Secretary Michael R. Pompeo With Paul W. Smith of The Paul W. Smith Show on WJR Detroit

Michael R. Pompeo, Secretary of State

Via Teleconference

QUESTION:  Secretary of State Mike Pompeo, good morning, sir.  It is an honor to have you on the Paul W. Smith Show in Detroit, Michigan.

SECRETARY POMPEO:  Paul, it’s great to be with you, sir.

QUESTION:  You know we’re right on the border with Canada and there are a lot of people who want to get over there where – I know that’s something that you’ve been working with Canada on in terms of restoring nonessential travel.  And unfortunately, we still are having our COVID-19 cases.  In fact, they’re kind of heating up again.

SECRETARY POMPEO:  Yeah.  Look, it’s important.  We’ve got to get America back going again.  And the Canadians want this, too.  We’re going to find a path forward – I am confident of that – before too long.  We see it in the great state of Michigan, we see it in states all along the Canadian border, we see it on our southern border as well.  We see it with country – with Europeans who want to come over and invest and create jobs in America as well.  We’re working to create a set of international protocols so that we can do the right thing, make sure people stay safe and healthy, but make sure also that people can do the things they need to do to take care of their families and their businesses.

QUESTION:  You’re in the heart of the automotive industry, and a lot of things have been done in China, and have been – we’ve depended on China for buying a lot of our product over the last several years.  What about travel to China?

SECRETARY POMPEO:  So the Chinese Communist Party presents a very unique challenge for the United States of America.  This is a nation that under the leadership of General Secretary Xi Jinping desires frankly to destroy our way of life, the very democracy that we depend on, all the things that the great people of Michigan care so deeply about.  And for a long time we’ve allowed them to do things that just treated us unfairly, right.  If a car manufacturer wants to operate there, it’s very different than when a Chinese company wants to come operate in the United States.  We just weren’t treated fairly.

And so what President Trump has tried to do, and he’s directed me to do, is create a set of reciprocal understandings where we’re treated fairly, we get the basic understanding that we’re not going to be cheated by them, we’re not going to have them steal the very intellectual property that our automotive industry depends upon.  We’ve made real progress; there’s still a long ways to go.  It’s been 40 years since a president’s been prepared to protect the American people, protect American industry.  We’re determined to do that.  We’ll get travel going again with the Chinese, but it’s the case that they have to respect America and treat people from Wisconsin and Michigan and Pennsylvania and my home state of Kansas in a way that is fair and reasonable.

QUESTION:  Well – and let’s face it, we’ve been letting China get away with stealing our intellectual property forever.  We forget that this is a government that participates openly in the counterfeiting of products, the – what we call the “knock-offs.”  I’ve been to China —

SECRETARY POMPEO:  Right.  (Laughter.)

QUESTION:  — a number of times for the auto shows, and it’s like astonishing that you see PING golf clubs, and then you realize PING had nothing to do with it.  Or you see a Chevrolet Camaro – they call it something else, but clearly they completely copied the Chevrolet Camaro, for example.

SECRETARY POMPEO:  I’m only chuckling – it’s not remotely funny – I’m chuckling because you describe a couple of brand names.  I could go through another 50, probably; you could too.

QUESTION:  I know.

SECRETARY POMPEO:  In the end, what – certainly that’s bad from a lot of perspectives, but the worst part about that is the millions of American jobs, the decrease in salaries and wages, that that’s foisted on the American people from what is hundreds of billions of dollars of stealing ideas and thoughts and the hard work of people of Michigan and the United States of America.  It’s unacceptable.

And Paul, for a long time, we said well, we can’t deal with this, they buy a lot of our stuff, or they ship us a lot of really cheap stuff and so we just can’t deal with it.  President Trump has said no, we’re going to deal with, we’re going to confront them.  We’re going to protect America and the American working-class citizens.  And we are hard at it.  We’ve made some progress.  The Chinese are now finding that we’re no longer going to turn the other cheek every time, and I am confident – it will take a while, Paul – but I’m confident we’ll get to a much better place.  And you’ll see American economic prosperity flow from that.

QUESTION:  I – listen, I agree with you.  I salute the President.  I salute you, Secretary of State Mike Pompeo, for doing that.  It’s about time somebody hold China accountable for these activities they’ve been getting away with forever.

Tell me what Clean 5G Networks are and how you’re promoting that effort.

SECRETARY POMPEO:  So this is another example of what we were just talking about, Paul.  So the Chinese Communist Party uses companies like Huawei and ZTE – they’re really – when the American people hear the word “company,” we think of private companies.  These are really state-owned enterprises, really the Chinese Government or they put these telecommunications systems in – they’re in places like in the Midwest – and they can get access to your kids’ data and what their face looks like and who their friends are.  That’s just unacceptable.

And so what we’ve done – we call it in the Clean 5G Network – is we’ve said look, information that belongs to the American people needs to stay on systems that are trusted, that we know, that we know aren’t going to end up in the hands of the Chinese Communist Party.  And so we are encouraging telecommunications providers, like those who operate in America, and those all around the world, to say please only put information on networks you understand and know and aren’t connected to the Chinese Communist Party.  And so we’ll designate them “clean,” and we’ll permit Americans to have their data on those systems.

It’s a security component to it; it’s a safety component to it.  There’s also a huge economic component to it as well.

QUESTION:  Mr. Secretary, I congratulate you and the President for the Middle East peace and the stability we have not seen maybe forever.  And the institutional media does not play it up or even talk about it the way they should because they don’t like this President.  But be that as it may, nobody can take away from the President and you what you’ve accomplished in the Middle East.

SECRETARY POMPEO:  Well, that’s kind.  What the President’s done has been important for citizens all across America.  I was a soldier once, a long time ago now.  We will have few American young men and women who have to go to the Middle East and fight because of the work that the United States has done under President Trump’s leadership.  We now have two countries who have accepted that Israel’s here to stay, that it’s the Jewish homeland.  They want to partner with it, not hate it.  We’ll find more countries that will want to do that as well.

It has flipped the traditional script.  The old story that – for eight years, President Obama said well, you can’t do anything until you solve the problem Israel and the Palestinians.  The truth is people in the Middle East and the Gulf States, they want peace too, and the Abraham Accords have now begun to deliver on that important promise.  It’ll save lives of America’s armed forces and our wonderful kids that go serve, and it will create less risk that a terror event that starts in the Middle East will come to our homeland.

QUESTION:  Mr. Secretary of State, I appreciate you staying a little extra, and very last question here.  For – you’re still in the service, you’re in the Army, so to speak.  Your general is a tough one.  And most recently, the quote was when he – we were talking about releasing those emails from Hillary Clinton, which should have been done a long time ago, but he’s doing it – quote, “They’re in the State Department, but Mike Pompeo has been unable to get them out, which is very sad.  Actually, I’m not happy about him for that reason.  He was unable to get them out.  I don’t know why.  You’re running the State Department, you get them out.”

I’ve got to imagine – and I’ve known – knew Donald Trump 30 years ago when I was at WABC in New York.  I haven’t talked to him lately, sadly, but he’s a very tough guy.  And he’s a very tough boss.  And are you able to go to him after he says something like this publicly and say look, boss, give me a break here, this is what I’m working on?

SECRETARY POMPEO:  (Laughter.)  I never ask for a break.  He’s a demanding boss.  I serve at his pleasure.  I – I’m working to deliver on the things that the American people voted for him and said he’s going to be the Commander-in-Chief.  And so my task in running the State Department is to deliver good outcomes for the American people at his direction.

And so we’ve talked about it.  There’s a whole handful of things I’m sure he’d say he didn’t think we did well enough, while there’s a whole handful of things I know I wish we had done better, too.  We continue to work on them, we strive for excellence every day, and we’re going to do – we’re going to do right by the American people.  We’ve done good things; there’s more work to do.  I hope we get the opportunity to do that.

QUESTION:  I hope you do, too.  Seventieth and current Secretary of State of the United States of America, Secretary of State Mike Pompeo.  Thank you, sir.

SECRETARY POMPEO:  Thank you, sir.  You have a good day.

QUESTION:  You do the same.

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    What GAO Found Traditional public schools were the most commonly available schooling option for military families near military installations, similar to schools available to U.S. families in general, according to GAO's analysis of Department of Education 2018-19 data. Over 90 percent of installations had at least one public schooling option nearby—such as a charter or magnet school—in addition to traditional public schools (see figure). Similar to U.S. schools in general, rural installations generally had fewer schooling options compared to their more highly populated urban counterparts. In addition, about one-half of the military installations GAO analyzed are in states that offer private school choice programs that provide eligible students with funding toward a non-public education. At least two of these states have private school choice programs specifically for military families. Public School Options within Average Commuting Distance of Military Installations, School Year 2018-19 Note: According to GAO's analysis of the Department of Transportation's 2017 National Household Travel Survey, the average commuting distance for rural and urban areas is 20 miles and 16 miles, respectively. For the purposes of this report, the term “military installations” refers to the 890 DOD installations and Coast Guard units included in GAO's analysis. Military families in GAO's review commonly reported considering housing options and school features when choosing schools for their children; however, they weighed these factors differently to meet their families' specific needs. For example, one reason parents said that they accepted a longer commute was to live in their preferred school district, while other parents said that they prioritized a shorter commute and increased family time over access to specific schools. Military families also reported considering academics, perceived safety, elective courses, and extracurricular activities. To inform their schooling decisions, most parents said that they rely heavily on their personal networks and social media. Why GAO Did This Study Approximately 650,000 military dependent children in the U.S. face various challenges that may affect their schooling, according to DOD. For example, these children transfer schools up to nine times, on average, before high school graduation. Military families frequently cite education issues for their children as a drawback to military service, according to DOD. GAO was asked to examine the schooling options available to school-age dependents of active-duty servicemembers. This report describes (1) available schooling options for school-age military dependent children in the U.S.; and (2) military families' views on factors they consider and resources they use when making schooling decisions. GAO analyzed data on federal education, military installation locations, and commuting patterns to examine schooling options near military installations. GAO also conducted six discussion groups with a total of 40 parents of school-age military dependent children; and interviewed officials at nine military installations that were selected to reflect a range of factors such as availability of different types of schooling options, rural or urban designation, and geographic region. In addition, GAO reviewed relevant federal laws and guidance, and interviewed officials from DOD, the Coast Guard, and representatives of national advocacy groups for military children. For more information, contact Jacqueline M. Nowicki at (617) 788-0580 or nowickij@gao.gov.
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  • Small Business Loans: SBA Generally Incorporated Key Elements for Estimating Subsidy Cost of 7(a) Program
    In U.S GAO News
    The Small Business Administration (SBA) develops its subsidy cost estimates for the 7(a) loan guarantee program—that is, estimates of the program's net long-term cost to the government—using a cash flow model. The model uses historical data, econometric equations, and macroeconomic projections to estimate cash flows—such as guarantee fees, SBA purchases of defaulted loans, and recoveries on those loans—for the loans SBA expects to guarantee in the next fiscal year. The net present value of the cash flows (value in current dollars) is the subsidy cost estimate. SBA generally incorporated key elements of subsidy cost estimation into its estimates for the 7(a) program for the fiscal year 2020 budget. Specifically, GAO found that SBA's estimation process was largely consistent with eight key elements GAO previously identified that help ensure subsidy estimates are supported, reliable, and reasonable. For example, SBA generally validated historical data, documented the cash flow model and key assumptions, analyzed the sensitivity of estimates to alternative assumptions, and had documented policies and procedures. SBA made changes in its estimation process that collectively increased the 7(a) program's subsidy cost to $99 million for fiscal year 2020 (a 0.33 percent subsidy rate when expressed as the cost per dollar of credit assistance) from $0 for fiscal year 2019 (0 percent subsidy rate). Some of these changes were routine updates to data and economic assumptions used in the cash flow model, while others were revisions to the estimation process. Additionally, some individual changes increased the subsidy costs, while others decreased it. Some of the changes that had the largest impact on the subsidy rate included the following: Incorporating the President's economic assumptions for fiscal year 2020 decreased the rate by 0.27 percentage points. Updating the basis for the size and composition of the loan cohort SBA expected to guarantee in fiscal year 2020 increased the rate by 0.21 percentage points. Revising the methodology for estimating purchase amounts for defaulted loans to better reflect the outstanding loan balance at the time of purchase increased the rate by 0.21 percentage points. The 7(a) program is SBA's largest loan guarantee program for small businesses, with about $95 billion in outstanding loan principal as of the end of fiscal year 2019. Federal agencies that provide credit assistance are generally required to estimate the net long-term cost to the government—known as the subsidy cost—for each annual cohort of loans. SBA initially estimated a zero subsidy cost for each cohort from fiscal years 2014 through 2019, but estimated that the fiscal year 2020 cohort would have a positive subsidy cost and require appropriations. GAO was asked to evaluate SBA's subsidy estimation process for the 7(a) program. This report examines (1) how SBA estimates 7(a) subsidy costs, (2) the extent to which SBA incorporated key elements of subsidy cost estimation into its estimation process for the fiscal year 2020 budget, and (3) the changes SBA made in its estimation process for the fiscal year 2020 budget. GAO reviewed SBA documentation on its estimation process, including information on SBA's cash flow model, and compared SBA's process to key elements that GAO previously identified ( GAO-16-269 ). GAO also interviewed officials from SBA, the Office of Management and Budget, and outside auditors and contractors that annually review SBA's process and model. For more information, contact William B. Shear at (202) 512-8678 or shearw@gao.gov.
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  • Lead Paint in Housing: HUD Has Not Identified High-Risk Project-Based Rental Assistance Properties
    In U.S GAO News
    During fiscal years 2018 and 2019, the Department of Housing and Urban Development (HUD) obligated about $421 million through two grant programs to state and local governments to help identify and control lead paint hazards in housing for low-income households. HUD also issued guidelines for evaluating and controlling lead paint hazards, generally encouraging abatement (such as replacing building components containing lead) as the preferred long-term solution. HUD has supported research on lead paint hazard control and provided education and outreach to public housing agencies, property owners, and the public through publications and training events. HUD monitors lead paint-related risks in its Project-Based Rental Assistance Program, one of HUD's three largest rental assistance programs, through management reviews and periodic physical inspections, but has not conducted a comprehensive risk assessment to identify properties posing the greatest risk to children under the age of 6. HUD's management reviews include assessing property owners' compliance with lead paint regulations—such as by reviewing lead disclosure forms, records of lead inspections, and plans to address lead paint hazards. Inspectors from HUD's Real Estate Assessment Center also assess the physical condition of properties, including identifying damaged paint that could indicate lead paint risks. According to HUD officials, they have not conducted risk assessments in project-based rental assistance housing because they believe the program has relatively few older and potentially riskier properties. However, GAO's analysis of HUD data found that 21 percent of project-based rental assistance properties have at least one building constructed before 1978 (when lead paint was banned in homes) and house over 138,000 children under the age of 6. If HUD used available program data to inform periodic risk assessments, HUD could identify which of the properties pose the greatest risk of exposure to lead paint hazards for children under the age of 6. Unless HUD develops a strategy for managing the risks associated with lead paint and lead paint hazards in project-based rental assistance housing, it may miss the opportunity to prevent children under the age of 6 from being inadvertently exposed to lead paint in those properties. Project-Based Rental Assistance Properties with at Least One Building Built before 1978 and That House Children under Age 6, as of December 31, 2019 Note: Children under the age of 6 are at the greatest risk of lead exposure because they have frequent hand-to-mouth contact, often crawl on the floor, and ingest nonfood items. Lead paint exposure in children under the age of 6 can cause brain damage, slowed development, and learning and behavioral problems. Exposure to lead paint hazards can cause serious harm to children under 6 years old. HUD is required by law to reduce the risk of lead paint hazards in HUD-assisted rental housing—including project-based rental assistance (subsidies to make privately owned multifamily properties affordable to low-income households). The 2019 Consolidated Appropriations Act Joint Explanatory Statement includes a provision for GAO to review, among other things, HUD's oversight of lead paint and related hazards in affordable rental housing. This report (1) describes how HUD programs and guidance address lead paint hazards in HUD-assisted and other low-income rental housing, and (2) examines HUD's oversight procedures for assessing risk for lead paint hazards in project-based rental assistance housing. GAO reviewed HUD and Environmental Protection Agency (EPA) lead paint regulations and documents on lead programs and methods for addressing lead paint hazards. GAO reviewed HUD oversight policies and procedures and analyzed HUD data on building and tenant age. GAO interviewed staff at HUD, EPA, and organizations that advocate for safe affordable housing. GAO recommends that HUD (1) conduct periodic risk assessments for the Project-Based Rental Assistance Program and (2) develop and implement plans to proactively manage identified lead paint risks. HUD agreed to conduct periodic risk assessments and develop and implement a plan to proactively manage risks. For more information, contact John H. Pendleton at (202) 512-8678 or pendletonj@gao.gov.
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  • Climate Change: USAID Is Taking Steps to Increase Projects’ Resilience, but Could Improve Reporting of Adaptation Funding
    In U.S GAO News
    The U.S. Agency for International Development (USAID) provided at least $810 million to directly and indirectly support climate adaptation from fiscal years 2014 through 2018—the latest available data at the time of GAO's analysis. However, USAID ended new funding for programming activities that directly address climate adaptation (i.e., direct funding) in fiscal year 2017 in part due to a shift in administration priorities, according to agency officials. However, following a congressional directive in the fiscal year 2020 appropriations act, USAID restored direct funding for adaptation programming. GAO found that USAID did not consistently report all funding data for activities that indirectly addressed climate adaptation, which does not align with expectations in foreign assistance guidance and internal controls standards. USAID's direct adaptation assistance had the primary program goal of enhancing resilience and reducing vulnerability. For example, in the Philippines, a USAID activity assisted communities in preparing for extreme weather events by developing maps of potential hazards to aid in evacuation planning. USAID attributed funding that indirectly addresses climate adaptation assistance (i.e., indirect funding) from programs with other goals such as agriculture, where priorities include supporting food production and distribution. For example, in Guatemala, a USAID agricultural activity worked with farmers to transition to crops with greater economic benefits that are also drought tolerant. However, not all missions with indirect adaptation assistance reported these funding data and reporting has varied, in part, because the agency has not clearly communicated the expectation to do so. Without addressing this issue, USAID risks providing incomplete and inconsistent data to Congress and others. A Community Leader Shows the Hazard Map Prepared as Part of a U.S. Agency for International Development Project to Help Adapt to Climate Change in the Philippines Since October 2016, USAID has generally required projects and activities to conduct climate risk management, which is the process of assessing and managing the effects of climate change. USAID requires documentation of this process and GAO's review found 95 percent compliance for USAID's priority countries for adaption funding. USAID has experienced some challenges with its initial implementation of climate risk management and is assessing these challenges and identifying improvements. For example, mission officials said that some technical staff lack expertise to do climate risk management and that their environment offices had a small number of staff to provide assistance. To help staff conduct climate risk management, USAID is building staff capacity through trainings and is in the process of evaluating implementation of the policy and whether it requires any changes, among other efforts. USAID is the primary U.S. government agency helping countries adapt to the effects of climate change. USAID has provided this assistance through activities that directly address climate adaptation as well as indirectly through activities that received funding for other purposes, such as agriculture, but which also support climate adaptation goals. GAO was asked to review issues related to U.S. foreign assistance for climate adaptation. For USAID, this report examines (1) funding the agency provided for climate adaptation assistance in fiscal years 2014 through 2018, and (2) how climate risk management is implemented. GAO analyzed funding data and documentation of agency activities and climate risk management; interviewed agency and project officials; and conducted fieldwork in three countries receiving adaptation assistance—Guatemala, the Philippines, and Uganda. GAO selected these countries based on the amount of funding they received for climate adaptation activities, geographic diversity, and variety of observed and projected climate effects, among other factors. GAO recommends that USAID communicate to its missions and bureaus that they are expected to report all data on funding that indirectly addresses climate adaptation. USAID agreed with the recommendation and outlined a number of steps the agency plans to take to improve the reporting of these data. For more information, contact David Gootnick at (202) 512-3149 or gootnickd@gao.gov.
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