Congressional Dish

The post office is in trouble. Faced with an enormous debt and a legal obligation to serve every single American, the United States Postal Service needs Congress to make some changes in order to prevent service cuts and financial ruin. In this episode we analyze the plan currently moving through Congress. Please support Congressional Dish: to contribute using credit card, debit card, PayPal, or Bitcoin to support Congressional Dish for each episode via Patreon Mail Contributions to: 5753 Hwy 85 North #4576 Crestview, FL 32536 Thank you for supporting truly independent media! Bill Outline : Postal Service Reform Act of 2017 Title I: Postal Service Benefits Reform Postal employees will be the requirements for the USPS to pre-fund employee retirement health benefits. Title II: Postal Service Operations Reform a Board of Governors, which will have power over the Postmaster General and determine the strategic direction and pricing of the post office products. starting the day the bill is enacted. Businesses will get with all of them converted by September 30, 2023. will be able to convert voluntarily starting on October 1, 2018 and will have shared delivery points for up to 50 units each. We will be informed in writing if our homes have been selected by the end of March 2019 and . will automatically be converted to the centralized delivery Gives the Postal Regulatory Committee the post office to provide State and local government services the post office to reinstate half of the rate surcharge that was in effect in April 2016. Title III: Postal Service Personnel a Chief Innovation Officer position Title IV: Postal Contracting Reform the post office to issue non-competitive contracts, with notification requirements if they are over $250,000 Additional Reading Article: by Joe Davidson, The Washington Post, February 7, 2017. Article: by Mary Lou Byrd, The Washington Times, June 11, 2013. Article: by Josh Sanbum, TIME, February 7, 2013. References Document: Twitter: USPS: USPS: National Association of Letter Carriers: GovTrack: GovTrack: GovTrack: CBO: GovTrack: CBO: White House: Video Clips YouTube: YouTube: YouTube: YouTube: Sound Clip Sources Hearing: , House Oversight and Government Reform Committee, February 7, 2017. Watch on Witnesses Megan J Brennan: Postmaster General Robert Taub: Chairman of the Postal Regulatory Commission Lori Rectanus: Direction or Physical Infrastructure issues at the US Gov’t Accountability Office Arthur Sackler: Manager at the Coalition for a 21st Century Postal Service Fredric Rolando: President of the National Association of Letter Carriers 5:19 Rep. Jason Chaffetz: Last July I was proud to see our committee favorably report the bill by a voice vote. Unfortunately, it didn’t make it across the finish line before the end of the Congress, but we did make a lot of progress, particularly with getting the CBO—the Congressional Budget Office—to come in and score the bill. 6:10 Rep. Jason Chaffetz: In an era of partisan politics, this legislation represents a significant bipartisan compromise. The bill gives the Postal Service the freedom it needs to successfully meet the business realities the agency faces. To do this, the bill allows the Postal Service to fully integrate its healthcare plans with Medicare. With such integration, the Postal Service can virtually wipe out its 52-billion-dollar retiree healthcare unfunded liability. Further, the bill achieves real savings by moving to more-efficient mail delivery, saving the Postal Service more than $200 a year for each address that can be converted from the door-to-door delivery to centralized delivery. The bill also helps the agency more accurately evaluate its cost structure and reforms key governance matters. 8:10 Rep. Elijah Cummings: The other thing I thank you for, Mr. Chairman, is so often what happens is that when a lot of work has been done in one term, it’s just tossed away, and then you have to start all over again. But I thank you for picking up where we left off. 10:40 Rep. Elijah Cummings: The total volume of mail handled by the Postal Service has fallen by more than 25% since 2006, and continued declines are expected. The cost of the Postal Service’s operations have also risen, in part because the Postal Service is required to provide universal delivery service to every address in the United States. Every year, about 900,000 new addresses are created in this country; and a network of postal facilities, letter carriers, and workers must expand to deliver to every new address—900,000; that’s a lot. The Postal Service is burdened by a 2006 statutory requirement imposed by Congress to fully pre-fund its liabilities for retiree healthcare costs, a requirement that no other federal agency or private-sector company faces. These liabilities, combined with the Postal Service’s unfunded pension liabilities, currently total about $125 billion, which is almost double its annual revenues. Even as it fixed costs continued to grow, the exigent rate increase that had been approved to enable the Postal Service to recoup some of the losses incurred because of a 2008 recession’s permanent impact on mail volume expired. Since 2006 the Postal Service has implemented significant cost-saving measures, including reducing positions and work hours, and consolidating facilities and delivery routes. 14:08 Rep. Elijah Cummings: Taking all these requirements and trends together, the Postal Service reported a net loss of $5.3 billion for fiscal year 2016, which represents a 10th consecutive year of net losses. We have repeatedly discussed the deteriorating financial condition at the Postal Service in this committee, but the situation is now worsened by unprecedented lack of any Senate-confirmed members on the Postal Service’s Board of Governors. Because many key management decisions are reserved by statute to the Senate-confirmed board members, there are many actions, such as establishing rates, class, and fees for products, that the Postal Service simply cannot take now. The need for postal reform is as urgent as it ever was. Fortunately, we also may be closer than ever to enacting reform. We must press ahead—all of us. 18:50 Rep. Gerald Connolly: I want to commend Chairman Chaffetz and Ranking Member Cummings for their leadership in holding together this coalition—not easy—and it’s a bipartisan coalition that helped write this bill. And especially Chairman Chaffetz could have yielded to the temptation, in light of the circumstances of 2017, to start all over again, and he didn’t do that. We worked together, we held it together, and I want to thank all the stakeholders represented in this room and those not in this room for understanding we can’t let perfect be the enemy of the good. 24:25 Megan Brennan: The Postal Service is self-funded. We pay for our operations through the sale of postal products and services and do not receive tax revenues to support our business. Over the past decade, total mail volume declined by 28%. First-class mail, which makes the greatest contribution to covering the cost of our networks, declined by 36%. In response, we have streamlined our operations, restructured our networks, reduced the size of our workforce, and improved productivity. As a result of these efforts, we’ve achieved annual cost savings of approximately $14 billion. We also successfully stabilized marketing-mail revenues and grew our package business, which together drive e-commerce growth. However, given the constraints imposed by law, all of those actions cannot offset the negative impacts caused by the consistent decline in the use of first-class mail. The Postal Service is required to maintain an extensive network necessary to fulfill our universal service obligation to deliver the mail to every address six days a week, regardless of volume. The cost of the network continues to grow as approximately one million new delivery points are added each year. However, less volume, limited pricing flexibility, and increasing costs means that there is less revenue to pay for our growing delivery network and to fund other legally mandated costs. Since 2012 the Postal Service has been forced to default on $33.9 billion in mandated payments for retiree health benefits. Without these defaults, the deferral of critical capital investments, and aggressive management actions, we would not have been able to pay our employees and suppliers, or deliver the mail. Despite our achievements in growing revenue and improving operational efficiency, we cannot overcome systemic financial imbalances caused by business-model constraints. 26:40 Megan Brennan: We believe there is broad support for the core provisions of the bill you have introduced. By enacting this urgently needed legislation, which includes those provisions, the Postal Service can achieve an estimated $26 billion in combined cost reductions and new revenue over five years. Enactment of these provisions, favorable resolution of the Postal Regulatory Commission’s pricing-review system, and continued aggressive management actions will return the Postal Service to financial stability. Medicare integration is the cornerstone of your bill. The civilian federal government is not required to pre-fund retiree health benefits, but that obligation is imposed on the Postal Service. We are merely asking to be treated like any business that offers health benefits to its retirees and has to fund them. Full integration with Medicare is a universally accepted best practice in private sector. Requiring full Medicare integration for Postal Service retirees would essentially eliminate our unfunded liability for retiree health benefits. It is simply a matter of fairness to enable the Postal Service and our employees to fully utilize the benefits for which we have paid. We also strongly endorse the provision of the bill that would restore half of the exigent rate increase as a permanent part of our rate base. That provision will help us pay for the infrastructure necessary to fulfill our universal service obligation. 28:20 Megan Brennan: H.R. 756 is fiscally responsible and enables the Postal Service to invest in the future and to continue to provide affordable, reliable, and secure delivery service to every business and home in America. 30:30 Robert Taub: H.R. 756 is specifically designed to put the Postal Service on sound financial footing. 33:43 Lori Rectanus: The continued deterioration of the Postal Service’s financial condition is simply a truth that revenues are not keeping up with expenses, a trend since 2007. This means that over the last decade the Postal Service has had a net loss of over $60 billion. While much of this loss was in fact due to the nonpayment of retiree health pre-funding payments, the Postal Service still lost over $10 billion outside of this requirement and other requirements. The revenue-expense gap occurs because first-class mail, the most profitable mail, continues to decline and is now down to 1981 levels. The Postal Service has made significant efforts to grow revenue in other ways, such as with package services. In the meantime, however, expenses continue to grow, largely because of compensation and benefit payments for employees. This is due to salary increases, as well as a larger workforce, in the past several years to support the more labor-intensive package business. In fact, over the past three years, the workforce has actually increased by over 20,000 people, contrasting sharply with prior years when its size decreased greatly. 38:15 Arthur Sackler: We support this bill and urge its approval as promptly as possible. 41:26 Arthur Sackler: H.R. 756 provides an elegant solution to this profound financial problem, integrating postal annuitants into Medicare will save the Postal Service billions each year and follow the best practices of the private sector. Companies that offer health insurance to employees and retirees generally require them to join Medicare at age 65. 42:06 Arthur Sackler: The implications of this bleak financial situation are near existential for Postal Service in its current form, so we support H.R. 756 notwithstanding its one-time market-dominant postal rate increase of 2.15%. We accept this increase in this unique set of circumstances only as necessary to achieve this bill and stabilize the Postal Service. Congress has wisely delegated rate setting to the postal agencies, but with respect, the industry will be compelled to oppose any effort to regard this bill as a precedent for other legislated rate increases. The industry has long supported the self-sustaining postal system, funded entirely by postage. That remains the best course from our perspective. And that is the beauty of your bill. It vastly improves the Postal Service’s financial stability, keeps the Postal Service self-sustaining, and wards off any prospect of a taxpayer bailout, as you noted, Mr. Chairman. 44:25 Fredric Rolando: The bill has broad support across the mailing industry, including business and labor, and is based on best practices in the private sector. 45:30 Fredric Rolando: Over the past decade, postal employees have worked diligently to restructure operations, cut costs, and sharply increase productivity, in response to technological change and the Great Recession. Despite the loss of more than 200,000 jobs, we’ve managed to preserve our networks and to maintain our capacity to serve the nation. But only Congress can address our biggest financial challenge: the unique and unsustainable burden to pre-fund future retiree health benefits decades in advance. No other enterprise in the country faces such a burden, which was imposed by legislation in 2006. The expense of this mandate has accounted for nearly 90% of the Postal Service’s reported losses since 2007. Without a change in the law, the mandate will cost $6 billion this year alone. H.R. 756 would maximize the integration of Medicare and our federal health program for Medicare-eligible postal annuitants, most of whom have already voluntarily enrolled in Medicare Parts A and B. The proposal would also give us access to low-cost prescription drugs and other benefits provided to private-employer plans by the Medicare Modernization Act. The savings would help to reduce all of our premium costs and, therefore, pre-funding costs. This approach adopts a standard practice of large private companies that provide retiree health insurance. It would effectively resolve the pre-funding burden that undermines the health of the Postal Service while only raising Medicare spending by one-tenth of one percent over 10 years. H.R. 756 also addresses a revenue shortfall caused by the expiration of the 2013 exigent rate increase, authorized by the Postal Regulatory Commission, to help the Postal Service recover from the permanent decline in mail volume caused by the Great Recession. The compromise adopted by your leadership bill, effectively restoring half of the exigent increase, is a reasonable one. 48:00 Fredric Rolando: All four postal unions urge the committee to adopt this legislation. 52:06 Rep. Jason Chaffetz: What is your current cash on hand; and then once you give me that number, then why isn’t that used to pay some of the payments that were due? You’ve defaulted, I believe, on five payments. Megan Brennan: Yes, Mr. Chairman, we’ve defaulted for the past five years to the tune of $33.9 billion. Our current cash on hand is $8.2 billion. And a determination was made by the Temporary Emergency Committee, which consisted at the time of our lone independent governor, myself, and the deputy postmaster general, to default on that payment to ensure that we can serve sufficient cash, which for an organization of our size is arguable at best, but to reserve sufficient cash to ensure if there was any contingency that would occur in the near term, we could at least have some cushion. Chaffetz: I mean, you have more cash than some of the others who are in the mail industry, but where is that proper balance? Where’s… ? Brennan: When I think—that’s a concern, Mr. Chairman, because for an organization that has expenditures of more than $70 billion a year, we would submit that $8.2 billion is insufficient. That’s the concern for us. And, also, as noted by the Chairman, and we’ve discussed this, the fact that we have deferred on critical capital investments in the past five years to the tune of over $8.9 billion, that impacts our ability to compete and to generate additional revenues. Chaffetz: Tell us, if you can give me a perspective on your fleet management. There was a hearing I think Chairman Meadows chaired earlier about the fleet. We were concerned the Postal Service was going to come up with a very sizeable contract to… Explain to me, where you are in the fleet and your perspective on it. Brennan: Yes, Mr. Chairman. Well, we have one of the largest civilian fleets in the country, with over 212,000 vehicles travelling more than four million miles a day. The fleet, though, is at the end of its expected life, particularly our delivery vehicles that the average age is over 25 years, and the annual maintenance cost is over a billion dollars. So, we have an approach to look at the next-generation delivery vehicles, that currently we’re in the midst of a prototype-testing period where we’re working with six different suppliers to provide us with these vehicles that we will test over the course of the next 18 months. We also just—this week, actually—a request for proposal for a commercial off-the-shelf solution for right-hand-drive vehicles is expected. So, we’ve got a multi-prong approach looking at how to address the vehicle fleet. 58:35 Rep. Stephen Lynch: There are some concerns out there about the funding of that piece that will require postal employees to sign up for Medicare and that it is some type of giveaway. That’s what I’ve heard out there. Now, you and I know differently. But could you explain to me how much money the postal workers have contributed to Medicare but, in large part, have not participated in that? Could you describe that for me, please? Megan Brennan: Yes, Congressman. In our opinion, this is a question of fairness. We’re merely asking that we be treated like any other self-funded entity that provides retiree health benefits. As noted by a number of the panelists, it’s best practice in private sector. And that’s the ask from the Postal Service, and our employees and the Postal Service have paid more than $30 billion into the Medicare trust fund since the early ’80s. We’re just asking to receive the benefit for which employees have paid. 1:03:35 Rep. Blake Farenthold: You mentioned that part of your expenses is six-day delivery to everywhere. Is it worth looking at, at some point in the future, maybe not six days to everywhere for everything? I mean, to be competitive, maybe you do need six. And, actually, I think one of your competitor’s advantage is seven-day package delivery. Over Christmas, I got packages from Amazon that you guys brought on Sunday. Matter of fact, I got one a couple of weeks ago. Apparently you’re still doing it. So, is shrinking to a less-than-six-day delivery for non-packages a potential cost savings? Megan Brennan: Yeah, as you noted, we are delivering packages seven days in select locations, primarily major metropolitan areas. Farenthold: I’m happy Corpus Christi, Texas, is now a major metropolitan area. Brennan: I said primarily. And we are expanding that, because, certainly, we serve every home— Farenthold: Right. Brennan: —and every business, Congressman. To your point, and candidly, we’ve spent the better part of the past two years trying to build a coalition around core provisions of a bill likely to generate broad support. Farenthold: Right. Brennan: And that’s what we focused on. And, also, I would offer candidly, it’s been my experience that there’s no congressional consensus around moving to five-day delivery. Farenthold: Oh, I could tell you that for sure, as well. 1:06:02 Rep. Blake Farenthold: You talked about capital expenses, your biggest being vehicles. What are your big capital—just list off a couple of items that are your big capital items beyond vehicles. Megan Brennan: The information systems, our IT infrastructure, repair and alteration, facility modifications, additional capacity for package sortation. 1:17:56 Rep. Darrell Issa: Additionally, the United States Post Office, with the power of the government, if they chose to aggressively site in or near people’s homes cluster boxes that could safely hold packages, they would leapfrog in service capability what Amazon is trying to build at your corner gas station, wouldn’t they. And I guess I should take that to the postmaster general. Not, what are the problems, but if you did that, wouldn’t you, in fact, offer a service far better and far more distributed than that which Amazon is trying to build today in some parts of urban America? Megan Brennan: Congressman Issa, as you and I discussed, the Postal Service approach is all new, possible deliveries. As noted—excuse me—we add nearly a million a year. Based on the delivery characteristics, we either implement box on post at the end of your driveway or centralized delivery. And just looking at last year, where when we looked at the growth by mode, over 750,000 new deliveries were centralized. So, there's certainly an efficiency gain associated with that. 1:26:40 Rep. Jody Hice: One of the issues that came up specifically dealt with Amazon and a serious competitor that they are, and one of the areas of technology that they’ve excelled in, obviously, is drone delivery. Is there any looking into consideration of drone delivery with the Postal Service? Megan Brennan: Currently, our engineering group is researching, and we’re probably on the peripheral of this advanced technology, currently just learning. And I would say whether it’s drone exploration or any other type of new technology, Congressman, we need the capital monies to be able to invest. Hice: Well, I understand the need for capital monies to invest, but you are looking into the possibility? Brennan: We’re exploring and recognizing what’s happening in the industry. Right now, we’re not an early adopter, I would categorize that, but we’re certainly aware of what’s happening in that space. Hice: Okay, so, at the current time, then, the commitment is to continue with the vehicle delivery. Brennan: Correct. 1:45:15 Rep. Mark Meadows: The gentleman recognizes the gentleman with the stylish glasses, from Missouri, for five minutes. Rep. William Lacy Clay: And, Mr. Chair, I noticed that the ranking member took some of my time. Oh, no—they restarted. Very good. Meadows: The gentleman will recognize that the chairman is always fair with— Clay: All right. Meadows: —his time. Clay: The— Meadows: We’re glad the gentleman from Missouri could get out of bed to come to this hearing. 1:49:00 Megan Brennan: We just recently, Congressman, raised prices on our market dominant, within that strict price cap— Unknown Speaker: Yeah. Brennan: —of eight-tenths of a percent. We also have the 10-year price review before the Commission, currently. 1:51:23 Rep. Mark Meadows: Well, you said all four unions support this bill, with no changes. Is that correct? With no changes, you support this bill, all four unions. Fredric Rolando: Yeah, all four unions support this bill. I think we mentioned two tweaks in the written testimony that we thought would be helpful. Meadows: Yeah, and then, but if those two tweaks don’t get done, this is better than— Rolando: Totally support this bill coming out of committee. Absolutely. 2:07:14 Arthur Sackler: I think that with the establishment of so much trust and reliance on electronic media, there is little that can be done to reverse some of the outflow of mail. But if you add a huge increase on top of that, it’s going to accelerate it dramatically. That’s the worry of the industry. Rep. Glenn Grothman: Okay, you consider the 2.1% not a significant increase? Is that what you’re telling us? Sackler: It is significant, but it is one that, to put it colloquially, we’re all holding our noses and accepting in the spirit of compromise in order to get this bill done. Music Presented in This Episode Intro & Exit: by (found on by mevio) Cover Art Design by Missing Cat! Please help! One of our listeners in Boqueron, Puerto Rico is missing his furry friend. Please keep an eye out for him if you are in the area.

Air traffic controllers in the United States are a part of the Federal Aviation Administration (FAA) but Congress is seriously considering changing that. In this episode, we examine a plan being developed to transfer control of the nation’s air traffic to a new non-profit corporation. Also, with former FBI Directory Jim Comey’s testimony to Congress dominating the news cycle, we take a trip down memory lane to the Bush years when Jim Comey testified before Congress in one of the most riveting moments in Congressional hearing history. Please support Congressional Dish: to contribute using credit card, debit card, PayPal, or Bitcoin to support Congressional Dish for each episode via Patreon Mail Contributions to: 5753 Hwy 85 North #4576 Crestview, FL 32536 Thank you for supporting truly independent media! Additional Reading Article: by Aarian Marshall, Wired, June 6, 2017. Article: by Rob Mark, Flying Mag, May 25, 2017. Article: by Rob Mark, Flying Mag, March 16, 2017. Article: by John Bresnahan, Anna Palmer, and Jake Sherman, Politico, April 16, 2015. Article: by Tanita Gaither, Hawaii News Now, 2014. Article: by Robert Poole and Dorothy Robyn, Reason Foundation, November 3, 2003. References Boston University: Hartzell Prop: Office of Inspector General: NATCA: Reason Foundation: Reason Foundation: GovTrack: GovTrack: GovTrack: OpenSecrets: OpenSecrets: OpenSecrets: YouTube: Sound Clip Sources Hearing: , House Transportation and Infrastructure Committee, May 17, 2017. Watch on Witnesses The Honorable Calvin Scovel, III, Inspector General, U.S. Department of Transportation Joseph W. Brown, President, Hartzell Propeller, Inc. Mr. Robert W. Poole, Jr., Director of Transportation Policy, Reason Foundation Mr. Paul M. Rinaldi, President, National Air Traffic Controllers Assocation Ms. Dorothy Robyn, Independent Policy Analyst Timestamps & Transcripts 3:33 Chairman Bill Shuster: Today we’ll focus on the need for air traffic control reform, divesting the high-tech service, 24/7 service business, from government and shifting it to an independent not-for-profit entity. 4:20 Chairman Bill Shuster: Everyone should be reminded of what happens if we choose the status quo. It means our system will be subject to more budget constraints, sequestration, and threats of government shutdowns. Sequestration isn’t gone. In 2013 sequestration led to furloughs and reduced operations, controlled our hiring, and training suffered, and the FAA bureaucrats tried to shut down contract towers. Fiscal constraints continue to be tight, as so in the federal budget, and that’s not going to change anytime soon, and it may get worse. We continue to rely on the unstable, dysfunctional, annual appropriations cycle. We have had no stand-alone transportation appropriations bill since 2006, and over that time period, Congress has passed 42 continuing resolutions to keep government doors open. The FAA also relies on authorizing legislation, and it took Congress 23 short-term extensions over five years before it passed previous long-term FAA authorization bill. Under these conditions, the FAA bureaucracy has been trying to undertake a high-tech modernization of air traffic control system for over three decades. It’s not working, and it’s never going to work. 5:52 Chairman Bill Shuster: Some argue that the latest attempt to modernize NextGen is showing some signs of progress, but we all know any progress is incremental at best and only in locations where the FAA partnered with the private sector. And let’s remember the name NextGen was really just a rebranding of the FAA’s ongoing failed efforts to modernize the system. NextGen is just a marketing term, not an actual technology or innovation, but it sounds catchier so Congress will fund it year after year. But the bottom line is there should be far more progress by now. Money has never been the problem; Congress has provided more than $7.4 billion for NextGen since 2004. Results of the problem: according to the FAA’s own calculation, the return on the taxpayers’ 7.4 billion invested has only been about 2 billion in benefits. And we’ve still got a long way to go. According to the DOT inspector general in 2014, the projected initial cost for NextGen was $40 billion, but they’ve said it could double or triple and be delayed another decade. Over the years, the FAA has described NextGen as transformation of America’s air transportation network. They also said it will forever redefine how we manage the system. But in 2015 the National Research Council confirmed what was already becoming painfully clear. According to the NRC, the original version of NextGen is not what was being implemented. It is not broadly transformational and is not fundamental change in the way the FAA handles air traffic. Only in the federal government would such a dismal record be considered a success. 7:40 Chairman Bill Shuster: Some have proposed targeting reforms to fix the FAA’s problems, but that’s an approach we’ve already tried many, many times, starting in the 1980s. Since 1995, Congress has passed various reforms to allow the FAA to run more like a business. Procurement reform in 1995 for the FAA to develop a more flexible acquisition-management system. Additional reforms in 1995 exempt the FAA from most federal personnel rules and allow the FAA to be able to implement more flexible rules for hiring, training, compensating, and assigning personnel. Procurement reforms in 1996 developed a cost accounting system. Additional personnel reforms in 1996 allowed FAA to negotiate pay. Organizational reforms in 2000 to establish a COO position, additional forms to allow greater pay so the FAA could recruit good candidates, particularly for a COO position. Additional reform in 2000 by the executive order to create the Air Traffic Organization. Organizational reforms in 2003 to establish the Joint Planning and Development Office to better coordinate NextGen. Reforms in 2012 to establish a chief NextGen officer. Property management reforms in 2012 to allow a better process for realignment and consolidation of facilities. All have failed to result in the FAA being run more like a business. The FAA has always performed like a massive bureaucracy and will continue to. 9:33 Chairman Bill Shuster: Last year’s bill that passed out of committee will serve as a framework for new legislation, but we are open to change. We want to talk to people and get their ideas, and that’s what we hope to hear today. 9:45 Chairman Bill Shuster: Our air traffic control reform proposal will be based on the following principles: create an independent not-for-profit corporation to provide air traffic services; fund the new service provider by fees assessed for air traffic service; free the new service provider from governmental dysfunction, political interference, and the uncertainty of the federal-budget process; create a governance structure that is right sized and balanced; and a board with sole fiduciary responsibility to the organization—and I need to repeat that—fiduciary responsibility. That’s a legal term. If you’re on a board of directors in the United States and you have the fiduciary responsibility, it’s not to who appointed you to the board; it’s to the board, it’s to that organization is who you’re responsible for, and that’s the law. That’s just not some pie in the sky. People can be removed and be prosecuted if they’re not doing their fiduciary responsibilities. 11:47 Chairman Bill Shuster: Give the new service provider the ability to access financial markets, leverage private funding for multi-year capital projects needed to modernize the system. 12:35 Chairman Bill Shuster: The only way to realize these benefits is to get the government out of the way. As President Ronald Regan said, government is not the solution to the problem; government is the problem. And we see all over the world people turning to the private sector—whether it’s Europe or it’s Asia, Australia, New Zealand, Canada—look around the world: countries, governments, are looking to partner with the private sector because they see they do it better. 13:01 Chairman Bill Shuster: Since the introduction of the Air Act over a year ago, this has been an ongoing process of education and discussion. We’ve held over 130 meetings with stakeholders, including both supporters and opponents of the Air Act. We’ve had numerous meetings with members of the House, the Senate, the White House, and other committees. These meetings have been extremely productive and give us new ideas to improve the legislation. 14:20 Chairman Bill Shuster: Air traffic control is not an inherently governmental function; it’s a 24/7 technology service. For those who worry that the system is too complex, I would say this: the most complex thing in the air space is not the air traffic control system, it’s the airplane. It’s the people at Boeing and Airbus and Cessna and the people that build these aircraft—that’s the most complicated thing in the system. And the FAA already oversees those highly sophisticated private-sector aircraft manufacturing, maintenance, and flight operations at arm’s length. We don’t build airplanes today, the government does, and that’s the most complex thing in the system. 16:26 Rep Peter DeFazio: We are now on the cusp of a 21st century system that will be the envy of the world. And other experts—MITRE Corporation, others—say a massive change now, where you cleave the FAA into parts, you leave the most vital thing to our manufacturers—certification, subject to appropriations, sequestrations, and shutdowns—you leave the most vital thing that is important to the American public, which is safety and oversight of safety, subject to sequestration, shutdowns, and political meddling. The only thing that gets moved is the ATO, and the ATO would be moved and essentially effectively controlled by the airlines. I know that the airlines aren’t here today, perhaps because they haven’t looked so great recently in public, and I’d also note that the airlines themselves have had outages 36 times—major outages—36 times since 2015. I’m not aware that the national air traffic control system has had a major disruption, with exception of deliberate sabotage by a contractor who knew how to get the system and the backup system. But the airlines, on their own, with no sabotage, have managed to melt down their dispatch and their reservation systems 36 times, stranding millions of people, so they can do it better, right? 18:15 Rep Peter DeFazio: In terms of funding, the FAA has currently projected, over the next decade, to be 97% self-funded. Unfortunately, the way our colleagues around here and the budget process works, despite the fact they’re self-funded, they can be sequestered or shut down. That’s a simple, simple fix. Take it off budget, make it into a trust-funded program. They are raising the revenues. That’s a simple fix. No, we’re going to cleave it in half, put vital functions over here—still subject to sequestration shutdown—and take this one part and put it over here and say somehow they’re going to self-fund. Now, the question, of course, is, how are they going to self-fund? The airlines have told me time and time again, they hate the ticket tax, they hate the ticket tax; they say, that’s our money. I say, no, it’s not your money; I buy a ticket, I pay the tax, the tax goes to the government; it’s not your money. They say, no, no, that affects the price of the ticket and competition and everything else; it’s a horrible thing. So, if they do away with the ticket tax, there goes 70% of the revenues. Well, what are they going to put in its place? Oh, it’s going to be a per-operation charge or something; we don’t know. Congress will have no say over this. 22:11 Rep Peter DeFazio: See all that yellow? That’s the U.S. That is going to be totally ADS-B, satellite-based, in 2020, with an exception—the airlines that petitioned and been given permission from the FAA for exceptions because many of their older planes do not have modern-enough GPS systems to use the new ADS-B. The airlines again have petitioned that they have a number more years before those planes would be able to use the ADS-B system. Not the FAA, the airlines themselves. 28:38 Rep Peter DeFazio: They can set user fees. User fees, I consider to be taxes. I consider the ticket tax to be a user fee, but we can argue semantics over that. But they are going to determine how the system is funded, which is tantamount to taxation without review by the Ways and Means committee or Congress. 37:00 Joseph Brown: Now, as a pilot, 4 to 500 hours a year, my office is the cockpit; and when I fly, I find a modern system, a high-functioning system, and I’ve seen it evolve over time, right before my eyes. I find controllers that do their job well, I find easy access, and powerful technology. I can file a flight plan from my smartphone and get my proposed route back, before I get to the airport, in a text. When I take off, I have GPS navigation systems on board that allow me to fly point to point all over this country. Couple months ago, I took off out of the Dallas-Fort Worth metro area and got cleared direct to Burlington, Vermont, 1300 miles ahead. And while I’m flying, I have the veil of safety brought to you by ADS-B, which is in fact deployed, giving me traffic callouts and separation cues and weather in my route of flight. And when I come in for landing, I can pick from 3,000 precision approaches, brought to me by a NextGen feature called WAAS, including at my home airport, which I value tremendously on foul-weather days. So, the bottom line for me is, NextGen is working—it works for me every day—and it’s getting stronger all the time. And from a technology standpoint, I believe we’re on the right track. 43:30 Robert Poole: Business Roundtable group began in 2011, made an initial presentation to A4A in the spring of 2012. We got a pretty cool, if not negative, reception at that point. No one wanted to restart the battles that had raged over this issue in previous decades. Everything changed in the spring of 2013, thanks to the sequester. Controller furloughs closed FAA Academy; threatened closure of 189 contract towers got everybody’s attention. In response, A4A, NATCA, and AOPA all requested new conversations with the BRT working group. And in May 2013, all three groups in the conference room at Business Roundtable agreed that an air traffic control corporation, converting the ATO into a corporation, self-funded, and out of the federal budget was the best approach. After this happened, that fall, Governor Engler and several others briefed Chairman Shuster on the proposal. This was not coming from the airlines. BRT group included a former FAA administrator, a former chief operating officer of the ATO, two former senior officials of USDOT and several consultants. Our governing model, as I said, was patterned after Nav Canada’s. Their stakeholder board represents airlines, general aviation, unions, and the government plus four other private citizens selected by the stakeholder members. 47:50 Paul Rinaldi: NATCA members guide approximately 70,000 flights per day in the United States, ensuring over 900 million passengers arrive safely at their destination every year. The United States Airspace System is considered the gold standard in aviation community, but that status is at risk. Unstable, unpredictable funding and status quo threatens it. We need a stable, reliable, predictable funding stream to operate our current system and allow for growth in the United States aviation system. 48:30 Paul Rinaldi: We also oppose any system that would put ATC in a for-profit model. In order for NATCA to consider a support of any proposal, it must meet our four core principles of reform. First, any new system must keep the safety and the efficiency of the National Airspace System the top priority. Second, any reform must protect our members’ employment relationship. This must maintain our members’ pay, benefits, retirement system, healthcare system, as well as the work rules in our contract. Third, any reform system must have a stable, predictable funding stream adequately enough to support air traffic control services, growth, new users, staffing, hiring, training, long-term modernization projects. Also, this reform must provide a stable funding stream through a transition period. Fourth, any reform must maintain a dynamic, diverse aviation system that continues to provide services to all segments of the aviation community and to all airports across America. 50:10 Paul Rinaldi: Please don’t take NATCA’s position as a need for stable, predictable funding as to mean the appropriators have not done their job. The appropriators in both chambers of Congress, on both sides of the aisles, have done their job well. The problem stems from lack of regular order we’ve been experiencing for over 10 years now. This lack of regular order has led to stop-and-go funding, many threats of shutdown, and our current staffing shortage. We’re at a 28-year low of fully certified controllers. We have 10,532 certified controllers; approximately 3,000 of them are eligible to retire at this time. 50:47 Paul Rinaldi: Unstable funding has prevented on-time implementation of NextGen modernization projects. NATCA takes pride in our role in partnering with the FAA in developing and implementing important modernization projects. We have successfully worked on many over the years. Unfortunately, all have been impacted by uncertainty of funding. If you just look at FY 2018, as we approached April 28 of this year, the FAA shifted its focus from NextGen to shutdown. We, then, received a one-week funding extension, followed by a five-month funding bill. While we’re elated over the funding bill, five months is certainly no way to plan for the future in aviation. Congress needs to pass an FAA reauthorization bill that provides stable, reliable, predictable funding. Congress should exempt the FAA employees from indiscriminate sequester cuts, otherwise we will see a hiring freeze, reduced staffing, furloughs, delays, reduced capacity, and suspension of key NextGen programs. 52:07 Dorothy Robyn: I am a policy wonk, and I’m a Democrat. I testified before some of you during the five years I spent in the Obama administration—first as the deputy under secretary of defense for Installations and Environment and then as the GSA Public Buildings commissioner, following the scandal at GSA. Previously, I spent eight years on President Clinton’s White House economic team, where, during his second term, I was the point person on aviation and air traffic control, among other issues. A policy focus I maintained after leaving the White House, first at Brookings and then as an economic consultant. The first point I want to make this morning is that corporatization of the air traffic control system is not a radical idea, nor is it a Republican idea. The Clinton administration tried unsuccessfully to do this in 1995 with its proposal to create a self-supporting government corporation—USATS—which would be run by a CEO and a board and regulated at arms’ length by the FAA. At the time, only four countries had corporatized their air traffic control system; now, more than 60 other countries have done so. 53:40 Dorothy Robyn: Air traffic control is not an inherently governmental function; it is not inherently governmental. Keeping planes safely separated is complex and safety-critical, but it is a purely operational process that follows well-established rules. Like running an airline or manufacturing a Boeing 787, air traffic control can be performed by a non-governmental entity as long as it is subject to oversight by FAA safety regulators whose job is inherently governmental. 54:50 Dorothy Robyn: Is it a monopoly? Yes, at least for now, but the telephone system was a monopoly for many years, and we didn’t have the government operate that. 55:03 Dorothy Robyn: The current arrangement is flawed on safety grounds. This is important. Echoing safety experts worldwide, ICAO, the International Civil Aviation Organization, has long called for the air traffic control regulator to be independent of the operation it regulates in order to avoid conflicts of interest. We are one of the only industrial nations in which the same agency both regulates and operates the air traffic control system. 1:06:00 Rep Peter DeFazio: So, let’s see, if I think about it, funding, sequestration, shutdowns—that all has to do with Congress. So if we had the FAA with its current funding sources, 97% projected over the next 10 years, so just a few efficiencies would get us to 100% self-funded, without meddling, exempt them from sequestration and shutdowns, would that solve many of your concerns—I’m not saying all—but would that solve many of your concerns, Mr. Rinaldi? Paul Rinaldi: Yes. 1:07:01 Peter DeFazio: Who would be responsible if the ATC failed financially in this country? Joseph Brown: Well, that’s one of my risk calculus when I think about this problem. The day the assets move out of the public sector and into the private sector, we’ve moved the essence of the system and the people with it. And there’s no way we can spend one day without that system full functioning and healthy and thriving. And so all the financial risk accrues to the people, regardless of where that monopoly reports. DeFazio: So, too big to fail. Brown: Too big to fail is my concern. 1:10:45 Joseph Brown: First, you have to invent and deploy the technology, which has generally been the FAA’s purpose, but then the user community has to equip and in many cases change equipment to experience the benefits, and that’s exactly where we are right now, and that’s why there’s an inflection point coming up. We have ADS-B fully deployed on a nationwide basis in terms of the ground structure, but only a percentage of the aircraft flying enjoy the benefits because they are not ADS-B compliant. Likewise, that will be true of Data Comm and other technologies. So, where we are right now is the FAA has done a lot of heavy lifting, and the users have to equip. 1:12:08 Chairman Bill Shuster: I would oppose going for a for-profit organization. 1:14:08 Rep Rick Larsen: Can this system be safe and broken, or should I drive? Calvin Scovel: It is safe, of course. And that’s— Larsen: How can it be safe if it’s broken? Scovel: —certainly a big plus for the FAA. Larsen: It seems to me that there’s a fundamental argument going on here— Scovel: Yeah. Larsen: —that says we have to go to privatization because the system is broken that actually controls the airspace. And if it’s broken, I don’t know how it can be safe, and so it would support the privatization argument. However, if it can’t be safe and broken, it would seem to undermine the whole argument for privatization. Scovel: I would characterize the system currently, it certainly is safe, and the record shows that. For a number of years now, no commercial aviation fatal accidents. As far as broken, I would take issue with that characterization. I would say certainly modernization has been lagging far behind where it should be, but it’s not broken. Larsen: Well, that’s good to hear. I’ll cancel my car rental. 1:31:37 Joseph Brown: I don’t think the comparison of our national airspace and management system to Canada is anything other than an exercise in gleaning some observations, but it’s not proper to directly compare. I mean, for sure, in our system we’re driving a much more substantial portion of our economy out of the aviation sector and the airspace that supports it. I mean, we have 10 times more pilots, 50,000 flights a day—it’s a wholly different organization. So for me, when I think about Canada, I believe that they made a choice that they thought suited their purposes with the role of aviation and its infrastructure, but we’re faced with entirely different objectives here, and as far as I’m concerned, the system that we’ve been living in has done a masterful job of adjudicating all of the interests of stakeholders, all the interests of our expansive country and the states that are in it and their needs, and so I can applaud things they’ve done that have worked for their country, but I also very much applaud things we’ve done in our country. And I would take exception to one thing Ms. Robyn said, which is she characterized our system as a laggard. That is just false. We have the technology deployed in our system today that no other country can rival. We lead in our NextGen initiative. So I’m pretty proud of where we are, and by the way, I know it because I fly it. It’s not a mystery, and it’s not a theory. 1:34:15 Calvin Scovel: As you know, my office looked at the air traffic control organizations for the other four countries. And we were told by officials in those organizations that they consider part of their borrowing authority to be leveragable or to be recognized by private lenders because, ultimately, should something drastic go wrong, the government would step in behind them. I’m not representing that that would be the case here—that’s your policy call to make—I’m simply relaying what officials for other air traffic control organizations have told us about their systems. Rep Albio Sires: So, in those four countries, they were on the hook? Is that what you’re saying? Scovel: Conceivably, they may be. 1:38:50 Rep Mark Meadows: Why would you suggest that the federal government can do something more efficiently than, perhaps, private stakeholders? Joseph Brown: You know, my calculus— Meadows: Can the federal government run your business better than you do? Brown: I would hope not. Meadows: I would hope not either, so why would you suggest that they can do that here? Brown: Well, because we’re talking about a range of interests here that’s much larger than my business. I mean, my business, I get to pick my product, I get to pick my customers, I get to decide what I think the value proposition is, I get course corrected by competition— Meadows: And it’s efficient that way, right? Brown: Yeah, but the— Meadows: So what if we had stakeholders who were making the same exact decisions that you’re making, with some parameters that are out there, wouldn’t you think that that would be more efficient? Brown: Actually, you’ve outlined my top concern which is that if this organization picks their customers and picks their service level and picks their product— Meadows: But, but— Brown: —they are no longer going— Meadows: But the chairman’s— Brown: —to pay taxes on public— Meadows: —already said that that can’t happen. We have an airspace that is available to everybody. Unknown Speaker: Gentleman’s time’s expired. Meadows: Thank you for [unclear] point. Unknown Speaker: Mr. Brown, you can finish, if you wish. Brown: I believe that I’ve made my point which is that the thing about this enterprise, one of the things that I’m concerned with is that it’s a coalition of stakeholders with a shared purpose which is to serve their own ends. And the thing that I like about the federal role in our airspace today is that is adjudicates an enormous diversity of needs in this community, whether it’s the Alaskan pilot who’s flying kids to school or whether it’s my business in Ohio or air tractors in Olney, Texas, they all have a seat at the table, and this has been demonstrated in this room today. Meadows: Yeah, my time has expired. 1:49:30 Dorothy Robyn: The FAA is two hatted; it does two very different things. It regulates all aspects of aviation, and that is an inherently governmental activity. You cannot write a contract that makes it possible for the private sector to carry that out. It requires judgment calls that the private sector can’t make. It also operates in the air traffic control system. There is nothing government—that is not inherently governmental; that is operational. That is no different than when GSA goes to the private sector and has them build a building. It is not an inherently governmental activity. The idea that, yes, the regulatory part of the FFA needs help. That part needs help. I agree with Mr. Brown. The idea, though, that in order to fix that, you don’t spin off the non-governmental part; that’s illogical to me. That’s exactly what you want to do—spin off the non-inherently governmental parts so that the FAA can stick to its knitting, focus on the regulatory function. 2:23:25 Rep Lloyd Smucker: Can you explain why you believe a regulated air traffic service provider would be outside of democratic oversight? Joseph Brown: It’s my understanding that this would be empowered as a business that can effectively decide what it invests in, how much it borrows, what technologies it picks, maybe what— Smucker: But still with congressional oversight. Brown: Well, are we going to have a committee for how they spend their money and what they invest in and where they deploy pappies and vassies and where they put up the next Data Community tower? Because if we are, why would we carve it out? 2:31:00 Rep John Duncan: I chaired the aviation subcommittee for six years, from 1995 until 2001, and Speaker Gingrich asked me to hold the first hearings on the proposed air traffic control corporation—Ms. Robyn, I think, will remember that—and at that point, I think almost everybody, maybe with the exception of Mr. Poole, was opposed to it and so forth. But the chairman, Chairman Shuster’s done an amazing job and now has brought some groups and people on board that were not in favor of this proposal at the time. 3:11:34 Paul Rinaldi: September will be here before we know it. We will be looking at another possible government shutdown, and as I said in my opening statement, as we lead up to a shutdown, the FAA turns their attention from NextGen or from UAV implementation to shutdown procedures. For the last 10 years, it happens a couple times a year, and we lose this time; and it’s four or five weeks leading up to it, five weeks on the back end of it, and they’re not sure what sequester is going to bring us if we actually do get a budget and do get a bill passed or what type of cuts we’re going to have into the aviation system. Hearing: , House Transportation and Infrastructure Committee, May 2, 2017. Witnesses William McGee, Consumers Union Aviation Consultant Scott Kirby, United Airlines President Timestamps & Transcripts 2:34:43 Rep Dina Titus: We’ve heard all this kind of ranting about how bad the airlines are and all these unfortunate experiences, and yet pretty soon this committee is set to consider a proposal to privatize air traffic control and hand over billions of dollars’ worth of investment and assets to a private corporation that’s going to be controlled by y’all, by the airlines, and then you’ll be able to run it as you see fit. Now, I’m opposed to that for a number of reasons, primarily because of how it’s going to leave customers kind of in the lurch, but my question is, what do you have to show that means you’re going to be able to take over this corporation and do well by your customers from that angle any better than you do from your angle that you are now? For example, there’re questions like, how much is the traveler going to have to pay to this corporation; what kind of things have you done at your airline in terms of routing that might be better that you’ll do through this corporation; terms of investment and technology, management decisions; what have you done about your own scheduling? All of those questions that have seemed to be criticized today, how are they going to translate into your being able to control air traffic control system through a private board? So, maybe y’all could just tell me some of the things you’re doing that would make an argument for why you should control that aspect of airlines as well. Scott Kirby: Well, thank you for the question, Congressman. And we believe that one of the ways we can actually help our customers is through ATC privatization. The worst thing we do to our customers is the long delays and cancellations. And those lead to customer service problems, they lead to the customer that gets to McCarran and is upset, and we want to fix that. And the FAA is a fantastic partner, and they want to fix that as well, but they’re handicapped today by the model, by the model where they do annual budgets, where investing for the future and the kinds of investments we need to make for the future are hard for the FAA to do in the normal course of business in the government. And the kinds of things that we could do to make the process better is, for example, you have more sophisticated GPS technology in your car than we use on aircraft today. We have these systems, and we could fly straight-line routes, but we still fly zigzag to highways in the sky to get from Washington to Las Vegas. We could do things like continuous-descent approaches. So today we’re at 35,000 feet, we step down in each one. It’s like driving your car and slamming on the accelerator and then hitting the brake, slamming on the accelerator—and we burn gas, and we take more time. All of that could allow us to fly shorter paths and get our customers there quicker. And we believe it’s one of the best things we could do for customer service is to reform the ATC program, and one of the best ways to do that is FAA privatization, not because the FAA is doing a bad job—they do a wonderful job—but the process is designed to be difficult and particularly for making long-term investments. 3:58:43 Rep Peter DeFazio: The question would be, well, now if we give control of the air traffic system to the airlines—effective control—four seats on a 13-person board, what do you think that means for customers and efficiency? William McGee: Well, it’s going to be particularly hard felt in the high-density airports and the busiest airports in the country. Now, I mean, what you just said is obviously a critical-enough issue: 17 flights scheduled at the same time. But underlining that is another problem that hasn’t really been discussed and that is the outsourcing—and it is outsourcing; the airlines call it partnering—but outsourcing of mainline flights to regional carriers. Up until recently, I don’t know if it’s still on there, but the Regional Airline Association on its homepage posted about the fact that not only more than 50% of all domestic departures operated by regionals on behalf of major carriers, but in addition they boasted of the fact that most of the departures every morning between New York and Washington, two of the busiest airports, not just in the country but on the planet—LaGuardia and Washington National—are operated by regionals. So, we have to ask ourselves, is that the best use of those slots to use smaller aircraft on some of the highest— DeFazio: So you’re saying that just because you’ve got a small aircraft and basically, maybe, you can follow it a tiny bit more closely, a little bit more closely, but because of wake turbulence, you’re taking up, basically, a slot with 60 people on board versus a slot with 180 people on board. McGee: Absolutely. I mean, I’m rusty on some of these issues; it’s been a long time since I worked as an airline dispatcher. But the bottom line is that, as they used to say, all metal requires x amount of space between it. So whether it’s a large aircraft or a small aircraft, there are differences with wake turbulence and things like that. But the bottom line is, again, are we using—these are public resources, let’s remember. These are not airline resources. The slots, they belong to the public. They’re treated as if they were private domain—but are we using them to the best ability in many ways, not just in terms of safety and efficiency but also in terms of the carbon footprint? 4:01:50 William McGee: And I think we also want to ask, well, why would they do that? Now, the response often comes from the airlines that customers prefer high frequency to consolidating flights. But there’s also another factor that doesn’t get discussed as much and that is the competition factor. In other words, if you have scarce slots at LaGuardia and you’re trying to prevent the competition from low-cost carriers, then use more frequencies out of those airports. Again, these are the most high ensity airports that we’re talking about. Music Presented in This Episode Intro & Exit: by (found on by mevio) Cover Art Design by

The American Health Care Act, the Republican plan for a new health care system, passed the House of Representatives at lightning speed. In this episode, get the backstory on the reckless process used to pass the bill, learn how it changed from the original version, and find out how the Congressional Budget Office expects the bill would affect you. Please support Congressional Dish: to contribute using credit card, debit card, PayPal, or Bitcoin to support Congressional Dish for each episode via Patreon Mail Contributions to: 5753 Hwy 85 North #4576 Crestview, FL 32536 Thank you for supporting truly independent media! Recommended Congressional Dish Episodes Bill Outline Bill Outline Title I: Energy and Commerce Subtitle A: Patient Access to Public Health Programs : Repeals the at the end of 2018 : Prohibits any Federal funding for any non-profit that performs abortions for a year Subtitle B: Medicaid Program Enhancement : Reduces Medicaid funding : Ends the Medicaid expansion... For people at the end of 2019 Ends the States' option at the end of 2017 People in this category who have Medicaid on December 31, 2019 will be and will keep their insurance as long as they never go off of Medicaid The Federal funding increase for states covering grandfathered individuals and is the requirement that Medicaid cover “essential health benefits” as of January 1, 2020. : Prevents Medicaid for lottery winners : Gives $10 billion extra over five years to the “non-expansion States” : Forces States to verify Medicaid eligibility every six months and gives them more enforcement money : Allows States deny people Medicaid if they are not participating in "" The State decides how long the person has to work for in order to get Medicaid The State can't deny Medicaid to... Pregnant women or to women who have had a baby within the last 60 days Kids under age 19 Only parents with kids under the age of 6 or a disabled child Gives the States more money for enforcement Subtitle C – Per Capita Allotment for Medical Assistance : Caps Medicaid funding on a per capita basis. States that spend too much one year will have their Medicaid States will be allowed to get Subtitle D: Patient Relief and Health Insurance Market Stability : Repeals the lower out-of-pocket limits for low-income people effective in 2020 : Creates a to be administered by the Secretary of Health and Human Services to give money to the States until the end of 2026. Funds : "high-risk individuals" buy insurance if they don't get coverage through their employer Giving money to insurance companies () so they will lower premiums Taxpayers will pay insurance companies to preventative care, including dental and vision & newborn care for people enrolled in health insurance in the State The fund is with $15 billion per year until 2020 and $10 billion per year until 2026. There will be an extra $8 billion a year put into the fund from 2018-2023 to pay for increased premiums and out-of-pocket costs of people in States that get a In order to receive money from the Federal fund, , starting with 7% in 2020 increasing to 50% by 2026 An extra $15 billion will go directly to health insurance companies. The rules in terms of whose claims will be paid for, the percentage of their premiums that would be paid, and the dollar amount at which the government will starting covering the insurance companies' costs will be determined by the Secretary of Health and Human Services : Starting in 2019, people who purchase insurance after a coverage gap of 63 days will be charged a 30% penalty for a year. The insurance companies get to keep all the extra money. : The requirements that bronze, silver, gold, platinum level plans exist and must cover certain percentages of expenses and are repealed effective January 1, 2020. : Allows insurance companies to charge older people five times more than younger people (they’re currently allowed to charge three times more) : Starting in 2018, States can apply for a waiver for the individual and small group insurance plans from the national requirements and instead allow States to determine what essential health benefits need to be covered by insurance companies. Waiver applications from States are after 60 days Waivers will be granted if the State says that doing so would do : Reduce premiums Increase enrollment Stabilize the insurance market Increase the number of health plans offered. Waivers will be Starting in 2019, states can also get ("pre-existing conditions") if they did not have coverage for at least 63 days in lieu of the 30% surcharge. States can get this waiver as long as that state participates in the high-risk funds to help pay for individuals and insurance companies' costs. Insurance companies could limit coverage during the , not permanently. : Health insurers can't set rates based on gender and "Nothing in this act shall be construed as permitting health insurance issuers to limit access to health coverage for individuals with preexisting conditions." Title I: Committee on Ways and Means Subtitle A: Repeal and Replace of Health-Related Tax Policy : Starting in 2018, the limits on the amount of advanced-paid tax credits that can be taken back from low income people will be repealed. : Allows tax credits to be used on “catastrophic-only” health insurance plans that are not listed on the exchanges and prohibits tax credits for any plan that covers abortions. : Repeals the tax credit for employers with fewer than 25 employees who want to provide health benefits to their employees starting in 2020 and prohibits tax credits for any health plan that covers abortion. : Reduces the tax penalties for failing to purchase insurance to $0 and back dates it to be effective in 2016. : Reduces the tax penalties for employers who fail to provide health benefits to their employees to $0 and back dates it to be effective in 2016. : Delays the start of a tax on insurance companies which charges a 40% excise tax on , which charge premiums more than $10,200/year ($850/month) for individuals until 2026. The 40% is only on the extra premiums charges above the cap. : Starting in 2017, over-the-counter drugs can be purchased with . : Starting in 2017, taxes on money from health savings accounts that is not used for medical expenses will be cut in half (from 20% to 10%) : Starting in 2017, the $2,500 limit on the amount that can be taken out of an employee’s paycheck for employer health plans that use “flexible savings accounts” is repealed. : Starting in 2017, repeals a , paid by manufacturers or importer, on sales of medical devices that are not generally purchased by the general public at retail stores. : Beginning in 2017, businesses who provide retiree prescription drug benefits that are at least as valuable as Medicare Part D can get a federal drug subsidy. This provision will allow those businesses to deduct the entire cost of providing that coverage even though a portion of the drug coverage is offset by the subsidy they receive. : People can get a tax deduction for medical care that is not paid for by insurance if those expenses exceed 10% of their gross income; this provision reduces that to 5.8 % starting in 2017. : No changes are actually made because the text of the new paragraphs are exactly the same as current law. : Starting in , this bill creates a new tax credit structure tied to age instead of income for people making under $75,000 per year (the credits gradually reduce the more you make over $75,000) : Under age 30: $2,000/yr Ages 30-40: $2,500/yr Ages 40-49: $3,000/yr Ages 50-59: $3,500/yr Over age 60: $4,000/yr The credits are at $14,000 per family for the five oldest individuals People can only get the tax credits Credits Married couples are if they want the health coverage tax credits There are exceptions for couples who don't live together & domestic abuse victims : Starting in 2018, increases the amount than can be put in Health Savings Accounts Individual contribution limit raised from $2,250 to $5,000 per year. Family contribution limit raised from $4,500 to $10,000. : Starting in 2018, married couples over the age of 55 with high deductible plans will be able to contribute more to joint health savings accounts : Starting in 2018, if a health savings account is opened within 60 days of a person getting coverage with a high deductible, medical expenses for those 60 days will be eligible for payment from the HSA Subtitle B: Repeal of Certain Consumer Taxes : "Repeal of tax on prescription medications" Starting in 2017, a fee paid by pharmaceutical manufacturers and distributors will be repealed : "Repeal of health insurance tax" Starting in 2017, a fee on large health insurance companies, which is tied to and increases with premium growth rates, would be repealed. Subtitle C: Repeal of Tanning Tax : Starting on July 1, 2017, the 10% tax on indoor tanning is repealed. Subtitle D: Remuneration from Certain Insurers : Starting in 2017, insurance companies can get between $500,000 and $1 million. Subtitle E: Repeal of Net Investment Income Tax : Starting in 2017, a 3.8% tax on net income from stock market investments over $200,000 will be repealed. Additional Reading Article: by Matthew Yglesias, Vox, May 9, 2017. Article: by Bram Sable-Smith, NPR, May 8, 2017. Article: by Anna Maria Barry-Jester, FiveThirtyEight, May 2, 2017. Article: , Health Affairs, April 25, 2017. Article: by Jeff Sommer, The New York Times, March 18, 2017. Article: by Amy Martyn, Consumer Affairs, November 1, 2016. Report: , Deloitte, March 31, 2010. Article: by Elizabeth Mendes, Gallup, January 8, 2010. References CBO Cost Estimate: Life of the bill in the Rules Committee: HealthCare.gov: GovTrack: OpenSecrets: OpenSecrets: OpenSecrets: Sound Clip Sources Hearing: , House of Representatives, April 6, 2017. Timestamps & Transcripts 03:48 Rep Jim McGovern: We’re meeting on an amendment affecting millions of people’s healthcare, that came out of a backroom about an hour ago, with no vetting at all. I think the amendment, it was—the text was stamped, I think at 11:24 a.m. We were noticed for this meeting at 11:52. We waived the traditional hour so we can kind of move on with it, but there was no vetting at all, no process whatsoever, just a couple of good old boys with a typewriter, saying maybe this will work. 8:00 Rep Jim McGovern: If you guys want to deal with healthcare, introduce a bill; get co-sponsors on the bill; have the relevant committees—committees like Ways and Means, and Energy and Commerce—do hearings, that’s a radical idea; invite people who know something about this issue—invite patients and patient-advocate groups and doctors and heads of hospitals, and invite some of your friends in the insurance industry—to come up and weigh in on your proposal; then you could do markups. Then get a CBO estimate, and after you get a CBO estimate and it’s marked up, then you come to Rules Committee, and you advance a bill to the floor. 13:40 Rep David Schweikert: If we were to actually have just sort of the top-line math question and say, let’s strip away some of the rhetoric and ideology and just sort of say “math,” when we look at our healthcare-utilization data, it’s functionally a hockey stick. Fifty percent of our population, the healthiest 50 percent, only use about three percent of healthcare costs, but our least healthy—our folks with chronic conditions, our brothers and sisters who really do suffer out there or have multiple issues laddered up—they represent five percent of that population, represents 50 percent of our spending. So you have this situation where we as a society, as a community, we’ve decided that guaranteed issue is out there, so now how do we find premium efficiency, rate efficiency? And as long as we’ve made this decision over here as a society, the fastest, most efficient thing we could do is actually sort of laddering some of that risk at that very top end. Last thing, and this may require a little more diving into it, and looking around, this is a smart committee, so you understand these things, if you were the actuaries building your rate profile, the ability to say we believe providing coverage for this population is going to cost this, you always have to design in a shock absorber because you wake up tomorrow and some people sign up for this coverage who have a chronic condition. The beauty of this type of risk-sharing model is that shock absorber that you have to build into your rate model can be substantially less because your top-end exposure is actually mitigated. So this was an occasion of, was there something we could do for lowering and making much more predictable the rate environment for that individual market, and this, I think, was the most elegant, simple way to get there. 38:55 Rep Alcee Hastings: In the brief time I’ve had to review it, the measure will provide $15 billion for the high-risk pools. Is that correct? All right. The language, specifically, setting it for is, “For the purpose of providing funding for the program there is appropriated, out of any money in the Treasury not otherwise appropriated, $15 billion for the period beginning January 1, 2018”—am I right?—“and ending on December 31, 2026.” So that’s $15 billion over a 10-year period of time. Get it straight, America. If this measure were to become law—there was a conservative gentleman, I can’t pull his name up right now, that said in the great scheme of things, it’s chump change because it simply would not provide the necessary money over the nine-year period of time. Hearing: , House of Representatives, May 3, 2017. Timestamps & Transcripts 24:05 Rep Jim McGovern: As you mentioned in your testimony, we found out last week that the MacArthur amendment mysteriously exempted Congress from the damaging effects of this bill, and I say mysteriously because nobody seems to know who put the provision in. And as the Vox reporter who uncovered the exemption put it, and I quote, “No one will fess up to putting the Congress exemption in the AHCA amendment.” Apparently, Representative MacArthur, your office told her that the Senate Budget added it, and the Senate Budget said no, in fact they didn’t. So, I guess I’m just curious. My first question is, where precisely did this exemption come from, and who thought that this bill was good enough for American families but not good enough for Congress? Mr. MacArthur, you wrote the amendment; did you put the provision in? Or Mrs. McSally, your bill tries to fix it; do you know anything about how the exemption got in there in the first place? Rep Martha McSally: Want to go? This budget-reconciliation process is not intuitive to really anyone. I mean, this is very arcane, and so as we’ve been going through this process in the House, trying to comply with Senate rules, content can only apply if it’s referred to specific Senate committees. And— McGovern: So somebody consciously knowing that—someone consciously moved the legislation forward without — McSally: So, again, my understanding is in order to comply with these arcane Senate rules of budget reconciliation, where if a matter is going to be referred to some other committee other than the ones that are listed in the original budget resolution, then it’ll no longer be applicable and the budget-reconciliation process doesn’t go forward. So, all I know is I heard it didn’t apply, and I said let’s fix it. McGovern: Who put it in? Who put the exemption in the first place? McSally: Yeah, and it specifically—just to be clear, it specifically related to his amendment. It’s not related to other provisions in the middle. So… McGovern: Yeah, so who put this exemption in in the beginning? Rep Tom MacArthur: Well, first, I don’t believe that members of Congress or our staffs should receive any special treatment, and I don’t think anybody believes that. McGovern: But Mrs. McSally’s bill— MacArthur: Well, as— McGovern: It’s not an amendment, it’s a bill; but it’s just to fix the fact that, is it a drafting error, or did somebody intentionally try to exempt Congress? MacArthur: It’s not an error, but the challenge, as Mrs. McSally has said, the challenge is getting House policy, drafting House policy, to conform with Senate rules. And I had every intention in drafting my amendment that there would be no special exception for Congress. Senate rules required us to accomplish this— McGovern: What Senate rules? Did you talk to the Senate parliamentarian? Who did…? MacArthur: I didn’t personally, but the requirement is because exempting us would require to go to a different committee that we needed to accomplish this through a stand-alone bill, which we have. Mrs. McSally has introduced it. I’m an original co-sponsor. I hope you’ll support the bill. I think it’s worthy of support, and none of us should want to exempt Congress— McGovern: None of us do, but from where we’re sitting, it looks like you guys get your hands caught in the cookie jar and then get exposed and then decided to fix it after a reporter uncovered it. MacArthur: Well, that’s your interpretation. I wouldn’t describe it that way. I think we fixed the issue in the only way that the Senate suggested that we could and that was through a stand-alone bill that was introduced around the same time. 28:56 Rep Jim McGovern: I think anybody who’s watching this is scratching their head, wondering how in the world can Congress be dealing with healthcare issues in a way where we don’t have hearings, where fixes are being worked out in a back room, and we’re just seeing the language for the first time right now, that their input is being pushed aside—American people don’t matter—all so that it could be a vote before we go in recess because the president wants us to. I mean, I think healthcare’s a very personal issue, it’s very important, and people want us to get it right, and I don’t think anybody here believes that we’re getting this right, even those of us with different opinions, in the process that we’re utilizing here. I’ve got to be honest with you, this process, to put it bluntly, is a goddamn mess. I mean, it really is. And I don’t know how anyone can defend it. Fixes upon fixes to fix the fixes to fix the fixes—and it’s going to be brought to the floor tomorrow, and we’re going to have a debate, and that’s how we’re going to serve our constituents? You guys can defend it, and you’ll have to defend it, but I think you’re going to be surprised how upset the American people are going to be. 37:30 Rep Fred Upton: My—our amendment, I should say, is carefully targeted at those states that may seek a waiver. Obviously, there are none today. I don’t know what Governor Scott or the future governor will do. Unknown Speaker: I’ll get to him in a minute. Upton: All right. Well, I know I talked to my governor this morning. He’s not interested in seeking a waiver. Unknown Speaker: Mm-hmm. Upton: I would guess that most governors—maybe all, I don’t know—will not seek a waiver, and in that case, my amendment just covers something if maybe it happens. And one of the reasons why we targeted the money—so it’s $8 billion: it’s a billion the first year; a billion the second year; and two billion, years, each, three, four, and five—because chances are if a governor does take this course, you’ll have fewer at the beginning than at the end. I ask the question, is five billion enough to cover those that might need some help if a governor sought a waiver in that first year, because remember, after the first year they have continuous coverage. Unknown Speaker: That's right. Upton: The answer, not a lot of facts behind it, but the answer was, five billion should probably cover that, in which case a number of us said, well, we want to make sure that it is covered. And that’s why it is eight billion and not five. 40:54 Rep Jim McGovern: Who did you ask? I mean, that’s the whole point of a CBO is because we want to get a nonpartisan— Rep Fred Upton: We don’t have a CBO score. McGovern: Right. So who? Who did you—who gave you these figures? Rep Alcee Hastings: Eight billion. Upton: Who? I'm sorry, who? McGovern: You said you asked— Upton: No, no. I know Mr. Hastings’ had an answer. I didn’t hear what he said. Hastings: No. You asked for the five billion, was that enough. Who? Upton: I asked, I asked— Hastings: And he asked who. Upton: I asked some of the drafters—so I made this proposal—I’m not a lawyer, like you—I asked legislative counsel, I asked a number of staff very tied into the—what is the estimate. They thought five billion would cover it. 51:25 Rep Alcee Hastings: And to predict for you what I think is going to happen in the Senate: I think they take health security a little more seriously and is a more moderate body than we are, and so you can reasonably expect that when you pass this tomorrow on the slimmest of margins that you may never see it again, and you will not see it in the form that it’s in. So let’s just have at it. I’ve had my fun. I hope you continue to have yours, and some of you ain’t going to be here the next time that we meet after 2018. Tell your body I said so. Music Presented in This Episode Intro & Exit: by (found on by mevio) Cover Art Design by

Congress is back from vacation and instead of focusing their investigative power on Syria in the wake of President Trump’s first bombing of the Syrian government, Congress focused on North Korea. In this episode, get the background information you will need to understand the daily developments related to North Korea and hear highlights from two Senate Armed Services Committee hearings and a U.N. Security Council meeting during which our plans for North Korea were laid on the table. Please support Congressional Dish: to contribute using credit card, debit card, PayPal, or Bitcoin to support Congressional Dish for each episode via Patreon Mail Contributions to: 5753 Hwy 85 North #4576 Crestview, FL 32536 Thank you for supporting truly independent media! Recommended Congressional Dish Episodes Additional Reading Article: by Jonathan Kaiman, The Los Angeles Times, May 1, 2017. Article: by Choe Sang-Hun, The New York Times, April 30, 2017. Article: by Rebecca Kheel, The Hill, April 30, 2017. Article: by Foster Klug and Kim Tong-Hyung, San Francisco Chronicle, April 28, 2017. Article: by Petra Cahill, NBC News, April 24, 2017. Article: by Sydney J. Freedberg Jr, Breaking Defense, March 2, 2017. Report: by Congressional Research Service, October 20, 2016. Article: by Sam Doo, Business Insider, April 20, 2015. Article: by Mark Bowden, Vanity Fair, March 2015. Article: by Garance Franke-Ruta, The Atlantic, August 31, 2013. Article: by Martin Jacques, The New York Times, September 23, 2011. Videos YouTube: Vice: Vice: Vice: YouTube: YouTube: YouTube: YouTube: References Document: GovTrack: Lockheed Martin: Missile Defense Agency: OpenSecrets: Carnegie Endowment for International Peace: Sound Clip Sources Hearing: , United States Senate Committee on Armed Services, April 25, 2017. Watch on Witnesses Dr. Victor D. Cha: Senior Advisor and Korea Chair, Center For Strategic and International Studies Dr. Aaron L. Friedberg: Professor of Politics and International Affairs, Princeton University Ms. Kelly E. Magsamen: Former Principal Deputy Assistant Secretary of Defense for Asian and Pacific Security Affairs, Office of the Secretary of Defense Dr. Ashley J. Tellis: Senior Fellow, Carnegie Endowment for International Peace Timestamps & Transcripts 18:52 Senator John McCain: America’s interests in the Asia-Pacific region are deep and enduring. That’s why, for the past 70 years, we’ve worked with our allies and partners to uphold a rules-based order based on principles of free peoples and free markets, open seas, and open skies, the rule of law, and the peaceful resolution of disputes. These ideas have produced unprecedented peace and prosperity in the Asia-Pacific. But now challenges to this rules-based order are mounting as a threat, not just the nations of the Asia-Pacific region but the United States as well. The most immediate challenge is the situation on the Korean Peninsula. Kim Jong-un’s regime has thrown its full weight behind its quest for nuclear weapons and the means to deliver them, and, unfortunately, the regime is making real progress. A North Korean missile with a nuclear payload capable of striking an American city is no longer a distant hypothetical but an imminent danger, one that poses a real and rising risk of conflict. 31:20 Dr. Aaron Friedberg: The goal of Beijing’s strategy has become increasingly clear in the last few years is to create a regional Eurasian order that’s very different from the one we’d been trying to build since the end of the Cold War. 32:03 Dr. Aaron Friedberg: When the Cold War ended, the United States set out to expand the geographic scope of the Western liberal economic and institutional order by integrating the pieces of the former Soviet Union and the former Soviet empire and by accelerating the integration of China—the process that had begun a few years before. As regards China, the United States pursued a two-prong strategy: on one hand, seeking to engage China across all domains, economic in particular but diplomatic in others; and at the same time, working with our allies and partners and maintaining our own forces in the region to preserve a balance of power that was favorable to our interests and the security of our allies. And the goals of that policy were to preserve stability, to deter the possibility of aggression, while waiting for engagement to work its magic. The U.S. hoped, in effect, to tame and ultimately to transform China, to encourage its leaders to see their interests as lying in preservation of that order, and to set in motion processes that would lead, eventually, to the economic and political liberalization of that country. 37:53 Dr. Aaron Friedberg: Economically, they’ve been using the growing gravitational pull of their economy to draw others towards them and also to become increasingly open in using economic threats and punishments to try to shape the behavior of others in the region, including U.S. allies; as Dr. Cha mentioned, Korea; and also the Philippines. 42:27 Dr. Aaron Friedberg: And while there’s obviously a limit to what we can and should say in public, we are at a point, I think, where we need to be able to explain to our allies, our possible adversaries, and ourselves how we would fight and win a war in Asia, should that ever become necessary. 45:50 Kelly Magsamen: First, we need to increase the pressure on North Korea as a necessary predicate to any other option. China is central to that, but we can’t rely only on Chinese pressure. We also need to be realistic. Kim Jong-un is not going to unilaterally disarm because of international pressure. Pressure alone is not going to solve the problem. Second, military options should remain on the table, but they are extremely high risk and should be a last resort. We should not kid ourselves here: a conflict on the peninsula would be unlike anything we have seen in decades. North Korea is not a Syria, it’s not an Iraq; the consequences could be extremely high. 55:51 Dr. Ashley J. Tellis: I think it would be very helpful for the administration to support your initiative, Senator McCain, with respect to the Asia-Pacific Stability Initiative. In fact, urgent funding at levels that approximate those are for the European Reassurance Initiative. 56:32 Dr. Ashley J. Tellis: In the near term, this will require shifting additional combat power to the theater, remedying shortfalls in critical munitions, expanding logistics’ capabilities, increasing joint exercises and training, and improving force resiliency by enabling a more dispersed deployment posture. But the longer term is just as crucial, and the demands of the longer term cannot be avoided indefinitely. Here, I believe, bipartisan support will be necessary for developing and rapidly integrating various revolutionary technologies into the joint force—technologies that will emphasize stealth, long-range, and unmanned capabilities as well as doubling down on our advantages in undersea warfare. 1:05:47 Dr. Aaron Friedberg: China’s been playing a game with us, for at least 15 years, on this issue. When we get especially concerned about what the North Koreans are doing, and we go to the Chinese and ask them for their help, what they’ve done in the past is to apply limited increments of pressure—they did it in 2003 to get the North Koreans to agree to sit down, what became six-party talks—but at the same time, almost simultaneously, as Victor suggests, they’re enabling the North Korean regime to continue by allowing continued economic exchange across their border. The Chinese have also allowed, or the Chinese authorities have at least looked aside as Chinese-based companies have exported to North Korea components that were essential to the development of their ballistic missiles, and probably other parts of their special-weapons programs. I’m not at all optimistic that the Chinese are going to play a different game with us now than they did in the past. One thing I would add, though: aside from military pressure, which for reasons that you suggest, Senator McCain, is I think of questionable plausibility, there are ways in which we could increase economic pressure on the North Korean regime, particularly by imposing further economic sanctions and especially financial sanctions. We did that in the Bush administration. I think it was actually something that caused a good deal of pain. We backed away from it for various reasons. I think it was a mistake to have done that. One of the reasons, my understanding, that we haven’t been willing to push on this harder is that it probably would involve sanctioning entities that are based in China, and I think we’ve been reluctant to do that because of our concerns about upsetting the relationship with China. I think if we’re going to be serious about this, we probably are going to have to go down that road. 1:08:37 Kelly Magsamen: Now is the time to try to make China understand that the status quo is worse for them than all other scenarios, and to do that, I think we need to hold their interests at risk, and what I mean by that is somewhat of what Dr. Friedberg said, which is we need to really think hard about secondary sanctions on Chinese banks. I actually think we should go out and do it now. I don’t think we should actually wait. I don’t think that holding it in advance is actually going to induce Chinese cooperation. So now is the time to demonstrate to China that we’re serious in that regard. 1:15:45 Dr. Aaron Friedberg: There is in the long run—I hesitate to use this term because it’s fallen into disfavor for good and bad reasons—but the ultimate solution to this problem is regime change unless and until there’s a change in the character of the North Korean regime and certainly the identity of the current leadership. There’s absolutely no prospect that I can see that this problem will get better. 1:26:05 Dr. Ashley J. Tellis: We cannot do anything else without exhausting the alternatives offered by diplomacy because dealing with North Korea, at the end of the day, will require a coalition effort, and we have to satisfy the expectations of our coalition partners that we’ve made every effort in the interim to deal with the challenge. And so we have to think of it in terms of a multi-step game. As Dr. Cha highlighted, the immediate objective should be to get the North Korean regime back to the negotiating table. The ultimate objective must be to hope that there will be evolutionary change in the regime. 2:07:45 Dr. Aaron Friedberg: If you ask what would be the sort of outer limit of what China could do— Unknown Speaker: Mm-hmm. Friedberg: —assuming that it was willing to do almost anything, it could bring North Korean economy to its knees, which it’s pretty close to that already; it could cut off the flows of funds that go across the border into North Korea, partly from the so-called illicit activities that the North Koreans engage in; it could interdict components that flow into North Korea through China that support the special-weapons programs; it could do a lot. Hearing: , United States Senate Committee on Armed Services, April 27, 2017. Witness Admiral Harry B. Harris, Jr., USN: Commander, United States Pacific Command Timestamps & Transcripts 16:44 John McCain: America’s interests in the Asia-Pacific region are deep and enduring. That’s why, for the past 70 years, we’ve worked with our allies and partners to uphold a rules-based order based on the principles of free peoples and free markets, open seas, and open skies, and the rule of law, and the peaceful resolution of disputes. These ideas have produced unprecedented peace and prosperity in the Asia-Pacific. But now challenges to this rules-based order are mounting, and they threaten not just the nations of the Asia-Pacific region but the United States as well. The most immediate threat is the situation on the Korean Peninsula. Kim Jong-un’s regime has thrown its full weight behind its quest for nuclear weapons and the means to deliver them, and, unfortunately, the regime is making real progress. A North Korean missile with a nuclear payload capable of striking an American city is no longer a distant hypothetical but an imminent danger, one that poses a real and rising risk of conflict. 19:47 John McCain: As its behavior toward South Korea indicates over the last several years, China has acted less and less like a responsible stakeholder of the rules-based order in the region and more like a bully. It has economically coerced its neighbors, increased its provocations in the East China Sea, and militarized the South China Sea. Meanwhile, with a rebalance policy too heavy on rhetoric and too light on action, years of senseless defense cuts and now the disastrous decision to withdraw from the Trans-Pacific Partnership, U.S. policy has failed to adapt to the scale and velocity of China’s challenge to the rules-based order. 21:44 John McCain: At our hearing earlier this week, our panel of expert witnesses agreed there was a strong merit for an “Asia-Pacific Stability Initiative.” This Initiative could enhance U.S. military power through targeted funding to realign our force posture in a region, improve operationally relevant infrastructure, fund additional exercises, pre-position equipment, and build capacity with our allies and partners. Admiral Harris, I’m eager to hear your thoughts on this kind of an initiative. 24:26 Senator Jack Reed: While North Korea poses an immediate national security threat, we must not lose sight of the potential long-term threat that China poses to the rules-based order in the Asia-Pacific region. Whether it be economic coercion of its small and more vulnerable neighbors or undermining the freedom of navigation that we all depend upon, China has not demonstrated a willingness to rise as a responsible global leader. Therefore, I believe it is critical that we empower and engage countries in Southeast Asia and South Asia to protect their own waterways and provide them with economical alternatives to maintain regional stability, preserve U.S. standing in Asia, and allow the economic growth and stability that has characterized the region for the last 50 years to continue. 35:41 John McCain: What does THAAD do for us? Admiral Harris: THAAD enables us and our South Korean allies to defend South Korea, or a big portion of South Korea, against the threat from North Korea. It is aimed at North Korea, the systems, and it poses no threat to China. McCain: But isn’t it incredibly difficult to counter the 4,000 artillery pieces that the North Koreans have on the DMZ, which could attack a city of 26 million people? Harris: It is, sir, and THAAD is not designed to counter those kinds of basic weapons. McCain: And what is designed to do that? Anything? Harris: We do not have those kinds of weapons that can counter those rockets once they’re launched. McCain: And they can launch—they have the capability of a launch of those rockets. Harris: At this very moment, they have that capability, Senator. 1:02:00 Senator Roger Wicker: There are these 4,000 short-range missiles, and your testimony is that there is essentially no defense from the south for those— Admiral Harris: Right. Wicker: —short-range missiles. Is that correct? Harris: And those aren’t missiles. Those are mostly artillery. Wicker: Artillery. Okay. Artillery. Harris: And so— Wicker: And there's no defense? Harris: Right. I mean, you’re trying to shoot down an artillery round, right. Wicker: Okay. And then, the chairman asked you, and I don’t think I understood the answer, what does THAAD get us? Harris: THAAD allows us an intercept capability to shoot down, at the high-altitude level, ballistic missiles that go from North Korea to South Korea. 1:57:37 Admiral Harris: What we said was, the Carl Vinson was leaving Singpore, truncating its exercise, cancelling is port visit, and heading to Northeast Asia. Unknown Speaker: But— Harris: And that’s where it is today. It’s within striking power, striking range of North Korea if the president were to call on it. 2:16:17 Senator Lindsay Graham: It should be the policy of the United States to never allow North Korea to develop an ICBM with a warhead that could hit America. Admiral Harris: I believe that’s correct. Graham: Okay. Do you believe that the only way they’ll change that policy, their desire, is if they believe that the regime could be taken down by us if they continue to develop an ICBM? Without credible military threat in the mind of the North Koreans they’re going to plow ahead? Harris: I believe that generally, but I believe that China might be able to exert its influence. Graham: Do you believe China could change North Korea’s behavior, absent a belief by North Korea, that we would use military force to stop their ICBM program? Harris: I do not. Graham: Okay. Do you believe that China would act stronger and more bold if they believe credible military force was on the table to stop North Korea? Harris: I do. Graham: So, it seems to me that the policy of the United States, given the admiral’s advice and you are really good at what you do, that we should all agree that it’s not good for America for North Korea to have an ICBM with a warhead attached, and it’s really not good for China, is it? Harris: I believe it is not good for China. Graham: Well, why don’t they believe that? Harris: Because they have their own calculus, their own decision process. Graham: Do you think they’re beginning to reshape their calculus in light of our reaction to North Korea? Harris: I hope so, but it’s early days. Graham: Okay. In terms of China’s leverage on North Korea, you said it was substantial. Harris: Their leverage is potentially substantial. Graham: Substantial. The best way to avoid a military conflict with North Korea over their missile program is for China to wake up North Korea to the reality of what threat that presents to North Korea and China. Is that fair to say? Harris: That is fair to say. Graham: Is it also fair to say that we do not have any intentions of invading North Korea at all? I mean, that’s not on our—nobody’s told you, “Get ready to invade North Korea.” Harris: That is not fair to say, sir. I believe the president has said that all options are on the table. Graham: Yeah, but, I mean, we’re not going to just go in and take North Korea down for the heck of it. Harris: Sir, I don’t want to get into what we could or could not do. Graham: Okay. Well, North Korea thinks we’re going to invade in any moment. Do you think that’s part of our national security strategy is, without provocation to attack North Korea? Harris: I think North Korea has provided provocation already in terms of— Graham: But without provocation, it’s not our policy to attack North Korea. Harris: They have provoked us already, sir. Graham: Yeah, I said but if they stopped it, they don’t have anything to worry about. Harris: Then we will have to look at it. You know, that’s a decision— Graham: That's all I'm saying. Harris: That’s a decision that the president would make. UN Security Council Meeting: , April 28, 2017. Timestamps & Transcripts 2:00 Antonio Guterres (UN Secretary General): The Security Council first adopted the resolution on the Democratic People’s Republic of Korea, DPRK, nuclear issue in 1993 when it urged the DPRK not to withdraw from the Treaty of Non-Proliferation of Nuclear Weapons. Twenty-four years later and despite extensive efforts, the challenge has defied resolution. In response to the DPRK’s accelerated nuclear and ballistic missile activities, the Security Council has adopted two sanctions resolutions and met 11 times in emergency consultations since January 2016. During this period, the DPRK conducted two nuclear tests, more than 30 launches using ballistic missile technology, and various other activities relating to the nuclear and ballistic missile programs. Its launches using ballistic-missile technology, have included tests of short, medium, intermediate range and submarine-launched ballistic missiles as well as the placement of a satellite in orbit. These tests and launches are clear violations of Security Council resolutions, and the absence of coordination and notifications in advance of these launches, other than the space launch of 7 February 2016, are also contrary to internationally accepted regulations and standards adopted by the International Maritime Organization and International Civil Aviation Organization. 11:30 Secretary Rex Tillerson: We have said this before, and it bears repeating: the policy of strategic patience is over. Additional patience will only mean acceptance of a nuclear North Korea. The more we bide our time, the sooner we will run out of it. 12:27 Secretary Rex Tillerson: Our goal is not regime change nor do we desire to threaten the North Korean people or destabilize the Asia-Pacific region. Over the years we have withdrawn our own nuclear weapons from South Korea and offered aid to North Korea as proof of our intent to de-escalate the situation and normalize relations. Since 1995 the United States has provided over $1.3 billion in aid to North Korea, and we look forward to resuming our contributions once the DPRK begins to dismantle its nuclear weapons and missile technology programs. 13:35 Secretary Rex Tillerson: I propose all nations take these three actions, beginning today: first, we call on UN member states to fully implement the commitments they have made regarding North Korea. This includes all measures required in resolutions 2321 and 2270. Those nations which have not fully enforced these resolutions fully discredit this body. Second, we call on countries to suspend or downgrade diplomatic relations with North Korea. North Korea exploits its diplomatic privileges to fund its illicit nuclear and missile technology programs, and constraining its diplomatic activity will cut off a flow of needed resources. In light of North Korea’s recent actions, normal relations with the DPRK are simply not acceptable. Third, we must increase North Korea’s financial isolation. We must levy new sanctions on DPRK entities and individuals supporting its weapons and missile programs, and tighten those that are already in place. The United States, also, would much prefer countries and people in question to own up to their lapses and correct their behavior themselves, but we will not hesitate to sanction third-country entities and individuals supporting the DPRK’s illegal activities. We must bring maximum economic pressure by severing trade relationships that directly fund the DPRK’s nuclear missile program. I call on the international community to suspend the flow of North Korean guest workers and to impose bans on North Korean imports, especially coal. We must all do our share, but China, accounting for 90 percent of North Korean trade, China alone has economic leverage over Pyongyang that is unique, and its role is, therefore, particularly important. The U.S. and China have held very productive exchanges on this issue, and we look forward to further actions that build on what China has already done. Lastly, as we have said before, all options for responding to future provocation must remain on the table. Diplomatic and financial levers of power will be backed up by a willingness to counteract North Korean aggression, with military action if necessary. 36:02 Wang Yi (China's Minister of Foreign Affairs): Mr. President, China is not the focal point of the problem on the peninsula. I think the key to solving the nuclear issue on the peninsula does not lie in the hands of the Chinese. 37:05 Wang Yi: The dual-track approach aims to promote parallel progress in the denuclearization of the peninsula and the establishment of a peace mechanism on the peninsula in a synchronized and reciprocal manner, ultimately achieving both goals together. The suspension-for-suspension proposal, which calls for the suspension of nuclear and missile activities by the DPRK and the suspension of large-scale military exercises by the U.S. and the ROK, seeks to bring the two sides back to the negotiating table, thus initiating the first step of the dual-track approach. 40:25 Wang Yi: Given the grave situation on the peninsula, China strongly urges all parties to remain calm and exercise restraint and avoid provocative rhetoric or actions that will lead to miscalculation. What I want to stress is that there is and should be no double standard on this issue. While we demand the DPRK to observe the Council’s resolutions and stop advancing its nuclear and missile development, we also demand the U.S., the ROK, and other parties to refrain from conducting or even expanding military exercises and deployment against the DPRK. 41:06 Wang Yi: All parties should comprehensively appreciate and fully implement DPRK related Security Council’s resolutions, in addition to introducing sanctions on the DPRK, the resolutions adopted do date also ask for resumption of the six-party talks, avoidance of acceleration of tensions, not to mention [unclear], in other words, imposing sanctions [unclear] talks about the [unclear] Council resolutions. We may not choose one over the other. We’ll only implement what we see fit. 42:30 Wang Yi: Before I conclude, I want to reiterate China’s firm opposition against a U.S. deployment of THAAD anti-missile system in the ROK. It’s a move that seriously undermines the strategic security of China and other countries in the region and damages the trust and the cooperation amongst the parties on the peninsula issue. It is detrimental to achieving denuclearization and maintaining long-term stability on the peninsula. China was again urges [unclear] parties to immediately stop the deployment process. 2:03:05 Secretary Rex Tillerson: We will not negotiate our way back to the negotiating table with North Korea. We will not reward their violations of past resolutions. We will not reward their bad behavior with talks. We will only engage in talks with North Korea when they exhibit a good-faith commitment to abiding by the Security Council resolutions and their past promises to end their nuclear programs. Cover Art Design by

Exxon Mobil’s CEO is now the Secretary of State. The Koch Brothers’ Congressman is the CIA Director. We’ve already seen signs that the Trump Administration and the fossil fuel industry are merging. In this episode, hear the highlights of the confirmation hearings of the two men now most responsible for environmental law enforcement in the United States: Secretary of the Interior Ryan Zinke and Administrator of the Environmental Protection Agency Scott Pruitt. Will they protect the environment from the fossil fuel industry or did President Trump appoint foxes to guard the henhouse? Please support Congressional Dish: to contribute using credit card, debit card, PayPal, or Bitcoin to support Congressional Dish for each episode via Patreon Mail Contributions to: 5753 Hwy 85 North #4576 Crestview, FL 32536 Thank you for supporting truly independent media! Recommended Congressional Dish Episodes Additional Reading Article: by Samantha Page, Think Progress, April 19, 2017. Article: by Sam Levin, The Guardian, April 17, 2017. News Release: , U.S. Environmental Protection Agency, April 13, 2017. Op-Ed: by Jack Lienke, Grist, April 12, 2017. Article: by Hiroko Tabuchi, The New York Times, April 10, 2017. Article: by Richard Nemec, Natural Gas Intel, April 6, 2017. Article: by Eric Lipton, The New York Times, March 29, 2017. Article: by Bryan Schott, UtahPolicy.com, March 27, 2017. Press Release: , U.S. Department of the Interior, March 16, 2017. Press Release: , U.S. Department of the Interior, March 15, 2017. Article: by Rob Chaney, Missoulian, March 10, 2017. Press Release: , U.S. Department of the Interior, March 6, 2017. Article: by Thomas Burr, The Salt Lake Tribune, March 1, 2017. Article: by Rong-Gong Lin II, The Los Angeles Times, March 1, 2017. Article: by Brady Dennis and Steven Mufson, The Washington Post, February 22, 2017. Article: by Natasha Geiling, Think Progress, February 19, 2017. Article: by Kirk Siegler, NPR, February 5, 2017. Article: by Heather Brown, CBS Minnesota, January 24, 2017. Document: by The American Lung Association Article: by Merrit Kennedy, NPR, December 20, 2016. Article: by Benjamin Wallace-Wells, The New Yorker, December 16, 2016. Press Release: , U.S. Department of the Interior, November 15, 2016. Article: by Holly Michels, Montana Standard, October 14, 2016. Article: by Joby Warrick and Juliet Eilperin, The Washington Post, January 15, 2016. Article: by Daniel J. Weiss and Miranda Peterson, Center for American Progress, February 10, 2014. References Encyclopedia Britannica: Fact Sheet: , US Department of the Interior U.S. Energy Information Administration: U.S. Energy Information Administration: Environmental Protection Agency: Environmental Protection Agency: Environmental Protection Agency: GovTrack: GovTrack: OpenSecrets: OpenSecrets: Sound Clip Sources Hearing: Interior Secretary Confirmation - Ryan Zinke, Senate Energy and Natural Resources Committee, January 17, 2017. Timestamps & Transcripts Part 1 42:54 Senator Lisa Murkowski: Will you commit to a formal review of all of the Obama administration’s actions that took resource-bearing lands and waters in Alaska effectively off the table, including the decisions that specifically prevented the leasing of those lands and those waters for development, and determine whether or not they can be reversed? Ryan Zinke: Yes. I think the president-elect has said that we want to be energy independent. As a former Navy Seal, I think I’ve been to 63 countries in my lifetime, and I can guarantee it is better to produce energy domestically under [missing audio] than watch it be produced overseas with no regulation. I’ve seen the consequences of what happens when you don’t have any regulation in the Middle East. We can do it right. The backbone of our environmental policies has been NEPA, and I’m a strong supporter of NEPA, but we also have to understand that we need an economy. And, look, if we don’t have an economy as a country, then the rest of it doesn’t matter, because we’re not going to be able to afford a strong military, nor are we going to be able to afford to keep the promises we’ve made as a great nation; and we’ve made a lot of promises to education, to our children’s future, to infrastructure, to Social Security; all that takes an economy that’s moving forward, and energy is a part of that economy, and Alaska is a critical part of that economy. Alaska’s different for a reason: you are blessed with great resources, you are blessed with great recreation—a little cold in the winter, but it’s not Palm Springs. Murkowski: You’re from Montana. You can handle it. Zinke: We can handle it. But, yes, I think we need to be prudent. And always, I think we need to review things to make sure we’re doing it right because over time the government keeps on getting bigger and bigger, the bureaucracy gets larger and larger, and we can’t get something done. 53:12 Senator John Hoeven: Also in North Dakota, we’ve had a real challenge with the Dakota Access Pipeline protest. You and I talked about it. State and local law enforcement has worked very hard to keep the peace and to keep people safe, but we need federal law-enforcement help as well, and so in your case, that’s going mean BIA law enforcement. And, so, my question is, if you’re confirmed, will you ensure that BIA law enforcement works with state and local law enforcement to resolve the situation, to keep people safe, and to make sure that the rule of law is followed? Ryan Zinke: Yes, sir. And we talked about it in your office, and if confirmed, I’m going to be a very busy man, travelling. I’m going to travel to Utah, travel to Alaska, and travel to North Dakota. Those are three impending problems that we need to resolve quickly. I have great respect for the Indian nations. I’m adopted Assiniboine. Last time the Sioux Nations all got together, I would say General Custer probably would say that was not a good issue. So, you look at this, and there is deep cultural ties, there is a feeling that we haven’t been a fair consultant, a fair partner, and so I think we need to listen to that voice. 57:45 Senator Bernie Sanders: President-elect Trump has suggested—more than suggested—stated in his view that climate change is a “hoax.” Now I know that you’re not here to be administrator of the EPA or secretary of the Energy, but the issue of climate change is in fact very important for issues that the Department of Interior deals with. Is President-elect Trump right? Is climate change a hoax? Ryan Zinke: I can give you—the best answer is three things: First of all, climate is changing. That’s indisputable. I’m from Glacier National Park, and I’ve seen— Sanders: You don’t have any more glaciers there, huh? Zinke: Well—and I’ve seen glaciers over the period of my time recede. Matter of fact, when my family and I have eaten lunch on Grinnell Glacier, the glacier has receded during lunch. Sanders: All right. But I have—if you could— Zinke: Yeah. Sanders: —is the president-elect right? Is climate change a hoax? Zinke: Well, if I can give you two more points— Sanders: Okay. Zinke: —I’ll make it short. The second thing is man has had an influence. I don’t think—I think that’s indisputable as well. So, climate is changing, man is an influence. I think where there’s debate on it is what that influence is, what can we do about it, and as the Department of Interior, I will inherit, if confirmed, the USGS. We have great scientists there. I’m not a climate-scientist expert, but I can tell you I will become a lot more familiar with it, and it’ll be based on objective science. I don’t believe it’s a hoax; I believe we should— Sanders: You do not believe it's a hoax. Zinke: No. I believe we should be prudent to be prudent. That means I don’t know definitively; there’s a lot of debate on both sides of the aisle— Sanders: Well, actually, there’s not a whole lot of debate now. The scientific community is virtually unanimous that climate change is real and causing devastating problems. There is the debate on this committee but not within the scientific community. 59:40 Senator Bernie Sanders: If climate change is already causing devastating problems, should we allow fossil fuel to be drilled on public lands? Ryan Zinke: Again, we need an economy and jobs, too. And I, in my experience, have probably seen 63 different countries. I’ve seen what happens when you don’t have regulated— Sanders: I’m taking your—I don’t mean to be rude, but this is not a whole lot—I’m taking your answer to be yes, we should allow fossil fuel to be drilled on public lands. Zinke: I’m an all-the-above energy, and I want to be honest with you—I’m all the above. Sanders: Will you encourage wind and solar on public lands? Zinke: I will encourage, absolutely, wind and sol—all the above. Sanders: Okay. Zinke: So I think that’s the better solution going forward is all-the-above energy. 1:00:40 Ryan Zinke: I want to be clear in this point: I am absolutely against transfer or sale of public land. 1:39:40 Senator John Barrasso: The war on coal: it is real for communities across the West, including Wyoming, including Montana; it’s devastated small towns, ultimately threatens our country’s energy security. If confirmed, will you commit to ending this moratorium on federal coal leasing? Ryan Zinke: The war on coal, I believe, is real. I have Decker, Montana, in my area, and behind me is a gentleman that works in the coal mines of the Crow Agency, which, by the way, the Crow Agency, if you were to take coal out of the picture, the unemployment rate would probably in the 90 percent. So they’re very keen on making sure they have their jobs and we give them the ability for self-determination. The moratorium, I think, was an example of many, is that one size fits all. It was a view from Washington and not a view from the states, particularly if you’re a state such as Wyoming, parts of Montana, West Virginia, where coal’s important. So overall, the president-elect has made a commitment to end “ the war on coal.” I think we should be smart on how we approach our energy. “All the above” is a correct policy. Coal is certainly a great part of our energy mix. To your point, I’m also a great believer that we should invest in the research and development, particularly on coal, because we know we have the asset. Let’s work together to make it cleaner, better. We should be leading the world in clean-energy technology, and I’m pretty confident that coal can be a part of that. 1:41:36 Senator John Barrasso: With the use of the Congressional Review Act, and I’m planning introducing a disapproval resolution on the BLM’s venting and flaring rule. To me that rule far exceeds the authority of the BLM, will ultimately put federal lands at a greater competitive disadvantage to state and private lands. Will you support our efforts to reverse this rule under the Congressional Review Act? Ryan Zinke: Yes, and I think what the driving force is is we’re venting a lot, and we’re wasting energy. And that is troubling to me, is that the amount of venting in North Dakota alone almost exceeds what we get out of the fields. So, a lot of the wasting can be approached by having an infrastructure. So let us build a system where we capture that energy that is otherwise being wasted. And that’s an enormous opportunity. It’s an enormous opportunity, our natural gas and geopolitically as well. We haven’t talked a lot about overseas, but energy is so critically important. If we want to check Russia, then let’s do it with liquid natural gas. If we want to put pressure on Iran, then let’s supplant every drop of Iranian crude. This is all part of a larger package, and it cannot be done without the great state of Wyoming and their assets, or Alaska. But we have to think globally on it, and it is better—and I’ve said this once before—but it is better to produce energy in America under reasonable regulation and get better over time than watch it be produced overseas with no regulation. That is indisputable. 1:43:23 Senator John Barrasso: And I want to talk about sage grouse management plans. The administration has ignored input from key stakeholders, including Western governors during the development of their plans, plans which were used to justify [missing audio] unwarranted status under the Endangered Species Act. But at the core, the plans fundamentally oppose the multiple-use mandates of the BLM, which includes grazing, recreation, energy development. Will you commit to returning conservation and management authority of the sage grouse back to the states in preventing this top-down mandate like this in the future? Ryan Zinke: My understanding is the sage grouse decision is going to come before the Department of Interior some time in March. I understand there’s going to be options and alternatives, proposed alternatives. I will work with you when I see those documents, and I’ll work with all of you when I see those documents, to make sure we’re doing the right thing. What concerns me about sage grouse is there’s no target number. I’m not sure how you can manage without a number. If we just grab a management of property without a number, I look at that with a suspect eye. So I think we’ve got to look at, everyone loves sage grouse, everyone understands that we have to protect the species, and generally those living in the ground are in a better position, and we should be an advocate and a partner in this rather than heavy-handed and just dictate terms, particularly when we don’t have a number. 2:33:40 Senator Mazie Hirono: In the discussion about energy, you’ve said a number of times that you support “all of the above,” which sounds really great except that in “all of the above,” what’s happened is that the fossil-fuel side of energy has gotten a lot of support over decades. So I hope that when you say “all of the above” that you will also be committed to providing more resources and support, particularly R&D for alternative and renewables, aside from, or in addition to, fossil fuels. So we need to have a more-level playing field for policies that truly reflect support for “all of the above.” Ryan Zinke: Yeah. I’ve always been a strong proponent on the record for research and development of different technologies, different innovations, different opportunities in this complete spectrum of the energy to include looking at traditional sources to make sure we’re better at doing that, you know, certainly horizontal drilling, fracking— Hirono: Yeah. Zinke: —coal. But “all the above” I think is the right approach. And when it comes out of the test tube and into fielding, energy needs to be affordable, reliable, and abundant. Part 2 12:15 Ryan Zinke: On the Gateway Pacific Terminal, what I raised my eyebrow on is I didn’t take a position, whether yes or no, on the Terminal. I took a position to make sure the NEPA process was followed and the EIS was completed before making a judgment. What I found was we were close to ending the NEPA process, with the EIS, after years and millions of dollars were spent on it, and then that was truncated and stopped by affidavits—and I didn’t judge whether the affidavits from the tribe were true or not true—if you don’t finish the NEPA process and don’t finish an EIS, and then all of a sudden that process can be interrupted and a permit can be pulled on the basis of something outside the EIS, why would you ever consent to spend millions of dollars on an EIS? That was my objection. And I don’t mean to speak for Senator Daines. Senator Maria Cantwell: So, you believe in the tribal sovereignty of the Lummi tribe to object in this case. Zinke: They certainly had every right to object as well as, in this case, the Crows, who also have a treaty obligation. 15:06 Senator Steve Daines: You have been a champion fighting on behalf of the Crow tribes, as you mentioned here in that last exchange, their sovereign right to develop their coal resources. And as you said in your testimony, the unemployment rate in Crow country will go north of 90 percent if they lose those jobs. Hearing: EPA Administrator Confirmation - Scott Pruitt, Senate Environment and Public Works Committee, January 18, 2017. Timestamps & Transcripts Part 1 01:30 Chairman John Barrasso: Good morning. I call this hearing to order. We have a quite a full house today. I welcome the audience. This is a formal Senate hearing, and in order to allow the committee to conduct its business, we’ll maintain decorum. That means if there are disorders, demonstrations, by a member of the audience, the person causing the disruption will be escorted from the room by the Capitol Police. 22:50: Senator Jim Inhofe: Yes, as attorney general, Scott Pruitt has fought the EPA, the Fish and Wildlife Service, the oil companies, and the out-going administration on many fronts, but all of these suits were brought to protect state and local interests from overzealous and activist executive agencies. Over the last eight years, the Obama administration has advanced a radical environmental agenda, has exhibited a deep distrust of state governments and private land owners, and has worked to obstruct the fossil-fuel industry and agriculture producers, the most-ardent protectors of the environment. 29:52 Scott Pruitt: I would lead the EPA with the following principles in mind: First, we must reject as a nation that false paradigm that if you’re pro-energy, you’re anti-environment; and if you’re pro-environment, you’re anti-energy. I really reject that narrative. In this nation we can grow our economy, harvest the resources God has blessed us with, while also being good stewards of the air, land, and water by which we’ve been favored. It is not an either-or proposition. Next, we should celebrate the great progress we’ve made as a nation since the inception of the EPA and the laws that have been passed by this body, but recognize that we have much work to do. Third, rule of law matters. Process matters. It inspires confidence in those that are regulated. The law is static, not transient. Regulators are supposed to make things regular, to fairly and equitably enforce the rules and not pick winners and losers. A regulator should not be for or against any sector of our economy; instead, a regulator ought to follow the law in setting up the rules so that those who are regulated can plan, allocate resources, to meet the standards versus operating in a state of uncertainty and duress. Fourth, federalism matters. It matters because Congress says so. And because we need to achieve good outcomes as a nation for air and water quality, we need the partnership of the states to achieve that. It is our state regulators who oftentimes best understand the local needs and the uniqueness of our environmental challenges, plus our state regulators possess the resources and expertise to enforce our environmental laws. Fifth, public participation is key. We need to hear all voices as we make decisions in behalf of our country with respect to environmental laws. 39:07 Senator Tom Carper: In 2011 the EPA required dirty coal power plants to clean up mercury and air toxic emissions by issuing the Mercury and Air Toxics Standards rule. This rule will reduce the mercury, a neurotoxin that contaminates our streams and our oceans, pollutes our fish, and harms our children’s health. As attorney general, I believe you’ve been part of at least 14 legal cases against the EPA, and at least three of these cases against the EPA’s rules, to reduce mercury emissions from power plants. Is that correct? Just yes or no. Scott Pruitt: Senator, we have been involved in litigation around the MATS rule. Carper: Is that correct? Yes or no. Pruitt: As I indicated, yes, we’ve been a part of litigation involving the MATS rule. Carper: Thank you. It’s my understanding that at least one of these cases against the mercury rule is still pending. Is that correct? Just yes or no. Pruitt: I believe so, Senator, yes. Carper: Thank you. 43:40 Senator Jim Inhofe: I’m glad you brought up this thing about the Clean Air Act. The amendments from 1990, I was one of the cosponsors, it’s been incredibly successful. I mean, you mentioned that we’ve reduced those pollutants by 63 percent, but what you didn’t add was that it is in spite of the fact that we had 153 percent increase in our economic activity. That’s a major thing. 48:52 Senator Sheldon Whitehouse: In Rhode Island, we have bad air days, and because of EPA’s work, there are fewer and fewer. A bad air day is a day when people driving into work hear on the radio that ozone from out-of-state smokestacks has made the air in Rhode Island dangerous and that infants and the elderly and people with breathing difficulties should stay home on an otherwise beautiful day. Because those smokestacks are out of state, we need EPA to protect us, and I see nothing in your record that would give a mom taking her child to the hospital for an asthma attack any comfort that you would take the slightest interest in her. And your passion for devolving power down to states doesn’t help us, because our state regulators can’t do anything about any of those problems; they all come from out-of-state sources. 49:45 Senator Sheldon Whitehouse: One of the things I’d like to ask you about here is the connection between you and some of these fossil-fuel companies. These are some of the companies that have supported you. These are some of the political organizations that you’ve raised money for. You’ve raised money for them for Pruitt for Attorney General, correct? Scott Pruitt: Yes, sir. I have a campaign committee for that, yes. Whitehouse: And Devon Energy, Koch Industries, ExxonMobil have all maxed out to that account. Pruitt: I’m not aware— Whitehouse: At various times. Pruitt: —if they maxed out or not, Senator, but I’m sure they’ve given to that committee. Whitehouse: Oklahoma Strong PAC is your leadership PAC? Pruitt: It was, yes. Whitehouse: It was? And, similarly, they gave money, they maxed out to that organization as well, which you controlled? Pruitt: I’m unsure about that, Senator. Whitehouse: Okay. But they contributed to it. Pruitt: I’m even unsure about that as well. I haven’t looked at that. Whitehouse: You closed your super PAC, Liberty 2.0, but that took fossil-fuel contributions as well, correct? Pruitt: That particular entity has been closed, yes. Whitehouse: Now, you helped raise money for the Republican Attorney General’s Association. While you were a member of its executive committee, they received $530,000 from Koch Industries, $350,000 from Murray Energy, $160,000 from ExxonMobil, and $125,000 from Devon Energy, the company whose letter you transposed onto your letterhead and sent as an Oklahoma attorney general document. 1:11:57 Senator Jeff Merkley: Over a number of years, information started pouring into EPA that the estimate of the amount of fugitive methane escaping in gas and oil drilling had been deeply underestimated. In 2011 the EPA put out its best estimates based on the information that was being presented. And this is relevant because methane is a global-warming gas, more potent than CO2. Gas companies didn’t like this because, well, it presented a vision of natural gas being more damaging environmentally than folks had previously understood. Devon Energy is one of the groups that sought to cast doubt on this scientific information, and it came to you to be their spokesperson, and they asked, will you be our mouthpiece in casting doubt and send a letter we have drafted to the EPA, and you sent that letter. And I just want to ask, first, are you aware that methane is approximately 30 times more potent than carbon dioxide as a global-warming gas? Scott Pruitt: I am, Senator. It’s— Merkley: Thank you. Pruitt: —the impact on human health— Merkley: That’s the answer. Yes. Thank you. It’s a yes-no question. And on a one to 10 scale, how concerned are you about the impacts of fugitive methane in driving global warming? Pruitt: Methane, as you indicated, has— Merkley: One to 10 scale. Highly, 10, very concerned; or one, not so concerned? Pruitt: The quantities of methane in the atmosphere compared to CO2 is less, but it’s far more potent, and it is— Merkley: Are you concerned? I’m asking about your level of concern. Pruitt: Yes, yes. Merkley: Highly concerned? Pruitt: I'm concerned. Merkley: Thank you. 1:13:34 Senator Jeff Merkley: Do you acknowledge sending this letter to the EPA in October 2011? Pruitt: Senator, that is a letter that’s on my letterhead that was sent to the EPA, yes, with respect to the issue. Merkley: You acknowledge that 97 percent of the words in that letter came directly from Devon Energy? Pruitt: I have not looked at the percentages, Senator. Merkley: The statement that’s been analyzed many times is that all of the 1,016 words, except for 37 words, were written directly by Devon Energy. Pruitt: Senator, that was a step that was taken as attorney general representing the interest of our state. Over 25 percent of our— Merkley: Yeah, so, I didn’t ask that question. I was just asking if you copied the letter virtually word for word. You have acknowledged that, yes, it’s in the record, people can count it, is correct. All right, so, a public office is about serving the public. There is a public concern over the impact of methane on global warming. There is scientific research showing that it’s far more devastating than anticipated and far more is leaking than—but you used your office as a direct extension of an oil company rather than a direct extension of the interests of the public health of the people of Oklahoma. Do you acknowledge that you presented a private oil company’s position rather than a position developed by the people of Oklahoma? Pruitt: Senator, with respect, I disagree. The efforts that I took as attorney general were representing the interests of the state of Oklahoma. Merkley: Earlier you said you— Pruitt: And there was a concern about— Merkley: No, no, excuse me. I’m asking the questions. You said earlier you listen to everyone. In drafting this letter, you took an oil company’s position, and then, without consulting people who had diverse views about the impact, you sent it off. How can you present that as representing the people of Oklahoma when you simply only consulted an oil company to push its own point of view for its private profit? Pruitt: Senator, there’s an obligation the EPA has to follow processes as established by this body. The cost-benefit analysis under Section 112 is something that they have to engage in. There was a concern about the overestimated percentages that the EPA put in the record—it was a record-based challenge—that was the expression of the letter to the EPA, and it was representing the interests of an industry in the state of Oklahoma— Merkley: Thank you. Pruitt: —not a company, an industry. Merkley: So, my question was, what other groups—environmental groups or other groups—did you consult so that you had that full perspective before representing simply a for-profit oil company using your official office and your official letterhead? Pruitt: There—I consulted with other environmental officials in Oklahoma that regulate that industry and learned from them with respect to the concerns about the estimates that were provided by the EPA. Merkley: Can you provide this committee with information showing who you consulted in representing this letter specifically for Devon Energy, because the information that’s in the public realm only shows that they simply sent you a letter, asked you to send it, and you sent it without questions. Pruitt: We have seven or so individuals in our office that are involved in these kinds of issues, and we will collect the information they have and provide it to this body pursuant to the chairman’s direction. Merkley: Your staff expanded substantially while you were in charge, to 251 staff members. Why do you need an outside oil company to draft a letter when you have 250 people working for you? Pruitt: Senator, as I’ve indicated, that was an effort that was protecting the state’s interest in making sure that we made the voices of all Oklahomans heard on a very important industry to our state. Merkley: You said that all heard, but you only sent it on behalf of a single voice: the oil company. Pruitt: That— Merkley: Thank you. 1:24:11 Senator Cory Booker: You’ve joined or filed 14 lawsuits against the EPA, challenging clean air and clean-water rules, yes? Scott Pruitt: We’ve been involved in multiple pieces of litigation, Senator. Booker: Yeah, but I’m looking at specifically 14, and, Mr. Chairman, I’d like to put those 14 lawsuits into the record, of where you specifically challenged the EPA on air quality. And let me just go through some of those. Chairman Barrasso: Without objection. Booker: Thank you, sir. To refresh your recollection, you filed two lawsuits challenging the EPA Mercury and Air Toxics Standards; you filed a lawsuit challenging the EPA’s 2015 National Ambient Air Quality Standards for ozone; you filed four lawsuits challenging the EPA’s Clean Power Plan; you have sued to challenge the EPA’s 111(b) standards for carbon dioxide emissions from new power plants; and you also sued to challenge the EPA’s Federal Implementation Plan for Oklahoma under the Regional Haze rule. You’re familiar with those, I imagine. Pruitt: Yes, Senator. Booker: And you filed a lawsuit challenging the EPA Cross-State Air Pollution Rule, something in New Jersey we’re very concerned with. And are you aware that that Rule, which you lost in that suit, scientists estimate that that alone prevents 400,000 asthma attacks nationally each year? Are you aware or those estimations? Pruitt: Yes, Your Honor. Or, yes, Senator. May I offer— Booker: I appreciate your promotion to judge. Let me continue, Mr. Pruitt. I don’t have that much time. Pruitt: Okay. Booker: So, each of these lawsuits that I just went through and that we analyzed, all of them challenge attempts by the EPA to reduce air pollution. In all of them except one you filed those lawsuits, joining with polluting companies that were also suing the EPA. And, so, in addition to filing those lawsuits with some of the polluting companies, or at least one that has now been specifically mentioned by two of my colleagues, you used substantial portions of the letters from those companies, put them on your official attorney general letterhead; and what was sort of surprising to me is that when you’ve been asked about this in the public, you basically represented that, “That’s actually called representative government in my view of the world.” Your testimony here says that you were representing industry; you were representing the polluters. And, so, with all of these lawsuits you filed, and with all of these letters like this one written to the EPA, on behalf of the industries that are causing the pollution, it seems clear to me that obviously the fact pattern on representing polluters is clear, that you worked very hard on behalf of these industries that have their profits externalized, negative externalities are their pollution. And, so, I just have a question for you specifically about the children of Oklahoma. Do you know how many kids in Oklahoma, roughly, have asthma? Pruitt: I do not, Senator. Booker: Well, according to the data published by the very non-partisan group, the American Lung Association, more than 111,000 children in Oklahoma, which is more than 10 percent, more than one in 10 of all the kids in Oklahoma, have asthma. That’s one of the highest asthma rates in the entire United States of America. Now, this is a crisis—similar data, for where I was mayor—and I can tell you firsthand the devastating impacts that asthma has on children and families: affecting their economic well-being; parents who have to watch their children struggle to breathe; people that have to miss work, rushing their kids to the hospital. One in 10 kids having a disease, missing school, is a significant problem. And so if you’ve been writing letters on behalf of polluting industries, I want to ask you, how many letters did you write to the EPA about this health crisis? If this is representative government, did you represent those children? I want to know what actions you’ve taken in the past six years in your capacity as protector of the welfare of Oklahoma citizens to protect the welfare of those 111,000 children. Did you ever let any of them write letters on your letterhead to the EPA, and did you even file one lawsuit—one lawsuit—on behalf of those kids to reduce the air pollution in your state and help them to have a healthy life? Pruitt: Senator, I’ve actually provided a list of cases to the chairman with respect to enforcement steps we’ve taken in multiple pieces of environmental litigation, but let me say to you, with respect to Cross-State Air Pollution and some of the cases you referred to, the state has to have an interest before it can bring those cases, as you know. You can’t just bring a lawsuit if you don’t have standing, if there’s not been some injury to the state of Oklahoma. In each of those cases, the court determined that there was a state interest— Booker: My time has expired, but if I could just say, injury, clearly asthma is triggered and caused by air pollutants. Clearly there is an air pollution problem, and the fact that you have not brought suits in any of the levels which you’ve represented the industries that are causing the pollution is really problematic when you’re going to sit in a position that is nationally supposed to be affecting this reality. And asthma in our country is the number one reason why children in America, health reason, why children in America miss school. 1:37:28 Senator Ed Markey: Eight of those cases are still ongoing, including your litigation that challenges critical rules that reduce levels of hazardous smog, mercury, and carbon pollution. As EPA administrator, you would be in a position to serve as plaintiff, defendant, judge, and jury on these ongoing eight lawsuits, and that would be wrong. In your ethics agreement, you have said that you would not participate in any matter that is ongoing litigation within one year, but, Mr. Pruitt, isn’t it correct that these lawsuits may very well continue for much longer than one year? Scott Pruitt: Well, Senator, I have the letter from the ethics counsel at the EPA, and the one-year time period is intended to address covered entities, entities that I served in a chairmanship or an officer capacity. The Southern Theological Seminary, the Windows Ministry, those entities are covered entities. So if there is a matter that arises before the EPA within a one-year period, a particular matter, a specific case that involves those entities, then the recusal would be in order. But that’s really the focus of the one-year timeline. Markey: So, will you agree to recuse yourself from those lawsuits which you brought as the attorney general of Oklahoma against the EPA, not just for one year, but for the entirety of the time that you are the administrator of the EPA? Will you commit to doing that? Pruitt: Senator, for clarity, I think that it’s important to note that the one-year time period, again, is for those covered entities that were highlighted in the EPA letter. With respect to pending litigation, the EPA ethics counsel has indicated, with respect to particular matters and specific parties, there will be an opportunity to get counsel from the EPA at that point to determine what steps could be taken to avoid appearances of impropriety. Markey: So, you will not recu—are you saying that you will not recuse yourself from the actual matters which you’re suing the EPA on right now as attorney general of Oklahoma for the time that you are the head of the EPA? Pruitt: I’m not saying that at all, Senator. Markey: You are saying that. Will you recuse yourself? Pruitt: I’m saying that the EPA ethics counsel has indicated those cases will require a review by the EPA ethics counsel, and if it involves a particular matter with a specific party, then recusal would potentially be in order, and I would follow the guidance and counsel of EPA ethics. Markey: I just think this is—this is a clear line for the American public, given your record from Oklahoma in suing the EPA on all of these matters, that if you don’t agree to recuse yourself, then, again, you become plaintiff, defendant, judge, and jury on the cases that you’re bringing right now as attorney general of Oklahoma against the EPA; and the EPA is for all of the people of the United States, not just the fossil-fuel industry of Oklahoma. So you’re not committing—and I think that’s a big mistake, Mr. Pruitt—to recuse yourself from those cases. It is critical. 2:19:49 Senator Kirsten Gillibrand: I’ve looked at your record. Most of the lawsuits you filed as attorney general were related to businesses, specifically what was important for your state in terms of employers and businesses, and the few lawsuits you did file about human safety were few and far between, but this role as head of the EPA, you’re going to have a much more important role to play. And I want to talk specifically about mercury. If you believe that mercury is a threat to public health but oppose the remedy of reducing mercury air pollution from power plants because it’s too costly, what, then, do you think you should do or what should be done to address the mercury pollution? Scott Pruitt: Let me say, Senator, mercury is something—it is a hazardous air pollutant under Section 112. It is something that the EPA has authority to regulate and should regulate. It should do so, though, within the framework established by this body, and the Supreme Court said that the EPA did not follow the cost-benefit obligations. It’s not that the benefits outweigh the costs, it’s just that they simply didn’t engage in a proper record-based support for their rule. And so that goes back to earlier questions with other senators about the process mattering, being committed to the rule of law and the rulemaking authority that Congress has given the EPA in making sure that as rules are passed, that they can be upheld in court. Gillibrand: But, I need you also to be worried about human health. I understand there’s a cost, but when you’re talking about lives, when you’re talking about children who can’t breathe—I’ve been to the emergency room at two in the morning with a child who can’t breathe; it’s a horrible thing. We’ve had children die in New York City because none of their teachers, no administrators in the schools knew what to do when a child has an asthma attack. It’s a huge problem. So I need you to care about human health and really believe that the cost, when human health is at risk, when people are dying, is far higher than it is the cost to that polluter to clean up the air and change their processes. I need you to feel it as if your children sitting behind you are the ones in the emergency room. I need you to know it. 2:31:32 Senator Bernie Sanders: And I apologize for being late, but we were at a hearing with Congressman Price, who is the nominee for HHS, and perhaps not a great idea to have important nominating hearings at exactly the same time. 2:33:30 Scott Pruitt: I believe the ability to measure with precision the degree of human activity’s impact on the climate is subject to more debate on whether the climate is changing or the human activity contributes to it. Senator Bernie Sanders: While you are not certain, the vast majority of scientists are telling us that if we do not get our act together and transform our energy system away from fossil fuel, there is a real question as to the quality of the planet that we are going to be leaving our children and our grandchildren. So, you are applying for a job as administrator for the EPA to protect our environment; overwhelming majority of scientists say we have got to act boldly, and you are telling me that there needs to be more debate on this issue and that we should not be acting boldly. Pruitt: No, Senator. As I’ve indicated, the climate is changing, and human activity impacts that. Sanders: But you haven’t told me why you think the climate is changing. Pruitt: Well, Senator, the job of the administrator is to carry out the statutes as passed by this body and to _ Sanders: Why is the climate changing? Pruitt: Senator, in response to the CO2 issue, the EPA administrator is constrained by statutes Sanders: I'm asking you a personal opinion. Pruitt: My personal opinion is immaterial— Sanders: Really?! Pruitt: —to the job of carrying out— Sanders: You are going to be the head of the agency to protect the environment, and your personal feelings about whether climate change is caused by human activity and carbon emissions is immaterial? Pruitt: Senator, I’ve acknowledged to you that the human activity impacts the climate. Sanders: Impacts. Pruitt: Yes. Sanders: Scientific community doesn’t tell us it impacts; they say it is the cause of climate change, we have to transform our energy system. Do you believe we have to transform our energy system in order to protect the planet for future generations? Pruitt: I believe the EPA has a very important role at regulating the emissions of CO2. Sanders: You didn’t answer my question. Do you believe we have to transform our energy system away from fossil fuel, to do what the scientific community is telling us, in order to make sure that this planet is healthy for our children and grandchildren? Pruitt: Senator, I believe that the administrator has a very important role to perform in regulating CO2. Sanders: Can you tell me, as I think all of us know, Oklahoma has been subjected to a record-breaking number of earthquakes. Scientists say that Oklahoma is almost certain to have more earthquakes, with heightened risk of a large quake, probable to endure for a decade and that the cause of this is fracking. Can you point me—picking up on Senator Harris’s discussion with you, can you point me to any opinion that you wrote, any enforcement actions you took, against the companies that were injecting waste fracking water? Pruitt: Senator, let me say I’m very concerned about the connection between activity in Oklahoma and- Sanders: And, therefore, you must have taken action, I guess. Can you tell me who you fined for doing this, if you are very concerned? Pruitt: The Corporation Commission in Oklahoma is vested with the jurisdiction, and they have actually acted on that. Sanders: And you have made public statements expressing your deep concern about this. Pruitt: We have worked with, through our- Sanders: You have made public statements. You’re in a state which is seeing a record-breaking number of earthquakes. You’re the attorney general. Obviously, you have stood up and said you will do everything you can to stop future earthquakes as a result of fracking. Pruitt: Senator, I’ve acknowledged that I’m concerned about the- Sanders: You acknowledged that you are concerned. Pruitt: Yes. Sanders: Your state is having a record number of—well, if that’s the kind of administrator for the EPA—your state’s having a record-breaking number of earthquakes, you acknowledge you are concerned; if that’s the kind of EPA administrator you will be, you are not going to get my vote. 2:37:43 Senator John Barrasso: I want to talk about some of the concerns I have with overregulation, and I’ll ask, do you have the same concerns with the overregulation of U.S. manufacturing over the last eight years? I believe we’ve _____(00:08) exported manufacturing jobs overseas, jobs that go with them in terms of the manufacturing of those goods to places like China and India that are going to produce those products in a less environmentally friendly way. And do you agree with this notion that this approach harms not just the environment, but also our own U.S. economy? Pruitt I believe, Senator, that it puts us in an economic disadvantage when we don’t hear all voices in the rulemaking process with respect to these issues, absolutely. Part 2 17:04 Senator Sheldon Whitehouse: Let me just ask you this as a hypothetical: if you had raised significant amounts of money for the Rule of Law Defense Fund from corporations who will be subject to EPA’s regulation, before EPA, with matters before EPA, might that place you in a conflict of interest? Scott Pruitt: The EPA ethics counsel has said—and by the way, these are career individuals as you know, Senator. Justina Fugh is a career person at EPA ethics, and so as they’ve reviewed these potential conflicts, I’ve disclosed all entities I’ve been affiliated with. Whitehouse: I understand that, but I’m asking you if you think it might place you in a conflict of interest, because we both understand that the ethics rules that the EPA’s enforcing predate Citizens United, predate dark money, and they’ve said in the letter that they aren’t even looking at that because they don’t have the authority to. That doesn’t mean it’s not a conflict of interest; it means that the regulatory authority on government ethics hasn’t caught up with this post-Citizens United, dark-money world. Pruitt: I think— Whitehouse: My question is, you’re a lawyer, you know conflicts of interest, you’ve been an attorney general, might it be a conflict of interest, within your definition of the term, if you had raised significant amounts of money for this Rule of Law Defense Fund and they’ll have business before EPA with you? Is that a potential conflict of interest? Pruitt: I think Justina Fugh actually did address those entities to the degree that I was never an officer of the super PAC that you referred to earlier, the Liberty 2.0, and so they looked at those entities to determine— Whitehouse: The question was fund raising. Pruitt: They looked at those entities— Whitehouse: That’s the question we don’t have any answers on is what you raised. Pruitt: They looked at those entities to determine what the nature of my relationship was and then indicated that those would have to be evaluated in the future as cases arose, and— Whitehouse: Right now, the chairman asked you a question which is, are there matters that might place you in a conflict of interest that you have not disclosed? You answered no. Might not having raised significant money—let’s say $1 million, let’s say you made a call to Devon Energy and said, I did you letter for you, RAGA needs a lot of money, we’ve got this dark-money thing where we can launder your identity clean off it, and the money will go into RAGA, I need a million bucks out of you—might that not create a conflict of interest for you if that were the facts? Pruitt: Ms. Fugh has indicated in her letter to me—again, these are career individuals at EPA ethics—that if particular matters involving specific parties arise in the future, it will be evaluated at that point, but I want to call into account— Whitehouse: But how will they know if you’re not willing to disclose that you raised the hypothetical million dollars from Devon Energy? Pruitt: Well, those aren’t even covered entities under her letter at this point. Whitehouse: That's my point. Pruitt: But it’s factual— Whitehouse: But that may very well create a conflict of interest, mightn’t it? Pruitt: Senator, I did not serve in an office or capacity at that entity. In fact, I was not [unclear] in any way— Whitehouse: You’ve said that already, too, but that also is not the question. The question is a very simple one: did you raise money for the Rule of Law Defense Fund from entities that will appear before EPA as potential defendants in subjects of regulation, and if so, how much, and what did you tell them, and what did you ask? It seems to me that’s not an unusual or— Pruitt: The Rule of Law Defense Fund, according to Ms. Fugh, would need to be a party in the future for that to be an issue. That’s what she’s indicated in her letter to me. Whitehouse: So— Pruitt: At the time— Whitehouse: So let me— Pruitt: —if issues arise in the future, I will seek the counsel of EPA ethics and follow the advice of those career folks to make a decision and recuse if necessary. That is— Whitehouse: But at this point— Pruitt: —something I commit to doing. Whitehouse: At this point, what I deduce from your statement is that if that set of hypothetical facts were true, if you had raised a million dollars from a big energy corporation to go through the Rule of Law Defense Fund to support your efforts at RAGA, that that is not something anybody should care about, even if that corporation is before you at EPA and subject to your regulation at EPA. Pruitt: Well, I think something that, if presented in the future, Justina Fugh and myself, EPA ethics would evaluate that, and I would take the appropriate steps to recuse if they told me to do so. Whitehouse: But how would it be presented in the future if you’re not willing to present it now? Pruitt: If there’s a matter— Whitehouse: Why does it matter in the future and not now? Pruitt: If there’s a matter or cast that comes before the EPA’s authority, that would be something. There’s ongoing—as you know, Senator, Ms. Fugh indicated this in her letter—there’s ongoing obligations that I will have, if confirmed as administrator, to bring those kinds of matters to attention of EPA ethics. Whitehouse: Well, for what it’s worth, I think that the Senate has a role in policing this as well, that the whole purpose of advice and consent and the reason there are these government ethics filings is so we can look at this exact question, and the fact that they haven’t been updated to take into account dark money and all these big political organizations that have been created with dark money doesn’t take away our Senate obligation to find out what conflicts of interest you will bring to the position of administrator. And it gives me very little comfort that you’re not willing to answer those questions here. My time has expired. I’ll continue in other rounds. 1:07:50 Senator Ed Markey: Do you support the current California waiver for greenhouse gas standards? Scott Pruitt: Senator, that’s what would be evaluated, and I think it’s very difficult, and we shouldn’t prejudge the outcome in that regard if confirmed as administrator. Markey: So you’re questioning the current waiver. You don’t think they’re entitled to the current waiver. Pruitt: Well, the waiver is something that’s granted on an annual basis, and the administrator would be responsible for making that decision. Markey: Yeah. And so you say you’re going to review it. Pruitt: Yes, Senator. Markey: Yeah. And when you say review, I hear undo the rights of the states, and I think to a certain extent that it’s troublesome because, obviously, what we’ve heard all day is how much you support states’ rights when it comes to these issues, but now when it comes to the right of California or Massachusetts and other states to be able to reduce carbon pollution, you’re saying you’re going to review that. So my problem really goes to this double standard that is created that when you sue from the Oklahoma perspective, from the oil and gas industry perspective, and you represent Oklahoma, you say they have a right to do what they want to do in the state of Oklahoma. But when it comes to Massachusetts or it comes to California, and it comes to the question of those states wanting to increase their protection for the environment, protect their victimization from carbon pollution, you say there you’re going to review. 1:51:58 Senator Jim Inhofe: The cost of regulations: as you know, the Supreme Court overturned the EPA’s Mercury and Air Toxics—that’s MATS—rule in 2015 because the EPA failed to—ignored the fact that the cost was $9.6 billion annually of the rule. Now, in fact, the EPA’s regularly issued rules over the past eight years that are very costly for our industries and our job creators. According to the CRS—now, CRS, when they make an evaluation, are much more conservative, the figure is always a very conservative figure, but they said the Clean Power Plan would be at least $5 billion to $8 billion a year. The figures I’ve heard on that are far greater because it wouldn’t be that much different than the old systems that they tried to do through legislation: the methane standards on oil and gas facilities, $315 million a year; the new ozone standards, $1.4 billion; the 2015 coal ash standards, $587 million a year; and the 2011 sulfur dioxide standards, $1.5 billion a year. Now, when you hear this, all this money is being spent on compliance costs by our job creators, people out there that are working for a living, and they’re hiring people. What are you thoughts, and what do you believe should be the role of the costs of EPA’s decision making? Pruitt: I think it’s very important in the rule-making process, Senator, and the Supreme Court and courts have recognized that very important factor. 1:54:46 Senator Sheldon Whitehouse: We have been talking about fundraising done by you for the Rule of Law Defense Fund during the time when you were both a board member and for a full year the chairman of the Rule of Law Defense Fund and the fact that we have exactly zero information in this committee about that fundraising. We also have zero—and let me ask unanimous consent for the page from— Chairman Barrasso: Without objection. Whitehouse: —the filing that discloses that he was in fact a member of the board of directors and chairman of the Rule of Law Defense Fund. We also have a meeting agenda from the Republican Attorney Generals Association during a time that you were executive committee member of the Republican Attorney Generals Association meeting at The Greenbrier, which I’ll stipulate for my friend from West Virginia is a lovely place to go, and the agenda, which I’d like to take this page of and put into the record, mentions a private meeting with Murray Energy. It mentions a private meeting with Southern Company. It mentions a private meeting with the American Fuel Petrochemical Manufacturers. If you’ll show the graphic, these are all the same groups that I’d been asking about in terms of your fundraising for the Rule of Law Defense Fund, and there’s Murray Energy, and there’s Southern Company, and I’m sure the American Fuel Petrochemical Manufacturers represent a lot of the others. As I understand it, we know nothing—no minutes, no statements, no reports—about what took place in those meetings that are described as private meetings on a sheet that is stamped “confidential.” Correct? We know nothing about the content of those meetings. Scott Pruitt: Senator, I didn’t generate the document. I know nothing about how that document got generated or what— Whitehouse: Are you denying that those private meetings took place? Pruitt: No, Senator. I just didn’t generate the document and don’t know about the content other than what you’ve represented. Whitehouse: Okay. And we don’t know. And because you were on the executive committee of RAGA, that’s information that we could get, right? I mean, it’s available, if there were minutes or reports out of those meetings, notes taken; but we don’t have them, correct? Pruitt: Senator, that would be a request made to the Republican Attorney Generals Association. And I might add, the Republican Attorney Generals Association, there’s a Democrat Attorney Generals Association as well. 1:59:43 Senator Sheldon Whitehouse: Given how many of these groups have important financial interests before the EPA, do you not think that 3,000 emails back and forth between you and your office and them are relevant to potential conflict of interest as an administrator and should be before us as we consider this? Scott Pruitt: Again, I think the EPA ethics council has put out a very clear process with respect to covered entities, as we described earlier, and on particular matters and specific cases, I will follow advice of that EPA career person, ethics, to make sure that there are recusing [unclear]— Whitehouse: You keep saying that, but the problem is— Chairman Barrasso: The senator’s time has expired. Whitehouse: Will you finish my sentence? Barrasso: Please do. Whitehouse: The problem with that is that if you haven’t disclosed any of this information, then the EPA ethics council would have no idea to even look. They would have no idea what the risks are. You can’t say, nobody can look at whether I did this, but by the way, they’re going to look at it. It just doesn’t add up. 2:12:30 Senator Jeff Merkley: Ten years ago we were talking about models that led to the conversation Senator Inhofe had about Climategate, about wrestling with assumptions and models. We don’t need models now; we have facts on the ground: the moose are dying because the ticks aren’t being killed by the winter being cold enough, the fish are migrating on the Atlantic coast, and Maine’s losing its lobsters to Canada. These facts on the ground are extraordinarily real, they have a huge economic impact, and shouldn’t we take a very serious approach to the urgency of this problem as we see it descending upon us? Scott Pruitt: Senator, I think the EPA—and if confirmed [missing audio] and obligation to deal with the issue. The Massachusetts v. EPA case says that CO2 is a pollutant under the Clean Air Act, and as such, that’s what generated the 2009 endangerment finding. So I think there is a legal obligation presently for the EPA administrator to respond to the CO2 issue through proper regulations. Cover Art Design by

We have the first wave of the Trump laws! In this episode, highlights of the most impactful laws from the first three months of the 115th Congress, which include favors to the fossil fuel industry, gun industry, telecommunications industry, and defense contractors. In addition, learn about a law (that’s flown completely under the radar) that fundamentally changes how NASA operates. Please support Congressional Dish: to contribute using credit card, debit card, PayPal, or Bitcoin to support Congressional Dish for each episode via Patreon Mail Contributions to: 5753 Hwy 85 North #4576 Crestview, FL 32536 Thank you for supporting truly independent media! Recommended Congressional Dish Episodes Bills Outline General James Mattis from the law that prohibits anyone from serving as Defense Secretary within seven years of leaving military service (Mattis had retired less than four years before his appointment). Gives the Government Accountability Office (GAO) to get federal agency records for audits and investigations Requires agency heads to - not just their actions - that the agency will take when given recommendations by the GAO and requires the reports to be given to more Congressional committees Makes it easier for the GAO to Gives the GAO an requiring companies listed in the stock market to publicly report payments by the fossil fuel and mineral industries to the US or foreign governments if the payments are over $100,000 in a year. a Department of Interior regulation known as the which aimed to reduce pollution from coal mining by blocking mining within 100 feet of streams and requiring coal mining companies to restore the land their use to it's pre-mining condition. a that never went into effect that would have prohibited who receive disability checks for mental illness from buying guns. the NASA administrator to create a plan to use current and former NASA employees to engage with K-12 female students to encourage them to pursue careers in aerospace. The plan must be submitted in 90 days. the National Science Foundation to recruit women to work in commercial science and engineering - $19.5 billion for NASA operations for 2017 Declares that it will be US policy that Sense of Congress: should be the primary means of transporting US astronauts to and from the International Space Station and reliance upon Russian transportation should be ended as soon as possible. Commercial providers of NASA services will have to provide "evidence-based support for their costs and schedules" only to "transition in a step-wise approach from the current regime that relies heavily on NASA sponsorship to a regime where NASA could be one of many customers of a low-Earth orbit non-governmental human space flight enterprise." The first report on progress will be Contracts between NASA and private providers are from lawsuits for "death, bodily injury, or loss of or damage to property resulting from launch services and reentry services carried out under the contract" for any amount over what their insurance covers. The immunity exclude claims resulting from willful misconduct by the private provider , which include "to enable a capability to extend human presence, including potential human habitation on another celestial body and a thriving space economy in the 21st Century." There will be a specific focus on provisions of law that required the government specifically to have the ability to restart the Space Shuttle program, if needed. the NASA Administrator to conduct long-term medical monitoring and treatment of astronauts with no out-of-pocket costs for the astronauts . a that would give the public a larger and earlier role in management plans for public land. The public would have been able to submit data & other information. The public also would have been given information as the plans were developed, allowing the public to comment during the planning process instead of after. a written by the Department of Defense, the General Services Administration, and NASA that would have made federal contractors prove their compliance with fourteen Federal labor laws, which would then be taken into consideration by agencies when awarding contracts. The contractors would also have to report their wages paid to employees to the agencies and would have limited forced arbitration of employee claims. a that would have pushed states to weigh student achievement via test scores of 95% of their students and graduation rates when determining which schools are "underperforming". The rule also would have required schools to provide parents and the public with more information on their annual report card. a that outlined indicators that states would have to use to judge teacher performance and tied results to some Federal aid funding. a that allowed but limited the drug testing of people receiving unemployment benefits. People could only be tested if they were dismissed for substance abuse related reasons and only if their jobs required carrying a firearm, aviation flight crews, air traffic controllers, commercial drivers, railroad crews, pipeline crews, and commercial maritime crews. a that would have required Internet service providers to obtain our approval if they were going to share our information, and not condition service on an acceptance of data sharing, and to notify us if our data was compromised. Additional Reading Article: by Kelly Mcevers, NPR, March 27, 2017. Article: by Andrew Wagner and Nsikan Akpan, PBS, March 24, 2017. Article: by Dana Goldstein, The New York Times, March 9, 2017. Article: by Chelsea Harvey, The Washington Post, March 8, 2017. Article: by Emma Brown, The Washington Post, March 8, 2017. Congressional Record: , House of Representatives, March 7, 2017. Article: by Ali Vitali, NBC News, February 28, 2017. Article: by Alina Selyukh, NPR, February 24, 2017. Article: by Brad Plumer, Vox, February 16, 2017. Article: by Joseph Morton, Omaha World Herald, February 3, 2017. Article: by Paul Rauber, Sierra, February 1, 2017. Article: by Brad Plumer, Vox, February 1, 2017. Article: by Brad Plumer, Vox, February 1, 2017. Press Release: by Representative Bill Johnson, January 30, 2017. Press Release: , Chairman Bill Huizenga, January 30, 2017. Op-Ed: by Stuart Shapiro, The Hill, April 17, 2015. References U.S. Dept of Labor: Senator Al Franken: OpenSecrets: OpenSecrets: OpenSecrets: OpenSecrets: OpenSecrets: OpenSecrets: OpenSecrets: OpenSecrets: OpenSecrets: Sound Clip Sources Hearing: , House of Representatives, Committee on Science, Space and Technology, February 16, 2017. Video: , Oval Office, March 21, 2017. Cover Art Design by

What is Puerto Rico? Many Americans - if not most - are unaware that Puerto Rico is a part of the United States. In this episode, learn the history of our scandalous treatment of the US citizens living in Puerto Rico and explore how Puerto Rico’s past foreshadowed the United States' present… and possibly our future. Executive Producers: Ralph and Carol Lynn Rivera, Brandon K. Lewis Please support Congressional Dish: to contribute with PayPal or Bitcoin to support Congressional Dish for each episode via Patreon Mail Contributions to: 5753 Hwy 85 North #4576 Crestview, FL 32536 Thank you for supporting truly independent media! Recommended Congressional Dish Episodes Additional Reading Book: by Nelson A. Denis, March 2016. Article: by Suzanne Gamboa, NBC News, March 22, 2017. Document: , Financial Oversight & Management Board for Puerto Rico, March 22, 2017. Article: by Ana Mulero, Healthcare Dive, March 21, 2017. Article: by Binyamin Appelbaum, The New York Times, March 15, 2017. Letter: , Financial Oversight & Management Board for Puerto Rico, March 13, 2017. Press Release: by Jenniffer Gonzalez-Colon, March 13, 2017. Article: by Luis J. Valentin, Caribbean Business, March 9, 2017. Article: , Globe control board opinion, The Boston Globe, March 5, 2017. Article: by Danica Coto, Salon, February 3, 2017. Letter: , Financial Oversight & Management Board for Puerto Rico, January 18, 2017. Article: by Tatiana Darie, Bloomberg, January 3, 2017. Article: by Katherine Greifeld, Bloomberg, September 30, 2016. Article: by Valeria Pelet, The Atlantic, September 3, 2016. Op-Ed: by Johnny Rullan, Morning Consult, June 20, 2016. Article: by Richard Wolf, USA Today, June 9, 2016. Article: by Alan Yuhas, The Guardian, June 9, 2016. Op-Ed: by Nelson A. Denis, Truthout, May 19, 2016. Article: by Jonathan Crawford, Bloomberg, March 23, 2016. Article: by Heather Long, CNN Money, February 21, 2016. Article: by Rory Carroll, Business Insider, July 9, 2015. Article: by Vanessa Rodriguez, OpenSecrets.org, June 4, 2015. Interview: by Mark Karlin, Truthout, May 24, 2015. Article: by Gene Demby, NPR, May 18, 2015. Article: by Janet Novack, Forbes, January 27, 2015. Article: by Robert W. wood, Forbes, January 13, 2015. Article: by D'Vera Cohn, Eileen Pattien and Mark Hugo Lopez, Pew Research Center, August 11, 2014. Article: by Sital S. Patel and Ben Eisen, Market Watch, April 22, 2014. Article: by Rebecca Burns, Michael Donley, and Carmilla Manzanet, Moyers & Company, April 2, 2014. Article: , Bond News, Reuters, February 10, 2014. Article: by Lizette Alvarez, The New York Times, February 8, 2014. Article: , Everything Everywhere, June 27, 2013. Document: by R. Sam Garrett, Congressional Research Service, June 25, 2013. GAO Report: by Jeffry Valentin-Mari, Ph.D. and Jose I. Alameda-Lozada, Ph.D. April 26, 2012. Article: by Danica Coto, The San Diego Union-Tribune, May 14, 2011. Article: by Abbie Boudreau and Scott Bronstein, CNN, February 1, 2010. Article: by Timothy L. O'Brien, The New York Times, July 19, 2004. Case Study: by the Minority Staff of the Permanent Subcommittee on Investigations, United States Senate, July 15, 2004. Article: by Zareena Hussain, The Tech, January 7, 1998. Article: by William K. Stevens, The New York Times, May 14, 1985. References U.S. Energy Information Administration Video: This Day in History: FBI Files 1986 Congressional Report: 1995 Dept of Energy Report: OpenSecrets Excelerate Energy American Maritime Partnership Financial Oversight and Management Board for Puerto Rico Control Board Control Board Website: Department of Economic Development & Commerce: 26 US Code 936: IRS: Forbes Company Profiles Travelponce.com: Sound Clip Sources Hearing: , Subcommittee on Indian, Insular and Alaska Native Affairs, March 22, 2017. Witnesses Panel I The Honorable Ricardo Rossello, Governor of Puerto Rico Mr. Gerardo Portela-Franco, Executive Director - Puerto Rico Fiscal Agency and Financial Advisory Authority Panel 2 Mr. Jose B. Carrion III, Chairman - Financial Oversight and Management Board of Puerto Rico Mr. Luis Benitez Hernandez, Chairman - PREPA Governing Board Mr. Stephen Spencer, Managing Director - Houlihan Lokey Mr. Adam Bergonzi, Managing Director & Chief Risk Officer - National Public Finance Guarantee Corporation Mr. Rob Bryngelson, President & CEO - Excelerate Energy Ms. Ana J. Matosantos, Member of Financial Oversight and Management Board of Puerto Rico Interview: Interview with , March 7, 2017. Luis: Puerto Ricans in Puerto Rico, contrary to common opinion, we do pay some federal taxes. What we don’t pay is federal income tax. Jen: Okay. Luis: So we don’t pay federal income tax. However, Puerto Ricans pay Medicare at the same rate that you pay in San Francisco/California. Jen: Do Puerto Ricans get the same benefits that I get in San Francisco? Luis: No, we do not get the same benefits that you get in San Francisco. Jen: Oh. Luis: So, for example, there are states like California, New York, and other states that I believe get about an 83 percent federal subsidy for Medicare expenses. There are other states—and I realize I’m being recorded, but don’t quote me on it. This you can check, also, very easily— Jen: Sure. Luis: Other states—I think it’s Tennessee— Jen: And you don’t have to give me exact numbers. Just go ahead and, like, big picture, tell me the situation. Luis: Got it. Jen: Yeah. Luis: Even better. So, there are states like California and New York that get about 80-some percent of reimbursement on their major expenses from the federal government. There are other states that get less. I think Tennessee gets less; I think Tennessee gets, like, 50-some percent. Puerto Rico, I think it gets about 23 percent. Jen: Oh, god. Luis: It’s important to understand that, where does the other—if we use 23 percent as an example for Medicare—where does the other 77 percent come from? State funding. Jen: Okay. Luis: So, please understand that if you move to Puerto Rico as a U.S. citizen, and you, for any reason, need Medicare, and you go to the hospital, those hospitals that you go to have to comply with MCS, which is part of HHS—Health and Human Services. And you have to comply with all the regulations and requirements of a hospital to be reimbursed and enjoy federal dollars. However, that institution/Puerto Rico is only getting cents on the dollar compared to other states, but someone needs to make up for that short fall. Jen: Yeah. Luis: The state does. Jen: Well— Luis: That lack of equality translates to Puerto Rico’s budget. Luis: I’m a proud American, and I will defend our country wherever I go. Jen: Mm-hmm. Luis: But I’m also a realist. I cannot expect Congress to give the people in Puerto Rico a fair share of the pie when we don’t have a delegation sitting at the table when the pie is divided. Luis: When I ran the office of the governor of Puerto Rico in New York, and we were lobbying to be included into the Affordable Care Act, my biggest argument, when I met with members of the Senate or the House, in states that had a large Puerto Rican population—Connecticut, New York, New Jersey, by way of example—my point to these members of Congress was, I need your help; I need you to be a voice to Puerto Rico to be included in the Affordable Care Act. And the staff would be like, are you kidding me, Luis? That is none of our business. And I will be like, well, let me—give me an opportunity to maybe convince you that it is your business. The problem is— Jen: Yeah, because you’ll pay for them when they come here. Luis: —you will pay for it. And by the way, we don’t even have a way to qualify because guess what, a lot of them are coming in, getting services, and going back to Puerto Rico once they’re done. Some are staying— Jen: Yeah, that's what I would do. Luis: Some are staying, but others are just coming here, and you have no way of qualifying and quantifying it because they’re United States citizens. You can’t stop it. Jen: Yeah— Luis: And how could you blame them? How could you blame them if Puerto Rico does not have the facilities to treat a cancer or SSI or any other initiative and my mother is risking her life? I’m going to take her to Orlando— Jen: Mm-hmm. Luis: —without a doubt. Jen: Yeah. Luis: I will say that Puerto Rico, even though we have all the issues that you and I have been talking about, we are still part of the United States, and it’s somewhat similar to the changes that we see here, stateside, in the contiguous 48 states, where I would say that from coast to coast, from Florida to California, I think the middle class in the United States has been shrinking. Jen: Mm-hmm. Luis: Likewise in Puerto Rico. Jen: Okay. Luis: But I would say that it is more like the United States, and we are not like Latin America and other third-world jurisdictions. We have a decent-size middle class because we don’t have the IRS because we are not paying federal income tax. There is in Puerto Rico a large underground economy where people work on the side, get paid in cash, and don’t report their earnings to the—there's no IRS—or to the local version of the IRS which is the Treasury Department. So, what you have in Puerto Rico is that you see somewhat of a thriving economy. So those people that are in commercial real estate and they’re doing business with big national chains like Macy’s and JCPenney and all that stuff, you will see in Puerto Rico sales records being broken and people spending a lot of money in the island. So, it’s not like the Dominican Republic. Even people in the projects that are subsidized by state and federal dollars, you can see that they have a/c in the walls, the projects are made out of cement, and you will be able to see all that when you go there in person. So, when you drive around Puerto Rico, all over the island, it is nothing like the Dominican Republic. We are way better, and— Jen: Well, I’ve never been there, either, so a comparison doesn’t really… Luis: Yeah. We are way better—and I realize that I’m about to contradict myself, okay?—we are way better, and it is thanks to the United States. So even though inequality has got all these problems and it’s affected the debt and all that stuff and we are looking now at serious issues, Puerto Rico is still better than—I will never move to Cuba because I think Cuba is better than Puerto Rico, so I get it— Puerto Rico is United States, and we’re doing better than most. Jen: So that brings me to the control board, because now we have Puerto Ricans saying on paper, no doubt, we want to become a state, and yet Congress just did this thing where your government, your state government, or closest thing—what do you call it? Territorial government? Luis: Yeah. Jen: Is that the proper phrase? Luis: Territory. Jen: Okay. Luis: Yeah. Jen: So your territorial government was, basically just taken over by this weird board that has some dictatorial powers. Is there any one in Puerto Rico that’s happy about this? Is there something I’m not seeing? Luis: Yeah. Okay, so, I’m going to compare that. First of all, let’s be fair, and we’re not the first jurisdiction that, let’s say, enjoys the benefit of a control board, because D.C., New York City, have both had it in different jurisdiction relationships, but they did, and it helped. Okay? Jen: O-kay. Luis: The difference between New York City is the following: you have a city that imposed a board by the state. So people in the city of New York, even though they had a control board years back, they had a control board what was decided by politicians who they elected. Jen: Yeah. Luis: Okay? Jen: Mm-hmm. Luis: So, that makes it—but it’s still the same in that you have a higher jurisdiction imposing a control board for fiscal reasons over a lower jurisdiction. Correct? Jen: Yes. Luis: And then you have D.C. They also had a control board, and the list goes on and use the federal government, if I’m not mistaken. So there you have a jurisdiction of a federal imposing in D.C., which is not independent. Now, let me tell you where emotions can go a little crazy here. And remember I’m a stakeholder; I’m pro American. Jen: Yeah. Luis: However, we did not invite the United States of America, back a hundred-and-some years ago; we were invaded. Jen: Yeah. Luis: So, we are invaded, we are treated unequally, that inequality causes financial chaos. We are told by the Supreme Court that our constitution is not really a constitution—you should research that; that was recent—an opinion by the Supreme Court. So, really, our constitution, that we thought we had a constitution, is not worth anything on paper because Congress has complete control of that jurisdiction. Jen: Mm-hmm. Luis: So, what we have is, back to your question about a board, is a federal government imposing a board on people who did not vote for those that imposed that board. Jen: Yeah. And I know that in Congress Puerto Rico has a representative at the time that this was created—I think it was Pedro Pierluisi—but he didn’t have a vote, so— Luis: No. Jen: And even on the board, the governor gets to sit at the table, but the governor of Puerto Rico doesn’t get a vote of the board. Luis: No. And there’s a slight correction to what you said about Pierluisi in your podcast: the resident commissioner does have a vote in Congress—not on committees, on subcommittees. Okay? Jen: Okay, so he has a vote on a subcommittee but not— Luis: No. Jen: —in the committee or the main House. Luis: Correct. Now, are you ready for the kicker? Jen: Yes. Luis: If the vote on a subcommittee comes to a point where the resident commissioner becomes the deciding vote, it doesn’t go. You’ve got to vote again. Jen: No! Luis: Yeah. Jen: So, that’s— Luis: Can I give you an— Jen: —kind of not really having a vote. I mean— Luis: No. Jen: —he does— Luis: No, I know. Luis: Let’s talk for a second about the pharmaceutical industry, okay? Jen: Yeah, because— Luis: Not to be confused— Jen: —just so that I’m on the same page as you, you worked for Pfizer for a while, too, right? Luis: I directed governor affairs for Pfizer, and that included jurisdictions of New York City and Puerto Rico. Jen: Okay— Luis: And San Francisco. Jen: —and when did you do that? Luis: I did that in 20—I took a year off of the government and I went to Pfizer, did not like it, then went back to Puerto Rico government. So that was 2011. Jen: So was that before the Clinton administration took away the tax credits or after? Luis: Oh, no, after. Oh, yes. Jen: Okay, okay. Luis: 2011, before I became a deputy secretary of the United States. Jen: Okay, got you. Luis: Okay. Jen: So this is after all the tax benefits were gone, and was Pfizer still—when did the pharmaceutical industry, like, leave Puerto Rico? When did they leave? Luis: No way. Why are you saying that? Jen: Because that's what I read. Luis: That's wrong. Jen: Is that not what happened? Luis: No! That’s wrong. I’m about to clarify that. Jen: Okay. Luis: All right. So, if you look at the pharmaceutical industry, if you search, let’s say, BIO, I believe BIO is still the pharmaceutical, big pharma association, the industry association, trade association, okay? If you look at that, you will see that in Puerto Rico BIO had a membership of a huge number of pharmaceuticals. And then you may look at BIO now, and the Puerto Rico chapter, which has another name, has way less pharmaceuticals. So the normal person that doesn’t understand how things work will say, well, everyone left. Well, let’s slow down and look at what are the names that are missing. Well, some of those names don’t exist anymore because the industry has completely merged and consolidated their resources. By way of example, I will tell you that in Puerto Rico alone, Pfizer bought Wyeth. Jen: Pfizer what? Luis: Pfizer bought Wyeth. Jen: Oh, okay. So, okay. Luis: Okay? Jen: Gotcha. So Pfizer got bigger by eating a smaller company. Luis: Correct. And there’s nothing wrong with that. So what happened was that I believe at that time when that happened, Pfizer had three operations in Puerto Rico, Wyeth had three operations in Puerto Rico, okay? So now when they merge, they have six plants in Puerto Rico. So what do they do? They are able to— economies of scale and to do streamline, and they are able to close two and stay with four. And now Wyeth is not in Puerto Rico— Jen: But the effect— Luis: —and people think Wyeth— Jen: Is the effect of that, of the people of Puerto Rico, that the people that worked in those two plants are now out of a job? Luis: But it has nothing to do with 936. Jen: Remind me. I did that episode, like, eight months ago. 936 was the tax credits disappearing? Was that…? Luis: That’s exactly—they disappeared with a coin toss, you said. Jen: Okay, okay. Thank you. Luis: So, so, that consolidation, that example that I’m sharing with you, I believe all happened after 936 stopped, but the reason why Pfizer and Wyeth consolidated was for reasons that had nothing to do with 936. Jen: Yeah. Luis: It had a lot to do with being more productive and being able to share assembly lines and being able to share resources and the same CEO and all that stuff. And so, to the untrained eye, to the Puerto Rican, what they think or see is, oh, Wyeth left. No, they didn’t leave; it was absorbed by a larger pharmaceutical. Jen: So, is the pharmaceutical industry still a major employer in Puerto Rico? Luis: Yes, it is. And I will tell something else: Pfizer and many pharmaceuticals, for many years, are enjoying tax benefits on—there’s something called CFC—controlled foreign corporations—and they are able to enjoy benefits that are comparable to 936. It’s just a different name; a different loophole, you want to call it—I don’t want to call it a loophole—it’s a different tax advantage. Luis: Remember, the pharmaceutical industry, way back when—and we’re talking about right after Puerto Rico changed from an agricultural economy to a manufacturing economy, okay? Jen: Mm-hmm. Luis: I really need you to follow me on this. Puerto Rico used to be sugarcane industry. Jen: Yeah. Luis: And we changed. Take my great uncle. He was the governor of Puerto Rico for the other party, the commonwealth party, and him and Governor Luis Munoz Marin came up with this tax incentive with the federal government and 936 were invented, and Puerto Rico changed—completely—and became a manufacturing economy. Jen: Okay. Luis: No more sugar cane; now we’re manufacturing. And when that happened, pharma came to Puerto Rico. What we have to remember is manufacturing industry also included, probably, the largest textile industry. Textile was huge in Puerto Rico. Now— Jen: Is it still there? Luis: No! Why—now, you’re smart. Why do you think textile is gone in Puerto Rico? Where is textile nowadays? Jen: Probably China, India. Luis: Yes, yes! So, in this case, it left to other jurisdictions for minimum wage and for a bunch of other reasons. 936? Yes! It was not great when it left, but the industry changed. Textile goes wherever you have the cheapest labor. And Puerto Rico— Jen: So— Luis: —cannot compete with India, China, Dominican Republic, where people get paid a dollar an hour. Forget it. You can’t compete with that. Jen: And it sounds like the same problem we’re having in California, in Texas, and Massachusetts, and everywhere. Luis: Yeah, yes. Jen: What would you like to see happen on the island? What do you think could help? Luis: Becoming a state. Jen: So that's the goal. Luis: Yes, without a shadow of a doubt, because if we become a state, we are able now to have the congressional mitigation to help us, and we’re able to fight for equal funding so that the state does not need to subsidize such huge percentages. And now we have an equal playing field. Now if I get in debt— Jen: Okay. Luis: Now if I get in debt, go ahead and criticize me all you want. Jen: Well, then you have bankruptcy protection if you go into debt. Luis: Also. Luis: So, you understand the reason why people are going to Puerto Rico is because of Law 20 and 22, right? Jen: Um, I don't know. No. Luis: So, I’m going to share with you the Law 20 and Law 22. Both laws were passed by Governor Luis Fortuno, which is a governor that I worked for. Jen: Okay. Luis: And those two laws were used, pushed, and promoted big time by the previous governor, Alejandro Garcia Padilla. You can do a quick Google, and you will see how most people went nuts over those two laws, and those two laws is the sole reason why people in stateside, mainland U.S., are fleeing to Puerto Rico to enjoy those tax benefits. Jen: Well, what are those benefits? Luis: I'm going to tell you. Jen: Okay. Luis: So, first, you have Law 20. Law 20 is better known as Export Services law, meaning you and I can open a corporation in Puerto Rico that exports services outside of Puerto Rico. Services, not manufacturing. So you and I can open a consulting firm that consults on any issue, and if our clients are not in Puerto Rico, if our clients are in Europe or New York or California, when that company in Puerto Rico bills those accounts, that corporation will only pay local four percent tax and no sales tax. Wow! Jen: Okay. That's crazy. Luis: Okay? So that means that you and I can have an existing company and have a law firm in New York, and you and I are the partners, and we’ll make—and let’s say that half of our clients are not in Puerto Rico, so why don’t we just open an office in Puerto Rico and do all the billing out of Puerto Rico and serve those clients from Puerto Rico—by the way, you and I can hire attorneys in Puerto Rico that are bilingual; graduated from Harvard, Yale, all those popular universities; pay even a fraction of what you and I would pay a lawyer in New York, and we bill them to the clients that are outside Puerto Rico, and we only pay four percent tax. That’s Law 20. It’s beautiful. Jen: Wow. Okay. Luis: All right. So, now, Law 20 was supplemented, complemented, by Law 22. Law 22 is called the Investor Act. So, now, you and I are the partners of that law firm, and we’ve moved operations and the corporation is only paying four percent tax, local tax, okay? Jen: Okay. Luis: Got it. You and I have not lived in Puerto Rico for the last 15 years. Jen: Okay. Luis: So we, you and I, have our attorneys will review Law 20, and what Law 20 says is you and I can move to Puerto Rico personally, and when we’re in Puerto Rico, our Puerto Rico-sourced income will be tax free. Jen: So the income—so, it’s the Investment Act. So are you talking about, like— Luis: Yes. Jen: —instead of paying capital gains tax, they pay nothing. Luis: Nothing. Now, it needs to be Puerto Rico-sourced income. That means that if you and I own Apple shares, or Microsoft, and we move to Puerto Rico, that’s passive income. We’ll pay taxes because that income is generated outside of Puerto Rico. Jen: Okay. Luis: But if you and I go to Puerto Rico like Paltry and Paulson moved to Puerto Rico, and we invest in property, and we invest in the business of Puerto Rico, that Puerto Rico-sourced income will be tax free. Jen: Federally or are there any state taxes? Luis: Both. Jen: Wow. So the state— Luis: I don’t have the law— Jen: —doesn’t even get anything from that. Luis: Well, yeah, they do because think about all the jobs. You know it’s crazy how much money is generated by having those people in Puerto Rico. Of course it generates— Jen: Yeah. I guess that makes sense. Luis: It’s called economic development. Yes, it generates—I have a lot of people that have new accounts with those individuals all the way from real estate, legal fees, engineering. They’re all millions and millions and millions of dollars that were not moving around the economy until they moved there. Jen: And so, are these two laws something that you personally support? Are they a good idea? Luis: I think it’s a good idea. We somehow need to generate some federal activity. Jen: We do, but at the same time, your government is broke. So isn’t raising revenues, isn’t that a solution? Luis: Well, no. Well, you know what? It’s a little contradicting, so when I say I endorse it, but I just told you a little while ago that I want to be a state. And if I was a state, that would probably not be possible. Jen: Yeah. Luis: Those two laws would not be possible if we’re a state, but guess what—we’re not a state. Jen: Yeah. Luis: And what the heck are we supposed to do? Jen: Yeah. I guess that’s true. You’ve got to play the hand you’re dealt. Okay. Luis: I would rather not have those two laws and be a state. Jen: Okay. That's fair. Luis: Education. I think that your podcast touched on education about 100 schools being closed. Jen: Yeah. Luis: Yeah, but how many people have moved to Orlando? We do not have— Jen: So there's not as many kids? Luis: No! No! Now, I’m going to defend, I’m going to defend this. With me, you may go crazy because I jump from side to side, so for one, one part of me says— Jen: I do that, too. I totally get it. Luis: One part of me says, the student body—I think the island student population went down from half a million to 400,000 students. That’s 25 percent. Jen: Okay. Luis: Okay. That means that I should be able to cut 25 percent of schools and 25 percent of my budget. Right? Well, let’s look at the other side. You and I, again, are married, right? Jen: Uh-huh. Luis: And you and I have a boat, and we have two kids, and the schools that we have our kids are three blocks away. Beautiful. Well, you and I bought a house because it was right next to the school. So now they’re going to close that school, and the next school is five miles away. Jen: Yeah. Luis: Are you and I pissed? Jen: Of course. Luis: I don’t give a crap that there’s less students. I’m going to picket, and I’m going to make a lot of noise, and I’m going to make it impossible for the government to close that school, which is what happens. You know what? Somebody else should sacrifice, not my wife and I. We have it good. I like to be able to walk three blocks and grab my children by the hand, have a beautiful conversation with them while we eat cookies, and we go to the school right next door. Well, guess what? The population is so much smaller now that somehow we cannot justify having the same number of schools open. I believe that happened in Chicago under new jurisdictions. We have to adjust. So guess who needs to deliver those bad news? The fiscal control board, because you cannot possibly justify having all those schools open. So who’s going to be the bad guy? Thank God there’s a fiscal control board, because if you leave, you allow the local elected official to make those decisions, it would be political suicide. And that transfers to any state. Ask any governor to close down 25 percent of schools, and they’re going to lose the election. Jen: Well, I mean, I think that’s just a part of the job. The problem— Luis: I know! Jen: —that I’m seeing as— Luis: No, but wait a second the problem is that the governor can’t do it because when you commit political suicide, and you need to support the legislature to do that, the elected officials in the legislative body would be the first ones that won’t back you up. They’ll say, you crazy? I’m not going to back you up; I want to get elected next time. That’s a huge problem. He says, I can’t do it without you. People are like let’s not do it; let’s let the other guy do it. And he’s like, no, we don’t have enough money. The students are leaving Orlando and New York. They moved away. We don’t need so many schools; we need to close. And the senators will be like, I’m not going to pass that law; are you kidding me? We’re all going to be out of a job. Jen: Well, I mean, and that’s the thing, like, maybe you’re not supposed to serve forever. Like, I just feel like those tough decisions are a part of a job of being elected, and one of my concerns of this control board is that those families, they can’t petition to this board. There is no voice for the Puerto Ricans where the governor doesn’t have a vote. I guess I’d feel more comfortable with it if I thought that those families could petition to their governor, and it would be one vote at the table that would have those political calculations in mind. But with these seven people that were selected by Congress, I mean, is there any concern that they’re going to prioritize the bankers over the Puerto Rican people? Luis: I think a lot of people are concerned about that. Cover Art Design by

“Repeal & Replace” is on the move! The American Health Care Act is the Republican plan to partially repeal the Affordable Care Act and it is quickly moving through Congress. In this episode, discover exactly what the bill would do if it were to become law. Also, Jen gives status updates on bills listeners are concerned about. Please support Congressional Dish: to contribute with PayPal or Bitcoin to support Congressional Dish for each episode via Patreon Mail Contributions to: 5753 Hwy 85 North #4576 Crestview, FL 32536 Thank you for supporting truly independent media! Recommended Congressional Dish Episodes Bill Outline Read The Bill: Part 1 Summary: Part 2 Summary: Title I - Energy & Commerce Subtitle A - Patient Access to Public Health Programs Sec. 101: Defunds the at the end of 2018 Sec. 103: Prohibits any Federal funding for any non-profit that performs abortions for a year Subtitle B - Medicaid Program Enhancement Sec. 111: Reduces Medicaid funding Sec. 112: Repeals the Medicaid expansion Sec. 112 (c): Repeals the requirement that Medicaid cover "essential health benefits" as of January 1, 2020. Sec. 114: Prevents Medicaid for lottery winners Sec. 115: Gives $10 billion extra to the "non-expansion States" Sec. 116: Forces States to verify Medicaid eligibility every six months, gives them more enforcement money, and allows $20,000 fines for ineligible people who get Medicaid benefits. Subtitle C - Per Capita Allotment for Medical Assistance Sec. 121: Caps Medicaid funding on a per capita basis. States that spend too much one year will have their Medicaid cut more the following year. Subtitle D - Patient Relief and Health Insurance Market Stability Sec. 131: Repeals the lower out-of-pocket limits for low-income people effective in 2020 Sec 132: Creates a $15 billion a year fund (which is reduced to $10 billion a year starting in 2020) for propping up the health insurance market by paying for "high risk" sick people Sec. 133: Starting in 2019, people who purchase insurance after a coverage gap of 63 days will be charged a 30% penalty for a year. The insurance companies get to keep all the extra money. Sec. 134: The requirements that bronze, silver, gold, platinum level plans exist and must cover certain percentages of expenses and are repealed effective January 1, 2020. Sec. 135: Allows insurance companies to charge older people five times more than younger people (they're currently allowed to charge three times more) Part 2: Tax Provisions Prepared by the Ways and Means Committee (page 67) Page 67: Remuneration from Certain Insurers Starting in 2018, insurance companies can get between $500,000 and $1 million. Page 68: Repeal of Tanning Tax Starting in 2018, the 10% tax on indoor tanning is repealed. Page 69: Repeal of Tax on Prescription Medications Starting in 2018, a fee paid by pharmaceutical manufacturers & distributors will be repealed This will save the industry $2.8 billion per year Page 69: Repeal of Health Insurance Tax Starting in 2018, a fee on large health insurance companies, which is tied to and increases with premium growth rates, would be repealed. This will save the industry approximately $14 billion per year Page 70: Repeal of Net Investment Income Tax Starting in 2018, a 3.8% tax on net income from stock market investments over $200,000 will be repealed Page 71 (Section 1): Recapture Excess Advance Payments of Premium Tax Credits Starting in 2018, the limits on the amount of advanced-paid tax credits that can be taken back from low income people will be repealed. Page 71 (Section 2): Additional Modifications to Premium Tax Credit Allows tax credits to be used on "catastrophic-only" health insurance plans that are not listed on the exchanges and prohibits tax credits for any plan that covers abortions. Page 80 (Section 3): Premium Tax Credit Repeals tax credits for premiums starting in 2020. Page 81 (Section 4): Small Business Tax Credit Repeals the tax credit for employers with fewer than 25 employees who want to provide health benefits to their employees starting in 2020 and prohibits tax credits for any health plan that covers abortion. Page 84 (Section 5): Individual Mandate Reduces the tax penalties for failing to purchase insurance to $0 and back dates it to be effective in 2016. Page 84 (Section 6): Employer Mandate Reduces the tax penalties for employers who fail to provide health benefits to their employees to $0 and back dates it to be effective in 2016. Page 85 (Section 7): Repeal of the Tax on Employee Health Insurance Premiums and Health Plan Benefits Delays the start of a tax on insurance companies which charges a 40% excise tax on , which charge premiums more than $10,200/year ($850/month) for individuals until 2025. The 40% is only on the extra premiums charges above the cap. Currently aren't scheduled to take effect until 2020. Page 85 (Section 8): Repeal of Tax on Over-The-Counter Medications Starting in 2018, over-the-counter drugs can be purchased with . Page 86 (Section 10): Repeal of Limitations on Contributions to Flexible Savings Accounts Starting in 2018, the $2,500 limit on the amount that can be taken out of an employee's paycheck for employer health plans that use "flexible savings accounts" is repealed starting in 2018. Page 87 (Section 11): Repeal the Medical Device Tax Starting in 2018, repeals a , paid by manufacturers or importer, on sales of medical devices that are not generally purchased by the general public at retail stores. Part 89 (Section 14): Repeal of Medicare Tax Increase says that this section should change the tax for Medicare Hospital Insurance, but the text to be inserted is identical to current law Repeal Bill Current Law Page 90 (Section 15): Refundable Tax Credit for Health Insurance Creates a new tax credit structure tied to age instead of income for people making under $75,000 per year (the credits gradually reduce the more you make over $75,000) Under age 30: $2,000/yr Ages 30-40: $2,500/yr Ages 40-49: $3,000/yr Ages 50-59: $3,500/yr Over age 60: $4,000/yr The credits are capped at $14,000 per family for the five oldest individuals Page 120 (Section 16): Maximum Contribution Limit to Health Savings Account Increased to Amount of Deductible and Out-of-Pocket Limitation Starting in 2018, increases the amount than can be put in Health Savings Accounts Individual contribution limit raised from $2,250 to $5,000 per year. Family contribution limit raised from $4,500 to $10,000. Bills Discussed in this Episode : Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Department of Education relating to teacher preparation issues Kills a rule that assesses the quality of teacher preparation programs : Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the final rule of the Department of the Interior relating to “Non-Subsistence Take of Wildlife, and Public Participation and Closure Procedures, on National Wildlife Refuges in Alaska” Kills an that limits hunting of animals not intended to be food in Alaska. : Lawsuit Abuse Reduction Act of 2017 Forces courts to sanction lawyers for filing lawsuits deemed improper. : Innocent Party Protection Act Changes the procedures for state lawsuits being heard in Federal court. : Fairness in Class Action Litigation Act of 2017 Class action lawsuits could only go forward if each person suffered the same type and scope of injury. : Concealed Carry Reciprocity Act of 2017 Allows people to carry concealed handguns in other states that issue concealed carry permits, in school zones, and on federally owned public land. : Mobilizing Against Sanctuary Cities Act Cuts off federal funds to cities that refuse to give the feds information about undocumented immigrants. : Prenatal Nondiscrimination Act (PRENDA) of 2017 Applies fines and up to five years in prison to any doctor that tries to perform an abortion or helps a woman get an abortion if they know it’s because of the sex or race of the child. : Defund Planned Parenthood Act of 2017 Prohibits funding for Planned Parenthood for a year unless they promise to not perform abortions. Gives money to community health centers instead. : To distribute Federal funds for elementary and secondary education in the form of vouchers for eligible students and to repeal a certain rule relating to nutrition standards in schools Repeals the , which was enacted as a part of Pres. Lyndon Johnson’s ‘War on Poverty’, which is a commitment to equal access to quality education by giving money to low-income districts. Creates a voucher program that will give parents tax money to send their kids to private schools or home school Repeals nutrition standards for foods served in the school lunch and breakfast programs. : Postal Service Reform Act of 2017 Changes the postal service health benefits program and pension funding Changes post office operations: Stops door delivery to new addresses and changes how rates are determined in a way that doesn’t create an unfair competitive advantage for the post office : National Right-to-Work Act Prevents labor unions from forcing workers to pay dues (bankrupts unions by forcing them to provide services to non-paying workers) : To terminate the Environmental Protection Agency. Ends the EPA in 2019 : AMP Act Amends copyright law to provide royalties to music producers, mixers, or sound engineers : To terminate the Department of Education /: 21st Century Endangered Species Transparency Act To amend the Endangered Species Act of 1973 to require publication of the basis for determinations that species are endangered species or threatened species. Additional Reading Article: by Ben Steverman, Bloomberg, March 8, 2017. Article: by Chrissie Juliano, Health Affairs Blog, March 7, 2017. Article: by Dan Mangan, CNBC, March 7, 2017. Article: by David Dayen, The Nation, March 7, 2017. Article: by Amy Martyn, Consumer Affairs, November 1, 2016. References GovTrack: Health Savings Accounts: News Release: OpenSecrets: OpenSecrets: OpenSecrets: OpenSecrets: OpenSecrets: OpenSecrets: OpenSecrets: OpenSecrets: OpenSecrets: OpenSecrets: U.S. Department of Health & Human Services: Sound Clip Sources Press Conference: , YouTube, March 9, 2017. Hearing: , March 8, 2017. Watch on CSPAN: - - - Hearing: , March 8, 2017. Watch on CSPAN Timestamps & Transcripts 13:24 Rep. Kathy Castor: This bill was released less than 48 hours ago without a bipartisan Congressional Budget Office score, so we don’t know how much it’s going to cost. Experts say it’s going to add to the deficit. We don’t know how many people are going to lose their insurance and how high the uninsured rate will go up in America because of this bill, because they didn’t take the time to wait, to see what that CBO score said. 3:05:25 Rep. Steve Scalise: We’ve asked CBO, by the way, for a score. Anybody who thinks we’re going to just wait and let some unelected bureaucrats in Washington stop us from following through on our promise to the American people that we’re going to repeal this failed law and finally rescue them from the double-digit increases in premiums and from the $10,000 and more in deductibles and all the other things that have destroyed good healthcare for them, we’re going to keep moving forward and fulfill that promise because the American people expect us to do it, they want us to do it, and CBO’s eventually going to come up with a score before it goes to budget committee, before it goes to the House floor. But in the meantime, if they can’t get the score out there, we’re still going to move forward and follow through on that promise. 3:15:10 Rep. Joe Barton: We’re all God’s children; we all want a CBO score. It’s not our fault that the CBO’s sitting on their bottom and not helping us. 8:35:34 Rep. Gus Bilirakis:We should be making it easier for small businesses to grow and succeed, not harder. 9:10:35 Rep. Frank Pallone: The problem that I see, though, is that—so, you and the others continue to talk about how bad the ACA is, and my point earlier when I mentioned you by name was because I’d like to see how you feel that your bill is going to improve any of these things. Now you mentioned deductibles. The way I read this bill—I’m not going to ask counsel because I read it, and I think it’s clear—the restrictions that we put on—or that have made it more difficult to increase deductibles with a private-insurance market, a lot of those are relaxed now. So I would venture to argue that if you have someone who’s complaining about deductibles, those deductibles are going to go up even more. Rep. John Shimkus: Yeah, but if I reclaim my time because, as you know, we’ve got two bills moving through the write at the same process that the benefit of what’s going on now is you talk to our friends in Ways and Means is the strong development of health savings accounts, which fills that gap, right? You buy insurance for a higher cost. If you live healthy lifestyles, you’ll be able to roll that over, the catastrophic number gets better, your payments get less if you believe in markets and competition. 10:16:45 Rep. Mike Doyle: I’m not sure what the gentleman is talking about when he talks about mandates. What mandate in the Obamacare bill does he take issue with? Certainly not with preexisting conditions or caps on benefits or letting your child stay on the policy to 26. So I’m curious, what is it we’re mandating— Rep. John Shimkus: Will the gentlemen yield? Doyle: Yeah, sure. Shimkus: What about men having to purchase prenatal care? Doyle: That—what— Shimkus: I’m just— Doyle: Every—that’s very— Shimkus: Is that not correct? Doyle: I—reclaiming my time. Shimkus: And should they? Doyle: Reclaiming my time. Chairman Greg Walden: Whoa, whoa, whoa— Doyle: There’s no such thing— Walden: —whoa, whoa, whoa. Doyle: —as à la carte— Walden: Regular order. Doyle: There’s no such thing as à la carte insurance, John. You know, you don’t get the— Shimkus: That's the point! Doyle: —list and say, give me that. Shimkus: That’s the point! We want the consumer to be able to go to the insurance market and be able to negotiate— Doyle: You tell— Shimkus:—on a plan— Doyle: Reclaiming my time. Walden: Whoa, whoa. Doyle: You tell me what insurance company will do that. There isn’t a single insurance— Walden: Gentleman’s time— Doyle: —in the world that does that. Walden: The gentleman’s time—the gentle— Doyle: You're talking about something that doesn't exist. Cover Art Design by

Former Congressman Tom Price is our new Secretary of Health and Human Services, making him the chief law enforcement officer of health care policy in the United States. In this episode, hear highlights from his Senate confirmation hearings as we search for clues as to the Republican Party plans for repealing the Affordable Care Act. We also examine the 21st Century Cures Act, which was signed into law in December. Please support Congressional Dish: to contribute with PayPal or Bitcoin to support Congressional Dish for each episode via Patreon Mail Contributions to: 5753 Hwy 85 North #4576 Crestview, FL 32536 Thank you for supporting truly independent media! Recommended Congressional Dish Episodes Bill Outline Bill Highlights Title I: Innovation Projects & State Response to Opioid Abuse funding for research programs, if money is appropriated $1 billion for grants for States to deal with the opioid abuse crisis The effects of this spending on the Pay as you Go budget Title II: Discovery privacy protections for people who participate as subjects in medical research studies the Secretary of Health and Human Services to a do a review of reporting regulations for researchers in search of regulations to cut, including regulations on reporting financial conflicts of interest and research animal care. to collect payments on behalf of the Secretary of Health and Human Services Title III: Development additional data options for approving drug applications the review process for new "regenerative advanced therapy" drugs, which includes drugs "intended to treat, modify, reverse or cure a serious or life-threatening disease or condition" or is a therapy that involves human cells. antibacterial and antifungal drugs to be approved after only being tested on a "limited population" The drugs will have have a "Limited Population" label the FDA approval process for new medical devices that help with life-threatening or irreversibly debilitating conditions and that have no existing alternatives. Devices addressing rare diseases or conditions are allowed be approved with lower standards for effectiveness; this provision expands the definition of "rare" by . Each FDA employee involved in drug approvals will get training for how to make their reviews . : Delivery The new Secretary of Health and Human Services will have to develop a strategy to "reduce regulatory and administrative burdens (such as doucmentation requirements) relating to the " health information technology developers from certification if their system allows information blocking. Developers, networks, or exchanges caught blocking information . will develop the rules for exchanging health record information. Creates a job in the Medicare & Medicaid Services department for an . : Savings for the Prevention and Public Health Fund from the Strategic Petroleum Reserve : Ensuring Mental and Substance Use Disorders Prevention, Treatment, and Recovery Programs Keep Pace With Technology Authorizes money to be used for mental health services and substance abuse treatment : Promoting Access to Mental Health and Substance Use Disorder Care a telephone and online service to help people locate mental health services and substance abuse treatment centers. Mental health and safe communities to test the idea of having court cases with mentally ill defendants heard in "drug or mental health courts" Other Medicare Provisions with Medicare Advantage organizations due to their failure to achieve a minimum quality rating before 2019. Additional Reading Article: by Jay Hancock and Rachel Bluth, Kaiser Health News, February 13, 2017. Article: by Amy Goldstein, The Washington Post, February 9, 2017. Article: by Jayne O'Donnell, USA Today, February 8, 2017. Article: by Marisa Taylor and Christina Jewett, Kaiser Health News, February 7, 2017. Article: by David Leonhardt, The New York Times, February 7, 2017. Article: by Sam Frizell, TIME, January 17, 2017. Article: by Manu Raju, CNN, January 17, 2017. Publication: , Congressional Budget Office, January 17, 2017. Article: by Kelly Servick, Science, December 12, 2016. Article: by Jeffrey K. Shapiro and Jennifer D. Newberger, FDA Law Blog, December 8, 2016. Article: by Sheila Kaplan, STAT, November 27, 2016. Article: by David Reich and Richard Kogan, Center on Budget and Policy Priorities, November 9, 2016. Article: by Alex Lazar, OpenSecrets.org, June 16, 2015. References Financial Disclosure: , United States House of Representatives, September 6, 2016. OpenSecrets: : Office of the National Coordinator for Health Information Technology, Cornell University Law School. Senate Vote: Innate Immunotherapeutics: Innate Immunotherapeutics: GovTrack: Sound Clip Sources Hearing: Health and Human Services Secretary Confirmation, Senate Health, Education, Labor and Pensions Committee, January 18, 2017 (Part 1) and January 24, 2017 (Part 2). Watch on CSPAN Timestamps & Transcripts Part 1 47:45 Senator Patty Murray: I want to review the facts. You purchased stock in Innate Immunotherapeutics, a company working to develop new drugs, on four separate occasions between January 2015 and August 2016. You made the decision to purchase that stock, not a broker. Yes or no. Tom Price: That was a decision that I made, yes. Murray: You were offered an opportunity to purchase stock at a lower price than was available to the general public. Yes or no. Price: The initial purchase in January of 2015 was at the market price. The secondary purchase in June through August, September of 2016 was at a price that was available to individuals who were participating in a private-placement offering. Murray:It was lower than was available to the general public, correct? Price: I don’t know that it was. It was the same price that everybody paid for the private-placement offering. Murray: Well, Congressman Chris Collins, who sits on President-elect Trump’s transition team, is both an investor and a board member of the company. He was reportedly overheard just last week off the House floor, bragging about how he had made people millionaires from a stock tip. Congressman Price, in our meeting, you informed me that you made these purchases based on conversations with Representative Collins. Is that correct? Price: No. What I— Murray: Well, that is what you said to me in my office. Price: What I believe I said to you was that I learned of the company from Congressman Collins. Murray: What I recall our conversation was that you had a conversation with Collins and then decided to purchase the stock. Price: No, that’s not correct. Murray: Well, that is what I remember you hearing it—say—in my office. In that conversation, did Representative Collins tell you anything that could be considered “a stock tip?” Yes or no. Price: I don’t believe so, no. Murray: Well, if you’re telling me he gave you information about a company, you were offered shares in the company at prices not available to the public, you bought those shares, is that not a stock tip? Price: Well, that’s not what happened. What happened was that he mentioned—he talked about the company and the work that they were doing in trying to solve the challenge of progressive secondary multiple sclerosis which is a very debilitating disease and one that I— Murray: I’m well aware of that, but— Price: —had the opportunity to treat patients when I was in practice. Murray: I’m aware— Price: I studied the company for a period of time and felt that it had some significant merit and promise, and purchased the initial shares on the stock exchange itself. Murray: Congressman Price, I have very limited time. Let me go on. Your purchases occurred while the 21st Century Cures Act, which had several provisions that could impact drug developers like Innate Immunotherapeutics, was being negotiated, and, again, just days before you were notified to prepare for a final vote on the bill. Congressman, do you believe it is appropriate for a senior member of Congress actively involved in policymaking in the health sector to repeatedly personally invest in a drug company that could benefit from those actions? Yes or no. Price: Well, that's not what happened. 1:06:50 Senator Bernie Sanders: The United States of America is the only major country on earth that does not guarantee healthcare to all people as a right. Canada does it; every major country in Europe does it. Do you believe that healthcare is a right of all Americans, whether they’re rich or they’re poor? Should people, because they are Americans, be able to go to the doctor when they need to, be able to go into a hospital, because they are Americans? Tom Price: Yes. We’re a compassionate society— Sanders: No, we are not a compassionate society. In terms of our relationship to poor and working people, our record is worse than virtually any other country on earth; we have the highest rate of childhood poverty of any other major country on earth; and half of our senior, older workers have nothing set aside for retirement. So I don’t think, compared to other countries, we are particularly compassionate. But my question is, in Canada, in other countries, all people have the right to get healthcare, do you believe we should move in that direction? Price: If you want to talk about other countries’ healthcare systems, there are consequences to the decisions that they’ve made just as there are consequences to the decision that we’ve made. I believe, and I look forward to working with you to make certain, that every single American has access to the highest-quality care and coverage that is possible. Sanders: “Has access to” does not mean that they are guaranteed healthcare. I have access to buying a ten-million-dollar home; I don’t have the money to do that. Price: And that’s why we believe it’s appropriate to put in place a system that gives every person the financial feasibility to be able to purchase the coverage that they want for themselves and for their family, again, not what the government forces them to buy. Sanders: Yeah, but if they don’t have any—well, it’s a long dissert. Thank you very much. Price: Thank you. 1:46:34 Senator Michael Bennet: So, I ask you, sir, are you aware that behind closed doors Republican leadership wrote into this bill that any replacement to the Affordable Care Act would be exempt from Senate rules that prohibit large increases to the deficit? Tom Price: As you may know, Senator, I stepped aside as chairman of the budget committee at the beginning of this year, and so I wasn’t involved in the writing of— Bennet: You have been the budget committee chairman during the rise of the Tea Party; you are a member of the Tea Party Caucus; you have said over and over again, as other people have, that the reason you’ve come to Washington is to reduce our deficit and reduce our debt. I assume you’re very well aware of the vehicle that is being used to repeal the Affordable Care Act. This is not— Price: Yes. Bennet: —some small piece of legislation. This is the Republican budget. Price: Yes, I'm aware of the bill. Yes. Bennet: But do you support a budget that increases the debt by $10 trillion? Price: No. What I support is an opportunity to use reconciliation to address the real challenges in the Affordable Care Act and to make certain that we put in place at the same time a provision that allows us to move the healthcare system in a much better direction— Bennet: Do you support the budget that was passed by the Senate Republicans— Price: I support— Bennet:—to repeal the Affordable Care Act that adds $10 trillion of debt to the budget deficit? Price: Well, the reconciliation bill is yet to come. I support the process that allows for and provides for the fiscal year ’17 reconciliation bill to come forward. 2:38:37 Senator Chris Murphy: But do you direct your broker around ethical guidelines? Do you tell him, for instance, not to invest in companies that are directly connected to your advocacy? Because it seems like a great deal: as a broker, he can just sit back, take a look— Tom Price: She. Murphy: —at the positions that you’re taking— Price: She. She can sit back. Murphy: She can—she can sit back— Price: Yeah. Murphy: —in this case—look at the legislative positions you’re taking, and invest in companies that she thinks are going to increase in value based on your legislative activities, and you can claim separation from that because you didn’t have a conversation. Price:Well, that’s a nefarious arrangement that I’m really astounded by. The fact of the matter is that I have had no conversations with my broker about any political activity at all, other than her— Murphy: Then why wouldn’t you tell her— Price: —other than her congratulating— Murphy: Why— Price: —me on my election. Murphy: But why wouldn’t you at least tell her, “Hey, listen; stay clear of any companies that are directly affected by my legislative work”? Price: Because the agreement that we have is that she provide a diversified portfolio, which is exactly what virtually every one of you have in your investment opportunities, and make certain that in order to protect one’s assets that there’s a diversified arrangement for purchase of stocks. I knew nothing about— Murphy: But you couldn’t have— Price: —those purchases. Murphy: But you couldn’t have a diversified portfolio while staying clear of the six companies that were directly affected by your work on an issue? Price: Well, as I said, I didn’t have any knowledge of those purchases. Murphy: Okay. 2:54:20 Senator Elizabeth Warren: One of the companies—it’s the company raised by Mr. Franken, Senator Franken—and that is Zimmer Biomet. They’re one of the world’s leading manufacturers of hip and knees, and they make more money if they can charge higher prices and sell more of their products. The company knows this, and so do the stock analysts. So on March 17, 2016 you purchased stock in Zimmer Biomet. Exactly six days after you bought the stock, on March 23, 2016, you introduced a bill in the House called the Hip Act that would require HHS secretary to suspend regulations affecting the payment for hip and knee replacements. Is that correct? Tom Price: I think the BPCI program to which I think you referred I’m a strong supporter of because it keeps the decision making in the— Warren: I’m not asking you about why you support it. I’m just asking, did you buy the stock, and then did you introduce a bill that would be helpful to the companies you just bought stock in? Price: The stock was bought by a direct—by a broker who was making those decisions. I wasn’t making those decisions. Warren: Okay, so you said you weren’t making those decisions. Let me just make sure that I understand. These are your stock trades, though. They are listed under your name, right? Price: They’re made on my behalf, yes. Warren:Okay. Was the stock purchased through an index fund? Price: I don't believe so. Warren: Through a passively managed mutual fund? Price: No. It’s a broker— Warren: Through an actively managed mutual fund? Price: It’s a broker-directed account. Warren: Through a blind trust? So, let’s just be clear. This is not just a stockbroker, someone you pay to handle the paperwork. This is someone who buys stock at your direction. This is someone who buys and sells the stock you want them to buy and sell. Price: Not true. Warren: So when you found out that— Price: That’s not true, Senator. Warren: Well, because you decide not to tell them—wink, wink, nod, nod—and we’re all just supposed to believe that? Price: It’s what members of this committee, it’s the manner of which— Warren: Well, I’m not one of them. Price: —members of this committee—Well, I understand that— Warren: So, let me just keep asking about this. Price: —but it’s important to appreciate that that’s the case. Warren:Then, I want to understand. When you found out that your broker had made this trade without your knowledge, did you reprimand her? Price: What—what I did was comply— Warren: Well, you found out that she made it. Price: What I did was comply— Warren: Did you fire her? Did you sell the stock? Price: What I did was comply with the rules of the House in an ethical and legal and— Warren: I didn’t ask whether or not the rules of the House— Price: —above-board manner— Warren: —let you do this. Price: —and in a transparent way. Warren: You know, all right. So, your periodic transaction report notes that you were notified of this trade on April 4, 2016. Did you take additional actions after that date to advance[audio cuts out] the company that you now own stock in? Price: I’m offended by the insinuation, Senator. Warren: Well, let me just read what you did. You may be offended, but here’s what you did. Congressional records show that after you were personally notified of this trade, which you said you didn’t know about in advance, that you added 23 out of your bill’s 24 co-sponsors; that also after you were notified of this stock transaction, you sent a letter to CMS, calling on them to cease all current and future planned mandatory initiatives under the Center for Medicare and Medicaid Innovation; and just so there was no misunderstanding about who you were trying to help, you specifically mentioned— Unknown Speaker: Your two minutes are up, Senator Warren. Thank you. Warren: —hip and knee replacement. 2:58:20 Senator Johnny Isakson: This is very important for us to all understand under the disclosure rules that we have and the way it operates, any of us could make the mistakes that are being alleged. I’m sure Senator Franken had no idea that he owned part of Philip Morris when he made the statement he made about tobacco companies, but he has a WisdomTree Equity Income Fund investment, as disclosed in his disclosure, which owns Philip Morris. So, it’s entirely possible for any of us to have somebody make an investment on our behalf and us not know where that money is invested because of the very way it works. I don’t say that to, in any way, embarrass Mr. Franken but to make a point that any one of us who have mutual funds or investment managers or people who do that, it’s entirely possible for us not to know, and to try and imply that somebody’s being obfuscating something or in otherwise denying something that’s a fact, it’s just not the fair thing to do, and I just wanted to make that point. Senator Al Franken: This is different than mutual funds. Isakson: It’s an investment in Philip Morris. Unknown Speaker: Alright. Unknown Speaker: Thank you. Warren: And my question was about what do you do after he had notice. Unknown Speaker: Senator Warren, your time has been generously… Senator Kaine. 3:21:09 Senator Tim Kaine: Do you agree with the president-elect that the replacement for the Affordable Care Act must ensure that there is insurance for everybody? Tom Price: I have stated it here and— Kaine: Right. Price: —always that it’s incredibly important that we have a system that allows for every single American to have access to the kind of coverage that they need and desire. Kaine: And he’s— 3:31:52 Senator Patty Murray: You admitted to me in our meeting that you, in your own words, talked with Congressman Collins about Innate Immuno. This inspired you to you, in your own words, study the company and then purchase its stock, and you did so without a broker. Yes or no. Tom Price: No. Murray: Without a broker. Price: I did not. Murray: You told me that you did this one on your own without the broker. Yes? Price: No, I did it through a broker. I directed the broker to purchase the stock, but I did it through a broker. Murray: You directed the broker to purchase particularly that stock. Price: That's correct. Murray: Yeah. 3:34:42 Senator Patty Murray: Will you commit to ensuring all 18 FDA-approved methods of contraception continue to be covered so that women do not have to go back to paying extra costs for birth control? Tom Price: What I will commit to and assure is that women and all Americans need to know that we believe strongly that every single American ought to have access to the kind of coverage and care that they desire and want. 3:36:38 Senator Patty Murray: The Office of Minority Health was reauthorized as part of the ACA. So will you commit to maintaining and supporting this office and its work? Tom Price: I will commit to be certain that minorities in this country are treated in a way that makes certain—makes absolutely certain—that they have access to the highest-quality care. Murray: So you will not commit to the Office of Minority Health being maintained. Price: I think it’s important that we think about the patient at the center of all this. Our commitment, my commitment, to you is to make certain that minority patients and all patients in this country have access to the highest-quality care. Murray: But in particular—so you won’t commit to the Office of Minority— Price: We—Look, there are different ways to handle things. I can’t commit to you to do something in a department that one, I’m not in—I haven’t gotten it yet— Murray: But you will be. Price: —and— Murray: You will be, and— Price: Let me put forward a possible position that I might find myself in. The individuals within the department come to me and they say, we’ve got a great idea for being able to find greater efficiencies within the department itself, and it results in merging this agency and that agency— Murray: I think—I think that— Price: —and we’ll call it something else. Murray: Yeah. I—okay. Price: And we will address the issues of minority health— Murray: I just have a minute left, and I hear your answer. Price: —in a big, big way— Murray: You’re not committed, okay. Price: —and make certain that it is responsive to patients. Part 2 14:50 Senator Ron Wyden: Congressman Price owns stock in an Australian biomedical firm called Innate Immunotherapeutics. His first stock purchase came in 2015 after consulting Representative Chris Collins, the company’s top shareholder and a member of its board. In 2016 the congressman was invited to participate in a special stock sale called a private placement. The company offered the private placement to raise funds for testing on an experimental treatment it intends to put up for FDA approval. Through this private placement, the congressman increased his stake in the company more than 500 percent. He has said he was unaware he paid a price below market value. It is hard to see how this claim passes the smell test. Company filings with the Australia’s stock exchange clearly state that this specific private placement would be made at below-market prices. The treasury department handbook on private placement states, and I will quote, they “are offered only to sophisticated investors in a nonpublic manner.” The congressman also said last week he directed the stock purchase himself, departing from what he said was typical practice. Then, there’s the matter of what was omitted from the congressman’s notarized disclosures. The congressman’s stake in Innate is more than five times larger than the figure he reported to ethic’s officials when he became a nominee. He disclosed owning less than $50,000 of Innate stock. At the time the disclosure was filed, by my calculation, his shares had a value of more than $250,000. Today his stake is valued at more than a half million dollars. Based on the math, it appears that the private placement was excluded entirely from the congressman’s financial disclosure. This company’s fortunes could be affected directly by legislation and treaties that come before the Congress. 30:49 Senator Orrin Hatch: First, is there anything that you are aware of in your background that might present a conflict of interest with the duties of the office to which you have been nominated? Tom Price: I do not. 51:36 Senator Ron Wyden: Will you commit to not implementing the order until the replacement plan is in place? Tom Price: As I mentioned, Senator, what I commit to you and what I commit to the American people is to keep patients the center of healthcare, and what that means to me is making certain that every single American has access to affordable health coverage that will provide the highest-quality healthcare that the world can provide. 1:24:34 Senator Richard Burr: Are you covered by the STOCK Act, legislation passed by Congress that requires you and every other member to publicly disclose all sales and purchases of assets within 30 days? Tom Price: Yes, sir. Burr: Now, you’ve been accused of not providing the committee of information related to your tax and financial records that were required of you. Are there any records you have been asked to provide that you have refused to provide? Price: None whatsoever. Burr: So all of your records are in. Price: Absolutely. Burr: Now, I’ve got to ask you, does it trouble you at all that as a nominee to serve in this administration that some want to hold you to a different standard than you as a member of Congress, and I might say the same standard that they currently buy and sell and trade assets on? Does it burn you that they want to hold you to a different standard now that you’re a nominee than they are as a member? Price: Well, I—we know what’s going on here. Burr: Oh, we do. Price: I mean— Burr: We do. Price: It’s—and I understand. And as my wife tells me, I volunteered for this, so… 1:26:49 Senator Richard Burr: As the nominee and hopefully—and I think you will be—the secretary of HHS, what are the main goals of an Obamacare replacement plan? Tom Price: Main goals, as I mentioned, are outlined in those principles, that is imperative that we have a system that’s accessible for every single American; that’s affordable for every single American; that is incentivizes and provides the highest-quality healthcare that the world knows; and provides choices to patients so that they’re the ones selecting who’s treating them, when, where, and the like. So it’s complicated to do, but it’s pretty simple stuff. 1:34:58 Senator Johnny Isakson: Any one of us can take a financial disclosure—and there’s something called desperate impact, where you take two facts—one over here and one over there—to make a wrong. Any one of us could do it to disrupt or misdirect people’s thoughts on somebody. It’s been happening to you a lot because people have taken things that you have disclosed and tried to extrapolate some evil that would keep you from being secretary of HHS when, in fact, it shouldn’t be true. For example, if you go to Senator Wyden’s annual report, he owns an interest in BlackRock Floating Rate Income Fund. The major holding of that fund is Valeant Pharmaceuticals. They’re the people we jumped all over for 2700 percent increases last year in pharmaceutical products. But we’re not accusing the ranking member of being for raising pharmaceutical prices, but you could take that extrapolation out of that and then indict somebody and accuse them. Is that not true? 1:51:30 Senator Michael Bennet: I wonder whether you also believe that it’s essential that there be a floor for insurance providers. You know, some of the things that the Affordable Care Act require for coverage include outpatient care; emergency services; hospitalization; maternity and newborn care; prescription drugs; rehab services; lab services; preventative care, such as birth control and mammograms; pediatric services, like vaccines; routine dental exams for children younger than 19. I’m not going to ask you to go through each one of those, but directionally, are we headed to a world where people in rural America have to settle for coverage for catastrophic care; are we headed to a place where there is regulation of insurance providers that say if you are going to be an insurance market, you need—particularly if we’re in a world where your son had crossed state lines —there has to be a floor of the services you’re willing to pay for? Tom Price: I think there has to be absolutely credible coverage, and I think that it’s important that the coverage—that individuals ought to be able to purchase this coverage that they want. 1:56:45 Senator Pat Toomey: When we talk about repeal, sometimes I hear people say, well, we’ve got to keep coverage of pre-existing conditions because, you know, we’ve got to keep that. And when I hear that, I think that we’re missing something here, and here’s what I’m getting at. There’s obviously a number of Americans who suffer from chronic, expensive healthcare needs. They’ve had these conditions sometimes all their lives, sometimes for some other period of time. And for many of them the proper care for those conditions is unaffordable. I think we agree that we want to make sure those people get the healthcare they need. Now, one way to force it is to force insurance companies to provide health-insurance coverage for someone as soon as they show up, regardless of what condition they have, which is kind of like asking the property casualty company to rebuild the house after it’s burned down. But that’s only one way to deal with this, and so am I correct: is it your view that there are other perhaps more effective ways—since, after all, Obamacare’s in a collapse—to make sure that people with these pre-existing chronic conditions get the healthcare that they need at an affordable price without necessarily having the guaranteed-issue mandate in the general population? Tom Price: I think there are other options, and I think it’s important, again, to appreciate that the position that we currently find ourselves in, with policy in this nation, is that those folks, in a very short period of time, are going to have nothing because of the collapse of the market. 2:18:05 Tom Price: Every single individual ought to be able to have access to coverage. 2:29:45 Senator Tim Scott: My last question has to do with the employer-sponsored healthcare system that we’re so accustomed to in this country, that provides about 175 million Americans with their insurance. In my home state of South Carolina, of course, we have about two and a half million people covered by their employer coverage. If confirmed as HHS secretary, how would you support American employers in their effort to provide effective family health coverage in a consistent and affordable manner? Said differently, there’s been some conversation about looking for ways to decouple having health insurance through your employer. Tom Price: I think the employer system has been absolutely a remarkable success in allowing individuals to gain coverage that they otherwise might not gain. I think that preserving the employer system is imperative. That being said, I think that there may be ways in which individual employers—I’ve heard from employers who say, if you just give me an opportunity to provide my employee the kind of resources so that he or she is able to select the coverage that they want, then that makes more sense to them. And if that works from a voluntary standpoint for employers and for employees, then it may be something to look at. Scott: That would be more like the HRA approach where— Price: Exactly. Scott: —employer funds an account, and the employee chooses the health insurance, not necessarily under the umbrella of the employer specifically. Price: Exactly. And gains the same tax benefit. 2:58:00 Tom Price: What I’m for is making certain, again, that the Medicaid population has access to the highest-quality care possible, and we’ll do everything to improve that because right now so many in the Medicaid population don’t have access to the highest-quality care. 3:20:50 Tom Price: Our goal is to make certain that seniors have access to the highest-quality healthcare possible at an affordable price. Senator Bob Menendez: Well, access without the ability to afford it, and I’ll end on this— Price: That's what I said, affordable price. 3:28:45 Senator Sherrod Brown: If you and he are working together, are you going to suggest to him that we find a way in repeal and replace to make sure there is guaranteed healthcare for our nation’s veterans? Tom Price: Well, I think it’s vital, again, as I’ve mentioned before, that every single American have access to affordable coverage that’s of high quality, and that’s our goal, and that’s our commitment. 3:30:52 [regarding a disabled child coverd by Medicaid] Tom Price: We are absolutely committed to making certain that that child and every other child and every other individual in this nation has access to the highest-quality care possible. Senator Bob Casey Jr.: Okay, so not an access—he will have the medical care that he has right now or better—if you can come up with a better level of care, that’s fine—but he will have at least the coverage of Medicaid and all that that entails that he has right now. And that’s either a yes or no; that’s not— Price: No, it’s not a yes or no because the fact of the matter is that in order for the current law to change, you all have to change it— Casey: No, but here’s— Price: —and if I’m given the privilege of leading at the Department of Health and Human Services— Casey: Here’s why it’s yes— Price: and I respond to— Casey: You should stop talking around this. You have led the fight in the House, backed up by Speaker Ryan, for years— Price: To improve Medicaid. Casey: —to block grant Medicaid, okay? Price: To improve Medicaid. Casey: To block grant Medicaid. What that means is, states will have to decide whether or not this child gets the Medicaid that he deserves. That’s what happens. So you push it back to the states and hope it works out… Cover Art Design by

Defense Secretary General James Mattis, Secretary of State Rex Tillerson, and CIA Director Mike Pompeo have been confirmed by the Senate and are now the most powerful influencers of foreign policy in the Trump Administration. In this episode, we examine their worldviews by investigating their pre-Trump Administration experience as corporate titans and hearing critical highlights from their confirmation hearings. Please support Congressional Dish: to contribute with PayPal or Bitcoin to support Congressional Dish for each episode via Patreon Mail Contributions to: 5753 Hwy 85 North #4576 Crestview, FL 32536 Thank you for supporting truly independent media! Recommended Congressional Dish Episodes South China Sea Map Image Credit: Israeli Settlements and Outposts Image Credit: Additional Reading Article: by the Associated Press, The New York Times, February 7, 2017. by Rebecca Kheel, The Hill, February 4, 2017. Article: by Steve Horn, Desmog, February 2, 2017. Article: by Dominic Dudley, Forbes, January 30, 2017. Article: , Financial Tribune, January 30, 2017. Article: by Angela Dewan and Emily Smith, CNN, January 30, 2017. Article: by Helen Clark, Asia Times, January 23, 2017. Document: , U.S. Senate, January 18, 2017. Op-Ed: by Medea Benjamin, The Guardian, January 9, 2017. Article: by Missy Ryan and Steven Mufson, The Washington Post, January 9, 2017. Document: , Office of the Director of National Intelligence, January 6, 2017. Article: by Dan Alexander, Forbes, January 4, 2017. Article: by Jennifer Williams and Javier Zarracina, Vox, December 30, 2016. Article: by Jonathan Ferziger and Michael Arnold, Bloomberg, December 26, 2016. Article: by Adam Taylor, The Washington Post, December 13, 2016. Article: by Steve Coll, The New Yorker, December 11, 2016. Article: by Avi Asher-Schapiro, International Business Times, November 18, 2016. Article: by Kaveh Waddell, The Atlantic, November 18, 2016. Article: by James Carden, The Nation, September 19, 2016. Fact Sheet: , U.S. Department of State, September 6, 2016. Op-Ed: by Mike Pompeo, Fox News Opinion, July 14, 2016. Article: by Jason Breslow, PBS, May 17, 2016. Op-Ed: by Mike Pompeo, National Review, December 21, 2015. Congressional Bill: by Mike Pompeo, House of Representatives, December 16, 2015. Article: , The Voice Of Vietnam, November 17, 2015. Article: by Derek Watkins, The New York Times, October 27, 2015. Article: by Tim Dickinson, RollingStone, September 24, 2014. Article: , BBC, February 7, 2014. Op-Ed: by Mike Pompeo and Tom Cotton, The Washington Post, September 3, 2013. Congressional Bill: by Mike Pompeo, House of Representatives, April 18, 2012. Op-Ed: by Rep. Mike Pompeo, Politico, February 2, 2012. Article: by Asjylyn Loder and David Evans, Bloomberg, October 3, 2011. Congressional Bill: by Mike Pompeo, House of Representatives, September 12, 2011. Article: by Lydia Polgreen, The New York Times, February 2, 2009. Article: by William Dowell, Time, November 13, 2000. References Opensecrets: Opensecrets: , GovTrack , The National WWII Museum , Gazprom Sound Clip Sources Interview: , Democracy Now, March 2007. Presidential Speech: , January 17, 1961. News Segment: , CNN, December 3, 2016. Video: , Center for Strategic and International Studies, April 22, 2016. Video: , NBC News, October 19, 2016. Hearing: Secretary of State Rex Tillerson Confirmation, Senate Foreign Relations Committee, January 11, 2017. Watch on CSPAN Timestamps & Transcripts Part 1 54:17 Rex Tillerson: We are the only global super power with the means and the moral compass capable of shaping the world for good. If we do not lead, we risk plunging the world deeper into confusion and danger. 1:11:18 Senator Ben Cardin: So, what would you have done, after we were surprised by what they did in taking over Crimea, what should the U.S. leadership had done in response to that, that we didn’t do? Rex Tillerson: I would have recommended that the Ukraine take all of its military assets it had available, put them on that eastern border, provide those assets with defensive weapons that are necessary just to defend themselves, announce that the U.S. is going to provide them intelligence and that either NATO or U.S. will provide air surveillance over that border to monitor any movements. Cardin:So, your recommendation would do a more robust supply of military? Tillerson: Yes, sir. 1:12:16 Senator Ben Cardin: Our NATO partners, particularly in the Baltics and Poland, are very concerned about Russian aggression. NATO has deployed troops in this region in order to show Russia that Article 5 means something. I take it you support that type of action. Rex Tillerson: Yes, I do. That is the type of response that Russia expects. If Russia acts with force—taking of Crimea was an act of force. They didn’t just volunteer themselves. So that required a proportional show of force to indicate to Russia that there’ll be no more taking of territory. 1:15:45 Senator Ben Cardin: We’re a part of COP21. Do you agree that the United States should continue in international leadership on climate-change issues with the international community? Rex Tillerson: I think it’s important that the United States maintain its seat at the table on the conversations around how to address threats of climate change, which do require a global response. No one country’s going to solve this alone. 1:27:35 Senator Bob Menendez: Do you believe it is in the national interest of the United States to continue to support international laws and norms that were established after World War II? Rex Tillerson: Yes, sir. Menendez: Do you believe that the international order includes respecting the territorial integrity of sovereign countries and the inviability of their borders? Tillerson: Yes, sir. Menendez: Did Russia violate this international order when it forcefully annexed Crimea and invaded Ukraine? Tillerson: Yes, it did.Menendez: Did Russia’s continuing occupation of foreign countries violate international laws and norms? Tillerson: I’m not sure which specific countries you’re referring to. Menendez: Well, the annexation of Crimea— Tillerson: Yes, sir. Menendez: —Eastern Ukraine, Georgia, just to mention a few. Tillerson: Yes, sir. Menendez: Does Russia and Syria’s targeted bombing campaign in Aleppo, on hospitals, for example, violate this international order? Tillerson: Yes. That is not acceptable behavior. 1:52:23 Senator Jeanne Shaheen: You were unwilling to agree with Senator Rubio’s characterization of Vladimir Putin as a war criminal, and you point out in your statement that Russia has disregarded American interests. I would suggest, as I think has been brought out in later testimony, that it not only has disregarded American interests but international norms and humanitarian interests. The State Department has described Russia as having an authoritarian political system dominated by President Vladimir Putin. Meanwhile, Freedom House currently puts Russia in a category of countries like Iran, with very restricted political rights ruled by one part or military dictatorships, religious hierarchies, or autocrats. Do you agree with that characterization of Russia and Vladimir Putin? Rex Tillerson:I would have no reason to take exception. 2:08:15 Senator Jeff Flake: How can we refashion some of our policies to nudge countries toward democracy that need nudging, or that punished countries weren't deemed spent, or encourage cooperation with us on security measures or humanitarian measures? Rex Tillerson: Well, certainly, the use of important USAID assistance really falls in kind of two broad areas: a disaster relief addressing imminent situations on the ground, where there's starvation or the result of storms or as result of conflict, providing assistance to relieve the immediate suffering. That is an important part of USAID. Over the past few years, in looking at the balance of that against, what I would call, development assistance, which is designed to create change, which, hopefully, becomes a sustainable change, that, regrettably, the disaster-assistance part of that budget has grown, and that means there's less available for development. Other important ways in which we can provide the assistance, though, are through other mechanisms, such as millennial challenge corporation for those countries that qualify. That's a different model. And so I think in terms of what is the issue we're trying to address, that then conditions how do we put obligations on the country then to modify behaviors, whether it's to take steps to reduce corruption, improve the strength of governments and their own institutional capacity to manage their affairs. Where I have seen a good progress is when assistance was put into the country with some requirement that, for instance, they modify or streamline their permitting process. One of the ways to begin to reduce corruption is to remove the complexities of how people are able to carry out their activities. The more steps you have in the process, the more opportunities there are for people to be taking something out of it or adding a cost to it. 2:10:24 Rex Tillerson: So, I think where we can tie our assistance to obligations, it’s important that we do so. 2:16:25 Rex Tillerson: As to how I would deal with the past history I have in my prior position with ExxonMobil, I've made clear in my disclosures, and I think in answers to questions that have been posed, that obviously there's a statutory recusal period, which I will adhere to, on any matters that might come before the State Department that deal directly and specifically with ExxonMobil. Beyond that, though, in terms of broader issues dealing with the fact that it might involve the oil and natural gas industry itself, the scope of that is such that I would not expect to have to recuse myself. Part 2 08:38 Senator Tim Kaine: You were with the company for nearly 42 years? Rex Tillerson: That is correct. Kaine: And for the majority of your time you were with the company in an executive and management position? Tillerson: Approximately half the time. Kaine: And you became CEO in 2006? Tillerson: Correct. Kaine:So, I’m not asking you on behalf of ExxonMobil—you’ve resigned from ExxonMobil. I'm asking you whether those allegations about ExxonMobil's knowledge of climate science and decision to fund and promote a view contrary to its awareness of the science, whether those allegations are true or false. Tillerson: The question would have to be put to ExxonMobil. Kaine: And let me ask you: do you lack the knowledge to answer my question, or are you refusing to answer my question? Tillerson: A little of both. 36:00 Rex Tillerson: We've had two competing priorities in Syria under this administration: Bashar al-Assad must go and the defeat of ISIS. And the truth of the matter is, carrying both of those out simultaneously is extremely difficult because at times they conflict with one another. The clear priority is to defeat ISIS. We defeat ISIS we, at least, create some level of stability in Syria which then lets us deal with the next priority of what is going to be the exit of Bashar Assad, but importantly, before we decide that is in fact what needs to happen, we have to answer the question, what comes next? What is going to be the government structure in Syria, and can we have any influence over that or not? 53:10 Senator Edward Markey: Do you believe that it should be a priority of the United States to work with other countries in the world to find climate-change solutions to that problem? Rex Tillerson: I think it's important for America to remain engaged in those discussions so that we are at the table, expressing a view, and understanding what the impacts may be on the American people and American competitiveness. 1:13:38 Senator Jeff Merkley: There are three individuals who were involved in the Trump campaign—Paul Manafort, Michael Cohen, and Carter Page—who, public reports, have been involved in dialogue with Russia, with the goal of finding a common strategy, with Russia believing that Trump would be better on Syria and Ukraine policy and Trump believing that Russia could help defeat Hillary Clinton. Now these reports have not been substantiated, I'm sure much more will come on them, but in theory, how do you feel about a U.S. candidate turning to a foreign country to essentially find another partner in defeating another opponent in a U.S. presidential election? Rex Tillerson: That would not comport with our democratic process. 1:16:35 Rex Tillerson: The defeat of ISIS as an ideology, in other words, other than the battlefield, is going to require advanced capabilities in our own communication tools in terms of disrupting their communication to develop their network, more importantly to further their ideology. This means getting into the Internet airspace and putting forth different ideas and disrupting their delivery of ideas to people who are persuaded to join them. 1:23:42 Senator John Barrasso: We have had a situation where some of the programs in place have not really supported all of the above energy, and we've seen where the World Bank has blocked funding for coal-fired power plants which would help bring light and other opportunities to a number of countries in Africa, and I wonder if you could comment on the need to use all of the sources of energy to help people who are living in poverty and without power. Rex Tillerson:Well, I think, and I know you touched on it, but nothing lifts people out of poverty quicker than electricity. That's just a fact. You give people light, you give them the ability to refrigerate food, medicine—it changes their entire quality of life. They no longer cook on animal dung and wood cooking in their homes, so health issues—their health improves. I think it's very important that we use wisely the American people's dollars as we support these programs, and that means whatever is the most efficient, effective way to deliver electricity to these areas that don't have it, that should be the choice, and that is the wisest use of American dollars. 1:27:30 Senator Chris Coons: Do you see RT as a Russian propaganda outlet, and how would you use and lead the resources of the State Department to counter Russian propaganda and to push back on this effort to change the rules of the world order? Rex Tillerson: Well, as you point out, utilizing the opportunity to communicate to the people of Russia through mechanisms that were successful in the past—Radio Free Europe—and utilizing those type of sources as well as providing information on the Internet to the extent people can access Internet so that they have availability to the facts, the facts, as they exist, to the alternative reporting of events that are presented through the largely controlled media outlets inside of Moscow. That is an important way in which to, at least, begin to inform the Russian people as to what the realities are in the world, and it is an important tool. It should be utilized. Part 3 08:28 Senator Cory Booker: You did characterize the Obama administration's decisions as weakness, even though you're saying that you wouldn't necessarily do something different. Rex Tillerson: In that instance, I would've done something different. Booker: Military force. Tillerson:A show of force at the border of the country that had been already had territory taken from them. Booker: American military force, in this case? Tillerson: No, I indicated Ukrainian military force, supported by the U.S. providing them with capable defensive weapons. If that's not seen across the border, then it's not a show of force. 55:32 Rex Tillerson: I had a great 41-and-a-half-year career, and I was truly blessed, enjoyed every minute of it. That part of my life's over. I've been humbled and honored with the opportunity to now serve my country—never thought I would have an opportunity to serve in this way—and so when I made the decision to say yes to President-elect Trump when he asked me to do this, the first step I took was to retain my own outside counsel, to begin the process, and the only guidance I gave them is I must have a complete and clear, clean break from all of my connections to ExxonMobil—not even the appearance—and whatever is required for us to achieve that, get that in place. I am appreciative that the ExxonMobil Corporation, whoever represented by their own counsel, and the ExxonMobil board were willing to work with me to achieve that as well. It was their objective, too. And in the end, if that required me to walk away from some things, that's fine, whatever was necessary to achieve that. And again, told people, I don't even want the appearance that there's any connection to myself and the future fortunes, up or down, of the ExxonMobil Corporation. 1:04:25 Rex Tillerson: We've got to step back and look at all of China's activities, and the one you mention now—the island-building in the South China Sea, the declaration of control of airspace in waters over the Senkaku Islands with Japan—both of those are illegal actions. They're taking territory or control or declaring control of territories that are not rightfully China's. The island-building in the South China Sea itself, in many respects, in my view, building islands and then putting military assets on those island is akin to Russia's taking of Crimea. It's taking of territory that others lay claim to. The U.S. has never taken a side in the issues, but what we have advocated for is, look, that's a disputed area, there are international processes for dealing with that, and China should respect those international processes. As you mentioned, some of their actions have already been challenged at the courts in The Hague, and they were found to be in violation. 1:06:00 Rex Tillerson: But you’ve got five trillion dollars of economic trade goes through those waters every day, and this is a threat to the entire global economy if China’s allowed to somehow dictate the terms of passage through these waters. 1:06:23 Rex Tillerson: We’re going to have to send China a clear signal that, first, the island-building stops, and second, your access to those islands is also not going to be allowed. 1:45:10 Senator Chris Murphy: Do you believe that the Iraq war—not the conduct of the war, but the war itself—was a mistake? Rex Tillerson: I think I indicated in response—I believe it was to Senator Paul's question—that I think our motives were commendable, but we did not achieve the objectives there: we did not achieve greater stability, we did not achieve improved national security for the United States of America. And that's just, the events have borne that out. And at the time, I held the same view, that I was concerned just as I was concerned before the decisions were made to go into Libya and change the leadership there. It's not that I endorse that leadership, but that leadership had the place somewhat stable with a lot of bad actors locked up in prison. Now, all those bad actors are running around the world. Murphy: Just, just— Tillerson: So it's the question of—it isn't a question that our ultimate goal has to be to change that type of oppressive leadership. It has to be, though, that we know what is coming after, or we have a high confidence that we can control what comes after or influence it, and it will be better than what we just took out. Murphy: But which—in this case, which motives are you referring to that were commendable? Tillerson:I think the concerns were that Saddam Hussein represented a significant threat to stability in that part of the world and to the United States directly. 1:47:00 Senator Chris Murphy: One last question, going back to Russia. You’ve said in earlier—answered an earlier question that you wouldn't commit today to the continuation of sanctions against the Russians for their involvement in the U.S. presidential election, but could you make a commitment to us today that if you deem sanctions to be the inappropriate policy, that you will recommend and argue for a substitute response for the interference in U.S. elections? Will you argue for a U.S. response, even if you don't believe sanctions is the right policy? Rex Tillerson: Yes. Yes, and all I've read is, again, the unclassified portions, but it is troubling. And if there's additional information that indicates the level of interference, it deserves a response. 2:04:25 Senator John Barrasso: The last thing I wanted to get to was the issue of energy as a master resource in the way that Putin uses it as a political weapon. And one of the things we're seeing now is this Nord Stream 2 pipeline, the pipeline between Russia and Germany that the United States has been working closely with our European partners, with respect to that. And this is something that we've had bipartisan support on—looking across the aisle: Senator Shaheen, Senator Murphy have signed a letter with me and with Senator Risch and Senator Rubio, Senator Johnson—because of our concern with the ability of this pipeline to deliver more energy and make Europe more dependent upon Russia for energy. It also bypasses Ukraine and impacts the Ukrainian economy as well when it runs directly from Russia under the Baltic Sea directly into Germany. Several European countries have raised the concerns that this pipeline would undermine sanctions on Russia, increase Russia's political leverage over Eastern Europe, and can you give us your assessment of something of which there's actually a lot of bipartisan agreement on this panel with regard to? Rex Tillerson: Well, energy is vital to every economy the world over, so it can be used as a powerful tool to influence, kind of tip the balance of the table in one party's direction or the other. So it is important that we are watching and paying attention to when this balance is upset. Now, the greatest response the United States can give to that threat is the development of our own natural resources. The country’s blessed with enormous natural resources of both oil and natural gas, and I know the Congress took action here in the recent past to approve the export of crude oil. We now have exports of liquefied natural gas. The more U.S. supply, which comes from a stable country that lives by our values, we can provide optionality to countries so that they cannot be held captive to a single source or to a dominant source. 2:17:45 Senator Rob Portman: I want to talk to you a little about your views on Israel and the U.S.-Israel relationship. One important issue for me, as you know, is this issue of Boycott, Divestment and Sanctions movement—the so-called BDS movement—which is a global movement targeting Israel. I've been concerned about this for a while, introduced some legislation on it. In fact, Ben Cardin and I have not just introduced but passed legislation in this regard to try to push back against the BDS forces. Recently—of course with the consent of the Obama administration—the U.N. Security Council passed this resolution condemning the settlements and demanding Israel cease all activities in the occupied Palestinian territories, including east Jerusalem, is the way the resolution reads. I think this will, no doubt, galvanize additional BDS activity. And so here's my question to you: would you make it a priority to counter Boycott, Divestment and Sanctions efforts against Israel, make sure Israel is not held to a double standard but instead treated as a normal member of the international community? Rex Tillerson: Yes, I would. Portman: Any preliminary thoughts as to how you would do that? Tillerson: Well, I think, just by raising it in our interactions with countries that do put in place provisions that boycott whatever elements of activity or business with Israel in their country, that we begin by highlighting that we oppose that and just expressing that view, and that those countries need to understand that does shade our view of them as well, then. One of the things that would, I think, help change the dynamic, obviously, would be if there were a change in the dynamic regionally. Today, because of Iran and the threat that Iran poses, we now find that Israel, the U.S., and the Arab neighbors in the region all share the same enemy, and this give us an opportunity to discuss things that previously, I think, could not have been discussed. 2:26:45 Senator Jeff Merkley: We are also viewing, often, climate change as a national-security issue, and since you believe—so I wanted to ask, do you see it as a national-security issue? Rex Tillerson: I don’t see it as the imminent national-security threat that, perhaps, others do. 2:27:30 Rex Tillerson: The facts on the ground are indisputable in terms of what’s happening with drought, disease, insect populations, all the things you cite. Now the science behind the clear connection is not conclusive, and there are many reports out there that we are unable, yet, to connect specific events to climate change alone. 2:30:26 Senator Jeff Merkley: We also saw that leading up to Paris, China has committed to producing as much renewable power as our entire electricity production in the United States, and we’ve seen India, now, talking about how to shift providing electricity to 300 million people who don’t have it and doing it primarily, or shifting from primarily a coal strategy to primarily a renewable-energy strategy. So we’re seeing big countries with big populations that have far smaller carbon footprints than the United States stepping up, and shouldn’t we step up as well? Rex Tillerson: I think the United States has stepped up. As I indicated earlier, I think the United States has a record over the last 20 years, of which it can be quite proud. 3:13:55 Rex Tillerson: I think the president-elect’s made clear in his views, that his whole objective of his campaign and putting America first, that he is not going to support anything that would put U.S. industry in any particular sector at a disadvantage to its competitors outside of the U.S., whether it’s automobile manufacturing or steel making or the oil and gas industry. 3:32:57 Rex Tillerson: I have never supported energy independence; I have supported energy security. Hearing: , Senate Armed Services Committee, January 12, 2017. Watch on CSPAN Timestamps & Transcripts 20:15 Senator John McCain: For seven decades, the United States has played a unique role in the world. We’ve not only put America first, but we’ve done so by maintaining and advancing a world order that has expanded security, prosperity, and freedom. This has required our alliances, our trade, our diplomacy, our values, but most of all, our military for when would-be aggressors aspire to threaten world order. It’s the global striking power of America’s armed forces that must deter or thwart their ambitions. Too many Americans, too many Americans seem to have forgotten this in recent years. Too many have forgotten that our world order is not self-sustaining. Too many have forgotten that while the threats we face may not have purely military solutions, they all have military dimensions. In short, too many have forgotten that hard power matters—having it, threatening it, leveraging it for diplomacy, and, at times, using it. Fairly or not, there is a perception around the world that America is weak and distracted, and that has only emboldened our adversaries to challenge the current world order. The threat posed by violent Islamic extremism continues to metastasize across Middle East, Africa, Asia, Europe, and but for those who remain vigilant, our homeland. It should now be clear that we will be engaged in a global conflict of varying scope and intensity for the foreseeable future; believing otherwise is wishful thinking. So, if confirmed, General Mattis, you would lead a military at war. You of all people appreciate what that means and what it demands. At the same time, our central challenge in the Middle East is not ISIL, as grave a threat as that is. It is a breakdown of regional order in which nearly every state is a battlefield for conflict, a combatant, or both. ISIL is a symptom of this disorder. 51:20 Senator John McCain: You are a distinguished student of history, and, as we are all aware, that following World War II, a world order was established which has held for, basically, the last 70 years. Do you believe that that world order is now under more strain than it’s ever been? James Mattis: I think it’s under the biggest attack since World War II, sir, and that’s from Russia, from terrorist groups, and with what China is doing in the South China Sea. McCain: And that would argue for us making sure we’re adequately prepared to meet these challenges. Mattis:I think deterrence is critical right now, sir. Absolutely. And that requires the strongest military. McCain: Do you think we have a strong-enough military today in order to achieve that goal? Mattis: No, sir. 1:13:08 Senator Jeanne Shaheen: Today, for the first time since the fall of Communism, American troops arrived in Poland as part of the European Reassurance Initiative. How important is it for us to continue these initiatives to reassure our European allies that we will continue to support them, and how concerned are you that some of President-elect Trump’s statements with respect to continuing to support NATO, to support our allies in Europe, has undermined our ability to continue this initiative, and will you support the ERI continuing, as secretary of defense? James Mattis: Senator, I do support ERI. NATO, from my perspective, having served once as a NATO supreme allied commander, is the most successful military alliance probably in modern-world history, maybe ever, and was put together, as you know, by the “greatest generation” coming home from a war to defend Europe against Soviet incursion by their military. Yet the first time it went to war was when this town and New York City were attacked. That’s the first time NATO went into combat. So my view is that nations with allies thrive, and nations without allies don’t, and so I would see us maintaining the strongest-possible relationship with NATO. 1:51:05 Senator Joni Ernst: I do believe we need to look at other regions around the globe, and we cannot turn a blind eye to ISIS in regions outside of the Middle East, such as in Southeast Asia. There are many news reports that have showed those areas are very active, and reports from last year, I noted over 57 Philippine government forces have been killed in battles linked with ISIS groups. There was also an attempted U.S. Embassy bombing in Manila and many other ISIS-claimed attacks throughout that region. Secretary Carter did agree with my assessment on ISIS in Southeast Asia, and President Obama was made well aware of my concerns; however, we have yet to develop a strategy to combat ISIS, especially in those regions where we are not focusing. How should our new administration address the rising threat of ISIS in Southeast Asia, and will you commit to working with me on this, sir? James Mattis: Absolutely, Senator. The way we do this, I think we have to deliver a very hard blow against ISIS in the Middle East so that there’s no sense of invulnerability or invincibility there. There’s got to be a military defeat of them there, but it must, as you point out, be a much broader approach. This requires an integrated strategy so you don’t squeeze them in one place and then they develop in another and we really are right back to square one. We’ve got to have an integrated strategy on this, and it’s got to be one that goes after the recruiting and their fundraising, as well as delivering a military blow against them in the Middle East, and that way you slow down this growth and start rolling it back by, with, and through allies. 2:08:55 Senator Dan Sullivan: In the Arctic, Russia has filled a vacuum left by the U.S., and, as you know, General, just in the past few years the buildup in the Arctic by the Russians has been quite dramatic: a new Arctic command; four new Arctic brigades; 14 operational air fields; 16 deep-water ports; 40 icebreakers, with 13 more on the way, three nuclear powered; huge new land claims in the Arctic for massive oil and gas reserves; the most long-range air patrols with Bear bombers since the Cold War; a snap military exercise in 2015 that included 45,000 troops, 3,400 military vehicles, 41 ships, 15 submarines, and 110 aircraft. What is the effect on the United States not being actively engaged in the Arctic, as you mention in your article? James Mattis: Senator, I think that America has global responsibilities, and it’s not to our advantage to leave any of those areas of the world absent from our efforts. Sullivan: What do you think Russia’s trying to achieve in the Arctic with that massive military buildup? Mattis: I don’t know. I believe, however, that we are going to have to figure it out and make certain that we’re not seeing an expansion of these efforts to dominate, what have been up until now, part of the international commons. Sullivan: What role would you see of increased U.S. presence and involvement with regard to our role in the Arctic versus what the Russians are doing? Mattis: Senator, with the new sea routes of communication that are opening up, as the sea ice retreats, I think we’re going to have to recognize this is an active area, whether it be for search and rescue, for patrolling, maintain sovereignty up along our Alaska coastline, that sort of thing. 2:47:17 Senator Lindsey Graham: Are we going to give the world a veto of what we do? James Mattis: I would never give the world a veto. 3:02:12 Senator Ben Sasse: You have commented, General, on the political objectives must be clearly defined to ensure military success in Iraq and Syria. How will your recommendations for pursuing Iraq and Syria differ from the Obama administration? James Mattis: Senator, I think the most important thing is to know when you go into a shooting war how you want it to end, and by setting out the political conditions that you’re out to achieve up front and come into agreement on that in the national security team and with the Congress, then you give it full resourcing to get there as rapidly as possible. And I think it’s getting there as rapidly as possible is probably where it would differ from the current administration where it would be a more accelerated campaign from what the president-elect has already called for. Hearing: , Senate Intelligence Committee, January 12, 2017. Watch on CSPAN Timestamps & Transcripts 57:28 Senator Martin Heinrich: You’ve been supportive of the use of enhanced interrogation techniques in the past, saying, back in September of 2014, that President Obama has continually refused to take the war on radical Islamic terrorism seriously and cited ending our interrogation program in 2009 as an example. Can you commit to this committee that under current law, which limits interrogation to the Army Field Manual, that you will comply with that law and that the CIA is out of the enhanced-interrogation business? Mike Pompeo: Yes. You have my full commitment to that, Senator Heinrich. Panel: , Foreign Policy Initiative Forum, December 3, 2014. Protest Guide Cover Art Design by