Transcripts For CSPAN2 Capital News Today 20091210

clearly played a role in many of their students and votes on the recovery act. i don't think that is any big secret. >> republicans basically when the jobless rate to stay above 10% -- >> i think the president would like democrats and republicans alike to prove to the american people that we can set aside whatever narrow political agenda anybody has in order to address the severity of the economic downturn and joblessness that's resulted from it and i can think of nothing better than taking the president up on again the ideas that have normally enjoyed very bipartisan support increasing our investment in infrastructure which will create jobs and help hundreds of thousands of small businesses across the country in terms of getting access to credit, tax incentives for hiring. look, again, the most important thing is those things in a non-partisan environment would get the support of republicans and democrats alike. i don't think that should be any different with this president, nor would it or should it be with any other president. i think we have a challenge that the american people have laid before us and that is to solve the problems that they have without getting involved in the blame game -- >> is in the president part of the blame game, two? he took a partisan swipes on that speech, even here you talked about how feelings toward ship on the deficit. this administration doesn't miss an opportunity like the pass at patrician. psychiatry shia the ability to forget -- no camano camano, but understand -- i appreciate the ability to forget anything that happened before we got here. the president didn't -- the president inherited an economic downturn. he inherited a massive budget deficit. he understands one thing, the american people put him here to solve the problems that were created however and by whoever they were created. that is what the president is going to do. he's going to make decisions that won't be altogether wildly popular with the american people. but i think he believes the american people will understand that we are making those tough decisions to pull ourselves back from falling into another great depression. it is hard to argue that the steps taken in the recovery act didn't directly lead to the first economic growth in the year. don't believe me, ask john mccain's economists who said we created jobs, we put ourselves on a path toward economic growth. that's not me. that was at work rivals chief economist in the campaign. i think what the president believes is we have a unique opportunity, setting aside all of that to move forward on behalf of the american people. to do it in a way that truly addresses their problems without falling into the convenient political back-and-forth games that have always governed washington. we can show the american people at this time and this year that it's possible to do. >> you said the president does recognize he's got the job now, so now it falls to him to fix it. are there statute of limitations on how he may mention what he inherited or the mess he inherited or, you know, how the past administration failed? >> again, it would be easy to put it in a box and just forget about it but we didn't -- we didn't get here overnight. we are not going to get out of our problems overnight. it's not part of the blame game. it's just a fact of life. jonathan? >> it's part of the blame game. >> no, i don't think it is. again, people made conscious decisions to support tax cuts in 2001 and in 2003. people make conscious decisions to support an increase in -- to add a benefit to medicare without paying for it. right? we know that. people make conscious decisions to authorize the war in afghanistan and iraq and not pay for them. the president recognizes that the era of continued free lunch is over. jonathan? >> back on health care, i want to see if i can give you more specific on this senate tentative deal. it involves two pieces; a new health care plan put together by -- put together by the office of personnel management and expansion of medicare to the near retired, 55 to 65. so does the president went to see -- with the president need to see both of those pieces as the deal moves forward for the dependent on each other? >> i think, look, i think a lot of the details of this obviously are being examined currently by cbo. i hesitate not having been in the room and the administration wasn't in the room right before they walked out and announced this. malae cents is i don't want to prejudge this but these two pieces fit together in a way that might be hard to break apart. >> my other question was what role did the white house played? >> no different than the role we played throughout this process and providing technical support and excise. again, this was throughout this process obviously we were aware of the negotiations that were ongoing. but not in the room as this was tentatively agreed to as you said and announced last evening. >> one thing on jobs. i a understand that the president is never going to accept this demand of no new spending for jobs. but the other to pieces -- the republicans have three suggestions. no freeze in federal spending, no tax increases on till and employment declined to a certain level -- >> i believe the president -- let's be clear the president has been clear on taxes and has cut taxes. >> there was no new regulation. there are tax increases slated for when the bush tax cuts expired, and i'm wondering if he would retain this idea that you create some kind of moratorium on tax increases on till there's change -- >> i don't want to get ahead of the budget process that is ongoing. i think the president reiterated his support in that room some certainty on taxes and reiterating again that he had cut taxes. mark. >> any clear yet on the charity decision? >> nope. the president is yet to make final decisions on that. if we have that -- as soon as we have that we will pass along. >> will it be announced before he accepts the prize? >> i hope so but i don't know the exact answer. >> but for sure he's not going to get a check with his middle, right? >> that's -- i do not believe that is the case because that then becomes -- [laughter] -- then we fall into jonathan's problem about taxable income. >> what charities are being considered? >> she's given obviously to a very broad range of charities in the past. he has helped use money to create microfinancing projects much like his mother worked on in different parts of the world and all of those are certainly active under consideration. >> robert, on climate change, the omnibus bill has been a symbol and there's 1.3 billion to help developing nations meet the standards for global warming. is that the figure that the president takes to copenhagen next week? >> let me get some guidance from the climate guys on this. i don't know whether that is the final number or not. >> how does that sound? does that sound about right? >> i will ask them if it sounds about right. >> will there be added value is -- will the u.s. be offering something else other than -- can i ask one other question, different subject? what is the state of play with japan and the negotiations over the air base relocation? >> we are continuing to engage in the government of japan in negotiations that will maintain the alliance as well as reducing pact of pieces on local communities. we have an agreement with the previous administration in japan. we set up a working group to discuss the implementation of that agreement and we are anxious for those conversations to continue. >> when you say we have an agreement, is the u.s. still opposed to the relocation under the new -- >> we have an agreement. what is working group is going to discuss is the implementation of what has already been agreed to. >> of the reports of a breakdown -- >> welcome and the only way to make progress is to continue standing up that working group and having that discussion. >> of the president be open to the meeting with the japanese prime minister in copenhagen? >> we did a couple of weeks ago. again i think this is appropriately being handled right now with our ambassador there and others in terms of making progress. i think this was discussed just a couple of weeks ago and i think the working group we would believe is the best way to continue that progress. >> culbert, one group that didn't like the president's speech on jobs yesterday was the congressional black caucus. you might say that is just a group but since he's the first african-american president -- >> i didn't say that. >> you may say that. okay. >> but i'm just saying he's the first african-american president -- >> what's be fair and balanced. >> thank you. [laughter] is the president concerned that they are not satisfied with his jobs plan? does the president planned to reach out to the cdc members? where do things stand on that? >> i think the president, congressman clyburn was a member, is a member obviously of the leadership and was in the meeting today. i think that -- i will say the president said yesterday the three ideas he outlined with some specificity don't represent the totality of all of what the president would like to see. obviously this was discussed in that larger meeting that we need to extend safety nets in terms of a common plan of insurance and cobra extensions. obviously the president discussed increases in exports as well as continued aid to the states and localities and there may be other targeted ideas the administration works through between now and even the beginning of the year. i think the dialogue will continue to read discussing with members of congress from both parties about how we can best address the situation. >> maxine waters says he doesn't pick up the phone to call members. does that bader the president? >> does it bother the president would come that she said that? i don't think it's true. >> of the epa carbon dioxide were willing, some businesses expressed concerns about more regulation in terms of jobs. is the white house believe in any way that these regulations could have a positive benefit? >> there's no question. first of all this was a process started malta under the cpa but under the previous cpa based on supreme court decision handed down in 2007 that required the epa to look into this. secondly, i think as the president talked about even as yesterday we have an ability through incentivizing a clean energy economy to create the type of demand that is necessary to create more and more clean energy jobs. somebody's going to build as i said before somebody's going to build the wind turbines that power our homes. somebody's going to build those solar panels. the only question is who's calling to do it. by locating those manufacturing facilities here it can be americans the build those rather than having us import them from somewhere else. >> on the senate deal in the past we've had some trouble getting you to say that the president supports a specific policy in the health care debate. is that correct that he supports that deals -- >> in this event the president went right around me and said it himself. >> okey but is this sort of a second best to the public option? i mean he did support a public auction. is this something that he's willing to accept or would he rather have had -- >> not only what he -- like quote the spokesperson who recently as 45 seconds ago said he supports it. >> would you rather have had a public auction -- >> you know, you asked me if the president would rather have won the lottery. it's an interesting hypothetical that -- >> we do hypothetical snout to get [laughter] >> he'd disagree with you on that. >> it's not hypothetical. it's the house bill. i mean, does he support that -- >> we are making progress. the president supports this process in terms of both good policy and as of a way to moving the process forward. >> is the president feel he did everything he could push specifically for public option especially since that was his preferred measure of choice and competition? >> yes. and he's continued to meet with senators in order to make progress. absolutely. >> and other follow-up? >> hamdan following up, too. i read his comments and heard his comments from the community health care thing, but is he saying that he supports this as a vehicle to a conference committee product, or is he singing as a final product that he would support this? >> welcome it is hard for me to gain what is going to happen a week from now. i can't even tell you what i'm going to have for dinner. so instead of protecting and predicting the of, the conference committee, just quote the president on what he said in terms of supporting both the policy and moving forward in progress. but understand, again, sometimes we miss it. sometimes we focus on the twigs and the forest, not even the trees, to understand that we are, and, likely one step closer to seeing comprehensive health care reform that we've had presidents talked about for 70 years. that's important. >> without a public option. >> with increased choice and competition. >> but you're not seeing you approve the senate over the house version? >> i'm sorry? >> by your not saying that you prefer the senate over the house version. >> i'm just trying to get the bill through the senate. [laughter] >> since you guys were not in the room when that actually came down, do you feel that -- does the white house feel it has a clear understanding of what is actually in the senate deal? >> say again? >> as the white house feel you will have a clear understanding of what's in this bill? we are waiting to hear from cbo. we are not going to see anything on parental ceo gets more involved but do you understand -- >> i don't think anybody is went seals the details until obviously a series of points have come to see you to make estimates and predictions on a full range of things. and we certainly will await that as well. >> the general since -- is the president says he supports and cons of the notion of making available to the public something akin to what government and please have an option of? >> well, look, the president certainly talked about that. >> is that what this is? is that what you think this is? >> that's certainly part of it. i mean, again, as jonathan said, there's two different -- as i understand, as i think people here understand there's two different aspects they would increase recent competition. one part of that is something akin to what -- what is set up fehpb. >> will dustin held during to something like a big lead utility? is that a good comparison? is that how much regulation -- >> i would be out of debt to discuss -- the truth is i don't know enough about the regulation of the utilities. >> not talking about the medicare part but the other party were just talking about with margaret -- that it offers a choice among another whole set of private insurance plans. so how does that offer the competition that the president was talking about if it's just more of private insurance plans on top of the 1,300 they already have? >> understand, bill, that somebody is going to -- there's going to be some 30 million people that will go into -- have access to different plans. the person that puts together the best plan that's the most affordable is what people are going to buy. that's the incentive of a system that allows increased recent competition i think it's clear people will have more choices than they have now; that the competition, as we've talked about in, will foster progress and costs. as i read i think in the morning papers, there are even incentives -- knott incentives, there's a mandate for the fact that a certain percentage of money involved in health insurance has to be actually spent on -- can't be spent on paper work. that's what drives up a lot of these costs. obviously that is a series of different incentives that will improve the system. and just a quick follow-up. you mentioned that the president dies calls on members of the congressional black caucus. according to the hell, john conyers said the president called him, concerned that he has made some demanding comments about him on a certain radio show. how would you describe the relationship between congressman conyers and the president? >> well, i think the president has respect for, conyers. i think the president -- i don't know the exact words the president used -- i think the president believed the criticism was untrue. suffice to say she reached out and touched someone. peter. only like the older people in the room got that joke. [laughter] and i just realized that light suddenly dated myself with something that is a healthy number of people -- >> you're talking about land lines. >> i know. [laughter] i'm trying, you know? peter, sorry. >> robert come on the issue of jobs in the african-american community, obviously the jobless rate among blacks is much more severe than among white americans. in the president's jobs bill, apart from shoring up the social safety net, is their anything he would like to see done particularly targeted at helping the black community? >> well, look, i think what the president believes is that the plan that he outlined will help white america, black america, hispanic america, asia and america. go through the weatherization, the retrofitting alone, we believe that policy like this creates a huge incentive that will increase jobs, that hopefully will begin to provide important training and the development of a skill that is obviously desperately needed not simply to jump-start an economy, but also to meet our goals of energy efficiency and clean energy. so whether it is the of unemployment rate and all of america, whether it's the unemployment rate in black america, hispanic america, or whether it's the underemployment rate, the president believes the ideas that he outlined our targeted and responsible in addressing those problems. >> just a quick follow-up. does he have any -- as the first african-american president, the president received strong support from the black community. does he feel any special sense that the black community on a plan rate is something that he wants to make a special focus? >> look, peter, i don't think the president believes that we should address only one part of the all in plan a rate. i think this is a -- this is a graph that in pact sauce all. as you mentioned, there's a greater number of unemployment african-americans than their trash to become national rate. there's a greater number of unemployed hispanic americans than the national rate. the president believes that the plans that he out and will have the ability to address both the national as well as the black and hispanic community. >> robert, a follow-up on that. >> i'll get back to you in a second. >> earlier this year, the president didn't seem thrilled when he had to sign the omnibus for fiscal 2000 line. is he at all upset now that congress is poised to pass a mother and has only gone through i think five of the 12 individual bills despite being under total democratic control? >> i don't know that we have -- i don't know the degree to which the omnibus as is presently constituted -- let me get some guidance from the legislative affairs at all if where we are. obviously, the president believes and was hopeful that we could get a budget and a series of appropriations bills on time, and believes we should continue to do that. i think that anybody would say that the process of either omnibus legislation or continuing resolutions that fund the government are not the ideal way to go about doing this. but he will sign -- >> but he will -- let me get guidance from legislative affairs. >> there are advocacy groups wondering if this administration will be working with sba because they're seems to be a problem -- the federal government is not meeting its goal of minority set-aside procurement contracts. and with that, they save the federal government were to do that, that would create jobs. >> i am happy to look at what those statements are and get an answer from the folks at sba on the exact -- >> if all the. again, on the issue of jobs in the black and brown community -- and the numbers are much higher than the average -- their large uniques circumstances to be detailed. is the white house trying to push more of a guerini connie -- ghana caulking for cash and things of that nature, blacks and browns are not pushing for the screen jobs, they are not rushing to get training for this. how is the administration going to afford that as they are trying to balance out on employment rates in those communities and push this project? >> while i will tell you what he has told people that have asked him this specifically in regards to the african-american on employment rate is what i said earlier. somebody is going to build these wind turbines. somebody is going to build these solar panels. somebody is going to be involved in the skills necessary to retrofit individual houses, apartment buildings, businesses, and what have you, in order to make them more efficient. we have to decide as a country that we are going to do that. not in port wind turbines, not in port solar panels, and not seek somebody else to do the type of skilled retrofitting that's necessary to meet our clean energy g g g g glsoney on their heating and cooling bills, as well as creating jobs. i think that the president believes that this is a special challenge that we have and a special challenge that all of us must meet. thanks guys. [inaudible conversations] >> [inaudible conversations] >> american icons, three original document trees from c-span now available on dvd. a unique journey through the iconic homes of the three branches of american government. see the exquisite detail of the supreme court through the eyes of the justices. go beyond the velvet ropes of public tour into those rarely seen spaces of the white house, america's most famous home. and explore the history, art and architecture of the capitol, one of america's most symbolic structures. american icons, a free disc dvd cent. it's 2495 plus shipping and handling. order online at c-span.org/store. yesterday senate democrats talked about a compromise on the health bill. the deal would replace the so-called government or public option with an alternative that includes expanding medicare eligibility. we will hear more about that in a moment. coming up in a few minutes senate health care debate from earlier today. >> leader a hearing on diplomatic security. we will hear about efforts to protect the people and property at state department overseas and facilities. now brief remarks from president, on the senate health care compromise. >> let me and by seeking a little of this broad effort. it's been a long roll. i know it's been a tough fight. but i also know the reason we've taken up this cause is the very same reason why so many members from both parties are here today. because no matter what our politics are, we know when it comes to health care the people we serve deserve better. the legislation in congress today contains both space ideas and republican ideas and plenty of compromising between. the senate made progress last night with the creative new framework that i believe will help pave the way for final passage and historic achievement on behalf of the american people. i support this effort especially since it is aimed at increasing choice and competition and lowering cost. so i want to thank all of you for sticking with it for all those late nights, the long weekends you guys have put in, so much this is well worth all of our efforts. >> we are joined on capitol hill by alex swain of congressional quarterly to learn more about a health care compromise senate democrats have tentatively agreed upon. alex, why did this in every sense for about an hour this evening? >> democratic leaders on to brief members on the kind of broad outlines of the steel and give a little update on where they stand on the health bill. the health bill depends on it holding together. i don't think anything is going to come of the meeting tonight. it's unclear how many details their brand share about the proposal because there is a pack of reporters waiting outside of the room to ask all the members when they come out what they've learned. a democratic leaders are trying to keep it very quiet with this deal entails. >> could you get a sense of the mood of the senators as they went into the meeting? >> i would say cautious optimism. a lot of democrats hope this is the deal that finally breaks the option but it really all comes down to how much does it cost if this deal ads any cost at all to the bill moderates say they won't be able to support it. >> what is this meeting to might actually mean for the future of the compromise? >> this one is just kind of an informational meeting. i don't think it means a lot as to whether the compromise stands or whether the bill moves forward. but i'm sure there is quite be probably more important meetings in the days ahead when they start to get information from the congressional budget office about how much this new policy would actually cost. >> we've been speaking with alex wayne with congressional quarterly. thanks for joining us. >> thank you. over the course of this debate there has been too much misinformation about what health care reform is and what it will do. i would like to set the record straight. the goal of health care reform is to lower-cost and provide a quality affordable coverage to american families, business and workers. and according to the nonpartisan congressional budget office, our bill, the patient protection and affordable care act, is a success. according to the cbo, this bill provides health insurance coverage to 31 million more americans. that is a big success. it lowers health insurance premiums, despite what some have said, some claim about premiums rising. that's not true. cbo says about this legislation, lowers health insurance premiums, but 47% and that gets much higher quality health care insurance than otherwise would get. reduces the federal deficit by $130 billion over the first ten years. in addition, as the president promised this, bill does not raise taxes on the middle class. in fact, this bill has a net tax cut. over the next ten years this bill will provide a total $338 billion in tax credits to help american families, small businesses and workers buy quality affordable health care coverage that they can count on. that's a tax cut, mr. president. a total of $338 billion in tax cuts. the chart behind me will begin to indicate that. to indicate that. the chart behind me will begin to indicate that. over the next ten years, this bill will provide a total of ice at 338 ilion dollars in tax cuts. the bill provides a net tax cuts of $40 billion in the year 2017. you can see that basically in the chart. $40 billion of tax cuts in 2017. that's $450 for every taxpayer affected. these are individual tax cuts. i'll make that clear. american individuals will get tax cuts under this legislation in these amounts. that same year, 2017, those who earn between 20,030,000 a year will see a federal tax decrease of nearly 37% at cbo. independent organization. in the average taxpayer mythmaking will receive a tax credit of more than $1300. that tax credit grows to more than $1500 in 2018. those are tax cuts, mr. president. they're important that we all remember this bill has a net tax cut of this amount or american taxpayers. that's individual americans, individual tax cuts. i have heard arguments that the responsibility to have health insurance amounts to a tax on the middle class. this is simply not true. in fact, this policy works to repeal a hidden tax of more than $1000 extra insurance premiums the american families with health insurance pay each year in order to cover the cost of caring for those without health insurance. that's $1000 per american family on average has to pay under the current system. and this bill would virtually eliminate that. additionally, this bill provides americans with the tools they need to meet that responsibility by insuring all americans with access to quality affordable health insurance. that eliminates barriers that prevent the americans from getting insurance coverage such as discrimination of preexisting condition. this bill amending that. all of us, either directly or through a family member or friend have heard horror stories on insurance companies denied coverage because a preexisting condition. this legislation stops that. and it makes this legislation makes quality insurance affordable to every american through tax cuts and help with co-pays and other out-of-pocket off. and if for some reason individual is still not able to buy health insurance coverage, they are exempt from paying the penalty. clearly, this penalty is not a tax. so they can afford it you don't have to pay. no penalty. i've also heard arguments that the excise tax on private insurance companies often cost in excess of insurance people raise taxes on individuals. this claim is equally untrue. the congressional budget office reaches a conclusion that that's not true. in fact, the congressional budget office reaches the conclusion of a lower premiums. i think the amount of 7% to 12% if i remember quickly. this policy therefore is not taxing individuals rather to tax the private insurance companies and not pass on the nature of higher premiums according to cbo. in fact, lower premiums according to cbo. this legislation is designed to encourage private insurance companies to offer employers to choose health insurance plans with lower premiums that are below the taxable threshold. in the congressional budget office noted just how this policy is. it would avoid the excise caused by lowering plan to lower premiums. as a result, cbo says premiums will to choose and wages will increase as employers offer more money in workers pockets instead of inflated health benefits. in fact, the bulk of the revenue raised by this provision, more than 82% of it, comes not from the tax itself in increased wages, increase wages as i counted of this provision. an mit economist jonathan gruber estimates this provision will cost worker wages to rise by $55 in 2019. that is $700 in additional income for every household with health insurance. the truth is this bill is fully paid for. fully paid for. cbo says so. and it is paid for in a fiscally responsible way. it reduces the federal deficit, lowers the growth of health care costs, provides quality affordable health insurance to millions more of americans and it is the next tax cut. not tax cuts for americans, businesses, and workers which of these tough economic times means more than ever. >> mr. president? >> senator from oklahoma. >> thank you. i stand confused from the chairman of the finance committee because we have all the reports that the bill you're talking about isn't the bill we're going to be voting on because we're totally changing what we are doing. what is out there now is we're going to expand medicare to those down to 55 years of age and we're going to expand medicaid up to those at 150%. we're going to add billions of dollars of mandates, even at 90% co. paid by the federal government to the states over the next ten years. we have a medicare program that you've taken $465 billion out of you and you're going to add to 34 million new people to under the new plan that the new plan we're talking about, you are talking about the plan that we used to have. it's interesting though as you make those points when you save a net tax cut. three quarters of the net tax cut goes to people in this country who pay no taxes in the first place. and the chairman can't deny that. the fact is that, according to the joint tax committee, the chairman conveniently doesn't look at the other body that gives us information on taxes. according to the joint tax committee, $288 billion of the 400 -- $394 billion will be refundable. that's a refundable tax credit to people who are paying no taxes now. >> may ask the senator, there was a tax cut whether or not is refundable and even if it's refundable if extra dollars in people's pockets. >> factors taxes to the american family, 40 million of them according to the joint tax committee taxes will rise on those who are making under $200,000 a year. the joint tax committee said that. now the point is that what you're talking about doesn't have an application because we don't have the bill again because we have a new the bill on the floor which is going to take a bankrupt program that our children today are responsible. if you're bored today based on the unfunded liabilities in medicare you are responsible for $350,000 if you are a new child born today for what we have not paid for in medicare. and now we have the new plan that's going to come out. we've got $465 billion out of medicare or moved it out of medicare to create a new program and we're going to wed 34 million new americans to it in a plan that is already mortgaged the future of our children. the other thing the chairman said is that costs in health care will go down. and that premiums will go down. while there is 11 out of 12 people who have studied the plan that says premiums will rise. and what cbo says is that if you're in the individual market your premiums are going to go out anywhere from 10% to 13%. and in fact they are not sure whether premiums will decline. they say it's on the other groups from a 1% increase to a 2% decrease over what they already would have incurred. so our problem with health care is cost. that's the thing that stops access to health care this country. and the plan, whether it's a new plan which nobody's gotten to see the details of or the plan that we have seen the details of, the 2074 pages that we have seen the details of reason is the cost of health care in this country. but none of that's important. because the most important thing is that puts government in control of your health care. do the task force on preventive health services, through the medicare advisory commission, and through the cost comparative effectiveness panel. so with a wink and a nod is we're going to put government in control of your health care. we're going to put them in the new bureaucracies between you and your you're. we're going to the 20,000 new federal employees between you and your doctor and we're not going to go with the cost and the average american is not going to get a tax cut. they're going to see a tax increase under this bill. the average middle-income american is going to see a tax increase under this bill. and so consequently, what we have heard sounds good on the surface, but the most important thing to remember is you are no longer, you are no longer going to be in control of your health care. because once the government puts its nose under the tents, just like it did on breast cancer screening and we have the gall to say we are going to recognize every time the agency does something that's harmful to a patient and their doctor relationship that were coming to the senate floor to correct it. and the fact is that ain't going to happen. so ultimately, your health care is going to cost more. your premiums are going to rise. eleven out of the 12 studies say that premiums are going to guys under the bill that's before us and the people that get the tax cuts are the people who aren't paying any taxes now. and you pay for this tax cut, taxes are going to rise on 40 million american families who earn under $200,000 a year. mr. president i yield. >> i want to speak on the dorgan amendment to the senator from north dakota is strong, good talented legislator who has a good amendment that. one of looked at that's been around this body for a long period of time. but he has to rise in opposition to this. i am the ranking member on the appropriations subcommittee and food and drug administration, the fda is in pervy of our sub committee so i work on the issues of the fda. and also if i may brag just a second the university of kansas was one of the best pharmaceutical schools in the world, often rated number one as a pharmacy school. so anybody interested in that field of study or work, that's a good place to go but also they are very concerned about what's in the dorgan amendment. the u.s. currently has one of the safest drug supply systems in the world that allows the federal food and drug administration to monitor and regulate the manufacture and distribution of approved medicines throughout the country. the legal authority to import drugs already exists in this country. however, however, no hhs secretary democrat or republican has been able to certify that the importation of prescription drugs to foreign nations is safe or will lead to cost savings. none have been able to. the dorgan amendment will allow for the importation of drugs from outside our current regulatory system to establish and enforce by the fda without certification and the secretary of hhs or a food and drug administration in the fda. allowing drug importation from foreign nations could threaten public health results unsafe, unapproved and counterfeit drugs being placed on pharmacy shelves in the united states. and i want to develop that thought for you. the fda has been tasked with the responsibility of safeguarding this country's prescription drug supply and has executed that responsibility quite well. but as this country and the food and the food and drug administration struggles to discover and prevent the growing threat posed by imported foreign produced goods as evidenced by recent failures to detect polluted products such as infant formula, pet food, and toothpaste, permitting the drugs without the complete assurance of the fda that it will not jeopardize public safety is a responsible and threatens this nation's safety and proven drug supply. and towards that end, mr. president, i asked that the letter that senator carper received from the health and human services agency, the fda direct or, be placed in the record after my comments. >> without objection. >> this letter states in particular this and i want to read from the fda chief what the commissioner of food and drugs is saying about the dorgan amendment. we commend the sponsors for their efforts to include numerous protective measures in the bill that addressed inherent risk of importing foreign products and other safety concerns relating to the distribution system of drugs in the u.s. however, as currently written result in structure would logistically challenging to implement and resource. in addition, there is significant safety concerns related to allow the importation of non-bioequivalent products and safety issues related to confusion and distribution of labeling and foreign products on the product that remain to be fully addressed in the amendment. in other words, they don't think we can do this. importation, reimportation of drugs without significant safety problems. there's been an explosion of illegal drug counterfeiting occurring around the world. in the emergence of them all to billion-dollar international black market has proven to the senate current and past hhs secretaries and the fda that we could would only increase the risk of life-threatening counterfeit contaminated or deluded prescription drugs entering our prescription drug supply. but millions of americans rely on and they trust. prescription drug counterfeiting has become a highly profitable that has been taken up by international organization crime syndicates, rogue nations such as north korea, syria, and your rent and developing nations such as china and pakistan that seem to exploit ineffective or weak counterfeit enforcement around the globe. criminals realize that the production of counterfeit drugs is twice as profitable as the trafficking of illegal narcotics and comes with significantly less criminal penalties than those of illegal drugs. due to these penalties global counterfeiting has grown into an epidemic that reaches every country around the world. the who world health organization estimates that tens of thousands of people are dying due to counterfeit hav, diabetes, and tropical disease medicines. unfortunately in most counterfeit cases it is not what is included in the state drugs. it is what has been excluded that proves to be most harmful and deadly to patients. by taking counterfeit, deluded, or completely ineffective drugs many patients fail to receive the important life-saving medicines they need. it is just as dangerous for a person with high cholesterol to use a counterfeit drugs that lacks the prescribed medicine as it is for a person to ingest a contaminated or even a poisonous pill. due to this global counterfeit epidemic, two secretaries of hhs under both the clinton and bush administration has been unable to certify that the importation of prescription drugs will not pose a substantial risk to the health and safety of citizens around, within the united states. and current secretary kathleen sibelius from kansas is committed to him putting until i can be proven that the safety of imported drugs are at or above american standards, end of quote. and the fda doesn't believe they can get that done at this time. now many of argued that the parallel trade in europe has proven drug importation across nation borders have resulted in prescription cost savings and has not increased risk to consumers or general public health trip however, these cost and safety insertions do not reflect the experience through what's called parallel trade. a study by the london school of economics on drug importation costs included the safety savings from parallel imports benefits paid no mind and third-party vendors and do not get passed on to the patients in the form of lower prices. they say this quote although the overall number of parallel imports is continued to increase, health care stakeholders are realizing feel of the expected savings. profits from parallel imports of proven mostly to the benefit of the third-party companies that buy and resell these medicines, end of quote. furthermore, a report by the university of london school of pharmacy on the safety of the parallel prescription drug trade stated this quote, the united endowment is the most vulnerable country in europe to counterfeiting only to the high level of quote parallel importing, end of quote. due to parallel trade, the medicines and health care regulatory agency in the uk has issued ten different recalls of counterfeit drugs in the past five years. drugs recalled include prescriptions to treat schizophrenia, blood pressure, cancer, most disturbing aspect of this infiltration was that these drugs entered the united kingdom through legitimate supply chains through parallel distribution trade according to the regulatory agency in the uk. in other studies european commission found that the prescription drug supply chain in europe which includes the former eastern bloc countries like latvia, slovakia, bulgaria is increasingly targeted by international criminal counterfeiters. european commission vice president gunter gerhardt stated european quote is a considerable risk for the safety of the patients. and that the increase in counterfeiting medicines quote is a very serious threat to public health and can cost lives. we don't want that happening to the united states, particularly with what we say in recent products coming in from china, not regulated under our system and things like toothpaste, pet food, and then the problems we have here. do you want that to happen in the dark system? no, we don't and we can't certify that we can keep these products safe. the ways you can see safety concerns and the lack of savings that may result from exposing the country to the potential risk created by the importation of drugs from outside her current safety system these are real threats. now it's kind of an interesting study in october 2004, then governor probably voinovich of illinois launched the ice age rx program to allow presidents in illinois and later missouri and then kansas to purchase low-cost drugs from canada. so we started this program. however, by 2006 the illinois state auditor found that the program cost nearly $1 million was used by only about 3700 people in illinois in 267 residents of my state of kansas. mr. president, the hhs has concerns regarding the safety of importation. the food and drug administration has concerns regarding the safety of importation and given the opportunity to purchase canadian prescription drugs only 267 kansans took that chance. we should not corrupt the safety of our drug supply chain without safety assurances from this country's regulatory audience. >> madam president, the amendments that we are now considering as an amendment that i have offered that deals with drug reimportation, that is the reimportation of prescription drugs from other countries. and one might ask the question why would we want to be import drugs from other countries? well, fda approved drugs are made all over the world. and they are shipped all over the world. again, fda approved drugs approved by our food and drug administration reduced in plants that are inspected by our food and drug administration. the difference is when they are shipped around the world the american consumer is charged the highest prices in the world by far. here is an example of the drug lipitor. there are plenty of examples and ogletree number of them today. but this is an example of lipitor. for an equivalent amount of lipitor, 20-milligram tablets, the u.s. consumer pays $125, the british pay $40, spanish page $32, canadians pay $33, germans pay $40. we are charge the highest prices in the world for lipitor. lipitor buy the ways the most popular cholesterol-lowering drug. i have a couple of bottles in my -- empty bottles i should say in the dust store here that demonstrates this drug was reduced in ireland. it was sent all around the world. think he'll put in the same bottle made by the same company approved by our food and drug administration. this was sent to canada. this was sent to the united states. the difference? well, the american consumer was allowed to pay three times as much as the canadian consumer. shouldn't say it loud, should say forced. but it's not just u.s. versus canada. it is u.s. versus every other country. and so the question is should that be the case? to the american consumer be charged the highest prices in the world? my answer to that is no. why is it the case that we are charge the highest prices in the world? because we're the only country in which there's a special little law that prevents our citizens from accessing that fda approved drugs from wherever it is sold out the most advantageous price. we have a provision in law that says the american people don't have the freedom to import a prescription drug on fda approved drugs that they find for half the price or 20% of the price in some other country. i say give the american people the freedom. i hear so much discussion on the floor of the senate about freedom. this is the ultimate freedom. the freedom of the american people to access those prescription drugs that are sold virtually every world, brand-name prescription drugs at a fraction of the price. now i have examples of other prescription drugs as well. to show you that it's not just lipitor. although lipitor's most popular cholesterol-lowering drug. this is plavix. now plavix is an anticoagulant. you will see that we pay higher than all of these countries by far. more than double what the british pay, more than double what the spanish pay. this is an mexia. if you are someone who has also sent you are taking axiom. for an equivalent amount of the same drug mexia you are charged $424 if you are an american citizen $40 for the british, $36 for the spanish, $37 for the germans, $67 for the french. the american consumer trying to control their condition of ulcers pays $424. ten times the amount of money that others are paying for the identical drug. ten times. well, this kind of what i believe is gouging, that is a pricing strategy that couches the american consumer can largely be resolved by the amendments that i have offered. every news that little sweetheart impediment in law and says to the american people, you may import prescription drugs that are fda approved for registered enterprises and other countries. we specifically say which countries those are that have the identical chain of custody that we have in our country. identical. we also put in this amendment unbelievable safety provisions dealing with pedigree, batch lots, tracers, that don't exist now in our domestic drug supplies let alone reimportation. so if we are allowing the american people to do this, the congressional budget office says my amendment will save $19 billion, $19 billion for the federal government over the next ten years, but about somewhere around $80 billion for american consumers about that. that's a pretty big savings. now, madam president, here is another chart that shows what has happened in addition to the fact that we are charge the highest prices in the world. what is happened in recent months in 2009 a brand-name prescription drugs have increased in price over 9%. at a time when there is virtually no inflation. they see increased prices for prescription drugs in this country just over 9%. take end well if you have arthritis to pay 10% this year. cingular for asthma uk today 12% more. though and that's what's happened. there is nothing, i repeat nothing in any of the health care plans considered either senate or the u.s. house that addresses this piece, the price, the escalated price of prescription drugs. now there are a lot of whole other folks in this country that are not senior citizens that are taking drug to manage their disease. they take cholesterol-lowering medicine. they take medicine to lower bread pressure. they manage their disease or manage their health issues and don't have to go to an acute care bed in a hospital because they are doing the right things and they're doing it with pharmaceuticals. the problem is the pharmaceutical prices are going up, up, up, way up, way above what other people in the world are paying for the identical drug. and i'm saying it's just not fair. not a president, the issue is not that the pharmaceutical industry is a bad industry or they are infested with that companies. i just think they have that pricing policies. just bad pricing policies. they are able to and therefore they do charge the american people by far the highest prices in the world. now i want to talk about a couple of important issues with respect to this issue of giving the american people the freedom to access or purchase that fda approved drug anywhere. as long as it comports with the countries in which the chain of custody is identical to ours, which is in our bill. and our bill includes as i said the establishment of pedigrees for batch lots and tracers that don't even exist in safety for existing drug supply. there are some who say into alleged that you can't do this safely. it causes all kinds of problems with counterfeiting and so one. well, the fact is the europeans have been doing it safely for 20 years. for over two decades in europe under a program called parallel trading if you are a german i want to buy prescription drug in spain it is not a problem. you do it to the parallel trading system. if you are in italy and want to buy prescription drugs from france, no problem. they been doing that safely for a long, long time. to suggest somehow we don't have the skill or the capability to do with the europeans have been doing routinely for 20 years is really in my judgment shortchanging our country and certainly shortchanging our consumers. now, we will however i think of people allege again that this is risky. it's just risky. i want to make the point about risk because i want to demonstrate something that i think most people don't know. 40% of the active ingredients of our existing prescription drugs come from china and india. 40% of the active ingredients come from china and india and in most places from areas that have never been inspected. now, my amendment does not allow drugs to be imported into this country from china or india. i'm talking about the ingredients of the pharmaceutical industry requires with what's to make their drugs. we don't allow drugs to be imported from china or india as a matter of this amendment. only fda approved drugs from fda inspected plants in canada, the european countries japan, new zealand, or australia. that's all. why? because they have an identical chain of custody to us. and that's the basis on which we determine how reimportation could work and could work safely. but i want to describe a recent scandal that illustrates the double standard that some want to apply to this question. in the scandal was about a drug called heparin, a blood thinner commonly used by dialysis patients was linked laster to more than 62.. heparin was pulled from the market and according to baxter health care which market separate than the u.s. the allergic reactions to heparin that caused those deaths appear to be caused by a contaminant that was added in the place of the active ingredient in pepper and somewhere during the manufacturing process, most likely in china. "the wall street journal" did a really important story on the heparin contamination. they reported that more than half of the world's heparin gets its start in china's poorly regulated supply chain. this is what "the wall street journal" after its investigation concluded. half the world's heparin, the main ingredient in this widely used anticlotting medicine gets its start in china's poorly regulated apply to you. wall street journal also published a series of pictures that i want to show, photographs of what is call that you want intestine dr. which processes the contestants used to make proper in. i want to show some photographs that came from "the wall street journal." this is a photograph of a facility and that's the outside. here is a photograph of someone in the facility who was stirring a rusty vat full of have friends ingredients with a tree branch. the processing of heparin from pig intestines in a facility in china in which in this rusty vat the worker is stirring with a tree branch. and so are the ingredients that are used to make medicine with respect to the blood clotting issue. so when the industry and others see that we can't have drug importation safely from canada or ireland the point is that they are getting a lot of their ingredient from china and india. and i would say simply look at this. and ask yourself whether the domestic drug supply with respect to that ingredient in those input have sufficient safety. while the record-keeping at these chinese facilities make it almost impossible to train -- trace rather the contaminant from this particular factory, these pictures taken by "the wall street journal" clearly show on sanitary conditions in which pig intestines are processed for that particular medicine. again by contrast the amendment we offer would allow the importation of fda approved medicines only with a chain of custody to ensure the drugs are handled properly. and it gives the fda the authority to inspect all facilities in all of the chain of custody. now the amendment mandates the use of anti-counterfeiting technology to track and trace for imported and domestic drugs to ensure product integrity that doesn't exist today. that is required of this amendment. the amendment also requires pharmacies and drug wholesalers to register with the fda and to be subject to strict requirements to assure the safety of important medications including frequent random inspections. so the amendment i am offering here would ensure safety and in fact provide a much greater margin of safety that now exists with all of our drug supply. and we need to have these improvements in my judgment because our own prescription distribution system is not as good as we think it is. here's an excellent example of something that took ways in the united states, a 2000 -- well this is a picture of mr. tim fagan, the young 16-year-old boy from long island, new york who received a liver transplant. he was described a drug called at the gym to boost his red blood cells and to fight the anemia after the operation. he received daily injections but his red blood cell count was and improving and the doctors couldn't figure out why, what was happening. after two months, tim's mom went to her local cvs pharmacy where she was told by the way the epogen or a site has been taking may have been counterfeits. and here is an example of again an example of counterfeiting in the existing domestic drug supply. counterfeiting in which this container held at the counterfeit medicine and this container held the real medicine. there were subtle differences, but not much. turned out that the vials that tim was injecting to take one 20th of the strength of what he was supposed to be taking in what was disclosed on the label. how did that happen? with a weaker drug sells for $22 a bottle and the high-strength version goes for $445 a bottle. investigators found that 110,000 of the bogus battles reach the market in this country. and it is estimated that criminals involved with that counterfeiting in that particular case made $46 million. the manufacturer of that drug, a company called amira source distributed the product or a complicated network of secondary distributors. although no one knew at the time, some of the epogen that americans eventually resold at most likely had most likely run through a cooler in the back of this strip club. in the back of a cb miami strip club called playpen south. and here's a chart that shows the distribution system that this counterfeit drug went through. again this is not an import. this is a domestic drive. and you can see this unbelievable complicated distribution system. and at the end of that they traveled through strip clubs. they traveled through homes. they traveled through trunks of cars without proper cooling and this story was told in great detail by some outstanding investigation by catherine a. band, called dangerous doses. mr. president, i ask consent that i continue to use the time under the democratic ask unanimous consent that that we extend the debate to 3:00 p.m. with senators being able to speak under ten minutes each. >> without objection. >> asked to speak for as much time as i may consume. again, talking about the issue i just described they traveled through strip clubs, through homes, through the trunks of cars without proper cooling. again i'm talking about the issue of a domestic drug supply that was counterfeit. the amendments that we are offering would fix the supply chain problem. it would require a pedigree for all drugs, not just those that are imported. all drugs. should've been done long ago and some of us have been trying for a long while. it would allow us to track every single drug from where it is made to the pharmacy where it is sold. in my amendment would require a set of anti-counterfeiting measures that are not in place now. now if you think of it, every 20-dollar bill. and most people would've looked at the new 20-dollar bills will understand there's very sophisticated and very substantial anti-counterfeiting technology in a new $20 bill that does not exist by the way. that sophistication, that relentless search for the ability to detect counterfeiting does not exist in our drug supply. the pedigree that we required, tracing capability, the batch lots, will make that a requirement on art entire drug supply. this amendment will make our entire drug supply safer and will allow americans to benefit from lower prices, the prices of which the same identical drugs are sold in other countries. in many cases, half the price. and in some cases much much lower 10% that they are sold in this country. i want to talk just a moment about the issue of doug price inflation because the drug price -- what is happening to us in this country is the drug price inflation of relentless increase year after year that the redline. 9.% this year and this is the rate of inflation. so we don't do anything to do with the issue of prescription drugs will miss the opportunity to do something to help the american people. now, let me just describe a few stories about the need for this amendment. my home state, mary ann wrote to me my husband has parkinson's disease so he takes a drug called mere packs. with medicare part b but in september he ends up in the donut hole. in 2008 when the sap and we paid $106 for his medication. it increased to $187 in october and november, $198 in december now in september 2009, the price is $286, 180-dollar increase in one year. >> will the senator yield for a question? >> i'd be happy to yield. >> senator i know it's awareness talk about this. how does the senator account for the fact that there is nearly a 9% increase in the cost of pharmaceutical drugs while the consumer price index this year has gone down 1.3% and this is probably the highest increase i understand in history or in most recent years in the cost of prescription drugs. what is the explanation between the divergence of those two lines? >> well, the explanation i suppose is probably better addressed to the pharmaceutical industry how and why you increase its prices this way. my guess is they do it because they can. the fact is the cost of living index here at the inflation rate is the yellow line. the price of prescription drugs is the redline. >> without having anything to do with anticipation of incoming reductions or reductions in increased cost of pharmaceuticals? >> i say to the senator from arizona, my expectation that the pharmaceutical industry has said this is a time to increase these prices in the most important element here is there is no restraint. no one has any capability of restraining them. the only way you will provide restraint on mississippi said to the american consumer, you know what's? you don't have to buy from these people at this price because it sold in virtually every other country at half the price. nbc to the american people we are going to give you the freedom to access the drug elsewhere i think very quickly the pharmaceutical industry would be able to impose these price increases because then you would have competition. freedom equals competition in my judgment here in this issue. >> could have to senator another question? we understand that you can buy lettuce from overseas. you can buy many other products from overseas. you can buy dairy products, you can buy almost any item except perhaps prescription drugs. and yet, the canadians in particular as well as the countries that are included in the senator's amendment all adhere to the same standards were higher standards than the united states of america does and now i understand that one of the senators, not you, has received a letter saying this is still a problem. i don't get it. maybe the senator from north dakota can explain it a little better. >> mr. president, there is not a safety issue here. to the extent that there is any safety issue is that we intend to increase safety of both the domestic supply of prescription drugs and the reimport of drugs. there was no use in dealing with batch lots and tracing capability. that doesn't exist in this point. so for anyone to suggest that somehow we're going to wind up with a prescription drug industry that is less safe or i should say prescription drug products that are less safe. that's just not the facts. and i indicated before europe has been doing this for 20 years in something called parallel trading. for 20 years they've done it. if you are germany want to buy from spain you can. if you're in italy and want to buy from france, you can. they do it successfully. i don't think anybody should tell us that we are not capable of doing what the europeans have done for 20 years and that is giving the people the freedom to access those prescription drugs where they are sold at a better price. >> could have to senator another question? isn't it true in letter was written to one of her colleagues to the administer of the fda, the organization that would basically make sure that any product that goes to american consumers along these lines would go through that bureaucracy and said it would require significant amount of assets and resources. i've since been told there is 11,000 employees of that bureaucracy. and i wonder if he thinks about that argument and again was the senator of north dakota informed about this position which, by the way, is the same position as the previous administrations? >> well, mr. president, the senator from arizona is correct. there is a letter from the food and drug administration. you know, the fact is we've seen this over the years that they say well, we don't have the resources or it will impose more risk. the fact is this amendment provides the resources for them because those that are going to register to be able to ship fda approved drugs into this country at a better price are going to have to pay a fee that the people who are selling will pay the fee and those pharmacies and others in our country who will be receiving will also pay a fee. this actually funds -- >> no additional funding from the taxpayer. >> no additional funding from the taxpayer at all. they will offer these lower-priced prescription drugs will be paying a fee for the purpose of the novel to do that, but this is not a taxpayer-funded issue at all and it will provide additional resources and pay for those resources without asking the taxpayers to come up with the money. >> do these countries that are included in the senator's amendment here to look at the american people as a those countries and the agreements we would have to them but you could have products that are safe that you could safely by and it would not impose any hazard to anyone else? >> well, mr. president, the countries that are involved in this amendment and they are limited are countries that have an identical chain of custody to our country. and so, these are countries that are accessing the same drugs. i just mentioned -- let me do it again because i showed two bottles of medicine. they are empty obviously, but both of these bottles contain lipitor, most of my colleagues know what lipitor is. and this was made by an american company in ireland and shipped all over the world. this little bottle would shift to the united states. this was shipped to canada. same bottle. one was blue, one was red in the label, the same bottle, saint l., infected the fda. what's the difference? they said guess what you get to do. you get to pay almost triple. why? and it's not just the american consumer. if i can just hold up a chart that shows two drugs i think if i can find it one is next to nexium. but nexium is an example and i also have one on lipitor. here's the price for nexium. you think the pharmaceutical industry is selling nexium at $37 for the equivalent quantity and germany and losing money? i don't think they are losing money at that. but instead of $37 they charge the american consumer $424. my point is the pricing policy. >> ifi from the question with the pharmaceutical companies able it cost $424 because we have to absorb the cost of all the research that went in to developing that vaccine. >> i would say this. that is also always faced. to say well, if you don't allow us to charge the american consumers we don't get to do the research and development that produces the next numerical drug. but you know what, most of the recent studies have shown that those industry spends more money on promotion marketing and advertising than they do on research. i want them to do research but there's one other piece. the congress gave without my support a proposal that said those american companies that have money overseas should bring back and we'll let them pay a lower tax rate. guess which industry was one of the largest industries to repatriate profits from abroad? of the pharmaceutical industry. now they are making big profits abroad and charging lower prices to those consumers abroad, why can't the american people have access to those prices? it's not because they will lose money because they made a lot of money abroad. that's why they brought repatriated much of it. >> due to seniors from his state and other citizens from his state travel to canada and by these prescription drugs because they know and are confident that they are getting it at a much lower price the same product. unfortunately citizens in my state have to go south. and that's unfortunate when they have to do that the cuts we do have a much larger problem they are absurd to say. >> well, mr. president, the citizens from north dakota often have to go to canada to buy a prescription drug. i told the story about the farmyard when i had a meeting and he was just sort of nibbling on a piece of straw and he said my wife is about 80 years old. she is fighting breast cancer for three years. he said the only way we can pay for prescription drugs was to drive to canada once every three months because when you buy tamoxifen in canada you pay one 10th of the price or one fifth of the price in japan in the united states. he said we do this every month so we can fight breast cancer. what is happening is consumers are allowed to bring back as an informal strategy about 90 days worth of supplies of prescription drugs for personal use only. but most american consumers can do that. they don't live anywhere close to a border. the question is can the rest have access to same prescription drugs that are sold at a fraction of the price. >> i asked the senator isn't it can true that the cbo has determined this measure of yours, this modest measure of only countries that are at the highest level of quality of inspection, of all the standards that we have. would it save the american consumer $100 billion? is that true? >> mr. president, the cbo says it would save the federal government about $19 billion then another $80 billion will be saved by the consumer so that's about $100 billion. nearly $100 billion savings in total. 19 billion of which will be saved by the federal government for its purchases and the rest by the american consumers. and finally i would ask the senator what is the basis against the senator's amendment? what possible reason frankly except for perhaps the influence of a special interest in this our nation's capital? >> well, i'm not a very good advocate for the other side. if one were to ask what's the best argument opposed to my amendment i would say that there aren't any arguments that are the best. there is a range of poor arguments are arguments that don't hold much water. my own view is that -- let me just describe. i started by saying i don't have a brief against the pharmaceutical industry. i want them to do well and be successful. i want them to keep finding and searching for a miracle drugs and by the way much of the work they will do with that comes from the national institutes of health and the massive investments we make in research. i want them all to be successful. my beef with them aside to get get pricing strategy that says the american people is what you pay and you could do about it because we decided that's what you pay them to offer everyone else around the world lower prices. that makes no sense to me. this is a pricing issue. they are wrong about it and i think the way to correct it is to give the american people a little bit of freedom. give the american people freedom. you'll save money for the government and the american people. and i want to make one additional point while the senator is here. yesterday -- if the senator from arizona is like me when i'm brushing my teeth in the morning i got a television blaring and i hear all these ads. i'll ask the doctor for the purple pill is right for you. i don't have any idea what that would do for me, but you feel that the answer is so compelling you almost think i've got to get out of here and stop brushing my teeth and go get a phone call he got her and see whether my life might be improved by taking a purple pill. i read a whole story of these advertisements. does your restless mind keep you from sleeping? do you lie awake exhausted? checketts lemaster is right for you. i read a bunch of these. i want now but blatter prof williams and flomax and ambien and they advertise it all day every morning. and i say knock off a little of that. give up some better prices. god bless you for doing all you do for the industry but give us their prices. get fair prices to the american consumer and knock off the advertising. the advertising is for a product that only a doctor can prescribe. you can't get this product unless the doctor thinks you need it. so stop asking if the purple pill is right for me or whether the purple pill is right for senator mccain. knock it off. >> could i say -- ask unanimous consent to nick and additional comments, mr. president? >> is there objection? without objection. >> i want to thank the senator from north dakota was been pursuing this issue for a number of years. i really believe that we are on the verge of success. i appreciate his eloquence. i appreciate his passion. but most of all, on behalf of the citizens of my state who can't get up to canada, who now are experiencing unprecedented economic difficulties, who need these life-saving prescription drugs many of them senior citizens. i just want to say thank you for your advocacy. i think you made an eloquent case and i think my colleagues have paid attention and will vote in the affirmative for your amendment today. >> mr. president, let me say that senator mccain has been a part of a separate for a long, long time. it's really interesting with all of the action on the floor of the senate in recent weeks, this is one of the few examples of a significant policy that is bipartisan. we've got republicans and democrats over 30 cosponsors who i worked with us to make certain that we can do this, do it safely, and give the american people the opportunity they deserve. this is really bipartisan. i appreciate that a lot. i want to say that the national federation of business supports this. with a long list of organizations that are strong supporters of this legislation or this amendment i should say. and i really hope that today perhaps that last, as long, long last after eight or ten years we might finally achieve a breakthrough and get this to the united states senate. i have said previously the pharmaceutical industry as a formidable opponents. i understand that. and we've had difficulty getting this in a piece of legislation that get signed to give the american people are pricing. and we do this, senator mccain, myself, it is suggested somehow we have no regard for this industry. it is not the case at all. it just is not. we have no regard for a pricing policy however that we believe is unfair to the american people. and it's been that way for too long. a long, long time too long and perhaps today with the vote on this amendment i expect later this afternoon perhaps today will be the first step in getting that changed. mr. president, i yield the floor. >> this week senators continue their debate on the health care bill. watch live gavel to gavel coverage on c-span 2, the only network with the full debate on edited and commercial free. and now that the latest updates from the reporters and others of the congressional quarterly rollcall group. throughout the month find out more at c-span's health care hub. .. now, a hearing on diplomatic security for the people and property at nearly 300 state department missions overseas and more than 120 domestic facilities. daniel akaka of hawaii chairs this homeland security subcommittee on the federal work force. it is two hours and ten minutes. >> i call this subcommittee [inaudible] -- to order. i want to welcome all witnesses and thank you for being here today. today's hearing, the diplomat shield, diplomatic security in today's world will examine the results of a government accountability office review of the department of state diplomatic security bureau, which provides security for the state department world wide. so our diplomats can advance u.s. interests. since the terrorist bombings of the u.s. embassies in kenya and tanzania and august, 1998 the terrorist attacks of mine 11 diplomatic securities responsibilities have grown and evolved. the walls in iraq and afghanistan further increase the challenges of keeping our diplomats safe. last week president obama announced his new afghanistan strategy. 30,000 u.s. troops will deploy in support of this effort. secretary of state, clinton, stated the number of civilians in afghanistan will triple by early next year. ds must be fully prepared to support a greater role in protecting civilians. over the last decade ds's budget has increased almost tenfold to about $10 billion its direct hire staff has doubled. unfortunately these extra resources have not guaranteed the ds's readiness. in particular i have concerns in three areas i hope will be addressed today. first, the department state department must address ongoing staffing challenges. gao identified key work force steps that hindered ds and carrying out its duties. less than half of regional security officer is serving in language designated positions meet their proficiency requirement. more than one-third of diplomatic security positions are filled by offices below the appropriate grade. and there are personal gaps posts overseas. i believe that ds should invest more in its work force by having enough people with experience and language skills necessary to fully support its critical missions. understaffing at least two overt reliance on contractors. gao found that there are 36,000 contractors that work in ds which is about 90% of diplomatic securities total workforce according to the gao. some ds employees are not prepared to manage this large contractor work force. recent security lapses of the u.s. embassy in kabul have illustrated the need for better contractor oversight. second, the state department must better manage the tension between fulfilling these diplomatic operations and providing strong security. today state department employees serve in iraq, afghanistan and other posts where they would have previously been required to evacuate. these diplomatic operations are critical to u.s. interest. but providing security for such dangerous missions places a great burden on the ds. because of these dangers some of our overseas posts resemble fortresses, and for security reasons will not be in locations considered most appropriate and accessible for diplomatic operations. a gao reported that some diplomats are concerned that secure measures make it more difficult for visitors to attend a u.s. embassy events making person-to-person engagement less likely. we must be mindful that the way our diplomatic presence is seen and felt in other countries may reinforce or undermine our broad diplomatic goals. it is certainly critical the u.s. protect its personnel from threats both on and off posts. security, however, must be carried out at a concert with our diplomatic mission. finally i want to emphasize the need for improved strategic planning efforts within ds. i support dustin gao's recommendations for the state department to conduct a strategic review of diplomatic security. the department has already stated that the ds will benefit from the quadrennial diplomacy and development review. i am looking forward to hearing more about this from our state department witness and how strategic planning for ds can become a part of its culture. i look forward to hearing from our witnesses today. senator voinovich, your opening statement. >> thank you, senator akaka, and i appreciate your holding this hearing today. i've been concerned about the management of the state department not only as a member of this oversight of government management in federal work force, but also as a former member of the foreign relations committee and now the appropriations committee on the subcommittee on how foreign operations, and i think that too often the management of some of our agencies haven't been given the consideration that they should have been given and i know that the secretary clinton has indicated that she wants to move forward and approve the management and there's going to be a large number of people that are going to be hired by the state department and we are anxious to make sure they get the right people on board to get the job done and i think that's one of the reasons why we are here today because we are concerned about the issue of diplomatic security, and i move around the world and visit some of our embassies and am very impressed with some of what might seem and in other instances after reading this report a little bit concerned. and it appears in that the bureau lacks strategic planning and with little capacity to prepare for future security needs. i talked to several with my staff, and it seems that we just have too many people that are under contract, although from what we can tell the was that are under contract to a pretty good job. i know when i was in iraq i had with the black, whenever the name of the group is, i asked them who is the security, i was in a helicopter and thought maybe it was our guys, no it was the security operation. got out of the helicopter and into an suv and wondered if was the security and it's another private operation. and then i wanted to find out who was training the iraqi government folks in a special unit and they were also hired people, and of course i was the department of defense. so, we would just like to look into how this is being looked at by the state department, and i think the thing that bothers me the most and i think senator akaka did a good job of fleeing get out is that it appears that the people that have been brought on don't have the chaining the training that the need to get the job done. i spent a couple of hours over the state department with richard holbrooke, and visited with the people, the team he's putting together to go into afghanistan, and i was impressed that he's taking his time trying to make sure he gets the right people and are not in a big rush just to bring people on but to try to find the right ones. so i really would like to know just what percentages of the people that are going to be doing this ought to be on government payroll and not private contractors. are there too many that are on the private payroll? second of all, can't we do a better job of preparing this individuals that we are asking to do this job? i & that takes about three years to train somebody for one of these jobs, and the other thing i'm interested in is who decides whether or not the private contractor is doing the job you are paying them for, and i found that too often they have private sector people on and the question is does the agency know whether or not they are getting a return on the investment they are putting into that private sector so anxious to hear your testimony today and the other two witnesses to follow. >> thank you very very much, senator voinovich. i want to welcome our first panel of witnesses to the subcommittee today. ambassador eric boswell, assistant secretary of state for diplomatic security. mr. jess spearman, director of international affairs and trade at the u.s. government and accountability office. as you know, it is a custom of the subcommittee to swear in all witnesses, and i would ask you to please stand and raise your right hand. >> do you swear the testimony you are about to give this subcommittee is the truth, the whole truth and nothing but the truth? so help you god? thank you. of that it be noted in the record the witness is answered in the affirmative. before we start, i want to know -- i want you to know that your full written statements will be part of the record, and i would also like to remind you to please let remarks to five minutes. ambassador boswell, will you please proceed with your statement? >> thank you, mr. chairman. good afternoon. thank you, mr. chairman and good afternoon to you members of the committee, senator voinovich as well. all i am very honored to appear before you today. i would like to thank you and the committee members for support and interest in the securities programs. with congressional support, diplomatic security has been able to safeguard american diplomats and facilities for the conduct of u.s. foreign policy and maintain robust investigative programs which serve to protect the borders of the united states. with your permission i will make this brief statement. while diplomatic security continues to provide the most secure environment possible for the conduct of america's foreign policy, as you mentioned, mr. chairman in your opening remarks the scope and scale of the ds's responsibilities and authority have grown immensely in response to emerging threats in security incidents. increase resources were necessary for the bureau to meet the requirements of securing our diplomatic securities in the extremely high for the environment of iraq, afghanistan, pakistan and other locations. the department currently operates diplomatic missions and locations where in the past we might have closed the post and evacuate all personnel when faced with similar threats. and as you may know, mr. chairman, i also served as assistant secretary for diplomatic security from 1995 to 1998. this is not the same organization that has when i left. it is far, far more capable. not only has ds grown in personnel and resources it has developed the organizational structure necessary to meet the current challenges as well as those of the future. the recently released government accountability office review of my bureau correctly assesses ds must do more to anticipate potential in the emerging global security troublespots in order to create risk management and mitigation strategies that best focus limited resources on who prioritized security needs. such plans must also incorporate this strategic management of the resources available for the bureau to fulfill its mission both currently and in the future. two years ago diplomatic security created a threat investigation analysis directorate to enhance our intelligence analysis capability. this directorate concentrates our analysis under one streamlined command structure and foster's closer working relationships among all analysts and those responsible for investigating committee touring and mitigating threats. our next challenge is to sharpen our focus as you mentioned, sir, not only predicting future security threats, but on planning in advance for the security solutions and resources needed for tomorrow's crisis and foreign policy initiatives. over the coming months we will begin working toward the development of a strategic planning unit charged with ensuring ds is even better positioned to support future policy initiatives and manage global security threats and incidents. the same time, we must balance our resources and security requirements to achieve an effective mix of high skilled personnel while controlling costs associated with requirements that have grown tremendously over the last 20 years. we are embarked on a new bureau wide planning process that will allow us to better manage the performance of our 120 plus existing programs and utilize data to make better and more informed resource decisions. having decisions supported data available will enable ds to determine how well the current programs and resources on line with the bureau and the departments strategic goals. ds is actively participating in this department's quadrennial diplomacy and development review, thus qddr, that the secretary, psychiatry clinton, has focused on improving the department's resources and training to ensure the right people for the right job at the right time are in place to conduct diplomacy around the world. we are also participating in the qddr working group responsible for the foreign affairs committee's activities and contingency response environments. the department of state operates in an increasingly dangerous locations, and this requires extensive resources to mitigate the risk. although this be toppled force has grown substantially over the past decade the fluid nature of the security environment in afghanistan and iraq and pakistan present an ongoing challenge to the program and staffing structures and those in other posts. to meet the challenge of securing u.s. diplomatic operations under the wartime conditions in iraq, afghanistan and other tight red zones thus ds relies on a worldwide personal protective services contract, wppss, to provide protective security aviation support and fix guard services. these contracts allow the scale of ability required for increased threats or new operational requirements and provide specialized services in extraordinary circumstances. in recognition of the early challenges ds experienced in the contract oversight specifically in iraq we have improved the contract officers representative training for all security office personnel and increased agent staffing in iraq and afghanistan to directly supervise the personal security contractors. in addition speed will establish a new security protected specialist skill code, a limited mom career federal appointment category -- allin polemic category to augment ds special agents by providing direct oversight of wppss protected motorcades and critical threat locations where such resources are needed most. we are similarly evaluating other staffing options to adequately cover this important oversize function -- oversight function. although the bureau is experiencing a surge in new positions, and even staff and take in the 1990's has resulted in significant experience gaps in the agent and security engineering corps. to limit the effects of this experience gap we've increased training and mentoring programs and carefully identified personnel capability of serving in what we call stretch assignments. over the past ten years the bureau has embarked on an ambitious record and hiring program. we've increase out reach to colleges and universities with an eye toward building a professional service that reflects america's diversity. in order to deploy a highly qualified personnel into the field quickly, we have revamped some of our training programs and are carefully evaluating our entire agent training program to ensure the instruction provided to new and existing ds special agents is relative to the new realities of our work here was mission. ds continues to strive to meet the security needs of the department an increasingly dangerous locations by and is putting beads and dedicating appropriate resources to accomplish the mission. through these changes ds remains one of the most dynamic agencies in the u.s. federal law enforcement and security community. thank you, mr. chairman, for the opportunity to brief you on the global mission of the bureau of diplomatic security and on our unique ability to safeguard americans working in some of the most dangerous locations abroad and that tax and requirements we face. with your continued support we will ensure diplomatic security remains a valuable and effective resource for protecting our people, programs, facilities and interests of around the world. >> thank you very much, ambassador boswell for your statement. mr. ford, will you please proceed with your statement? >> thank you, mr. chairman, senator voinovich. i am pleased to be here today to discuss the deeper one of state's bureau of diplomatic security which is responsible for protection of people, information and property at over 400 embassies, consulates and domestic locations. since 1998 and the bombings of the u.s. embassies in east africa, the scope and complexity of threats facing americans abroad and at home has increased significantly. diplomatic security must be prepared to counter such threats such as crime, espionage, visa passport fraud, technological intrusions, political violence and terrorism. my statement today is based on our report, which we released two days ago which was requested by the subcommittee. i'm going to briefly summarize our findings. we found that since 1998 ds's mission and activities and subsequently its resources have grown considerably in reaction to the security threats and incidents that i just outlined. the war and iraq and afghanistan, the need to enhance the physical security of the embassies and facilities domestically, the increased protection emissions that ds has to undertake come investigations of passport fraud and a visa fraud of all lead to significant budgetary and personnel growth. diplomatic securities budget has increased tenfold since 1998 from approximately $200 million to about $2 billion today. in addition, the size of ds to retire work force is doubled since 1998. the number of direct hire security specialists, special agents, engineers, technicians and careers is increased from approximately 1,000 in 1998 to over 2,000 today. at the same time, the diplomatic security bureau has increased its use of contractors to support security operations worldwide specifically through increases in their guard force and use of contractors to provide protective details for american diplomats in negative print environments. as a consequence of this growth, diplomatic security faces policy and operational challenges. first, ds is maintaining missions an increasingly dangerous locations. necessitating the use of more resources and making it more difficult to provide security in these locations. second, although ds has grown considerably in staff over the past ten years it still faces significant staffing shortages and domestic offices. it still has a number of language deficiencies of staff, and it still has experience gaps as well as other operational challenges, which need to be addressed. finally, the state has not benefited from good strategic planning for the bureau which is an area that we made recommendations for in our report. we identified several operational challenges that indeed the ds from carrying out missions. to cite some mexicans, the staffing shortages in its domestic offices. in her 2008, about one-third of ds domestic officers operated with a 25% vacancy three or higher reported a shortage reflect the ability to complete work resulting in case backlogs and inadequate training opportunities. foreign-language deficiencies. as you cited in your opening statement, mr. chairman, we found about 53% of the regional security officers overseas do not speak or read at the level required of their positions. and we concluded that these foreign-language shortfalls could negatively affect several aspects of u.s. diplomacy including security operations. to cite an example an officer at one post told us that because she could not speak the language she had to transfer a sensitive phone call on an informant on a potential criminal activity to one of her weekly engaged staff. experienced gaps. our analysis shows about 34% of the ds's positions, not including baghdad, are filled with officers below the position great. for exceed permissible assistant regional security officers with whom we met with in the course of our work indicated that they did not feel that what the prepared for their jobs. particularly with the responsibility to manage large secured contracts. we previously reported that experience gaps can compromise diplomatic readiness. balancing security and diplomatic missions. ds's desire to provide the best security possible to its staff overseas has at times resulted in tension within the department. but over its diplomatic mission versus its security needs. for example, diplomatic security established strict policies concerning access to facilities that are usually included in both personal and vehicles greetings. some public affairs officers that we met with indicated they were frustrated that they could not operate as freely as they would like and this continues to be a challenge within the department terms of balancing appropriate security versus enhancing our diplomatic posture outside the embassy walls. in our view, the increasing growth in extended missions and operational challenges facing the bureau requires strategic review of the department. while ds has undertaken some planning efforts we found they had not addressed the resource needs or challenges that we outlined in our report. several senior diplomatic security officials indicated ds remains a reactive in nature. stating that several reasons for this is for lack of long-term planning that they had to react to policy decisions made elsewhere in the department or in the white house or the congress. finally, past efforts to strategically plan at ds have not resulted in a good solid strategic planning. we cited an example in the report in fiscal year 2006 that ds indicated that it needed to develop a work force planning strategy to recruit sustaining efforts and find highly skilled personnel and that they needed to establish a trading flow which i can discuss later to help deal with staff shortages. we found as of 2009 that these issues had not yet been resolved. in the report we recommended the secretary state as part of the quadrennial diplomatic review conduct a strategic review of the bureau of diplomatic security to ensure that its missions and activities address the department priority needs and address the challenges we outlined in our report. mr. chairman, that concludes my statement and i would be happy to answer any questions. >> thank you very much, mr. ford. ambassador boswell, last week secretary of state hillary clinton testified that the u.s. is on track to triple the number of civilian positions in afghanistan to 974 by early next year. how will this large increase impact u.s. operations in afghanistan? and how much additional ds staffing will be required? >> mr. chairman, i will be a great challenge to ds as the surge in iraq was some years ago. but we have the advantage this time of having a little more advanced notice. we are going to be doubling the staff of our security office in kabul. and we have shall we say large resource package included in the discussions that will go forward regarding the budget for 2011. but it is a very significant change. at the moment the ds agents in afghanistan are largely protecting the u.s. mission in kabul. they do not have responsibilities outside of kabul. we are going to be, we, the u.s. government, are going to be opening up to u.s. consulates in afghanistan this year, next year i should say, in 2010. one in sharif and other fire in the west. those consulates will be protected by the ds agents. the civilian personnel that are further in the field mostly in the south and the east are under the protection of the military. >> ambassador, the state department just announced its intention to find a new contractor to provide security at the u.s. embassy in kabul after reviewing allegations of misconduct in security lapses by the current contractor. a prominent government watchdog group questions whether embassy security in a combat zone should be handled by the private sector instead of bye government and we use. has the state department considered whether these positions and combat zones should be performed in-house? >> yes, sir, we have. that contract, which allows you mentioned we, the department has decided not to exercise renewal in option year in that contract is going to be read completed. it's going to be read competed a long card companies. i have to clarify that what we are talking about here are the cards that provide the static security around the embassy in kabul. they man the guard posts around this embassy in kabul. they check the vehicles, manned checkpoints, they screen the people admitted to the compound. these are all the people that provide bodyguard services that protect people when we move. these are the fixed post guards around the world. those -- that function has been provided by contractors for many years. i don't see any real chance that they could be provided by direct higher u.s. government employees are military simply because there are so many. we have, you mentioned the number of people we have in ds, and the proportion of which were contractors. out of the 44,000 people that you mentioned, something like i think 32,000 are these fixed post cards, that guard embassies around the world. it just like the fixed post people that stand outside the capitol were around the state department. and that has been a successful program for many years. >> ambassador, according to the gao report, ds is planning to replace some contractors with federal employees. please tell us more about the ds's plans for reducing the number of contractors. >> yes, sir. i think it's fair to say that the surge, the civilian surge in afghanistan and pakistan -- iraq, and also in pakistan which we haven't mentioned quite yet, it severely challenged ds from the point of view of stretching us and making very great demands on our resources. and i think ds did extremely well and stepping to the plate and meeting those challenges but one of the places we could have done better and we didn't was in in the administrative -- providing the administrative tale that supports the teeth, the agents in the field. and this was pointed out in a recent state department inspection also of ds that we had under resources the administrative management and mostly in the state's. both in the headquarters and in the field offices, and so we are significantly increasing the number of the direct hire people for positions that have in the past been filled by contractors. bye contractors i don't mean guards. i don't mean bodyguards. these are administrative and technical positions, secretaries, analysts, this sort of stuff. >> mr. ford commodore report states that when the united states removes its remaining forces from iraq by the end of 2011 it will impact diplomatic securities operations. what specific challenges do you foresee? >> well, we haven't seen -- we haven't seen the plan yet for it sec'y how that withdrawal is going to -- hauer it is going to be impacted in terms of the civilian side. as military withdrawals, ds already has a very large presence in iraq. we believe that it will affect ds because some of the protective service is the the military may be providing currently could be transferred over to ds. but we don't have any specific information with regard to what the staffing implications of that might be. in our report we had indicated i believe it was last year ds had i believe 81 special agents in iraq which is by far the largest number of any overseas post. so the point that we are making in the report is there is likely to be some implications for ds as we withdraw forces from iraq just like there will be if we surgeon to afghanistan. so, but we don't -- we have not yet been briefed on what the actual numbers will be and what the resource implications might be for providing protective services in iraq once the military starts to withdraw. >> ambassador, would you have anything to add to that? >> only to say it is a major challenge facing us. as the military withdrawals, we will take over, we, the department, will take over certain functions now performed by the military, and i can give you an example. the police training function which is currently done by the military will be handled by the department. that will mean a significant increase in the number of direct how your usg employees and contractors that will be assigned to the embassy in baghdad and also around the country and that will be a big challenge for us because they will have to be protected. this is a sycophant stuff increase and these folks, business isn't in baghdad, it is out in the countryside and we will have to protect them. and we are seeking the resources necessary to do that. there is a very active planning operation regarding iraq in 2012, it is department wide. we are very much a part of it. and this aspect is one of the things we are considering very closely. >> thank you, senator voinovich. >> one of the things that always bothered me about iraq was lack of planning documented in several books, assassins' become a fiasco and a few others. and i was looking toward the and we got our act together, and it seems to me we are doing a better job of preparing for the mission in afghanistan. do you have a critical path put in place? you mention you know that in terms of iraq who is going to leave and in the green zone and how much is being provided by the military and how are those people going to be taken care of? i don't think very much is said about the number of people that are going to leave in iraq that may continue with the prt is we have been there but has anybody set down with a piece of paper and scope it out so that you've got confidence that once this takes place in 2011 and you're going to be taking care of folks? >> yes we are, senator. as i mentioned there's a very active planning program that is going on with it is going on not only in the department that involves ambassador chris hill's staff in baghdad as well. i think it is reasonable to say that we will have a significant presence, we the department will have a significant presence in the countryside. it's likely that we will open up new consulates which do not exist now. and it's also likely that there will be all we are going to call in the roaring presence posts which we are a state department employees will be out in the countryside and we are very actively planning one for that and how we are going to protect them. >> is there any paper, any word that we could look at what kind of give the long-range plan and commitment in iraq so that we have some idea where folks are going and how long we anticipate there being there? >> i'm not aware of any paper that exists. this is a planning process that is going on. i don't think i can tell you that there is a formal road map yet. but i do know that the planning is going on and is being factored into the president's 2011 budget request. >> mr. chairman, i think it would be a good idea for us to talk with foreign relations, to really get an idea just what the commitment is going to be made in iraq once the troops leave. the other thing i think that hasn't been underscored in the president's presentation or quite frankly i don't think it has been brought up. maybe i've seen some of the other hearings. what are the plans we've got to move folks out to do the prt and government infrastructure building and so forth that we have in afghanistan and, you know, how long do we think we are going to need to do that in order to stabilize those communities? it is a big part of it. we talk about the military side of this. but i think that we may not be in a candid as what we should be. in other words, information i got is we are probably going to had to have folks for a longer period than what the president presented although i support wholeheartedly support the idea of putting the pressure on him to get the things done that they are supposed to be doing. but this recent comment by karzai about the fact that we are going to have to be there a long time, one of the things we are not talking about is if we have an afghanistan army we are going to have to pay for it. we are going to have to pay for, they don't have the money, it's going to be different than iraq, but beyond that, we are getting off the subject, you're going to have a lot of people over there and i would be very interested in knowing because of this very good plan that is shared with me what are you going to do to make sure when they get out in the boonies that they are being taken care of? and i did hear the you were going to initially rely on the military; is that right? >> yes, sir. the arrangement that has been made is that we, diplomatic security, are responsible for the staff at the embassy in kabul and associated missions in kabul and also the two consulates, the to future conflicts. and as you said i think we are going to be there a long time. but the protection for the civilians that are embedded with the military in the field is provided by the military. there are -- i think the rule of thumb is something like about ten civilians per battalion, eight to ten, something like that. i'm sure it is not a cookie cutter but that's roughly the number, and those people will be protected by the military. >> you indicated that you've done an analysis of the people that should be governmental and replacing contractors. do you have that anywhere written down about what somebody did some thought into what this was like and that you made some decisions to say we are going to have people that are going to be on the federal payroll rather than have contractors; is that -- >> yes, sir i want to clarify that is not wholesale replacement of a lot of contractors. what has been kind of the subject of controversy is the degree to which the u.s. government relies on contractors largely in the field. and that, i'm afraid, is not going to change from the security point of view. we've really have no alternative to using contractors both as our fixed post cards and i don't think really any substantive reason not to use contractors for that purpose. but also as a sort of forced multiplier for us and which it is so that we can deal with protecting our people when we get surges like this, for example there are something like 1,000 bodyguards including the ones who protected you when you were there in iraq. right now that number can go up and down and change. i don't see any way that those contractors will be replaced by direct hire people. the commission on the wartime contract and is looking at that among other things, and i don't imagine they are going to come up with an alternative. >> may i ask you something? you see it's been happening for a long time you might comment on it. has somebody really sat down and looked at a piece of paper and said these folks are costing x number of dollars, the uncertain competency is that we need compared to if they were direct hires and how does that work out from the dollars and cents point of view? and other words, you're saying basically we've got to stay with those people, we've been with those people, has anybody ever thought of developing a cadre of officials within a department that could do the same thing? and is there a reason that you don't want to do that in terms of recruitment or cost? is it cheaper to hire these people? >> yes, sir. that is a long and complex subject but i will do my best to answer. and right off the top line need to make clear the differentiation between fixed post guards manning perimeter. and the bodyguards who are much more controversial, the black waters of this world. there is no question -- i don't think i need a study to tell you that hiring them to stand fixed post around the embassy which is what happens in every single country in the world except the combat zones, that is except for afghanistan and iraq, that hiring local nationals is far, far cheaper than trying to hire some american contractor who will put americans -- not only that but it's not necessary. it's just not necessary. these are contractors who -- some of them are under personal service agreement. they don't work for a guard company -- >> by the way that reminds me senter akaka probably you troubled -- store right, they've got a lot of folks that white professionals have been attached to the embassies for years that our nationals that are providing security. thanks for reminding -- >> that is the bulk of the contractors, the great bulk of the contractors. and they go home at night. it don't go in some guard camp, they go home at night. >> so the fact is it's cheaper. >> it's much cheaper, infinitely cheaper. >> now, the second category are the security guards, the bodyguards, black water, dying for, triple canopy, these people. there has been a question of whether it is cheaper to do it with americans on contract or perhaps military, u.s. military. and i believe the congressional budget office came out with a study last year in which they put up the true cost or as best they could get of the true cost of the civilian contractor bodyguard. and military person that came out. it was very close to the same. obviously if we substitute military that is 1,000 new military iraq at a time we are drawing on the military. it's not very practical. >> thank you very much. senator voinovich. mr. ford, you testified that gao identified both domestic and overseas ds offices with a significant staffing gaps. i want to set the stage for why this issue is so important. would you please describe how the staffing shortfalls could affect our diplomatic missions? and the security of state department personnel, and i would like to ask for any additional remarks from the ambassador as well on this. mr. ford? >> okay. let me start by most of the staffing gaps we identified in our work tended to be in the domestic offices here in the united states. i think typically what was happening was that ds would receive protective missions for things like the olympics where they needed to staff positions in iraq and afghanistan which was the highest priority and they tended to use agents that were here on domestic assignments and so the domestic offices here, they are responsible for things like passports, visas fraud, another investigatory type of missions that ds has. those were the shortfalls in terms of the mission. so we had some examples we cited in the report. i think one of the knicks and bulls as i recall was in the houston field office which we indicated they had about a 50% staff vacancies last year when we consulted with them about what the implications of that they told us it resulted in case backlogs on such things as the western hemisphere travel initiative, so some of the implications of the ds having the shift resources to conduct say work in afghanistan and iraq by taking people from the domestic offices, that resulted in a mission shortfalls domestically and that is probably where most of the impact occurred based on our analysis. now we also visited a number of overseas locations in which we talked to a number of ds folks and other embassy employees and various overseas missions, and similarly in those that were not necessarily the highest priorities such as pakistan, iraq and places like that. a lot of their folks were shifted over to work in those other locations which had some negative implications in terms of what they wanted to do with their individual locations. we also found that it impacted ds's ability to provide sufficient training for all of its staff because there isn't a sufficient training flow. by the way this is the state department wide problem, it's not unique to ds. where the staff are not able to get the training they need because the need to go overseas and immediately fill a position which in some cases resulted in people that may not be as experienced as they should be to fulfill that mission and we cited some examples in the report of people telling us hey, i'm not sure i'm fully trained to do my job. i'm going to have to learn ojt, we need to do. those are the implications of staff shortages that the ds is faced with because these other higher priorities. >> ambassador? anything to add to that? >> yes, sir. i think it's true as i mentioned earlier that the challenge from the stress of trying to staff major initiatives in iraq and afghanistan have a downstream of fact or back stream of fact. we were dealing with our highest challenge. we were dealing with our highest priority. it is true that it caused vacancies in domestic field offices. i think we've got a long way toward addressing that. there are vacancy rates in the field office is much lower now than the figures used in the gao report which i think for for 2008. we have a vacancy rate in the domestic field offices now of 16% foreign service and civil service and we are working to close the last remaining gap. i would take a little issue with what mr. ford said in terms of training. i don't think any ds agent had their training cut short, that is their agent training cut short to go to any assignment overseas. we've wouldn't do that. but i think that we are -- where we did fall short is on the issue of language and by i know senator voinovich this is something you're interested in and the director-general testified before this committee several weeks ago. the gao report accurately points out that we have about 50% of our ds jobs overseas bottling which designated do not have people that have tested at that level. and i think there was some curtailment of language training or wafers put in place to get people out. having said that, as i mentioned at the top, i was in this job ten years ago when at a time there were very few diplomatic security positions overseas. that were ever language does it needed. it was not part of the deal and i and very pleased now to see that the bureau and the core of agencies often the good direction in the sense that many more agents are getting language training including hard language training, chinese over a long period of time. that had not been done in the past. now we are still catching up. there's a lot of positions that were language designated that we haven't had a chance or the time, they haven't been designated barthelme enough to be able to put people with that kind of training. but i can assure you there is a high priority of mine making sure that agents get the right kind of language training to go to the post. the human resources people at the state department are very much adhering to this as well. there are fewer language weavers that are being approved but we have a certain amount of catching up to do in that regard. >> ambassador, senior diplomats worldwide have been provided fully armored cars to protect them from terrorist attacks. but ambassador newman and ms. johnson state that some situations, the use of high-profile armored vehicles may put our diplomats at greater risk. also in some cases these vehicles may not be the correct ones for the local terrain. my question for you is diplomatic security also hearing these concerns, and are there steps ds can take to provide more flexible low profile security where it is appropriate? >> yes, sir. one of the other bits of culture shock i had coming back to this job after ten years of absence was defined as was mentioned in the report that whereas ten years ago there were relatively small number of armored vehicles out in the field, relatively small number of embassies that were the ambassador rated an armored vehicle now it's thousands of armored vehicles and certainly every investor is required to have an armored vehicle and many places it is more than one. i think we have 3,000 armored vehicles, maybe more than that in the field mostly in the combat zones as is appropriate. in terms of what kind of vehicles i think it is a fair criticism. to some degree we are limited. i have to remind the panel we are limited by america and the kind of a vehicle you can put heavy armor in on is a chevy suburban and that is a lot of what is out there. that is a lot of what is out there. what we are doing -- i think we have made a good deal of progress we do have other vehicles particularly in places where we are exempt from by america because of right-hand drive for example, pakistan is one, is a place like that. but also, we are i think making a lot of progress in mixing up the kind of vehicles we are using, combination of high profile, low-profile vehicles and vehicles better adapted to the training as you mentioned. i think that is a fair criticism but we are moving in the right direction on that. >> thank you, ambassador. senator voinovich? >> i would just like to get back to the issue of the training flow to. how is the department coming on that? it impacts you but it impacts of appeals, too. >> the training float has been a dream of managers for many years. i think we did get some training positions, we, the department, got some training positions on a one time basis and 20 allied one time shot. we have never been able to maintain you can quit a training flight, and it's had many other names over the years, and manning motion. it's not just training. there's always gaps between assignments in the service, it is just the nature of the game. there's training, there's, leave, this kind of thing, and there are the complications that result from trying to match up a departure date with an arrival date. so those gaps exist and would be nice to have that kind of floats, but i don't think -- we've never seen. >> in terms of the language gap, either hire new people that have the language or take the people that are there and upgrade their language skills and in order to do that you've got to give them time off for that to occur which means if they are not doing their job somebody else has to do it and you're saying still you are not to the point where you are robbing peter to pay paul. >> no sir i didn't mean to imply that at all. .. ahead of time so we can put people into training to fulfill a language requirement. >> the coordinator of almost every hemisphere has a regional security officer, the chief security officer for the embassy as the dhs a gem. some of them are very senior and manage enormous operations and some are small. but one that virtually every pose. our regional security officer my dad was the head of security years and years ago for the state department in the sixties there were probably a 20 security officers. they were truly regional because there was only 20 but nothing regional about the jobs now. of very six -- very few responsible for more than one country. regional security officers are the chief security official. >> they are state department? >> always. >> so really, if that is the case that is a group of people you are trying to bring on board for these positions? >> that is right. we have 700 agents in the field, a security officers in the field. a little under half of our population is in the field and those that are stateside also spent time in the field >> i have no other questions >> ambassador, in august, am i staff travelled to the consulates fantasies in the mid east and central asia and saw firsthand a post that look like a fortress. of course, strong security measures are necessary to protect embassy personnel but nonetheless, our diplomats informed my staff that these posts make it more difficult to build relationships with local populations. either due to security standards are in excess ability. my question is how to rebuild better relationships and to ensure that the poster well protected? >> mr. chairman, responsibility is the security part but it is a balance rear trying to reach. we tried to play our part in helping the foreign service to achieve that balance. having said that, i think a somebody was here from overseas buildings they would tell you they work very closely with diplomatic security to produce designs and buildings and standards that are more approachable, but he made or a little less than a fortress but you off -- have to understand also that the wake of the terrorist attacks in our embassies in 1998 congress mandated the standards for buildings and the department went through an incredibly intense building program and i think we built 50 or 60, 65 new embassies several years. to do that in the economical way, much use was made of a standard and is the design. that is not very pretty. i will tell you that. it is very functional and many embassies that your staff sought and the central asia were certainly of fact kind of design. i do think we have made a lot of effort to to make these buildings a little less fortress like. but, senator, i am a big fan of secure buildings. when i get a threat two and i sit in my morning meeting and then look at the threats of new places one of the first questions i asked is what kind of building do we have there to protect our people? i am very reassured when it is one of the new buildings. >> thank you ambassador bozell? mr. neumann stated in his written testimony the state department needs to give the officers more secure communication devices to be used in the field because officers currently rely on the military or these capabilities. is the department considering doing this? are there any obstacles to moving forward on this? >> we have a capability of why we package we use for secured communications in certain instances. for example, of the secretary travels. but they are not in general use as the ambassador pointed out in his statement. the state department personnel in the field like in afghanistan are closely linked to military and did you use the military communications. we need to do some more on our side. i think some things are being done. for example, in afghanistan we made available our open that it is sensitive but unclassified with a step in the right direction to all of the people that we have in afghanistan. >> the gao report identified as challenges, space of balance and security with a safe diplomatic mission prepared to have been recommendations have we can best achieve the balance? >> we now have a report that has a recommendation. based on working in this area for many years, the key thing is communication. sometimes there is miscommunication that occurs between security folks and the diplomatic side which tries to accomplish to reach a broader audience and in many cases there is a lack of communication about what type of security is necessary for them to conduct their work and get out of the building. i would say at a minimum, this may be a training issue, we need to make sure our security folks are sensitive to the diplomatic mission and make sure the diplomatic folks are sensitive to the security mission that ds has. when you talk to rosa etfs officials in the field and the state department employees, i often hear perception that indicate when does not understand what the other's job is. as a consequence there are some negative viewpoints on both parts. but i think the main thing is training and other communication mechanisms that the department makes it clear row we have security standards hid our embassies for people who want to go outside the embassy, and on the diplomatic side or on the ds side there is the understanding we want to reach a the local population because we have other diplomatic objectives. constant communication is the key. >> thank you very much. that was my final question. >> do you have an a criteria that you use in terms of where you will build new embassies? >> by that i mean, i was in china 2005 they are building a new embassy 45 minutes outside of beijing. currently maybe they have already moved, it was downtown so it is not to wait out somewhere else. this is something you can go to to say that we moved it there for 10 different reasons or is there a standard macedonia? they have one of the prized pieces of property on the way out. and a residential area to both what is a criteria that you use about where we put these places? >> it is something you ask the next panel. you get them somewhat way out there where you're not close to the business area or any other embassy. does anybody way that in terms of its location and in digit will create? the biggest is the one we built in iraq. who in the double ever built that think? what was the basis? >> the short answer is that there is a standard and it does govern to a large degree where we put our embassies. that is the classic requirement well known for its setback between our buildings occupied and the edge of the property where the wall is, it is the essential for the most important security american mr. icahn put into place with the 170-foot setback for of course, that means you have a significant embassy and you need a significant piece of land and land of that size is often very difficult to find. it is true that new embassies as i mentioned before in my testimony, there is a lot of an embassy is boats, many of them are not right in the downtown core. putting parenthetically the one in beijing is. that is a big city but in this in town and in fact, did an area where a lot of other embassies. the new-line. i am intimately familiar. >> bed is good news to me because i told they were building at 35 for 40 minutes. >> it was not being built wait out it is just that beijing is a big city and built in a different part of town. it is further from the ambassador's residence but in terms of where it is coming in a very active continental hotel right across the street from it and several other embassies. it is also true, i think, that while we do have embassies that are distant as a byproduct of building these two of the seas, the town's and cities grew up. i was putting together the embassy together at the time. we got a lot of criticism having to put together a site to that was half an hour away from a downtown location were the old very difficult to defend embassy was. it was in a bunch of tomato fields owned by local farmers and 13 acres per car went back to that site last year were the new embassy has been in place 15 years. and the town has grown up around it. it is a highly prestigious area with the enormous other buildings around it. that does not have been in every case but it happened there. like in the uk or london the state department said you would get so much money for this it will help pay for the new embassy? >> that is right. but the reason for the new embassy was simply the existing embassy is very difficult to protect. almost impossible to protect well. almost as much unattractive barbwire and barriers as possible was put around that classic and famous embassy and still, there is a real threat to in london as we have witnessed in the last few years. that embassy is being sold. and a new site has been found a rather remarkable new site. >> i have seen it. >> centrally located and expensive. [laughter] >> think you mr. chairman. >> i want to thank our first panel for being here today. your responses will be helpful to what we will be doing. again, i think you and wish you well in your positions. thank you know i like to call-up the second panel. the second panel of witnesses our ambassador newman president of american academy of diplomacy. and ms. susan johnson president of american foreign service association. as you know, it is a custom of the subcommittee to swear in witnesses and i will ask you to stand and raise your right hand. do swear the testimony you're about to give to the subcommittee is the truth, the whole truth, nothing but the truth, so help you god? think you. let the record note that of the witnesses answered in the affirmative. before we start, i want you to know the full written statement will be part of the record. i also like to remind you please limit you're or zero remarks to five minutes. ambassador neumann please proceed with your statement? >> chairman and senator voinovich thank you for inviting me to appear. i am not a security specialist at steep is speak to one as one who does live with security issues and surges three threats to his ambassador. want to pay special tribute to the brave new and hard work game officers who have protected me and my mission in dangerous times required also like to a knowledge my respect for the people of those from blackwater who protected me in iraq and afghanistan. they perform discourage judgment and restraint and one lost his leg in the process. whatever it now attaches to other site go all of those men state department and contractor employees my gratitude if i wanted to have that moment to express it. to sum up the problems i wanted to talk about our the inadequate security communications that you referred to in the previous panel. security mobility issues especially the need for expanded air assets that may be required perk utilizing local security forces for branch post and excepting some greater degree of risk when it is warranted. and finally the consideration of funds for security emergencies. the gao reported or observed the changing security conditions that govern our life. that has produced in vast expansion of facilities in and resources. but there are still gaps between some of our standards and practices and then aids we have to serve. the lack of standards, not the equipment for computer based communications. we have had this problem for years and we have never sell it. delegated it to the military, but that will be a problem as they go away and frankly we have people serving with allied military such or to have compatible secure communications for of this is a bureaucratic issue. military projects the exact same secrets in deployable circumstances and it is time to some of the willpower to just solve the problems and find a way to sell -- send computers to the field with our officers. this is but exclusively a problem of ds of years and standards. you raised the comment from a previous panel from my testimony about our vehicles. i think we have made progress on the mix of vehicles. we still have a problem in some areas. ds has made a good deal of progress on that and i think it is something that needs close attention and follow up work by would note that part of the problem is also a congressionally mandated problem. that is the by american standard. but congress has supported waivers and changes and i hope you will continue to do that progress the military redeploy as we will face complex issues of him both protections. that may be more robust capabilities then and now has the state should consider having the assets both fixed in these critical fact areas. and stand there is some planning going on for this, but many issues remained to be sealed and future funding is a significant issue. these resources and the authorities to be used for need to be thought about now and the budgeted. supplemental budgets are not sustainable or dependable year-to-year. this problem as you well know goes to everybody in congress but it is time to stop flinching from the requirement to pay litigation for the dangers we ask your personnel two except park operating in areas like afghanistan requires adoption new ways of thinking about risk. our foreign service officers are not soldiers but the nation's need for informed judgments on economic and political subjects do not rise when it stops prepare cannot collectively over personal relationships are face to face. we're hampered not only by those but also in post standard normally referred to as your tolerance. we avoid this problem in the field by turning over security to the military so people are moving on different standards than those we would use if they were not secured. as the military withdraws from iraq and we're on our own and established borat -- branch post we will experience increased problems. we do not have high levels of risk for civilians and i would be opposed to ordering officers to take risks they consider unreasonable. but we must find better users and rehab to date. we made progress in iraq and to me places where we have 48 our requirements from movements in cultures that do not make appointments 48 hours in advance for unnecessary work. we have to have standards that allow for judgment to weigh the risk to be derived from the action. be clear i am not criticizing those who worked for me. they did a fine job. i hope we are beyond the issues of the past in which dedicated officers really pushed the bureaucratic boundaries to accomplish what they often correctly believed to be a central test. not matters of officers this asserted taking foolish risks or bad judgment, but the point* is to nip the tension between security standards and what we need to know or do. i believe we have made progress but we will find this problem coming back in the spades. some speak of risk management is a bureaucratic term to avoid saying somebody may get hurt or killed taking an action that seems sensible of the time but they need the flexibility to make such difficult decisions we need to strengthen on two levels. one is on the field. you talked about security officers and regular officers not standing each other. we need to move to have paid this training as a part of all state department officers. there is no telling when you go to sleep if you'll be part of the next two in the world. second, concerns washington. we need a more systematic policy for the balance should buy between local responsibility and washington responsibility. are believe we have made some progress but it is too dependent on individual officers and i think if you ask people to take risks they need to know if they have some background if they get lucky. and as we go to the purity branch, we have repeatedly had problems for the last eight years and how we securities people in three have not done well with our answers to start delegating the protectionist to the military has only been partially successful. i frankly to the believe the military and not think or question their willingness but them to have a resource to secure all of the people or allow them to move for their frequency required. >> mr. ambassador. >> that is about it. we can use local security and we know how to do a bow we have to make decisions and find it and finally to last points. one. we need some kind of financial reserve because the state does not have the resources as defense to swing money in a crisis. that would take a lot of work for the congress to design in a way not to be a slush fund. the last thing is through strategic -- through strategic planning we have not done nearly enough. we need to do more. we do not have enough people. but i think we're still playing catch-up in the strategic planning. >> thank you. ms. johnson? please proceed with your statement. >> thank you chairman and senator voinovich and thank you for and avoiding station fighting is to testify on this issue. our welcome the opportunity to share our perspective to testify get along with ambassador neumann with whom we almost always agree. [laughter] fail looking for areas of disagreement we're proud to represent the form of security specialists and the state department that make it 10 percent of our total membership and we're proud to salute their dedication and courage and hard work to protect both the overall mission and personnel. the challenges and demands facing the foreign service abroad as well as concern for security and safety of diplomatic personnel have grown exponentially over the last two decades. for reasons of security centrally located and accessible mission seem to be largely a thing of the past. our ability to travel from many of the countries we are assigned to is far from what it used to be progress say daughter of a career officer i recall traveling to remote areas of the sahara then what was then ethiopia going horseback riding after-school from friends at the u.s. space. of many miles into the country outside of the consulate general. the seem like distant memories. the need for increased vigilance and better security measures has led to new and tougher security standards come back restricting access to our travel outside of the embassies and missions. we cannot rely on the country to provide adequate security. . . security measures and policies and the ability to do our jobs as diplomats effectively is more challenging than ever. afsa welcomes the g.a.o. report calling for strategic review of the recent growth in the mission and the resources required by the bureau of diplomatic security. we support the gao recommendations. we also concur with ambassador neumann's recommendations. i served in iraq as a senior advisor to the iraqi foreign ministry from july through september of 2003 and for the next three years in bosnia as a deputy high representative and supervisor

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