tv Key Capitol Hill Hearings CSPAN September 22, 2016 2:00am-4:01am EDT
the pen after a severe reaction to a be staying. no one should have to go without an assertive product because of cost. that is why i went to the commissioner last week, along with members of the new mexico congressional delegation, requesting that the fda you lies all available resources to build -- i would like you to answer for them because i think the real question they have of you and the fda is, how did we get to this point? what happened to create this situation, how we got into a monopoly situation that we're talking about. could you describe that is simply as possible how you think we got here. that it terribly troubling this company now is further
trying to encroach into the market because they are apparently going to put out a generic and so they are trying to keep the market to themselves. they have their own at the pen -- epi-pen. could you try to answer that s ugly as possible, how did we get here? rex for most drugs once they lose their patent protection and mostey can have generics, rugs to get generics. but some drugs do not. either they have large market, they have patents that say in -pen has patents to go through 2025. be aher cases, it might small market talking about for
other patients in new mexico seeing price rises or a single source drug. only one company sells it. and so in all these cases they do not have competition. in the u.s., that is what keeps prices down is competition. there is some reason that competitors have not enter the market and broad prices down. quick to have approved for these , why isn't someone stepping up and saying there is a lot of money to be made here, who do point to to say what is causing this monopoly situation that has these astronomical prices? rex there is one other competitor on the market. others were pulled off,
one was pulled off for performance problems. for a drug like this in a situation like this you want it to work. you do not want to say what fda should rush something through even though it might not work all the time. if that were your life at stake, you would want it to work every time. so we have to make sure that if there is competition here that it works to the epinephrine auto injector and it will deliver the life-saving medication when we have a life-threatening anaphylaxis happening. rex mr. chairman, just to wrap up. you mentioned that patents over and over again that seem to be part of this. i know it is not in the jurisdiction of this committee but i think that is something we should be looking at is what the patents are doing to create monopoly situations. we appreciate your service and thank you very much for being
here today with us. thank you. recognizing the senator from montana. rex thank you for coming here today. we are here because of huge spikes in the prices of specific prescription medications. i share senator udall's concerns . we have seen a 400 and -- 400% increase. life-saving drug and delivery system that not only people in new mexico rely on, people in montana and all across the nation. without the competition in the market these spikes will go and check. i'm concerned about the impact, some of him have to choose between buying their prescription drugs and buying food. we need to increase competition as you have mentioned. creating market checks on the price of drugs and decreasing costs for those who need them. you highlight the savings that
generic drugs afford, saving 1.62 in dollars over the past 10 years. in montana to has translated to $682 million saved in 2014. according to the generic pharmaceutical association's wasric report, lipitor $3.29 a pill before the generic was introduced in 2011. the generic now sells for $.14 a pill, a 96% savings. my question is what are the fda and the office of generic drugs doing to incentivize the production of more generics particularly when there is little or no competition while maintaining drug quality and drug safety? is we expeditedo applications where there is no competition. if it is a first generic, if there is just a brand we
expedite that competition. often nowadays with the modern program we have we will approve multiple copies because that often drives the price down more than a single copy. if there is just one generic and the reference drug has been withdrawn so we have a sole-source situation than we will expedite that is well. that application. or multiple occasions because we do not know which one is going to get approved. rex going along that line of thinking, entering the market would help create other examples like lipitor. by reducing the turbulence we see in the market and decreasing costs. the fda has provide -- has proposed modifying but there are concerns of this would prevent some generics from getting to market. since you have delayed the obligation until next year what
provisions are you considering to help ring generics to the market? rex this rule is not about helping bring generics to the market. we got a lot of comments on the road, we had a public meeting after the proposed rule was published and we received a large number of comments from stakeholders and we are still a value -- evaluating those comments. -- in termsoking at of the concrete example there are certain applications being assigned what they call target gold dates instead of target action dates. a gold date is not binding. clarity to the applicant. what are you doing to address those concerns? rex under the agreement we made under a generic drug user fee act, we agreed to have a goal , 14, 15, and 16.
acts of 10target months. if someone sends in october 1 ans year, if they send in approvable application it can be reviewed and responded to. exit is not binding. rex sometimes there are other factors that come in. goal is wels, our would do to 90% of them within the 10 months. works. how they program rex by shifting it would speed up the process and create more certainty? dates thatrlier for thection date where anylog that did not have goals associated, our agreement
under that was we would take an action on 90% of those by the end of the five years. we already did that. we exceeded that by 15 months. we have acted on almost all of those. cracks my time is up. to conclude i understand there is more than 14,000 approved generics and i believe incentivizing new, safe, and effective generics and moaning opposition is important. thank you for your thoughtful comments. i encourage you to facilitate by reducing these barriers to entry and by preventing -- providing stability for manufacturing to plan effectively and continue to bring safe and quality generic drugs to market. successes.a lot of rex thank you. youindicated earlier that have the ability to prioritize within the backlog and you listed a few criteria by which you might prioritize.
i'm interested in knowing, you indicated in your comments to my colleague the ranking member, you use the word only game in town. what you mean is little or no competition. is that a criteria by which you can prioritize from that backlog ? rex yes. clicks you do that? rex yes. it is not just the backlog. you are not so many in there. even application would -- we got today we would still try to prioritize that it were a single source. if it was only one drug on the market. quite ok. you indicated that in your testimony in part a response to oftenstions that substance within the application process is insufficient for an approval. and therefore that application is still pending and would be
considered in my words, part of the backlog. it is waiting on the applicant to do something more to make that application more viable and potentially approvable. the summary of what we are talking about. cracks yes. this is notd that about crossing the t's and dotting the eyes. the -- you indicated that you let the drug companies know where there might be problems. they have the opportunity to correct those issues as the process is -- the application is going through the process. cracks that is correct. cracks and so it is not like starting over at the end. you do not deny an application id say to the drug company,
am sorry, you do not qualify, you do not get our approval. go fix something and come back and apply again. a complete we do is response. we send out a complete response. these are the things you must do beore your application can considered approvable. that has to include the facilities. often an application may have saved 14 facilities around the world that they are relying upon for testing as part of the manufacturing, as part of the packaging. we have to make sure those facilities are in good standing. perhaps they may have to work on improving a facility, it might be in another country or switching to a different facility. these are the kind of problems they face sometimes. processs that approval involve inspection or is this a paper process is to mark cracks there are a large number of
facilities around the world that make generic drugs for the u.s. or test drugs or do the equivalent of testing. we try to have a schedule for inspecting those every several years on a regular basis. will be newere inspections, new facilities that will come in with the application or it they will be doing something never did before, they will be making a sterile product which is different than making a tablet. we would go in and inspect as well. sometimes there it -- they are inspections. we will not inspect them again if they are in good standing. clicks is there a common denominator for drug monies that are required to submit additional information during the approval process, those are in the backlog, is there a smaller company as compared to a larger company, someone who is new to the market, a new entrant pharmaceutical
business? rex we wish. we have tried to discern this and what is causing this problem. drug user feeeric program, almost no generic trucks were approved on the first cycle. they were all deficient. often they went through four cycles. that was the -- there was a tremendous amount of work. there was a long time. many of them could submit before the patent has expired so they had some time to work on their application. trying to do a lot of analysis to answer your question. we want to know that too. how can we remedy this situation . up in the 85%, 90% first cycle approvals. over the 20 years of that program we have taught the
industry what they need to do to send in an approvable application and we meet with them before so they can get to the application efficiently. rex i will follow up on that. >> they were forced off roughly a year ago. do we know if mylan is paying them to keep that product off the market? would that be legally allowed under the law? not a decider. allowed for one company
to pay another to keep the device off the market? >> i do not know. i am not a lawyer, i am a doctor. >> it has been discussed in the private sector. >> and buying up other companies to keep their products off the market. you mentioned and i do not want to put words in your mouth but essentially referred the generics having a potentially powerful positive effect on lowering the cost of drugs. in the interest, should congress be looking at making sure that there are not strategies in which name brand drug companies keep generics off the market? >> yes. we believe that we are subject to some of these is the senator
talked about. sometimes using the rems, a restricted program for safety as a reason not to give the product out. >> i was appalled to hear that that somehow the name brand company can prevent their competitor from getting enough of the drug to do the very studies that you are requiring. forldn't that be grounds them being penalized in some way -- it is another strategy to prevent a competitor legally entering the marketplace. >> we have been talking to the .embers about these problems we have a long history of citizen petitions which congress had taken some actions on before. before filing citizen petitions to prevent the availability of
generics based on various scientific issues that are raised. >> is it trying to get approval for a modified product to address the dosing issues that it had? rex i am not allowed to discuss anything like that. would you be prioritizing their application? >> if we were doing that, if another new drug application came in, that is not a generic, those have a rapid timeframe already. for review and approval. >> we're talking about a combination product. the drug is approved so it is just the device. you are saying it would be fast tracked if they were to reapply with a modified device to address the dosage issue that they had previously. the newuld be under
drug application review process which is governed by timelines which are very speedy. >> you have authority in cases where there is market dysfunction to prioritize applications, is that correct western mark -- is that correct? market dysfunction does not enter into the language. what we have done is we prioritized -- >> when there is a single product in the marketplace and people cannot afford it, to have the ability to address that by prioritizing a application whether it is competitor or generic, put that at the top of the list to address a big problem faced by millions of americans? andcannot afford the drug their lives are at risk. >> we do prioritize that for
generics where it is a single source area -- source. >> what about for a competitor? >> we do not have a procedure for that. >> if a company comes back and they say we had a slight manufacturing defect that caused us to have a dosage problem, we fixed it, here is our new version, are you going to send them out for clinical trials that cost $10 billion, i am exaggerating in 10 years or the are they going to get that modification approved and back on the market? >> if you are talking about an epinephrine auto injector, they really do not need clinical trials. this is not the issue need to share -- show that you are injecting the epinephrine where it is supposed to go. and that you can do that reliable -- reliably every time under emergency circumstances. >> i'm trying to get some sense
of how much money, how much time for a slight modification of an injector because the interest or had a big obstacle for them reentering the market? >> they may have to -- >> how much time and how much money, the public would like to understand how the obstacle is posed by the fda. it is important that things work. it is important that there be a functioning system to allow product to get back on the market. how much time, how much money would it take? to solve awere manufacturing problem it might -- and they had to change things they might have to depending on how they change their auto injector, they might have to do human factor studies again to make sure that people would use it properly. or they might not area if the
change was just inside, they might not have to do that. if the change is how you went about injecting yourself they might have to test that our people to make sure that would work for them. >> we're talking about a preloaded syringe that cost $600. and people cannot afford it. it should not be impossible to enter the market and i encourage , im wrapping up so i will turn this back to you. i encourage you to ponder from that direction of whether there are unreasonably difficult, expensive procedures that make it very hard for competitors to enter the market. if it was easier, there would be people entering the market, we would not have this problem. we have all these tricks of the system in which the name brand is seeking to prevent those competitors and if you are -- you have procedures that are complicit at is a problem. that.d to examine
it is not just this one drug. this is a systemic problem in our drug approval process. the price of drugs are making health care the most expensive in the world. out of reach to millions of americans. they bypassed or it's because they cannot afford to buy them under their deductible. is it -- it is a very big deal. thank you. >> we are about to wrap up the hearing. just a couple of follow-ups. i indicated that the understanding is that the fda is close to finalizing negotiations with the industry on a new round of fees and regulatory requirements. responseated in your that it goes back to the
definition of a backlog created takes a number of steps. me, is that to tell part of the negotiations with the industry, from their perspective. indicated further issues that could be negotiated with the companies in this process that reduce the number of times it is necessary to have the application reconsidered? >> i think that is on their mind and on our minds, too. one of the things that we need to do is the process for generics where you give advice to generics. that is what we negotiated under the prescription drug user fee act. that is something that there is great interest in and having a program so that for these constituted things it is not
just the pill. we can interact with companies and give them advice and tell them what to do. load, the large work load that we have now part of which is inherited from the inks that are cycling multiple times. can you report anything about the status? x with the industry they have concluded and there are many other steps, we have a public and we hopeescribed to provide the consequences to congress. >> is there a time frame in which you expect the consequences to occur? >> that was in the statute. i will ask my colleague.
i wanted to give you accurate information. we hope to post the notices soon and we would transmit to congress by january. >> that is your expectation. >> i would hope so. >> i mentioned you were able and i know this is not a generic drug but we were talking about duchenne and the muscular dystrophy drug. it is not a generic that the reports are you found a way to accelerate the process. is that an accurate analysis or statement or description of what occurred? >> the product was approved under something called accelerated approval. maybe it is a misnomer but that is what it is called. you do not have clinical trials that showed the product gave benefits to patients. you prove it on a circuit and point that is likely to predict
clinical benefits. that is how we approve a lot of hiv drugs over the years and cancer drugs and many other drugs. withompany has to prove later studies that the product does have predicted benefits. >> is there anything to learn from that process that would apply to generics? >> i do not think so. the has to do with showing effectiveness. generics get their effectiveness by showing they are the same as the reference drug. >> a different standard. the generic got to be more easily met. >> yes. the generic does not have to do clinical studies. they are not allowed to do critical studies or else they cannot be a generic. >> do you have anything you would like to tell us that we have not gotten from you from
our questioning western mark -- questioning? >> we are very focused on making sure that any drugs that can be approved and are safe and effective can get on the market. that the pathways are clear. that there are not necessary barriers to getting on the market. withtandards have to do making sure those drugs work for patients. and that they are reasonably safe and they are adequate quality. so that the drug supply in the u.s. is a very reliable, high-quality drug supply. and we do try to expedite where improve availability. we are sensitive to that. >> thank you for your testimony today. in my view, this hearing was what a congressional hearing in most instances should be, an opportunity to be educated and
to learn i do have helped me in that process. from others of the subcommittee, any questions should be turned into subcommittee staff within one week which is wednesday, september 28. we would appreciate it if fda could respond within four weeks thereafter. i thank everyone for their attendance and i will conclude this hearing. the meeting is adjourned. [captions copyright national cable satellite corp. 2014] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org]
national park service. ,ive coverage on c-span3 c-span.org, and the c-span radio app. rexford campaign 2016 c-span continues on the road to the white house. >> we all want to get back to making america strong and great again. ms. clinton: i am running for everyone working hard to support their families. everyone has been knocked down but gets back up. live coverage of the presidential and vice presidential debates on c-span. the c-span radio app and c-span.org area monday, secure -- september 26 is the first presidential debate. , theesday, october 4 presidential -- vice presidential debate.
and hosting the second presidential debate. leading up to the third and final debate between hillary clinton and donald trump. taking place at the university of nevada las vegas on october 19. live coverage of the presidential and vice presidential debates. listen free on the c-span radio app or on-demand at c-span.org. c-span. created by america's cable-television companies and brought to as a public service by your cable or satellite provider. at this month's federal open market committee meeting, the federal reserve chair voted 7-3 to leave interest rates on -- unchanged area janet yellen held a news conference after the meeting where she answered questions about the decision and responded to donald chumps -- trumps accusations that the fed is keeping interest rates low for political reasons.
this is one hour. ms. yellen: good afternoon. at our meeting, my colleagues and i on the central market open committee discussed overall economic conditions and decided to keep the target range for the federal funds rate at one quarter to one half percent. we judged that the case for an increase is strengthened by decided for the time being to wait for further evidence of continued rugrats toward our objectives. our current policy should help move the economy toward our
statutory goals of maximum employment and price stability. i will have more to say about the decision shortly but first i will review recent economic developments in the outlook. economic growth which was subdued during the first half of the year appears to have picked up. the spending has been supported by solid increases in household income as well as by relatively high levels of consumer sentiment and wealth business investments remain soft both in the energy sector and more broadly. the energy industry has been hard hit by the drop in oil prices since mid-114. investment in that sector continued to contract through the first half of the year. showing signs of
stabilizing. that the to see -- economy will expand. gains averaged a thousand per month over the past four months. about the same solid pace recorded since the beginning of the year. wet is above the pace that estimate is needed to provide work for it new entrants in the job market. so far this year most measures markets haveet -- shown little change. the unappointed rate in august, or .9% was the same as in january. the measure includes both who want and are available to work but have not searched recently as well as people who are working part-time but would rather work full-time.
the fact that unemployment measures have been holding steady while the number of jobs thatound solidly shows presumably in response to better employment opportunities and higher wages have started actively seeking and finding jobs. this is a very welcome development both for the individuals involved and the nation as a whole. that labor to expect market conditions will strengthen somewhat further over time. and theeconomic growth improving job market are key factors supporting our inflation outlook. inflationnsumer price as measured by the price index for personal conception expenditures was less than 1% over the 12 months ending in july. still short of our objective. reflects declines
in energy and import prices. core inflation which it splits could prices that tend to be more volatile than other prices has been running about 1.5%. influences holding down inflation fade and as the job market strengthens further, we continue to expect inflation to rise to 2% over the next two to three years. also riskson outlook him -- rests on our judgment that longer run inflation expectations remain reasonably well anchored. however, we can not take the stability of longer run inflation expectations for granted. we will continue to carefully monitor actual and expected progress toward our inflation goal. we are fully committed to achieving our 2% inflation objective. let me turn to the economic projections now extending
through 2019 that were submitted for this meeting by the federal open market committee participants. as always, participants can -- conditioned projections on their own view of the appropriate monetary policy which in turn depends on each assessment of the multitude of factors that shaped the outlook. the median projection for growth -- four jp is 1.8% this year. this figure is somewhat lower than projected in june as a result of the weaker than expected growth seen in the first half of the year. in 2017 and 2018, the median growth projection is unchanged at 2%. somewhat higher than the median estimate of longer run normal growth. growth was down to 8%
in line with its estimate of its longer run rate which is -- which has been revised since june. the median projection for the employment rate stands at 8.4% at the end of this year. a touch higher than in june. over the next three years the median unemployment rate runs near 4.5%. modestly below the median estimate of its longer run normal rate. finally, the median inflation is 1.3% this year and rises to 1.9% next year and 2% in 2018 and 2019. returning to monetary policy the recent pickup and economic growth and continued progress in the labor market have strengthened the case for an increase in the federal funds rate. -- to be the committee
roughly balanced. why didn't we raise the funds at today's meeting? are decision does not reflect a lack of confidence in the economy. conditions in the labor market are strengthened. we expect that to continue. low, weflation remains expect it to rise to our 2% objective over time. but with labor market being taken up at a somewhat slower place -- pace than in previous [inaudible] we chose to wait for further evidence of continued progress toward our objectives. this conscious -- cautious approach support is more appropriate given the short-term interest rates that are near zero which means that we can toe effective the respond
strong inflation pressures in the future by raising rates into a weakening market and falling in asian. theontinue to expect that evolution of the economy will warrant only gradual increases in the federal funds rate over time to achieve and maintain our objectives. that is based in our view that the neutral nominal federal funds rate, that is the interest rate that is neither expansionary nor contractionary and keeps the economy operating on an even keel is currently quite low by historical standards. with the federal fund rate below the neutral rate the current stance of monetary policy should be viewed as modestly accommodative. which is appropriate to foster further project -- progress toward our objectives. since monetary policy is modestly accommodative there
appears little risk of falling behind the curve in the future. gradual increases in the funds rate will like the be sufficient to get to a neutral policy stance over the next few years. this fear is consistent with participants projections of appropriate monetary policy. the median projection for the federal funds rate rises only gradually. 21.1% of the end of next year, and 2.6% by the end of 2019. compared with the projections made in june, median path to the federal funds rate has been revised down a quarter to one half percentage point. most participants also marked down there estimate of the longer run federal funds rate with the median at 2.9%. as i have noted in -- on
previous occasions, participants projections for the federal funds rate including the median path are not a fixed plan for future policy. courseis not on a preset . these forecasts represent participants' individual assessments of appropriate policy given their projections of economic growth, employment, inflation, and other factors at the particular point in time. outlook isc inherently uncertain. any assessment of the appropriate path to the federal funds rate will change in response to changes to the economic outlook and associated risks. finally we will continue to reinvest proceeds from maturing treasury securities and principal payments from agency debt and mortgage backed securities. as our state -- statement says we anticipate continuing this policy until normalization of
the funds rate is well underway. maintaining our sizable holdings of longer-term securities should help maintain accommodative financial conditions and should reduce the risk that we might have to lower the federal funds rate to zero. in the event of a future large shock. thank you. i would be happy to take your questions. cracks critics of the federal reserve have said that you look for any excuse not to hike and the gold coast constantly moves. it looks like there are new goalposts. when you say looking for further evidence, you suggested that evidence that labor market slack is being taken up. could you explain for -- what for the time being means in
terms of a time frame and without further evidence you look for to hike interest rates and also this notion that the goalposts seem to move and you introduced a new goalposts with this statement. thank you. ms. yellen: i will try to respond to those questions. let me try to set out again how the committee sees the economy and what we are looking for. we are generally pleased with how the u.s. economy is doing. weak in the first half of the year. we are seeing evidence that the economy is now expanding more strongly. as a mentioned, payroll gains in recent months have in solid. averaging around 180,000 per month which is less than the pace of 2015. it is well above what is needed to provide jobs for new entrants into the labor force overtime. the unemployment rate is pretty close to most fomc participant''
estimate of its long-running equilibrium value. oft rate and other measures labor utilization are little changed since the beginning of the year. i do not see that is bad news. because it may reflect the strong labor market is attracting people from outside the labor force back into employment. the labor force participation rates increased on balance since late last year. it is on the declining demographic trend and the fact that it increased shows substantial number of people are being attracted into the labor market. the employments and population ratio is also increasing. we were not really certain that this is something that would happen as the labor markets strengthened and it is good to see that development has taken place and that is some news that
we have received in recent months. the labor market does have that potential to have people come back in with out the employment rate coming down. we're not seeing strong pressures on you -- utilization suggesting overheating and my assessment would be based on this evidence that the economy has a little more room to run than my have previously thought. that is good news. remember that inflation wetinues below 2% although expected to move up over time. that risksee agrees to the outlook have become roughly balanced. we expect labor market conditions to continue strengthening. we are generally agreed that gradual increases in the federal funds rate to remove what is a modest degree for accommodation
will be appropriate. we do not see the economy is overheating now. my colleagues and i exchanged views at this meeting on the appropriate timing of its next step in reducing policy stimulus. most of us judge that the case for an immediate increase in the federal funds rate is stronger given would be sensible the finding of a bit more running room to wait to see some continued progress, evidence that we progress toward our objectives. for the time being we are going to watch incoming evidence as you can see from the -- most participants do expect this one increase in the federal funds rate would he appropriate this year. to see that if we
continue on the current course of labor market improvement and there are no major new risks that develop and we simply stand the current course. i was wondering if you could comment on the apparent tension to tour -- between the steady on the longnd -- run rates and some of the projections and assuming march toward a rate hike. if the neutral rates coming down over time and continues coming down and you are eating up accommodation that way anyway, why not wait for the dust to settle before moving rates. ms. yellen: it is true that our estimates are coming down and that is what is largely responsible for that shift. at the same time, we generally agree that the stance of monetary policy is somewhat accommodative.
is a faster a month pace of employment growth and is sustainable in the longer run. we have seen people come into the labor force, maybe more than what would be expected it -- which is why the and of women rate has not fallen. it is probably not something that is possible without the economy overheating on an indefinite basis. so policy needs to be forward-looking. we do not want the economy to overheat and significantly overshoot our 2% inflation objective. that is one risk. -- that we need to address. we generally agree that some gradual increases to remove that accommodation will be appropriate if we stay on this course. as i emphasized, it is not that much accommodation and the economy has shown evidence that
there are more people who are being attracted back to the labor force, so in that sense, i would characterize it as we have found the economy has a bit more running room. nevertheless, we do not want the economy to overheat and if things continue on the current course, some gradual increases will be appropriate and namely what we discussed today were issues affecting the timing of such increases. last month in your speech at jackson hole, you seemed to raise expectations that there could be a rate hike in september. other fed officials talk including chairman fisher, they seemed to support that. the fed president had some comments that sent the market lodging.
seemed had the governor to draw back. is this hurting the fed's credibility, do you think or is this just the normal thing that we should be looking for at this time, on certain time -- at this uncertain time with the economy. thought the case for a rate increase had strengthened and that assessment is included in today's statement. so i think most of my colleagues agree with that assessment. i think we are trying to understand some difficult issues . there is less disagreement among participants in the committee's than you might think listening to speeches and commentary. i think we all agree that the economy is making progress, that we are close to an unemployment rate that is one that is
sustainable in the longer run. we have -- we all agree that we are under shooting our inflation goal and we want to make sure we stay on a course that raises that the 2% three at and we are struggling with the difficult theof issues about what is new normal in this economy and the global economy more generally. which explains why we keep revising down the rate path. that in a important body like ours that a range of views are expressed. that we have independent minded people who gathered together and discuss these issues. my colleagues do explain in their individual speeches their own perspectives. these are complicated, complex issues. weis straightforward how
interpret what is appropriate policy and what is going on in the economy. markete is that participants in the public more generally learn more about the issues that we are grappling this sethey listen to of speeches. i think it is a good thing that the fomc is not a body that suffers from [indiscernible] and you see that is one of the real worries in an organization that everybody thinks identically. lot that we share in common and express in our statements and our speeches. we are debating and discussing issues pertaining -- pertaining to timing. donald trump the republican
presidential nominee has charged that the fed is keeping interest rates artificially low to support the obama administration. i would like to hear what you have to say to that charge. on a related note i wanted to ask you about the fed's nest -- int policy meeting which is november, we prefer the next election. given that the case for raising rates you say today has strengthened, should the public ae that november meeting as meeting when rate action could happen. thank you. >> congress very wisely established the federal reserve as an independent agency in order to insulate monetary policy from short-term clinical pressures. that say emphatically partisan politics plays no role in our decisions about the appropriate stance of monetary policy. decide what the best policy is to foster price
stability and maximum employment and to manage the variety of risks that we see as affecting the outlook. we do not discuss politics in our meetings and we do not take politics into account in our decisions. generally we are leased with the progress of the economy and the decision not to raise rates today and to wait for some further evidence that we are continuing on this course. this largely based on the judgment that we are not seeing evidence that the economy is overheating and that we are seeing evidence that people are being drawn in in larger numbers , at least i would have expected into the labor market. and that is healthy to continue. nevertheless, we do need to be forward-looking and if we continue along this course, it
likely will be appropriate to raise the federal funds rate. -- you askedou about november. every meeting is live and we will again assess as we always do and coming evidence in november and decide whether or not a movie is warranted. torres from bloomberg. what observable data would convince you and the committee that this neutral federal funds rate is starting to move up? there's a popular piece of research that suggests that it is zero. i am struck your opening remarks that the economy is not overheating. does that mean the committee reach for yield going on right now as very low cost to its policy? thanks. : you asked what evidence would suggest that the neutral rate is moving up.
if you sell us revising up our growth forecast and revising withinr estimates unchanged at four policy, if you saw this you would see revisions in the funds rate cap. if unemployment were moving down faster if we saw upward pressure on inflation, that would be suggestive of the appropriateness of reevaluating whether or not the neutral rate had increased. he revisions will reflect the fact that while the economy has made a lot of progress, it has only made that progress in the context of monetary policy and has been characterized by extremely low interest rates and negative yields for a very long period of time.
about globald factors. --bal factors, capital flows >> the global reach for yield and whether she saw it as an accommodation policy. in most advanced nations new we have highly accommodated policies and they seem to be necessary or countries to be able to achieve their inflation and employment objectives. that is characteristic of an environment in which the neutral interest rates in advanced countries around the globe appearing to be very low. that ifan environment we do have to live without for a long time we have to be aware
that it does give rise to the reach for yield as individuals and investors seek to take on to risk or lengthen maturity seek higher yields and i think we should be concerned about that to the extent it creates financial stability risk and we are very aware that those are possible. we engage in regular assessments of financial stability factors that bear on financial stability overall. that the threats to financial stability -- i would characterize them at this point as moderate. i wouldn't characterize it as moderate. would say that valuations are
not out of line with historical norms, that there are areas my colleague is focused on -- commercial real estate, where price to rent ratios are very high and cap rates are very low and that is something that has caught our attention. tools to variety of address such risks. we have recently issued new supervisory guidance pertaining to commercial real estate. i would say in the area of commercial real estate, while valuations are high, we are seeing tightening of lending associated with that arise in commercial real estate prices. we aren'tenerally seeing signs of leverage building up for maturity transformation in the way we started the run-up to the crisis
and we are keeping a close eye on it. times."the "financial yeardudley earlier this suggested that political uncertainty in the u.s. maybe one of the depressants on business investment. i wonder if you see any further evidence that that was one of the reasons businesses are holding back. speech,r jackson hole you presented a fairly optimistic sense of the scope of further monetary stimulus. you raised the question of automatic stimulants. are you concerned that there is insufficient fiscal backup and too much is being lumped on the soldiers of central banks? chair yellen: starting with the ,ssue of political uncertainty investment spending really has been quite loose for some time and we are really not certain exactly what is causing that part of it.
some of it has been the huge contraction in drilling activity associated with falling oil prices, but the weakness in investment spending extends beyond that sector, and i am not certain exactly what explains that, but i am not aware of evidence that suggests it is political uncertainty. but i would agree with the finding that it has been week. consumer sentiment is perfectly solid. we are seeing a lot of strength in consumer spending and consumer sentiment certainly seems to be solid. scope forabout further monetary policy action. --as careful in jackson hole i indicated that we have a number of tools we have used .efore and could use again
i did indicate that i do have concerns about the scope of monetary policy at this point and our balance sheet is large and we are not at what we see as the normal level of interest rates, so at the moment the rate is very low, below the normal level. at the moment i would say zero lower bound is concerned and we have less scope than i would like to see or expect us to have in the longer run. it would be worthwhile for other policymakers to think about what role they could play in addressing negative shocks and i mentioned specifically automatic stabilizers because i think that's an important way in which fiscal policy serves to push in shocks to the economy and it would seem to me, without
getting into specifics, that there are ways in which the response of fiscal policy could strengthened, which would help take some burden of monetary policy. from "the new york times." in the run-up to the brexit vote several policymakers cited it as a reason they were reluctant to raise rates -- because of the uncertainty. in the run-up to the presidential election i have not heard any policymaker give that as a reason they may want to delay raising rates in november . could you explain why the fed regards brexit as a greater danger than the presidential election happening here? and second, there were three dissents. could you explain what the cause of disagreement was that those policymakers? chair yellen: we are very , given theevaluating
way the economy is operating, what is the right policy to foster our goals. i am not going to get into factors -- those are that we don't consider and i'm not going to get involved in commenting on the election. -- as i of the dissents indicated, the notion that we do have some accommodations, that if we continue on the current path, it is something we will need to remove over a time. there is general agreement among that, what the precise timing of what is the right timing for removing that accommodation is something on which we had active discussions, and there are a range of opinions. ae dissents represents
judgment on the part of some of my colleagues that it is important to begin that process now. i certainly agree and i have set myself that there are risks in waiting too long to remove accommodation. to take a forward-looking approach -- i have always advocated making policy based on forecasts for the economy and taking accounts of risk and there are two particular risks we need to think about in balance. one is the risk that the economy runs too hot, that unemployment and labor market tightens too much as unemployment falls to a low-level, but we need to tighten policy in ways that would be ideal and of course that is doing that because that
is a difficult thing to to gently create more slack in the labor market, which could cause a recession in the process. that is something my colleagues and i certainly wouldn't want to be responsible for. we would all like to have a very long asked angela with the labor market operating well for many years to come and the prospect that we could create downside risk for the labor market is something we would like to avoid and this might be essential to avoiding that. on the other hand, inflation is running below 2% and it's also important that we get back to 2% and i have routinely indicated a number of measures of inflation expectations that are running at the low and of their historical
range and we are watching that as well. there would also be risks from not seeing inflation move back to a 2% objectives. exactly how to balance these ,isks, which is more serious can affect one's judgment about the appropriate timing and we are all struggling to understand the magnitude and nature of those risks. >> rebecca jarvis, abc. chair yellen, at a time when the public is losing faith in many institutions, that the fomc discussed the importance of today as an opportunity to dispel thinking that the fed is politically compromised or beholden to markets? chair yellen: the federal reserve is not clinically compromised. we do not discuss politics in our meetings. i cannot recall any meeting i have ever attended where
politics has been the matter of discussion. public, if they had been watching our meeting on tv today, would have felt that we the serious intellectual debate about the risks and the forecast for the economy, and we struggled mightily with trying to understand one another's points of view and to come out of the responsibly.act that is my commitment to the american people, that i want to lead an institution that is not political, that we are striving to do our very best to pursue the roles that congress has assigned us, which are important ones of price stability and maximum employment. >> does it concern you, given what donald trump has said, about the federal reserve, that
he could go back if you were president and look at the minutes and look for signs of the fed being politically motivated? chair yellen: i have no concern that the fed is politically motivated and i will assure you that you will not find any signs of political motivation when the transcripts are released in five years. it is important that we maintain the confidence of the public, and i do believe we deserve it. i know these are difficult decisions and everybody may not agree with them but i hope the public will understand that we are striving to do our best to pursue these goals. mentioned a commercial real estate. are you worried that bubbles could form in the economy because of our prolonged low interest rates? chair yellen: yes, of course we
are worried that bubbles could form in the economy, and we routinely monitor asset valuations. while nobody can know for sure what type of valuation represents a bubble, that is something one can tell in hindsight. we are monitoring these measures and valuations and commercial real estate valuations are high. time butmoved up over still valuations are high. it is something we have discussed and we have called this out in our monetary policy report and other presentations. withe in our supervision banks, as i indicated, issued supervisory guidance to make sure they don't -- to make sure ,tandards are sound on loans
and we are aware that this is something we look at in stress tests with the larger banks, to see what would happen to their capital decisions, to make sure they hold capital. and of course i think the soundness instead of the banking system has improved but we are focused on such things. >> hi. quick question on regulation and the scandal at wells fargo over phony customer accounts. but we are focused on such things. >>i know that there are other regulators that have looked into this, but you are also regulator of wells fargo. has the fed opened a separate investigation into these practices at wells fargo? wouldn't you, because they do involve issues of consumer protection, potentially of risk management and corporate governance?
are you looking at them broadly across the banking system right now? chair yellen: in this specific occurred abuses that took place in the national banks, the control of the currency and that's responsibility there. on the consumer side it is the ftc that has responsibility. we work cooperatively and closely with these organizations and in terms of of our overall supervisory responsibility for large banking organization we are very focused and this will be a particular focus of our supervision. going forward over the next year or so, on the compliance environment, to make sure that the controls of the senior
management oversight and the boards of directors are appropriate to control these kinds of risks. we have been distressed to see banking organizations responding when a particular problem arises and what we would really want to thats for best procedures ensure employees are always acting in a legal and ethical manner, and that the incentives that are put in place in these organizations are appropriate and don't serve to foster behaviors that could harm the public. this has been and will be a focus of our supervision. from "the washington post." over the past year we have seen american policymakers have our most serious discussions about terrorists in the last several decades. if tariffs were to be enacted in
the coming year or so, does the fed have an opinion on what that would do to growth in america? chair yellen: that is a political issue that is currently being debated that i don't want to get into. that one.to pass on >> i'm with "american banker." a question about wells fargo -- one of the concerns that has been raised is that the bank itself says it doesn't know what was happening. there were thousands of employees that were involved. some are calling for a breakup, saying that the banks are too big to manage. do you think, leaving aside the question of wells, that it's possible for a bank to get so big that it can't be managed and that perhaps the best financial would be to break it up?
chair yellen: so we have high expectations for what we expect to be in place in a large organization, or any banking organization. robustct there to be systems of risk management, strong audit functions, a board of directors that is monitoring and supervising and holding senior management accountable. for things that happen throughout the organization. i don't think that these are impossible standards to meet. but iay be challenging won't arrive at the conclusion that just because an organization's large it can't living up to those standards. ande are our expectations we intend to hold banking organizations responsible for
putting in place that kind of risk management and compliance environment. not endorsing a general conclusion that banks of that size are too big to manage. i believe they can be, but that is what we expect. >> eric schatz care from bloomberg. thank you. i have a question about the rate trajectory the fed outlined today in the dot plot. while there is clearly a wide range, the median expectation is were the fed funds target to raise by a half percentage point in 2017, three quarters of a point in 2018 and a further three corners of a point in and, bringing us to 2.15% the 3% in the long run. at the same time, the median
forecast for gdp growth is 2% over the next few years and 1.8% thereafter. i should add that the most optimistic projection is for a growth of 2.5% for all the projections outlined here. if economic growth is going to be that slow for that long, where will the inflationary forces emerge that would require tightening of 250 basis points from where we are now, and if not inflation, is there some other expiration? the projections -- i agree, the projections for growth are slow. we have further written down our estimate of the longer run, more normal growth rate, and what that reflects is an assessment that productivity growth is likely to remain low for an extended time, although it does invite the expectation that it
will pick up from the miserable half percent pace for year over the last five years. slow growth is a factor, slow productivity growth is a factor that influences the longer run normal level of interest rates and writing down the likely pace of productivity growth is one factor that is responsible for the downward shift in the past that you see for the federal funds rate. for is an important reason revising them to neutral rates. but let's go to part of your question about inflation. such slowf having growth, disappointing productivity growth, we have a labor market that last year generated an average of about 230,000 jobs per month.
it has beenyear generating about 180,000 jobs a month, and that is a very solid and a pace growth that likely is not sustainable in the longer run. also we have been pleased to see people come back in the labor market, so it certainly is sustainable for some further amount of time. but i think would ultimately drives inflation and wage growth is that tightness in the labor market and pressure on resource utilization and the sad fact is that we are giving that healthy pace of job market growth with very slow growth and output. i don't think it bears on the inflation outlook -- it has in thed a downward shift projected path to the neutral
and actual federal funds rate, but it is a huge concern because productivity growth ultimately means a slow growth and sleeping standards and that is a concern that policymakers should be focused on. "politico." back to wells fargo. obviously this is more of a consumer finance question, but i am wondering if you think it does pose safety and standards questions if something like this is widespread across a big bank. you mentioned there would be a supervisory focus over the coming year. are there any adjustments you can speak to that might be warranted, given these revelations? mentioned, weas i are going to be focusing on compliance, risk management, and board oversight -- not only at wells, but across bank holding companies. of course, consumer issues and
issues that involve consumers and ifome safety issues there was one lesson from the financial crisis it's that abuses of consumers of the sort ,e have the in subprime lending they ultimately did become safety and sadness issues. of course we need to have that concern and we will focus their. i can't at this point give you that.ics beyond >> mike derby. a large number of congressional democrats that. and the campaign of hillary clinton would like bankers removed from the boards overseeing the regional fed banks. also other reformers would like to see the private ownership of the bank ownership of the regional fed's be brought fully into government.
i want to know what you thought of those proposals. we have a system that congress can sit up in the federal reserve and act in whice governance of the reserve banks involves banks contributing capital and serving on the boards of directors. we have long recognized inside the federal reserve that when we are charged with supervision of banks, having bankers involved in that obviously presents conflict of interest and we have put in place a very strong that those ensure conflicts of interest are not ,llowed to play out in any way that bankers are not allowed to be involved in supervision. dodd frank changed the arengements so that they
nonbanking directors and can participate in the selection of the president as well. i want to make sure the public has confidence that in spite of the fact that we do have this banker involvement in our boards of directors that it is not giving rise to any conflicts or conduct of policy. up -- if that's set up has changed, it's up to congress to decide what to do. it raises complex issues about the governance in the reserve banks and the federal reserve. i would caution that it is -- with thedo ramifications of making changes.
>> care in "market news international. you mentioned in the previous answer the need to be forward-looking, but you also pointed to the economy not overheating as a reason you could hold off on raising rates. monetary policy is traditionally operated long. do you think this timeline has changed since the financial crisis or do to the use of unconventional tools -- how does that factor into your decision-making? the notion that monetary policy operates with variable legs -- that statement is due to milton friedman, and is one of the essential things to understand about monetary policy and it is not fundamentally changed at all. that is why i believe we have to
notorward-looking and i am favor of the whites of their eyes approach. we need to operate based on forecasts. but the global economy and the u.s. economy have changed a lot and history doesn't always replay itself. many of those of us sitting around thewe need to operate ban forecasts. table, we learned the lesson that if policy is not forward-looking that inflation can pick up to highly undesirable levels, that inflation expectations can be dislodged upward and as a consequence of that can be endemic lay higher inflation, which is very costly to reduce. absolutely none of us want to relive an episode like that. believe my colleagues, that
it was important to be forward-looking, and we won't make that mistake again. that the structure of the economy changes, things change, the nature of the inflation process has changed significantly since the bad days of the 1970's when the fed had to face this chronic high inflation problem. we have seen inflation respond less to the economy, to movements in the unemployment rate, that the phillips curve has become flatter and that is something we need to factor into our decision-making. inflation expectations appear to be better anchored and perhaps that has been a result of a long period of low and stable inflation. we didn't have in the 1970's. in addition we have to be
attentive to the fact that we have had a long period in which inflation is undershooting our 2% objective, and we see some signs -- i would conclude that inflation expectations are reasonably well anchored at 2%. the we are seeing signs suggesting slippage, and we are a long way from facing the problems that japan faces, but there should always be a reminder to us that we would not want to find ourselves in a period where inflation is chronically running below objective inflation expectations and with low neutral rates that becomes more important. things are changed, but the principle of forward-looking absolutely holds. >> i'm with cnn. you just mentioned one of the economy's major problems was low productivity growth and one of the solutions that has widely been proposed is that are jobs.
many economists say some workers are staying on the sidelines because they lack new job skills, that would help them attain better employment. the fed doesn't have the authority to finance or run a job-training program or apprenticeship. would you want that authority, and is it at all frustrating that you and your colleagues know one of the solutions to fixing the major issue of the economy, that you can take concrete steps to solve them? chair yellen: i do think job-training and job skills are important, and we do work in community development, trying to in the local communities with reserve banks operate to try and foster broader understanding of and kinds of programs work how community organizations and state and local governments can put in place programs that will be helpful.
, aas recently visited program that was impressive in philadelphia, some in chicago and other places. i do believe it is possible to design programs that will help people overcome obstacles in getting jobs that are available. but i definitely think that while we can play some role in facilitating an understanding of what works and doesn't work, it is certainly worthwhile for policymakers at the federal level and state and local level to be focusing on this, because i think it is an area that would be helpful in making progress. >> thank you, manager. as we have gotten to this 4.9% unemployment rate through this year's long recovery we have yet to see substantial pickup and wage growth.
it seems as if the american middle class continues to express and disappointment about that. is there but it is on the horizon? you can come in 2017, for example? and if not, when? chair yellen: i think we have seen some modest pickup and wage growth. it is running a little bit higher than it was over the last two years by a number of important measures. we have seen income growth pickup recently. i think the census report was encouraging, showing that there are income gains both codes of more jobs and higher paying jobs and that it is occurring throughout the income distribution, helping many families. thewe do expect unemployment rate to decline further. we expect labor market conditions to continue to my hope and
expectation is that we will see some further pickup and wage growth, and that it will be broadly beneficial to american households. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] obama to somend extent were prisoners of the situations they had created. on the other hand, they both participants in game.isting budget >> this sunday night on "q&a," author and "washington post" columnist robert samuelson talks about his columns on business and economic game. >> this sunday night on issues . economic performance under president obama. >> my opinion is not so high, policies thatsued were essentially aimed at bolstering his reputation and his legacy, and it seemed to me
to undermine general confidence in the economy. 8:00nday night at ou "q&a." on c-span's >> the presidential inauguration is about four months away. and preparations around the u.s. capitol have "q&a." begun. members of house and senate leadership took heart in a ceremonial groundbreaking yesterday, gibbering in the first nail into what would become the stage where the 45th president of the united states will be sworn into office on january 20, 2017. let's have a look. begun. >> ha indeeds arrived. if we could pick up our hammers and join me in driving the snail for the presidential inaugural platform. let's do that on three. one, two, three.
[applause] >> well-done. >> that video from our capitol hill producer, greg kaplan. for more updates you cancel him on twitter, @gregkaplan. >> c-span's "washington journal," live every day with news and policy issues that impact you. and this morning, we are alive from the office building on capitol hill, where members of the house homeland security committee assessed the recent bombings in new york and new jersey. although the overall threat environment in the country and the work of their committee. guests include donald payne jr., brian higgins, and
scott perry. watch c-span's washington," live beginning at 7:00 eastern. join the discussion. >> cia director john brennan spoke at a conference for the intelligence community. topics included the security challenges posed by russia and china. this is an hour 20 minutes,. everyone. my name is john brennan and i have the great honor of being the director of the central intelligence agency and it is an absolute pleasure to be here and kick off the day of discussion and examination of the ethos and profession of intelligence. iq for being here and supporting this important endeavor. i want to thank president
stephen now and associate vice president frank phillippe out for the outstanding hospitality. thank you to all of the staff in support here at gw university. george washington is a true center of excellence, particularly in the realm of national security and cyber studies. i am thrilled to have so many people with ties to gw following today's proceedings. i promise you it will be a fascinating day of debate. having gw as a setting, it is nice to return to one's roots. not myself as much as i would've enjoyed being an alumni of this illustrious institution. i'm talking about the organization i've had the honor of leading for 3.5 years, the central intelligence agency. we are a few blocks from the former headquarters of the office of the tjx services. ciara's says her during world
war ii. it was later cia headquarters in 1961. we have a sign in our museum, one must of you will never get to see. initially, the buildings only marker read "governor printing office." that is until a member of president dwight d. eisenhower staff had repeated problems finding the building. an annoyed president called the end a better sign one up immediately. this is not surprising and i can tell you firsthand you do not want to be on the receiving side from an annoyed president, let alone to phone calls. welcome to the third annual at those and practice of intelligence conference. it has only been two years since our first conference. we have established a lasting tradition. looking at the agenda, i'm excited about the topics and what our analysts will bring to the dais. today we will highlight the role of intelligence in addressing humanitarian disasters in debate
right balance between secrecy and public accountability. you can see our focus is narrow. in all seriousness, i cannot become another said he was such a wide range of deeply significant issues being so coherent. each panel addresses and a sessional element of what the cia and intelligence community have to deal with day in and day out. it is both regional and functional, technical and strategic. the agenda puts the global nature of cia and intelligence agency mission on display. the first panel, is proof that although our responsibilities of evolved over time, some elements of our mission never change. the topic is rivalries and to
their future. the potential for conflict involving the most powerful countries in the world has always been a focus of cia looking back at the briefs, documents we recently released to the public, these issues were at the forefront of our operation and analytical times. they remained so for the duration of the cold war and remain sound today. with the surge of activity by the terrorists, most importantly or notably with the activities 15 years ago, it shifted from nonstate actors and all the while strong nations such as china and russia did not dampen their vision. their efforts to project power beyond their borders are provoking trouble in the south china sea and eastern europe. today's panel poses the question, have we directed to much of our attention away from the weighty issues of politics? where the flashpoints that can
turn local conflict into something more serious? what can officials and organizations due to better understand these rivalries and best equipped policymakers to address them. the second panel is no less evocative. it is entitled, destructive technology into digital dilemmas. it will take a look at how groundbreaking technology is a double-edged sword. u.s. government and the intelligence community in particular are at the forefront of the challenge. the cia and intelligence community have been slow at times to embrace aspects of the digital revolution. concerns about security caution in and restrain our enthusiasm. but most recently, they are catching up and shaping the technological "aha!" moment. i would have loved to stretch my
technological muscles. i find the fields to be endlessly fascinating and i know our panelists will provide us with a discussion of the trends. they will go over crucial questions such as how to best leverage these technologies to optimize our nation's security as well as our civil the birdies and privacy. -- civil liberties and privacy. when should we keep an eye out for? what is the government role? the panel i am moderating also has three of my colleagues. we discuss the role of technology, liaison partnerships, and espionage. analysis, covered actions.
it dominates the public discourse. what is missing, is understanding how important these relationships are two the cia's mission. despite the size in the breadth of the intelligence community, there are places we cannot go without immense risk and complications. which is why we rely so heavily on our liaison relationships. some alliances have been with us throughout our 69-year-old history. and the global network of partners in the fight against al qaeda. these relationships across the world are forced multipliers. i do not see how the cia could fully carry out our responsibilities without those foreign intelligence relationships that supply not only operational manners -- matters but a host of other activities. i am sure my dear colleagues from united kingdom, afghanistan, and a story. i look forward to what they have to say.
i know those from london, cabrera, and kabul will provide more. our fourth panel will focus on the topic the public generally does not associate with intelligence organizations. assessing the potential total of humanitarian disasters. this fascinating discussion will shed light on an aspect of intelligence work that rarely receives the recognition it deserves. instability is a defining feature of the international landscape today. it foments some of the greatest challenges we face. specifically, what was once a refugee say haven is a significant source of massive refugee displacement. there is a country that has lost at least 35 years worth of development in terms of income, education, intel health. more than 13 million syrians
need some form of humanitarian assistance. you might not think this humanitarian plight and similar ones can see much of my time as cia director, but as i have stressed before, cia and intelligence community mission is global in scale and scope. we have offices devoted to covering these issues as well as the hurdles that lie ahead is our government tries to mitigate the effects of its fast destruction and displacement. for example, cia has a role of the atrocities prevention board with the utmost gravity as the office collects, sauces, and shares intelligence related to threats of genocide. we at the cia and intelligence community on her to contribute to this crucial mission and our government many other humanitarian efforts. our panelists will tell you, they're are absolutely critical to our national security interest. one way, the last panel moderated by my deputy david cohen, will look at the provocative and essential issues
of intelligence oversight, accountability, and openness. i know there are people who wish we could return to a time when nsa stood for no such agency. that is no longer a feasible option, so at least for democracies but it is a reasonable one. the american people of the right to know the types of activities their federal government performs on their half. history has shown that blind trust is a false currency. the cia and the rest of the intelligence community have to maintain the requisite level of public confidence in order to do our job effectively. we have seen the consequences when that faith is lost. this does not mean opening our doors wide without regard for repercussions. secrecy is a necessary element
of what we as intelligence professionals seek to do. but not secrecy for secrecy's sake. secrecy for the sake of security and safety. in our profession, concepts such as compartmentalization and "need to know" are necessary. people have lost their lives when national security is harmed. the topic of national security and public trust is complicated. different people will have reasonable disagreements. as you can see from the panels make-night, we're not shying away. there is a need for public debate facing our great nation and the world we live in. deeply complex emotional issues such as cyber and surveillance. these are difficult topics. once where differences are to be a expected.
while there are legitimate disagreements to be had,1 i know with certainty that there is a role for government to play. the threats and adversaries we face are far too dangerous to simply stand back and admire the problem. the cia tells the community we have a better place in this debate and a larger one about the role of intelligence in our democracy. we cannot return to the passive posture of years ago. we cannot cloak ourselves in secrecy and hope for the best. we have an obligation to earn the sacred trust the american people have placed in us. otherwise, without such debate, misperceptions rather than the reality of the intelligence profession and up driving discourse. once again, thank you for joining us today. your participation, comments, and perspectives, are the reasons why we put this conference together.
at cia, with tried to instill a sense that our employees should be intelligence officers first. excelling at the individual craft, but always known how their personal skill set nest within the larger goals of the agency in our national security establishment. after today i hope we have a better understanding of where the cia and the rest of the intelligence community fits within our own security apparatus in how we can strengthen it going forward. from my perspective, the profession of intelligence has never been important more than it is today. after 36 years in this profession, the success of our intelligence practice hopefully comes down to the women and men who join our ranks and selflessly serve their fellow citizens. intelligence officers with intelligence and courage,
devoted teammates, who know that the stories of this profession or what we can't they are all about. i hope many of these students are today will think about the cia into intelligence community is a future place for them to pursue their professional ambitions. those selfless qualities or what the core of what the cia is all about and the defining characteristics of the intelligence we constantly strive to hold day in and day out. it is my great pleasure to introduce the former assistant secretary of the navy, trustee apparatus of george washington university, and the individual who served at the national ceremonies. [applause] >> thank you. good morning. i would like to welcome you to the campus of the george
washington university. i am pleased that george washington university is able to partner with the cia and host their third national security conference. i have privileged to be your host. i echoed the director's comments. he is just really great. in my humble opinion. i share his excitement. we have a very aggressive schedule today. the world has changed since my initial exposure to the intelligence community. as with many of you, my initial exposure was threats on targets. sitting on an aircraft carrier night, we saw the aaa firing.
it really gained credibility. we started listening to them deeply and hard. we have a wonderful schedule going today and there are a lot of people here who will be mentioned later in the program. our goal is to look over the horizon and get a glimpse of the issues that will shake the world today and in the future. i want to express my appreciation to the staff. george washington center for cyber and homeland security and the cia for planning this conference. it is a lot of work. i also want to thank our panelists for sharing their
experiences and expertise. before we get started, some housekeeping. please silence your mobile devices and your cell phones. you are allowed to take photos of the speakers on stage but not the members of the audience. food and drink are not permitted in the auditorium. but you are welcome to bring in bottled water. the conference is open to the press. permitted init is being webcast live and recorded. the comments of the conference speakers, panelist, and moderators are all on the record for direct attribution. each panel will have a discussion in q&a portion. during this phase, please use the microphone throughout the auditorium.
in consideration of speakers time in time of those attending the conference, please ask precise, specific questions related to the panel topic. let us get started. as tensions with russia and china rise, the first panel will ask whether the great power rivalry is an enduring danger or a thing of the past. to discuss the topic, we have the following experts with years of experience on china and russia. their biographies are in your program. our moderator is the director at the school of media and public affairs. panel members, cia deputy assistant director at the eurasian center.
former deputy director of cia and current distinguished inspector general at john's hopkins, john maclachlan. georgetown professor and former cia and national security council east asia expert dennis wilder. please welcome them to the stage. [applause] >> well, good morning, everybody. i want to make sure, we will have interactivity later. i am frank and it is a tremendous pleasure and challenge to engage this topic of great power rivalry.
as we mentioned, we will come around with microphones later to take your questions and i would ask if you are in the middle or towards the aisles, some will have a microphone. give a short name if you can and ask your questions in macon as the sink as possible so we can cover as much terrain as possible. our discussion revolves around the notion of great power rivalries which we spend a lot of time studying at institutions like this and institutions like where you are. we want to look at a couple key questions. had we look at the potential for these great powers and great power rivalries today. do we underestimate that potential? what are the risks and opportunities to leverage those rivalries should they exist going forward? and, how should the intelligence
community calculate this and ensure it is well-positioned to navigate where these rivalries may take us? perhaps, john maclachlan, you can get us started with this in terms of giving us a frame for this conversation. we chatted the other day as i was dashing through and airport. you talked about this remarkable century we have been through and how it has defined the experience of these rivalries. perhaps you can share for the group. john: looking at the issues in a larger context, that is what we are trying to do. it is important to look at the century we have been through which has been in many ways and a historic one.
70 years of cold war. following the soviet union, wallowing that, 17 years between 1991 when the soviet union fell to the 2008 financial crisis when the united states had a kind of unchallenged position in the world. that ended to a degree in 2008 as confidence in our position in the world was shaken a little bit around the world and in that time, we had the luxury of dealing with issues that looked to us, preps artificially, but looked to us like black and white. a clear mission, world war i, world war ii, the cold war. and then the moment of 17 years when there was not great powers but it great power. now,