Transcripts For CSPAN Capitol Hill Hearings 20120622

>> the house oversight committee voted yesterday to hold attorney-general eric holder in contempt over documents they have requested but not received from the justice department in the fast and furious investigation. nancy pelosi and john boehner all reacted. later, mitt romney speaks to a group of latino officials. what's it all of us decide at the same time that we will tighten our belts and spend less, guess what, we will all end up for. -- poor. this is the stuff we have known since the 1930's. it is self-defeating. >> who is going to tell them the truth? we have to tell them. if we do not, country fails. we must succeed in this. we will reach them through the media and through politics. pop culture, we should not be afraid to get out there. we should be influenced buers in pop culture. watch these online at the video library. earlier today, house democrat and republican leaders gave their weekly briefing. during remarks, minority leader pelosi called the vote against eric holder and "shameful display of abuse of power," and accused house republicans of retaliating against him because of their department's investigation into voter suppression law. she spoke for just over half an hour inside the capitol. >> good morning. this is a very interesting week, because so many things are coming together or not. what we have seen is a shameful display of abuse of power by the republicans in the house of representatives. instead of bringing jobs- creating legislation to the fore, the transportation bill, they are holding the attorney general of the united states in contempt of congress for doing his job. it is really important to note how this is connected with some of their other decisions. it is no accident. it is no coincidence that the attorney general of the united states is the person responsible for making sure that voter suppression does not happen in our country, that issues related to civil liberties of the american people are upheld. these very same people are holding in contempt -- they are part of a nationwide scheme to suppress the vote. there are allied with those who are suffocating the system with unlimited special interest secret money, and they are poisoning the debate. they are poisoning the debate with that money. so what does the average citizen say? a pox on both your houses. and that is a victory for the special interests. our founders had in mind a democracy where governments are of the many and determine our government. these folks want a plutocracy. instead of the voice of the many, the checkbooks of the very few determine the outcome of the election. again, a plutocracy. so nbc is diversion. -- you see a diversion. let's not talk about this transportation bill, student loans, nine days until the lower interest rate will expire. instead, instead, let's tie the hands of the person who will decide to make sure that the american people have the right to vote -- who have the right to vote are able to vote on their vote is counted. it is all tied together. combined with their threat on the debt ceiling, the republican delay in ejects not only uncertainty -- that has prevailed for a while, paralysis in our economy. we hear this from businesses large and small. the threat to our credit rating. to the full faith and credit to the united states -- of the united states of america. this contributes to a process on a part of businesses who want to hire -- a paralysis on the part of businesses who want to hire but do not. why would they do such a thing? because it is their philosophy. they are the party that makes adam smith look like a keynesian. they are laissez, laisseez, laissez faire. they support those who would privatize the system and nationalize risk. in our financial transactions. laissez faire in terms of they do not want any regulation for public housing, public education, public health, social security -- this is what they believe. no government. bless their hearts, they act upon their beliefs. their beliefs are dangerously thriving middle-class in our country. so you see so much of a coming together. why would they oppose an initiative to create jobs? the president's american jobs act. some people called obstruction. it is obstruction, but obstruction is their orthodoxy. they do not believe in a public role. it is not the they are obstructing this way of getting something done. it is no way for them. that is why they take pride in that they do nothing. everybody knows that our founders had in mind that there would be a public role, that we would have a public-private partnership, and that the education of our children, incentives for the creation of jobs, and economic security for our seniors. we all believe kids should be in clean and safe neighborhoods. the security of our country should be done in a fiscally sound way. there is no political bias to it. that is not partisan in any way. but it is the orthodoxy -- if your belief is that there should be no public role, and the only role of government is to give tax breaks to the wealthiest people in our country and let something trickle-down. if it does, that is okay. and if it doesn't, as the speaker said, so be it. we do not say amen to that. their approach under the bush years, and the george w. bush years, created the deficit, did not create jobs, took us to the brink of a depression. it is very hard to grow out of it. when they bring this up again as their approach, you have to say, this did not work before. it bought only make matters worse for america's thriving middle-class. so we say to them, passed the transportation bill. take away the uncertainty to students for the interest that they will pay on student loans. past the middle income tax cut. so that we can remove all doubt that that will exist and not be held hostage for tax cuts to the wealthiest people in the country. the budget in which they have enshrined uncertainty -- this is their goal. and fairness. -- on the fairness. how else could you describe the elimination of medicare, resulting in fewer benefits to what you give $4,000 -- while you give $4,000 tax cuts to people making up more than $1 million a year. is it fair to make people pay more student loans will you give that tax break to the wealthy? you see it all coming together. a diversion from not doing their job of helping us come together on transportation bills -- it has always been bipartisan. it has always been a job creator and has always treated to the safety of transportation in our country, the promotion of commerce, the quality of life, moving people and products to and from home and work. but now it has been held up. nine days to go. let's hope that there is still a chance that there can be some interest on the part of the house republicans to support what 74 members of the united states senate's -- 3/4 of the senate on record supports a bipartisan bill. that is unacceptable to the house republicans. this is a serious time, especially as we go into approximately 140 days until the election. 140 days until the election, or maybe what i monday off. 140 days -- maybe i am one day off. not only important to our economy, to our one and five kids who live in poverty in america and are being cast aside, not only to those who are looking for jobs and this perhaps -- paralysis is preventing them from being unleashed, but also important to our democracy. suppress the vote, suffocate the debate with unlimited dollars. poison the debate, a victory for the special interests. in shrine and fairness in the favor of special interests at the expense -- expense of the the middle-class. it is an important week. as we go into a celebration of our own independence, it is important for us to understand that you cannot change the policy on us to change the politics. unless we dare, unless we dare, by -- as they have to do -- as we have to do, they should do. amend the constitution to overturn citizens united. remove money as completely as possible from the process, and electrons farmers who will do that in both parties. -- b. let reformers who will do that in both parties. it is important to know that this is nothing accidental, coincidental or just happened to happen. the decision to suppress the vote to validate policies that increase that deficit and increase unemployment. that is exactly what they had in mind. >> democrats are tough on george w. bush's policy. what is the difference between what republicans are doing with eric holder and what democrats did to michael mccasey? >> in the house, our contempt of congress was addressed to josh bolten. i cannot speak to those cases, they never came to a vote on the senate floor. in the house, we took a hat -- a vote. the circumstances were quite different. we were talking about political intervention in the hiring of u.s. attorneys, having them retain their position through political innovation -- political intervention from the white house. it is important for me to speak about this issue because our e leisure cummings -- elijah cummings, who we are proud of the role he played -- the particulars of the cases are very different. as you know, we want our case. a judge ruled in our table. i can only speak -- speak to our experiences. >> a ranking member of congress said that, if speaker boehner were to bring up the vote to hold holder in content, he would become one of the most extreme members of congress ever. do you agree? >> i defer to the superior knowledge and wisdom of mr. cummings on the suspect -- subject. i just know that this case is different from what we have before us years ago. >> you have any -- given the fact that the interest-rate increase will only apply to new loans -- >> suppose you are a student. you are taking at 11 and he signed up for 6.8%. you signed up. sometime down the road you are going to perhaps renegotiate the loan. you have to really know how to do that. there is a lot involved in that. that'll be passed on to the borrower. people have to make decisions -- if you want to talk about the uncertainty, how about the uncertainty of knowing that this may or may not be the interest that i pay? you do not even know if it will be retroactive. so why would we do that, except to schumer -- humor the intransigence of the republicans in the house of representatives. why should students have to face that uncertainty if we agree that the interest rate should be 3.4%, not 6.8%? it hurts the students. we had a presentation as recently as this morning about what it means to the -- a student. it means a lot to the student and the families. so much so that these families may have to decide, not knowing whether this will happen, they may just have to pass up going to school this year. >> madoff leader, how to follow up -- madame leader, i want to follow up. the attorney general said he was willing to give some documents, then the president picks -- withheld them. this turned into a clash between the house and the white house. are you worried this will turn into a fight between the president and the house? >> this is part of the scheme that the right wing -- i do not think all republicans subscribe to this, but the over the edge gang which dominates the house of representatives has said that this is the best way for us to spend our time, to review a policy that began in the bush administration. a mistake was made, a person was fired. tens of thousands of documents have been turned over. without going into the conversation between the feds and the jury -- the attorney general -- the administration made every attempt to make every document available. the president said that to the speaker of the house. >> we all know what his pledge is. but i want to talk about to the pledge means and what it does not mean. what does it mean to have this interaction between the republicans and mr. norquist? >> i think they are in touch every day. i think his physical presence is not indicative of the influence he had on the caucus. if we will take any pledges here, it should be a pledge to uphold our democracy, not to give tax cuts to the richest people in the country, which undermines fairness in our country and destabilizes the middle-class, does not create jobs, and increases the deficit. >> is there a difference a tween the attorney general being held in contempt and being fired? >> there is a big difference. >> democrats and republicans agree they are walking guns into -- were walking guns into mexico. a letter was later retracted. i'm curious about what you think is the difference between why it was appropriate to hold contempt one time, but not the other? >> that is -- i'm going to leave it to elijah cummings, who has made us very proud in doing the right thing on this. not taking it swinging to some other place, but trying to take this to a balanced place about what our responsibility is. contempt of congress -- to frivolously use that very important vehicle to undermine the person assigned to stop the voter suppression in our country -- this is connected. it is no accident. it is a decision and it is a clear -- it is as clear as can be. it is not only to monopolize his time. it is to undermine his name, to undermine his name as he goes forward to protect and defend the constitution of the united states. >> the supreme court did not rule on health care. the democratic left told reporters that democrats had discussed their contingency plans for a range of options. do you maintain confidence that the court or role in your favor -- i am wondering what the contingency plan of democrats is if it is struck down? >> the only means i have been party to were once we have tabulated the benefits of the plan, knowing that people have already benefited and that more people are now on their parents' plan until they are 26. many more millions of young people cannot be discriminated on the basis of a pre-existing medical condition. seniors pay less for their prescription drugs because of legislation which closes the doughnut hole -- you probably do not know what that means kids, -- what that means, but it means something to seniors. that is the annual checkup without co-pay. those are some of the benefits. as many as 80 million people already benefit from those. that is what we are trying to defend in this legislation. there had been some other meetings about the implementation of the law that have nothing to do with the court case, but i believe that the court's oral in favor. we are ironclad constitutionally. we are ironclad on the constitution and we will see what the court does. we believe in judicial review. republicans have not come up until now, belief in judicial review, and now suddenly they are big proponents of margaret vs. madison, which just a few years ago they said was -- marbury vs. madison, which until a few years ago they said was wrongly decided. the speaker said he was going to take the massachusetts case on doma to the supreme court, and use tax dollars frivolously to defend this bill. i think it is important to now. i talked to about one republicans did not believe in judicial review. one occasion was on the bill in 2005. they rode a bill that said the court should not have judicial review over doma. they know it is on very fragile constitutional ground. we think it is unconstitutional. but they, realizing that, wrote a bill stripping the supreme court of the right to rule on it. it passed the house but did not pass the senate, thank god. >> a last question about health care. on policy, i know you have to -- i know you are going on 63 -- 6-3, but on a matter of policy, if the court strikes down at the mandate and leaves in place all the things that you like and the doughnut hole closure, as a matter of policy, can you justify leaving those things in place without a mandate? all those other things without the mandate -- if a strike that down, how can you leave those in place? >> to borrow a supreme court metaphor, you have to eat your vegetables. you have to have the mandate in order for this to work from a financial standpoint, but that -- in other words, we want to keep those in place. the biggest difference in the lives of the american people -- one of, in terms of this legislation, is that you cannot be deprived of coverage if you have a pre-existing medical condition. this is huge. this is huge. and insurance companies even say that they cannot do that unless the premiums skyrocket. so if the american people like the idea that they and their children cannot be deprived of health care and health insurance because of pre-existing medical conditions, -- that will require some other action in order for that to happen. what could that be? it could be something passed in the congress similar to what we had in the house bill. a surcharge on the wealthy to pay for aspects of that. the senate had another idea. it went a different path. states can take their own actions in california. we have our legislation as you know. massachusetts under the governorship of mitt romney passed a mandate that he said was necessary for the health and well-being of the people of massachusetts. they can have of their own exchanges. they can have a public auction. -- option. you are asking what are some of the things that could happen. what we cannot say to the american people is that we are going to throw you at the mercy of the insurance company is to have reduced coverage to you and rescinded policies when you are going into the operating room. they have raise your rates to the point of being prohibitive. we have to remember that one of the main reasons to pace -- past the health-care bill -- the cost of it was unsustainable. to our economy, to our competitiveness, to have this and tell of health care costs around our businesses. it was unsustainable. you had to have the legislation that kept its integrity. it took us down a path of decreasing costs to all the entities that i mentioned including the federal budget. the many things in there that we do not get credit for from the cbo, some things that go along with it like electronic medical records, that kind of thing. it will drive down the cost of health care as well. it is not figured into the cbo report, but the think tanks have said it would be hundreds of billions of dollars of savings over the life of the bill. tt's hope and pray that court will love the constitution more than it loves broccoli and we will have a decision based on the merits of the constitution of the united states. >> those are all things that the american people will demand. can they justify leaving it on the table? the majority that exists in the house right now has no interest in making these things available. they do not want to you see the wall street journal. it is $2, if he did the zero papers. -- %2, two papers. does that happen where you where are? there are criticizing some of the republicans that they be like some of those things. there has to be a way to pay for it, to reduce the cost, and expand the coverage and improve the quality. this bill did just that. the insurance company said it intends to millions of new clients. it is subsidized by the taxpayer. under a federal set of rules. that is a beautiful thing. whole structure comes down, that makes it worse for them. they wanted to keep charging more for premiums. now that they have, they would rather see a fixed formulation. this is a longer conversation that is spent elative and so we see what the court will do. it is a remarkable thing. nobody knows. those who know do not speak. that is a phrase we have been using. nowhere does it apply more than to the supreme court. they are going after eric holder because he is going after these measures for voter suppression. it is a plan on the part of republicans. thank you all very much. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> now we will get john boehner's take of the boat but contempt charges against eric holder which will come up on the house floor next week. speaker banner spoke to reporters for 15 minutes. >> good morning. the american people are continuing to ask the question where are the jobs? middle-class families are struggling with high unemployment, rising prices and stagnant wages. republicans have been relentlessly focused on helping them keep jobs. we will remain there. congress also has an responsibility to learn the truth about what happens in fast and furious. on february the fourth 2011, the department of justice denied allegations that it allowed guns to these bold into mexico. 10 months later, the justice department formally withdrew their denial and the acknowledged it made false claims about this reckless operation. the obama administration will have done this to find out how and why it made these false claims. we're talking about a program that a mexican drug dealers guns and those guns killed an american border agents. the american people deserve the truth. the administration has an obligation to turn over the document right now. they have covered that the truth. what is the obama administration hiding that today the house will pass the domestic energy and jobs act by expanding energy production. this is the latest in a series of more than 30 jobs bills that have removed government barriers in stop policies that are driving up the gas prices. house republicans want to get a highway bill done. we want to make sure it is a bill that includes real reforms to ensure taxpayer funds are paying for a legitimate projects to support economic activity not planting more flowers and beautification projects around the country. we continue to support bipartisan job-creating issues. next month a house will act to boost economic growth and create jobs by preventing a massive tax hike and providing a fairer and simpler tax code that closes the tax hikes. tax reform will help fuel more economic growth and job creation. they will stop regulations that will hurt businesses. i think you know the supreme court will rule on the president's health-care law which are driving up costs and making it harder for small businesses to hire new workers. unless they throw out the entire law, the house will vote to repeal whatever is left of obamacare. then we need to an act common sense that help protect jobs and protect americans' access to the care they need, from the doctor they choose at a lower costs. >> nancy pelosi said the citation is about diverting attention from the transportation bill and undermining an attorney general define to guarantee the right to vote. do you have a response to that? >> i met with the republicans on the highway bill. they have been heavily engaged. clearly there is some movement that has been all the way since the meeting i had. we're continuing to do our work. the american people deserve the truth about what happened. the family of brian terry deserve answers about why their son was killed as a result of the operation run by the united states government. this morning they put out a statement. i will redo the lasted since -- last sentence of its. our son lost his life protecting this nation and it is very disappointing that we are now faced with an administration that seems more concerned with protecting themselves rather than revealing the truth behind operation fast and furious. this is a very serious matter. until yesterday, it was just the department of justice that we were concerned about. clearly at the 11th hour and 58 minutes of the white house, they decided to inject themselves into this. there have been no indications that the white house has been involved at all. there have been lots of claims about how many times this white house and that white house have invoked the issue of executive privilege. the privilege that is reserved for the president and his top advisers. why the white house would invoke executive privilege over department of justice documents raises serious questions. knowing what you know now, should he resign? >> we're trying to get to the facts and the truth about where this program started, why it continued, and why an american border agent was killed as a result. what we want is the truth. we want to get to the bottom of this. the house will vote next week on a consent resolution unless these documents we are looking for are in fact turned over. this is about getting to the chair of four the american people care it is not about personalities. >> what if someone said we should be in a negotiation? are they not looking at this in their conference? >> the negotiation that was proposed by the attorney general is that we should accept some documents of his choosing and as a result of him turning over some documents that this tousing that we would never ever pursue content. this is not hardly a rational basis for a negotiation or is it a reasonable attempt at turning over the documents that we have been asking for. i have been heavily involved in this for months. and made sure that the t's were dotted. and i's i understand there is a criminal investigation. i do not want to do anything that would interrupt that investigation. the documents relating to why they sent the letter up on february 4 of last year, why it took them 10 months to retract that letter, what those deliberations are, have nothing to do with the criminal trial. those documents i think are important for the truth to come out. >> i know of the attorney general said. then saying they did not want to function. >> as more members understand all of the facts as i know them, this was done with plenty of deliberation and plenty of time for the administration to work with us to resolve this issue. >> they are coming to talk to your members. some other republican challengers will not sign the pledge. some say your party position will shift. is this not as important as they used to be? by i understand he will come up here and have a conversation. the american people understand the raging taxes in this economy is the wrong thing to do. we are going to move our extension next month. we're glad to outline our principles for tax reform. i have been around the political process for a long time. i've never voted to raise taxes. we have a big job to do. i am not interested in raising taxes. they can discuss whether tax increases, and how they resolve it all. >> i know you believe spending is the problem. given that some members of your party are showing some reluctance, do you think that you have shown some willingness to raise tax revenues as part of an effort to bring down the debt that depot more members are coming down that do you think it will make finding common ground easier? >> i had the additional revenues on the table. revenues out of economic growth, more efficient tax systems, revenues out of opportunity cost from having certainty about what the tax field looks like. i do believe that there is a way to resolve this. at this point, giving this government more revenue would be like giving a cocaine addict who wants to quit more cocaine. we have to have controls on spending. we have to deal with the entitlement crisis that is threatening the very existence of these programs. that conversation will continue well into next year. >> do you think you might distract from their job. the began talking about jobs. >> our focus has been on jobs. i understand that members of congress have taken an oath of office to uphold and defend the laws of the united states of america. when those laws are broken congress has a responsibility to provide oversight at the executive branch. we are pursuing our legitimate concerns about making sure that the american people know the true behind fast and furious and the death of terry. >> if there are further investigations, when you get involved? >> i do believe chairman issa have a better handle on the type of document needed. i will help facilitate the conversation. i do believe that it is his response ability. he is in a much better position of understanding exactly which documents he needs. thatere's a lot of concern this does not just take effect on january 1. particularly in the defense community. this could affect the economy this fall. are you committed to turning off the sequestered before the election? >> listen, we have done everything we can to try to replace the sequestered. that is why the house acted last month and moved a bill to the senate to make sure that these reductions in force which will come before the first of the year do not happen. i am concerned that you cannot wait until january the second and just flip a switch. i am convinced that we will see thinks live coming month after month as we get up to january the second of the sequester is not replaced. it is time for the senate to act. we have not heard anything out of the senate. we're not heard anything out of the president. maybe instead of campaigning every day, we could be concerned about the job picture in our country by working with the congress to make sure that this sequester does not go into affect. >> [inaudible] >> now we will get the white house perspective on the oversight committee vote to hold eric holder in contempt. the president has asserted executive privilege of the document saw by congress. it is part of the briefing is about 30 minutes. >> hello, everyone. welcome to the white house. before i take your questions i just wanted to note that today the department of health and human services announced that 12. 8 million americans will benefit from $1. 1 billion in rebates from insurance companies. these rebates will be delivered by august 1st. the rebates were made possible by the affordable care act, which generally requires insurance companies to spend at least 80 percent of consumers' premium dollars on health care, not advertising, bonuses, or overhead. if insurance companies do not meet that standard, they must provide rebates to their consumers. the rebates are just another example of how the affordable care act is giving consumers a better value for their health care dollar and making our health care system stronger. i'm sure there will be a lot of questions about that, and perhaps on other issues. ben feller. >> thanks, jay. i wanted to ask about fast and furious and the move by the house panel to cite the attorney general for contempt. historically, in these standoffs, there's some arrangement reached between the white house and congress to prevent a potential court fight that could hurt either side. can you tell us if there's any such effort underway right now between the white house and republicans on the hill? >> i can tell you that we certainly would like to resolve this if there is a good-faith desire to resolve it on the part of house republicans. i think it's worth taking a step back. at the beginning of this year, republicans announced that one of their chief legislative and strategic priorities was to investigate the administration and damage the president politically. we are nine days away from the expiration of federal transportation funding, which guarantees jobs for almost a million construction workers because congress has not passed a transportation bill. we are 10 days away from student loan rates doubling, potentially impacting over 7. 4 million borrowers. yet, instead of creating jobs or helping the middle class, congressional republicans are focused on this politically motivated, taxpayer-funded, election-year fishing expedition. the problem of gunwalking was a field-driven tactic that dated back to the previous administration, and it was this administration's attorney general who ended it. in fact, the justice department has spent the past 14 months accommodating congressional investigators, including producing 7,600 pages of documents and testifying at 11 congressional hearings. yet, republicans insist on moving forward with an effort that republicans and objective legal experts have noted is purely political. given the economic challenges facing the country, we believe house republicans should instead be engaged in efforts to create jobs and grow the economy, rather than political theater. >> so you think it's political theater. but is there something happening behind the scenes? do you think there is a good- faith effort that can be had here to resolve this? >> as you know, the attorney general requested a meeting with the chairman of the committee and, while i would refer you to the department of justice for more details, made an effort to reach a resolution on this matter. and it is certainly in our -- we believe worth the effort of trying to find a solution. but we have to have a willingness on the other side to work with us to find that solution. it is important for the public to know -- the public, by and large, is not particularly aware of this matter -- that every document related to the fast and furious operation has long since been provided to congressional investigators. and as i noted before, this is an operation and a tactic that was generated in the field during the previous administration that, when it was discovered by the attorney general, when he became aware of it, he ended it in this administration. he referred it to the inspector general for investigation. it has been recognized by the attorney general and others in this administration, including the president, as a flawed tactic that needed to be ended and investigated, and this administration has done that. what this is about, after all this time and all these documents and all the testimony, is an attempt to score political points. i think it's a -- speaking of flaws -- a flawed attempt, because it is this approach i think that explains at least in part why this congress has the lowest public approval ratings of any in memory, if not history. so that is our view of the matter. >> last question. can you clarify or elaborate on what you mean by every document has been provided when the president has asserted privilege on some documents? >> correct. the issue here is about after- the-fact, internal documents that have to do with the executive branch's ability to operate appropriately and independently in response to congressional investigations and media inquiries. everything that has been -- every piece of documentation that relates to the operation itself -- if the interest here is in the operation -- how it came about, its origination, how it was approved, why such a flawed tactic was employed, that has been provided to congressional investigators. the assertion of privilege has to do with the protection of the executive branch's capacity, enshrined in the constitution in the separation of powers, to deliberate independently and respond appropriately to congressional investigators' requests and to media inquiries. i would note also that, as i said, the attorney general referred this manner, when he learned of it and put a stop to it, to the inspector general. the inspector general has access to all the documents at issue here, and is investigating at the attorney general's request. reuters and then jake. >> thanks, jay. on the resignation of the commerce secretary, does the president plan to nominate somebody else and try and get them confirmed? >> well, first, i would refer you to the president's statement thanking john bryson for his service, noting mr. bryson's many decades of service both in the private sector and the public sector. and i would refer you to secretary bryson's letter explaining his resignation. dr. blank, becky blank, will serve as acting commerce secretary. if we have a personnel announcement to make beyond that we'll let you know. but the president has a lot of confidence in dr. blank -- she has served in this position already and did it quite well -- and has a great deal of confidence in her ability to carry on the important work that the commerce department does. >> so that's a no, there's no plan to nominate someone else? >> no, i said that if we had a personnel announcement to make we would provide it, and we will, if and when we do. >> okay. let's try on another thing. there's a story in the times today about the cia helping allies make sure that weapons don't get into the wrong hands in the syrian opposition. i don't know that i can get you to talk about intelligence matters, but i wonder if you could talk about how much you know about the opposition and how much confidence anyone can have that weapons that go to the syrian opposition stay out of the hands of potential foes? >> i appreciate what you noted because i'm not going to discuss intelligence matters. i can say that as a general matter -- and this is something i've noted before -- that part of this period of helping the opposition consolidate itself has been one where we have evaluated who makes up the opposition. and we've certainly noted that there are some elements of the opposition that are not necessarily friendly to the united states. they do not make up the bulk of the opposition, and the opposition is not entirely unified, as you know. but again, that would be a separate matter from the issue that you raised at the top of the question. >> so how much confidence do you have that you know enough about the opposition that you can actually direct the flow of weapons in the right direction? >> well, again, i'm not commenting on an article so i can't -- i can only say to you that our position on providing lethal assistance has not changed. what i can tell you is that we provide humanitarian aid to the syrian people. we provide non-lethal assistance to the opposition, and we continue to work with the opposition, in concert with our international partners, to help them organize themselves, to help them develop greater capacities, all as part of the process of preparing for a political transition that the syrian people absolutely desire and deserve and that will take place. >> and that stops short of giving the opposition weapons? >> again, we do not, as a matter of policy, provide lethal aid to the opposition. jake. >> the documents being blocked through executive privilege, are any of them to or from individuals in the white house? or are they all internal doj documents? >> i don't have a way to characterize the documents in question here. i can tell you that long ago, the administration provided documentation about specific questions regarding officials at the white house and the national security staff. that was a long time ago, which speaks to -- it was last fall -- speaks to how prolonged this political investigation has been ongoing. the point i made earlier is that this is an assertion based on the absolute need for this president, as the steward of the executive branch -- not just for his administration but for every administration going forward -- to retain the separation of powers, to protect the capacity of the executive branch to deliberate on these matters, and to work independently and appropriately in response to these kinds of inquiries. the issue here has been the issue here has been the operation known as fast and furious, and that operation is being thoroughly investigated by the inspector general, who has access to all these documents, including the ones that you're asking about. and when it comes to the operation itself, everything has been provided to congressional investigators. and that is really the issue, isn't it? it is, how did this operation come about? and it originated in a field office during the previous administration. it was ended under this administration, by this attorney general. >> the operation began in fall 2009. the operation fast and furious began -- >> the tactic began in the previous administration. >> okay, but the operation -- you keep saying -- >> okay. the tactic began in the previous administration, and it was ended under this one when this attorney general discovered it and believed it was a flawed tactic. he then referred it to the inspector general. >> the documents that the president is asserting executive privilege and not disclosing -- you don't know or you're not going to say whether any of them are to or from anybody in the white house? >> again, i'm not going to characterize documents related to this except to say that, on the specific matter of white house -- anybody in the white house -- and this refers, i think -- and you know if you cover this, and i know some folks here have -- you know because these documents were provided and are out there and were provided back in the fall -- they relate to anybody in the white house knowing about the so-called fast and furious operation. any document related to the white house, anybody at the white house knowing about the fast and furious operation was provided -- at the time was provided back in the fall. >> in early 2011, the justice department wrote a letter to congress in which they said something that was not true. >> right. >> right? they said that atf had nothing to do with guns going over into mexico. that wasn't true, and it took them until december 2011 to take that back. is there not a legitimate investigative and oversight responsibility to find out what the department of justice knew when they were giving false information to congress? >> first of all, i think that matter has been thoroughly discussed in congressional testimony, including nine appearances by the attorney general, including the 7,600 -- >> -- after the false statement? >> -- documents that have been provided. the issue -- i would refer you to a leading member of congress in the republican party who, himself, called this politics. i think most people in this room understand that this is about politics. it is not about an effort to divine the truth in a serious matter -- which is why the tactic used in this operation was used, how it originated, and the consequences of using it. this administration takes very seriously, the attorney general, as demonstrated by the actions he took, takes it very seriously. and he has demonstrated his willingness to try to reach a resolution to this matter with congressional investigators. to this point, the interest of house republicans has been to use this politically, as they previewed for the world in the beginning of this year when they made clear that that was one of their chief goals of the year. >> jay, just one last question. the family of brian terry, the slain border patrol agent at whose murder scene at least two of these guns were found, they disagree with your characterization about these investigations. they say that the attorney general's refusal to fully disclose the documents associated with fast and furious and president obama's assertion of executive privilege serves to compound this tragedy. it denies the terry family and the american people the truth. that's a statement from the terry family lawyer. >> look, we absolutely agree with the need to find out the truth about why fast and furious happened, why the tactic that, again, was employed in the previous administration in different operations and was stopped by this attorney general -- why it came about. and that's why the attorney general referred it to the inspector general. that is why we have provided congress every document that pertains to the operation itself that is at issue here when you talk about the family that you referred to. and -- >> the terry family. >> the terry family. and that is separate from an attempt by members of congress, republican members of congress, to try to score political points -- as senator grassley referred to his desire for a "political scalp" -- that is separate from trying to find out the truth about what happened in this operation, which this administration has been pursuing since the attorney general discovered it. let me move around a little bit. steve, and then norah. yes. >> can you say categorically that there is no -- there's been no cover-up? >> absolutely. >> there's nothing being covered up by the justice department, by the white house, as far as your involvement in -- >> again, the attorney general -- >> -- not in the initial thing, but in the -- >> the attorney general referred this matter to the inspector general. the inspector general has full access to all documents we are discussing right now -- full access. and he is investigating this matter. congress has been provided an enormous number of documents -- 7,600 pages. it has been provided access to the attorney general on eight occasions, as well as other justice department officials and relevant officials to this matter. and this has gone on for months and months and months. the assertion of privilege has to do with the absolute necessity of retaining the executive branch's independence enshrined in the constitution in the separation of powers, to allow it to appropriately and independently respond to -- deliberate and respond to these kinds of inquiries. that is an assertion that has been made by administrations of both parties dating back 30 years. and that is the matter -- that is what the issue is here. again, the attorney general of this administration ended this practice. he referred it to the inspector general. the inspector general has been investigating since that time, and has access to all these documents. yes, norah. >> on syria, is the united states, along with allies, willing to give president bashar al-assad safe passage out of the country? >> it is not for us to decide that. it is up to the syrian people to decide the fate of mr. assad. and it is -- i know the report you're referring to, and i would simply state that it is our position to work with the international community, to work with our partners to try to bring about the political transition that the syrian people desperately deserve. and it is our firm belief that that political transition cannot take place without bashar al-assad stepping down, removing himself from power. >> so what are you suggesting happens to assad when he removes himself from power? >> well, this is not a matter for the united states to decide, certainly not alone. the fact of the matter is we need to -- >> so when assad steps down he can stay in syria? >> president assad has not made any indication -- i think he's made every indication to the contrary -- that he is going to participate in this political transition that his people are demanding. instead he has launched a brutal assault against his own people, an assault that continues to this day. >> but the u.s. policy position is to call for a peaceful political transition. is there no answer with what to do with assad once he steps down? >> again, that is not something that the united states decides. that was an issue, i think you'll recall, that was raised during the libya situation. the united states does not make a decision about the disposition of leaders who remove themselves from power. that's obviously up to the syrian people. >> but perhaps yemen is a better comparison. is the u.s. encouraging kofi annan to host sort of a conference-type, where there would be a transition of power like they did in yemen and president saleh got immunity? is that a potential option? >> i'm not going to negotiate from here an outcome in syria except to say that our clear position is that assad has no place in syria's future. he has long since relinquished any claim he had to a spot in syria's future as its leader by the horrific actions he's taken in an effort to thwart the will of the syrian people and to retain his own hold on power. >> and then final question on syria. after the bilat between president obama and president putin, there seemed to be some indication afterwards from u.s. officials and others that putin expressed that he was not wedded to assad. is that correct? >> i'm not going to speak for president putin. i can only tell you that, as the president said and others said, that syria was certainly a topic of discussion during their lengthy bilateral meeting and the two leaders share the desire for an end to the violence in syria. and i would refer you to the statements that each leader made. but i can't speak for president putin from here. ed. >> since we were talking about transparency on fast and furious, a quick one on bryson, secretary bryson stepping down. ans now -- you've added event with the president and secretary bryson. why is that not open to the entire media and to television cameras? we haven't seen him since the hit-and-run incidents. maybe people want to ask a question. maybe we want to see how healthy he is. why is it not open to cameras? >> secretary bryson submitted his resignation letter, the president accepted it. it is a matter -- in terms of his medical condition, i would simply refer you to his letter of resignation and refer you then to him and to the commerce department for further questions about that. this is a situation where -- >> well, we'd like to -- >> -- the president is meeting with secretary bryson to thank him for his service, to thank him for the months he spent as commerce secretary and to commend him for his lifetime of service in the public and private sector. >> you repeatedly, on fast and furious, kept saying that the attorney general deserved credit for ending the gunrunning operation, but you seem to be leaving out the fact that agent terry was killed, and not -- >> not at all, ed. that's an insult. >> no, but you're not mentioning -- does he not deserve -- the attorney general -- you're giving him credit for ending the operation. does he not deserve some blame for the fact that this gunrunning operation resulted in a federal agent being killed on his watch? >> well, the attorney general made clear and has made clear on numerous occasions, including the eight times he has testified on capitol hill with regard to this matter, that when he learned about it, took this matter exceptionally seriously. that is why he ended it, and that is why he referred it to the inspector general for investigation. this is a tactic that was employed in operations in the prior administration -- during the prior administration. it was a field-driven tactic. it was not something that was generated out of washington. when it was discovered by the attorney general he put an end to it, and he launched -- or requested an investigation into it. i think that demonstrates the seriousness with which he regards it. >> you've also given the attorney general credit here in this briefing for turning over -- i think you at one point said every page to congress -- 7,600 pages. but my understanding is the inspector general at the justice department has gotten tens of thousands of pages. i think the number is something 70,000 -- 80,000 pages. so how can you say every page has been turned over if congress has gotten about 10 percent of it? >> well, i think you're engaging in a little selective listening. >> well, you said every page -- >> what i did say is every page related to the fast and furious operation. and that is what is at issue here -- how did this operation come about, how did this tactic begin to be used -- a flawed tactic, which everyone recognizes -- including the attorney general, the president of the united states, congressional leaders of both parties was a flawed tactic and a mistake. and that's why this attorney general referred this matter to the ig for investigation. what is being -- the documents over which privilege is being asserted are internal executive branch documents that have to do with response to congressional inquiries, response to media inquiries. those kinds of deliberations have been protected under privilege as a matter of the separation of powers enshrined in the constitution by administrations of both parties dating back 30 years. >> how many pages is the -- >> i don't have a page count for you, ed. >> well, why not? >> i just don't. >> i mean, you have given us no information about what is covered by what the president is claiming executive privilege on beyond the broad protecting advisors advice -- >> as you, i think perhaps more than others, given the interest in this at your network, knows the administration, principally the department of justice, has cooperated extensively with congressional investigators, provided extensive documentation. the administration has even provided documents related to an interest in whether or not people in the white house knew of this operation at the time -- >> but why is there not a piece of paper -- >> -- and provided that -- >> how many pages -- >> -- let me finish, please, ed -- and provided that last fall. and there wasn't a lot of interest in it because it disappointed those who were trying to make politics out of this. and here is the central fact of this matter, this many months into it, this many months where house republican leaders have been focused on this rather than helping the economy grow or helping it create jobs, is that there is no evidence of anything beyond what the attorney general has said about this matter. and our level of cooperation has been extensive. >> but when you say, "go back to last fall," the president's executive privilege claim only came in yesterday. so why are we getting no information -- >> because we made every -- >> -- and how broad is the scope? i mean, what does it cover? >> ed, i can attempt to get more details for you, in terms of what it covers. i don't have page numbers for you. what i can tell you is that the assertion of privilege came at the time when it became clear that there was no intention to resolve this matter, at least to that point, in a good-faith effort by house republican leaders, that they were committed to their previously publicly announced intention to hold a contempt vote -- a highly political gesture, a completely partisan vote, and when efforts to resolve this matter otherwise were exhausted, in order to provide the absolutely necessary stewardship to the executive branch that this president must provide on behalf of his administration and every future administration, this action was taken. >> jay, on this question of how far the privilege goes, traditionally, privileges involve either the interactions with the white house and the white house staff, or national security. in this case, it seems to go beyond that. is it a general thought in the white house that executive privilege -- is it applied to all the executive branch, even in the -- >> well, steve, i'm not the counsel, but i think that you need to do a little research. the truth is our assertion is consistent with the positions taken by prior administrations in disputes with congress that date back to the washington administration in 1792. the legal analysis is blessed by the career doj staff, who have advised both democratic and republican administrations on congressional executive relations. and as both historical practice and judicial decisions confirm, the fact that documents reside within an agency rather than in the white house is irrelevant to whether they are privileged. there are at least five examples we can provide to you from recent history where that is demonstrated. chris and then dan. >> jay, in 2007 president obama criticized former president bush for asserting executive privilege, for not handing over documents related to the firings of the nine u.s. attorneys. does he not run the risk of looking hypocritical by criticizing the former president and now essentially evoking the same action? >> no, because this president, again, is -- after making, through his department of justice, an extraordinary effort to cooperate with congress on this matter of providing thousands of pages of documents, having the attorney general testify eight times -- asserting a privilege that retains the capacity of the executive branch now and in the future to operate independently, as enshrined in the constitution. i would note that this is the first time president obama has asserted the privilege. but as you know, previous presidents of both parties have done so repeatedly. according to crs, executive privilege has been asserted 24 times since 1981. president george w. bush asserted it six times. president clinton, 14 times. president george h. w. bush asserted it once. and president reagan, three times. in fact, president obama has gone longer without asserting the privilege than any president in the last three decades, which is consistent with the statement that you quoted. bottom line is, after a level of cooperation that i think demonstrates this administration's absolute interest in finding out the truth about the fast and furious operation, and why that flawed tactic was used, its origins and its implementation, its efforts to work with congress to provide it the information that was required under legitimate oversight needs, an assertion was made -- because this has become a political fishing expedition. and it is absolute evidence -- and i would refer you to the statements by congressional house -- rather, republican congressional leaders from the beginning of the year, where they made clear that one of their chief priorities for this year was to use their investigative power in the house to score political points in this election year. i think knowing that tells you everything about the motivations here. >> you make the point that you've turned over thousands of documents, and yet not all of the documents that congress would like to see. so what's the difference? why not -- >> well, i think i made clear in answers several times to the questions that every document that relates to the fast and furious operation has been provided. and others have been provided, as i mentioned last fall, that relate to any knowledge anybody in the white house had contemporaneously about the fast and furious operation -- again, as part of an effort to cooperate, as part of an effort to resolve this matter in a professional way, not in a partisan way. >> for more informations on the congressional vote and the rest of this white house briefing, go online to c-span.org. >> this weekend on afterwards, details of fast and furious. >> this affected not only the american people, but the mexican people as well. there are hundreds of faceless mexican citizens who have been murdered as a result of this. the only thing we knew outside of the program was that guns from american dealers were going to mexican cartels. really, the government was sanctioning these sales and sending them to mexico. >> she is interviewed by white house correspondent major garrett. this is part of book tv this week and on c-span-[applause] -- c-span-2. >> up next, republican candidate mitt romney talks to latino officials. then president obama discuss the student loans. following that, aung san suu kyi addresses the british parliament. later, the head of the british securities and exchange commission testifies about market regulations. on tomorrow morning's "washington journal," and pr business editor and national journal correspondent discuss where u.s. financial markets are headed. university of baltimore law school professor examines the executive privilege claims concerning attorney general folder and the fast and furious case. and the census bureau and the pew hispanic center talk about hispanics in the u.s. and how they fare in education, employment and income. "washington journal," live at 7:00 a.m. eastern on c-span. >> in florida, presidential candidate mitt romney said that president obama is taking the hispanic vote for granted. he addressed the national association of latino elected officials in orlando. his remarks are 30 minutes. president obama will speak at the same convention tomorrow. >> thank you for that generous introduction. i appreciate the chance to be with you today. i am delighted to be invited to your annual conference. it is an honor to be among some many dedicated, elected officials. i come to you as a candidate for the president of the united states of america, and i will govern from the principle that while this is an extraordinary land of diversity, there is much more that unites us than there is that divides us. [applause] each of us wants a different path in life, but we are united by one great overwhelming passion. we love the united states of america. we believe in america. we are one nation under god. today we are united not only by our faith in america, we are also united by our concern for america. the country we love is in peril. that is why i am running for president. almost four years ago, the american people did something that was very much the sort of thing americans like to do. we gave someone a chance to leave, someone who we had not known very long, who did not have much of a record, but promised to lead us to a better place. at the time, we did not know what kind of a president he would be. it was a moment of crisis for our economy, and when barack obama came into office, america wished him well and hope for the best. three and a half years later, over 23 million americans are out of work, and employed -- unemployed, underemployed or simply quit looking for a job. at a time when we should be gaining momentum in the economy, we are actually losing it right now. job growth slowed and this week we learned that the number of job openings has slowed again. and as you know, hispanics have been hit disproportionately hard. while the national unemployment is still above 8% and has been for 40 straight months, hispanic unemployment is at 11%. the middle class under president obama has been crushed. more americans are living in poverty today than at any point in american history. over two million more hispanics are living in poverty today than the day when president obama took office. home values have plunged. our national debt is at record levels and families are buried under higher prices for things like food and gasoline. and yet the president has said the private sector is doing fine. this is more than a policy failure. it is a moral failure. i know the president will say that he inherited the economic crisis, and that is true. but we should not allow the challenges he faced four years ago to divert our attention from another important fact. the president pursued policies that have made this the slowest recovery since the great depression. and he broke promises many people were counting on to build a brighter future. it did not have to be this way. just compare this president's record with the first term of ronald reagan. president reagan also faced an economic crisis. in fact, in 1982, the unemployment rate peaked nearly 11%. but in the two years that followed, just two years, he delivered a true recovery. economic growth and job creation or three times higher than in the obama economy. if president obama had delivered a real recovery, a reagan recovery, we would have 5 million more jobs today. 5 million more. the unemployment rate would be about 6%, and our economy would be at least one trillion dollars larger. not tomorrow, president obama will speak here. of course, that is the first time he has spoken years since hi last campaign. he may admit that he has not kept every promise. he may say that even though you are not better off today than you were four years ago, things could be worse. he will imply that he did not really have an alternative. i believe he is taking your vote for granted. i come here today with a simple message. you do have an alternative. your voice is more important now than ever before and your vote should be respected. this november, we are going to make a choice. we can continue along the path we're on, or we can choose a better way, instead of continuing -- better way. instead of continuing with the policies of the last three and a half years, we can revitalize our economy. we can lead the world, as we indent --what we eve invent and create. let me make this clear. this is the only way we can sustain the middle class and create sustained prosperity. raising taxes to grow government does not grow the middle class. today, i'm asking you to join me because while we might not agree on everything, we share the same goal, the same vision, and the same belief in american greatness that draws so many people to our shores. liberty's torch can burn just as brightly for future generations of immigrants as it has burned in the past. we now our businesses cannot succeed, grow, and hire more workers without a competitive tax system. that is why i am going to lower our corporate tax rate and reduce individual tax rates by 20% across the board. we also know that our families need more reliable energy. expanding our resources will create jobs and generate revenues. it will also bring manufacturing back to our shores. you will see a manufacturing resurgence if we get the policy right. we now our economy cannot grow of we're moraging our future to pay for the big government programs of today. we cannot keep borrowing massively more than we taken without putting the country in peril. as president, i will rein in spending and i will get the budget balanced. i will repeal obamacare. we cannot afford another two dollars trillion entitlement. -- $2 trillion entitlement. everybody likes free stuff, but there is no free stuff when the government has to pay and tax the american people or borrow from future administrations. in obamacare, -- in one study, 73% of business owners said that obamacare has made it harder for them to hire people. think about that. if jobs are your priority, you have to get rid of obamacare and put in place real reform that works. repealing obamacare will give businesses what they need to grow. we can also jump-start the economy by expanding trade. as you know, the president has not created a single new trade agreement with a latin american nation. he has also failed to crack down on china. as president, i will give the parents of every low income and special needs students the chance to choose where their child goes to school. [applause] when it comes to education, a choice for every parent means a chance for every child. an effective immigration system can also strengthen the economy as it has since the nation's founding. unfortunately -- unfortunately, despite his promises, president obama has failed to address immigration reform. for two years, this president had huge majorities in the house and senate. he was free to pursue any policy he pleased, but he did nothing to advance a permanent fix for our broken immigration system. nothing. instead he failed to act until facing a tough re-election and trying to secure your vote. last week the president finally issued a temporary measure. he called it a "stop-gap" measure. he seems to think it will be just enough to get him through the election. after 3 and a half years of putting every issue from loan guarantees to his donors, to cash for clunkers, putting all those things before immigration, he has been seized by an overwhelming need to do what he could have done on day 1, but didn't. i think you deserve better. some people have asked if i will let stand the president's executive order. the answer is, i will put in place my own long-term solution which will replace and supersede the president's temporary measure. as president, i won't settle for stop-gap measures. i'll work with republicans and democrats to build a long-term solution and i'll prioritize measures that strengthen legal immigration and make it more transparent and easier, and i will address the problem of illegal immigration in a civil and resolute manner. we may not always agree, but when i make a promise to you, i will keep it. let me speak about some of the guidelines i will use in putting together that policy. as you've heard me say many times, it is critical that we redouble our efforts to secure the borders that means preventing illegal border crossings and making it harder to illegally overstay a visa. we should field enough border patrol agents, complete a high- tech fence and implement an improved exit verification system. our immigration system should help promote strong families as well, and not keep them apart. our nation benefits when moms and dads are kids are all together under the same roof. but today to many families are caught in a broken system, costing time and money and entangles the in excessive red tape. for those seeking to come to america the right way, we can do -- that kind of bureaucratic nightmare has to and, and we can do this with just a few common sense reforms. as president, i'd reallocate green cards to those seeking to keep their families under one roof, and will exempt from caps the spouses and minor children of legal permanent residents, and will eliminate other forms of bureaucratic red tape that keep families from coming together. immigration reform is not just a moral imperative. it's also an economic necessity. immigrants with advanced degrees start companies, and they drive innovation at a very high rate. immigrants founded or co- founded nearly half of our top 50 venture-backed companies in the u.s. they are nearly 30% more likely to start a business and that kind of risk-taking is something we need more than ever because new business start-ups in america are at a 30-year low. i'll work with states and employers to update our temporary worker program so that it meets economic needs, and if you get an advanced degree here, we want you to stay here so, i'd staple a green card to the diploma of someone who gets an advanced degree in america. we want the best and brightest to enrich the nation with the jobs and technology they are going to create. now, we also have a strong tradition in this country of honoring immigrants who join our military and put their lives on the line to keep the country safe. since september 11, 2001, the u.s. has naturalized almost 75,000 members of the armed forces. too many of those patriots died on distant battlefields for our freedom before receiving full citizenship here in the country they called home. as president i will stand for a path to legal status for anyone who is willing to stand up and defend this great nation through military service. those who have risked their lives in the defense of america have earned their right to make their life in america. but improving access to legal immigration is only one part of the equation. we must also make legal immigration more attractive than illegal immigration so that people are rewarded for waiting patiently in line. that's why my administration will establish a strong, employment verification system so that every business can know with confidence that the people it hires are legally eligible for employment. we can find common ground here, and we have got to. we owe it to ourselves as americans to ensure that our country remains a land of opportunity, both for those that are born here and for those that share our values, respect our laws, and want to come to our shores. throughout my campaign i have often had the chance to speak about my dad and how proud i am of him. he was born to american parents living in mexico. when he was 5, they left everything behind and started over in the united states. his dad, my grandfather, was a builder and he went bust more than once. my grandfather did not make much money. there were times in my dad's life when he lived in poverty. but my grandfather had big hopes for my dad and tried to help him as best he could. my dad did not finish college, but he believed in the country where the circumstances of one's birth or not a barrier to achievement, and he was not afraid of hard work. he held odd jobs, putting a plasterboard, selling paint. he was lucky enough to live in america where hard work can turn aspirations into realities. after he became a man of the business world, he got the opportunity to lead a great car company, and ultimately, he became the governor of the great state, the state of michigan. this is my father's story, but it could be the story of any american. most of you here today are leaders in your community. you are here because you have benefited from the land of opportunity and you want to give back to this country, to fight for its people so they have the same chance to succeed. we are truly one america. everyone here as made this exceptional nation what it is today. this is not an election about two people. this is not an election about being a republican nor a democrat or independent. this is an election about the future of america. i would ask each of you to honestly look at the last three and a half years and ask whether we can do better. is the america of 11% hispanic unemployment the america of our dreams? we can do better. we can prosper again. with the powerful recovery we have all been waiting for, the good jobs that some many people need, and above all, the opportunities we owe to our children and our grandchildren. i will do that. i will make that happen with your help and your support. thank you so much and god bless this great land. thank you. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> president obama will address the national association of latino elected officials conference tomorrow in florida. we will have his remarks live at 1:15 p.m. eastern here on c- span. for more information on our road to the white house coverage, go to c-span.org/campaign 2012. president obama is calling on congress again to extend lower interest rates on federal student loans. current rates are set to double on july 1st, affecting 17.4 million students. the white house and republicans in congress agree that the rates should be extended, but not how to pay for it. these remarks are 10 minutes. >> ladies and gentlemen, the president of the united states and secretary arne duncan. [applause] >> thank you. [applause.] thank you, everybody. thank you. everybody have a seat. [applause.] well, it is good to see all of you. >> we love you! >> i love you guys back. [laughter.] i have to say, the -- i don't know about the choice of music coming in here, though. [laughter.] i love my marine band, but this is kind of a young demographic for the piano cocktail hour. [laughter.] so some of the most fun i've had as president is when i get a chance to talk with you, college students, about the importance of earning a higher education in today's economy. and i'll admit that the east room isn't as rowdy as carmichael arena at unc, or -- we got any unc folks here in the house? there we go. coors center at cu boulder -- any -- no? okay. [laughter.] i have to say that most of you are much more dressed up than usually when i see you in your own natural habitats. [laughter.] but our message today is serious. right now, the unemployment rate for americans with a college degree or more is about half the national average. they earn twice as much as those who don't have a high school diploma. so whether it's at a four-year college, or a community college, or a technical program, some form of higher education, something beyond high school has never been more important. it's the surest path to finding a good job, earning a good salary, making it into the middle class. and at the same time, over the last two decades, the cost of college has doubled -- it's actually more than doubled. and that means -- and i don't have to tell you, because you're probably tallying it up right now -- the cost for you to take out loans has increased, and you are more likely to rack up more debt. the average student who borrows to pay for college now graduates with about $26,000 of debt from their student loans. americans as a whole now owe more on student loans than they do on their credit cards. and that is wrong, because we cannot afford to price the middle class and folks who aspire to go into the middle class, we can't price them out of the college education market. we can't stand by when millions of young people are already saddled with debt just as you're starting off. your parents, your grandparents, oftentimes they were in a position where when they got that first job, the first thing they're thinking about is, how do i save to buy a home and start a family. and if you're already dealing with a big bunch of debt before you even get started, that's a problem. and it's mind-boggling that we've had this stalemate in washington that threatens to make the situation even worse. so the reason you're all here, the reason all these fine- looking young people behind me are here is that in just over a week the interest rates on federal student loans are scheduled to double. i've been talking about this now for what -- a month and a half, two months, three months, five months -- i've lost track. [laughter.] we've been talking about it for a long time. if congress does not get this done in a week, the average student with federal student loans will rack up an additional $1,000 in debt over the coming year. if congress fails to act, more than 7 million students will suddenly be hit with the equivalent of a $1,000 tax hike. and that's not something that you can afford right now. now, as i said, if this warning sounds familiar, we've been talking about this for months. congress has had the time to fix this for months. it's part of the reason why everybody here looks impatient. [laughter.] this issue didn't come out of nowhere; it's been looming for months. but we've been stuck watching congress play chicken with another deadline. so we're nine days away from thousands of american workers having to walk off their job because congress hasn't passed a transportation bill. we're 10 days away from nearly 7.5 million students seeing their loan rates double because congress hasn't acted. this should be a no-brainer. it should not be difficult. it should've gotten done weeks ago. now, the good news is there are folks in congress trying to do the right thing. last month, democrats in the senate put forward a plan that would have kept these rates in place without adding a dime to the deficit. unfortunately, senate republicans got together and blocked it. over in the house, the republicans said they'd keep these rates down only if we agreed to cut things like preventive health care for women, which obviously wouldn't fix the problem, but would create a new problem. this is -- even as they were voting in lockstep for an economic plan that would cut financial aid for nine million college students by an average of $1,000 and give a $150,000 tax cut to wealthy americans. so i recognize that there's been some effort to change the subject from this rate hike. one congressman warned that this is all about giving college students "free college education" -- which doesn't make much sense, because the definition of a loan is it's not free -- [laughter] -- you have to pay it back. others have said we're just talking about student loans to distract from the economy. that doesn't make much sense because this is the economy. this is all about the economy. this is all about whether or not we are going to have the best-trained, best-educated workforce in the world. that improves our economy. and higher education cannot be a luxury reserved just for a privileged few. it's an economic necessity for every family, and every family should be able to afford it. so you guys, during this period when you've been in college have been some of the toughest economic times since the 1930s, and there are still a lot of challenges ahead globally. and we can't control every economic headwind that we face, but this is something we can control. this is something we can do something about. stopping student rates from doubling at the end of the month is something we can do right now to make a difference in the lives of all the american people. there's still 10 days for congress to do the right thing. i understand that members of both parties say they want to get this done, and there are conversations taking place, but they haven't done it yet. and we've got to keep the pressure on. that's where all of you come in. over the past few months, there are so many students and parents who have been working hard to shine a light on this issue. you've rallied on campuses, in your communities. you've called, you've emailed, you've tweeted your representatives in washington. so you've played your part in making sure your voice is heard and your democracy is responsive. my main message is, as you guys embark on this day of action, i want to make sure you keep this going. don't stop until it's actually done. there is nothing more powerful than millions of voices that are calling for change, and all of your voices can make a difference. so keep telling congress to do what's right, to get this done. tell them now is not the time to double interest rates on your student loans. tell them to double down on an investment in a strong and secure middle class -- and that means your education. tell them now is the time to double down on an america where everybody who works hard has a fair shot at success. and for those who are not here and are watching, if you tweet, use the hashtag #dontdoublemyrate -- [laughter] -- #dontdoublemyrate. but i tell you, when i look out at this group right here, you give me confidence in america. you make me optimistic, not only because you're getting a great education, but also because all of you are participating and you are making sure this democracy works the way it is supposed to. we need outstanding engineers and nonprofit leaders and outstanding citizens. this is what you guys are spending by your presence and activities. keep it up. thank you, everybody. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] tomorrow a panel discussion of the year is done. -- of the eurozone carry i. live coverage starts at 11:00 a.m. eastern here on c-span. then a form of better and housing issues. we will hear from scott. live coverage of national housing conference gets under way at 9:00 a.m. eastern. >> this weekend, harvard professor on the civil war in the movement to end slavery. >> it is one of the fascinating aspects of the abolitionists. the self-described abolitionists are still minorities. >> lectures in history, night at 8:00 a.m. eastern. more from our series on key political figures the ran for president and lost but changed political history. a look at eugene debs sunday at 7:30 p.m.. this weekend on c-span3. >> now human rights activists suu kyi addresses members of parliament. she won a peace prize in 1991. myanmar and did the military rule last year. six that did this in person in our way. remarks areu kyi's about 40 minutes. [applause] >> of this hall has hosted many events over the past nine calendar years -- 900 years. only a few international figures in recent times, nelson mandela, pope benedict the 16th, and barack obama. have spoken year. today suu kyi will become the first figure other than a head of state, it the first woman from abroad, and the first citizen of asia to do so. [applause] this is not a break from president without a purpose. has withstood the unimaginable suffering with the dignity, fortitude and resolve which most of us can barely conceived. this is in cement. she has been the symbol of resistance to a regime which, even in an imperfect world has been exceptional in its barbarity. as the united nations has documented and from three trips to burma's borders i can attest weaponhis is a break as a wel of war. deployment of child soldiers. incarceration of opponents and unspeakable conditions, destruction of villages and excruciating torture. burma has become a beautiful land where fear runs through society like blood slowing through veins. one woman has defied a dictatorship. that is why she is with us here in westminster this afternoon. the recent election to parliament of our guest, colleagues, and the release of many political prisoners are welcome signs of reform. we earnestly hope that further, and fundamental, reform will ultimately lead to the freedom, democracy and rule of law which we have so long enjoyed and the people of burma have too long been denied. there is an asian saying that a journey of a thousand miles must start with a single step. will be taken in this parliament today. privilege to welcome the conscience of a country and a heroine for humanity, daw aung san suu kyi. >> thank you for inviting me to speak to you here in this magnificent hall. i am very conscious of the extraordinary nature of this honor. i understand there is some debate as to whether i would speak here in this splendid setting. i welcome that debate and discussion. it is what parliament is all about. i have just come from downing street. it is my first visit there. it is a familiar scene and not just from a television broadcast but from my own family history. photographnown from my fathe of my father was him setting in downing street with others with whom he had been discussing burma's transition. he was pictured wearing a large british military issued a coat. to protect him against the . i was there. it was raining. very british. my father is a founding mean remember in world war ii. he took on the responsibility and the desire to see democracy established. it is here to view that democracy was the only political system worthy of an independent nation. it is a view that i have long shared. campaign wrote about his first encounter with my father and his memoir. the meeting came to the end of the war shortly after my father had decided that the burmese independence army should join forces with the allies. the general said you have only come to us because we are winning. to which my father replied. it would not be much your coming to you if you want. my father was a practical man with whom he could do business. six decades later i strive to be as practical as my father was. so i am here in part to ask for practical help, help as a friend and an equal. in support of the reforms which can bring better lives, greater opportunities to the people of burma who have been for so long deprived of their rights in the world. stands at the start of a journey toward a better future. so many hills remain to be climbed, obstacles to be breached. so far. the support of the people of britain can get us so much further. in a speech about change and reform, it is appropriate to be here. at the heart of this process must be the establishment of a strong parliamentary institution. the british parliament is perhaps the preeminent symbol to oppressed peoples across the world of freedom of speech. i would imagine that some people here, to some extent, take this freedom for granted. for us in burma, what you take for granted, we have had to struggle for, long and hard. so many people in burma gave up so much, gave up everything, in burma's ongoing struggle for democracy. and we are only now just beginning to see the fruits of our struggle. westminster has long set a shining example of realising the people's desire to be part of their own legislative process. in burma, our parliament is in its infancy, having been established only in march 2011. as with any new institution, especially an institution which goes against the cultural grain military rule, it will take time to find its feet, and time to find its voice. our new legislative processes, while undoubtedly an improvement on what went before, are not as transparent as they might be. i would like to see us learn from established examples of parliamentary democracies deepen our own democratic standards over time. perhaps the most critical in establishing the credibility of the parliamentary process happens before parliament even opens, namely, the people's participation in a inclusive electoral process. earlier this year, i myself participated in my first ever election as a candidate. to this day i have not yet had the chance to vote freely in any election. in 1990, i was allowed to cast an advance vote while under house arrest, but i was prevented from contesting as a candidate for my party, the national league for democracy. i was disqualified on the grounds that i had received help from foreign quarters. this amounted to bbc broadcasts that the authorities considered to be biased in my favour. what struck me most ahead of this year's by-elections was how quickly people in the constituencies across burma grasped the importance of participating in the political process. they understood first hand that the right to vote was not something given to all. take advantage when the opportunity arose, because they understood what it meant to have that opportunity taken away from them. during the years that i lived in the uk, i never had the right to vote myself. but i can remember, even during my university days, that i was always trying to encourage my friends to exercise their right to vote. it was never clear to me whether they followed those instructions. but it was clear to me even then that if we do not guard the rights we have, we run the risk of seeing those rights erode away. to those who feel themselves to be somehow above politics, i want to say that politics should be seen neither as something that exists above us, nor as something that happens beneath us, but as something integral to our everyday existence. after my marriage i constantly preached my gospel of political participation to my late husband, michael. i can still distinctly recall the occasion when a canvasser knocked on the door of our oxford home, during an election campaign. michael opened the door and when he saw the gentleman, poised to deliver his campaigning pitch, he said 'it's no use trying to win me over, it's my wife who decides how i should vote. come back later? ' the canvasser did come back what a wife who decided how her husband should vote looked like. it has been less than 100 days since i, together with my fellow national league for democracy candidates, was out on the campaign trail across burma. our by-elections were held on april the first- and i am conscious that there was a certain scepticism that this would be another elaborate april fools joke. in fact it turned out to be an april of new hope. the voting process was largely free and fair, and i would like to pay tribute to president thein sein for this, and for his committment and sincerity in the reform process. as i have long said, it is through dialogue and through cooperation that political differences can best be resolved, and my own committment to this path remains as strong as ever. elections in burma are very different to those in many more established democracies such as yours. apathy, especially amongst the young, is certainly not an issue. for me the most encouraging and rewarding aspect of our own elections was the participation, in such vast numbers and with such enthusiasm, of our young people. often our biggest challenge was restraining the crowds of university students, school children, and flag-waving toddlers, who greeted us on the campaign, blocking the roads through the length of towns. the day before the elections, on my way to my constituency, i passed a hillock which had been "occupied" by a group of children, the oldest about ten or eleven, their leader standing at the summit holding the nld flag. the passion of the electorate was a passion born of hunger for something long denied. following burma's independence in 1948, our parliamentary system was of course based on that of the uk. the era became known, in burmese, as the parliamentary era- a name which by the mere necessity of its application speaks of the unfortunate changes which followed. our parliamentary era, which lasted- more or less- until 1962, could not be said to have been perfect. but it was certainly the most progressive and promising period until now in the short history of independent burma. it was at this time that burma was considered the nation most likely to succeed in south east asia. things did not, however, go entirely to plan. they often don't, in burma, and indeed in the rest of the world. now, once again, we have an opportunity to reestablish true democracy in burma. which we have waited many decades. if we do not use this opportunity, if we do not get things right this time round, it may be several decades more before a similar opportunity arises again. and so it is for that reason that i would ask britain, as one of the oldest parliamentary democracies, to consider what it can do to help build the sound institutions needed to support our nascent parliamentary democracy. the reforms taking place, led by president thein sein, are to be welcomed. but this cannot be a personality-based process. without strong institutions this process will not be sustainable. our legislature has much to learn about the democratisation process, and i hope that britain and other democracies can help by sharing your own experiences with us. thus far, i have only spent a matter of minutes inside the burmese parliament, when i took my oath as a new mp last month. i must say that i found the atmosphere rather formal. men are required to wear formal headgear. there is certainly no heckling. i would wish that over time perhaps we will reflect the liveliness and relative informality of westminster. i am not unaware of the saying that more tears have been shed over wishes granted than over wishes denied. nevertheless, it is when burma has its own satisfactory equivalent of prime minister's questions that we will be able to say that parliamentary democracy has truly come of age. i would also like to emphasise the importance of establishing requisite parliamentary control over the budget. in all this, what is most important is to empower the people, the essential ingredient of democracy. britain is living proof that a constitution does not need to be written down in order to be effective. it is more important that a constitution should be accepted by the people, that people should feel it belongs to them, that it is not an external document imposed upon them. one of the clearly stated aims of the nld is constitutional reform. burma's original constitution was drawn up following the meeting between my father, aung san, and clement atlee, here in london in 1947. this constitution may not have been perfect, but at its core was a profound understanding of and respect for the aspirations of the people. the current constitution, drawn up by the military government in 2008, must be amended to incorporate the basic rights and aspirations of burma's ethnic nationalities. in over sixty years of independence, burma has not yet known a time when we could say that there was peace throughout the land. at this very moment, hostilities continue between kachin forces and the state armed forces in the north. in the west, communal strife has led to the loss of innocent lives and the displacements of tens of thousands of hapless citizens. we need to address the problems that lie at the root of conflict. we need to develop a culture of political settlement through negotiation, and to promote the rule of law, that all who live in burma may enjoy the benefits of both freedom and security. in the immediate term, we also need humanitarian support for the many many people, in the north and in the west, largely women and children, who have been forced to flee their homes. as the long history of the united kingdom shows clearly, people never lose their need to preserve their national or ethnic identity. this is something which goes beyond, which supersedes, economic development. and that is why i hope that in working for burma's national reconciliation, the international community will recognise that it is political dialogue and political settlement which must be given precedence over short-term economic development. if differences remain unresolved, if basic aspirations remain unfulfilled, there cannot be an adequate foundation for sustainable development of any kind- economic, social or political. britain has for so long under successive governments, including the present conservative-liberal democrat coalition, and the previous labour government, been a staunch and unshakeable supporter of aid efforts in burma. i hope you can continue to help our country through targeted and coordinated development assistance. britain has been until now the largest bilateral donor to burma. it is in education in particular that i hope the british can play a major role. we need short-term results so that our people may see that democratisation has a tangible positive impact on their own lives. vocational training and creation of employment opportunities to help address youth unemployment are particularly important. system is desperately weak, reform is needed, not just of schools and curriculum, and the training of teachers, but also of our attitude to education, which at present is too narrow and rigid. i hope also that british businesses can also play a role in supporting the democratic reform process, through what i have termed democracy-friendly investment. by this, i mean investment that prioritises transparency, accountability, workers' rights, and environmental sustainability. investment, particularly in labour-intensive sectors, when carried out responsibly and with positive intent, can offer real benefits to our people. one test will be whether new players will benefit from the investment coming in. britain has played an important role in facilitating the forthcoming visit, next month, of the extractive industries transparency initiative secretariat. i hope this will be the start of many similar initiatives in the months ahead. conclusion it was through learning about two great british leaders, gladstone and disraeli, while at oxford, that i first developed my understanding of parliamentary democracy. i learnt the basics, that one accepts the decision of the voters, that the governing power is gained and relinquished in accordance with the desires of the electorate, that it is the system which goes on, and that ultimately everyone gets another chance. these are things taken for granted here in britain. but in 1990 in burma, the winner of the elections, the nld, was never allowed even to convene parliament. i hope that we can leave such days behind us, and that as we look forward to the future, it will be the will of the people that is reflected faithfully in burma's changing political landscape. this journey out of burma has not been a sentimental pilgrimage to the past, but an exploration of the new opportunities at hand for the people of burma. i have been struck, throughout my trip, by how extraordinarily warmhearted and open the world has been to us. to experience this first hand, after so long physically separated from this world, has been very moving. countries that geographically are distant, have shown that they are close to burma in what really matters, they are close to the aspirations of the burmese people. we are brought into proximity through our shared values- and no geographical distance, no human-made barriers, can stand in our way. during the years of my house arrest it was not just the bbc and other broadcasting stations that kept me in touch with the world outside. it was the music of mozart and ravi shankar, and the biographies of men and women of different races and religions, that convinced me i would never be alone in my struggle. the prizes and honours i received were not so much a personal tribute, as a recognition of the basic humanity that unites one isolated person to the rest of the world. during our dark days in the 1990s, a friend sent me a poem by arthur hugh clough. it begins 'say not the struggle nought availeth'. i understand that winston churchill, one of the greatest parliamentarians the world has known, used the poem himself as a plea for the usa to step in against nazi germany. today, i want to make a rather different point, that we can work together, combining political wisdom from east and west, to bring the light of democratic values to all peoples, in burma and beyond. i will just read the final verse, and not by eastern windows only, when daylight comes, comes in the light, in front the sun climbs slow, how slowly, but westward, look, the land is bright. i would like to emphasise in conclusion that this is the most important time for burma, that this is the moment of our greatest need- and so i would ask that our friends, both here in britain and beyond, participate and support burma's efforts towards the establishment of a truly democratic and just society. thank you for giving me this opportunity to address the members of one of the oldest democratic institutions in the world. thank you for letting me into your midst. my country has not yet entered the ranks of truly democratic societies, but i'm confident we will get there before too long, with your help. [applause] on behalf of the house of lords, and everyone here today, may i express our collective and heartfelt thanks for your inspiring words. we all espouse freedom and democracy but few of us are called upon to pay for and uphold these principles by spending 15 years in detention. your presence here today is a testament to your courageous approach of steadfast non- violence and reason in the face of an oppressive, powerful and determined regime. your struggle has reverberated around the world. it has forcibly reminded us that free and fair elections, a free press, an independent judiciary, and the institutions of civil society are the cornerstones of democracy and individual freedom. we take these freedoms for granted at our peril. democracy is never won once and forever it is a process requiring constant vigilance. today you have reminded us of the struggle that must continue in burma and elsewhere. in post-war europe we have seen that it is possible for countries to make the transition from totalitarianism to democracy, and i trust that this will give you hope and encouragement for the journey ahead. your stand against repression has been at the heart of the national league for democracy's struggle. i am sure that at times during your long campaign you must have felt unbearably lonely, though as you yourself have said, the nobel peace prize allowed you to feel part of the international community. and indeed, through you, your people and your country were always in our minds. now, together, we must use this occasion of your address to fellow parliamentarians to renew our own determination to be part of the struggle for liberty whenever and wherever it arises. [applause] ♪hi ♪ >> mary schapiro testified on capitol herehill today. that is that on c-span. then nancy pelosi and john maynard give their perspectives on a house oversight vote to hold eric holder in contempt over fast and furious documents. >> on tomorrow morning's "washington journal" and national journal correspondent discusses where u.s. financial markets are headed. univ. of baltimore law school professor examines the executive privilege claims concerning eric holder and the fast and furious case. then mark lopez from the howanic specenter and hispanics fair and employment and income. "washington journal" at 7:00 a.m. eastern on c-span. >> now the head of the securities and exchange commission testifies about money market regulations and risk. mary schapiro to questions from members of the senate banking committee which is chaired by senator tim johnson. this is one hour and 20 minutes. >> i called this hearing to order. today we will examine the health and stability of money market mutual funds. the impact of two reforms and the potential negative consequences additional proposed reforms from the perspective of the industry itself and products. i look forward to hearing testimony and recommendations as the committee can tinges its oversight of the financial markets. we are anticipating a series of 11 votes, we will forgo opening statements from the committees and members in order to begin questioning of our witnesses. i remind my colleagues at the record will be open for the next seven days and any other materials you would like to senate. i would also ask everyone to take five minutes for your questions. the first panel, we have the chairman of the securities and exchange commission, chairman mary schapiro. please begin your testimony. >> i appreciate the opportunity to testify about money market mutual funds. as we all know, during the financial crisis and a single money market fund broke the box and triggered bonds across the market. within a matter of days, investors have withdrawn $3 billion from prime market bonds or 40% of those bond assets. it is one of the destabilizing events during the crisis. money market funds began selling portfolio securities into markets that were already under stress. if for the depressed the value of the securities and created a vicious cycle. other funds held in the same securities were struggling to meet the demands of their customers and found themselves at risk of breaking the box. the shock waves were widespread. money market funds began hoarding cash. this dramatically reduce the cash and liquidity available for entities. in the final two weeks of september 2008, money market funds reduce their holdings of commercial paper alone by more than $200 billion. the money market funds ended only after the treasury department to the unprecedented step of using the exchange stabilization fund to guarantee more than three trillion dollars in market fund shares. it improve the market, but it put u.s. taxpayers directly at risk from any losses. in the wake of the financial crisis, many asked, where were the regulators? why did they not do more? having viewed this issue closed and methodically since my arrival in 2009, i have come to understand that money market funds produces a risk. others agree. regulators and both political parties have raised flax about the risk posed by money market funds and the need for reform. two years ago, we passed a series of measures to increase their resiliency of money market funds by instituting a liquidity standards and reducing maturities and approving credit. these steps have been widely hailed. i have said then and still believe that more needs to be done. this core part of our financial system is operating without a net. there are several features of the market finds that needs to stabilize. first, the one buyers share price was sponsors support has fostered an and expectation of safety. sponsors of stepped in with their own capital at least 300 times to absorb losses our protector funds from falling below $1. when sponsors cannot support a bond, investors lose confidence and rush to redeem. an early reading shareholder can get their full $1. investors have an incentive to redeem at the first sign of problems in a fund. large institutional investors are most likely to be monitoring that and to remove large sums of money quickly. the slow-moving retail investors and small businesses will bear the full loss. there are too many investors redeeming at the same time. the fund could be forced to sell securities at higher prices. it would depress the barter short-term market. this spreads the contagion to other funds. it is for these reasons that i asked the staff to explore a number of the structural reforms, including two particular that may be promising. they need to set their share prices based on the market the idea of the fund's underlying assets. understanding the dollar is important to investors to use this project, a second option would be to allow money market funds to maintain a stable dollar value as they do today and require the funds to maintain a capital offer to support the funds stable and the values and restrictions on redemptions. if a large -- occurred, the money market fund would incur a loss. it a supplement the capital and dramatically reduce the contagion to other funds and the system. these ideas and others are the subject of continued analysis and discussion. if the commission were to propose a reform, there were a be an opportunity for comment. investors, taxpayers, and the financial system at large. it is essential to address this risk now instead of waiting for the next crisis. thank you. i would be pleased to answer your questions. >> thank you, chairman schapiro. please put five minutes on the clock for each of the questions. what did the sec know about money market funds that you did not know before the crisis? how is this new information inform their views of the risk of money market funds? >> senator, the transparency initiative that the sec undertook had been extremely useful to us in the monitoring the rest of the money market funds are taking. i would also say that every morning when i pick up the newspaper and read about an earthquake in japan or problems in european financial institutions, the first question i asked the staff is, what is money market fund exposure to these incidences are institutions? what the data has done is given us a window into these exposures in a bigger way. it also helps us understand the risk that exist within fund portfolios. we have hired a former money market fund portfolio manager to help us work through this data. we have noticed interesting things that some fund managers are taking on the ticket to get a greater risk than others while the share prices are still priced at a dollar. we learned that most funds significantly reduce their exposures to european banks in light of all the problems in the eurozone. they were able to capture higher yields. that is enticing to investors. this shows the $1 share price can be enticing. >> which one are two revisions in the 2010 reforms do you believe have been most beneficial? what analysis has the sec conducted on the full impact and effectiveness of the 2010 reforms? has it informed your view on what worked well? >> sure. we studied the 2010 reforms very carefully. from my perspective, the most value has been the liquidity requirement. the requirement for 10% daily liquidity. it was exceeded on average. that has been the most helpful in meeting redemptions, particularly hot numbers of redemption that we saw this past summer. we have analyzed the 2010 reforms carefully. we believe they have served their purpose quite well. they do not solve the problem we are most concerned with right now, which is the potential for a money-market fund suffered a severe loss as a result of the credit event and not be able to absorb the loss and the propensity if there are grounds of the market funds. we think the 2010 reforms were extremely positive. if we put out a release recommending for their reforms, we will include in that a careful analysis of the 2010 reforms and why we believe we need to go further. >> there are pros and cons within the policy proposal. what would be the impact of additional reforms such as asset value or redemption restriction on those who use our rely on money market funds, including minister polities and companies in the retail if implemented? do you agree with some who have suggested that additional reform because investors to move assets out of the money market funds? >> senator, that is a question i could answer over a long period of time. additional reforms will have costs associated with them. we would intend in our release to fully analyze not is operational and administrative costs which could come from other kinds of changes, but also costs competitive issues and opportunity costs and the full range of costs-benefits. the costs would be far, far outweighed by the benefits of forestalling another potentially devastating run we saw in 2008. investors not having access to their accounts during back to period, the costs of the short- term market freezing up, and other companies not able to have access to commercial paper, the costs of small businesses and individuals not been able to access their cash management accounts and make payrolls are tuition payments. the implications for our economy are very broad and very deep. those are costs we need to take into account, as well as the costs of course of any proposed changes. >> senator shelby. >> thank you. in your written testimony, it talked about the financial system as a justification for additional money market fund regulation. has the financial stability oversight council designated any money market funds or activities systemically important? >> senator, as you know in their annual report of the financial stability oversight council, money market funds were discussed at length as a weakness and the potential systemic risk for the u.s. financial systems. they have not designated to any institution at this point as systemically important financial institution. >> yesterday "the wall street journal" reported that a new sec study has found that money market mutual funds receive financial support from their sponsors more than 300 times since the 1970's and about 100 more times than previously reported. did the commission review or approve a study? if so, could you provide a copy of this study to the committee? and how many times has money market funds required sponsors since the 2010 reforms? is that too much? that is a lot. >> it tests my ability to remember, but please remind me if i forget anything. it is not really study, it's a tabulation. it does not include all kinds of sponsors support. i believe the number may be conservative. it is a tabulation in many instances where people came to us in order to get authority to do sponsors support. what you wanted to do was an affiliate transaction, which would be a violation of sec rules. i would be more than happy to provide the information to the committee. it is likely conservative number. it is those instances i came to the attention of the staff or were notified about the support that was given. i know that moody reported a number summer in 200. i do not know what they look at. our staff we did everything back to the 1970's. they might have a different base line at moody's. they reported that 62 money market funds required support from the sponsors, but they looked only at the 100 largest bonds as an example. our staff look at everything back to the inception of money market funds in the 1970's. >> the sec work with the fed reserve in developing the 2010 money market fund reform? if so, can you please explain? >> senator, i am not sure to what extent the staff consulted with our talk with the fed reserve board's staff with respect to the 2010 reforms. they may well have, but i do not know the extent. >> are the currently working with the fed reserve in developing further reforms? >> yes. our staff has had lots of conversations about the potential reforms. >> ok. chairman schapiro, there were some speeches about shadow thinking. our money market funds shadow banks? >> i am not a big fan of the term shadow banks. money market funds are hugely important in our economy. they are important to millions of investors. honestly, they have been generally responsibly managed. this is not about shadow banks. >> should the fed be the primary regulator of money market funds? >> i think as ec is a fine regulator of money market funds. they are at the end of the day investment products. the sec is the government expert on investment products. the confusion of the complication is that their value does not fluctuate like investment products can and should and do. >> thank you. should the fed be the primary regulator of market funds? >> i think the is a fine regulator -- sec is a fine regulator. the sec is truly the federal government's expert on investment product. the confusion or the complication is that their value does not fluctuate like investment products can, should and do. it because we have a fiction of a stable net asset value. >> thank you. i want to commend you and ranking member shall be for holding this hearing. looking back over the last several years, there were many issues that had potential buyer consequences to the financial system which were not examined -- potential dire consequences to the financial system which were not examined. this is a very important topic. that may follow up question that senator shelby post. the financial stability council has not designated a mutual-fund systemically important and subject to regulation that they can do that. is that correct? >> i believe we could designate individual funds as systemically important or the activity of transformation and credit mediation as systemically important activities. >> if the sec does not create a rule that would apply to all neutral funds, the stock could pick out the largest funds and impose restrictions or operating procedures on them under their authority. is that a fair estimate? >> i think that is right. we are working to define what criteria would be used for asset managers and designating them systemically important. >> you could have essentially a system in which some are regulated and some are not. anything the sec did under the investment act would apply to every mutual-fund equally? >> apply to all money-market funds. the risk of having some designated and some not designated -- the contagion spread very quickly across many money-market funds. the risk no incentive not to run if you can get your dollar out as an early redeemer. why take the chance and stay in a fund and potentially have to bear the losses? >> most of the institutional investors have the most connectivity to the funds they monitor on an individual basis, unlike retail investors. they typically can withdraw their funds at the full dollar nav and at the end of the line, it might get less. is that correct? >> the tendency is for the losses to be concentrated in the remaining were slower moving shareholders which are always retail, small-business is and not the large institutions. grex -- > > one of the issues raised by senator shelby is the testimony about -- situations where the sponsor of the funds stepped in and provided capital. this raises the issue -- if that is the norm and they have the intent and capability of doing that, essentially the funds can complete themselves. that raises another issue about the capacity of the funds and their willingness. is there any consideration to the stress testing of the financial companies now? looking at the capacity of funds to support or as sponsors to escort the funds as something he would consider? >> we do have stress testing as part of the 2010 reforms but it is just testing the portfolio of the funds as opposed to test in the capacity and willingness to step in and support a fund that is in danger of breaking the dollar. the real concern about that is not that it is a bad thing to have sponsors support to prevent a fund from breaking the dollar. it is that there will come a time when a fund will not have either the capacity or willingness to step in and support its fund. investors believe there will be supported because of history that has shown us that in hundreds of instances, funds have stepped in to do that. history has shown us that when things got bad, the federal government stepped in. so experience is trumping the theoretical understanding that these are at risk. >> i'm concerned about the impact on municipal participants. many municipalities that use money market funds in an efficient way to manage their cash. are you looking seriously at any impact that could have on municipalities? they are all under siege because of local and national economy. >> absolutely. we have concerns. we listened carefully to state and local governments and their concerns about money market funds. they use them as cash management vehicles unstable -- they need stable value product to do that. that is one reason we have an option for capital which would allow the product to stay at a stable value. the other concern is whether money market funds will continue to exist and be able to buy municipal securities. only about 10% of the total municipal securities are held by money market funds. i believe money market funds will continue to exist. they will continue to invest in municipal securities. but if the municipal treasurers cannot bear the risk of loss of a penny or a share in their cash management account, one has to wonder whether a money-market fund is the right place for them to be. they do have that rest. risk.hey do have that >> thank you for having this hearing. the ranking member as well. this is a very important topic and i appreciate the chance to have this discussion. my first question, thank you madam chairman for being with us. in a footnote on the first page of your testimony, you acknowledge the views of your testimony are your views and not the views of the commission. is it fair to say that the views you have expressed the not represent the majority of the commission? >> senator, i would not say that. clearly they have not joined me in this testimony. the commission as a whole has not. i think that some will tell you they still have open minds and they want to engage with the documents. to see what the proposals and cost benefits are. but you are right that some of them have expressed their views that nothing more needs to be done. that the 2010 reforms were sufficient. but i am hopeful that we will have the debate i think we need to have. >> it seems to me there is a majority on the commission that does not share your view on this. we will see how this develops. i also want to make a point that the disclosure that there were 300 instances in which there were some voluntary support succeeded in getting some said additional stores written but the fact that it came without the accompanying analysis and data is pretty unfortunate. i have seen articles in which people leap to conclusions that may not be supported by the data. i would like to drill down a bit into this topic since you have raised this and seem to be making this an important basis for suggesting that we need some really extraordinary new regulations. the federal reserve bank of boston said there were 47 instances of direct support between 2007 and two -- 2010. the refer to around 100 and since his between'89 and 2003. moody's reported more cases between -- my first question, as everybody using the same definition of what constitutes support? >> they may not be and they may not also be looking at the -- >> could you tell us what is the definition you have used to define an instance of this voluntary support that gets you to discount of 300? >> we used a conservative evaluation, looking at those instances where money market funds came to the staff of the sec and saw a 42 violate the transaction rules by making a contribution to the fund. we generally talked-about it as being entering into a capital support agreement or a letter of credit. we did not count renewals of agreements or other types of potential -- what credit agreement is essentially a conditional support. does it still count if it was never drawn on? >> yes. is still shows up as a liability on the balance sheet. >> but there was no credit of that that occurred for an out -- adverse outcome? do you distinguish between significant amounts of support? >> no. i do not think it is relative -- necessary to distinguish. capital support is there. it contributes to the understanding. >> it is not clear that the consequence would be breaking the buck. let me ask another question. in the event that a sponsor had an agreement to purchase securities and securities have been paid in full, would that count as one of these instances? >> yes, it would. >> ok. how about the number of instances since the 2010 -- how many occurred after the new regulations were imposed? >> since 2010, there have been three sponsors support occasion that were necessary because of a downgrade of its foreign bank. -- of a foreign bank. >> it is hard for us to evaluate when you say necessary. we went through a number of exempt -- of examples where support is defined in ways that would not suggest to me or to many people that there was any real danger. my concern is that this is the impression being created. these are all instances about which we should be very concerned when in fact it sounds as though many of them are not terribly disturbing. >> i am more than happy to provide background the formation to you but i think it's important to note that money- market funds come to us and ask us for the authority to enter into these arrangements. these are not generated by the sec. >> i understand they are heavily regulated and forced to come to you for permission for many things but that does not mean that things they're forced to request permission for are not necessarily a disturbing or evidence that things are crumbling. so he will give us a public release of the data and analysis. when you expect we can get that? >> as quickly as possible. within the next couple of weeks. >> i would like to make a general point and wrap up my time. your testimony in my view, you are portraying an industry that is very vulnerable and has these risks. i find that extraordinary and in light of the actual history. when you think of the way this industry has thrived for decades that has seen so many extraordinary events -- bout of inflation, the crest of the industry. all kinds of devastating natural disasters ,9/11. but prior to the financial crisis of 2008, there were thousands of bank failures. during all that time, one money market fund broke the buck. there was no run, no contagion. investors got 96 cents out of every dollar. then comes a financial crisis that is the worst since the great depression. commercial and investment banks crumble. an entire industry is wiped out. all are forced to be bought or convert their charter. while the entire financial- services sector is virtually collapsing in seizing up, the panic that ceased this sector did affect some of the money market funds. one of them broke the buck. extraordinary measures were taken. then you oppose new regulation that you talked about -- liquidity, maturity, more transparency. since then, we have had another round of real stresses. and ongoing terrible recession, european credit crisis, the downgrade of the u.s. government. and not a single problem in this whole industry. no one gets in trouble. now without having had a chance to look at the data that you cite, citing the very characteristics that have been in place and the first day of this industry, you are telling us this is a very volatile -- a vulnerable industry, using that to justify things that threaten -- >> senator menendez. >> thank you, mr. chairman. i am not sure which analysis you are referring to that you're going to make public. i had a question about your analysis process. what reforms are you talking about? >> i was asked to provide the background on the 300 occasions where there has been capital support provided to money-market funds. >> my question is have you studied the impact of the sec's 2010 changes on money markets? >> yes we have. in the release, we laid out potential for the reforms. i will tell you we believe the 20,010 reform mark extremely well for what they were designed -- 2010 reform worked extremely well for what they were designed to do. as we saw through the summer in europe when there was a time of extraordinary redemption, they performed very well. ven that's a weekperio period, about $100 billion but the -- was withdrawn from money-market funds. i would disagree that there was no wrong. the polio -- the goal here -- this is an industry that has performed very well. >> i did not want to spend my time. that is good for presidential debates. let me ask you this. are you going to release the impact of the 2010 changes before you move on to your next set of reforms? some of us would like to know what those 2010 changes did before you move onto a next set of reforms to get a sense of the impact. for example, how much of their belize -- reduce systemic risk? >> we can certainly do that. we could provide that in a former response on the record. >> have you done an analysis of your proposed reforms that are coming down the pipette that you can share? >> that would be in the form of a proposed rule recommendation with lots of alternatives and options and questions. that would include a complete cost benefit analysis of the proposed options with the capital buffer with redemption exchange -- restrictions. this compared to the cost of iran to our economy and the alternatives were money might flow if it were to flow out the money markets. we have quite a detailed cost- benefit and economic analysis in the proposing analysis. >> are you going to define the reforms both on safety and soundness but also in whether investors will be willing to invest? >> yes, we would look at the competitive impact of any reforms. >> do you believe, i have heard some criticism that there is not a wide enough array of options being considered. >> i would say that -- the president's working group in 2010 published a report that laid out more than half a dozen options for reform, including capital and floating nad, and converting to a special purpose banks. there were four or five other recommendations. >> i'm concerned about the net asset value of fluctuation. that is problematic. we have written to the commission expressing that view. how much would capitol offers cost and how much will they reduce systemic risk? >> it depends on how you structure a capital buffer. i think a small capital buffer coupled with limitations or fees on redemptions would permit you to have a small buffer and yet require redeeming shareholders to bear the loss, some of the cost of their redemptions. a small buffer would allow you to have fluctuations that could be absorbed on the day to day basis. we will try to cost out what the cost of capital would be. >> right now and you cannot tell us how much that would reduce systemic risk with you -- that you are proposing? >> that is part of our analysis but i think a capital buffer would allow the money market fund to maintain the stable value as it does today but support it through the insertion of relatively small losses that occur without breaking the buck. >> i want to follow up on senator menendez's question about the analysis. if money market funds are forced to float their net asset value, there is a great concern about the fact that the flow of hundreds of billions of dollars would be severely disrupted. have you or your staff undertaken any studies as to how the reforms you have floated might affect the ability of investors to continue to use money market funds as an effective cash management tool? >> absolutely. part of our analysis is the impact on state municipal governments, forecast management. we understand many of them operate under legal requirements to utilize the stable value product. that is one reason we are proposing alternatives. if you need to use a stable value of products, there is a capital alternative that would allow -- but will look at the cost implications for business apologies of both the cash management aspect of money market funds and their capacity to by state and local paper. >> have you reached any conclusions as to what kind of disruption might be caused in the economy during the development of capital in this context? >> we have had conversations with state and local governments. we held a round table last year. b. have participation from state and local governments talking about the issues and their concerns, will they need to have additional staff or change their programs to request what conclusions have you come up with? >> part of our release is to receive specific data about what those costs would be a compared those against the costs of the potential for run that freezes money-market funds, suspends redemption and gives them no access to their cash management vehicle. >> in april, a committee issued a report on the money market funds that included proposals to float the net asset value a ... value. who at thesec provided the input on this report? >> the staff works with a committee that was dealing with these issues. the commissioners did disagree with the conclusions of this agreement registered at the highest levels. papers were published prematurely. before the commission was able to register their was not a majority of the commission support. this was a staff paper seeking comment on a broad range of potential options. >> thank you. a professor from georgetown makes the point that it is important to distinguish between a destabilizing run and an orderly what. in a run, the funds are forced to sell assets that potentially it distress prices. potentially destabilizing money markets. in a walk, the funds can be used in the normal cash flow manner for maturing assets to meet redemptions. are you focusing on that kind of distinction? you agree with that distinction and do you think their reforms you're talking about properly take into account that kind of distinction? >> i think the reforms do take into account that kind of distinction. our concern is the propensity to run. not to keep money market funds in business or limit people's ability to withdraw and move their money. our concern is the destabilizing run such as resaw in 2008. we are very focused -- we have had staff look at the professors' report. it contains conjectures and statements but not quantitative data and analysis we would expect to include along with our reform proposals. >> abidine we disagree with his analysis, you do agree with the distinction that -- although you may disagree with his analysis, you do agree with the distinction? >> i think it is difficult to have an orderly walk. a fund is likely to suspend redemptions which freezes everybody in place, including those who need access to their funds for cash management purposes -- mortgage payments, payable, tuition. my concern is about the potential to break the buck because of the brittleness of the $1 value and that leading to a run. >> thank you. senator warner. >> thank you. i want to go back to some earlier comment. i share your concern that if you have to have an intervention and it is breaking the buck, it has the potential of unraveling. the interesting thing is when you look at the stock, normally we go after the larger systemic important institutions. my sense is that the largest money market funds are probably the safest in terms of shoring up if they get into this gray area. it is the smaller ones on the fringe them may be providing the most threat to the system. i guess this goes back to -- i want to comment more about center -- senator rei'd's question. can you speak to that? >> i think the stress test is an interesting idea. with respect to the capacity to provide capital. i think the problem is if there is going to be capital support, it ought to be explicit capital support. investors should note it will be there when it is needed, not be left to wonder whether the sponsor is still capable of providing support for willing to provide that support. that is why my view is the need to move forward with a rule that would require either a floating net asset value or a capital buffer, coupled with a redemption fee or limitation to ensure that those soredium early are not bearing some of the -- >> no differentiation between those money market funds to have had long, stable relations? everybody would be in the same pot? if we are going to go on the capital offer, would it be for a lehman style collapse or a normal course to have a small reserve here so that if there was something that got near that cushion? or would that be part of the review? >> that as part of the analysis but the reserve fund was about $62 billion. not a household name. they held about 1.2% in their assets in the minh papers. when they broke the buck, it was in a time a general crisis in the economy. but it spread rapidly to many other money market funds. if you read secretary paulson's book, he talks about standing on the edge of a cliff. they did not know what happened because of redemptions were going through the roof. there were going to create this spiraling down that would be very difficult to stop which is why treasury did stepped in to the tune of more than $3 trillion. >> if you had to put a capital buffer to be in place for that law will up in contagion, would you disrupt the whole business? >> i think that would be expensive and would not make sense. you could have a much smaller capital offer coupled with some kinds of limitations on redemptions so the losses are borne by all redeemers, not just those who are left at the end of the day. >> your notion on his reforms would be systemwide, not with some analysis of those funds that are graded stronger versus those who are more on the peripheral? >> i think it needs to be explicit. investors need to understand, will the capital be there or will it not be there? a uniform capital offer or any other offer has that benefit to it. just to assume that because a fund never had to bail or support its money market fund in the past means it never will in the future would be concerning. >> is there any sense of -- you seen improvements since the 2010 reforms. have you looked at other things in terms of additional liquidity requirements as opposed to some of the reforms you were looking at? there are other ways to get the protection? press we have. the president's working group published a paper that they doubt different options. two tiered money market structure with tighter restrictions on stable value funds and less ties on a floating rate funds. there were several other alternatives. we also held a round table on those. we are open to continuing to discuss options. we have had lots of constructive conversation with industry but we have to get at the structural weakness and i am not sure enhanced liquidity requirements going to 50% liquidity rather than 30% would get us there. but we can put a release out and have this discussion in far more concrete and specific terms with economic analysis to accompany it. >> thank you ranking member for having the hearing. madam, thank you fear service. i have lived this as a former school superintendent. i of seen the importance. -- i have seen the importance and seen the challenges that arise. it is hair raising. we need to be cautious about this because the costs are potentially very real and large for municipalities. there has been a lot of general top about that today. have you done specific analysis on the potential cost to these local governments? >> our release will talk about to the extent we have data on the potential costs to municipalities and state issuers as well as on them and their capacity. we will also seek additional data and input on those very issues. we recognize this is not a cost less propositioned by any means. i spent time with a number of members from colorado and other states after reserve broke the buck. their local governments could not access their accounts. >> i was there. and i know it. having lived it, i have seen it and still am deeply worried about the unintended consequences that might arise. what i know in our case is that the financing we were able to do dramatically improve the conditions for kids in the denver public schools who for the first time in our history are saying resources added back to their classrooms while district around us are having to cut back. had attraction -- had the transaction been one we could not do, that would not be the case today. i guess my plea is one for precision and paying very close attention to what effect this might have on liquidity at the local level. not for the municipalities themselves but for the people we serve in those places. >> absolutely. we recognize these are incredibly valuable tools and our goal is to make them stronger and better able to withstand. >> if you look back -- have the dodd-frank law been in place and the 2010 reforms been an effect four years ago, what is the likelihood the reserve fund would have broken the block? is it possible that requirements under dodd-frank would have reduced the likelihood that it be would be in such terrible shape? with improved credit standards that affected the ware with ball of the reserve fund? >> i do not know the 2010 amendments would have been enough. i think they have been very valuable and have contributed to the resiliency of money market funds but they do not address a 7 credit the event that causes a loss which is what we had in reserve -- address a sudden credit event that causes a loss which is what we had. there require higher quality but do not address a sudden credit yvette. they do not address or alter the incentive the shareholder has to run it even fear losses. there is no penalty to getting out quick. there is a real penalty to hanging around potentially. i do not think they address the unfair result that can occur when an investor gets out quickly and losses are concentrated with retail investors or retail investors are left in a frozen fund and cannot access the liquidity. i do not think it would have been enough. that is why we are here today. >> thank you. >> any additional questions for maybe it scahapiro matted for the record. you may be excused. i will now ask the witnesses of the second panel to quickly take their seats. we welcome you and thank you for your willingness to testify before this committee. the honorable nancy kopp is the treasurer of the state of maryland. mr paul is with the national association for investment cos. mr. j. christopher donahue as the president, ceo and director of federated investors inc.. bradley fox mr. is vice president and treasurer of safeway. and professor david scharfstein, president of finance and banking at half the harvard business school. because we are running short on time, we are going to move right to questions of our second panel. each of our witnesses statements will be submitted for the record. i will ask five minutes on the clock. professor, please describe the causes of the run on money funds in september 20 -- 2008 and the reason why you recommend for the reforms for financial stability. >> thank you. the run on the money funds in september 2008 was triggered by the failure of lehman brothers. in the year leading up to the failure, recent research shows that not just their reserve primary fund but a whole host of other funds took the opportunity to increase risk in their portfolios. there were and stresses in those markets at the time, increased yields on various forms of paper that was issued by financial institutions and those funds increased. quite a few increase the risk of their portfolios. there was a lot of exposure to risky paper in those funds. when lehman field, there was a run on the reserve primary fund. institutional investors that run pulled their funds out. the 2010 reforms are raised -- desirable and go some of the way. but they are not enough. if you look at the recent experience with the european sovereign debt crisis, what we saw was a similar event that happened. not as extreme. the run was not as quick. what we saw the was again funds increasing their risk and exposure to euro zone banks. when the crisis escalated last summer, what we saw was large withdrawals from those funds. those have implications for foreign banks which are the main users of the money funds. they are the main issuers into the money funds. that created a dollar funding problem for them which spilled over and has affected the ability of those banks to make loans to u.s. firms and other companies that need dollar funding. i would also say that the liquidity requirements as part of that fund cross purposes with other efforts that are in place to get u.s. banks to find themselves on a more long-term basis. if you require money funds to hold short-term paper, that means banks are going to be issuing more short-term paper and part of what you're trying to do is to get banks to lend themselves in a more stable way. >> what impact have the 2010 sec reforms had on users of money market funds such as state governments and companies? >> ms. kopp, please begin. >> i am here representing 13 organizations of state, local municipal governments. they use money market funds for liquidity for money management as well as for financing. the fact is that the increased tightening of the credit standards, the shortening of the duration, the enhanced disclosure of having on the web site the total portfolio has made it more possible for us to compare the sites and funds and to go where we have to go. but we use these funds for daily liquidity, for managing our money. that is our main concern. it has made it simpler. we think they have been very important. we think there has not been a lot of time since 2010 to measure all of the impact but what the professor called the trot and the senator called a walk, both are testament to the fact of we have not had a run. >> i would agree as well. i think money market funds have been extremely efficient applicators of capital from investors to borrowers. some 40% of all corporate commercial paper is purchased by 2a7 money market funds carry their improvements and reforms from 2010 have only enhanced the role they play in the marketplace. i think that is shown with the fact that there are $900 billion invested in prime money-market funds from institutional investors. so they have proven very resilient in the face of very serious global market turmoil from the european debt crisis. >> senator shelby. >> thank you, mr. chairman. i will direct this question to mr. stevenson, mr. donahue. some have argued that a product that seek to maintain a stable net asset in value while investing in instruments that can decline in value is essentially maintaining fiction. is the stable net asset value money-market fund a fiction? >> it is clearly not. we have done a considerable amount of empirical analysis of the variability of funds net asset value per share over extended amount of time. the degree to which they fluctuate is really quite marginal. you can look at it in preiods of -- periods of stress. >> does it depend on where you invest in? >> you are right. we invest only in the shortest, highest quality paper that is available. >> that is the protection? what that is what under the structural rule permits funds to keep their net asset value per share with a great deal the precision of around $1. >> any comment? >> we had a hearing with the se on thise late 70's subject. it was the same issue in question. the sec is looking for a re-do here. the portfolios in the credit were that hold maturity and the enhancements added in 2010 -- is a solid thing that has done a great thing for the american public. >> have the disclosure requirements improve your ability to manage cash? would your ability to manage cash be further improved if information was provided in real time or near real-time? >> if you were talking of going to a floating rate, let me make it clear that throughout the country, there are laws particularly with local government that require a value vehicle. they would have to change all of those lost to pull out or pull out their money. last week, the gfoa met in chicago and there was a clear consensus that they would be forced to move out. because of the law and because their accounting system do not allow them -- does not allow them to go to that. so they would have to go to banks which are less transparent. >> you agree with that, mr. fox? >> i think that from a system standpoint, it will be very difficult to monitor his a floating net asset value for money market funds and corporations would simply not use them as investment vehicles. the transparency from the 2010 reforms has been very helpful. we look at these portfolios. we understand where they are invested and are comfortable with the stable $1 net asset value. >> i will direct this to the professor. what should be done to decrease the expectation of another taxpayer funded bail out of the money-market industry? is it more capital and how much? >> i would say is more capital. i think that is the proper lands. -- proper lens to look at this through. there was extraordinary support for these funds during the crisis and the treasury guaranteed calibrating the exact amount of capital is difficult. i do not think it will be nearly as costly as people say. if the industry is correct and there is not much risk in the funds, having a subordinated share classed as has been proposed should not be very costly at all. >> is the bigger the fund, the larger the fund, the less likelihood of needing taxpayers? >you have a lot of small money market funds that operate every year where -- everywhere. in a time of crisis, the big ones have more potential to save themselves than others? >> also support is important and that can be -- sponsor support is important and that can be helpful. clear capital set aside in advance would be -- >> what do you suggest? you have a figure in mind? we are talking about a lot of money. >> that's right. if you had a subordinated share class in the order of 3%, i do not see that as being particularly costly. >> that will not work. the math does not work. we have a $2.50 trillion industry. if you say 3% of capital, that is $75 billion of capital. assuming you can get that, that demands a return on capital. our cost to capital is like 11%. let's use 10%. easy and numbers. that means you have to earn $7.5 billion. where are you going to earn that? from the $2.50 trillion in the industry. that is 30 basis points. it does not work. we have revenues of 15 basis points in good times. the numbers just to not work. >> i understand to some extent the interest the people and the use of money market funds. it works well but i also want to make sure the taxpayers do not have to bail out anybody. we have done that. we have been down that road. that is a bad road to go down. >> the best part of dodd-frank is that part that says you are not allowed to re-do the insurance thing from money funds which we did not ask for and did not want. >> senator reid. >> thank you. implicit in a lot of the questions and operations of the funds is that the funds are prepared and have the capacity to and least of -- on a temporary basis maintain the dollar nad. is that if there is something? >> because of the concept of their portfolio, they are able to maintain a $1 nav with a blow it credit, then it will not be a $1 nav. then you're going to have the suspension of redemption and the orderly liquidation of the fund. you do not have a run because you suspend the redemption, the people do not want and you have an orderly and liquidation which is not what happened in the reserve case. >> here is the situation. you have a prominent fund that miscalculated -- in the case of 2008, held assets were rated aaa 24 hours before they went bankrupt. so they look pretty good. because of the notoriety and the assumption that people have that a lot of mutual funds, their portfolios are fairly similar. the presumption would be that in a situation which might happen that one fund could break the buck, stop redemptions and that would have no affect on the funds. is that the perception? >> no, because of the 2010 amendments, you will not have it run in the fund that breaks the but because of the other trend. what happened in the 2010 amendment is that you have more cash in the system. we are required to maintain 30% cash when 15% went out. you have transparency. people know what is in the portfolio and we have a know your customer requirement. you have to know who was coming in and going out. the key is due you have liquidity in the system? the problem in 2008 was there was no liquidity in the system. when there was a deviation of net asset value of 1994, there was no foul because there was liquidity. when the marketplace is shutdown, you had a problem. but i think senator shelby's comments go to what -- go to the heart of what our job is. we have to contemplate things that seem so far removed from day-to-day practice. there is a possibility given these rules that there could be liquidity problem in the overall system. not emanating from what you are doing but to case where european banking system or political and economic problems clyde and liquidity start freezing up. then it is not the question of how much you are holding. you just cannot get access to a sufficient liquidity to redeem. is that a possibility? but that is a possibility. it is addressed by congress in dodd-frank which directs the fed. they are supposed to come out with rules and regulations to govern our emergency landing that is supposed to add money and liquidity to the financial system, not allow to aid in individual company or failing financial company. and it has to be done where they do not lose money and exited quickly. that is exactly what they did with the almf with money funds back at that time. >> getting to what this all might rest on is the federal reserve stepping in and declaring that this is -- we know you cannot do it for an individual company but that the potential impact of a failing fund could trigger failures in other well-run funds. therefore we are stepping in and using federal resources to support. >> i'm just try to figure out what is the assumption on -- underlying. >> and what the testimony in vice is to look at all 300 of those events through the -- testimony in bites is to look at all 300 of those events through a lens. looking at it from a point of view of 2008, you can also look at it from my point of view of 1994. that is the only other time a fund broke a dollar. money fund assets grew that month and it did not have a knock on the fact. i would invite you to scrutinize whether it is likely -- prime money funds have to pay $600 billion in assets that they can liquidate within a week to meet redemptions. whether we have done what the industry thinks we have to address in a reasonable term the kind of prices be might need without any prospect of are going to the taxpayer again. although taxpayers paid nothing on the guarantee program and they made $1 billion on the quarter. >> i think your point is well taken. we cannot ignore 1994 but we cannot ignore 2008. we have to look at both. we have to assess the probability. demi also have to -- then we also have to poll what are the underlying assumptions if the get into a 2008. in a 1994 situation, the market's sort of move forward on their own. we just not approvingly. in 2008, we have to know the assumptions. one assumption that worst case scenario, the fed has this power to come in and move resources. at least we have that on the table. i think that has to be acknowledged. but the fed has on numerous occasions taken steps to make sure commercial paper markets are functioning effectively. >> i want to make sure we understand it is explicit, not implicit. down the road, if the fed does take a move like this, i think we all want to have to -- we knew they have the authority and this is not one of those unauthorized bailouts. >> i would like to direct several questions to mr. donahue. the first question would be in response to chairman schapiro's points. the past instances in which sponsors provided voluntary support to their money funds means that they are not as safe as they appear. i think that is one of first central arguments. could you respond to that promise. >> we create a lot of fun terry i am one of 13 kids. i have eight of my own. you are forever supporting children. the idea that you support funds -- you look at any other product. people are supporting their products. they are making independent voluntary marketplace analysis and judgments about what to do with a product. i did not know anything about the 300 or 200. none of that really matters. what matters is you have good solid people deciding whether or not and what to do to help shareholders. i think what the support shows is the inherent resiliency of the fund. when you have to $0.60 trillion in these funds with no interest and lots of regulatory abuse, that is an accomplishment. it is because the people want the cash management system. if you talk about support in terms of what was done, how about the support that every single one is doing 100% on waiving investment advisory fees to keep the funds going during these low interest times? i look at support as something that is not unlike having a family. we're trying to buy other clients. >> is it fair to say that many of these are a strength of the industry? >> there are manifestations of the strength and judgment people make about why to do something. there may be a reputation will issue. customers may be uncomfortable with the name even though it will pay off in time and in full. there may be questions do you want to improve things. there could be a lot of reasons. there may be individual customers you are trying to deal with. there are a lot of reasons other than you had to buy the lehman peeper. there are other elements to it. it shows a strong dynamism to be able to see the variety of moves that people have made to support the strong products. >> some have suggested that having a fixed net asset value is somehow unfair to investors because investors should not really understand. they think this is akin to a bank deposit. that strikes me as a rather surprising argument. it appears frequently. a variation is an chairmen shapiro's testimony. >> most investors deal with us on one account. the understand what the money market fund is. if there's any good thing to come out of reserve funds, they realize that the investors were worth a lot. there is no bailout. people understand it. fidelity has run a good survey of their retail base. they said they understand what the lay of the land is. one of the thing about all this regulatory noise is emphasizing what we put on the front page of every end report. e-mail those money. >> i would just like to ask unanimous -- you may lose money. >> out like to ask unanimous consent. >> can i ask on behalf of the many investors that we represent millions. we do read the prospectus. we know it is an investment. it is not a savings account. three forms of 2010 has brought back home. i think treating us like children is really not appropriate. >> thank you. i summon a question about -- i have so many questions for all of you. this caught my attention as i was reading it. i would get you the headings. i like you to say why you make that proposition. you say reforms under consideration are fundamentally at odds with the nature of money market funds. i apologize that we were unable to finish. i want to think the witnesses for the thoughtful testimony today and the cooperation and asking the important questions. this hearing is adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> tomorrow a panel discussion on the greek elections and the financial stability of the eurozone. and we will hear from the former ambassador to the eu. live coverage starts at 11:00 a.m. eastern here on c-span. on c-span2 a forum on veterans' housing issues. we will hear from georgette's signature. live coverage of national housing conference gets under way at 9:00 a.m. eastern. >> the house oversight committee voted to hold eric holder in content over document they have requested that they did not receive from the justice department. today nancy pelosi, et john boehner , the white house all reacted to the content. this is next. later, mitt romney talks to a group of latino elected officials. >> how do you approach book interviews differently than news reports and interviews? >> i think book interviews at gathering history. i think of interviewing when i'm working for the news side as gathering contemporary information. >> how difficult is it to remain with this? >> i will try to get people an understanding of what is happening in this campaign. it is thought that difficult to put your biases to the site. >> have you get your information? twitter is our primary new source for anyone who covers politics and a detention. twitter did not exist years ago for all purposes. >> watch what is newsworthy in the rise of social media. >> nancy pelosi called the boat on contempt charges against eric holder. she called it is shameful abuse of power. she spoke to reporters for 30 minutes. >> good morning. this is a very interesting week. so many things are coming together or not. what we have seen is a shameful display of abusive power by the republicans in the house of representatives. instead of bringing legislation to the floor the transportation bill, they're holding the attorney general of the united states in contempt of congress for doing his job. it is important to note how this is connected with some of their other decisions. it is no accident or coincidence that the attorney general of the united states is the person responsible for making sure that voter suppression does that happen in our country, that issues relate to the civil liberties of the american people are upheld. these very same people are holding in content are part of a nationwide scheme to suppress the vote. they are closely allied with those who are suffocating the system with unlimited special interest, a sticker money. they are poisoning the debate with that money. so what does the average citizen say? a pox on both your houses. and that is a victory for the special interests. our founders had in mind a democracy where governments are of the many and determine our government. these folks want a plutocracy. instead of the voice of the many, the checkbooks of the very few determine the outcome of the election. again, a plutocracy. so nbc is diversion. -- you see a diversion. let's not talk about this transportation bill, student loans, nine days until the lower interest rate will expire. instead, instead, let's tie the hands of the person who will decide to make sure that the american people have the right to vote -- who have the right to vote are able to vote on their vote is counted. it is all tied together. combined with their threat on the debt ceiling, the republican delay in ejects not only uncertainty -- that has prevailed for a while, paralysis in our economy. we hear this from businesses large and small. the threat to our credit rating. to the full faith and credit to the united states -- of the united states of america. this contributes to a process on a part of businesses who want to hire -- a paralysis on the part of businesses who want to hire but do not. why would they do such a thing? because it is their philosophy. they are the party that makes adam smith look like a keynesian. they are laissez, laisseez, laissez faire. they support those who would privatize the system and nationalize risk. in our financial transactions. laissez faire in terms of they do not want any regulation for public housing, public education, public health, social security -- this is what they believe. no government. bless their hearts, they act upon their beliefs. their beliefs are dangerously thriving middle-class in our country. so you see so much of a coming together. why would they oppose an initiative to create jobs? the president's american jobs act. some people called obstruction. it is obstruction, but obstruction is their orthodoxy. they do not believe in a public role. it is not the they are obstructing this way of getting something done. it is no way for them. that is why they take pride in that they do nothing. everybody knows that our founders had in mind that there would be a public role, that we would have a public-private partnership, and that the education of our children, incentives for the creation of jobs, and economic security for our seniors. we all believe kids should be in clean and safe neighborhoods. the security of our country should be done in a fiscally sound way. there is no political bias to it. that is not partisan in any way. but it is the orthodoxy -- if your belief is that there should be no public role, and the only role of government is to give tax breaks to the wealthiest people in our country and let something trickle-down. if it does, that is okay. theif it doesn't, as speaker said, so be it. we do not say amen to that. their approach under the bush years, and the george w. bush years, created the deficit, did not create jobs, took us to the brink of a depression. it is very hard to grow out of it. when they bring this up again as their approach, you have to say, this did not work before. it bought only make matters worse for america's thriving middle-class. so we say to them, passed the transportation bill. take away the uncertainty to students for the interest that they will pay on student loans. past the middle income tax cut. so that we can remove all doubt that that will exist and not be held hostage for tax cuts to the wealthiest people in the country. the budget in which they have enshrined uncertainty -- this is their goal. and fairness. -- on the fairness. how else could you describe the elimination of medicare, resulting in fewer benefits to what you give $4,000 -- while you give $4,000 tax cuts to people making up more than $1 million a year. is it fair to make people pay more student loans will you give that tax break to the wealthy? you see it all coming together. a diversion from not doing their job of helping us come together on transportation bills -- it has always been bipartisan. it has always been a job creator and has always treated to the safety of transportation in our country, the promotion of commerce, the quality of life, moving people and products to and from home and work. but now it has been held up. nine days to go. let's hope that there is still a chance that there can be some interest on the part of the house republicans to support what 74 members of the united states senate's -- 3/4 of the senate on record supports a bipartisan bill. that is unacceptable to the house republicans. this is a serious time, especially as we go into approximately 140 days until the election. 140 days until the election, or maybe what i monday off. 140 days -- maybe i am one day off. not only important to our economy, to our one and five kids who live in poverty in america and are being cast aside, not only to those who are looking for jobs and this perhaps -- paralysis is preventing them from being unleashed, but also important to our democracy. suppress the vote, suffocate the debate with unlimited dollars. poison the debate, a victory for the special interests. in shrine and fairness in the favor of special interests at the expense -- expense of the the middle-class. it is an important week. as we go into a celebration of our own independence, it is important for us to understand that you cannot change the policy on us to change the politics. unless we dare, unless we dare, by -- as they have to do -- as we have to do, they should do. amend the constitution to overturn citizens united. remove money as completely as possible from the process, and electrons farmers who will do that in both parties. -- b. let reformers who will do that in both parties. it is important to know that this is nothing accidental, coincidental or just happened to happen. the decision to suppress the vote to validate policies that increase that deficit and increase unemployment. that is exactly what they had in mind. >> democrats are tough on george w. bush's policy. what is the difference between what republicans are doing with eric holder and what democrats did to michael mccasey? >> in the house, our contempt of congress was addressed to josh bolten. i cannot speak to those cases, they never came to a vote on the senate floor. in the house, we took a hat -- a vote. the circumstances were quite different. we were talking about political intervention in the hiring of u.s. attorneys, having them retain their position through political innovation -- political intervention from the white house. it is important for me to speak about this issue because our e leisure cummings -- elijah cummings, who we are proud of the role he played -- the particulars of the cases are very different. as you know, we want our case. a judge ruled in our table. i can only speak -- speak to our experiences. >> a ranking member of congress said that, if speaker boehner were to bring up the vote to hold holder in content, he would become one of the most extreme members of congress ever. do you agree? >> i defer to the superior knowledge and wisdom of mr. cummings on the suspect -- subject. i just know that this case is different from what we have before us years ago. >> you have any -- given the fact that the interest-rate increase will only apply to new loans -- >> suppose you are a student. you are taking at 11 and he signed up for 6.8%. you signed up. sometime down the road you are going to perhaps renegotiate the loan. you have to really know how to do that. there is a lot involved in that. that'll be passed on to the borrower. people have to make decisions -- if you want to talk about the uncertainty, how about the uncertainty of knowing that this may or may not be the interest that i pay? you do not even know if it will be retroactive. so why would we do that, except to schumer -- humor the intransigence of the republicans in the house of representatives. why should students have to face that uncertainty if we agree that the interest rate should be 3.4%, not 6.8%? it hurts the students. we had a presentation as recently as this morning about what it means to the -- a student. it means a lot to the student and the families. so much so that these families may have to decide, not knowing whether this will happen, they may just have to pass up going to school this year. >> madoff leader, how to follow up -- madame leader, i want to follow up. the attorney general said he was willing to give some documents, then the president picks -- withheld them. this turned into a clash between the house and the white house. are you worried this will turn into a fight between the president and the house? >> this is part of the scheme that the right wing -- i do not think all republicans subscribe to this, but the over the edge gang which dominates the house of representatives has said that this is the best way for us to spend our time, to review a policy that began in the bush administration. a mistake was made, a person was fired. tens of thousands of documents have been turned over. without going into the conversation between the feds and the jury -- the attorney general -- the administration made every attempt to make every document available. the president said that to the speaker of the house. >> we all know what his pledge is. but i want to talk about to the pledge means and what it does not mean. what does it mean to have this interaction between the republicans and mr. norquist? >> i think they are in touch every day. i think his physical presence is not indicative of the influence he had on the caucus. if we will take any pledges here, it should be a pledge to uphold our democracy, not to give tax cuts to the richest people in the country, which undermines fairness in our country and destabilizes the middle-class, does not create jobs, and increases the deficit. >> is there a difference a tween the attorney general being held in contempt and being fired? >> there is a big difference. >> democrats and republicans agree they are walking guns into -- were walking guns into mexico. a letter was later retracted. i'm curious about what you think is the difference between why it was appropriate to hold contempt one time, but not the other? >> that is -- i'm going to leave it to elijah cummings, who has made us very proud in doing the right thing on this. not taking it swinging to some other place, but trying to take this to a balanced place about what our responsibility is. contempt of congress -- to frivolously use that very important vehicle to undermine the person assigned to stop the voter suppression in our country -- this is connected. it is no accident. it is a decision and it is a clear -- it is as clear as can be. it is not only to monopolize his time. it is to undermine his name, to undermine his name as he goes forward to protect and defend the constitution of the united states. >> the supreme court did not rule on health care. the democratic left told reporters that democrats had discussed their contingency plans for a range of options. do you maintain confidence that the court or role in your favor -- i am wondering what the contingency plan of democrats is if it is struck down? >> the only means i have been party to were once we have tabulated the benefits of the plan, knowing that people have already benefited and that more people are now on their parent'' plan until they are 26. many more millions of young people cannot be discriminated on the basis of a pre-existing medical condition. seniors pay less for their prescription drugs because of legislation which closes the doughnut hole -- you probably do not know what that means kids, -- what that means, but it means something to seniors. that is the annual checkup without co-pay. those are some of the benefits. as many as 80 million people already benefit from those. that is what we are trying to defend in this legislation. there had been some other meetings about the implementation of the law that have nothing to do with the court case, but i believe that the court's oral in favor. we are ironclad constitutionally. we are ironclad on the constitution and we will see what the court does. we believe in judicial review. republicans have not come up until now, belief in judicial review, and now suddenly they are big proponents of margaret vs. madison, which just a few years ago they said was -- marbury vs. madison, which until a few years ago they said was wrongly decided. the speaker said he was going to take the massachusetts case on doma to the supreme court, and use tax dollars frivolously to defend this bill. i think it is important to now. i talked to about one republicans did not believe in judicial review. one occasion was on the bill in 2005. they rode a bill that said the court should not have judicial review over doma. they know it is on very fragile constitutional ground. we think it is unconstitutional. but they, realizing that, wrote a bill stripping the supreme court of the right to rule on it. it passed the house but did not pass the senate, thank god. >> a last question about health care. on policy, i know you have to -- i know you are going on 63 -- 6-3, but on a matter of policy, if the court strikes down at the mandate and leaves in place all the things that you like and the doughnut hole closure, as a matter of policy, can you justify leaving those things in place without a mandate? all those other things without the mandate -- if a strike that down, how can you leave those in place? >> to borrow a supreme court metaphor, you have to eat your vegetables. you have to have the mandate in order for this to work from a financial standpoint, but that -- in other words, we want to keep those in place. the biggest difference in the lives of the american people -- one of, in terms of this legislation, is that you cannot be deprived of coverage if you have a pre-existing medical condition. this is huge. this is huge. and insurance companies even say that they cannot do that unless the premiums skyrocket. so if the american people like the idea that they and their children cannot be deprived of health care and health insurance because of pre- existing medical conditions, -- that will require some other action in order for that to happen. what could that be? it could be something passed in the congress similar to what we had in the house bill. a surcharge on the wealthy to pay for aspects of that. the senate had another idea. it went a different path. states can take their own actions in california. we have our legislation as you know. massachusetts under the governorship of mitt romney passed a mandate that he said was necessary for the health and well-being of the people of massachusetts. they can have of their own exchanges. they can have a public auction. -- option. you are asking what are some of the things that could happen. what we cannot say to the american people is that we are going to throw you at the mercy of the insurance company is to have reduced coverage to you and rescinded policies when you are going into the operating room. they have raise your rates to the point of being prohibitive. we have to remember that one of the main reasons to pace -- past the health-care bill -- the cost of it was unsustainable. to our economy, to our competitiveness, to have this and tell of health care costs around our businesses. it was unsustainable. you had to have the legislation that kept its integrity. it took us down a path of decreasing costs to all the entities that i mentioned including the federal budget. the many things in there that we do not get credit for from the cbo, some things that go along with it like electronic medical records, that kind of thing. it will drive down the cost of health care as well. it is not figured into the cbo report, but the think tanks have said it would be hundreds of billions of dollars of savings over the life of the bill. let's hope and pray that the court will love the constitution more than it loves broccoli and we will have a decision based on the merits of the constitution of the united states. >> those are all things that the american people will demand. can they justify leaving it on the table? the majority that exists in the house right now has no interest in making these things available. they do not want to strengthen the medicare as we do you see the wall street journal. it is $2, %2, two papers. does that happen where you are? there are criticizing some of the republicans that they be like some of those things. there has to be a way to pay for it, to reduce the cost, and expand the coverage and improve the quality. this bill did just that. the insurance company said it intends to millions of new clients. it is subsidized by the taxpayer. under a federal set of rules. that is a beautiful thing. if that whole structure comes down, that makes it worse for them. they wanted to keep charging more for premiums. now that they have, they would rather see a fixed formulation. this is a longer conversation that is spent elative and so we see what the court will do. it is a remarkable thing. nobody knows. those who know do not speak. that is a phrase we have been using. nowhere does it apply more than to the supreme court. they are going after eric holder because he is going after these measures for voter suppression. it is a plan on the part of republicans. thank you all very much. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> now we will get john boehner's take of the boat but contempt charges against eric holder which will come up on the house floor next week. speaker banner spoke to reporters for 15 minutes. >> good morning. the american people are continuing to ask the question where are the jobs? middle-class families are struggling with high unemployment, rising prices and stagnant wages. republicans have been relentlessly focused on helping them keep jobs. we will remain there. congress also has an responsibility to learn the truth about what happens in fast and furious. on february the fourth 2011, the department of justice denied allegations that it allowed guns to these bold into mexico. 10 months later, the justice department formally withdrew their denial and the acknowledged it made false claims about this reckless operation. the obama administration will have done this to find out how and why it made these false claims. we're talking about a program that a mexican drug dealers guns and those guns killed an american border agents. the american people deserve the truth. the administration has an obligation to turn over the document right now. they have covered that the truth. what is the obama administration hiding that today the house will pass the domestic energy and jobs act by expanding energy production. this is the latest in a series of more than 30 jobs bills that have removed government barriers in stop policies that are driving up the gas prices. house republicans want to get a highway bill done. we want to make sure it is a bill that includes real reforms to ensure taxpayer funds are paying for a legitimate projects to support economic activity not planting more flowers and beautification projects around the country. we continue to support bipartisan job-creating issues. next month a house will act to boost economic growth and create jobs by preventing a massive tax hike and providing a fairer and simpler tax code that closes the tax hikes. tax reform will help fuel more economic growth and job creation. they will stop regulations that will hurt businesses. i think you know the supreme court will rule on the president's health-care law which are driving up costs and making it harder for small businesses to hire new workers. unless they throw out the entire law, the house will vote to repeal whatever is left of obamacare. then we need to an act common sense that hp protect jobs and protect americans' access to the care they need, from the doctor they choose at a lower costs. >> nancy pelosi said the citation is about diverting attention from the transportation bill and undermining an attorney general define to guarantee the right to vote. do you have a response to that? >> i met with the republicans on the highway bill. they have been heavily engaged. clearly there is some movement that has been all the way since the meeting i had. we're continuing to do our work. the american people deserve the truth about what happened. the family of brian terry deserve answers about why their son was killed as a result of the operation run by the united states government. this morning they put out a statement. i will redo the lasted since -- last sentence of its. our son lost his life protecting this nation and it is very disappointing that we are now faced with an administration that seems more concerned with protecting themselves rather than revealing the truth behind operation fast and furious. this is a very serious matter. until yesterday, it was just the department of justice that we were concerned about. clearly at the 11th hour and 58 minutes of the white house, they decided to inject themselves into this. there have been no indications that the white house has been involved at all. there have been lots of claims about how many times this white house and that white house have invoked the issue of executive privilege. the privilege that is reserved for the president and his top advisers. why the white house would invoke executive privilege over department of justice documents raises serious questions. knowing what you know now, should he resign? >> we're trying to get to the facts and the truth about where this program started, why it continued, and why an american border agent was killed as a result. what we want is the truth. we want to get to the bottom of this. the house will vote next week on a consent resolution unless these documents we are looking for are in fact turned over. this is about getting to the chair of four the american people care it is not about personalities. >> what if someone said we should be in a negotiation? are they not looking at this in their conference? >> the negotiation that was proposed by the attorney general is that we should accept some documents of his choosing and as a result of him turning over some documents that this tousing that we would never ever pursue content. this is not hardly a rational basis for a negotiation or is it a reasonable attempt at turning over the documents that we have been asking for. i have been heavily involved in this for months. and made sure that the t's were crossed and i's dotted. i understand there is a criminal investigation. i do not want to do anything that would interrupt that investigation. the documents relating to why they sent the letter up on february 4 of last year, why it took them 10 months to retract that letter, what those deliberations are, have nothing to do with the criminal trial. those documents i think are important for the truth to come out. >> i know of the attorney general said. then saying they did not want to function. >> as more members understand all of the facts as i know them, this was done with plenty of deliberation and plenty of time for the administration to work with us to resolve this issue. >> they are coming to talk to your members. some other republican challengers will not sign the pledge. some say your party position will shift. is this not as important as they used to be? by i understand he will come up here and have a conversation. the american people understand the raging taxes in this economy is the wrong thing to do. we are going to move our extension next month. we're glad to outline our principles for tax reform. i have been around the political process for a long time. i've never voted to raise taxes. we have a big job to do. i am not interested in raising taxes. they can discuss whether tax increases, and how they resolve it all. >> i know you believe spending is the problem. given that some members of your party are showing some reluctance, do you think that you have shown some willingness to raise tax revenues as part of an effort to bring down the debt that depot more members are coming down that do you think it will make finding common ground easier? >> i had the additional revenues on the table. revenues out of economic growth, more efficient tax systems, revenues out of opportunity cost from having certainty about what the tax field looks like. i do believe that there is a way to resolve this. at this point, giving this government more revenue would be like giving a cocaine addict who wants to quit more cocaine. we have to have controls on spending. we have to deal with the entitlement crisis that is threatening the very existence of these programs. that conversation will continue well into next year. >> do you think you might distract from their job. the began talking about jobs. >> our focus has been on jobs. i understand that members of congress have taken an oath of office to uphold and defend the laws of the united states of america. when those laws are broken congress has a responsibility to provide oversight at the executive branch. we are pursuing our legitimate concerns about making sure that the american people know the true behind fast and furious and the death of terry. >> if there are further investigations, when you get involved? >> i do believe chairman issa have a better handle on the type of document needed. i will help facilitate the conversation. i do believe that it is his response ability. he is in a much better position of understanding exactly which documents he needs. >> there's a lot of concern that this does not just take effect on january 1. particularly in the defense community. this could affect the economy this fall. are you committed to turning off the sequestered before the election? >> listen, we have done everything we can to try to replace the sequestered. that is why the house acted last month and moved a bill to the senate to make sure that these reductions in force which will come before the first of the year do not happen. i am concerned that you cannot wait until january the second and just flip a switch. i am convinced that we will see thinks live coming month after month as we get up to january the second of the sequester is not replaced. it is time for the senate to act. we have not heard anything out of the senate. we're not heard anything out of the president. maybe instead of campaigning every day, we could be concerned about the job picture in our country by working with the congress to make sure that this sequester does not go into affect. >> [inaudible] >> now we will get the white house perspective on the oversight committee vote to hold eric holder in contempt. the president has asserted executive privilege of the document saw by congress. it is part of the briefing is about 30 minutes. >> hello, everyone. welcome to the white house. before i take your questions i just wanted to note that today the department of health and human services announced that 12. 8 million americans will benefit from $1. 1 billion in rebates from insurance companies. these rebates will be delivered by august 1st. the rebates were made possible by the affordable care act, which generally requires insurance companies to spend at least 80 percent of consumers' premium dollars on health care, not advertising, bonuses, or overhead. if insurance companies do not meet that standard, they must provide rebates to their consumers. the rebates are just another example of how the affordable care act is giving consumers a better value for their health care dollar and making our health care system stronger. i'm sure there will be a lot of questions about that, and perhaps on other issues. ben feller. >> thanks, jay. i wanted to ask about fast and furious and the move by the house panel to cite the attorney general for contempt. historically, in these standoffs, there's some arrangement reached between the white house and congress to prevent a potential court fight that could hurt either side. can you tell us if there's any such effort underway right now between the white house and republicans on the hill? >> i can tell you that we certainly would like to resolve this if there is a good-faith desire to resolve it on the part of house republicans. i think it's worth taking a step back. at the beginning of this year, republicans announced that one of their chief legislative and strategic priorities was to investigate the administration and damage the president politically. we are nine days away from the expiration of federal transportation funding, which guarantees jobs for almost a million construction workers because congress has not passed a transportation bill. we are 10 days away from student loan rates doubling, potentially impacting over 7. 4 million borrowers. yet, instead of creating jobs or helping the middle class, congressional republicans are focused on this politically motivated, taxpayer-funded, election-year fishing expedition. the problem of gunwalking was a field-driven tactic that dated back to the previous administration, and it was this administration's attorney general who ended it. in fact, the justice department has spent the past 14 months accommodating congressional investigators, including producing 7,600 pages of documents and testifying at 11 congressional hearings. yet, republicans insist on moving forward with an effort that republicans and objective legal experts have noted is purely political. given the economic challenges facing the country, we believe house republicans should instead be engaged in efforts to create jobs and grow the economy, rather than political theater. >> so you think it's political theater. but is there something happening behind the scenes? do you think there is a good- faith effort that can be had here to resolve this? >> as you know, the attorney general requested a meeting with the chairman of the committee and, while i would refer you to the department of justice for more details, made an effort to reach a resolution on this matter. and it is certainly in our -- we believe worth the effort of trying to find a solution. but we have to have a willingness on the other side to work with us to find that solution. it is important for the public to know -- the public, by and large, is not particularly aware of this matter -- that every document related to the fast and furious operation has long since been provided to congressional investigators. and as i noted before, this is an operation and a tactic that was generated in the field during the previous administration that, when it was discovered by the attorney general, when he became aware of it, he ended it in this administration. he referred it to the inspector general for investigation. it has been recognized by the attorney general and others in this administration, including the president, as a flawed tactic that needed to be ended and investigated, and this administration has done that. what this is about, after all this time and all these documents and all the testimony, is an attempt to score political points. i think it's a -- speaking of flaws -- a flawed attempt, because it is this approach i think that explains at least in part why this congress has the lowest public approval ratings of any in memory, if not history. so that is our view of the matter. >> last question. can you clarify or elaborate on what you mean by every document has been provided when the president has asserted privilege on some documents? >> correct. the issue here is about after- the-fact, internal documents that have to do with the executive branch's ability to operate appropriately and independently in response to congressional investigations and media inquiries. everything that has been -- every piece of documentation that relates to the operation itself -- if the interest here is in the operation -- how it came about, its origination, how it was approved, why such a flawed tactic was employed, that has been provided to congressional investigators. the assertion of privilege has to do with the protection of the executive branch's capacity, enshrined in the constitution in the separation of powers, to deliberate independently and respond appropriately to congressional investigators' requests and to media inquiries. i would note also that, as i said, the attorney general referred this manner, when he learned of it and put a stop to it, to the inspector general. the inspector general has access to all the documents at

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