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tv   Capitol Hill Hearings  CSPAN  May 22, 2013 8:00pm-1:00am EDT

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college degree is more important than ever to obtain reliable employment, we are in grave danger of placing too many young students out of a college education. these drastic increases in tuition occurred at the same time we have seen the worst economic downturn since the great depression. we know that to compete for the jobs of the 21st century and drive in a global economy, we need a grow, skilled, educated work forest, particularly in the areas of science, technology, engineering, and math. it is estimated that the u.s. will need 22 million more college educated workers by the year 2018. partly driven by rise in college costs we are expected to fall short by three million workers. our colleges and universities such as u.w. madison and boyd college and others in my district have the talented faculty to produce our 21st century work force but they
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immediate the students to teach and train and an unaffordable college education is an unaffordable future for our country. as students get bogged down with they are an debt, reducing expenditures in our current economy. due to the high burdens put on students from their loans, new car purchases in our state are reduced by more than 200 million annually and that's just in the state of wifble. households with student loan debt are overwhelmingly more likely to rent a home than own a home, affecting home sales. owning a home, buying a car, these aren't just typical byproducts of the american dream but important components of our country's overall health and
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across the country. we need to see strength in these two markets. we find ourselves at a crossroads, instead of providing an advanced economic opportunity for our young people, a college education is trapping students in endless debt, preventing them from advancing economically and contributing to our economy. if we continue to believe in an accessible, affordable and quality college education should be a national priority, then it is critical to our future economic prosperity, we need to come up with a long-term plan to go against the skyrocketing plans. we tried to increase the maximum ,645 in 2016. $ we have income based programs to
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manage loan repayments during stressed economic times. we have tried to create a tax credit providing a maximum of $2,500 tax credit to eligible families and students. we provided loan for giveness after 10 years of payment and everybody else after five years' of payment and required schools for a calculator based on their families' financial condition. we need to do moreover the long run. we can restore consumer protections for our students. we can increase our funding or higher education and re-authorize the higher education act and protect programs like pell grants that support low-income students attending college. it will affect students who live
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in our districts. unless we take action on july 1, interest rates on subsidized stafford loans will double from 3.4% to 6.8%. if we do nothing at a time when ur country is still facing a deep economic recovery, seven million students will sigh their student loan rates increase, seven million people will have their rates increase on student loans. that will wind up costing student borrowers $1,000 more a year. if we do nothing, that will add $4.3 billion to students' debt burden in just one year alone. quite simply, we cannot afford to do nothing. allowing these interest rates to double would represent a deer electricity of our duty. and right now banks can receive
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loans from the federal government that have low levels, less than 1%. if banks can receive such loans, shouldn't we protect lower loans for our students who are struggling in today's economy more than anyone else? last year before i arrived in washington, congress extended the 3.4% rate for one full year. there are a number of bills right now, including those introduced by my democratic colleagues that would extend the rate by one year if not more. we must take action now before we risk drowning our future work force and even more student loan debt. now this body, this house tomorrow will be taking up a measure, h.r. 1911, the make college more expensive act. unfortunately, the legislation this body will consider, instead of providing needed relief for our students will instead make college more expensive for millions of young people and their families across the
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country. as i mentioned, if we don't act by july 1, interest rates on subsidized student loans will double from 3.4% to 6.8%. the republican legislation that we have before us tomorrow would be even worse for students than if we did nothing at all. by tying federal student loan rates to the 10-year treasury note, the interest rate for students entering college would be reset for every year he or she is in college. by the time next year's freshmen graduate and start repaying, the interest rates that they had on their first year of college is projected to more than double beyond today's current rate for subsidized stafford loans. in practical terms, what that means over the long run is a student about to enroll, will pay higher interest rates under
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the republican plan than if congress let the current rate double. again, this bill is even more damaging than if we do nothing, which we should do as a body at all. according to a research service, students who borrow the maximum amount will pay $1,000 300 in interest rates under the republican plan than if we allow the rates to double and $6,000 more than if we kept the rate at 3.4%. the overall cost to students and families would be $4 billion in additional interest payments over the next decade compared to our current law. let me repeat that. if we pass h.r. 1911, it will cost our students and families $4 billion moreover the next 10 years than if we keep the law the way it is. these facts don't lie.
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the bill does not make college more affordable. it does just the opposite. it worsens the student debt crisis that we should be working to solve and this is another case of mistaken priorities and misguided plans. while the democrats are working hard to even the playing field, republicans would make it even harder for the average american to afford college. h.r. 1911 imposes a long-term financial burden on people looking to pursue higher education. it will put $4 billion in student debt over the next decade that would have been used to help pay down our deficit. this is not a sustainable, balanced way to deal with our deficit and no way to ensure a thriving future for the next generation. we have seen time and time again how student debt stifles our economy and we cannot afford to make college more expensive for americans trying to get that education. i'm very pleased to be joined by
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another freshman member of this body, representative from the state of new york, who is the author of one of these bills that will make sure that we keep that interest rate at 3.4% and not allow it to double on july 1. i would like to yield my time to mr. jeffries of new york. mr. jeffries: let me first thank the distinguished gentleman from the badger state, my good riend, representative mark pocan who has been a leader on issues of significance to america. in fact during his short time in the congress, we have seen week after week, month after month, representative pocan has come to the floor of the house of representatives, the people's house, and boldly articulated a progressive vision of how we can
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deal with some of the problems that we confront today in america. and certainly when we talk about wrapping our arms collectively around the issues of great significance in this country of ours dealing with the crisis in higher education is of utmost importance. and as representative pocan has laid out, if the congress does not act by july 1, more than ven million americans will face a doubling of their student oan interest rate from 3.4% to 6.8%. increasing an already heavy burden as it relates to their college education. why is it important that we
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address this issue? well, one, the cost of a college education in america keeps going up, but the amount of financial aid available to these students keeps coming down. and so college and higher education, which is a pathway toward the american dream is increasingly out of reach for low-income americans, for working families, for the sons and the daughters of the middle class. why is this troubling? well, it's troubling because it's clear that going to college makes sense as it relates to creating a better future for americans. and this chart that we have illustrates the point in a very compelling way. education pays.
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this lays out the median weekly earnings of individuals at different levels of educational attainment. now with less than a high school diploma, you earn approximately $451 a week and your unemployment rate is in excess of 14%. if you've got a high school diploma or g.e.d., you will make $638 per week. you still have a very high unemployment rate on average, 9.4%. if you get a bachelor's degree, your weekly earnings increase to $1,053 per week and your average nemployment drops to 4.9%.
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and if you were to take that a step further and obtain a professional degree, your weekly average earnings increase to an excess of $1,600 a week and the collective unemployment rate drops to 2.4%. education pays. and that's why for the good of america, we support the position that we should invest in young people, help facilitate their pursuit of a college education that will benefit them. it will benefit their families. it will benefit the communities from whence they come and it will benefit america. by oday, as was indicated
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representative pocan, we have a student loan debt crisis that we confront in america. student loan debt is now second only to home mortgages in collective debt as it relates to the american people. it was staggeringly high just a $650 million or so. it now exceeds $1 trillion. t's a crisis of incredible proportion. now similar to representative pocan and distinguished the gentleman from pennsylvania, representative cartwright, we have only been here for a couple of months, but it's been clear in that relatively short period
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of time that there are many in the people's house who consistently talk about the notion that the debt that we have in america is a moral imperative for us to get it under control. it exceeds $16 trillion. they blame president obama for that debt. and that's why we have an irresponsible fight every time there's occasion to raise the debt ceiling. and i don't want to dwell on that fact, but i will note we are in the situation we are in today not because of assistance that the government has provided to those seeking higher education or other positive domestic spending programs. we're in this situation at $16 trillion debt situation because of some irresponsible decisions that were made during the eight years of the previous administration. that's just the fact.
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. how dare we shoulder future yen rations with such a burden, but when it comes to a $1 trillion debt burden being shouldered by younger americans, what we've gotten is an irresponsible bill, h.r. 1911, that will actually make a bad situation even worse. as representative pocan indicated, i've introduced legislation that would freeze the current interest rate at 3.4%. there are other ideas on this side of the aisle. all designed to deal with making sure that as many americans as possible can go to college, that it is affordable,
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and they can leave college with a minimum amount of debt, so they can accelerate their entry into society as productive americans. that's really what we want. because the higher the debt burden that the average american faces, young american, the more likely it is that they'll put off consumer spending decisions that are important to our economy such as the purchase of a home. they'll put off, because of their student loan debt burden, starting a family. many who might otherwise be future entrepreneurs, create startup companies that may become the next google or the
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next yahoo or the next facebook, may put off those decisions because they need the certainty of a job that will help pay down this debt. and so there are a lot of complications that are created as a result of the trillion dollar debt burden that we have in america. and so how are we going to deal with this problem? well, the g.o.p.'s proposal, as mentioned, really will make a bad situation worse. under the current interest rate, 3.4%, over the next four years, someone with a subsidized stafford loan would $1,174 in debt. if we did nothing and allowed the increase to take place on
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july 1, that same individual would have $8,808 in debt over a five-year period. but with the g.o.p. proposal, would be the student in the worst possible position, n excess of $10,000 in debt. this is not an appropriate approach for our future college students, for younger americans, for this great country of ours. that's why we're urging the rejection of h.r. 1911. let's come to the table, have a discussion, that allows younger americans and our college students to benefit from the historically low interest rates that exist and allow them to pursue the dream of a college
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education so they can grow and prosper and benefit the good of the country. i yield back to representative pocan. mr. pocan: thank you representative jeffries for your leadership on this issue. your bill, which i'm proud to be a co-sponsor of, and i think it's fair to say the aspiring college students in new york and across the country owe you a good kind of debt for the work that you're doing, thank you so much for continuing to expose what we need to expose, which is the bill before this body tomorrow will cost $10,000 in interest more than it has to. because it is worse than if we simply did nothing and let the loans double on july 1. we need to act. we have bills, like representative jeffries' bill, to do that. i'd like to share one story and
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introduce a colleague of mine from one wisconsin now. has collected these stories, this is from a woman in my district, alexandra. let me read what she said. i'm 27, my student loans forbid me from living in a safe neighborhood. i have to live where there's cheap housing and have a roommate. i can't afford a car payment and don't have one. i have a great job, one that i worked very hard to get and three quarters of my entire paycheck go to my student loan payment. i live every day worrying that someday my student loans are going to get the best of me, financially. i'm very close to defaulting on my loans. i fear never having the opportunity to buy a house or a car, invest, or having a savings account, have a family or pay for my children's education. i fear the thought of merely surviving. i have to live with that fact
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that this will likely be my life for the next 20 years. alexandra, thank you so much for sharing your story with one wisconsin now so we can share it here today. you're not alone. i have a lot of stories from people in waveg who share the -- who share the exact same story that the current pace we're on if we don't fix student loans and the cost of education, we are going to put so much extra burden on your generation and the next generation that again, you will not have the opportunity that many of us have had toward buying a car, buying a home, getting your family jump started. so this is a crisis. it's a real crisis right now. and we need to address that. i have another colleague i'd like to yield some time to. representative matt cartwright is another one of our freshmen from pennsylvania. he's also the freshman class president for the democrats, taking a leadership role among our body. he's been an outspoken advocate for the middss i this
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district, this country and especially for those voices in pennsylvania. mr. speaker, i'd like to yield some time to mr. cartwright. mr. cartwright: i thank you, mr. pocan. mr. speaker, talking about the middle class is something that isn't done enough of here in this chamber. middle class is something that makes america what it is. the middle class is something that speaks to americans and says, come join us. we represent opportunity in this country. we represent the ability to achieve more, to realize the american dream. it's the middle class that makes america different from so many other nations in this world and it's the middle class that we must work overtime to make sure we preserve. because if we lose the middle class in this country, we lose the sense of opportunity, the
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sense of hope, the sense of upward mobility. we lose an essential elm of what it is to be americans. we have to do everything we can do to preserve the middle class , and one of the biggest, stoutest pillars of the middle class is our education system in this country, including the higher education system. i rise, mr. speaker, in opposition to h.r. 1911 on the floor tomorrow. nominally it is called the smarter solution for students act. i call it, and many of my colleagues call it, the make college more expensive act. a much more accurate title for this bill. according to the congressional research service, this bill h.r. 1911, students who borrow
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the maximum amount of $27,000 of unsubsidized and subsidized stafford loans over five years would pay $12,374 in interest under h.r. 1911. or $10,867 in interest under current law if rates are allowed to double to 6.8%. or $7,033 if rates stay at 3.4%. keeping the interest rates where they are will save our students nearly $5,000. and for that reason, i co-sponsored representative joseph courtney's bill, h.r. 1433, which will extend these low rates for at least two more years. and that's the fair thing to do. that's the decent thing to do. it's the american thing to do.
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to protect the middle class. this is the approach we need now, with costs of college rising and student debt expanding at historically high rates. let's examine the facts. the total outstanding student loan debt in the united states has surpassed the $1 trillion mark. this is a figure that has outpaced credit card debt, auto debt, it's second only to mortgage debt in this entire nation. a recent study shows that student loan debt is the only type of consumer debt in the united states of america that has actually increased during this great recession. and the problem only continues to grow worse. as a result of these debts, millions of americans cannot buy cars, purchase new homes, start businesses, or do the other things that mean
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realizing the american dream. it's a terrible time for young people. it's a horrific time for young people. talk about the employment rate for young people. the unemployment rate in april for people between the ages of 16 and 24 was 16.2%. more than double the national average that we read about in the newspapers. according to a recent study, ommissioned by demos, nearly 45% of unemployed americans are between the ages of 16 and 24. the study also stated 4.7 million young americans are underemployed, working part-time when what they really want to do is get full-time family sustaining, good-paying jobs. there's -- they don't have them. the result? young americans are either unemployed or underemployed and
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will likely lose a combined $20 billion in earnings over the next decade. that's from the center for american progress. raising their college interest rates is going to further impact their ability to purchase homes, cars, pay for their children to go to school, further dragging down our dragging economy. this is all on top of the cost of college. the average tuition for in-state students at public four-year colleges in this country increased by 66% beyond the rate of inflation between the -- between 2002 and 2003 and the 2012-2013 academic year. 66% -- 66% beyond the rate of inflation. for private college, the tuition and fees increased by
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27% beyond the rate of inflation in that comparable time period. since 1982, the cost of college 582%.n and fees is up twice the rate of medical care which is also exploding, as we all know. to help provide students and parents greater transparency as to the true cost, what a college education in total will cost, i introduced last week h.r. 2020, the truth in tuition act which will require schools to either present each incoming class of students with a multiyear tuition and fee schedule, or give each student a nonbinding estimate of what their education will cost them individually. h.r. 2020, the truth in tuition act would require schools either to present each incoming class of students with a multiyear tuition and fee
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schedule or give each student a non-binding estimate of what their education is going to cost them individually, taking into account tuition, fees, and that particular student's financeable aid package. in this bill, there are no price caps and it does not freeze the price of tuition, schools are free to set tuition rates as they see fit. this legislation will help students and families plan by laying it out in front of them what they can expect the entire cost of the college education to be. . and give a clear picture of what their degree will cost. responsible colleges and universities are already doing this and this is already the law in the state of illinois. this is already happening. but it's the noncompliant. it's maybe the colleges that
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aren't going the extra mile to inform the students of what kind of fees and costs in tuition they are facing in the whole cost of their university or college career. it's the colleges and universities who are not revealing this that this bill is addressing. this legislation will help students and families plan for higher education by making sure they get a clear picture of what the degree is going to cost. t's going to cut down on excessive and fee fluctuations and will encourage colleges to maintain some kind of level nonfluctuating tuition schedule so that surprises don't happen to the students. it will also slow college dropout rates in this nation. colleges all across the country are experiencing dropouts for
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he develop reason that the student didn't expect that the fees to be raised. the cost of a higher education and the debt carried by our recent graduates has skyrocketed across the last decade. it's the cost of the tuition and it's the interest attached to the debt that are the crippling features of this. without having a full picture of college costs, students and their families are forced to take on more student loan debt than they originally anticipated. this bill, h.r. 2020 helps stop the uncertainty. and further advantage of it is pricing the colleges will think ahead to costs and to develop more restrained budget growth plans.
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advertising long-term pricing may encourage some colleges to limit their tuition growth voluntarily. in the event of significant hardship on the part of the college or the university, dramatic reduction in state aid for higher education or other exceptional circumstances, this bill provides a waiver for the secretary of education to be able to issue to make sure that the schools are not impacted. mr. speaker, i oppose h.r. 1911 because it allows the costs of college and university education to get out of hand because of interest rates and i'm introducing h.r. 2020, the twuth -- truth in tuition act in order to restrain costs to begin with. doing both of these things is something we need to be doing in this chamber because it is one
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of the foundations of the american middle class, allowing young people to complete the educations that they hope to complete, to become the people they want to be, to train themselves and to equip them to compete on a global scale and to achieve the american dream ultimately, a dream that everyone needs to be able to achieve in this country because once we start letting go of that, we start letting go of this country, the united states of america. nd i yield, mr. pocan. mr. pocan: thank you for your leadership, how to give a good direct vision, the reality of costs and higher education. i can say one thing from being a state leages lator for 14 years, i served when the federal economy collapsed and states had
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less and less money to invest in public universities. you hear about the rising costs of private universities, but in a system like university of wisconsin which is one of the world class university system is, the costs have gone up enough that it is harder and harder for the average person to afford. they rely on the loans and if the interest rates double or worse yet we pass 1911 and make them increase even more, you are taking that affordability out of more people's hands. i want to share a short story from someone who posted it on my facebook page and i would like to introduce another person on this issue. i asked for a comment on our facebook page and i got a comment from a woman named amber, short but poignant. i haven't yet started paying back my loan. as a single parent, i will have
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to choose between feeding my children and paying my loans. my children will come first but it worries that i will be strapped beyond what i can make at work. this is unfortunately what we are doing to the people who are currently graduating from higher education across the country. i would like to yield some time to a colleague of mine, a very experienced colleague, a leader among progressives in this body, currently the co-chair of the progressive caucus and from the state of minnesota, i would like to yield time to mr. keith ellison from minnesota. mr. ellison: i would like to say this is extremely important topic and i just want to say, mr. speaker, that, you know, you should look at legislation like a sailboat on a still pond.
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it takes the american people, the wind, to move that sailboat along and on this student loan issue and access to education in this country, we need the american people, mr. speaker, to rise up and lift their voices and say we demand affordable secondary college education. you know, there are great ideas, congressman cartwright has a brilliant idea, the truth in tuition act, superior to h.r. 1911 which is worsening the problem of college affordability. at the end of the day, the best ideas will sail when the students and the parents across the united states, mr. speaker, come together and say, we insist on quality affordable education. do you know there are at least 20 million borrowers across the united states for higher ed
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every year? 20 million people borrow money every year to go to some form of higher ed, it's a lot of people. and the fact is, mr. speaker, if those people, just them, said you know what? these interest rates are not fair. this tuition is not fair. we deserve access to higher education. it would change everything. 37 million people owe -- 37 million people owe some sort of tuition payment and about five million of those are late by at least one month. if those people came together and said, we are going to form ourselves into an organization and going to demand better terms, they could move mountains. but this is a civil rights issue. i'm not talking about a color or a gender or sexual orientation
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but about americans, middle-class people wanting to be part of the american dream. and let me wrap up. mr. pocan you have been doing an awesome job with the progressive message but what we are doing is trying to help the american people imagine america as a generous inclusive society that accepts people from all walks of life and that it preserves the ladder of opportunity. we believe we should have early childhood education so the young ones can get a head start on a good life. we believe in solid quality k.-12 and kids should have nutrition. when they get to college, they should be able to seek their dream and be who they want to be and we believe people ought to be paid fair and take care of
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their family and go to the doctor and when they reach their golden years, they ought to retire with dignity. cradle to the grave, american dream and prosperity. it's not too much to ask for in the richest country in the world. but a key link, life of prosperity in this country is college affordability and it is something if you want it, you've got to fight for it. nobody's going to hand it to you. when americans want to see civil rights before the law and see african-americans have civil rights and women, workers have some voice on the job, they stood up and they said, we got to rearrange this deal. when they said our environment was getting poison and dirty and demand that industry made sure we have a cleaner environment, they stood up and did something about it and this is something
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we have to do right now. i want to say to you, this is an excellent opportunity to raise key issues about a central issue about american prosperity for american and middle-class people and i thank the gentleman from wisconsin. mr. pocan: thank you very much. your leadership has been well appreciated. and thank you for bringing back the central theme of the congressional progressive caucus. we had a back-to-work budget, funding on behalf of the middle class. the republican budget in this house balanced the budget on the backs of the middle class. but our budget had the backs of the middle class and those aspiring to be in the middle class. and one of those is that opportunity to get a higher education, to advance society, to change your economic outlook.
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--rew up in a lower mid will middle-class families. when i went to college, you were able to pay back your loans in a five-year period. the growing of more and more, it's a 10-year, 20-year payment back in order to be able to afford those rising student costs and that is taking a bite not only out of the current economy, but out of the opportunities for those people getting those degrees so they can improve their lives and families' lives to get into the middle class. the congressional progressive caucus has had this as a central focus. how can we help those in poverty and help those in the middle class to have every chance and opportunity that they should have. those student loans are a crucial part of that. if we let this bill pass, 1911,
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tomorrow in this body, we will put a financial burden on the backs of those who need it the most, those who are taking out loans to afford college. and if we do nothing as a body, the interest rate will double come july 1.6.8% congress has to act. now this body has been able to repeal imes to try to the affordable care act and the benefits. 37 times. yet, we have not found a way yet to fix the student loan crisis and we simply need to do that and that's why the progressive caucus is fighting for that. i would like to close with one final story. we collected some stories and this is from a woman in wisconsin. i graduated from a four-year
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college in 2006. today, seven years later, my loan payments are over $600 per month. to put that in perspective, our combined household income is roughly $48,000 per year, that's 15% of our income before taxes. that's money that's not going into our retirement fund, not going towards a new home, not going towards the child's college fund and certainly not going back into the economy in a productive way. my husband and i have been forced to make major life decisions based on my student loan debt alone. unfortunately, there is no end in sight in regards to my student loan. my interest rates vary from 4.5% to 11.25%. some of the payments i make cover the interest alone. my principal amount hasn't
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changed. this wasn't what i was envisioning. these are the real stories. from people in wisconsin, but no different from people across the country. we have heard tonight and i thank representative jeffries from new york, representative cartwright from pennsylvania, representative ellison from minnesota for coming and sharing those strong words about why we need to address this issue and why it's a crucial issue, not a democratic or republican or independent issue but an american issue especially for those in the middle class and those aspiring to be in the middle class. we need to act on this and we need to act on this soon before july 1. mr. speaker, i am sorry, but 1911, the bill before this body tomorrow will only make the situation worse. i urge my colleagues to vote against it. and i yield my time back. the speaker pro tempore: the
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gentleman yields back the balance of his time. . . . . the speaker pro tempore: under the speaker's announced policy of january 3, 2013, the chair recognizes the gentleman from texas, mr. gohmert, for 30 minutes. mr. gohmert: thank you, mr. speaker. it may surprise some of my
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colleagues, i agree with so much of what was being said with regard to the cost of education and how we need to be very sensitive to that. i was concerned about the vote we were going to cast tomorrow on -- that would prevent the interest rates from going up to 6.8% as they're going to do if this body does nothing and i was very concerned about it going up to 6.8%, and then i understood the proposed republican bill that we're going to take up tomorrow will not let it go up to 6.8%. but i was wondering why we didn't just leave it where it is. let's just extend it. the democrats set in motion, when they were in the majority, this situation where it was going to raise and actually it was going to raise last year, and we voted a year ago to just
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extend the current rate for a year. and as i've had members of my own leadership and whip team pushing me on the issue, wanting me to vote for the bill tomorrow, i've been trying to find out more and more about, why is this provision in there? why are we doing this? and it was very clear. the interest rate for student loans is going up to 6.8% if we do nothing because that's the law that was put in place. well, i said, why can't we leave it where it is? and the explanation was given, because the democrats in what they put together to pay for obamacare actually were counting on, and they got c.b.o. to count, on using the difference between the current rate and it going up to 6.8% as
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the democrats were counting on it having done. so on the one hand, my friends express the same concern that i have about the interest rates jumping up that high, going , and then to 6.8% on the other hand, they were not explaining that the reason that it was going to jump up so high if we do nothing is because democrats were counting on that as a way to help pay the massive billions of dollars that are going to be required for obamacare, even though people are going to get less insurance, lescare, and have less say about their care, it's still going to cost billions and billions more. and in fact, c.b.o. has
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indicated, gee, they originally scored it over $1 trillion and then the president said, called doug elmendorf over from c.b.o., explained, said something to him in the oval office because when he went back, magically they were able to lower it under $1 trillion as the president said it was going to cost. after it passed, c.b.o. came back and said, we were right the first time, it's going to be more than $1 trillion. others are saying it may be $2 trillion. it's going to cost massive amounts more, there are going to be massive taxes, according to what the supreme court calls it, we didn't call it taxes but that's what the supreme court said the democrats did when they pass odd because macare without a single republican vote and they were counting on the increase, tremendous increase, the billions of dollars coming from increased interest on student loans
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raising. now if you go back just a little bit, why in the world is the government even involved in the student loan business anyway? we didn't used to be, as the federal government, a bank that just loaned people money on a regular basis. when the democrats were in the majority, they pushed through a bill that forced all lending institutions out of the student loan business and the government took over the student loan business. well, if this is going to totally cease to be a government that is of the people, by the people, for the eople, and not moving toward tyrannical despotism, then we have to allow people to have private property, we have to allow the free market torain, we have to allow individuals and banking institutions to make the loans, but oh, no, our
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friends across the aisle decided, we're going to shove the free market out of the student loan business and we're going to take over student loans and we're going to set it at a low rate and -- but we're going to -- it's going to go up and we'll use the billions that come from that magical increase down the road to pay for obamacare. and that's how part of it supposedly was paid for. one of the things i learned the hard way, while our friends, the democrats, were in the majority for four years, was that actually, the first congress they were in the majority, they pass they passed a pay as you go bill, pay-go they called it. i voted for it. i got criticized by republican leadership, don't you know they don't mean what they say? they don't -- they're not going to pay for anything, it's just a game. i said how would i not be for paying as we go?
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that's what their bill said. and then i learned the hard way on that, because then i saw, they really weren't serious about it. because bill after bill came to the floor and said, well, but you put a rule in place it has to be paid for, you have to come up -- oh, but, we're waiving the pay as you go requirement on this bill. what about this other one? well, we're waiving the pay as you go -- so i was shocked to find out, apparently our leadership, the folks who had been here a longer period of time had already learned and i learned the lesson the hard way so the next congress when they came up with a pay as you go bill, i said, you kidding me? you fooled me last time. i'm not going to vote for a bill you have no interest in actually following through and doing exactly what the bill says. i'm not going to vote for a bill like that. i'm not going to help participate in the charade. but when it comes to obamacare, they say, it's paid for. this is one of the magical ways
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that billions of dollars were projected by c.b.o. to be produced, they're going to do it on the backs of students. well, we had control, the republicans did, of the congress in the previous two years. and a year ago, we said, let's just keep it at current rate and move it forward a year and we'll do something a year from now. so my republican friends when trying to persuade me to vote for this bill tomorrow said, look, the student loan rates will stay where they are for now. eventually they will go up some but the good news is they won't go all the way up to 6.8%. i said why do they go up at all? they said, because we promised we're going to pay as we go and we meant it. but we're not going to go all the way to 6.8% so we'll actually have a shortfall we'll
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have to come up with because the democrats were counting on these billions of dollars coming off the backs of students to pay for obamacare. so as all of this has become clearer and clearer to me, tonight, well, earlier this -- late this afternoon, this evening, i've been communicating back and forth with my staff, so we have a bill that my democratic friends ought to be thrilled to death about. we're going to file it first thing in the morning. it ought to excite my friends across the aisle and i know my own leadership has been wanting me to vote for this bill. but they say the reason the rates have to go up at all is because under the budget previously done for obamacare to pay for obamacare, the democrats counted on this revenue and so since we don't want to increase the deficit spending, we're going to have to let the rates go up a little bit, but we're not going to let
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them go up to 6.8%, as originally put in place by our democrats -- by our democratic friends. what my bill will do, it says, we'll keep the current rates right where they are. i hope folks will join me in encouraging the lead ship to bring my bill to the floor instead of the one we're going to consider tomorrow. if we have to wait 72 hours, that's fine, let's do it. my bill will leave the rate right where they are for a two-year period and since we don't want the rates to go up for college students, we're sorry that the democrats ever figured in that -- figured that in as part of the process of paying for obecause -- obamacare, and since we don't want it to have to go up on the students, those who are having to borrow money to pay for college, then the way we keep
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from increasing the deficit spending in the bill i'll file first thing in the morning, we eliminate the obamacare slush fund and the billions that are eliminated for the slush fund for obamacare will no longer have to come from the backs of young people who cannot afford o go to college without loans. that's a solution, and i hope my democratic friends will hear and get word about this great bill because i believe what they were say, they're serious, even though their party passed a bill called -- that we refer to as obamacare, certainly not affordable care, but we pass -- they passed that bill, by themselves, without any republican votes because we knew how bad it was, we knew how much it was going to cost,
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we knew you wouldn't get to keep your insurance if you wanned it, we knew you weren't going to keep your doctor if you wanned, we saw all those terrible things that are now oming to pass, and it will prevent obamacare slush fund, the money that's set aside in it'll just bill, eliminate the slush fund and say to the democrats, you never should have had that slush fund and you're not going to pay for it on the backs of those who can't afford to go to college without getting loans. i did have to double check with regard to this bill, hade to make sure that i wasn't going to be voting on something that affected loans that my wife and i have -- my wife and i are paying our children's student loans. because before i ever ran for office as a judge, my wife and
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i set aside enough money that it was going to take care of our kids' college. but by virtue of running for office and taking a huge cut in pay, we ended up having to utilize that money for our family. and for our girls and for expenses. and so my wifened i are paying our kids' student loans because i didn't want them to have to suffer with a bunch of student bt because their father felt a calling to go into public service. but it would not be appropriate for me to vote on a bill that affected the rates of loans that we're paying and it is now quite clear that that's not the case. the student loan bill that we're going to vote on, whether
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it's the one tomorrow or whether it's the one that i will file tomorrow that i would prefer that we do, either way, it will not affect one iota, not at all, loans that are already in place, student loans. so i'll be able to vote. and anyway, i've been whipping with our own team, undecided and later today was leaning no and the more i found out the more it's convinced me, we really should not allow the democrats pushing through obamacare and the massive trillions of dollars that's ultimately going to cost to have any part of it forcibly borne by students, by young people who just want to better themselves by getting a higher education and having to get a loan to do it, so i have taken the things my friends said to
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heart and i am counting on them to have meant what they said, mr. speaker, and so i'm hoping they'll agree in the morning to co-sponsor my bill so that they can be consistent with the things they promised. now it does defund the obamacare slush fund but since that was originally going to be borne on the backs of college students i'm sure they don't ind that going away. and with regard to taxes, let's face it, if the money costs the federal government an amount down here and they have an interest rate that's higher than the cost of the money that the federal government gets to loan to students, then the federal government's making money on that and that's what the democrats knew and that's why they counted on the higher interest rates to help pay for obamacare. so, anyway, we will -- hopefully we can work together and get that accomplished. because let's face it, that
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kind of expense should not have to be borne because it really becomes a tax, it's revenue. new revenue for the federal government. and then i'm hoping, before the end of the two years, if we would do my bill, i would hope that before the end of the two years we can do what should have been done in the first place and that is get it back to the private sector where we become referees again as the federal government to make sure that neither lender nor borrower are cheating. that's what we're supposed to be. we're supposed to be a referee. but over the years, through both republican and democratic majorities, the government has continued to move from the realm of being a referee to being also a player and also the coach as well as the referee. and it's hard for anybody to
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ever compete against a player who's coached and refereed by the opponent. the government shouldn't be in that business of being adversaries, opponents or competitors with the private sector. shouldn't be. so i would hope that we will get to a bill that puts all the lending back in the private sector, where the federal government's no longer the lender. i hope we can do that with different kinds of insurance. get it out of the federal government. because invariably, when the government controls everything, it's just what we've seen with the i.r.s. scandals. you're going to have some abuses where people that would control all of your health care records, people that will make the decisions on what health care you get, people that can actually come in and take your home, not only -- the only people that can come in and take your home, the only people
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that can come in and seize assets without proper due process of law, the i.r.s. and needs to be dismantled and i hope we can do that. i hope we can get to place where we're no longer the bureaucracy that becomes so autocratic that it could care less about people's personal feelings. oh, yeah, people come here on the floor of the congress talking about people's personal feelings. but when you see the big monolithic government that just has gotten so big, it doesn't care about people's feelings, it's hurting people right and left. sure, the president had private sector leaders stand up and talk about how great obamacare was going to be and now they've been finding out it's not going to be so great. you're not keeping your insurance, you're not keeping your doctor, you're going to get less heament care, you're going to get -- health care, you're going to get less insurance and it's going to cost a lot more. and with regard to the i.r.s.
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scandal, we had ms. lerner come before committee, i was in judiciary, he were -- we were doing our own hearings on other matters, and i heard some of her statement about how she didn't do anything wrong, she's not guilty of anything. well, as a judge and a chief justice who is very familiar with the fifth amendment, and as a judge who had to advise defendants that you understand if you say anything at all on your own behalf, you have waived your fifth amendment right and you will have to answer questions and you will not be able to claim the fifth amendment. so what did ms. lerner do today? she came in, said she didn't do anything wrong. she followed the law in all ways. oh, she was just a paragon of virtue. well, then, she waived her right to claim the fifth
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amendment before congress and she needs to be brought back up here and have that explained properly. you waived your right when you started telling us how virtual white house you were -- virtual with us you were, so now you're going to -- virtuous you were. so now you're going to have to answer questions. you can't come in here and say to this congress, i did absolutely nothing wrong, i violated no wrongs, i'm in no danger of having violated any laws, and then turn right around and honestly say, i'm not going to speak because what i say is going to tend to incriminate me. it can't incriminate you if you didn't do anything wrong. so go ahead and testify. you started out so go ahead and finish up. sure, you can go out on the street and say i didn't do anything wrong, but when you come before a court or congress and say to that congress, i didn't do anything wrong, or to a court, i didn't do anything wrong, you just waived your
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right and you're going to tell us what it was that you didn't do wrong so we can decide that for ourselves. so i hope she'll be brought back. and we also had mr. douglas shumen come in and testify and what i was hearing as far as part of his testimony was, yeah, he knew about the illegality of what was going on. and he was trying to put a stop to it and he knew that conservatives were being targeted. well, let's face it. that means that this administration was using the i.r.s. to help them win another election. well, it worked. now, how far up into the administration is what we need to know. but i don't believe we're going to find out from people like mr. shumen who went to the white house he said over 100
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times and even though he's working for the president and even though he started out under the bush administration, that's fine, we had people under the bush administration that screwed up plenty of things, too, but he's working for president obama, comes to the white house over 100 times, knows there's wrongful conduct that's gone on at the i.r.s. and never says a word? oh, i went to -- what did you go for over 100 times? i remember going for an egg roll. well, guess what, if you went for an egg roll, the president was out theres, he normally is for the -- there, he normally is for the easter egg roll. you wouldn't even say something? that man should have been fired , we vuent she -- we shouldn't have clowns that will work at the i.r.s., no il-- know illegal activity's going on, go talk to the to their boss go
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over to the white house over 100 times and not even breathe a word of it, so their bosses know, i wouldn't want somebody like that working for me. if there's illegal activity going on and you come see me over 100 times, i would hope that during one of those times you'd tell me this was going on. because if you didn't and i found out, you'd be fired as soon as i found out. and ms. lerner would have been fired as soon as we found out. but instead what happens? well, they plan a question so it comes out that way. so maybe the president will earn after we plan a question. something is awry. something is very, very wrong. and having had thousands of cases, criminal cases come before my court, come through smell when things
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don't pass the smell test and this stinks to high heaven. so, in the morning i hope i'll have a whole list of democratic colleagues that are ready to sign on to my bill so that we'll keep the interest rates for student loans where they are. so that we don't push paying for the obamacare slush fund onto the backs of students. nd we then get time to put the student loan business back in the private sector so the federal government can be the referee. and monitor the lending institutions and the borrowers and be the referee. that's what we're supposed to be. and as far as the i.r.s. i hope mr. speaker, and pray some consciences are being bothered and hounded in
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the i.r.s. and over benghazi and over the a.p. scandal, the abuse of process there. the abuse of process in going after conservative reporters, that consciences will begin to be bothered. and they won't be cleared until they come forward and say, i'm a whistleblower, i have got to get the truth off my chest, let chipping fall where they may. that's what i hope and pray for and with that, mr. speaker, i yield back. the speaker pro tempore: the gentleman yields back. for what purpose does the gentleman from texas seek recognition? mr. gohmert: i would move that we do now hereby adjourn. the speaker pro tempore: the question is on the motion to adjourn. those in favor say aye. those opposed, no. the ayes have it and the motion is adopted.
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accordingly the house stands adjourned until >> for what purpose does the gentleman from oklahoma seek recognition? >> i ask for unanimous consent
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to speak out of order for five minutes to conclude with a request. >> without objection. >> thank you. ,s you are all well aware of it has been a tough week in the southwest. inhas been a tough few days the fourth district of oklahoma. today i rise to mention briefly thanks for your prayers and good will and to note the tornado that rolled through oklahoma from newcastle to moore and the southern part of local must city. -- of oklahoma city. congressman cole is not with us today because he is addressing the needs of his citizens as they try to put themselves back together after the strike by an f5 tornado.
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not only does huber present the community, but he was raised there. twofamily is buried generations in the cemetery there. it is a community that is important to him in many ways. with that said, the good for us -- folks in moore and others pulled themselves back together. they will finish sifting through every pile of rubble and make a determination there is no one left to be saved if they work frantically to try to do that. they will begin the process of laying to rest those who were lost. they'll put the entire community back together. many folks are well aware of the importance of fema and the federal response. moore is a classic example.
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this could be any community in the united states of where in the greatest tragedy, the tragic loss of life, city government, county government, state government comes together to work seamlessly to help those in need and recover those beyond help. in the oklahoma delegation and our friends in the texas delegation appreciate everything you have and will do to help in this effort. with that, i will yield the remaining of my time, mr. speaker, to the gentleman who represents part of the area to the north of oklahoma city, the fifth district of oklahoma. >> the gentleman from oklahoma is recognized. >> thank you. andave lost six in texas 10 in shawnee, oklahoma and children and fortuna dolts. we have been overwhelmed with
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the number of people that have come to us to say -- and adults. we have been overwhelmed with the number of people that have come to us. we would like to ask a moment of silence. >> members will rise. >> i yield back. at purpose does the gentlelady from texas seek recognition? ms. johnson: i would like to speak out of order in order to address what we just talked about. the oklahoma situation. the speaker pro tempore: witut objection, the gentlelady from texas is recognized. the house will be in order. the gentlelady will suspend. ms. johnson: thank y, mr. speaker.
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s the democratic side of the democratic -- of the texas delegation, i want to join the other republicans that came up with the leads from oklahoma and simply say that this is not a partisan issue. we stand ready to be the assistance and whatever we can do to assist those people in oklahoma. i represent dallas. that is closer to oklahoma city than it is to houston. and no matter where occurrences might occur, we stand ready as american people to stand by those people who have been affected, not just standing >> federal officials visited moore to assess the damage and offer recover it. we will hear from homeland security janet napolitano and the heads of fema and the
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american red cross. it begins with governor mary fallin. this is 35 minutes. we are very pleased to have our secretary of homeland security janet napolitano here. welcome. we are glad to have you here. she is an important player in helping us get recovery efforts. we need her here. she is the former governor. she understands what is going on and it comes to disaster recovery. we appreciate the secretary joining us today. welcome to oklahoma. we are very pleased to have american red cross. the red cross has played a very important role in recovery efforts. the red cross has always been
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there when we needed them. they certainly help with our families and providing food and water and shelter. welcome. glad to have you. we also have congressman tom cole. he represents this area. glad to have you back from washington. i'm very sorry to would have happened to your hometown. we want to say thank you to all of the personnel that has been working on the staff. the firefighters, police, emergency response personnel, the mayors. the tremendous job everyone has been doing is moving along very well. it is a big project.
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there are a lot of issues that need to be dealt with. we are making progress. i could see we were clearing out some public areas of debris and work in -- opening up more road so people can get through and begin the process of recovering. i want to mention that this is still a very active recovery. many people have talked about the traffic on the roads. not involved in the recovery enough or in the couldof business, if you not come, it would be helpful. i asked the public to be patient with us.
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we need to get personal and equipment on the roadways to get things done. also, the individuals affected by the storms, we wanted to make contact with the state and fema. we need to know where you are at. we need to know if you need assistance. connectus the weekend you with appropriate assistance -- contact us so we can connect you with the appropriate assistance. there is help. to tell us of your whereabouts, especially with those who may not be able to find some of the relatives. if people could register with that website and let us know your safe and well, it will help who is accounted
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for. we have been receiving phone calls from all over oklahoma and the united states and some other countries. we are grateful for your support. it is a long recovery process. , you can want to help give it to the american red cross. also the salvation army and the united way. that will help with the local charities. in the long term, we have set up a disaster release fund. it is called ok strong disaster relief. the initialthrough -- cleanup families
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stage, families have a lot of costs involved. affected individuals regardless of income level are encouraged to contact fema. visit with them regarding available services. we have fema people available here. thank you for coming. now i would like to turn over to secretary napolitano. thank you once again and welcome to him, -- welcome to oklahoma. >> thank you. you have been doing a terrific job. a lot of work to be done now in terms of recovery. really good burning together first responders here and around the country -- really good
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bringing together first responders here and around the country. we will be working with oklahoma on supporting debris removal. that will open up roads and streets. and individual homeowners will be worked with so we can get that debris out. register with fema or we can alert you to what assistance you qualify for. know people are really hurting. there's a lot of recovery yet to be done. on that point, i am pleased to strong. charity ok
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one of the things impressed me so much. people are taking charge and moving forward with the recovery in the communities. it is impressive. it is a model for the rest of the country. to top it off, i understand that high school graduation will occur on time this weekend. the recovery is underway. debris removal is a key thing. contact fema if you have not done so already. cameras will leave. the national ones will leave first, then the local ones. we will be here to stay until the recovery is complete. you have our commitment on that.
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now here's the director of fema. >> thank you, secretary. governor, congressman, mayors. toant to express condolences those families that lost their loved ones as well as those who are injured. to thevery big thank you first responders, lease officers, firefighters, emts, paramedics, nurses, doctors. they saved lives. they put themselves at risk. thank you for your leadership. one thing that is important the secretary mentioned, i want to reiterate. it is important for people to register for help.
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anyways -- 1-800-621-fema. and register on your smart phone. it is important to register as get as possible so we can the assistance that people need. centersster recovery opening today. the others will open over the next few days. people can go there and register for help that they need. thatecretary mentioned fema is working closely with the officials.ocal we were here before the storm and will be here after the storm. we will be here as long as it , oklahomaelp moore
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rebuild. thank you. i'm gail from the american red cross. at thealf of everyone american red cross, our hearts and prayers go out to the families who have lost everything, especially those who have lost loved ones. a terrible tragedy. it was a dangerous disaster. it was a rough one. our prayers are with the people of moore. we are on the ground with the shelter and offering food and comfort. we have six sites where we are providing food. we have emergency response vehicles that are driving around the affected areas. we are also providing food. we have more on the way as well. in terms of shelter, sick shelters around the area.
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-- six shelters around the area. you can find them on the shelter app or on the website. in terms of comfort, we have disaster services. we have health counselors who are providing comfort and emotional support. things like tarp and pails and gloves, and that will help people sift through their belongings and pulled her lives back together again. we also will be your as long as the community needs us. he have a local chapter here. we will make sure we will serve any unmet needs. oklahoma is remarkably prepared.
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when you consider the loss of life, you learn what to do. of a tornado, we have a great tornado application. i recommend everyone down load it to us that they can be prepared. how want to thank the american public for their support of the american red cross and thank collected officials on the ground and first responders surely doing a remarkable job. >> congressman tom cole, i am privileged to represent the area. it has been my home for 53 years. it is extraordinarily important to me, and i want to start quickly and thank the local master's of disaster. and the firster response, nobody does better
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than those two gentlemen are around here. we are very fortunate to have the quality of local leadership here. they have been wonderful. friend,the governor's my colleague served with may. [inaudible] be planning to run against louis for the mayor, you have been spending so much time here the last few days. he will sooner or later hang it up. albert, weproud of
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have got to stop meeting like this. he is one of the best in the country. it is such a pleasure and privilege to have you here. is under these circumstances. you visited with mayor louis as well. plraying for you guys. anything you need, i want you to call directly. it was incredibly generous and gracious gesture that i appreciate. i am very grateful for that.
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the commitment is not just while you guys are here, but the longer term, the speaker of the house made it very clear that he is working in a bipartisan way. it is something like this and hopefully we can get beyond it. response, and nothing can replace family members, very tough when lives are over seturned. there have been all sorts of infrastructure needs. i know the governor has been working with the state legislature to try to get something set up so that she is free to operate and do what she thinks is appropriate. thank you for coming.
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every time you come, i have dealt with enough of these things. americans are remarkably compassionate. they turned to the red cross, the salvation army, and the united way to move very quickly. peoplere really decent going through difficult times and responding very well. we appreciate that you are here. albert ashwood, i just have a couple of quick items. i would like to reemphasize the wonderful things that we have, the wonderful relationship with fema. they're wonderful partners but we are here a little too much sometimes. we appreciate all the help that you give us. workw that people want to
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with the city to make sure it happens as quickly and expeditiously as possible. everything we talked about here today, we talk about the system that is available. for tornadoes. tornadoes in eastern cleveland county. they are all included in this disaster because the cameras ay and they tend to be forgotten. that theyaking sure get out here as quickly as possible the day of a bear part of this as well. >> i like to say thank you for
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everybody that has been behind me and in front of me, i appreciate what you're doing. we are going to be allowing residents back in the neighborhood, and the live vehicles and equipment, and the trailers and no satellite trucks. we'll be allowing press to go in at 3:00 to the neighborhoods, but you have to be of baidarka. i just want to say thank you so much to the president, who think you to the madame secretary, the governor, but congressman, everybody here. higher appreciated. echo of the mayor's comments on thanking the state and federal government. actayors, we can only within the legislation that they apply to us, so we're very grateful. the numbers at this event are
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becoming even more staggering. call the 13,000 homes impacted. property damage is 1.5-$2 billion. this is a significant event and this will take us awhile to address. from an oklahoma city perspective, the water is back on. will also be pulling back the bolt of fire protection for the area, they'll be going back to their normal duties and will keep a couple of small fire battalion on hand to help answer questions and make sure kids are not playing in the debris and those types of public safety issues. police will stay on and continue to secure the area to make sure that the people and there are people supposed to be in there. urging, the big 12 baseball tournament will begin tomorrow in oklahoma city. i appreciate their commitment to this, i think the time like
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this, having an appropriate diversion might be good for this. but it will be a long weekend. it is not that my schedule is more important than anyone else's, but i will be throwing out the first pitch at night and the first funeral at 10:00. citizensest of our that could not evade the terror. thank you all for being here and drawing some much attention to this event. it is very helpful and i am sure the people behind me are hearing from people all over the world offering prayers and condolences. it is very much appreciated. >>-the cleveland county commissioner. of peopleoutpouring
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from all across the country and we appreciate that so much. as a first responder, i wanna say that the partnership that has developed here has been unbelievable from day one. from sunday and all the way through, it has been incredible. i appreciate the response to this. it has been unbelievable. we will be here. this is our county. we will continue to it heal together. it might be a long road, but we will make it through, but i appreciate all of you being there. >> i want to say that i am a resident, in heavy that needs to get hold of any of these people or any of these people, i have here for you. i have been out ever since the tornado happened.
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i will meet you or come to your home or what ever i need to do. >> that may be the greatest statement here. >> billy have any questions? >> some residents still can't get in touch with families and officials of last that everyone is accounted for. is there active search and rescue or search recovery right now? >> talking to command post last night, it is my understanding that there are six individuals they are looking for but they are all adults. it is not known if they walked off the property and have not made contact or if they are in the rubble somewhere. time,very fluid at this but they're trying to account for them to than to make sure that is taking care of.
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is it completely officially over? >> we are transitioning in the recovery. i would be a last one to say it is totally over. >> any update? >> my understanding, talking to the unified command at the command post is that they believe all the children are accounted for. what we have heard. >> keep in mind that the tornado we are talking about is the 1% or 2% target of that you get. it is the anomaly of the severe weather. most of them and you come across you can protect yourself in your own home taking the tornado
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procedures. this is the anomaly that flattens everything to the ground. a bit remiss to say that turner precautions were not taken or facilities were not strong enough. can they always be stronger? absolutely, but think everything was done that could be done at the time. >> [inaudible] >> we are still trying to get those numbers, the emergency management that we can find out how many we checked, we will get that number to you. many homeless? that is hard to tell because in oklahoma, they don't go to shelters, they go to friends and family. if you talk about the damage we had, the 70 mile path is
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extremely wide. areknowing how many homeless right now, we can only go a shelter numbers. >> there are only 29 people the state in the shelter last night and we know there are more people that don't have our roof over their heads. it is a testimony to neighbors helping neighbors during the day. we had about 150 people going in and out of the shelters, and they are stopping by for a hot meal and a shower. the mayor is out for a possible legislative bill to require a storm shelters to be built. >> [inaudible] >> [inaudible]
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we are going to require -- but we are not going to require people to do anything but we encourage people to. safe roomng about the programs, and we will be announcing something a little bit later today that will allow us to set up a fund to have a safe room donations. people have said, how can i help? others are saying, how can i make a significant and meaningful impact on people in this terrible tragedy. we have the disaster relief fund, but we also would like to give people the opportunity that if they would like to donate to a fund that will help with safe rooms, which will be beginning during this cleanup. i would like for you to address
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the safer and initiative. we were one of the first in the nation to implement a statewide program to give three days to encourage more safe rooms, and with what many in. after the 99 storm, where the first state to come up with a safe rebate program with the argentine management agency. tooffered rebates individuals that took the intent of upon themselves the pacific rim and for themselves and their families. we offered reimbursement of the $2,000. $12 million on rebates. 6000 at the minimum. we want again spent another $3 million on safe rooms for individuals, and returned to
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allowing individual communities to try that, and we concentrated on finding safe rooms for schools based on local applications have refunded over a hundred of those. more federally assisted and federally funded safe rooms that anyone in the united states. >> how many schools have them? are they a closed ground or above ground ha -- >> for the most part, the safe rooms we have funded have been below ground. they are usually utilize as the band room or a music room, something that is multi functional. mind, most of these projects have been anywhere between $600,000-$1 million and
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they have been like a brand new construction of new schools. >> it was one of the first in the nation. >> if you stand here, you get all the credit. the door slides down, and they're locked them. >> it is a municipal ordinance that requires on new a shelter on the inside or the outside, and we have not talked about this with the homeowners association to see the difference in the cost. we don't want to be so expensive that the homes are not
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affordable. we don't want to force anybody to do it. that is the way that most people feel. most people probably rebuilt and will probably get a storm shelter. >> can you talk about the aid from washington and how much the request will be? >> i will speak about the state lovell and the congressmen can speak more about the federal side. you might want to mention the 85% funds. >> to assist with debris , 80% for theercen
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proceeding 60 days. they will drawdown funds very quickly. >> what does that say about the state level? the legislature has passed bills through committee that would allocate $45 million of the rainy day savings account. the affair want to mention, they're looking at legislation to help homeowners. if you can imagine at the end of the year, if you don't have a
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house, you're paying taxes on a house that you don't have. in your property is going to be re-evaluated, and there have been times in the past where we get some financial relief through tax deductions at the end of the income tax year to be able to compensate for that. if you look at the parking lot, there have been a tough cars that have been destroyed. on some language to help with that, too. >> let me provide a little bit of contact. we voted for hurricane sandy.
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within the disaster zone itself, it is not worse than anything you would see with 17dy or katrina, but it is miles and 1.25 miles across. money alreadyough appropriated on existing programs to take care of things. if that is not the case, my philosophy has always been that your first obligation is to take care of people in a disaster. it is always wise to the prudent to try to go as far as you can. i want to make sure that people on the ground and oklahoma, louisiana, new york, california, they get the help they need when they needed.
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in theernor and i were .klahoma city bombing he certainly got that held here in this community in 1999. the american people were there for us, we need to be there for the american people. text from both sides of the aisle that in my entire career. there is not a big division or debate over this. it is not just a washington difference of opinion. i thank that is actually the mindset. they are focused on trying to get the problem done, that is what the speaker wants to do. the rest of us can fall
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respectively at get the job done. thank you. "washingtonxt as guses" niki tsongas military assaults, the benghazi attack. goodlattehairman bob to about investigations into the irs targeting of conservative groups. washington journal as live every morning at 7:00 a.m. eastern on c-span. your experiences at boston college, and none is more meaningful than the education you have received here. education is transformational. it literally changes lives.
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that is why people work so hard to become educated and that is why education has always been the key to the american dream. it erases arbitrary divisions of race, class, culture, and gunlocks the god-given potential. as john f. kennedy once said, not all of us have equal talent, but all of us should have equal opportunity to develop our talent. commencement speeches from leadership, politics, the sciences. you will hear stories of advice for the new graduating class. this weekend, senators al f ranken and ted cruz. thehat has happened in senate, most notably, we didn't even consider a budget resolution.
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therehout the budget, have been years in which a budget resolution has not passed, but three consecutive fourth, and this is the they finally passed one. it is supposed to be done by april 15. stature torelli, congress is required to pass a budget and complete bathhouse process. -- that process. it is no wonder everything has gotten distorted and out of wac because of sequestration and the automatic cuts. major debt piling up. territory, with no question -- without question. >> the state of congressional gridlock, part of a three-day holiday weekend. this weekend, on book tv.
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>> lois lerner, the director of the irs tax-exempt division and at the house oversight hearing today looking into irs targeting into conservative groups. the at the hearing, inspector general for tax administration. the hearings chaired by daryl issa. >> this meeting will come to order. [inaudible] at second, americans deserve an efficient and effective government that works for them. our duty on the oversight committee is to protect these rights. our responsibility is to hold government accountable to taxpayers because they have a
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right to know what they get from their government. it is our job to work tirelessly to deliver the facts to the american people and bring genuine reform to the federal bureaucracy. i would note today that what we read at the opening of every committee hearing is particularly questionable today commodore or are poor. today, oren it says -- today, when it says "government by the people for the people." there is nothing that we should find more important than to take it seriously, get to the bottom of it, and eradicate the behavior.
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since 2010, there appears to have ben a targeting of people based on their beliefs. particularly those that use tea party in their name liberal media, late-night television, and referred to in this administration with disdain. even in the halls of congress, people would talk about who they party-who was tea- supported. there is no tea party. there are hundreds of organizations as independent as any single american and that simply wanted to live up to the constitution and have their freedom protected by our country. when we received troubling complaint by groups across the country that were receiving what
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appeared to be inappropriate and unnecessary questions, in many cases, after more than a year, sometimes two years of inaction by the irs, we went to the inspector general who is with us today. in march of last year, on the request of our staff and later the formal letter, inspector general launched a formal investigation. we knew then that something seemed to be wrong. we knew that there was smoke. and we knew that something did not seem to be right. was we did not know and really wrong, and organize and pervasive denying of hundreds of by deliberate
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inaction. our suspicions were just that. few weeks havet we begun to realize that this was, at least in the irs, vast. every single person that looked at one of these applications could have and should have been a whistle-blower. could have and shouldcould havee realized there was something wrong. more than atime of year, we had an intervening election. many people wanted to talk about this relative to the election. i will not do that here today. this is more important than anyone election. we need to look look at this relative to our democracy. the powerto tax is to destroy. the power to grant tax status is an enhancement of the rights and liberties of our speech.
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that is what was at stake. it would not matter one bit if a different group was targeted. it is wrong. , manyss reduce his laws of them complex. we may hear in the weeks and months of all of that there was a complex of the of these applications that cause it. complexity is created more often the it exists. the irs finds complexity when convenient and publicity when it is convenient. that is what we have begun to find out. , at least same time two investigations were going on. congress was misled. the american people were misled just yesterday, the committee interviewed holly paused, the director of exempt organizations division of the
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irs. a tremendous amount of attention is on the inspector general's investigation and the committee has learned that from an pause, she was part of investigation that concluded in may 2012. am found essentially the same thing that mr. george found more than a year later. think about it. for more than a year, the irs knew it had inappropriately targeted groups of americans and other political these without withoutng it in onerous -- without answering questions that were a result of the internal investigation. many believe the irs is an independent agency. nothing could be further from the truth. we define it deliberately as less political.
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it has only two political appointees. carefully scrutinized have limited visibility to congress because we are protecting american people's right. the former commissioner with us today will tell us he reports to the deputy of treasury. he is a subordinate of a subordinate of a competent officer. it is not an agency they get to do what it wants to do with the canopy challenged by treasury. as a result, we discovered not pause know about the and participate in the iris 'until investigation, she also played an integral role in the ig investigation. sheere shocked to find that participated in virtually the interrogations or interviews with their own
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subordinates. one of the questions that i'd you had to ask was did anyone tell you to do this. if that question was asked, their own superior was in the room. of the appearances was signed up by the ig ig, the committee finds inappropriate for any instructor inspecting wrongdoing with in an agency to include individuals and the agency who could be dissipated -- you could be participating willingly in this activity. also unclear why the and dr. general did not inform the committee of his findings when he first became aware of the targeting no later than july 2012. here is where taking liberty of this committee. a liberty of the congress.
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despite numerous requests from the committee for information and updates, including an august 3 better, the request of the ig to inform congress about serious or flagrant problems quickly, the ig failed to do that. that is existing law. that is under the ig act. that has been a responsibility of ig's across-the-board since the 1970's. we in this committee support, defend, and promote the ig's trieste but we must also insist that we not wait 10 months to find out there is a there there. that is perhaps the greatest failing of an otherwise well- regarded inspector. -- we will be looking at how things went so wrong, how multiple wrongdoing occurred.
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how the one and position of authority seems to know anything about it. and within the administration, there seems to be a culture of installation -- of installation ratherts deniability than addressing wrongdoing. american people don't expect perfection. many of them make mistakes. if you make wrong doings and do so but overtly -- and do so deliberately but the buck has to stop somewhere. the buck. of this committee. this committee will not stop this investigation into win of the irs is fixed. know the irs is fixed. i asked the question --is this
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the only time? did this happen again? his answer to me in an unambiguous way is the internal and. are not there for me to say that it is not happening somewhere else in the irs. meaning the american people today should not have confidence that this is an isolated incident but rather like the days of enron and worldcom, you ask a question -- has congress made this organization accountable the way they make us accountable? i have paid a lot of taxes on my life. most people have. we know one thing. you cannot just enjoy doing the right thing and expect the iris to take your word and the check descended. in.nd the check you send documentation is essential when dealing with the irs. we can expect no less when we deal with the irs.
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i now recognize the ranking member. llinghank you for caliln this important hearing. mr. chairman, you are right. this is more important than one election. the revelations that have us withward provide a moment president for transformation -- momebnnt pregnant for transformation for generations to ome. come. that;''s why this hearing must e about two essential things. truth and trust. the american people expect the iris to exercise its responsibilities in a fair and nonpartisan manner. when the irs breaches that
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the abilitymages of the agency to implement the nation's tax laws effectively and efficiently. the inspector general has called the actions by irs employees in "inappropriate." after reading the ig's report, i think it goes well beyond that. i believe there was gross negligence -- gross incompetence and mismanagement and how the irs determine which for taxtions qualified exempt status. and trust.ut truth -- by now we have all heard
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how irs employees used terms like "tea party" and "patriots" to single out conservative groups. in some cases it took more than three years to resolve. ladies and gentlemen, we are better than not. we are simply better than that. irs staff stopped working for more than a year from october 2010 through november 2011. on how to waited process these applications, this is simply a acceptable. ton the irs finally got processing applications, employees with little or no
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oversight and overly expensive requests for information to many of these groups but understandably angered them. this is had been hit -- have been put in place to prevent these in the future but much more needs to be done. , atrding to the ig audit least part of the reason for the mismanagement is an adequate guidance on how to process these cases. the original statute passed by congress requires 501(c) four organization's engaged exclusively in social where for -- social where for activities. the regulation was issued that only to be primarily engaged in social welfare
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activities. as a result, they can spend up to 49% of their funds on campaign related activities. -- concernsturn have also been raised by groups of already qualified for tax exempt status. whose applications are still pending and are now openly engaging in campaign related activities and spending billions of dollars with little or no irs oversight of their activities. these concerns are not limited to just one political party, by the way. groups likeent democracy 21 and others have written to the irs about ross gpst's gps -- crossroads and patriots usa.
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i am encouraged that these -- that the ig has announced to both be examining this issue in more detail in the upcoming audit. it is also time to revisit in 1959 regulation and consider returning to the original standard set forth in the statute that bans political activity by these groups altogether which is what congress originally intended. as we investigate the actions of our arrest employees, -- of irs employees. let me pause to say there are many great employees in the irs. i'm sure the chairman would agree with me that' it's not our intention to say negative things about all the employees of the
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irs. there are many hard working people who are probably looking at the event right now wondering why they are talking about me. we say to those employees, we appreciate what you're doing but we are trying to make sure this organization are straightened out. mr. shulman, who was the head of the irs when these actions occurred, was appointed by president bush. there is no evidence to suggest he directed irs employee to intentionally lay or arrest tea party groups. arrest irs party groups. officials who have appeared before congress today cap agreed no one outside the irs participated in these activities or was aware of them when they occurred. were confirmed
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again yesterday when the committee conducted a transcribed interview of holly inse who served as manager washington, dc, which oversees the cincinnati unit that processed these applications. i share the chairman's serious questions about why mr. shulman to ms. lerner failed inform congress about these problems. again ladies and gentlemen, we are talking about truth and trust. most, this is one of their significant failures. i do not believe their answers to date have been sufficient. at the committee continues him what i hope will be a bipartisan and thorough investigation, i want to make a request of the chairman.
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now that the president has designated danny were full -- they werfel, i believe committee should hear from him about his plans to adjust the recommendations in the ig report and steps he intends to take to restore the public trust and the irs. as i've said repeatedly, to do our jobs, we must focus on oversight and reform. mr. werfelearing will allow us to do both. i would like to say a brief word about ms. lerner. her attorney has written to the committee to inform us she intends to invoke her fifth amendment right against self- incrimination. of course i'm disappointed that we will not be able to ask her questions today. i believe she could share much light on what we're trying ti
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o find -- the truth. every member of the committee takes an oath that supports the constitution. this is ms. lerner's right under the constitution. i will honor her decision and i respectfully urge my colleagues to do the same. i ask unanimous consent to place into the record written answers the ms. lerner provided a response to questions posed by the inspector general, as well as similar answers are right by her boss, joseph grant. >> they will not be accepted at this time. they have not been provided to us by ig on a bipartisan basis. we will take them under advisement. i will take back my reservation
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after mr. george has used them and agreed that in fact they are true or someone else from the ig. findingcked i'm things we want -- >> they were provided by flight i understand. but they were not provided to us. mr. george, am i to assume this was the only one provided where were all of them provided to the minorities? what mr. chairman, i have been informed they were provided to both sides last night. >> there is a way to get them to us to where we know they are there. we expect to receive all transcribed interviews were only this one? we've asked for all of them equally. but we prioritize them. we are still working on the request. >> can we get an estimate of
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time? . will take back my reserve are working on the request. we prioritize them as requested by the committee. i cannot give you at this very moment a definitive time for receiving -- for your receipt of them. >> i trust there will will be no greater time than you give tax cares to respond. with that, it will be accepted and placed in the record. >> mr. chairman, we would not submit -- we were under the impression that you all had the document. it was mighty blindsiding me, i assure you. -- it was not you blindsiding me, i assure you.
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to be this committee very careful. this committee should act on the level of a federal court. i think we need to be very careful not to let partisanship undermine the integrity, not only of the committee but of our investigations. the american people are and i havepon us full faith and confidence in the chairman and all of our members that we will do is i just said. our witnesses to answering our questions today. with that, i yield back. >> we now go to the chairman of the subcommittee. >> thank you, mr. chairman. two rogue agents. that's what the white house tells us where the people responsible for this. i have a news report that says
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-- two rogue employees were responsible for investigating troops. they were responsible for the systematic targeting of conservative groups over two years. this administration would have us believe that. this administration, this agency charged with enforcing obamacare systematically targeted groups who came into existence because they opposed obamacare and they started , marchng the very month 2010, that obamacare became law. expects us to believe it was just a work -- a work of two rogue agent. this administration found out about this practice as early as june 2011. after that date, ms. lerner had indirectunities
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interactions with ways and means wasittee in this committee she could've set the record straight and she chose not to do it here yet they expect us to believe the systematic targeting of conservative groups was just the work of two rogue agents in cincinnati. this administration, the agency which was so calculating that they planted the question of days ago when ms. lerner gave the news that the irs was engaged in this targeting before the ig's report came out. they all got together and said let's do this. let's let the question and break this story. yet they expect us to believe it was just the work of a couple of employees. the subject of this committee
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knows something about. this initiation -- this administration which told us and people that the attack that killed four americans in benghazi was the work -- was caused by a video, is now the same administration who expects us to believe that ofs scandal was the result two rogue agents in cincinnati. mr. chairman, but people don't buy it. the american people get it. they just want medicine meditation to give them the truth -- they just wanted this administration to give them the truth. i yield back. >> i thank the gentleman. mr. lynch is recognized. >> thank you very much, mr. chairman. thank you and the ranking member for holding this hearing. i would also like to thank the
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witnesses coming forward. each year the state department releases its report on human rights and practices. it's a comprehensive assessment of human rights conditions across the world. releasedhe overview this year provides sustainable democracy means more than just elections and includes a remark from president obama of the united nations defining democracy. "people can assemble without fear and due process that guarantees the rights of all people." it concluedes these elements of democracy face serious threats around the world in 2012. walpole law and the people's republic of china provides -- the people's in
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republic of china provides freedom of press, authorities do not generally respected these rights in practice. those who make politically sensitive comments in public speeches and comments to the media remain subject to punitive measures. the government secretly monitors gathering of intellectual scholars were political or sensitive issues were discussed. in belarus, the national constitution provides for freedom of speech and press but the regeime -- regime in pl does not respectace the rights -- the regime in place does not respect the rights. frequent identity checks and other forms of intimidation. in my view, these and other violations of individual freedom of expression served to show exactly what is at stake when a
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federal agency targets u.s. citizens based on their political beliefs. such a practice compromises one of the bedrock principles of our democracy, the commitment to ensure that all citizens are free to exercise their freedom of speech without fear of retribution from the government. it constitutes a significant impression on human rights in this country. th practicee was unacceptable. the criteria used irs --the criteria used include specific organization names such as "tea "patriot" and policy positions like government spending. in the case file statements -- any case file statements that
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criticize how the country is being run. anything that criticizes hothe government on how the country is being run. enhancedsubject to investigation by the irs. the inspector general has reported many organizations had an approval or denial letter for more than two years after submitting applications. some remained open for as long as 1000 calendar days. burdensome request letters were sent out for additional information. with for characterize as unnecessary. it is my hope today's hearing will serve to build upon investigation conducted by inspector general george and assist our committee in determining how we can ensure such practices are never repeated within the federal government.
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this don't get -- if committee is prevented by production or by a refusal to answer the questions need need to get to the bottom of this, he will leave us no alternative but to ask the implement of a special prosecutor. -- but to ask for the implementation of a special prosecutor. this is a very serious matter. like like to handle it in this tomittee -- we would like handle it in this committee. i saw the last committee granted witness for the irs had no names, no direction as to who , whohese investigations chose the terms could be used. stonewall ised the committee. .hat cannot continue
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i hope that is not the approach of the irs going forward. there will be hell to pay if that is the root we choose to go down. i yield the balance of my time. >> all members will have seven days to place their opening statements in the record. we now recognize our panel witnesses. mr. russell george is the treasury inspector general for tax it ministration. mr. douglas shulman is a former commissioner of the irs. ms. lois lerner is the director of exempt organizations at the internal revenue service. wollen is it that the secretary of the department of treasury as i previously noted.
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pursuant to the rules of the committee, all witnesses will be sworn. would you please rise, raise your right hand to take the oath? responsible responsible responsible >> do you solemnly swear the testimony you will give will be the truth, the whole truth and nothing but the truth? let the record indicate all witnesses answered in the affirmative. for all the witnesses, your entire opening statements will be placed in the record. we understand sometimes you're obligated to stay with your opening statement. if so, keep it within five minutes. if you'd like to use the time to either add to or to summarize, that could be very helpful for the members. mr. george, you're up first. welcome. >> thank you, mr. chairman.
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chairman issa, ranking member cummings and members of the committee. thank you for the opportunity to discuss our recent report concerning the internal revenue treatment of groups that apply for tax exempt status. as you noted and as you are chairman, our audit was initiated based on concerns of taxpayers allegations they were subjected to unfair treatment by the i.r.s. the three allegations considered during our review were proven true. the i.r.s. targeted specific groups applying for tax exempt status. it delayed the processing of these group's applications and requested unnecessary information as well as subjected these groups to special scrutiny. it is important to note that the i.r.s. conducted an audit -- rather, that we attempted an audit of the i.r.s. and not an
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investigation. pursuant to the inspector general act, tigta is authorized to conduct audits and investigations and oversight of i.r.s. programs and operations. audits are generally reviews of i.r.s. programs designed to identify systemic problems and recommend corrective actions, whereas investigations are focused on a person or persons and are usually undertaken in response to reports or complaints of misconduct. investigations may be criminal or administrative in nature and can result in referral for prosecution or referral for management for administrative action. once again, the report we are discussing today is an audit of the i.r.s.'s processing of tax exempt applications.
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it is not uncommon for audits to present specific issues that lead to additional reviews or investigations. the inappropriate criteria discussed in this audit were the i.r.s. targeting for review tea party and other organizations based on their names or policy positions, a practice started in 2012 and which was not fully corrected until may 2012. actually, the practice was started at 2010 and not fully corrected until may of 2012. these criteria were inappropriate and that they did not focus on tax exempt laws and treasury regulations. they remained in effect for approximate 18 months. the organization selected for review for significant campaign intervention experienced substantial delays in the processing of their applications. in addition, many of these organizations received requests
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for unnecessary information, including lists of donors. in closing, our overall assessment is that the i.r.s. demonstrated poor judgment and gross mismanagement in the implementation of this program. the substantiated allegations are troubling and race many confess. chairman issa, ranking member cummings and members of the committee, thank you for the invitation to appear. >> thank you, mr. shulman. chairman issa, ranking member cummings and members of the committee, thank you for the opportunity to appear before the committee on oversight and government reform to discuss the treasury inspector general's findings. i was the commissioner of the internal revenue service from arch 2008 until november 2012. and during that time, the agency was called upon to tackle a number of challenges. the agency played a key role in
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stimulus and economic recovery efforts during the economic downturn, aggressively addressed offshore tax evasion and completed a major modernization of its core database. the agency also continued to deliver on its core mission of collecting the revenue to fund the government. the i.r.s. is a major operation with more than 90,000 employees who work on issues ranging from processing individual tax returns to building complex technology, to ensuring compliance with businesses, to educating the public about tax law changes, to administering a very complex set of rules governing tax exempt organizations. i've now read the treasury inspector general's report. i was dismayed and saddened to read the inspector general's
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conclusions that actions had been taken creating the appearance that the service was not acting as it should have. that is as a nonpolitical, nonpartisan agency. utilizing a list with key words to select applicants for review based on organizations' names or policy positions is, in my view, inappropriate and damaging. the i.r.s. serves a critical function for our nation, it collects the taxes necessary to run the government. because of this important responsibility, the i.r.s. must administer and must be perceived to administer our tax laws fairly and impartially. given the challenges that the agency faces, it does its jobs in an admirable way the great majority of the time.
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and the men and women of the i.r.s. are hard-working, honest public servants. while the inspector general's report did not indicate that there was any political motivation involved, the actions outlined in the report have justifiably led to questions about the fairness of the approach taken here. the effect is bad for the agency and bad for the american taxpayer. i'm happy to answer questions. >> thank you. >> ms. lerner, i note you've not provided a written testimony for the committee. do you wish to make an opening statement? >> yes, sir, i do. >> please proceed. >> good morning, mr. chairman and members of the committee, my name is lois lerner and i'm the director of exempt organizations at the internal revenue service. i've been a government employee for over 34 years. i initially practiced law at
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the department of justice and later at the federal election commission. in 2001, i became a -- i moved to the i.r.s. to work in the exempt organization office and in 2006 i was promoted to be the director of that office. exempt organizations overseas about 1.6 million tax exempt organizations and processes over 60,000 applications for tax exemption every year. as director, i'm responsible for with 900 employees nationwide and administer a budget of almost $100 million. my professional career has been devoted to fulfilling responsibilities for the agencies which i've worked and am very proud of the work i've done in government. on may 14, the treasury inspector general released a report finding the exempt organization's field office in cincinnati, ohio, used inappropriate criteria to identify for further review
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applications from organizations that plan to engage in political activity which may mean they did not qualify for tax exemption. on that same day, the department of justice launched an investigation into the matters described in the inspector general's report. in addition, members of this committee have accused me of providing false information when i responded to questions about the i.r.s. processing of applications for tax exemption. i have not done anything wrong. i have not broken any laws. i have not violated any i.r.s. rules and regulations and i have not provided false information to this or any other congressional committee. while i'd very much like to answer the committee's questions today, i've been advised by my council to assert my constitutional right to not answer questions related to the subject matter of this hearing.
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after very careful consideration, i've decided to follow my counsel's advice and not testify or answer any of the questions today. because i'm asserting my right not to testify, i know some people will assume i've done something wrong. i have not. one of the basic functions of the fifth amendment is to protect innocent individuals, and that is the protection i'm invoking today. thank you. >> thank you for your testimony. ms. lerner, earlier the ranking member made me aware of a response we have that is purported to come from you in reguards to questions that the i.g. asked during his investigation. can we have you authenticate simply the questions and answers previously given to the inspector general? >> i don't know what that is. i'd have to look at it. >> could you please make it available to the witness?
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>> this appears to be my response. >> so it's your testimony that as far as your recollection,
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that is your response? >> that's correct. >> ms. lerner, the topic of today's hearing is the i.r.s.'s improper targeting to certain groups for scrutiny regarding their application for tax exempt status. as director of exempt organizations of the tax exempt and government entity's division of the i.r.s., you're uniquely positioned to provide testimony to help this committee better understand how and why the i.r.s. targeted these groups. to that end, i must ask you to reconsider particularly in light of the fact that you have given not once but twice testimony before this committee under oath this morning. you have made an opening statement in which you made asergs of your innocence, assertions you did nothing wrong, assertions you broke no laws or rules. additionally, you authenticated earlier answers to the i.g. at this point, i believe you
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have not asserted your rights but in fact have waved your rights. would you please seek counsel for further guidance on this atter while we wait? >> i will not answer any questions or testify about the subject matter of this committee's meeting. >> we will take your refusal as a refusal to testify. the witness and counsel are dismissed. >> point of order? >> the gentleman will state a point of order. please wait. >> mr. issa, mr. cummings said we should conduct this like a courtroom and i agree. she just testified and waved ever fifth amendment right to privilege and you don't get to tell your side of the story and not be subjected to cross-examination. that's not the way it worked.
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she waved her right to fifth amendment privilege by giving an opening statement. she ought to stand here and answer our questions. [applause] >> mr. chairman? >> mr. cummings. with respect to my good friend, i said i'd like to see it run like a federal court. unfortunately this is not a federal court? remust adhere to that. >> thank you. we'll pause for a moment. >> ms. lerner, i'll ask you a
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couple of additional questions. is it possible that we could narrow the scope of questions and that there are some areas you would be able to answer any questions on here today? >> i will not answer any uestions or testify today. >> ms. lerner, would you be willing to answer questions specifically related to the earlier statements made under oath in this committee? >> i decline to answer that question for the reasons i've already given. >> for this reason, i have no choice but to excuse the witness subject to recall after we seek specific counsel on the questions of whether or not the constitutional right of the fifth amendment has been properly waved. notwithstanding that in consultation with the department of justice as to whether or not limited or use of immunity could be negotiated. the witness and counsel are
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dismissed. the clerk will please rearrange the seating. >> for all the members on both sides of the day as sides of the dias, i think we both take a moment, i speak for mr. cummings and myself, this is a committee investigating more than anything else, the ultimate right of free speech and the first amendment. so as we go on with the rest of
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this hearing, i would admonish all of us to remember that it's not the first amendment or the second amendment or the fifth amendment or the 10th amendment in a vacuum. we have to respect them all. the jeal -- the gentle lady is entitled to assert her fifth amendment though there are questions about how it was done. there can be no question we have to respect it. additionally, her assertion is not to be viewed or used during this hearing to make any determination, plus or minus, as to actions that were taken. we have the inspector general with us today and have other fact witnesses and this committee has more than 10 additional witnesses that will be called either to hearings or to interviews already on the schedule. i believe that this committee has a long history of very few during my tenure of 12 years of these occasions and we should
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not use this either for political gain or for any indication it is anything other than somebody's right. >> it is the committee's work to find out what went terribly wrong. i'll take one liberty mentioning mr. cummings' earlier statement. at this point, this committee is not investigating wrongdoing for political purposes by high-ranking individuals in or out of this government. we are investigating something which has now been entered as fact that wrongdoing occurred and occurred over a group and that group happened to be key worded things that are generally called conservative. in my research on this, and i think mr. cummings would agree, this is not new to government. this has happened before. and it has not always been conservative groups. so as we go through this, i would ask all of us to avoid
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talking about who is liked by president bush, who is liked by president obama, who is liked by republicans or democrats. -rats and e republic democrans today. >> i agree with what you just said and i would associate myself with your words. >> mr. chairman? >> for what purpose does the gentleman seek recognition? >> would the gentleman yield one minute? >> a fraction thereof. >> i want to say the same. i appreciate what the chairman said. i think he's on target but the irony is inescapeable. ms. lerner gets to execute her constitutional rights but won't stay here and answer questions about the constitutional of thousands of americans denied by their actions. i think it's inescapeable. >> it is this committee's goal to get to the truth if we have
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to go several routes, we'll get there eventually and the dots will be connected. and if you would move over, it would be less distracting and e'll remove the other chair. >> i'll take note of the gentlelady's opening statement. she made it obvious with 90,000 i.r.s. individuals, 900 working for her and more or less 9-900 involved in this or maybe slightly more. we're talking about a fraction of 1% of the i.r.s., and i join with the gentleman in recognizing that this is not to dispairage the men and women of the i.r.s. mr. rowland, you're recognized for five minutes. >> thank you, chairman issa, ranking member cummings and members of the committee. thank you for letting me appear
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today. last week the general for tax administration mr. charged poked a report in the inappropriate criteria to identify tax exempt applications. like president obama and the secretary i believe what is described in the report is unacceptable and inexcusable. the i.r.s. must operate without bias or even the per session of bias and act in an utterly nonpartisan manner and act with the utmost integrity. the i.r.s. did not do that here. upon learning of the i.g.'s findings, president obama and secretary lu took immediate action. first within 24 hours of receiving the i.g.'s report, secretary lu asked for and accepted the resignation of the acting commissioner. the next day, the acting commissioner for tax exempt and government entities tendered his resignation. the day after that, the president appointed danny werfel to be the new acting commissioner and charged him withholding accountable anybody responsible for improper conduct.
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second, secretary lu instructed mr. werfel to act fully and promptly. all nine of the recommendations in the i.g. report. the secretary also directed mr. werfel to examine and correct any failures in the system that allowed this behavior to happen. third, the secretary asked mr. werfel to conduct a broader review to see whether the inexcusable conduct reflects larger manageable failures and culture issues at the i.r.s. that requires systematic change. the secretary directed mr. werfel to take action and implement the necessary changes. within 30 days, mr. werfel will report back to the secretary and the president on his progress and on any future actions he expects to take. before i describe the treasury's interactions to the i.g. related to this audit, it's important to underscore two critical points. first, there is no indication the treasury was involved in the improper conduct at the i.r.s. the i.g. report cannot find any evidence the treasury or others
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outside the i.r.s. had any role. mr. george confirmed this point in the testimony before the ways and means testimony last friday and before the senate finance committee yesterday. second, the improper conduct already had ended by the time mr. george informed treasury of the facts of his audit. mr. george's report states the improper conduct ended in may of 2012. mr. george testified he first notified treasury of the fact he was conducting an audit in june of 2012. at some point in 2012, though i do not recall precisely when mr. george notified me at his initiative he had undertaken an audit of his review of tax exempt applications. he told me only of the facts he had undertaken such an audit and did not provide any findings. that is my recollection and that is what mr. george testified before the ways and means committee last friday and before the senate finance committee yesterday. in that conversation, i told him that he should follow the facts where they lead. i told him that our job is to stay out of the way and let him do his work. i told him to let us know if he
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wanted our help and otherwise, let us know when he had more to tell us. i understand mr. george also notified this committee in july 2012 that he had begun his review. and similarly in october of 2012, he provided a notice on his public website that he was conducting his review. again, to be clear, mr. george told me he was conducting an audit and i told him to follow the facts wherever they lead. our core principal is we do not interfere in any way with the independent review of an inspector general. when an inspector general tells us he's conducting a review, we step back and leave him to do his work. that is how the process functions. that is how the process should function and that is how the process functions here. let me reiterate that there is no indication the treasury was involved in the inexcusable behavior at the i.r.s. and treasury only learned of the facts the i.g. was conducting a review after the unacceptable conduct had already ended.
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it is important in this context to make clear that treasury's long-standing practice spanning republican and democratic administrations is not to involve itself in the details of the i.r.s.'s administration and enforcement of the nation's tax laws. it is critical that the nation's tax laws are administered and enforced in a way that neither involves political influence or the perception of political influence and is particularly true with respect to the decisions reflecting specific taxpayers. over the past 12 days, president obama and the secretary have taken decisive action to address what happened at the i.r.s. the president named a new acting commissioner and we charged him withholding parties -- responsible parties accountable and was taking immediate action to revent these inexcusable acts from happening again. treasury is committed to taking all measures to restore the public's confidence in the i.r.s. and towards that end, we have asked the i.g. for its continued assistance and are cooperating fully with this committee and the congress. thank you again for the opportunity to appear before
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you today. >> thank you, mr. wolin. a comment i never heard at the defense of not knowing and i'm disappointed. let me go through a line of questioning primarily with mr. george. mr. george, before the ways and means committee you told representative danny davis the following. r audit, sir, began with the request of congressional staff in what i want to give you -- i want to give you the exact date, sir, i do not have it here. march 1 of 2012 is when there was an initial contact with the government reform and oversight committee, and our audit began, or roughly and then you go on with may or march, etc., etc. so essentially, this began in your mind when you were made aware of it in march of 2012 by members of my committee, staff members and my committee, correct? >> yes. >> so oddly enough, we have
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with us, and put it up on the oard, from holly, a document just released to us in preparation for yesterday's , forward hat says tigta document request, the following are issues that could indicate a case to be considered a potential tea party case and sent for secondary screening, one, tea party patriots of 912 project, number four, statements in the case file that are critical of how the country is being run. now, that's may 20, 2013. to your knowledge -- and that is tensionly the result of an internal investigation. done by the i.r.s., not your investigation. i'm sorry, that's july 23, i'm looking at emails which
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unfortunately are this year. but that's july 23, 2012. is it your understanding the i.r.s. concluded they had wrongdoing through their own internal investigation by july of 2012? >> i have no information on that. but let me consult with my counsel. >> i have been informed they conducted an internal review, sir, that was completed before that period. >> ok. so it's your testimony that in fact, independent of your activity, mr. shulman's reports conducted and concluded wrongdoing and could have in fact reported that up the chain and take appropriate action inend -- independent of your activities? >> that certainly an option, sir. >> mr. shulman, before i go to mr. george, it was your watch, your people did an internal review. how is it that you did not know that things were rotten in your
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shop in time to not only make sure it stopped and stayed stopped, but in fact the treasury, your boss sitting next to you, was aware of it? >> you know, i've said that i learned about this some time in the spring, and by "this" i learned the fact there was a list and the fact that tea party was on it. >> you knew at that time that you had mistreated americans within your organization and saw no need to report it up the chain, is that your testimony? >> my testimony is that i -- at that point, i'd had a preliminary verbal report. i'd been told at that same point that the activity was being stopped, and i was told that the i.g. was looking into the matter. >> stop there. i don't care about the i.g. right now. the i.g. probably prompted the internal report. the i.g. in fact has been the
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reason we haven't heard about this until long after the election until months or actually a year had gone by. i'm asking you a question. it was your job to make sure what activity in youred -- organization. i do not care that the irs does not keep paperwork. pay my taxes, i do not do it based off of paper. report upou did not -- did you report up to anyone else in your chain? >> i had some of the facts, not all of them. i had no idea of the scope and severity. i did not know the full list. i did not know who was on the list. >> i am not going to belabor that. i'm going to move back to the inspector general.
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mr. george, september, you mentioned your report would be ready. these exchanges that we are -- september 24, 2012, the answer to our request was that the audit was still ongoing. and an update,12 you said that there was a delayed response and you were studying for a final. that is when it was pushed off to march. just wanted to check on the progress of this. this is 2013. are you at a point where you can schedule a briefing? we are leaving no stone unturned. this is february 22. we will -- we want to be able -- we will not be able to
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provide a briefing until april or may. my time is limited, i will put the rest and for the record. . could go on as late as may 9 the committee staff said, can we go ahead and schedule a briefing. may 9, i will get back to you. it goes on. mr. george, this committee and the entire congress has existing law. yesterday, i spoke to your fellow inspector general's. under the existing law, you have a pure level reports of substantial misconduct. including waste fraud and abuse. congress and the irs in the same sentence. i sent you a letter explaining the seven day rule and the
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statue as it has been written for decades. you have a responsibility to keep us continuously and, according to statue, equally informed. it appears that you did not. do you agree? >> no. you conducted day after ,ay after day the interviews you are doing that. andknow, at some time -- i'm going to close with a question, on what day did you the irssonally that had abused americans in the process of approval. when was the revelatory moment. did you have an obligation to report that to congress at that
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time? >> i have a detailed timeline. it goes from month-to-month regarding the interaction with your staff and the commissioner. as well as the department of the treasury. i would appreciate the opportunity to give you the statement. >> we are going to accept that. says thattimeline you kept us informed and we knew that it was a pattern and you .poke to ways and means there are hundreds of organizations that were languishing and not being approved. they did not get a fair answer in a timely fashion. if you are saying that you informed mr. rowlands, so he would know what was going on and you informed us, here's my
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problem. mr. shulman has said that he did not know. mr. warren said he did not know. , ihough i am not under oath have reviewed my committee's staff documents, we certainly did not have the information in any way, shape, or form. practically today. >> there are procedures for conducting an audit of stop this is an audit. we have to ensure fairness. report information until the irs has had an opportunity to take a look at it so that we are not misstating facts. >> that is not the statute. that is not the statute. >> it would be impractical for us to give you information which would not be accurate.
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it would be counterproductive. >> i appreciate that. i've taken a lifetime. i will give equal time to my other members. made it clear that the statute, as written, does not give you the ability to use us as a whipping boy when you want to. , i admonish you because i can as one member of government say that there was a there there. people in your operation new. if you did not know, you were derelict in your duty. that is not something you should be proud of. to the extent that you knew or suspected, mr. rowlands is implying that the treasury did not know.
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that is astounding. mr. george, the fact is, if these individuals did not know and you do not allow them to take corrective action and eight timely fashion in a criminal investigation/audit, i will work with the ranking members of congress to reiterate the clarity of congress's absolute right to have continuous information. that is not waiting for the final conclusion. andoes not say audits investigations shall, upon their conclusion, be delivered seven days later. i will give you the last word. the opportunity to work with you and other members of congress to clarify what the seven day rule is under the inspector general act.
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once again, i think it behooves all of us to have accurate information given to congress. we do not want to act precipitously. many times, when information is conveyed to the hill, it is sometimes not contained on the hill. that is not fair to the people who are investigating -- >> i apologize, i said i would give you the last word. we're seeing a lot week out of the administration. this information was leaked. -- it is oury past understanding that as we speak, dozens, if not 100s -- if not hundreds of applicants are being denied justice. denied continued to be justice, every clock to it is a
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clock -- is a time that you are not meeting your obligation. you have a legitimate obligation to adjudicate in a timely fashion. to the extent that there's an applicant who comes forward to this committee that has not been approved, you are now derelict in your duty. >> thank you very much. thent to pick up where chairman left off. you are the head of the irs from 2008 until 2012. all this happened on your watch. of the terms and .he use of the terms
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the targeting of conservative groups. called on up -- inappropriate. i think is worse than that. and it undermines public trust in the irs. that is unfortunate. i want to you about two major issues. i would like you to address the allegations that the administration was engaged in some kind of effort to use the irs to target its political enemies. i want to walk through this very quickly. you to be the head of the irs? >> president bush. >> are you biased against conservative groups question mark >> no. >> queue ticket deserve more scrutiny? >> no. -- do you think they deserve
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more scrutiny? >> no. did you ever receive targettions to conservative groups question mark >> no. >> did you ever receive instructions from anyone from the white house? >> no. misguided acts were .nitiated irs employees they were not part of an administration conspiracy. you had no knowledge of them before 2012. is that right? >> i do not remember ever hearing about this until 2012. >> we have dispensed with that issue. i want to address the question of why you failed to inform congress about these activities last year when you learned of them. i want tol you,
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remind you that you are under that when i you watch your testimony the other day, i was very troubled. some of your testimony this morning has been troubling. yourt you to give us answers. i know you be truthful. see youof congress expressing concern that conservative groups were being targeted by the irs. when asked about these allegations in a hearing before the ways and means committee in march of 2012. , there is no targeting. if you did not know what was going on, you learned about
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it soon after. you never corrected the record. .ou are the head of iraq's why did you not come back to congress and explain that you i canstaken? >> so, recall that i learned about the list after that testimony. about the list, i learned to other things. first, i learned that the activities were stopped. by the time you got to me, the list was no longer being used with the inappropriate criteria. second i learned that the list was in the hands of the inspector general. my procedure, as head of the when i knew something that sounded of
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, i did not have all the facts, i do not know how the list was used, i did not have the fax. and, it was in the hands of the inspector general. the inspector general would do a thorough review of the matter. when he had all the facts, he would report that to the irs, the treasury, and to congress. haveat point, i did not anything concrete. i did not have a full set of facts to come back to congress or the committee with. >> that answer would be more acceptable if you had not given the answer that you did in march. when congress asked you a question and you say these words, there is absolutely no targeting.
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what youto me, given just said, you knew that congress was concerned about this. -- knew that the information you just said it -- had been corrected. if you say that there is absolutely no targeting, it seems to me that you would come back with a phone call or letter, or something. common sense. people would expect you, as the head of the irs, to come back and do that. you do not feel that way. -- >> i do notat want you to repeat stop -- repeat. i take it that you disagree with what i just said. i learnedtime that
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about this list, i thought i was taking the appropriate action. i still feel that way today. >> is simply not good enough. -- back is simply not good enough. -- that is simply not good enough. the irs has conducted an internal investigation. you should have conducted your own investigation. you knew there was a target list. "tea party" ond it. personneler snell -- and reassigned them. come on. help us. help us help the taxpayers. am i missing something? an internal investigation?
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.> i never understood that word oneid you reassigned person back in 2012? >> not that i am aware of. >> you did not know that? >> i have no recollection. >> what you learned about the targeting, you made some kind of inquiry. you found out it had been resolved. who did you go to? what did they say that the resolution was. >> i was the head of the irs congress said -- you said there was no targeting. help me with this.
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>> this is a very serious matter. i recognize that. this is a 90,000 person agency. this is a unit that was working on applications, by definition, for organizations that have political activity. asgeneral operating style the only one of two presidential point he's in the building, -- presidential point he's -- , wasntees in the building to handle sensitive case matters. who is your deputy? >> steve miller. he informed me that we found this list. tea party" on it.
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i have no memory of what was on the list. beingnot know how is used. i did not know if it had progressive on it. he said that is not being used anymore. the inspector general is looking into it. i was aware that some of these cases were languishing. gotten letters from congress. i said that we are putting extra people on it. that is my memory of it. as i said, what the inspector general has this, my practice is to support the inspector general and not to interfere. nothing to do with interfering in inspector general investigation. you have to understand why getting to this. two words. two. 2.
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, and trust. -- hope and trust. we need to be able to trust the irs. on this day, we need to be able to trust your words. you're talking about something that is of paramount concern to of congress, to the chairman the top investigative committee .nd the congress you find out information, and you get upset -- did you get upset? yes. i had concerns. i did not know the scope and severity. i felt comfort that the inspector general was going to look into it and report back to congress at the appropriate time. you know, you
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had an organization that is responsible that you are responsible for that organization. you do not know if an employee was reassigned. you did not come back to congress and let congress know what you knew. you had to give us a lot of details. if i said something to congress it was the opposite of what it was, it seems like logic would tell me to go back and say something. i acted on certain information that didn't happen, now i have it. this is what it is. i have limitations. i want to set the record straight. i take it that you disagree with what i just said. >> i told you before. i figure to the proper course. >> very well.
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>> we now recognize the gentleman from florida. i look around and i end up being the most senior member of this panel. having seen a number of scandals and also our sophisticated -- participated in many investigations, i have not seen an investigation on this committee that is so shocking to the american people. i went home last weekend, almost to a person, everyone asked me about this. this affects trust in the government. everyone idea with who pays taxes has to deal with the -- everyone i deal with has to pay taxes.
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i want to get to the bottom of this. , the irse, so far would have us believe that this is a bunch of lower-level irs employees who gathered around the water cooler in cincinnati and said, would we target this week? and, it just got out of hand. is that the end of the story? do not think that is the end of the story. is thisis the starting chart from this morning. this is not very fancy. very highly paid graphics. this started back in 2010. there is a long list of members of congress who contacted you.
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people like myself and this committee, but senators and others asking questions. all the way through. from here to, .ere, nothing got done none of these things were true. not one. not one. >> i differ -- defer. do for -- i >> whether you are liberal or ,onservative, the constitution right at the beginning you have 10 amendments that the founding fathers put in there.
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gagged people for 27 months. you close them down for 27 months. we're discussing policies of expanding government. , a whole host of issues. plus, an election. for 27 months you gagged or close down the legitimate right of those folks to participate in the process as protected in the constitution. >> let meagree? premise, i was not heavily >> ok.d -- >> let me finish. >>understanding is that -- my best understanding is that
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people were operating at the time. >> did you know. >> there is a whole another option. >> no. --did you know, mr. miller did you know mr. miller? did you send ms. lerner to look at this? mr. miller informed me, sometime in the spring, but he was going to look into the matter further. he was going to find out what was going on. on this weren directly with my deputy. >> did you know that ms. lerner, who was the head of this, but $740,000 the team -- between 2012 and 2009. did you check off on bonuses? going to testify, but didn't. >> that number does not sound
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familiar. make those decisions, but i did sign off on the overall agency. did you tell the committee of your political participations, donations will stop >> my whole life? >> yes. >> i heard you are an appointee of one administration. what is your history of participation? >> my full history of participation in politics? have you been a member of political parties and groups? >> i have. yes. of my, to the best recollection, i have. i have not made any contributions a long time. the chair now recognizes the
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gentlelady from new york. >> i thank you. i believe that we are united in this committee and being outraged at the alleged for theirof americans political beliefs by the irs. is it illegal to target americans for their political beliefs question mark -- police? -- and beliefs? , we do notstage believe it was illegal what they did. >> do you believe it should be illegal to target americans hasg the irs? >> the irs policies which, if there are
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willful actions taken that violate civil rights of a falsify, which would documents, destroyed documents, there are political activities that the internal revenue service employees could engage in. isave to note, the secretary delegated tax policy questions to the assistant secretary for tax policy. i have to defer. >> i believe it should be illegal. i find it very troubling. these allegations that the irs targeted americans for the political police and withheld information from this committee. specifically, mr. george,
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chairman issa and representative ,ordan -- or rather ms. lerner we asked for information about the potential targeting of tea party organizations. in response to media reports and requesting this committee, you inrted an investigation reviewing applications for tax exempt status. >> that is correct. we have had conversations with staffs of this committee prior to the receipt of this letter. did theou investigation. you informed chairman issa and this immediate about that investigation. is that correct? >> that is correct.
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its ownrs began internal review of the tax exempt organization convention -- division, is that true question mark is not a common ?ccurrence? -- is that true if that's a common occurrence? -- is that a common occurrence? a recollectione of the time frame. i have read the report. i saw the reports. take aty asked me to look. i think that is what you're talking about. my understanding is -- i'm sorry. >> what i'm talking about is that you did not inform the committee. that is the process. >> i do not being recalled to be do recall being asked
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to do an internal review. i recall people coming to me saying, find out what is going on in cincinnati. chosecifically, the irs not to other congress and this committee about the internal review -- or looking into it, whatever you want to call it -- to2012, ms. lerner responded this committee. i quote, the application process to obtain the on whether or not the organizations bp requirements for tax exempt status. at no point does the letter mentioned that irs officials are conducting their own review. why did she omit that fact? >> i'm not familiar with that letter. i'm sorry.
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>> ms. lerner never inform the committee of what is happening in the irs, regarding the tax agent status. do you think it is appropriate for the irs to extend such a misleading response to the committee. >> i would have to look at the whole response. that i knewnlikely about it or reviewed. >> i would say that we are all outraged. to start too early talking about what we can do to fix it. in your reports, you mentioned that it needed to be clarified what is tax exempt and what is not. what is political activity and what is not. what is the status of changing this so that it does not happen in the future? tax policya question. i do not know the answer to that.
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may, we're still in the process of still still looking at this matter. it is possible that criminal activity may have occurred. it is too early, at this stage, to make a determination. >> just to clarify on the question, you talked about the system. in no way did you say that this misconduct was a result of a lack of clarity. theseer words, targeting individuals is not because of complexity. rather, it was simple. >> we had some technical questions which were submitted along the chain to the appropriate people in washington. beforeover 13 months they received a response.
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that was the cause of some of the delay in addressing the tax exempt issues. . attribute a lack of training there was inadequate training of the people were handling these applications. i fault the irs for that. but i thank you. >> i thank you. >> there are a number of investigations. the inspector general targeted the issue of who knew what when. who was involved. who directed these targeting actions. who is complicit. we will find out the answers to all these questions. who at the irs targeted conservative groups.
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those who would have us believe that this was spontaneous, but this just a rugged -- that this just happened. someone was complicit in this. someone orchestrated this. that is not my focus. my focus is making sure that this never happens again. i was shocked when ms. lerner made her statement of, we made mistakes. for that, we apologize. . was shocked i thought, that's it? an apology. the federal government using its investigative arm to prosecute american citizens race on their political beliefs and affiliations. and they get an apology? ms. lerner has used her constitutional right not to answer our questions.
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, she's denying others their constitutional rights. i believe that should be a crime. from the same community. i have a question about what you know now. did you believe that the actions of the iressa, in targeting individuals based on their local police, represents the values of our hometown community? of our democracy? .> i have read this report this use of the criteria used by the irs was inappropriate. it is something that i'm incredibly sad about. i'm sad that it happened. i'm sad that it casts a shadow over the rest of the good work of the agency. that it doesagree
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not represent our democratic values? do you agree that this does not represent our democratic values to persecute people based on their political beliefs. >> i do not see those are -- i cannot see those words in the report. i want to thank you. but for your answers and work, we still would not know. you had told the lady from new york that you do not have any evidence of crime. correct question mark >> as of this time. >> mr. chairman, if you directed this, according to the united states code, this would have been a crime. you would've been subject to five years of incarceration. i believe that, whether this happens from someone else or by
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you, that we need a law for this. i've introduced this bill. we have 80 cosponsors. marco rubio enter this into the senate. that's an important step. we must say that this will never happen again. no one should target americans based on their political beliefs. an implosion not do that. they're violating united states code. they will go to jail. i believe that, even without this, if their constitutional rights violated, we need to continue these investigations. when did you know things. based on the assumptions that you're being asked about when you knew about the ig report. i don't want to know about the
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ig report. i will i know when you're new to the irs is targeting people. when did you know was happening in the irs. >> i learned when lois lerner made her public statement. and today's later. -- and two days later. i did not know what mr. jordan look into into his audit until then. >> you said that you are a political appointee, you said you not taking political actions. i think it is a travesty that you have a constitutional oath to execute your duty and, as a political appointee, you decided that if the organization decide to take actions against people, it was not in your perfume. we're to get to the bottom of
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this. perview. not in your we're going to get to the bottom of this. >> you misstated what i said. about thed you learn investigation that the irs was i had not heard about it until the last few days. mr. shulman, i want to go back over your testimony before congress. , 2012, you testified before the ways and means committee that you had a chance on marcho mr. miller 22. any time prior?
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you testified before congress, obviously you're preparing for that. did you speak to ms. lerner prior to your testimony? i want to describe what the chairman said to you in dialogue. he said that we've seen some recent allegations that the irs is targeting certain tea party groups across the country and .equesting onerous documents they're delaying approval for tax exempt status. can you elaborate on what is going on with that? can you give us assurances that the irs is not targeting particular groups based on political leanings? in response to that question, you answered, there is absolutely no targeting.
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what was the basis of your answer? fromreceived letters members of congress. >> i go through a lot of them. you received quite a few. >> on this issue, i received quite a few. no targeting. in this sense, if you read the few that if you read the full there are twot ways a social welfare group can operate. >> i'm not going to waste my time on that. what was the basis for your statement? >> i can give you my explanation. .o the best of my recollection
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i said that there is no .argeting >> you said there's absolutely absolutely no targeting. it was more affirmative than that. you get congress impression that there was absolutely no targeting. absolutely no targeting. that is what you said. >> if you give me a minute, i can find it. >> i only have a short amount time. can you explain it quickly? >> i was operating with the information that i had at the time. >> that is what i'm getting at. what was the basis of the information you had at the time? how could you testified before congress and say that there is actually no target don't -- no targeting going on and put congress in this situation. what was the basis of your reasoning? >> that is what i'm trying to say, i said there is no
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targeting. has two ways to .perate they can apply or they can start operating. there is no need to go through this process. you can file your return at the end of the year. i said there was no targeting, in the sense that, in some conversations that i had had, these people had voluntarily came in. the post -- the question had imposed to me, why they getting all of these questions? i said that it is normal to have these questions. my understanding, at the time, was that conservative groups -- >> i want to take back my time. i understand. my understanding is that
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conservative groups were not the only one. >> progressive groups are also being targeted. on that. back you up now you're saying that they were not being being targeted because other groups are being targeted, is that what you are saying? >> i would love to explain to you. >> plays. -- lease. -- please. of whether orions not these questions were normal. at no time, to the best of my memory, was i ever given the were only that these being asked of conservative groups. >> you have gobbled up most of my time.
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,here is no targeting going on you said. you learn later on, there's a west. there is a list of -- there is a list. there is a list of people being targeted. you learn that there is a list. a list of people being targeted. tea party. patriots. people were critical of how the government is being run. what did you do? you did nothing. you did nothing to straighten out the impression that you had you by your testimony misled congress -- your testimony. you misled congress. when you learned that our suspicions were true, you did nothing. you did nothing. you abdicated your sponsor ability. you are allowed congress to
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proceed under false information. you never came back. to never notified congress say that you gave us the wrong information. you never straightened out the impression. that is inexcusable. it really is. i yield back the balance of my time. >> thank you very much. it was conservative groups that were targeted, but people of all political persuasions are upset about this. president obama said it was inexcusable. americans are right to be a great about it. i am angry about it. given the power that the irs has in all of our lives, it should not matter what political stripe you are from. the aclu said that even the
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apparent appearance of way politics is as troubling as it gets. there must be cleared checks and place to prevent this from ever happening again. mr. george, we promise or commit to us that you will make it a high priority to make sure that something like this never happens again? >> will make a commitment to internalrk with the revenue service and others involved to establish procedures to help identify and deploy -- and avoid this from occurring. i cannot control what happens inside of the irs. 2012, you22 of testified before congress at the
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ways and means hearing. that has been covered several times. an irs review was completed a month later. you said that when he met with mr. miller, you are assured that this activity had stopped. so, you took no further action. withou ever discuss this anyone at the department of treasury? any treasury official at all? i had no substantive conversation with anyone at treasury. >> when you learned that they said went on, who did you discuss this with at the i learned the details when the report was made up like a week ago.
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at that point, we discussed it with the secretary and others. we want to make sure that we put in policies and procedures to make sure that this does not happen again. not just implementations of the recommendations of the inspector general. , to make sure that this making at carefully and sure that this is the happen again. wasne of these groups audit, aboutir prayer meetings that were held. how much time was spent in prayer meetings? do you? >> no.
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i think the conduct is outlined in the inspector general's report is deplorable. i cannot be more clear than that. it is outrageous. that those type of questions should be asked in this situation? >> no. it sounded appropriate. >> a few minutes ago, you said that there was another method. said that there are situations where people do not have to apply. what were you talking about? >> none of these groups, of the 300 talked about, actually had to open for their status. the social welfare groups can start operating, and hold themselves out, can do all the a tax-freed can file
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return for a tax-exempt organization. that is an option that organizations have. >> i want to be clear on that. thank you very much. i yield back. >> thank you very much. that this lead was planted for something bad to , when the interpretation of the law was changed, that is a terrible thing. taking a clear words of the statute and then changing in a way.
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one thing is clear, we see something terrible in the absence of normal oversight in the irs. the problemsthat persisted for a year and a half. there was very little oversight. doing theree are and competent best, i suppose. best, i in competence suppose. you testified that your audit .id not uncover any evidence you suggested that the use of screening criteria that was
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used. would you indicate whether you >> therehat question? direction from the department. i asked -- >> i asked these questions because the handling of this has shaken confidence in the irs. if there was any evidence that there was outside influence outside the irs, that would be troubling. did you find out any evidence that anyone in the white house,
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in particular, targeted conservative organizations or played any role in direct in the criteria? >> no. we did not look at the white house. we do not question anyone about these directives. >> that is the question i asked. that is correct. >> do intend to ask the question? >> this may seem like symantec's -- like semantics, but at this point, the investigation is ongoing. >> when you intend to ask the question? >> at this stage, i'm .ot in a position to say
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we will go where the facts lead us. it at leave we'll go wherever the facts lead us. will anyone, -- did anyone ? >> mayof the irs know i clarify my answer, we asked if anyone outside of the irs -- >> um. -- did you,ty
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irsself ever propose that personnel use screening criteria to target conservative organizations question mark >> absolutely not. -- organizations question mark >> absolute not -- organizations? >> absolute not. mr. chairman, this committee is pursuing the appropriate investigation. we will behat getting direct answers from all those involved and know what needs to be done. i will say that whatever you do,
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the difference between exclusively and primarily has to be clarified. then can, in turn, if the proper direct. >> you said you had a partial set of facts. you do not have the full story. is that accurate question mark -- is that accurate? >> in the two years where the starting was taking place, to any member of congress contact you or write you about this subject? >> yes. >> how many? >> i do not know. , hundrednted them up and 32 different members of congress contacted you over the time.
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the letters i remember about this set of facts started coming in and february 2012. 501c4 contacted you about status. >> do you know how many news stories, can you hazard a guess, but took forward in the time we're talking about? >> in my office, we have a google alert and they can find out with the press is saying about me. do you have a google alert when stories about the irs or you come up? >> the irs has press clippings i saw on a regular basis. >> would you hazard how many major news stories took place that have been questioned at? >> i would not.
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>> 42. we just did a quick search. 42 major news stories. 132 members of the united states congress contacting you about this issue, 42 major news stories about this issue in the time period in question and you never checked it out. you never researched it. are you sure you're being square with us today, mr. shulman? >> absolutely. >> that's interesting because they just cited your testimony from one year ago and you used similar language. can you give us assurances that the irs is not targeting particular groups? thanks for bringing this up because i think there has been a lot of press about this. there was, we found out. sayinglet me start by yes, i can give you assurances.
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i do not think you can say it any stronger. we pride ourselves it on being a non-partisan, non-political organization because you said you could assure everyone then that nothing was going on and the gentleman sitting beside you issued a report last week that set what you told the congress, what you told the american people one year ago is absolutely wrong. you're sure you're being square with us? >> excuse me? >> to ever talk to anyone at the white house about this issue? >> about this issue? not that i remember. >> do you ever go to winehouse? in your time as commissioner, did you ever go to the white house for meetings? >> a number of times. >> how many? >> many around budget and policy -- ers of tax and any thing >> do you have any idea? we just looked at the white
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house log. 118 times you11, were at the white house. that's a lot. i but these democratic members of congress have not been there close to that many times. 118 times you are at the white house. 132 members of congress contact you about this information, 42 major news stories about this very subject and you told congress one year ago that you could give assurances that nothing is going on, everything is wonderful. we are not targeting conservative groups. that is why the american people are like -- this is unbelievable. you sure you did not talk to anyone about this issue? >> about singling out conservative groups for special scrutiny docks >> that's what we're talking about. >> some absolutely sure we did
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not -- it did not come up in a conversation after 118 times congress talked about it? are you sure you did not bring it up? >> not to my knowledge and would not be appropriate, so i certainly believe that it did not have any conversations. >> i recognize mr. conley next up for questions. >> thank you, mr. chairman. shulman, iran appointed by president bush when at? >> i was nominated in 2007 and confirmed in 2008. >> and served until? >> november 2012. >> a you served in the last year the bush administration and for the first term of the obama administration. is that correct?
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>> yes. >> there might be many reasons that you would be at the white house. what would be some of those reasons? with myaster egg roll kids. questions about the administer ability of tax policies they were thinking of. our budget, helping the department of education streamline application processes for financial aid. >> you are aware that you're under oath today. >> very aware. in responseestimony is you haveion never had any conversations on this subject with anyone at the white house though you were there 118 times. >> just so i am clear, i have no memory. it would not have been appropriate to have a
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conversation with anyone at the about the subject of discriminating against conservative groups in any part of this. >> let me be clear about that. you answered a series of derogatory is from the ranking member and again, in listening to your answer, i want to be clear. neither anyone from the bush white house or the obama administration my house ever called you and said, there are a list of groups, and unbridled -- the umbrella of titles we want you to be sensitive of if they apply for a non-profits status -- that never happened. >> thank you. mr. george, i am looking at your report and i want to make sure i understand it. we're talking about this like it happened in a vacuum. some sinister plot was hatched
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by normally colorless bureaucrats in cincinnati to get somebody for their political beliefs. was there a triggering event that flooded the irs with new applications between 2010-2012? some difficulty getting a definitive answer as to exactly how this began, the genesis of this program. >> canada tel. little bit? what seems to be the triggering event is the supreme court ruling in citizen united. the number of applications for aen 2009 and 2012 1751 todoubled from 3000. >> there is no question that
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event, the ruling of the supreme court came down. iris resources expanded? to the congress rushed to your aid since were flooded with new responsibilities? here are some more resources to help you to hire or to train, because you cited bad training so you could handle this volume of applications? >> i would have to defer to mr. shulman. >> where you flooded with the resources after citizens united? >> were we given resources? no. >> all right. mr. george, i guess i'm looking in your report and it's a pie chart i want to understand. on a focusing particularly conservative groups. all of us feel as americans, in respect of of your political beliefs, no one should be targeted. in the proper exercise of their
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right to express themselves politically but you have a pie chart with 298 cases you looked out. >> that's correct. >> of time reading this right, 72 of them had been named tea party in the title. >> that's correct. >> and 11 had 912? >> correct. ." 13 had "patriot but 202 are listed as "other." could some of them have been progress of? >> we were unable to make that determination because in many instances the names were neutral and you could not necessarily attribute it to one particular affiliation or another. >> i know i have very limited time left but this is so asortant and all of us, americans, do not want the
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chilling effect of any government agency suppressing fought for the right of every american to express themselves in respect of those beliefs. to what do you attribute to what seems to be a rogue elements in cincinnati and ignored it, or returned to this activity, if it is just a natural perversion in cincinnati? what were they doing that they fought was proper, apparently? what's the conclusion that i can give you today is that it was a lack of oversight from management both in washington primarily and the fact that they did not go back to insure that the direction they and instructions that were given to the determination's unit within cincinnati were being complied with. out the initial inappropriate action had occurred, they attempted to make
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corrective action and they did direct corrective action. they failed to go back to follow up to assure that the actions were being complied with. there was mismanagement. there was a lack of the fehlau responsibilities that they had. thank you, mr. george, for your testimony. thehe 118 times you were in white house, who were your meeting with? >> i am not familiar with that. >> this is from the winehouse log. >> i'm assuming that accounts to when i go to omb, the budget office, for resources. >> it counts for times went to the white house. who did you meet with? >> i met with a variety of people. >> what was the main subject to talk about? 118 different things? >> the themes of the things i would have spoken to people
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about would have been, the budget, tax policy, the fiscal streamlining shops up, the financial aid application -- streamlining fafsa. >> did you talk about the implementation of the affordable care act? >> the implementation of the affordable care act would have been one of the themes. the could have been more. i'm not prepared to give you an exhaustive list. >> which one consumed the most of your time? >> budget, general tax policy, and the affordable care act. has a major fight -- and major role in the money flow. >> a new targeted the very groups who came into existence because they opposed what you're talking about in 118 different visits and you started targeting them the very month it became law yet you did not have a discussion on that subject matter when many of them more
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about the implementation of the affordable care iraq and the groups you were targeting were opposed to the affordable care act. that's a question. >> i'm sorry. what's the question? house went to the white 118 times and one key subject was implementation of the affordable health care act. in your administration, your time as commissioner, the targeting of groups because they opposed the affordable health care act and it was never brought up in any of those instances when this is a major topic of conversation? >> i did not. we are a non-partisan, non- political person trying to implement laws on the books and it would have been inappropriate and nobody ever asked me, nor did i ever -- cuts that would all be well and good, but mr. george issued a report that says the opposite. it's why we're here. you say you give assurances that it was not happening in your at
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the white house 118 times talking about the affordable care and you never talked about the targeting of the groups and we're supposed to believe that? the gentleman from utah. confirmation hearing on january 29th if, you were asked by then senator wyden, what do you intend to do to make sure the irs, on your watch, is not used as a political tool? your response was, that's a great question. i believe it is incredibly important that the irs is seen as fair, and nonpolitical, nonpartisan group that is a public service group. i would be a public servants serving all american taxpayers and the government. how would you, based on that standard, what letter grade would you give yourself in your tenure and what you did there? to be aed every day
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good leader and public servant. >> i'm asking for a letter grade on your assessment. >> there was clearly a break down in our determinations. >> i know you know what a letter grade is. >> i'm not going to grade myself. these 118 visits to the white house, did you ever have a discussion about 501(c)4's? have hads the first i an accounting of this. ofo not accept the premise 118 visits to the white house that may or may not be true. let me gesticulate to the record broadly. >> did you ever talk about 501(c)4's at the white house? yes or no? >> our determinations process? >> anyone about them.
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did you ever talk about the citizens united case? >> not that i remember. >> and no discussion? >> not that i remember. >> its a major thing, a big deal, and you never had one conversation? >> not that i remember. >> usage you first heard of this problem in spring 2012, correct? >> i first heard about the list in spring 2012. >> when did you first learn there is a concern about the targeting based on political beliefs and speech? when did you first hear that? >> to the best of my , february-march time frame of 2012? also -- >> you cannot. on june 3rd, the chairman of the waves and means committee sent you a letter.
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june, 2011, second paragraph. the irs appears to have selected the targeted certain taxpayers engaged in political speech. he is sent you, the head of the irs, a letter like this and you say you know nothing about it? >> that zahra was trying to go. this is a very separate matter. that is a gift tax matter that i'm aware of. >> this is political speech and continues to go on. the charlesr from to sends a letter on october 6th requesting information about the tax exemption. how is it that it takes you so long and you say you do not know this? you said you took immediate action. what happens with all of these letters? mr. shulman, when you get a letter from a member of
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congress, who else is copied on that? who else do you give it to? you are not the only one who sees it. >> as far as i know, it goes to the congressional affairs office and they get farmed out to the appropriate subject matter experts to try to get the best dancers. get copies?wolin >> not that i'm aware of. >> does anyone get them outside of the irs? >> i really don't know. >> does anybody get these letters of the white house? >> at the white house? >> at the white house. >> not that i'm aware of. >> when you get a letter from the chairman of the ways and means committee, you were telling me that you have no idea where it goes and what happens to it. >> to the best of my knowledge it goes into congressional affairs. someone in organization answers it. if it were for my signature on the return, it would come to me for review most of the time.
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there is a lot of individual constituent mail that comes in to the irs. >> so you get a lot of mail. you have 132 members of congress. >> if it is something someone else will take care of, i might not have seen it. the ones you are referring to, mr. camp, mr. boustani. >> mr. hatch, did you see that letter? >> yes. >> he said it was a lie by omission. how do you react? >> my belief is, first of all, the letter in question was not under my signature. thinkant to know what you of this idea of a lie by omission. >> i disagree. >> i yield back.
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>> that will clue -- conclude. we go to the gentle lady from california. you have been, the head of the irs for over five years. you are in charge of the internal revenue service, correct? >> i was head of the irs for four years 8 months. >> ok. you get 132 letters from members of congress concerned about legeting india send them to affairs to deal with. did you feel any responsibility to go to the cincinnati office and find out what's going on? did you ever make a visit to cincinnati? >> i guess i do not accept the premise that i got 132 letters about targeting. i was not aware of that number until now. i knew about two questions. >> regard this. when congress contact you, whether it is to all senators are members of this committee,
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doesn't it alerts you to maybe if there is smoke, there is fire? did you ever visit the cincinnati office? >> i visited early in my tenure the cincinnati office which has many different operations, but i do not believe i went to cincinnati during this 2012 time frame. >> you take responsibility for an happened in cincinnati? >> dry dig responsibility for the list being done? i do not take personal responsibility for their being a list of criteria put on it, but i do accept the fact that this did happen on my watch. responsibilityke but recognize the fact that happened under your watch? >> i recognize it happened under my watch, and i'm very sorry that it happened while i was at the irs. >> one of the problems we have here is people are unwilling to
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take responsibilities for action that happened under their command. you have a duty, as far as i'm concerned, to find out what was going on in the cincinnati office when members of congress , 132 of them, 50 of them, 10 of them inform you that they think there is some kind of targeting going on. if that does not elevate your concern and interest, then something is fundamentally wrong between the way congress interacts with the administration and bureaucracy. the law is that a 501(c)4 must operate exclusively for the social welfare. says,s what the law correct? >> yes. >> exclusively for social welfare purposes. somewhere along the line, the irs came out with a regulation
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that reduced it to "primarily." >> that's my understanding. >> does the regulation trump a statute? give legalhere to advice. as an attorney, that is my understanding. a regulation does not trump a statute, but a regulation can be used to elaborate on the intent of a statute. >> if we look at those two words -- exclusively and primarily -- there is a dramatic difference. if regulation cannot trump statute, then everything that has been going on here relative to authorizing 501(c)4's if they are not exclusively used for social purposes is a violation of the law, correct? >> i would say yes, but there may be court interpretations but when the passenger on the legislation and the of thentation
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regulation, so i don't have the history. >> in your review of the situation, have you identified in cincinnati the individuals who have developed this list? >> we have not. >> why not? had some difficulty fromrms of getting clarity some of the irs employees we have interviewed. keep in mind, this is an audit. the people we have been interacting with were not under oath. furthermatter develops and changes its character, that might change the willingness of people to be more forthcoming with information. the committee yesterday interviewed the manager of the ruling and agreement office in washington, d.c.
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for least part of the time in question, she oversaw 300 employees in the cincinnati union who determines whether they qualify for tax-exempt status. she said she was the first person in the washington office to learn about the use of inappropriate criteria in june 2011. is that consistent with your report? >> i have no information on that. >> the gentle lady's time has expired, but you may continue to answer. >> we have no information on that. >> i yield back. we now go to the gentleman from michigan, mr. wall bird. would you yield me two seconds? >> the center for american progress and organize for american action, and others, are 501(c)4's. this is not new.
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president obama uses one. >> will the gentleman yield? >> i will yield briefly. >> mr. chairman, regardless of whether it is a democratic, progressive, conservative, republican organization, the laws we have should be enforced. the statute was trumped by regulation and we should all be concerned about that. i yield back. >> i can clarify for all of us, , there is ain 1959 whole lot of water over the dam since 1959. i think it's important today to realize that without congressional action, tromping in 1959 by the irs would be legislating, without a doubt, and i think the ig, including in his audit, told all of us that the ways and means committee has, in fact, a challenge to deal with. do we really wanted the way it
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evolving in use? like the american lung association endorses legislative initiatives, as you know, in california. they promote initiatives and so on. they do it as a minority of what they do. i think one of the challenges for this committee, and i would about it,s to think they have the authority to essentially trump a regulation. in our case, we have primary responsibility to ask questions like, should the ig have known sooner? it should mr. shulman been a better manager? if so, how'd we insurer in the woulde that mr. wolin have known with specificity sooner? i would only say that as chair
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because our land is not unlimited. the jurisdiction of the ways and means as to laws governing the irs does not belong in this committee. i know all of us are very proud that we do a lot of work. one thing we do not do is pass a tax law. although we all have opinions on it, let me assure you. the gentleman is recognized. >> thank you, mr. chair. i ask unanimous consent to have my full five minutes restored. it's been interesting listening to the accounts of 118 visits to the white house for mr. shulman. no talk about this specific issue. no talk about related issues during those 118 visits. 132 letters from members of congress. newspapers and, frankly, we just had the opportunity now to have the press really engaged, but 42 over the course of time.
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and also look at a train of thens from september 2010, finance committee chairman baucus wrote a letter to the irs asking to serve tax-exempt organizations to ensure political campaign activity is not their primary activity. october 2010. senator durbin wrote to review the process of several tax- exempt organizations. senators2010 several wrote to the irs about the issue. march 2012s and in wrote to the irs and the white house to ask about the political activity of tax-exempt organizations be investigated. senator levin said letters and said the irs appears to be could possibly standing by while organizations clearly adore the tax code with no apparent consequences."
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to me, this seems as a significant amount of requests for information and concerns that private citizens come organizations seeking tax-exempt status who happen to be of a conservative side would be checked on and questioned. i find it difficult, mr. wolin, to understand how that did not come across or frame of reference in the early on. did you ever discuss congressional interest in the way the irs was handling political nonprofits with the president? >> i did not, never. >> did you ever discuss it with anyone at the white house or any agency outside the irs? >> i did not. >> why did you not discuss it when you knew it was of such interest to congress and you knew that congress was apparently not satisfied with whatever action is the agency had taken thus far on either side of the issue? frankly, congressmen come in
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the correspondence to which you referred did not come to me. it was in general, as you suggest, addressed to the irs and i was unaware of the concern. >> the treasury has intense rounds ability. it ought to have intense scrutiny over the irs, correct? >> important to reiterate that with respect to the details of tax administration and enforcement, it is now in the long standing rule not to get involved in the details this a victory because we do not want to have political influence over those kinds of detailed activities. i think this is a hearing and is subject matter that makes clear why it is not a good idea. >> not a good idea. mr. shulman, when did you learn about the second bolo and the failure of employees to follow instructions from their employers? >> about the fact that there was one and a second?
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that i did not learn about until this last week when the reports came out. >> wow. were you involved in any discussions about difficult -- disciplining people who were being insubordinate at the cincinnati office? >> not what i remember. this headline -- has will not roll at irs -- heads won't roll. labor rules giving them protection. ,he amount of ineptitude assuming that a fifth amendment was requested by ms. lerner, who is not here, we have to assume that there is some concern about criminality as well. what does it take for someone to get discipline that the irs?
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aret the irs, there procedures that people follow -- >> and one that people don't follow, i would guess. >> there is a union, so it depends if it is someone in the union or not. best of my knowledge, it is the procedures you would think about in any organization. >> while you were commissioner, for what reasons did you discipline individuals that the irs lawyer commissioner? >> inappropriate conduct, not doing their job, those kinds of things. >> and we must all this? i yield back. >> i thank the gentleman. >> thank you, mr. chairman. mr. shulman, i want this and deeply troubled and i know i speak for the entire panel.
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we are all deeply troubled by what has happened at the irs and, perhaps, the most troubling beenis that the irs has revealed to have targeted groups for their political beliefs, their political leanings. it's an outrage if this is true, and i want to drill down a little bit with you, mr. george. you are the inspector general. last week, you testified in front of the house ways and to the effecte from you're looking into this matter, whether you call an audit or an investigation, when you were looking into this matter, he saw no evidence that irs employees were politically motivated in the creation or use of the inappropriate screening criteria. was that essentially your testimony? >> we received no evidence during the course of our audit to that effect, yes.
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the really square with the headline that groups were targeted by the irs for their political beliefs and leanings. i want to ask, is it true? people do things for a reason. people at the irs came up with improper ways of going about their business, to improperly triage groups with political- sounding names to the top of the , if itr extra scrutiny did those things and was not for political reasons then why? >> congressman, there are beasons for the irs to issue " on the lookout" type directives violating secrets or without giving a bad guy away of avoiding detection.
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i will point out in the case of terrorist it activity, both domestic and international, there may be a reason for the irs to be on the lookout for a particular type of application or something of the like. mr. connallythat mentioned earlier this morning was the doubling of the applications that we saw after the supreme court's's decision in citizens010 united. and that's true. is that correct? >> it is correct, but i want to make sure i'm clear. our audit did not say that this was of a direct result of it. it was coincidental. >> and you are anticipating my next question. whether or not we know there was a direct relation, we do not want to engage in that reasoning, but whether or not we know what the cause was come of
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we know that the applications doubled starting in 2010. >> that's my understanding. >> the workload doubling and reestablished no extra resources given to the irs to do this work. as one possible explanation that the staff for not acting for political reasons were actually acting to streamline their own work and try to get through it twice as high pile of work in a streamlined a fashion so that they could actually get their work done? >> congressman, there are certainly valid reasons for the internal revenue service to try to become more efficient in the way the identify these types of cases, however, it is entirely inappropriate for them to use certain categories in which to accomplish that. >> exactly. i think you have testified they have not really zeroed in on individuals because you did an
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audit, not an investigation. >> that's correct. >> you have said they were asked by several members of congress to do an investigation. why have you not done one? our activities are covered by privacy act rules. in some instances, during the course of an audit, if an investigation were initiated, the audit would cease. you do an audit first and then moved to an investigation? i hope you will do that and i want to finish with this question. did the irs's improper prioritizing of certain groups tofour extra scrutiny lead any actual and correct the terminations of the tax exempt eligibility of any groups? i will open that up to all three of you gentlemen. do any of you know if this
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improper conduct led to improper decisions? >> i will say that this action led to the fact that not a single application for this status, tax-exempt status, was denied. there were delayed, not years at times, but not a single one, at least the ones we examined, were denied. it does raise questions in that regard. >> mr. shulman >> not that i'm aware of, but i would have heard it from the inspector general. >> i to defer to the inspector general who has looked at this. >> thank you and i yelled back. cracks just clarify, none were denied, but, by definition, by not granting them is in fact and not allowing them to have it. you can deny by not denying
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because if you deny they have a right of appeal. you let them sit in limbo, they are screwed and some are still screwed today. is that -- it is a term of art. if you were a tea party organization, you might use that term. >> i would be very frustrated. >> the gentleman made a very good point. the doubling, did they target the tea party before any doubling backs your own testimony shows between 2009- 2010 there was not a marked increase and they began targeting with one organization and expanded it? >> yes, they did. there were 479 of these tea party groups that were targeted in total. were there any bolo's issue for progressive or liberal groups? i'm assuming from the investigation, it showed liberal groups that fly straight through
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in the same time and got the 501(c)4. >> this is a very important question. i beg your indulgence. bolo, be on the lookout, were the ones would describe within our report. but there were other ones used for other purposes, for example, looking out for indicators of known fraud schemes so that they could be referred to the group that handles those issues for nationwide organizations. there are notes to refer state and local chapters to the same reviewers. as we continue our review of this matter, we recently identified some other bolo's the raise concerns about political factors. i cannot get into detail at this time as to the information because it is still incomplete.
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there are 6103 issues involved here as well. >> it's fair to say that there was a bolo for tea party but not moveon or progressive? >> i am not in a position to give you a definitive answer on that at this time, mr. chairman. >> you are saying today that thate were other 501(c)4's were in fact targeted and held in a similar way. >> i cannot give you a definitive answer at this time. least one aware of at that was targeted using a bolo with at 501(c)4 that was targeted politically that did not fall into this current report we have before us?
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privilegeding for information. i'm asking for one. >> i don't know. the purpose of the audit semiconductor, which was to determine the context of political campaign intervention, there were no others. as i recognize the gentleman from oklahoma, i want to recognize you flew for the night to get here and you'll be leaving as the vote concluded. i think all of us today offer you our heartfelt condolences. >> thank you, mr. chair. it's a very tough time and will be for a long time. mr. george, i want to clarify several things. none of them had been turned down, they just have a large amount of paperwork and additional pressure is applied to them and a long delay but no response, basically we will get
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back to you at some point? "that's correct. >> that sounds like the keystone pipeline to me. that's a whole nother issue. the irs has not been forthcoming in stem -- in these instances. that is when you have inferred. you feel like they have not been forthcoming in the questions you have asked? >> your question is on management? >> staff and management. have not been completely forthcoming on the issues. clackum that is an inference that can be made from the fact that we have not gotten clear answers. -- >> that is an inference. >> two levels of individuals and you're not getting full answers that you expect. in those and to be
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as personally, but that is my understanding. >> mr. wolin, did you ever ask anyone at the irs? you had to hear about all of these reports as well the possible political activity was happening in the irs. 42 major news stories talking about potential targeting. did you have a conversation anyone with anywhere in the irs were u.s. the question, is this true or is this happening sometime after may 3rd, 2012? >> i did not. with respect to the details on how the irs administers the tax code -- >> and asking if you had a conversation where you ask if this was true are happening, because there were a lot of media reports. what's the first time i was aware of this was when the inspector general said come on the basis of some congressional inquiries they would be beginning an audit and i was the first i learned of it.
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>> wow. mr. shulman, in my office before a letter goes out, there are four people including myself to goes through that letter as it goes through the process of review and fact check. i assume it's the same in your office. p you pen the l-- you do not pen the letters. i wrote a letter to drop is and i received a response back from steve miller. in that response about the exact issue he said, in cases where they raise issues for where there is no established precedent, the determinations may refer the application to technical. they are reviewed by tax law specialists whose job it is to provide guidance for the law in accordance with chief counsel. that's a lot of people. from my district, this is one of
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the letters who came in from someone in my district to specifically contacted me and had a whole series of questions that came back to them with, in my area, the oklahoma city patriots in action. have any candidates rights for public office spoken or will they speak at your function or organization? if so, include a transcript of any speeches given by candidates. tot is remarkable to be able mask. do you directly, or indirectly, communicate with members of legislative bodies? there is no definition for what and direct communication as. i don't even know what that would mean. my favorite question -- who developed of the web site and has control over the data? not only is that an insane question, a stunt even grammatically correct. of yourvide all copies corporate minutes from inception
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to present. this was asked. in the first page it says, under penalty of perjury, i declare i have examined this information and goes through this long statement. based on the letter that we received, when i read the letter to you, it is how long list of people that have to be involved in the formation of this. how do we get the list of individuals that were involved rattly is the process of how these questions were done? rogue agents,ew that does not match up with a letter and how we were told this was actually created. technical,es attorneys, chief counsel. it's a pretty large list of people involved in creating this. aboutof someone's knew this because you cannot form this without it. how did it get that information? ms. lerner is obviously the best
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person to ask and she has chosen not to answer questions. >> as you said, there are probably other people who work on the details of that that you could ask. i assume the aig, who now has a better understanding of this, would be helpful. i presume that the committee investigative staff will take the letters like that and ask who was involved. there any way is to know about how many people have been in the audit to determine how many people went into creating this and how many different offices? this lists three different offices and multiple groups of people reference just in their response to me in creating a survey. >> my understanding is we have not made that determination, sir. but that might be something we need to know. >> we will take that under the wise men. >> i yield back.
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>> the gentleman from wisconsin. wisconsin, we try to find a silver lining. >> if you find one, you can find a sunny day in a snowstorm. >> this has done more to unify democrats and republicans in my five months so far. >> use it until we lose it. hopefully we won't. >> exactly. let me drill down in a different area because of what has been talked about, really the ineptitude of what happened, but specifically, mr. george, one of your recommendation that stands out is better guidance in terms of whether organizations properly qualify for the 501(c)4. for the future, since the two
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years previous to citizens united, a pretty even number of applications and now that as more than doubled, so we're clearly seeing more activity in this area. if we really want to make sure, not for this sad way that was done through the irs, but some other way, you in your report, you say we need the acting commissioner for tax-exempt government division to work with me chief counsel and apartment the treasury to improve guidance to help determine the primary guidance for social welfare organizations. >> that's correct. >> of the group's primary activity is political they do not qualify for the 501(c)4? >> as long as they passed the test of it not being their primary activity. cuts in your opinion from the report, the irs does not have adequate guidance for employees to figure out that question. >> that is definitely my point. >> mr. shulman, you are no
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longer there, but the treasury oversees implementing regulations for the tax code passed by congress. in this specific area, you expect the treasury to come out with some guidelines on measuring the primary activity of 501(c)4 organization so we can actually have some clear and concrete guidance from irs employees. guidance, as you know, is very old and it's a very complicated area. as the ig report recommends, and we this matter makes clear, bu need some new guidance in this area. we have adopted all the recommendations. we will work with the new acting commissioner to see what additional guidance we can provide so that we can bring better clarity to this area and help avoid the types of things we have just learned happening. >> is there a time line on this? >> we will get to work as soon
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as possible, but i have no specific time when other than to say the secretary has charged the new acting commissioner with a report in 30 days that includes, among other things, how we are progressing with respect to the implementation of the various recommendations mr. george has put forward and that we have accepted. >> this is probably one of the areas we can look at. as you can see, there is unanimous and be in the room here looking at these things. feelignsz.s unanimous th have a fairsure we and level process? as soon as you could do that, it would be much appreciated. finally, i would close in saying it's really great to have this in the open. it's been a very good hearing. i would hope that you would consider opening the thomas --kering hearing so we can
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colleague yield? >> that's a lot of yielding. i may have to give you more time. george, in response to mr. cartwright, you said something i do not think you're competent to say. it sure the doubling of applications of the 501(c)4's the said it was just coincidental. you do not know that. we do not know they causal or coincidental and i wanted to give you an opportunity to and knowledge. >> i agree with your statement, but my point was that we did not indicate in our report that it was because of citizens united there was a doubling. >> is it not also true that 501(c)4 would benefit versus a 501(c)3 the that the donors do not have to be revealed? >> that's my understanding.
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have the last 10 seconds. >> mr. wolin, they debated the best way and to break this news, when ms. lerner gave the speech and had planted question on how you're going to spin this, were you involved in those discussions on how the story would be breaking? >> i was not. it's a though responsibility to oversee the irs? >> there have been press reports. on the conversations about people from the chief of staff officers and lawyers about these questions. i will not directly involved in those conversations. >> the treasury was? >> again, we will work with you to get the names, but there were people in the chief of staff's office. >> do know how she was chosen and why? >> i had no knowledge of that until we learned about it probably together when there was
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testimony from mr. miller on that question. i have no knowledge. >> thank you. mr. george, following up on just one quick thing, i have our staff check and citizens united was decided and announced on january 21st, 2010, and the irs began targeting in march 2010. is that correct? >> un kutcher the date. the first file polled was less than two months later. i'm not sure the date of the issuance of the supreme court. >> we can all get that in google. that's a fact. the irs begane is targeting was than 60 days tea party groups after citizens united was started. i would assume that it's awful hard to have this suppose the exponential increase in applications in less than 60 days especially since they had gathered starting with
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application 1. , it ise is a coincidence a coincidence that it happened so close to deciding of the supreme court case, and not the increase? >> it does seem coincidental. your. shulman, are familiar with any examples in which confidential information relating to the application of tax-exempt status of groups was leaked to any entity outside of the irs? >> i'm familiar with some press reports than had big recollections of things happening. >> we will pick one in particular. a media reports that on istanbul's be -- austan goolsbee reveal confidential tax information about koch industries. do you have any idea how he obtained that information?
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>> two things. from the remember time, it was not confirmed that he had confidential information and come to the extent he did -- >> the whole thing is that it should have alerted year because that is something very, very important. it's a pretty big deal. did you ask your staff at the irs how it happened? did you find out if anyone had given him the information? did this give you pause? someone should have gone back to ask. did you ask anyone, yes or no, to look into it? >> it was several years ago. i have a recollection that the inspector general actually did an investigation to see if something had happened. that's my best memory. that's a very vague.
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>> is that true, mr. george? i did not know you were at that time investigating. >> this is one of the most frustrating aspects of implementing or overseeing the irs, the restrictions that the tax code places on me and my ability to communicate information to people outside of the ways and means committee. the irs has strict confidentiality rules which we actually in force and i'm not allowed to provide. >> i appreciate that. i want to keep going. mr. shulman, how would that information be obtained? you're the head guy. how would that be obtained? be obtained.not 61 03 prohibits irs employees from -- >> thanks. you gave me my answer. >> six months after he made that public information, you went to the white house and met with him
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on february 3rd, 2011. m did you. r. goolsbee then or at any time how we obtain that information? >> not my recollection. >> >> why not? thatis is a very important you should have looked at. did you take an oath at office? >> i did. >> ok. let's keep going. are you familiar with the news -- the publication of pending tax-exempt for conservative inning organizations question mark -- organizations? >> i'm sorry. can you repeat the question? >> are you familiar with the publication? >> i familiar with theli


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