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tv   C-SPAN Weekend  CSPAN  June 13, 2010 1:00pm-6:00pm EDT

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thousands of people who had been relying on the activities of the energy industry will also be+ affected. according to a bloomberg news report, shutting down 33 rigs will cost as many as 6000 jobs in the next three weeks alone. each job supports an additional 400 jobs regarding supplies and services. energy helps the power the other industries, directly and indirectly through economic growth and income. while other sectors of the economy are struggling is not a good way to help the gulf coast in this unfolding strategy.3
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>> thank you, mr. chairman.
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i want to thank the st. today. i also want toothank you for coming to share your stories with us today. it is never easy. there is nothing we can do today to replace the pain of your loss. but the one thing we can do is never forget what your husbands went through and what those other men on the rig went through, and to get to the bottom of why that happened and make sure that it never happens again so that no other families have to go through what you have gone through. so thank you for coming today. i thhnk that one of our witnesses on the second panel, mr. chairman, summarized the concerns of ploft of us on -- most of us on the committee in his opening statement when he said there are really more happened out on that deepwater horizon rig. that came out in our first hearing. one of the things that concerns many of us is the story keeps shifting.
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we were originally told there about 1,000 barrels per day. then when bp's people ttstified, that number was up to 5,000 barrels per day, and just last week we were told bp was excited because they were capturing 10,000 barrels per day which was estimated to be only one half to one quarter of the release from the. the entire devastation to the gulf region cannot be comprehended at this stage. our job at the oversight committee is to get answers to those questions, to find out why this happened. to find out how it happened. to find out who is responsible and whattthey must do to be held accountable.
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the witnesses here today will help ut a human face on this tragedy. there are d disturbing parts of this story we need answers to. one of the things we have done is ask for specific information from bp, haliburton, transocean, and other people on that drilling rig. one of the things that is frustrating when we ask for information, as i did following our may 12 hearing, and getting back a response only after a second follow-up request was sent that was incomplete and ignored the request that we made at the time of the initial hearing. mr. chairman, it is obvious to me that we will have to continue to pursue answers to the questions. we need to have additional hearings as necessary until the people oo louisiana, mississippi, alabama, florida, and indeed, the entire united
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staaes know what happened and what we're doinn about it. and i yield the balance of my time. >> thank you, mr. chairman, and good morning. i feel sort of like deja vu all over again. in september f 2005 my staff and i came to hear firsthand the importantly the health needs in the wake of hurricane katrina. it was the first of many visits, and now with this region barely back on its feet frrm that tragedy, we are faced with another one, which, in the words of many residents, is and will be far worse for many, many reasons. so thank you chairman stupak and ranking member burgess for having this oversight hearing where its impact is being felt.
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first of all, my condolences to the families of the men whose lives were lost. thank you for having the courage to testify and for that of the other families that you represent, and the important position you are taking on the future of off-shore drilling in sbite -- spite of your loss, as well as the high-sea dedication act, which is an insult o the workers when they sacrifice and leave home for weeks at a time. we wish a speedy recovery to those injured, and to those whose live hood has been dis-- livihood has been disrupted or damaged. we commit to working with president obama to do everything we can to bring your ommunities and your lives back to as close to normal as possible as soon as possible. at every briefing and those of
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national ressurces i have asked bp and the coast guard for assurance that everything that needed to be done was being don+ to ensure long-term health impact, including using and providing protective gear. it seems the assurances we received were empty. without the insistence of residents, the decisions of like lean and lmrk, it seems no commaze would have been made. this is troubling and i look forward to hearing from our witnesses as to what they think we as a committee and a congress need to do. i remain reluctant on new drilling. i think enforcement of regulations could improve safety measures for off-shore drilling that is now permitted. that incceased regulation of the companies involved in the process. and the fullest possible recovery for all that has been
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damaged must be a part of our responsibility going forward. that you, mr. chairman. i i yield the balance of my time. >> thank you. as members know, our subcommittee just don't do a hearing or two. this is our second learg. we'll be doing another one within the next two weeks with the head of bp, tony hayward, up in washington, and later this month we have a fourth hearing set. so like hurricane katrina, our committee came down. i led that group. with the health aspects after l- hurricane katrina. this issue. it should be noted, if i count it is unusual for nine members to come down for a field hearing. eachhdiscussion we have had on these circumstances, ll members have shown up. i thank the other members for taking time out of their schedules to be here.
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next we will hear from mr. markee from massachusetts. he's chair of the environment subcommittee of the energy and commerce committee. mr. markee is also chairman of the committee on climate change. >> thank you very much. our hearts go out to those whose loveddones were lost in this explosion. we ttank you for beeng here today. it takes a lot of courage. we thank you for being here, and we extend our sympathies to you and your families. we begin to appreciate how vital our role in the oceans play in our committee as soon as we saw the impact from that explosion. we have ecome increasingly frussrated as each rosy asssrance provided by bp failed
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to be true and every attempt to stop the oil's flow failed to work. every day as this oil encroaches on the wetlands,est wearies -- estuaries and beaches the anger is felt by the entire area and the people living in the gulf it is clear that bp's actions, that while they spent billions of dollars to evelop technologies that would allow us to ddill ultradeep into the ocean, that investment was not matched with the development of ultrasafe technologies that couud prevent, contain, and clean up the consequences of these types of drilling operations. it has also become clear that just as no one has capped bp's profits, the great damage it has caused and as a result, we must make sure that bp must repay everything that they have cauued
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in terms of damage and that should not be capped as well. bp must be held accountable. oil has made its way onto the beaches of four coastal estates from louisiana to florida. as of yesterday, approximately 33% of the fisheries in the gulf of mexico had been closed. depriving people of their livlihoods. i have seen firsthand the the decay in the marshland and heard of the birds and the fish and phe dolphins that have already been killed by oil. we have also heard reports that there may be plumes of sub surface oil posing an insidious threat to deep sea coral and other marine life, oil that will not make its presence known by the clear signs of tar balls or oil birds ut which could nevertheless harm generations of awe quatic life.
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reearkably last week bp executive tonyyhayward claimed that bp didn't have enough resources in its tool kit to handle the gulf oil disaster. that is why this week i will introduce the oil s.o.s. bill that will requure companies to fund research and development for upgraded safety and cleaa-up tools so that in the future companies like bp will never again be relying on 30-year-old technologies to deal with 21st century problems. that is unfair to the families who must suffer the consequences of the lack of preparation by bp. thank you mr. chairman. >> thank you, mr. markey. >> the gentlelady from colorado, -popening statement, please. >> in late august 2005 a perfect storm, hur dane katrina,
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devastattd homes and took a terrible toll on human life and the economy. the spring, five years later, the residents of this area being resilient and caring and working hard had just started to turn -ptheir commi committee around d rebuild their lives when another perfect storm hit, this one being entirely manmade. the deep water horizon is a national tragedy, and we are terribly concerned about it, but the local effects are felt far more acutely. the human impact in terms of loss of life and njuries and the economic impact to the local fishing and tourism industries and the environmental impact along the gulf coast are all terrible, and frankly the effects will last indefinitely longer than we know. accidents on this scale raise many questions about what went wrong. answer on who to blame.
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we have had several hearings on the national resources committee in which several of us sit where we probe the causes of the accident. what we have been able to tell today is that it really was a perfect storm. we had a blow-out in testing at certification problems. we had faulty cementing. we had a lack of a chain of command. we had many, many problems that are going tt take a long time to sort out. but as the chairman said, this committee is nothing if not stubborn and diligent. and we're going to get to the bottom of it because if we don'tt this could happen again, and we can't lee this happen again. of loss of ecosystems, in terms of loss of economy and jobs. we might have another environmental perfect storm. mother nature is unpredictable.+ but we can't be causing thesee impacts ourselves.
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we have to make sure that systems are in place so hat when the important drilling that occurs out here is done, it's done in an environmently safe way and in a way that will save human lives. natalie and court any, i want to echo echo what my colleagues have said, this is a terrible loss to you and your families, and we are hear to sympathize with your losses. much more than that, we want to do what you want to do. we want to make sure that we work with you so that this never happens to any other families. and mr. chairman, i yield the balance of my time. >> thank you. >> opening statement. the jeptllady from illinois. >> thank you, mr. chairman, and mr. burgess for holding this veryyimportant hearing here in louisiana. i am really happy that we can be here to offer support andd
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congressmen.
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we also have to quickly determine holes in that regulatory and enforceeent framework. for example, canada requires a relief well at the very same timeeany deep water well is drilled. i also believe it is imperative eliminate the cap on damages imposed on oil and gas companies that cause environmental catastrophes. it is uncon shunnable that current law allows companies like bp to make billions of
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dollars in profits and then when an accident occurs, the law may protect them from paying for the damages they cause. the point of toddy's hearing is to learn about the impact of the oil spill at deepwater horizon drilling web -- drilling site in the gulf region. we are hearing from these two widows today. representatives of industries being hit the hardest. i want to thank each and every one of you for being with us today. i know how difficult the last six weeks have been. i can try to know that. i want youuto know that we truly appreciate hearing your perspective of ttis unprecedented disaster, and we will be working to make sure that we address the problems and assure that it never happens again. thank you, mr. chairman. >> thank you. let's hear from our two native sons, charlie malone, member of
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the committee. go ahead. >> thhnk you, ssr. our condolences to you and thank you for having the courage to be here today. mr. chairman, thank you. ranking member burgess, thank you. our state, our people, our environment, our lively hood -- livelihood, thank you for being here. the news media is reminding us that we are facing the largest environmental disaster in our nation's history. has difficult not to draw the correlation to the largest national disaster in our area as well. it is easy tt become distracted day long, but we are here to make sure the real tragedy on
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people's lives aren't forgotten. i would add a footnote. louisiana issstill open for bbsiness, and the people along the coast need citizens in the neighboring states to ccme and enjoy louisiana, and we need to make certain that this investigation into what went wrong is thoroughly carried out. we must examine all solutions that may -- we must examine all solutions and guard against a situation like this ever happening again. these stories are not easy to share, so i sincerrly appreciate the willingness of the witnesses to come before this group and share their personal accounts. hopefully this hearing and others like it will reveal the pattern of missteps and negligence that led to this continuing growing catastrophe.
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because the responders work as fast as possible to cap this well, it is important to keep this from striking our coast. in addition, we must make sure the safety of the workers in america and on these riggs are protected. the sooner we aser -- ascertain the vullnerabilities, the sooner we can correct the problems. i am afraid when the cameras and the national attentiin leaves, we in louisiana will only be just commencing with our 3 the oil in the gulf of mexico could wipe our industries for decades. we need your expertise to mitigate these scenarios and to make our resources productive again as soon as possible. again, mr. chairman, ranking
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membee, thank you for holding phis hearing. >> that concludes the opening statement by members. let's have our first panel of witnesses. on our first panel we havv miss natalie roshta whose husband was killed during the explosion. ms. kemp whose husband was killed during the explosion. they were high schooo sweethearts and have a 3-year-old nd a 4-month-old daughtee. thank you both for being here.3 subcommittee to taae all testimony under oath. please be advised that you have the right under the rules of the house to be advised during your testimony. do you wish to be represented by counsel? pull that mic forward, please. >> i do not.
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-- i do have counsel. >> could you identify your counsel's name. if during testimony you want to consult with him, just take a moment and do so. if they testimony they would have to be sworn in. miss kemp, do you have outside counsel. >> i am formally represented, but i have mr. barry here today to give legal counsel if iineed it. + >> if at any time you would like to consult with him before you answer, please do. >> so please rise, raise your right hand, and take the oath. do you swear or affirm the testimony you are about to give to be the truth, the whole truth, and nothing but the truth in the matter pending before this committee? >> yes, i do. >> yes. >> let the record reflect the witnesses supplied in the affirmative. you are now under oath. we will hear an opening statement from each of you. pull that mike up -- mic up
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closer to you so we can all here you. >> before i begin, i would first like to thank each and every one of you again for allowing me to say on behalf of my how's, shane, who was tragically killed in an explosion at bp. and on behalf of our son, blain. i never thought i was goinn to have to say to a bright-eyed 3-year-old that his dad would never come home to us. every week when blain and i would say good-bye and see him off, i feared the helicopter ride. through god's grace and family and friends, we are makinn it through. after all the meetings and safety drills, i knew he was
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safe. when the deepwater horizon incident began to unfold, i began to ask myself, will i ever recover? what if he's out there and they didn't look well enough? as the days past, i understood the reality. deepwater horizon famill. it was important to him to provide the life he wanted for me and my son. his lifestyle allowed me to attend college. we met -- the life blain and i
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knew was over. shane and i's wonderful love story came to an end. blain has now a void that will never bb filled. the day i found out and i got that phone call april 21st and i heard what had happened, i knew he was safe. i just knew he was coming home. the only thing i knew was to get closer to the water. just to get to the water. i knew that's where he would be. as the hours passed, i received a phone call that he was on a missing list and they were searching for him. -pi never thought it would be o this level ever. as i sit here today, i come with
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a new perspective. a perspective that i can make a differencee i do fully support off-shore drilling and always will, because i know like my husband shane, many en and women depend on this as a means to provvde for their families and also to provide our country with a commodity that is necessary to everyday life. p would like to leave here today knowing that because of my husband's tragic death we can begin to focus on making safety the most important priority. not to focus on making more safety regulations but to implement the ones we already have. thii tragedy will not be in vain. as of right ow, my husband's
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death is in vain. but if it serves to make the lives of men and women working in the oil field top priority and to call upon these oil companies that they will be held accountable for their actions. my intense -- there were many safety practices in place. it is my hope that these 11 men who suffered a tragic death will serve as a motive to enforce safety above all others. in the weeks that shane was home the laat time he was to go offshore, we had many detailed conversations of the wrong that was going on out there, the mud they were losing, the high-pressure situations they were in. i pray every day when i wake and my bed time prayers with blain that can be able to sit down with him and be able to tell him his daddy was a hero because his death changed the heart and soul of those who placed their
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business agendas over the importance of life. in closing, i would like to accomplish -- what i would like to accomplish today before i say that is the removal of death on the high seas act. any man that is injured out there has more rights than a man that was killed providing for his country and his family. in closing i would like to ask that the next time you see a picture of deepwater horizon or hill about the oil spill youu think about this -- the flow of oil eventually will be stopped. slowly the environment will recover. the gulf will continue to provide us with the oil and gas we all enjoy, but the lives of the 11 men and survivors of the ddepwater horizon incident will forever be changed. we can only hope that the legacy of this tragedy will be more than a devastating oil spill but
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an unfortunate tragedy that prompted change for those that love their work in the oil fields of the gulf of mexico. >> thank you. mr. kemp, your opening statement, please. >> good morning. my name is courtney kemp. my husband was one of the 11 men killed on the deepwater horizon oil rig that exploded april, 2010. on behalf of my husband and family, i would like to thank you for the opportunity to speak oil and gas industry. s in the - my husband and i have two pressures daughters, kaylee 3, and madison 4 months. our daughhers will only know about their father by the stories we tell them. while oil companies should make a profit, i don't believe it should be at the risk of
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breaking lives or destroying families. i ask you to consider harsh punishments to all companies who choose to ignore safety regulations before other families are destroyed. i am not here today to suggest coogress implement more safety regulations but rather for you to hold companies accountable for safety regular layings in place neglected. if proper safety procedures had been taken on the deepwattr horizon, it is my firm belief that this tradge dick -- tragic accident would have been prevented and my husband's death would nnt have happened. one can see the devastation that is happening to the coastline seafood industry in general. however, our state has overcome many adversities in the past, including numerous weather related incideets.
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we are aastrong nation and will recover from that tragedy as well. america is a rich nation, but in my opinion, we have become too dependent on foreign imports. while we realize we are suffering from economic impact resulting from the leaking oil, it would be more devastating if you allow drilling in the gulf to cease. if drilling ceases, nottonly would off-shore people lose their jobs, but the trickle down effect would be devastating not only to the gulf shore states but eventually to the entire country. you must not allow this to happen. drilling in the gulf must i would also like to speak with the members of congress about one of the many acts of congress that may have a negative effect on my family's future. the death on the high seas act is an antiquated act of congress passed in 1920 which spells out the losses that the family of a person who suffers wrongful death on the high seas may
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recover. it does so as a comprehensive act that limits liabilities for death on the high seas. this act does not permit the applicatioos of strong wrongful death remedies. it does not look to general + maritime law to supplement the ii essence, the act limits the liabilities of wrong-doers in this matter such as bp, trans ocean, and many others. my family can never and will never be adequately compens compensated for our loss. what i am seeking is accountability from the wrong doers who caused this terrible tragedy. i ask that the members of congress use this catastrophe as a basissto revisit and amendd this out-dated act from 1920, revise those with 21st realities
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in mind. please use this opportunity to make corporate america more responsible and accountable. require corporate wrong-doers to fully, fairly, and adequately compensate the victims of senseless accidents. thank you. >> thank you both for your testimony. let me ask a question or two, if i may. we'll start with questions from members. our investiggtion has uncovered several flaws in the design and operation of this well, including equipment malfunctions. from our investigation we have learned that bp and transscean were not prepared for a catastrophic loss of oil control on the deepwater horizon like the one that occurred on april 20. we have learned from the following problems among many, but some of the more obvious ones are mechanical problems were uncovered as early as march of 2010.+ the fail-safe tool designed to
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prevent you a -- prevent a catastrophic loss of control was not maintained properly and was not fully tested. it appeared bp made well design choices that compromised safety. there were signs of possible loss of well control in the 24 hours before it exploded, yet steps were not taken to safeguard the employees. it also appears hat bp made several cementing design ccoices that went against the best practices for the industry. this weekend we see adds from bp like this, one we have here, and i point that out because it says we will get it done, we will make this right. it reminds me of the marshee we saw last night. once the oil gets in the marsh yerks you really can't get them out. mother nature has to do that. but more importantly, you can't make your loss right.
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importantly, the ad never mentions your loss. that of the 11 people who died and those that were injured. so let me ask you this, atalie and courrney, what would you ask bp if you had the opportunity? hopefully you can do it through us. ms. roshto. >> if i had one question it would be, i know my husband can't come back. there is nothing i can do or say to make him come back, but why? what went wrong? why weren't you out there trying to do something in the weeks before when they were having problems? p> i would also ask whh, but in a difference sense. why is it that money is more important than someone's life? why? has never mentioned the 11 or bp
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the ones that are injured or the men that are struggling mentally that survived that tragic night. >> through this hearing you mentioned the death on the high seas act. i'm sure every member here took note of it and we'll look into it, as i'm sure the whole congress will. what other hopes do you have this hearing will accomplish? what else would you like to see come from these hearings? you mentioned safety, you mentioned the high-seas act. anything else you would like to see? ms. kemp? ms. roshto? i'm afraid to ask your council, because i'm -- counsel, because i'm sure they have a list of them. >> my request would be to not stop off-shore drilling. when i heard that, hit deep
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because my husband took great pride in his job, and many men depend on off-shore drilling. that is our way of life. i mean, that would not do these men any justice one bit. >> i totally agree with natal ie's statement in that our husbands willl-- it is important that congress and the government in itself takes pride in knowing that there re men out there that worked every day to put fuel in your vehicles, to heat our homes, and that is something that is very knee demrected, and i hope people today realize how important off-shore drilling is.
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we do live in a rural area, and this is our way for a family inform make a living and be able to provide for children. and i hope that you work very hard and diligently to make sure that drilling continues in the gulf. >> i can't speak for all the members, but from where i sit, drilling will continue right now after this tragic accident. i think we need to pause here, let's see what went wrong, and let's make sure it doesn't happen again. whether it is a shallow well or a deepwater well, let's make sure we get it right. we can't have more hearings like this with young folks like you talking about your tragic loss anded environment being devastated in the gulf. i think we have to slow down for a moment here, let's see what's going on, and let's get proper rules and regulatioos and safety concerns addressed.
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i think there will always be drilling in the continental shelf, but we just have to do it better, safer. mr. burgess will go next. five minutes. >> i want to thank our witnesses for being here today. i want to thank you for bringing to our attention the death of the high seassact. it is interesting, we have been talking about changing the law where bp's liability is capped but that actually wouldn't help what you re talking about on the death of the high seas act where no licte liability occurs beyond three miles out from the shore. clearly, as we adjust from 21st century, the liability of the
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companies, this is something that on an individual basis has to be tackled. so just to let you know, your testimony here has been very helpful. let me ask you a question. did your husbands work for bp, or transocean. >> transocean. >> transocean. >> and since the accident, what have you heard from the company itself? have hey come to you and offered any type of assistance with putting your lives back together? >> actually, i sat across the president and c.e.o. of transocean. me. they have kept in close contact with me with anything to do out there. >> are they giving you financial assistance at this point? >> yes. we are still receiving a pay
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check. >> is that the same for you, ms. kemp? >> yes. the president and c.e.o. came to the house to express his personal condolences. like natalie i also had a representative from transocean who we keep in close contact and he and i speak on a regular daily basis, and yes, we are still receiving their payccecks as if they were out there working. >> so the ability to keep body while things are being sorted out, you have a cash flow that issavailable to you. >> yes. >> yes. + >> the reason i asked ask is because just proceeding the deepwater horizon tragedy there was another tragedy that occurred on land on april 5 in west virginia, and mr. haiiman i will submit this for the record, but a newspaper article on the uper big fran branch mine, each miner's spouse or
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beneficiary will collect life insurance benefits that are five times the annual pay, the spouse will be entitled to 20 years of health benefits, dependent children receive health benefits to age 19 or 24. this company obviously got out in front of this issue. i'm glad to hear that transocean did. i actually don't know if any of bp's employees were killed in the accident. i'd be interested to know if they have been as forthcoming. but clearly, this is not -- this, in my opinion, this is preventative medicine. this is taking care of a family that needs help or is suffering a devastating loss. i'm glad o hear transocean has stepped up. i hope that it is every bit as reasonable as what the owners of upper big branch mine did, because they clearly recognized public relations problem as is
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transocean as is bp, and honestly, as is hhliburton did your husbands talk to you at all? you renched the fact that whether you talked to your husbands they talked about things that were not right on the rig. is there anything you can share with us about the stories your husbanns were elling you during those last visits about concerns they had about safety on the rigg >> the last time shane was home, the three weeks he was home, we had some pretty detailed conversations about some of the issues out there concerning the wells. >> let me stop you for just a second. >> is that normal coastside 3 overlied? -- was he overly concerned? >> i had an intense interest in his work because i couldn't see with my own two eyes i had a lot of questions. i mean the 4 1/2 years he was
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his work because he was moving and he was interested about jobs. we had some interesting conversations about ome issues that they had out there. main reason he had an issue with because he was working in the mud room, mud balls, no oubt. i actually spoke with him at 1:30 the morning of the accident. he expressed some concerns about an issue they were having. i talked to him at 10:30 .m., at that time he didn't express any concern but at our 1:30 a.m. conversation he had concerns about a well issue they were having, the mud loss. >> in the little time i have left, can you respond to that, ms. kemp? >> yes, my husband also stated that they had been losing mud so
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they had had a problem with flood control before, and the well involved a lot of tools, several millions of dollars worth of equipment that were lost. they were also receiving a lot of kicks from the wells, a lot of gas pressure, and that had been going on throughout the duration of his well. >> thank you. ms. roshto, ms. kemp i want to thank you for bringing up this problem with the jones act, otherwise known as the death on the high seas act. because a lot of people don't appreciate what is going on out they don't know these are flagged vessels. the deepwater horizon zent incident was flagged as a vessel in the marshall islands. were you aware of that? >> no. >> becaase they are a flagged vessel, they are subject to the jones act limitations which are very restrictive. they don't provide any expense for quality of life damages, for
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the emotional loss that the two of you have, for losing your husband, for the emotional loss that your children have, for the fact that your husband won't be there for their high school graduations or their weddings or those wonderful times that families get to celebrate. if this had happened on land under the laws of louisiana and almost every other state, your -pclaims would have been significantly greater and different because those quality of life damages are recognized but they aae not under the federal law money known as the jones act -- federal law known as the jones act, and that is the concern you are expressing. is that what you were sharing with the committee? >> yes. >> now, one of the things that we do kkow is that transocean was involved in reaching out to families after this disaster occurred, and ms. roshto you talked about being contacted --
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i think you said it was 6:00 in the morning by phone call? >> actually, my mother woke me up. she had gotten a phone call from a friend of a friend that was on another rig. i actually did not hear from transocean unnil 11:22 that afternoon to ask if it was a good contact number, and i again talked to him at 2:20, and they did not confirm that he was 0 on the missing list until around 4:00. >> you tell us the extent of your contact with that representative from transocean when you went through that difficult first period. >> the first day i called pretty much every hour. after 11 it was pretty much every hour. it was never any new tu -- new information. i didn't find out he was on the
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i had heard that there were different hospitals. i actually ccntacted different hospitals that i heard some were -pat. we made it down to the ort. we stayed there. that's when we found out that those that were supposed to be coming in went to where the seaport was supposed to be coming in and that's about the time i found out he was on the missing list. >> when you talk about the boat coming in, are you referring to -- >> the crew boat that was 3 >> bringing the survivors back to show. >> what were you told, if anything, about the circumstances that had led to this disaster? >> at that point at the seaport i didn't know much. i knew i had watched on the 3:00 news conference on the tv. that was the extent. at 3:00 i watched the news conferencee that was the most information i heard then. the only thing i knew up until
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that point was that there had been an explosion. >> when was the first time you had contact with anyone from transocean that gave you some sense of explanation of what had happened to your husband? >> never. never. >> so to this day you have never received an explanation? >> no. >> no. >> ms. kemp, i see you also responding. tell us what your experience was like in dealing with transocean. >> i receivee a call at approximately 4:30 on april 21st. the lady told me that there had been an explosion on the deepwater horizon and an emergency evacuation was taking place and the coast guard was on the zeen. -- was on the scene. i immediately jumped to my feet and said where is my husband. she said, at this time we don't know. i said can you tell me anything about him, anything about the crew? no, ma'am, we don't have any
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information. i said, ok. i took her name, her phone number, and i said that i would be contacting her. then about 6:00 that morning, i called -- went back and forth with ms. wheeler, and i called his home, and becky was already en route to new orleans, his wife. he was one of the ones injured. i said, where is wyatt? what's going on? anybody is. i don't have a clue. when i gee down there, i will try to find out something for you and get back to you. transocean set up a hooline. i started calling the hotline every hour on the hour. when i did, around 2:00 someone anssered the hotline and told me that everyone had been accounted for and no fatalities were reported. >> that was 2:00 the first day?
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>> 2:00 the first day, april 21. s -- at approximately 2:30 the sheriff in our parish came to the house. he is a personal friend of ours. he came to the house and said courtney, let's go in this room, and i need you to call this lady. that's when she informed me that wyatt was one of the 11 missing. to this day we have never received any explanation as to what happened. there is a lot of speculation, but we have never gotten an explanation from transocean, bp, anybody. >> mr. markey, questions, please. >> thank you, mr. chairman, very much. and thank you for our testimony. it is very important for us to hear how our laws and how they are implemented imfact ordinary families. so the first thing i would like to tell you is that your
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ttstimony is going to help to make it possible for us to repeal the death on the high seas act so we never again have a situation like this. we have thousands and thousands of people who are out on threes riggs on the ocean and never was any intention of -- for you and people like you not to be able to recovee for your families. thatthas to be changed. and your testimony is going tt very profoundly help us to shall able to accomplish that goal. you talked a little bit about the concerns your husband had about mud control, about well control. was he concerned about the shortcuts that bp was making in safety out on the rig, ms. roshto? >> they never made any reference to bp as far as safety. the last problem, he actually
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aatended a safety school that transocean put on. and he highly spoke of transocean and their safety. now, there were statements made that there wereetimes that he felt there were agendas put over safety, you know business agendas, to get the work done. weeks before the first week he was out before the accident, there was talk about high pushing them to get -- ou know, theyywere over-budgeting, they were over their time on the hole. yes, there were concerns, but never anything pointed toward bp or transocean. >> what would you say to bp about the impact that compromises in safety have upon families when splg goes tragically wrong?
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>> i would say that it is all going to be ok in the end. you are going to get that oil out of that hole, regardless of how long it takes. but there were 11 men that suffered and 11 families that suffered and let's not place the importance of oil over the importance of a life. >> thank you, ms. roshto. what would you say to bp about the compromise of safety in the pursuit of oil? see how -- people say moneyy is the root of all evil, and in this case, it really was. it is plain to sea that of course bp was in a hurry because they were over-scheduled and of course trying to hurry up and get off of that well and move
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onto the next one. so in a way it is just the fact that life is way too precious and no amount of money will ever be sufficient to bring your spouse back or your husband back or annthinn like that, and frankly, it is not that important as far as you were talking about a life. >> well, one way that we can hurt bp is to make sure that bp stands forr"bills paii." that the money for feams familiee, the money to clean up the gulf comes out of their pocket. >> that's right. >> and that we repeal the death on the high seas act and we change the laws in order to make sure hat companies are more
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accountable when they harm not only lives but the livelihoods of people who are dependent upon these businesses. >> i truly believe that bp will never understand thh pain that they feel. the only way that big companies like that will feel the pain is when it comes down to their pock etc. because that is base basscally how we have felt is all they are worrying about. until they are hurt bad enough, they will never understand what we are going through, and even if they are hurt bad enough, they will never understand the pain we feel. >> weeare going to make sure that they feel the pain and the two of you will always be remembered as we go back to washington. >> and if you can do that, this will serve justice to all the other men, if you can do that. if you can do this, it will make all the pain -- i will speak for
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courtney, too, and all the suffering worth every bit of this, just to see something change out there. >> thank you. thank you for your time. >> thank you. >> thank you, mr. chairman. testimony today and also in your written testimony about the safety meetings, fire drills, and safety teaching that your husband, shane, went through. did you feel he was thoroughly trained about emergency procedures on the rig, what would happen? >> yes, and no. every sunday, especially the last sunday before he would come home on wednesday he would always say, fire drill, baby, i got to go. practice, practice, praatice. evacuation drills and all that
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kind of stuff. but hroughout all this i have learned that at 10:00 every sunday, same time every sunday, every place. if there can be something different done as far as maybe under different conditions or different ways of going about it practice and you can do it, but when it really comes down to it like it did the night of april 20, it all goes out awash in an incident like that. if there could be something done different to protect them in different situations. >> but they were trained to do one thing but maybe not respond to a situation like this? >> yes. >> ms. kemp, what about your husband, wyatt? >> they were trained, they were made to do different things and go through different trainings and all of that as great, and
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then wyatt would say, some helped, some didn't. but at this catastrophe, the magnitude of this accident, from what -- whether we talked to some of the crew membees and everything, all of their safety plans, all of their, you know, fire safety drills, all of that went out the window. they were not expecting something of this magnitude to happen. you're talking about a blast that threw the axis off the window, broke them in haaf. there were things there that they couldn't do anything to help the other people, because like this. .
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did your husbands talk to you about that? did they talk about a lack of a place -- a system in place to address that? >> shane was fully aware of the chain of command and who to go to if we had a problem. from different things i have heard, who should have been in command? who should head been making which call? that should have been adddessed. it is a dyyamic position.
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they do have a captain. there needs to be a definition of who is in charge and who makes which calls in which situations. >> ms. kemp, you have thoughts on that? >> i agree. my husband knew who to go to personally. in something this horrific, it all went out the window. >> do you know ii yourrhusband felt like he could go to people and talk about this gas buildup and have it addressed? or was it just something he was reporting? >> it was more of a fact that he was reporting. i feel certain that he and mr. wheeleer talked about it -- wheeler talked about it. he is also a tool pusher and was above the chain of command -- above wyatt in the chain of
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command. >> we are sharing that everybody knew about the problems and but nobody felt they could stop it oo slow it down. they knew there were problems, but they were just sort of going along to do their jobs. >> i know about smaller issues. in 2000 -- 2008, my husband received an award for citing something within transocean, not within bp. within the company, transocean, shane always felt like, if there it to is co-workers. -- his co- workers. never once did he make a statement to me about feeling comfortable about speaking with bp.
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if he had a concern with transocean, never did they follow up with bp. >> thank you. >> can ms. kemp answer? >> my husband was a company man. the bp men call the shots at their well. as far as the rig with transocean, my husband was willing and able to go and speak to transocean members. like that, because they called the shots. >> thank you. your questions, please. >> let me follow up on that. because the project was being rushed to be finished. did that pressure come from bp to transocean or was that just internally transocean?
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did the transocean employees feel like they were being pressured by bp to complete the job? did you have any sense of that? >> not really a sense of it, but iibelieve that was the extent. bp was in a crunch. they were behind on the well, i think -- i know, speaking for wyatt, that he was pressured in trying to get things her read up and done. >> that pressure would have come from his -- get things hurried up and done. >> that pressure would have come from his boss? i am trying to understand who might have short circuit did and what the cause of that would have been in terms of safety -- short circuited and what the
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cause of that would have been in terms of safety. >> i think it was a trickle effect. transocean knew that -- they knew the contract and how they pay the men on the rig. i think it was a trickle effect. -p>> was any of the slowdown --t was a difficult well, as you both mentioned. was any offthe slowdown particularly identified as things that would affect safety? >> when they were osing tools loste whole, they had the hole. they put the deepwater horizon rig over this hole and were stilllhaving problems in the first two weeks that they got their. -- got there. they had to drill a relief well.
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>> has transocean ever made any statements to you or assurances about financial compensation saidyour families -- phey are paying salaries. did they ever talk to you about the future? >> they have come to me and >> i see. >> but it is not enough. >> we spoke, but nothing of the serious nature. >> and what about bp? what kind of contact have you had with british petroleum? letters, phone >> two pp men attended shane's -- bp men attended shane's funeral service. in never extended a hand or a hug or said i am sorry.
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i never saw them after that. >> they came right up to you an+ ask you? -- asked you? >> they spoke to me right after the service -- right before the service and i have not seen the incense. >> mrs. kelp? >> two bp men came to the service. one extended his hand. i shook it. he told me he was -- he wanted to hug me. the other gentleman extended his hand, tolddme who he was. that was the extent of my conversation or dealings with bp. >> did they identify themselves as too high up they were -- how high up they were in the company? >> no, ma'am. >> was there ever any indication from either of your husband's
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thatocean and beat tbp, different instructions were coming down, that there was any feeling that bp was not doing what it should do? was there ever any of that? >> my husband never spoke of that. >> no, ma'am. >> aside from both of your feeling that we should repeal death on the high seas act, it sounds like you not think there needs to be new legislation, but rather enforcement. is there anything else you would think we ought to do in order to >> i think -- there were plenty
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of safety regulations in place. it was the mere fact of them being enforced n not being deflected -- and not being neglected, and having some accountability when they are negleeted. >> i fully agree. these companies have to look at -- have to be looked at, perhaps by a third-party.. there must be a backuppplan. ii there regulating ttemselves, the right or wrong way? undoubtedly, it was the wrong way in this situation. >> thank you very much. >> thank you. >> next questions. >> thank you. thank you again for being here. mrs. kemp, i understand why it worked for transocean for four
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years before the explosion. we know he was a hard-working+ individual who had recently been promoted to assistant driller. did he work on the deep water horizon for all of those years? >> it was a little bit more than four years. he had only worked on he >> how would heehave compared that to other sites would have been mm question. >> he had worked on a land rig, but not in the gulf. >> your husband was also a very hard worker and wasstraining to work at the subsea level. he had also worked for four years for trrnsocean? >> iyes, ma'am. >> you testifiid that your husbands spoke to you about the difficulty -- the loss of equipment and so forth. did shane work on any other
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projects that he would have been able to compare? >> no, he did not hear the day he got tired, he called the guy who hired him -- no, he did not. the day he got hired, he called the guy who hired him and was told that the deepwater horizon was where he would want to be. >> the pprpose of my question was to try to get a sense of the experienced in this operation and whether they were different from any others. in their discussions with other workers, this deepwater operation, did you ever get a sense that the difficulties they were experiencing more difficult -- were different or greater than what might have bben who had worked on other rigs? >> wyatt just told me that -- it
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was difficult to get some kicks from a ell and have some problems, but it was their job to deal with the problems, fix themm and go on with it. this well was different in the fact that they were having so many problems and so many things were happening. it was just kind of out of hand. p> that was your sense, also? >> the numerous kickbacks they were having in the loss of the well really concern shane. he had never worked in it before. that was his main concern and we talked about that a lot. >> although a lot of information is being uncovered, there is still a lot that we do not know. i think you can walk away from this hearing with the assurance that this subcommittee, as it does in every instance, will not answered and we know what happened and who is responsible.
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again, thank you for being here and honoring the lives f yourr husbands. next questions. >> thank you, mr..chairman. on a bright note, i have pent many a hunting season in liberty, mississippi. we hunted above the when i was just out of collegere - there when i was just out of college. jones' bill is a good huntinn and fishing area. is a good huntingg and fishing area. there are probably guys that i would have had a lot in common with. the debt on the high seas thing bothers me tremendously. i will support and work to try and make sure we repeal and reffrm that aw. it is egregious that there is no recourse then the -- than the
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obligation being reimbursement for a funeral. that is very disheartening in these days and times, and even back in those days and times it should not have been that way. did transocean advise either of you how long they intended to continue giving you your husbands' checkk? are they going to continue health benefits? >> we will receive a paycheck -- we have not spoke about health insurance. >> we of touched on health insurance part. it is my understanding that, until a settlement is reached,%+ we will be compensated with health insurance, up to one year after the settlement. we have to pay for it at the company rate.
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after that year, we're on our own. >> the life insurance -- is that a company benefit? or is that something that you and your husbands purchased? >> it is a company benefit. >> is it adequate to maintain your family? we do not know how long that might be -- the rest of your life. >> i would say so, because ast year when the deep water horizon started to take on water -- deepwater horizon started to take on water, he came home and told me he was working in a dangerous environment. we took out extra insurance from the company. >> you have to pay for that yourself? >> making out of his chest and it was at the company's expense -- they came out of the check
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and it was at the company's expense. >> we took the company plan.. >> there has been -- i have heard, i do not know what is ffct or not, and i do not know if either of your husbands have a conversation, but i understand that somber day -- schlumberger was on the a rig prior to the explosion and said they were getting off just 11 hours out. did either of your husband's talk to you about that? >> my husband did not, but i am aware of them being out there. >> did they say anything about the unsafe conditions? my father is friends with someene who works for them. he told my dad. >> would you think that your husband's -- they could say to the transocean people -- if they are getting off, maybe there is a problem?
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>> let's fall in behiid. a mother should have been put on the same crew boat -- >> they should have been put on the same crew boat or helicopter and leave behind a skeleton crew to see what was going on. dii either one of them -- did y'all talk to them that afternoon in that period of time where they might have said and then about schlumberger? >> my husband never talked about that. i worked in a dangerous job as well and he did not want -- i do not think he wanted to bother me. >> he did not want you to worry. what do you do? >> am an investigator for job protection -- child with the department of social services. and you get some very situations -- >> you get some hairy situatioos.
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one of the things that come to the committee -- this lady is from mississippi, this lady is from north louisiana. if we look at the residencies of the people on the rig -- we probably have miisissippi, arkansas, alabama, tennessee -- you name it. they're from everywhere. this is one rig and it is just like that of throughouu the south, as best i can tell. i support drilling. i hope that we can find something between shutting down and drill, baby, drill to give us the balance, to maintain the economy, to provide good jobs. need tosame time, we make sure this never happens again. safety should be our first priirity. i think all of us -- that is where we will work to try and make sure that, when you go to
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work, your expectation is that you will be coming back from work. >> thank you. your next questions -- five minutes. >> we talked about safety regulations. [inaudible] were there things that you saw and conversations you had with husbands about safety regulations that were not properly administered by federal regulators? >> i did not speak to my husband about safety regulations on this well. learn about everything
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that was taking place until after the explosion. >> did you have a conversatioo with some of the other families? >> correct. we had some conversations with other crew members. there were things that had come out in the media. >> looking back on our conversations, i never thought about it when we were talking about it -- i never thought about the probllms that they were having and how it could end up. what i found out as i had conversations with the crew members, and i thought about what he said, it realll made me realize that there was a problem. he saw it. he knew that there was a problem. he never physically pinpointed a safety issue that they had, but he did make reference to safety. that was -- he was always very
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prideful about transocean and how they practiced safety. it was always transocean, never bp. he was always very prideful in transocean's practices of safety. there were downfalls to their whichy and different they went about doing things -- different ways they went about doing things -- cards and permits. >> i have heard some stories that there may have been some pretty strong disagreement between the transocean and pbp people about displacement offthe mud or the sealant.
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we had a hearing with transocean [unintelligible] there ere some strong disagreements overrthe process mud. was used to displace the >> i have heard that frommsome of the crew members, one in -pparticular, who walked in andp and transocean were going back and forth about what should take place that day and about the displacement of the mud ann sea water. it as ind of a heated conversation. >> that is what i heard. >> [unintelligible] did they perceive that responsibility? >> i have learned more about
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mms in the past weeks than i ever knew. >> you have an agency of over 1700 people. it seemed like one agency was+ not doing its job. that is something else we will it may be a case of just doing your job right. big government or small government -- we should all be confident in our government. that is something eese we have to do on our side to make sure that families do not have to worry about this in the future. yyu both talk about what the industry did to your lives and your families, and how much
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pride your husbands had. you have talked about this potential shutdown. all of these rigs -- they have been operating along time. you have shared what happened to >> what happened to my family is being able to put a roof over my child's head. i had been the college. i was supposed to graduate may 13. i had to take an incomplete because of the incident. shane had every intention of putting me through school to get my masters. it meant a way for my child and mm life style -- thaa most 21 or 22-year-olds cannot proviie to their children. offshooe, you make more money
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than you do on land. that is just a fact. it also meant being able to come home and spend three weeks -- every ay -- with your family. most people do not dead but the weekend -- get but the weekend. our husbands could be with us for three days ---three weeks, doing everything we wanted. >> in louiiiana, you can walk down the street and ask somebody, what do you do for a living? 75% or 80% of hem will say that they work offshore or they nobody -- are they know somebody who works offshore or for transocean. the oil industry is a very large industry in our state and with the coastal states. especially in my home town. like she said, it is one that -- my husband could go outtthere,
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make good money, ann be at home with me and the girls, and give us his devoted time. we talked about hunting. i had to share that with my husband -- he enjoyed his fair that was definitely one thing that he enjoyed -- was a time at not have to worry about the rig or work. it was one thing that we all really enjoyed it. >> thank you, mr. chairman. i cannot imagine what it is like. i appreciate the strength of both of you are exhibiting. -pthank you so much. >> we would like to thank you again for your testimony. let me again as you for your counsel. the both of indicated you have counsel. transocean has asked for a $17 billion cap.
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we would like to -- your council to explain whether that would be effective. you have raised the awareness of the issue. we would like a full explanation as we tried to move forward to amend that ct. -- try to move forward to amend we would appreciate the council givinggus more nput on that. we will use this to supplement the record, since there have been many questions on that act. thank you. we will dismiss you. thank you again for your courage, your testimony, and feel freeeto stay if you would like for the rest of this hearing. thank you both. >> thank you.
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i would nowwlike to call our on our second panel, we have wilma sobra, a chemist who provides technical assistance to the louisiana environment she has extensive knowledge on the effects of a spill. also, mr. duplessis, an oyster and shrimp fisherman. he has been put out of work. mr. kelby linn, who works for a beach front property group on dauphin island.
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also, moby solangi, dr. solangi has written on the fisheries. as with the last panel, it is the policy of the subcommittee to take all testimony under oath. please be advised that you have the right to be apprised by counsel during your testimony. do any of you wish to be represented by counsel? >> nope. >> everyone is shaking their heads. please rise and take the oath. >> do you swear and affirm that your testimony is about to be the truth, notting but the truth, in front of this committee? >> but the record reflect that the witnesses have replied in the affirmative. we will now hear their opening statements. keep to five minutes.
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he -- you may submit a longer statement for our record or to supplement our record at a later time. mr. linn, i asked you to speak into the microphone and we will be ready to go. begin,,sir. >> i want to first thank police for their testimony. we are here to ttlk about -- thank the ladies for their testimony. impact on the environment, but nothing can mitigate the impact they have had. our condolences. my name is kelby linn, i am vice president of the chamber of commerce and owner of a realistic and property management company on dauphin island, alabama. we are a small island that depends totally on tourism -- charter fishing, that type of thing. it is sand beaches.
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the environment is probably our biggest draw. once the news hit the press, we got ourselves into a situution where about, seven days later, all of our reservations started being canceled. we have 110 vacation rental properties that we manage or other property owners on the island. pe're one of the llrger employers on the island. as our business grows, so goes so many of the others -- t-shirt shops, restaurants, small things. there is not a traffic light on the island. independent restaurants. phereeare no franchises. is all family-geared. tourism is family-based. we have come into this season with the best year that we have experienced since a lot of you
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folks were here from hurricane islanddand hurricane katrina. i will not o into that history that everybody around here knows all too well. we were coming in -- where 33% over last year. most of us were coming in with the first year in the black that we had seen since 2005. that being said, within four weeks or five weeks, we lost over 175 reservations and dropped from almost and 80% future occupancy rate down to approximately 30%. the businesses that we have around us -- it has all been in preparation. the government has responded strongly. governor riley has really stepped up and started helping -pus a lot. bp's part of this whole thing is -- the preparation on dauphin
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island has actually been pretty strong. we have a lot of community meesures that have been put in place. we have productive sand barriers that were built. we had the national guard to come in and put containment system on the water's edge on the north side of the island. we have had several firms -- booms that have been put in all the way around. there has been more preparation. last week, we had our first tar palls hit. we're now into tar patties and the connections of those. we have not seen the devastation in the marshes that others have seen. we have our estuaries and oystering and things around us, but it has not impacted us quite get like it has there. we know it is coming. we know it is at pensacoll
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beach. we know the sheen is within 1 mile offshore. there has been significant odor at times. the quality of life has, not+ only for those who live there on the island such as myself, but for anyone who would want to come visit, has definitely deteriorated substantially. there is no end to this. the next step i have to come o is, what is bp doing to help us pet through this? the claims process has been cumbersome. there have been treeendous amounts of $5,000 checks given out to individual fishermen and oysterman -- all deserving. when it comes to the small business side -- to anyone who has more of of pnl impact -- more of a pnl impact, we have seen no claims response so far. in our case, we finally decided to go with a local attorney to help us do that.
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i'm trying to keep the business but he to do that, but i feel like the claims process -- i3 the claims process is not helping us whatsoever and it will take that type of clout. the suggestions that i have -- i would hope they would come out more in the question and answer. we feel like the and fighting the elephant -- ant fighting the elephant. thank you. >> thank you. mr. duplessis? pull that up there a little bit. >> yes. i want to also express my condolences to the two very strong and ladies that spoke earlier -- young ladies that spoke earlier. thank you for allowing me to
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tell how this tragic oil spill has affected me and my family. the worst part of this tragedy for me has been the unknown. a brief note about myself -- my name is a clarence duplessis.. i waa going in a small fishing communnty just north of louisiana. my family settled in that paris six generations before me. at the high sshool, i join -- in that parish six generations before me. after high school, i joined the -- i served.es and is urged mike ar -- my wife was in the navy. i went to full-time commercial fishing. in 2005, my wife and i lost
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everything we owned to hurting the drina. -- hurricane katrina. a few weeks ago, we were faced with the deep water horizon -- deepwater horizon oil spill. before the critics lower their heads and say no way, i will explain. faced with an enemy that wanted to kill me. this was a problem with a solution -- kill them first,%+ survive, and the problee is solved. when-a doubt, i had a young family to feed, clothe, and educate. it was also a problem with a solution. i had experience with fishing, i had saltwater in my veins.
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i went fishing. my children pay their college tuition by working as the cans they loved every minute of it. in 2005, hurricane katrina hit us with a crippling blow. even then,,though the entire region was wiped out and the bags and left, there was still a solution. just ii case there is anyone here who has not yet noticed, the people of south louisiana and the fishing communities of south louusiana are some of the haadest working, most defiant, earth. after this storm, we faced the difficult task of rebuilding, but that was the solution. now, five years later, we are facing the deepwater horizon oil
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spill. this is the worst of our problems, ecause there are no answers or solutions, only questions. as we watched our livelihoods and an entire culture be washed away by cruue oil and chemicals that no one knows the long-term effects of, we ask, will we have a mortgage payment next month? we would be able to go to bed tonight nd stop falling asleep good news. what if they do not stop the leak? how long will this last? will i ever be able to go oystering again? how long will it take the fisheries to recover? will bp, around with the much needed money they promised -- come around with the much-needed money they promised? leave like the insuranceags and-
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companies did? what can i do to survive? if weeget a tropical storm or hurricane? how can i get a loan when the sba still holds the ortgageeon all my properties from katrina. i have 1000 questions and no answers. i hope you can understand why this is the worst tragedy of my lifetime. i thank you for your time and may god bless you all. >> thank you. dr. solangi, your testimony. >> i thank you the testimony -- the committee for inviting me. my condolences to the young ladies. this is a tremendous tragedy. biology in 1980 from the university of southern mississippi. little did i know that the subject of my research, which was the affect of south
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louisiana crude oil on fish, would come in handy. my research focused on the pathological changes experienced oil and a potential recoverye- once these toxicants were removed. i have worked with marine mammals, specifically dolphins, in the region. the waters of mississippi and the adjacent waters in the gulf of mexico are home to one of the largest dolphin populations in the united states. there also inhabbted by several other endangered, threatened, and protected wildlife species. dolphins are an important part of the ecosystem. being on top of the food chain, they are good biological indicator of the health of their environmental habitat.
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they're constantly iipacted by a variety of natural and other factors. in the aftermath of the horizon will spill, it is now even more necessary ann important to study the potential changes that may occur in the dolphins and their habitat as a result of the oil spill. the institute for marine mammal studies was established in 1984 as a nonprofii organization. we're dedicated to education, conservation, research and marine mammals and their environment in the wild and in captivity. -pwe serve as a liaison between public and private entities science. the subjects of research that we have covered are very broad and include different things about+ underwater acoustics, health, genetics, microbiology, biology.ology, behavior, and%- we've had cooperation from the university of southern
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mississippi, jackson state, oklahoma state, university of miami, university of california berkeley, louisiana sttte, and the naval reeearch laboratory among othhrs. the institute is the only organization in the gulf coast states of mississippi and alabama with the capability nd expertise to care for sick and injured marine mammals while simultaneously conducting programs in education, conservation, and research on3 the institute has been a network for over 25 years and the national machine fisheries -- marine fisheries have been involvvd in the care of second marine mammals in several coastal states. we have developed a full-service research and ehabilitation center in mississippi. it is fortunate that we have a
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facility that can at least help in the rescue, recovery, and rehabilitation of some of our endangered and threatened species. so far, we have handled thh over 100.umber of sea turtles -- only a few of them have been involved in oil spill related activities. the majority have no evidence of that. with handled -- we have handled thousands ii our area and none of them have been involved in any oil spill activity. this is one of the largest oil there are very unique habitat, consisting of base, by use -- bays, baaous, estuaries, and islands. the tidal exchange is low as compared to other areas. the region is very rich in
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fishery resources and produces a substantial amount of seafood. if the oil well is not capped quickly, the effects of the oil spill on the habitat and its wildlife could be catastrophic. the time for recovery will be dependent on the amount of oil in the environment and the time of exposure. crude oil is very cooplex chemical compound and its degradation is completely complex as well. many components can enter the food chain and affect the productivity of the ecosystem. the potential affect of the oil spill, including the large not only affect the it ecosystem, but could also affect the livelihoods of commercial and recreational fishermen as weel as toorism. thisscould be -- have a downward effect on the regional and national economy. anddrisss. development and use of our resources requires adequate
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safeguards -- a saaety net to protect the environment and those who make their living from it. thank you. >> thank you. ms. subra? >> thank you. thank ou for the opportunity to submit testimony. i am providing testimony on behalf offsubra company. there are two human populations that are experiencing the most exposure due to the bp crude oil spill. community members in the coastal areas. fishermen and workers employed to install booms and clean up the crude oil. the ongoing also has resulted in the formation of crude oil aerosol which have moved onshore way ahead of the oil slick and
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continue to move onshore aloog with the crude oil slick. these aerosols have caused and are continuing to cause to new members to experience voters along the coast of the coastal staaes -- the crude-oil aerosol has resulted in the health impacts including headaches, irritation to eyes, nose, throat, and lungs, and asthma attacks. ms. bennett -- these have been experienced by people living in louisiana and where we are today. it has been experienced in metropolitan areas, including new orleans, at mile marker 100 -p-- that means it is 100 miles from the mouth of the mississippi. people in new orleans are also experiencing these severe impact. the been experienced bb workers and fishermen in the general
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area of the crude oil slick and the marshes and the estuaries where the oil has come on shoree the epa website says some of these chemicals may cause short- lived effects like headaches, eyes, ose, and throat in order to offset the loss of livelihood, bp has been encouraged to hire the local fishermen whh have firsthand knowledge of the area. these fishermen were hirrd to install the booms and to start cleaning up the spilled oil and the absorbent pads. on may 4, 2210, we received and began to distribute protective gear to the fissures to utilize -- to the fishermen to utilize in their cleannp activities. they include goggles,,gloves, and sleeve protecttrs. we continue to distribute this equipment to the fishing community and to individuals in theepolluted area. workers hired began reporting
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health sentence such as severe headaches, not shot, difficulty breathing, and dizziness. the workers were reluctant to speak out, because they were scared the word lose the job -- the only source of income they had. the wives were speaking out, -pbecause. they were because all of of the -- because they ned. concer the wivee even stopped speaking out. they said that they should avoid skin contact and nasal passage contact by using the appropriate equipment. on may 7, we went to u.s. district court on behalf of the fishermen who chaalenged bp who did not want to provide them the proper training and equipment. a consent degcree was signed by the bp people thought they
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would be responsible to provide adequate care. we are provided information to the epa on the lack of compliance by bp with the terms of the consent decreee they have not been there to deal with the oil. they issued a detailed directive of the kind of training that+ were required for each different task, as well as having required bp to provide the togear. still, bp failed to provide respirators to the workers exposed to the crude oil and the workers experienced help them back over and over again. however, when some of the fishermen brought their them, bp told them to put theh respirator away or to leave thh job. those who have been employed to do the booms, they are pulling
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them in ith their hands and no protective gear. as stated earlier on may 26 and 28, workkrs were injured and brought to the hospital complaaning of hospital, and nausea, dizziness and chest pains. they have worker safety programs. evee after oceanndid this, -- osha did this, another issue has become heat stress. osha pointed out that bp did not have adequate protection of workers from heaa stress. you cannot use a respirator because it increases your risk of heat stress. if the workers are being exposed to heat as well as the toxic organic chemicals from this bill, they should be protected not usingth insults', heat stress to allow them to continue to inhale the toxic
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chemicals. thank you. >> thank you. thank you all for your testimony. we will begin with our questions. dr. solangi, in your testimony,3 you indicate that the zero well -- it is not capped quickly, the effects on the habitat and its wildlife could be cctastrophic and the time for recovery would be dependent on the amount of oil in the environment and the length of exposure. my question is, not only do we have to cap the well and stop the flow, you have to have clean up. it will still be time before the waterways can purge themselves, correct? >> correct. part of my research and in the 1980's was animals who were exposed to oil.
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the question was, how soon can3 it really was dependent on the time of exposure and how long it took. we found amazingly that nature has a way to recover,ut but the speed of reccvery depends on how much they were exposed to it and how long. that is what i referred it to. >> i bring this ad from bp. in the marshes, we saw the oil. is there any way to clean that up? >> is very difficult. it will take a natural process. one of the biggest problems with this disaster is that it is ery difficult to mitigate these issues. you're very familiar with the hurricanes and earthquakes. it will take time for nature to fix itself. >> in the area where we were
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yesterday, i think that 90% of that area is affected. the only way you can flush this out -- clean this out is really through the louisiana and mississippi river flushing itself naturally, right? >> that is one part of it. there'll be natural degradation and bacteria. there'll be other processes that will take care of eliminating the oil. it willltake time, depending on how much oil there is. small amounts for small periods of time -- nature has its way of taking care of it. we do have natural siieepages. this is the moot concentrated amount. if it continues to come through, you'll see prolonged exposure and prolonged effects. >> the eventual effects of the oil on mammals or any of our
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aquatics life really depenns on tte time of exposure. i'm sure each species must depend on what amount initially affects it. >> congressman, thattis an excellent question. we mentioned inhalation. many of these animals breathe right on the surface or close to where the oil spill is. you get respiratory problems. marine mammals are just like you and i appeared they breathe air, to their young ooes, and eat the fish that are conttminated. it is really compoundedd particularly with the animals really close to the surface f the the spill. it is a very significant issue >> mr. duplessis, did you receive a $5,000 check from bp? >> yes, i did.
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>> nothing since? >> no. i met just yesterday with an adjuster who said that i would be gettinn another $5,000 check. >> i was reading that the earn $5,000 to $6,000 if thee have a good day. is that right? >> that is right. >> mr. cooper was asked to go out and do some clean-up. heeis the head of the louisiana %+rimp association. he could not be here today. he took the opportunity to work. it is almost like a lottery -- you might work for a few days on the cleanup, but then it is a month later before you are called again? you get the $5,000 check -- is
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for working?initial ppyment or >> the $5,000 payment that has been given oot the commercial fisheemen is supposed to be in mitigation for lost wages and lost income. >> a day's work for shirmper -- shrimpers. >> we might make $5,000 in one day, but we also have long periods with no income at all. for examppe, the first time i met with the adjuster, my wife and i at there, and he asked the question, well, how muuh are you losing this month and how much do you expect us to pay you? >> right.
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>> my wife went throuuh the papers and said, we maae $27,000 last year. he said, we will give you a check ffr $5,000 noo. you give us your prrof of and down and next -- proof of income and next month we will finalize your adjustments. we met yesterday and we got another $5,000 checkkpromised to us. >> you are still $17,000 short for one month. >> yes. >> bp says more than 2600 vessels are now involved in the response effort. that would include some of the shrimpers. they're not 2600 vessels out there today? that is like the cumulative amount over the last seven weeks since this bill has been going on -- this spill has been going
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on. >> my name has been on the list since day one and i have never gotten a call. >> your book has never seen the water -- boat has never seen the water. you might be on the list. my time has expired. let's stay with you for just a moment. the $55000 -- again, as a student of the consumable crustacean, i thank you for what pou do for the country and the economy. it is important that we get you+ up and running. .
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>> that is their explanation. >> i would never tell the irs, but how are you end your accountant handling that? taxable income? flax i would say that t is. fleck not treated as a business interruption insurance, obviously, as it would not then be taxed. that is y understanding. i am not an accountant, so do not take that to the bbnk. you are from alabama, not the onny one with a newspaper. "the wall street journal" this morning, i was reading it from texas. talking about how emotions are boiling over.
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bp met with local leaders to discuss cleanup efforts and were threatened with incarceration. i have a solution. "you can put that in our jail and you can sit there until you figure out." is that eflectiveeof the feeling back home? >> it is rapidly escalating in terms of frustration. half we invited bp to come speak at a chamber meeting. we were told that they had 400 chamber vessels, contract did they had 400 in waiting and 50 on the water. we were beginning the war with tar balls and things.
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we were not completely slammed at that point. buu that was the attitude. the money situation is the same thing. the $5,000 is more a marketing ploy. they are coming back with payments for sooe of the folks. the folks that have called about working and have not seen money as of this morning and 9:00, that is what i call. about $5,000, we have $60,000 every month in overhead. i would get to a half days out of that. that is why i ended up having to do something else.
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the only way to keep the business alive is with cash flow. >> a loan with no end in sight, how will you manage that aspect of the cash flow? >> the problem right now is survival over the next six months. i feel that between youuguys helping us out there will have to be some help from bp coming down the road. we have approximately two months left of cash flow. >> i agree that there will have let me ask you a question. you detail this in your safety concerns. where is the epa in this? this is ffderal oil. these are federal hydrocarbons on federal land. you've talked about health and human services. should the epa not be out their front and center? to heek witt vp, epa should be giving the directive -- bp, epa
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should be giving the directive for protective gear. it was excoriated for not having done moreeto protect the people sent to do the cleanup of the 9/11 site. now congress is left takkng care of their disabilities for the rest of their natural lives. half why is the epa not more proactive in this emergency? -p>> they have put actors on the shore. solid lan. epa is monitoring the slick and the boats where the workers are that data has been given to epa.
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it has not been made public. to see with their monitoring fo3 >> it seems like the epa should assert their authority to make protective gear available to those involved in the cleenup. it waa their fault that they were out there having to clean that stuff up in the first place. >> questions, please? >> i would like to focus on the claims process for bp. they have repeatedly stated to this committee and the press that we will pay all legitimate when i missed the tour it was because i was in a monsoon and driving back last night i aw a sign on the side of the road
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that captures of the attitude of most people of the goals -- most people in the gulf towards bp right now, "dam bp, god bless america." feel aaout what is happening to them, their way of life, their family, and that is why this hearing is so important. when i talked to the folks down there thhy said they had not been out in weeks evvn though they were hired by the teeth. onn of the things i want to talk we heard that they had created a small business impact process. as you talked about how it
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worked, as i understand t if you are a boat captain for a deck hand you can receive from 5000 -- up to $5,000 per check up front. you can tell us about how the process works? >> from the start, when they started they sent out a list of things that we would needdfor proof of income. they wanted three years of income tax records. trent tickets, tickets thattwe use for shrimping -- shrimp tickets, to give their views on the boats for shrimping. iiwent in with everything that they requested.
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the man almost like he did not wanted. he took the three years of income-tax because my wife had made copies for them to take. you wanted? i have got it. -- you want it? i have got it. they gave me a check for $5,000. this was not payment in full. first ssartee the program i was one week into the process. local attorneys read the paper work and they were ssgning paperwork relieving bp from
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liability. >> they were requiring you to sign a waiver against future claims in order to get this up front payment? -p>> exactly. >> i bet that nooone explained the first payment. >> by the time i had got there the state attorney was all over bp and made them do away with this paperwork. >> but it was after some of the payment? >> yes. but they also made them take those papprs and null and void them. >> is there anything about your experience with the bp claims process that you would like the american people to know?
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>> is a cluster. it is a total mess. -- >> it is a cluster. it is a total mess. there were three people in this building taking claims. three fishermen would walk out. each one was told different things from each individual. one fisherman, a good friend of ourr, told me that an adjuster basically threatened him by telling him that a -- hey, you have a big toppline in your taxes and your bottom line is kind of small. we want to put you on notice that he would get payment on the bottom line, not your gross income.
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>> my father served in the marine corps. my cousin served in the marine corps. you are the embodiment of the marine corps motto, always faithful. i am very grateful that you came to share your story. >> what a beat -- what do you think of the adjusters for bp? >> and i think they're hired, contacted. >> the ceo of bp said that they would pay for all legitimate claims of all fishermen, of all tourist based industries.
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you put that in your profits from last may, $27,000. but they only gave you a check for $5,000. what did they say you? >> that this was not a final settlement. that this was only the beginning of the process. in other words what they're saying is that just giving this amount of money o us to hold this over de until final ---to hold this over until final >> bp made $6 million between jannary, february, and march of 2010. you came in with your tax records proving that less may be made $27,000. what did beat the say to you?
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but they would wait more? -- that they would wait more? i think they are justtwaking you out. i think they're waiting for the storm to pass and they will not have to pay all these claims. i suspect that this is their real plan. >> i am just hoping that it does not wind up the way i think that it will. when the storm is over they will pack their bags. >> you know that there is a llt that does not protect them -- there is a law that protects them from having to pay anything more than $75 million to all of the indussry in the gulf. they are only responsible for cleaning up the mess in the ocean. in terms of the impact on you,
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would you support repealing the liabiliiy for bp to ensure that all of your pay? not because bp out of thh goodness of their heart determines that they will give you a check, but because all law requires they have unlimited liability. would you like to see repealed? >> 100%. >> how abouu you? >> i agree. >> i agree. >> all right. we have got agreement on that. how about the jones act, would you like to repeal that law? the limitation on damages to families? >> no doubt. >> of course. >> i agree with you. >> great. i think what we are seeing already is business as usual at bp.
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giving you $55000 when you have incontrovertible evidence that last may your family made $27,000 is just the beginning of a long story we are going have. we just had a big debate. nine years later. about the health impact on people working on 9/11. people expooed on 9/11. there is still a debate as to whether or not we shouud take care of those people. we are having a hard time doing that now. the lesson that we learned is that we have to get in at the beginning and give them the protection at the beginning. if you think that the fee is providing the resources necessary to make sure that the equipment and training as their to protect these people who are being exposed to these chemicals --
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>> not adequately, something we have been working on since the beginning. >> do you think that bp is doing -pthe work to gettthe full understanding of the chemicals in the ocean and on all of the uniitended consequences of shooting these dispersants into the ocean and the impact it can have on the livelihood of the people here in the gulf? >> i do nothing that they were prepared for it. >> b d does not stand for be prepared, we know that for sure. but we do not want to have to nickel-and-dimed them on these issues to make sure thht there is complete protection. in it -- in terms of tourism, what has bp done to make sure that there is anticipatory help for you n alabama?
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>> they granted $25 million to the state. part of his is for preparation. part of it was for advertising to try to counter the things being said in the press. >> how much does the tourism business make in alabama >> i do nottknow the grand total. a thing we bring in somewhere around $70 million, but i am -- i think we bring in somewhere around $70 million, i am not sure. >> the trickle-down effect on that, $10 million is going to mobile county. that is being broken down to approximately $7 million on our end going to use for secondary
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stoppage on the beach. not ii the water because of surf and things like that. trickling down from there've to a sizable sum in the fishing community. conjunction -- conjunntion with the staloff, $125,000. [inaudible] of these questions that mr.ome%- markey was asking. confirming something said in your written testimony as grossly inadequate, these
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fishermen and shrimpers getting some payments of $5,000 every month, of what you said in your written testimony is that for small businesses like yourself you have an overhead of $60,000 every month. much more cuubersome.ems to be have you behalf -- have you been getting any payment from bp? >> no, ma'am. i was transferred from one apartment to another because phey had not dealt with small business. it is my understanding that while we have been invited back to the neighboring city two geared to doing anything more than gathering information. everything is being processed in fouu other states.
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>> have you been given any information? >> in my case i went to a local attorney to start helping me with the process. >> do you have to pay the attorney? >> afraid so. not that i want another loan. >> so, now you have to take out loans to keep yourself float because of claims process. do you think that the process could beemade more easy? let me back up. you have been said to be organized. possibly as organizeddas my husband. [laughter] so, you cannot find out from may of last year what your income is. i assume you have similar records? >> i have good records.
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the same information is pretty much the same. >> they should be able to determine the compensation that you will get it mr. hayward, when he said this he was under oath, just like you today. that everything would be made clear. do you think of that well happen? >> my only hope for obvious that we as individuals mall with one, we have no chance for of -- we have no chance of fighting bp. you guys can help us. i should not be borrowing money, i should be getting a grand that bp days. >> guess what? we intend to help you. as you heard, we are going to
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stay on this. i have a coople of specific questions about the environmental impact. you spoke in your oral testimony about dispersants and your concern for gulf coast residents. epa has expresseddconcern over the buuning of oil and use of oil as persons and has asked bp to use less of a toxic dose birth in -- this person. what was their response? >> bps for them to use a less just applying the same one. pne of the major concerns i have is that most of the constituents are proprietary. >> you mean the chemicals? >> right, the chemicals in the disbursement. when they go the hospital the staff does not know potentially
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what chemicals they were exposed to. an issue we have been worring on for a long time. thattkind of information needs public but if not them the first responders immediately. >> is there some alternative to these dispersants? is there some alternative way to cleaa this uu? to minimize the risk of dispersants? >> the alternative ways are to recover it from the slick, dispersing it into the water column. which has a huge environmental impact. it will not be as visible as when it comes onshore as you saw. >> let the members know that we
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let's get one round through and move on. >> you told us that they were forced to sign waivers that severely limited any future legal claims. that was resulted with a waiver is being removed. how did you get that to happen? >> we went to court on may 2 as they were -- as a result of these limited to the state of louisiana, once we get a
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decision in court is about enforcement. five days later the court said that bp must train and provide protective gear off. and it is not being enforced. lack of enforcement, lack of engagement so far, the agreement >> in the context, the bp ever explain the rationale for saaing they wanted to remove liability? >> they agreed in court that it would not be appropriaae and therefore would not hold water. like any of the agreements that have been signed. >> in the vienna. mississippi and alabama stated that if it was to apply the case would have to be brought.
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they made that decision. >> are you saying that bp is still not providing any kind of appropriate protective gear? >> in the case of those troopers they were not provided. they have not provided the respiratory protection. that is where we get the inhalation of toxic chemicals. in fact if they bring one it provides the sugh -- provides us, since it has been said that they must do protected against heat stress, used as an excuse to not have them wear respirators. in fact you cannot deal with th3 inhalation. yes, it is very hot in louisiana. but this is a workplace
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environment and they need to be protected against both situations. >> york organization -- your organization is for him to the root -- declaring there has been prohibition? what role should osha play? >> they should be enforcing the regulations they have to have appropriate workplace safety ann protection for workers. >> that is their job. have you seen them? >> they were slow in coming through. demonstrate that they were needed and then they issue a directive bargaining oo the training and the gear, required
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by bp. now we are seeing them going out ann evaluating, focusing much more on the stress. still, the workers are getting sick when they inhale. >> i assume you have brought that to the attention of osha and the company. what is the response to that? >> the issue of the stress and respirators just came to light as i repared my testimony. so, we are trying to figure out what kind of a response we can get. we are working on that right now. >> some of these economically stressed workers hired to do this job apparently expressed fear that they would be fired if they complained. is that accurate? >> yes. i am hearing that rom fissures
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all across louisiana. >> were any fire? how did they get that impression? >> by working for bp or their contractors. >> have people been fire that complained? >> fissures will tell me this, but when it comes down to telling someone in an affidavit they are very reluctant. they are very reluccant -- thei3 >> thank you. >> fiber like to thank the witnesses for taking the time to be with us here this morning. in your testimony this kind of follows on to what my colleague was askingg
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decisions have been made as a trade-off in terms of detrimental health and the quantity of crude oil. both are important. why can we not do both? why can we not protect health and the environment? as well as protect shorelines. is it not possible to do both? what do you think needs to be in place to make sure that we can do both? we need to protect wetlands, estuaries, health nd the environment. this is a vast country. leader of the fort -- leader of the free world. >> when the oil came ashore it dispersed into the water columm.
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it has allowed the slick to come on shore. the issue of tte workers, the workers should have been protected from the very beginning. it is a bad enough situation with ool coming ashore and contaminating things. there is no reason why these workers should not be hired or be put in a position to be totally protected. if bp had a job site on a rig you would expect as expennable, it comes down to protection. that is what we need to focus+ on. >> they are dealing with the
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area from oil and need protection to stop the inflation pathway of exposure. >> in all of my statements i have asked about protective gear assurances did not mean anything, did was not until your organization forced the issue thank you for the work you have been oing. but obviously with this being the largest oil spill in the history of our country there is a lot of media attention. from your perspective, as the overall impact and balance been positive.
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what is the impact of the media there? >> pretty much 90% neggtive. the terrible pictures of the birds and environmental quality. we have been getting so many calls from people, speaking mostly for alabama tourism, the questions that are being asked are -- do we have to go out and
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work with dead birds on the beach? this is the impact that the press has had. we have a $40,000 every year budget for the chamber of commerce. the impact has been terrible. >> like he said, everything that comes on the television is all negative. our area, our seafood promotion+ board has been running some
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pretty good advertisements for the seafood. hard to convince people that the seafood is safe when you have got areas being opened and closed daily. buffs by a lot to my neck in advertisements saying that if you have been affected, i am up to my neck. >> is that enough? >> your time is up. >> my time is up? ok.
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>> finance, question. >> thank you, mr. chairman. thhre have been a lot of issues about disbursements, helping or hurting in the long term. or without dispersants, what doh you see? if we shut it down tomorrow, which would be wonderful, what do you see in he timeframe for recovery in the gulf? and for the estuaries, should >> a very long term recovery. that estimate is better served after we have stopped the flow of oil and we have got rid of the slick as well as the water coluun. then we will haveeinformation about contamination both in the margins, the wetlands, and they
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will be able to figure out an estimate of how long. >> that was why i said if we shut it down tomorrow. it is somewhere in the range of 1 million barrels each day, 20,000 barrels -- sorry, 25 million barrels each day. -- 25 million gallons each day. in your mind, what is in your thoughts. what do you eel is the future for you right now and the community?
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>> just like you i am a fisherman. i have been trying to discuss it. -- trying not to discuss it. i hhve four children and 14 grandchildren. this is a part of our culture. it is really devastating to think about. the possibility of a love him to
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take out my grandkids. -- the possibility of not being able to take out my grandkids. in '65. i am not young anymore. so, it will be a rough 10 years. >> exactly the feeling i have. mr. lynn, you are on the opposite side in one respect. we have cleaned beaches quicker, but you have estuary's right behind that are important to the fisheries. how are you feeling about this short-term and long-term? of >> that is the biggest is the
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difficulty we are having. >> we can see things and fix thhngs and get on with our life. i fear that it will take decades. the stigma of what is going on here, we are still bbing told that everything was cut in half by katrina. this is five years later. this stigma of oil on the beaches, it is gone, the culture. from day to day none of us know how we will " -- how we will
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cope with this. >> when they started talking about emergency loans i've got great, it would give the peoole impacted an opportunity to see where this would play out. talking about decades, it will not play out in our lifetime.. >> i will say one thing, onn phone call and my loans were deferred for 12 months. it was not a hassle. i have to give them that credit. >> mr. chairman, thank you.
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-ptalking about bp doing the testing over the water for air quality right now. >> that is how it is. bp is supposed to do it on the water. >> but we are not getting access to those air quality reports over water? >> we have asked for it over the last week and half. >> why is the epa not putting it on the web site? >> i have no answer. >> we will get that answer for you. there is no reason. >> it would be very helpful. >> that is their job and their task. if that have access to the data, it should be made public.
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it for sure should not be withheld. if we could get them to dig deeper. i would like to talk about the chain of command. maybe walk in touch on this. one of the problems we have been having is getting things done with the locals doing everything they know how to protect our way of life. seems like we keep running into look -- into roadblocks. what have you all found from the defensive efforts? i know that we talked for weeks to getta barrier plan from the federal government. to try to protect the march. -- maacia -- marsh.
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who is telling you to go where? >> basically what would normally have been a corrosion year was put aside. between bp and the federal government they came in and within three weeks we had a protective sand barrier along the main road. which is where the infrastructure runs. because of the hurricanes we have lost a lot of sand on the west end wherr the tourism is. it can bring stuff right in to the system. that was the reason for that protection. >> you have had this confirmed by bp?
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helping us.rbors dr., he is >> like i said, it took us over three weeks. >> we had action quickly. surely we did in terms of emergency protection devices. >> i have been in talks with billy, telling him to take care of itself. >> he is working hard. chandelier we have been trying po get this done for years.
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i do ot know what the problem was. you haveethe corps of engineers. we needed approval from the corps of engineers. weeks. they got approval on part of it. >> still only one-fourth of the plan. i do not think they have even started dredging the sand. >> i do not know the problem. not knowing the long-term effects from studies, but as far as my side of it we have been saying this for years. why should we have to start new studies? >> when they said that we needed
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environmental studies and that the environment was being destroyed, we have got to set up a better chain of command. every time something is not happening no one wants to be accountable. things like this happening every day, even though the pressdent says he s have an, no one was to be in charge when things go wrong. we need to prrtect these places. >> i understand that. on the same token i caa understand the president's mission. just like with drilling.
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say go ahead and drill, clearly -- >> i will ask members to respect the 5 minute time period there was express interest in doing we promised we would finish by 2:00. half what are the safety nets you are looking at? we were way down south yesterday.
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there are very many shoreline drillings and environmentally sensitive areas where you should not do it. it took me a long time but i got the ban on the great lakes, my district comprises 600 of the great lakes.
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>> as you said, for decades it has been a fact of life. half there are many safeguards and engineering issues. this is an anomaly. cuff cuff rigs can become your job to make sure that accidents like this do not occur. small issues can be reconciled.. >> it seems like the engineering to drill deeper and in more sensitive areas has been developed.
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the science is the same as it was in the early 1900's. >> that is the side of the equatioo people having difficulty with. what do we do now? half >> what is long-term a fact? >> there are two elements.
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in many cases is not coming quickly. the other major component of crude-oil areecounter carbons. a large number of those components are knoww to cause cancer. when they start to inhale it did is taken into their bodies. half they can get cancer, but as well aa heart and lung problems, breeding and into the body, going home at night and coming back out to be exposed again. we do not want contaminatiin
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because there were not provided with proper protection. >> who is the responsible enforcement officer? >> osha primarily as it is a workplace issue. the agency's that the federal level have the oversight. the ones that are the command center could do something to provide the bp actually provide has said, which the agenciesourt have said. well. >> yourrtestimony for air monitor information and disbursements, i am sure our committee can get some answers. mr. burgess? >> you said that the epa is monitoring of land and the dp is volunteering on the water, correct? the ir quality? >> that is hoo it is divvied up.
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>> is the land monitoring data time on the epa website? >> can you ask that again? >> the levels on land? website usually within one to two days. >> you said there was concern over crude-oil. the epa had the official statemeets thht were short- lived. correct? hydrocarbons are higher there could be long-term effects? >> ride. the concentrations are being detected in the monitors that
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they are some distance from the marsh. the workers are exposed to much higher concentrations. >> my understanding is that there are people not involved in the work that simply live in the area that complained of respiratory complaints and dizziness, nausea. is ttat happening? >> can you ass again? >> people not involve that just live in the area, are they being affected? >> they are being affected by the aerosol in the air being carried on shore. >> so that is the responsibility of those individuals. >> the federal health agency. >> are they fulfilling their obligation under the law? >> they are starting to send mobile clinics. >> yessor no question. are they fulfilling their obligation? >> not adequately.
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>> what are some of the levels on the land? >> i did not understand. >> ocean monitors that have been deployed, what are the levels they are recording? >> here is a lot of their picking up on the land at 6 monitoring locations. it does not exceed the ambient standard in the louisiana but they are very close. the ambiance standard is established to determine where in the general area exceeds thh standard and what the sources are. >> is that the 1.4 parts per billion standard? >> yes.+ >> with people complaining of levels are not being exceeded?%- of the chemicals are volatile and being detected. sufficient to cause a health impact.
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we have asked over and over again with -- for systems. >> what is the plot -- surprise you to learn that the application submitted by bp suggesteddthat they did not have to prrvide environmental data? and it is a worst-case scenario in our very first hearing? the application submitted was woefully inadequate. a shame on them for not filling out the application and not taking it bacc to them, saying that this is not acceptable. you must show us how you will mitigate the environmental effects if this thing gets away from us you will have to show us how you will mitigate those of factss unfortunately lacking in the
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application as approved. let me just ask you a question. i appreciate that the spca has been good to work with. having run a business myself, i understand that when you start borrowing expenses you can only do that for so long. are yoo the sole signatory? is there a line where bp and sign-on? >> i was hoping you could find that. >> what if they go away as a consequence of that in your held with the loans, is that correct? >> totally. >> that does not seem like a satisfactory arrangement. >> is like being on the second floor of a burning building and taking a 50% chance oo dying in the jump.
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>> thank you, mr. chhirman. >> questions, please. >> i would like to follow up on the point that dr. burgess wass raising. and it seems like this process was upside down and backwards from the beginning in terms of the leasing approval process. .
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during the four-year lease. despite that information in the permitting process, a conclusion was reached that an offshore still larger than 1,000 barrrls would not have a significant to environmental impact. whaa do you think of that3 >> i think it was inadequate. there were a lot of hypotheticals considerations, and, really, it was not -- >> this obviously got accepted, and the process went forward. >> one of the of the things that
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we know is hat b.p. had discussed a worst-case scenario response in its initial exploratton plan, indicating that it considered a potential large scales bill, and their exploration plans said that the worst-case scenario would be a blowout at the exploratory stage, leading to a spill of about 162,000 garrelssper day of crude oil, and their regional oil response planned for a worst-case scenario and had been improved, and yet, we know that testified they were capable of handling a certain release, 250,000 barrels per day, without having a disastrous impact. and yet, this spill was
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releasing somewhere between 1000 and 5,000 barrels per day, so what do you think of b.p.'s representations' during the permitting process in terms of their capability of handling a catastrophe of this magnitude? >> i think at this time, they have not demonstrated their ability of being able to handle a catastrophic oil spill. i mean, right now, i believe is more than 5,000 barrels, and, ultimately, we are going to find out that this was not very well thought out. >> miss? >> this gets back to eeforcement or oversight, and they should have had to have a mechanism to demonstrate that they could, and obviously, they did not have the credibility because this spill
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has not been contained and has caused some environmental damage, so how much, as you review these applications, indeed accept at face value, and how much do you require them to provide information as to hhw exactly they would handle such a situation. >> one of the things that has been hard for me to understand, given the magnitude of this spill and the region is affecting is how a company like b.p. can get an exemption in the later stages of the exemption process that preventssthem from having to do an environmental impact study considering all of these different scenarios based on where that well is located, because if you lookkat the issued on mayy1, 2008 -- that mms issued, you would have to do
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that analysis, and dr. burgess, you have to go into more detailed analysis of the impact of such a spill, and yet, we know that in the central region, where this well is located, they are not subjected to the same requirements undermm's opwn issues. we have to protect the livelihood's of the people, like the witnesses we have today. >> thank you, mr. braley. mr. maakey for questions. >> ms. subra, you said that they were not publishing b.p. data. epa told us that they can on the data, but on may 20, epa and
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the department of homeland security ordered b.p. to publish that data on its own, and they b.p.'s website, if you want access tt it. have you had the opportunity to look at that? >> no, i have not, but i will, but it would also be great if epa -- >> i think that the more information we can put out there, the better, but the good news is that it is on b.p.'s web site. after today's hearing, we will make sure that it is viral, that everyone has access to it, that it is up there. doctor, what do you think could be the longer-terr consequences to the health of marine life as a result of exposure to these? >> i think it could be devastating.
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the area you are looking at is very unique. it is not unlike the valdez or prince william sound. these are bays, estuaries. the flushing is very minimal, one to two feet per day, versus 12 in other areas. you hear about mud masks when mud actually retains oii.. this has mud and clay, and it is going to retain them. >> the chemicals that are creating a toxics due out in the gulf of mexico, what the fed can they have -- creating a toxic
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stew? are you concerned about the health impacts on human beings? >> yes. through bioaccumulation and magnificaaion, you would see some of these contaminants go through the system. as i pointed out in my testimony, the amount of exposure and the amount of time of exposure will determine how nature will fix itself. eventually, it will take time to fix it. during the war in iraq, 500 million gallons were spilled in the arabian gulf, and it has taken time to recovvr, but, again, there are serious consequences for the area, especcally the wetlands and the bays and the bayous that are a
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criticallhabitat for shrimp and other things to develop. >> so we could have health impacts to human beings from eating it creatures in the future that have been exposed in the future to this toxic stew. you have human beings right now who are being exposed to chemicals and oil that could have long-term negative impacts on the health of americans. i justtthink that there should be no expense spare to ensure that we put in the preventive health-care guarantees that we are not going to allow for this to affect the people down here in the gulf especially, but, ultimately, all across the country, because this food chain upstarts here, but it goes right up into mississippi and the
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atlantic coast, as well. fishermen. >> you could take over my job very eloquently summarizes my testimony. >> again, i am only reflecting your testimony. >> you have summarized what i wanted to say. hearing here today. >> a lot of the things we do, monitoring the dolphins, being on top of this huge change, -- the food chain, the dolphins become the canary in tte mine, and what ultimately happens to the dolphins will happen to us. >> you have all laid out a blistering, scalding indictment
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about b.p. and the gulf. we very much empathize with all of your problems, and we are going to try to do our best to make sure that b.p. and the federal govvrnment are there for you as long as we have to. thank you. >> thank you. >> questions, please? >> thank you very much. dr. solangi, i want to follow up on the questions about the dolphins, because you said that dolphins treated that have not had oil damage. i expect you'll see some of that damage as it works its way up the food chain. >> yes. this is the birthing grounds foo the dolphins. we have approximately 3000 to 5000 dolphins that inhabit the area.
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they come from shallow waters to give birth, so we have a double jeopardy. there are bbb dolphins and baby turtles. the first thing they do is inhale. they have respiratory problems. then, they have skin problems. >> how long before you start -pseeing those effects? >> i would say in the next few weeks, we will start seeing many of these mammals coming to shore. >> we heard last night from the fish and wildlife service and from the state that there were about 100 dolphins that they had seen, only one of which died from oil damage, but they are also expecting to see more, so we should expectancies impacts occur, and do you have any projection about how large is impact would be on the dolphins? >> i think it will be a very serious consequence. we have about 3000 to 5000
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estimated in this area, and a large number of young abies being born, it could be very serious. >> ms. subra, i had a question based largely on theefact that i am in colorado, where heat stress is not a big worker issuu, and my question is, you talked about how people are being -- workers are being told to tick off their respirators and not use them because of the heat stress. is there some kind of a way that we can treat both of those issues at once? that they can both use the respirators so they do not suffer, so ttey do not inhale these contaminants, and at the same time, they can be relievee from this heat sttess? >> first of all, they are not given the respirators in the first place, but they are using the heat stress as a reason not to give it to them. >> how would that work?
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>> one of the ways to avoid the sufficient shade and enough cool liquid to keep you hydrated, nd then, if you are hydrated, and you are not being impacted by the heat, then you can use the respirator, and workkwill not stress your body as much. >> it did not seem to me that the breathing was related to the coolants and the shade parts. >> it is difficult to breeze through a respirator, but you have to remember that the majority are fishers from this local area. this is what we had gotten an agreement on, and those fissures are used to working on the water for long periods of time. they can work with the
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respirators and not stress their body and protect their body. >> i would like to hear his opinion on this. because he has been fishing in the waters. respirator is more of a public- relations thing. if the cameras see the people with the respirators, they will say, "hey, this is dangerous." even though they know it is dangerous. i think it is a pr thing more than anything else. that, plus the good respirators are expensive. that could be part of the problem also. >> but what ms. subra is saying, if people are in hailing these chemicals which could be a health damage, and if you do not make them buy it themselves, but bp buys them, and they have sufficient shade and sufficient
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hydratioo, they can have a respirator to protect their stress. would you agree with that? >> absolutely. the people down there are used to heat and humidity. i think it would be less stress on the body with the heat rathhr than the fumes. >> yes, right. >> that is, no doubt, less harmful. >> thank you. >> thank you for coming and sharing their wisdom with us. there is no ssbssitute for going out in the field and hearing3 we really, really appreciate it. we have learned a lot today. >> questions, please? >> yes, i want to echo my colleague' statement of gratitudd. coming here really does equip us i think with a different -pperspective on not what only s happening but what needs to be done, so thank you very, very
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much. i used to spend a week every summer with my family at a beach, which is right next to the national laaeshore, near pensacola, and that's amazing white sands, sugar-white sand. one of the local officials had called on b.p. beccuse there was -- there were these oil globs that they wanted b.p. to get to work on, and it took a long time to get any response, and in the end, hours later, in any case, the response was inadequate from b.p. it sounded to me like they were going to get some local either volunteers or government, so i
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have a couple of questions. one, what has been the experience in terms of the+ timing of the response for help, requests for help from b.p., and secondly, what has been the state and local response, and is phere a decent coordination going on? when we came down from thesaw%- hearings on katrina is that the bureaucratic snags at various levels of government really postpones the kind of responses that should have happened, so, first, if you would tell us your experience? >> dolphin island itself, we are the little brother of the coastline. we actually had an event, an amount of preparation that was almost overkill at the time.
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they're using it as a staging ground. it became pretty much the command center, shall we say, for lean harbors, o'brien, interstate, honor of the major pleanup contractors that had been hired by b.p.. also, in mobile was a strong strategic point, so we had hundreds of people walking around in hazmat suits hen actually had its own issues. you ay have seen the child in phe water playing with the hazmat seeds, and that made international news, but aside preparation is we did have people on the ground when it came time. they are workinggin a range of 20 to 30 minutes per hour, we were told again, because of the heattstress issues that are
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going on out there. some seem to be much less that was from government response, local efforts. be we do not know what happened it is my understanding there were going after quick training to pull in both in the area, to get them out there to start happening. i think part of the problem is we did not think we could get to them. dolphin island is on the west side of the bay. we catch all of tte grief. mobile bay comes out and washes to the west. i think everyone isssurprised by the enormity of this thing. it is now in pensacola, and another area is down the road. >> again, one of the things you want people to know is that dolphii island, come on down for the summer? that is what you want people to hear? >> we would like to have seen that, but even now, it is hard to explain even on our own
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website. there is an impact on our website. we had to do it. ww tell people to come down, but when we have odors in the air, we have things on the beach, a changing eevironment every day,e island sides, the national guard. and sand barriers, which ww are so glad they are there, but you have to climb over them to even see a beach. we are not a big vacation heaven -pright now. >> got it. other comments about the role of local, state, and federal government, and how that ordination is going? any other comments on that? >> well, down in one parish, which is more less the epicenter, in the beginning, it was mass chaos.
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we had people and news media, and b.p. and everyone was crying down in venice, louisiana. most of the boats or leading out of venice. that was the closest land. , and it was back at first, but it is kind of college -- it was the closest land point, but it isscoming down now. it is not like during the hurricane evacuation, when everybody, you know, it had been planned, anddthe evacuation and things went smoothly, although it up to mississippi. everybody was coordinated together.
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but there were no plans. this was a surprise. we were ambushed. local governments getting together. >> thank you. >> the chair recognizes the doctor for five minutes.. >> thank you, mr. chairman. dr. solangi, you said that the dolphins could be the canary in the mine. the ingestion of oil or toxins in the food chain, what do we know about the impact on dolphins who have suggested oil and toxiis aa least over other sea life that has ingested oil and toxins? >> we have beee studying dolphins for the last 30 or 40 years. any animal that dies, we do a
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necropsies and pathologistses, d we have been able to develop some sort of background profile, and by studying the environment positioned to understand what is going to happen in this particular episode, so we not only see what the ingestion is going to do but the other environmental factorr. we swim in it. the animals swim in it. we eat thh food. they eat the food. so it is a good model, and i think that is one of the things that we are capable of doing to give s a big, broad happening. when you see a large number of animals showing up onnthe beaches, we can be assured that we would be next.
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gentlemen, have you had to layg. off employees? and what about other people in and what is happening with those workers who might have been laid off o? >> the individual fishermaenn a lot of them are under contract or have they did get some sort of income. the retail businesses, the real management companies, most are taking -- i know of some things that have already taken place. in our case, we added a person
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to handle the overflow and the deterioration f what is going on. i hate to bring it up, but that is another reason. our primary interest is to keep the employeessthat we have. they have worked for us for years. we are their only hope. you can go and work for wal- mart. we have 20 to 25 contractors that fix houses, that do all of these things. without having companies such as ours, and this is across the board, i do not know where people are going to turn. they arr an independent bunch. that is why they are here. i do not know what they're going to do. i would hope that somehow witt your help, we will be able to survive. i think they all feel the same way. >> thank you. >> our company is a small company.
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most of the workers that we employ our deckhands that worked seasonal, and when i do not work, they do not work. >> thank you. i think i yield back my time. just let me again join my colleagues in thinking all four of you and the previous panels ffr coming out and testifying and sharing this information with s. thanks. >> the boarddrecognizes the geetleman from louisiana. i would point out that when you gave us that like to dependent, i did not know i would be yielding five minutes to you sitting here. >> thaak you. let me try and put some things in perspective.
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everything the government has can be applied. it is a totally different responss, because we have noo the vessels, nottthe equipment, not the technology. the only thing we can basically put is the boots on the ground and try to help get what is coming down and other things to make the coast guard, of course, be more forceful rather than just -- it took me two weeks to get clinic to events. there was a facility, but b.p. would rather put ppople they get in an emergency unit and send
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them up. is about 80 miles away, across the interstate. so the frustrations of the expectations of what the government should or should not or could or could not have done is out there, and it is blurred, so there are frustrations of around. one last point. after katrinn, we're finding out that some things are not adequate. this is not a spill. this is a leak. it did not take care of all of our problems, and we found reforms we had to do their because it lacked adequacy. so, with those two things, regardless, an agency of the
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federal government waive the loss of that a permit can be issued to drill,,and i could not get a federal agency to waivv a rule after katrina to help the people in this region. this is basically breaking the law. we need to look at this. with what little time iihave left, let me offer - since you are one of my constituents, the four of you, if you have got anything that you have not been asked or wish that you like to express, please, if you have ggt anything, or if anyyody else has anything they would like to add? >> just one comment.
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the gentleman was talking about the dolphins. my wife, one of her favorite things to do, when we were shrimping, was to hand feed the when we would sit down at the end of the day and get the anchor, she would sit down and feed the dolphins. i could not get her away for two hours. >> i hope that we have kind of giving you an idea about our frustrations and the dire straits we are truly in at this point in time.. >> it could have a very scenic the impact, not only in this region but for the entire country. it is just not a mississippi,
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louisiana issue. i think we should look at it prudently, and we should not go into emotional decisions. let's make some good decisions, rational decisions, so that everything is balanced. i think that is what gets lost in panic situations, where you lose rationality, so there are a lot of things that we need to think about and fix and make sure that this never happens agaii. >> and i think we have to be very aware as we go through it, because each day, there is a new omes to life. i wanted to respond to her issue about not responding quickly. when the slick hit another area,
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b.p. said that they could not respond and start doing any cleanup until they had samples taken and analyzed to be sure crude oil, and if that is ther - same thing that is happening as the sklick moves into florida, there is no question whh's it is, and you lose a very valuable time in addressing the problem immediately, versus waiting three, five, seven days to get thh results back. >> thank you.+ thank you, mr. chairman. >> during katrina, he kept our committee's feet to the fire. we will have hearings probably later this month, and if you are not doing a formal hearing, we would iivite the parties uu, and we would put them in a room.
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i wanted to know that your repreeenting and fighting for your interests.. and with that, questions, please, five minutes. >> thank you. we are trying to maintain the integrity. this is a prized commodity. our chefs are world famous, teaching people what to do with louisiana seafood. with that, there is a lot of people that have misunderstanding. there is tremendous testing done, and anyone who can buy louisiana seafood, they are getting quality seafood. the question is, how limited is
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available, how much will be available in the future? first, can you tell us how many seabeds are open because of the oil, and how many are closed because of a threat? >> today, i cannot tell you. yesterday, we had, i think, out of 14 areas, there were, like, six areas open for raw oysters.+ i cannot be certain of that, small area left on the west bank that is still open.+ and the east bank, i would say 80% of the east bank is open presently, but they are talking about starting a closure. >> yyu are talking about the
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past bank of the mississippi river?3 the east bank of the mississippi river, from tteemississippi state to the mississippi river. what is happening with the shrimping, because all of the other areas are closed, it has caused a concentration of boats in one area, nd the shrimp cannot handle that around the clock so hard, and what is happening is that the shrimp are leaving, where normally they would stay. they are leaving, so it is a problem. we do not have the area to work. we have a lot more people that are working small areas that are left, and right now, the oyster industries are faced with a lot
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of regulations that just started this year with us, refrigeration requirements and this other stuff, and this is also a problem for the oyster fisheries, because the oystermen have to move to different areas in order to work, and it puts them further away from home base, and it is just creating a problem with the guys who have refrigeration and do not have refrigeration. >> a lot ii still being done to try to mitigate the disaster. early off, everyone was talking about what they are going to do after the oillhit, and so many of our people were saying, "hold on a second. we want to be proactive and stop ittbefore it gets to the marsh, because once ittgets here, it will be a much tougher challenge to clean it up rather than keeping it out in the first place." -palso, to put a barrier in frot
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of the marsh so the raw oysters stays away from the marsh and the seafood bed, and it stops any of the long-term damage in those areas that have not already experienced it. we have all of these ideas, and charlie and i and others on the from people, and maybe somebody did not get enough sleep they sound like, but others sound like there are brilliant ideas, and you wonder why they are not getting tried. putting things in the water to absorb the oil. kevin costner came here with a machine that displaces the oil from the water. you do not see any of these being tried. they should all be being tried throughout the gulf right now, and it 10 of ttem work and 20 of them do not, you do more of the 10 that work.
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it is frustrating to see that none of these are being tried from all of his brilliant idees. have you seen any of these put into action from what you have seen and heard? >> no, i have not, and i do not know why b.p. -- it would seem that it would be in b.p.'s best interests, because it would help to get it cleaned up. the kevin costner issue, the last i heard was that he was going to come into the area and demonstrate it, and i have not heard it. >> and i have seen the demonstrations that looked like it worked. that is why we need a real chain of command. everybody is in charge of nobody. thank you. i yieed back. >> thanks, steve. well, that includes all of our questions. i want to thank our witnesses' for coming tooay, and i thann
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you for your testimony i want to thank the parish for being a great host. thank you for letting us this area. we appreciateethe opportunity to be down here with you. our committee is continuing a methodical investigatiin of this incident. we are looking at all of the major factors and all of the role portion of prevented this disaater from happening. the subcommittee will continue to investigate and hold hearings until we get the answers that we're looking for, and at tiies, we will order meebers of those responsible parties into washington and try to work out some of these problems. it is important for us to be down here to learn first hand, and we appreciate being down here. and on three more hearings this month for just this incident alone. we just do not do one hearing and then leave. we will be here with you through
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the whole process we have asked the witnesses o supplement their testimony, and we would days, and members will also be able to submit any further question is. the meeting is adjourned. [captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute] just give us five minutes, just about five minutes. >> tomorrow, president obama starts his two-day visit to louisiana and other areas. we previewed the trip on today's "washington journal."
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>> this person is right to for and he is joining us on theper,- telephone this morning. guest: thank you. host: what will he see when he goes to florida, louisiana, and mississippi? guest: we have beautiful beaches here. i do not know if you have seen them. they are easily among the most beautiful beaches in the world. our beaches, aad it has been coming ashore a little bit.
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this will be brought to an abrrpt standstill. hostt there is the oil in the form of large balls that starts to melt on the white, sandy beaches you referred to. >> yes, we have told that once it hits the stands, it is actually easy to clean up. but if it starts coming to shore, and it keeps coming, and pi could get inside our base. we do have an active commercial oyster fishery in pensacolaa we have a lot of shrimp in the3 we're very concerned about what happens when it gets inside the bay. host: what is the long-term impact that yoo will be seeing in pensacola and along the coast?
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guest: we have just been recovering from hurricane ivan. this seemed like the first season that it really turned out. we have some new hotels open. everyone seemed to be aving a good situation. restaurants and hotels were to a halt. it is haad to overstate it. it just kills everything. tourists do not come to the beach to see oil on it. it issreally bad. it is like putting on the brakes. host: secretary ken salazar, what job do you think he is not doing as secretary, and more specifically, mms, which has gone through a transformation since the spill? >> obviously, they have done an awful jjb, mmss of course, it was their job to
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prevent this, and i think that was the federal government's role. i do know -- it is going to have to be b.p. if there is something we're disappointed in, there is the response of b.p., and the coast it seems to be so strrnge. it just seems to be lacking. for instance, for the oil approaching, we would like them to be doing something before it gets to the edges, and they keep telling us that there are skimmer's out here, but there are not that many. i do not know if small skimmer's make an impact anyway. we want to see b.p. acting like this is their own backyard, and we are not sure we are seeing that. host: and yeah, b.p. has a new
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advertising campaign, saying that they are going to get this right, essentially. do you believe b.p.? >> i think the problem is, if you go back to the stores ast week, looking at their plans for this, it was basically a fantasy. they were saying that stuff was not going to get to the beaches to e so effective, and they were going to be able to blot up 20 million gallons a day, and they have not come anywhere near that. the numbers were wrong. websites were wrong. it was a fantasy. of course, mms is supposed to be in charge of doing that vetting. b.p. obviously realizes they messed up, and every day that goes on, they look courss and worse. i do not think there are purpooefully trying to do a bad
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they were just not prepared to do the job. host: as you know, the president traveling to the gulf coast, his first overnight since that oil spill on april 20, and then on going to the white house to meet with the president. do you think anything will change? guest: nokomis because, again, -- no, because i assume that b.p. is doing everything technologically that they can. there have been some suggestions that they put up some amount of money and essentially give it to the states. i think that would be a good idea. if we could tell mr. obama to do
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anything, it would be that. tell b.p. to turn the money over to these local ommuniiies and states and start doing what they need to do. other than that, i do not think there is any major bullet. host: carl wernicke, thank you for being with us early on the sunday morning. bye. >> with the supreme court confirmation hearing coming up forrelena kagan, the supreme court, the building, and all of its history. phe supreme court, today at 6:30 p.m. eastern on c-span. >> federal reserve chairman ben bernanke said on wednesday that he expects the u.s. economy to experience continued growth but
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warned that it seems to be on an unavoidable path. by the way, you can see this c-span.org. this is about one hour 10 minutes. >> to discuss the progress of the economic recovery aad the challenges that are still ahead. i am pleased, as i said, to have with us the chairman of the federal reserve system, dr. ben bernanke. when the 111th congress began, when the president took office, 1.5 years later, the economy has experienced its third straight quarter of economic growth, including 5.6% growth in the fourth quarter of 2009 and 3% growth in the first quarter of 2010. there is a chart to illustrate
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that. 1.5 years ago, the economy was losing jobs, hemorrhaging jobs. morrhaging os the d and debri to thousand nine wels79,00 , e moh alon noin play ade narly a million bsbetween january and maof tis ye athe cha ows the jo growth the last span of tie. he uim the actions taken by this congress and this the administration also played a significant role. there was the recovery act, which we passed in 2009, and that has contributed to significantly to the economic turnaround, raising real gdp to 4.2 percentage points in the fourth quarter of 2010 and increasing employment between $1.20 million and 2.8 million jobs.
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the fedeeal reserve nd the fdic have engaged in an unprecedented and coordinated efforts to stabilize the system by injecting liquidity, capital, savings, and requiring banks to raise capital. but we, as democrats, have been focused on the economic recovery. we're also aware of the need for responsibility. we want to see the economy and the budget recover step-by-step. unlike the previous a administration, which inherited a surplus over 10 years and turned it into large deficits, the current administration was handed a $1.30 trillion deficits and more deficits over the next years. this has taken an unavoidable toll.
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the president has also proposed to frreze not discretionary spending for three years. there was a bill to add to our fiscal toolbox, which allows the president to sign a bill into recommend to us and the congress the elimination of some items in the building offa budgetary cost. we will continue to pursue these and other steps to pursue fiscal responsibility. we are continuing to work on legislation to address this situation. we're pleased to read chairman ben bernanke here to respond to the questions and give
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testimony. too many americans continue to feel the effects of this recession and wonder when relief is going to come. we would like to hear dr. bernanke's ideas about what steps can be taken to maximize returns to sustain economic strength. before we turn to this testimony, i would like to extend a warm welcome to the newest member of the committee, welcome aboard. we are glad to have you. testiffes, let me also turned to the ranking member for any statement he would care to make for opening purposes. >> thank you, mr. chairman, and thank you for opening this hearing. i, too, when to stand up and recognize our newest membbr from hawaii. it is exciting to see you and
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your family here and being sworn into congress, so we are very happy to have been. welcome to the nation's capital. and welcome to you, mr. bernanke. it is good that you're here to talk about the economy, because the hhalth of the u.s. and the entwined with the issues we deal with in this committee. watcheddas the sovereign debt crisis has more problems. the recovery is being threatened, and we see global instabblity -- global stability is being threatened. in some ways, we are seeing a replay of a similar dynamic which impaired financial markets in 2008. there was a systemic exposure to assets. now, it is driven by a sovereign credit and the possibility of a3 interbank lending rates, like libor, on the rays, and
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investors have become much more market is down.p, and the stock what we are watching in real time is the adjustment of the marketplace and the severe inflicted on countries mired in debt to. at the moment, the u.s. is in the periphery of the u.s. debt crisis, and there are lower -- to interest rates. there is a global flight to -psafety. but americans are left to wonder. could we one day find ourselves at the epicenter of such a3+ could a european-style crisis one day happen right here n the united states? the answer is undoubtably yes, and the sad truth is that inaction by policy makers to change our fiscal course is hastening this day of reckoning. a brief look at the budget numbers shows that our current situation and the trajectory going forward is very dire. the budget deficit this year stands at $1.50 trillion, or just over 10% of gdp.
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under the president's budget, the budget we are living under right now, the c.e.o. tells us phe level of debt will triple in one decade. the u.s. is poised to join that an increasingly large share. there is a risk to our economy, to society's most vulnerable citizens, and america's standing in the world market forces and investor sentiment do not offer the luxury of time. empty rhetoric is o substitute for results. foreigners now own roughly half of our debt. the size of our current and future funding needs makes us quite vulnerable to a shift in market sentiment and higher than expected interest rates. exposure to the rough justice of
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the marketplace would certainly make our bad fiscal situation even worse. the main point here is the need for policy makers to reassure credit markets that the u.s. is enggged in charting a clear deficits soon. sustainable it is clear to me that this means reining in government spending, not just ramming up taxess to give it, we need to reform our eetitlement programs, which threatened to collapse our safety net, overwhelm the federal debt with -- budget, and sink us. the situation in other parts of the world provide us with a great cautionary tale. it is always best to ssore up your finances before the+ market's demand it. what had this administration done to respond? two new entitlement programs but no budget. there is a commitment to continue spendinggmoney we do not have, creating brand new entitlements and plunginn our nation deeper into debt.
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it tells us hat washington still does not recognize the severity of our fiscal and economic challenges. i look forward to your testimony today, mr. beenanke, and i hope the heater warnings. >> and noww before turning to the chairman for his comments, i would ask that alllbe allowed to submit a record. without objection, so ordered. mr. bernanke, you can summarize as you see fit, because you are the only witness today, and we encourage you to take your time in responding in elaborating. thank you again for coming. if war is yours. >> thank you, mr. chairman. chairman spratt, a ranking member, and other members of the committee. i am happy to testify about these items. the economic recooery that began in the second half of last year has continued at a moderate pace so far this year.
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moreover, the economy, supported by monetary policy and concerted effort of policymakers to stabilize the financial system, appears to be on track and to expand for this year and next. the latest economic projections which were made near the end of april anticipate the real growth domestic product will grow in the neighborhood of 3.5% in the course of 2010 as a whole and on a somewhat faster pace next year. this would only be a slow tyne. in this environment, inflation is likely to remain subdued. although the support to economic growth is likely to diminish in data suggest that gains ining%- demand will sustained recovery in economic activity. real consumer spending has risen strength in global goods.cular%- consumer spending is likely to
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increase at a moderate pace going forward, with a gradual pickup in employment and income, greater consumer confiience, and some improvement in credit conditions. in the business sector, reall outlays for equipment and software had another solid gain, and the increases were more broadly based than in 2009. . indicats point to ctinued stenh in the co quarter. looking forward, investme in new equipment an software is expect to bespported by healthcorporate ban sheets, elatively low-st nancing of ew roject increased confenin th rability of the cvery,and ace agg comment and nd capacit ales prbright more general, u.s. manufacting outp, whichas benefited frostrong p dend, rose at an annualae of tis yeahest foumonths restint on paceothent revery remained in the housingmarkt, les and consucavbe
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teoralysted lateb e home buyetax crt. but lookg for these tempory movents, urlining using acty apprs o firm only alttle snce y2009 with actvity being weighown in par by a arge ientoryf distrs oracan existing housesand by theiffules of many ders i obtaining cred. spendi onrsidenti backy vacancy rs, slow prop pris ng crit cditions. meanwhile, pressures on state and local dgets the temperedowhat ong fedel support ave led th goernmts to make fher cts in emplment infrastructure tough as you know, the labor market was hit particularly hard payroll emmloyment rose by 431,000 in may. but that figure importantly it reflects an increase in hiring for the annual census. private payroll employment has
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risen an average $140,000 per month. expectations of hiring prospects have improved since the beginning of the year. however, a significant amount of time will be needed to restore 8.5 million jobs lost in 2008 and 2009. data continned to show a subdued trading creases in consumer prices. for three months, expenditures rose at an annual rate of one -- a rate of 0.5%. over he past two years, overall consumer prices have fluctuated. aside from his volatile componentss a moderation in inflation has been clear and broadly based during this time. long run inflation expectations have been stable with measures remaining within a narrow range
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that prevailed for the last few years. measures based on nominal index someone of late. at least some of these declines reflect market responses to changes in the financial situation in europe. since late last year, market concerns have mounted over the ability of greece and other euro countries to budget their deficits and high levels of public debt. by early may, financial strains had increased significantly as investors focused on these whether otherding a countries would support their members, provides fiscal consolidation, and exposure to institutions to global markets. broad equity market
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[unintelligible] treasury yields have fallen as much as 50 basis points since late it will -- late april. corporate spreads have over the same time as some issuance of corporate bonds have been postponed, especially by speculative-grade issuers. in response to these concerns, european leaders have put in strong measures. committed to addrees their fiscal problems. a major assistance package has been established by the european union and the international monetary fund for greece. the backstop near-term financing needs of its members more generally, the eu has established a stabilization mechannsm.
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addressing strains in the european financial markets, the european central bank [unintelligible] it has resumed auctions of three months and six month loans. dollar funding markets, the.-%- federal reserve has established a u.s.-dollar equity lines with banks. they are providing an important backstop. more generally, the ongoing international cooperation sends an important signal to financial markets that we will take the actions necessary to ensure stability and continued ecooomic recovery. the actions taken by european
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leaders represent a firm commitment to resolve the stresses it and restore market confidence. the recent fall in equuty prices and economic prospects in europe willlleave some imprint in the u.s. economy, [unintelligible] it the federal reserve will remain vigilant. ongoing developments in europe point to the importance of maintaining sound government finances. the united states enjoyed the uniquely favored position. our economy as large, diversified, and flexible. our financial markets are deep and liquid. the ggobal investors have used treasury securities as a safe haven. nevertheless, history makes
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clear that failure to achieve fiscal stability will, over time, set the nation's vitality and reduce the living standard. fiscal position has deteriorated since the onset of the financial crisis. the exceptional increase in the deficit has, in large part, reflected the effects [unintelligible] as the economy of financial markets continue to recover and the actions continued to promote stability are phased out, in the absence of further policy actions, the federal budget appears to be on an unsustainable path. head variety of projections -- a variety projections show us a
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structural budget gap that is%+ large relative toothe size of the economy and increasing over time. among the primary forces putting a pressure on the deficit in [unintelligible] and by that time most of the baby boomers have retired, the ratio will be 1-3. to avoid sharp destructive shifts in spending programs in the future and to retain the confidence of the public in the markets, we should be planning how we will be meeting these budgetary challenges.
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achieving long-term fiscal sustainability will be difficult. unless we make a strong commitment we will have the financial stability nor healthy economic rowth. thank you. i am happy to take your questions. work -- the worst recessionh th- since the great depression. we seem to have turned a corner. if we had ot takee the extraordinary steps that we took, starting with an the tarp solicitation by the bush and ministration, the recovery it backed by the obama administration,,and many other monetary and fiscal stuff in between, where would we be now? do you think those steps have been vindicated? we took strenuous meesures in
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the fall of 20088to avert the collapse of the global financial system and to restore a proper functioning to global financial markets. it took awhile for thht to work. currently, financial markets are in better shape than they were a year-and-a-half ago. monetarr and fiscal policy have been supporttve. it has also added to growth. at this point, we see a moderate recovery. it is not as fast as we would liie, but we have averted when i think would have been a extraordinarily severe downward depression. >> with a the counter-cyclical efforts retook, where they sufficient? >> sufficient depends on your comparison of cost and benefits. but i think the fiscal policy, previous episodes of fiscal policy that it did increasee
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growth and job creation. >> you seem to have knowledgeein -pyour testimony that we have sn growth. does that iidicate that your concern about a double-dip or%+ possibility of a of relapse? >> foreeasting ii very difficult. i do not make promises in any direction. it does appear that the recovery has made an important transition from being supported primarily by inventory dynamics and by3 being led by private demand, including consumer spenddng. that is encouraging in terms of somsustainability. the canoe will continue to recover at a moderate pace --
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the economy will continue to recover at a moderate pace. right now, our expectation is the economy will continue to grow at around a pace of 3% or 4% this year. >> eachh member here could give you some account or compelling account where a credit-worthy constituent has not been able to find credit. moving and flowing again in this country? the growth rates depends critically on having adequate capital in the form of alvaroable -- in the formmof borrowable money. >> the markets have restored something cllse to normal fuuctioning in the capital markets and securities markets. the larger firms have access to the a premarket and have been able to raise funding as needed. in addition, they have liquid balance sheet. problems still remain for smallee firms. --
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although banksshave resumed, the continue to be conservative in their lending policies. i would suggest a conference -- i was just in a conference last week in detroit. we need to make sure that banks are able to land and that thhre -- able to lend and that they are not being excessively conservative. >> are you says -- are you satisfied that that message is getting down to the managers and regulators? >> i am never satisfied. there are examples where that is not happening. we have made a substantial effort in terms of training, conference calls, and repeated exhortation to bar examiners that it is very important to
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work with the banks to make sur+ that credit-worthy borrowers are not ttrn away. the banks have undertaken a number of steps. for example, they have taken second-look programs where loans that have been denied in the first round up mission are given second look that might justify am.-- the lon -- the loan. >> what is theerole of fannie mae and freddie mac as we go for? >> we are in a transition. freddie and fannie are in conservatorship. they are playing a very -pimportant role in the moment - at the moment and providing securitization for home mortgages. the market is pretty much non-
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functional going forward, we need to get to a more sustainable situation. i would be happy to talk about alternativv models of reform. but i think every videe aggees that the current situation, the status quo, is not as sustainable. we need to go over those institutions going forward. >> as you look back, we have peen catastrophe after test chesterfield her -- we have seen catastrophe after catastrophe occur. is the fed and other monetary authorities in needs of a better distant early warning
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system? >> they are multiple dimensions of had to address these financial regulatory reform legislation -- ddmensions of how to address the financial report for reform legislation. we need regulation to identify gaps before they lead to a crisis. the philosophy underlying the creation of a systemic risk council and giving the federal peserve consolidation over large systemic-critical firms -- we need to make them more resilience so that they will be more stable during the crisis. variety of mechanisms, including increased capital requirements, increased liquidity your comments, however estimate the derivatives trading more transparent.
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congress is working n alternative mechanisms for safely winding down large systemically critical firms so that it can fill withoot bringing down the rest of the system. those are the three dimensions of our response. we will never eliminate financial crises. we need to make surr that they're much less frequent, that they are less virulent, and that they have less effect on the economy. >> thank you. >> it is good to have you back. [unintelligible] some countries bond eals, spain, italy, reached fresh highs this weekk in your opinion, is the ecb doing everything it needs to be from a policy actions stem. ? -- policy action standpoint? thf
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>> this is a joint effort of a number of european authorities, including the european union, the european commission, and the ecb. it is a complicated process because there are a number of countries that have difficult since fiscal situations. the concern is that those countries cannot manage their fiscal positions on their own and that there might be contagion to other countries or to the banking systems. those are the concerns that are being faced. i encouraged by the resppnse of the europeans. although they lack the central authority that the united states has, they have understood the importance of cooperation and they put together some very substantial programs, including a $500 billion euro stabilizatton mechanism that will ssand behind countries on the periihery that need assistance in meeting their fiscal operations.
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the imf is also providiig bilateral assistance. the goals of those programs is to make sure that these countries are able to meet their obligations and achieve iscal sustaanability. i think the markets remain uncertain about whether these measures will be successful. that is why you still see a lot of volatility in the markets. i can assure you that the european leadership is fully committed to addressing this probllm, preserving the eurozone, preserving the european union. they are working very aggressively right now to establish some effective solutions. >> let's go to monetary policy and currency olicy. the ecb is engaged in qualitative easing.
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their object is liquidity for sovereign credit markets. the reserve has been in gates and a similar process lately. now we have two reserve currencies engaged in quantitative easing policy. gold hit the all-time high yesterday. i thinkkmost people will view that as a vott of nooconfidence against these currencies. what is the personal touch you? whattis your view on the long- term repercussions with respect to weak currency policies? one could argue that we do not have a weak dollar because so -- because the rail system much weaker. but with this kind of easing in place, we have removed one of the fire walls that have protected the our monetary what is your view on that? >> the signal that gold is
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sending is very different from what other asset prices are sending the spread -- are sending. the spread of bonds remains quite low. the market expeccs to% inflation inflation over thes.22% next 10 years. i think there's a great deal of anxiety in the financial mmrkets are now appearing holding -- in the financial markets right now. what to gauge inflation?
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it looks like you are using tips spreads. you're using consumer surveys. what leading indicators due look at to inform your view on the future -- do you look at to inform our view on the future? >> you pointed to a number of them. certainly, we look at resource utilization and price and wage pressure. that is very low right now. with the increases in productivity, labor costs are declining firms are finding that their labor costs are falling rather than rising. inflation expectations are very we take some comfort from the fact that a measure of mechanisms, they have been quite stable. we look broadll at the economm. prices are indicators. it is very eclectic process.
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even though we have indeed expanded their balance sheet, i have given some testimony in the last few months whereei have%+ laid out in some detail how we can exit from those extraordinary policies as needed, when needee, without leaving any monetary or inflationary bias in the system. we are comfortable in that we have those tools. >> you have some reserves. my concern with this tool is that we're talking about a credit crunch that our constittents are facing. rolling ooer the vintage offreal estate paper and people cannot get loans from theirrcommittee banks. once mopping up the money supply starts moving, it seems to me that he will precipitate another credit crunch on top in order to mop up inflation.
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what is to make us think that we will not have tighter credit when it is time to reverse your policy? >> when the federal reserve thinks the economy is growing more than at a sustainable pace, it begins to raise interest rates precisely to reduce the demand for credit and to give alternative loans. >> so we're looking at a tight credit period for some time.. >> the degree of the timing will depend on what we see to get the -peconomy sustainable growth pa. -- growth path. >> we need to create -- the economy's decree two hundred 50,000 tons per month, every month, for five years -- the economy needs to create two hundred 50,000 -- the economy
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needs to create 250,000 and jobs per month, every month, for five years. do you have confidence that the private sector will pick up the slack in employment to get unemployment going down fast? 3% to 3.5% growth does not strike me as sufficient enough to get back to the is tons of lower and pro levels -- lower employment levels that we have injured in this country. >> demand and consuuer exports and consumerrspending is taking the baton to provide some sorts of growth. in that respect, as we all would like to say, the private sector is beginning to take over this
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recovery. at the same time, there's not much evidence at this point that the recovery will be robust enough to get us back to historical a lower levels of unemployment in the short period time. --- in a short period of time. we want to get small businesses healthy and hiring as much as possible. we worked very hard on credit for small businesses. >> thank you. >> before going to miss short, we have been informed by the chairman's staff that yoo have + plane to catch at 12:30 p.m. i am going to ride the five- minute space pretty tightly. ms. schwartz. >> thank you very much. i want to follow up on some of
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the questions that have been asked and have you every bit.+ we see small business growth does the answer in he short term. we have focused on the job growth in small business. we have taken a number of actions that we feel are making a difference. i wanted to ask youuspecifically about lending. we have done investment tax credits for biofuels as a way to incentivize small businesses who do not have a assets and built to take tax credits. we have extended bonus depreciation for small businesses for making capital investments. we increased the cash flow. we provide a five-year operating
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loss carry back. we have cut capital gains taxes for small businesses. we have actually treated tax credit for small businesses to provide health benefits. the president has a new initiative on exports. you referenced the export businesses. need for small businesses tthe increase in their outreach to the markets in the world and to deal to sell their proddcts around the world. there is an initiative that the president has endorsed to double those numbers. we are looking to the future to expand these tax credits. we can help innovative new businesses and small bussnesses that have trouble accessing
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wanted to know what you think of that. -- have trouble accessing credit and wanted to know what you think of that. they will make a difference and expanding growth and we hope thht it will be in jobs. we continue to hear it. eric concern, as you pointedd out, is making sure that their and there are banks to work acting too conservatively. we agree that they have to make sure they have enough capital themselves. but they have to get some dollars out the door. we're looking at a small business lending legislation
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that would actually encourage banks through some feeeral dollars. i would highlight the innerest manufacturing, but particularly innovative entrepreneurs who want to take the steps nd have a hard time accessing small-3 i know you prefer not to comment on legislation, but the access to capital and what the government can do to encourage bankk to do this. what what they did what might be doing to encourage small business grossed -- what might we be doing to encourage small- business growth? >> to give me a very good description. the small business is very important.
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we should also keep in mind starttd businesses. they provide a lot of -- keeppin mind and start up businesses. they provide a lot of creation. i think it is important to trr to remove barriers for small businesses to expand. i agree that we want to makee policy has small-business- friendly as possible. the federal reseeve is doing its part by maintaining support of monetary policy. riosa to maintain credit. that is important as well. -- we also have to maintain+ credit. that is important as well. from narrow perspective, we have
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at the very top of our priority list. we have increased their information ggttering, training of examiners, and we would like to know if your constituents are telling you if they have been turned down unfairly. we have a hot line and website. we want to know about it and we want to respond to it. >> still, i want to follow up on the issue of start-ups. lending to new businesses n their first year. we would bb happy to follow-up with you and we thank you for
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your comments. >> good morning, chairman bernanke. . as youell know,airm spranking numberine in come mf see the presidens fiscal yostified at the first meeting. atthe send meeting,w rece esiny when nations have a debt-to-gdp ratio of 90%, and they will likely lose economic growth. her study says that he average wws 1%. if you're economic growth is averaging 3%, it it would fall to two 0.5%.
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we have received negative+ economic growth at those points were debt-to-gdp have reached 90%. debt held by the public is closer to 60%. are you familiar with the professorr' study? are you familiar with her conclusions? do you agree or disagree? >> i am familiar with hee steady. ---with her study. her book is an extraordinary piece of work that includes analyses of dozens of crises. on this particular issue, i as debt increases, interest rates increase. that tends to make investment more costly. tax rates go up.
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>> since time is limited -- specifically gross debt of gdp, we are at that the bomb point now. -- we are at that tipping point now. >> i do not think there's however, if we were to go out and things are as the cbo projects, we're close to a situation where we need to pay close attention to our fiscal sustainability. >> you speak about the european leaders, "have put in place a number of strong measures. countries under stress have committed to address their fiscal problems." i think it was yes jail the day before, the new prime minister of the u.k. -- i think it was+
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yesterday or the day before, the new prime minister of the u.k. warned a painful and unavoidable cuts. germany's chancellor was quoted as saying that germany faces "serious and difficult times." they announced a rather sizable group of spending cuts to deal with their spending crisis which future of our country. when i looked at germany's deficit-to-gdp ratio, it seems to be comparable to our own. when i look at their debt-to-gdp comparable to our own in dealing with gross debt. do you appeared to be complimenting the eurooean leaders for taking strong stands? do you see similar strong stands
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being taken by this particular pongress to rein in the debt? >> countties have different amount of fiscal capacity, it if you will. countries like greece, which are clearly being shut out from the market because of their deficit ratios, needy minute and sharp changes in their position. -- need immediate and sharp changes in their position. we are a safe haven currency. -pwe are diversified economy. we have a long record of paying our debts aad their interests. we have more breathing space. i do not know exactly how much we have. but we need a program for returning eric trajeccory of fisccl pulsate to a sustainable -- >> -- for returning our trajectory of fiscal sustainability to --
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>> ittis important to economic growth today to send a signal that we have a plan in place. did i understand you correctly? >> you did. a plan in place will help keep interest rates down and help growth e strrnger in the near term. >> thank you, chairman. >> thank you for your testimony, mr. chairman. there's a report out todaa that the federal reserve, six months into a combinationnstudy of the 20 largest banks, has found thht many of the bonuses and incentive programs have contributed to the worst place. if the remainder of the study confirms that to be true, will the fed do anything about it? will it act this year, rather than letting annther year slipped by? what are ome of the policy alternatives you have to deal with these compensation practices by our largest banks? >> absolutely, we're going to
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respond. we did a series of surveys and as the eport says, we found that maay banks have not modified their practices from what they were before the crisis. we anticipate of an intra-agency guidance on this matter within the next few weeks. we will be putting out a set of criteria and expectations shortly. we will be pushing the banks to move as so that ttey will not be engennering excessive -- to move as quickly as possible so let it will lobby engendering excessive risk-taking. -- to move as quickly as possible so they will not be in gendering excessive risk-taking. >> do you believe we will see a
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genuine change in compensation and practices from before this downturn until now, that people will be able to tell the >> the structure of the compensation practices needs to change so that thereeis not an incentive to take exccssive risk. packages where the trader gets all the upside and none of the downside, that is what we are trying to get rid of. >> what do you believe would be the best estimate of the dollar% cost to the taxpayers of the park. -- of tarp? >> for financial institutions, it is not very large. except for a id, every other major institution has -- except for aig, every other major institution has repaid the tarp.
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the direct cost is quite small.+ in the end, it will be a profit. that does not include some of the other uses to which tarp was put, including the automakers support and the foreclosure program. the treasury has provided numbers on those. they have an overall cost of $110 billion. >> there was reference to the small business lending fund act. without getting into all of the details, do you believe that e need to take more action to assure the flow offcredit to small businesses? described at the fed sufficient? >> the fed and the administration ought to be looking at new ways to get credit flowing.. to my mind, that is one of the dangers to the ecovery. job creation and small-business growth will love be sufficient
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to sustain the momentum. -- will not be sufficient to sustain the momentum. >> the concept of auditing the fed, you have made your faults clear on that. -- you ave made your thoughts clear on that. if it were to pass, how do you see the audit working? >> the senate measure opens up all of their financial transactions, all of our financial controls, all of our pinancial-related activities and ensures thattthe taxpayers' money is well protecced and well used. we are absolutely comfortable with that. and havete satisfied
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an agreement to do that. we are already working with gao to do that. the concern i had about the house version of the bill is that it also included an audit of monetary policies, which involves congress asking the gao to a valid the fed prostate -- the fed's monetary decisions and would be subject to confidence.+ i would strongly -- to retain the 1978 exemption forrmonetary poliiy -- i would strongly urge you to retain the 1978 exemption for monetary policy.
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>> thank you, mr. chairman. three -- may i have chart 3? can you tell us, year-over- year, for the gray area, which was the deficit going at that timee up or down? >> understand, there was a jump tremendously in 2009. >> from 2004 to 2005 to 2006 to 2007, was it up or down? " i can see from the figure that it was down. -- >> i can see from the figure3
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>> what we saw during the time that president bush was in office and the republicans were in charge, the deficit was going down. what is the trend, speaking as an economist, where is it going after that? >> when we are talking about the recession -- >> no. >> clearly, it is going up. >> you said we need a plan in some of the financial areas. too bad certainty to the market, doowe need to add to the budget -- to add certainty o the
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market, do we need to add to the >> i think you want clarity on those issues as soon as you practically can. there is policy uncertainty as far as what is happening in washington.. if we can provide clarity, that woold be a good thing. we are at a time where we have,- not seen a budget without that%+ certainty. what is your prognostication going for if we do not have the certainty? >> those are very important issues and i hope that congress will move expeditiously to provide clarity. >> besides the budget and the gst, they do not see certainty.
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[unintelligible] >> i hear the same thing, uncertainty about the economy and policies that in terms of expansion. financial regulation is important for uu to clarify as quickly as possible, congress and regulators, what will be expected by banks in the future. we want to do a good job. we want to turn not good legislation and regulation. >> i assume with that -- has the fed done a study?
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what have you learned with regard to the whole financial crisis and the way yyu work and in the way anybody else has worked? have you done a study? >> we have done a series of papers. there was one on monetary policy that was made public. we have done a number of papers on supervision practice. they have guided us in revamping the supervisory structure. we have been doing a number of different -- >> as you know, we are bout to reform. are all of those reports and sttdies have done available? if so, may we have aacopy of those? >> i will have to take an inventory of what we have. what we have worked on is not so much the regulatory structure, but our supervisory execution of those rules. >> that might be beneficial, too. can we have copies of that? >> we will see what we have.
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>> if you do have something, is it possible thht we can have a copy of it? >> yes. >> thank you, mr. chairman. >> questions that suggeeted that the explosion of the deficit has to do with democratic policies. when standing is that theecbo ccnducted a sttdy in whhch they indicated that they believe that the long-term debt over the next 10 years, where looking at $8 ttillion debt, and ttey -pdiscovered that $5 trillion of that resulted from two decisions, the 2001 and the 2003 tax cuts and the massive expansion of the medicare part b
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program. those were put on the -- part in part d program. those were part on the national what do you think of this? >> i am sure that those re can be made that the 2001 and 2003 tax cuts were stimulative? >> i think they were still we had a recession in 2001. we had some recovery from that. the meltdown was a financial crisis that was unrelated to these fiscal issues. >> let me go to their recovery act. you indicated that government interventioo is averted a more severe recession, if not a second great depression.
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do you included the recovery act in your tabulation of government intercession? >> i beliive the reccvery act did create growth and jobs. it is difficult to know how much. based on our analysis and past experience, i think it did contribute to their recovery. >> the recovery act was -- i am .round-numbering it has there been any assessment that to put credence in that assesses which pieces of the recovery act were perhaps more impact full than others? >> i do not of this particular episode. i guess the answer is no. i do not. >> when we had the recovery act on the floor in the house, the republlcan alternative was a recovery act that s consistent entirely of tax cuts, about five
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under $50 billion worth of tax cuts. you said -- about $550 billion worth of tax cuts. can you assess what the impact would have been if we had only a -precovery act -- what implications with that have had for the state's? we had direct assistance to states so they could have a level of service. what would have been thhre responsive -- what would have been the outcome if our only response had been tax cuts? >> as you point out, they would not have covered some of the state and looal budgetary issues your referred to. i am sorry. i do not know how to answer that question. >> thank you.
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>> thank you for being here today, chairman. the economy seemssto react to everything you say. you said earlier that we need a plan to deal with our long-term financial debt which is important to current economic decisions. is that correct? >> yes. >> is the inability of congress to pass a budget for this current year and our inability to do the appropriation bills for this year have a negative impact n our economy? if so, to what degree? >> it is important for us to persuade the markets that we ability to address our long term deficit problems. the inability toopass a budget could be a negative in that respect. %far, it isestly, so
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releasing to have any effect. p- it really does not have any effect. >> in terms of tax policy, you said it needs toobe small- business-friendly. does it need to friendly also? is this a time to let taxes increase or to increase tax rates on anybody in our country? we have heard about all the ax change we have decreased for small business for investment. what about increasing tax rates on consumers? >> i am trying to avoid getting into the details of debates about specific measures. >> in general. >> in general, right now, we have a stimulus fissal policy
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and ii needed that includes lower taxes and higher spending but in order for that to be sustainable, we need a plan in the medium-term to bring this back to a sustainable trajectory. that is critical. as long as we have confidence in the markets that we will be able to exit the situation with a sustainable fiscal program, then i think we will be ok. if the markets take the conclusion from our actions that we are unable to do that's, then then unable to do that, phey will remain unconvinced. >> how much of it is based on fiscal restraint or spending restraint by congress? how much of it would be a tax3 >> i think it deeends on the detailed structure. again, i am trying to avoid taking sides on this. it is really up to congress to
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make those decisions. you have the expertise. >> there 20 people have that expertise -- there are plenty of people who have that expertise.+ however you want to put it together, it needs to assure markets that deficits wiil be medium-term and the llng term. >> are we looking at a double dip in the economy? i continue to your concern about the commercial real-estate market. it is when to hit. mortgage market that drove us3 are you concerned about that? what are we doing about it? >> we are concerned about it. it is a weak point in the economy. for small banks and medium-sized banks, that is a problem. we have done a number of things. the federal orked -- the federal reserve board with the
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treasury to create a program to bring back the mortgage-backedd security market. we're trying to work with them to restruuture commercial real estate loans and to find ways to manage troubled loans. we're doing the best can with the banks and with the market. there seems to be a few glimmers of hope in this area. but it does remain a very serious concern. we're watching it very carefully. >> the democrats have run the congress for 40 years. corruption that took hold. we are rallying against that. later, i would be a face of a similar type of corruption to a %+ole different group of people. >> director alecgibney -- director alexxgibney talks about
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his new documentary. >> the governor of alabama is the ranking member of the house financial services committee. he is joining us on "newsmakers" rush andined by philip brus the brady dennis. >> congressman, let's start broadly about financial reform. i wanted to look back over the course of the last year-and-a- half and ask you about this. nine bay --eform was u
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financial reform was not a partisan thing. house and in the senate.n the%- why o think it ended up going on that route these past months? been thatought it has increasinggy over the last two months. the northern republicans and the -- they have been morr about less government and limited ggvernment, being less intrusive

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