tv Politics and Public Policy Today CSPAN April 28, 2016 9:00am-11:01am EDT
to ensure if we see a theme or a risk throughout, we can act on it accordingly. we're continuing to run a risk-based program. part of evaluating, we're continuing to look for connecting the dots, as you say, with the tcr program and including information gathering from other divisions. >> mr. white, the fcc did not and still does not have a standardized identification code that consistently identifies all the entities that regulates and makes connections between them. i believe the failure was in part data standards failure, last year congressman, myself and number called the financial transparency act to direct all financial regulators, including the fcc, to adopt data standards for information they collect with the hope of transforming the disconnect into open searchable data. in fact, the original name of
the bill was the transparency act, it will adopt the legal entity to consistently identify all the entities it regulates and affiliations between them. so in the future parallel investigations into related entities like will be electronically visible. for all information provided by other laws directs each agency to publish such information, machine readable and freely downloadable. won't initiative like this help prevent future failures like we saw with the bernie madoff scheme. >> we have adopted strategies to enhance our use of data analytics and capture all the data that's to us from external sources. we've centralized all the information we've had. so anyone throughout can go in and look at a given registrant and see what activities have been involved or nonexam review for that. we're certainly applies the data analytics and will welcome anything that can give us additional insight into the
activities of the registrant's that we're examining. >> thanks. i believe we have to do better. we can do better and there's incredible technologies and connectivity, we ought to be able to recognize this. let me switch to mr. flan ri, if i could. the department of labors proposed few dish area role mentions annuities 172 times, but the regulatory impact analysis does not examine the impact of the rule on annuities or the retirement that's using them. last october, david gramm from the division of investment management testify, and i quote, he said a lot of we've been talking about with them, the department of labor, have been on impacts, impacts of choices that they've been making on invest stores "what impacts is he describes and did your office conduct any cost benefit analysis? >> we did not do a cost benefit
analysis. we're involved with providing technical comments. i'm sorry, i'm not familiar with what -- >> i think gentleman's time has expired the chair now recognize mr. foster. >> thank you, mr. chairman. and questions i guess will be directed to -- i would like to congratulate you on your hiring of two physics phds as the only physicist in congress. i recognize the complexities of things like structured financial products. the technology that's involved and high frequency trading. all these of sort of things that we need that sort of expertise and i'm glad to see that you recognizing that too. i'm also the author of the contingent capitol requirements of the bill and someone who is widely credible with having invented the concept in 2002. we've seen it adopted really
worldwide, i think, with what i see as a lot of success, you see the swiss banking regulators, which are faced with a problem that their economy is not big enough to backstop that they have. they have used contention capital to make it solid counterparties. and contemplate times in financial stress. we've seen the whole deutsch bank is aggressively restructuring, you know, cutting bonuses and so on. because driven in large part by the worries that the contingent convertible coupons will not be paid more than a year away. it is to my mind working very successfully at providing the early morning signal that is one of their main merits. i guess most recently canada, the new government canada announcing they are going to use contingent capital to make sure the canadian taxpayer is not on the hook. i think, you know, this is a very successful thing, i've
continued to try to get them adopted, which they have full regulatory authority but we're not seeing very aggressive adoption. i was wondering if you can just give your take on what you see as the lessons learned in the worldwide, and the way forward for potentially getting those lessons used in the united states. >> well, first of all, it's a pleasure to meet you. contingent capital is personally in my academic environment and career i spent a fair amount of time talking about. i think you put your finger on what i view to be the biggest advantage capital instruments. that is rather than wait until the last minute when it's close to insolvency, instruments address that possibility, keep us away from that possibility and give the managers and the shareholders of the firm an incentive to stay away from certain trigger points. when i first started talking
about this, the crisis was fresh in our minds and people who had this vision that capital would be almost zero then there would be a conversion. by the time capitalism was zero, all sorts of bad things started to happen to these firms. i believe -- i'm sure you're correct when you say that they could be permitted as part of the capital stack of the united states. they haven't been, and i think there were people who feel that higher capital formal equity requirements are safer, more protective than contingent capital requirements are. and then how one comes out on that is based on how one -- what one believes is the effect of higher capital requirements on the operation of the firm and the pricing of its products. >> do you think at this point there are good examples of trigger mechanisms that have been workable in times of stress or is that still an on going
experiment. >> i believe that's a problem. the securities in europe and asia that have been so successful have book value trigger mechanisms. and one of the characteristics of firms that get into trouble is that their market value deteriorates much more quickly than the book value does. the market loses confidence in the firm, despite the fact that it may be showing strong book capital relations. and so the trigger of these capital instruments off of book capital ratios i view as sort of problematic and likely to interfere with their value. and are there issues just related to the sec, you know, how they would be registered under the 1933 act or are those, you know, if you go and go to the european web sites with the thought of investing in contingent capitals there's this big warning if you're a u.s. citizen, forget it. i was just wondering if there is a clear regulatory path of
whether you would see sec issues involved in making these widely used? >> i'm not aware of any considerations actively going on inside the sec. it would focus on disclose sure. disclo disclo d disclose sures that would accept the risks. >> the gentleman's time has expired. >> thank you, mr. chairman. welcome panel, great to have you here, i'm a warm up act for ms. wagner who is going to go in a second on the d.o.l. fiduciary. many of us, as you're well aware, have concerns about the rule. and it's my understanding that the sec, also, shared some concerns about the proposed rule and now the actual rule. is it fair to say that the department of labor, for the most part, disregarded much of the advice that the sec gave to them in waregard to this rule?
>> the advice that was given, i think of it more as technical comments. some of it was incorporated into the final rule and some was not, i don't know about the preponderance. >> okay. one of our concerns, would be, one of the economist suggested that the department of labor should measure improper activity of advisors through measuring conflict of interest, proposed with the purpose of the rule making process, no projected investment returns. it seems like the dol didn't take that advice; is that fair to say? >> i'm not familiar with the final dol rule. it's 395 pages and i look forward to reading it, but i haven't yet. >> have you undertaken any analysis of invest stores? >> we have not yet gotten to that point because our internal deliberations, again, in a different security space, have
not gotten to the point of generating a rule. we have not yet done that sort of economic analysis. >> tell me if you share my concern, i come from central western and northern wisconsin, not a really wealthy part of the world, we don't have a lot of people who have a half a million or $750,000 in the retirement accounts. we have people who have 30 and 50 and $80,000 in their retirement accounts. there is some concern that we're doing to migrate those folks from getting advice from someone that they've worked with and that they know and that they trust to a different computer model. do you foresee that happening, as well. >> well, i think you can look at the advisor, and the way you have, you can also look at it as an opportunity for people who are just getting into retirement savings, people are generally more comfortable taking advice from computers than i might be or you might be.
>> so, let's actually play that a little bit, it might not be just a person who just started to invest. now, the first time invest store in washington, d.c. might start after a couple of years and have $80,000 in their retirement account. in my community, it's after 25 years they have $80,000 in their account. based on, and maybe this is for the panel. do you think that maybe someone who is not an expert in investing, their life focus has been elsewhere, they put a little bit of money away. do you think that, say look back to last august, that that person, when the market start to move is going to be more compelled to look at their computer screen and make their right choice as opposed to calling their investment advisor and trying to sell their investments. their advisor is going to hold on a second, that's not the right call, we should ride this storm. that's not part of our plan. we know there's peaks and vallies we ride it out, don't sell. are they going to get the same
advice from the computer? i guess my question is, aren't they going to make really bad choices for their future if you have a advisor as opposed to financial advisor. >> i suspect that there were a lot of people in the world in wisconsin, who didn't even know what was happening that day, didn't look at the financial statements. but, in general, i agree with you entirely, good financial advice is valuable. i think that good financial advice also comes with confli s conflicts. >> i don't dispute that. does good financial advice come from a computer? >> i don't know enough about those computers. >> if i'm able to get 8 or 10 questions about, you know, some of my goals and some my income, what do i want in retirement, i put it in and hits algorithm and spits out advice, do you think that just because i'm a low-income individual, i'm a
low-dollar saver, that shouldn't be entitled to the advice that comes from someone that makes $800,000 a year? >> i guess we don't know. we certain -- certainly the point you make is widely discussed. but we don't know for a fact what's going to happen. >> do you have a study in the works so we can know? >> we will know when we take up a rule with the sec. >> isn't it too late? isn't it too late because my people are already going to be kicked out of personal advice and they're going to be regulated to a computer, do you share that concern? they're already out once you do your study? and the rule is implemented. >> again, the rules under which the dol operate are different from those than the legislative authorities. >> i can't how we navigate both and how that's going to play out on the expense side. >> sorry mr. chairman, yield back. >> gentleman from california. >> thank you. i would point out that think
think it was congress's intention that the sec and the department of labor have very similar identical rules. it is absurd to think that i.r.a. accounts would have one set of protections and nonira and non -- nonpension accounts would have another and it's even more absurd to say that the ira accounts of typically controlled by those in their '50s and '60s should have more protection than widows and widowers and elderly people who are typically middle class families control the larger accounts. i share some of the last gentleman's concerns. mr. chairman, the one part of the sec we don't have before us are those concerned with accounting standards. i would like to enter into the record by letter of earlier this month demonstrating the incredible harm that is being
done to our economy by the misuse -- well, the departure for accepted accounting theory that requires companies to write off the research and the experimentation costs. thank you. mr. butler, we've just -- we're still suffering from this 2008 downturn. i think it was mostly caused by the credit rating agencies. we still have a system where the umpire pays -- is paid by one of the teams and selected by that team. and the sec has decided to, instead of being an agency that favors transparency for invest stores, has decided to conceal this by such relatively meaningless so-called protections. it says well the sales force can't talk to those who do the
ratings. the people who do the ratings are compensated by the company, their promotions depend upon the company. they want the company to be successful. is there any rule that those engaged in rating debt obligations cannot receive stock options, bonuses, or any benefit from the success of a company they work for, mr. butler. >> each of the companies has different compensations range -- >> i asked, is there any sec prohibition, with regard to to specifically rating analyst and compensation. >> yeah. >> i would have to take that. >> okay. so if you give -- if you give grade inflation, the company makes money, your stock options do better and the sec has no rule of which you're aware. if you're not aware of the rule, it will be hard to think the rule is being enforced since you're the one enforcing the rule. let me -- i mean, the debt
markets are, obviously, far more important to the economy or at least involve far more capital than the stock markets, those who nvrs basically entirely dependent upon the ratings, even if you know better, you're managing, say, the price bond fund, if you decide to forego buying a double a rated bond that pays 20 basis points more, then i'm going to invest in vanguard. because all i'm going to be able to do is decide which has the highest -- the highest rating and the highest yield. i want to talk to you about one particular problem that is the reform bonds, obviously, the way to make money is to try to get peru as a client. it's a significant country and one way to do that is to avoid even offering to rate these
bonds that seem to be a part of a selective default. is there any rule that says that a bond -- that a credit rating agency can't refuse to rate bonds because they can make more money from the -- you know, they're paid off one way or another not to rate them. >> i'm generally familiar with the media coverage on the peruvian bonds. >> and i can't discuss the specifics. >> is there any rule that says that you enforce, that would prohibit peru from saying, please don't comment on our peruvian bonds and we'll make sure to give you a contract worth millions of dollars in some other part of our financial deal, can is there any rule that you can point. >> the rules provide specifically and that's the prohibition of rating analysts to be involved in sales. >> this is whether you take the
engagement. >> doesn't involve the rating analysts. >> the rule prohibits rating of the analyzed data function from being involved in the sales marketing function, that that's achieved by prohibiting analysts from being involved in sales and markets. >> that's not what i'm asking. >> the sales force decides whether to take the engagement. if peru pays them a few million dollars to say just don't even get your credit rating analyst involved, don't let them look at it. >> he's got the question, do you have the answer? >> in addition to the rule, there's a required certificate to accompany each rating action that says there was no influence -- >> this is a nonrating action, sir, you're avoiding my question, the answer is obvious. >> thank you. gentlem gentlemen, recognized for five minutes. >> director, as part of last year's transportation bill, one of my bills was included that would allow small reporting companies to incorporate by reference any post effective
amendments on the form s 1. the sec when implementing this provision in january, estimated that over 70,000 work hours and $85 million would be saved annually by small businesses. truly, this is a huge benefit for small companies. how -- however, in february, i wrote a letter to the sec asking for a similar analysis on the effects of expanding the availability of form s 3 for smaller reporting companies regardless of public float or exchange trade and status. this is a provision of a piece of legislation that i sponsored and which has been passed out of this committee, unfortunately the response that i received to my letter, was wholly inadequate and didn't indicate whether such a review or study would be done. would you commit today to performing that kind of analysis of the benefits of this provision for small companies and providing more detailed
response? >> well, i'm sorry but i never saw your letter. i don't know -- i don't know who went into -- into the response. one of the things that concerns me about reducing reporting from small companies is certainly there was room for there to be waste. but there's also evidence that companies that go to the markets with less information are less likely to be traded and a second dare market trading for stock is ultimately what companies would like to have the they're going to have access to capital. to get back to your immediate point, i have a number of current policy things that we need to deal with, i will be more than happy to consider doing. >> i would like to take a look at this, facilitating capital formation is obviously part of the sec mission and this is a provision that has appeared in that sec forum on small business capital formation annual report several times. i think we can really find common ground here and i would ask dr. larry that you will
commit to performing this kind of analysis. i will make sure that you get a copy of my original letter, i'll make sure i send it directly to you. moving on, i would like to obviously discuss the extent that the sec and department of labor coordinated in crafting their recently finalized fiduciary rule. according to e-mail records outlined in a recent senate report and mr. chairman i would like to have these entered into the record. it seems that the department of labor disregarded advice from the sec, specifically, regarding concerns raised by the division of economic and risk analysis. in fact, a specific quote, and these are fascinating reads, specific quote from an economist at the department of labor states, we have now gone far beyond the point where your input is helpful to me. these exchanges between the sec and the dol should make for very interesting reading. from your perspective over the
past year, sir, from the proposed rule to the recently issued final rule, how well has the department of labor coordinated with the sec? >> we certainly had opportunities to provide technical assistants. i'm familiar with the e-mail you describe because it involved one of my staff. >> yes. >> the staff are from dol had also been a friend and professional acquaintance of this fellow for a while. i think what you're seeing is the combination of a long string of e-mails. the economist can be pretty direct. you know, if somebody says, i understand what you're saying, but it's not applicable to my case, i don't want to hear any more about it. that's kind of the way i interpret that e-mail. >> there were others here, too, and i don't see the department of labor being open to any of your advice from, i think, a very fine office that you run and certainly, you know, i have great concerns, i want the dera
to do an analysis and an impact of this dol rule as it stand right now. is that forthcoming? >> when and if, and i hope it's when, the commission considers the rule for fiduciary standards in our space, we will look carefully at the dol rule that will be part of the baseline. we always start with the baseline. >> it's your jurisdiction, sir, honestly it is as laid out very perfectly in section 913. we want you to do your own uniform fiduciary rule making here. this is your purview, your space. you are the regulators, and including fen ra. and i really encourage and would like to get a commitment that you're. >> that's always part of one of our economic analysis. >> i look forward to working with you as we move forward. >> i look forward to working with you.
>> could you please describe the statutory requirements for. the annual examination is required to cover eight specific review areas and also requires that we conduct an exam of each of the registered with the sec. they required review areas are are informed by the risk assessment process that we use internally. the risk assessment process takes variety of inputs information the prior exams. which allow for the teams to be most effective as they go through their inspection process. we also have the examination teams araid in such a way we
have -- examining the larger restaurants and smaller registration team, smaller examination teams of the smaller registrants we have an effective allocation. as a result of the examinations, there's a report given to each of the specifically identifying the deficiencies we've noted. there's a summary report that's required to be put together by the office, which is assembled and reports publicly a summary of all the essential findings that we find in the examinations. >> i think we're doing a very good job and effective job of what we have. i believe that we can do better at which one of the reasons why from the budget request an additional request for two fy '17 would be used as specialized examiners. it would allow for us to go narrow and deep specifically, issues that arief throughout the source perhaps at other times during the course of the year.
>> do you think it's necessary for those exams to be annual and for your folks to be present. >> i think it's important over site the agencies we've seen real change as a result of the examinations conducted and real change implemented at the firms as a result of the recommendations that accompany our findings but for the fact we're in there with irregularity that we are, i would not be able to sit here today and say with such -- such conviction that there was real change. the annual requirement, though, is one that allows for us to bring a different approach each year to focus on different areas within the firm, so that we're not going in on a predictable basis, but rather on a more tailored basis for a particular firm with regards to risk that have been identified to us or that we've seen. >> if you could scale or tailor the current requirements, what would you do? >> i'm sorry, whcould you repea
the question. >> if you could scale or tailor the current requirements, what would you do? >> i'm comfortable with it as it's currently crafted. >> the written statements notes that you authorize to award whistle blower is in the range of 10 to 30%, why is the threshold not zero? >> i think if the intention is to insent vise individuals to come forward, i think the cal cue las that individuals go through to decide whether they're going to report seasoning is very complicated and has a lot of factors. amongst them, i think how much is in it for me and it could be how much is in it for me. but if it is true that when a person making it and whether they should approach regulator, one of the out comes could be that they give zero, that could change and effect negatively their incentive and their enthusiasm about coming forward, i think it's appropriate to not have zero as the baseline so that individuals that may be reluctant to come forward knows
there's at least possibility of some monetary award. >> what's the current value of the whistle blower fund. >> just over $400 million. >> 400 million. >> correct. >> what kind of current controls do you have in place that, you know, respect to that fund. that's a pretty sizable amount of money? >> so, we can only make payments when commission approves it and there's a process by which we pay only against what we can confirm has been collected and so we have internal controls to make sure that the cases that have been deemed to be worthy of an award, we -- the documentation requirements that we receive documentation either from the court or from the appropriate person inside the sec to verify we've collected the money and then we multiply that what the percentage of the commission has approved. >> this sec inspector general or the general accounting office audit those funds? >> yes. on an annual basis, audits the invest store protection fund? >> thank you.
>> gentleman's time is expired. we have been called for votes. we have five minutes left on the vote. so those members are here, this is a passage on the bill. i think there are only two votes if i'm not mistaken. i believe there are two other members who were here who will be returning after votes for final questioning, so you are -- the committee is adjourned until to be reconvened immediately after votes. we're lye on capitol hill where defense secretary and giant staff of chair will be on the administration strategy to combat isis. committee chaired by john mccain, rhode island senator jack reid is the ranking member. live coverage here on cspan 3
efforts to counter so-called islamic state. i thank our distinguished witnesses for appearing before us this morning and for their continued service to our nation during a time of war. please convey the gratitude and appreciation of this committee to all the men and women you lead. since our witnesses lasts appeared before this committee, we have seen a steady increase in operational activity in iraq and syria. air strikes have steadily increased and improved, new capabilities such as the 810 rand now attack helicopters have gradually been added. efforts to train and equipped veteran forces have been restarted and slowly expanded. additional u.s. troops have been periodically deployed to the fight a few dozen and a few hundred at a time. these operational adjustments have resulted in some operational gains. we have seen iraqi security forces make modest games against isil and province and coalition
of syrian curds take territory away from isil across parts of northern syria, all of while, united states and coalition special operation forces continue their daily degrading of isil forces in iraq and syria. these games are real and encouraging and testify to the excellence of our military leaders an troops on the ground. the purpose of this hearing is certainly to review those operational issues, but more importantly to try to put them into some strategic context. too often, it seems, policy makers, politicians in the media all want to engage at the operational level. i understand. military operations are important and interesting, but i worry that we're stairing at our challenges in the broader middle east through soda straws. need to lift our sights. at a more strategic level, we see a middle east descending
into chaos, in the words of henry kiss sin jer, and i quote, there's a struggle for power within states, the conflict between states and the kplikt between ethnic and religious groups and an assault on the international system. while the epi center for power and identity is iraq and syria where isil established its fate. it is a growing contagion that effects libya, yemen, parts of east and west africa, afghanistan and beyond. as we've seen from paris the san bernardino to brussels. this threat is increasingly capable of targeting us, as many of us predicted that it would. and yet at this strategic level, we always seem to be a step behind, a day late and a dollar short, while too many of our leaders both in the administration and yes in the congress, too. fixated on and sought to micro manage military operations in
iraq and syria. isil executed strategic counter move, launching sophisticated attacks in the heart of western civilization and deepening its presence in lieb bya in a count it helped and abandon, we now see thousands of terrorists and trapi training camps, all the warning signs that existed in afghanistan on september 10th, 2001. the administration increasingly a pee-- appears focus on this problem, but once again, response has been reactive, slow and insufficient, similarly with russia, last year vladimir putin secured a strategic in its first out of country military since the time of the czars. russian forces moved into syria, doubled down on the assad regime and decimated the syrian
opposition groups and american and our allies as we were supporting. russia used syria as fire exercise for modernizing military. despite predictions of russian -- putin has instead used limited military means to achieve distinct political goals. despite the pledge to withdraw from syria, assad's forces backed by russia now appear poise to retake, meanwhile, advanced russian military capabilities remain in syria enhancing putin's ability to project power beyond the region. once again, once again, the u.s. response has appeared confused, reactive and inadequate. none of this is happening because the adversary ris are ten feet tall are somehow more capable than us. instead as sophisticated and ruthless as isil is, it has major strategic vulnerabilities,
not least resentment in engenders among the muslim communities it seeks to oppress. vladimir putin is playing a weak hand, economically and demographically, he is consistently playing it better than we are playing ours. so, too, with the aryanian regime -- ie rainian regime, remains weak, but it is aggressively expanding the influence and overting the long-term partners. put simply, too many of our leaders involve in the tactical fight. the calibration and es ska laca and military operations and not enough in the strategic fight. despite the gains we've made, we must ask ourselves, is this working? are we winning? are we getting ahead of the threats and problems we face or are they getting ahead of us? what enduring objectives do we
hope to achieve across the middle east, the region that is experiencing greater turmoil than at any time since the collapse of the ottoman empire, how will we achieve those goals and on what timeline and at what cost. i understand the american people are frustrated with washington. i know there's a belief out there that we invaded and occupied iraq and it failed. that we intervened but did not occupy libya and it failed. we did not intervene in syria, that failed, too. but what ties all of this together is that we left. we left. where we never engaged in the first place. we pulled away and stood back and tried to convince ourselves that everything would be all right and look at the result. no new order is emerged in the middle east, only chaos. and the vacuum we left behind has been filled by the most extreme and anti-american of
forces, isil, al qaeda, iran and its terrorist proxies and now russia. we cannot afford to believe that this is not our problem, it is our problem. as general david portre -- petr wrote last week, rather in the case of syria, the actions of the extremist groups are likely to spill instability extremism, violence and refugees far beyond their immediate surrounding we cannot go on pretending that we can avoid these problems or that the current approach of trying to treat the symptoms of the disease rather than its cause will work if only we give it more time. it will not. we need to stop fixating on military details and look at the bigger picture, no one believes
there are easy solutions to the underlying problems in the middle east. but after the past seven years, this should much should be clear, walking away isn't the answer and time is not on our side, senator reid? >> thank you very much mr. chairman, let me join you, welcome carter. thank you for your services and your presence here today. this morning's hearing to update the hearing on the status of coalition islamic state in iraq and along isil is especially timely. it comes on the heels by the region by the president, secretary carry and part of the administration continue to view the on going effort as part of operation and inherent resolve. we look forward to hearing the assessment on the ground that has been made to date and the military task that can be accomplished through months ahead. in recent days the department has announced two deployments, one each for iraq and syria,
they intend to two countries as the focus of coalition operations turns to isolating as well as ensuring partners on the ground in iraq and syria as enabling point need to continue. the deployment to iraq on the sensitive time who continues to struggle to bring together elements of the political establishment in iraq, complicated reality that was on full display earlier this week when prime minister partially reshuffled the cabinet and stepped up pressure by thousands of protesters threatening, as we consider our policy in iraq, particularly it's important to remember that the coalition is there and the invitation must remain cognizant of the political opposition some to continue giving you growing presence in the country. ignoring that reality, risk damaging the strategic goal on the lastly political solution for iraq and the -- in syria the
su session seen a growing number of isolation in days. most concern by the forces assad regime. in march, president putin announced drawing its forces from syria, that is often the case with president putin, the public message is not consistent with the reality of events on the ground. according to reports, forces loyal government engaged in mass and combat all around, these actions do not pretend well for the direction of this conflict. i hope the secretary and chairman will provide their updated assessment on the military actions the regime and russian forces and how these figure into our planet. when currently before the committee is request by the administration to extend the dod authority as we consider this request, it's my assessment without our local syrian partner on the ground, the recapture and a number of other talented,
would not be possible. i hope the chairman speaks to this request for extension. i hope the secretary of chairman will provided the updated assessment by isil's growing president of libya. there have been public reports of the number of military operations libya and some suggestions that more may follow. committee moves towards the bill, it's critical that we have a key of your view on the threat made to libya. gentleman i look forward to your testimony, thank you. >> welcome secretary carter. >> chairman mckay, thank you. thank you for those statements and for this hearing and for the range both geographic and in terms of tactical operation on strategic that you're asking us to speak to. thank all the members of the committee and for your interest of being here. and above all, thank you for thanking the troops, means a lot.
you have many opportunities to carry that to them directly, but i'll try to do that, too, when i do. appreciate that. i will briefly in my opening statement address all of the aspects the subjects raised in your two statements, but obviously, our campaign to defeat isil, but more broadly our military strategy in the middle east. i appreciate that this is my seventh appearance before this committee, fifth one focused on the middle east since i became secretary of defense and the timing is, as senator reid noted, fortuitous in the sense i just return frd a two-week trip from the asian pacific and also the middle east, both regions critical in u.s. global security. and where are our men -- where our men and women in uniform are deeply engamed. why all of the challenges going on today, particularly the five challenges i discussed with you
last month in my budget testimony, namely, russia, china, north korea, iran, terrori terrorism, especially isil. dod can't choose between one or the other or between acting and the present and investing in the future, we have to do them all. there's much i can say about the asian pacific, i'm going to focus my comments on the middle east. there are actions in our strong military posture continue to be guided by our north star of what's in america's national interests these are several things, that was the purpose of my visit to iraq where i confer with my commander, met with prime minister and defense minister of haiti. spoke to regional government and announced a number of key next steps that president obama has
directed to further accelerate and defeat of isil, more on that in a moment. when appeared before this committee to discuss our campaign early december, i outlined how we embarked on a major acceleration of this campaign, an effort chairman had recommended that the president in october and consisted of multiple steps. first, there were a number of immediate accelerants. we deployed additional strike aircrafts, supporting an expanded air campaign against new targets and new categories of targets illuminated by refined intelligence. we deployed initial contingent special operations in syria. we expanded equipment of syrian forces engaged in the fight against isil. we began enabling capable, motivated local forces in southern syria also, and enhancing jordan's control. we leveraged air power and advisors to help them take it and cutting the iraqi side of main line of communication
between isis power centers -- we introduced a targeting force. we worked to improve our ability to target isil's leadership and presence beyond iraq and syria. we started to expand the military campaign against isil every domain, including cyber and space. all these capabilities were marshalled against a clear coalition military campaign gland, focusing on operations on three objectives, one, destroying isil's parent tumor in iraq and syria, which is necessary not sufficient but necessary. >> second, combatting the -- worldwide that's been noted by both the chairman and senator reid three our most important mission which is to help protect the homeland in addition to accelerating the campaign with additional u.s. capabilities we renewed our out reached coalition members and over the last three months i've convened
my counterparts several times, paris brussels, last week in ree a -- riad, above all to urge them to contribute more in more meaningful ways. since we embarked on that major acceleration, results followed and they've continued even in recent weeks. on the battlefield iraq, iraq security forces retook ramadi and heat and they had begun isolations to pressure with the attempt to collapse control over that city. and in syria, capable and motivated local forces supported by our coalition retook the dam in the west and the town in the east, cutting off two significant lines of communication in iraq, including one of the last major northern arteries between them and therefore between isil and syria and isil and iraq. we also have seen results from
targeting isil leaders and financing. we've eliminated the cab gnat having taken out the ministers of war and finance. we captured one of the principals isil's chemical warfare enterprise, removed external plotters from the battlefield, and most recently took out the isil amir for southern mosul, weakening isil's ranks there. and our attacks on isil's economic infrastructure from oil wells and trucks to cache storage to isil's financial leaders is putting a stranglehold on isil's ability to pay its fighters, undermining its ability to govern and making it harder to attract new recruits. these are the results in our -- there are also results in our coalition's train-and-equip efforts as well. so far, with your support in congress, we've trained over 20,000 iraqi security forces and provided six full brigades sets of equipment to the iraqi army, and we provided two brigade sets to the peshmerga, part of more
than 12 million pounds of critical supplies donated by more than 20 countries. for our part, ranging from ammunition to small, medium and heavy weapons to counter-ied equipment. meanwhile, in addition to the local forces we're working with in both iraq and syria, 90% of our military coalition partners from europe, the gulf and asia, 26 countries in all, have committed in the past few months to increase their contributions to help accelerate the defeat of isil. all this has been necessary for putting isil on a path to lasting defeat, but it's not sufficient. indeed, i've consistently told you that we're looking to do more and that we would be doing more. as we take advantage of opportunities, we're generating new ones and then seizing those opportunities to repeat this cycle, reinforcing success. this has been our intent and is consistent with our overall strategic approach, which is to enable capable, motivated, local forces to recapture and then
hold and govern territory tyrannized by isil. based on the results we've had and our desire on continuing isil's defees, we are conducting the next phase of the military campaign. they are, one, stabilizing iraq's anbar province, two, generating iraqi security forces to envelope mosul, three, identifying and developing more local forces in syria that will isolate and pressure raqqah, and four, providing more firepower, sustainment and logistical support for our partners to enable them to collapse isil's control over both these cities. to help facilitate these next plays, we're taking a number of key actions in both iraq and syria, actions president obama directed and that he and i announced over the last week and a half. and i should note that the president has approved all the actions that chairman dunford and i have recommended to him to
date. in iraq our actions are in support of iraqi security forces operations to isolated pressure mosul. they've all been approved by prime minister abadi. as i told our troops in baghdad last week, we'll be placing advisers with the isf down to the brigade and battalion level. we'll be leveraging apache attack helicopters to support the isf's effort to envelope and then retake mosul. we'll send additional heimars to support the iraqi ground defensive there. we'll provide financial assistance to the peshmerga up to $415 million to bolster one of the most effective fighting forces against isil. and to do all this, we're going to adjust how we use the u.s. forces already in iraq and immediately bring in about 215 more of them. in syria, our actions are to help our local partners continue isolating and pressuring raqqah. as the president announced on monday, we're increasing u.s.
forces there six-fold from 50 to 300. these additional 250 personnel, including special operations forces, will help expand our ongoing efforts to identify, train and equip capable, motivated, local anti-isil forces inside syria, especially among the sunni arab community. they'll also serve as a hub to incorporate partner special forces from both european and gulf partners that will augment our coalition's counter-isil efforts there. in the meantime, in addition to initiating training inside syria, we're also continuing to train and equip other vetted syrian forces outside of syria, keeping our focus, as we have in recent months, on battle-hardened, proven anti-isil leaders whom we can make more capable as enablers and amplifiers of our effects. and in this context, let me say that the section 1209 program is central to our ground campaign.
in syria we're now carrying out a different approach than before. instead, one that we've used to train and enable local elements that have proven themselves against isil on the battlefield. we've moved away from last year's disappointments with a former approach to the program, and we need your support to fully overcome them. focus on the program as it is now, and in particular, release the now $349 million in 1209 funding currently blocked by congress. and mr. chairman, i understand you intend to help clear these funds with the committee, and i hope other committees will follow suit, and i'm grateful for that. the fact is, our command -- for our commanders to be agile in accelerating our campaign against isil, we need a similarly agile congressional funding process. we're required to submit reprogramming requests, as you all know, to the four congressional defense committees. and so far on these funds we've
received differing responses on differing time lines, and sometimes with conflicting demands. we must get this working better going forward. i would also urge you and the other three defense committees to consider ending the reprogramming requirement for syria so that it's on equal footing with how you've structured your oversight of our train and equip programs in iraq and afghanistan. as it stands, the current setup invites troubling micro management of a wartime effort and risks inhibiting results. beyond iraq and syria, we're also addressing isil's metastasis. in afghanistan, since we authorized our forces to conduct targeted strikes against isil there, we've degraded the terrorist group's elements in that country. and in libya we have continued to follow isil activities closely, undertaking a successful strike last year in which we took out isil's key leader in the country. another strike in february against an isil training camp.
and as the new libyan government gets on its feet, we will support it in the fight against isil. we will counter isil and work with partners wherever isil has or tries to gain a foothold, whether in yemen, west africa, south or southeast asia. even as we do more, we're continuing to marshal our friends and allies across the counter-isil coalition to do more to accelerate isil's lasting defeat. when i met with my counterparts from the gulf cooperation council last week, i emphasizes the importance of them doing more, not only uniterrell, but also politically and economically. that's because sunni support for stabilization, multisectarian governance and reconstruction will all be critical to ensuring that isil stays defeated. and mr. chairman, i just want to second the point you made, which is, in the region, in my
conversations there, parties are already beginning to look beyond the defeat of isil and ask what their situation is at that point. that reinforces the need, as you indicated, to think strategically. next week in stuttgart, germany, i'll be convening my fellow defense ministers from the major contributors to the military campaign to discuss ways we can all continue to accelerate our efforts. that said, while the military momentum is gathering strength and isil is struggling to resist our multifaceted pressure, i am increasingly concerned about political, economic and diplomatic challenges in both iraq and syria affecting the pace of the military campaign. in iraq, as the proximate yiyt isil threat against baghdad has diminished, political ambitions have created discord. and in some instances, ethnosectarian competition has increased, creating an added burden and distraction for prime
minister abadi's government before the task of defeating isil is complete. this, of course, is occurring while iraq struggles with significant fiscal challenges due to the lower price of oil and a huge reconstruction bill as it retakes cities from isil. and in syria, competing agendas for the future of the political transition are inhibiting the generation and coalescing of anti-isil forces. secretary kerry, secretary lew and my colleagues from the other departments and agencies are focused on this intently, but they need support from you in congress to help ensure that military momentum is matched with political and economic momentum. and that the military defeat of isil in syria and iraq, when it is complete, will be lasting. i've articulated a clear strategy with the end state being a lasting defeat of isil, and that means it must be achieved by local forces. our strategic approach is therefore to enable such forces
to collapse isil's control of mosul and raqqah by bringing to bear in support of them the full might of the u.s. military through some of our most unique capabilities, such as precision air campaign and expeditionary targeting forces, offensive operations in cyberspace, training, logistics, sustainment and equipment. enabling local forces, not substituting for them, is necessary to ensure a lasting defeat. and sometimes that means our pace is predicated on the speed at which local forces can absorb our enabling. now, some seem to suggest we pursue different strategies, and there are, in fact, alternative strategies. and i've addressed these alternatives in previous testimonies. we don't recommend them, and here's why. one alternative would be to leave the complex and chaotic middle east, try to contain isil's danger to the united states and target terrorists entirely from offshore.
an approach of this sort has its attractions, since it avoids the many complexities of the middle east, but the reality is that such a containment approach simply cannot succeed in today's connected and globalized world, and i don't recommend it. and another alternative would be to introduce a significant foreign ground force, hypothetically international, although almost certainly preponderantly american to capture isil and other military seized by isil. as i testified previously, there are several problems with this approach that have led me not to recommend it either. in the near term, such a strategic approach would entail a significant military undertaking that, much as we'd wish otherwise, realistically, we would embark upon largely by ourselves. and it would be creeding our competitive advantage of special forces, mobility and firepower, instead fighting on the enemies' terms of ground combat amidst a local population that has
previously responded violently to such an approach. in the medium-term by seeming to western-ize or americanize isil by the populations of iraq and syria, we might turn those local people who are fighting isil, who are inclined to resist their rule, into fighting us instead. as chairman dunford has said, isil "would love nothing more than a large presence of u.s. forces on the ground in iraq and syria so that they could have a call to jihad." and lastly, in the long term, there would still remain the problem of securing and governing the territory recaptured, which in the end must be done by local forces. we cannot substitute for them. the bottom line is this, we can't ignore this fight, but we also can't win it entirely from the outside in. that's why we're helping capable, motivated, local forces in every way we can without taking their place. finally, i want to conclude with
a few words about resources. as i have serious concerns with the proposal from one of the defense committees to underfund dod's overseas war-fighting accounts by $18 billion and spend that money on programmatic items we didn't request. i have to say, this approach is deeply flawed and troubling. having detailed my objections yesterday before the appropriations committee, today in the context of this testimony, i just want to highlight the danger of underfunding our war effort. gambling with funding for our troops in places like iraq and syria. as secretary of defense, i cannot support such a maneuver. indeed, it is important that we provide our troops and commanders in the field with all the resources they need to succeed. and i know that with your support and with the continued dedication of our people and our partners, we will deliver isil a lasting defeat. thank you. >> thank you, mr. chairman. general dunford.
>> chairman mccain, ranking member reed -- >> secretary, i mean. >> chairman mccain, ranking member reed, distinguished members of the committee, thanks for the opportunity to join secretary carter in appearing before you today to talk about the counter isil campaign. secretary carter just provided a campaign update and an overview of our strategic approach. before taking your questions, i would like to briefly share my perspective on where we are in the military campaign and where we're going. mindful that isil is a transregional threat with affiliates located from south asia to west africa, our top priority remains to disrupt attacks against the homeland, the american people, our allies and our partners, regardless of the source. we continue to assess that the most dangerous threat remains core isil in iraq and syria. i just returned from iraq last week and received the campaign update from our commanders and iraqi leadership. i also had the opportunity to visit with our troops and to observe iraqi forces at their training sites. while the situation is complex with no shortage of political
and military challenges, i was encouraged by what i heard and what i saw on the ground. last fall it would have been fair to say that isil had the momentum. i don't believe that is any longer the case. without repeating the detailed progress outlined by secretary carter, i'll summarize that by saying that our strikes in conjunction with iraqi security forces, peshmerga and sunni tribal forces, we've reduced isil's territorial control, undermined its brand and aura of invincibility and destroyed much of its war-fighting capability. the enemy's resources and freedom of movement also have been significantly reduced, and the pressure we are applying is degrading the enemy's morale. more importantly, the progress of the last several months has instilled confidence in our iraqi partners. they believe they can defeat isil. currently, iraqi forces are continuing operations in the anbar province while simultaneously conducting shaping operations to isolate mosul. in the months ahead, iraqi forces, the peshmerga and sunni tribal forces will bring increasing pressure to bear
against the enemy in mosul. meanwhile, we will be aggressive in looking for opportunities to reinforce success, as secretary carter has said, and we'll seize every opportunity to maintain a momentum and increase the effectiveness of our partners. similarly in syria, the pressure we put on isil has degraded their capabilities, limited their freedom of movement and reduced their resources. in the past few months, the local kurdish and arab forces that we support have retaken a significant percentage of the territory previously under isil control in northeast syria. other vetted syrian opposition forces are currently fighting along the turkish/syrian border in operations that will put additional pressure on isil, further stemming the flow of foreign fighters and supplies into syria. the recent authorization of additional u.s. forces in syria will allow us to increase the capacity and capability of indigenous ground forces and set the conditions for operations against raqqah. in closing, i believe we've moved the campaign forward over the last few months. the progress is real.
with that said, we're not satisfied or complacent about where we are, and we won't be satisfied until isil is defeated in iraq and syria and wherever it attempts to take root. once again, thanks for the opportunity to appear before you this morning, and i look forward to your questions. >> thank you very much, general. you know, secretary carter, it's frustrating to a lot of us to, as you outlined the options that we have. the option that you left out, which is entirely doable, and i know this for a fact, is if we had about 10,000 of 100,000-person contingent of which the sunni nations would contribute that would go in on the ground and take raqqah and mosul. and when you talk about the territorial gains, you forget to mention that the second largest city in iraq is still in isis hands and they have still no strategy so far to retake raqqah. but it's really frustrating to us when you set up these strongmen that the only alternatives we have is to walk
away and the other is a preponderantly american force. that's not true. the other option is that we have been pushing for months and months -- years -- is an international force of which the united states would be a small component of, and that is doable. and when i keep hearing this, that oh, we only have these two choices, it's -- i say with all due respect, it's intellectually dishonest. now on the issue of the reprogramming. yes, i was, quote, blocking the approval of the reprogramming until yesterday when i had a very excellent briefing from general dunford that cleared up concerns that i had. and why did i have those concerns, mr. secretary? it's because when we spent a couple hundred million dollars the last time, then the commander of central command testified before this committee that we had four or five people
left after expending a couple of hundred million dollars in what i predicted would be an abysmal failure, which was making these people pledge that they would only attack isil. now, my question is, is that still the case with this force? are they prohibited from responding to being attacked by syria? >> thank you, chairman. i'll address both of your questions and ask the chairman to do the same. you're right, i described two bookends, if you'd like, and there are various gradations in between. so you're absolutely right. with respect to the option you describe of a 9-1 ratio of international forces to u.s. forces, that would be a highly desirable circumstance to be in. i do not doubt that. i have no indication from those countries, despite a lot of
effort, of a willingness to do that. and then the second point i'd just like to make, and then i'll leave that point, is the -- as i was describing the possibility of foreign forces entering iraq and syria, i tried to describe there the welcome that they might receive and the remaining issue of sustaining territory once it is taken and held, and i think that's the principal strategic issue with a large foreign force, whether american or -- >> please accelerate your answer. >> i will. and second, on the 1209 program, thank you for that, chairman. i just want to acknowledge, and i acknowledged this last year -- we made a disappointing start at
that, and no bones about that. we have changed the approach to that fundamentally. i hope -- i believe -- in fact, the chairman has described that to you, and that's the basis on which you've indicate d willingness to support it. just to be brief about what the difference is. we were trying when that program was initiated to make forces brand-new forces to counter isil in syria. our approach now is to identify, and this is where the special forces have been valuable to us. forces already fighting isil whom we can enable with the great might of the american military. that's our new approach. >> thank you. don't want -- i got it. do you believe that the cease-fire is collapsing, general dunford? >> chairman, i do believe -- >> and we know what happened last time before the cease-fire, and that was that the russian air was bombing the daylights out of the moderate forces, many
of which we had trained and equipped. what are we going to do with the collapse of the cease-fire, a resumption of russian bombing of american trained forces? what is going to be our option there? >> chairman, if our forces are attacked by regime forces, we have the authority to respond. >> will we give them the ability to respond? >> we will, chairman. >> that means surface-to-air capability? >> it does not mean that, chairman. >> well, i guess i have to go back to the problem that we face, and that is that with the cease-fire breaking down, with millions of refugees, with 200, at least 300,000 people killed and the resumption of hostilities, now with russian air practicing indiscriminate
bombing, what are we going to do about that situation, and can we count on a couple of thousand american train-and-equip forces to reduce or counter what is clearly a consolidation of power on the part in the hands of bashar al assad? i hate isis, but it isn't isis that's killed 300,000. it isn't isis that's driven millions into refugee status. it's bashar al assad. and i wonder what you believe our options are in this obviously deteriorating situation in syria, which means a resumption of the slaughter, a resumption of the flow of refugees. mr. secretary? >> may i start and chairman join in behind.
we are intent upon fighting isil in syria because our principal and paramount responsibility is to protect the american people, and isil's trying to attack the american people. but i agree with you also about the assad regime, and it's a reason why assad can't be part of the future of that country, in my judgment, because of what he's done to his people. and i also agree with you that while the cessation of hostilities has had an important effect, particularly -- both in the north and the south, but very much in the south in permitting the humanitarian assistance, it is not being completely abided by, that is, especially by the syrian regime. and finally, you mentioned russia. and while you're mentioning russia, i'll just remind you of what i've said to you before, the russians said they were come in to syria to fight isil, and
that's not what they did. they supported assad. and thereby, prolonging the syrian civil war. so, that is a tragic situation, and secretary kerry is trying to work on that. and as you know, i can't describe here the full extent of our efforts with respect to the assad regime. but again, i'd just go back to our focus in this testimony and our focus pretty much in the department of defense, not exclusively, but largely, is on protecting america, and that means destroying isil. >> my time is expired. but obviously, according to general nicholson, the situation in afghanistan is deteriorating. isn't it imperative that we revisit the decision on reducing the number of troops in afghanistan by half now? and shouldn't we do that before these important meetings in june and july? either one. >> chairman, we're constantly
re-evaluating the situation in afghanistan -- >> but we have to make a decision. >> we do. we do. and we're constantly making -- >> will the president be making that decision? >> i think the president will be making those decisions. he's indicated a continued willingness to adjust to circumstances there and to ensure the success of something we've been working for a long time. >> but our partner allies know that before -- >> yes, i do. >> thank you very much. i apologize to the committee for overdoing, staying my time. senator reed. >> thank you very much, mr. chairman. again, gentlemen, thank you for your testimony. and in this very complex region, sometimes we have difficulties with our allies as well as our adversaries, and turkey has been both a supporter in allowing us to operate our incirlik and also someone who's not been completely cooperative in some of our requests. mr. secretary, you will be seeing them, i presume, in stuttgart. and can you comment on what you would like them to do more and
whether they are capable or willing to do that? >> thanks. it's a timely question and a very important one, because by dint of geography, they are the single most important of the nato western family of countries that can have an influence on the situation in syria. they are doing more, and i'm grateful for what they are doing. they're doing more along the border. they're helping us to operate in some ways. i can go into it in another setting. and i'm very grateful for that. i'd like them to do more. i've wanted them to do more for some time. i think i've made that clear. but we continue to work with them. they're an important party. they're an important ally. they can make a larger contribution. >> those are -- in the spectrum of possible operational approaches that you laid out,
the one that's being adopted now is rather light footprint, special operations troops, air, going in, trying to degrade both isil in iraq, isil in mosul. a most significant ground presence would require, i presume, an adjacent country providing both the operational and political support for a staging area. have you any indications of that being accepted, tolerated or agreed to? >> well, turkey's allowed us to operate out of incirlik. it would be an enormous part of the air campaign. very grateful for that. so, they are willing to allow us to operate against isil. and with respect to the special forces in syria, i just want to distinguish that from iraq. in the iraq case, there aren't special forces. we have thousands of americans that are doing all kinds of things that are necessary. they're logistics. because this iraqi army needs to be rebuilt.
it needs to be sustained. it needs to have its line of communications sustained as it goes up the tigris river valley towards mosul. there's a lot of pieces to this. the reason for these -- again, without going into a lot of detail -- for the special forces presence in syria is not their numbers themselves. it's their ability to go in, identify groups that are willing to go after isil and then bring down like a funnel of a tornado the great weight of the american military power through those forces and amplify, enable their effects. that's what they're so good at. that's why they're there. that's why we're increasing their numbers. >> i concur, but the point would be that those size operations, special operations, have been supported by adjacent countries. is there any indication they would support a large land force mobilizing on their territory and across their territory? >> i don't have any indication from the turks that they would
do that, no. >> let me shift gears. many on the committee have been urging that we take a much more proactive cyber presence in the conflict, and that seems to be emerging. and i wonder, both you and the secretary and general dunford could comment on the cyber operations? >> i'd comment very generally on it. i asked the chairman a number of months ago, admiral rogers, our cybercom commander and also the nsa director to take on the war against isil as essentially the first major combat operation of cybercom. he has done that. the objectives there are to interrupt isil command and control, interrupt its ability to move money around, interrupt its ability to tyrannize and control its population,
interrupt its ability to recruit externally. all of that it does in a cyber-enabled way. and so, we're talking about cyber operations in syria and iraq. and my feeling about that was and is very direct, which is, you know, we're bombing them, and we're going to take out their internet and so forth as well. in the modern world, that's necessary to defeat an enemy, and we've got to use every tool that we have. this is the first big test of cybercom. i have very high expectations they can be successful. let me ask that the chairman add anything. >> brief comment, please. >> let me add to what the secretary said. the overall effect we're trying to achieve is virtual isolation. and this complements very much our physical actions on the ground, and the particular focus is external operations that might be conducted by isil. >> thank you very much. thank you, mr. chairman. >> senate yoor reed. >> secretary, this week we've been talking about the 250
troops to be deployed, additional troops in syria and 217 in iraq. how many boots do we have on the ground now? in syria and iraq. >> in iraq the total is around 3,500 now. i just want to remind you that that's the force management level -- >> understand. >> it's not like we do everywhere else. and the special operations complement that we're multiplying six-fold is from 50 to those 300 in syria. >> okay. general dunford, talk a little bit about rules of engagement, because a lot of times they talk about train and equip. we know that would only include defensive activity in certain areas. where are they now on that? >> senator, are you talking about our forces? >> our forces. >> our forces on the ground, number one, they're going after isil, so they're unrestricted in going after isil.
that includes the air campaign. and if they're under attack and there's positive identification of an enemy and hostile intent, they are authorized to engage. >> they are. that's good. now, the question i have, the second question is all the activity. we have during the course of this hearing not really talked about anything outside of syria and iraq. but other things are happening right now. we're talking about in reuters yesterday the islamic state has greatly expanded its control over territories in libya, militants claiming key positions and all of this. our secretary director clapper recently warned that they're spreading in europe, they have opened the borders across europe, planting sleeper cells, so forth. general rodriguez, the commander of africa, says the i force there has grown with a presence in eastern cities. we're talking about eastern citizens, libya, tunisia,
algeria. but now it's going down further. it's in sub sahara africa. we're talking about somalia. we're talking about nigeria. and i have friends who say that even in the central africa republic and the eastern congo it's becoming apparent. now, my question is this. when we've developed africa to start with, it was developed without resources. they have to get their resources from ucom and other sources. and that being the case, it's -- what is happening right now -- i think if we say we had a strategy to contain isil that the strategy didn't work, that we are not containing isil. so, we're talking about our troops, what they're doing up there and the train-and-equip programs in syria and iraq, but what about these new areas that they're going into now? how are we going to be able to resource should we have to? what are your thoughts about that? >> i'll give a start and then the chairman's been working on
this very much also. you're absolutely right. we have seen, and director clapper -- i'm not familiar with the specific testimony, but i'm sure it absolutely right. and you know africa, of course, extremely well yourself, senator. there's a mixture of two things going on. one is a rebranding of existing extremist groups signing up, so to speak, to isil. and the other is newly inspired or newly funded nucleuses of groups. both of those are of concern. and i wouldn't say containment, i would say destruction of isil wherever it emerges is the right strategy, and it can't end with syria and iraq. that's necessary. it's not sufficient. we need to do it elsewhere, and we are both following those developments really closely and taking some actions, some of which we can discuss here, and
i'll turn it over to the chairman at that point. >> yeah, senator -- >> before your answer, is rodriguez right when he talks about the number of, the 6,000 number down there? >> i agree with that assessment, senator. i agree with that assessment. right now with regards specifically to africom, they're conducting operations there in libya. we have operations in support of libyan forces and the libyan government. we have as a result of his concept of operations reallocated resources. the secretary made that decision about a month ago, month and a half ago, to reallocate resources to africom to further develop the intelligence we would need to support operations in libya and throughout africa. we're also working closely with the french in west africa with a coalition in east africa. >> and in sub sahara africa, all the activity now in nigeria, the same thing? >> we also have isr in that area and are working with partners on the ground in that area. >> thank you. thank you, chairman. >> senator. >> thank you, chairman.
secretary carter, before i get to a couple of different questions regarding isil, i just want to bring to your attention an important issue facing our national security at the moment in terms of the availability of domestic trusted supply of state-of-the-art microelectronics for our military's weapons systems and platforms. you may be aware there was a recent sale of ibm's trusted foundry, which had been dod's sole source supplier of leading edge technologies for over a decade now to a company based in abu dhabi. i think that raises some serious concerns about the future stability of dod's trusted banker electronic source. i think between defense, microelectronics, the national labs and certainly the capable state-of-the-art industry suppliers here in the u.s., we ought to be able to fill that void, but i just want to urge you to take a hard look at that and make sure we have a long-term strategy. >> senator, thank you.
we have and we do have a mitigation strategy. i'd be happy to have someone come over and discuss it with you, but it's an important point, and we need a trusted source of microcircuits especially for very special and essential functions. >> exactly. well, i look forward to that. to the issue of the day, for both you, secretary, and general dunford. we all recognize that isil continues to be a very serious threat, but there have been some positive signs of progress since last year. and according to media reports, new foreign fighters joining isil, those numbers are at a significantly lower rate this time than they were last year. the news reports have suggested that they're on the order of something like 200 a month from something close to 2,000 a month a year ago. i want to ask you, are those numbers that we see in the media
actually accurate to what you attribute the sharp decline and whether or not cyber com, which you mentioned, is having a role in that overall as well? >> we do observe that trend. i think it's very hard to be precise about these numbers, but i think that that trend is one the intelligence community does say is a very discernible. at the same time, from my point of view, any is too many. so we're not done until there are none. but i'm told that that trend is observable and the numbers as well as we're able to discern those numbers. >> general. >> senator, i would attribute the reduction, and i'm with the secretary in terms of specific numbers. but i think the reduction is for a couple of reasons. one is we assess that foreign fighters come from about 145
countries, and a number of those countries now have come together in a more meaningful way to share information and intelligence. it's not what we would want it to be, but it's much better than a year ago. and we do have a specific organization that's been established to bring those nations together to exchange information and to be proactive about foreign fighters. and so, our visibility on foreign fighters has increased. secondly, the turks have been helpful in that regard, and i think the efforts that they have taken along the border have, in fact, reduced the numbers of foreign fighters that flow back and forth between turkey and syria. but again, at both areas, both with regard to what the turks are doing and with regard to the information and the intelligence exchanges that we have, we have much more work to do, and we're not satisfied with the level, but it has proven to make an impact. >> well, we appreciate that you don't intend to let up until the job is done. have we had any success in sort of cutting off the ability of isis to reach right into even
suburban communities in the united states and create a demand for, you know, i think a number of us have had news reports where kids in our own communities, teenagers, people in their 20s suddenly decided to buy a ticket and try to get to syria. how is that process going? are we able to cut off that sort of electronic foreign fighter source, and are we having an impact in that area as well? >> our effort in iraq and syria is aimed at making it more difficult for them to operate out of those locations, including by trying to lure americans into acts of violence. i do have to say that the law enforcement community and homeland security have an enormous effort here. homeland, i won't speak for them, but they're working extremely hard on that, and that's not in our area of
responsibility, but it's essential. so, they're working, so to speak, the other end of the problem. >> thank you both. general, did you want to add anything? >> senator, i was just going to say that one thing that's encouraging there was a recent poll that talked about the appeal of isil to islamic youth worldwide. there's been a fair reduction in that, and i would attribute that in part to our success against isil. and again, that narrative of invincibility has been shattered over the past year. the less success they have on the battlefield, the less of an appeal there is, the less the appeal they have to be a global caliphate. >> great. thank you both very much. >> thank you very much, gentlemen. general dunford, as chairman mccain just pointed out, most of the fatalities and civilian casualties in syria are caused by bashar assad's barrel bombs and air attacks. do you agree that we have the capability to take out assad's air force?
>> i do, senator. >> why have we not done so? >> we have not declared war on the syrian regime, senator. >> you're not saying it would take a congressional declaration of war to take that action, are you? >> i think it would take the president directing us to do that, senator. >> okay. so, i wonder why the president has not directed us to prevent these civilian fatalities and casualties by taking out assad's air force. >> the task he's given us militarily is against isil, senator. >> what would be your recommendation in that regard? >> specifically as to whether or not to attack the regime -- >> as to whether we should take out the air force that is causing the majority of the civilian fatalities and casualties. >> senator, i would prefer not to give that recommendation in public. that's a policy recommendation that if i was going to provide that, i'd provide it to the president in private. >> okay.
secretary carter, you said assad cannot be part of the future. is that the explicit view of the president of the united states? >> yes, it is, and that's why secretary kerry is working on a political transition to a regime after assad. as the chairman just indicated, we haven't undertaken to change that regime by force now for a number of years. we have not made that undertaking our focus in syria as the department of defense is on fighting isil because of its threat, direct threat to americans. but with respect to the tragedy, the civil war in syria, we're working on that political transition, but it's a political transition. our leadership i think has indicated it necessarily involves assad removing himself from the scene because of
exactly everything he's done to his people, which you've just cited. >> assad voluntarily removing himself from the scene. >> no, i think -- here's where the russians would do well to make what they do correspond to what they say. and that is to move the political transition forward, use the leverage that they have and that they've gained by intervening on assad's side to end the civil war and get assad to step aside while keeping some structure to the syrian government that can then marry up to moderate opposition whom we support and create a life and a government for the people of that shattered country -- >> well, we certainly have seen that out of the russian leadership. let me just ask, there were reports last december. there was an article in "bloomberg" saying obama no longer seems sure assad should go.
i think what you're saying is that that's not accurate. so, let me just make sure, is the president ruling out somehow working with the assad regime against isis in the short term? >> they have -- we have not worked with them. they've shown no inclination, we're not planning -- >> was the administration -- >> we're not planning to do that. >> is there a debate within the administration about that? >> i have not heard that idea broached. >> mr. secretary, a number of european parliamentarians i've spoken with in recent months have told me in private that they wish europe had worked with us on syria back in 2013, and frankly, i wish congress had been more resolute in that regard also back in 2013. senator cotton was a voice in the wilderness at that time. but now that our nato allies in
europe face the chaos of an unprecedented migrant influx, do you believe nato could help in substantive action against isil, and how could they be helpful? >> i do believe they could be -- i need to say more helpful because the nato countries, i think without exception -- we mentioned turkey already, its important contributions -- are working along with us on the same campaign plan. nato as nato has not been asked yet by the european countries. we favor that. and there are reasons why nato as nato is more than the sum of the parts, and i'm sure you appreciate that. so, i think nato as nato could make a contribution. that's being discussed with the secretary-general right now. i'll just say, with respect to the refugee crisis, the
europeans' preference has been to use the european union and not nato as their chosen instrument for addressing the refugee crisis. that is their choice. and so they have not asked in the main for nato to be a big part of that effort. we did take a step to assist when i was in brussels a few months ago to bring the turks, the greeks and the germans together to work at naval operations in aaegeegean sea ai at smugglers to stop bringing people from turkey to greece that have had some success. but the europeans in the main -- this is their choice -- have wanted the european union, not nato, to address the refugee situation. >> thank you.
>> thank you, mr. chairman. secretary carter, thank you for being here. thank you for all your hard work. last week an advocacy group called protect our defenders released a disturbing report detailing inaccurate and misleading information that was provided by the department to this committee during a hearing in 2013 and in follow-up letters about sexual assault cases. civilian prosecutors allegedly refused to prosecute and that the chain of command later insisted they be tried as opposed to simply approved on the recommendation of military attorneys. the report by protect our defenders and a follow-on in-depth investigation by the "ap" alleged that the 93 cases the department highlighted to prove the toughness of commanders in handling sexual assault cases were inaccurately described. i'm obviously very troubled by these allegations that the department, and specifically the military, provided misleading information to congress with the intent of defeating legislation that i and others on this
committee introduced to address the scourge of sexual assault in the military. these reports suggest an effort by the military to undermine this committee and congress' responsibilities to do oversight and determine policies. and if you looked at this, the testimony that was given by admiral winnefeld was quoted verbatim by several senators. so when you give testimony, senators listen to what is said and they will repeat it. so if you are giving false information, then senators are left repeating false information, which is not in the interests of justice or legislating. they also throw into question the veracity of other testimony given by the military and defense officials in front of the committee. so, if you looked into these allegations yet? and if not, do you plan to? >> thank you, senator. two things about that. the first is, it's absolutely essential that we give accurate information because it's important that we use accurate information to defeat this scourge. and i appreciate all that you've done and all of your leadership
in that regard. admiral winnefeld is an extremely honorable man, and i can't imagine that he would ever give information that was not accurate and to the best of his knowledge. i have in response to your question asked my staff to confirm the numbers that he gave. we will of course report that to you. and if i could just say on a somewhat different note, but because you raised it, it is sexual assault prevention and response month. and later this afternoon i will be recognize iing six tremendou sexual response coordinators from around the country at our bases here. i just wanted to put in a word for them because they are super. you had something to do with creating that role, and i appreciate it. but i have asked my staff to
confirm those numbers, and it's very important that we do. >> so, it's more than just numbers to be aware. it's about the characterization of what happened. >> understand. yes, exactly. >> and what the "ap" did so effectively is when the military said these cases were declined by local das and weren't going to be prosecuted, and because commanders insisted they be done, they were done. what the "ap" uncovered, one at ft. drum, in fact that was not the case. she did not decline to prosecute and she wouldn't have, but it was done collaboratively because they felt it was the best way for the military to proceed. so, it's not about numbers. it's about how what happened was characterized. and i also share your faith in admiral winnefeld, but i would like to know, are you going to investigate who gave him those numbers, how those numbers were compiled, how they were characterized, how they were given him in report form and who wrote those reports and provided that?
>> yes, we will confirm or not confirm those facts. and you're right, it's not just the number, it's the characterization of each case. and i have asked my staff to look into those numbers. it's important that we get it right. you're absolutely correct. >> and what do you think is the line that the department and military should draw when it comes to lobbying for or against legislation? >> our job is not to lobby. i think we're here to try to tell you the truth about what we're doing to the best of our ability and to explain the choices that are before the country, the resources that will be needed for things and our effor efforts. lobby is not a word i'd like to use with respect to our responsibilities. i think our responsibilities are to report to our overseers the truth as we best understand it. >> why can i expect your investigation of this issue to
be complete? >> just as soon as it's complete, i promise you. >> okay. thank you, mr. secretary. thank you, mr. chairman. >> on behalf of chairman mccain, senator fisher, please. >> thank you, mr. chairman. mr. secretary, what is the political end state that our military efforts in syria are trying to achieve? >> our military efforts in syria are intended to defeat isil and regain for local forces the territory now being tyrannized by isil and being used by it as a platform to attack america. we also have a political -- >> so, our military efforts, though, are focused entirely on isil, not the chaos that is happening in the entire country? >> that is correct. we have another effort which secretary kerry can speak to aimed at the political transition as we were discussing earlier.
>> do you believe that the efforts on the ground are favorable to this solution? that we're going to have? >> they have had results so far in the taking of, as i mentioned earlier, tisherenedan. there are other efforts i can't speak of here. then ultimately, the purpose -- and this is reason why we're -- and the president has given us authority to increase our numbers there. our objective, of course, is to collapse isil's control over raqqah. >> i assume you're referring to the deployment of another 250 soldiers -- >> correct. >> -- to help contribute to that goal, is that correct? >> that's correct. >> and if we have as an immediate objective to recapture raqqah -- am i correct in stating that?
>> yes. >> do you believe that the deployment of these 250 soldiers will specifically connect us to that goal then? >> let me talk to their purpose and then ask the chairman to pitch in as well, senator, but that is precisely the reason why we're introducing those forces, to identify and then enable forces that are local to the region and who want to expel isil from that territory, including raqqah. and along the lines of what we've seen in shidadi with the syrian coalition, which enabled by us expelled isil from that important town. we'd like to do that with raqqah as well. chairman, do you want to add? >> if i can just clarify a point. when you're talking about local forces, are you talking about sunni forces in the area? >> yes.
arab forces. they're the ones who live there in that area. >> and either you, mr. secretary, or general, how many sunni forces do you believe are going to be required for this operation to be successful and for us to reach this goal? >> senator, if i just want to go back to the purpose of the special operations forces. the increase of u.s. forces on the ground in syria is to do two things. to your original question, it's to grow the size of our partners on the ground and to increase their effectiveness. we assess right now that there are about 6,000 syrian arab coalition members. we perhaps have as many as twice that number that are currently in the vetting process as a result of our forces on the ground, and we expect those numbers to increase. with regard to forces in raqqah, that will be a combination of syrian arab coalition members but supported also by the kurdish forces that we have been supporting here over the past
year. those numbers are almost 30,000 kurdish forces there. so a combination of those forces, plus the support that we provide from the coalition will be required for raqqah. >> and going past just the numbers of the boots on the ground that are needed, are there, obviously, other capabilities that are going to be required for these forces to have? for example, what kind of equipment do they need? and are there any leadership or chain-of-command issues that you believe need to be resolved before this will be effective? >> the answer is yes, there are issues. and we're doing several things. we're assisting in the planning effort. we're providing logistical support, including ammunition. and with select groups with the authorities we have, specific weapons, vehicles, communications equipment, so forth, as well as training. those are the four main areas that are required for them to be
successful. >> are there leadership concerns, chain of command concerns within these forces, especially when we have our troops embedded with them? >> we have -- you know, that's been the purpose of the last few months, and that's why we felt confident increasing the numbers of u.s. forces there, because we believe the force protection concerns have been mitigated. we think the relationship that we have with these forces is sufficient for us to put additional forces there. >> thank you. thank you, mr. chairman. >> thank you. on behalf of chairman mccain, i recognize senator donnelly. >> thank you, mr. chairman. i'm going to yield my time to mr. manchin, who has a pressing engagement. >> thank you, senator donnelly. i appreciate that very much. and thank all of you for your service. and i'd like to direct this first of all to general dunford. general dunford, as both of you are aware, the defense department is forced to make hard choices in today's budget constraints. we understand that, too. recently it was announced that we are sending 250 of our
special operation operators into syria at costs of approximately, i understand, $1 million to $1.5 million to train one special operator, equally to $375 million to train those 250. on tuesday, this committee held a hearing to discuss the f-35 program which is still estimating the cost about $108 million per unit. i asked on tuesday if general bogdan thinks we're spending our money wisely. we're on track to buy 243 aircraft. knowing the type of fight we're expecting you to fight right now and defend our country. if we traded ten, just ten f-35's we could increase the size of the special operation forces by over 700. in the world that you see today, i guess, are we concerned we're sacrificing short term needs for
our long term security strategy? would ten less f-35's make that much difference down the road as it would make a difference today with 700 troops on the ground. >> you bring up the important issue we struggle with as we put the '17 budget together. we confront a wide range of challenges from russia, iran, north korea, china, as well as violent extremism. in effect the kind of situations you just outlined, are exactly the choices we made. we did in fact reduce the numbers of f-35's this year to balance in other capability areas to make sure that with the money that we had, the top line we had, we did the very best we could to make sure we are postured to deal with all those challenges. we've done exactly as you've outlined. >> i'mi saying i could ask themi talked today the general when he was here and asked him our troop strengths, mr. secretary i think we're scheduled to go to 980,000? >> in the army active and --
>> ask you point blank what does it take to defend the threats we have. he said one two. that's 220,000 troops short. i don't want to tell people that we're short on this one. we're looking at ways, knowing we're working under constraints. we're asking for direction that gives you the job to do, the wherewithal to do the best job you have to do. do you concur -- >> i'll -- >> -- 220,000 short. >> no, our number is 980,000. that's the end strength number that we and the army are aiming for, the 450,000 active component -- >> i know what you're aiming at, i'm sorry. i'm asking, what does it take to do the job? the general believes it's 1.2. >> that's the number we're shooting for, 980,000 -- >> you and the general are --
>> is adequate -- no, i think general millie and the acting secretary of the army's priorities are, in fact, readiness. that is the principle thing that the general and i and general dunford have focused on in the army. more than end strength where we're adding resources this year is to full spectrum training and bringing a total army back to levels of readiness that are necessary. if i can loop back to your special forces point, also, senator, we have a lot more than 300 special forces. not like we have to make these people. we're sending them there. we have tens of thousands of special forces. excellent people, yes, exquisitely trained people. it's not like we don't have them to apply to syria. we're applying them in the number and manner that makes sense at this moment.
let me ask the chairman if he wants to add to those questions. >> right now in this budget year i was more concerned with the capability of the force than i was the capacity. in other words, i wasn't satisfied that with the force structure we currently have we had sufficient training and equipment. and that was the priority this year, was to focus on the capability of the forces that we have, as opposed to the force structure. >> i'm just -- i'm concerned in the way you're explaining it, sir, i understand where you're coming from. it doesn't make sense from my way of trying to analyze this. because general millie was clear. he didn't hesitate. i asked him what it would take to defend the nation and face the threats we had. we felt that we were woefully short at 980,000. he truly did. if there's a difference maybe we can talk in a more secured briefing. >> we can. you're thinking absolutely
right. this is a question of balancing investments in structure readiness as the chairman said. that's a balance we all struck, including general millie and the leadership of the army. i just repeat, that the principle strategic issue that we are trying to address in the army budget is not for structure, it is readiness. that's general millie's and my principle concern in the army. >> my time is expire pd. the disknificationysfunction we body and on capitol hill shows we must put our country first in defense of this country versus our politics. it's a shame we don't get a good budget and we don't have to make difficult choices.
i'm sorry for that. >> amen to that, thank you. >> thank you for your appearance before the committee. secretary carter i want to talk about how our counter isis policy has been made. i want to start in the south china sea before we move on. you just returned from a trip to the philippines, we announced china has began reclamation activities 120 west of subic bay. is it the case if china were to reclaim scarborough shoal they could overwatch all flights out of the philippines and have risk of missile systems. >> it's precisely those kinds of concerns that i was working with the philippines. they're a treaty ally. we take that seriously. very seriously. that's why we are establishing some new installations from
which we can operate. so that we strengthen our own posture there then that's why we're doing the rebalance in general which is not just working with the increasing number of allies and partners who are coming to us saying we're concerned about china. we're getting more and more of that including places like vietnam. but it's also why we're sending our best equipment to the asia pacific why we're doing more. >> it's why last week i gather there were at least three flights conducted in the vicinity of scarborough shoal by u.s. aircraft? >> i prefer discuss that -- have you briefed that privately. >> media reports -- >> there's no question about it, we will continue to fly, sail and operate wherever international law permits. we do that around the world and we're not going to stop. >> media reports indicate the flights did occur but they did
not occur within 12 miles of that feature which would have been a more assertive action in conte contesting china's claims. i want to leave the south china sea and go to the point of the policy making process. >> could i interrupt? this is the second time secretary carter you've refused to confirm what's well known in the media. that's not fair to the committee. it's all been reported there were flights into the area around those islands. why you would refuse to confirm that when it's been in the media is i think not the proper deference this committee is owed. >> i'm only refusing because i believe it's classified information, senator. but i don't -- >> actually, i'm glad the chairman pointed it out. but i think it raises the point that i want to go on to now from your two predecessors secretary gates and secretary pinetta about the nature of policy.
secretary gates said obama's foreign policy is not as bad as it sounds. it's the way it comes out that diminished its effectiveness. they often end up in the right place but a day late and a dollar short. it presents an image that president obama is being dragged kicking and screaming to each new stage. it becomes incremental the message is lost. secretary pinetta. quote, i think what i've seen in the last four years is almost as cautiousness and over correction. which makes it appear that the united states is hesitant to take action and that send a message of weakness, end quote. both in our actions in the south china sea where we may or may not be flying missions going inside the 12 mile territorial ring, but also in the most recent announcement that we're going to deploy troops to syria, but only 250 troops. what would you comment on
secretary pinetta and secretary gates' position about how this policy is being made? >> i can't obviously speak for them or for the time that they were secretary. i can only speak from my own experience and ask the chairman to do the same. i am forthright as i told you you would be when you confirmed me as secretary of defense in giving the president my best advice. i'm also absolutely committed to making sure he gets professional military advice, that's where the chairman comes in. i've never failed to have a hearing for my views. and you asked and -- raised one particular, which i already addressed in my hearing, the additional soft in syria the numbers was precisely what the chairman and i