working hard on implementing basel 3 itself. we want to putut the world during 2012. -- the rule during 2012. >> for more than three years,
2:53 am
that the fed has been that the policy through extraordinary means. the new information we have today pertainmostly to an eventual tightening of policy to raise interest rates. why is there no new information about the size of the balance sheet? why should anybody deduce about an eventual extension of the balance sheet? >> we will be providing in are minutes and survey of economic projections released in three weeks some additional qualitative information about people's views of the balance sheet going forward. the reason that i cannot provide all of that information now is basically that we received a whole range of qualitative comments. we have further discussion during the meeting yesterday and today. did we need a little time to summarize that and to have it
2:54 am
approved. the minutes are approved by the entire committee. it will be definitive statement about what we currently no about the balance sheet. i will say a few things. one is that expanding the balance sheet certainly remains an option. it is one that we would consider very seriously if progress toward employment was continued or became more inadequate or if inflation remains low. we will continue to look at that. as we say, we are prepared to take additional measures in general. that would be one class of measures we would consider. i can make one additional poin which may be was not obvious. in june, we provided some the sales related to calling
2:55 am
of assets to the path of interest rates. those principles remain in fours. one implication of our extension -- in force. one implication of our extension is to imply the initial sales from our balance sheets which are far down the road will be later than previously thought. adobe presumably predict it will presumably be in 2015. -- it will presumably be in 2015. additional purchases remained a topic that we are debating. it'll depend on our assessment of the sec and the risks of that particular toll and how the economy is evolving. >> >> when i look at these
2:56 am
forecasts for 2014, in media forecasts mean is 1.24%. how should draw this side best understand what they're likely to do? you said they will consider further options. can you tell us a bit more about what he might further do? >> there is no mechanical relationship between these projections and the outcomes of the decisions. there is a big input to the decisions. it is a collective decision. if you want to draw lines, my
2:57 am
suggestion would be to look at the middle of the distribution. we do have a democratic process committee. e median would give you some is.e of worth the here the weit we did note in support of our assessment of late 2014 which is a committee decision, that is supported by the observation that 11 of the 17 participants expect the rate at the end of 2014 to be one sermon -- 1% or a blast. in terms of the future, there are a lot of ways we can go. we can provide more relationships between information betwee individuals and policy preferences.
2:58 am
there is nothing specific now that has been decided. we have a very capable subcommittee which is charged with continual assessment and ways to improve our transparency. we will be looking at additional possibilities. we welcome feedback for that matter. there's nothing specifically planned at this time. >> associated press. last night, the president unveiled plan to expand the government's refinancing program. essentially, it relieved the white paper that said up to 2.5 million homeowners could benefit. it would save $3,000 per year in mortgage payments. right now there is a mortgage penalty between state attorney general and the nation's major mortgage lenders.
2:59 am
it is the tune of $25 billion. much of which would ben the former principal reduction. in the white paper released, the fed seems to indicate that principle reduction could be helpful but it was unclear about whether they thought this was an acceptable or feasible option. they also made clear that a lot of the proposals that currently out there each around the edges when you're dealing with the foreclosure crisis. do you think the principal reduction in the form of the major mortgage settlements would do a lot to help the rising crisis? if not, is there any other alternative that would help? >> the fed reserve has a very strong interest in the housing sector. the weakness of the housing sector is an important reason why the economy is not recovering more robustly.
3:00 am
the problems in housing finance are part of the reason why monetary policy has not been more powerful. part of our transmission mechanism is through lower interest rates which affect refinancing and sales and purchases as well. in addition, we have considerable interest in servicing, loan modifications, and it delinquencies and all the aspects of mortgage lyndo lending. we have an interest in this area. we did a white paper that looked at the number of issues including refincing and mortgage finance. it is important to say that our intent in that white paper was to provide the benefit of our analysis andto the public and those making policy. we did not take specific stand on individual issues. we tried to provide the pros and cons and some context for these
3:01 am
debates. we did discuss refinancing. we did discuss principal forgiven as. i would say that there are a variety of views about principle forgiveness. there's no official position. there seems very likely that it could be helpful depending on how structured in reducing delinquencies. there are also some potential drawbacks. one of them is the fact that the amount of negative equity in united states is about $700 billion which is enorms. there is a single program that will put everybody in the country above water. i think the issue then becomes if we have $25 billion or whatever the number may end of being. what is the most cost-effective
3:02 am
way to help as many people as possib tax that is an ongoing debate. with respect to principal reduction, i spoke about this in the past. it has some advantages. a lot depends on how it is structured and what the alternatives are. >> thank you. one of the goals of the fed and the release of all these new materis and forecasts are to how create and set expectations. are you concerns that the policy packed today might help create negative expectations? take aerage american's way of your announcement to
3:03 am
keep interest rates low might signal to them that may be the bad things that the economy is in much worse shape than we all thought. there is the abilityo create a self sustaining economic recovery at some point. is there a risk of this? >> whenever the fed takes policy action, there's always some potential for a signal. that is true not just in these current times any time the fed lowers or increases interest rates. that is something we have to think about. those considerations are outweighed generally by the need to maintain accommodative financial conditions so it is attractive to firms to invest and hire, attractive to those who are eligible to buy homes and so on. i think that ultimately is for powerful than the signal from
3:04 am
the change in policy, up articular the markets and news -- in particular, at the market and news media are in good about picking up the underlying data and reporting what people think. i would not overstate the fed's ability to massively change expectations there is statements. -- for their statements. while we take that into account, we think it is important to say what we think. we think it is important to provide the right amount of stimulus to help the economy recover from its underutilized condition. >> let me follow up on peter's question. why should somebody looking at these numbers say as aggressive as you say you have been, it
3:05 am
does not look like you and have met any of your goals. why is it more now? >> as i said earlier, the fed has been doing great deal since august. we have a put a date anon a timeframe of lower interest rates. we looked at the extension programs which is continuing. today we announced a further extension of the expected. of lower rates by issuing- expected time frame of lower rates by issuing the policy information. we hope to convey today market to the extent there is support. i do not accept the premise that we he been passive. we have been active.
3:06 am
the low level of inflation is a validation of the following sense. there are some that were very concerned that our balance sheet would lead to higher inflation. as i mentioned earlier, if the situation continues, unemployment is declining at a rate that is very slow. the logic of o framework says we should be looking at ways to do more. it is not completely straightforward. we're dealing with a varietyf non standard policy tools. we cannot is lower at 25 basis points like the good old days. your basic point is right. we need to adopt policies that
3:07 am
will both achieve our at the information objectives and help the economy recover. i would say that your question shows a benefit of explaining this framework. the framework makes clear that we need to be thinking about ways in which we can provide further stimulus if we do not get some improvements in the case of recovery and normalization of inflation. >> i have two short questions. one said about the longtime oal woudld beaol 0% if properly measured.
3:08 am
the second question, comparing what you did today, are you approaching more inflation target like a bank of sweden or rway? >> the reader price stability would say inflation should be at zero. there are some technical reasons why that may not be true. there are some other issues that measure the value of inflation above zero. it is probably consistent with prices. as we talked about frequently, we said ouet our objective thats good with both sides of the mandate. price stability at 2% is low enough that we believe it will
3:09 am
not interfere with financial planning and economic planning. also in the interest of employment, a target for inflation that was zero will have zero consequences. we have seen many entasis that inflation can be bad for economic -- emphasis on the inflation can be bad for economic performance. a target of zero would not be consistent with the other part of our mandates. incidently, is zero inflation rate to a me nominal rates would be a low levels, typically 2% or 3% and would increase the probability barbican not cut any further. there are good rsons -- probability where we cannot cut
3:10 am
any further. there are good reason. 2% is the nber they use. this is not a prayer for what central banks to. are we inflation targeteers? if you mean a central bank that put top priority on inflation and other goals like employment as subsidiary goals than the answer is no. we are a dull mandates central bank. we but equal weight on price stability and maximum employment. the goals given to us by congress. we are not absolute cists if there is a need to let inflation rern.
3:11 am
if there is another result, that is something we would be willing to do. it is worth noting that even central banks that call themselves inflation target tears at least pay some attention to other parts of the retarders --targeters at least some attention to other parts of the speech. i would reject that term. we are going to be treating the price stability and mimum employment on level footing. >> thank you. can you clarify whether if actual economic conditions match the projections? is that acceptable?
3:12 am
in the past, and number of times you said even when interest rates are at 0, they have a significant influence on economic growth. do you still believe the fed has the capacity to deploy chills that would have a civic some of the yen's impact? >> -- deployed tools that would have a significant impact in fat? we want to continue. if recovery continues to be modest and progress on an appointment very sw and if inflation appears to be likely to be below target for a number of years out, then i think it would be a very strong case
3:13 am
based on our framework for finding additional tools r expansionary policies or to support the economy. to we will continue to look at the different options and tried to decide what will be most affected. we are in a difficult situation in terms of the section of policy tools. my own view, thinking about the effects of additional purchases and securities, i have been pretty satisfied in the sense that purchases do seem to have a desired a fact of financial conditions. they tend to ease conditions and lower interest rates, strengthen asset prices. those are the things that monetary policy normally does. what has been more uncertain is
3:14 am
the effectiveness of this. we have seen some developments that have probably weakens. one would expect more activity than we have been saying. did this is part of the recent -- one would expect more activity than we have been seeing. this is part of the recent economy. i am not saying that we are out of ammunition. i think we still have tools. we need to further analyze and steady those tools and try to make comparisons in terms of effectiveness, risks, and the bikes. we still have a process to find out what is the most effective approach. >> the question about the new
3:15 am
forward guidance language in the statement itself, peter anticipated one of my questions abou the potential dangers in a negative signal. what was the rationale for continuing to have the phraseology in some of having the forecasts deepen themselves -- instead of having the forecasted deepen themselves? >> that is interesting. i might have commented that our two main tools at this point our asset purchases. the other is a communications to the extent we can communicate the rates below are for longer. it will ease financial conditions and will be ably we can affect the state of the economy. that is another reason why we
3:16 am
brought out some of these ideas. the reason that we just do not release the economic projections and leave it at that is because what the economic projections of future policy rates are important input to our policy discussions around the table, the decision is ultimately made by the market committee. that is the voters to stick around the table. it is a process by which we exchange ideas and me arguments. they can do this by is sending this in and having a meeting. we have the meeting to talk to each other and try to come to some kind of consensus. the fomc will always trump the
3:17 am
projections of forward interest rates. clearly, because the participants and people around the table are the same, the projection to get significant information about where it is likely to go. >> they stated that global growth has slowed and is weighing on financial conditions. one way that the federal reserve could help would be by loan into the loa international monetary fund. we have all noted that the fed was not shy with came to extending loans to international financial institutions, private banks and so on.
3:18 am
is it something that you could it the sovereign debt crisis got worse? >> lending to financial institutions as part of our mandated function. it is part of our ability to provide it in the event of a panic as we have done. it is not within the purview of the federal reserve. it is made by the treasury adminiration and approval by the congress. to the appropriate insiders would be the administration and the congress, not the federal reserve. >> my head is full of questions. i am going to keep it to two.
3:19 am
you are linking their inflation target to the pce. the pce is the thing americans do not kw what it is. did they do know what the cip is. can you explain in layman's terms why they should not worry too much when inflation -- if the cpi is different than the pce? the second question is related to the targeted one. the fed has been vague in terms of what sort of inflation it would accept. criticism of the federal reserve and the institution itself has been so intense. there are people out there if you are going to say the federal reserve just admitted it.
3:20 am
how are you going to respond to those people? the answer the question about the pce. >> we chose the pc index for is some valid technical reasons. it better accounts for changes in people's purchasing patterns. people will tend to move to other types of goods and services when things get too expensive. that is not accounted for by the cpi. the pce includes all health- care costs, and not just out of pocket costs. that has two benefits. one iss it reduces the s-- it reduces the share as it is
3:21 am
tied to housing. the cpi is devoted to housing. a large part of that index is made up numbers. that is one benefit. not to put too much weight on the housing nuers. ht the other is even a people are not paying for health care out of pocket, they pay for it through taxes or through reduced wages. i think this is probably a better measure of the inflation that is faced by to vocal consumers than the cpi is. various measures move very closely together. you will not have a situation
3:22 am
pi is 10% and the pce 2%. if you look at the cpi, they should feel very comfortable that is very close to where the pce is. this is where the united states has been for many years. there is a good reason for it, to avoid a deflationary. it is very negative. the value of your argument that the value of the dollar it decreases 2% is not a good one and less to do your saving in a mattress. to most people invest in various kinds of instruments and receive a rate of interest. this ishe ment that interest rates are pretty low.
3:23 am
over a longer time, even if you have money any cd or other investment vehicle, the interest rates to compensate you for inflation. they will be tied together. levels of inflation this low, interest rates should pretty much fully compensate for the losses. i would reiterate that we are not aware of the problems that low interest rat cause for savers and insurance companies. we do try to keep the spirispir. >> thank you.
3:24 am
there are two issues in congress where your advice might be worthwhile. the payroll tax cut is going up. the question is whether it is extended. what is your opinion it would have if it was not extended? what if congress were to not implement it? what impact would that have on the u.s. economy? >> as you know, the federal reserve makes it a policy to try to avoid commenting on specific tax and spending programs. i do not have those numbers at hand. i would say the following. i have tried to convey to congress that response of fiscal policy has a lease to components. one is to achieve fiscal
3:25 am
sustainability. to achieve fiscal sustainability, we need to be acting soon. now would be preferable. we can improve our programs to modify or simplify our tax code. they are ways that will be persuasive over the longer term. that is an important thing to do. it relates to the second part of your question. it is important to take steps. the specific steps are up to congress. it is important that action be taken to provide a credible plan to achieve fiscal sustainability. the second part of my recommendation is that we need this juncture to be sensitive to the decisions that are made on what is still a very fragile recovery.
3:26 am
there and many ways to do it. at this.ooking >> thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]
3:27 am
3:28 am
3:29 am
3:30 am
3:31 am
3:32 am
3:33 am
3:34 am
3:35 am
3:36 am
3:37 am
3:38 am
3:39 am
3:40 am
3:41 am
3:42 am
3:43 am
3:44 am
3:45 am
3:46 am
3:47 am
3:48 am
3:49 am
3:50 am
3:51 am
3:52 am
3:53 am
3:54 am
3:55 am
3:56 am
3:57 am
3:58 am
3:59 am
4:00 am
4:01 am
4:02 am
4:03 am
4:04 am
4:05 am
4:06 am
4:07 am
4:08 am
4:09 am
4:10 am
4:11 am
4:12 am
4:13 am
4:14 am
4:15 am
4:16 am
4:17 am
4:18 am
4:19 am
4:20 am
4:21 am
4:22 am
4:23 am
4:24 am
4:25 am
4:26 am
4:27 am
4:28 am
4:29 am
4:30 am
4:31 am
4:32 am
4:33 am
4:34 am
4:35 am
4:36 am
4:37 am
4:38 am
4:39 am
4:40 am
4:41 am
4:42 am
4:43 am
4:44 am
4:45 am
4:46 am
4:47 am
4:48 am
4:49 am
4:50 am
4:51 am
4:52 am
4:53 am
4:54 am
4:55 am
4:56 am
4:57 am
4:58 am
4:59 am
5:00 am
>> with the next two hours here on c-span, there's a house hearing on the obama administration's decision against building the keystone x.l. oil pipeline from canada to texas. and at 7:00 a.m. eastern, "washington journal," live from the washington auto show. we'll talk with executives from general motors, ford, hyundai, and kota automotive. >> for more resources in the presidential race, use c-span's
5:01 am
campaign 2012 website to watch videos of the candidates on the campaign trail, see what the candidates have said on issues important to you, and read the latest from candidates, political reporters, and people like from you social media sites at >> the senate budget committee this morning holds a hearing on the outlook for the u.s. and global economies. senator conrad chairs the budget committee, and jeff sessions is the top republican on the panel. the hearing is live at 10:00 a.m. eastern on c-span. and later in the day, defense secretary leon panetta releases the fiscal 2013 budget. the associated press reports that the budget will reduce military spending by $260 billion over five years. and it will reduce the number of soldiers in the army by ,000.
5:02 am
at his briefing, secretary panetta already joined by the deputy joint chiefs of staff, martin dempsey. it's live here on c-span. the house energy subcommittee yesterday held a hearing on the obama administration's decision to deny a permit for the keystone x.l. oil pipeline. it would have carried canadian oil across the u.s. to texas. the state department's assistant secretary for science and the environment testifies about how the administration made the pipeline decision. this is two hours. >> we're delighted you're here on the second row, and hope you'll enjoy the hearing as well. today's hearing gives us the
5:03 am
opportunity to learn why the obama administration denied a permit to build the keystone pipeline from canada through parts of the united states. how could the obama administration, when presented with the chance to create thousands of jobs and at the same time significantly reduce our dependence on oil from the middle east say no to the american people? today we will examine how such a harmful decision was made and explore opportunities to reverse that decision while administration struggled to find a rational decision to reject the construction of keystone pipeline. we're going to look for ways to build the keystone pipeline. this is a project that would cost about $7 billion to build.
5:04 am
there will not be any government money involved in this project. it is all being supplied by private industry. it would immediately put at least 20,000 people to work. that certainly sounds like the national interest to me. if our president decides that sending three aircraft carrier strike groups to the strait of hormuz to defend the free flow of oil, if he thinks that's in the national interest, one would also think a pipeline from canada that would help us be less dependent on middle east oil would also serve the national interest. the president's own state department determined the pipeline woo no significant impact -- would have no significant impact on the environment. the president said it himself. his rejection of the keystone pipeline is not based on its merits, he said that, which makes us believe that the
5:05 am
decision to reject the pipeline was solely a political decision to help him be re-elected. at this time i would like to yield the remaining time. >> thank you for holding this hearing on this bill. a couple of points with the couple of minutes i have. this is what the state department has by way of environmental studies on the keystone route. as you can see, it's very voluminous, and it's difficult would end why this would be discarded. we'll get into some of the points later during questioning. i want to go off my regular script and express my displeasure that the state department decided or objects to our nebraska witness that could help put in context the nebraska exemption and what nebraska is do.
5:06 am
the state department objected because they don't sit on the same panel as a state witness. so the head of our nebraska department of environmental quality is not worthy enough to sit there, and because of then time constraints, his ability to answer our questions had to be deleted from this panel, and frankly, i'm disturbed by that. but we're going to get into the full excuse of using the state of nebraska has the reason, reading your testimony, as the reason for the denial. in fact, the bill was written so you wouldn't have to make that decision, and we'll get into those statements. i yield back. >> i might say also that last night the president, in his
5:07 am
state of the union address, talked about the importance of infrastructure for america to remain competitive. >> i'm really going to have to say that regular oil -- the five minutes is up, so we should proceed before regular oil is up. the time is up, mr. chairman. >> well, i think when you said that, there's still 30 seconds left. >> i looked at it, and it was five minutes. >> we will enforce the five-minute rule and recognize the gentleman. >> thank you, mr. chairman. thank you for recognizing me. i am also delighted to see the referees there. this is a good opportunity for them to exercise their craft, but i expect it to be a big battle to take place this morning, at this morning's hearing, because today we're holding yet another hearing on the keystone x.l. pipeline as a
5:08 am
follow to the last year. and the majority attempted to force the obama administration to hasteily make a decision on the keystone x.l. pipeline. we first tried to remove legislation that required the administration to forgo its legal obligations and its due diligence and come out with a favorable decision for keystone x.l. by november 1 of last year. and the majorities is reckless and irresponsible, so be it if the american public was left unprotected because of the administration did not have the time needed to conduct a thorough review, i want to repeat, a thorough review and oversight of this project.
5:09 am
as long as industry got what it wanted, then what's the most important goal of this congress. after that tactic failed, the majority held hostage the payroll tax cut extension, which would benefit millions of middle class working families in order to attach a rider that attempted to force president obama to come out in favor of keystone x.l. accident happen 60 days of the bill's enactment, and we all know how well that strategy worked out. again, the majority said too bad if ordinary americans might have been negatively impacted by a lack of federal oversight, and who cares if the republican governor has yet to even
5:10 am
identify a new route for the pipeline. as was the scene last year, my republican colleagues continued to push this false notion that if you would just roll back government or oversight for average americans and allow industry to do what it wanted, then somehow, miraculously, jobs will be created and millions of out of work americans would be gainfully employed. after all, mr. chairman, we saw how well this well defined philosophy worked during the bush years with the collapse of our total financial institutions and our economy.
5:11 am
mr. chairman, it's ironic that the subcommittee and joint committees, that went to pass the house last year, the only piece of legislation that actually became law was the pipeline safety reauthorization bill, which expanded regulation in order to address public safety. in fact, the pipeline safety bill enjoyed unanimous support from this committee, and so it would appear that my republican colleagues are not always opposed to federal regulation and oversight. especially when logistics are directly affected. so today, we're hear on another pro vehicle yal fishing expedition by the majority party, again, to try to
5:12 am
sidestep federal regulation and oversight in order to help industry get what they want and the american public be damned in the process. they know when the legislation would never, ever become law -- >> mr. chairman, i think the gentleman's time -- and i want his words taken down. move that his words be stricken. gentleman's time is expired. >> the gentleman made a -- made an accusation of saying that we're tied to campaign contributions. a, that's wrong, but that's against our rules.
5:13 am
his words need to be taken down. we'll have the clerk review the transcript, and then we will proceed at that point, and i would remind everyone that we do not need to be making accusations about what people are and are not doing as far as legal campaign finance laws and whatever. at this time, i'd like to recognize the gentleman from michigan for five minutes, mr. upton, chairman of the full committee. >> well, thank you. i notice we have a number of refugees in that second row. welcome to the big house. i noticed that you've got red flags, and, of course, it's not a yellow flag, it's red. a red flag usually means it's a review of the play. we look forward to having a review of the play. in fact, that vote did pass in this committee and on the house floor by a 2-1 margin, and we're looking to have the ruling on the field confirmed again and perhaps again and again.
5:14 am
it's not often that congress can take a step that will reduce the future price at the gas pump, strengthening the nation's energy security and create literally tens of thousands of jobs. it's certainly not often that we can accomplish all of these important goals at absolutely no cost to the taxpayer. but that's exactly what approving the keystone x.l. pipeline expansion project would do and why i support this legislation, hr-3548, the north american energy access act. keystone is a shovel-ready project whose construction would create badly needed jobs. once completed, it would allow more oil from our ally candidate to come to the u.s., taking the place of imports from far less friendly producers. the oil would go to refineries in the midwest and the gulf coast, increasing the supply of american-made gas and preserving domestic refining jobs. the pipeline would also provide an outlet for the growing supplies of domestic oil produced in the formation in
5:15 am
north dakota and montana, relieving a potential bottleneck there. and every penny of the $7 billion project will be paid for by the private sector. given the many benefits of keystone, it is no surprise that so many americans consider this decision to be a no-brainer. especially since the environmental impacts have been studied for years and found to be minimal. last year, the house passed a bill requiring the state department to make the long overdue decision on keystone by november 1. it was certainly bipartisan, 47 democrats joining nearly all the republicans in supporting the reasonable measure. the bill would have probably garnered more votes if not for the administration's repeated assurances it's going to make a decision before the end of 2011 and that the legislative deadline was not necessary. but sadly, as the end of the era approached, they postponed their position until 2013 at the earliest. in response, congress gave the president a second chance to do the right thing by providing
5:16 am
them yet another 60 days to approve keystone as part of the payroll tax bill, but last week he decided to reject the proposal after only 26 days. 60 days wasn't enough. make no mistake, time is of the essence. not only are there unemployed americans anxiously looking for jobs, not only is iran threatening the strait of hormuz, not only is the price of the pump headed toward $5 in the next couple of moss, but the canadian government is understandably growing impatient with the endless red tape and delays coming from washington. canada is a rapidly increasing is oil production, and if the u.s. foolishly refuses to be a customer for these new supplies, canada will build a pipeline not to the south, but to the pacific coast and the oil will be exported to china, where they're waving their hands because they want it there. that's why we are again offering an opportunity to approve keystone. i believe this approach, this
5:17 am
legislation given the decision making authority to the ferc is a good one. i look forward to moving it through the committee. and i would yield to anyone on our side that would like time, and if not, we'll yield back my time. >> the gentleman yields back the balance of his time. at this time, i recognize the gentleman from california for five minutes, mr. waxman. >> today we once again consider legislation to approve the pipeline. this legislation extends one pet project from every requirement. yes, one project would be exempted from every review. now, is that a way to approve an important and controversial pipeline? i hardly think that's the case.
5:18 am
the fact is that the legislation we're considering today is an earmark that benefits just one project. you remember the republicans saying they were against ear marks? well, not when it helps their friends. and the arguments for the project just does not stand up to scrutiny. this pipeline won't lower gas prices or create jobs being promised. why have the republicans introduced bill after bill to short circuit the permitting process on keystone x.l.? they say it will make the country more energy independent. that's a myth. oil prices are set by the global markets. this pipeline will have no impact on our vulnerability to price spikes or iranian
5:19 am
brinkmanship. in fact, it won't even reduce our import. it will simply allow canada oil companies to use the united states as a conduit for shipping their sands over to china. i know this they say that if they don't get the pipeline, they're going to go to the west coast. well, that's a problem, because there are first nations in canada who don't want this pipeline going in that direction, and it's not so clear they're going to get the approval to do that. canadian oil that is now being refined in the midwest, suppressing prices in the market will be diverted to the gulf coast for export, costing consumers in the midwest billions of dollars. the republicans say they support the pipeline because it will create tens of thousands
5:20 am
of jobs. but that's not right either. according to trans canada, the company seeking to build the pipeline, the project will have "a peak workforce of approximately 3,500 to 4,200 construction personnel." some labor groups have recently described the antics on keystone as the politics as usual strategy of a do-nothing republican congress. if the republicans were seriously and actually concerned about jobs, they'd work with the president in passing his jobs bill. they have no solution to the jobs prices. the jobs prices they say must be responded to by carrying away regulations to protect public health and safety. and then they say this one
5:21 am
project will provide the jobs we need. it's amazing to me. the fact is the legislation we are considering today is one that is hard to understand. we asked the coke brothers whether this was -- this committee has an obligation to understand who benefits from this legislation. last year, news organizations reported that one company, coke industries, would be one of the big winners if this pipeline were constructed. we asked coke whether this was true, and we're told they have no interest whatsoever in the pipeline, but then we learned that they told a canadian government that they have a direct and substantial interest . something does not add up. to understand this situation
5:22 am
better, we invited the coke brothers or the coke industries to come here and testify. the chairman hasn't even responded to our letter. we, therefore, mr. chairman, are invoking the minority's rights under rule 11 of the house rules to have a minority hearing. it's important we hear from the coke and other stakeholders. i think this pipeline is a bad idea. it ignores the concerns -- >> gentleman's time is expired. i would also tell the gentleman, we will certainly accept the letter and we will follow the rules, but we are not going to be submitting the coke brothers, and we're not asking the coke brothers to appear, because the coke brothers have nothing to do with this project. at this time i would like to -- >> just point of order, you made a statement where you were not recognized, you cut me out in the middle of the session. i'd like to know the station -- >> your time was up, mr. waxman. now, we're going to recess this
5:23 am
hearing for 10 minutes, and then we're going to come back. >> are you calling the coke brothers during the recess? >> let me tell you something. if you want to talk about that, let's talk about the millions of dollars that the obama administration gave companies like solyndra, to people like george keyser, who's bundling money for the president. would you like for us to subpoena him too? >> why are you interrupting members and then take unlimited time for yourself? >> i'm responding to your questions, your allegations. i'm the chairman. and i'm telling you right now we're going to recess for 10 minutes. >> call the hearing back to order.
5:24 am
and at this time, we'll hear the testimony of our two witnesses, and i would like to welcome both of you to this hearing today. first of all, we have the honorable carrie ann jones, assistant secretary of state, bureau of oceans and international environmental and scientific affairs. and we also have mr. jeffrey wright, who is director of office and energy projects at the federal energy regulatory commission. so, once again, i welcome you all to the hearing. each one of you will be recognized for five minutes. and then we'll have questions for you at that time. so, miss jones, i'll recognize you for your five minutes. >> thank you, mr. chairman, and good morning, mr. chairman. >> be sure to turn your microphone on. >> ok. i think it's on. good morning, chairman, ranking member, and other members of the subcommittee on energy and power. i appreciate the opportunity to appear before you today.
5:25 am
the u.s. department of state received the application for keystone x.l. pipeline project in september 2008. we undertook a thorough, rigorous, and transparent process to determine whether issuing the presidential permit for this pipeline was in the national interest -- >> would you please pull the mic closer to you? >> is that better? >> much better. >> ok. i think you know that first part already. in december, congress passed a contrary payroll tax cut continuation act of 2011, which required a determination by the president within 60 days of whether the keystone x.l. pipeline project would serve the national interest. on january 18, 2012, the department of state recommended to the president that the application for a presidential permit be denied due to insufficient time to conduct the necessary analysis. the president accepted our recommendation and determined that the keystone pipeline project as presented and analyzed at that time would not
5:26 am
serve the national interest. i would like to provide some further details about this process and also comment briefly on the administration's view of hr-3548. on april 30, 2004, president bush issued executive order 13337, which designated and empowered the department of state to receive the applications for presidential permits for all oil infrastructure projects that cross the u.s. border. the executive order indicates that the permit should be deprant based on whether it is in the national interest. the department's national interest determination factors include numerous issues, including energy security, foreign policy, economic effects, health, safety, and environmental considerations, including climate change, as well as any other factor the department believes is relevant to the national interest. to make an informed decision, the department is directed in the executive order to request additional information as needed from the applicants.
5:27 am
in order to analyze the potential impacts of the project as required by the executive order, the department determined that it would pry an environmental impact statement consistent with nepa, the national environmental policy act of 1969. we also carried out processes mandated by the national historic preservation act of 1966 and the endangered species act. following requirements, we engaged in a robust public outreach effort. on august 26, 2011, we issued the final e.i.s. following its issuance, we began a review period for the national interest determination. and we conducted an additional public comment period that closed on october 9, 2011. we held meetings along the pipeline route, including in the sand hills. these meetings were passionate with strong opinions and rationales on both sides.
5:28 am
in nebraska, we heard concerns about the fradge and i will unique sand hills of nebraska. we heard about their importance to a nation and to the people of nebraska. indeed, the people felt so strongly about this issue, that their legislators met in special session to draft the law to ensure the sand hills would be protected. that is why we paused the process in november 22011. based on experience with pipelines of similar length, we estimated it would take until early 2013 to complete our assessment. in december 2011, as we were cooperating with nebraska's department of environmental quality, the temporary payroll tax cut continuation act was enacted into law. we knew that 6 owe days was not enough time to complete the work and the analysis needed relevant to the national interest determination. we decided not based on the merits, but on the inadequate time period and the incomplete review to recommend that the president deny the permit.
5:29 am
this now brings notice hr-3548. the proposed legislation imposes now time con streants and creates automatic mandates that prevent an informed decision. we also feel the legislation raises serious questions about existing legal authorities and appeared to override foreign policy, national security considerations implicated by across broader permit, which are properly assessed by the state department. we remain fully engaged with all our key partners and suppliers, including canada, as we work on issues of energy security and diplomacy. the state department remains committed to carrying out its responsibilities under the executive order with difficult just answer and fair tons the applicants, but with ultimate concern for the best interest of the american people. thank you again for this opportunity to testify, and i will be pleased to answer any questions. >> thank you, mr. jones. mr. wright, you're recognized for five minutes. awe thank you.
5:30 am
chairman, ranking member, and members of the subcommittee, i'm the director of the office of energy projects at the federal energy regulatory commission, and i appreciatei ao appear before you today. the office is responsible for the certification of of interstate pipelines pursuant to the natural gas act. the act addresses the keystone pipeline project. i have no position on the bill but should they act on an application, the office would likely take a primary role in devising commission on the matter. i will offer comments on the bill with the goal of seeking to ensure that if congress gives this responsibility to the commission, the legislation should provide clear procedures. before commenting, authorization provided by the bill would
5:31 am
differ from the natural gas act and that the proposed act does not make any provision for procedures such as public notice, public comment, issuance of an order, hearing, or a judicial review and consideration of an application. section three would require the commission to approve the project within 30 days of receipt of an application. if not, and application is deemed approved. the 30 day deadline would not allow for a meaningful public comment. in fact, it could be read as giving notice aggression in the issuance of the permit. it also states the permit is to be implemented with an impact statement. it is not clear whether the commission would have authority to ensure and enforce compliance with the measures required by that document.
5:32 am
section threeb1 authorizes a modification. the bill does not articulate the process for such a decision. another section states they will enter into an understanding with the state for a timely review under the policy act of any modification of the project and the state of nebraska. upon approval, the commission will have 30 days to finish its review and to approve a modification and if not, modification will be deemed approved. the process is not clear. it appears to contemplate an entity will issue a document regarding a modification after which there will be the opportunity to approve the
5:33 am
proposal. there would have 30 days to complete consideration of the modification. it could be read to mean they have no discretion but to approve and it does not appear to provide a process for public notice or hearing. section four states that a permit issued under this act should be the sole legal authority. except for the safety oversight of the pipeline and hazardous material safety administration and the existing tariff authority. it is unclear whether such permits would still be required. of the department is responsible for issuing the permit, individual states or subdivisions have authority to cite oil pipelines. this legislation could be construed as provide local
5:34 am
authority. there will be happy to enter any questions. >> thank you very much. i recognize myself for five minutes of questions. mrs. jones, in october 2010, the secretary of state clinton said she was inclined to approve the keystone pipeline permit. october 31, 2011, the press secretary stated the fact is that this is a decision that will be made by the state department. and the next day president obama said the decision would rest with him. in his announcement last week to reject the pipeline, he said he
5:35 am
had accepted the recommendation to do so. i question is, were you involved in the decision made at the state department and did you recommend the president reject this permit? >> thank you, mr. chairman. the recommendation to the president was a state department regnant -- recommendation and it came from my bureau. >> your burueau -- bureau recommended it be denied. >> the other is the economic affairs. the state department looks at this across all the issues involved. there are multiple involved. all the meetings we have, we
5:36 am
also have some energy expertise and matters with canada. >> i think mr. walton has a copy of this impact statement. is it true the state department's draft concluded that the keystone pipeline would have limited adviser -- adverse impact? >> the statement suggested there would be a little adverse impact to most resources. in dead -- it said if the applicant followed all of the state and local rules and all the litigation procedures, there were three or four areas that were of concern or there could be impact. spills, cultural resource --
5:37 am
resources related to native americans, what lands, and some other areas where trees would not be put back. the statement is a very long. the summary is a one-page but there are other pieces throughout the document. >> is it to the environmental impact statement including a review of an alternative not to build the pipeline at all and didn't this statement conclude that building the pipeline along the preferred route was better than no " -- pipeline at all? >> in the statement, we looked at many alternative routes. we analyzed those. we looked at once that avoided the sand hills, tipped short --
5:38 am
tooked short jogs. it did not identify any alternative routes as more preferable to the proposed route based on the different considerations they had as well as economic and technical issues. the denial of this permit is related to the timeline we had. we did not have a complete rout to look at. >> reading directly from the statement, it says as a result of these considerations, the department of state does not regard the no action alternative, not to build the pipeline, we do not regard that alternative to be preferable to the proposed project. this language is clear that, as
5:39 am
opposed to to not doing anything, it was preferable to build the pipeline. we find ourselves confused about how all of a sudden the state department and the president reversed themselves on this. this was a study that went on for 40 months. my time has expired. i recognize the gentleman from illinois for five minutes. >> mrs. jones, most would agree that haste makes waste. my question is, why did the state to recommend the president denying the pipeline? >> and we recommended that denial because we felt we did not have the time to get the
5:40 am
information that was needed on the alternative routes in nebraska. we would also be unable to look at the other factors, economic, socio-economic, and environmental factors, as well as foreign policy. we did not have the time to do that. that is why i recommended a denial. it was not based on the merits of the project. >> maybe you can explain this, why was the assessment not completed by the arbitrary deadline set forth by the republicans? what additional issues to do not time to consider? in november, when we identified
5:41 am
the need for additional information on alternative routes that would avoid the sand hills and nebraska, where recognized there are many pieces to that information. the first piece is to identify what some of those alternative routes may be. we do not have the complete route for this pipeline which goes through a part of the center part of the country. we also cannot have the level of detail. we would have to get into detail regarding all of the information. topography, bodies of water, if across tenney aquifers. then we would have to look if there are any endangered species is used. we would have to interact with the communities to hear their concerns and understand what any issues might be. that would take several months. the estimate was supported
5:42 am
approximately by the applicant and the states of nebraska. this is a process that we have defined and worked with partners to understand what would be needed to get the information that we thought we needed to make a decision that would be well informed. >> do you think ben that it would have been irresponsible, reckless, or harmful to the american public had you tried to grant permits within these artificial deadlines as established by the republicans? >> it would have been irresponsible because we did not have to find is to begin
5:43 am
portion of a major pipeline that would be a major piece of infrastructure. it was an important piece. it is what we based our first decision on. the most recent is based on the fact that we did not have the time to get the info we needed. >> in our experience,, have you had any instances where congress enacted some artificial deadline that did not allow you time to completely perform your responsibilities to the american public? >> not that i can recall. >> i yield back.
5:44 am
>> thank you. of like to recognize the gentleman from texas. >> out of like to make a disclosure. my congressional district in taxes if it were a state at what time would have been the fifth largest energy producing states in the country. i have produced in oil wells, a natural gas wells. i have produced coal mines. i have gas-fired power plants. i have natural gas pipelines, water pipelines. there are some in use and some that are not in use but underground. i have big pipelines and little pipelines. i think i know a little bit about the subject. i have listened with interest to the gentle lady from the
5:45 am
state department. i will say that she puts the best face possible on a terrible decision that your department has made. one of the things you just said was that there where socioeconomic factors that had to be considered. where is that in the law? especially in the state department. is it in the law? i don't need a long answer. is there a statute under law that says the state department has to consider socioeconomic factors? >> it is an executive order. >> that is not a law. i would like you to provide it for me if that is the case. is it is socioeconomic factors that a project might bring thousands of high-paying jobs to the factor? isn't a socioeconomic factors
5:46 am
that might bring much needed energy to the lower southwest and southeastern states? >> it is. >> were those considered? >> absolutely. the decision was not based on the factors. >> those might be the reason that instilled the radical environmentalists began to protest and petitions against it that when the secretaries say was as the status, she indicated she was inclined to approve it. is that a fair statement? >> we were considering all of those factors that dimensions. -- you mentioned. we are unable to completed
5:47 am
because of a deadline. >> what is the statutory deadline for consideration? is in its 180 days? >> i am not sure. >> i know it is not for years. what i'm not going to swear it is 180 days. i think it is 180 days. >> my understanding is that in previous cases it had taken two years or so. i'm not sure what the statutory time line is. >> there are three phases of a pipeline. you have the construction phase, the operation phase and unfortunately you can have a catastrophic accident once it is an operation. where their concerns about the construction of a pipeline? what i'm trying to get at is the primary concern of the state department. it is in an operation phase?
5:48 am
>> our concern was that we did not have it. -- have time to do the analysis. the reason the decision was taken was because we did not have it. >> we found one in world war two in less time than it is taking. it is an insult to the american people to say that you need more time. there are 10 other agencies that have reviewed this project. correct me if i am wrong, but my understanding is that the corps of engineers and approved it. if the energy department approved its. the department of transportation approved it. the environmental agency approved it. the defense department approved
5:49 am
it. common security approved it. the department of commerce approved it. amid the state department which i believe is required to look at the international publications, only they did not approve it. >> of like to recognize the gentleman from california for five minutes. >> thank you very much. a year ago there were press reports that coke industries would be one of the big winners in this pipeline was constructed. >> will the gentleman yield? >> no. we've learned that they told the canadian government they have a substantial interest.
5:50 am
something does not add up. i have before me a document, an application for intervenors status in canada. it says that this is an application from a company in canada it is a subsidiary of coke industries. it said what is your specific interests. it said it is among canada's largest crude-oil producers and exporters, according supply for its refineries in pine bend, minnesota. it has a direct interest in the application. i would like this document to be made part of the record. >> without objection.
5:51 am
>> this raises the issue that the statement that koch industries is not accurate. the plan to intervene in canada. they are involved. the keystone xl pipeline poses substantial risk for americans. egos from canada to the gulf of mexico. even if it is rerouted a brown -- around nebraska, it almost certainly still go through the offer, -- aquafir, endangering water supplies for 2 million americans. the state department analysis indicates the shifting from crude oil would increase carbon pollution. these are risks. there are real and serious.
5:52 am
the oil companies are also real. they will finally be able to export it to asia. the benefits for americans are less clear. how many jobs with the pipeline generate according to the state department's analysis? >> the economic analysis and consideration is part of the review we had been doing that was cut short with the deadline we face. the final statements we approximate said based on the work crews that would be used to build a pipeline comment that 5000 to 6000 of the needed per year for two years. >> the oil industry has been saying it would pre 20,000. there are many of us supporting those claims.
5:53 am
have they cemented information? -- submitted information? have the oil companies challenged the data? >> we had a lot of challenges. >> let me get back to my time. the washington post claimed that this would create tens of thousands of jobs. this is called a pin of your -- a pinocchio challenge and this was made. the economy's recovering the would give the economy moving again. this is a pitiful excuse for a jobs policy.
5:54 am
i want to ask about the review. assuming that transcanada reapply is in the state department is still relevant, you will need to access the application. will you commit exit other -- to examine other questions about addressing u.s. carbon emissions? >> said of the cemented without -- should a new application be submitted, we will lok at it without prejudice, we would look at all the different aspects of the project. greenhouse gases as well as economic considerations and everything would be considered. we would do that in all fairness and transparency.
5:55 am
it should be a new application. >> >> i would like to yield one minute of my time from my friend from kansas. >> i've set of four a year. -- sat here for a year and obssess about koch industries. i've watched this for years. we reached a new point. the as a private company to see if they have a benefit. this makes no sense to me. we're supposed to do good policy. i cannot understand whether they would be relevant are not to our decision. i would not for a moment if wished -- consider if we should bring warren buffett in to see if his interest would benefit from this i heard he would be
5:56 am
greatly benefited if we did not get it approved. i cannot believe that anyone on this committee would have this. have it turn on whether a private company benefited her. this is not what we're supposed to be doing. we should not be making decisions based on whether one company or another benefit. >> thank you appear in thank you for being here today. my constituents are wondering about this fear. when do you think you can make a decision? 10 years from now? >> when we made a decision in
5:57 am
november that we needed information, we put an estimate that it would take to the first quarter 2013. we recognize the denial because we did not have the time to do that. >> wire they so nimble and you're so slow? >> i did not have a chance to respond to his comments. we did not finish the determination with other agencies. i was not clear as to what kind of approval it was referring to. we did not finish this. >> hillary clinton made remarks. she also called it a lifeline that moves oil and gas around the world. according department of energy, they passed it a straight.
5:58 am
the fact is that crude oil features have risen 7.4% since december 16 on concerns that iran would close the passage of the face of pressure from the european governments to abandon the nuclear weapons program. in light of these threats, why has it taken three years for the state department to review the pipeline? do you agree that it is in our natural interest to be more independent from those who want to harm our way of life? would you agree that fluctuating oil prices demonstrate how our economic and national security is threatened by unstable sources of oil? hillary clinton is concerned about their provocative actions.
5:59 am
does the state department shared the same concerns with canada? yes or no? on the canada thing. >> we share a commitment to work toward that an energy security. it is part of our strong bilateral relationship. as you point out, the whole issue of energy security is a very important national priority. it is one of the considerations will pipelines are being reviewed. we did not have the opportunity to complete it. that is the reason why we've that is the reason why we've made the recommendation that we


info Stream Only

Uploaded by TV Archive on