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tv   Key Capitol Hill Hearings  CSPAN  November 6, 2015 2:00pm-4:01pm EST

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minutes unanimity today. i will tell you, i'm not running for political office. i'm in this for only one reason. i came out of retirement for one reason, and that is to do this job. i will do my job to the best of my ability, and it will did the changes that lead to the right thing. announcer: robert mcdonald in washington, d.c. as we take you to the white house for the daily press briefing in progress, taking questions regarding the white house rejecting the keystone xl pipeline project. mr. earnest: the comment of it wouldatch -- no,
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not be wise after five years of negotiations with -- among 12 different countries, to try to renegotiate the agreement, particularly considering it was reached only -- as it relates to the argument he is making about deep concerns that he has for the financial well-being of the pharmaceutical industry, the fact is in these 12 countries -- what the pharmaceutical industry had been advocating for our 12 years of data protection of their products to ensure generic versions of their drugs cannot be sold for 12 years. they have a legitimate argument in terms of making a case.
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there should be some protection that they are afforded so they continue to have an incentive to invest in the kind of research and development that would yield new life-saving medications. so their desire for some protection is reasonable. what they have suggested is that peri of protectiono should alsod partnership. the agreement is in place an effective standard of eight years among the tpp member theons, and so pharmaceutical industry has suggested we fell short of our goal by four years. that fails to account for the current situation. right now there are five different countries who are part of the tpp agreement who have
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zero data protection for the pharmaceutical industry. thehis is a situation of pharmaceutical industry needing to acknowledge the glass is half full. they need to acknowledge that a previously empty glass is now almost entirely full. this is an agreement that reflects both the need to compromise, but it also reflects the need to ensure that patients in all the tpp countries have access to life-saving drugs, and if you put in place essentially that is too period long, you will deny a life-saving medication to those patients who need it, and that is why we believe both this is a ansonable agreement and agreement that is good for patients in all countries and an agreement that will improve the
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prospects of the pharmaceutical industry. the fact is we agreed to the agreement anyway. it is one that we continue to believe deserves strong bipartisan support in the congress. ok, ron? >> on keystone, the argument was made that 40,000 jobs would be made by this project. what was the finding about that? mr. earnest: you can look at the actual report, and there is a job creation analysis in the re. this would create a grand total of 35 grand total jobs in the united states. economic impact would be negligible based on the analysis that was performed by the state department. though the 40,000 jobs are
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temporary, they are significant. mr. earnest: those who make the argument are principally those, or many of them, have blocked the administration's proposal to make a robust investment in our infrastructure that would actually create more than 1.5 million jobs over 10 years. the fact that the matter is this is a proposal that is fully paid for, is a proposal that deserves bipartisan support and makes investments across the country that benefits everybody. for those who are making that argument, if they are interested in working with the in administration to create jobs based on investment in infrastructure, i have a great idea where they can start the efforts to my never is by focusing on the growth american act. >> [indiscernible] mr. earnest: he made that what the u.s.d on
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government has learned in the last few days. agrees there is it?lligence that's just mr. earnest: i am not prepared to offer my system from here, that one of the national security priorities we have to shareadhere to is as much information as we can with the american public about these kinds of matters that are relevant to our national security. as result of this information that the department of homeland in they has taken steps region to improve our security measures to ensure the safety of the american traveling public. >> you say based on a u.s. assessment, not based on a conversation with the british prime minister or something else, the point is there is an u.s. assessment information -- that there is a possibility of a bomb on flight. mr. earnest: there is
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information held by the us government that led to the president making that statement. >> you cannot give us an indication where that came from? mr. earnest: i cannot come up based on our reasonable need to protect sources and methods. -- can you describe the concern that the president sa that theid administration will and and there will be no two state solution. this is something that presidents have worked at and worked hard to achieve. there must be a tremendous feeling of failure, disappointment. what is it? mr. earnest: is disappointed about the fact that prime saids thattanyahu itself times are not right for a
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palestinian state. particularly the efforts of secretary kerry in this regard that the united states cannot make these difficult decisions on behalf of the parties. the u.s. and play a role in bringing the parties together and facilitate some conversation in trying to help both sides build trust, but ultimately when it comes down to making it difficult decisions, the leaders of the israeli people and the palestinian people have to make those decisions. the prime minister of israel is suggesting conditions are not right for the positive in state, it will be hard to have a two-state solution to the comfort between the two parties if one of the parties is adjusting the other cannot have a state. >> [indiscernible] i assessment is not there for a palestinian state, so the u.s. is basing its assessment primarily on what the israeli prime minister's
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is?ssment mr. earnest: we are basing it on the public comments of the israeli prime minister. the united states cannot impose a two state solution on israel and the palestinians. that would not be a smart thing to do, but even if we wanted to, he would not be able to. the fact is we have said this for long time that the leaders of the israeli and palestinian people's are ultimately going to be responsible for making the difficult decision that will finally resolve this conflict. it has been the u.s. policy for quite some time now, a policy that democratic and republican administrations have supported, to try to bring about a two state solution. based on the comments of the prime minister of israel, that seems not likely to occur over the course of the next 15 months. however, if that likelihood and that expectation will not in any
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way color the commitment of this deepentration to further the unprecedented level of security cooperation between our two countries. >> what is the u.s. doing on the palestinian side? mr. earnest: i know secretary kerry has over the last couple months, has been in touch with palestinian leaders, but for more details and you got to ask the state department. earlier if, i asked there was a move afoot to move the low 100 the number of detainees to be held before the year's end. has that changed at all, and the president's contingent yesterday, 56, if i am not mistaken, are eligible? is it the intention to have transferred?es
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mr. earnest: 53 is the number that was approved for transfer, and it is our desire to reach arrangements with countries around the world to save the transfer those individuals into theirions in which ability to threaten national security of the united states has been effectively mitigated. this is something the department of defense and the state department in particular are hard at work on, and our goal is not to get the population at there, below 100, it is the goal to get it to zero. i note the call for the closing facility at guantanamo bay and described it as a national security imperative. that should be a pretty clear indication that is the question yesterday about speaker ryan's disagreement with the
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president's desire to" on them at bay. president bush and five secretaries of state on way back to president nixon -- it is relevant to point out that speaker ryan is disagreeing with 28 generals and admirals -- end, is it the president's intention to have been transferred by the end of year? mr. earnest:mr. earnest: i believe there will be additional transfers that will take place before the end of the year, but there is also one that is prolonged a stone congressional congress be provide informed 30 days before one of the transfers can move forward. process, andwn the congress has been interested in slowing down the process, when
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we would like to work with them to make that process or efficient. they have declined to do that thus far, but i would anticipate there will be additional transfers before year's end. >> the president mentioned today that gasoline prices have already fallen. it the contention that they would not fall farther had this pipeline been approved? mr. earnest: that is the conclusion of this report, that is impact of gas prices negligible. >> i will ask you about case itd, where senator cruz has is a bill that would require a five-year minimum mandatory sentence for convicted illegal immigrants who commit felonies
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and then are deported and then return. is there a reason the president would not back something like that in the interest of the safety of the american people? mr. earnest: i think there are is a a lot ofmr. earnest: good reason not to back legislation that senator cruz has put forward. the idea if you are convicted of a felony and you are deported and you come back and commit a does notat delegated recent testimony locked up? mr. earnest: the actions that this administration has pursued to enhance accountability is to make sure our enforcement efforts are focused on felonies. right now the policy that senator cruz has exacerbated by opposing immigration reform brings us closer to that -- and if we want to be focused on enforcement and border security and making sure our communities are safe and that our efforts
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are focused on felons and not an families, then you would not be just a strong supporter of the executive actions that this president has instituted. you would be a supporter of the conference of immigration bill that have the senate with strong bipartisan support a year or two ago. gitmoollow-up on first, it was obviously one of his first priorities. what is the current thinking on the ability to keep that promise control oflicans' congress and their opposition to closing it? dateu still at this late see that this president will eat office have enclosed one-time bay?lose guantanamo mr. earnest: absolutely.
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this is a national security imperative. ,he president is determined despite the significant congressional obstacles that have been corrected to compost this goal. >> is there a way to do it without congress voting affirmatively -- mr. earnest: it will be easier if we can get congress to cooperate in an effort. >> is it possible to do without congressional approval? mr. earnest: i have not ouructed my own review -- preference is we would like to try to work with congress to get it done. i will not take it off the table the ability of the president to use whatever authority is available to him to move closer to a couple she this goal. i cannot say that with any specific action in mind. i just say it illustrates eu that the determination that the president feels to try to get
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this done. >> on the russian plane, putin has suspended russian flights to egypt while they try to determine what exactly happened. decision inade that consultation with russian intelligence. is there any consideration of a similar move here? this point, no. the safety precautions we believe are necessary are being implemented based on the decision of them was announced by secretary johnson earlier today to put in place of interim precautionary measures at a handful of airports in the region. >> are we working with russian intelligence on this? how much cooperation is there in terms of the cause, what happened? i. earnest: the only thing can tell you is u.s. officials have been in touch with egyptian and russian officials about this
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incident and about ongoing investigation. to press you on the plane, there seems to be a disconnect between something you said and just repeated and what the president said, which on wh one of you guys is right. ich. u.s.ay there is no investigators that are part of this, that they have been in touch with investigators from egypt and russia. the presidency to indicate otherwise, the we are going to spend a lot of time making sure and our ownations intelligence community figure out what is going before making a definitive announcement. expect your own intelligence and investigators will be able to do that while participating in
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the investigation? mr. earnest: those are two different things. i do not say they're not doing anything, -- >> other than being in touch -- so are they doing anything? mr. earnest: yes. >> what are they doing? mr. earnest: the fact is i am not going to be able to get into details about the activities of our officers as they take steps and work information critical to the safety of the american public. >> are you aware a judge and investigations have asked united states for help in some of the processing of the evidence they have recovered? mr. earnest: my understanding is we have made an offer of assistance like what you have there has not been specific request made at this point by egyptian officials for that kind of assistance. on the kind of assistance you just described. >> one last time, without saying -- areey are doing, is
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our investigators or officials involved in the process of without saying what --is mr. earnest: you're making it to complicated. i acknowledged yesterday that our security officers are trying to learn everything they could about what exactly happened. that does not mean they are working closely with russian and egyptian investigators. they are leaving their own investigation. that certainly is appropriate. this is a disaster that occurred on egyptian soil, that affected hundreds of innocent russian live. it is understandable they would be most focused on the street you can also expect as i said yesterday that u.s. national security officials, including our intelligence officials, are taking a close look at this morning as much as we can as it relates to information that could be useful to protecting american public. that is what led me to say yesterday that the possibility
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of terrorist involvement cannot be ruled out, and it is also the president yesterday say there could be a bomb involved. commentsday, the dea about officials, being in conflict with the president on this topic. is there something going on here, some concern that the president has? concernxpressed any that several of his law enforcement officials are [indiscernible] mr. earnest: i've heard him say that. the jerusalem is the second official to make that claim without any evidence. fact is that the evidence does not support kind. somehow our law enforcement
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officers across the country are shooting her duties and failing to do their responsibility to serve and protect the communities in which they are assigned. ask mr.d have to rosenberg exactly what point he is trying to make you might ask him if there is any evidence to substantiate the claim he has made. surprising that you expressingne surprise and then moving on if these were people outside the administration -- these are people who work directly for the president. at some point does the president hall them in and say shut up or whatever? they arest: independent long officers from so that changes the nature of the relationship.
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>> in terms of the prosecution of cases, he appointed them. mr. earnest: no doubt. >> at what point does he say -- your newspaper reported that the president had the opportunity to beat with the fbi director last week when they talked about these issues, and i will not get into details with butconversation, depending on director comey to participate in the strengthening of the relationship of the , andnforcement officers also to engage in debate around encryption, that there is a prime consideration of policymakers in this country that has to make about the balancing of the national security and safety of the american people with the need to protect the civil liberties of the american people. is somebody who
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brings a of experience to that debate from the president is counting on his participation in those deliberations. these are difficult issues. director comey is wrestling with that, and i think the president will continue to consult with him as they work through these challenges. theetting back to keystone, president said throughout this process in several occasions that the main criteria for approving the project would be that if the pipeline did not contribute to climate change. and during some comments made by some chief administration officials this morning, state department officials this morning, not just this morning but in the latest environmental assessments of the pipeline, stated that the project would not have an overall effect on emissions. said in hisy kerry
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statement this morning that the main driving force behind his recommendation is that he did not want to undermine the united states' ability to lead the world on climate change. so if the president's key determining factor on whether to approve this project, whether it contributes to climate change and that did not pan out and secretary seems to be saying that this has to do with undermining our ability to lead the world, was this a pr move? mr. earnest: no it was not. i differ with the present mess -- premise of your precious. i noted in his speech that he delivered to georgetown he said in that effects of the pipeline impact on our climate will absolutely be critical to determining whether this product is allowed to go forward. and the net effect of this project is not a substantial impact on gas prices or energy
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security or the u.s. economy or even a direct impact on climate change, but the net effect is it undermines the ability of the united states to can sing you to lead the interim -- to continue to lead the international community in response to this challenge. even the sharpest critical of change policy in the past has acknowledged the united states cannot do this alone, that we will need to persuade other countries to use our influence, to take important steps to reduce carbon pollution. so that is how i would answer your question, and that is why -- >> that was not statement of criteria to this process. mr. earnest: when the president delivered a major speech at georgetown -- >> whether the project would get your to climate change from a determination of the state department is the pipeline would not venture to climate change. mr. earnest: i will redo another
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believesy government we will judge this project whether it accelerates climate change or if it helps the american public with gas prices. the impact is negligible, courting to this report, and the fact is it would make it more difficult for the u.s. government to succeed in fighting the causes of change because it undermines our ability to persuade other countries around the world to join our efforts. so again, the president places out -- >> but he never said that the key determining factor would be climate change -- mr. earnest: i have never heard the president said that. my explanation for their determination -- thatt me see if i can dig appeared wanted to ask you about the president's comments about
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the possible bomb on the plane, getting back to michael's question. there are investigators on the case. there are u.s. investigators on the case. mr. earnest: there are u.s. national security officials that are using their capabilities to learn as much as they can about this incident and to understand what impact it could have on safety of the american people. as a result of their efforts and of what they have learned thus far, you saw that the director of homeland security announced a serious of interim steps that a aries of interim steps at handful of airports in the region that would be important to protecting the american traveling public and the department of homeland security has begun the work of implementing those steps. >> should u.s. travelers be concerned about flying to that region? mr. earnest: we always urge
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vigilance on the part of the u.s. citizens, particularly when traveling overseas, but for advice about where it is a to travel and where it is not and what precautions they should take, i would encourage them to consult the state department that has a website organized by country, where you can look at any travel advisories the government may have. this is updated on information collected i security officials -- collected by security officials and is consistent with information given to state department employees around the world. >> to get back to this comment the president made, i'm going to the -- as we are talking, he , we got to make sure it is not adding to the problem of climate change. we got the mission the creation of jobs -- we got to measure the
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creation of jobs against the problem of climate change. there is a new document transcript in the spring. you are saying the president did not make that statement in the process -- mr. earnest: read the last sentence again. we got to measure that gets whether it is going to do to an overall warming of the planet that could be disastrous. mr. earnest: we are engaged in an effort to build a policy response that produces carbon pollution and fight climate change, and that is not something the united states england. it is our policies we only implement in the united states have not have the preventing a warming planet. we will succeed is if we can get the rest of the international community, including the largest economies of the world, to go with us, and
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that is the construction of this this pipeline- would undermine the effort. >> the present inches size both sides for overhyping the significance of the pipeline, but as we have been discussing, it has now been rejected because of the symbolism of it. seemed a little hard to reconcile, that on the one hand it is overblown, but it is so symbolically crucial. i think the point the president has tried to make his we heard outside claims from advocates on both sides about the true impact of this pipeline. the state department spent years reviewing this project to try to determine the true impact. the fact is despite the claims
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pipeline, itof the were not have much been impact on gas prices, on energy security, and the impact on the broader u.s. economy is 0.02% when it comes to gdp. that is one side. there are some on the side of those who oppose the pipeline who said that the pipeline itself would contribute change.antly to climate based on the careful review that was done at the state department, there is reason to doubt that, too. what there is not reason to doubt what the diplomatic experts at the state department concluded is that the ability of u.s. officials to make the case of the countries around the world that they cannot just continue to pursue business as usual and that they need to actually implement policy changes that will reduce carbon pollution would be undermined if
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the was just going to pursue business as usual. this goes back to a basic tenet of this presidency. andcampaign slogan in 2007 2008 was changed you believe in. that is part of what this is about. one of the reasons we had been able to make so much progress in the last few years is because of our willingness to implement change, so we have made in investingogress in renewable energy. if we stay the course and looked to develop additional sources of oil and gas in united states and around the world, that would have been one option, but by investing in renewable energy, we are in a place where we have tripled the amount of energy reduced in the united states by the wind, and increase the
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amount of energy being produced by the sun. the president made a series of important commitments to energy efficiency, both in terms of fuel standards for cars and trucks, but also when it comes to energy standards that are in place for home appliances and even for buildings. and because of that commitment 2014ficiency, last year in the united states actually used less oil and gas than we did as a country in 2008, despite the our economy has grown. those kind of message are worthwhile and would not have been possible had the president not been willing to shoot some changes. changes --itute some
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institute some changes. there has been a willingness to take on wall street for. do we now have a financial system -- the president got a lot of criticism from the cable companies for weighing in on the net neutrality debate. but ultimately the president was speaking his mind, and that -- special to interests with the goal of trying to advance the present's isnda -- president's agenda his constant as president. >> if shell had not pulled out of the arctic with its drilling, which is been problematic -- mr. earnest: the fact is the well that shall was truly in the arctic earlier this year was that wasa lease
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acquired by sheltering the bush administration. this administration recently to cancel these sales in the arctic in 2016 and 2017. i think our policy as it relates to the arctic is consistent with decision announced today. the big to paris, seeure, does the president himself as trying to save the world with what he is working on with this? mr. earnest: what he seasons of trying to do is continue to mobilize the international respond to the urgent threat posed by climate change. i think this is one of those situations where the unique role of the united states international community comes united states, given the size of our economy, given the stability of our coming, given our influence around the
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globe is uniquely positioned to convince other countries to take significant steps to cut carbon pollution. those countries who are only willing to make those commitments once they saw the united states was not just talking the talk, but we're willing to walk the walk. this is been the latest evidence of our willingness, and that will not prevent the oil andanies from squealing washington politicians that they own from squealing even louder, but it will not intimidate the president as he makes a decision he believes is in the best interests of the country, our economy, of the health of our children, but in the best interest in the fire. permityou explain the application from a corporation -- why did the president feel compelled to come out and speak to the cameras? mr. earnest: all of you have the expectation that is what he would do, and given the law is on the books for consideration
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of these kinds of projects, it is presidential authority that is used to determine whether or not these projects move for her. -- forward. there is an executive order in it is the says prerogative of the state department, but it made sense he would be involved in announcing the decision. >> the president used language say it has gotten blown out of proportion. elevating it further, by speaking about it from the white house. don't you wonder whether or not that will make them more vulnerable to the claims this is further politicization of the ?the president is not mr. earnest: worried at all about the oil companies and the d.c. politicians they own that
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he is on the wrong thing. prevent him from taking additional steps he believes will be necessary, to look out for the best interests of the country and our company, to look out for the best interests of the health of our children and of the planets. respect, it was a few fridays ago when the president made a decision to put special operators on grant in syria, and we did not hear from him. so this particular issue, it seems very charged already, and so the president has decided to come out of it. it is lending some credence to those who are saying is just about politics. mr. earnest: i do not think the amount of politics has been injected into this situation would have been diminished if somehow the secretary of state has spoken instead of the president. >> can you look at the supreme it said it would hear
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appeals from several states regarding the mandate on contraception. your reaction? we have confidence in the power of the legal argument we may on the circuit court level that the policy that we have in place appropriately for millionsneed of americans that axis to birth while also protecting the rights for religious freedom that is protected in constitution. we had confidence in the power of his arguments based on our consideration of the arguments, but also based on the fact that there are seven appeals court judges that actually have side with us and favoredd the the policyion that we have in place appropriately strikes that else -- that
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balance. the court will have the toortunity consider the merits of that arguments, but we have confidence in the argument we will be able to make before the supreme court. >> office that will withstand the scrutiny? mr. earnest: the court will have to make their decision, but we have confidence in the persuasive power of the arguments we made. -- givention on tpp the calendar is looking -- with a long congressional recess, what are you saying to democrats -- mr. earnest: those french workweeks? what do you think the democrats who would rather -- the lame-duck session -- mr. earnest: there is no reason
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congress should wait more than a year to consider an agreement that was made public yesterday. there is ample time based on the process that is codified in the trade promotion authority legislation for the public to consider the details of this agreement and for members of congress to consider the heels of this agreement. to consider the details of this agreement. we hope it will follow the guidelines of the law and consider the details of the agreement. i know that some people referred to trade promotion authority as fast-track legislation, but a 90 before the president can sign an agreement that he is acknowledged he intends to sign i think would be an indication that congress' definition of facts is different than most people's. there will be ample opportunity for the american public to consider this agreement, for
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members of congress to consider the details of the agreement, and for congress to pass the agreement in less than a year. the aviation to sures, can you provide clarity on what we're talking about them and secretary johnson did not give details -- where are we talking about? how long are they going to be in place? let me say there are a few did just i can give you. we are talking about fewer than 10 airports, all of which are in the region. thatinds of measures secretary johnson has ordered are things like expanded screening that is applied to items taken on board the aircraft. the measures also include
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thated airport assessments are conducted in conjunction with international partners. there are other forms of assistance united states can provide the airport authorities that can be useful in better butring those facilities, the details of that kind of assistance is not something i can discuss them here. -- from here. these steps are being taken in airport facilities where the united states already has a collaborative relationship with the airport authorities. it is not necessary for us to go and will this -- and institute these measures from the ground up. ensure the is safety of americans traveling overseas. >> why was this decision taken
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-- hasrom what happened there been a revised assessment of the capabilities of actors in the region which has prompted this? mr. earnest: this is happening quickly. this is a reaction to the information we have learned incident in the sinai peninsula. secretary johnson has acknowledged these are steps he is ordered out of an abundance of caution. there is no specific threat -- these measures are not being taken as a result of specific threats to the homeland. it is the prudent exercise of an abundance of caution given the information that u.s. officials this airlineabout disaster in the sinai peninsula. >> are you taking this decision
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because your desk and has not made you believe that certain actors have more capability or pose a greater risk? mr. earnest: i would not say it that way. in some ways it is less than that. this is just a prudent response and the exercise of an abundance of caution based on the information that has been this possible terrorist attack in the sinai peninsula. a series ofust steps that the secretary of homeland security believes should be taken out of an abundance of caution based on what we know about what might have happened aboard that metrojet flight 9268. josh, did president obama know in advance of the decisions
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that secretary kerry made? mr. earnest: the state department has been conducting this review for a number of years now, and the white house ceived updates on the presses. the president had typically been briefed about those periodic updates. so the first time the president had the opportunity to consider the final determination of the secretary of state was this morning in his meeting with him. but based on the periodic updates that the white house has received over the years, i do not believe the president was surprised. >> does that mean the fix was in for president obama to embrace kerry's decision? mr. earnest: no, it does not. it means the state department did as they should, each is based on long-established precedent conduct a thoughtful
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-- andk review of this rigorous review of this project, they make a determination on the conclusions of the national interest. the president was regularly updated on the progress of that review and that is why the president was not surprised by the outcome. >> didn't he need more of an hour to decide whether to embrace the decision from the department? mr. earnest: sunday updates the president received, the president had a good idea about the direction this was headed. had reaction from the response from secure ride them not only called the decision sickening, but said it goes against a bipartisan majority in congress and the will of the american people? mr. earnest: the reference to the word sickening is exhibit a in the case i would make to you inflatinge are over the significance of this report.
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no denying many members of congress, including some democrats, do not agree with the president on this. president and his team have thought about this for quite some time. the state department carefully considered its. given the presence -- the responsibility the president feels for continuing to lead the international community to take steps to fight climate change, the president believes this is the right call. angela? >> following up on the question, it seems airports in the region where these measures are applying -- how would you define region? mr. earnest: not more than by describing it in the region in which the sinai peninsula is located. >> back to the pipeline. keystone was not the only pipeline waiting approval.
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there is also another pipeline. where read anything into that will go based on the conclusions they? mr. earnest: exhibit b, that the decision to run the keystone pipeline was overhyped, i cannot recall ever hearing of the pipeline whose name you just recited. [laughter] i do not know whether or not there is an ongoing process or not to consider that project if there is. it will bent inviting the kinds of standards that are described by the law. you point out that there are thousands of miles that up and built inside the united states since obama took office. in fact, the southern segment of the keystone pipeline was built in the last couple of years
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while president obama has been in office. the argument that we are making ite is very specific, but does not mean that no more pipeline will be constructed in this country over the next few months. >> opponents of the keystone decision say that it will lead to more -- and the administration has acknowledged that is a light effect. there have been safety problems with oil and rail, and are decisions that would delay safety components for railroads to comply with. how does the president do with the effect of the keystone decision? mr. earnest: what you described as a fact is the source of significant doubt based on the analysis done by the state department. the state department said that thoseploitation of resources in western canada
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would likely only be economically feasible if the ande of oil was between $65 $75 a barrel. that is the way that the project could be economically justified. and the fact is right now you can buy a barrel of oil for less .han $50 the longer term -- at least the near and midterm production for to price of oil continues foresee prices at or around that level. there is significant doubt whether or not this moves forward. that being said, the president's transport to the safe of materials like oil is significant.
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i know there was recent regulatory action around improving the safety of some of the rail cars that are used to transport oils within the united states, and that is consistent with priority that the president and his administration has placed on rail safety. a couple things. report thatis a showed hillary clinton -- [indiscernible] statehe was secretary of acknowledging based on her training, there was a determination to know what is what is andap + -- is not classified. [indiscernible] mr. earnest: i believe investigators have found nothing was marked classified. >> is she supposed to know based
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on what she is -- speak anyt: i cannot documents she may have sign. i do not think it undermines her argument because the fact substantiate their argument she is been making for a number of months now. [indiscernible] with chris christie talking about the abduction issue, and going back a week, we have to release of about 6000 prisoners. there have been some law enforcement groups that projected to that release. is there is an increase in opioid, heroin sale, and a half years and people back into the society
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that they will return to that. do you think that would be a return at a time when we have this going on, opioid, heroin addiction? mr. earnest: the president has had the opportunity to speak about the need for our society to confront the challenges posed by those who have an addiction toopioids and heroine. talked about how communities in west virginia have been significantly and negatively affected by the presence of opioids. there are a number of steps that can be taken, some of them law enforcement, but many of them not, that can try to address this problem. to formerlys incarcerated individuals, the president had the opportunity earlier this week to travel to
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newwark look at programs prisoners andsing being successfully integrated into a society's, and the assistance that is offered to substance abuse treatment. there are a number of facilities inmateshe country where can try to be treated for those kinds even while behind bars. those are the kinds of things that our society will have to think broadly about as we confront this significant challenge. ahead, i leteek you get started on your weekend. on monday, the president will host israeli prime ministers netanyahu at the white house . he will discuss regional issues come to
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peacefully prevent iran from andiring a nuclear weapon, he looks forward to discussing the relationship palestinian's, the gaza strip, the west bank and that need for a general advances for a two state solution. the visit is a demonstration of andpontoon united states israel, as well as the unprecedented security cooperation, including consultation to further enhance security. mother unit, the present will deliver remarks at an organizing for action event and will deliver remarks and answer questions at a dinner. willesday the president attend meetings at the white house. on wednesday the president will host a breakfast to honor families of veterans and veterans on veterans day. the president will visit arlington national survey to participate in a sermon. on thursday the president will the medal ofin
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honor for conspicuous gallantry. that will take place in the east repaired on friday the president will attend meetings in the white house, and on saturday the president will depart for turkey, beans, and the legend for his weeklong trip to attend the g 20 at turkey and a handful of multilateral meetings in asia. next week should be interesting. francesca -- >> on monday, the not so there's going to be joint press conference. am i understanding that correctly? mr. earnest: i do not believe there will be a news conference on monday. >> are you able to say why? mr. earnest: no, but we can look into it for you. thanks, guys. [captions copyright national cable satellite corp. 2015] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit]
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announcer: any questions during iefing.ez the keystone developer pledges to seek another permit. canada, newly elected prime says he isudeau disappointed, but looking forward to a fresh start with the obama administration. trudeau blames the failure of the project on stephen harper's failure to address u.s. environmental concerns. obama talked about his relations with the new canadian leader and the administration's stance after meeting privately with secretary of state john kerry,
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president obama: several years ago a review process began other view of the pipeline of it. canadian oil through our heartland into the gulf of mexico and out into the world market. this morning secretary kerry informed me that after extensive public outreach and consultation with other cabinet agencies, the state department has decided that the keystone xl pipeline would not serve the national effort of the united states. i agree with that decision. this morning i also the opportunity to speak with the prime minister trudeau of canada and while he expressed his disappointment giving candace --ue -- canada's should provide the basis for even closer ordination between
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our countries on forward. in the coming weeks senior members of my team will be r's in orderh thei to help deepen the cooperation. for years the keystone pipeline has occupied what i frankly consider an overinflated role in our clinical discourse. -- political discourse. it became too often use as a campaign cudgel rather than a serious policy matter. all of this obscured the fact that this pipeline would neither be a silver bullet for the economy, as was promised by some, nor the express lane declined disaster proclaimed by others. to illustrate this let me briefly comment on some of the reasons why the state department rejected this pipeline. first, the pipeline would not make it meaningful long-term contribution to our economy. aboutcongress is serious
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wanting to create jobs, this was not the way to do it. if they want to do it, what we should be doing is passing a bipartisan effort structure plan in the short term that could create more than 30 times as many jobs per year as the pipeline would and in the long run with benefit our economy and workers for decades to come. our business is created to hundred 68,000 jobs last month. he created 13.5 million new jobs over the past 68 straight months, the longest streak on record. the unappointed rate fell to 5%. this congress should pass a serious infrastructure plan and keep those jobs coming. that would make a difference. the pipeline would not admit a serious impact on those numbers and on the american people's prospects for the future.
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the pipeline would not lower gas prices for american consumers. in fact gas prices have already been falling steadily. the national average gas price is down to about $.77 over a year ago. it's down one dollar over two years ago. it is down $1.27 over three years ago. today in 41 states drivers can find at least one gas station selling gas for less than two dollars a gallon. while our politics have been consumed by debate over whether or not this pipeline would create jobs and lower gas prices, we have gone ahead and created jobs and lower gas prices. third, should think dirtier crude oil into our country but not increase america's energy security. has increased america's energy security is our strategy over the past several years to reduce our reliance on dirty
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fossil fuels from unstable parts of the world. three years ago i set a goal to cut our oil imports in half by 2020. between producing more oil at home and using less oil throughout our economy we met that goal last year. five years early. for the first time in two decades united states of america now produces more oil than we buy from other countries. the truth is the united states will continue to rely on oil and gas as we transition, as we must transition to a clean energy economy. that transition will take some time. but it is also going more quickly than many anticipated. think about it. since i took office we have doubled the distance our cars will go on a gallon of gas by 2025. tripled the power we generate from the wind. multiplied the power we generate
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from the sun 20 times over. our biggest and most successful businesses are going all in on clean energy. thanks in part of the investments we have made there are already parts of america were clean power from the wind or the sun is cheaper than dirtier conventional power. the point is the old rule says we cannot promote economic growth and protect our environment at same time. the old rule said we cannot transition to clean energy without squeezing businesses and consumers. but this is america and we have come up with new ways and new technologies to break down the old rules. american energy is booming, energy prices are falling, and over the past decade, even as our economy has continued to grow america has cut our total carbon pollution more than any other country on earth. today the united states of
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america is leading on climate change with our investments in clean energy and energy efficiency. on climateleading change with new roles of power plants and will protect our air so our kids can breathe. america is leading on climate change by working with other big emitters like china to encourage and announce new commitments to reduce harmful greenhouse gas emissions. in part because of that american leadership, more than 150 nations for presenting your the 90% of global emissions have put forward plans to cut pollution. america is now a global leader when it comes to taking serious action to fight climate change. frankly, approving this project would undercut that global leadership. that is the biggest risk we face. not acting. today we are continuing to lead by example because ultimately if we are going to prevent large
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part of this earth becoming not only inhospitable but uninhabitable in our lifetimes, we will have to keep some fossil fuels in the graph rather than burn them and release more dangerous pollution into the sky. as long as i and president of united states, america will hold ourselves to the same high standards to which we hold the rest of the world. three weeks or now i look forward to joining my fellow world leaders in paris where we come together around an ambitious framework to protect the one planet that we have got while we still can. if we want to prevent the worst effects of climate change before it is too late, the time to act is now. not later, not someday. right here, right now. i am optimistic about what we can encompass together. i'm optimistic because our own country proves every day, one step at a time that not only do
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we have the power to combat this threat, we can do it while creating new jobs. while growing our economy. while saving money. while helping consumers. and most of all leaving our kids a cleaner, safer planet at the same time. that is what our own ingenuity and actions can do. that is what we can accomplish. america is prepared to show the rest of the world the way forward. regular much. thank you all. >> some reaction to the keystone decision from the 2016 president of candidates. senators ted cruz and marco rubio tweeting similar responses. ted cruz writing "as president i would authorize keystone xl and we would get americans to work." marco rubio writing open quote when i'm president, keystone
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will be approved and the backward energy policies will come to an end." writing "the obama administration politically motivated rejection of the pipeline is a self-inflicted attack on the u.s. economy and jobs." democratic candidate bernie sanders tweets "as a leader in the opposition to keystone xl from day one, i strongly apply the president's decision to kill this project once and for all," former maryland governor martin o'malley tweeting "thanks to the president for getting this done with a link to his plan to deal with climate change. you can watch the president's. announcement again on c-span we will have it tonight at 8:00 eastern time along with some of the latest reactions. every weekend the c-span network features programs on politics, nonfiction books, and american history. as the nation commemorates veterans day, saturday starting at 11:00 a.m. eastern, american history will be live from the national world war ii museum in
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in newd's as we look -- orleans as a look back seven years to the wars and and his legacy. we will to museum exhibits and take your calls and tweets. starting this week and every sunday morning at 10:00 our new program "road to the white house rewind" take a look at past president of campaigns through archival footage. this sunday will feature ronald reagan's 1979 presidential campaign announcement. and on c-span saturday night at 8:30 the steamboat freedom conference debate, the effect of legalized marijuana in colorado and other states around the country. sunday evening at 6:30, our approach to the white house coverage continues with former maryland governor and democratic presidential candidate martin o'malley it will speak at townhall meeting at the university of new hampshire in durham. c-span2,afternoon on book tv starting at 4:00 eastern , is the boston book festival featuring nonfiction author presentations including jessica stern on the terrorist group isis. about to and his book
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iraq and afghanistan war veterans who use their military discipline and values to help others. and james were in his book "the nearest thing to life" on the connection between fictional lighting -- writing. a book discussion of former first lady of massachusetts ann romney on her book "in this together" about her journey with multiple sclerosis. get our complete we can schedule at more than half of the health insurance co-ops created under the health care law are closing. a house subcommittee held a hearing this week to find what caused the failure. members are from the chief of staff of the centers for medicaid services and several state insurance officials. the hearing then about 2.5 hours.
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>> good morning. the subcommittee will come to order. the subcommittee convened this hearing today to examine another obamacare failure, the co-op insurance loan program. of the 23 co-ops that sold health insurance plans, unfortunately 12 have failed to date. the represent $1.23 billion in federal taxpayer money. since co-ops must pay an outstanding debt or obligation before repaying the loan, it's unlikely the federal government will ever recover these funds. originally intended to increase choice increase competition among insurers, they are -- 36%rally flawed allowance would go unpaid. in 2012 the office of management
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and budget protected taxpayers with these 43% of loans offered to the program. the following year, a hhs report --ressed concern about -- 223 clubs operating in 23 states. this total does not include the corporate veil before it and rolled the single person. cms award at a club in vermont with 30 million taxpayer
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dollars. in 2013 vermont state insurance commissioner denied the coalescence to sell health insurance on its application fatally flawed. the federal funds that already been spent to establish the co-op about 4.5 million taxpayer dollars were never recovered. over 120,000 individuals which amount to 1/5 of the co-op and release nationally. opportunity premiums are too low and it was concerned about its ability to pay claims to providers or it. it received $145 million in federal loans but operating losses over 126 $3 million. we are grateful and will be joined by a senator vitter run out to a vote on the senate side. he will talk about the cola programs in nebraska. -- co-op programs in nebraska. andbolstered six co-ops
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dire financial situations. three have since closed. it's doubtful the cms will recover any of these additional funds. several factors have caused the co-ops to fail. in other cases the cost of premiums were too low. july 2015 audit issued before on rush of co-op closures the 21 or 23 co-ops incurred net losses. in 2014 anticipation of love and romance -- low enrollment -- so, --. less money was paid into the risk quarter program that was expected. insurers ended up with 12.6% of the payments. they were anticipating. given the dismal financial situations, they hoped risk quarter payments would bail them out. the risk quarter program was always a -- intended to be budget neutral.
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2014 a in early spokesperson from cms conference the quarter policy model on the quarter envision a partida was supported on a bipartisan basis was estimated to be budget neutral and we intend to limit it as designed. -- implement it as designed. we will hear from individuals on the ground in limiting and regulating co-ops from day. one we will hear from space -- we hear from individuals to establish co-ops and the challenges they face to balance requirements and keeping co-ops afloat. we will hear from the auditors. who will speak to the financial challengers. cms aboutl hear from not only what was wrong, but how we can fix it. with the goal of recovering taxpayer dollars to the co-ops. thanks to all the witnesses for testifying today. the ranking member.
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>> thank you mr. chairman. i am sorry that this important hearing has been impacted by the votes today it is an important hearing. from day one i have worked with the state of colorado and the administration to help our co-op succeed. across the country they have provided consumer focused coverage options and have a -- injecting competition into the market. another are facing financial challenges and unfortunately will not be able to compete in the 2016 marketplace. we have seen announcements about co-ops closing the doors, including the co-op in my home state of colorado. i'm very disappointed that the colorado division of insurance was compelled to shut down the co-op. alsoce challenges but helped 83,000 colorado wins for two years.
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it was well on his way fiscal stability. i'm disappointed at the way cms has managed this problem something equally to blame is us. congress. i believe congress has not worked as a partner to support the emerging co-op market intending to bring more choices to a market frequently dominated by one or two insurers. i wish we send the co-op in colorado but if we can't do that, i hope we can use our time productively today to make sure the remaining co-ops are successful. unfortunately i know better than that. i know that hearing before the subcommittee with the title "affordable care act or obamacare" in the title somehow will not be a productive endeavor. we will not spend the next several hours learning from the experts before us about the challenges faced by the co-ops and what we can do to improve them. oversight anding
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set of taking 61 votes to a policy affordable care act. instead my colleagues on the other side of the aisle prefer to settle the sidelines and refer the law to failed. congress has squandered the last five years by celebrating every bump in the road as we implemented the law rather than focusing on how to make it better. even worse, some of my colleagues have intentionally placed roadblocks that it actually made it harder for their own constituents to access care. i am not suggesting the affordable care act has been perfect. far from it. i think the important thing from these bones in the road is to recognize the problems and try to move the ball forward. we can work that, together to improve health care coverage for millions of americans. -- is op-ed, the senator guess he's not going to testify. he said in an op-ed last weekend
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"this is not about spreadsheets. it's about people." frankly i cannot agree more. it's about people who for the affordable care act face skyrocketing health care costs. it's about people who wrote the mercy of health insurance companies that could raise rates or deny coverage for arbitrary reasons to protect their profits. it's about people who feared and on expected medical costs could bankrupt them. thanks of the affordable care act, they don't have to face these uncertainties anymore. americans are no longer one accident or illness away from financial ruin. chairman, our constituents should be able to depend on congress to work productively in a bipartisan manner to improve the health care landscape in this country. that is what i hope to do today. to hear from time the experts before us about how we can make the remaining co-ops 60. as i said earlier, i've had some hard questions.
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i want to know what went wrong with the risk mitigation mechanisms designed to promote competition and ensure stability in the insurance marketplace. i want answers about how the co-ops wind up owing money to the big insurance companies the risk adjustment programs. i want to understand white cms over the summer that risk quarter collections would be sufficient to cover all payments while listen three months later they revealed they would only be able to pay 13% of the requested amount to insurers. i want to know whether cms is thinking outside the box and coming up with a past forward. thanks again to all of our witnesses for coming today. thanks for waiting bully went to vote. i think we will be waiting again, or you will be waiting again and it only go back to vote. your expertise will improve the lot in the lives of our
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constituents. i hope that numbers on both sides of the aisle have come ready to hear your ideas so we can finally have a productive hearing on the affordable care act. rep. murphy: this big -- mr. mckinley? representative mckinley: i agree this is about people. failure of the co-ops affect real-life consequences. people are hurting and confused. the collapse of the west virginia-kentucky co-op these 56th -- 56,000 policyholders frantically searching for new coverage. ago the coal industry was booming and we enjoyed the seventh best on a planet rate in the country. theunemployment rate is now fifth -- is the worst in the nation 45% of coal miners have lost jobs the last three years. thousands more affiliated with the coal industry have lost
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their paychecks. these individuals and their families are hurting. they found a piece of mine in knowing that at least their families health care was secure. unfortunately that comfort did not last long. families enrolled in the west virginia-ishaqi co-op at happy -- west virginia-kentucky co-op have lost their coverage. the red flags were not addressed after the co-op failed. p instead of hitting the pause button, they awarded $350 million in additional funding. 12 of the 24 co-ops have already failed. i intended to ask who will be responsible for the medical bills that incurred by families all across? who will pick up those costs when hecs are not there? will cms give flex ability to families confronting the crisis of the lost health care? what about -- with only one
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statewide exchange available in west virginia, one, failure will not result in the families in west virginia paying 120% higher premiums and they were last year. is that fair? anotherue is not about failed obamacare program costing taxpayers in excess of billions of dollars. is an opportunity for us in this room and in congress to express our compassion and empathy for the hard-working families that have lost their sense of security. i look forward to the presentations today and i yield back. rep. murphy: dr. burgess? representative burgess: i think it's important we are having this hearing today. there is a lot of policy in the affordable care act and a lot of it was bad policy. the co-op program is no
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exception it has wasted millions of dollars it has suffered from a lack of oversight is greeted instability for millions of patients. the model was fundamentally unsound from the start and another example of the administration's desire to construct dangerous instruments with our nation's health care. let us not forget the ultimate patient protection is the assurance that their insurance carrier will not simply evaporate in the night. leading patients without the coverage in which they rely. are shut down,s accounting for $1 billion in taxpayer dollars lost. the rate of failure continues to accelerate. in fact the subcommittee staff struggled to finalize materials for this hearing because co-ops were failing and announcing failures faster they can finalize the memoranda. we will hear from witnesses the center for
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medicare and medicaid services continue to stand in the way of the flexibility that the remaining co-ops need to become sustainable. we should not stand by as more and more taxpayer dollars are lost, more taxpayer dollars are invested in failed experiments, and millions remain at risk of losing their insurance as covers for co-ops continue to close the door. i yield back. >> thank you mr. chairman. i would to thank eyewitnesses, especially commissioner from tennessee for joining us. we are fortunate to have you in our state and we are fortunate to have your guidance we look forward to what you will tell us about the failed co-op we have -- in our state we represent appreciate cms for taking the time to be here their answers we need as we conduct our oversight into diligence. i yield back to you rep. murphy:
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mr. vallone for five minutes. >> thank you mr. chairman. while we passed the formal care act we dramatically change the health-care landscape in this country the law has been historically a success. it may access the conference of health care a reality for the american people. before the incredible care act was passed the interest of any -- system is broken. it had rapidly rising costs and painful inequalities february 2010 headline months before the aca was passed declared "soaring ratings reflect unsustainable health system." americansmillion could be discriminated against for pre-existing medical conditions ranging from diabetes to breast cancer to pregnancy. many insurance plans lacked important benefits and limited coverage. these things are no longer true.
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because of the affordable, people that were previously gained -- deemed uninsurable are finally getting coverage. insurers cannot cancel a woman's policy just because she becomes ill. women are no longer discriminated against and people who cannot afford insurance before are now able to do so. the co-op played a critical role in this post aca world. they put choices and consumers hands. they prioritize the customers instead of the coming overhead. they fostered competition in the marketplace by bringing down prices. they do exactly what we had in my movie past the affordable care act. in today's hearing should be an opportunity to examine how we can ensure the remaining co-ops 60. wish me talking about how to infuse competition into the market place to bring premiums down. we should be figure out ways to have our constituents have access to high-quality a formal health care. i am worried that this is not what this will be about. we have had dozens of hearings on the affordable care act those
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hearings have had only one purpose, to undermine the affordable care act regardless family people it actually helps give it they more often served a highlight only the flaws in the program. i look forward to when a having a hearing mr. chairman were experts can talk about what is working and there is much to applaud in that regard. we should be taking this opportunity to do valuable oversight. the affordable care act oversight of the last five years has never served to invite the committee nor to improve the law. it has done the opposite. it's incredibly frustrating to hear republicans criticize the law time and time again without offering productive ways to improve it and get better health care to more americans he needed. over 60 votes to repeat -- repeal or undermine the law, most of the majority would rather rude for failure than help move the law forward. finally i have heard many of my colleagues on the other side of the aisle admit in the clothing of the co-op many disappears -- many beneficiaries will have to
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find a policies. they are crying mr. burgess, why did you try to get the governor and the state legislator to expand medicaid? that might help. .rbis blackburn --ms blackburn, many people that sign up for the co-op had no insurance prior to their existence. over the voices of concern when people cannot afford insurance over uninsurable because a child at a pre-existing condition? i think it's sad to have a productive conversation about how we can improve the affordable care act and the lives of all of our conditions. -- constituents. i yield back. rep. murphy: we will get through as much as possible. they will swear you in and get your testimony. if you don't beautiful five minutes, you don't need to have a full five minutes. the committee is holding an investigative hearing. do any of you have any
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objections to testifying under oath? they all answered no. we advise you that under the rules of the house you are entitled to be advised by counsel. do any of you desire to be advised by counsel today? you? to identify counsel please. thank you. will they be testifying? thank you. anyone else of counsel today? thank you. would you all please rise and raise right hand and i will swear you in. you'reere the testimony about to give is the truth, the whole truth, nothing but the truth? thank you. you are now under oath and subject to penalties set forth in section 18 of the united states code. we will start with ms. mcpeak from tennessee. you may give a summary of your statement. >> good morning chairman murphy and nevers of the subcommittee. thank you for inviting me to testify.
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from thee mcpeak department of commerce in insurance. committee leadership roles of the national association of insurance commissioners as an executive member of the international association of insurance supervisors and is a member of the federal advisory committee on insurance. i spent most of my career it insurance regulation, previously serving as a commissioner of the kentucky department of insurance your it i have a strong if any for the country state-based system of oversight. i will highlight the history of tennessee, -- tennessee's co-op. my, so focus on events this year. cha was awarded $73.3 million in loans and advances from cms to launch the company. cha first offered plans on the federal facilitated marketplace and 2014 with plans and five of tennessee's eight service areas. the company achieved a minimal
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membership in 2014 to enlarge -- due in large part to having price significance -- and having limited network options. the companies never ship and great challenges were compounded i a population that was less healthy and thought more medical services and projected. cat recorded a net loss of approximately $22 million at year-end 2014. -- projected medical costs continued to significant increase. the department and cha quickly recognized that such growth was too much too fast. i department wrote a letter which you have an exhibit one to hhs secretary birdwell on january 8 replies -- requesting an immediate enrollment freeze on cha due to the company triggering the departments financial condition standards. the decision to freeze in roman and remains the right decision for the company. mid-2015 the department
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conducted a thorough actuarial review of the company's proposed 2016 rate. after conducting a review department of -- almost 45% for 2016. throughout 2015, cha peta more than 40,000 covered lives of reducing gun on was 25,000 on the ff and where they remain today. we were not go to formally unfreeze the company until we reviewed initial results from a targeted financial examination and financial viability given and until cms released federal guidance on a risk corridor program. the department was notified by cms. that cha was being placed on an enhanced oversight plan. it was followed by risk guidance everybody for significant reduced risk payments. the announcement in the newly created network efficiency.
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the 18.5apartment of milley garside want to be counted a surplus in the loan term for change to be identical to the term of insolvency contributions. the department told cha, and it into have that that statutory accounting principles will require the money to be classified as surplus if they bilaterally agreed to the loan the -- cmserm see in approved it was not written. they are working closely and corporate for success of runoff. our focus is on tennessee first and foremost. my staff of monitor the situation closely. the runoff will continue well into 2016 and it may be additional surprises but as of today cooperation between the three entities has helped insurers have a smooth transition.
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thank you for the opportunity to discuss the experience with the subcommittee. i look forward to your questions. rep. murphy: mr. donaldson, commissioner for the the louisiana department of insurance. could you please pull the microphone to your face. >> maybe i should point it. thank you. thank you mr. chairman for the invitation and the opportunity to be here today to speak briefly about our experience in louisiana. let me start of the outset by telling you a little bit about myself and if assessing the point i'm here on behalf of my state of louisiana and not as a representative of the national association of insurance commissioners although i am an active participant having served as its president in 2013.
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i have been insurance commissioner since 2006 and was recently reelected for the third time in beginning my next four-year term as we speak. louisianaon of the cooperative around the u.s. was a welcome part from my perspective although i have said repeatedly throughout my time is commissioner that if i had been here i would've voted no on final passage of the affordable care act or other concerns. enough for the creation of co-ops. i saw that as a mechanism to address competition which i believe is the most important aspect of consumer protection in my state. are my top insurer, blue cross has 70% of the individual small group and large group market. my friends that stored mississippi have a more dominant
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view that in the when i said them in alabama is even more dominant. the well-intentioned purpose of the creation of these co-ops to put consumers in control of it insurer and to create more competition in our states, i welcomed at the outset. having said that i now described the effort to create health insurers in the environment that existed as the rollout occurred of the affordable care act. i have analogized it to be so much a learning how ail in a -- s hurricane. it was not possible to succeed under the circumstances. much happened in my state that affected that. we licensed our co-op in april of 2013 and they began signing up enrollees in accordance with the loan agreement with cms in october of 2013.
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that loan agreement called for them to sign up 28,000 lives. they used up with 9000 instead. in the several months between their approval and the beginning theyeir doing business, have the challenges of the issues presented by guarantee issue, no lifetime limits, age cap's, etc. not to mention the need for them to go out and rent a network of providers in a not very friendly to a purchaser of such service environment. they had a higher a tpa to do claims, to do their premium collection and payments. they had built a marketing network of agents. all of that in a relatively short five-month amount of time that frankly in hindsight was not functional. the next challenge came with the rollout on june 30 by cms on the
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transitional reinsurance program numbers and the risk adjustment program numbers. and where the co-op would receive $10 million under the reinsurance payments, it would 07 $.5 million under the risk adjustment program. that are presented a $5 million hit to the bottom line. it triggered our calling them in on july 1 the leadership of our co-op to tell them they should actually make the decision to go into runoff before the enrollment period began on october 1. the board voted to accommodate that request from our folks and they began doing that. are at the louisiana co-op financial situation is dire and we are doing everything we can to preserve and to network a group of providers and make sure their policyholders will continue to have coverage through the end of 2015.
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now, as state regulators have the unenviable task as i have of trying to wind down a company while at the same time conserving it. in doing so, unlike tennessee, without the protection of a guaranteed fun to assure those health-care providers that their bills would be paid. let me talk for a few minutes about our relationship -- rep. murphy: you are out of time. we have one vote. hereve a senator who is and if he -- we have one vote on the floor. >> the problem is they are down to about two or three minutes left in the vote. i don't think they will hold it open for us. with all the respect, i will ask the members a good on a vote. rep. murphy: we will have to hold off.
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come back as quickly as possible in which you reconvene in about 10 minutes. thank you. rep. murphy: we are joined in bringing back in the junior senator from nebraska, senator taught jeff fortenberry emily cain is in congress. we are thankful. make sure you turn your mic off -- you are recognized for five minutes. >> chairman murphy in ranking members of the subcommittee, thank you for inviting me to testify today. forpreciate the opportunity how we should response to the failure of the co-ops in 13 states. i'm tempted to joke that two co-ops have failed while you were off voting.
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it is a problem. it is let hundreds of thousands american scrabbling to find new health plans this fall. before we dive into the details, i suggest we take our partisan hats off. i'm a fierce opponent of the affordable care act. i know many of you might be strong supporters of the aca. but i don't think that is what the hearing is about today. this is about getting to the bottom of what is actually going on, why so many of our neighbors are losing their health care coverage. the tumultuous failure of the aca co-op began in my own backyard. it began with co-opportunity. it is headquartered in nebraska but had a majority of its subscribers in nebraska. the goal of the hearing is to get to the co-ops and went to speak to two issues. first, while there is much we need to understand, we would know so far would suggest a systematic failure of the co-op program. and an even greater bureaucratic incompetence.
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secondly the lack of , transparency is harmful. the department of health and human services owns the american public answers. republican or democrat our , constituents deserve nothing less than a full accounting of what has happened with this program. the co-op program was included in the aca to purportedly foster exchangesn in the new by federally funding the startup of 23 nonprofit health insurers. to get them off the ground, taxpayers loaned them to $2.4 billion. after less than two years, the program has a failure rate of over 50%. the first failure, headquartered in iowa but majority of subscribers in nebraska, was arguably the messiest because members of the program lost their health plan in the middle of a plan year. co-opportunity have bee awarded $145 billion of taxpayer loans.
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the new insurer had garnered about 10 times the number of enrollees and was seemingly successful. despite ample funding and obviously far more enrollees, on december 16, 2014 -- the iowa insurance commissioner place it under his supervision order. by january 23, the iowa insurance commissioner deemed it rehabilitation and possible and sought a court order for liquidation. after just one year from the new not-for-profit insurer abruptly collapsed. this was a terrible midyear shock to the 120,000 will opportunity and release, a majority in my state. these people were forced out of their plans and had to go through the grueling process of signing up for coverage on all over again. with lots of uncertainty and fear about how their families might be covered or might not be covered. so why did co-opportunity
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failed? curiously, nine months later, we do not have any answers. sadly, the messy demise was just the first of the dominoes to fall this fall. now a total of 12 co-ops will be closed by the end of the year. these 12 were awarded more than $12.1 billion in loans and had more than half a million enrollees. another noteworthy failure is health republic of new york -- the largest in the nation. it received more in taxpayer loans than anyone. totaling about $265 million. in late september, the announced they would be ceasing operations at the end of the year, but just last friday, the state health insurance regulatory body revealed the situation was actually much worse than have been understood. a review conducted in conjunction with cms now finds the previously reported findings were not an accurate representation of health republic's financial condition.
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the co-op is planning to close down as fast as possible, instead of being in business until the end of the year. that means that more than 200,000 enrollees in help her public will have to pick a new insurer and plan to maintain, as well as planning for next year. the new coverage, which they now have to sign up for, will be expiring at the end of the next month. and they will have to begin the process all over again of trying to find a health insurer. the sudden disruption and consumer confusion is eerily similar to what happened to nebraskans and iowans. with inaccurate filings on the with inaccurate filings on the new york co-op and with more than $1 billion in taxpayer loans out the door, there are more questions than ever regarding the co-op program at large. and if those that are responsible for regulating it knew what they were doing.
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i do believe it is essential that hhs answers basic questions and all of this should be demanding that. for instance cms awarded , additional solvency loans to co-opportunity and health republic new york. and the kentucky health cooperative, all of which have since closed were now closing. with cms doubling down on the initial misjudgment by awarding additional loans, how to decide to make these loans? did they have any expectation they would be paid back over they only going to be used to the threeate claims? insurers for operating a substantial losses that seem in the stems from poorly pricing of products. one analysis measure the difference between the silver plan premium for a 27-year-old single person in the state to the corresponding insurance market for all other carriers. he was what they found. co-opportunity in nebraska and health republic in new york and
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the health cooperative of kentucky they were pricing their products more than 20% below their competitors. how could this be possible? should hhs have given more taxpayer numbers given the anomalies of the model? moreover, hhs has yet to address if and when taxpayers will be repaid for the loans that have closed. these are the types of questions in the information that hhs should be providing to the american people through congress. why are they not? the lack of transparency thus far has been terribly disappointing. i started asking questions right after co-opportunity failed, without receiving a response to my question, i asked more when a second co-op failed in louisiana. by the time eight more had gone under, i elevated my answer. i try to get answers to these questions. these are good governance, not partisan questions. i elevated my questions by pledging we would oppose the fast tracking of all nominations
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for the senate. since that announcement less than three weeks ago, four more co-ops have closed. cementing further that this is a systematic problem and still we do not hear from hhs. faced covers disruption and the taxpayers that footed the bill deserve answers. cms needs to provide a complete accounting of what is going wrong, and i hope that starts today with your important hearing. thank you for the invitation. rep. murphy: i thank you, senator. i think he will head back to the senate. we do appreciate your insight and persistence on this. we want to continue to work with you. >> let me just add, you do not hear my opening statement, i said the same thing as you did. this should not be a partisan issue. we need to figure out what is going on with the co-ops closing. >> possibly better oversight. rep. murphy: thank you. we will now continue with the
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panel, next up is dr. peter belinson. your recognize 45 minutes. -- for five minutes. >> thank you for inviting me to testify today. as the chairman said, i am president and ceo of evergreen health co-op in maryland. a maryland-based co-op founded in 2012. i also serve as to all of the ceos, is a board member for the national alliance of state health cooperative. and i appreciate the opportunity to appear before you today. discussing issues affecting evergreen and the other co-ops. as several of you have said, while many of the elements of the aca have engendered significant partisan disagreement the notion of , establishing local consumer driven and innovative options, while enhancing competition in the marketplace, should be appealing across the ideological spectrum. the question we now confront with remaining 11 co-ops, how
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can they succeed and how can taxpayer investment be preserved? unlike the difficulties experienced by many others in their first two years, evergreen health in maryland is strong, due to our quick and nimble response to 1% conditions in our first year of operations. going into the current open enrollment, started a few days ago, we have a healthier than average enrolled population due to a diversified business. we have greater than $35 million in assets. we have risk-based capital and solvency inadequacy of 30%, and in each month we've been turning a profit. he can be a profitable mechanism. our strong relationship with governor larry hogan and his staff continues to provide us with significant support. evergreen, like all others, takes very seriously our obligation to pay back the loans funds granted to us by the federal government. however, several regulations developed by cms at their
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discretion, not as required by provisions of the aca, are significantly impeding the ability of the 11 remaining co-ops to successfully innovate and compete with a few carriers left on each state's respective markets. in light of these concerns i would like to highlight three solutions that can forge a successful path forward. let me be clear these do not , require an act of congress, they do not require additional appropriations by the congress. first, as the co-op successfully market themselves and capture larger enrollment, they would need additional solvency dollars to continue to meet state regulatory requirements. however, as you know, cms has no additional funds to assist. the solution to this issue is to allow individual co-ops to raise capital. in fact, as you may remember, the ability to obtain private capital in section 1322 was one of the measures by which the
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original applications were judged. cms should amend the loan commitments to allow taxability of raising capital because the restrictions on obtaining additional capital are not required under the aca section 1322. second, risk adjustment creates additional issues and formal is -- formulas applied by cms are skewed due the benefit of pre-existing insurers with administrative ability and years of claims data. the solution? cms provides the risk adjustment formula for providing a level playing field for all carriers. third and finally, the risk corridor payments. the solution is a swift revolution -- resolution to the current funding deficit for the program will go a long way to improving the balance sheets and long-term outlook. finally, we at evergreen health hope that both sides of the island congress recognize that the nonprofit member governed
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co-ops are trying to forge a new path to give consumers increased choice in their coverage. this competition has had demonstrable effects. the co-ops have brought and innovative approach to the marketplace and thus additional choices to consumers. for example, evergreen health offers a value-based product for diabetics in maryland. it is pushed the marketplace considerably. which removes virtually all financial barriers, co-pays, and and -- deductibles to services, medications, and care that is needed to keep a diabetic patient from developing a myriad of complications from the disease. in conclusion, i share the concern protecting the initial investment. the solutions i propose today do not entail an act of congress or any additional appropriations. they simply require cms, the congress, and the co-ops to work together to make sure the remaining 11 co-ops are preserved and taxpayer dollars
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are preserved as well. thank you very much. rep. murphy: now we will hear from john morrison the vice , chairman in montana. john: ranking members, neighbors of the subcommittee, thank you for inviting me to testify. my name is john morrison. i was montana's insurance commissioner in 2001 to 2008. i chaired the any ice health insurance committee. i'm the founder and past president of the montana health club. co-ops into the marketplace in in 22 states and 2014 on a providing coverage to one million americans. they are brought much-needed competition to the marketplaces, giving consumers more choices and introducing innovations. and in saving consumers and taxpayers money. montana, where i live, as a co-op. wyoming does not. both states are on the ffm. in 2013, montana's average monthly premium was 18% lower than wyoming. in 2015, with the montana health
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co-op in the picture based on , the second lowest tiered plan, montana is now 40% lower. 2014 states with co-ops that average silver plan receipt percent lower in states without co-ops. in 2015, among states, the delta was about 13%. and over $500 per person for the year, based on the roughly 3.7 million americans enrolled in co-op states in 2015, consumers in the states have already saved more than the total cost of the co-op program. moreover, when rates are lower, subsidy cost to the federal government are lower. taxpayers have already saved at least hundreds of millions in subsidies and would have saved billions of the decade ahead. one study published projected that if co-ops kept rates down by 2%-5% the savings over the , next five years would be $17 billion. so the question is not how much
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co-op loans have cost the taxpayer. the better question, how much has the closing of co-ops cost the consumer and the taxpayer for years to come? this question should be studied carefully. so i thank you for holding this hearing today. senator kent conrad said the long knives came out to kill the co-ops in their cribs. we need to get to the bottom of this and find out who killed these co-ops and how much americans will pay for that mistake. i got involved in the co-op project at the request of others, because it believed co-ops can break the inflationary spiral in our system. in my opinion, the following conduct of congress and the administration has contributed significant. one, the $6 billion in capitalization grants were changed to loans. two, they were prohibited to using loan funds for marketing.
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three, in 2011 when dozens of groups began meeting to turn them into a nation right -- nationwide reality congress , slashed funding from $6 billion to $3.4 billion. four, omb directed caps to prevent co-ops from achieving 5% market share. five, in late 2012, 24 co-ops had signed loan agreements and more than 40 additional groups were awaiting review. congress responded by rescinding the remaining lending authority and prohibiting cms from authorizing additional co-ops. six, although co-ops and not yet opened doors, congressional committees attack them and tied them up with excessive document -- expensive document demands. seven, requirements were more than twice as high as other insurers. eight, they were allowed to early renewed their noncompliant policies and preselected good risk degrade the marketplace , pool.
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nine, were prohibited to access private capital. 10, in year one, co-ops were prohibited from limiting enrollment on state exchanges and the ffm despite limited capital. 11, many co-ops were forced to pay risk adjustment to existing carriers without consideration of the effect of early renewals or the co-op solvency requirement. 12, recently, congress reneged on the risk corridor. paying less than $.13 on the dollar. americans will pay billions of dollars more in the years ahead because these co-ops are closing. there are 11 co-ops remaining. in my written statement, i make recommendations for measures that should be taken to maximize the chance for long-term survival. i hope we can discuss some


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