Skip to main content
Internet Archive's 25th Anniversary Logo

tv   Politics and Public Policy Today  CSPAN  February 18, 2016 1:16pm-3:17pm EST

1:16 pm
this. there's no way the government is going to give that back? there's not going to be a provision to give that back? that's not a part of this trip? >> that's not a part of this trip. yeah. >> who determines which dissidents the president will meet with? is that something that's negotiated? do you already have -- is that something that's already been discussed? >> we determine, you know, who we, you know, meet with in different countries. and we've certainly indicated to the cubans this is something the president will be doing on this trip as he does on other trips. >> i was hoping you could flush out why now. you've talked previously about using -- trip as the carrot to get some of the concrete progress you are hoping to see. you know, previously you have said that you would go when there was enough progress. this morning you wrote you're going because there's insufficient progress. what's changed? >> well, you know, the fact is
1:17 pm
there's a little bit of both. in the sense that -- what we want is to take all this opening, all this activity, again, what we've seen over the last year, all this interest from businesses and state and local governments and the cubans, and start to make it concrete. start to show outcomes and results. you're beginning to see that take hold. you know, again, the direct flights agreement that was reached. you have some businesses beginning to be able to operate in cuba. but we've also been having discussions with the cubans about all these issues. what more can we do so that that becomes the beginning of something and is not a trickle but leads to a much more significant flow of activity. so we are confident that at this point it is both the case that we have made progress in normalization, we've dealt with a number of the important issues that had to be addressed at the beginning of that process. but now we want to see more of that connectivity come online in
1:18 pm
terms of, again, commercial activity, in terms of many of the issues that we've been discussing with the cuban government. and frankly given the choice between going in december when frankly it would just kind of be a vacation down to cuba, or going now and trying to get some business done, we believe that the time is right to go and lean in and try to get as much done on this trip as we can and try to create as much momentum as we can to carry that forward throughout the year. >> you don't think you've lost leverage? >> no, i don't think so. because, again, first of all, this has been an ongoing process of discussions with the cubans. look, the president is also going to cuba. what he says and how that trip goes as you all know from covering many trips will depend on, you know, whether we are demonstrating progress. so i think that the interest that both countries have in showing the progress on normalization and having this be a productive and successful visit, i think, continues to
1:19 pm
create the conditions where there's an incentive to get things done. mark. >> will president obama get a chance to address the cuban people? >> you know, we have not developed a schedule, mark. but i certainly think that he would want to look for some opportunity where he'll be able to speak to the cuban people. so i don't want to suggest that we have a particular venue in mind, but, you know, again, i think he sees this as an opportunity where he's meeting the cuban government, but he's also going to want to be engaging broadly with the cuban people. >> so you're looking for to arrange something like that? >> something, but again, yeah, it's preliminary. we haven't really begun to flush out the elements of a schedule yet. >> would you expect a reciprocal invitation to be extended to president castro? >> well, we'll take this one visit at a time. we were able to meet president castro in new york. that was at unga though. but our focus now is on this
1:20 pm
visit. carol. >> what specific policies are you hoping that the cubans will announce at either or during or after this visit? and do you expect that you guys will do an executive order to lift the travel ban to the extent that you can? and on turkey, the turks are accusing the u.s.-backed syrian kurds of the attack yesterday and calling on you guys to sever ties. what is your response to that? and have you seen any evidence that their claims are true? >> so we have not determined a responsibility. we obviously condemn in the strongest possible terms the attacks that took place in turkey. you know, we as a government have not settled upon assignment of responsibility, but we'll be engaging with the turks on this. you know, we've made clear to the turks that -- in all of our engagements with the ypg and other kurdish elements that we made very clear to them the
1:21 pm
importance of our alliance with turkey and the importance of them not engaging in efforts that would undermine what should be our focus, which is the shared threat of isil. so this is something though we'll be talking directly to turkey about. we'll of course want to make sure that their security concerns as an ally are taken very seriously. and we'll want to make sure that the different actors we're working with in syria are focusing their attention where it should be, which is on the counter isil effort. on your first cuba questions. you know, we have been steadily making regulatory changes since december 17th. at the end of january announced our last tranche. but i would expect that that process will continue. so as we have additional regulatory changes to make, we will announce them.
1:22 pm
i don't want to preview what they are because that's, you know, an ongoing process that involves our efforts to ensure that, you know, not only are we acting consistent with the laws that are on the books, even if we would lift the embargo if we could, but they were also focused on the right issues and areas. generally what we've aimed to do is promote additional travel, commerce and economic activity in cuba that, again, we believe benefits the cuban people. in terms the steps the cuban government can take. you know, again, i don't want to be overly prescriptive from here. i would say that we talked to our business community. there are a number of things that cuba could do that could make it easier for businesses to operate in cuba and operate in ways that benefit the cuban people, to have a presence and to be able to engage cuban
1:23 pm
workers. so, again, there's actually a delegation here this week including minister of trade and discussing practical steps to be taken that again connect our regulatory changes with their economic reform efforts. there are also issues we just regularly and consistently have raised. as i mentioned, internet access has been one of those, our support for private sector as part of economic reform agenda has been one. and then on human rights i'm sure we'll have a number of specific issues that we'll be continuing to raise between now and the trip. we'll want to make clear that in any case we'll be focused on those issues because the american people care about them, the president cares about them. so, again, i think between now and the trip and on the trip itself we'll want to have steps taken by both the united states and cuba that show how this is
1:24 pm
moving forward. and then there will be areas of bilateral cooperation that we're pursuing with cuba where we'll be exploring what can get done >> one more. >> yep. >> did you guys talk to folks on the hill, particularly your critics of this policy in regards to this trip? >> we've been doing outreach to the hill. i myself spoke to a number of members. i don't like to read those out. i definitely spoke to people of different viewpoints, people who are critical of what we're doing and people who are very supportive. i will say that, you know, our judgment of what's taken place increases in support for this policy on capitol hill. that this is moving the direction of opening. and you see that with a number of people who are supporting lifting the travel ban on congress. you see that in some initial efforts to lift the embargo. and you see it as something that crosses party lines.
1:25 pm
so you have senator leahy on the one hand and senator flake who is also very supportive of what we're doing. so part of what i think the opportunity is here is you have bipartisan support for this policy that is been growing and we want to push that forward. >> i want to ask you to talk a little bit about i think critics have pointed to the spike of arrest of dissidents in cuba as evidence maybe they have wi-fi hot spots now but there's actually been a regression on human rights issues. so i'm wondering do you guys see this having been enough positive, or has this issue kind of overshadowed some of the gains that have been made, especially economically? i wanted to ask really quickly if there has been progress made on returning some american fugitives that are now in cuba. and then on argentina, if the u.s. sees now that there is a
1:26 pm
new president -- or a new first family for the first time in a long time, whether they can be an ally and what kind of reception you expect the president to get especially considering the one that has no -- >> yeah. so on human rights. first of all, we see everything that we're doing as being in the net positive for the lives and human rights of the cuban people. i'd say a number of things. first of all, the economic issues ultimately are connected to the human rights issues because it gets at are the cuban people going to benefit from having a better well being, are they going to be empowered by greater access to information and the outside world? but we're also seeing is the expectations of the cuban people have gone up for the future. and that's a good thing. we want the cuban people to be hopeful for the future. we want them to see that there
1:27 pm
are possibilities for them to be continuing to pursue a better life. what we do see with the government is they have continued in particular a practice of these short-term detentions that are, again, deeply concerning. the number of kind of long-term political prisoners along the lines of a number of people released around december 17 9, those types of detentions have gone down over the years and months. but what we see is this practice of short-term detentions, harassment of people seeking to express basic rights. and that's an issue that we'll be raising directly with the cuban government. and the fact of the matter is the cuban people see this as a hopeful time as a moment of opportunity. and it's important that the cuban government recognize that, you know, those aspirations of their people are going to ultimately rebound to the benefit of cuba is not something to be put down. so it will be on the agenda. as we look at this, it's
1:28 pm
important to remember. we tried it one way for 50 years. we had an embargo. we had democracy funding. and you did not have a promotion of human rights on the island. we believe this is a much better way to ultimately support the cuban people and help them achieve a better life. i'll give you just one example. you know, the u.s. government had an embargo that limited the cuban people's ability to access all kinds of goods, at the same time we were seeking to provide phones to some individual cubans. well, why not just try to allow all cubans to have access to telecommunications? that in our judgment is a better way of advancing the things we care about. with respect to argentina, we definitely anticipate that they'll be a closer partner on a range of issues.
1:29 pm
and in fact the president has been a strong voice for democracy and human rights in latin america. he signalled he'd like to have closer economic and diplomatic cooperation with the united states. so we believe this is really a new beginning and a new era in our relations with argentina. and it mirrors the sentiment we see across the region, particularly since our cuba opening where there's much more reseptemberivity ceptive receptivity. i imagine it will be very positive and speaks to the good will throughout the hemisphere for president obama. yeah. >> you talked about the embargo and trying to get it lifted. the trade minister earlier this week described things he thinks the white house can do without the lifting of the embargo. the allowing the dollar to be used in a third country and permitting u.s. imported cigars, of course that might be something -- had those things been considered? is it too soon? when will it be appropriate to consider those especially if you
1:30 pm
continue to have the entrangs you have in congress -- >> look, our judgment is that the embargo should be lifted. you know, short of that we want to look at what are the areas where we can open up space that can promote the greatest travel and commercial activity that ultimately, again, benefits the cuban people. so we are looking at those issues. and as i said to carol, i'd expect just as we've kind of on a regular basis been rolling out these different regulatory changes that we'll be able to continue to do that in the coming weeks. we think that's in our own interests. you know, we think that helps advance interests of americans who want to travel to cuba to engage the cuban people or american businesses that want to engage in cuba. but also frankly in helping ordinary cubans. so we'll be looking at that. >> what will be the technical process of doing that? >> so it's very technical process. and essentially what it involves is different agencies at the
1:31 pm
u.s. government in particular as it relates to our sanctions policy, treasury where we very much would urge the confirmation of adam zubin because he oversees this office and it's very important work. treasury reviewing our regulations and deciding what type of licenses to issue, what type of policy changes that can be made. and of course everything that we do has to be reviewed by office of legal counsel to ensure it's consistent with existing law. >> i have one specific question and one broader one. specifically, the first lady doesn't go on that many foreign trips. can you talk about what her participation means and whether the obama's daughters are going, because it does say the first family will meet president. and can you talk more broadly with how administration can work with burma on similar
1:32 pm
democratization -- >> so the first lady will be coming. i don't -- we don't know if the children will be at this point, but the first lady will be accompanying the president. she's taken a greater interest in issues related to girls education internationally as we've moved into the second term. and, again, that's beyond the united states. so that's been the substantive focus that she's had. but i also think that, you know, she looks for the appropriate opportunities that have in part to do with their schedules aligning, also in part having to do with focusing on regions where i think she can help us advance our efforts. and if you look at this type of trip, you know, what the first lady as frankly singularly good
1:33 pm
at is she's an enormously popular figure in countries around the world, generates a lot of good will and is very able messenger for america and its values. and so going to a place like cuba for the first time, and this presidency the first time in many years, having this kind of historic opening to the cuban people i think it's very important that she's there and that her voice is a part of the conversation. and this region more generally of the americas is one that she's interested in engaging. so we very much welcome her participation. with respect to burma, i do think you know there are some parallels and obviously a lot of differences. the core parallel is that we believe that the policy of not engaging burma and cuba was not working in either case. you know, when we came into office, in burma you'd had a military hunta ruled with an iron fist for many years, you had aung san suu kyi and many
1:34 pm
other people in prison, you had an economy closed off from the rest of the world. and we felt that simply using isolation and sanctions wasn't working to resolve that situation. and so the president engaged. and we engaged broadly in burma. so we engaged the government, but we also engaged civil society. we also engaged entrepreneurs. we also sought to promote economic ties to show the benefit that could come from more engagement with the international community. and we've seen that have an enormous effect in just a small number of years in burma in opening up space there and restoring their connections to the international community and ultimately in very successful election that took place late last year. and i'd note the president traveled to burma twice, you know, even when those questions were still very much in play. you know, our judgment is you don't wait until the story's
1:35 pm
over to show up and find out what happened. that just puts us on the sidelines. and that by going to a place like burma he was able to advance the things that we care about. he was able to raise the hopes of the people there and he was able to restore relations with a country that had been very -- for the united states. i think the common thread is that we believe we can accomplish more through engagement. we believe that engagement should be with the government but also with the people of the country. we believe greater connectivity to the united states and the international community, diplomatically, economically, you know, ultimately is going to be to the benefit of the cuban people. >> one more question, is that one of the things that makes
1:36 pm
democratization one of the challenges? >> well, you had aung san suu kyi in burma, so there was an opposition figure who enormous whereas in terms of the politics in cuba you have a one-party system and then elements of opposition. it's not analogous to the long standing prominence of the nld and aung san suu kyi in burma including their running and winning an election in the late '80s. so the political circumstances are certainly different. julie. >> thanks. as you've outlined, the united states government has done a lot to sort of relax our restrictions and facilitate some more travel and commerce with cuba. they haven't done nearly as much on their end. if i'm not mistaken, imports were down from the u.s. last year substantially. and as you mentioned they haven't done anywhere near what we'd like to see them do on human rights. so can you just sort of address this criticism that you're
1:37 pm
getting from some of the opponents of this policy that this trip really rewards a regime that in many ways is still, you know, very much against american values and has not done what we wanted -- or what the president wanted to see happen like he first announced this? >> first of all, we do still have enormous restrictions in place. we have an embargo in place. the cubans themselves, i think, you know, certainly, you know, continued to point at all of those restrictions as a constraint. the fact of the matter is we do believe that they could do some things, practical things that could make it easier for businesses to operate in cuba, to establish a presence in cuba, to engage cuban workers directly, to interact with their private sector.
1:38 pm
so there's a range of issues that we've been discussing with them. and we've been able to find, you know, in some cases direct solutions. you know, airbnb can get in because they're directly engaging the cuban people. and that private sector. a factory that will benefit small farmers through the production of tractors, but we wanted to do much more than that. we wanted to see the cubans take steps that allow for an opening for u.s. businesses because ultimately we believe if our businesses are operating there and there's travel there that that's going to be the benefit of the people. so, again, a degree of progress. some steps by the cuban government on whether it's internet access or specific arrangement with u.s. companies, but not enough. and that leads to the core point, which is we believe the best way to try to push this forward is for the president to
1:39 pm
go. that essentially there's been a whole range of activity, part of what businesses have been able to do is -- and we've been able to do is kind of look under the hood of the cuban regulations and the cuban legal framework over the course of the last year. this is not a country that was in many ways designed or prepared to immediately engage the u.s. private sector. but i think we now have that understanding, so i think there is an opening for us to try to push a much greater degree of activity through. again, the basic point we would make to critics is the way to carry this policy forward is to keep leaning forward and to keep engaging more and to keep pressing for greater activity and to keep pressing for the cubans take steps in line with our steps that open up this space for the countries. and pulling back it would only make it harder to achieve those
1:40 pm
things, but a presidential visit is a forcing mechanism and i think it has potential benefit of, you know, making our government and the cuban government do as much as we can to make normalization move forward. >> do you think it's fair to them you want to see more changes on their end in exchange for this trip as in a run-up to or during the visit between two presidents? >> again, it's not a quid pro quo, but i think we would like the trip to show the concrete progress in normalization. and so it's an opportunity to demonstrate results. and frankly inso far as the cuban government wants to meet the expectations of their own people which have been raised by the opening to the united states and help improve the livelihood of the cuban people that that engagement will serve those objectiv objectives. we feel very strongly that engagement is a far preferable way of pursuing the things that
1:41 pm
america cares about than isolation. >> a couple for you, ben. one, building on carol's question, i think you alluded to this too, cuba let american businesses directly hire from the cuban labor pool? >> that's an example of an issue that we have continually raised with them. and we would like there to be, you know, increasing opportunities for american businesses to hire cubans. and foreign businesses to hire cubans. again, sometimes that's very easy. if it's, you know, airbnb contracting with a cuban home, that's one thing. but if it'sc;9ç a u.s. company hiring workers, those are the types of issues that we're discussing with them. >> any progress towards nominating an ambassador in c a cuba? >> that's something that, you know, we're still working through. again, as some of you've heard me say one of the reasons why
1:42 pm
we've been comfortable where we are is because we have an excellent chief down there who is of ambassador rank, worked closely with susan rice when she was at the u.n., very well thought of in cuba and in the united states. so we're comfortable with jeff, but we're going to certainly be addressing the question of ambassador in the coming months. >> and finally, when u.s.-vietnam relations were normalized, not quite 20 years ago, we heard a lot about how the previous approach had failed and how this was going to lead to greater openness. you read the state department report on human rights now for vietnam and it's just ghastly. it's egregious plolitical abuse. what do you say to critics broadening with cuba you are in effect putting american businesses in the service an authoritarian regime is going to use them for patronage for jobs and going to prop itself up that way? >> few things, one, vietnam is not 90 miles from florida.
1:43 pm
two, i think that, you know, what american businesses can bring is greater opportunity for cubans, greater connectivity to the united states and to the cuban-american community. yes, i mean, if the cuban economy improves there will be more resources for the government but far more resources for the cuban people. and if you look at the direction of the cuban economy, a lot of the activity, a lot of the growth is in the kwent propista &háhp &hc% american business is a net positive for the cuban people and that over time is going to bring about real benefits and improvements in their lives. and then there's certain sectors obviously where we can make, you know, critical difference if you look at something like telecommunications. the last thing i'd say is part of what's different is we have a cuban-american community that is deeply invested in the future of cuba that cares deeply about the
1:44 pm
well-being and the rights of the cuban people. and what we've heard from many of them is they see cuba is changing. there is an evolution taking place in cuba. and we can either be a part of that or not. and if we keep ourselves out of it and the europeans and others are there helping to shape the changes taking place, that doesn't make a lot of sense. and that's why i think you have people like carlos gutierrez and other cuban-americans who've come to this recognition that this is the moment for us to engage. again, this is a government that was very comfortable for over five decades with the embargo in place and with the united states as essentially the source of legitimacy they drew upon because of what we were trying to do to cuba. we have seen raul castro begin to initiate a set of reforms in
1:45 pm
cuba. they obviously aren't at the pace and scale that the united states would suggest with their economy. and obviously doesn't get at the core political issues. but there's an evolution taking place. and we want to be a part of that evolution. we don't want to remove ourselves from it. >> last one in the back. >> thank you so much. so, you know, the embargo is a big obstacle. the cubans want it lifted because it's a big hurdle to normalizing relations. can you talk about how it's playing on the campaign trail, senators marco rubio and ted cruz already said that these are, you know, unjustifiable concessions. so can you talk about whether or not the president is concerned as others have said here today that should a republican win the white house all of this is going to be reverted? and then for argentina, can you elaborate more on the timing of the trip? it's been two decades, as you said before. what specific message is the president bringing to president
1:46 pm
macri? >> i think the timing is we wanted to go early in this administration given that president macri expressed his interests in renewing our relationship. so we want to sit down with him early in his term to chart the way forward. but also demonstrate that, you know, a cornerstone of the president's legacy is his approach to latin america and that involves the cuba opening, that involves the colombia peace process, but it also involves making sure that we're leei in leaving strong relations with important countries like argentina. i think it's fitting to go on the back end of the cuba trip for that reason as well. with respect to your first question, you know, first of all, again, the longstanding approach that those senators have supported has failed to produce any results. the cuban government is still in place. it's not as if, you know, one more year of the embargo is
1:47 pm
going to bring transformational change. this is a policy we pursued for decades. we have an evidentiary basis to prove it's not working. beyond that it wasn't helping the cuban people. the cuban people were suffering because of the embargo and because of these restrictive policies. and the fact of the matter is the thing that we should all agree on, and i think we do all agree on is we want a better life for the cuban people. the cuban people support these changes. every indication is that they overwhelmingly support engagement with the united states. so why would we in service of our objective of helping the cuban people ignore their voices and tell them that they're going to have to continue to live under the embargo, and tell them that they're going to have to live cutoff from the rest of the world. let's listen to the cuban people. they are invested in this. they see this as potentially leading to a better future. and, you know, moreover, i don't think that it's the right way to think about the changes we've made as not in our own
1:48 pm
interests. it's not a concession to have an embassy. that makes no sense. an embassy allows us to better represent our interests, to better engage civil society, to better facilitate american commerce, to better speak up for the things we care about. it's not a concession to allow americans to travel to cuba. americans would very much like to travel to cuba. so explaining to them that it's some concession to allow them to do something they want doesn't make a lot of sense either. and it's not a concession to allow american businesses to pursue opportunities that they are seeking in cuba. that's in our own interest. that's the opposite of what a concession is. so i think, again, to just conclude on your question, the reason we think this will be irreversible is because the logic of it is so clear. what we were doing was not working. this has a better chance of having a successful outcome for our interests. if people are traveling there, they're not going to want to be told they can't travel there
1:49 pm
anymore. if businesses are starting to operate there, they're not going to want to be told to shut down. if we have an embassy there, doesn't make much sense to shut it down. if we have new opportunities in the americas because we've gotten rid of this anchor on our standing in the region, it doesn't make much sense to immediately anger and alienate the western hemisphere by reversing this policy. and that's why we believe you see bipartisan members of congress but also a diverse group of stakeholders from the chamber of commerce to many, many, many people in the cuban-american community to the faith communities like the catholic church all supporting this change in policy. >> -- bernie sanders or hillary clinton will continue his legacy in this foreign policy arena? >> without commenting on certain candidates, i mean, i think the positions that they've taken clearly indicate support for our policy. and, you know, certainly we
1:50 pm
believe that they understand that the old approach didn't work and this is a better way of pursuing things. >> thank you, ben. >> i think as you can tell there is obviously a lot of passion here in the white house and in the administration for this change in policy. we certainly look forward to the trip next month. hopefully many of you will be able to join us for that trip. we've already been out here for an hour or so. i'm happy to take a few more questions that you have. >> one of your favorite topics. >> i have a lot of favorite topics. >> asked about donald trump, pope francis says anyone who wants to build a border wall is no christian. could his comments be extended to millions of americans as well? >> the pope has a spokesperson
1:51 pm
and so you can certainly speak to that individual to -- for a greater understanding of what the pope was saying. i think i can just say as a general matter that president obama had the opportunity a couple of weeks ago to address the national prayer breakfast where he talked about his own personal faith, his own personal christian faith. informed his view of the values and priorities that he has chosen to champion in the white house. and we've noted, i think on a number of occasions we've had the opportunity to note, that many of those values and priorities are not shared by mr. trump. so i will, however, though, extend to mr. trump the courtesy that he has not extended to the president, and not use this opportunity to call into question the kind of private personal conversations that he's having with his god. >> so he talked about wanting to see concrete progress from cuba
1:52 pm
leading up to this trip. when i asked if there were any conditions or specific things that you wanted to see met before then, he was a little bit vague about it, saying that there was a range of issues that would continue to be discussed. so can you clarify, are there -- when he says concrete steps, do you want to see certain things before the president sets foot there? >> i think what ben was referring to is the fact that over the course of the last 14 or 15 months since the president announced this policy change we've seen a number of concrete steps taken by the cuban government to begin to normalize relations between our two countries. as ben said at the closing, the president announced this change in policy because he believed that that change would be good for the cuban people, but most importantly, it would be good for the u.s. and the american people and the american economy. and that has manifested itself in a variety of ways, whether it is the opening of an embassy, the re-establishing of
1:53 pm
commercial flights, or even greater opportunities for american businesses inside of cuba. you can certainly anticipate that in the lead-up to this trip, during the trip, and certainly after, that we're going to continue to seek additional concrete steps that we believe advance the interests of the united states. >> so there are some specific things that you want to see before he lands. >> well, we would like to see continued progress in the direction of more normal relations between our two countries. we believe that kind of progress would serve the interests not just of the cuban people, but of the citizens of the united states. >> why doesn't he want to meet with fidel castro? >> well, the president -- president obama is planning -- i think it's been noted -- to meet with president raul castro. he's the leader of the country. the president will have essentially a two-day visit to cuba and we're going to have some limited time.
1:54 pm
been noted that the details are still being worked out but at this point i would not anticipate a meeting with the former president. >> why doesn't the president want to attend scalia's funeral? >> well, michelle, as we discussed yesterday, the president and first lady tomorrow will be traveling to the supreme court building to pay their respects to justice scalia whose body will be lying in repose at the supreme court. the supreme court has organized this opportunity for the american public to travel to the supreme court on friday and pay tribute to justice scalia. that's exactly what the president and first lady will be doing tomorrow. like thousands of americans, not all of whom agree with justice scalia's view of the law, they do agree that his service to the country and his service to an institution that is critical to our democracy warrants special
1:55 pm
attention, and the president will pay his respects to justice scalia and his service to the sku country by 2r568ing to the supreme court tomorrow. >> why wouldn't he just go to the funeral? >> vice president biden who had his own personal relationship with justice scalia and his family will be representing the administration at the funeral. obviously when the vice president travels someplace, his security footprint is at least a little bit lighter. but given his personal relationship with the family, and given the president's desire to find a respectful way to pay tribute to justice scalia's service to the country, we believe we have settled on an appropriate and respectful arrangement. i think all of this should be viewed in the context of the comments that the president offered in person on saturday evening just a few hours after receiving the news of justice
1:56 pm
scalia's death. the president addressed the news media and spent the bulk of his remarks paying tribute to justice scalia and his life. when asked about justice scalia at a news conference on tuesday, the president, once again, took the opportunity to speak at length about his respect for justice scalia's intellect and commitment to the rule of law and his service to the country. i think all of that taken together reflects the kind of approach that i think that most americans are looking for from their leaders in washington, d.c. there's so much rancor and politics and partisanship that we allow ourselves to get into separate corners to the extent that some people want to use the funeral of the supreme court justice. what the president thinks is appropriate is respectfully paying tribute to high-profile
1:57 pm
patriotic american citizens even when you don't agree on all the issues. that's what he's going to do. all right? >> you talked earlier in the briefing on the progress with human rights. i wondered, there was a time with the state department had submitted names of political prisoners. about 50 of them were released, then some were re-arrested. i wonder how the officials are trying to make sure people don't get re-arrested and what the unintended consequences might be as a result of the president's visit. >> i'd refer to the state department for the updated assessment about condition of those conversations. because the truth is these are the kinds of conversations that are going on between u.s. diplomats and cuban diplomats on essentially a daily basis at this point. a regular part of our engagement with the cuban government has been focused on ensuring that the cuban people are empowered
1:58 pm
and have their human rights protected. we believe that there is a lot more that the cuban government needs to do to do that. that is a consistent part of our engagement with them. i don't have an update on that at this point, but there's no misunderstanding about that. and that is precisely why the president has sought to deepen the engagement between our two countries so that we can be more effective in advocating for the human rights of the cuban people. >> can you give us any sense of timing or a process for when the president is planning to begin rolling out his choice for scalia's successor, who he wants to nominate? [ inaudible question ] >> let me answer that in a couple different ways. i would expect that as the president contemplates the very
1:59 pm
important decision, that he will consult with a wide variety of people, with a wide variety of viewpoints. some of those conversations will eventually become public. i think many of them probably won't be. but the president seems certainly to take this particular issue -- i guess the president and his team take this particular constitutional responsibility quite seriously and the president has already begun to have conversations with senior members of his team about this process. we're at the beginning of this process, but it is one that the president and his team intend to carry out expeditiously. we're mindful of the fact that the president has almost another year in office. there certainly is ample time for the united states senate to act. but what's also true is that at least in recent history, we've not had a supreme court vacancy that has spanned two supreme
2:00 pm
court terms. so the president certainly wants to move promptly so that the united states senate can do the same in giving his nominee a fair hearing and a timely yes or no vote. >> vice president in an interview to public radio and talked a little bit about sort of how the from ez is looking at his pick and suggested that he may be going for a consensus candidate, said the president won't pick -- his words -- won't pick the most liberal jurist in the nation. he made a point of noting many judges have had unanimous support from republicans. should we read into that? is the president sort of moving towards a consensus pick as opposed to one end of the spectrum or the other? >> obviously vice president biden has a unique perspective on this situation. he is somebody as chairman of the senate judiciary committee
2:01 pm
presided over the confirmation hearings of i believe four different supreme court justices. so he obviously has his own unique insight into the kind of criteria that a president can and should use when choosing a supreme court justice. president obama has drawn on that expertise and that experience from vice president biden in announcing his nomination of both sonia sotomayor and elena kagan to the supreme court. and i'm confident that president obama will be interested in drawing on vice president biden's perspective in making this decision as well. what president obama is focused on is choosing the best person in the united states of america to fill this job. i'm not going to get ahead of the process. i don't know if the vp has signaled his interest in being considered for this job. but of course he did point out a relevant fact which is that there are a number of senior
2:02 pm
level judges, judges who serve on the appellate courts, who have actually gotten strong bipartisan support in the united states senate. there is a track record that the president has of appointing people whose qualifications are beyond question. and i would expect that the president will nominate someone else -- or someone to the supreme court who has credentials that could be similarly described. >> just one question about gitmo. can you give me an update on whether or not the administration plans to submit to congress details about closing gitmo? i believe the deadline is the 23rd. >> i don't have an update for the timing of that plan. we're certainly mindful of that deadline that's established in the nd p.aa. as soon as we have a plan to present to congress, i'll make
2:03 pm
sure we get it to you as well. >> are you predicting that it will likely happen? >> well, i was -- back in the summer i was asked to predict the timing of when this report would be presented to congress. i was off by several months. so i have learned my lesson and i will not be making future predictions about the timing of when this report will be presented. i know that in that intervening time that the department of defense has been working very diligently with other components of the president's national security team to put together a thoughtful, workable, sensible plan that reflects the national security interests of the united states and reflects the responsibility that the united states government has to be good stewards of taxpayer dollars. so i don't have an update on the timing for the plan. i know that they've made a lot of progress on this over the last few months. but when it is presented to congress, we'll ensure that it is made public as well so all of
2:04 pm
will have a chance to take a look at it. >> if you don't put forward the whole plan by that deadline, will you put forth something narrower to address the provision? >> i don't want to speculate at this point that we won't meet the deadline. but if february 23rd comes around and we haven't presented the plan we can talk about what we'll try to communicate to congress. okay? >> speaking of an ndaa deadline that you already blew through, i wanted to ask you why the administration didn't turn over a plan as the ndaa had required on monday for the fight against isis? >> well, i would anticipate that this is something that the department of defense, department of state will be able to present to congress shortly. congress is on recess this week, so i know that they're working diligently to complete this plan. i think the other thing that's true here, justin, is that given the number of senior level administration officials that have testified in public, under oath, some of them have even
2:05 pm
testified in classified setting, about our ongoing efforts to degrade and ultimately destroy isil, i don't anticipate there are a whole lot of people in congress that are going to learn a whole lot new in that plan. >> i want to ask about otm. there's a lot of layers to this so i'll troo i y to power throu. >> i'll try to do the same with my answer. >> the ig's report said she couldn't serve as acting director after she was nominated. you guys issued a statement saying there was long precedent saying she should be able to switch over jobs but there was a federal court case recently that did not agree with you and said that she wasn't a first assistant at that agency, that as soon as you nominated her for the full job she was no longer eligible to serve as acting director. i know that you are appealing that case, but because it is the current sort of ruling that you're working with, are you not concerned that sort of her
2:06 pm
actions could be -- as acting director -- deemed illegal in the period until she's -- >> i'm aware of this situation. i have not gotten the full legal analysis about why our lawyers believe it is entirely appropriate for her to continue to do the important work that she's doing at opm. so we can try to provide you a greater understanding of our interpretation of the law, but we certainly say with a lot of confidence, not just that she has the -- cleared the legal bar to perform that work, that she's doing an extent job. she inherited a very difficult situation and she has gone to work rolling up her sleeves, drawing on her private sector leadership expertise to implement significant reforms at
2:07 pm
o pch opm. we are -- i think democrats and republicans alike have been impressed at the pace with which she has been able to make important progress on some really difficult issues. there's an enormous amount of work that needs to get done, and we're hopeful that essentially congress can put this to rest and conif ifirm her to the opm full time so she can continue to do the critically important work she's doing without being distracted. >> a couple of weeks ago you were saying that if the republicans didn't pass things on the president's agenda, that that was something you thought voters should have in their minds when they go to the polls in november. do you think that's true about the -- what they do with the supreme court nomination as well, that -- if the republicans don't have hearings or don't vote for your nominee, that's something voters should base their decision on? >> going back to the argument i
2:08 pm
made a couple weeks ago, the point that i was trying to make is that there is a lot of discussion about how there were republicans who were harshly critical of some of the legitimately bipartisan proposals that we put forward. and my observation was that that left republicans in a situation where it was not clear at all exactly what they were going to do over the course of this year. knowing that we've got republicans in charge of the congress and a democrat in charge of the white house, you're going to have to act in bipartisan fashion to get anything done. if republicans shoot down every bipartisan proposal that the president puts forward, then it puts republicans in an uncomfortable position of having spent years urging the american people to give him the responsibility of running the united states congress, and essentially spending a year doing nothing what i think is also true, and i think this is
2:09 pm
true in the minds of the american people as well, supreme court nominations are a little bit different. people recognize that a lifetime appointment to the highest court in the land entails a special responsibility. and the other legislative agenda items that we have put forward are critically important to the country. there is no denying that reforming our criminal justice system would make a difference in the lives of thousands of americans and could potentially do something really important to reduce the crime rate and improve our economy. the transpacific partnership, over the longer term, is the kind of thing that would even further strengthen the strongest and most durable economy in the world and revolutionize the relationship that the united states has with some of the fastest growing economies in
2:10 pm
asia. so that is poimportant work tha congress needs to do in terms of ratifying the transpacific partnership. when it comes to the supreme court, the senate has a constitutional responsibility and there has been an attempt, i know, as i observed yesterday, by people on all sides to try to politicize these hearings and to politicize the process. and what we're trying to do is to focus squarely on the president's constitutional responsibility and the senate's constitutional responsibility. and if that's what we do, i'm confident that a legislative process that is so often broken down -- been broken down by -- in dysfunction will actually perform in a way that the american people expect. it doesn't mean we're going to have differences of opinion. i'm confident we're going to
2:11 pm
have differences of opinion. are we going to have a spirited hearing or days of hearings? yeah, i'll bet that we do. will there be some people who complain and say that they don't support the president's nominee? i'm confident that's probably going to happen, into. but the real question that the american people have -- the suggestion is not that we shouldn't have a debate. the question is whether or not the united states senate is going to fulfill their basic constitutional responsibility and i think american people, including those who are going to cast a vote in 2016, will be watching. >> do you think that if a senator says that there shouldn't be hearings, or is opposed to the process so there aren't hearings, is that something that should be in the minds of the voters in that senator's state in november if that senator is up for re-election? >> well, look. at this point i'm not going to be able to predict with a lot of specificity exactly what a
2:12 pm
specific voter is going to have in mind when they go to the voting booth nine or ten months from now. >> do you want this to be something in their minds? >> well, i think it is certainly something that's legitimate. and i think that this issue is -- again, given the stakes, it is something that will get a lot of attention. and that's a good thing. this is something that should be subjected to a vigorous public debate. but look, at the end of the day, the president has a constitutional duty, and so does the united states senate. >> josh, i'm curious why president obama was so thrilled, almost euphoric, to have received a parking pass for the united center today. do we expect the president to be driving himself around chicago looking for a parking space after he leaves office? >> that's a good question. i guess i wouldn't rule it out. we've talked a lot about how the president certainly misses the
2:13 pm
opportunity that he gets to drive himself around. he spent a little time driving around the south lawn with jerry seinfeld last year and he certainly enjoyed that. but i can tell you that in his post-presidency life, i think the president is eagerly anticipating spending some winter nights at the united center watching both the bulls and the blackhawks. >> he's not going to drive himself there. >> i wouldn't rule it out. maybe he'll have a self-driving car so he'll be able to ride along without actually putting his hands on the wheel. >> last question. who did he have dinner with last night? >> the president did make an outing last night. the pool accompanied the president to blt restaurant, just across the street here. i'm sure it was just serendipitous that a handful of "new york times" reporters would be at the bar of the restaurant at 6:00 p.m. on a wednesday night. i'm sure that hardly ever happens. last night it did.
2:14 pm
and they saw the president walk in. the president did have dinner with some friends, many of them are people who are assisting the outside work of the foundation as it gets up and running. so there were friends -- some of you tweeted about them. but there were former senior administration -- former white house officials, and some others who were there. they had been meeting over the course of the day to sort of talk about some of the planning for the foundation. and when the president heard they were in town he wanted to go over and see them. i spoke to the president about it a little bit this morning anticipating you might ask me about this and he told me that it was -- that it was almost entirely social. >> was morgan freeman at the table? >> i wasn't there. i saw that other people saw him, so i think that's accurate. but i haven't seen a full list of who joined the president for
2:15 pm
dinner. >> i'd like to ask about north korea and cuba. clearly cuba is a good example that the u.s. has deep and direct ebb gaungagement and ira also a good example. when it comes to north korea, the administration hasn't shown that kind of attitude despite the fact that north korea has developed nuclear weapon and even trying to get hydrogen bomb. is the administration ready to take on north korea with that kind of deep and direct engagement? >> toshi, we're not, and the reason simply is that the north koreans have continues to engage in repeated proverb kags that gro provocations that grossly violate their obligations. as you know they conducted a nuclear test this year that violated a range of u.n. security council resolutions. they conducted a launch that
2:16 pm
tested some missile technology earlier this month. and those actions were roundly condemned by the international community. if north korea is prepared to put an end to those kinds of provocative acts, come into compliance with international obligations, and make clear that they are committed to the goal of denuclearizing the korean peninsula, that would give north korea the opportunity to begin to reengage with the international community. if that's something that they desire, they know precisely the path that they can take. two give them an opportunity not just to improve their relationship with the united states, two give them an opportunity to re-engage in the world and in the international community. it certainly would improve their economy. it would improve their relationship with south korea. two improve their relationship with other countries in the region like russia and china,
2:17 pm
and even japan. and that's been our approach and fortunately for the united states, the international community agrees with us that those are the steps that north korea needs to take, and they will continue to work with us to apply pressure to north korea, to further isolate them, and to compel them to take the kinds of steps that will allow them to kw come into compliance with the international community's expectations. andre. >> thank you. two things. one on syria and two on cuba. with syria, we are supposed to be a part of a group, among the u.s. and russia, who will discuss a multi-lateral format a way forward in syria with a cease-fire. and the question very simply is why is it okay to do that in a multi-lateral format but not
2:18 pm
bilateral as the russians keep saying. >> andre, we've acknowledged for a number of months now that the -- that there is an opportunity for the russians, if they're prepared to sign on to the goals of the international countere counterisil coalition, of whom there are 65 or 66 members, then their contribution to that effort would be welcomed. that is something that the russians have resisted. because of that resistance, and they have chosen to take a number of unilateral steps, we have engaged with the russian military to the extent necessary to deconflict our activities. but, frankly, we've been disappointed both that russia's military activities have not been effectively integrated with the international counterisil coalition, and that russia's military activities have not been focused on isil, but rather
2:19 pm
concentrated on propping up the assad regime. that has resulted in more widespread bloodshed and suffering, and only serves to undermine the stated political goals of the russian government. so that is a contradiction that the russian government has been unable to address, and it's why that even as russia gets deeper and deeper into the sectarian conflict, they're not actually advancing their longer term interests in the region. in the short term, they may able to help the assad regime strengthen its hold on power, but over the long term, russia is being forced to dedicate more and more resources to trying to hold on to the only military installation that they have outside of the former soviet
2:20 pm
union. >> given that approach, what do you really expect from the -- >> what we expect is the painstakingly slow and difficult and complicated diplomacy will take the next step there. and secretary kerry has been tenacious in trying to move this process forward. but look, even as this process moves forward slowly, lives are being lost, and lives are being scarred because you see innocent civilians caught in the cross fire. you see more and more people forced to flee their homes to avoid violence, and, unfortunately, russia's actions are only perpetuating that situation and not actually coordinating with the international community to rectify it. >> when will the cease-fire begin? >> this will be the part of the
2:21 pm
multi-lateral discussions that are planned for tomorrow. >> now on cuba, i wanted to ask about something that ben mentioned, that you are interested in cuban cancer vaccines. the question basically is, does it make cuba a potential partner in your initiative or any partners like that? >> that's a good question. we know that the cuban government has invested a lot in military -- in medical technology and if our improved engagement with the cubans would allow medical experts in the united states to deepen their engagement with medical researchers and physicians in cuba, then that would be a really good thing. it would be a good thing for the cuban people. certainly would be a good thing for the united states and it
2:22 pm
would be a good thing for the world in terms of trying to capitalize on what is -- what could be important gains that cuba has made, and we can certainly leverage those gains to advance the interests of the scientific community in trying to cure skis like cancer. >> this cancer thing, how confident is the white house that you will achieve something, that you will achieve a breakthrough or some results, meaningful results, by the end of the year? you have a very small window there. >> we do have a very small window here. we are seeking to lay the groundwork so we can turbo charge the progress that's been made thus far and try to shorten the distance between the progress that we're making now and the ultimate goal of curing cancer. i don't anticipate that's going to happen before the end of the year, but i do anticipate that by better focusing our attention on this goal, that we can more
2:23 pm
effectively use our resources, that we can more effectively share knowledge between the government and the variety of private sector entities that are pursuing these efforts, and that we can lay the groundwork for the kind of breakthrough that would have a tangible impact on millions of lives. >> i heard people speculate that you called this initiative -- that you are already upon the brink of a major discovery. maybe has made major discovery and just waiting for it to be announced. >> the reason we use the terminology is it reflects, one, the scale of the ambition that the president has for confronting this. there's no denying that when president kennedy made this announcement that it was widely viewed as a very ambitious, bold, audacious move. but yet one that was achieved. we envision something similarly am
2:24 pm
ambitious. the second thing is -- this is also relevant, too -- when president kennedy made this announcement the goal was not realized during his presidency. it wasn't until 1969 that this goal was eventually realized. and so what we're hoping to do is to lay the groundwork in the presidency of barack obama so that some future president will be able to make a proud public announcement about a medical breakthrough that would lead to a cure for cancer. >> clarify one thing. in terms of terrorism funding in new york city. there were comments that you made that seem to suggest that senator schumer's position on the iran deal may have something to do with why this cut is happening and that the white house is playing politics at a time when the issue should be the unique threat that new york city faces. can you just clarify what you said about schumer in relation to this cut and whether there is any relationship at all? >> there's no relationship at
2:25 pm
all. we can walk you through the numbers that indicate that this administration has made a substantial investment in homeland security, not just for new york city that obviously has some unique challenges, but for the whole country. and when you take a look at the resources that have been provided the city and state of new york over the last several years, the amount that has been unspent -- or that remains in their accounts and unspent and the new commitment that we have made in the context of this recent budget, i think our commitment to homeland security is quite clear. and so the concerns that are raised yesterday were entirely focused on our concern that if you take a look at the facts, the facts back up precisely the priority that this president has placed on homeland security and
2:26 pm
making sure that state and local officials across the country have the resources that they need to protect their communities. >> the kinds related to more unspent funds? is that what you're saying? >> no. what i'm saying is -- we can walk you through the numbers because it is complicated. there is $600 million in funds that have been provided by the federal government. most of them through dhs, that have been provided in previous years, that are still in the accounts maintained by the city and state of new york. those funds continuing to available to them. so i know that there were some -- there was a suggestion that somehow there were unmet needs. the fact is, there are substantial resources that continue to be available, and in the context of this budget, the administration is proposing to add another $255 million on top of that. the reason -- again, this is a
2:27 pm
substantial sum of money that would be dedicated to things like homeland security, resilience, and other things that are critical to the well being and safety of the people of new york. the reason the $255 million number is significant is not because that is this year's annual commitment, but if you take a look at the last two years in the way those funds have been spent, the last two years combined city and state officials have spent, out of this collection of funds, about $125 million or $150 million. so it's not just that there are significant sums in reserve. it is the amount of money that's being provided under this budget proposal far exceeds the expenditures that have been made in the last two years combined. and that's the point that we're making. so we've had our differences with senator schumer over national security, and those differences have been well chronicled, including as recently as yesterday. but what we're focused on is making sure that people understand the facts about the
2:28 pm
commitment that we have made to our homeland security and the way that we have backed up that commitment in the context of the budget process. thanks, everybody. we'll see you tomorrow. >> white house press secretary josh earnest wrapping up today's briefing. much of today's briefing with national security advisor ben rhodes with information about the president's trip to cuba next month. more on that from abc news' website. the trip, the first by a u.s. president in more than 80 years, is planned for march 21st and 22nd before of the president flies to argentina on march 23rd. during the trip to cuba, president obama is set to meet with cuban president raul castro. the two men first met face to face during a summit in panama last year. first lady michelle obama will travel with the president to cuba and the first family will join him in argentina. the move comes roughly 15 months
2:29 pm
following the president's pledge with raul castro to re-open diplomatic channels following a prisoner exchange and the humanitarian release of u.s. contractor allan gross in december 2014. read more at more road to the white house coverage coming up tonight. hillary clinton will be in nevada at a get out the vote rally at the laborers international union in las vegas. live coverage on c-span starting at 11:30 p.m. eastern. nevada holds its democratic caucuses on saturday where polls are showing a very tight race there between mrs. clinton and senator bernie sanders. c-span's coverage of the presidential candidates continues this week with campaign events in south carolina and nevada leading up to the south carolina gop primary and the nevada democratic caucuses on saturday, february 20th. our live coverage of the results starts on saturday at 7:30 p.m. eastern with the candidate speeches and your reaction to the results on c-span, c-span
2:30 pm
radio and tonight on american history tv, archival coverage of past presidential campaigns. including 1992's concession spee speech. at 8:40, a 1980 interview with ronald reagan while on the campaign trail in new hampshire. and at 11:30, the 1984 democratic presidential candidates debate in iowa. also coming up, campaign ads, the 1980 interviews with john anderson, howard baker and george h.w. bush, and more. all of that tonight on american history tv. here on c-span3. federal reserve chair janet yellen says the economy and labor market continue to grow despite a recent slowdown. she testified last week before
2:31 pm
the house financial services committee delivering the federal reserve's biannual report to congress on the state of the economy. >> committee will come to order. without objection the chair's authorized to declare a recess of the committee at any time. this hearing is for the purpose of receiving the semiannual testimony of the chair of the board of governors of the federal reserve system on the conduct of monetary policy in the state of the economy. i recognize myself for three minutes for an opening statement. last month we all heard president obama attempt to take an economic victory lap in his state of the union speech but the american people are having none of it, though, they are tired of hearing from out-of-touch ruling class in
2:32 pm
washington just how good things are when their realities are vastly different. so, chair yellen notwithstanding the fact that you are a presidential appointee, i hope you do not follow suit this morning. reality is since the president was elected and the fed embarked upon its impressive and unprecedented quantitative easing and zero real interest rates policies, the net worth has declined. the real unemployment rate continues to hover around 10%. approximately 1 in 6 is on food stamps and almost 15% live in poverty. there hasn't been a single year when economic growth has reached 3%. as one published report noted there's no parallel for this since the end of world war ii, maybe not since the beginning of the republic, unquote. last year's less than 1% gdp growth just punctuates the matter for struggling working families. i will not use this hearing to either praise or condemn the
2:33 pm
fed's decision to raise by 25 basis points interest rates in december, nor do i think it appropriate to advise the fomc on how to vote during its next meeting. but given that article one, section eight of the constitution gives congress the power to coin money and regulate the value thereof, i do feel compelled to demand that the fed adopt a monetary policy course that is predictable, transparency, sustainable and barring terribly exigent circumstances to stick with it. this is part of the rationale underlying the house-passed fed oversight reform and modernization act. to use austrian economist's phrase it is fatal conceit to believe the fed is capable of micromanaging our economy to some state of economic nirvana. we now have at least eight years of recent history to prove otherwise. most importantly, no amount of monetary policy can substitute for sound fiscal policy. unless and until the crushing
2:34 pm
regulatory onslaught of obamacare, dodd/frank and the epa is replaced with greater opportunity, competition and innovation, the fed cannot substantially help our economy, it can only hurt it. it can hurt it by continuing to serve as the financier and facilitator of our unsustainable federal debt. just last month the congressional budget office yet again warned of your unsustainable debt which references the debt 199 times. the fed can hurt our economy by continuing to force investors to chase yield, thus inflating dangerous asset bubbles, the deflating of which we are likely seeing in our turbulent equity markets today. the fed can continue to hurt our economy by failing to unwind its unprecedented balance sheet. by growing at almost 500 percent the fed itself has become one of our largest sources of systemic risk.
2:35 pm
finally, separate and apart from monetary policy, alarmingly the fed under dodd/frank can now functionally control virtually every major corner of the financial services sector of our economy. it does so without almost no accountability or transparency. not only does it harm economic growth, it is an affront to due processes, checks and balances and the rule of law. the american people should, again, be duly alarmed that they may wake up one day to discover that our central bankers have become our central planners. the chair now recognizes the ranking member for three minutes for an opening statement. >> thank you, mr. chairman, for this meeting here today. but i'd really like to thank chair yellen for being here to discuss with us today the state of the economy and your role in ensuring that a full recovery is achieved for all. as a result of your herculean efforts, the efforts of democrats in congress and the obama administration we've truly made tremendous progress since
2:36 pm
the darkest days of the financial crisis. over the past 71 consecutive months our economy has added more than 14 million private sector jobs and the unemployment rate has fallen by more than half. but despite this commendable progress, significant work remains. wages have yet to see real gains. 7.8 million workers remain jobless, 6 million workers are involuntarily working part-time jobs, and another 2 million americans indicate they would join the workforce if only the economy were strong enough to support them. with inflation consistently running below target, i wonder whether the expected path for further raising rates over the course of 2016 may overemphasize concerns about inflation. and underestimate the weakness in our labor market and i look forward to your comments on this issue. absent a full recovery, i feel
2:37 pm
that further raising rates may be a step that takes us further away from what is needed to ensure that the needs of vulnerable populations are met. at today's hearing i also hope we can explore the ramifications of an exit strategy that relies heavily on paying private sector banks not to lend the funds they hold in reserve and discuss reasonable alternatives that may exist that do not involve a massive transfer of wealth from the federal reserve to private sector banks. i just wonder if it is possible for these funds to be used for workers who are really worried about whether or not they going to have a pension or if there can be some social responsibility investment with these funds to help our workers in vulnerable populations. finally, many of us have been very patient about the implementation of the living wills. and, you know, this is a
2:38 pm
requirement in the dodd/frank act and it's designed to end too big to fail. and i know that you have to give careful consideration to all of this, but after one, not two, but five submissions the federal reserve has yet to impose consequences for living wills that are not credible. what can we do about this? it's time that we understand that we have given a lot of opportunities to the banks to get it right and they haven't done that. chair yellen, i look forward to hearing your views on the economy, and i welcome the opportunity to discuss how to be more effectively -- we can more effectively elevate the needs of the most vulnerable populations and promote a safe and sound financial system and i want you to know that our audience today is made up of workers who really want to hear you talk about this. so, i would welcome opportunities to address some of their concerns. i yield back the balance of my time.
2:39 pm
>> the chair now recognizes the gentleman from south carolina, mr. mulvaney, for two minutes. the vice chair of our monetary policy and trade subcommittee. >> when i sat down to get ready for this it occurred me that i could ask you about a bunch of things. i could ask you about your plans on interest rates and how you arrived at the decisions you're going to make, what you used to arrive at those decisions. i could ask you about your role in the fed in regulating financial institutions, dodd/frank, for example, has given you regulatory powers over banks, nonbanks, clearinghouses and thrift holding companies. it also struck me i could ask you about the role of the fed and more specifically the new york branch and the possibly misleading statements secretary lew made to two congressional committees regarding the fed and the treasury's role in intentionally withholding information from congress about plans to prioritize debt payments during the last government shutdown and then i
2:40 pm
realized that's too much. that's too much not to just ask you in the few minutes we have today, it's just too much for you to be doing. the fed has like so many other parts of our government grown way beyond its original intended scope. when congress chartered the bank in 1913 we asked it to do one thing, keep the financial system and primarily currency stable. today the fed is involved in everything from how much purchasing power these people have to where they can bank, how they can invest and save and to believe some whether or not they even have a job. maybe you shouldn't be involved in trying to get us to full employment, something that your own economics orthodoxy teaches you don't have the ability to do but only fiscal policy should do. maybe you shouldn't be involved with regulating mortgages and credit cards and you certainly shouldn't be involved in political decisions to intentionally keep congress in the dark about how this country's going to pay back its principal and its interest on the debt, so i hope today we get
2:41 pm
a chance to talk about a lot of things, sound money, dual mandate, full employment, regulations, community banks, the impact of zero rates on retirees, asset bubbles, in hopes that at the end we discover that perhaps the time has come to get back to basics and one, and one thing only, and that is long-term price stability. >> time of the gentleman has expired. the chair now recognizes the gentlelady from wisconsin, ms. moore, for two minutes, ranking member of the monetary policy and trade subcommittee. >> thank you so much, mr. chairman. welcome back, chair yellen. well, as you can tell from the opening statements there's plenty to discuss since your last appearance before this committee. i supported your rate increase in december. i still do. and i think you're providing a lot of credibility to markets with your leadership. however, these seem to be economic times that are destined to be interesting.
2:42 pm
since december we've witnessed a lot of global economic turmoil and now it's turning up in the u.s. as reflected in our stock market. foreign central banks are moving to ease rates even as we're moving to try to tighten them. and i'm not saying that we need to harmonize our monetary policy but i'm very interested in hearing how you and the fed are working with foreign central banks to get in front of these ominous trends. as you've stated so many times before monetary policy is a limited tool. but if we're going to grow our economy and keep it on track and as i look at the folk in green in the audience, it causes me to realize that members of congress have to do their part, too, and not just throw it all in the lap of the fed. we've got to embrace proven growth strategies like tackling poverty especially among women by providing vocational training so they can qualify and compete for sustainable jobs with living
2:43 pm
wages. and with that i would yield back the balance of my time. >> gendgentlelady yields back. today we welcome the testimony of the honorable janet yellen, chair yellen has previously testified before this committee, so i believe she needs no further introduction. without objection, chair yellen, your written statement will be made part of the record. you're now recognized for five minutes to give an oral presentation of your testimony, thank you. >> thank you. chairman hensarling, ranking member waters, and other members of the committee, i'm pleased to present the federal reserve's semiannual monetary policy report to the congress. in my remarks today, i will discuss the current economic situation and outlook before turning to monetary policy. since my appearance before this
2:44 pm
committee last july, the economy has made further progress toward the federal reserve's objective of maximum employment. and while inflation is expected to remain low in the near term, in part because of further declines in energy prices, the federal open market committee expects that inflation will rise to its 2% objective over the medium term. in the labor market, the number of payroll jobs rose 2.7 million in 2015 and posted a further gain of 150,000 in january of this year. the cumulative increase in employment since its trough in early 2010 is now more than 13 million jobs. meanwhile, the unemployment rate fell to 4.9% in january. .8 of a percentage point below its level a year ago, and in
2:45 pm
line with the median of fomc participants' most recent estimates of its longer-run normal level. other measures of labor market conditions have also shown solid improvement, with noticeable declines over the past year in the number of individuals who want and are available to work but have not actively searched recently and in the number of people who are working part-time but would rather work full-time. however, these measures remain above the levels seen prior to the recession, suggesting that some slack in the labor markets remains. thus, while labor market conditions have improved substantially, there's still room for further sustainable improvement. the strong gains in the job market last year were accompanied by a continued, moderate expansion in economic activity. u.s. real gross domestic product
2:46 pm
is estimated to have increased about 1.75% in 2015. over the course of the year, subdued foreign growth and the appreciation of the dollar restrained net exports. in the fourth quarter of last year, growth in the gross domestic product is reported to have slowed more sharply, to an annual rate of just 0.75 percent. again, growth was held back by weak net exports as well as by a negative contribution from inventory investment. although private domestic final demand appears to have slowed somewhat in the fourth quarter, it has continued to advance. household spending has been supported by steady job gains and solid growth in real disposal income aided in part by the declines in oil prices.
2:47 pm
one area of particular strength has been purchases of cars and light trucks. sales of these vehicles in 2015 reached their highest level ever. in the drilling and mining sector, lower oil prices have caused companies to slash jobs and sharply cut capital outlays, but in most other sectors business investment rose over the second half of last year, and home building activity has continued to move up on balance, although the level of new construction remains well below the longer-run levels implied by demographic trends. financial conditions in the united states have recently become less supportive of growth, with declines in broad measures of equity prices, higher borrowing rates for riskier borrowers and a further appreciation of the dollar. these developments, if they prove persistent, could weigh on the outlook for economic activity in the labor market.
2:48 pm
although declines in longer-term interest rates and oil prices provide some offset. still, ongoing employment gains and faster wage growth should support the growth of real incomes and, therefore, consumer spending. and global economic growth should pick up over time, supported by highly accommodative monetary policies abroad. against this backdrop the committee expects with the gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace in coming years, and that labor market indicators will continue to strengthen. as is always the case, the economic outlook is uncertain. foreign economic developments in particular pose risks to u.s. economic growth. most notably, although recent economic indicators do not
2:49 pm
suggest a sharp slowdown in chinese growth, declines in the foreign exchange value have intensified uncertainty about china's exchange rate policy and the prospects for its economy. this uncertainty led to increased volatility in global financial markets and against the backdrop of persistent weakness abroad, exacerbated concerns about the outlook for global growth. these growth concerns, along with strong supply conditions and high inventories, contributed to the recent fall in the prices of oil and other commodities. in turn, low commodity prices could trigger financial stresses in commodity exporting economies particularly in vulnerable emerging market economies and for commodity producing firms in many countries.
2:50 pm
should any of these downside risks materialize, foreign activity and demand for u.s. exports could weaken and financial market conditions could tighten further. of course, economic growth could also exceed our projections for a number of reasons, including the possibility that low oil prices will boost u.s. economic growth more than we expect. at present, the committee is closely monitoring global economic and financial developments as well as assessing their implications for the labor market and inflation and the balance of risk to the outlook. as i noted earlier, inflation continues to run below the committee's 2% objective. overall consumer prices as measured by the price index for personal consumption expenditures increased just a half percent over the 12 months of 2015.
2:51 pm
to a large extent, the low average pace of inflation last year can be traced to the earlier steep declines in oil prices and in the prices of other imported goods. and given the recent further declines in the prices of oil and other commodities, as well as the further appreciation of the dollar, the committee expects inflation to remain low in the near term. however, once oil and import prices stop falling, the downward pressure on domestic inflation from those sources should wane. and as the labor market strengthens further, inflation is expected to rise gradually to 2% over the medium term. in light of the current shortfall of inflation from 2%, the committee is carefully monitoring actual and expected progress toward its inflation goal. of course, inflation expectations play an important
2:52 pm
role in the inflation process, and the committee's confidence in the inflation outlook depends importantly on the degree to which longer-run inflation expectations remain anchored. it is worth noting in this regard that market-based measures of inflation compensation have moved down to historically low levels. our analysis suggests that changes in risk and liquidity premiums over the past year and a half contributed significantly to these declines. some survey measures of longer-run inflation expectations are also at the low end of their recent ranges. overall, however, they have been reasonably stable. turning to monetary policy, the fomc conducts policy to promote maximum price stability as required by our statutory
2:53 pm
mandate from the congress. last march the committee stated that it would be appropriate to raise the target range for the federal funds rate when it had seen further improvement in the labor market and was reasonably confident that inflation would move back to its 2% objective over the medium term. in december, the committee judged that these two criteria had been satisfied and decided to raise the target range for the federal funds rate one quarter percentage point to between 0.25 and 0.50 percent. this increase marked the end of a seven-year period during which the federal funds rate was held near zero. the committee did not adjust the target range in january. the decision in december to raise the federal funds rate reflected the committee's assessment that even after a modest reduction in policy accommodation, economic activity would continue to expand at a
2:54 pm
moderate pace and labor market indicators would continue to strengthen. although inflation was running below the committee's longer-run much of the softness in inflation was attributable to transitory factors that are likely to abate over time and t diminishing slack in labor and product markets would help move inflation towards 2%. in addition the committee recognized that it takes time for monetary policy actions to affect economic conditions. if the fomc delayed the start of policy normalization for too long, it might have to tighten policy relatively abruptly in the future to keep the economy from overheating and inflation from significantly overshooting its objective. such an abrupt tightening could increase the risk of pushing the economy into recession.
2:55 pm
it's important to note that even after this increase the stance of monetary policy remains accommodative. the fomc anticipates the economic conditions will only warrant gradual increases in the federal rate. in addition the committee expects that the federal funds rate is likely to remain for some time below the levels that are expected to prevail in the longer run. this expectation is consistent with the view that the neutral nominal federal funds rate defined as the value of the federal funds rate that would be neither expansionary nor contractionary if the economy is operating near potential is currently low by historical standards and is likely to rise only gradually over time. the low level of the neutral federal funds rate may be partly attributable to a range of
2:56 pm
persistent economic headwinds such as limited access to credit for some borrowers, weak growth abroad and a significant appreciation of the dollar that have weighed on aggregate demand. of course, monetary policy is by no means on a preset course. the actual path of the federal funds rate will depend on what incoming data tell us about the economic outlook and we will regularly reassess what level of the federal funds rate is consistent with achieving and maintaining maximum employment and 2% inflation. in doing so, we will take into account a wide range of information. including measures of labor market conditions, indicators of inflation pressures, and inflation expectations and readings on financial and international developments. in particular, stronger growth or a more rapid increase in inflation than the committee
2:57 pm
currently anticipates would suggest that the neutral federal funds rate was rising more quickly than expected, making it appropriate to raise the federal funds rate more quickly as well. conversely, if the economy were to disappoint, a lower path of the federal funds rate would be appropriate. we are committed to our dual objectives and we will adjust policy as appropriate to foster financial conditions consistent with their attainment over time. consistent with its previous communications, the federal reserve used interest on excess reserves and overnight reverse repurchase operations to move the federal funds rate into the new target range. the adjustment to the ioer rate has been particularly important in raising the federal funds rate and short-term interest rates more generally in an environment of abundant bank
2:58 pm
reserves. meanwhile, overnight rrp operations complement the ioer rate by establishing a soft floor on money market interest rates. the ioer rate and the overnight rrp operations allow the fomc to control the federal funds rate effectively without having to first shrink its balance sheet by selling a large part of its holdings of longer-term securities. the committee judged that removing monetary policy accommodation by the traditional approach of raising short-term interest rates is preferable to selling longer-term assets because such sales could be difficult to calibrate and could generate unexpected financial market reactions. the committee is continuing its policy of reinvesting proceeds for maturing treasury securities
2:59 pm
and principal payments from agency debt and mortgage-backed securities. as highlighted in the december statement, the fomc anticipates continuing this policy until normalization of the level of the federal funds rate is well under way. maintaining our sizable holdings of longer-term securities should help maintain accommodative financial conditions and reduce the risk that we might need to return the federal funds rate target to the effective lower bound in response to future adverse shocks. thank you. i will be pleased to take your questions. >> chair now recognizes himself for five minutes for questions. chair yellen, i know you are familiar with the federal oversight reform and modernization act known as the f.o.r.m. act which was passed by the house in november is designed to bring about greater transparency and accountability at the fed. respect the fed's independence,
3:00 pm
but to ensure that the fed lets the rest of us know the variables that are used in monetary policy and their reaction function so that working families can plan out their family economies. i know that you are not a fan of the f.o.r.m. act because i have a letter dated november 16th that you sent to the speaker. in that letter you call the act a grave mistake. i have another letter that describes it as an important reform. your letter mentions or complains that monetary policy would be forced to be strictly adhered to by the prescriptions of a simple rule. my letter says the legislation does not chain the fed to any rule and certainly not a mechanical rule. your letter says that the act would undermine the independence of the fed. my letter says in no way would
3:01 pm
the legislation compromise the fed's independence. on the contrary publicly reporting a strategy helps prevent policymakers from bending under pressure and sacrificing independence. your letter states that the f.o.r.m. act would, quote, severely damage the u.s. economy were it to become law. my letter says the new legislation would improve economic performance. by definition, your letter is signed by you. my letter is signed by dr. lars hanson of the university of chicago nobel laureate in economics, also signed by robert lucas, university of chicago nobel laureate in economics. edward prescott, arizona state university, nobel laureate in economics. george shultz former secretary of the treasury, robert heller former federal reserve governor,
3:02 pm
jerry jordan former president of the cleveland federal reserve bank, william poole former president of the st. louis federal reserve bank, former member of the council of economic advisers. michael boskin stanford university former chairman of the president's council of economic advisers. former consultant federal reserve board of governors. marvin goodfriend, carnegie mellon former research director for the federal reserve board of richmond. allen metzer carnegie mellon and john taylor of stanford university, former undersecretary of the treasury, member of the council of economic advisers, author of the taylor rule, and there's about 15 others, signatories to the letter. so, chair yellen, we have three nobel prizewinners in economics, a host of former federal reserve
3:03 pm
officials, some of the most renowned and respected economists in the country, pretty much disagree with everything that you asserted in your three-page missive against the f.o.r.m. act. i know you're not a fan, but i would just caution you, chair, that when you use such apocalyptic and hyperbolic language, you might consider whether it undercuts your credibility as fed chair. 6 i have one question, in your testimony, chair yellen, in characterizing the fed strategy to increase policy rates, you testified, quote, removing monetary policy -- policy accommodation by the traditional approach is preferable to shrinking the fed's balance sheet which now holds almost as much in treasuries as china and japan do combined. i'm trying to figure out what
3:04 pm
precisely is traditional about this current approach where the fed and the ranking member i think brought this up in her opening statement subsidizes deposit rates for some of the biggest banks in our country which can distort as you well know real asset allocation and constrain economic opportunity. and last i look as we speak the fed's fund rate is just about -- just above 30 basis points. you're paying banks 50 basis points for excess reserves which would seem to be above the market rate. you have previously testified that this does not involve a subsidy to the banks. it appears to be a subsidy. and it appears to distort real asset allocation. so, what is traditional about this approach? >> the tool that we have used to raise our target for short-term interest rates, namely our key tool being interest on excess
3:05 pm
reserves, is widely used by central banks as a key tool of monetary policy. and it is the critical tool that we need to rely on in order to adjust the level of short-term rates to what we regard as the appropriate stance to achieve congressionally mandated goals. i would point out that although we are paying interest to banks on reserves, those reserves are financing our holdings, a large portfolio of holdings of longer-term treasury securities, and mortgage-backed securities on which we earn substantially greater interest. and because of that large balance sheet, this past year the fed transferred back to the treasury and to the american
3:06 pm
taxpayers $100 billion -- >> but it is true, chair yellen, is it not, that you're paying 50 basis points when the fed fund rate is 30 basis points? >> it's necessary for us to raise benchmark rates in order for a whole host of short-term interest -- >> that would seem to imply a subsidy to the biggest banks. my time has long since expired, the chair now recognizes the ranking member for five minutes. >> mr. chairman. chair yellen, continue ing o the discussion that was just initiated by the chairman, as you continue to embark on the path of raising rates, i want to explore the alternative approaches that may exist for the federal reserve to do so in a manner that does not rely so heavily on paying massive sums to private sector banks to hold on to the reserves they maintain at the fed. while the fed pay close to $7 billion on reserves in 2015 as
3:07 pm
the economy strengthens and rates are further increased, the amounts paid could increase dramatically into the tens of billions of dollars. can you expand on why you believe that paying interest on excess reserves is particularly important for raising rates in the current environment and discuss possible alternative approaches that may exist. and if you talk about what you believe is to be the mandate of congress and how you don't have the authority for alternatives. i want to hear more about that and what you do have the authority to do. >> well, prior to the financial crisis, the fed adjusted the level of short-term interest rates through small variations in the supply of reserves to the banking system. following the financial crisis, as our balance sheet expanded,
3:08 pm
reserves became abundant, and the traditional, old-fashioned approach was no longer feasible. congress had debated the wisdom of giving us the tool of paying interest on reserves for many years and decided to do so in 2006 and then speeded up implementation in 2008. the knowledge that we had that tool and would be able to use it when we deemed it appropriate to begin to raise the short-term level of interest rates, as we did in december, the knowledge that that tool was available, as i just mentioned a tool that is critical to our control of short-term rates and widely used globally, that was an important fact when we considered all the actions that we took, the unconventional actions, that we
3:09 pm
took to produce the decline in the unemployment rate and improvement in the labor market that we've achieved. so, if we were denied that tool, at the present time we would not be able to easily raise the level of short-term rates -- >> however, if i may interrupt you for a moment, are you saying that you are limited only to that action or do you have the authority to make some other decisions relative to what the interest rate you are paying to these big banks? you have some flexibility here? >> so, we would likely to regain effective control of short-term interest rates need to shrink our portfolio from its current large level back to the kinds of levels we had before the crisis. and we have set out over several
3:10 pm
years a plan for how we would normalize policy that relies not on selling long-term assets but on adjusting short-term interest rates. i believe that if we were to follow the plan of selling off long-term assets, it could prove very disruptive to the expansion. it's a strategy that i think could harm the economic recovery, and it certainly is not what we have set out to the public. we said we would shrink our balance sheet in a gradual and predictable way would not be disruptive -- >> may i interrupt you again. you are saying it was congress starting in 2006 who helped to design this approach and congress could if they decided to take it away as an approach that you would use, even though you do not think it would be helpful. >> i think it would be very
3:11 pm
disruptive to the economy. and i really -- i want to point out several things about this. first of all, although the banks are earning this interest on the excess -- on the reserves that they hold, as the level of short-term rates rises, first of all, on their wholesale funding that many of these banks rely on, they're also paying more to gain that funding. eventually this will be the mechanism that would lead as well to higher deposit rates to reward savers. and finally, i really want to emphasize that from the taxpayer's point of view, the federal reserve has transferred since 2008 through 2015 roughly $600 billion back to congress, to the taxpayers, to the treasury funds that have
3:12 pm
contributed importantly to financing the government. and that has only been possible because we have a larger stock of reserves on our -- in the banking system and correspondingly hold a far larger stock of interest-bearing assets that pay a larger amount. prior to the crisis, a typical -- a typical level of transfers from the fed to the treasury was in the order of $20 billion. for the past two years we've transferred $100 billion a year. >> thank you very much. we need to talk about this some more. i yield back the balance of my time. >> the chair now recognizes the gentleman from south carolina, mr. mulvaney, vice chair of the monetary and policy trade subcommittee. >> i thank the chairman. a quick follow-up on the chairmen's question. you mentioned that using the ioer and the rrp were
3:13 pm
traditional tools and other central banks had used them. have you ever used them? >> no. >> has the federal funds rate which i understand now is trading on the market at 30 basis points, ever been -- ever -- below the ioer which is now set at 50 basis points? >> has it is ever been below? >> yes, ma'am. >> it's -- since we set the -- when we were first given the power to pay interest on reserves, we set it at 25 basis points and the fed funds rate traded below it. and when we raised it to 50, the fed funds rate moved up by roughly 25 basis points. the amount of the increase in ioer but continues to trade below it. >> all right, so your testimony is that those are traditional tools. so, let's move, then, to a different discussion with that as a background. you have in the past been a proponent, though a reserved
3:14 pm
opponent, proponent of a rules-based system. back in 2012 you gave a speech that you said, quote, why shouldn't the fomc adopt such a rule against a guide post -- as a guidepost. the answer is that times are by no means normal now and the simple rules that perform well under ordinary circumstances just won't perform well. two years ago to this committee you said something similar. you said in response to a question about rules, you said the conditions facing the economy are extremely unusual. i've tried to argue and believe strongly while a taylor rule is or something like it provides a sensible approach in more normal times like the moderations under current situations it's not appropriate. so, that's your testimony at 2014. you gave a speech in 2012. here we are in 2016. you, by your own testimony, are using traditional tools of monetary policy. your written testimony begins by saying that the economy's made further progress towards a
3:15 pm
federal reserve's objective of maximum employment. you go on to say inflation is low in the near term but it will rise to its 2% objective over the medium term. are we in normal times? >> the economy is in many ways close to normal in the sense that the unemployment rate has declined to levels that most of my colleagues believe are consistent with full employment in the longer run. and inflation, while it's below 2%, i do think there's a good reason to think it will move up over time. and in that sense things are normal. but what is not normal is that the so-called neutral level of the federal funds rate that i referred to in my testimony and we discuss in the report is by no means normal.
3:16 pm
in other words, we have needed for seven years to hold the federal funds rate both in nominal and inflation or real terms, inflation adjusted or real terms, at exceptionally low levels to achieve growth averaging 2% or a little bit above. >> i'm sorry to interrupt but i do want -- >> in that sense it's not normal. the economy is being held back by headwinds. i would point out that a tenet of the taylor rule is that it takes -- it assumes and embodies in it an assumption that the equilibrium level of the feds funds rate with a 2% objective is 4% or that the real equilibrium federal funds rate is 2% and that simply isn't the case. >> madam chair, i'm surprisingly not pushing the taylor rule. i'm simply asking about a generu


info Stream Only

Uploaded by TV Archive on