Transcripts For CSPAN Public Affairs 20130726

I think they definitely need to do a better job there. I think this is true not just for president obama but everyone of us. Things are complicated. They are more complex than they look on paper. You bring up the payroll tax cut. I thought it was a terrible idea in the context where we are supposed to collect this money to help pay for the retirement of current retirees. You cannot have it both ways. Claim we have Social Security selffunded and then say we are not going to collect that program. Unds that is extremely important. Do itdmitting the way you is by borrowing more money. There are a lot of things lost in the debate. Some are born and complicated. Specific tonk it is president obama. Guest was a payroll tax cut as part of the stimulus. It happened through the payroll taxes. It did not mean money going to Social Security was reduced. Guest exactly. But that was lost in the debate. Been i do think there has in messaging problem with obama. He did not do the things he could have done which was helped to educate the public. When everyone else is tightening their belts, this is the time the Program Needs to be investing to sustain the economy through hard times and tell the private sector to take over and generate a robust recovery. Biggestk back on the misstep on messaging, if he would have been educating the public on this counter intuitive thing, it could have helped people understand the role of government when we are in the worst downturn the country has seen in 70 years and millions of people are out of work. It would have worked to get the economy back on track. Is withidi shierholz the Economic Policy institute. She is a member of the board of directors at the d. C. Employment justice center. She holds a ph. D. In economics from the university of michigan. Our other guest also has a degree in economics from paris. She is a Senior Research fellow at george mason university. You can read her writing. You can read her work on line. Were talking about what president obama is looking forward to in the future. Ahead, you are on the air. Host i am a smallbusiness owner. I have quite a bit of employees that make minimum wage. Employees, certain people know how to work the system. They will work for three or four months. Then they will stop working. A month later, they will go on unemployment. I feel like the economy is getting better. Job ofould do a better go onnizing the people to theployment, i feel unemployment would go down. People would be more consistent with their jobs. It is all about accountability. Money onke more unemployment then they do being employed. Host heidi shierholz. Guest i think you make a good point about the cost of turnover two companies. We know hiring and firing and people leaving and needing to hire more people is a highcost for businesses. One of the things that can be done to reduce those costs is to increase the minimum wage. There is good evidence that increases in the minimum wage reduce turnover. When people get paid more, they are less likely to leave that job. Moneyan save a lot of for businesses. One of the ways we can combat that turnover is increasing the minimum wage. The other thing that is interesting about the Unemployment Insurance benefits, we had a big expansion of benefits. Congress did that in the downturn and aftermath. That is totally appropriate when you are in the worst slump in 70 years. We have fewer Job Opportunities than before. Increasing Unemployment Insurance is the thing congress always does at a time like this or when the economy is in a downturn. They have done it this time. There has been a lot of research that shows those increases in are notment benefits keeping people from looking for work. We have so few Job Opportunities. We have so many longterm unemployed. People have given up looking for work. If you get unemployment, you have to be actively seeking work. Extended benefits have kept people in the labor force looking for work. That is a good outcome of this extension because it will likely increase the shares of the long term unemployed who ultimately stay in the labor market. I think the problem of. Overnment intervention they have unintended consequences. They have unintended consequences. People tried to go around them. Why we have to think of the energizing our economy. This is president obama speaking in illinois. [video clip] if you think education is expensive, wait until you see how much [indiscernible] costs in the 21st century. If we do not make this investment, we will put our kids, workers, and country at a competitive disadvantage. In the earliest years. I willp to make keep pushing to make high quality education available for every preschooler in america. [applause] not just because it works for our kids because it provides a vital system for our parents. Ias we speak, federal agencies are moving on my plan to connect American Students to highspeed internet over the next five years. We are making that happen right now. We have already begun meeting with Business Leaders and Technology Entrepreneurs and innovative educators to identify the best ideas for redesigning our high schools so that they teach the skills required for a hightech economy. Is the role of education in boosting the economy . Guest at the college level, there is no doubt that getting a University Diploma increases your expected future income. Education is extremely important. This is yet another area where there has been massive involvement of the government. Intervention is not always good in these areas. There are a lot of failing schools in spite of massive increases for adjusted inflation for spending on education at both the state and federal levels. We need to think differently about how to do education in this country rather than just throw money at it. I would suggest that one of the ways is to give people a choice. If people the money and let them choose where their children go to school. It is even more important for low incomeents who are stuck in extremely bad School Districts. I think they deserve the same kind of choice. Higher income parents have more flexibility. They can move houses and choose School Districts. It is the moment to empower people to change the School Districts and empower them with choice rather than continuing to throw money at schools. Host College Enrollment fell 2 in 2012, the most significant decline since the 1990s. To 2013. Point traditional family here nonprofit colleges began a contraction that well 4year nonprofit colleges began a contraction. Fort the Silver Lining this horrible downturn for young people. They will get into school and get that extra degree and it would make them better off in the future. If you look at the data, these kinds of numbers show that it was not happening. We did not see an uptick in enrollment. Enrollment ticked down. That is interesting. I will check that out. K inid not see an uptic enrollment in college. While a lot of kids may have the resources, most College Students need to work to stay in college. If they are not able to find a job to keep them in college, they will not be able to attend school. The other thing is parents who saw their wealth estimated by the housing bubble. They will be less likely to help their kids. That is why we did not see an increase in enrollment. It is one of the things that is hurting his cohort coming out. We know that College Education matters a lot to your future earnings. One other thing that is important to keep in mind is not to be all in all. We know that the median wage for College Workers has not increased for 10 years, even before the recession hit. We really saw a stagnation of the wages of people with an b. A. With other factors that are really driving wage trends, not just educational disparities. Other factors that are falling money to the top of the income and wages distribution rather than seeing it go to middle class families. Education, a College Degree in particular. To really solve the problems in our economy to reduce the wage inequality we have seen. Colleges give the ball on a demonstration a low grade on the economy. Themany people give the obama peopletration many give the Obama Administration a low grade on the economy. Caller my concern is my kids. I have five. The only thing i have seen is that you use it richer and the pork state court. The poor stay poor. The poor stay poor. It has been a continuing trend. If i go on here and get a job and i do not do my job, i would not have that job very long. That someoneeve does not do something about all of these fat cats in washington in getting these kickbacks and not doing very job, what they said they were going to do to begin with. That covers all of them. Host veronique de rugy. That is a heartbreaking call. I strongly believe in america and its ability to turn around. It goes back to where we started. Share of thet population has stagnated. Does not create the kind of dynamism in the labor market that we should be seen. A lot has been done and it has backfired. Thesees were made when interventions were taken. I share your concern. I think the labor market is really stuck in the mud right now. , it will not be like this forever. Thet has been done by government. It just has not worked. Host heidi shierholz. I really appreciate your call. I want to focus on one of the things your call did. We have had a lot of a growth of good jobs even before this recession began. We really did not see wages growing very well for most workers for three decades before this recession began. Obama talked about that during during his speeches. Workersto focus on being able to join a union if they want to. It is increased employer aggressiveness in fighting union drives. E have seen huge growth concern that Companies Facing a union drive can keep a union from organizing. With thes not kept up union fighting in that industry. Workers who want to join a union should be able to. We know that is one of the ways we will see growth in good jobs in this country. Host thank you so much for joining us. A comet anz is economist and veronique de rugy works at george mason university. Coming up next, our america by the numbers segment takes a look at Energy Production and its use. We will be right back. The first lady reflects the schims in the United States schism in the United States about what women are supposed to be today. Are we supposed to be mom in chief or are we supposed to be first mate . If the president is supposed to be head of state and head of government, is the first lady supposed to be the ideal action fashionist . Is she supposed to be a mom in chief . Is she supposed to be the help make . Mate . Lp if she is going to be the help mate, has to understand what is going on in the country and her husbands agenda. As we continue our conversation on first ladies, about the rolelk of the first lady and it moves from Traditional Home and family and its move from Traditional Home and family to activism. This is a website. It is the history of Popular Culture. It is a collection of stories on the history of Popular Culture. To st. Paul culture, it is more than that. Say pop culture, it is more than that. I have been going into detail about how pop culture in packs sports, music. We have history of media entities, newspaper entities. There are a range of things. Ien i formulated the site, cast a wide net to see what works. Sunday with jack doyle. 8 on cspans q a washington journal continues. Host we are looking at international energy. Frank, with the center for strategic and international studies. Headlining todays wall street journal is says the u. S. Sees a boom in Global Energy use. The world will use far more of every type of energy. The u. S. Energy Department Said that an energy will drive current consumption. Us why weby telling are looking at this. Host it is important to the u. S. , priorities on a number of fronts. The environment, energy andrity, our Environment Energy consumption is going to grow by 10 after the year 2040. The worlds Energy Consumption will be up more than half over the same time. Why is this so important to the United States. Give us more details about how that the sec affects our planning for our energy usage. Guest in d expenditures are one of the highest portion of consumer budgets. Consumers are paying relatively high prices for fuels, particularly petroleum, right now. Italy electricity bills have stayed relatively low. The impact on the consumer budget is rising. Oil prices have created concerns. It is worth understanding the issues that drive that. Host you can call us as at 2025853880. If you are in the mountains, call us at 2025853881. Why is it important to look at u. S. Energy consumption and where it is headed . We are competitors, but we are also allies. You use energy for everything you did. You turn on the lights, run your electrons, cars for transportation. Electronics, cars for transportation. The emerging economies in the past, 70 of our demand was met by the developed world, as you would expect. As populations grow and Energy Intensity increases in the developing world, emerging economies are switching back. Ebay Growth Centers are asia, the middle east the big Growth Centers are asia, the middle east, africa. The prices are global. We seedam sieminski, some of the key findings. World Energy Production is expected to increase 56 by 2014. Consumption grew by less than 10 . U. S. Consumption pick up is going to be in a number of places. Electricity consumption will rise and fuelling consumption will rise. We believe coal will hold onto most of its market share over our protection period. Automobiles are getting more miles per gallon. Petroleum andw liquid fuel consumption to come down over time despite the fact that there will be more cars on the road. What doesk verrastro, that mean by you what does that mean to you . Guest we have gone to a servicetype society. We can be more competitive. There are great opportunities. Host will we be more reliant or less reliant on foreign resources by 2040 . Guest we will be less reliant. Chasm betweenbig and a lot of Infrastructure Investment has to happen. A lot of aboveground issues that we frequently talk about. As we look at opec production, it is predicted to, mainly from the middle east. That is the growth area. Why is that significant . Guest there are three Different Countries in the middle east that have big oil reserves. Audi arabia, iraq, and iran opecare key members of the organization. Production inoil countries like iraq and iran will drive considerable production. There might actually be too much production. They might have to decide how to divide up their market shares. Host we look at this graphic. The nineopec production is opecntrated in the non production is concentrated in the United States. Tell me about this. In brazil, and oil is coming from what they call the presalt to a logic formation. In canada, it is the oil sands. Kazakstan, is typical oil production. Russia is one of the biggest countries in terms of having the same kind of Oil Shale Resources we have discovered and exploited in the u. S. In places like north dakota and texas. Is predictedstates to have this growth. Growth, here is 2010, 2040. The predictions we are seeing from eia what are you watching for, Frank Verrastro . Production in the United States is on shale oil side as well as conventional production, offshore production. We thought u. S. Production peaked in 1970, and you are looking to be risk averse. Demand was growing, resource was scarce. Now we have totally flip to that. The highest production potential in 20 years, the number one or number two gas reducer in the world gas producer in the world. We could be the number one exporter at the end of the decade. It is a major transportation. Major transformation. Host jean is on the line. Gas to using natural produce methanol, as israel is for the, to compete rising price of gasoline. China for eight years has been producing methanol and using it in their cars from coal. Unfortunately, their process is polluting because it burns coal to drive the process. There happens to be a 1984 patent process from Johns Hopkins that from Johns Hopkins and produces twice as much methanol per ton of coal because it does not burn the coal. It is a chemical process. In any case, will the united thees leaves revisit alternative fuel act of 1988 and give methanol chance to help us at the fuel pump . Host Adam Sieminski . Guest the exploration of what can be done with alternate fuels is an ongoing activity here in the u. S. There has been lots of things happening. Inare using a lot of ethanol our gasoline. We are up to 10 essentially of the gasoline supply coming from ethanol. There is a lot of experimentation along with fuelced biofuels, these of diesel fuels. Methanol is one of the possibilities, but so far the cost of doing that has been higher than the number of the alternatives under way. In our longterm projections for fuels going out in 2040, we see quite a bit of fuels like ethanol in brazil and the u. S. We think that there will be gas to liquids projects in places, it likely here is even in the United States. And coal we see, as you mentioned, coaltoliquids activity going on. 2040, even say by with quite a bit of progress in this area, it will still represent less than four percent of the world supply. Host Adam Sieminski was sworn we arehead of the looking at a new report from the eia. International Energy Outlook. 2013,s the outlook from projections in the decades to come. Frank verrastro, can you respond to the callers comments . Guest natural Gas Production is a great boon to get gas in some form. People are looking at natural gas liquids am a compressed natural gas, coaltogas, a number of ways to do this. Fuel cells. The difference is that oil, because it is more carbon intensive, gets you more miles per gallon. As you done to gasoline pool with more ethanol, as you dilute the gasoline pool with more ethanol lets take a look at the map from the eia of shale oil and gas and their potential impact on world energy markets. The stirs minsky mr. Sim eminski . Guest a study we did two years ago looked at Global Shale Oil resources, and we also looked and tried to understand what was happening with Shale Oil Resources around the world. Thatwe have concluded is there are enormous resources of shale oil and shale gas in many countries around the world. On the oil side, russia, the u. S. Has significant resources. On the gas side, it is china, argentina, and the u. S. But the major activity that is underway right now in both of these areas is in the United States. There are a lot of aboveground issues that are slowing this down outside the u. S. , and aboveground issues, as you might imagine, are not resource based, which are found below ground, but economic and policy and social issues above ground. Things like land ownership, environmental issues, having the right companies and technological skill sets to actually do the development. Red the can see in basins that have resource estimates. Resources in alaska down through canada and the United States. Orange, the peach color, that is basins without an estimate on the resources. You see here also the picture globally. Lets go to john in brooklyn, new york. Caller good morning. Thank you for taking my call. I appreciate cspan for information. My question on energy where would the general public find the easiest resources to understand the emissions that go into our atmosphere, the ground, nuclear,rom coal, oil, all the Different Energy sources . It can be very complicated, difficult to understand our emissions that affect our environment. To balance theve economy with a good environment, the generaluld public easily understand and get this information . Guest thank you for that question, john. That is a layup question for me because i am going to say what ,ou want to go to is eia. Gov the Energy Information website. Orre you will find an in miss amount of material on u. S. And Global Energy you will find and in or miss you will find an enormous amount of u. S. And Global Energy. Quite a bit of information on the use of energy, where it comes from, and some of the environmental side effects that you are expressing. One of the things that we found in something called the annual Energy Outlook that we do for the United States every year, is that Carbon Dioxide emissions from Energy Related activities actually peaked in 2005 and have been coming down. We have them rising slightly over our forecast period out through 2040, but never reaching again the peak that was hit in the year 2005. That is pretty good news because Carbon Dioxide emissions are a standin for many of the other pollution issues associated with and that seems to be under fairly Good Management and gives me quite a bit of hope in terms of your question. Verrastro, what does Energy Intensity mean . Why is it significant . Guest think of it in terms of efficiency so in terms of work to get a manufacturing process out, you want to increase productivity without your energy usage increasing. That is the reverse of that. The story is the United States has done a good job as we have moved from Energy Intensive industries into Service Industries and information technology. We have reduced our footprint, so we have improved efficiency along the way. We are hoping to see other emerging economies make that change as well. We have seen japan be relatively flat. The trajectory that china and india were on has been stark in terms of increase, so were hoping to a lay that, so you can reduce efficiency around the world by producing less. Host Adam Sieminski, ellis about the graphic here. Guest the main point of that is to explain the major drivers for Energy Around the world. Gdp we show there is that. S a huge driver of energy use prosperity is rising so sharply already in china and india and in our forecast, that it is growing faster than the improvements and Energy Intensity that frank was highlighting. What that means is that the on the waymption is up. The goodee is that news of Economic Growth that is coming in the developing world has a side effect of higher Energy Consumption, and the side in the of that environment and Energy Security have to be managed well, which brings us back to the original question you asked why is it important to think about these . U. S. Energylook at performance and compare it to europe, we see the gdp in orange and the Energy Intensity in blue. To population in green. Why is the Energy Intensity level where it is . Guest our levels are improving. One reason is that we are getting a lot better at automobile fuel efficiency. Our cars are going more miles on a gallon of gasoline. We are also seeing improvements appliances, and i think there is still a lot of progress that could be made in buildings, but that is underway. One of the other important things in thinking about Energy Intensity is not just efficiency and conservation, but the shifts that take place structurally in economies. As you move from manufacturing to a serviceoriented economy, Energy Intensity improves. It is one of the things that ultimately will happen in china and india, that will slow down the growth we are seeing in Global Energy. Sieminski is the u. S. Administrator in the Energy Information administration. Energyerrastro from international studies. Lets hear from john in south carolina. Welcome. Caller good morning. I know my time is short. I want to ask a couple of questions. Do we have a gas shortage . I dont believe there is a gasoline shortage, no. The answer to that is no. Caller ok. Do we pump enough gas here in the United States to sustain us . Yout i want to make sure are asking about gasoline and natural gas. There is no shortage of natural gas either. We are pumping so much natural gas, there is an opportunity for the u. S. To export that. We think we will be a net exporter of natural gas around 202012. Around 2020. Caller i talking about gas for the car. Guest gas from the car comes from refining crude oil. The reserve base for crude oil is improving dramatically with the ability to get oil from shale and places like the bachmann formation in north dakota and the eagle ford in texas. This is really important. In true thousand five we were importing 60 of in 2005 we were import existing percent of liquid fuels consumption. To2011 that number was down 40 , and it is lower than that now and it is going to move lower. The u. S. Is importing less and less of those petroleum products. There really is no shortage. We have a lot of it. Caller both of those was a yes answer. So if there is no gas shortage and we pump enough here, why are we paying so much per gallon . Lets ask Frank Verrastro for that . Caller the perfect setup. Guest the perfect setup. Because it is a global market, it is precariously balanced right now. It is fully supplied, stocks are growing, but if you look at iraq, asia, there is enough geopolitical risk ,round the world that prices gasoline reflects the price of crude, the transportation to refineries, refining cost, regulatory activity, and distribution to your local gas station six blocks from your home. John, i know this does not bring a lot of comfort to you, but a little bit over a year ago, oil prices on a noble 127,were up close to 128 a barrel. That difference between where frank said prices are now and where they were a year ago is about 20 a barrel, and that is . 50 a barrel . 50 a gallon on gasoline. Traces could be even higher than they are now. If we can prices could be even higher than they are now. Host james in tennessee. Caller hello i host james, are you on with us . Caller yeah, im still here. Look at it this way. We need to keep pretending on this staff. The whole thing we did back in the 1950s or 1960s, gas was . 36 a gallon. We had plenty of oil. The United States needs to look at their own people and quit tooling with these foreigners. Working withquit foreigners and rely on our own resources. How realistic is that . Guest the u. S. Is already a neck exporter of a net exporter of coal and gasoline. We think we could be a net exporter of natural gas in another five or six years, so we are moving in that direction. Still part of the world, and that is one of the reasons we want to keep coming back to one of these ideas, why do we need to look at the natural at the national Energy Outlook . In a trades environment, things happen outside the u. S. , impact our supply and pricing here. So even if we were totally independent of imported oil, we would still be part of the world oil market, and if something happens in the middle east, for example, it is going to impact our prices. Host Frank Verrastro . Guest james, i feel your pain on this one, but while there is a tendency to draw a circle around the United States and make ourselves selfsufficient, if we were to have a hurricane or a major storm that took out refineries, we would look at the make up thoseto supplies. It is good to be linked to the international market. Enhancingeliance and Energy Security is a good thing, but we need to be interdependent as well. Europe and china helped out considerably with our supplies, and that was a good thing. Host our next caller. Caller i am basically calling because ironically, right before i switched onto this program, i saw the movie gas lines 2, which is all about the shale gas that is being harvested currently in america right now. It seems to be having disastrous effects as far as environmentally. Sorry, i am just kind of nervous. This is the first time i have ever called in. Host thats ok. Should it is like, why we do that when there are so many options available . I saw a talk the other day about the possibilities of creating highaltitude kites that could possibly power the entire United States. Havejust wondering if we large expenditures for things do that, why cant we for other things that are just as existential in nature . Thank you. For a response christopher, frank for rasco Frank Verrastro. He talked about fracking and the environmental safety of and other ideas. Guest the scalability of when howeia forecast talks about fossil fuels predominate, we have seen a rapid rise in solar and wind energy, and new Research Going into renewables. I still think that is coming. The bulk of the globe still relies on fossil fuels for 80 of energy, so you need to keep that system robust as well. I would urge a little bit of caution on gas land. Documentary,a quasi when he lights his water on fire he drilled into his gas line. I would be careful that some of this is entertainment and movies, and explore the facts a little bit more. Host Adam Sieminski. Important, asery you indicated, christopher, that Environmental Impact from Energy Production its managed. The secretary of energy actually committee a few years ago to look at the impact of hydraulic fracturing. The conclusion of this committee that originally industry had been stacked with too many environmentally oriented people. Well, guess what, it could be managed. They acknowledged there were potential problems. They said those problems could be dealt with pretty effectively and still protect the environment. One of the things you have to keep in mind is that no activity is without risk. All Energy Sources have risk of some type associated with them. We know that you can have oil spills, we know there can be Nuclear Power plant accidents. We know there are disasters in coal mines. We know that there can be issues associated with natural gas, the release of methane, for example. All of these things can be problems. We also know that our wellbeing and our economy, and peoples lives are positively impacted by the use of energy. So it ends up being a tradeoff, and i think what we have to do is give our state and federal officials the right tools to be able to continue to manage those things, and i think it can be done. Host lets hear from mississippi. John joins us. Morning. Er good i has several points if you all will indulge me, please. One, we have one of the largest Oil Refineries in our town. When this refinery was first put here and i know this for a fact because my grandfather sat in on the meeting there were representatives from major Car Manufacturers down here at the time when the Oil Refineries was being put in here. It was standard oil, rockefeller. And coalanufacturers companies are and Car Companies are in bed together. Produces fullsize sedans that can get 40 to 45 miles per gallon. I know people have invented carburetor systems that can help us have better fuel economy. Thing, as far as we can implement in this country Nuclear Power plants to help produce our. We also have a waste problem in this country. We have many smallscale Waste Disposal plants that generate steam, that that skin can be turned around and used to produce power. The a lot of options on table. Lets go to Adam Sieminski, administrator of the Energy Information administration. Guest there is a lot of progress being made in fuel efficiency. At the Energy Information administration, the incorporation of the new fuel economy standards from last year brought in by the epa and the department of transportation show up in our longterm forecasts as almost 1. 5 Million Barrels a day lower in gasoline consumption, and that is on a base of 8 million or 9 Million Barrels a day. There is a lot of effort going on in terms of Technology Fuel consumption in the u. S. We are making quite a bit of in the electric and hybrid electric vehicle factor. We can see that making a little bit of progress over time. European back to the comments, the observation that you made one of the things you want to keep in mind is one reason they have smaller cars and better fuel mileage in europe is that gasoline prices tend to be eight or nine dollars eight dollars or nine dollars a gallon there. There are not many people in the United States pushing that kind of price outlook for gasoline here. If we had high gasoline prices like that am a i am pretty sure that everybody would be looking for those 50 mile per hour on 50s those 50 meyer mile per gallon cars. With the new fuel economy standards, we will approach 45, 46, 40 seven miles per gallon by 25 by 2035, 2040. Att the eia takes a look Renewable Energy and Nuclear Power. Biofuels, projections out to 2040. Orange, we see coal, natural gas. Red is nuclear. What do you see, frank for nafta Frank Verrastro, in terms of Renewable Energy in the future . Guest there is a lot of Research Going on to the extent that you can move it into transportation and beyond that. The Nuclear Issues have been interesting. I would argue that post built aa, we have not new Nuclear Plant in this country in a long time even though we have the largest fleet in the world. That still has a lot of potential but it has hurtles to overcome. I think the array of energy that is available is much better now than it was 20 years ago. Going back to the car issue, you have 240 million vehicles in this country, so you have to turn over that fleet to see the fuel efficiency take hold. Guest one of the Fastest Growing energy in the u. S. Over the next 30 years in the eia projections will be wind and solar, so the renewables content of energy. We also see strong growth in natural gas. The twobal basis, fastestgrowing fuels will be renewables and nuclear. We have on a world basis each of those growing at about 2. 5 per year. That is a pretty good clip for a basic fuel. Nuclear power will grow very strongly in places like china, rob we russia, and even in north america probably russia, and even in north america. We willcast is that have a few more Nuclear Power plants in the year 2040 than we have today, and we will have up rates this is kind of more power coming from existing facilities that contribute to that as well. So it is a combination of a few new plants plus better plow are coming from the existing better plants coming from the existing. Plastic is oil. Is itng about that, not the most patriotic thing. Ople could do to recycle you can tweet us cspanwrj. I have noticed over the years here in the mountains, deer hunting and turkey hunting, once you cross over the ridges, you can see the Wind Turbines off in the distance. But also, i have noticed locally on the river bottoms about 2 3 of the way, you have tunnels. I have had friends who have to build around their house to keep their windows and doors on their house. Does not have to be a big turbine, it can be something simple to take care of it. We had a big Graduation Party in the woods in 1998, and we used the pto driven generator. I have thought about this. How about hydraulic driven, that generates energy to those pumps and in return charge the batteries. Out we are just about of time. Adam sieminski . Guest probably one of the most effective ways of substituting for gasoline in cars is hybrid electric vehicles. There what you have is a small gasoline engine that recharges the battery, so it is along the ideas of what you said. I think it is interesting your observation about seeing the Wind Turbines. I think they are pretty looking. I like seeing that. It is a fastgrowing Energy Opportunity in the u. S. Federal labs have , the wind andwork biomass opportunities. There is a huge opportunity for wind at start in texas and runs oklahoma andong the states right there in that area. We are taking advantage of that. Host our guests are Adam Sieminski, the administrator of informationrgy administration. And franks for astro from the center Frank Verrastro from csi us. Thank you so much to both of you for joining us. That is all for washington journal. We now go to the house floor. The clerk the speakers rooms, washington, d. C. , july 26, 2013, i hereby appoint the honorable George Holding to act as speaker pro tempore on this day. Signed, john a. Boehner, speaker of the house of representatives. The speaker pro tempore the prayer will be offered by our chaplain, father conroy. Chaplain conroy let us pray. Gracious god, we give you thanks for giving us another day. You have blessed us with all good gifts and with thankful hearts we express our gratitude. You have created us with opportunities to serve other people in their need, to share together in respect and affection and to be faithful in the responsibilities we have been given. In this moment of prayer, please grant to the members of this peoples house, as they meet with their respective constituents, the gifts of wisdom and decertainment that in their words and actions they will do justice, love with mercy and walk humbly with you. May all that is done this day be for your greater honor and glory, amen. The speaker pro tempore the chair has examined the journal of the last days proceedings and announces to the house his approval thereof. Pursuant to clause 1 of rule 1 e journal stands approved. The chair will lead the house in the pledge of allegiance. I pledge allegiance to the flag of the United States of america and to the republic for which it stands, one nation, under indivisible, with liberty and justice for all. Without objection, the house stands adjourned until noon, tuesday, july 30, 2013, for the senate is out today, returning monday to resume their work on their version of the transportation bill. The senate will begin the week with the nomination of james comey. To the director of the fbi. Also, three nominees to the National Labor relations board. Andow the senate on cspan2 the house on cspan. President obama is headed to camp david this morning, has left the white house. Many cabinet members and their families will be joining him there. A group of eight republican senators have started discussing potential curbs on Social Security and medicare spending that could be part of a broad agreement to restructure most of the remaining cuts over the next decade under the sequester. By johnnyrs led isakson of georgia met thursday with white house chief of staff Denis Mcdonough to discuss potential entitlement cuts that could replace the spending cuts that are automatic in 2011 on the debt limit deal. The Washington Post reports that lawmakers will leave for the august recess next week and will not return until september 9. President obama will spend a week in august in Marthas Vineyard and will be at the summit in russia in early september. The post writes, that week that leaves only two weeks for both sides to reach a budget agreement. Yesterday as the house wrapped up its business, the democratic whip steny hoyer asked republican majority leader eric cantor if he could expect the house to go to conference in the senate over the budget. Here is what he had to say. Does the gentleman expect we will go to conference . At all on the budget . I yield to my friend. I think theer, gentleman for his tenacity, as this is a weekly discussion between he and me, and i am delighted to respond and say to the speaker that it is something that we should commit ourselves to working out. But as the gentleman knows, the position of the majority is we do not want to enter into discussions if the prerequisite is you have to raise tensions. The gentleman has heard me every week on this issue, that we believe strongly you fix the problem of overspending. You reform the program that unfundedorm to address liabilities first. Then if the gentleman is insistent that taxpayers need to pay more of their hardearned tax dollars into washington, that discussion is perhaps a preprint. But as a prerequisite to entering budget talks that we agree to raise taxes, it is not something i think the American People want this body to engage in. I yield back. I thank the gentleman for his comments. Premise isan hoss absolutely incorrect. The American People ought to know that. The senate has voted to go to conference. Excuse me,wants they have not voted to go to conference because republican members of the senate will not vote to go to conference all stop there was nothing in that motion that said there was a prerequisite that the house agreed to anything. Nothing. My friend the majority leader has said repeatedly that we have a prerequisite. We have a difference of opinion. That is what the mock receipt is about. There is no prerequisite. That is what democracy is about. To gois no prerequisite into conference. Number one, the senate could not make us agree. That is what conferences are about. They are about coming together and understanding there are differences. There would be no need for a there were no differences. The house is back today at noon on cspan. How changes to the immigration system could impact low and high skilled workers as well as the economy overhaul. It is hosted by the Cato Institute, coverage beginning at noon eastern. The treatment of hunger strikers at guantanamo compromises the core ethical values of our medical profession. The ama has long endorsed the competentthat every patient has the right to refuse medical intervention. The World Medical association and the International Red cross have determined that force feeding through the use of restraints is not only an ethical violation but contravenes article three of the geneva conventions. My concern is my concern is lets set aside the numbers you might or might not feel you can safely push out. , but are an unknown number the president has apparently said it is 46, that you can never try. Do you honestly think that the people behind me and the people who are impelling this hearingw release ofor thewwwwwww prisoners just becausewwww they are now in the United States . The fearbased argument toww keep the guantanamo basewwww facility open is hard to understand. Thewwwwwwwwwwwwno our National Security. The 86 men who have been cleared transfer should be transferred. We must find lawful dispositions. Allccccccccccccccs the Senate Judiciary committee on human rights of the closing big Guantanamo Bay prison, saturday at 10 00 a. M. Eastern. Also on booktv, live coverage of the roosevelt reading festival, president ial and museum in hyde park, new york. , president obama and secretary chuck hagel commemorate the armistice. Last year, president obama signed into law a bill funding highways, mass transit, and other Surface Service transportation permits for two years, also authorizing a permit for state transportation projects. Wednesday the Senate Environment Committee Held a hearing on the laws and limitation with the newly confirmed transportation secretary anthony foxx, among witnesses. This is one hour and 45 minutes. Welcome, everybody. Mr. Secretary, welcome. Please have a seat. We will do Opening Statements, and as soon as the last senator appears, people come in and out, we will then turn to you for your comments and we will ask you some questions. We are here today to conduct tv a program,he which we greatly expanded. It is supported by groups conferencem the u. S. Of mayors to the u. S. Chamber of commerce to the aflcio, and that is quite a coalition. The Program Provides direct loans, loan guarantees, and lines of credit to surface transportation product project at favorable terms. There is a steady stream of funding behind those loans that we can count on. Is veryost here to us low. And we can leverage these funds. The successfuln program by expanding it tenfold. I want to thank my colleagues on both sides of the aisle who understood the potential of this program because we spent about 100 million a year in the old program. It has expanded this year to 750 tolion in 2013 and goes up 1 billion in fiscal year 2014. So according to the federal Highway Administration, every themade available additional funding for tifia will support one million jobs. We are talking about something that is very important here. Since its creation, the tifia program provided over 11 billion in Credit Assistance to 34 projects totaling over 40 3 billion. However, in recent years, the number of applications for tifia assistance is greatly exceeded available funding. For example, in fiscal year the Highway Administration received requests for 14 billion dollars in Credit Assistance for projects totaling over 48 billion in Infrastructure Investment. Map 21, thege of tifia program could support less than 1 10 of that demand. Isly expanded tifia program experiencing incredible demand from cities and states. According to the fhwa, 31 projects totaling 42 billion were seeking assistance under the tifia program. So, colleagues, we did the right thing by expanding this program. States and cities are stepping up to the plate to provide local transportation funding to accelerate objects through this program. 3010 initiative in Los Angeles County is an example of how it can successfully leverage the investments. It was called 3010 originally. The intent was to build in 10 years am a with tifia, what would otherwise take 30 years. We were able to step up and meet that need in los angeles. I have to thank former mayor of villaraigosa. We started the expansion of tifia. In los angeles, they approved a half cent sales tax dinner generated by transportation, and that is the funding behind the tifia loan debate. With the greatly increased resources that congress provided mr. Secretary,l, that tifia funds be used efficiently, effectively, and responsibly. I have faith in your leadership to make sure it is done. We had a good meeting in which i said you were in there for one day, even before the vote on your nomination, and i said, esther secretary, please check on this because we have got to get those mr. Secretary, lees check on this because we have to get those dollars out the door because we need those jobs. Today, secretary anthony foxx changes inbout the plummeted by tifia and what steps the department is taking to make sure the funding is being used. A second panel, transportation experts and stakeholders, will share their impressions of the improved and expanded tifia program and discuss the opportunities the Program Creates across the country. So i am very excited about this. This is our first hearing after map 21 to take a look at the tifia program. Now, of course, our next challenge in the next bill is to find the Funding Source to continue not only this program but our basic infrastructure program. We will be looking very working very hard on that. I turn now to raking member senator theater Ranking Member senator vitter. You. Ank this is an important hearing i have been looking forward to, and i want to especially welcome the secretary and congratulate him on his nomination and confirmation. I am happy your First Committee experience as secretary is here at dpw, and i hope this is our first meeting together on important programs. Ensuring that america has a healthy comprehensive network is a fundamental responsibility of government. Our transportation infrastructure is a critical component of our economy, our way of life. It is fundamental to connect to in communities to promote and sustain Economic Growth. Over the course of the next year, the committee will need to not only ensure proper and itation and oversight proper implementation and oversight, but also work through a new authorization. We have a lot of work ahead of us. That is why it is important to begin that process today with an examination of map 21s reforms to tifia. While many pieces of map 21 are still being would into place, tifia got an early start well into implementation. That gives us an opportunity to do oversight now. Since tifia was first established in 1998, it has been an essential tool for many states and communities. With proper implementation of map 21 reforms, i think tifia can and should build on that past success. It is a powerful, flexible investment tool to leverage taxpayer dollars and encourage private sector participation and efficiencies for critical projects. Reforms have increased transparency by broadening access and refocusing the program on project financial viability. Quality infrastructure means Something Different in every part of the country. For years, understanding of this concept and empowering it through federal policy is what has made transportation infrastructure such a bipartisan issue. At is why proper oversight of tifia that is why proper oversight of tifia is critical to make sure the program is equipped for tomorrows challenges. There are already areas of concern, including the management of tifias rolling application process, the potential use of improper discretion in the project theoval process, and functionality and ramifications of tifias definition of rural projects, seeking the rural the ruralg financing structure. I hope this focuses on those areas of concern as we do appropriate oversight. As we have seen over the last several years, uncertainty causes real disruption for our state and communities in the planning, maintenance, and delivery of transportation infrastructure, making sure these uncertainties are addressed and that the program operates as promised, will go a long way in settling that landscape. As we move in a more on ourensive discussion infrastructure needs, it must be noted that while tifias essential to investing in infrastructure, it certainly does not replace a sound, sustainable Highway Trust Fund. I want to make that point as well. Again, i thank the chair and the witnesses for all the work they have brought into this hearing, and i look forward to the testimony and discussion. , i agree withter everything you said. Do we have that on the record . [laughter] i said it to put it in the record. Brand senator gillibrand . Thank you. Secretary foxx, i look forward to working with you in the coming years and to address many Transportation Needs that new york has. A state of new york faces diversity of transportation challenges ranging from highly experiencingreas, high levels of traffic and congestion, mainly over the hudson river, to rural highways they need to be safely , totained, and agriculture ensure it is not disrupted. Much of the transportation infrastructure is rapidly aging and in need of repair him and in some cases in need of replacement. Our infrastructure was given a dismal report card. Bridges were rated d . Roads are poor or mediocre conditions. That is why i believe a strong federal investment is necessary. We cannot allow our country to continue to fall behind and we need longterm policies to ensure sustainable funding for our nations infrastructure. As i travel across my state, i have seen firsthand the challenges that the municipalities and counties are facing. According to new york state dot, out of the 17,000 highways and bridges in new york state, more than 2000 representing 12 are structurally deficient. That means they will need significant repair. More than 4500, or 20 , are functionally obsolete, meaning they were not designed to handle the levels of traffic they are currently experiencing on a regular basis. According to the American Society of civil engineers, the cost to repair or replace all of is yorks deficient bridges a staggering 9. 37 billion. That is higher than any other state. I am proud to work on this committee and i am proud of the work they did coming together on our bipartisan bill, cap 21, significantly map21, which will result in enhancing spurring capital investment. Likesmart investments this, we can harness the potential of the Financial Sector to spur Economic Development and create good paying jobs. My colleagues may be aware of the arctic currently underway to replace the Tappan Zee Bridge. Selected as as project of national significance. This bridge is an integral part of the northeastern highway system, an artery critical to state commerce. It carries 133,000 vehicles daily, 40 more traffic than its original design. It has long been considered a tifia program has long been to shoot a key element to repairing the Tappan Zee Bridge, and an alternative to cost of thisll project should not be borne by the residents of new york state alone or by dramatically increasing tolls on the bridge. Mr. Secretary, thank you again for agreeing to come before this committee for this Oversight Committee today. Thank you for your willingness to serve our nation at this critical time. Thank you. Senator inhofe . By saying iart cannot think of anyone who could have been nominated anywhere in america who is Better Qualified and will be easier to work with than secretary foxx. I think a lot of that is misery loves company, and you and i were both mayors of major cities. We know what a hard job it is, dont we . We do. Also, gary ridley is in the office, and he has testified more before this committee than anyone else has. I have said here before, i believe the federal Infrastructure Spending is seen, as one of the primary purposes of government. Given our enormous infrastructure needs, it is difficult to imagine that the next highway bill could meet all these needs. Not only do we need to get the most out of our federal highway dollars, we need to incentivize the state and local government and the private sector to as best to invest as much as possible inroads in bridges. Map21 is it essential in managing the federal funds. I have three long paragraphs following this talking about the tifia program, each i not repeat because they are precisely what chairman boxer said in her Opening Statement. I will just agree with your statement in this rare case. [laughter] unfortunately, since the passage of map21 last august, or has been tremendous criticism of the inefficiency of the administration. There is no point in providing almost 15 times the funding for tifia ifafety it prevents resources from being used for their intended purpose. It is essential that we address institutional obstacles currently preventing objects optimal use from tifia. With the fully funded and optimized tifia program, we have to inevitably turn our attention to the shortfall in the Highway Trust Fund. Absent additional revenue, will be faced with a 92 cut in highway funding. Most all trust Fund Receipts will be used to reimburse states for projects already under construction. Although i would prefer at we identify a sustainable source, i have suggested in the past it is reasonable to resort to general funds as we have over five times in the past when faced with no alternative other than a series of shortterm extensions. I want to say this because we have a lot of my conservative friends that have, first of all i know you are aware of this, mr. Secretary, that i have been probably ranked as the most conservative member but i always say i am a big spender in two areas defense and infrastructure. That is what we are supposed to be doing here, if you read the constitution. I am upset with some of my conservative friends who make statements on the floor as we were trying to get this bill passed that we are really not right. In fact, the conservative position was to do a re authorization as opposed to doing extensions tom extensions you could argue that take 30 off the top or 28 . We know it takes a lot of money out of the system. You cannot plan for it. You cannot put the reforms. We have more reforms in our bill a year ago than all other bills, i think, combined. You dont get that with extensions. So we will be faced with this thing. Group, thenservative americans the american conservative union, correctly use the statement i used on the floor saying the conservative position is to come up with a good, healthy reauthorization bill and start doing what the constitution says we are supposed to be doing. I just know that we are going to do the best we can, and we are going to work as a team and make this thing happen. In having your capabilities to work with us and we look forward to that process. Thank you, madam chairman. Fe, i amor inhoe breathless after that. Senator cardin. Chairwoman, it is always a pleasure to come after my big spending friend. , welcome. Foxx it is a pleasure to have you as secretary of transportation, and we are honored that your first appearances before this to midi. You have a reputation of working across party lines to get things done. It is not always the case with secretaries appearing before committees. You are i think appearing before a Friendly Committee that will give you the tools necessary to modernize our infrastructure. You are following secretary lahood, who did an incredible job and had a wonderful relationship with members of congress. As a result, i think we got some good things done for the country. We look forward to a similar working relationship with you and the congress. Tifia was a pragmatic way to leverage more transportation funding. It certainly is a calm pushing those purposes. As many of my colleagues have pointed out, it does not deal with the fundamental issue that we have, and that is how do we finance longterm commitments to modernize our transportation in this country . I could not agree more with the previous speakers that we need longterm, robust transportation program. Senator it is difficult to look at how we can get it from general funds when we do not have enough to balance the federal budget. I do not disagree philosophically. As a practical matter, we have to tackle the issue of where we will get the revenues necessary to fund a fundamental functions of government. I agree transportation is a fundamental responsibility and we need to have funding for that. Let me respond. I do not disagree at all. I look at the things funded out of the general fund and think in terms of funding of our infrastructure is not more important than a lot of those things. That is not my choice. I would rather have the long term Funding Source you mentioned, but we do not have that yet. This has that kind of critical effect on me and what i am willing to do. I understand my colleague and friend. I would point out some of us are prepared to make the tough decisions so we have revenues necessary to do what is right for this country. There have been numbers that have suggested a carbon tax as a way of dealing with Energy Policy and environmental policy and also having revenue to deal with the longterm transportation program. I think we need to look at those types of proposals in a way to accomplish our mutual objective of being able to finance modern transportation in this country. Let me mention two other issues i need to point out as we talk about tifia. Many of the states utilizing tifia to build new roads have a long backlog on repair and maintenance of their existing roads. Geoffrey minh sen. Gillibrand mentioned the problem in new york on bridges. If you take that nationwide, the backlog on repairs and bridges and highways is close to 3 trillion. As we are building new roads, which is important, we do not have the funding to maintain the existing roads. I think we need to look at how we can put a priority on maintaining the safety of our existing transportation infrastructure. The second point i want to raise because itto tifia, is not helping with repair and maintenance, it is whether we have the right mix of transportation programs within tifia. It is my understanding 84 of the programs go for new highways. I suggest if you represent a state like i do in maryland, you look at our number one transportation challenge, the washington metro area has been rated as the worst traffic congested area in the nation. We need help on transit projects. Transit projects are having a difficult time getting tifia funding. We have a need in this region for the purple line expansion, the red line extension. When we take a look at the transportation bill on the floor today, the appropriations bill, it does not have the type of robust appropriations that give us great hope these kinds of projects can move in a timely way. Secretary foxx, i want to make those comments as we talk about tifia, to recognize we have broader issues. We look forward to working with you to accomplish our mutual objective of modernizing our Transportation System that will not only improve the quality of life for people who live in this country but help our economy grow. Thank you. Senator bozeman. Visitnjoyed the office and getting to know you. I think you are going to do great things for transportation. The committee is going to be very supportive. In arkansas, we have some concerns. We have a couple of major interstates we would like to work hard to get completed. Interstate 49, northself quarter, we do not have many of those running through the country. Interstate 69 project. We look forward to working with you on that. We are in the process of sequestration. It is here now. It is here for the foreseeable future unless we figure out a way to undo that so we do not have the acrosstheboard cuts. I hope we can Work Together to manage sequestration as best we can for the department. Hopefully we can do that and provide you some help in that regard. Also working with the faa to improve certification, to make our aircraft manufacturers internationally competitive is very important. Tifia, just insuring the mediumsized small communities and rural states have an equal opportunity to participate. I think that is very important. Then promoting cooperative federalism with the states, working together. As we face the challenges we have talked about today, we all agree we do not have the funding base we need. Were trying to think outside the box working with the states and private entities to get some of these things done. Also, something that is very visiting and after with you, i know it is important to you, reducing the bureaucracy and road blocks so we can get these projects done in a timely fashion which would save a tremendous amount of money and be very helpful in a variety of different ways. We welcome you on board. We look forward to working with you. We appreciate your testimony today. Thank you, madam chair. Senator white house. Welcome, secretary foxx. I am delighted you are where you are. I look forward to working with you on rhode island issues. We hear a lot of talk in washington about our nations deficit. We have a very serious infrastructure deficit as well as a fiscal deficit that gets much less attention, but it is probably more immediately important to the American People when bridges are not safe, highways are not smith, water is not cleaned properly and the services that are accustomed to are not provided. I think we need to work on this. I am a big fan of the tifia program, but my rhode island director of transportation tells me we have nothing that qualifies for the tifia program. We have plenty of highways that need to be repaired. We have plenty of bridges that need to be repaired. We have an enormous amount of work to do. We have aging infrastructure. On the waterside, it is equally serious. I think we are a 6 billion in Water Infrastructure we are behind on and our Water Resources bill is trapped in the senate because the house cannot legislate. It is a frustrating circumstance to be in. Q a, and want to ask your thoughts about other creative ways in which we can go forward, particularly to help states like mine where tifia does not apply. I welcome you. This is a big issue. Infrastructure should be something republicans and democrats can agree on. Every american is entitled to save highways and bridges and water, both disposal and drinking water. At the moment, that deficit gets nowhere near the attention it should. Thank you, chairman. I thank the Ranking Member for focusing on this. I look forward to hearing. Thank you, senator. Secretary, the floor is yours. Thank you. It is a pleasure to join you today in my first hearing as the u. S. Secretary of transportation. I want to discuss the transportation infrastructure and innovation act program, more commonly known as tifia. Mayors and governors are looking for ways to get more out of taxpayer dollars while making critical investments for the future. I know this from experience. Tifia is a powerful tool that helps us do that. I want to applaud the leadership of chairman boxer and many others who have been instrumental in getting the reauthorization done and the tifia expansion. Tifia was greeted by congress to help states and local governments finance a large project with innovative sources of revenue. Tifias flexible terms and low Interest Rates make it possible to obtain financing for critical projects that would have been delayed or deferred because of their size and complexity. This includes projects like the recently closed sr 91 improvement projects in riverside, california. At the beginning of this month, we provided a 421 million loan to this 1. 3 billion project which is expected to reduce traffic delays and create more than 16,000 jobs. Tifia is also in multimodal program. Many large scale surface transportation projects including highways, transit, railroad, free, and access projects are eligible for assistance. Were seeing a broad interest in tifia for innovative projects and projects with non traditional sponsors. Were seeing interest in states across the country with more take advantage of the program each year. Tifia is fulfilling its fundamental goal to leverage federal funds by attracting substantial private or non federal investments in Critical Infrastructure improvement projects to improve the nations surface Transportation System. Tifia is helping us to stretch our dollars further. This committee recognizes the power of tifia as a tool that can leverage federal resources. Your comments reflect that. That you passed and the president signed last summer included a significant expansion of the program increase in tifias funding more than yearfold to 1 billion per in fiscal year 2014. We estimate tifias leverage ratio is more than 30 to one. That means 1 a Budget Authority will result in over 30 of Infrastructure Investment. Level,map21 funding tifia will stimulate as much as 30 billion or more in Infrastructure Investment in fiscal year 2014 alone. The demand for tifia is high. Each of the last three years, we have received up to 15 billion in requests for tifia assistance. This year is no different. The department of treads page hisham the department of transportation has received requests to finance 31 projects across the country. Thanks to strong bipartisan support and the leadership of chairman boxer and Ranking Member vitter and this committee, we now have the resources to meet the demand for tifia. Since map21 went into effect, we have been working hard to dispense the money quickly. We have released money for 18 projects. We have 25 project progressing through the pipeline right now. To put that in perspective, that is about 2 3 the total number of projects tifia has financed since 1999. Were also streamlining the way we manage this program and are continuing to spread the word developing a series of webinars for local stakeholders interested in accessing tifia. Transparency and accountability are High Priorities throughout the process. Dot is working to keep. Takeholders informed we have a vigorous and highly efficient effort to make sure loans are likely to be repaid and taxpayers are protected. Were committed to oversight. It reviews all tifia requests. Under the Obama Administration, the Credit Council has strengthened its focus on credit worthiness requirements incorporating lessons from the financial crisis and insuring projects are not overleveraged or financed based on overly optimistic assumptions about revenue. I think i am out of time. Please go ahead. I will give you another two minutes. Above all, tifia has been a successful way to leverage federal dollars and has helped communities across america invest in the largescale Infrastructure Projects we need to be successful in the 21st century century. The program has extended more than 11 billion to support almost 44 billion in highway, bridge, a real, and bus project. This year we expect to obligate tifia funds for seven or more projects, a record number. 2014 promises to be even busier. It is a pleasure to be here. I look forward to working with all of you to address the nations important infrastructure needs. I am happy to answer any of your questions. Thank you, mr. Secretary. It is music to our ears. We stuck our necks out and decided together, all of us on this committee, both sides, that this was a Program Worth expanding in a time when we are not expanding many other things. When you took over and i talked to you about this, did you make any changes . Did you put more people on this program . What changes did you make in administratively handling the new, robustly funded program . Thank you for the question. We are focusing very much on helping these projects move through the pipeline. That was one of the first orders of business for me coming into the department, having conversations with you and many others on the committee. We are making progress on that. We have two projects that have moved recently in the los angeles area. Have you had to make any changes in the way tifia has been handled . Had your predecessor put in place . Are you moving people around . In terms of staffing, were expanding. You can expect we will add something on the order of 16 additional people to help us move projects through the pipeline. I think it is important. You point out at the same time you want to get the money on the street, you want to make sure theyre safe investments for us. That is why tifia is so effective. There is very low risk to us. To the large increase in funding, map21 also included policy enhancements there were broadly supported by outside organizations, many of whom are here today, including the ability to provide master Credit Agreements for what we call a program of project. Increasing the share of the project cost that could be covered by tifia. Could you explain the status of implementing changes and allowing applicants to take full advantage of these new provisions . We have had one request by a community, a sponsor, to pursue a master Credit Agreement. Even in the course of pursuing that, i believe it was decided that was not a good fit for that particular sponsor. The flexibility is important. Byallows us to pull projects a sponsor and have an overreaching Credit Agreement available. I think that flexibility is very important. That is as far as it has gone to my knowledge. But you are prepared to deal with those as they come in. Absolutely. Map21 also made improvements to make tifia assistance more practical and usable for all regions of the country, particularly rural areas. What is tifia doing to educate new applicants and how they can benefit, particularly in the rural areas . A very good question. One of the things our staff is working on and has already started are a series about reaches to local communities all across the country. Some of them are through webinars. There are other efforts to make this available to local communities. I also want to point of the changes to the program that forws for a lower limit assistance to Rural Communities has been very important. We are looking to make even greater use of that flexibility. You, mr. Secretary, for being here. As the chairman noted, we dramatically expanded tifia. Part of that deal was to also screen 9 streamline and simplify the criteria used. We tried to make it real simple. Eligibility and credit worthiness. That is because we wanted to in thee transparency Selection Process and get the program back to its original intent. Some of us are concerned in the dot application there is a new term, Public Benefit. Ofing for a description Public Benefit. Why is that inserted in there . It is not what we wanted to get back to, eligibility, either you are in the box or not, either you are eligible or not in creditworthiness. Concern is Something Like Public Benefit is completely subjective. Tremendousassert administration discretion which we did not want to do. We wanted this to be more of a firstcome, firstserved. Lets have clear, objective criteria. Why is that term in your material and in the application process . Thank you for the question. Thate say at the outset made the comment i need to come back to following the hearing. On the face of it, i can tell you do not know of any request for a letter of interest that has come into us that has been excluded as a result of some concern about Public Benefit. In other words, every project that has come through our doors, our staff is trying to work to get to yes on those projects. I think that is consistent with the view you had in crafting the legislation and the view i have in terms of trying to get these projects going. I would urge you to look get that and maybe supplement your answer. If what you say is true, and i hope it is, it is a useless, time consuming question. Why not take it out and not make people answer another question which does not have to do with the two criteria we laid out . Related to that, we dramatically expanded tifia. We wanted it to be more or less a firstcome, firstserved rolling process. With that in mind, how many projects have received assistance since it was issued in july of last year . I know of one project that has made it all the way through the process. There are several projects in the course of making it through. I think there are five or so that have gone through the credit worthiness process and have been invited to apply for the program. You may recall one of the things that has changed with the wem is we are being are front loading a lot of the effort on the creditworthiness so that when we get to the application phase, we can move much faster. I think were finding that is the case. I believe by the end of this year, you will see several projects that will get through. I think 2014 will be even more expensive. Again, the concern is related to what i was talking about a minute ago. The concern is there are dozens spending. Pending. If there are dozens pending, the concern is there will be picking and choosing rather than moving eligible projects through the pipeline. If i might, sir. My instructions to our staff is to try to get to yes on every application we get. It should be out liarthere may s we go through creditworthiness that do not work. Even then, we will try to figure out a way with the sponsor to make it work. I want you to understand that is where i am coming from. Let me back up. I am not suggesting we should break the rules about eligibility or credit worthiness, but simply we should not be picking and choosing subjectively. No one should, including the administration. If you can get the pipeline moving to illustrate your not, i think that would build confidence. Right now, there are a lot pending. That is the concern. As was mentioned, another issue that has come up is the rural carve out and the threat that some magic. Megaprojects could gobble all the money. Could you address that as you move forward . Flexibility this committee and congress provided tailored to Rural Communities has been extremely helpful. That is one of the reasons we have been consistent on keeping the 33 amount that is contributed to projects solid across the range of projects that have come through. It leaves us with the ability to use the capacity to do projects in Rural America and other parts of the country. Gotme from a state that has urban parts and rural parts of it. All of those parts are part of america. We will keep working to make sure were building every part of this country through this program. Thank you. Sen. Gillibrand. As i mentioned in my Opening Statement, your state is in the process of seeking a tifia loan for the replacement of the Tappan Zee Bridge. In march, the governor announced process was moving forward and was in the credit review stage. Since then, we have not received an update on the status. Could you provide me of an update on the status of new yorks request . I appreciate the significance of this project. It is a project of national significance. It is a bridge that continues to be highly trafficked, as you have pointed out. This project has gone through several phases. It is still in creditworthiness. By the way, is the largest tifia request we have tried to work through. I expect this project will continue making its way through the credit worthiness review. I will say at a certain point, there were some there was some concern about the appropriate percentage level for the tifia loan. Was an interest in having it be higher than 33 . It is now agreed by the parties to keep it at 33 . I think we will see that project moving through the system. Are there other mechanisms or alternative funding available taxdes tifia, including exempt financing or other privatepublic partnerships . There are. There are private activity funds and bonds. There are other tools in the toolbox. The president has proposed an Infrastructure Bank as part of his fiscal 2014 budget. All that will be helpful and effective tools to help us build our system. Acrossbeen pointed out the committee there is still tremendous need for infrastructure, both repair and new, across the country. Give us some specifics. How do you plan to utilize the federal Highway Administrations office of the Innovative Program delivery as you seek to meet the nations infrastructure needs . Request in. We are seeing some examples of innovative project delivery. The Highway Administration has started a program with the goal of speeding project delivery. When we shave time off of projects without compromising safety and environmental controls, we save money and help those dollars go further. When you aretions building a bridge, the components can be put together intoe roadside and moved the thoroughfare and sat down to make a bridge built faster. They are looking at ways to do that. Were also looking at our processes and other permitting requirements to see if we can find ways to streamline those to the projects done quicker. On that last point, is it helpful to work with other agencies like the department of commerce and the department of energy to help streamline implementation of additional publicprivate partnerships . As we look at the idea of an 40 tructure bank or a of 40 or authority, are there ways the department of transportation can do that . What is your view of that approach . There are ways we can do that. On thesident has put table some very good ideas about how to do that. I hope we can see some activity around congress in terms of responding to those ideas. A 10 even if you have billion Infrastructure Bank, you are not that against the need for repair and maintenance and improvements across the country, it is a huge step to get it there. It is a huge step to get more private money involved, but we still have a great need beyond that. In terms of streamlining, do you think working with other agencies is the right approach . Can you do that independently . Is essential. In some of our activity with epa and hud, we have been able to Work Together to make our products more impactful at the local level. I can speak to that specifically having been a mayor. As we start to think about our reauthorizations, one of the policies we are working on right now is a National Freight policy designed to look at our Economic Data which will come from commerce. It will help us to begin with ourend in mind as we build freight infrastructure. We are collaborating a good deal. I will be looking for ways to help as collaborate across agencies to make our Transportation System more impactful. One example i want to highlight. I have talked to many investors that would be delighted to invest in a highspeed rail line in highly frequented corridors. These are highly traffic routes that could be financially lucrative if the investment is done properly. Many investors say we do not need financing, loan guarantees. We need the streamlining and ability to do the projects in a timely manner. If you cannot structure the build out in a way that is affordable for an investor, it cannot be done. Is that something you have how to be more creative . There is a lot of conversation about private building of infrastructure, whether it israel or something else. Orwhether it is rail something else. There has always got to be a Revenue Source that gives them a return on their investment. I think there is a lot we can do engaging with the private sector to figure out how to streamline the process for them. We are seeing this in some parts of the country. Chicago has an Infrastructure Bank they have established. Bringing private sector money to the table, helping to pick roger that will provide projects that will provide the best return on benefit we should return continue working toward that. The larger point i am trying to make here is that while there are some projects that are great candidates for Public Private, there are some that are simply part of the public good and will never qualify for the Public Private partnership, but are important because of that. Thank you, mr. Secretary. We are very happy to see you. We are excited to work with you as we tackle our next problem, and we have a big problem. We have two figure out a way to move forward, and we know you will be a big help to us. Will you stand ready to be a resource for us as we put together the next bipartisan highway bill . Do everythingwill i can to be helpful to you and the committee, and i look forward to working with you. Thank you so much. Sorry, inhofe, im forgot that you wanted to question. Stay here. Quickly, one thing i would request, and that is, in my Opening Statement i told about all theked reforms that are there. Other projects. What i would ask of you and we probably had more i believe, and i said this in my Opening Statement we had more and i have been around these bills since i was in the house back in the 1980s. What i am going to ask you to do is look at these reforms and be sure they are carried out so that they are put into practical very helpfululd be in building a lot more miles of road. If you would do that, to become personally familiar with those reforms, i would appreciate that. I was serious when i said a lot of these people here in washington and the United States senate do not know what a hard job is. There is no harder job than being the mayor of a major city. There is no hiding place. We understand that, and when i was first elected, they neglected the infrastructure in my city of tulsa, and i had to immediately jump in there. What kind of experience did you have as mayor of charlotte, North Carolina, in terms of your infrastructure . Thank you for the question, senator. It is hard to be a mayor and not have experience with infrastructure. In charlotte, we went through a period of 30 years of dramatic sprawl expansion. Result of our ability to annex. It became clear to me we were not come to be able able to annex anymore because the laws and we and the laws had run out of demand. Yet we were experiencing exponential occupation growth. It was the largest, Fastest Growing metro region in the country. Haveransportation systems to do several things at once. People, make good landuse choices, and hopefully provide people with a reliable way to get somewhere. For us it was highways, transit,ike paths, sidewalks, bridges and when those things all Work Together well, what happens is people have choices. When they have choices, they feel empowered. It is ultimately what transportation does for our country. It empowers people to have a good quality of life and have good jobs. I think there is no better Training Ground for your job than at that level. Know, the faa is currently involved in a lawsuit, and that is why i wanted to visit with you a little bit here. This event, the oshkosh event, is the largest such event anywhere in the world. The revenues generated for the faa far exceed the amount they would pay their air traffic controllers. The chairwoman dismisses you, maybe we could hear that in the back panel. Thank you, senator inhofe. We look forward to working with you, mr. Secretary. Bass, mr. Geoffrey , mr. Arthur leahy, my friend and chief executive officer of Los Angeles Council metropolitan transportation authority. R. D. J. Gribbin managing director, macquarrie capital. You would all take your seats, rieare all ash macqua capital. We will talk with mr. James start with and go across the table. We are very interested in getting your views today on tifia, what you feel about the program, and he reports back from your perspective since you are really on the ground. We will start with mr. James statesecretary, United Department of transportation i am sorry, chief financial officer, Texas Department of transportation. You, and good morning. Thank you, chairman boxer, for holding this hearing to discuss the tifia program. It is my privilege to discuss a states perspective on the program. I would like to thank the 21. Ittee for map since its passage, texas has worked diligently to implement note,w provisions, and of the Texas Legislature recently passed legislation permitting texas to assume some fun environmental reviews for transportation projects. We are hopeful that we can replicate the same success in texas. Will continue to implement the implements of map21 in the second year of the bill, and we look forward to updating the committee on those efforts in the coming months. 21day i will discuss one map provision, in particular the tifia program. Map21 solves several key challenges, at least on paper, that have held back the tifia program. We were encouraged by the substantial increase in funding for the program. The increased share of project costs that tifia could finance, revisions for rural projects, and the congressional desire to make the tifia program more efficient. However, if map21 funds are not deployed to projects that are ready, the program will lose \mentum and Congress Objectives will not have been fully achieved. Since tifias inception in 1998, texas has been an early and frequent user of the program. We view tifia as a critical component in the delivery of all of our larger scale project in the state. Within the last 10 years, our legislature has enacted several financing initiatives that can be used in conjunction with to deliver those projects sooner and more efficiently than traditional methods. Projects in texas today have received more than three point 4 billion in tifia assistance, combined with state and local 3. 4 million 3. 4 billion in tifia assistance. Forfederal budget impact the project is estimated at only 343 million. Compared to the traditional federal funding, tifia helped save the federal government over 8. 5 ilya dollars to deliver the same projects. Great example of states doing more with fewer federal dollars available. Under map21, texas has submitted six letters of interest, and we continue to have open and forthright discussions with u. S. Dot about our projects. Toy have been good partners work with, and we appreciate their willingness to meet with us and work through the new tifia process. 21, u. S. Dot was allowed discretion to evaluate and choose eligible projects under specific criteria. U. S. Dot also had the authority to weigh and compare the relative merits of eligible projects and score those under the scoring system. D. O. T. Added criteria such as livability to their list of selection criteria, and too much discretion seemed to be permeating the process and made the program more about meeting selective criteria as opposed to funding the rest object in order to the best projects in order to meet the requirements of citizens. Establishing a limited set of objectives, Eligibility Criteria that required a yes or no determination of satisfaction. We believe Market Forces should direct where projects are selected to receive tifia funding. One year after passage, the majority of funds have not yet been put to use. Of the newic effect approach, whether intended or not, is that it does not meet. Ongress intent the new law requires u. S. Dot to indicate whether an application is played within 30 days of receipt and to approve or disapprove an application within 60 days after giving notice that it is complete. The process prior to map21 and by requiring that almost every project detail the disclosed prior to the application stage, u. S. Dot has put an undue burden on the project sponsors and has drug out what is intended to be a streamlined process. In addition to the timing issues, usda t has indicated that except under exceptional circumstances, they will not consider assistance for more than 33 of the total project cost. We would be thankful if they would consider projects may. Enefit more than that 33 i see that i just ran out of time. Ok. We believe u. S. Dot should adhere to Congress Intent and consider projects that would benefit from more than 33 to fund their projects, especially if it is important to put all the dollars in the tifia program to work. Given that map21 is only a two year built, we have a compelling reason to get it back on track. Map21 provides critical changes and increased funding, but changes can be made to further correct the program. I would like to thank the committee for the opportunity to to share texas dots relationship with the program. We are committed to working with all of our federal partners to support the continued success of the valuable tifia program. Thank you for that. I really appreciate your specific points there. I can take them up with the secretary. Now we turn to mr. Geoffrey summon rtner, no nossaman llp. , basedaman is a law firm in los angeles. I am proud to be a constituent. Chairman boxer, thank you for opportunity to participate in this hearing. I have submitted a detailed statement and will cover only the highlights of my remarks today. Are shippedtifia from two perspectives. I am a partner in a law firm that represents state and regional transportation agencies around the country. They are struggling with the same basic problem how to deliver their largest and most complicated project while minimizing the use of federal gas taxes. Many of our Agency Clients have successfully done exactly that. Was privileged to serve on the National Temperatures and financing among the unanimous recommendations of our bipartisan report was strong support for a tifia program sized to meet projected demand. 21, congress map did just that, and the states have responded. As you mentioned, since map21s passage, prospective accidents have prospective applicants this is clearly nowhere before i consider equally noteworthy is that the number of states requesting assistance has to 24. En there are more projects in the pipeline that will push these numbers even higher. With increased tifia demand comes increased u. S. Dot responsibility to respond. The u. S. Dot has made significant efforts since last year. What can be done to deliver on congressionally enacted better . Ents and do first, we can streamline the application process. Can bean application formally submitted, there are two steps the letter of interest and that credit review. These serve valuable functions, that the enormous detail the u. S. Dot requires of all hello i of all lois is tantamount to a full application process, without worrying about what Congress Imposed to process the applications themselves. Second, we need help in using tifia to maximize competition. When states issue procurements to contemplate states can maximize competitive tension dot can firsts. Make conditional commitments available before prices are submitted, and second, they are able to close tifia loans soon after those bids are received. This can be done in a way that absolutely ensures credit worthiness analysis. Third, the u. S. Dot needs to consider making loans larger than 33 . Recallr i am sure you that in adopting map21, congress permitted loan sizes to ofe up from 33 to 49 eligible costs. Nevertheless, to my knowledge u. S. Dot has yet to actively consider a loan greater than 33 , despite numerous requests. The Program Office response to anequests say is that obligation not derived from any map21 statutory language. It is critical to preserve tifias value proposition. Tifia loans are intended to be subordinate to Investment Grade debt, not in most circumstances Investment Grade themselves. Tifia loans are intended to allow sculpting of repayment for the latter part of the loans duration. These features have been hallmarks since the tifia programs inception in 1998 and need to be retained. , u. S. Dot should strongly consider processing Higher Quality credits more efficiently. Intent, tifiah applicants dedicate a wide range of nonfederal Revenue Sources to repay tifia loans. Loans for projects backed by their own future user fees like tolls deserve revenue specific analysis. On the other hand, however, project backed by a states own highway funds or other Investment Grade rated Revenue Sources deserve streamline to due diligence. U. S. Dot never recreate the work agencies have already performed. We can enhance transparency for better management. Dot has increased communications with the public. Yet it remains simply impossible for public agencies to retain sufficient information to understand the extent to which the tifia Program Capacity remains for a given fiscal year. Tifia be fully utilized . We do not know. As the that is fine. Very happy to see you, please proceed. Senator, it is a pleasure to be here. Members, thank you for having us, thank you for having the panel today. We always appreciate the work of the community. Is whatles county metro we call in california a self help county. We have sales tax measures, voter approved sales tax measures. We have a duration of 30 years. The voters vote for those in thes because included tax measure will be a list of projects, a list of deliverables. So we will be held accountable by the taxpayers of l. A. County to finance those projects. Tifia is of great assistance to us. I am pleased to say that we have been by a few weeks ago to apply for a large tifia loan for our subway, the purple line out to the west, and our regional country in downtown los angeles. These projects will be paid for with local voter approved sales taxes. Tifia allows us to accelerate these projects to get the benefit quicker, allows us to save money to deliver more improve, and it helps our credibility with taxpayers so they will approve future sales tax measures as appropriate. To get a sales tax measure approved in california requires a 2 3 vote, so it is important for us to deliver the goods and that we enjoyed the trust and conference and confidence of our taxpayers. A number of the points are very important, and we hope the Committee Considers them. We think the tifia Program Helps transportation dollars go further. We know this will help us create jobs. The two project i mentioned will create 40,000 jobs in los angeles. Some of those jobs will be all over the country. But the tifia Program Allows us to deliver the jobs faster and create jobs. That, i will close. Thank you again, and Ranking Member vitter, for having me. Jamest we turn to roberts, president and ceo of Granite Construction incorporated. My name is jim roberts, president and ceo of Granite Construction incorporated, a California Based Company that builds roads, bridges, used by millions of people everyday. Agc, are representing National Association of 26,000 businesses involved in every aspect of business in but in every aspect of construction. Concern about the solvency of the Highway Trust Fund weighs heavily on the Construction Industry, and we urge you to address this program sooner rather than later. The solution is twofold. Congress and Administration Must work bipartisan way to identify new Revenue Sources to adjust Transportation Needs both now and in the future. There must be more private sector involvement in construction of transportation projects. Agc believes the program has a proven record of the cop pushing its objective. Tifia has been successful in leveraging market gaps. Roviding eligible throughout its history, state have takenovernments advantage of securing loans, loan guarantees, or lines of credit provided by tifia. Thankfully, the Bipartisan Initiative chairman boxer and the other public works committee, provides the tifia program with a substantial increase in Budget Authority in map21. Specific projects include the Central Texas turnpike system, the 183a project in nevada. The intercounty connector in maryland. Is 2. 4redit assistance billion dollars, generating 9. 4 billion of work. The Tappan Zee Bridge in new york, 3. 1 billion. The u. S. 36 managed lanes between denver and boulder, colorado, 3. 9 million, all currently receiving tifia financing. The Construction Industry benefits from tifia Financial Assistance because it allows transportation projects to move forward. Many budgets have been built using the design build contracting method. Projects arebuild, selected on a technical proposal and price. Putting together a complex build project, the costs are significant. If the project is not move forward because of a lack of funding, the investment may be lost. Repeated losses will eliminate qualified contractors from pursuing the contracts, eliminating competition. Project funding is a key significant factor in the process. Dedicated financing sources such as tifia demonstrate to us that the owner is committed to awarding the project, which allows us to be more likely to submit a proposal. Despite the clear priority is given to the tifia program, map 21, agc is concerned there has been a notable slowdown in the tifia financing since map21 was enacted. It appears dot is being cautious in approving the tifia financing on tifia projects. Overseeing projects that are awarded tifia financing. Awarding financing to a project that has financial problems and puts the government at risk for is al problems the past success of the tifia program, and the promise that it provides in the future, should not be undermined by an inefficient process. Some adjustments can be made so that operates efficiently. Dot should redirect more personnel to the tifia review team. Dot should not hold all decisions on tifia awards until a record of the decision on the project is issued. Dot should develop educational tools and technical advisers to assist states that lack experience in applying for this assistance. There must be full transparency to encourage states to continue to make applications. Tifia should establish an Investment Grade rating for projects that are close but ultimately unable to do so on their own. Agc encourages dot to accept these recommendations. Us will help move vital projects to construction. While it is still greatly important that the administration address the long term solvency of a Highway Trust Fund, we must ensure that operatedlike tifia is as efficiently as possible. Thank you for allowing the agency to present our views on tifia to the committee, and i welcome your questions. Not least, mr. D. J. Gribbin, managing director of macquarie capital. Adamhank you, m chairwoman. Macquarie is the Worlds Largest private sector investor in infrastructure, and we have been successful in developing projects in the u. S. Since 2008 we have been involved in projects results i served ohiochief counsel to the Highway Administration. I had the privilege of working with tifia from both Public Policy and private transaction or specters. In my remarks, i would like to cover three topics. Thatenefits of tifia extend beyond finance, the need for Administration Reform of the approval process, and the importance of a portfolio approach to lending. First, tifia has done more than provide Additional Capital for infrastructure. Its prioritization of project ection, and considerable the tifia Success Story goes beyond the 11 billion invested and 43 billion worth of projects. Just the fact that borrowers have to repay funds encourages sponsors tear pick funds that return on investment. Project repaid with toll revenue bring significant discipline to the project thection process, avoiding challenges of bridges to nowhere. Increased funding with tifia was helpful to the program. But i would encourage the committee to allow the department to use some policy criteria for awarding loans and not have tifia just morphed into a broad, grantlike program that subsidizes every program. Removing some of the subjectivity of the process, it also broadens the criteria so that every potential process could qualify. In the Bush Administration, we used tifia program to encourage governments to utilize pricing to finance their infrastructure and manage congestion. The Obama Administration used tifia to encourage livability. Both administrations provided tifia loans to highpriority projects that did not directly advance policy goals. But tifia was a useful tool to encourage new thinking about transportation projects. It would be a loss to the Transportation Community if the department did not have the ability to use tifia as an incentive to encourage new thinking. My second point is on a second comments on the need to speed the process. The most serious challenge currently facing the tifia program is to type is the time it takes to process and approve the loan application. The challenge is incorporated the changes incorporated map21 and the improvement made by the tifia office have helped alleviate some of the concern about timing, but there is still much to be done. Most of the improvements the program could be made administratively and do not require a strange a change in statute. Let me touch on two briefly here. First of all, it would be helpful if tifia was moved to the office of secretary of transportation. This would improve communications with omb, federal highway, the credit counselor, and the office of secretary, all of which have a roll in no policy changes affecting if you loans should be made especially on a particular loan after you after the application has been submitted. Listed should strafe months off the approval should shave months off the approval process. Against the potential that a borrower will not be able to repay the loan. This is evident in a position taken by a staff member who refused loans for projects that were risky so alone cannot be repaid and refused loans that were not risky as they were not in need of tibia tifia assistance. This developed into the very potent system that exist today that therell always be problems. Matures, it would be good to take a portfolio approach. While the credit counsel should helpful for taxpayers for these funds they should not be encouraged to take minimal risk or zero risk strategy. It would work against the policy of the tifia that was to provide credit for projects. The worst performing tifia still provide infinitely more than the worst performing grant. I welcome any questions you might have. I want to thank the panel. You did exactly what we ask you to do. We want to know how this program that we agreed to expand is working. I think what we are hearing from about thee concerns pace. On the other hand, i do not hear complete criticism. I will go to mr. Leahy to talk to him. I know los angeles is doing extraordinary work in delivering so many extraordinary transit projects in a short amount of time. Especially a super majority ofn he came with his group team with his team and you decided to take us to our colleagues, we have seen tremendous movement and robbers in a los angeles. Tremendous progress in los angeles. I wonder if you could comment on accelerating these types of projects. Particularly at a time of lower construction costs. We have three Major Projects i mentioned, all of which are being accelerated in part because of the potential of tifia. The northsouth crenshaw line. A regional downtown connector that will cover regions of l a county which is a very large county. And the wilshire subway to the west of los angeles. ,n the case of tifia loans weve saved money and get the benefit of the projects quicker. Altogether those projects will create more than 40,000 jobs in a struggling los angeles economy. And i would add to that the theect of benefit subjective benefit of proving to the voter we can deliver the goods. We made promises and we will deliver on those promises. To get a two thirds vote on in favor of a sales tax in the middle of a recession is quite an achievement. The reflects voter confidence that we will deliver. And for us it gives us a steady stream of payback for the tifia loan. Out of all the folks here, i think you were a bit negative about the way the dot is handling things now. It is important that we expand on that because we have just as much at stake in the tifia as everyone does as we put our on finance senate and we want to make sure it is working right. Are you having personal experience that shows you that they are not moving quickly . That they are not moving to a larger share . Asu concerned about youve been very successful texas has been a leader in successfully having our scale projects. Largescale projects. I hope we can write a joint letter laying out some of these problems. Question. Ou for the the me first state that the tifia had a very positive effect and impact within the state of texas and continues to do so. With any program we do see there are areas for potential improvement. Under the four letters of interest that access dot submitted, we initially asked projecto 45 49 of costs. We received word back that in order to go above and yawned the historic cap of 33 we would need to have a compelling argument in order to go above 32 . I think a good compelling argument as we said they should. We appear they were not very persuasive. We apparently were not at very persuasive. In terms of the other witnesses today, the challenge i can only imagine in a program that is expanded 8 to 10 fold in trying to bring on additional staff and expertise to hit the ground running on day one. Timing, isle on the a project the grand Parkway Project in houston. We submitted our letter of interest last august. Last week we priced in the Capital Markets 2. 9 billion in bonds will close on those next week. You are currently at the reddit counsel stage we are currently at the credit stage. We were invited to formally submit an application. But we are artie gone through the rating agencies and price that in the market. Included some temporary mechanisms in the hope and anticipation of closing with tifia later this year that we will be able to use tifia to take it out. I think this is very Important Information for us. Secretary fox said he is adding 16 people so clearly he gets the fact that they are not staffed up enough. This is very critical. Looking at it from their site, they do not want to make a mistake because the first will implode on whoever makes a mistake with her it is republican or democratic administrations. And so we have to understand that. At the same time, when you said you close on your bonds heres what i will propose. This is my last comment of this hearing. All of you have been very constructive. And i do appreciate the specificity that you have brought to this because we cant help if we do not know what is going on. Oxx wants secretary f to make this work. Sides tok for both Work Together in laying out all of your testimony and also layout in a format that is very simple. What the problems are. You have my word that we would that we will do that. You can kind of give a heads up. Introduce yourself to us. [indiscernible] a lot of times we dont have to we dont have that happen if you recreate the whole thing. It is my hope that we can break through some of the institutional resistance because this is a greatly increased program. I am sure that means greatly increased applications and a lot of pressure. Thank you all and i will turn it over to david to finish this. Im glad that one person from dot state around. When you are the one person to raise your hand, i almost asked how your summer internship is going. [laughter] im glad one person from dot is here because that is the point and we think that is important for the department to hear it. Thank you all for your testimony and for being specific and precise. Let me ask all of you, when we genetically expanded this program dramatically expanded this program the goal was to become a firstcome firstserved process. You have appened is lot of applications will stop. Application will stop. Thee its because you have sea legs underneath them and it is a big expansion. The alternative is a fear we have that they still want to pick winners and losers and use more discretion than we intended. Which is the case of each of your opinions . In my opinion, is the first that you mentioned. Staffing up for a greatly enhanced program. I do not know the details of the salary ranges that they are authorized to offer, but i can certainly imagine it will be a challenge to attract the talent with the experience. Some of which as you know many of these are obligated transactions. In order to track staff of that experience, i can understand that it might be challenging given Civil Service salary levels. Anybody else want to chime in . s perspective is to get the political aspect out of it into expedited. The opportunity is there, we just need to make sure that it is expedited. I would just note that there are some tifia loans that have more risk. In los angeles we have a Large Revenue stream so the loans we get are basically risk free. We think when that is the case that that should allow for expedited processing of that loan application. Other loans might have more risk and that i not be the case. Dot i was on at the credit counsel so ive seen this in inside the government. Being a slow process is not new. Part of the challenge is that it is so ocular and funded so thatar and funded is administering the loans is not as effective as it could be. And there are structure changes that need to be made to help move as quickly. Mr. Griffin let me follow up with you. You suggested that there should be more subjective policy oriented factors. As you can tell from my comments, i disagree with that. Wouldnt that increase the uncertainty and increase the bureaucratic time requirements in such a way that it would be less effective and more costly in the market place . Intuitively, yes. Part of my comments were driven by the fact that tifia is very successful because it is a niche player. It is used in specific situations where governments can be pain we pay overtime repay over time. Part of the challenge is resisting the temptation and apply across a number of areas where tifia would not be all that helpful. Itself canhe program be a really useful tool to encourage borrowers to think outside the box and approach finance in a different manner. Using both Bush Administration and obama admission use it successfully to that extent. And thereve been significant permits as a result of that and it is not significantly slow down the process. Im hoping we will change that record overtime. And that once this happens we will streamline the process. I dont think we have given it enough time. We will all be pushing to streamline that and decrease that timeline. My final comment would be maybe we should tear down the universe own the universe where it is more effective and makes more of an impact in that universe. I would hate to increase and get back to very subject of factors because that level of discretion really increases uncertainty and therefore lack of efficiency and lack of time limits in the market. We are just finishing up, welcome. Hear the came to senator say loosey goosey. Youes when i pop in never know. I have a lotop in going on so i apologize. , when is when i chair get to the end of a hearing i will ask if you the chance to give an Opening Statement. Limited ask you to take a minute to give a let me just ask you take a minute to give a closing statement. In terms of your advice for us going forward. Some good advice that represents a consensus. Themthink we can divide into two pockets. One is policy and what is administration. Ventashere might be a from the policy there is a difference for the policy. There arent number of things that can greatly streamlined the process. Providing expediting processing for commonplace loans. There is a whole series of things that it ministration can speed along. Im thankful for this hearing and the letter afterward that will include some of these ideas. I think it is very consistent across the panel that tifia is a Great Program for financing and it should not be used as a funding mechanism. We have given several individual recognitions. Recommendations. It is very important to expedite the process. Process where you will have the credit worthiness going along simultaneously so we can expect the end result of the approvals. Develop more educational tools to those entities that are not capable today of understanding the process. Also, more transparency in the project Selection Process. Open so thatent people have a strong level of trustworthiness of the program. And also one thing i did mention earlier is that if you were available to help establish projects that folks cannot do so on their own so that it is helping at the same time. Great program, lets expedited. Is it leahy . There is a resemblance. [laughter] senator, thank you for asking. I have lamented that i cannot hase debt, but that tifia been helpful in los angeles for a number of projects. We believe we have a very strong nonrevenue stream. Helpsfia program encourage and incentivize nonfederal revenue streams. To show the voters that they can trust us. We have discussed is that the notion of a master Credit Agreement is commendable and the loan should be subordinated to facilitate getting that were done. I appreciate being here with you. Senator, i appreciate the opportunity. We have reviewed a number of things today will rethink the dot can improve. Some mechanical technical things that are not entirely a lack of staff. I hope there will be some consideration. We are only a short time away from reauthorization of map 21. I think it is worth pointing out that this committee pioneered should be that tifia sized to meet the anticipated demand. That is turn out to be a really good policy. Every dollar you put forth for tifia has leverage. As you look for to reauthorization, what you are looking forward to is another increase in the programs loan capacity. And that will be something that discussion should be started on now. Bass, sometimes people call me carp. [laughter] the quick response. A quick response, please. The existing staff has done a wonderful job in a very challenging environment in a greatly expanding program. Having said that, i think there are some opportunities to improve the timeliness of the overall process. One of the things we talked about as well is historically 33 . Ap on tifia had been under map 2100 and been increased to 49 . Theres been a reluctance to go above 32 . If that is true to need to be a clear criteria when in the administration decides that more than 33 will be helpful. I think if there is an opportunity to streamline the process for projects in rural areas of the nation would be beneficial as well. The will say in conclusion chairman and i have been partners for a long time and governors of our country. One of the things we focus on how to leverage a little bit of into itmoney to steer for structure. Infrastructure. Saythe last thing is to find out what works and do more of that. This is something that works and we can make a better. Thanks very much for sharing with us. Senator carper i know youre incredible chairmanship that lead you in other directions, but you always manage to show us that you care about these issues deeply. It is a pleasure to have you on this committee. A goodry foxx was for and what has happened here with these good people that want this program to work who love the we did is exactly right. We will use their comments. We have a representative of duty still here taking copious notes. Raise your hand and introduce yourself. He has become a star of our show. We are so be it so happy that stayed here to transmit this. Hearing it from you and from us and i know secretary foxx is interested in making this better. We are committed to this program, and we are committed to making sure it is the most Effective Program it can be. Inc. You for your help thank you for your help. Both the senate and house will be talking about transportation issues next week as they take up the 2014 presentation and housing spending bills. The house gaveling on noon eastern here on cspan. In about five minutes we will take you live to the Cato Institute here in washington. Theyre having a discussion on changes in u. S. Immigration policy and the system could impact both low and high skill workers. The discussion money gets underway here on cspan. Earlier this week the house judiciary subcommittee on statustion examined the of undocumented immigrants that were brought to the u. S. As children. A sister of and on undocumented immigrant and think she had to endure because of her illegal that us. Her illegal status. My parents moved to the United States in the 1980 but yes and i was born in 1987 in california. Shortly after my birth we moved back to columbia with money they saved working in the u. S. And. Ried to pursue a life that they have my sister while we were living in columbia in 1991 when i was four years old and she was three years old he move back to the u. S. They moved back in order to provide a better life for us. They wanted us to live without the drugs, violence and daily car bombings that defined daily life in columbia. And for us to have a chance at a worldclass education in pursuing the American Dream. For many years, i do not know about my familys novation status immigration status. As years passed i began to understand my family was not like most. Even though my parents worked hard to provide for my family we were never treated the same. My dad worked nights and my mom worked mornings to make sure my sister and i were never left alone. The toant was for raise their daughters in a stable home. Quicklyearned english by volunteering at her school and working on her homework with us. Iran him or my mom asking my teachers send home extra homework so that my sister and i could catch up. My younger sister was born here in florida in 1993. We all grew up in the same home, attended the same schools thomas , played lacrosse. There is one difference that would dominate our lives. I sister evelyn was brought here on a now expired visa. It was not until high school that i found out about my familys immigration status. There were so many things that i cannot do or how to work twice as hard to figure out because of the situation. For example, i was not able to get my drivers license when i turned 16. I cannot tell you how hard it is as a teenager to not be able to drive. As hard as this was for my younger sister and me, there was always a light at the end of the tunnel we were u. S. Citizens. Evelyn does not have that, she had to go through graduation knowing there was no relief in sight. She had to walk across that stage and into the status shadows. In a somewhat normal life she had gotten to live, and the only home she had ever known, she also had to walk across that stage without her mom watching. Our mother a couple months before had been pulled over at a traffic stop, arrested, and forced to leave the country. All of this happening with my sister in the car. This occurred while i was a sophomore in college and i cannot put into words the level of devastation this caused. Effective my wellbeing and academic success. I sister and i worked hard in school and earned scholarships. But unlike my younger sister and i, evelyn was unable unable to claim her scholarship because of her undocumented status. As a u. S. Citizen i have been able to pursue the American Dream. Im a graduate of Florida State university and am currently pursuing my masters degree at the university of florida. I have learned to cherish every moment i have with my family. Especially since we have lost our mom. As a u. S. Citizen, i am hopeful that Congress Finds a way to keep this from happening to other families. As of last year, itd been over six years years since i have over since her life think to a halt. This is the only home she knows. She has been here for 21 years, yet she is punished every day and forced to live a life in limbo for no reason. The American Dream has been at her sweet for my family. I have had to watch my sister be denied opportunities afforded to us in the only country she has ever known, by what amounts to be an accident of birth. Thank you so much for letting me share my story. Continuing the discussion, we are live at the Cato Institute. Are talking about changes to the immigration system, just Getting Started live on cspan. Since you did not come here to hear me talk about it, i will entered deuce our first , a chair ofofessor Scott College in atlanta. She is a fellow at the American Enterprise institute. Her interests are immigration. In dozens ofshed academic journals. Beside thebeing golden door. Door. Our second presenter is a Research Fellow at the National Euro of Economic Research. Previously he worked at the Federal Reserve act of philadelphia. His Research Interest includes the interplay of different economic factors of production, the impact of technology on labor markets, and immigration. He has written almost a dozen pieces that have appeared in journals as well as numerous book chapters and other blications, most notably in how American Workers Work Together in the American Labor market. Market. Thefinal presenter leads center of global development. He has served as Public Policy director at georgetown, as well as a consultant for numerous aid organizations. His Research Interests include on effect of foreign aid Economic Development and trying to judge techniques to the value to evaluate the effectiveness. In recent years with immigration, on immigration, with focus on global immigration restrictions. His papers have been published in numerous outlets, including academic journals. Journal paper in a counterpart of him over not overnight. Without further ado i will begin with our first presenter,. [applause] many thanks to cato for organizing this event. It could not be more timely. I will talk about the case for highly skilled immigrants. This is incredibly easy to make, and if you do not believe me hopefully you will in 20 minutes. Let me start with the caveat that i say highly skilled, i mean highly educated. This is not to delegate or give credit to the talents that lets less educated workers have. It is the shorthand you hear when talking about education am a you call it skilled. It is important to recognize that workers do have skills. I will talk about the highly educated. . I willl i talk about give you an overview of skill levels and how they compare to those of the u. S. Natives, and i will talk about highly skilled immigrants in the labor market, tellsat Economic Research us about their contributions to the economy and about policies, since that is what is on the agenda these days in congress. What the figure shows you is the educational distribution of the foreign born workforce. If you took all immigrants, defined as anyone who is not a citizen at birth, and list the distribution across educational dataories for most recent available, this is what it would look like. Looks like see . It immigrants are relatively low education, but the preponderance of the common group is not having a High School Diploma or ged. U. S. Natives in contrast, they look like this. What is interesting to take away from this is u. S. Natives are relatively unlikely to be in the no High School Degree category, the one on the far left. Compulsory education laws that requires everyone to go to school in the United States until 16 or 18. But his people and up getting their diploma. If they recognize there is a high return to getting a ged, so they go on and get it. The of u. S. Natives are in High School Diploma or ged, some college, or bachelors degree category, and small percentages are in the masters or theessional degrees or in phd category. What you should walk away from this with is the comparison of immigrants to natives. What this figure shows is the relative share of immigrants to the share of natives. It is taking the first dig your and dividing by the second figure. It is comparing the two. Immigrants are disproportionately at the extreme. Likely toarticularly be at the no High School Degree, not a surprise when you think about the fact that almost 1 3 of immigrants are from mexico, latin america or, other relatively poor countries. Look what happens when you look at the other side of the educational distribution. The percent of phds, immigrants are twice as likely as u. S. Natives to have a phd and just as likely to have a masters or professional degree. Then you look at immigrants, they are at the ends of the labor market. This is where the economic contributions come in him a these comparative advantages that immigrants have, that they are different from u. S. Natives. Lets think about highly skilled immigrants in the labor market. One of the concerns u. S. Natives is they compete with natives were jobs, and natives are either less likely to have a job or when they have a job they earn lower wages. This seems like common sense, and you hear anecdotes, my brother lost a job because competition from immigrants. When you go through and systematically look at the eta, little, the surprisingly evidence of negative effects on competing or similar u. S. Workers. When you look at highly skilled immigrants, the only research that finds a significant negative effect on wages among highly skilled workers, those who have beyond a college in the is published quarterly journal of economics. When you look at the preponderance of the evidence, article after article finds lots of evidence of zeros, and some evidence of positive effects that has went out in a paper published in labor economics that looks like i listed economics immigrants are complementary to higher skilled natives. When you look at low skilled immigrants, those who are at the bottom of the educational distribution, there are there is more evidence of negative effects, things are still very mixed mixed here, it would be very difficult to walk away from the economics literature with the conclusion that immigrants hurt impeding natives in the labor market. Hi1b visas. Lk about h1b visas are these temporary abuses, visas, for specialized workers. Is noly there compelling evidence by Economic Research that h1b holders harm similar natives. Shows that h1b workers actually earn more than similar natives, that they are not undercutting u. S. Natives in the market. I research for the Federal Reserve bank in atlanta shows these workers have no negative effects on unemployment or on wages in the i. T. Sector, where most workers work. There is Research Done published economicurnal of statistics in 2012 that shows h 1b workers reduce wages among high mileage regiment u. S. Natives. Canesearch for the mentor Enterprise Institute shows the number of h1b workers is related to total employment. They a concerned about h1b workers, it looks more like an age torry than an immigrants story. People are having difficulty getting jobs are older workers. Some of them are foreignborn as well as nativeborn. The idea that we will attribute what is going on in the in dustry does not hold up in the data. Why dont we see more negative effects . There is a lot of possibilities. Might that you is natives move into different jobs as a result of immigration, and this is what research showed it that u. S. Natives moved into the comparative advantage as result of immigration by the low skilled and high skilled immigrants. It is possible u. S. Natives move whats areas, and this is other research showed, that u. S. Natives moved to different places when immigrants are moving into their local area. There is research that suggests the competition from highly skilled immigrants comes when they seek english when they speak english well. The fact that a lot of high skilled immigrants in hightech fields are not fluent in substiy are for usborn workers. Another possibility and the most important one here is highly skilled workers do not harm competing or other u. S. Native Job Opportunities because highly skilled immigrants create jobs. The other innovative activities. What is the research . If we turn to job creation, my report for the partnership for the new American Economy shows if you increase the number of foreignborn advanced degree holders in the United States for every 100 more of them, total u. S. Employment increases by 44. If those foreignborn holders have astead and degree from a u. S. University, you get 262 more u. S. Jobs from u. S. Natives. Theres job creation going on, not just for the immigrants, but for u. S. Natives as result of having more highly skilled immigrant. This is creation. What research by others show here is about 1 4 of highTech Startups and half of the high Tech Startups insulin valley have at least one key immigrant founder, that immigrants are paid playing an Important Role in the hightech industry. Other Research Shows in that immigrants are more likely to have started a firm with at least 10 employees that u. S. Natives are when we look at college graduates. , creatingobs businesses. They are innovating as well. Research shows immigrants are twice as likely to patent as a collegea grad roots who are u. S. Natives are. They work in stem and are in innovative fields. Research shows not only are immigrants more likely to patent and innovate and natives, but there is no crowd out or negative effects going on among u. S. Natives. If anything, it looks like theres positive spillovers among u. S. Natives. Research shows that when you have more h1b workers you have higher productivity growth, that if you look at foreignborn stem workers a can account for 1 4 of the increase in productivity growth in the 1990s and during the early 2000 s. Highly immigrants are net fiscal contributors am a that they are paying more in taxes than receiving and government benefits. In this era when we are worried about Social Security and medicare and outsized government it iss, having important to have them. When we think about policy implications from this, they are clear, that we would want more highly skilled immigrants, creating jobs, creating is is is, patenting, innovating. One thing that is important recognize is the foreign students, the graduate level, and the h1b program are thiscal entry points for population, that most of them are not coming over as green cards. They are not coming as unauthorized immigrants. Programs ensuring that there are ways for foreign students to enter and get visas, and then stay in United States is very important if we want to get the jobs and business creation benefits of highly skilled immigrants. When you think what are the problems with current policy with the senate legislation, there are very long waits it for green cards, hundreds of thousands of highly skilled immigrants waiting, mostly in the United States on h1b visas to get a green card, and they are waiting for many years. Particularly if they are from china, india, the philippines, or mexico, because of the country cap said no one country can receive more than seven percent of green cards right now. The senate bill would change that since that is a very good thing to get rid of these country caps and and the cues that stretch for years and years. What i tell my students is if you want to remain in the united how should they remain, they should marry a u. S. Native erie it is sad i have to tell them that, not consistent with the type of visas they are on, but our system is messed up, when your best way to stay in the United States is to marry a u. S. Native. I would like to say low skilled and less educated immigrants play an Important Role in our economy as well. He should not forget about their economic contributions. These to not take any of this as not saying that low skilled immigrants matter as well. Thank you. [applause] thank you. Thank you for having me here. It is great to talk here, what i want to talk about his benefits on lows of immigration skilled immigration, so the benefits and costs of immigration is a big topic. I will not discuss its all the benefits and costs. I will focus on two pieces of my research and what they continue contribute. I want to start with a broad overview, and i will copy some of the facts on this. Stage foro set the understanding my contribution to this topic. Know, for aing we while that the gains to immigrants themselves from migrating ouare few. If you think about the average michigan living in mexico compared to what they earn in the u. S. , there is an enormous gap that incentivizes empty come here. That is one of the things that michael will talk about. A world would be better off if there were fewer restrictions. A lot of people would be better off if there were fewer restrictions on where you could live in the world. In addition, as it turns out, there are gains to the receiving country, which are also positive. , will use the term native born usborn, and natives, interchangeably, so there is they for us as well, and are also positive, but smaller than the gains to the immigrants themselves. Today when i talk about events to immigration, i am talk about second thing, the gains to us, and we should not forget the first, and i may come back to that, but today ou im talking about benefits to native war. There is a theoretical model in the economic literature which says we get gains from immigration by pushing up the wages of native warn workers. Alwaysonomists there is a tradeoff, never a free lunch, so the cost is there is some winners and losers. Immigration is vicious down the wages of some workers and up for some workers, but on average would benefit. How does this work . Immigration system is one in which what we do is we admit immigrants who have skills that would otherwise be scarce in the existing population, skills that would be hard to come by in the existing population. If we do that, it pushes down the wages of those who have us,ls, but for the rest of by having access to this pool of workers who ask dares skills, that makes us more productive. Up wages as a result go and we are better off. Another words, the average butve warm worker, benefits at the expense of lower wages for some types of workers. A corollary of this is that if we just pick immigrants that look like us, if they have the same mix of skills as us, there would be no end of it in this model, just the expanding the population. Ok. To make this more concrete, lets look at the skill mix of immigrants and natives as it actually occurs. Into verye division broad skill categories. Immigrants who are over the past decade, the percentage of the lack of bars, and the natives who are shown in the gray bars, among college and noncollege status. This is a broad distinction. Differencesilled within these broad categories, but a lot of Economics Research has shown this is like the most basic key skilled measure that divides workers in the labor market, college and nonCollege Workers who very different things, and the labor market treats them as different types of workers. A majority ofs is u. S. Workers, almost 60 the 60 , are College Educated. In the standard model, it says we benefit from importing this dares the scarce skills, the lessllege workers, the educated workers, as our immigration policy which is in that direction. Those immigrants are nonCollege Educated. It is not pushed very strongly in that direction and as it turns out. If these ours were the same would, in this theory we get no benefit from immigration, and we are not far from being there. In addition, inside this black most of theor Illegal Immigrants who are not a part of the official immigration policy. If you take them out, our policy is less tilted toward losing benefits for the u. S. How does it work . To remind you, in theory, bringing in the bringing in these nonCollege Workers, it will push down the wages of nonCollege Workers, but push up the wages of everybody else, and since most of us are College Educated in the u. S. , the average native benefits. Is that what actually happens in practice . Is that what happens question . First you need to know to other things. It matters not just that the skill mix, but how many come. They would not have much impact on the way church are so there will not be benefit or cost. Are notimmigrants spread. Ically uniformly immigrants are a lot more consecrated in some markets than others, and that is what we can use and economists often used to assess these models empirically. That is where we will try that. The first thing we should see, if this is the way i am describing is correct, faces that got more immigration to see for slower increases in college immigration pushes down the skill mix and makes us less budget less College Educated. Indeed we see that. Circle inshowing is a this data plot is a metropolitan area, the labor market, and on the x axis is the share of foreign born over the last 10 years, the amount of immigration relative to the top elation. They axis is the change in chair of College Educated. Faces that got more immigrants saw faster declines in college share or lower increases in college share, and places that got less immigrants saw faster increases in college share. Immigration is pushing down the average College Education. Immigrants are less educated. Ok. Badss you think that is a thing, i remind you in the standard model this produces benefits and indeed you see that. More foreignborn workers and increases in college share also saw faster wage growth for foreign born workers. They do warn workers who happen to live in cities who have bigger inflows of immigrants in saw19 in the 2000s faster wage growth. That is the benefit of immigration in the standard awful. What about the cost . The people that are supposed to be hurt by this are the noncollege worker, we are pushing down theres wages as we add more nonCollege Workers. When you write this up and to the growth of wages of college and noncollege, you do not see that negative effect. If you look at the lefthand bar, wage growth for noncollege graphs and the righthand is for College Workers, which are upward sloping, as the model predicts. You are not seeing that cost side of the equation, the noncollege wages are not going down in the 2000s. I do not want to overstate this. You can work hard and rule out that immigrants are picking places that have faster wage growth using historical patterns of immigration and economists have tried to rule these things out. Sometimes if you look another decades, you can find negative effects, but they tend to be muted is the way i will summarize. They tend to be smaller than the theory would predict. What is going on . My view is that standard model watoo simple, leaving out ys the labor market adapts. One of those way is that firms can respond to immigration by changing the way they produce, they change their production technology. Another thing that leaves out is immigrants and natives may not compete so head to head as we might imagine. He worked in different occupations, and even immigrants and natives who looked the same. Their production technology. Idea of this is that in response to an influx of low skilled workers, firms might develop more adopt reduction technologies which are more unSkilled Labor. If you think about this, this will diminish the negative wage impact. Fors find productive uses more low skilled workers when there are more low skilled workers available. That is not as hard as you might think, because we live in a world where overtime technology is becoming increasing skill demand a. I look at automation and the big thing that is going on at manufacturing, and the main thing that is going on in manufacturing is that over time firms are automating their production, they are adopting things like industrial robots, which essentially are replacing tasks previously by low skilled workers. In response to immigration, what what i found is that firms simply adopt less of this new expensive machinery and employ people instead. Usednd so in particular i the strategy that i told you about, i compared firms who were located in areas that saw big influxes of low skilled workers due to immigration to firms in areas who did not, and i found that this depressed their adoption of Automation Technologies, and instead gave more Job Opportunities to low skilled workers. Unless you think this has something to do with the kinds of firms that are located in high immigration areas, i have information on what these firms were planning to do in terms of adoption of Automation Technologies are to the arrival of the immigrant. If you ask them what it is not retrospective, they interviewed the firms prior to this wave of immigration in the late 1980s, and their plans for a sickly the same adoption of Automation Technology prior to the wave of emigration, but when the immigrants came in they shifted their plans, they shifted down their use of Automation Technology. Onther thing that is going is that maybe immigrants and natives, even ones that look the same on paper to us, that have the same education, same work experience, theyre not working in the same jobs. They are competing in different labor markets in some sense. If this is the case, and there is some evidence for it, the cost of immigration is going to be disproportionately borne by the immigrants themselves. If immigrants compete with other immigrants and less so with natives, what immigration will do is it will push down the wages of other immigrants, not relative to similarly skilled natives, and you actually see this. This is, the x axis is increasing the amount of in a transformed version for theoretical reasons, basically to the right is more immigrants, and the y axis is now the growth in immigrants toes relative similarly skilled natives. What this shows you his place as they got more, the wages of immigrants rob relative to similar skilled natives, and that tells you immigrants are the ones who are disproportionately hit by immigration relative to natives. Found in my own research is this has something to do with the Language Skills of immigrants. When you break it up into immigrants with strong english and poor english, it is driven by the immigrants with poor english. This is shown here. Immigrants who are poor at english, you do not see a downward trending relationship, and with no english skills, that is where you see the downward trend. This point home, i looked at a special case, which is puerto rico, and a lot of people do not know that puerto rico gets a lot of immigration, too, from latin america, and particular and what the rico,ence in puerto everybody speaks spanish, natives and immigrants. If you do the same graph, you do not see that downward sloping relationship. Ok. Is other evidence that immigrants and natives do different things. , wherementioned work immigrants specialize in jobs which require less communication skills, essentially. That is consistent with that language story i told you. There is direct evidence where there is a lot of immigrants, the price of low skill services, which would be jobs that do not require a lot of communication are are sick of delay lower, so this is another way the benefits of low skilled immigration. Low Skilled Services are cheaper in markets where there is a lot of immigration. Ok. There is a friday of other things that immigration there is a variety of other things that immigration does. About the productivity spillover from other types of immigration. There are other impacts. I want to drive home the idea that we benefit from bringing in low skilled workers. There is this potential cost and maybe we are raising inequality, and that is a big concern, so we might want to couple this with transfer policies. It is a lot Like International trade. Can compensate the losers. In the u. S. You do not see much of this supposedly cost side of the equation. Theres good reason to think it is small. Theres the possibility that immigrants and natives work in different kinds of jobs and and that firms are very adaptable in how they react to low skilled immigration. Finally, alex asked me to talk about my thoughts on policy, and all the heat and the noise seemed to be about illegal immigration, like what are we going to do about border enforcement, what are we going to do, are we going to have an amnesty . That feels like we are too late when we have that today. You need to take a step back and say why are they coming here despite the fact that is not legal to do so. The answer is they have this in normas incentive, they want to come here, they have the big economic gains from coming here, and on top of that, we want them to come here. We benefit from them coming. We demand their labor which is why they want to come. Maybe the problem really is not illegal immigration, it is why dont we have more low skilled visas, why dont we have more legal ways for immigrants to come . We may be answered about other impacts of admitting a lot of low skilled workers, and my answer to that is look, they have this enormous benefit for coming here, if youre worried about the costs of admitting low skilled immigrants, why do we capture that with visa fees or other things to capture those benefits for ourselves . Maybe in an era of budget deficits, maybe that is something to give thought to. Thanks for letting me give a talk here. I appreciate it. [applause] this is it . Great. Thank you very much for your time. I hope to give you something for its. , butnot mean to alarm you i just met you and i know roughly how much money you make. You, and not exactly of course, but i have a good idea, and the reason i have a good idea is because of a remarkable calculation that was done at the world bank recently which is amist, great book of his called the nots. Nd the have he is assembled the data of real income of people all over the world, stick them into a single harmonized database and asked this question if you take some random person from that database and he wants to predict their real in, real income, adjusted for prices across he getes, how far can toward a perfect prediction of that persons real income knowing nothing else about them except what country they live in , one fact only. 60 the stunning fact is 60 of thepredict intervery its on real Living Standards based on only where you live and work. For a to let that sink in second because to me this is one of the most stunning facts about the economy or the world. Were talking about something important, that your real Living Standard and all that means for for your ability to realize your dreams and the health and survival of your children, etc. And the calculation does not just suggest that where you live is more important than anything else about you, this number means where you live is more important than Everything Else about you combined, whether you are hardworking, lazy, black, white, female, male, your parents were rich, your parents were poor, hot, ugly, Everything Else about you explain a lot, but not as much as your country of residence. That is a remarkable situation that suggests there is an enormous inequality of opportunity in the world. You can notice it in places like this. Here is the border between the u. S. State of california and the mexican state of baja, california. The minimum wage on one side of that border is it the seven cents an hour and a minimum wage on the other is an order of magnitude higher. Another way to look at the fascinating results is to think for a second, you have the same person doing the same task in two different places, and that is an arbitrage opportunity, where the same thing is being sold to different markets for hundreds of percentages of and it is an opportunity to add value. All arbitrage opportunities are an opportunity to create value in the world, to generate wealth. And it is common in the world to have the same person, to have a person who does a task for hundred 50 a month in one place , be able to move, come to washington, d. C. , other richer parts of the world to do exactly the same thing for 10 times as much. Thatmentioned the paper lets say nathans economic literature on what is the size of this arbitrage opportunity, how much alley value could be added to the World Economy by exploiting this opportunity. There are all kinds of calculation that amounts to saying how many people are you going to assume can move and what is the gain to each one of them. When you add them up, and sophisticated ways, you get to be really big numbers in the trillions. The global gdp gains, to even modest increases in labor thelity rivals and exceeds Global Economic gains from any other kind of relaxation of the International Economic barriers you can think of. What i talk about in the paper is that if you add up economistsbest calculations of the global gain from dropping all policy barriers to trade, so total elimination of air every terror on earth, licensing restriction, and add to that the bynomic gain estimated others of total elimination of every barrier, policy and otherwise to the movement of capital, so perfectly allocate globe, across the entire eliminate all asymmetry, add those together and you cannot get to more than three dollars trillion every year in global gain. Modest that to a increase in labor mobility, and i mean take one in 20 of people now citing him what the world bank defines as developing countries, allow them to work in richer countries, just one in 20 of them, and you get above 4 trillion, conservatively, and larger amounts of mobility would result in larger gains. Just titanic gains. Back gently on the brilliant presentation by that ishis is a game primarily realized but these kinds of population shifts occur over generations. If you were to say in 1900, ok, 80 Million Immigrants are coming to the United States and their country experience an economic gain over the next hundred years, now they are us. We arere them then, but them now. Now i am us. The movements occur over a time i amere we should not sure it is meaningful to talk about us and them. This is a gain to the country because the immigrants become the country. What kind of doubts could you have about these numbers . There are not a lot of papers about this issue, an issue that needs to be studied a lot more. A lot of what i read about in the paper is how we could challenge numbers like these. What are people doing in papers like this . A very simple calculation of theres a bunch of people at a we income level, and what if move a certain amount of them to a higher income level and multiply the amount of people moving by the income gained. You can think of for ways you can think of that are pretty obvious. You might wonder maybe migrants are not as productive as natives at the destination. Theiring about productivity is less in their eyes. You could say maybe there is some kind of bad economic effect on people who did not were move at the argent, and that offsetting cost should be taken into it accounts in a global calculus. Maybe there is a offsetting negative economic harm at the destination which other panelists have talked about, and fourth, you might have a non economic concern about all these economic gains, but how many of those people could feasibly move in any realistic political scenario, so why dont we leave this hypothetical stuff on the table and talk about things that matter. I want to spend the rest of the rf lightly over the literature on the subjects. First, lets talk about the gains to migrants. What is thek productivity of a migrant who moves or the reverse of the question, if somebody had not moved, what would be their economic productivity. If you took one of them many ethiopian cabdrivers in washington and transported them to ethiopia am a what would be their productivity, and how would that differ from the average economic differences between americans and ethiopians . The piece called premium, my coauthors try to estimate for the gains to immigrants the United States, and we try to account for as many observable and unobservable differences between migrants and nonmigrants as we can. We got micro data from the world bank from the u. S. And from 42 other countries, backed them all together and asked the question, how about an observable he identical person from each of 42 countries and in that country and in the United States, what is their real income after adjusting for price differences, after adjusting for country of birth, after adjusting for country of education and age and education level and gender. The question were asking is, take a mexican, born in in mexico, educated in mexico, left and they are 35 years old and they have nine years of education and they are then make all possible adjustments based on self selection on determinants of them, and ask what do you end up with as the gap in economic productivity between that person in United States and that person in mexico. Here are the the results for all 42 countries we did. The vertical axis is the realple of that persons income home that they get in states. Even after all those adjustments, youre still left with hundreds of percent gains. Another way to look at this is most of the determinants of poverty in ethiopia do not come with his cabdrivers. To turn shakespeare backwards, the fault is not in ourselves, it is in our stars, mostly in where we are born. Second objection about negative externalities at the origin . Theres a lot of literature about this, and i want to provoke thought briefly on this subject by taking a local thought exercise. Here is metropolitan washington, d. C. , and there are people in the world who believe that skilled migration from developing countries is so harmful that it should be referred to with the pejorative rhyming phrase, brain drain. I do not use that. I referred to it by the neutral term skilled migration because for the following reason lets take a low income part of washington, east of the Anacostia River where incomes are relatively low, and asked the question, what is the economic harm that is done by allowing smart young kids to leave those places, allowing them to live elsewhere, allowing them to work elsewhere . That they, that is same logical question of being what would be the economic benefit to those places of not allowing them to leave, that is, trapping them there, not giving them a decision about whether or not to leave. Thats set aside many ethical problems that you might have a policy like like that and say would it be effective . Much you might wonder how of the deficit in Human Capital production in those neighborhoods would be remedied by forcing the skilled people who have gone up there to go there, and the same thing happens between countries. Ocd has estimated by what fraction africas deficit of physician would be remedied by the hypothetical relocation of african physicians back to africa, somehow, by black helicopters, i do not know. And if youre is about 10 of the deficit as estimated by the World Health Organization would be remedied by even that draconian, forcible relocation of every emigre african doctor, and that is the reason why doctors are not in africa is primarily due to very complex forces that are not remedied by forcing people to live one place or another. In this anacostia example you might be concerned about whether or not allowing smart young that Geographic Area would it affect Peoples Education decisions. Hadley some of the reason people like people do stay in school and get an education, the fact that they can get high incomes elsewhere, the same thing does happen between countries. Mice research and the research of others show that the education decision, the extent and the specialties of education decisions of a lot of young people in developing countries are shaped by the opportunity to migrate, the option to migrate, even if not exercise. The bottom line on this is and this is going to sound like a strong state, but i know this literature so i can say definitively, that there is no piece of evidence in the economic literature that any race on earth was ever developed primarily due to restrictions on any place onhat earth was ever made healthier by recessions on movement of Health Professionals or any of the effects you might imagine from restricting peoples movement. It makes more sense when we contemplate the real effects of a policy like trapping people in a low income neighborhood. Now i want to talk briefly about effect on people at the destination. I can cut this pretty short other guests have done a fantastic job. I want to point out the long term discussion and i am alluding to the longterm discussion that is not even worth having. Other economists have pointed out the u. S. Got a lot bigger between 1900 and 2005, and the u. S. Got four times bigger. We were a country of 75 Million People in 1900. Unemployment in those years happens to be exactly the same. Somehow all of that labor force entry, less than half by immigrants and a lot of other labor force entry, by women during that time, and to have generated it proportionate terms roughly as many jobs as it took. Really this is very intuitive when you think in the long term immigrants and other labor force suppliersre not just of their own labor. They are consumers of the produce of other peoples labor. In the long run we are all part of an icon. The reason were having this discussion or doing research on it is in the shortterm, and the most influential influential piece of research in this area a person at berkeley who does who studied this episode in a paper. It was an agreement between carter and hester that allowed ,000 cuban refugees to leave and arrive in miami. 100,000 of them stay there permanently. That means in three months there was this unexpected giants seven percent jump in the size of the labor force of miami. He looks for effects on anybody in the monthsent after relative to other cities that do not express this gigantic inflow and cannot find anything, nothing, even for blacks and hispanics, isolated, nothing at all. It is fair to say that even 23 years later it is still a subject of active research, how could that be . We have talked a lot about some of those reasons. It might have to do with labor supply, the labor supply of natives was low in areas where these people ended up working. I have a new paper on that that thedocumenting u. S. Workers supplied to manual formwork jobs in North Carolina did not seem to be affected by the Great Recession when unemployment jumped to 11 . In economic terms, for just some jobs that immigrants are doing, the native supply seems to be locally inelastic. It could happen to do with labor demands, that if there is something about large inflows immigrants that stimulate demand, and not just driving curve bykers down the competing with them, but shifting outward labor demand curve. Ethan talked about all kinds of mechanisms for this. Firms adjust their technology theces in response to availability of labor. His research has been very influential there. Hunt has a fascinating new paper showing that natives adjust their educational choices based on the presence of low skill migrants. Another at Boston University has some innovative work showing that skilled womens mavis danish Labor Force Participation are influenced by the availability of low skilled migrants. Kinds of things that stimulate economic activity, and therefore the demand for other peoples labor, including natives and including low skilled natives, lots of things going on here. The mental model of one labor demand curve and is it downward sloping or not, but the title of the 2003 paper is much simpler than the actual economy. I want to talk finally about feasibility and then i will finish. Economistere this the parts from economics. Even people agree entirely with every word i have just set off and just pat me on the back and. Ay would luck with that that is impossible. I want to point out in america lots of things are impossible until they are possible and then they are possible. To be one of the most inspiring documents in all of u. S. History is this letter from ben franklin to congress in february, 1790, and you might know that franklin died in april of 1790, so this is the last public act of his life. He dashed off a letter represented a Greater Association showing how about you guys abolish slavery right now and 1790, not just end the slave trade, but make it illegal for other human beings to own human beings today. You know it was generations before that happened or was even discussed in congress again, but it was debated for two days, and they did not keep a full transcript in those days, but there are standards of the discussion, and they gave all sorts of practical objections to this. Who is going to compensate the Property Owners for all the expropriation, go back to the greeks and romans, slaves have always been with us, etc. , etc. There are hilarious hearts that say franklin is getting old and he is a little loopy. They were right at that time. Now today it seems crazy, and franklin turns out to be right. It took a while, but things can change massively. There is a vast opportunity out there that i think slowly the world is finding ways to realize and it deserves a lot more research. Thanks. [applause]. Thank you very much for much for all the presenters and they are fantastic. Now we will begin that question and answer session where you will get a chance to ask questions. I want to give you a few reminders. Wait to be called on. Wait for the microphone to arrive to you so that everybody in the room can hear you and can hear you on cspan. And thats your name and affiliation. Cato is a libertarian think tank, but i will heavily regulate the question and answer session. Please ask a relevant question and refrain from making an extended statement, please. With that, lets have the questions from the audience. , right here in the front row. Good afternoon. Question, i did not see images of military applications for immigrant labor, and did you think about that or take that into consideration given all the ways in which we are spreading out our military across the world . I am very ignorant of that. Ive never seen any work on that, never done any work on that. Im interested in it, but i do not know. Representative who has introduced a bill to deal with that issue in terms of a modified dream act, so that is one application, but it is fairly small compared to the entire aspect. Other questions . Yes, maam, right here. I am a commentator. I wanted to ask and hear about what happens with unemployment in the low Skilled Labor, native labors, when immigrant laborers can occupy that, those jobs . What happens as a result to that with income inequality . I would give an example. The person that hires foreign Skilled Laborers and play them 20 a day, instead of paying minimumnutes of salary. This person is making a lot of honey, the person who is hiring, slavery salaries. That increases income inequality, and we have seen that. And we see the native labor, the low Skilled Laborer, that becomes unemployed, and we have seen that impact in African American natives, people that unemployment right now. I did not hear anything about that and do you have any comment . Sure. I cannot talk about unemployment unemployment, i talked about wages, but the same research thats the date the wage impacts of immigration is also looked systematically at unemployment impact, and they have also looked specifically at these groups, about other minorities in the u. S. You might and as i pointed out, you can sometimes find effects. We ought to be concerned about that. But its just these effects, when you look at it systematically the patterns are its not a hunal impact. These are people at the bottom of the economic ladder in some cases so you want to be concerned about it. But immigration is not responsible for the 14 Unemployment Rate in the black population. At most it contributed a tiny part of that. So yes, i think you have concern about it. It is not a major driver of unemployment in minorty and disadvantaged populations farce we know. To address the inquality point because it doesnt receive enough public attention and its wonderful president obama has been talking about it this week. Lets hope we continue talking about it. But immigration has played a tiny role in the tremendous increase in inquality in the United States that most of the inquality has happened at the upper end. Its a winner take all society. And thats really not due to immigration. At the lower end where you might think that what is going on with the wage distribution, research by david card who has gone through and looked very carefully at this and they find that very little of that increase in inquality at the bottom send due to immigration. Instead most of it is due to changing labor market institutions in the u. S. , the decline in minute minimum wage but not due to immigration. Doug brooks, my question would be we talked about the boat lift from cuba. Has there been any studies related to other groups, say the y rainians or now the afghans or iraqis who have been coming to the United States, have there been studies on them and the impact on the places theyve ended up . I dont know off the top of my head. The only studies im aware of for the United States is one looking at the entry of russian scientists and engineers when the soviet union allowed juice to come to the United States. Ts looking at math me tigses. And what they find is it looks like the russian math me tigses didnt play well with the u. S. Born. They didnt speak the same language. There is also some research that goes back and looks at when the nazis came to power and they came to the United States and the benefits the u. S. Received as a result of that. These other groups would be very interesting to look at, i dont believe anyone has systematically. David cards work has been incredibly semiknoll. There is a stack of papers looking at every Mass Movement that has occurred. Were almost running out of them as economists to study them. There is a paper about the return of french who were living in algeria at the time of algerian independence. A huge number of portuguese people are returning to europe when an gol la became independent. Russians coming to israel at the time of the fall of the soviet union. Polish 600,000 polish people arriving in the u. K. Again and again all of these find almost no net effects. If you control for the other effects that these guys have been talking about, the fact that the labor demand curve is shifting right and left, that is the overall demand for everybodys labor is being stimulated by my grants then you find there is some competition. There is competition in all labor markets. There say fascinating paper about women moving into the labor market showing they were competing with men and there was a downward sloping supply curve. There was a study of movement of blacks out of the south into northern cities and there is a slightly sloping labor demand curve. All of these things are abstracting away from the fact this serve also shifts and thats why nobody has been able to find in any of these studies of all kind of flows of people from all kind of organize gins into all kinds of destinations any of these effects. Alex just mentioned the most extreme one i know of that i dont think has been studied in detail is the liberalization of movement of people in south africa that occurred in the 1990s. This is an International Situation in that large amounts of south africa were not recognized as being part of south africa africa. They had many of the attributes including judiciary and stamps and military. Then one day they said actually that population which is six times larger than the population of the white areas d about 1 7 as wealthy can move freely and there is no restriction about what jobs they can take and what time of day in the white areas. Now its 20 years later. We ran the experiment. What happened to the wages and employment of all those white people . Well, it improved and there are numerous studies. There is one i know of from the university of cape town that track as cross the Income Distribution what happened to the Employment Conditions and wages of white people even with this titanic movement of hundreds of of the population and at a vastly different skill level they ended up complimenting workers in white areas and not substituting for them at all. Thats what i want to convey here is the consensus the uniformity of decades of findings on these issues. Ill add one thing to to that. Americans value eth nick diversity. So places people are willing to ay more in places that are more eth i canly diverse. It tends to drive up willingness to live in an area where there is more eth nick diversity. Its hard to have that in restaurants if you adopt have it in your population. Someone from rural New Hampshire knows its hard to get those benefits without the mmigrants. Daniel keen from american university. I would think that the trillion dollar bill on the sidewalk argument would provide justification for eliminating restrictions on work visas and letting nick come on a work interested uld be in that. People often ask me if im in favor of open borders and i told someone recently im gnost i can on open borders. Is is that the question ill posed. That anybody can take any job in any place they want without any regulation. Thats not true for me. I cant go practice as a physician, i cant go practice as a lawyer whenever i feel like it. There are all kinds of regulations or spatial regulations on where i go. Alex could have me thrown out of here by the police if he felt like it. You dont have to worry about that. Well well see about that. Im talking a lot. But we dont have a situation now where movement or the taking of jobs is completely unregulated. I would need to see evidence that a total deregulation of grant or nt by my heir occupational choices. Absolutely no regulation on any of their choices at all, i would need to see evidence on that. I dont know what the evidence on that would be do mest tickically. Regulation that make sure that the quality of foreign physicians is observeable makes sense. Im not sure if repeating their entire residence si which is what they have to do now, you have to become a resident again and walk around making coffee for the attending physician. I think thats a little extreme. But should there be no regulation at all . If i were on the surgery table i would want there to be some regulation to make sure the quality is good enough. Im not sure about no regulation but we could argue about the level of regulation that is right. We want markets to regulate to the greatest extent possible. Occupational licenses where there are good reasonses to have licenses. But its very difficult for regulators to determine how many people should enter and in what occupation. And when you look at some of the details in the bill that was pass bid the senate, you have this huge bureaucratic commission that determines how many points people get for certain occupations and measure wages at a detailed level. It would be wonderful to get better data on labor markets but im leery of whether its going to happen. Either thans final point is we should sell off more visas or auction them off and let markets determine who enters and certainly have more visas than we have now. This book that was mentioned earlier, i cant think of a more sensible proposal on immigration reform. Its really worth a look. Im a private citizen. I have two questions. During the 1980s when our immigrant population increase that coins sided with our prison population increasing, is that related . If we are seen as a recipient country receiving immigrants, has any donor country like india that sends us highly skilled immigrants or ilippines which sends medium skilled, have they looked at what they are doing wrong to keep their citizens to make their countries more opportunity rich . Do you know the crime literature . My understanding of the findings on immigration and crime are that basically if anything immigration reduces crime rates. I know people find that very hard to believe but immigrants tend to be very low have very low crime propensity in markets that get a lot of immigration tend to see crime go down. There is work on the rise in prison population and i dont know that as far as i know there is no Causal Association between those two. Maybe somebody can comment on our second question. Its a very complex question. Lets talk about nurses in the philippines. Philippines is the number one sending country of nurses to the u. S. 54 of nurses in the u. S. Are just from philippines. Nd the philippines has i dont want to say too many because i dont know what the right number of nurses is. The philippines has way more nurses than per person than any country on earth. I saw this number scythed and i wanted to know if it was true. I went in and counted how many practicing registered nurses thrmp in the philippines. And its more in the philippines than in the u. K. Its a pretty poor country. Its like peru and they have huge numbers of nurses. One of the reasons for that is that there is a well developed private and Public Sector machinery for pepping fill pin nurses migrate. They work here, canada, israel, they work everywhere. And one of the reasons that mostly ill pin people women become nurses is the ability to migrate even if they never exercise it. There are large numbers of unemployed nurses in the philippines now. The problem is not to keep nurses at home but to generate jobs for people including overseas. There are other countries in completely different situation like jamaica is interested in attracting more of its nurses to stay rather than immigrate and there are experiments on how to do that, paying them two or three times as much is something that is not in the realm of possibility for other countries. But there are other things they have exeermented with like task shiftings, letting them do more of the things doctors do like prescribe medicine or practice indpebtly. Have more choice in where work. Some just assign you to an area and say thats where youre going to work for the next five years, good luck. Allowing them more choice in where they work. Ut its it is different by country and even over time and i think a very interesting area. I can answer about the crime data. Something has been said about immigrants for generation is they are more likely to commit crimes. We see going back in time that has never been the case. Immigrants have always been he has lakely to commit crimes on average than native born americans. Even in the earliest 20th century which there was a commission to study that, they came to negative conclusions about immigrants in every single category. They claimed they are racially inferior, predisposed to lowering american wages. Everything you can think of they found or manipulated data that immigrants are bad for the u. S. Except in the area of crime. Seg meant ilarious experience ur daily might seem otherwise. They areless likely to commit crimes. What you see heavilyism grant cities with the exception of miami, it is the exception that proves the rule that cities with large immigrant populations have lower crime rate. And they choose places that are a bit more peaceful and once they go in there, the crime rate drops more once they ettle. Several things here on immigration. I wonder if each of the panelists could state what is your view of the concept of the sovreignty. Te and mr. Clemens hit on it a little bit but im very curious about what is your actual view of the nations state . Do you guys want to address that . That doesnt have much to do with your research. My husband is a philosopher. So i here some about cosmopolitanism which is this view that you think about the welfare of your own citizens or people within your own country. I think we all most of us tend to succumb to that. One of the things i appreciate about michaels work is it does think globally. Im not a philosopher or political scientists to know what a nations state is as an economist but i think immigration really is best viewed from a global perspective instead of from within your own country and the gains to u. S. Gnat tives or the cost to u. S. Natives. And when you think about it globally you get answers sometimes that are unambiguously in favor of greater immigration. The only thing ill add to that is i sure wish there was a way we could there is so much gains to be had as michael talked about, fl allowing more people to immigrate to the u. S. And to other developed countries. I wish there was a way to coordinate that better. Because there are gains for them and some opportunities for bargaining on that. So i mean, obviously, the kind of governments are an impediment to that but i dont want to make any more views about my views of the existence of governments. I want to separate questions of whether institutions should exist from whether they should be open. When this country was founded huge parts of the potchlation werent citizens. So women couldnt vote, lacked basic citizenship rights. You could look at that and say abollish citizenship or say maybe its an institution that should be more open to people entering it and leaving it. Two very different solutions. When i look at the world and i see the calculation of how much your place of birth matters, one response to that which i wouldnt share i okay lets aboll lish states and governments and pretend like they dont serve a function. Another would be to say what are ways that the institutions involved in the nation states could become more open to people changing the nation state that they are affiliated with. Im often told by people that look you are in favor of some sort of global vail of ignorance and if you read john recalls he will tell that you nation states are the basic unit of analysis where there is a vail of ignorance and nation states is where its defined and outside of it ethics dont mean anything. I disagree with that. The fact that the republican of south africa declared that was not part of south africa would mean we cant say that act was ethical or unethical because thats a separate country. What is or isnt a country is something people decide every day. In the 1990s south africa made a decision about who was in the in group. I dont accept that ethics cant be defined across borders but im also hesitant to declare that government serves no function. A greater openness of the institutions of the nation state could be beneficial for everybody. I had a two part question. Being you talked a little bit about what the fiscal burden a little bit of immigration and the different groups what their fiscal burden is. The concern for Many Americans is half americans dont pay taxes. They are concerned that the immigrants coming in are going to fall into that group that dont pay as opposed to the group that does pay. Is there any research if they come in the low end, do they end up moving snup and the second part is panelists were talking about how high skill immigration would be a big benefit and low scale immigration would be a big benefit. Is there a relationship percentage that is optimal for our country . If 10 of immigrants coming in should be high skill or 80 should be low skill. Has there been research on what would be an optimal infusion for our country . Ill tackle the first part because thats easier i think. Much like low skilled or less educated natives. Less immigration receive less than they pay. Thats true of natives and immigrants. Its a problem if you viewed it a problem. Its a problem with the tax strukeure not with immigration. You would want to change your tax structure or transfer programs are designed. That is where i think the changes should occur first. The second part of that question is that wages do increase for the average immigrant over time that they asimulate. So their tax payments would increase over time. Now for immigrants who have not graduated high school which is e predominant group, right now over their own life times they are net fiscal cost. Once you get to high school and higher immigrants are net fiscal contributor. This is from the report that is the best evidence from 1996 which is old now. When you look at descendants of immigrants, they become us, they become the country. When you look at the descendants of immigrants which all of us really are that over time they do pay back if you ill if their immigrating ancestor was low education, they pay that back. So it depends on what your time horizon is what you think about the cost is. That was a good answer. All we have is that model that i talked about, that very simple model that says you ought to admit immigrants whose skills are rare in the existing population. There is a lot of problems with that model. Further more, i have some doubts about our ability to fine tune exactly who we get. So thats another issue. If you look back at the various major policy shifts, the immigrants we actually got compared to what we said we wanted differs wildly. And so maybe we ought to think more about what kind of policy we want to have for other reasons as well, not just this kind of optimal kind of calculation. I dont im not a specialist in the study of immigrant simulation but i know one fascinating fact chi looked up that is now online, you can quet the whole thing on lines. Fraction of white foreign born in 1940 with a high school egree is 12 , 12 . And now over 50 of the unauthorized population of the u. S. Adult population has a High School Degree. Remarkable. So there might be some level of immigration that asimulation doesnt happen, kids are just incredibly poor and uneducated, whatever that is it would have to be vastly greater than what we saw in the 20th century. On the right level of immigration we talked about proposals for more Market Driven mechanisms for egulating immigration. Richard freeman at harvard has an article talking about this. Economists have been talking about these mechanisms for a long time. Thats one of the reasons i like the book is because it talks ability mechanisms for regulating because go around washington and ask what is the optimal size of the u. S. Labor force and optimal composition of it . Does anybody know the optimum allocation of acapital in wall street . And man being knows that any composition is going to be imperfect and maybe wildly flawed. And mechanisms for gathering information from the real world about what the right mix of the labor force is which is what these mechanisms are might be something that the world could explore. We have time for one more uestion. Thank you very much for this presentation. My the emphasis has been on the benefits for the receiving country, in particular the u. S. The standard model is we receive the immigrants, the wages go down and other groups see the wages go up and everybody will gain. I suppose the capital is assumed to be the same. On the sending country i suppose the reverse is true. Michael eluded to Global Benefits but the model says the sending country loses. What is your view on that and is there a case for policy intervention, transfers between governments . The research i dont know the research on brain drain is well but yeah, there mirror image labor supply impacts in the receiving sending countries. The sending countries, the people they tend to send varies by country, they tend to send heir high skill workers. And im not sure you should call this a cost for them either. The sending countries tend to have high inquality so this would tend to push down inquality in the sending countries if the model is right. And if the model is not right, theyll adjust in other ways. I have never seen any evidence in the literature that the limitation on the physical movement of skilled workers per per east has caused any ay has caused any. Impeerically the possibility of figuring out who would have been a good leader and forcing either open i cant much less creating the conditions for that person to be an effective leader or effective entrepreneur, ive never even any evidence that has successfully been done. There are many countries that have made the transition from houge out flows of Skilled Labor to inflows of Skilled Labor, korea in the 0th century went from losing huge numbers of skilled people to attracting them back on net. But that was because of much broader change that is occurred in the economy and not because of their movement. The movement as the driver of the change ive never seen any evidence on. Thank you very much. And please give a warm round of applause to our panel. Lunch will be served on the second floor. And rest rooms are on the second floor right along the yellow walm. Hank you again for coming. The u. S. Gnat passed Bipartisan Legislation that included citizenship for undocumented workers living in the u. S. A number of House Republicans have been hesitant to support full citizenship for those who have come to the country illegally, some have been considering a proposal for the legalization of undocumented immigrants brought to the u. S. As children. The house judicial subCommittee Held a hearing on that this week and well going to show you this weekend. The house and senate are out today and back next week. But today the House Ethics Committee announcing its investigating four representatives of issues. They are continuing an investigation of minnesota republican michelle backman. Also peter roskam. They didnt say why. Hey are also investigating tim bishop. He helped get a fireworks permit for someone who donated to his campaign. And tierney is being investigated. They said they will announce its next course of action in september. This is a website. Its the history of Popular Culture. Its a collection of stories rather on the history of Popular Culture. To say pop culture, its quite more than that. What ive been trying to do with this site is go into more etail with how Popular Culture impacts the politics and sports and other arenas. Its not just about pop culture. What we have on the site are stories about popular music, we have sports buy ogfi. We some buy oggrafi. There are a change of things and when i formulated the site i cast a live net to see what would work. Historydig. Com. The Egyptian State media is reporting today that Muhammad Morsi has been charged with es pi nadge. Angered his supportsers yesterday a Senate Foreign Relations Committee heard about the situation in egypt from a former ambassador to the country and president obamas former middle east advisor. They both warn the government against cutting off military aid. The hearing is just over two hours. This hearing will come to order. Thank you for joining us today for a timely hearing on the unfolding circumstances in egypt. I want to thank ambassador dennis ross and dr. Michele dunne and ambassador Daniel Kurtzer for being here today. We look forward to their effective on the situation in egypt and the ramifications for egypt and the United States. The situation in egypt has tremendous implications for the United States. Our response must be carefully calibrated. At the same time, support u. S. National security interest in the region. These two goals are, in my view, not at odds with one another. They do require a complex policy response that allows us to advocate for muchneeded democratic reforms while also ensuring our own security needs. At the end of the day, our policy and our laws must be nuanced enough to allow for a response that reflects our interests. It is my view that terminating u. S. Assistance at this time could provoke a further crisis in egypt that would not be to our benefit. Having said that, the future of our relationship with egypt will be determined by our ctions in the coming weeks. Whether we will have a stable and willing partner in crucial matters of security, combating terrorism, trafficking of weapons and people, support for peace in the middle east. Alternatively, we can stand aside during this crisis and just hope for the best. While our choices are difficult at this time, it is my view abandoning egypt would be a particularly poor policy choice. Whatever policy we ultimately choose during this time of upheaval in egypt, it is critical all parties exercise restraint, let protests remain peaceful, and that violence is rejected. The interim government should take those concerns to heart and above all in short the restoration of democracy bs transparent and inclusive as possible. Steps that exacerbated the divide in egyptian society, including the use of support and protesters the only way forward to a vibrant and stable democracy lies in the inclusion of all Political Parties and groups. Let me be clear our support is not unconditional and unending. At the end of the day, egyptian leaders and the Egyptian Military must show they are committed to a political process, credible democratic elections, and governors who protect the rights of religious minorities and women. On that subject, i am concerned about the treatment of christians, women, and refugees in a stabilized egypt. It means preventing the beating and killing of christians and sexual assaults on women. Lso, egypt turning its back. Egypts military an interim government should provide safe haven for innocent the billions fleeing the brutality of the asad regime. I hope Security Forces will be vigilant in the increasingly iolent finite where innocent victims have been killed and terrorist groups have lost launched attacks. The egypt government must uickly overturn the recent convictions of 43 ngo workers. Must not stand. Their work to support the americans in a strong pluralistic democracy the choices that lie before us. With that, let me recognize our Ranking Member. Thank you. I want to welcome our witnesses. Due to the dramatic changes that occurred in egypt, it is critical we take a look and take time to discuss our relationship. Sometimes, we forget we have Critical National security interest is in egypt. The most populous come get country in the middle east. It provides u. S. Military vessel, preferred access to the canal. Our two countries cooperate on ounterterrorism. So, our policy right now is in a bit of a quandary. We are trying to decide how to move ahead with egypt, how the issue of the two affects what it was or was not, how it affects our policies going forward. I really do appreciate the witnesses coming in and giving us time to think with you as to how we move ahead with our policy in the quandaries we face. At the same time, understanding the importance of egypt as a strategic ally and, candidly, very important entity in the region we want to see stability prevailing. Mr. Chairman, i thank you for having this hearing. I thank you to the witnesses, and i look forward to your testimony. Thank you. With that, let me turn to our witnesses. I am pleased to introduce ambassador dennis ross. Created one of the nations most respected Foreign Policy lines. Welcome, ambassador, back to the committee. We also have with us dr. Michele dunne. She has served on the National Security Council Staff and policy and planning in the bureau of intelligence and Research State department. And ambassador Daniel Kurtzer, professor in middle east policies and studies. A Great Institution in the state of new jersey. Erved in the Foreign Service for almost three decades and retired in 2005 and has been an ambassador in both israel and egypt. Thank you all for being here. Your full statement will be entered into the record without objection. We ask you to summarize your statement in about five minutes or so so we can have a dialogue with you. With that, ambassador ross, if you will start. Thank you. Last time i was here, i was here to talk about serious and the civil war there. T is no question that both our morals and Strategic Interests are engaged there. The response is very different, the stakes are very high. I find myself in agreement with what you are saying in your statement. When we look at egypt, we know that egypt is perhaps the most important arab country. It is always one that affects the rest of the region. Politically, culturally it has been a trendsetter. When we look at the events of the arab awakening, they might have begun in tunisia but it was the events of Tahrir Square which captured the imagination of the world. It is an unsettling situation, to say the least. At a minimum, we have seen unelected leader removed, but i think when we look at the selected leader that was removed, we have to understand that the intervention by the military is an intervention that was very much backed by a very large segment of the egyptian population. A Critical Mass of egyptians feel that this leadership under president morsi and the Muslim Brotherhood was a leadership that was not addressing egypts problems. It was more concerned with control than it was with governance. While one can dispute the actual numbers that were on the petitions and one can question how many will be on the street, there is no question that a significant percentage of egyptians responded. What took place was a popular uprising. The military used that uprising to remove president morsi, but the reality is that today there is a good day of support for what the military has done. Here are those within egypt, within the rest of the region which would view what has taken place as a course correction and that helps to explain why you look at the saudis and the kuwaitis having provided assistance and beginning to act on that. There is one narrative that describes this very much as a course correction, a popular uprising. Theres also a different narrative which comes from the the Muslim Brotherhood and the backers of president morsi who see a legitimately elected government replaced in an illegitimate way. They demand the reinstatement of president morsi. They make it clear that they will not allow things to remain as they are and they will ontinue to try to disrupt life within egypt unless he is reinstated. We have what can only be described as a deep polarization. There are efforts to mediate the differences, but it is difficult to see how these are likely to be mediated. We are bound to see this polarization continue for some time. It will confront us. There will be difficult ilemmas. I think that we can look at the interim government which has many figures on it who are credible. We look at malawi and a number of others. They are certainly very credible figures, but at the same time, we have to recognize that the arbiter today is the military. The first deputy prime minister, you look at the speech he made yesterday in terms of calling on egyptians to come out and support their effort against terrorism which another way of talking about their efforts against the Muslim Brotherhood. Which will be we are in for what will be a long period of instability. The real question for us becomes what do we do now and it is not as simple an nswer. There are some who say that we should cut off assistance. I am not one of those. It is not because i dont understand the rationale behind doing that or the arguments that are made, the notion that it was a coup, that we have laws, that we have its bulls. I take all of those very seriously. I take seriously the reality that the militarys actions were supported by the significant percentage of the egyptian population. I take seriously the need for us to maintain influence in the current situation. If we were to cut off our assistance at this point, the effect of that would be that we would lose the link we have with the military, but wed also find a backlash among the egyptian public. The egyptian public would look at this as an american effort to dictate to them against the opular will. They would not take seriously our calls or statements that this is simply our law and these are our principles. We would also find we would not have much influence in the rest of the region. Much is influenced by what is going on in syria. We would also see the saudis and others and will take the lace and assistance. I am concerned that the net effect would be that we dont ave influence at a time when we should be able to affect what will happen. I would not overstate the degree of our leverage but i think it is critical for us to be prepared to use the leverage that we have. A military clearly wants us to maintain the relationship for practical reasons. They also want it for symbolic reasons. If we cut off the assistance, it reinforces the narrative that them Muslim Brotherhood has put out there and it will make it difficult for the interim government and the ilitary to get assistance. The key for me is to use our leverage, not to be reluctant to use our leverage, and to use it for a variety of urposes. We should be using it to ensure that the military really does go back to the barracks, to ensure that the interim government is empowered to make real decisions. Along those lines, they should be working with the imf. I think that there should be inclusiveness, there should be a transparent political process, i think there should be an international monitors who would be invited in to observe the election, to demonstrate that these will be free and fair. Even if it means that the timing should be, should reflect the need for preparation. As well, there should be the point you made about pardoning the 43 ngos that were arrested for violating egyptian laws. One of the most important things we could do and the signal that we would send about egypts posture with regards to building a Civil Society which is the key to having a level playing field. We should use our leverage for those purposes and for allowing the Muslim Brotherhood to be included within an election. If they choose not to take part, that would be their decision. The bottom line is that without having delusions about how much leverage that we have, recognizing the limits, we should not take ourselves out of the game right now. We should not simply make a statement for the sake of making a statement. We should try to shape the direction that each of takes. We have a huge stake in how egypt evolves. Ultimately, we should exercise that leverage and understand the following. If in fact we find that we are not listened to, we can always cut off the assistance later. I dont object to the use of assistance or the idea that we should be prepared to cut it off if we find that there is not responsiveness to the point and the principles that we are pushing. If we were to do it at this point, unfortunately we would no longer have an effect on what happens in egypt. I dont think we should cut ourselves off. Thank you. Thank you, chairman menendez, Ranking Member corker, members of the committee. Thanks for the honor of testified about the crisis in egypt. As we look at the political turmoil and try to sort out u. S. Policy options, i would like to raise four points. He first point is that the july 3 removal of the Muslim Brotherhood president morsi by military to following enormous demonstrations should not the understood primarily as a triumph of secularism over islamism. Along with secularists and islamists in egypt, there is another major player which is the Egyptian State itself. This was left largely intact after the removal of former president mubarak. The military, which is the most powerful player within the state worked with the islamists and against the secularists. Now, the military as well as other state institutions has been on the defensive. This new alignment may not be any more stable or lasting. It is also important to say the Current Alliance with the secular opposition is antibrotherhood. It is not antiislamist. The party supported the removal of morsi and has exerted its influence in the new transition by vetoing the cabinet choices. My second point is that we should really reserve judgment. This will put egypt on the path towards democracy or not. On the Positive Side of the ledger, the military is not exerting control directly but has put civilians out front. They put in place a cabinet. In addition to that, i would say another positive sign is that the new transition roadmap puts the rewriting of the constitution before the holding of new parliamentary and president ial elections and this does correct a flaw in the irst transition. The fact that they held this before the first time. They are dominating the process and is quitting others. On the negative side of the ledger, the way in which the democratic process was set aside on july 3 is troubling. He was a failure as a president and he behaved as though winning 52 gave him a mandate to rule as a pharaoh. The broad public opposition to his leadership was real. But it would have been much more powerful and salutary for egypts young democracy if he had been defeated in the early election or a referendum. There were some efforts made to persuade him to accept this, but they were very very brief. Then, very quickly, the military moved to remove him in this way. In a way, which sets a dangerous precedent. In addition to this, the new transition going on in egypt is in danger of repeating the single most important mistake of the first transition which was the failure to build a broad consensus and a tendency to exclude critical players. The secularists were saluted before, the brotherhood is excluded now. While they are speaking the language of inclusion, reconciliation, there actions are saying the option. Some of the Senior Leaders are detained without charge. There are rumors surfacing daily that they might be charged a very serious offenses such as treason or terrorism. There are lots of other signs that the intention is to exclude the brotherhood, perhaps out law it again. There is a real contradiction here between the talk about inclusion and the actions that the government is taking. My third point is despite the militarys argument that it took this action to remove morsi in order to spare the country a civil war, egypt seems to be headed into a time of greater instability and perhaps a cycle of instability. There has already been a troubling spike in violence. More than 160 People Killed and 1400 injured in the past couple of weeks. Daily clashes between proand antimorsi groups. Egypt is a much more heavily armed country than it was a couple of years ago. A spike in attacks against the military and Police Officers in the sinai. Egypt in the situation could see a return to the type of nsurgency and domestic terrorism it experienced in the 1990s when jihad these targeted government officials come christians, taurus, and liberals. If there is this kind of ongoing violence, it will not be possible to attract forests and investment back to egypt. There is money coming into the central bank from gulf donors and so forth. The call yesterday by the deputy prime minister, the defense minister for massive demonstrations tomorrow. In order to provide him, he said a mandate to crack down on terrorism. Risks to escalate in the violence further. In light of all of these many dangers, the United States should proceed with caution and be guided by some basic principles. Egypt can only be a reliable Security Partner for the u. S. And a reliable peace partner for israel if it is reasonably stable. It will only become stable once it develops a governing system that answers strong and persistent popular demand for responsiveness from accountability for my fairness, and respect for citizens rights. We will have to look at the signs in the coming weeks about whether there will be inclusive we will have to look at the signs in the coming weeks about whether there will be inclusive and this or whether this campaign of excluding the brotherhood will escalate. Will there be things like Media Freedom . Civil society freedom . It is very important, the case against 43 ngo workers, including 16 americans who have been convicted and sentenced to prison for ngos working in egypt. The u. S. Should take the time to pause