Transcripts For CSPAN2 Capital News Today 20121208

What gorbachev to do. Thank you, sir. What i would like to ask our panel is simply to take a minute each and give me your sense of the Lessons Learned on the entire imf experience and how they might apply today for some Lesson Learned, perhaps just professionally. Im going to start by asking myself this question. How good the anchors in 1985 have been so foolish as to believe that a president at the beginning of the president ial campaign, making a Foreign Policy speech that was almost totally different in total towards the soviet union than the tone he took in the first three years not to have in mind that politics might have sent in to do with it. But heavens, the media is so skeptical. Minute, minute, minute. A minute on the meaning of the impact of inf. The principal Lesson Learned in looking at some of the things we talked about here today as you must know the total range of your interest in you must be prepared to serve all of them equally well and not allow yourself to get tangled up in setting conditions that no one can meet unless it is your active to avoid negotiations. If you want negotiations, you must make it possible for your negotiating partner to get to the table. Thank you rain much. The one that i would take away is the importance, number one, of eliminating weapons you want rather than putting a limit on them in verifying that. Its much easier to verify this year than any concrete number. And therefore, i think we really have to get our minds off we putting women on types of arms, they trying to get rid of those we dont want. We are facing now a possible theory of stearate using chemical weapons. They shouldve been abolished five or 10 years ago if the treaty had been enforced. So it seems to me, go for abolition of these weapons with good, thorough verification. I worked with inf despite the fact that two or three years before we got it, but that would be acceptable. Rick, your turn. As the chairman of the global stearate u. S. A. , i have to agree with jack. I wont expound on that. You know, there was no way when i was deeply involved in the issue in the early 80s that i couldve foreseen gorbachev. Nor could i foreseen the treaty. The zero option when it was propounded was preposterous. I post it. So did the secretary of state. Reviewed this and i guess this is the lesson. We view this is largely a challenge and an opportunity and strengthen the alliance. We saw ourselves under threat. The doublecheck decision on deployment of the missiles was part of a broader political military exercise to strengthen the alliance to deal with whatever the next challenge we would face from the soviet union. What i have to say is you have to learn to pay that and thats exactly what the Reagan Administration did when they found themselves with somebody they can do business with. It could and Ronald Reagan may have been the only guy in the administration that believed in the near option that by god u. N. After. And here i have to agree with ros. Somebody with a big man with a backside if youre president of the United States can achieve a great deal. Thank you very much. Thank you all very much. Cant knock [inaudible conversations] y aerators institute . I think the Writers Institute is something thats very important within the culture. We are a culture of words, a voice says. Words are key to our imagination , our capacity to envision things. We ourselves are not completely tied to print on the page senseis of writing, but i think theres no other art form so utterly sensible than perhaps film, which we work with, too. But there is that thing in literature it just captures the human spirit. Commander of the u. S. Military operation in the pacific, admiral Samuel Locklear spoke with pentagon reporters about north koreas plan to launch a satellite figure this one in violation of two u. N. Security resolutions. He also talked about chinas decision to the Aircraft Carrier in the Obama Administration shifted a la terry resources for the pacific region. This is a halfhour. Well, good morning and allow hot. I am glad to be here to talk to you about the pacific command, where we are today to where we see ourselves heading in the future. Since the last time i was here, we continue to move forward on the rebalanced initiative after as directed by president obama. The rebalanced rows on the strengths of the entire u. S. Government, including policy, diplomacy, trade and of course security and that the area i work in. For me, the rebalanced has been and continues to be the strength of the relationships, adjusting our military posture and presents and employ new capacities to ensure we continue to effectively and efficiently contribute to the stability of the asiapacific as we protect u. S. National interests. Of course the keys to success of the innovative access agreement, greatly increased exercises, rotational presence increases come efficient force posture in yesterdays will maximize the dollars given to spend. Also by putting our most capable forces forward as always her newest, most advanced equipment, to ensure we effectively operate with our allies in part or as across a wide range of operations as we worked together for peace and stability. I was asked to keep his opening remarks a little shorter than the last time so i can get your questions. I picked to finish up with a couple of thoughts. Rebalances based on the strategy of collaboration and cooperation, not containment. The United States is a Pacific Power and remain a Pacific Power and we look forward to doing our part to keep asiapacific hopeful, peaceful and secure for decades to come. Thank you. I think well take our first question right here. My name is betty lint. Im with the world journal. Could you address the growing chinese assertiveness in South China Sea and East China Sea in china Just Announced theyre going to intercept [inaudible] are going to participate in talks with the chinese and what kind of message would you like to cover quite thank you for the question. Of course the issues that are being phased in the South China Sea and other areas in the North Central east asia, i think are quite complicated because of the nature of the territorial dispute. Some of them historic, some of them now driven by the need for access to resources in those areas and not to some degree has motivated some of the dvds you see there. The u. S. Position as you know is that we dont take sides on territorial disputes. As many of those around the globe, not just the South China Sea. But we do want them resolved peacefully without coercion and we call all the parties they are, including the chinese to ensure as they approach these problems that they do so in a way that avoids conflict, that avoids miscalculation, that uses vehicles available today through diplomacy and through those legal forums that allow them to get the Reasonable Solutions on these attackers earning to coercion or conflict. So it is import and i think as we go forward to ensure that all parties remain calm about these things and that we dont unnecessarily introduce were fighting apparatus into these decisions are discussions. I think its a broad question about north korea if i could. Its been a little while now its Kendell Young has taken over. Just wanted to ask, has there been any sign that north koreas military and Security Policy strategy has changed since hes come on board . Or d. C. As a continuation of how they act in their approach is under these predecessors . I think were still on the waitandsee stage is. I believe you can take a look at the last number of there have been i think a number assigned that might lead you to believe the new regime leadership is going to take i would say a rational approach to how they deal with their own economy and deal with their own people internationally. So i think that generally theres a feeling that we might be some hope there. However, we are approaching a potential violation of the u. N. Security Council Resolution and we encourage the leadership in north korea to consider what theyre doing on the overall security environment on the peninsula as well as in asia. Did you follow up anything new . We been hearing rumblings for a time. Anything new you can provide in terms of insight into lunches are things like that . I think youre tracking it pretty well for the media today there are indications of what they will call a satellite launch. We believe it is still the u. N. Security resolutions because of the missile theyll be fired and the implications it has for Ballistic Missiles activity somewhere down the road and the destabilizing impact it will have on the security environment throughout the region, not just dependent. Can you follow up on some of that . What is your assessment . They say they saw birth of her problems at their failed launch. What is your assessment . How could they have felt the problems . Juicier ran possibly helping them . And do you think hes doing this in response to hardliners in his own government . Why would he be doing this . Well, the professed reason is to probably do it in conjunction with the anniversary on the 17th, which is widely reported in the paper, in the newspapers. But you know, our assessment is that their desire to continue down this road is motivated by their desire to ensure that their capability and they are not a selfproclaimed nuclear state, their ability to demonstrate to the world that they have the capacity to build and have the missile technogy to be able to use it in ways that theyre choosing down the road. They said i said earlier would be very destabilizing not only to the region, but the International Security environment. So whos helping them in my assessment of the ability to be able to launch this missile . I have progressively gained Better Technology over time and progressively gained back during number of methods over a number of years and decades. The announcement of radar for the ally. Do you have an update on that program and other efforts underway or envisioned to increase broadly missile defense, our pasture there, and that of our allies and partners. Well, yes, i have nothing further to add they are can wanted to discuss that with our allies to determine the times and location so i have nothing more than that. When it comes to missile ballistic defense, theres a problem that affects our partners, allies in the region, as well as the homeland in that well continue to wait for opportunity to be able to strengthen our partnerships and our capabilities with our allies to be able to deal with the threats as they e emerge. Were going that today. Intercepters, anything else . At this point in time, im not prepared to talk about any of the details of that. I would just say that we continue to look for opportunities to improve our capabilities as the threat set changes and grows. [inaudible] india, first trip, give us a sense of what kind relations nay have with india and who will be your proprieties, and basically, u. S. Was included as a partner with [inaudible] how help you in your activities . Stating with the last question first. As far as the indian Ocean Organization that youve related to that we are, not a part of, but invited as an observer to it. In general, throughout the region, first you have to understand the breath and scope of that region. Its well over half the people in the world living in that region. All of the Major Economies in that region including ours. Seven of the ten largest armies in that region. You can put all the continue innocents in continue innocents in continents in the Pacific Ocean and still have room for another africa, another canada, another United States and another mexico. Thats just in the pacific. The indian ocean is vast as well. You have this really large, very dynamic, cant even call it a region. Its half of the world. Where you have historical ties between countries, bilateral, multilateral, and you have this theres no one Security Organization thats able to deal with things such as a nato, and i dont think youll get to that because its such a vast and diverse region. We have to rely in and support the multilateral organizations that allow us to capitalize on where we have like interests or be afraid to lead in that areas, and to the earlier questions. We very much support india, military india, taking a leadership in the security issues, in and around the indian ocean, and we are looking for opportunities to participate and operate with them where them where we can. Directed as all parts of the government have to seek a long term security Relationship Partnership with india, and that covers a lot of different areas, but in the military area, we look for opportunities to interoperate with each other, and were headed in that direction. Kevin. Assess chinas Aircraft Carrier because this this town we hear its a sign of, you know, inevitable conflict, or rickety soviet bucket not to worry about it. Should americans worry about this thing . Well, you know, my assessment is if i were china, and i was in the economic position that chinas in, and i was in a position of where i have to look after my Global Security interests, i would consider building an Aircraft Carrier, and i might consider building several Aircraft Carriers so the real question is whether we should be concerned with them or not, like any other country that builds Aircraft Carriers is whether or not those types of platforms will be successfully integrated into a Global Security environment thats a peaceful one. They have a role in maintaining the peaceful, Global Security environment. If the issue is that they are not part of that Global Security environment, then i think we have to be concerned about it. [inaudible] i think were hopeful they are part of the environment, and we are doing Everything Possible to bring them into the security environment in the way thats already fairly matured globally in a way that they are a productive part of that environment. [inaudible] from the times, admiral, since the strategy was changed to refocus effort towards your area of the world, way would you say are the most important capabilities youve actually been able to add to command than what you have before . Well, id like to know weve only been at the rebalance, you know, publicly for less than a year so strategies often take time to be able to get assets and policies in place. The most important thing was what we did in the beginning was the fact that we looked at the world, a post afghanistan, you know, area, and we said as we reshape the force for the future, where do our primary interests lie . I think the most important thing was that the president put out at strategy that said this was a priority for us now, saying that publicly to the world, and all levels of the government, incoming the military, removed forward to ensure our allies in the region that this is actually a prior my for us, and priority for us, and that were going to do it. I would note that the president was in cam cambodia after the election, and then he was in burma, and secretary clinton moves throughout the region as well as secretary panetta, and the amount of activities i do and my forces do is a prompt jump than what we did in the past, and were looking for opportunities to do more exercise. We are doing more of those things already, and thats viz l to the allies. I think its visible to the partners, and i feel it visible to the region. We oftenment to jump to, well, wheres the next aircraft carry your or the submarine. Thats the signal. We will, over time, as youve heard secretary panetta say, rebalance towards the pacific, and i mentioned opening remarks. Were rapidly moving the most capable assets into the region because of the Ballistic Missile defense threats we face and those things, so its about a holistic approach, and what i do on the military side is just one aspect of it. Its got to be tie into the economic side, whats happening in the diplomatic side, and so were working hard that accomplishes this strategy. A quick question. You started to do or plan to do rotational b52 deployments to northern australia. Well, youve seen the outcome of the what was there. We have a wonderful relationship with the australian counterparts, and the two countries we continue to look at opportunities where we could partner better to be able to provide, you know, provide a better security structure in that part of the world, which has growing important to the global and Economic Security environment. From west china, news agency of hong kong. You mentioned youd like to see a mature military to military relationship with china, and sec that pa panetta has invited chia to join the green pack as [inaudible] how do they respond to that, and [inaudible] regarding the military to exchange in 2013, and how would you deal with the new Chinese Military . Well, i first of all, let me say that i think the middle to middle relationship in the last couple of years, between us, have been quite historic. They have increased, and they have endured what in the past might have made them be truncated. They endured, you know, diplomatic issues that, in the past, might help stop them, and we continued to have the mill to mill. As i said before, i was invited to beijing twice, visited with my counter parts there. Just yesterday in my headquarters, the deputy chief of the pla navy was in hawaii with my headquarters receiving briefings on the future activities that our navies will do together, looking, talking through the issues of the rim of the pacific exercise of which you mentioned that will happen in 20 14. We have a growing ability to have a dialogue at the military level thats frank and open. We do that through consulted talks that we do on a periodic basis, and then we build a calendar of events on the areas where we think well have the most opportunity to have success working together. We build that calendar of events, and so far, were having a very good record on meeting objectives and actually completing them. Right now, i believe theres, in this time frame, theres exactly but theres an hdr exercise were doing in a bilateral way between the u. S. Military, paycom, and the pla. I just sent letters to my counterparts, congratlating them on their promotions, and hoping that we continue to have is a good and open dialogue. In the end, its, you know, we have the responsibility, the pl organization and the u. S. Military have a responsibility to have a good dialogue and good relationship. Its in the best interest of not just Regional Security in asia, but Global Security. Tom, missile defense, dig teacher deeper if possible. How concerned are you with the effects in the region, and the fact the that Missile Program in the United States have not produced a successful intercepter since 2008 . Can you go into what you think your version should be for adopting the paa thats why europe into asia because leaders here said they would like to do some sort of paa in asia. You asked a lot of questions in there. [inaudible] [laughter] well, let me talk about the sbx in general. You know, the sbx was built as a research and development platform. It was not designed to be in the long term missile ballistic architecture. Theres benefit in research and development, but since it was built, my estimation is that the overall sophistication of the capabilities have grown, and its grown globally so that the need to have diminished because they are mature of enough to have it. As far as the intercepters to be productive, you have to look across the technologies that we pursue, and recognize that the Significant Technology challenges that have been associated with that program, and really, i think you have to in the time frame that weve had to develop these systems, i think weve done the Technology Part of the of this Ballistic Missile defense have done Amazing Things in that time frame, to be able to produce the capabilities that are there now. Im confident that they are going to produce the result that you are asking about in the near future. As far as the overall, how you would put a paa in europe, i came from europe in the last position. Again, i think it goes back to discussion, for me, about, about europe versus the size and immensity and vastness of the region. The region even the pacific region, but in the indopacific, and trying to apply that exact model to defense of this area, i think, would be a stretch for me. However, i think there are opportunities looking at the alliances, growing partnership, multilateral organizations, who are investing in Ballistic Missile defense capabilities of their own. If they are properly networked and properly put into an organizational construct where they can work together, you will, in effect, have a type of paa architecture. I think that will happen overtime. It will require information sharing between countries who have may not done that before and may be uncomfortable with it, but i think as the security environment changes, theres good opportunities for that to occur, and well pursue those. A followup, in europe, you have nato as at least an organizing construct. You dont have that in the pacific. When you talk about networks, linking things together, what is your construct to do that . [inaudible] u. S. Going to be a broker . Well, you know, we spoke bilateral relationship strategy in this part of the world, and now were seeing the need for more multilateral organizations. Inherent in multilateralism is the discussion about the type of collective securitytype initiatives you might pursue using the technologies that youre able to buy and be able to operate. I think theres a way ahead here. Thanks, admiral, david alexander. You mentioned burma earlier. Talk about where militarytomilitary relations are with burma [inaudible] right. Well, you know, first weir, the mill to mill in burma are a, you know, were in the follow on the state department in the decisions op where to go forward so well be supporting commander at the state department on this. My opinion is that as we as the state department and the leadership of the Congress Works through any issues that might have in the past prevented mill to mill, that we, there are areas in our mill to mill relationships that we can be productive in early on that will help a government and military who are seeking reform, to be able to do things with them that will help them understand and be productive in the reform, particularly as it relates to how you built a military thats subservient to a civilian leadership. How do you build military that values rule of law . That values human rights . Calculate that into an organizational construct in its training. We can add value in the areas, and were prepared to do that. Time for two more, justin and christina. Thanks, justin with fox news. I wanted to ask you about the strategic shift to the region, are you concerned that this shift could be considered premature considering there are still real problems in the middle east if you look at syria where u. S. Is at risk, a serious conflict there with the chemical weapons, obviously, real concerns about iran as well. Is the shift occurring before the job is done in the middle east . Well, i would go back to the president s strategy on this, and take a look at it that didnt say wed shift everything we have in the military or in the government into the asia pacific. It prioritized the asia pacific, but it talked about an enduring requirement to be in a present and security role in the middle east as well. You know, were talking about, i think, a near term perspective on this, you know, were we seed a glide slope in afghanistan. Yes, the middle east is has issues that and has historically had issues that will require, i think, u. S. , obviously, u. S. Leadership, but also requires certain level of military security over time, and we will have to balance that as we look at the size and nature of our forestructure, and, you know, what we have, the assets we have to be able to accomplish it, but im convinced we can do both in the long run, and im convinced were on a good glide slope in the asia pacific that will allow us to realize that over the next number of years. Christina with the washington times, thank you for coming to speak with us. U. S. Officials have said several days moved up into the region, talked about why we send ships to the region, and, also, the number one concern with north koreas planned missile launch, whether they are violating u. N. , you know, International Regulations or whether were worried that they could reach a missile to reach the u. S. Whats the number one concern with that, and why are we moving ships to the region . The moving the ships would be today moving them today or in the long run . Today this week. Oh, okay. Well, we moved ships around the region all the time. We have a fairly robust deployed naval force thats actually, you know, stationed in that part of the world. We do move them around for exercises, move them around for contingencies, and in this case, you know, should seem logical well move them around to have the best Situational Awareness that we have, and to the drug that those ships are capable of participating in Ballistic Missile defense, and then well position them to be able to do that. Well go forward with that as we did last time. Number one, so we understand whats going on, and id say second with it is we understand if they do violence the Security Council and launch a missile, what kind is it . What is it about . Where does it go . Who does it threaten . Where do the parts of it that dont that dont go really want it to go, where do they go . What are the consequences of that . Eventually, i think, your question about, about, you know, what are our concerns as far as Homeland Defense . I think from my per perspectivei have to, number one, kind of worry about reassuring our allies, that we have that well done. I also have a Homeland Defense requirement for gaum and for other states in that part of the world. I have a supporting role to ensure that Homeland Defense should, at some point in time, there be a nation that decides to attack the homeland with a Ballistic Missile that im positioned to be able to support my other commanders, northern command, Strategic Command to be able to infriewns that in a way that we control the outcome of it. Is it likely a u. S. Response given that north korea will likely launch a missile in the next few weeks . Well, you have to refer you to the state department or to osd on that. Thats not my lane to see what that response would be. Monitoring the situation closely . Very closely. Tharngs a thanks a lot. Closing comments, and well wrap up. Only that i appreciate all of you taking the time to do this. The asia pacific is a very complex region. I believe that if we work this right, that we can continue to provide a to have a productive, generally secure environment in the asia pacific that weve enjoyed for the last roughly about 5060 years that i think has given rise to a lot of Economic Growth, a lot of things that have been good for groabl economy, a growing, you know, humanity, growing humanity, and i think we have the opportunity to do that, and my job is to ensure thats the direction we head. Thank you. The Supreme Court look what happened in 2008 by a majority of 63, and say thats precedent, and indiana had a free voter id. Talk about the facts. The society on the indiana case, it was constitutional for them to establish id. They did not say that all of those states who have subsequently correct, they talked indiana. Let me finish. No, no. You misrepresented what i said. No, i didnt. The Supreme Court is the law of the land. When i hear these accusations that black people, voter id laws, you know, disportionally affect minorities because it it implies to me that somehow we have something missing in our brain, lesser than, you know, to me, is white americans get ids to vote and go through all the processes to follow the laws, what are you telling black people . That somehow, they are not good enough . They are lesser than . Thats what bothers me a about a lot of the rhetoric coming from democrats and the left that we always have to make special, you know, there has to be a specialness when we deal with minorities because they are too feebleminded. We have to make concessions for them because they cant follow the rules like everybody else, and when you treat people like victims, then i dont they they want to aspire. More with the editor and plibber of conservativeblackchick. Com, crystal wright, sunday night at 8 on cspans q a. The staff had to make the plan for the invasion of japan without considering the atomic bomb. It was estimated that the land would cost 700,000 and 250,000 of our youngsters to be killed, and 500,000 of them to be maimed for life. As Harry Trumans grandson, somebody in the middle of this, i have to i choose to honor both, both the sacrifice and the sacrifice of the american servicemen fighting their way through the pacific, and of a little girl like sadako who died as a result of the bombing. Unimaginable what that must have been like to be close to that, to the center where that fire ball originate the in the blast strongest. Follow the journey sunday on cspans 3 American History tv. The president s eldest ground son in washington to talk about meetings with bomb survivors and the inspare ration of the trip at 9 p. M. Eastern. Theres 750 billion of waste in health care annually. Bruce brussard recently spoke to the city club of cleveland about health care, insurance, and medicare. This is an hour. Good afternoon, welcome to the city club of cleveland. Im president of the city clubs burped of directors. Im delighted to introduce to you the president and effective january 1, ceo, of humana inc, a phenomenonture 100 health care and Health Insurance provider and administrator serving over 11 million customers in the United States. Over the recent election, at the center of the policy debate with implications beyond the Health Care Industry impacting the largest fiscal pom aand larger concerns. Fortunate to have with us him here to share insights on the industry and the developing policy. Prior to joining humana in 2011, he was an executive, and before that, u. S. Oncology, large producers and providers of Health Care Products to to Major Health Care institutions. With that background, he brings to the podium today a Broad Perspective on Health Care Issues facing the country. He holds the undergraduate degree from texas a m, and mba from university of houston. We are looking forward to your comments today on this very important topic. Thanks for being here. [applause] thank you. [applause] thank you.  [applause] thank you, everyone. [applause] well, thank you. I really appreciate the opportunity to address each one of you. As we talked today, our nation is actually wrestling with one of the largest issues, probably in a long time. Thats our debt, and the large amount of debt that the United States is facing today. I will outline the challenge we face. I will also show you transforming health care in the ways we can solve this debt issue. Ill demonstrate approaches in the Delivery System and how its already achieving results outside of the federal government. Ill describe how health care can harness simplicity to have stability as we undergo transformation. First, i want to take a moment and talk about ohio. And cleveland. How they are addressing some of the large issues here locally. Particularly, the recently announce the demonstration of integrating care coverage. They are individuals to be covered by medicare and medicaid. I dont know if you know this, but duel eligible population represents 20 of the medicare population today, but 31 of the cost. We are excited to be a part of the program under a strategic partnership. A company in dayton called care source, serving beneficiaries in cleveland, akron, and youngstown. Our partnership with care source pairs our chronic ability and also managing complicated conditions, and their experience of being the leader in receiverring underprivileged people in health care for the last 23 years. It is this type of partnership designed to integrate care and simplify the Health Care Experience for elderly and disabled individuals that well be talking about in a few minutes. We have a strong commitment to ohio as it is one of the sixth largest states with a medicare population. Our commitment to this is to improve the health and lifelong well being of our members through a comprehensive program of preventative care, care coordination, croppic and chronic conditions. The company wide dedication to experience and customer service. In another way we are demonstrating commitment to health care and well being is the work to help people that are their lifestyle and lead a more active life. We know the roots of the countrys problem in health care is unHealthy Lifestyles of most americans. At humana, we battle the issue with a great many fronts. Two of the most excite of of them are here in cleveland. We joined forces with the metropolitan Housing Authority to build a new multigenerational playground, just a few minutes east of here. 150 volunteers from humana and the community teamed up to build a place where kids, adults, and senior can play. The town home, done since 2011, but built across the country to be planned in the coming years. Im proud to tell you we are one of the planned sponsors of the National Senior games that will actually take place here in cleveland in july 2007, in july of 2012. The games are inspirational and a perfect example of health and well being among seniors. As a business leader, being part of this for many years, encourage you to get involved in the game at least make the point to visit as a spectator. Right now, the work we do, the work we do, but theres a cloud having over it. That cloud is our National Debt crisis. As you likely know, the u. S. National debt stands at more than 11 trillion and could double in one decade. In addition if you add the money the government owes, is owed by oh owes from trust funds, our debt exceeds 16 trillion. Placing that in cop text is increasing by the minute by 2 million. Humana strongly believes that if we do not address our debt issues, our nations economy suffers, slower growth, and fiscal crisis. We have to come together to fix it, with a need of comprehensive bipartisan plan that addresses revenue, including progrowth tax reform, spending, and entitlements. They are involved in the Organization Called campaign to fix the debt founded by bowles and simpson, led by thought leaders on both sides of congress. We believe the campaign makes a difference in pushing congress smartly and responsibly to enhance a comprehensive deal. I encourage you to lead and get involved and fixthedebt. Org, and if you want information afterwards, id love to talk to you about it. In the meantime, we recognize health care plays a significant role. Controlling Health Care Costs is linked directly to the fiscal security. We spend 16 of the gdp in the u. S. On health care. For this, we have lower life expectancy, higher infant mortality than any developed country. We are much more obese. We overuse medical Services Much more. U. S. Has 26. 6mris for every 1 million patient population. That compares to 6. 8 units for developed countries. Chronic illness is rapidly increasing, 735 of the Health Care Dollars today is spent on chronic conditions of which many are preventable. The cost of care varies humanly and rationally from hospital to hospital and doctor to doctor. Worst of all, waste and fraud, a duplication of medical Services Cost the nation 750 billion a year. You also wonder about the impact of the 2010 Affordable Care act. Also known as health care reform. Many major provisions are scheduled to take effect in 2014, just more than a year from now. The act demonstrates projects designed to improve the Delivery System, opens access to coverage and projects to cover million more individuals. Still, it does little to address the major problem in health care, and thats costs that are rising, and they are too high. In reality, they are unsustainablely rising too fast. Clearly, something must be down to stabilize the program, like medicare, but also to address stainability across the entire Health Care System. The private sectors already playing a key role in leading and changing our reforms, but i want to talk about it today is the way to simplify health care as a means to reach a sustainable level. If you look at health care from a point of view of the average person, the system is unbelievably complex and fragmented. Health care decisions move, involve many choices and overwhelming amounts of information. Health care bills and statements are king in the complexity. Even finding the right specialist or facility can be fought with guess work and uncertainty. We must simp fie our approach to health care, attack rising costs, and other issues for the ordinary americans to understand and act upon. In order to create Sustainable Health care Delivery Systems. A simple, comprehensive view of a fragmented system is a key to creating stainability. As health insurers, we are one of the only ones that have such a view. Our old role was to provide app oversight to the customer through carriers through actual science and claims management. Our new role is to create an integrated delivery model driven by primary care providers that use and share data at the point of care, to improve expwrowt comes, outcomes, lower cost, and create a better Health Care Experience. At humana, our model integrates delivery, data support for clinicians, pharmaceuticals, and wellness and productivity platforms. In many ways, our model is an evolution with its roots prevalent 2030 years ago. Todays simplicity is the key. We believe in integrated model that emphasizes primary care that can provide outcomes or the cost of care, and, especially to patients with critical or complex medical needs including the patients in the medicare and medicaid programs. The con cement relies on primary care physicians to coordinate care for patients helping them navigate the Health Care System so they can receive the right care, the right place, at the right time. Like Many Organizations and industries, technology plays such an Important Role in enabling this to happen. We are investing in today, Data Analytics capabilities that identify caps in care, and sport physicians and parties with accelerated information. One example of that is the program used of a sophisticated algorithm to identify individuals before Critical Health events occur. In a month, the program identifies more than 400,000 members and intervention and produces over 800,000 messages called care alert. Conversion rates for the interactions are at 34 , being a member, got the message, took the action, and the gap in care was closed. Leading to Higher Quality and lower costs. Our vision includes technology that enables practice management, practices that use different Electronic Health records to Exchange Information and talk to each other. This allows physicians to share patient information in realtime that can further reduce the gap in care. We also support Health Plan Members with array of services and programs designed to maintain health and address chronic conditions. We start with personalized feedback. Members through a health assessment, a biometric screening. This feeds into humana vitality, a personalizedded Health Portal rewarding the member for following a customized exercise, diet, and lifestyle plan. Essentially, were borrowing from other industries to create an experience like the frequent flier program. Identify individuals before the critical events occur. Humana care blends onsite and telephonic support. Humana care develops individuals selfcare, goals support, behaviors through proven techniques, including inhome visits designed to help seniors age with grace. When people connect with humana cares, good things happen. Hospitalization is reduced 33 . Emergency room visits decrease 13s, and readmission rates decreased by 26 . Humana cares is a window to help people achieve life are long wellbeing, but wellbeing is centeredded on physical health but its much more. Also embraces financial and personal security. Social and community belongings, and vocational purpose. And producing lower costs, better quality, Better Outcomes and better member experience. Our most extensive experience for this model comes from the medicare population. Seniors and disabled individuals. Unlike original medicare, which mightily writes the checks for services and provide sends in the bill, Medicare Advantage incorporates integrated systems of care like in humanas model. Empirical evidence shows humanay plan delivers Higher Quality of care than lower cost than the original medicare. A higher percentage of humana Care Advantage Members Receive Services at a difference of 7. 3 from the original medicare. Advantage members receive care for nearly 15 less than the cost of comparable care, the original medicare, with no reduction in quality. The state retirement system switched to the advantage plan and saved 31 million a year in their first year. Results like this does not have and only happens because of close coordination, cooperation, and collaboration between the various participants in our fragmentes healthcare Delivery System. Theres strong provider component and a commitment to sustainable Delivery Systems. Doctors and hospitals. Absolutely must commit to practicing evidencebased medicine. They also need to wire themselfs into a comprehensive Electronic Network that provides other providers their patients. And while the News Coverage focuses on healthcare reform, the private sector, including privateers and payer, is accelerating the adoption of a Delivery System that already makes a difference. In summary, out of control healthcare cos are cost are the problem. The solution is integrated care that combines data, technology, and customerfriendly and healthy programs. The results will be better quality, better outcome, lower cost, and better healthcare experience. Thank you. I think we can open it up for questions. [applause] we are honored today to welcome bruce broussard, president of lieu manna ink. Please formulate your questions now and remember to be brief and to the point. We welcome all of you here and those listening to 90. 3wcpn inside stream, wclv, wtam, one of the many radio stations across the country. Our Television Broadcast partner is wbicpbs idea stream, Television Broadcasts of the city club are made possible by Cleveland State university and pnc. Our live can becast is supported by the university of akron, closed captioning is made possible by nordstrom corporation. Next friday, december 7, the city club welcomes aaron david miller, Vice President of new initiatives and distinguished scholar at the Woodrow Wilson International Center for scholars. Friday, december 14th. The city club will host an roman, president and ceo of the National Association to end homelessness. Please visit our web site, ski club. Org, for information about our Upcoming Forum or to listen to a podcast of any of our past programs. Well like to welcome guests from human in humana care, and mutual. Thank you for your support. We would like to welcome to todays programs students who are joining us from area high school. Student participation is made possible by a generous gift from the chars sparr trust. Will the students please stand and be recognize it. [applause] now we would like to return to our speaker for our traditional city club question and answer period. We welcome questions from everyone, including guests, holding the microphone today is Program Directer kerry miller, may we have our first question, please. Mr. Broussard, you talked about the complexities facing the average american patient, the american medical system, certainly are complex. With the new insurance exchanges coming in the next year or so that will certainly not make it more complex. My question is, i notice from the Program Notes today that humana played a part in the drafting of the Affordable Care act. My question is, why didnt humana and the others who were playing a part in that, try to copy the system that was very simple in canada and other parts of europe and having a single pair single payer take care of all medical expenses. Good question. Could be here quite some time tenancy it. Quite some time to answer it. Our Vantage Point on the system that works in canada is still expense simple canada is also does not have the care level that is here in the United States from the standpoint of technology, and even in the european countries, especially the uk, they have a onepayer system, but what happened is that onepayer system has caused long lines, health care is delayed getting to people, and the end result, the private sector that actually is formed. We as an organization are a big believer that the integration of care into a more a simpler modll its under one roof or enabled in a society that can access care at single point and then be able to use it across the platform as a whole. Were not a big believer in a governmental sponsored only plan because it does not encourage innovation and does not encourage competitive aspects, and we think the competitive aspects will only make us better going forward. Bruce, question slightly off the topic. Being a texas a m guy, what do you think of Johnny Manziel ask do you think can win the heisman . I have to tell you, the school is making me proud. The year i have been associated with texas a m, ive never seen a Better Football Team and i think he will win. A little off topic. Mr. Broussard, i want to comment and give you some background first. I am a humana Medicare Advantage subscriber through my wifes retirement. And generally very satisfied with the program, particularly enjoy the silver sneakers relationship to encourage exercise, and i was pleased you mentioned the senior games here in cleveland next year, 2013. I will be participating in the swimming. Good for you. Because already qualified because you have qualifier the year before. My questions are multiple, but let me first of all Medicare Advantage plans got a fair amount of criticism during the discussions of the Affordable Care act as being more expensive and not performing at the level they should have, essentially. I know you maintain yours are doing well. Id like to know the Broad Spectrum on the question more than what just humana is doing, but are all of them doing well, and the other piece that goes with that is, there was a lot of talk about this saving of money from medicare to help fund the Affordable Care act, and part of that i thought was to reduce Medicare Advantage plan. How is that going to affect thing . And the third part of the question is, is there significant broadbased data to show that change in lifestyle has changed healthcare costs curve downward, not just yours you give a lot of percentages. Im really looking at the total population. Okay. Well, you might have to help me out with those. My memory is bad. I can do one or two questions. When you get to three, its also more complex. Let me try. Youre exactly right. The one complaint with Medicare Advantage early on was that it was costing the federal government more than traditional medicare, and it was real in not around the effectiveness the plan. It was really around the rates they were paying. And so they were paying above the medicare rate at the outset. And really why they did that in the early part of the decade was around stimulating and getting that going and what happens in relation to your second question, around the savings that is coming from Medicare Advantage, now theyre beginning to move the rates to medicare fee for service rate, which are coming down and theyre using that to fund other resources within the Medicare Advantage program. And in fact in some of the regions because it is regional based how theyre adjusting those rates now theyre actually below medicare rates. So we have regions we now offer services in that there are 95 of medicare. But whats interesting about h this gets back to the question about the sing arepayer system. It motivates us as an organization to be more innovative in ensuring people are healthier and being treated better, because Medicare Advantage, we get paid a fixed payment. And at the beginning of our relationship with relationships with those like yourself, we have a seven to ten year relationship with you so we want you to be healthy, in the right areas, because if you are healthy, we do better. 0 so our interests are aligned. So as we see this, we become more innovative. As our rates come down, we become more innovative how to be more effective to us thats really the picture of the future of health care. When you sea Medicare Advantage, that might not be called Medicare Advantage, but the components being paid for quality, being paid for managing the care, and being able to help individuals both navigate the system, be healthier, and at the same time continue to find the right place at the right time to be treated. The last question was around healthy behavior. What youre doing, being active im assuming your eating rightup look very healthy is the right thing to do. Not only from a health point of view i did see you sneak that cookie in but i didnt want to say anything. [laughter] but its not only healthy from a standpoint of prolonging some kind of chronic condition. Just to give you a statistic, we have 600,000 debris diabetics and usually they usually have two to three chronic conditions. So one condition then leads to another condition which leads to another condition. Living a Healthy Lifestyle helps prevent that from happening. What we also noticed is living a Healthy Lifestyle helps the brain. Helps people be more engaged longer and live a life much broader than just being healthier, so you see our dream lifelong wellbeing is not just the physical health but the enemy health, and we have studies that demonstrate that the ability to have an effect on care is directly related to your lifestyle in that regard, and i think diabetes is a great example of that and one of the most expensive diseases we face today outside of cancer as a result of bad habits and eating. Some of the he it his hereditary. But a lot about what we do to our body. You talked about the unneeded use of medical care. Do you believe thats due 0 a flew or problem in the Healthcare System, and if so, please explain. Insightful question. Yes, it is a flaw. Theres two aspects of the healthcare Delivery System that have gotten to us where we are as a society today. One is its fragments nature. So amps only caring about their own silo and that creates a Consumer Experience that is difficult. The second half is we way for mat we do. So, an individual that owns a imaging device gets paid for everytime they turn that imaging device on. And so what that does, it encourages more and more use as opposed to the outcome. And the outcome is a healthier person. And so what needs to happen and what is transpiring in the private sector is moving payment not what you do but the effect you have head on health. And when i talk about medicare were not motivated to do more mris, were motivated to get him to help effectively. So the flaw in the system is were paying for they call it piecemeal, individual services as opposed to paying for the outcome as a whole. You mentioned silos and how were viewing everything in fragments. How about a silo of the young people . The Affordable Care act, do you think theres an understanding among that generation of all the implications for them, including costs . No. I really dont. And there will be a the Affordable Care act will raise the cost of insurance for younger people. No ifs, ands, or buts, and the rope for that is theres an aspect called community rating, and insurers have to take everybody no matter if youre sick or healthy. Theres also an aspect within the bill that you only can charge so much the difference between the lowest charge for an individual and the charge for an individual. What thats going to cause Healthy People are going their costs go up and the unHealthy People are going to stay the same or go down a little bit. And in addition, what you have is you have a lot of up unHealthy People that were uninsured coming back into the market places. So these influences are going to cause the rates to go up in that regard, and the healthier, younger people are going to pay more. Theres no ifs, ands 0, are buts about it. I think one of the most compelling points of your discussion today was your reliance on primary care physicians. Unfortunately the stats that i read say that we dont have enough now, and theres even fewer in the pipeline. So what is humana going to do about that . Well, i do first, we would love for the federal government and industry to help stimulate more individuals to come into the primary care profession. Thats one. And we have activities going on in that context. More important russian similar to other industries, how do we get them more productive . How do we help them in their daytoday activities to gain more productivity . And theres multiple ways we are working to do that. First is technology. I talked about our ability to proactively use data to identify events before they occur. That helps in being able to stop reactive medicine and more Proactive Medicine in that aspect of that. I also talk about our humana care where we have close to 5,000 people that go to the home for chronic condition. That takes the pressure off the primary care individual for having to deal with that. Whether its reactive or proactive. And then the third area is continuing to advance the physician assistant area, and being able to leverage nurses and allow nurses to continue to grow in their profession, to be able to be an ally to the physicians, where now the physicians can delegate to the nurses in that regard. So technology, continuing to encourage people go into into the profession and a change in the way we deliver health care as a whole. We are fully aware, and we will have a primary care shortage as time progresses unless we do something in those areas. Thank you. I have a question on parts d of medicare. The drug. Its my understanding that the government is not allowed to negotiate drug prices. Is that correct . That is correct. Okay. Say that i have two drugs that i take, one is on form tumor ularry drug the other is on anthem. So i have two drugs and only one is allowable by one Healthcare Provider and the other. Could you address that . Let me try to address it at different levels. Relative to negotiating by the federal government, its the negotiation of the federal government to the pharmaceutical companies, so today there is actually a restriction of the federal government cant use the purchasing power to negotiate a bulk purchase to the pharmaceutical companies. Its really not to us as human newscast. Its the farm sought cal aspects of that. So when you your next question ll come back to that. What happened in mart d and actually president clinton referred to this in his speech at the Democratic Convention is actually bringing the cost of the pharmaceuticals down. What its doing is similar to what i wag talking about relative to capitalistic competition. We did a joint venture just a few years ago with walmart. And we introduced a 15 a month drug plan. 15 a month. And the city thought we were crazy to do this, but what we did is we worked with walmarts purchasing power, walmart Distribution Capabilities capabd management and our ability to Bring Solutions to our members. And brought our product out. This his brought down the price of part d significantly. This year united came off witness a 15 plan and doing it with target and cvs and thats bringing competition to the market place. Youre right, maybe you cant take the anthem plan and the humana plan at the time of purchase and use those individually but the thing about Medicare Advantage or part d, you can walk next year, and your ability to walk from one plan to another man, motivates me to deliver an experience as best i can and at a price that is the most Cost Effective fashion, and that motivates our leaders in our organization to be innovative to be able to bring joint ventures like walmart out. Another great example with walmart, we just brought out a plan on healthy food, and were actually if you go into william and youre a uhandin member and you you have your discount card, you get a discount on buying healthy food, and it is sponsored by human newscast. This gets bang to our belief that we want to take care of your health as opposed to worrying about the procedures being applied. We want to get you healthier and when youre in chronic conditions, we want to find a way to get you back to a lifestyle that will allow you to be productive. Over here. I like your idea of personal responsibility, and you mentioned at the beginning of your talk about fixing the budget. Aside from all of us being willing to pay more taxes or having to pay more taxes, and staying in shape, what do you i would like you to expand on the idea of what individuals can do to be personally responsible to fix the debt . Well, theres a shortterm aspect and theres a longterm aspect in the short term, you know, were going to have to fix it because we have postponed this so long and its going to be a blend of taxes and entitlement changes. So the individual today is probably thats the best thing we can do, but i believe we have to speak our voice, because if we dont, this is going to come and fall down on us as a country and have worse consequences. But in the long run, for us to be effective, we have to get control over the entitlement prom. That doesnt mean we take entitlements away from people. We make it much more productive. And our goals an organization is to take our that responsibility on by lowering the health costs the cost of health care through innovative ways that doesnt push risk from one organization to another, which is what Insurance Companies did. Its to take it on and bring programs like healthy food, and part d, where were able to offer 15, offer humana care and other things, begin to effect the cost of care. As i mentioned in the health care today, which is our vocation, i know what of so it ill speak to that. Theres 750 billion of waste a year. Can you imagine what 750 billion if we were able to put that back into the system . Would do for our budget in to me, those are the things that were looking to the federal government to incentivize people to take responsibility, and thats where humana is leading and being able to deal with the Healthcare System for that. So, individually, speak your mind. Thats the best i can do. Long term, its going to impact the productive of our entire program. The Affordable Care act has some features in it like Accountable Care organizations and health homes, which are designed, i think to address the same things youre talking about. Can you talk about how those work and how they fit with the things humana is doing . There is a some programs that i mixed brief d mentioned briefly about the demonstration aspects, and in the federal government identifies the problem of fragmentation, and the fee for Service Aspect of being the problem child of our health care Delivery System. So, how do we take that on in a very, very fragmented industry . And through integrated care, where they pay somebody a fixed payment and that individual takes the responsibility for someones health care. That sounds very familiar to Medicare Advantage. And so when we look at Medicare Advantage and you look at humanas capabilities of being able to manage across the system, and being able to help individuals navigate that journey of a fragmented industry, its Medicare Advantage. Thats where we are big believers in items like medical homes and so on in that aspect, and we believe that if the industry would get behind it, it will help in the cost of health care, and wrangle that 750 billion out of the industry as a whole. But theres a lot of coordination that needs to be required there. And theres a lot of egos that have to be put down to decide who is at the front of the bus driverring and who is on the bus rising, and thats where you start to see the political issues that take place in some Hospital Systems or hospital system, physician to fission, in being able to bring that along. So were big proopponents of the idea of acos and we want to enable that happening. Where the challenge will be ills the political local affairs that happen and how do they get off the ground in that aspect of that. Today we think the Medicare Advantage program is a great example of that. We think as time progresses well continue to take those skills and help other organizations be able to do that. Were doing that today. In fact we have a number of relationships and local markets were actually facilitating with some of the backbone we have as an organization. Good afternoon. When youre talking about 750 billion of waste in the system, are you including medicare waste . Yes. You are. How much of that is medicare . Well, medicare is 4050 of the health care expense so i will just extrapolate from that. But i will tell you, probably theres a lot more waste in medicare than commercial because the policing is harder. 40 of the 750 billion minimum. Minimum. So what is being done about that . And what should be done and has your vast organization proposed anything to be done to eliminate waste in medicare . If you dont tackle that, you could talk forever about the other aspects of waste. Well, other few things there. I thing in general the waste is coming from duplicated services, coming from fraud and inefficiency relative to where the individual is being serviced. So one of the reason why were 15 below medicare, is our program lets talk about humana care as an example. Our objective is to continue to keep people at home in an environment that they feel most comfortable with as opposed to an institution. So, we measure in our organization readmission rates. We reduced 26 readmission rates. The goal there is to continue to encourage people to stay home and be able to take care of them at home. That helps that waste in that regard. The able to not have duplicated diagnostic services are an example of that. And someone overlooking the whole individual has that observation as opposed to the silos. Back to the medicare for a second. Where is that waste and what have you seen as an organization the waste being and how would you suggest that be tackled . Okay. The waste is across the platform. I mean, i think if you this week there was an aural in the New York Times around fraud. Fraud and some of the activities going on in that area. So fraud is a component of that. But for us as an organization, the largest waste is the lack of integrated care. And we what that means is duplication of services and where people are in the wrong aspect of that. Youre shaking your head so must mott be answering your question. [inaudible] thank you for a talk which demonstrates one of the things that i find very encouraging about this Affordable Care act that were now beginning to embrace, and it is exactly the tremendous focus on how it plays out in the market place, and humana is setting itself up as a model player in a complex game that involves lots of bargaining, lots of incentives, rewarding behavior you want. But i am struck, looking back on the last election and the discussion of obamacare, that it seemed to get a bad rap as a quoteunquote government takeover, and it really was conceived of as almost the opposite, an effort to make the private market place function better, with better rules, and i would like to hear from you, if you agree that it is in fact a market are centered effort and is not a government takeover. I think that the higher where the dollars are going to be spend i mentioned a little bit about the insurance side. It is going to have a cost increase from an Insurance Point of view. More people will be covered. A great aspect of it. But its going to cost the american individual more dollars because the risk profile is changing. Nower probably not be as active in the individual Exchange Market as others will be, but you will see an increase in that regard. I think the reason why i say that is that has not come out in the healthcare reform debate, and the knowledgeable people in the back room are raising that, but we are a big believer in 2014 for individuals that are nonmedicare, theyre going to see their rate goes up, no ifs, ands, or butss about it. The reform help is in the demonstration area and you dont see a lot of that coming out today but they really encourage electronic connectivity through bringing the Electronic Medical record to the provider, and they encourage a holeisic view of the individual around these things called the Accountable Care organization and medical homes and those things. We think longterm those will have an impact. Might not be called Accountable Care organizations but theyre in the right zip code. So when you look at it from the taxpayer point of view in the short run, theyre more looking at what is it going to effect from a cost point of view and the dollars being pushed around in the industry. Longterm i think there will be a lot of benefits from it, from the electronic point of view and a structural change point of view, because were going to a lot. So theres a shortterm view and a longterm view. A lot of people are focused on the shortterm aspect and the funding required for that. I would like you to comment on the exchanges that seem to be somewhat controversial. I believe our government has said not now, and would that lead to a federal Exchange Program in ohio . What is humanas approach exchanges . Do you prefer federal run or state run . We do believe in the medicaid system closer to the population, i. E. The state is probably a better way to do it. I think thats the most appropriate way to give care, localized in that aspect of it. Causes more complications for vets like myself because now i have 50 customers as opposed to one customer, but we think its better for the care model point of view. Health care is local, and its not a National Business and cant be exporter or anything. Its a local business. Our perspective on changes is we have a exchange of walk before you run and thats what your governor has that perspective on, is to learn a little bit before you jump in with everything getting wet here. And the reason being is because so many moving parts are happening here. I mentioned a little bit about the pricing model is changing abuse you have this ratio that you have to stay within. In addition, youre going to bring a lot of people on that traditionally have not been insured, and you dont know what their Health Conditions are and dont know what that means to the cost of care in that aspect and you dont know where that goes. I think we have the philosophy of, lets take baby stepped before we jump into it. I think thats what your governor has done. One issue we have not addressed today is the delicate issue of the disproportionate spending on health care in the last days and weeks of ones life, and given the dubious night of outcomes at that point, what is human nas nation this area . I might have bread or cookies thrown at me. I come out of the cancer business. I was a ceo and chairman of a board of one of the largest Cancer Companies in the United States, and end of life was a very, very activity part of our organization as a result of that. And what i learned, in many, many dialogues with physicians that were part of our organization, is the end of life is best spent in a time of nontreatment. Its a time its a tough decision because people dont want to give up that hope and promise, and doctors arent paid to give up. Or theyre not trained to give up and that discussion is a very hard discussion to have in that aspect of it, but it is something that i think will never come from to society in a policy, but i think over time, having hospice be part of the treatment plan is an important part of that in our organization, we never encourage that because that is really the right of the physician and the right of the Family Member in that regard. But we do offer services, social workers and other means through our humana cares relationship that allows us to deal with those tough issues in aned indicated way and resources to help. Thats where we look at our responsibility as, to help them navigate that decision. Thats a personal decision and a hard decision, and let that decision be on the Family Members and the provider. We are believers that hospice, especially in circumstances, that its not promising, is the right way to deal with it. So you take it from a cost discussion to a quality of life discussion, when and when you make that quality of life discussion and make the decision, the cost decision will bear out. If i understand your point, it is that integrated care is what is going to lead to the efficiencies to eliminate waste and to bring down the cost of the entire Healthcare System. Just answered the question he was trying to ask me. The devil is in the details. Who is going to be making these decisions as to whether care is provided or not . We all remember, it wasnt so long ago, that thanks to our Insurance Companies, we had to go to a primary care doctor to get permission to go to a specialist. If the primary care doctor isnt is this primary care doctor . The Insurance Company . Who maks the financial decision . Thats really what is going to drive the whole thing. Great question. Ill give you our perspective, and our perspective is that the physician is at the center of health care. And we believe that the physician, along with the relationship with the individual, is where that decision is made. We dont believe its the hospital. We dont believe its the payer. We dont believe anything like that. We believe its the physician that makes that decision with the individual. We do have a bias to primary care, because we believe that primary care sees the overall aspects of it and consulting with specialists and having specialists by their side, but we believe that primary care has a much more holistic view of the care model than just the specialist in that regard. But specialist are very, very important part of the healthcare Delivery System, but used in an appropriate fashion. We do also believe that the skin in the game by the individual, especially on the commercial side, is an important part. If you think about health care today, it is the individual paying the bill, the individual providing the service and the individual that is receiving the service are three different groups of people. And they have three different, really, interests in mind at some point, and theyre not always aligned. Our belief is alining those interests together, having empowerment by individuals in their financial artist pacing participation in and it having the physician more incentivized around quality and cost, not just around doing the individual units of work in that regard. So we look at it, primary care as an important part, and really being one of the leads in the care model, with a partnership with specialist, but the primary care is the center part. We believe pairs payers should be in the background north the foreground, and a closer connection between quality and cost and reimbursement. [applause] today at the city club of cleveland we have been listening to a friday forum, featuring bruce broussard, the president of humana, inc. Thank you, mr. Broussard. Thank you, ladies and gentlemen, this for you. Is now adjourned. [bell ringing] [inaudible conversations] on tomorrows washington journal, u. S. News and world report business correspondentent rick newman on the november jobs report and a discussion about Public Health in america with National Institute of allergy director. Washington journal begins live each morning, 7 00 a. M. Eastern on cspan. We have had these explosions of knowledge in medicine but we have not coordinated care, and all these services we have end up having so many cracks that the cracks are as harmful as the diseases that were treating, and you got to step back and ask, are we hurting people overall . On a global level, what are we doing sometimes . And of course, now weve got these reports saying, 30 of everything we do may not be necessary in healthcare . When we step back 30 of all the medications we prescribe, the tests we order, the procedures, this is something i think which is for the first time really being called out as a problem. Dysfunction in the u. S. Health care name. By unaccountable on cspan 2. Writer institute. I think a Writers Institute is very important within the culture. We are a culture of words, of voices, words are key to our imagination, our capacity to envision things. We ourselves are not completely tied to print on the page types of writing, but i think that theres no other art form so readily accessible, other than perhaps film, which we work with, too. But it is something there is something in literature that just captures the human spirit. This weekend, join booktv, American History tv, and cspans local content vehicles as we look behind the scenes at the history and literary life of new yorks capitol city, albany, saturday at noon eastern on booktv on cspan2, and sunday at 5 00 p. M. On American History tv on cspan3. The House Transportation Committee held a hearing on highspeed rail focusing on a project under construction in california and the Obama Administrations highspeed rail program. Transportation secretary ray la hood testifies about the 10 billion already spent with the goal of providing 80 of americans with access to highspeed rail within 25 years. This is just over three hours. Good morning. Like to call this hearing to order. Today is another one of our hearings and focused on Passenger Rail in the United States, and this is an oversight hearing, which we conduct at the full committee level. Pleased to welcome everyone to this hearing, and this opportunity to review the progress of highspeed rail in particular today, and the title of the hearing is, an update on the highspeed rail and inner city Passenger Rail program, mistakes made and Lessons Learned is the title. The order of business is were going to hear members Opening Statements from the committee. Then our first panel will actually be two members who well welcome and hear their commentary, both of them from kaz, from california, leaders in the congress, were pleased to welcome. And then well have the secretary in i believe one panel and another panel to follow. Thats the order of business. Again, welcome. Ill start with my opening statement. And will yield, and continue. Again, as i said, and introductory comments, that we have been trying to conduct some oversight of Passenger Rail service. We focused in the past hearing on amtrak and its organization, and reorganization attempts. I think dating back to 2005 and most recently. The purpose of these hearings is not to micromanage. Sometimes people say, i get a little bit into the weeds, but to impact hopefully influence policy which were responsible for legislation that accounts for important responsibility under our transportation portfolio. That is making certain that the United States is in the business of business regarding rail and conducting that activity for passengers and freight in a responsible manner. At this committees level we have responsibility over amtrak, our significant and really only passenger and franchised operator in the United States so we focus quite bit on that agency. And as you know, for 40 years or more, we have subsidized that operation for more than a billion dollars a year, and we are also faced with the subsidizing highspeed rail and that has been a 10 billion investment that has been made by this administration, and also by the congress. American recovery stimulus dollars, 8 billion, and then several billion added by congress. Thats no insignificant figure. Again, when were dealing with multitrillion dollar deficits, we do have a responsibility as a congress and a committee to see that the money is wisely spent, and even if its stimulus money, that the money is spent. One of the questions ill pose today to the secretary and to others that are before us, is to date only, i believe, 7 of the 10 billion has actually been expended to date. Stop and think about that. Were supposed to be adding jobs. The stimulus was supposed to be creating economic opportunities. But 7 of the stimulus dollars s and the total 10 billion has been spent to date. I might also preface my remarks by saying i consider myself one of the strongest advocates in fact i have been quoted as saying the biggest cheerleader for transportation and for Passenger Rail and for highspeed rail in the country, and i still heap to cling to that title. My efforts as chair is actually to move the positive program forward. When we did the preact, the first Rail Passenger reauthorization in 11 years, and worked with the other side of the aisle in moving that important legislation forward. It sets the framework that were now operating under, and well be looking at reauthorization in the next congress. So, at it very important. Let me just say that, whether were building a highspeed rail, inner city Passenger Rail, transit services, any kind of infrastructure, highways, you want want to build a fourlane highway where there are no passengers or vehicles to access it. You want want to build a city Transit System where you dont have adequate capacity or people passengers to use that facility. The same thing holds true with highspeed rail and inner city Passenger Service. Greatly concerned about the direction of this whole effort. I was excited when i heard president obama and his administration beginning wanting to promote highspeed rail. Unfortunately most of the money, the 10 billion, does not go for highspeed rail. They chose instead to support almost 150 projects and the number is growing, and a lot of that money has been left behind. In fact, most of the money that has been rededicated to highspeed rail has been sent back by states, including my state, the state of florida. We had a bait and switch propoise sal for highspeed rail. The actual speed what 84milesanhour. 84 miles and took one hour to transit the distance of the proposed lincoln central florida. And that is not highspeed. Highspeed is at least and by our definition, 110 milesperhour average. That doesnt mean the train gets up to 110, 150. 160 miles for some stretch. Were talking about the average speed. Theres also a bait and switch in ohio. We were looking at 39 miles to 58 miles an hour. That money was wisely turned back. There was a similar proposal in wisconsin. That money was turned back. And unfortunately, the beginning of the whole highspeed effort in eUnited States has been somewhat of a setback for highspeed rail. The only route that has a possibility of being high speed is california. We have two california members were going to hear from. Well go into details about californias progress. But having visited out there, it does only service about 100mile stretch, and mostly in a rural area without the transportation interconnection wes need, and intermodal system. Were sending serving the major population centers. Im concerned about plans to connect i always say lax los angeles and the sfo, San Francisco bay area, which iralso troubling reports we have on that. So, our intention today is really to try to work in a positive fashion to make certain that true highspeed rail occurs in the United States. I make some noh secret. I tell people in my country and around the country, our Number One School in be as you may know amtrak owns and the Government People own, have an interest in the 600 mimes of track between washington, dc, our Nations Capital, philadelphia, new york city, boston, the most congested corridor in the United States of america, and that it is the only 600mile wes really own. We own smaller stretches, all the rest of Amtrak Service is run over more than 20,000 miles of private freight rail and i see some of the freight rail anymore audience anyway have concerns, too, about using insome of their corridors and not having dedicated the highspeed corridors we need to address that issue as we move forward. A final point is the northeast corridor is where i think we should be putting the focus, some dollars, give the Administration Credit for at least taking the money that has been turned back, dedicating some the northeast corridor, but were doing that in a piecemeal halfbaked fashion. The northeast corridor, every state, every major area, can benefit by bringing highspeed rail to the northeast corridor. 70 of our air traffic delays emanate from the northeast corridor. Even when we have next Generation Air Traffic Control and move planes faster and closer together, with the doubling of the air traffic, with the all of the other restrictions we have in that corridor, you must have highspeed rail to serve that area and it has the connections to also service one of the most congest corridors in the United States of america. So, next week, our hearing, final hearing, will be a hearing that well hold on the northeast corridor. Our very first hearing on a snowy day in january when i became chairman was on Grand Central station in new york city, and well conclude our final hearing at this session dealing with progress or lack of progress in the northeast corridor next week in our hearing that will focus specifically on the northeast corridor. So, with those comments, again, as a strong supporter, because of energy and environment, because of congestion, still remain dedicated to moving positive inner city Passenger Rail and particularly highspeed service as the United States is falling further behind and must lead the pack instead of being behind the pack. With those quick comments, let me go the patient Ranking Member who is so nice to me yesterday. I have to be very nice today. Thank you, mr. Chairman. Ive disappointed i know never going to hang there. Nothing can move don young from the center. Nothing. Takes five people to move. Thats right. So, thank you mr. Chairman. Mr. Chairman, ive been involved in the issue of high and higher speed rail since early on in my career, in the 90s, al swift on the appropriations committee, designated the first proposed five highspeed rail routes in america and one of them was from eugene, oregon to vancouver, british columbia, and we will hear a bit later from Paula Hammond this secretary of transportation in my state, who will describe our progress, or lack thereof, small amount of progress in achieving those goals. But were plugging away at it. This is not an easy thing. Rightofway issues are very problematic. The conflicts between freight and Passenger Rail. We need to invest time and effort in helping to work those things through. But die i do believe the American People want high and higher speed rail. California is trying something unique in terms of the new rightofway. Theyre seeing difficulties about that has the promise of true highspeed rail, which can pretty much only come with new and dedicated rightofway which is problematic and expensive. But i still believe that theres a tremendous market for this, and if done right, it will be something that future generations of americans will look back on and say they cant believe there was a day when we were wimping around with what were limping wound with now, an underfend funded amtrak, undercapitalized amtrak, and were not putting in the investments we need to help people movie efficiently from pointtopoint by higher speed rail. I just point to the spanish example as probably most analogous to ours. 20 years ago theyd that had a system that was crappyer than here, and they built a segment to the coast, and everybody said, we want that, too, and now they go they have a system that moves people very long distances, very quickly, and has changed real estate markets, businesses. It has been a tremendous boost. They have problems with the economy but this has been major changes, and you can find that in places like california with extraordinarily high priced real estate in the urban centers but with highspeed rail people could live even further out than die than they do now. I want to thank you. We took United States through 9 11 and very difficult times together. Dont mention tsa please. I was her virtue that is my child. You hoped in the conception. [inaudible] [laughter] all right. Were going to have a life that one because weve got mr. Denham from california. Mr. Behm come you recognize. To take the opportunity to make a quick statement. Talk and a highspeed drill in changes to do so new to talk about. This is something i supported in the state senate windows at 33 billion project going to the Ballot Initiative to bar 9. 95 billion. Rumor had a decent Credit Rating as a state. Since then, our Credit Rating has been downgraded. Its gone through the roof in the planet once had has no plan. I went for 33 billion to 90. 5 billion with no private investors to pay for it, with no funding coming from the federal government to pay for unable to float upon the voters pass. Lets put it back on the ballot so that we can in the project once and for all. I think theres a lot of things that i can california and a new shiny treatment he wanted them. It would be fun to have. The question is coming to have to ask yourself, can we afford to have something fun . Can we do it with no plan . That questions will continue to spend robert is the 90. 5 billion come from and its been reduced to 60 billion, where these new readership numbers coming from but have no justification. Lastly, i want something that shows we have a budget done on time, not over several decades. One of the things promised not only to me as a member of the Central Valley, but to the entire state was this is going to be done and be prepared order that is going to stay off of our allegory and, better states number one industry. If we continue to start iraq industry, will continue to lose our number one industry. With data yield back. I thank the gentleman. On the gentlelady, ms. Richardson from california, you recognize. Thank you, mr. Maker. I cant compare to the show to refer to mr. Defazio, but maybe ill be a good cousin for you today. Thank you on the chairman and Ranking Member defazio he was here earlier. Fa to acknowledge mr. On. I traveled with mr. Denham and mr. Mica to look at this issue. Although we may not agree on the ultimate thoughts of your event this project, i think youve been very conscientious and what to do with space for the Central Valley. We will work to provide shoot with a plan. Thats a part of the secretary being here and others is that we can get the ball rolling and get it done. Today we are here to discuss the highspeed and intercity Passenger Rail opportunities. I also want to acknowledge secretary rao said. Probably more than any secretary in congress to consistently come patiently to answer a question and make sure we are well informed so they can do our work and we thank you for that, as there. As a member of the rose said Committee Cochair of the california jesus will caucus and they share the bicameral highspeed rail caucus, development and implementation of the highspeed rail system is one of my highest priorities. Right now china is operated and 13 highspeed railways and has more than 20 under construction. By 2020, this network will cover nearly 10,000 miles. When i looked at the title of the initial hearing about what mistakes been made, it seems to me one of the one mistakes is their lack of continued commitment to highspeed rail inadequate dollars to features system in the United States. Not only are we not investing in alternatives to have it sounds, but we spend it on bandaids for infrastructure rather than investing any time choose system. Our president has taken bold steps in the secretary has carried that flatly says. We must provide them support to provide additional dollar certainly needed as mr. Denham reference to get this project going. When you consider the amount of money spent on gasoline, aging infrastructure and all the changes, certainly highspeed rail must be at the forefront here when you consider the Federal Reserve bank of San Francisco restaurants at the infrastructure investments, its good thing for the buck in the since fiscal multipliers increase for each dollar are significant and should be done. When you consider california as mr. Denham mentioned as the ninth highest gdp in the world, first in the United States and represents 12 of the countrys population, certainly when others before us, generation consider trying going last, we should be hesitating in his disdain upon only one labeling of the opportunities are there in california. Some portions of her landscape that makes a sure highspeed rail possibility similar to france and china and our chairman here included to that. The recent gao preliminary assessment of californias cost estimates show California Highspeed Rail Authority has secured 11. 5 billion from federal and state forces and still needs a shortfall of 57 billion to move forward. To put this investment into the 1950s, Congress Took old action to invest in its infrastructure and create a system. The system to be five years to build and after several editions a total length. The cost of construction has been estimated at over 425 billion in todays dollars that were making that same decision. Cert and we shouldnt afford at this time. Urban mobility report by Texas Transportation Institute found the cost of the slow speed but we currently have on long delays and endless congestion can dniester cost the United States over 100 billion annually. Now its time to make the investment for alternatives to congested highways and simultaneously create jobs. The intercity Passenger Rail service is one of those alternatives that many speed trumps long delay that faces our nation major interstate today. The northeast corridor and california has federal system should be treated as the first step to developing nations highspeed rail network, not an ending point. I want to think are witnesses witnesses before us today and i look forward to your testimony about the support issue. I yield back. Thank you so much. Ms. Norton. Mr. Chairman, i dont know if this is just one now, thats next week. If so, i would not be surprised if there is some highspeed rail. It will be i may save a little time. Thatll never go away. Its been a pleasure to work with you on that matter. I do know about california and other places where highspeed rail may be controversial, but i do know where we are furthest along. I want to do is get started so we have a pilot to show we can do this. Those who created the American River system with considerable help from the United States government during the civil war. Private and public alike, public officials, denying me the tip to government money and ran with it would be turning over in their graves to see how far behind we are developed and developing countries on highspeed rail. The fact we cannot say a single example of real highspeed rail in the United States should be in for me as a matter of personal embarrassment as an american citizen. In a district where we have the hub of amtrak, amtrak has already created a master plan for redesigning the nation in order to accommodate highspeed rail. Its already dealing with the infrastructure and of course in the northeast corridor is where we have already the fastest trains. I dont want to engage in a competition with the rest of the country. I understand why the stimulus package trying to catch up with countries around the world funded the highspeed rail at various parts of the country. I note that its an easy milestone. Its not going to hook up the entire country on highspeed rail pages saying on your on your mark, here we go. I dont would be able to avoid prioritizing where the money goes, piloting that because weve not done that. Im not convinced we know how to do it because we havent done it. To avoid making mistakes throughout the country, having no model to study, i hope we will restart where we have heard he started on northeast corridor. Somebody else in the southeastern california or anywhere in the United States that they can do it faster and their model is ready, i will concede to them. Just lets get started. Thank you, mr. Chairman. I think the gentlelady. I also think her for 15 years. We talked about having Union Station is a true intermodal center. We used to have our people come to the greyhound station to three plot, drag their luggage to Union Station. We used to go around town to take a bus with satellite location. Ms. Norton was with me and in 15 minutes we got it done, dedicated, came up for that jury in a very heated election. They thank you for your leadership. Not the secretary come but the deputy secretary was instrumental in making Nations Capital headteacher intermodal center. I think both of you. Ms. Edwards. Thank you, mr. Chairman. I want to thank all of our Witnesses Today and particularly thank secretary lahood. I understand its your birthday. I dont think i wouldve chosen to spend my birthday with you, but im glad youve chosen to spend your birthday with us. Particularly to the chairman for holding this hearing and discussion today about highspeed rail. We had a chance to begin a half ago to go up to new york and less amtrak, but it just took forever. I do share your view and that of ms. Norton that we have a really densely populated corridor in the north east that requires her best development of highspeed rail. I dont think that has to be, nor should it be at the exclusion of development of highspeed rail and other quarters of the country. When i think about a trip that i took many years ago with my son from paris to the dirt on your region in france going from a densely populated urban area to a rural and mountainous region and highspeed railways and excluded the mayor. So i think the same can be true of areas around the central coast. I think it is true in other areas of the country. For us to be competitive, i think its absolutely necessary. We know of course we dont have to sing a phrase here, but we know the investment in highspeed rail in that infrastructure will pay off in thousands and thousands of jobs and will payoff in terms of making us more competitive. If a worker going from boston to washington d. C. Can have so many more options for work or employment, our employees can have so many more options if their employees can make it a day commute. And so, we need to get started. Theres been so much discussion on this committee with the stimulus package. I really have to question why it is that members of congress are so headstrong against highspeed rail in some corridors when it was their state legislature that one of the highspeed rail dollars and yet they reject the bad. I have to say in maryland we were particular beneficiaries when florida went through its own rejection phase. Im grateful for that. I dont think it is particularly. And so i look forward to a discussion today about how we can get off the don. Sometimes these great resistance to change that requires somebody to punch through its vision. Im sure and i know this is true that over a period of time when the interstate highway system is being developed, their attorneys have said no, we dont want the highway. Who doesnt want a highway now . Thereve been other occasions, even with their own metrorail here in this region. I can think of communities i represent now who said i dont want that show coming to her district. It will keep people out. Guess what . There baking for metro now. I was making for much of this morning when i spent an hour and have committed 8. 6 miles. We have a need to get from one place to another to do her business and can dr. Work. I share the deal as many in our freight rail industry. We could be so much more efficient if we werent sharing tracks and sharing infrastructure with our Passenger Rail system. So lets get this right, mr. Chairman. But spend the money we need to spend an lets consider that an investment and a payoff, maybe not for us, but for a couple generations in the future. With that i yield. I think gentlelady. Thank you, mr. Chairman. Im going to make a few comments. Im from indiana and will probably never get highspeed rail. In my observation recently with the ongoing nsa project to my district, trying to get a highway bill from evansville to indianapolis they see the same steppingstones that highspeed rail has. I think some of the discussion has revolved around the pediments of the money that are stopping these projects. The reality is there are environmental issues, ongoing lawsuits for years, sometimes decades. These rightofway issues, ongoing lawsuits, sometimes for decades. They cost people so much money that the question i have a should the federal government continue to funnel money to projects that are going to take two decades, three decades of for not going to address some of the drivers of the ongoing cost. Interstate 69, a little different than building a highspeed rail, but it is her nutrigrain. Its not an existing rightofway. We started thinking about this project in the late 1960s. I would argue how the interstate highway system if they felt that today we couldnt build it. I think with my two years on this committee and been to a number of hearings about highspeed rail, im in favor of it. In a lot of areas that make sense. But we do need to address some of these issues. Thank you. I yield back. Any other member state recognition . First Witnesses Panel for their perseverance. They get first choice speaking. I would ask unanimous consent that members on the committee, others if they choose to be permitted to sit with the committee at todays hearing, off her testimony and ask questions about objections to order. Youre welcome to join us afterwards. Shell be a dm at the pecking order of questions. Youve endured very well so far. But that we want to welcome our two colleagues, mr. Mccarthy, mr. Inside. Thank you for joining us. Welcome and you recognize. Thank you, mr. Chairman. I want to thank you for your credit to americas infrastructure in tenure as chairman. He did a very good job and we appreciate the commitment. Mr. Secretary, happy birthday. You have to do share that someone special to me, my wife. I will see her later today. And to mr. Inside, thank you for joining us. I listen to other comments today and i cant disagree with your comment, but the one thing we all have to look to, especially in a time of why we are here, none of you who claim to be here. We are here debating a fiscal cliff. Were here debating direction of america, we were going to go financially. Very responsible ability as members of congress. We are the stewards of public funding. Its rightfully have this hearing again and i vitiated. In december when i came, at least a couple issues. We want to invest in infrastructure. One america to move quickly in the best ways possible. What you want from you also need a plan for her. If the networks, a planned test it, its an audited in a plan that has a review. I happen to come from california. The happiness in the area and many of you talk about. Its part of where it began. I have ruled out of viability, cost and with them and come in this will ever that is why i joined the chairman, mr. Denham, mr. Miller at the gao, asking for an audit and review of the Business Plan in california. A look forward to hearing testimony later through corporatists completed. Today it has been billions of dollars. As concerns about the Business Plan itself an equally concerning to me just because weve invested money coming does that mean we have to invest more . The current plan to be finished in the smallest ever asked for another 38 billion of the federal government. Please put that in perspective. We arrest a number for the rest of the month under fiscal cliff. If you resell the dollar symbol the taxes has proposed, youll make it 31 billion a year and they are requesting more than the kids for that. So we need to be stewards. Yes, we want movement. Guess he wants to work rate. Before we make investment again, shouldnt be review the business . Secondly, its an issue that mr. Denham raised. This is put before the california voters. Guess it looks different today. As a california voter think youd have go back because thats not what was proposed. It said there would be private funding. There is no proposed private funding as of today. Theres no money in to question whether it will be in the future. So, does the federal government know that for the rest of the plan, which the voters asked for consent would come. If what the biggest funders of this, why would we not wait to what they said they would do . That is a question we all have to ask. Thirdly, when you read the Business Plan and you live in my area, the number schist doughnut up. The millions of people they predict will ride the train for my area are nowhere near the population that will do it. Theres roughly 750 within the Central Valley that currently take a train, or an airplane to reach in which theyre going to observe. So is your investment going to pay up for you making an investment or you can have to continue to invest and subsidize the writers on the train themselves . California first but this issue up when we had a surplus. Many people really think of when you surplus you want to do a lot of different things. That is not the same for california is today and definitely not with the federal government is today. Our stewardship has to analyze the Business Plan, analyze the numbers can also put on the table may be at the cut our losses. Maybe say that were not going to fund more say they should pay down the deficit. I know hollywood happens to be in california. This is not a Kevin Costner movie. If we build it, i dont know if they will come. Thats not it with the taxpayers money. Its right at this hearingfrom the best way scrutinize. Before we move forward on anything, the legislative peer review at the same questions of the Business Plan. We should even ask more because it wasnt their money. Its the taxpayers money and were responsible for investing. I yield back. I thank the gentleman. Im pleased to recognize this hahn, generally from california. Thank you. Good morning, mr. Chairman, members of the committee. Thank you for allowing me to participate in this hearing today. Ive only been in congress about a year and a half, but my whole life ive been deeply involved in transportation issues, particularly in my capacity in the Los Angeles City council for 10 years. So my dad who was in l. A. County supervisor for 40 years in l. A. County took my brother and i to the world fair to the 1960, which was held in seattle. Many of you probably were born then. So there was this modern monorail project to ferry people around the world fair in the investors of the project at the time offered to build a monorail system is a Pilot Program in los angeles, traversing the harbor freeway. Dad thought it was a good idea but couldnt get any of the other city fathers are county fathers to agree that this is a good investment. Nobody at that time so if you ever get people out of their beloved cars. So that monorail now circles disneylands Magic Kingdom in anaheim consummately. But that is a reminder to me that the biggest mistake weve made so far is not helping major transportation projects that the public can use, well use it will get them out of their cars. In california i believe and i think the voters of proved that time and again that highspeed rail will reduce congestion, will create jobs and will modernize the entires tastes real system. It will reduce congestion, which is a key issue for california. Transportation congestion is strangling business potential of our state and weighed down Economic Committee that isnt as critical to success of california to the nation as a whole. If any of you have driven on the freeway between los angeles and san diego, it can take anywhere from two to four hours in traffic. Turning to aviation commanders delays as well. Between San Francisco and series takes only an hour. One out of every four flights between los angeles and San Francisco is a busy short hallmark United States are late or close to an hour or more. That doesnt even include the time noah takes with air travel and going through security. Our Transportation Network is already overburdened enough fun before you factor in the projected increase in travelers in california. In many cases theres no physical space to expand the freeway to take into account projected growth in travelers. They do not want to expand airports. Communities surrounding mobilizing. As the population of those who need to construct options that wont just continue the break open a new transportation future. I think highspeed rail is that option. Theres no doubt that highspeed rail is a job creator. At a minimum, construction project will create 20,000 jobs each year for five years. This is great for the state of california, which was certainly hit hard by the recession. At 20,000 is before you factor in the jobs the new system will ultimately generate. Third, the plan will modernize the states rail system. Tikriti blended system that would begin construction in highspeed rail while improving other rail systems around the state. This will allow the has to drill system to connect the inner city and regional rails system called the bookends. This activity funds for projects throughout california, including caltrans positive train control and Los Angeles Metrolink upgraded my part of the state. This road will get upgrades and swap out diesel engines for an electrified system cleaner and faster. Highspeed rail would not happen without federal government to port including legislation by congress to authorize the program. The United States will maintain our position of Economic Leadership we have to invest in the best infrastructure in the world. That will not be true if we do not invest in highspeed rail. We cannot wait until heavyset cutely congested. Airports cannot stand anymore to start thinking another longdistance Transportation Options. We did catch up to germany, france and japan. Just heard this morning cioppino celebrating the 50th anniversary of their bullet train. We cannot allow china to surpass us in our next generation of infrastructure. Tourists across the world will visit our highspeed rail to marvel at our civic engineering and technological prowess. This is not just at a Transportation Company changing the revitalization along the cities along the route. In conclusion, it is clear support the highspeed rail california. The federal program will help make it possible. What we need now is fishing. But we need now is leadership. What we need now is believed that the people of california in this country want us to invest in this type of transportation option. Thank you, mr. Chairman. I yield back. I think most of the members for joining us. Welcome to join us if you think kiefer questions. Well excuse you at this time as we bring secretary of the hood of who is witness. Our second panelist is the secretary of transportation, former member of this panel from a distinguished secretary of transportation. Appreciate his cooperation efforts and also delighted to have him here on anniversary of his birth. Welcome, secretary lahood. Your recognize. Mr. Chairman, let me begin by congratulating you on a Job Well Done as chair of this committee. I served when making your shuster who is the chair and i heard all of tim oberstars lectures as you have a very long period of time. He accomplish in a short period of time as chair of the committee is extraordinary. A transportation bellemont as long as either one of us wanted, but its a good bill. An faa bill is a good bill. We couldnt do the work we do at the department of transportation at the leadership of this committee and your chairmanship over the last time that weve been together. So youve done a lot and you have a lot to be proud to. We havent agreed on everything, but weve agreed on most things because we agree how important transportation is for america. I want to offer my words of congratulations to you i may also want to say a word as a former staffer of 17 years around here. Jim kunz and his team really did a good job on both bills and a lot of other things and i know jim is moving onto bigger and better things, but to office staff to work on this committee, youre the ones that do the work and we appreciate all of you also. So to the chairman in the Ranking Member, im delighted to be here. President about ms. Highspeed intercity Passenger Rail Program Consumer Transportation Options to millions of americans as we invest in our rail creating jobs. Supporting Economic Growth across the country. Highspeed rail and higher performing Passenger Rail are critical to americas future. By 2015, our country will be home to 100 million more people. Right now a highway somewhere nice i dont have to tell any of you that for many of the communities you come from. This condition will only grow with time. We connected a four phase a transportation crisis later. Investing real is a priority for president upon the and this administration. Most importantly as a priority for the American People. Since 2009, we have received 500 applications. In your statement, mr. Chairman, you acknowledge two or three governors who turned down the money. During this period of time, we have received 500 applications. For the money turned up from florida, 2. 3 billion. We at 10 billion worth of requests for that money. The idea that people dont want Passenger Rail, they do. We have the statistics, but we the people to tell us this. So lets look at the progress weve made as a result of this administrations investment, the nations first highspeed rail set to break ground this year. 220 miles powertrain system will carry travelers from los angeles and San Francisco in less than three hours, more than twice the size. California will have highspeed, to highspeed trains. Weve introduced that are now expanding 110 Miles Per Hour service and as you indicate, mr. Chairman, the law says that highspeed train. In october i wrote on a train for a short stretch as a result of investments made in illinois, chicago, st. Louis corridor and i saw the progress myself. Wilson recently visited a plant in rochelle, illinois that is building 130 real cars and about 250 jobs in the process. These are crispian ordered from california and other places. These are american jobs. American workers building americas train set. Thats what this is about. This rochelle plant did not exist before president obama initiated a highspeed rail program. When i was there that day, i notably spoke to 250 employees. Theyre talking about building another facility there as a result of the vision that this administration has for Passenger Rail. This is about jobs. Not just the future. These jobs exist today as a result of our investment. More than 40 stations are treated across the country, strengthening connections between regions at revitalizing local economy. We are leading a comprehensive planning effort to determine the northeast corridors next generation of service. In a short amount of time, weve developed a sophisticated Credit Management process for one of the largest discretionary infrastructure programs in the country. Rather than a onesizefitsall approach, we are targeting Service Improvements for the specific needs of the premarket. For those of you who think we have it moved fast enough, four years ago there was no highspeed rail vision. Four years ago we had not invested 10 billion. If we had moved too fast and the money had spent or allocated properly, id be sitting here and your questions about that. We had to reach agreements with freight rail cup needs in america. I hope youre going to hear from ed hamberger that we work cooperatively with every freight rail. We worked with time and we hammered out agreements. We didnt get everything we wanted. So the idea that this is taking too long, we are talking for years four years in agreements with every freight rail in america to use their free system, to use their infrastructure because we dont have enough money to build all the tracks. We need our friends and freight rail. So the idea that its taking too long it took 50 years to build the interstate system in the beginning, not every governor wanted a road running through their state. What do we have today . Because of the vision of eisenhower, because of the vision of a congress that said every year were going to invest in highways, we have a stateoftheart interstate system. So we are obligated 100 of our recovery act money, 99 of our total program funding. As a result, 152 projects are now moving forward in 32 states in four years. Not fast enough for sun, but done the right way by the book. We have 1. 7 billion in Construction Projects now underway completed in 17 states. In four years. Not fast enough for some, but pretty darned good and done the right way by the pope. We have another 1. 5 million in job creating projects. Youre already seeing projects coming on time time and on budget. We recently completed a project in vermont that upgrade of 190 miles of track for both passenger and freight rail. In india for stored Passenger Rail service into town for the First Time Since 1959 and in the process for millions of dollars of private set your investment. In the northeast weve invested more than 3 billion for projects. For those of you who think we havent invested enough in the northeast, with invested 3 billion. Thats almost as much as weve invested in california. And more than weve invested anyplace else in the country except california. What weve done is set at infrastructure, eliminate bottlenecks only the foundation to highspeed rail. For instance come investments will ensure by 2016 the segment between haven and hartford will be completely doublecheck providing commuters more frequent reliable train service. In pennsylvania we made improvements on the philadelphia harrisburg keystone corridor that will allow trains to travel hires these. As much as weve accomplished, the reality is weve only started to meet the enormous pent up demand for Passenger Rail. Over the last eight years, younger americans have been driving us all while choosing Passenger Rail and Public Transportation. We are doing for the next generation of previous generations did for us. We have an obligation to do what other generations do. The other generations but the interstate system. What are we going to do . I have nine grandchildren. What are we going to do for the next generation . The nextgeneration of transportation is highspeed rail and were on track to accomplishing it. We are not going to stop. Were not going to be dissuaded. We will have highspeed rail in america. We are on our way. The president has a vision. Many of you have a vision. Its going to happen. Thank you, mr. Chairman. Im happy to answer questions. We will get right into questions. Mr. Chairman, could i just also insert but that objection your entire statement. And the letter you have indicated will be made part of the record with that of fiction so ordered. Thank you. A couple of concerns we have, first of all i mentioned before that out of 10 billion, 8 billion with stimulus and another several billion appropriated by congress for rail. Only 7 has actually been spent. Youve indicated a great deal, almost all of it obligated. Can you provide the committee but the timeframe of the payout as youve asked for additional investment. Ms. Richardson talking about the more money income and with difficulty getting money out. It could be n. to 700 million in Congress Took back some of the money appropriated. Shovel ready as the president s conduct has been somewhat of a national joke because everything takes so long. Theyre trying to get the expediting of the process. We did some of that in the math 21 bill and certainly we need to have a fiery and other agencies responsible for getting that money out. Could you provide us with an some expenditures sonographic description . All do that for the record if that okay. Would be great. I dont mind investing the money if we know how its being spent. But to come and ask for more, we havent been able to spend it. Any recommendations for speeding up the process . Some of the things we do with fra are totally mindless when you can rent freight trains and all kinds of traffic and amtrak and on the service they want and we spend years doing these studies to see if we can run additional Passenger Service to me mr. Chairman, i think you will did good work. Some of that was compromised to get it through. Particularly in rail, get people out of their cars, energy for the environment, weve got to be on the spend money. 7 is enough to. 5 years after stimulus only had 67 billion in infrastructure money for 35 of that money was still sitting in washington. I know youre working to get that out. We have to change the law in some of the policy that were in charge of in order to make things truly shovel ready. There were some concerns expressed by the Government Accountability report on the selection of these products in march of 2011. Specifically report said there were concerns about transparency and other issues with the selection process. It couldnt verify some of the criteria, which some of these projects for select date. Can you cite any improvements in that process . You recited the number of projects and also criticized by gao for the process. We Pay Attention to what the gao said i would try to improve our decisionmaking process. Weve tried to use the governors as our partners on these projects. Receiving proposals from them and the states and the d. O. T. s been working with them. They paid attention to what the gao said and tried to improve our process for selecting projects. The other most recent report by the Inspector General was released just weeks ago, september 11, 2012. It said the race concerned about fras stakeholder agreement process. Would you like to comment regarding their criticism . The comment i would make is when this program started as part of the Stimulus Program which you indicated 8 billion. Weve never had a highspeed rail program at sra were d. O. T. That we had to staff. Are we short of staff . Yes. Have we stopped up . Yes. Have we found people with expertise . We take seriously what the ig tollison try to make improvements. On the date this program started, there was no highspeed rail program or staff. We had to staff up for that. We do have only one highspeed rail project underway in the United States. In the northeast corridor we have a Long Term Plan in the last plan i saw an exit for to focus. It can be done in a third of the time, probably a third of the money included private Sector Partnership in systems and congestion quarters. But thats the subject essentially. Right now most of the commentary was on the one project we have that can achieve highspeed chosen between again to fear the rural destinations playing chick act into the major metropolitan area for San Francisco to los angeles and the south. It may be sure you in three years or so the total cost of 6 million. Can we get through part of it in the states, et cetera. The report we have from california is that the total project is going to be 6800 with the date of 2028. The latest plan, that raises questions of six or 8 billion. That would take a pretty substantial federal permit into the future to forget the next four years and we have money, 39 of the stimulus money is obligated to california projects. But the longerterm commitment to connecting those two major areas consumed a huge amount of money the current opposition from the burst of california. The other criticism i heard, looking at actually could save money even though thats an expensive figure. Theyre going to use current rightofway to San Francisco and los angeles, which is not a dedicated highspeed alignment. The future of federal support is estimated at 42 billion. How do you see that playing out . First of all, with a strong commitment from the governor has appointed new people to his Rail Authority. Governor brown is as committed as governor and the country to this project which obviously is very. We also have a committed assembling california but had to take a vote to sell the bottom. The house and senate in california voted for this project. Youll know they represent the people in california in the assembly, in sacramento. So at the very top leadership in california, we have people supporting this that we need to support it. We also have several companies talking with the governor and his staff in the highspeed Rail Authority about investing in california. We know this project cannot or will not be built with total federal dollars. We dont have enough money here to do that. We need private investment. Thats what im trying to lean towards this it appears there is a commitment. We party committed 39 of the 10 million, which be sufficient for the first leg. The first leg is the easy part of it because again it doesnt serve metropolitan areas. The expensive part and more difficult parties down the road and now well take a commitment from future congress, future state legislators and governor. Its not going to be a fully completed highspeed rail system in california till the estimate of 2028, missing 42 billion of federal money and 67 billion for the total projects. If there is some plan the administration has for part or in the future, wed also like to see that. Also, what about the issues raised about the nondedicated alignment, nondedicated highspeed alignment and current rightofways north and south . To your question of financing, ill repeat what i said. Theres lots of private investors working with the state of california, Governors Office and others about their ability to privately invest in this project. We know full well this project will not be fully funded by the federal government. California does that. With respect to the others, also do something for the record. A sound like youre open to having the private sector in that quarter and other quarters fully participate in financing construction and operation . Absolutely. Very good, pleased to hear that. The various countries that their operations. Were falling further behind and it may have told shoot even the russians have someone at the table between st. Petersburg and moscow. I was interested to find the European Union is now open and it will be in a couple years of all the Public Transportation operations for highspeed and other rail service to the private sector, which is something we should look at and actually italy has moved forward an expedited fashion open to private contract to now providing Computing Service to the public site are your so we can look at some things that may be successful in other countries in other countries. I have you on the record today with the financing operation. Im pleased to hear that. Let me yield to find a good thank you, mr. Chairman. I can only take my colleague, mr. Donald, at his word. He echoed the same today that one of the rope locks has been the lack of knowing the details. So the conversation you just went through with mr. Lahood, how soon could we expect to get an update on who these private companies are . How much are they willing to an as and how soon is the senate going to come together . I heard mr. Donovan say the same concern for a year now. When you anticipate to be prepared to work with you to present a package of how he might get the private investment quite look, im not going to speak for the governor, but what i am going to save this will be happy to provide to companies in california and in other states, why to make investments. How much theyre going to invest obviously hasnt been determined to that has to be determined through negotiations. We can certainly give you a report on companies that want to invest in california. Would you also express to the governor i dont think the chairman would object to that, that he would put together a report cannot say whether he wants to do through close section, because the committee some better sense of what we can anticipate of the real commitment to private sector quite thank you, sir. I next question he said the president has a vision of the best example of the vision is its actually pretty money up front to begin the process of highspeed rail. Mr. And says there is no planned. Can you help us to better understand what the specific tenets of the president for highspeed rail and in particular for california . The president s vision for the country is to connect 80 of the country over the next 25 years. We put the cost of that is about 500 billion. Ive submitted maps for the record. I can do it again. I have some maps here id be happy to submit for the record, which show what that is. We cant do this without governors. We need part 1. Were partners, both republican and democrat partners. Thats the way this is going to work