Skip to main content

tv   Key Capitol Hill Hearings  CSPAN  May 7, 2014 10:30am-12:31pm EDT

10:30 am
the national religious broadcasters association. johnnie has even helped us get things done here in washington. she has represented the disabled on numerous government committees and was instrumental in the passage of the americans with disabilities act, and she continues to help. as for awards, her list is very long. she's the recipient of the victory award from the national rehabilitation hospital, the golden word award from the international bible society, and the courage award from the courage rehabilitation center. she's the recipient of the william wilbur force award. she holds degrees from westminster seminary, indiana wes layan university, columbia university, lancaster bible church, western maryland college. as i said, she's quite the achiever. and how does she really do it?
10:31 am
well, you know, mr. speaker, i think something that c.s. lewis once said will help with that. he said if you read history you'll find that the people who did most for the present world were precisely those who thought most of the next. it is since people who largely ceased to think of the other world that she have become so ineffective in our world. i think joni understands this. her mind is truly set on another place. her life has been extraordinary. so, again, on behalf of the house of representatives, i'd like to recognize and celebrate the life of jon jon tada, a tada - of oni eareckson and i yield back the balance of my time. the speaker pro tempore: the gentleman's time has expired. the chair recognizes ms. bonmuchey for five minutes. -- ms. bonamici, for five minutes. ms. bonamici: i call attention to historic legislation that has for decades served as a
10:32 am
lifeline to our country's seniors. the older americans act is responsible for critical services like housing, nutrition and employment assistance. for many seniors, the older americans act responsible for the delivery of their only warm meal of the day and their only social interaction. the legislation expired in 2011, and today i'm speaking in support of h.r. 4122, the bill i introduced with congressman ruben hinojosa, to re-authorize the older americans act. congress first passed the older americans act in 1965 as one of president lyndon johnson's great society programs. its goal is to ensure that our seniors age with dignity, maintain independence for as long as possible and do not grow old in poverty. over the years the o.a.a. has been re-authorized and improved upon to meet the needs of the changing population. as americans live longer, our policy needs to keep pace.
10:33 am
our legislation includes stronger elder abecause protections, modernize -- abuse protections, improved transportation services and other programs that promote seniors' independence. one of the titles in the older americans act he provides important employment -- act provides important employment support, something they need more than ever. the senior community service employment program provides job training and job placement for low-income seniors. many of the people who use this important program are laid off -- were laid off during the recession only to see their position disappear during the recovery. now they find they lack the necessary skills to fill the new jobs that have been created and they must compete with the younger and experienced work force willing to accept wages lower than their earning potential. this important program, known as csep, provides specialized training for these workers. by partnering with local
10:34 am
nonprofits and state agencies, it helps older americans develop new skills and pairs them with employers. i recently met with several participants at the forest grove oregon senior center in my district and i heard firsthand how the program helps people get back on their feet. programs like this are exactly what many of the long-term unemployed need, and while we're continuing to debate extending the emergency unemployment program, we are addressing the problem head on for many of our stwepts by offering a solution that's good for employees, businesses and the economy as a whole. mr. speaker, the older americans act was developed so our country's seniors can age with dignity. today it continues to offer and provide support to older americans who are eager to work and live independent lives as they age. the senate has advanced its own bipartisan older americans act bill, and i'm hopeful my colleagues will follow suit and
10:35 am
support h.r. 4122. thank you, mr. speaker, and i yield back the balance of my time. the speaker pro tempore: the gentlelady yields back. pursuant to clause 12-a of rule 1, the chair declares the house in recess until noon today. >> democratic whip steny hoyer has urged democrats to oppose that measure. they'll also consider related resolution to ask attorney general eric holder to appoint a special counsel to investigate the issue. also this week the house is expected to work on a bill to permanently extend research and development tax credit that expired the end of last year. we'll have live house coverage when they return in just about an hour and a half at noon
10:36 am
eastern here on c-span. also on capitol hill today, the house armed services committee is under way. they are holding their all-day markup session of the 2015 defense authorization bill. that's buck mckeon, the chairman of the committee. it's going all day, expected to go on all day. you can follow our live coverage on c-span3 and also online at c-span.org. right now we'll take you live over to the joint economic committee on your screen is federal reserve chair, janet yellen, she's been testifying before the committee for the last couple minutes. live coverage here on c-span. >> 165 of the dodd-frank act. to establish enhanced credential standards for large banking firms in the form of risk-based and leverage capital, liquidity, and risk management requirements. in-r digs -- in ady, the rules require large foreign banking organizations to form a u.s. intermediate holding company and
10:37 am
it imposes enhanced credential requirements for these intermediate holding companies. looking forward, the federal reserve is considering whether additional measures are needed to further reduce the risks associated with large interconnected financial institutions. while we have seen substantial improvements in labor market conditions and the overall economy since the financial crisis and severe recession, we recognize that more must be accomplished. many americans who want a job are still unemployed. inflation continues to run below the fomc's longer run objective, and work remains to strengthen our financial system. will i continue to work closely with my -- i will continue to work closely with my colleagues and others to carry out the important missions that the congress has given the federal reserve. thank you. i will be pleased to take your
10:38 am
questions. >> thank you, madam. i'd like to get a clear picture of the fed's comprehensive, it strategy in a number of areas. the economic projections hold, can we expect a q.e. bond to end sometime this fall? we have indicated that as long as we continue to see improvements in the labor market and we believe the outlook is for continued progress, and as long as we continue to believe and see evidence that inflation will move back up over time to our 2% longer run objective, we anticipate continuing to reduce the pace of our asset purchases in measured steps. the answer is yes. if something were to change notably about the outlook, we would reconsider that plan, but
10:39 am
if those conditions hold, we would continue on our current course. >> i'll leave my colleagues to ask about the notably different changes. beyond that, we have -- the fed holds $4.7 trillion on the balance sheet. extraordinarily large. when do you expect to begin normalizing the size of the fed's balance sheet? is there a range of years? >> so when we complete the asset purchase program, the committee as indicated that it expects considerable -- it will be considerable time before we begin to normalize policy in the sense of beginning to raise our target for short-term interest rates. >> what range -- let's move to that. before i do, what's the appropriate size -- do you have an appropriate size for the fed's balance sheet? >> i can't give you a number
10:40 am
that would be the appropriate size. we -- i believe the committee anticipates that our balance sheet over time will move down to substantially lower levels than it is now. whether or not it will ultimately return to precrisis levels is something that we will remain somewhat larger, something that we will determine as we gain experience with exit. one way that we are likely to turn to to normalize the size of our balance sheet, eventually, would be to cease reinvestment of principal as it comes due. the committee is not given definite guidance at this point about when it would take the step of stopping reinvestment of maturing principal, and eventually as we come closer to
10:41 am
normalization, i expect we will give such guidance. >> when do you expect on normalizing interest rates? when do you expect that to begin? assume the feds' economic projection holds? >> what we have said in our most recent guidance is that in determining when that time is right, we will be looking at how much progress we have actually made in coming close to our mandate from congress to attain maximum employment and inflation of 2%, and we'll evaluate the pace at which we expect progress going forward. concretely the committee indicated that at the time the purchase program ends, it thinks it will be a considerable time beyond that before it will be
10:42 am
appropriate to begin that process. and the reason is that under its baseline outlook, it would like to see or expect it will need to see further progress in the labor market and it's emphasize that the level of inflation will also matter. >> if the fed's economic projections hold, what is that range? if i were to say you'll begin normalizing interest rates in 2015, would i be wrong? >> so there is no mechanical formula or timetable for when that will occur. >> i know that you work through your projections going forward, and certainly if those were to hold you have some range of time that you'll begin that process. what range is that? >> so the committee has simply said a considerable time without mechanically stating what that time interval is.
10:43 am
>> is considerable -- if which to say this will begin normalize d in 2016, would i be wrong? >> there is no specific timeline for doing that. individual members of the federal open market committee, however, every three months provide their own forecasts for how they see the economy evolving under appropriate monetary policy, and that becomes the basis for discussion in the committee, and you can look at those projections that .nclude individual participants for normalization you would see most members believe that in 2015 or 2016 normalization would begin under their baseline outlook. >> to put it in perspective, what year, what range of years, could we expect the target rate
10:44 am
to reach 2%, for example? >> so i think the answer is that it depends on the evolution of the economy. what we are focused on is adjusting our monetary policy in light of incoming evidence about the evolution of the economy -- >> but if it holds -- granted, this is all dependent from your view on economic performance, but given your projections, how far out are we looking at to just move about halfway back to normalization? >> again, i'm afraid i can't give you a timetable, but the committee did try to in its recent statements in march and april provide some guidance to the public about the pace at which it expects interest rates, short-term rates to increase. once that process has started.
10:45 am
and what they said is that they think it will take some time, even after the economy is in a sense fudgesing normally -- functioning normally, namely we are operating at full employment and inflation's around 2%, they think it's likely it will take some time to come back to normal or historically average levels of interest rates. short-term interest rates, they would see as normal levels based on history of something on the order of 4%. and they have indicated that they think it's going to take some time to reach levels like that. i would emphasize that that's a forecast. it's not a promise. but we have had head winds that have acted on the economy and head winds in the global economy and perhaps a slowdown in the pace of growth in the economy and those are some of the factors that lead them to
10:46 am
believe a gradual pace of interest rate increases will prove appropriate. >> understood. fed holds about $1st6 trillion residential mortgage bank securities, a large amount. so again assuming the fed's economic projections hold, when do you expect to begin moving them back into the market? reverse, or other approaches? what range of years -- i do worry i think there will be political resistance when you take those steps, but what years will you see that occurring? >> so we have indicated that we do not intend to steal mortgage backed securities from our portfolio except perhaps when the hole thing's through very small, eliminate some residual holdings. so eventually, and the committee hasn't decided on the timing of this, we are likely to cease
10:47 am
reinvestment of principal and at that point our holdings of mortgage-backed securities would begin to decline over time as principal matures. so it would take a period of some years for our holdings to diminish. >> i have a question about bank reserves, $2.6 trillion is for many, including me, potential fuel for inflation. when the economy strengthens and banks begin to lend, we hope sooner rather than later, to keep rapid inflation in check, will you raise reserve requirements or rate of interest paid on the reserves? do you have a view at this point? >> it's my expectation that when the time comes to raise the level of short-term interest rates, that we will certainly raise the interest rate that we pay on excess reserves and are likely to use a number of
10:48 am
complimentary tools that we have developed, including our tool kid includes overnight, reverse repos, term repos, and our terms of deposit facility, we'll use those tools to push up the general level of short-term interest rates, but interest on reserves will be a key tool we will be using. >> what impact will have that on economic growth? >> we'll only be taking that step when we have judged that the economy is strong enough, that economic growth is sufficient, the labor market has recovered enough, and inflation is moving back toward 2%, we will have judged that the time is appropriate to tighten financial conditions in order to make sure that we don't overshoot our inflation objective. so the effect it will have on
10:49 am
the economy is to restrain the economy, to make sure that we don't allow inflation to rise above our longer term objective. >> thank you. my main concern having served on the committee in the early to mid 2000's, very able and highly predecessor sat where you sat and assured the committee maintaining low interest rates for an extended period wouldn't cause general price inflation or inflate -- which didn't prove to be the case. after the credit fueled housing bubble burst in 2007, the predecessors assured the committee that this would -- the committee, this resulting weakness would be confined to the subprime segment of the housing market and the damage would be limited to about $150 billion. roughly the cost of the s&l crisis. some financial crisis in the fall of 2008 we were repeatedly assured the fed had its strategy
10:50 am
exit from a large expansion of the balance sheet to normalize the policy. yet the goal posts have been moved time and time again, now removed. today you have assured the committee once again, and i so appreciate your testimony, that the fed is confident it can exit without sparking high inflation, but that we can't know the details or the timetable, but hat the fed have essentially handled. i don't expect the fed to be perfect. yours is a tough job. theirs is a tough job. but it just strikes me this -- over time this don't worry, be happy monetary message isn't working. at least in my view for the committee. certainly not for the economy at this point. i know my colleagues will ask about today's "wall street journal" where noted economist, federal reserve historian makes
10:51 am
a point never in history has a country that's financed big budget deficits with large amounts of central bank money avoided inflation. my worries that the track record of central banks, including the fed, in identifying these economic turning points, acting quickly to prevent inflation, that track record is not as good as we would like. forgive me for being skeptical. i believe we need more specifics and clear timetable on the comprehensive exit strategy. with that again thank you so .uch for being here advice chair. >> thank you. as the chairman was talking about with the change to the forward guidance policy in the past it was tied, of course, rising interest rates was tied to the 6.5% unemployment rate, and now the feds said it will consider a wide range of economic indicators and not just
10:52 am
the unemployment rate. he questioned you a little bit about this with the other indicators, but could you tell me what you see the benefits of this new approach and what are the drawbacks of moving away from an exact number? >> so let me, if i might explain , we the number, the 6.5% issued the number 6.5% at a time when the unemployment rate was around 8%, and we were very far from what anyone could call full employment. which is our goal. we wanted to indicate to markets that we would need to see a lot of improvement in the labor market and assuming inflation was under control before we would dream of raising our target for short-term interest rates. and to make that clear we took the number 6.5%, we felt
10:53 am
confident that we would not, if inflation was under control, consider it appropriate to begin that process as long as unemployment -- the unemployment rate was over 6.5%. the gap would be sufficiently wide that something we should -- should consider as a possibility. and so we gave the number 6 1/2 considerable distance from where we were to the public to say we will wait at least that long. now, we did not say that we would raise the -- our target for the federal funds rate when e reached the level of 6.5%. what we said was that would be close enough that we need to look very carefully at what to assess using many different metrics of the labor market, where is it, and what is appropriate policy. now it's appropriate to really
10:54 am
look at many more things. and we changed our forward guidance only because we were coming close to 6.5% and we have now crossed it. there's no change in the guidance, we are saying now that we are there, we want you to understand we have to develop a more nuanced approach to what's going on in the labor market. now, the unemployment rate is a good indicator of the state of the labor market, and if i could only have one, i think that's the metric i would probably choose. but there are different things happening in the labor market we need to take account of. for example, part-time employment that's involuntary. people working part-time, who want full-time jobs. want to work more. it is at exceptionally high levels, 5% of the labor force. it's unusually high relative to the unemployment rate. we have really never seen a
10:55 am
situation where long-term unemployment is so large. so large a fraction of total unemployment, around 35%. that's very unusual. other things are happening that we really in evaluating how much slack is there in the labor market? labor force participation rate hags fallen -- has fallen a lot. there's some structural reasons for that demographics, baby boomers are aging and getting into the years when they retire and their labor force participation naturally declines. so the declines we have seen, it's not entirely because of a weak economy. but i think some of it is because of a weak economy and in a sense it's hard to give you a precise number for how much of that decline is cyclical, but to the extent there is a cyclical
10:56 am
decline that's more slack, and that's what we are looking at and trying to judge. we are also looking at wage developments and the level of payroll employment creation. >> let me follow up on a few of those. what do you think the fed can be doing about long-term unemployment which we all acknowledge is too high? >> i think that a stronger economy as we have growth in the economy, my expectation is that long-term unemployment is going to come down. short-term unemployment is around normal levels. but i fully expect long-term unemployment to decline as the economy strengthens. there is a debate about whether or not long-term unemployment may have less effect on wages and in turn on inflation than short-term unemployment, and that's something that's receiving a great deal of public attention and discussion, rightly so. but i have very little doubt
10:57 am
that if growth in the economy picks up and continues long-term unemployment will come down. >> one of the hearings i chaired this last year was with robert rush, it was about income inequality. he talked about how right now we have a situation in our country where the wealthiest 400 have the same amount of wealth as the bottom 50%. and the international monetary fund recently warned that income equality is actually a drag on our country's economy. why do you think we have seen this rise and how does it affect economic growth on the country as a whole? do you think it's a factor? >> we have seen a trend towards rising inequality in income and also in wealth, and i personally ew this as as a very disturbing trend that policymakers should be looking at and considering what is the ppropriate response.
10:58 am
in part a weak economy, the people who are affected by unemployment are disproportionately people at the lower income end of the spectrum. so a weak economy contributes something to income inequality, and i think what the state can do is to promote a stronger economy, a stronger job market, generally and that will help. but the trends that are responsible for rising inequality go much deeper than the fact that we have had a deep recession. we can see those secular trends in operation at least since the mid 1980's. there's a great deal of discussion about what they are. but they probably have to do with technological change in the way it's increased the demand for skills in the work force
10:59 am
with globalization. so the return to education and to skill has gone up dramatically. there may be institutional changes that are at work as well. so there are deeper forces that are affecting this that go beyond anything that the fed can do. but i really do think -- >> it's something we should be taking up? >> we should be thinking about very carefully. >> one of the things you mentioned in your opening was about how how the thing has flattened out. could you expand on that? i think what we have seen while the housing market has come back with housing prices in my state's one of the ones where they have gone up the most, residential construction moving up, one thing that's held housing back is the significant drop in household formation which gets to the income equality during and after the recession. about 800,000 fewer households were created each year than in the previous seven years. young people aren't forming households as much and getting
11:00 am
new houses. can you comment on this? --i agree with the data your you're citing. we have seen very slow household formation. many young people who are living with their parents, it also is very difficult for people hoe come out of school with heavy burdens of student debt to be able to qualify for morlts. a -- mortgages. >> it's very timely since my daughter is arriving at 10:00 p.m. she's only a first year in college. still. >> my expectation is that as the job market strengthens and the economy strengthens we'll see household formation pick up. but it's hard to note here exactly what the new normal is. and i think we need to see some pickup in household formation in order to see continued recovery in the housing market. mortgage rates went up quite a
11:01 am
lot over the spring and summer. they're still quite low by historical standards so when that -- in that sense housing remains affordable, and i expect housing to pick up, but really it has been -- has flattened out and recovery seems to be in progress really has now flattened out. >> the first quarter, as one of the major reasons we saw a slowdown in the first quarter and will you see anticipation of improvement in the first few quarters? >> yes. we've heard many pieces of evidence as well as what we see in broader statistics that suggests that the weather played a role and recent data is certainly much more encouraging on a wide range of fronts from car sales, retail sales, industrial production. that we te hopeful
11:02 am
are seeing a pickup in economic activity. >> in my opening i talked about how we don't foresee a rise in inflation in the significant future. do you agree with that? >> that is my forecast. inflation has been running under 2%. we expect it to move gradually back over time up to 2%. there are some transitory things that can give it a boost over the next year or so but my expectation is that it will be gradual, gradually moving back to 2%, but obviously this is something we will watch very closely. >> yeah. i asked that guy that tweeted me and said i was wrong. i thought i have you -- >> i'm with you. >> so whoever he is with that strange handle he knows the answer now. so, ok, i mentioned -- my last question here. i mentioned in my opening about what we can be doing to
11:03 am
continue to -- i mentioned a bunch of things. immigration reform, tax reform, to make the things more straightforward. not playing red light/green light every single year with our tax code and incentives. i mentioned to you as head of the mappings federal reserve talked to me in my office last week was the section 179 deduction limits for depreciation of business investment, that they were increased to $500,000 in 2010 but the increased depreciation deduction expired at the end of the 2013. and when i -- ironically after i met with him i met with small businesses through the next few days. as they had said to me during the height of the downturn they thought this was a very useful thing to stimulate investment and add more jobs. and i wanted to get your thought about that as we look at these tax extenders. >> so you know, i think the cost of capital is an important
11:04 am
factor that influences investments although the state of the economy and business confidence and optimism about growth is a very important role as well. and the tax provision that you mentioned is something that was put into effect at a time when investment spending was very weak and i can't quantify what its impact was but it probably played a role in having it pick up. there are a number of different tax provisions that affect the cost of capital and so tax policy generally, including the provision that you mentioned, are definitely relevant to the strength of investment spending. >> thank you very much, chair yellen. >> thank you. members should note we've been very generous to make sure the chairman has plenty of time to answer questions. we will be returning to the five-minute question period. representative hanna. >> thank you very much.
11:05 am
thank you very much for being here. i want to follow up on something that chairman brady talked about briefly. milton friedman once said inflation is always and everywhere and today we see that the united states department of agriculture estimates that food costs may go up as much as 3.5% this year and that is the highest potential rate in the last i think three years. in this morning's "wall street journal" allen melzer, a distinguished federal reserve historian writes, the fed focuses far too much attention on distracting monthly and quarterly data while ignoring the long-term effects of money growth. beyond the pure inflationary concerns, he said some of the side effects of the fed policies has the ugly consequences which is the low interest rates for retired persons that forces them to take substantially greater risks than bank c.d.'s and that many of them relied on in the
11:06 am
past. he says -- goes on to say -- this usually ends in tears for a lot of people. and we see people who planned on retirement and simply based on historic rates and they are just not there for them anymore. is maintaining an extraordinarily low interest rate for a decade creating market distortiones that will have long-term effects on the economy? and you know, it's nice to talk about being able to control inflation going forward and you'll respond to keep it below 2%. last year it was a percent and a half. account federal reserve identify, you think accurately, a change in economic conditions and execute an exit strategy before inflation occurs? just as mr. brady said, never anytime in history of this country that finance big budget deficits with large amounts of central bank money avoided
11:07 am
inflation. >> well, i do believe that we have the tools and absolutely the will and the determination to remove monetary accommodation at an appropriate time to avoid overshooting our inflation objective. everybody on the committee, the experience for them was the 1970's when we saw very high inflation and a huge effort by chairman volcker to tighten monetary policy to bring it down. we lived through a period in which fed policy wasn't sufficiently tight and high inflation led to a rise in inflation expectations. we saw that those inflation
11:08 am
expectations could become a persistent source of high inflation and that it could be very costly to lower inflation. the lessons from that period are very real for all of us, and none of us want to make that mistake again. i do believe we have the tools and the determination to avoid -- to avoid that. we indicate inflationary developments and inflationary expectations are part of our focus. as we watch what the likely evolution of inflation is and i can't say that, you know, that we will get it perfect but i can tell you that the committee s adopted 2% inflation objective in order to make clear our commitment to achieving that objective and to be held accountable for it and we're determined to have that
11:09 am
happen. >> of course, if we raise interest rates, our debt payments, our interest payments will exceed our national defense budget i think within eight or -- seven or eight years. i think 2021 is the estimate. so all of that working together we really need to grow our economy to afford to be able to manage that. >> we want to be able to, and we expect as the economy recovers that a point will come when it will be appropriate to raise short-term interest rates , long-term interest rates are likely to be rising over time as that occurs, and this is something i think congress should certainly be taking into account as you look at what fiscal burdens will be down the road. >> thank you. my time has expired. >> thank you. representative delaney. >> thank you, mr. chairman. and thank you chair yellen for being here. i also want to comment, i was stunned at how remarkably clear
11:10 am
and linear your remarks have been here today. it is good to see firsthand. you touched on some deeper structural trends going on in the employment market and the job market and you tied those i think very appropriatery to the trends of -- to the macro trends of global technology. which as we all know have benefited people with terrific educations or with access to capital or with highly refined skills but they have been very disruptive to the average american. and in my judgment this is the root cause of some of the concerns that we have around income inequality and job creation, particularly job creation of jobs that have decent standard of living. we're created high skilled jobs and low skilled jobs. is it possible -- and you hate to use those four words that people always regret, quote, this time is different, is it possible that these trends, as
11:11 am
they continue to play out in our economy and in our job market put us in a position that we have -- the fed would have accommodating monetary policy for a sustained period of time as we work through these things? particularly absent congress doing things like immigration reform, greater investment in infrastructure, more targeted weighted work through these challenges, is it possible that that is the new norm and that the size of the federal verve's balance sheet in fact stays quite large for a reasonable period of time? which i don't think necessarily is a problem which is my second question. i would be curious on your thoughts on that. >> so -- i think these longer with rends have to do relative wages in the work force and have been going on for a long time for reasons that you stated. i don't think that those trends are ones that the federal
11:12 am
reserve can really address the appropriate policies where they may have to do with education and training. in that sense, when the labor market has returned to normal, in the sense that most people who were looking for work are able to find work for which they are suited and skilled in a reasonable period of time, there really won't be much more that is in our domain that we can do. so we wouldn't keep our balance sheet large or refrained from raising interest rates for that reason. but there are some people who have suggested that the distribution of income and rising inequality are pulling down spending and holding down spending growth. and it's hard to get clear evidence on that. to the extent that that's frew,
11:13 am
it would be a way in which inequality would be slowing the pace of recovery and that would be how long we would hold interest rates where they are. >> and my second question is around -- and you mentioned in your testimony how you think about certain financial indicators at the polls in particular because we've definitely seen in the last couple of years a delinking that's gone on between leverage spreads and leverage, right, hich as leverage goes up others go down? just as we have seen the delinking of market values with corporate earnings. so this delinking i think more as froth as opposed to formation asset bubbles. how do you think about these things or what kind of benchmarks do you use to indicate that we may in fact be using asset bubbles?
11:14 am
>> so we can't detect within any certainty whether or not there is an asset bubble. but we can look at a variety of different valuation metrics akin to price earnings ratios in the stock market. a variety of ways of measuring those and we can look to see how valuations in that sense moved out of historically normal ranges. and i would say for the equity market as a whole, the answer is that valuations are in historically normal ranges. now, interest rates, long-term interest rates are low, and that is one of the factors that feeds into equity market valuations. so there is that linkage. so there are pockets where we could potentially see misvaluations in smaller cap stocks, but overall those broad
11:15 am
metrics don't suggest that we are in obviously bubble territory. but we don't have targets for equity prices and can't detect if we're in a bubble with certainty. >> thank you very much. >> thank you. senator coots. >> thank you, mr. chairman. thank you, chair for combrur -- thank you, chair, for your presentations here today and the answers. i want to just ask you if you'd be willing to step aside for a moment in terms of just responding in terms of representing the fed and give us some of your personal thoughts if you think it's appropriate relative to a couple of -- well, this question in particular. as i travel throughout indiana and talk to businesses, large, small and everything in between , so many of the c.e.o.'s and owners of those businesses
11:16 am
almost to a person indicate that they're underperforming and they're underperforming because of the uncertainties at they face relative to scal policies, relative to prospects of uncertainty about what their taxation is going to be and particularly regulatory policy. now, essentially they say it's a disincentive to the private sector business investment which as we know is the foundation of job creation. your predecessor -- i asked your predecessor the question of whether or not -- what his opinion was relative to the policies that really have
11:17 am
we en and his answer was, pretty much exhausted the major tools that we have to address some of these problems. he agreed these were disincentives for investment. sitting on an awful lot of unused capital. he said really that's a function for you people at the other end of constitution avenue, and he's right, it is. my question is -- i think it was in your statement the new -- fed, you made reference see if i can find it here. you made reference to the fact that it's going to be -- i quote you here. a gradual return over the next two to three years of economic conditions consistent with the fed mandate. and given that, would you be
11:18 am
willing to give us some direction relative to the -- what legislative policies we could take or not fake and the consequences of either accelerating that movement to where we want to get to beyond he two or three-year period or disincentivizing, perhaps, pushing that out? what would you say that is causing a lot of businesses to underperform? >> so i agree with you. my own discussions with businesses, i hear exactly the same things that you're citing. concern about regulations, about taxation, about uncertainty, about fiscal policy. i guess one recommendation that i would give you is that long-term budget deficits, we
11:19 am
can see in, for example, c.b.o.'s very long-term projections that they remain -- there is more work to do to put fiscal policy on a sustainable course, that progress has been made over the last several years in bringing down deficits in the short term. but the combination of demographics, the structure of entitlement programs and historic trends in health care costs, we can see that over the long term deficits will rise to unsustainable levels relative to the economy and putting in place a package of reforms. ones i know these are very controversial matters but that would probably help confidence. as regulators ourselves in the aftermath of financial crisis, we also can see very clearly,
11:20 am
for example, that the kinds of regulations we're putting in place during the process of doing that create uncertainty and burdens. we hear this, for example, from community banks all the time. and, you know, here i would say to some extent the regulations, we're doing this for a very good reason. we had a financial crisis. it's important to make the financial system safer and sounder. and for our own part, we will try to make sure that we worry about regulatory burden, we try to design regulations that are different and appropriate for different sectors of the economy. i think it's important for us, too, to be sensitive to regulatory burdens in order to minimize its impact on the
11:21 am
economy. but we are doing things that are important to make the economy safer and sounder. >> well, thank you for that answer. in closing here, because i notice my time is up, you join a long list of very responsible americans who have the experience and the expertise to give us some warnings about what may happen in the future and the consequences of our inability to act over the last several years now in addressing these major problems that are going to have significant consequences on the economy of this country and on future generations. i don't know what it's going to take for us to summon the will to do what we all know that we need to do, but we -- i appreciate your adding your name to that long list saying you have a responsibility up here and you're not fulfilling that responsibility. thank you. >> senator casey.
11:22 am
>> thanks very much, mr. chairman. madam chair, thank you and welcome. it's good to be with you this morning. i wanted to ask you a couple of questions about jobs and manufacturing. i'll start with that and ask the question about the preparation for job growth and some of the investments i think we're not making in our children. but i'll start with the job picture. we had a lot to be positive about with all of the cautionary notes that your testimony articulates. when i think about it from the national perspective, both good job numbers in the last couple months and even the recent report a lot less in the way of good news in terms of the labor participation rate which i'm told is at a 35-year low. i noted, though, in your testimony that you said on page -- page 1 you said, and i'm quoting, during the economic recovery so far payroll employment has increased by about 8 1/2 million jobs since
11:23 am
its low point and the unemployment rate has declined bout 3 3/4 percentage points since its peak, unquote. so that's good news in terms of the recent news as well as over a number of years but we still got a long way to go. i guess the real cautionary note, though, or the reason for concern or main reason for concern would be on labor force participation. can you speak to that in terms of what you would hope to see or what you're concerned about with regard to that number? >> so, we have seen a substantial decline, especially over the last year or so, in labor force participation. i think it is clear that part of it is democrat -- demographic, secular and will continue. it purely reflects the fact that we have an aging population and as people move into that 60's-plus age
11:24 am
bracket, the amount they work declines notably in spite of the fact that current retirees are working more and participating more in the labor force than earlier vintages. but nevertheless, if we had a strong economy, even for that group, it would not surprise me at all if we didn't see more participation in the labor force by retirees. in addition, we're seeing for all age groups, prime age workers and younger people, reduction in labor force participation. for young people it's partly related to going back to school but eventually, of course, those people will enter the labor force and seek jobs. especially in those nonretiree demographic groups, to me it's clear that the weak state of the labor market, partly explains why we're seeing a
11:25 am
decline in labor force participation. so i will be looking very carefully at trends in labor force participation as the economy strengthens, as the unemployment rate comes down. we need to really figure out what portion of the labor force participation decline is secular and what portion is cyclical and that's what we're going to be looking at very closely. i guess i would expect as the economy recovers we might see labor force participation strengthen rather than continue to decline. >> one thing we talk about a lot is the skills gap and the disconnect there between the jobs that we need to fill or the need -- that need to be created in the future and the skill level of folks that are seeking those jobs or looking for work in the marketplace.
11:26 am
i guess one of the questions that i have for you, you look at trends all the time. you look at the economic impact of policies that we put in place here, and you see those trends and the kind of skills that folks would need for jobs of the future. i guess i'd ask you. my youngest daughter is a junior in approximate high school. if sherp 3 or say, 2 -- if she were 3 or say, 2 or 3 years old right now, what do you hope she would get to be placed in the high-skilled jobs that we hope we have policies that has a strategy to get us to the point where we no longer have that skills gap? what would you hope that either or -- in terms of a healthier smart start? >> i hope that you and society at large will make sure that she has access to a good college education. the gap in earnings between
11:27 am
those with a college degree and those with less education has increased enormously. good opportunities to get advanced training in skills i think will clearly -- every bit of evidence suggests that will make a difference to her life-long earnings. >> i'll send you some questions for the record as well. thank you very much. >> thank you. >> don't worry, madam chair. knowing senator casey, she will get a good education. >> i have no doubt. >> senator wicker. >> thank you, dr. yellen. this has been very enlightening. let me first just try to clean up a few things. in his very fine opening statement chairman brady got to a point where he said he was hopeful he would enlighten the committee on six specific points. there's no time for you to answer those. i would like to submit those questions as my questions for the record and ask you if you'll answer them on the
11:28 am
record, will you do that? >> i'd be glad to. and the last is about transparency. also, i understand your reluctance to be tied down to specific predictions of when this or that will happen. but i do think we got a yes from you on one thing and that is when the asset purchase program will end. as i understand it, you have a set of expectations for the rest of the year. and if those expectations are met, you expect the asset purchase program to end this fall. is that a yes? >> that is correct. if the labor market continues to recover and we continue to see -- see the evidence as pointing to inflation moving up over time to two, the committee is likely to continue taking
11:29 am
further steps that would end the program next fall. >> in the fall of this year? >> correct. >> ok. and so -- and senator klobuchar saw she saw no sign of inflation in the foreseeable future. you don't agree with that. and ideally inflation should increase to 2% and that would be a better result as far as you're concerned? >> 2% is the committee's longer term objective, and we would not want to see a persistent daveiation either below or above 2%. so it won't be at that level at every moment but we expect it to move up gradually over time back to 2%. >> great. you mentioned during your testimony today, maximum employment and full employment. would you just define those for the committee? >> i'm using those terms interchangeably. maximum employment is the wording that's used in the
11:30 am
federal reserve act. it's our goal that congress defined for us. i'm using the term -- > and what is -- could you use that to a percentage rate, what is maximum employment? >> so i determine maximum employment as meaning a level of employment in the labor market where people are able in a reasonable amount of time to gain work -- >> so -- >> they're qualified. >> for today's purchase, you're not going to put a percentage point? >> i'm not going to put a percentage point. >> in terms of economic -- income inequality -- and let's get back to the metzer article in today's "wall street journal." he suggests that actually the policies of the obama administration and the federal eserve are responsible for the income inequality and he says
11:31 am
ironically despite often repeated demands for redistribution to lower income groups that policies pursued by the obama administration, supported by the federal reserve, have prished the opposite. he goes on to say, voters should recognize that goosing the stock market through very low interest rates, not to mention the subsidies and handouts to cronies, have contributed to that result. we'll leave the subsidies for another discussion. but don't you acknowledge, dr. yellen, that the interest rates, which you've achieved, have driven people to the stock market, therefore, goosing the stock market and contributing to this maldistribution of income? >> well, i would not deny that the level of interest rates affects the stock market.
11:32 am
i would hardly endorse the term goosing the stock market. we have no target for stock prices. the policies that we've undertaken are meant to ease financial conditions in a whole variety of ways that will be conducive to generating greater spending and greater spending means that we create jobs throughout the economy. so to think of that as something that is promoting an increase in income inequality i would take issue with. i think a stronger economy brings benefits to a wide variety of households throughout the economy, including lower income households who are gaining jobs. so we do probably have an impact on the stock market. we also an an impact on stock prices and how prices have come
11:33 am
back up again. and for so many households, middle income households, that's their most important asset. that return of house prices to more normal levels i think has been a major benefit to many, many american households. they've seen themselves move from situations where they're underwater on their mortgages to being, you know, back in the black. and it also helps give them access to credit if they want to send a kid to school or have an emergency or want to start a small business. and so there have been benefits in this policy and the policies we've pursued for main street as well as for those who hold equities in their portfolios. >> thank you. >> thank. senator sanders. >> thank you, mr. chairman. dr. yellen, welcome, and good luck on your new endeavor here.
11:34 am
>> thank you. >> mr. chairman, with your permission, i'd like to put into the record a recent bbc article entitled "study: u.s. an alogarchy, not a democracy." mr. chairman, can i place that in the record? >> without objection. >> thank you. madam chair, in the u.s. today, the top 1% own about 38% of the financial wealth of america. the bottom 60th own 2.3%. one family, the walton family, over $140 billion. that's more wealth than the bottom 40% of the american people. in recent years we've seen a huge increase in the number of millionaires and billionaires while we continue to have the highest rate of childhood poverty in the industrialized world.
11:35 am
despite this, as many of my republican friends talk about the oppressive obama economic policies, in the last year charles and david koch struggled under these policies and their wealth increased by $12 billion in one year. despite the oppressive obama economic policies. in terms of income, 95% of new income generated in this country in the last year point to the top 1%. now, a study, which i just introduced into the record, by two professors from princeton university, professor martin gill ons and northwestern professor benjamin paige basically suggests that while historically we have considered our society to be a capitalist democracy we may now have tered into a phase of an alogarchic society. given your power held by the
11:36 am
billionaire class and their political representatives, are we still a capitalist democracy or have we gone over into an alogarchic form of society in which incredible economic and political power now rest with ?he billionaire class >> so all of the statistics on inequality that you cited are ones that grately concern me and i think for the same reason that you're concerned about can shape the determined availability of groups to participate equally in a democracy and have grave effects on social stability over time. and so i don't know what to call our system or how to -- i prefer not to give labels, but there's no question that we've had a trend toward growing inequality and i personally
11:37 am
find it very worrisome trend that deserves the attention of policymakers. >> thank you. i think the point that the professors are making and others have made is that there comes a point where the billionaire class has so much political power, where the koch brothers, now because of citizens united, able to buy and sell politicians, they have so much political power, at which point is that revirsible? that is a great concern to me. i want to go to another point. some of my colleagues, especially in the house, believe that we can improve lives for the middle class and create jobs by completely repealing the estate tax which applies now to perhaps less than .1% of the wealthiest families in this country. would it make sense for you to give enormous tax breaks for the families of the top 1% of people in this country? >> so i've indicated that i share your concern with inequality, but i just i'm
11:38 am
going to say on this that it's up to the congress to decide what's appropriate. there are a number of different ways to address it that certainly is on the list. >> all right. well, let me ask you another question. some of my friends in the house, the ryan budget and so forth, suggests one way to stimulate the economy, to create decent-paying jobs is to give more tax breaks to the wealthiest people in this country and the largest corporations despite the massive wealth and income inequality we have right now. if we give tax breaks to the koch brothers who are worth $80 billion, do you think that will create jobs in this country? >> i think most of the evidence we have suggests that transfers to lower income people tend to be spent a larger fraction of the dollar is spent than when there's a transfer to a wealthy individual. but changes in tax policy -- so that's from the demand side. tax policy also has supply side
11:39 am
effects that one should take into account. >> ok. thank you, mr. chairman. >> thank you. representative paulsen. >> thank you, mr. chairman. dr. yellen, thank you for being here and offering your testimony today. you mentioned several times that the unemployment rate is still too high and clearly we as elected officials who represent our constituency would agree with that. in april you made some remarks to the economic club of new york. at that time you said that the central tendency of the federal market committee participant projections for the unemployment rate at the end of 2016 -- so this is still out a year and a half -- would be 5.2% to 5.6%. for inflation, the central tendency is 1.7% to 2%. you kind of mentioned the 2% today. if this forecast were to become reality, you mentioned, the economy would be approaching what my colleagues and i view as maximum employment and price stability for the first time in nearly a decade. so i guess i'm kind of wondering because you didn't want to put a number on maximum
11:40 am
reform. in light of the unemployment being -- full employment or maximum employment is significantly higher at 5.2% to 5.6%, is that the new normal that you're potentially targeting for full employment? is this is a number that purely a guess based on empurecal evidence that -- impurecal evidence that every member of our committee is few months.e each it's what they think would be consistent with stable inflation rather than gradually rising inflation over time. and based on the evidence that begun, these are just estimates and something
11:41 am
best hanges but their assessment, most of them are in a range of 5.2% to 5.6%. now, when unemployment was as ow as 4% previously, to some extent, that may be overshooting. nothing that says that 5.2% to 5.6% is a floor on how low unemployment can go. for example, in the late 1990's unemployment fell well below those levels, but there may have been special factors. an increase in productivity growth and a strong dollar appreciation, the dollar that was holding inflation down and made that happy coincidence of very low unemployment and stable inflation possible. so at the moment this is their best guess and it's where they
11:42 am
envision the economy is being in 2016. >> you mentioned, too, it was nice -- well, in general with the april jobs numbers that came out it was nice to see the unemployment fall, right, to 6.3%, but the labor force participation rate which you said you wanted to look at the details of that labor force participation rate, it fell to essentially tying a low. that was the most concerns for me, 800,000 people that have now left the work force, right, or the labor force has declined by 800,000. that's a pretty significant number. what do you envision the labor force participation rate be if we hit that 5.2% to 5.6% unemployment rate? >> it's hard for me to give you an estimate of that. we had a huge move. it is very unusual to see a .4% decline in the unemployment rate in a single month with a comparable move in labor force participation. we always tell ourselves and
11:43 am
i'll state i think one should not make too much of any single month's numbers. my preference would be to look at those labor force and labor market statistics over three or six months to get a read on things. if we do that, what we see is the unemployment rates come down. for the last six months, job growth has been -- employment has been gaining about 200,000 jobs a month and somewhat higher over the last three months. the labor force participation rate, it's bounced around, but it's been roughly stable. so it came down. it had gone up previously. over the last six months, it's been roughly stable. which is -- i think there is a declining labor force participation rate as a trend, so a stable labor force participation rate could
11:44 am
signify that some cyclical slack in the labor market is over ly diminishing time. so looking over three to six months i would say the patterns we're seeing are consistent with improvement in the labor market. >> ok. thank you. >> thank you. representative cummings. >> chairman yellen, in february, senator elizabeth warren and i wrote to you urging that a formal vote of the board of governors be required before the fed entered into consent orders over $1 million. my staff reviewed all fed enforcement actions between 1997 and 2013 and found that only about 2% resulted in penalties over $1 million. during a hearing before the senate banking committee on february 27, senator warren asked whether you agreed with our proposal. you answered and i quote, i do think it's appropriate for us to make changes and i fully expect that we will, end of
11:45 am
quote. yet, senator warren and i received a response letter from you -- thank you -- in which you wrote, i agree that it's appropriate for the board of governors to be fully involved in important decisions relating to the enforcement and supervisory matters. you went on to say, steps are already under way to develop new processes and procedures for review and approval of significant enforcement actions. my question is, can you tell me what specific steps are under way? will the board procedures be changed to require formal votes when you will major enforcement actions is? and if so, by what date will that occur? and if that's the procedural change you anticipate making, what new processes and procedures for approval of enforcement actions will be introduced? >> so we have met and it's in the public record we have a number of meetings at this
11:46 am
point over the last couple of months to discuss enforcement actions. we are participating in those discussions with our staff early so that we can guide the handling of these matters. i think it's fully appropriate. and i pledge that we will .ontinue to do so we have taken a vote on at least one very important nforcement matter. and i want to take a little bit more time to work with the staff to decide exactly what the guidelines will be for when we should delegate and when board action is required. you suggested a particular cutoff and want to think more carefully about how to define precisely which actions should require board votes when it's appropriate for us to vote.
11:47 am
what i do want to pledge is that the board will be very involved, discuss and meet to discuss major enforcement actions. and we've done so. >> you were vice chair of the board of the governors when the independent foreclosure review was terminated in january, 2013. did the board formally approve the amendments to the consent decree that terminated the i.f.r.? >> the board did not vote on that agreement. under the procedures in place, this was a matter that was delegated to the staff, but the staff consulted closely with members of the board. before they took those actions, and so the board did have input in an informal way when those decisions were made but there was no formal vote. >> on march 4, i joined with
11:48 am
oversight chairman darrell issa in a letter requesting that both the fed and the o.c.c. produce documents relating to this decision, the o.c.c. produced those documents several weeks ago. we received the fed's documents yesterday. thank you. and we are still reviewing them. the documents produced by the o.c.c. show there were no reliable data or error rates at the time you terminated the i.f.r., but there are preliminary data showing that double-digit error rates in some categories, some services. deep dives were planned to identify the full extent of harm, but they could not be completed because the i.f.r. was terminated. did you know this when the i.f.r. was terminated, did you know that? >> the i.f.r. was terminated because it was decided that the terms was too slow in of its time frame and its
11:49 am
ability to get money into the pockets of homeowners who had been harmed. it was a decision that the o.c.c. took the lead in and the federal reserve went along with after consulting closely with community groups and looking at the process that was -- that was taking place with the independent consultants reviewing these files. it was not a happy outcome. >> it was a horrible outcome. horrible! i don't know if you looked into it but it's a very sad thing that happened here. well, i know i'm out of time, but i will send you some follow-up questions. along with senator warren. >> yes. be happy to answer them. >> thank you. representative -- thank you for being here today and for your answer and answering questions. you have a difficult job. wish you well and we look forward to future hearings to
11:50 am
come. the hearing is adjourned. [captioning performed by national captioning institute] [captions copyright national able satellite corp. 2014]
11:51 am
11:52 am
>> if you missed any of this morning's hearing with the chair, you'll find it at c-span.org. the u.s. house will be gaveling in in about 10 minutes or so to begin their legislative work. morning-hour speeches, legislative work beginning at noon. they'll begin today with a resolution holding former i.r.s. official lois lerner in contempt of congress. and also a resolution asking attorney general eric holder to hold a special -- to appoint a special council to investigate the i.r.s. issue. we will have live coverage coming up. there is the ranking democrat of the oversight committee, elijah cummings of maryland, on your screen. we'll take you live now over to another committee hearing that's under way. a markup session, actually. hank johnson of georgia. they're meeting today to mark up the 2015 defense authorization bill. they have been at it since about 10:00 this morning. expecting to go all day. while we have the time we'll show you their discussion,
11:53 am
their markup session with a reminder, too, you can join the conversation online. we're asking you on facebook, what are the most pressing issues for the defense department in the coming year, facebook.com/cspan. >> renewable energy technologies utilize solar energy to provide lighting to interior buildings. use of this technology is an alternative to traditional allowance -- excuse me -- traditional reliance on electric power. approximately 80% of wal-mart stores are fully lit by direct solar technology during most day-time hours. this is evidence of the maturity, reliability and unique value of solar daylighting technology. advocates and manufacturers of this technology include brands of georgia, lutron from pennsylvania and solar tube from california. thus, supporting this amendment is an easy opportunity to boost
11:54 am
u.s. jobs and manufacturing. multiple states, including arizona, california, hawaii, north carolina and wisconsin already define solar daylighting as renewable energy. direct solar technologies has offered a proven means to which d.o.d. can meet its renewable energy requirement. by creating a demonstration project, congress can help the department to clearly understand the potential of this technology to save the department and the taxpayers valuable resources and i reluctantly move for unanimous consent to withdraw this a dment because there is problem that's been cited to me about the funding issue. and so with that i will yield the balance of my time.
11:55 am
and offer to withdraw. >> the gentleman yields back and request unanimous consent to withdraw his amendment. without objection, so ordered. any further amendments to the subcommittee report? >> yes, i have another amendment at the desk. >> clerk will please pass out the amendment. without objection, the reading of the amendment will be ispensed with. the chair now recognizes the gentleman for purpg of offering and explaining his amendment. >> -- purpose of offering and explaining his amendment.
11:56 am
>> thank you, mr. chairman. my amendment is good for the department of defense, for u.s. manufacturing, for liberal democrats and conservice tiff republicans. my amendment will -- conservative republicans. my amendment will save the department of defense money on its energy bills, reduce its alliance on dirty fuels all without growing the size of government. the amendment clarifies that the use of direct solar technology help the defense department meet its renewable energy target. direct solar renewable energy technologies utilize solar energy to provide lighting to interior buildings and spaces. use of this technology is an alternative to traditional reliance on electric power. two other direct use renewable energy technologies, solar, thermal and geothermal heat pumps already qualify. and by changing the term electric energy to facility energy to accommodate these prior additions, congress also
11:57 am
made clear that the generation of electricity is not a requirement. my amendment makes it clear that only direct solar renewable energy technology and not simply skylights will qualify. approximately 80% of wal-mart stores are fully lit by direct solar technology during most daytime hours. this is evidence of the maturity, reliability and unique value of solar daylighting. advocates and manufacturers of acuity nology include brand of georgia, solar tube from california. thus, supporting this evidence is an easy opportunity to boost u.s. jobs and manufacturing. multiple states, including arizona, california, hawaii, north carolina and wisconsin already define solar daylighting as renewable energy. direct solar technologies offer a proven and promising means by
11:58 am
which d.o.d. can meet its renewable energy requirement. industry is not asking for a direct solar mandate, just a level playing field. this is an obvious chance for congress to embrace a commonsense energy solution that will reduce d.o.d. costs without sacrificing critical clean energy and energy conservation objectives. i therefore urge support for this amendment. >> the gentleman yields back. is there further debate on the amendment? >> mr. chairman. >> the gentleman from virginia is recognized for five minutes. >> thank you, mr. chairman. and i appreciate the intent of my colleague. i am familiar with the technology and i do speak in opposition to the amendment. the amendment was generated by a company for the specific purpose of generating more business for their company. i just want to be clear that this is not a device that actually generates electricity.
11:59 am
it's simply transmitting solar light down through a tube. it's not actually generating electricity which is the traditional definition of renewable. now, the department of energy is responsible for defining these areas and this would put the department of defense and -- with a completely different definition of renewable, what's renewable and what is not. the department of defense administration itself is in opposition to this. and i would recommend to my colleagues that they, too, oppose this and unless and until the department of energy agrees that this is in fact a renewable source of energy. because at present it does not meet that definition. >> just a reminder this hearing continues all day, this markup session of the 2015 defense
12:00 pm
authorization bill. follow it on c-span.org. and over on c-span3 and on facebook asking you about your defense priorities. anthony says secure our borders. david says they should be closing all unnecessary bases. again, coverage continuing live on c-span3. here on c-span, we'll take you live next to the house floor. they're coming in to begin their legislative work for the day. they will take up a resolution holding former i.r.s. official lois lerner in contempt of congress for her refusal to testify before house oversight committee investigating i.r.s. targeting of conservative groups. also take up a related resolution which would ask attorney general eric holder to appoint a special counsel to investigate the issue. we expect a first round of votes sometime after 3:00 eastern and more later on. live coverage of the u.s. house here on c-span.
12:01 pm
the speaker: the house will be in order. the prayer today will be offered by our guest chaplain, resk ran don williams from the maine state police, augusta, maine. the chaplain: shall we pray. i thank you, god, forgiving me the opportunity to represent you in the main -- and the maine state police and the people of the great state of maine. i pray that i represent them well as should be the desire of this great body as they represent their states. my dearest heavenly father, i come to you today on behalf of this body of representatives from our great and wonderful united states as they represent their people. i ask that you give them wisdom and understanding from above. god, we all need your wisdom. i thank you for these men and women who have given of
12:02 pm
themselves to represent their people and make decisions that will affect all of the people of this great and wonderful nation. god, please give them the character and integrity to rule this nation, give them the strength to stand true to their beliefs and the courage to stand for what is true and right. help us to be faithful to your word and, lord, i ask for your blessings to return upon this great and wonderful nation. in thy holy name i pray, amen. the speaker: the chair has examined the journal of the last day's proceedings and announces to the house his approval thereof. pursuant to clause 1 of rule 1 the journal stands approved. the pledge of allegiance today will be led by the gentleman rom texas, mr. williams. mr. williams: i pledge allegiance to the flag of the united states of america and to the republic for which it ands, one nation, under god,
12:03 pm
indivisible, with liberty and justice for all. the speaker: without objection, the gentleman from maine, mr. michaud, is recognized for one minute. mr. michaud: thank you very much, mr. speaker. i rise today to welcome chaplain donald williams as today's guest chaplain. chaplain williams is originally from springfield, missouri, but he came to maine in 1985 where he served as pastor of the fellowship baptist church. chaplain williams was sworn in as deputy sheriff and chaplain for the county sheriff's office in 1987. in addition to serving as chaplain for the maine state police and augusta police department, he was involved with maine law enforcement chaplain corps and the state's criminal justice academy. chaplain williams has gone above and beyond in serving the
12:04 pm
spiritual need of maine's police force for over 20 years. his remarkable service was reflective in his nomination for the 2010 national sheriff's association chaplain of the year award. he is a true asset to our state and our country and i'm proud to stand with him here today. thank you very much, mr. speaker, and i yield back the balance of my time. the speaker pro tempore: the gentleman yields back the balance of his time. the chair will entertain up to 15 further requests for one-minute speeches. on each side of the aisle. for what purpose does the gentleman from texas seek recognition? the gentleman is recognized for one minute. mr. williams: mr. speaker, the president recently announced that the u.s. commerce department would enter its internet agreement with a nonprofit organization who has overseen our databases since 1998. president obama's plans could lead to international control and come at a time when nations all over the world are looking for any technological advantage they can gain over the united states.
12:05 pm
both republicans and democrats alike agree that the obama administration decision to cut ties with icam can lead to an uncertain future that hinders free speech and threatens national security. the united states has always been the most protective country of free speech in the entire world. as other countries, international organizations advocate for a more globalized web, the trampling of our first amendment rights and greater censorship will be at an even higher risk. it is imperative we closely monitor this situation moving forward to ensure that free speech and any medium is never censored. in god we trust. i yield back. the speaker pro tempore: the gentleman yields back. for what purpose does the gentleman from rhode island rise? mr. cicilline: mr. speaker, i ask unanimous consent to address the house for one minute. the speaker pro tempore: without objection, so ordered. mr. cicilline: mr. speaker, last week i unveiled the faces of the unemployed, an effort to help put a human face on the unemployment crisis. yesterday, out-of-work americans all across the
12:06 pm
country came here and was shut out of the capitol building. they were not allowed to share their stories in the building that belongs to them in front of the people they sent to congress. mr. speaker, you may have stopped sharing their stories any the capitol yesterday, but with the faces of the unemployed, their faces will be congress every single day until you bring this bill to the floor for a vote. 2 1/2 million americans are without the safety net today, and that number could reach nearly five million if congress does not act to extend unemployment benefits before the end of this year. these are real americans, many of whom worked their whole lives until recently and now can't afford the basic necessary its. they spent all of their savings. some have even become homeless. others on the verge of losing everything. every one of these people deserve a vote, mr. speaker. i urge you to bring the senate bill to the floor for an immediate vote that we can extend unemployment benefits and to help millions of americans. i yield back the balance of my time. the speaker pro tempore: the gentleman yields back. for what purpose does the gentleman from illinois rise?
12:07 pm
>> i ask unanimous consent to address the house for one minute and to revise and extend my remarks. the speaker pro tempore: without objection, the gentleman is recognized. mr. hultgren: mr. speaker, i rise today to celebrate the city of st. charles' 180th anniversary this may. known as the pride of the fox, st. charles has erned its reputation, boasting beautiful parks, innovative schools, companies and architecture. formerly known as charleston, the city was incorporated three years before the city of chicago. in trevon, st. charles was named the number one city nationwide in which to raise a familiarry by family circle magazine. from river fest to the national acclaimed scare crow festival, from hotel baker to high schools that graduate an average of 95% of seniors each year, st. charles has been an ideal center of commerce, family, fun and rest. the city leads by example in illinois and i'm proud to celebrate its many years of prosperity. as we celebrate this 180th anniversary, i'd also like to give special recognition to someone 18th anniversary, a birth that is.
12:08 pm
18th hter, kylie, her birthday. i wish i could with you but i can't. happy birthday. i yield back. the speaker pro tempore: the gentleman yields back the balance of his time. for what purpose does the entleman from new york rise? without objection, the gentleman is recognized for one minute. mr. higgins: mr. speaker, i rise today to recognize teacher appreciation week. we know that a good education is critical for today's youth to have a successful future. we owe our thanks to the teachers who dedicate themselves to providing this. the need for education begins early, setting children on a positive path for learning at a young age. as students get older, it is essential to provide them with the skills, especially math, science, education, that will give them the ability to compete in a globalized economy. mr. speaker, congress should use this week to recommit ourselves to fund and support programs that improve education for our children. education is the most powerful tool we have to fight poverty
12:09 pm
in our neighborhoods, improve opportunity for our youth, build stronger communities and to create more successful tomorrows. i yield back the balance of my time. the speaker pro tempore: the gentleman yields back. for what purpose does the gentleman from texas rise? >> i ask unanimous consent to address the house for one minute. the speaker pro tempore: without objection, the gentleman is recognized for one minute. >> mr. speaker, i rise today to support the establishment of the select committee on benghazi. mr. marchant: chents in my district demand to know what happened on september 11, 2011, in libya. almost two years have passed and congress continues to get stonewalled by the administration. the most serious of these offenses is that the terrorists who were responsible for this action have not yet been brought to justice. the creation of the house select committee is a serious matter. we owe this to the families and loved ones that were lost. this is our best way forward to
12:10 pm
uncover what actually happened and under the leadership of congressman trey gowdy, i'm confident we will get to the bottom of this. i urge all of my colleagues to join me in supporting the creation of the select committee on benghazi. thank you and i yield back. the speaker pro tempore: the gentleman yields back. for what purpose does the gentlewoman from -- the gentleman from minnesota rise? mr. ellison: to address the ouse for one minute. the speaker pro tempore: for what purpose does the gentlewoman from california rise? ms. hahn: mr. speaker, i'd like to address the house for one minute. the speaker pro tempore: without objection, the gentlewoman is recognized for one minute. ms. hahn: mr. speaker, my colleague from new york just recently talked about education and why it's so important and what a great tool it is to fight poverty and provide for the future of our young people which is why what i'm going to say is even more serious. in the middle of the night on april 15, hundreds of girls
12:11 pm
were abducted from their beds in a school in nigeria. the militant terrorist group, bokeo had a ram, is now -- boko haram, is now going to sell these girls into sex slavery for just $12 a girl. i have just gotten back from the nigerian embassy. we met with a nigerian official for updates on this ongoing tragedy and to stand behind strengthened efforts to bring these girls back home to their families. as a mother and grandmother, i cannot imagine the pain the parents of these girls are experiencing. many of these parents are terrified to speak to the media for fear of what might happen to their daughters. i appreciate our president's new commitment to help the nigerian government bring these girls home. these girls were pursuing their education. despite threats from a terrorist group bent on preventing the education of women. we cannot stand idly by while
12:12 pm
fear and violence oppress the freedom and dreams of women around the world. the speaker pro tempore: the time of the gentlewoman has expired. for what purpose does the gentleman from texas rise? >> i ask unanimous consent to address the house for one minute and to revise and extend my remarks. -- the speaker pro tempore: without objection, so ordered. mr. smith: surely reporters, political party affiliation explains some of their bias. a new study of the media by two indiana professors found that among journalists who choose a side, democrats outnumber republicans by 4-1. maybe that explains why the liberal national media have largely ignored the i.r.s. and benghazi scandals, dismiss climate change skeptics and sugarcoated obamacare. it shouldn't surprise us that journalists have removed from their code of ethics the requirement that their, quote,
12:13 pm
news reports should be free of opinion or bias and represent all sides of the issue, end quote. isn't that incredible that that has been removed from the journalist code of ethics? the media should give the american people the facts, not tell them what to think. the speaker pro tempore: the gentleman yields back the balance of his time. for what purpose does the gentleman from minnesota rise? mr. ellison: to address the house for one minute. the speaker pro tempore: the gentleman is recognized for one minute. mr. ellison: mr. speaker, while the democrats are working hard to address the needs of working americans, over 2.5 million having been left out in the cold since republicans refuse to bring up a bill which is paid for to extend unemployment insurance, republicans are busy with yet another partisan litical exploiltation of a tragedy in benghazi. so yesterday citizens had to go to the steps of the capitol to
12:14 pm
talk about how they lost their jobs and they lost their unemployment insurance and now they have -- they are at their wits' end and are at at the end of their family's budget and need responsive government to step up, and yet republicans are announcing yet another select committee on benghazi which has had 13 hearings, 25,000 document -- pages of document request and 50 briefings. this is an exploitation of a serious tragedy. we know what happened. but you know what, it's politics, and unfortunately the american people need responsive government who are here to help them like the 2.5 million people who are desperately in need for their government to step forward to help them with this unemployment crisis. we can do more. we've got to do it now. stop the games. the speaker pro tempore: the time of the gentleman has expired. for what purpose does the
12:15 pm
gentleman from pennsylvania seek recognition? without objection, the gentleman is recognized for one minute. mr. pitts: mr. speaker, with russian-backed militants creating chaos in ukraine, muldova has put their forces on high alert. they are a breakaway states within their borders. in fact, there is evidence that a ian forces, located in region of mull defensea, has -- muldova, has been involved with the violence in ukraine. could see its attempts to submit friendships undermined by pro-russian provocativors. tolerated. t be last week i introduced a bipartisan resolution that calls on this house to support muldovan independence and oppose aggression by the russian federation. it is clear that vladimir putin will take advantage of any sign of weakness. we need to displace strength on behalf of our friends in the region, engage them and support
12:16 pm
their right to defend the independent republic of muldova from addressive actions. i yield back. the speaker pro tempore: the gentleman yields back. for what purpose does the gentlewoman from california rise? without objection, the gentlewoman is recognized. mrs. capps: mr. speaker, i rise to draw attention to the serious gaps in our cancer care system. a system the institute of medicine has deemed in crisis. far too many patients, cancer patients for them, the process of a cancer diagnosis and treatment is overwhelming. patients must navigate treatment provided by multiple providers with little help to coordinate the treatments, the side effects and the psycho social impacts. while some providers involved are active in their cancer care, we need to make it the standard, not the exception. that's why i've introduced the planning actively for cancer treatment or pact act. with my republican colleague, mr. boustany, from louisiana. the pact act would provide a
12:17 pm
personalized road map to cancer care developed by the patient and provider. these plans have been shown to improve patient outcomes, increased patient satisfaction and reduce unnecessarily utilization of scarce health care facilities. that's why cancer patient research and provider groups like the lymphoma research foundation and the national coalition for cancer survivorship, they all support this bill. with the pact act we have an opportunity to make cancer patients better. along with the health care systems that care for them. i urge my colleagues to co-sponsor this important bill and i yield back the balance of my time. the speaker pro tempore: the gentlewoman yields back the balance of her time. for what purpose does the gentleman from texas rise? without objection, so ordered. >> mr. speaker, i'm outraged over reports involving the care of our veterans. and the blatant mismanagement at the v.a. we've made promises to our nation's veterans and yet wounded veterans are waiting
12:18 pm
months and even years with some even dying due to backlogs at the v.a. i found out yesterday a veteran in my district died from excessive delays because he was unable to get necessary heart surgery. mr. farenthold: delays at the v.a. hospital in phoenix may have led to additional deaths and reportedly v.a. officials have ordered hospital workers to shield this information in order to hide incredibly long waits. workers at a v.a. clinic in fort collins, colorado, were supposedly told to falsify appointment records to escape retribution for into the -- for not meeting agency-imposed goals. if they didn't do that, they were going to end up on a bad boy list. mr. speaker, true, these reports demonstrate a serious problem within the v.a. the brave americans who served our country did not wait months or years to answer the call to protect our freedom. they deserve the best care that we can give them in a timely manner. unfortunately under current leadership with the v.a. that seems impossible.
12:19 pm
if secretary shinseki can't get this done, president obama needs to find somebody who can. i yield back. the speaker pro tempore: the gentleman yields back the balance of his time. for what purpose does the gentlewoman from nevada rise? without objection, the gentlewoman is recognized for one minute. titistitis last week during the v.a. -- ms. titus: last week during the v.a. aproposes debate, i spoke about madeline taylor. a veteran denied the rights to be interned -- inturned with her house because they were lesbians. idaho does not recognize their marriage and is denying the couple the honor and dignity earned through madeline's service in the u.s. navy. clearly lgbt veterans continue to face discrimination. nearly a year after the landmark decision striking down doma, the v.a. still does not have a clear policy to ensure all veterans, all veterans and their spouses have access to their earned benefits. in response to the situation, idaho resident and 27-year army
12:20 pm
veteran colonel barry johnson offered madeline and jean his plot at the staple cemetery stating, madeline loves her country, she wants her partner by her side and she wants to eternally rest among veterans in the state she made home. she deserves that. we need more people like the colonel here in congress willing to speak up on behalf of all our veterans and their families who deserve to receive the benefits that they've earned. i yield back. the speaker pro tempore: the gentlewoman yields back the balance of her time. for what purpose does the gentleman from florida rise? without objection, the gentlewoman is recognized for one minute. ms. ros-lehtinen: thank you so much, mr. speaker. and i'd like to congratulate the team from hebrew academy in south florida for winning this year's national council of synagogue youth jump competition. schools across the country were charged with creating events related to israel advocacy,
12:21 pm
jewish values, holocaust remembrance and bullying prevention. through this competition, students developed -- develop and build critical aspects of leadership that can be applied lives. ut their for their teams' winning project, the hebrew academy jump team created an israel awareness day developed -- day, developed a bullingy awareness -- bullying awareness week and created a remembrance project that engaged holocaust survivors to have their stories integrated in their school's holocaust crick limb. i congratulate -- curriculum. i congratulate these impressive students on what they have accomplished for our community and for their victory in the national competition. at this time, mr. speaker, i would like to submit into the record the names of the exceptional hebrew academy jump team members and i thank you for the time, mr. speaker. the speaker pro tempore: without objection, the gentlewoman's time has expired. for what purpose does the
12:22 pm
gentlewoman from florida rise? without objection, the gentlewoman is recognized for ne minute. ms. wilson: mr. speaker, last night i introduced a bipartisan resolution condemning the abduction of nigerian school girls by the terrorist group boko haram which has claimed responsibility. leadership of the u.s. house foreign affairs committee and the subcommittee on africa joined me and co-sponsored house resolution 573. mr. speaker, i'm personally deeply disturbed by this atrocity and it shines a light on the terror that so many girls face around the world every day in attaining the basic right of an education. we must do everything in our power to ensure the safe return
12:23 pm
of these precious children and strengthen efforts to protect them from those who conduct violent attacks. i support secretary kerri's decision to send a security team to nigeria. it will take the efforts of the nigerian government, the united states government and the international community to rescue the missing young girls. these young women could be our daughters, our sisters, our nieces. mr. speaker, the terror is still continuing as i stand and address this house. we must end this nightmare for these girls and for girls all over the world. the speaker pro tempore: the time of the gentlewoman from florida has expired. all time for one-minute speeches has now expired. for what purpose does the gentleman from florida rise? >> mr. speaker, by direction on
12:24 pm
committee of the rules, i call up house resolution 568 and ask for its immediate consideration. the speaker pro tempore: the clerk will report the resolution. the clerk: house calendar number 103, house resolution 568, resolved that of house report 113-415 is called up by direction of the committee on oversight and government reform , a, all points of order against the report are waived and the report shall be considered as read. and, b-1, in accompanying the resolution offered by direction of the committee on oversight and government reform, shall be considered as read and shall not be subject to a point of order. and, two, the previous question shall be considered as ordered on such resolution to adoption without intervening motion sore de-- or demand for digs of the question except one, 50 minutes of debate equally divided and controlled by the chair and ranking minority member of the committee on oversight and government reform or their respective designees.
12:25 pm
two, after conclusion of debate, one motion to refer if offered by representative cummings of maryland or his designee, which shall be separately debatable for 10 minutes, equally divided and controlled by the proponent and an opponent. and, three, one motion to recommit with or without instructions. section 2, upon adoption of this resolution, it shall be in order to -- in order, without intervention of any point of order to consider in the house the resolution, house resolution 565, calling on attorney generic h. holder jr. to appoint a special council to investigate the targeting of conservative nonprofit groups by the internal revenue service. the resolution shall be considered as read. the previous question shall be considered as ordered on the resolution to adoption without intervening motion or demand for division of the question except 40 minutes of debate equally divided and controlled by the chair and ranking minority member of the committee on the judiciary.
12:26 pm
the speaker pro tempore: the gentleman from florida is recognized for one hour. mr. nugent: mr. speaker, for the purpose of debate only, i yield the customary 30 minutes to the gentleman from massachusetts, congressman mcgovern. pending which time i yield myself as much time as i may consume. during consideration of this resolution, all time yielded is or the purpose of debate only. mr. speaker, i ask for unanimous consent that all members have five legislative days to revise and extend their remarks. the speaker pro tempore: without objection, so ordered. mr. nugent: mr. speaker, i rise in support of this rule, house resolution 568. house resolution 568 provides for consideration of two important resolutions. both resolutions are critical to getting to the bottom of the i.r.s. targeting of conservative nonprofit groups and they're critical to holding this government accountable. the groups who are discriminated against deserve to know the full truth and so do the american people. to this day, mr. speaker, no
12:27 pm
one has been held accountable or the actions of the i.r.s. i wish that the underlying resolutions weren't necessary. but once again the self-proclaimed, quote, most transparent administration in the history, unquote, hasn't been helping much in providing the answers to the american people that they so rightly deserve. for example, one of the underlying resolutions, house resolution 565, calls for the attorney general to appoint a special council to investigate the targeting that took place. again, it's frustrating that this house even needs to take this step, mr. speaker. but as we've come to find out, the justice department chose a democrat political supporter to lead their investigation into i.r.s. actions. this attorney donated over $6,000 to the president's election campaigns. and if that's not a conflict of interest, i don't know what is. that's extremely disappointing to me because this administration had the opportunity to give the merican assurances that they
12:28 pm
wouldn't stand for the i.r.s.'s conduct. they wouldn't allow an agency to be a tool to punish people for their political beliefs and would work diligently to root out this behavior and hold the appropriate people accountable. instead, the administration severely undermined the credibility of the investigation at every turn. we need impartiality, objectiveness from this administration and, mr. speaker, we just didn't get it. we've hit a wall, mr. speaker. it's time we've had a special council to look into this issue so we can fully understand the depths of the targeting. what we do know, mr. speaker, is that all signs point to lois lerner. as a central figure in this scandal. mrs. lerner has been unwilling to answer questions before the oversight and government reform committee, despite giving testimony to two other bodies. her reactions to this point beg the question, what's she trying to hide?
12:29 pm
mrs. lerner has roughly a year, she's had a year to work with the committee and ample time to comply with this subpoena. unfortunately she's refused to do so. when called to testify before the committee, lois lerner simultaneously asserted her innocence while depriving the american people of the opportunity to get the questions answered. mrs. lerner made 17 separate factual assertions before invoking her fifth amendment right. 17, mr. speaker. in the words of my colleagues from south carolina, there's a lot of talking for someone who wants to remain silent. some people believe, and me being one of them, that you can't do that. you can't make selective assertions and still invoke your fifth amendment right. mr. speaker, i believe that mrs. lerner's conduct shows contempt for this body. i certainly do. i truly believe that. but that is what we're here today for. to have a debate, to see what
12:30 pm
the majority of this body believes. this rule allows for the debate to happen and a vote to happen. it allows congress to do its job, providing oversilent of the executive branch -- oversight of the executive branch. if contempt vote passes, it will place the issue into federal court. it will be up to them to decide if we're accurate or offbase. let the court decide that. that's the appropriate step because that's where the dispute between these two branches is supposed to reside. the judicial branch is the arbitrator between the executive branch and the legislative branch when it comes to issues like this. that's how our three-branch system works. we should let the process takes place. i support this rule and i urge my colleagues to do the same. with that i reserve the balance of my time. the speaker pro tempore: the gentleman reserves the balance of his time. for what purpose does the gentleman from massachusetts rise? mr. mcgovern: thank you, mr. speaker. i want to thank the gentleman from florida, mr. nugent, for yielding me the customary 30 minutes, and i ask unanimous consent to revise and extend

28 Views

info Stream Only

Uploaded by TV Archive on