Transcripts For CSPAN Politics Public Policy Today 20130208

Cartridge . He was involved in overseeing a number of these activities, yes, there was a relationship. Were they so concealed that the first attempt to find did not find them . Yes, the method used was one of the best we had ever encountered. So mr. Alawlaki is by not an american citizen by where anyone in america would be proud . He was part of al qaeda, and it was his determination to kill americans on behalf of al qaeda. Thank you. Is it true that in the last four years the fbi has arrested 100 people, either planning, conspiring, or trying to commit a terrorist attack on this nation . Yes, they have arrested a lot of people. That is because of good, sound intelligence. I think what people forget is that they will kill us if they can and it is extraordinarily difficult if you cannot get into where they were hiding. Would it have been possible to have arrested mr. Alawlaki where he was in the yemen . We work very closely with yemenis to see if we can arrest individuals. If we can, we want to do that because it is valuable for us. Any actions taken in concert with the Yemeni Government are done in terms of any types of strikes we might engage there with them, are done only because we do not have the ability to bring those individuals into custody. Thank you. My time is up. Senator chambliss . Thanks, madam chair. In 2002 what was your knowledge of interrogation videotapes about zebeda, and did you see any information about a review of them in 2002 . I do not have their recollection of that, senator. Of the tapes or that request . At the time in 2002, i did not know what my involvement or knowledge was at the time. I believe i was aware of the briefings being taped. It should be no surprise that many members have been dissatisfied with the administrations cooperation on the benghazi inquiries. Senator graham asked director clapper if he was aware of the attacks in the summer of 2012 and asked if he had informed the president about those attacks. Those seemed like reasonable questions, and dni said we would be given an answer. When we got an answer back from the dni, there was a notation next to this particular question that senator graham asked, and here is what it said per nss, no response required. Mr. Brennan, that is your shop. Do you have any knowledge about why senator grahams question was not to be answered . There is a longstanding tradition understanding of respecting the executive privilege that exists in the presidency in terms of what information is provided to the president or advice, counsel, to him. I would suspect that that question gets into this issue of the executive privilege which i think again has been a long standing tradition. Are you sure that is the answer or do you think . I do not understand, because that will not be a request coming to me. I understand, so my direction to you, at what i ask you, is that you review that. We will get you the and notation, if necessary. Secretary panetta told us it was detainee information that was key to them finding the courier and bin laden. Were you briefed by any of the analysts who tracked down bin laden . Before the operation . Yes. Yes, absolutely. Is that the information given to you, that it came from interrogation of detainees on whom eips had been used . I cannot recall. They talked about the chain of collection that took place related to the information coming from the detainees. Do you agree with secretary panettas comments . Senator, looking at this document from ssci, i do not know what the facts are. I really need to look at that carefully and see what cias response is. The report called into question whether any information was unique. Fair enough. The secretary comments are indirect you told me a couple days ago when we met that the study was not objective, and it was a prosecutors brief, written with an eye toward finding problems. You went on to say your withholding judgment until you read the response. My understanding is from what he said, that is what you are going to do. Suppose the cia takes a position and finds that the conclusions are wrong. I know john brennan well enough to note that you are quick to stand up and say what is on your mind and what ever you conclude. I am not want to ask you for response to that, but i know you will give us your thoughts and opinions about cias response to it and how we move forward with this. I will do that. Thank you very much. Senator wyden. I mean senator rockefeller. Thank you, madam chair. I just made a comment to the chair, mr. Brennan, that i have been through a whole lot of confirmation hearings in 28 years here, including quite a few cia directors. I quite honestly do not recall anybody who is more forthright, more direct, more accommodating without violating who you are, more open to the possibility of working with this committee in a way that will do two things one, that will give the folks at cia who probably constantly worry about what is the next awful thing that we are going to say about them, but that is not our intention because we are into the business of problem solving, and if we have a 26,000page document, it is not fun for us if we are trying to solve a problem. I have a feeling you understand that, you have a feeling that you feel the cia, if they felt they were working in with some contention with the Oversight Committee in the senate, but that the senate was involved, was informed, interested, that this would be something they would welcome. That there are a lot of people over at the cia who may be stuck in that midlife crisis, etc. , who are looking for an open, fresh, a strong leader. I happen to think you are that leader. I have felt that since our conversation. I felt that from before our conversation. And we have not had our secret meeting yet, so i am sure i am not going to change my mind. I think you have done an extraordinary job of patience, courtesy, and the only question you could not answer that i am aware of is who was it that took notes on the meeting that you had 20 years ago. But i find it in my heart to forgive you for that. To me, i think you are a terrific leader, and i will look forward to tuesday, i think you are the guy for the job and the only guy for the job. Thank you, senator, for your very kind words, and i have not lived up to them yet. It is a daunting task to go to cia. I want every member of this committee to be defender of the men and women of the cia, and i see it as my obligation to represent them to you on their behalf, so when times get tough and when people are going to be criticizing the cia, i have all of you to say you knew about what the cia were doing, and you will defend them. Thank you. Senator burr . I will be brief because i notice you are on your fourth glass of water and i do not want to be accused of waterboarding you. With the exception of our request for the president ial daily briefs around the time of benghazi, which there was executive privilege claim, do you know of any other claim of the state of privilege on the documents that this committee is waiting on now . I know there are requests for emails that might have taken place between the Intelligence Community and the white house, and so there are a number of elements that i think people are looking at. But none that executive privilege have been claimed on . I am not a position to say that, and i would defer to those individuals, the white house counsel, to make those determinations about what they want to they have not testified not producing those documents on its executive privilege. If they are brought to claim it, they need to claim it quick. On january 13 of this year, president obama signed into law the 2013 intelligence authorization act which requires notification of any disclosure of national intelligence. We have not received any notification of authorized disclosures. Have there been any authorized disclosures, to your knowledge . Since you have not received any notification, there have not been. Would you consider the information reported about the cameras and playback an authorized disclosure . I do not know which piece youre talking about. There has much discussion in the media and in the newspapers about this. I do not know specifically about any classified information. The fact that the Administration May be going through a process to institutionalize our processes and procedures in an of itself is not a classified issue. Those details that are classified, i do not know of any that came out in some of those reports. If there is classified information that is out there, and it was not authorized, was there a crime report filed relative to the play book . Presumably there was, senator. Those decisions as far as initiating investigations are done by those agencies that have stewardship of that information. In discussions with the department of justice, to make a determination whether or not unlike of the fact that maybe some many people have access to it, how they can proceed with criminal investigations. As we prepare for the closed hearing on monday on tuesday i will ask you today that you be prepared to provide for the committee any specific discussions that you have where you are authorized to reveal classified information or to talk about information on covert action, not something i would like to do today. The answer may be zero. If there are things tuesday, it would be an opportunity to provide. That was a question from a prehearing question that was unanswered. My last question is i am still not clear on whether you think the information from cia interrogations saves lives. Have you ever made a representation to a court, including a fisa court, but the type and importance of information learned from detainees . The first question, if i believe there was that information whether i was clear. All i am not clear at this time because i read a report that calls into question a lot of information that i was provided earlier on. When i was in the government as the head of National Counterterrorism center, i know that i had signed out a number of affirmations related to the continuation of certain programs based on the analysis and intelligence that was available. I do not know exactly what it was at the time, but we can look at that. But the committee can assume that you had faith if you make that claim to a court, you had faith in the documents and in the information that was supplied you to make that declaration . Absolutely. If i made such an affirmation, i would have faith that the information provided was an accurate representation. Thank you very much. Thank you, senator, very much. Thank you, senator. We have talked for several hours now about the question of targeted killings of americans, and you have heard it from a number of senators. I would like to get your reaction on one point in particular. That is this question, particularly in the concept you have given, that you have tried to focus on areas where the evidence is substantial, the threat is imminent, where there is a particularly persuasive case, that the targeted killing of americans is warranted. In that kind of case, do you believe that the president should provide an individual american with the opportunity to surrender before killing them . I have not spoken about any specific operations i am talking about the concept because you talk about the concept. Imminent threats, serious evidence, grave concern, and certainly words that strike, according to me, and that is why i would be interested in your thoughts weather in those kinds of instances the president ought to give, should give, individual americans the opportunity to surrender. Thats use the example of al qaeda, because if an american were to join al qaeda, we have said, openly, repeatedly, that we are at war with al qaeda. We have set out kind that is trying to kill americans, and that we will do Everything Possible to protect the lives of american citizens from these murderous attacks. We have signaled this worldwide. We repeatedly have said it openly. Any american he joins al qaeda will know full well that they have joined an authorization that is at war with the United States and has killed thousands upon thousands of individuals, many of whom were americans. In american who did that should know well that they in fact are part of an enemy against us and that the United States will do Everything Possible to destroy that enemy to save american lives. And i certainly, and i said this at the very beginning, i certainly want to be part of that effort to fight al qaeda on all of these key fronts. I just want to have some answers, and i will give you another chance, whether you think the president should give an individual american a chance to surrender . I think senator king talked about the idea, and i commend you for saying you are open to hearing about that. This is something that can be set in motion in a straightforward way as a general principle, and i am not talking about any one individual, and you have answered the question, and i will not go any further, unless you want to add anything to it. The other point i would say is we have covered a lot of ground today, and as far as im concerned, we have got a lot of ground still to cover. I have made it clear that we have got to see any and all of those legal opinions, once that a Bipartisan Group of senators asked for, before the vote at your credit you said you would take the message back to the white house. Because what it really goes to, mr. Brennan, is this question of checks and balances. And we probably did not use that word and off this afternoon, because i think that is really what this is all about. A constitution gives the president the significant power to protect our country, and dangerous times, unfettered power. It is power that is balanced through this special system that ensures a congressional oversight, and that is why these questions that i and others have tried to get at in terms of congressional oversight, being able to get all of the opinions that are relevant to the legal analysis for targeting americans, and then to learn more about how you are going to bring the public into the discussion. Certainly you have been patient this afternoon, and i want you to know we have covered a lot of ground, but i think we have a lot to go. Any member of al qaeda, a u. S. Citizen or not, needs to know they have the ability to surrender anytime, anywhere throughout the world, and they can do so before their organization is to strike. We will destroy that organization, and u. S. Citizens can surrender anytime. Just on that point, i do not take a back seat to anybody in terms of citing al qaeda. I asked you a different question, and on the question of what kind of evidence ought to be applied, whether there ought to be geographic limits, the question of whether an individual should be allowed to surrender. For example, there is a question of whether the obligation changes, a valid target has not been publicly reported, so there are issues here, and i think we are going to have to continue discussions, and, madam, i look forward to the extra round. Senator coats. I think it may be better held for further discussion next week in the classified room, but this whole idea of leaks, nothing upsets me more in this committee, and we have had a lot of these in the last few years, to see something that was discussed in classified areas, written up the next day in the newspapers or on the part of the media, and it drives some of us crazy. It does me, anyway. So maybe i am paranoid about all this and so forth. I cannot totally get my hands around this al qaeda in the Arabian Peninsula situation which we discussed earlier, but i will defer that until tuesday so we can discuss in more detail. That may just ask you one question here. You said i do not have the date the al qaeda core has been dissipated. We see this thing metastasizing now across Northern Africa and other parts. What is your latest assessment of al qaeda in terms of its control and operation of these smaller efforts that are popping up in different parts of the middle east and north africa . In the past i think the core asserted an amount of the influence over the franchises. It depends on our definition of the core and our ability to disrupt communication between them. Aqap, other elements, have developed as a result of the local environment. They are unique unto themselves. We need to make sure that we are able to work with the governments and Intelligence Service is so we can put pressure on them. And number of them have local agendas, and some of them have international agendas. Aqap in yemen has a effort underway to bring that government down, and the government has done a great job. There are other elements, narcotics smugglers, human traffickers, they involve kidnappings and ransoms, and are involved in terrorist attacks. We need to take into account what the informant is, who we can work with, how to put pressure on them, but any element associated with al qaeda has as part of its agenda death and destruction. I agree but we need to do is be mindful of this metastasization of the al qaeda cancer. In relationship to some kind of centralized control over all these things and having said that the core is decimated, it really varies. We see the al qaeda core exerting control over these elements. There is a lot of independence of effort come autonomous efforts that are underway, and i will be happy to talk and concession about the relationships that exist between al qaeda cores. Thank you very much, senator. Senator collins. Thank you, madam chairman. Mr. Brennan, i want to follow up on the point that senator coats just raised, because if you look at a map, back in 2001, you would see that al qaeda was mainly in afghanistan and pakistan. If you look at a map today, you would see al qaeda in all sorts of countries. That is not to say that there were not cells and other countries back in 2001, but it raises the question in my mind of whether, even though we have been successful in taking out some of the core of al qaeda and some highlevel leaders, whether our strategy is working. If the cancer of al qaeda it is metastasizing, do we need a new treatment . What we have tried to do over the past decade and longer is to be able to treat this real cancer in a number of ways. Sometimes it takes lethal force, military might, working with our partners in a variety of ways, addressing some of the infrastructural institutional and other disease that exist in these countries that al qaeda takes advantage of. If you look at the geographic map from south asia the middle east and north africa, there has been tremendous political turbulence in that area over the past decade, and particularly in the last couple years. There are a lot of uncovered spaces that outcry has taken advantage of. We have made progress in some areas. Somalia is in fact a good example of a place where we have worked with neighboring countries, local government, with a multilateral element in africa, to try to supress them. It is not just a kinetic solution. As we look at the sahel, this is an area where al qaeda can put down roots beyond the reaches of government. They have done this and it has been unattended because of the difficulties these countries have feeding their people. It is but al qaeda and the force of islamic extremists that have preferred it are making some real concern. That is why looking at syria and what is going on in that country, we cannot allow vast areas to be exported by al qaeda in these areas because it will be to our peril. I certainly agree with you on that, and in our testified hearing next week i will ask you about syria and also the iranian threat. I do not think those are appropriate in open session. Just two final questions one has to do with priories that you have said. In recent years paramilitary operations had consumed a lot of resources, expertise, time, energy, and efforts at the cia. Do you believe this has been at the expense of traditional cia responsibility collection, analysis . There have been opportunity costs because of the dedication of those resources. I would inventory our resources so they are being dedicated against a wide variety of Strategic Priorities to protect our country. In terms of operational collection activities worldwide, the analysis being done, what are we doing in these other areas . Cyber are so many different areas. There is an intersection between counterterrorism and these other areas. International organized crime. We want to optimize this resources so we can leverage capabilities we have to deal with these challenging issues across a very large globe. Mr. Brennan, you have devoted a great deal of your life to Public Service, for which i thank you. And you obviously understand the world of intelligence in a way that few people do. You have been an intelligence professional for much of your professional life. In the last four years, you have held a political position at the white house. And i have been talking to people at the cia, whom i respect, and one intelligence official told me that a key question for the men and women of the cia is which john brennan are they going to get. Are they going to get john brennan who has been the right hand adviser of president obama in a political white house, and, by the nature of the position, i do not say that critically. That is the position. Or are they going to get john brennan who was a career cia officer, who worked his way up in the ranks . And the concern is that they want to hear that you are going to be the cias representative to the white house, not the white houses representative to the cia. I want to give you the opportunity today to respond to that concern. I would note that i also heard a very good comments from people with whom i talked, but i think it is in accordance it is important that you are going to be the leader of the agency and not the white houses agent within the agency. Thank you, senator. If i were to be honored to go out to cia, the cia would get the john brennan who is neither a democrat nor republican, nor has ever been. The john brennan who has a deep appreciation, respect in the intelligence profession, one who has been fortunate to have lived in 25 years, a john brennan who has had the Great Fortune to be in the white house the past four years watching an understanding how intelligence is used in support of our National Security. Cia would get a john brennan view has been working National Security issues for my life, and would get a john brennan who understands that the value of intelligence, the importance of this intelligence is not to tell the president what he wants to hear, not to tell this committee what he wants to hear, to tell the policy makers, the congressional overseers what they need to hear. But the Intelligence Committee with all its expertise has been able to uncover and understand about world events that fundamentally affect the lives of not just this generation of americans, but of future generations of americans. If i had the great privilege to lead the cia, it would be the biggest honor of my life, and i would understand just how important and we keep that would be. If i ever dishonored that responsibility, i cannot look at myself in the mirror. I could not look my family in the mirror. I could not look you in the face, and that is something that is important, so the proof will be in the pudding, and if i have that opportunity, it would be my intention to make sure i did Everything Possible to live up to the trust, confidence, that this congress, this senate, and this president might place in me. Thank you very much. Thank you, madam chairman. That you very much. If there are no further questions, john, i would like to associate myself with what senator rockefeller said. I have sat through a number of these hearings. I do not think i have ever heard anyone more forthright or more honest or more direct. You really did not hedge. You said what you thought. I want you to know that that is very much appreciated. I actually think you are going to be a fine and strong leader for the cia. I cannot help but say i am really fully supportive of this and will do everything i can possibly to make sure this Committee Works with you, closely and honestly. We will have a classified hearing. I am specifically going to just warn you that i would like to talk or have you respond in detail to what i perceive as a difficult, the evolving situation in north africa, now with tunisia, with libya, with all these countries, and certainly with mali, and how you plan to direct the agency to deal with this devolving momentum that is taking place in Northern Africa. So that will be for tuesday, and at the request of senator levin, i ask for unanimous consent to add into the record a joint statement that he and i made on april 27, 2012, and, secondly, in order to have mr. Brennans answers to questions for the record by the time he returns before us in closed session, i ask members provide questions fear for the record by 5 00 p. M. Tomorrow. That is friday, february 8, so we have them for you as soon as possible. Hot so you can respond to them tuesday. I want to thank you and your family for being here. And i wish you well. Thank you, and the hearing is adjourned. Taking madam chairman. Thank you madam chairman. [captions Copyright National cable satellite corp. 2013] [captioning performed by National Captioning Institute] now live coverage as we go to the state department with the new secretary of state john kerry will speak and hold a joint press conference with canadas the minister of Foreign Affairs, john baird. According to a spokesman, the two are expected to address a range of topics, and we should hear from both secretary kerry of Foreign Affairs minister of canada that in just a moment. More live coverage at 3 45, a farewell ceremony for outgoing defense secretary leon panetta. That it will be held at fort myer, virginia, and will include remarks from president obama and general martin dempsey. He said he will step down from his post once his successor is confirmed. For the time being, waiting here as secretary of state john kerry and the Canadian Foreign minister take the podiums. We are here at the state department waiting for secretary of state john kerry and the canadian Foreign Affairs minister john baird to hold their joint press conference. They have been meeting here, and talking about various issues, including the keystone xl will pipeline going from canada through the United States. Got a little behind schedule. We will have more live coverage this afternoon at 3 45 as defense secretary leon panetta has a farewell ceremony attended by the president and also the joint chiefs of staff chairman, and we will bring that to you at 3 caught 45. While we wait for secretary kerry to appear, which the canadian of Foreign Affairs minister, we will look at a program from earlier which deals with the troubled asset relief program, and we will bring you back to this department as soon as they arrive. What is your role . Guest we are the watchdog over the bailout. When congress made the bailout, they wanted a very independent watchdog, so first and foremost we are Law Enforcement agency, so we investigate crime related to the bailout, but also the dollars, and we try to bring transparency and pre oversight to this. That is what we are doing, being the watchdog. Christie romero being the and specter general which came out with a report that looks at executive pay for the companies that took bail out dollars. Here are headlines. The Washington Post says other headlines, tarp vdo watchdob rips access to pay we will now go back to the state department. Been a good afternoon. It is my great pleasure to welcome foreign minister john baird here to this department. He was one of the first calls i made after i officially came into the building and started and was sworn in, and he is my first guest as foreign minister. I hope everybody understands this is meant to underscore the strength of the relationship we have, and we are grateful for it. Not agree on the toughest issues. We begin with hockey. I played a little bit, and since i am a bruins fan, we have clashed in many ways. He, from ottawa, as a fan of the senators, and i want you to know it is the first time i ever heard talk well of senators. [laughter] i am grateful for it. Today was the first of what i know will be many very productive sessions, and the reason for that is that canada and the United States share the same values. We have a history and heritage and our people that is unbelievably connected. We have the same entrepreneurial spirit. We have the same core beliefs that everybody ought to be able to find their place in life to do better. We also share Something Else that is important 1 trillion of bilateral trade relationships. That is hugely important to both of our countries, to our economies, and to our citizens. Canada is one of the largest, investmentehensive relationships we have in the world that supports millions of jobs in the United States, and today the foreign minister and i agreed to try to discuss ways that we can grow that and even make it stronger, and there are ways to do that. Our border with canada happily is not a barrier. It is really a 5000milelong connection between us, and it is a central part of the daily pulse of our relationship. Today we talked about progress beyond our border. An initiative in which Prime Minister harper and president obama announced last year, and we are approving our corporation now and keeping our nation secure against threats without unnecessary burdens at the border, to the degree we can facilitate. We want to do that. We talked about our Dynamic Energy relationship. Can a that is the largest Foreign Energy supplier for the United States of america, and many people in america are not aware of that. Many people think of the mideast and other part of the world, canada is our largest supplier, and our shared network of electrical grids keep energy flowing both ways across the border. As we move forward to meet the needs of the secure, Clean Energy Future on the shared continent, we will continue to build on our foundation of cooperation. Our neighbor to the north is also one of our most able, global partners. On issue after issue, whether cooperation with nato, to promote security, stability around the board, or our efforts to mitigate Climate Change to International Climate negotiations, the Major Economies forum, the climate and clean air coalition, all our joint work to advance human rights to the osce the organization of american states, and every one of these efforts, canada and United States are united for progress. We also discussed our common efforts on iran. The p5 plus 1 partners are unified, and were committed to preventing iran from securing a nuclear weapon. We will continue our dualtrack policy of both pressure and engagement. I want to underscore to iran, the window for diplomacy is still open, and we have agreed to meet iran again in two weeks in kazakhstan. We have made our position clear the choice is really ultimately up to iran. The International Community is ready to respond if iran comes prepared to talk real substance and to address the concerns which could not be more clear about their nuclear program. If they do not, then they will choose to leave themselves more isolated. That is that choice. I would like to think the foreign minister for canadas leadership on all the global challenges we face together, in conflict zones like syria and mali. Canada has stepped up, and can the that is helping our humanitarian response. In our own hemisphere, canada is a strong advocate for strengthening democracy and the rule of law throughout central america, the caribbean, and i look forward to working with the minister is a partner on regional issues that affect the americas, including lead to this year when we will meet with the foreign minister of mexico to decide ways as to how all of north america, which we talked about, can actually work effectively together. With all the issues on a crowded agenda, i am pleased to be able to say that canada and the United States stand shoulder to shoulder and Work Together as partners, as allies, and as trusted friends. And i look forward to our corporation, mr. Baird. The key for making me your first visit today. I appreciate it, and i look forward to discovering Innovative New ways in which we can do even more and do better. Thank you. Thank you. Thank you very much, mr. Secretary, a great privilege and honor to be your first foreign minister to visit you here at the state department. Taking for the priority and the confidence you place in the relationship with canada. That is tremendously important. He led states has been phenomenal friend, and i think that leaders in the governments have accomplished a great deal. Obviously for us the number one priority continues to be job creation, Economic Growth, and i appreciate the opportunity to talk about a wide range of issues that we seek to tackle, to help encourage job creation and Economic Growth on books sides of the border. The Detroit River International Crossing is an accord priority for canada, and we have been pleased with corp. We have received in washington and in lansing, michigan, and we look forward to getting this huge drop Creation Initiative moving forward in the months and years ahead. We are we had a good discussion and exchange on energy policy. The keystone xl pipeline is a huge priority for our government, and for the canadian economy, and i appreciated the ogue we had. President obama and Prime Minister harper both assumed a 17 reduction in emissis as part of the copenhagen accord and that continues to be a priority with canada on our plan to save coal generated electricity generation. I appreciated the opportunity to discuss other issues involving security. I share canada shares the huge concern with nuclear erin perspective. We need that to be beyond irans support upper terrorism, their human rights record, the threat of a nuclear iran is the biggest threat to pieces and security, and i appreciated your strong comments on this. I share the view that a diplomatic solution is possible. We support the p5 plus one initiative. We support sanctions against the iranian regime. We want them to change course and rejoin the International Community. We had a good discussion as well with respect to syria, and i think concern of all of civilized humanity, the terror horrors going on and the huge challenge and problem of chemical weapons. I appreciate the chance to talk about human rights and our strong commitment to working to support and defend freedom around the world. The fight against International Terrorism is the great struggle of our generation, and we are strong and solid partners with the United States. [speaking in french] thank you again for your time and your leadership. Thank you, sir. [indiscernible] we will start with cnns gary, thank you. The vast majority of top Security Officials in the Previous Administration supported army circassian the rebels. Were you briefed about this plan when you were in the senate, and what do you think about the plan proved the you think is time to start army the rebels . You think the mixed messages coming from iran, the foreign minister, and the president have said they would be open to talks with iran. The foreign minister had some nice, its to say about you, but the Supreme Leader said direct talks are not possible. Do you think there are prospects for a deal, and the you have a plan to move this forward . That was three questions. 1 one does not equal two. B well done, i am impressed. [indiscernible] i beg your pardon . I am taking stock every day. Next time i will ask you to ask have a question. Let me answer that. The first part of your question, let me say that i do not know what the discussions were in the white house and who said what, and i will not go backwards. This is a new administration now. I am a new secretary of state and we are Going Forward from this point. My sense right now is that everybody in the administration and people in other parts of the world are deeply distressed by the continued violence in syria. There is too much killing, too much violence, and we obviously want to find a way forward. There are serious questions about aqi coming in and other violent groups on the ground. It is a very complicated and very dangerous situation. Everybody understands it is a place that has chemical weapons, and were deeply concerned about that. I would just say to you that we are evaluating. We are violating now. Were taking a look at what steps if any diplomatic, particularly might be able to be taken in an effort to try to reduce that violence and deal with the situation. When we are prepared to tell you, you will be the first to know. We will let you know. We will evaluate this as we go for. I knew the foreign minister and i talked about this at length, at length, and we both share a deep concern about what is happening there. I am going to focus on it quite considerably. On iran, we are deeply concerned about the arms that went into yemen. I think the yemenis need to speak to that first, before we do, but i want to emphasize the announcement the iranians themselves have made in a letter to the iaea in which they have announced a different kind of centrifuge is concerned. It is concerning. It is disturbing. My plea to the iranians or my statement is a clear statement. We are prepared to let diplomacy be the victor in this confrontation over their nuclear program. The president has made it clear that iran is prepared to talk about a Peaceful Nuclear program. Iran has a choice. They have to prove to the world that it is peaceful, and we are prepared to sit reasonably and negotiate how they can do that and how we can all be satisfied with respect to the United Nations requirements in the effort to do that. Or they can choose to be more isolated, as i said earlier. It is really their choice, not ours, as to which way they want to go. The administration, the president has made it clear that his preference is to have a diplomatic solution, but if he cannot get there, he is prepared to do whatever is necessary to make certain that iran does not have a nuclear weapon. Hi, there. Congratulations, senator kerry, and welcome. One have question keystone. President obama made a point of emphasizing the need to confront Climate Change. Does that bode badly for keystone . And a quick one about concerns over obligations that canadians have been involved in the last couple of recent terror attacks. With respect to the keystone, secretary clinton has put in place a very open and transparent process, which i am committed to seeing through. I can guarantee you that it will be fair and transparent, accountable, and we hope that we will be able to be in a position to make an announcement in the near term. I do not want to pin down precisely when, but i assure you, in the near term. I will not go into the merits of it here today. I take great respect, as i did in my comments earlier, to the Important Energy relationship with canada and the importance of the overall relationship, but we have a legitimate process that is under way, and i intend to honor that. We had a good discussion with respect to keystone. We appreciated the secretarys comments at his confirmation hearings. We spoke about making decisions based on science and based on fact. Obviously, when it comes to the environment, i think we have lightminded objectives. Mr. Harper and mr. Obama have both set a 7 reduction in emissions. We have worked together on reducing emissions in cars and trucks. Canada is aggressively moving forward on our plan to ban and phase out dirty coalfired electricity, and i think we all share the need for a growing economy to create jobs. We share the desire on Energy Security in north america, and we also share the objective of protecting our environment for future generations, and those will be areas where we will continue to Work Together. [speaking french] merci. Thank you very much. Thank you very, very much. We appreciate it. Appreciate it. Thank you. [captioning performed by National Captioning Institute] [captions Copyright National cable satellite corp. 2013] well have more live coverage ahead on cspan at 3 45 p. M. Eastern time, a farewell ceremony for the outgoing secretary of defense, leon panetta. That will be from fort myer, virginia. President obama will be there to make remarks. Secretary panetta has said he will leave his post once his successor is confirmed in the senate. Again, live coverage of his farewell ceremony expected in about 45 minutes 3 45 eastern time here on cspan. Tuesday night, president obama will deliver his fourth state of the Union Address to a joint session of congress. Our coverage will start at 8 00 p. M. Eastern and include the speech at 9 00 followed by the republican response from florida senator marco rubio as well as your comments. Again, tuesday beginning at 8 00 p. M. Eastern on cspan, cspan radio, and cspan. Org. Earlier today, the chamber of commerce hosted a Quarterly Economic briefing, asking a panel of economists what they want to hear from the president during his state of the union speech. Here is a brief look at a portion of their meeting. We have a stated the union coming up next week. What, in your area, would you wish for . What would surprise you . What do you expect . I will start with bob in the middle, and we will work to the extremes. Boy, that would be the chamber has been a great partner with us on this issue, but one of the things trucking has been struggling with is we are not investing enough in our infrastructure. That is Good Government spending. It creates jobs and productivity in the long run. You actually have an industry how Many Industries can do this you have an industry that says, please fax me more. Please tax me more. We have gotten so desperate in this area that we are talking about, perhaps because we cannot make a policy decision on this and have not since the early 1990s on the federal level, maybe we need to go to indexing of the fuel tax. You are talking like infrastructure, not to pay for subsidies, right . What we need is more infrastructure, and that is a public good, and it needs to be paid for, and generally with tax revenues. I do not think anybody is faulting that. I think it is sold that we need higher fuel tax, and we can use that either to reduce the deficit or to pay for Something Else. It was designed or intended whether it has done so successfully or not, it was done to pay for infrastructure. Absolutely. We are not real happy about that. John, what are you hoping for next week . For some reason, i have not been consulted on that. The president in the Campaign Said he was 4 and all of the above energy policy, so lets have some announcements that support that he was for an all of the above energy policy. Lets move forward with the things that you need to do to accomplish that policy. I would say that we would also i would like to see stop this discussion about taxing the industry and trying to characterize it as subsidies, which is simply not true, and i would like to see more opportunities in terms of where we can open up areas that are offlimits right now. All those combined can generate an enormous amount of opportunity for the economy right when we need it. I will just mention a couple of things. I think lenders have been really concerned about the implementation of new rules that affect the lending and Housing Market. To the extent that we can get more clarity and certainty as to what the framework will be like Going Forward, i think lenders can take advantage of some of that flexibility once they know what the rules are in extending credit. The other thing i mentioned is not a particularly sexy topic, but i think it is an important one Financial Literacy for young people, and trying to reach out to the industry to come up with a way to really promote Financial Literacy and education before college level, getting into high schools so that we have an educated group of young folks who come out and understand about the importance of having a financial house in order, the importance of having a good credit history, the understanding what it means to be smart about using credit. You can watch that entire conversation with the chamber of commerce this afternoon right after the farewell ceremony for secretary of defense leon panetta, which is expected to start at about 3 45 p. M. Eastern, and next tuesday night, president obama delivering his fourth state of the Union Address to a joint session of congress. It includes the president s speech at 9 00 and the republican response from florida senator marco rubio. That will be on cspan, cspan radio, and cspan. Org first Lady Helen Taft on discussing politics. I always had the satisfaction of knowing almost as much as he about the politics and intricacies of any situation. I think any woman can discuss with her husband topics of national interest. I became familiar with more than politics. It involve real statesmanship. Helen taft, whose husband William Howard taft, was the only man to serve as president and Supreme Court chief justice. She is one of the women who served as first lady in cspans no original series, first ladies influence and image. Produced with the White House Historical association, season one begins president s day, february 18, at 9 00 p. M. Eastern and pacific on cspan, cspan radio, and cspan. Org. Al jazeera has a new u. S. Based news channel. We will take a look at its history and mission from todays washington journal. Host good morning and thank you for being here. Al jazeera is expanding its coverage. Give us a sense of who can see it right now in the u. S. Guest we believe it is 4. 5 Million People who can see us on various Cable Networks in some of the largest cities and in some smaller independent operators in smaller cities. A good part of the traffic has been people who stream it online, and that is a pretty dedicated following. In fact, with the very large online content, a good percentage of that comes from the United States. There is an appetite, clearly. How much of that will translate to a cable channel again where some of these folks are dedicated online streamers is a challenge, but we hope we can provide interesting and freshen up content and have some people cross over. Host how will the recent purchase expand the american audience . Who will you be able to reach now . Guest it is an estimated 50 million viewers. Obviously it is a great leap forward and a great deal. One of the things we fought for years was distribution in the americas. This just opens some eyeballs to us, and we hope it will give people a chance to see our coverage, to sample it for those who have not seen it, and again, provide a platform for the core audience we already have. Host it is a 24hour Global News Network carried in places like new york city, washington, d. C. , and other places like vermont, rhode island, ohio, and some programs are carried on live tv. They carry a couple of items you do. 95 million visits to the website in 20 million. It will be available in 40 million more homes. Why expand the reach. What is the mission of reaching more americans . It is part of a Global Expansion anyway. We have a turkish channel, a balkan channel. Theres plans for a swahili channel and an additional channel after this. I think it was determined years ago and i was not there at the time that there was an absence of coverage of large segments of the population of the world. It was also felt that a large segment of the population was underserved or did not trust their broadcasters in the countries they were. We do have research that shows that an astonishingly high number of viewers in africa get their news from us because they do not trust their staterun newscasts as much, so it is an alternative. We have 70 bureaus around the world of various sizes, but it gives a breadth of coverage to report from places where other people are not. Just the other day we are in mali with all of what is just the other day we are in mali with all of what is going there, and they were planning a soccer match with nigeria. We had backtoback reports from mali and nigeria and who else has that . It is astonishing. Host bob wheelock is executive producer of the americas for Al Jazeera English and helping to establish the new Al Jazeera America channel to launch in july of 2013 . Guest we hope so. Ambitious. We made a lot of progress but a lot to do. Host if you would like to get in the conversation host how well Al Jazeera America differ from al jazeera arabic . Guest Al Jazeera English is drastically different. Al Jazeera America as a base line, looking at 60 domestic content and 40 international. Any given day depending on the news flow, we are not going to stick to that as a hard and fast thing. But that is the overall content. What it allows us the expansion also gives us more resources in the United States. We have five bureaus in the United States right now, four in latin america. We will increase it to 11 overall in the United States and one in toronto. A total of eight in latin america, is the plan. Obviously it allows us more breadth of coverage, trying to place the bureaus strategically. One of the biggest frustrations for me is sometimes the stories we cant do in america because the resources are stretched thin. So, we are looking forward to covering more stories about the people of america, their day today lives, the things theyre going through, and in many cases, the solutions that have come up with to try to make the lives better and to try to overcome some of obstacles they face every day. Be it health care, the economy, education. Americans are incredibly resourceful people and i think it is probably the best the melting pot of stories that we can hope to fish from. Host lets watch an excerpt from Al Jazeera English coverage of the boy scouts of america debate right now over whether or not members and leaders, openly gay members and leaders, should be allowed. Heres how Al Jazeera English cover that. [video clip] being a boy scout is a tradition passed down for generations here of the United States, but policies here in the u. S. Contrasts sharply to international counterparts. For example, homosexuals are not restricted from membership in canada or even most european associations. Even the u. S. Girls scouts have a different policy, accepting gay and transgendered members into their association. The boys scouts of america have almost 3 million members, and 70 of the troops are sponsored by Church Groups who oppose homosexuality. In 2000, the u. S. Supreme court ruled the group has a constitutional right to refuse a members. It is a policy many parents want of help. Upheld. It is not hate, not bigotry. It is a choice about how to raise my children and what i perceive to be my christian values. On sunday, president obama weighed in, urging the group to open its membership to everyone. Of the boy scouts are unwilling to lift the ban. They simply will not be relevant to a generation decided to embrace lgbt brothers, sisters, coworkers, friends. For now, the ban remains in place. Scout leaders say they need more time to consider and consult before deciding whether to overturn this centuryold policy. Al jazeera, washington. Host that is an excerpt from Al Jazeera English, one of the news programs. Bob wheelock, what is the lens or voice your journalistic approach your stories with . Guest it is not different from any other broadcaster, i dont think. We look for the truth. We look to tell the story for the people and to give people a voice. We will go out and search and try to find simple characters, often, to drive the story, to try to give it something that you can invest in as a viewer. But, you know, assembly and on the story like that it is a news story of the day so it is barely cut and dry. We make a great effort to get all voices in. And then tried to leave the viewer here is the information, what people are saying. You decide. It is not for us to tell people how they should feel either way. We tried to present it and let them have some information from which they can make an intelligent decision about how they feel about a decision like that. Host michael from centreville, of virginia. Democrats line. Caller you just mentioned that the lens you approach your coverage with is a search for the truth. I am afraid to say is my experience with you is a little bit different. I am american from egyptian origin. I was listening to your coverage of the egyptian revolution two years ago. My experience was very discouraging, to say the least. Your coverage of the event was inaccurate. You exaggerated the numbers of people on the streets when the events were actually to your liking. And he played down the numbers of the youth of the streets when the coverage of the events was not very much to your liking. I do want to ask you if you have any affiliation with the government of qatar, because as far as i remember, the egyptian youth who actually led the revolution did not like your coverage of it and kicked your journalists off of the streets when you attempted to cover the event. The military Supreme Council who led egypt for two years but not like you and the almost kick you out of the country. So, do you really think your extension and the u. S. Would be different . Host where did you get your facts from . Where if you found information that was contradictory . Host where are you getting your fax . Caller i was in complete contact with my friend during the revolution. [inaudible] host are starting to break up. Guest far as the relationship with the government of qatar, the royal family owns the channel. As far as any relationship, i have had, i have never met anyone from qatar and i have never said i have to do a story is certain way. I have had no editorial interference at all from anyone. In regards to our coverage, it won numerous awards around of the world and many other networks took our coverage and broadcast it. There were millions of people on the streets and millions of points of view. You say we were kicked out of the country and forced to leave the country by the government but i would say that says that maybe they did not like our coverage because they felt we were providing too much coverage of the revolution and the people. There is a myth that we have a great relationship with every middle eastern government but a few of them dont care for us. We seek the truth. We talk to the people in the streets and hear from protesters and put people in great harm to cover that. We lost a cameraman a week ago in syria who was killed on duty. We do seek the truth. Most of the time i think we get it right but there is a Million People on the street and you will get a few diverse opinions. I appreciate yours. Host bob wheelock is with aljazeera english. Prior to that, he was a 25year veteran of abc news, a d. C. Based senior producer. He also worked at nbc news a while ago, 19891991, a senior producer for the today show. Lets go back to the phones from alexandria, republican caller. Caller good morning, i have a couple of comments to make. The first point aljazeera journalists in iraq in 2004 2005 were identified and found out to be directly aiding and abetting a annamese of u. S. Forces on the ground and directly contributed by spotting and targeting american sources for the enemy directly leading to the death of american troops in iraq. I think that is something that the listeners of the show should be aware of. I read the aljazeera website consistently. I think the news is different but the editorial portions are so strongly antiamerican. Of these articles are talking about the downfall of america and the strength of america. Last week, when president obama announced an increase in aiding and humanitarian aid to syrian civilians in the refugee camps in southern turkey, Aljazeera Randy article how america by not giving weapons to the Free Syrian Army was actually in directly assisting extremists like alqaeda that would be fighting their leading in directly to an extremist result. Maybe you can comment it is my opinion that you are a voice for the other side and your not an independent newschannel and it is strongly antiamerican and it leads to a pretty entire american sentiment. I have very good friends to speak arabic and they would tell you about the entire american debate that goes there and the support of ideas that is anti american just does not stop. Host before we let you go, you said you will still go to the website for new stories. Do you find those to be fair . Caller they do post stuff on africa and the east asia but these are not things you would hear about in your normal newschannel and the u. S. I look at it with a big grain of salt. I was present when aljazeera was on board and they were covering one of the things we were doing now. Doing there. I think they were doing their best but when you get to the editorials, you have some unbelievably radical Opinion Column nests and radical editorials that are leading to the coverage of your news. I think it is harmful. I would question was your motivation is and where your personal loyalty lies. Let host give him a chance to respond. Guest as to the last point first i am an american and was born here in washington, d. C. At the air force base and my father was military. I have no doubts about my respect for this country and for what it stands for. On your assertion that aljazeera crews were helping spot and harm americans, that allegation has been made and has never been substantiated. I did a call in show a couple of weeks ago and a gentleman who was in iraq at the time and was assigned to handling the media, he brought that up when asked by me and another panelist not from aljazeera if he had ever seen anything like that. He admitted that he had just heard it. There are a lot of things that have been set said that took place that have never been proven to be true. The aljazeera office in iraq was bombed. Maybe it was a coincidence, i dont know. The editorials are that they are editorials and i cannot vouch for them or a test to them. We produced news content from the United States. I am proud of that. It is not pro or anti but we try to be editorial collect at correct and not politically correct. Sometimes people will not agree. It is important to move that needle. I think you have failed to institute any thinking about these issues or start discussion. I take umbrage at to question in my role and my patriotism. If you can cite specifics and the time and date, i will try to find it. These are charges mostly by people who have never watched of the channel. Host this is a story from the guardian. It talks about the jobs that you are hiring for. And it says it follows middle eastern broadcasters 500 deal to buy al gores Cable Network earlier this year. It apparently plans to double headcount. We talked of us some of the numbers and employees. Who will be the faces and names and voices . Guest the search is beginning for the new faces of aljazeera. There was over 11,000 revs amazed resumes the other day so it is interesting. Clearly, there is interest in working for the channel. We hope to find journalists who are respected and known for their journalism. We would like them to have some identity and recognition with american viewers and that will help. We want them to be known for the right reasons, good journalism, a good credibility, and not so much for their personality or their celebrity. Host here are some facts host here are some facts the purchase of current tv happened at the tail end of last year. There is a planned launch of the Jazeera America. Some more details about the network it reaches over 260 million homes in over 130 countries and Staff Members include over 400 journalists in 70 bureaus around the world. This is from twitter sad that most American News outlets have eliminated their foreign news correspondents on the ground. Are you bucking a trend . Guest we are and it is a trend of conventional wisdom. I have worked at American Networks for almost 30 years and i was a London Bureau chief and worked there for abc. They did cut back. Covering International News is expensive. They will provide to the picture and not the context or actual reporting. You can take that picture and voice over so feels international or in washington. Weve got boots on the ground, people in mali, nigeria, people in bangladesh. It is not everyones cup of tea. I dont believe every american cant wake up and say what is happening in mali today but many people are not happy with what they are getting from American Television News Networks and they have broader interests. The web site traffic indicates the last year or even admitted he gets some news on aljazeera that he does not get from other places. That is our audience. Host brooklyn, new york, democrats online. Caller good morning, i am looking forward to aljazeera english this is what i am expecting from aljazeera in english once in awhile it would be nice if you talked about the truth of 9 11 why architects and engineers have asked for a new investigation. Why wouldnt the Government Support a 9 11 investigation . Host this is from twitter sandy writes in and ask about the sale by al gore of al jazeera. Tell us tell us about that sale. Guest it Means Nothing for me personally. For the network, is an opportunity. We were trying several different ways to get exposure and distribution in the United States. Al gore launched of this channel and it was not doing well with ratings. Peter de approach them or we approach or they approached us and it became available. We have to come up with a whole new channel so it is a lot of work and a lot of risk and a lot of people make a big deal out of the cost that was paid for the purchase of the channel. I dont have the numbers totally correct but i believe when fox had false starts and trying to get distribution, i think they paid 1 billion to get their distribution. It is a big stakes money game and we wanted to have distribution in the United States and felt there is an audience. The investment was made. Host our next caller is from oregon, republican. Caller thanks for taking my call. I have watched your show on link tv and i feel you are very slanteyed. I am very concerned about the stuff going on in our country with the Muslim Community and i feel your outrage will be toward the Muslim Community. I am very concerned about one group in oregon. I am surprised to see that you are here in america because we would not be allowed to do what you are doing in a Moslem Community or another country. I am concerned of what i see and i know you probably have accolades from obama because i feel he is backing more of the Moslem Community than he is the American People. Host lets talk about these concerns. Guest again, in our reporting, in the content we provide, there is no antijewish sentiment. Our reporters are americans, canadians, one or two folks from the united kingdom. We strive here in america to provide fair, objective coverage. I think we do a really good job of it and if you watch what is aljazeera english and watch the content coming from the United States, i think you would agree. I would disagree that a moslem countries you cannot have american broadcasts. It is not censored or filter. There may have been a time years ago when that was the case but that is certainly not the case now. Again, i have never been told that i cannot do a story that i have to shake up the story is certainly or use terminology or phrase in that is not comfortable. On any day, there is editorial questions over how story should play and how high up it should go but that is in the newsroom of every newspaper, television, and news from in the country. Host oakland, maryland, welcome. Caller thanks for taking my call. I became a current year were about one year ago and i have gotten into it. I am concerned that now that you have lots of channels, what will happen bill press the morning and your other regulars . I appreciate their point of view and i hope there are enough slots instead of all the programming where you will put new programming but you need to keep some commentary. Have you decided these things yet to . Guest we are working out the grid. It is a huge challenge for obvious programming reasons and facilities and that kind of thing. Regarding the folks, i have met personally with a number of this stuff and my colleagues have met with the staff on the west coast. They have some terrific people and we are hoping to integrate as many as possible. We want to use them in aljazeera and i must say, the response has been overwhelming from them about wanting to join and believing what the journal is meant to be. Hopefully, who knows . You may see some familiarity and you may not lose everything from the current situation. Host bob wheelock is the executive producer for alJazeera Americas end of the new channel will launch this summer. His work has won four emmys, a dupont, and a peabody award and went to college right here at George Washington university. John, west chester, pa. , independent line. Caller i am not surprised i think aljazeera is a breath of fresh air in america. I hope you even out the bias from channels like msnbc and fox. Host have you watched aljazeera english . Yes, i watch all the time on youtube. I watch a parade much every night. They have good programs like inside syria. I think it gives a different perspective on the middle east which we dont find in america of at least not regularly. Guest thank you, john. Part of what we want to do at alJazeera America is to provide the same sort prism and a look at the United States. We have a show called inside story america. We just completed a threepart done special which is not an original idea but bush but the first show had to hear from people who feel better it is their right to own guns and lets hear from them and say why. I told us that we dont do this year is if we cannot start from that. We are say we say we are the voice of the voices and i personally think gun owners too many people are speaking on their behalf saying what they should think. We want to hear from them so we got into a gun show and a gun store. It is less easy when you are aljazeera but the folks welcomed us and and the feedback was tremendous. I am really proud of the job step did because the first show was all about those people of this country, intelligently describing why they feel they should or need to own firearms. It is not something i have heard a lot of other channel and i think that is what we need to do. I use the phrase editorially correct, not politically correct. this is a voice and this is a country where the voices are supposed to be heard. That is what this channel is supposed to be about and that is what we hope to accomplish. Host from twitter what does al jazeera mean in english or is it just a name . Guest a little symbol is about the peninsula. It is the peninsula in the persian gulf and the middle east. There are some people who said you should drop aljazeera from the name. We dont want to run and we dont want to pretend we are some that we are not. It is aljazeera geared toward coverage of the United States of america. It is aljazeera to cover the issues of the people in america. We did another call in show and i was touched because we got a call from a listener in louisiana, a fisherman. He cited our continuous coverage of the bp oil spill. We did a threepart series showing scientifically the effects of the fish and wildlife. There was also the Economic Impact and he said you guys have stayed on this story and thank you. You guys continue to press on this story. All the other networks show up when katrina heads and they go away again. We have a commitment to stay on the story. We did it in haiti we did with the oil spill and the tent intend to do it across america. Host how much access to your journalists have now and will they have . Guest we have access. We have people who have passes to get in but not enough. We tend to not Cover Congress on a daily basis for the white house on a daily basis. We try to cover it when the issue that we think is important enough with the american channel, is focused more on american content, we will increase that. We like to be the outside looking in a little bit and question it. As a longtime washington journalist, there is a tendency to become part of a new cover. We find it refreshing to be a little bit outside. I think the programming will demand more and comprehensive coverage from washington, d. C. Host annapolis, maryland, republican line comingreciate aljazeera to america myself. I find that al gore has made a big step in what has been considered a media issue based on his philosophy. Ronaldhe 1980s when reagan release date fcc rules and Many Television stations merged into the five you see today. I think we need to have a clear understanding when Brian Williams says this station is owned by ge before a story that people understand what he says that. They do have an agenda based on their ownership. Host thank you. Guest i would agree. I worked at nbc and ive worked at abc when disney took over. The influence was never as harsh or severe as anyone on the outside would assume. There are very few independent news organizations. Most of them are tied to some corporate ownership and some are tied to governmentor run things and funded by governments and taxpayers. Bbc is one and it does not mean you do not do good journalism. We still hire people we have 11,000 people or so applying for jobs. These are not people that we know of in the Job Description it does not say you need and it tended to be anti anything. These are people who want to work and tell stories in a different way in america. We think there is an opening for that and market Research Shows that. Our challenge will be to get those viewers and tried to bring them into our tent. We always say that if you watch us, you like us. Most of the complaints about the coverage on the telecom from people who have never watched the channel. Host one of our earlier callers talked about the relationship to the qatar government. Is there a plan to be self sufficient financially . Guest we have to run commercials to broadcast in the United States. We run very few on the aljazeera english channel. Most of them are for various airlines that a middle east related. As a producer, you welcome commercials occasionally which gives you a chance to figure out where you are going next. We are probably one of the few airbirds that has tried to negotiate the air minutes we have to run. We are not dependent on the revenue from the commercials. Any money that is made will go into the pot for the coverage. Aljazeera spends its money on coverage and being able to have a caller 70 bureaus around the world and provide the cost of the trouble to cover stories in places where other people are not. The commercial time, weve got to work it out in our programming and it is a little bit of a challenge on our long form documentary program and we have to reedit some of these things and make it seem as with commercial inserts. For the first time, because of the relationship with cable distribution, we need to meet some expectations for ratings. Aljazeera has had the luxury of not caring about ratings or revenue. It is almost like programming for yourself sometimes. Now there will be a bar we need to reach for cable distributors. We think we will be able to do that and we hope we can. We think if we get one or two shows going really well and people see them and they say they like that, we will build the audience. Host grand rapids, mich. , democrats line, welcome. Caller i would like to make a comment i would like to tell all the americans out there, dont be afraid of getting more news. For example, a few weeks ago, i kind of watched my local news and i usually watch nbc and then aljazeera english here in grand rapids which is on our Public Access tv station. Like those three women that were murdered in france by the extremist side of moslems, they did not talk about that for a couple of days on the regular news. To me, that was an important story worldwide. They needed to let us know there are people out there trying to stop people from doing the right thing and, with aljazeera, i get that story. I did not get it anywhere else. We need to look at aljazeera as another piece of the news puzzle so we get the full story of how the world works. I would also like to say it is kind of ironic that al gore made his money selling his tv station. Just wanted to make that comment, thank you. Guest i think you said it well dont fear the news or information. That is what we operate on. You cited a good example of coverage that might not be popular to some in the middle east world but of a story we did and we had to do. It is an event that took place and we needed to give it context and there is interest in these stories. Host new york, independent line. Caller morning, that caller got my ideas down. You have done a good job of presenting the program. I dont have it right now but i am not happy with the mainstream news programs. I watch rt america and spanish and i enjoy their international coverage. I will be getting on my Cable Company to see what i have to do to get aljazeera. You have done a good job this morning. Host here is one last tweet here is a story from New York Times the media distributor. Guest time warner had intentions to drop tv because of its low ratings. They are now are being aced s to replace it with alJazeera America. Theres nothing to see yet. They have watched aljazeera english coverage and the negotiations have been under way. I also live in brooklyn, channel 92 on time warner carries aljazeera. It is on as we speak in new york. Ultimately, i hope they will carry it. It is an important carrier that presents a wide variety of channels and news and the spectrum for is people and we would like to be part of that. We dont think there is any reason we should not be. Host bob wheelock is executive producer for the americas and this started trying to establish the new alJazeera America channel. [captioning performed by National Captioning Institute] [captions Copyright National cable satellite corp. 2013] he farewell ceremony for leon panetta. He will leave his post once his successor is confirmed in the senate. While we wait for secretary panetta, the u. S. Chamber of commerce held its Quarterly Economic briefing. They talked about automatic spending cuts set to take place next month. Here is a look at some of his comments. The worst aspect of sequestration is not the overall cut. We know we need to trim spending and cut or change the trajectory of our spending Going Forward, predominantly entitlement spending. Without that, i do not think we will ever get our budget under control. We will be downgraded by the other ratings agencies. We will start to see Interest Rate increases and the people who hold our debt around the world less interested in holding it. All of those will affect the u. S. Economy. When i look at sequestration, i do not look at the cuts per se as impacting the economy. They are not going to help growth in the short term. They have offsetting factors that mitigates the negative. The problem with sequestration is the way the cuts will take place. What we tell our congressmen and since these when we send them to washington that is why we send them congressmen and senators when we send them here, we send them here to spend money. We provide we expect the federal government to provide public goods, roads, education, National Defense. We send them here to spend. We know that in order to pay for those goods, we will have to tax. That is what they are here to do, to spend and to tax. We hope they prioritize. We hope they look out there and say, what do i need to do first . How much do i need to do . And only do that. Sequestration flies in the face of the reason for sending them here. It obviates the need and legislates against prioritization. We tell them, go out and lob everything the same. Whether it is a Division Budget or a Company Budget knows the ball game. We all had a little bit here and a little bit to their. There. We know that if we get cut, we will cut that one first. That is stupid. What we should do is figure out a way to prioritize these cuts. That was the job of the Super Committee. There was an agreement made a yearandahalf ago that he would get a debt ceiling increase and there would be a 1. 20 trillion cut. The Super Committee was supposed to put it together. They were supposed to prioritize. They were selects members of the congress who were supposed to prioritize. They did not do it. Know when they might not do it, Congress Said we will put something in here that is so draconian and so stupid that nobody would let it happen. Lo and behold, that is what we are dealing with. That is a sad state of affairs from the political process, a very sad state of affairs. Now we come back and say, what should we do with sequestration . The president talks about cows balance and fairness. Talks about balance and fairness. There was 4 in spending for every 1 in tax increases. As we went along, the discussion shifted. As election prospects rose and fell, the balance suddenly became 2 to 1. After the election, the talk was 1 to 1. After we saw the deal done, it was zero spending cuts for the tax increases. Now we are hearing negative to 1. The president wants to counsel because that for already made in the future. Was to count the cuts that were already made in the future. We are going to replace those cuts with more tax increases. By the way, john, thanks for stepping up. They are all aimed at oil and gas extraction industries. This is not good public policy. We would like to see some prioritization. Should we do away with the cuts . That is not a good thing. We have not established a sustainable fiscal policy. We still have a policy that even under the most optimistic Economic Forecast starts to turn up and the debt ri to gdp ratio starts to go up. There are virtually no increases in Interest Rates for the next two or three years even though growth picks up. Even beyond that, modest increases in Interest Rates. Every percentage point increase in Interest Rates as about one and to 60 billion to the debt. That quickly stars to cause an increase in spiral. I worked as cbo and we used to worry about deficit to gdp ratios of 5. 5 . That is the range where they start to spiral out of control. We have not seen anything remotely close to a deficit to gdp ratio of 6 in the last four years. By the way, even under the best assumptions of cbo, we are looking at another two to three years old the last three years before we get down to the five two to three years before we get down to the 5. 5 . The Defense Industry will be impacted more than others. We have to make a decision as to how we want that to play out. We do not have that discussion. I do not the cuts are so large that if they were instituted, if congress were to pick and priorities be a corporate cuts that they would lead to a downturn. The forecast that cbo came out with when we talk about the fiscal cliff said it we will lose 500 billion or more and sequestration funding and increase taxes if you did nothing. Of that, 5 billion, that would cause a mild recession on the order of 0. 5 of gdp. If you look at moodys forecast for cbs. Now we talk about a sequestration that is 1 5 of that. We have seen tax increases that were another fifth of that, so were looking where we have Something Like 40 of that. I do not see a recession coming because of that. In many cases cbo reverts to a static approach, you do not look at what is happening in housing, which could be what is better than many of us think is happening. , we are not looking at the Energy Sector which has done well and which could expand as well and do better under the next few quarters as it did over the past year. I do not take it is pushing us back into recession, and if we prioritized other cuts, it would set the stage for doing even more of that down the road. That is part of the chamber of commerce conversation, and you can watch part of that after ceremony for s defense secretary leon panetta. President obama and a trip chiefs of staff chairman also expected to make their remarks here. And remain standing as honors are rendered. Taking his position on the reviewing stand is the reviewing official for to thes ceremony, the hon. Leon panetta, secretary of defense, accompanied by the host and cohosts, the president of the United States, barack h obama, and the chairman of the joint chiefs of staff, general martin dempsey. [hail to the chief plays] [stars and stripes forever plays] please be seated. [applause] review. [yankee doodle plays] ladies and gentleman, please stand for the playing of the United States national anthem. Present arms. Present arms. [the starspangled banner p lays] please be seated. [indiscernible] tlemen, nd gen general dempsey. [applause] mr. President , secretary and mrs. Panetta, ambassadors, members of congress, men and women of the armed forces of the United States, especially our Wounded Warrior some and cannot forget bravo. I was hoping bravo would be out there for the inspector of troops, but apparently a local jeremy thought differently. It is an honor to be here for this event. Were here to show our profound respect and thanks to secretary panetta. I recall play tempest and nice metaphor, and i like to think of you as the prospero of Public Service. The secretary has used his arts to imbue a sense of Public Service in generations of the men and women. And like that knowledge will do, he now asks us to let our indulgences set him free. Secretary panetta could not have served so well at the fatefully without the indictable and untiring support of his family. And so we up we thank you for your Selfless Service that have made your husbands contributions possible. [applause] it is clear secretary panetta has mastered the balance of service and self. Last week a clip of you was played of you from 1989, and you have barely changed. I am sure your mediterranean diet as help, olive oil for your skin, garlic for your heart, and red wine for Everything Else. He speaks often of your italian heritage, and it is no secret mother wanted you to be a concert pianist. So is fitting on this day in history in 1908 survey rachmaninoff premiere of his symphony number two in st. Petersburg, russia. A runoff was a technical pianist. History records in rarely missed a note despite the enormous complexity of his compositions. But you chose to use your hands to orchestrate other kinds of efforts. You worked both ends up on paddling avenue. He and soviet advocated an instructive for the purity of Public Service. Then the nation called again and you answered again. So for the past four years you have led those in the intelligence and defense communities, those trusted with protecting our nation and our families. You have led the fight for the proper amount of resources. You balance the threat of external attack with the threat of internal and insolvency. You once said diversity in america is as old as this nation itself. You did more than just speak about it. You took action. You have insured our forces will be able to draw upon the very best this nation has to offer. You have overseen the fielding of Nuclear Capabilities to meet the threats of tomorrow, and you have demonstrated that steadfast commitment to families and troops wherever they are in the world. Youre many trips to afghanistan dedicate that only too well. Tonight when i depart for the winter snows of afghanistan, i will carry your support to those troops and i will think about you and the potential that at some point in the future you will enjoy that warm california sun. I have been thinking a lot about what you will do about after you give up their public surface. You talked about wanting to write a book. It could ashley be a tom clancy novel. Here is some advice get it cleared first trip i can only imagine that you might be influenced by fellow changeless monterey notable, john steinbeck. He described in detail that critique life of immigrants, from farm workers in california. In that little time i have had in the last few days i have thought of alternative titles for your parable about the individual and the institution. So here goes. Instead of east of eden, a nurse could be east of the potomac. Or instead of the grapes of wrath, i would humbly suggest the nuts of you will recall that is latin for boredom. You could convert one of those bestsellers into a movie. I hear james kennel feeney is available to play you again as he did. Tony sopranos giffords was pauli walnuts. Gandolphini had to wear a wig, he captured your service. For those five decades you have never yielded to cynicism, you have always believed in the goodness of governing well. Your character and competence have set the example. In 2009 he told the graduating class of maryland to go forward knowing you are greater than the challenges of your time. You have made our nation safer. You have made our men in uniform and women stronger. And you have prepared us to meet the challenges ahead in our time and in the future. For that, you have earned our eternal esteem. These and gentlemen, it is my great honor to introduce our commander in chief, president barack obama. [applause] thank you. Please be seated. In the years between the world wars, a young married couple in italy packed up what few belongings that they had and boardedx a boat for a new world. They pass under the statute of liberty, and went through the lines of ellis island. Carmelo and Carmelita Panetta had no money and spoke little english. But they had a dream of a better life. They worked hard. They went west to california. They started a family and taught their sons that if they studied and worked, if they gave back to this country that they too could shell in a creek share in america pause, street today we pay tribute to their son, leon panetta, a man who has not simply lived up to the american dream, but has helped to protect it, for all of us. Leon, our presence here today, members of congress, deputy secretary carter, general betsy, and members of the joint chiefs, service secretaries, and the men and women of the greatest military that the world has ever known, all this is a reflection of our personal appreciation to you and the gratitude of a nation that you have helped keep strong and free. By the time i can office leon panetta and was regarded as one of our finest public servants. With an extraordinary career across more than four decades. He and soviet have settled into the good life. Theyre beautiful monterey, the beloved walnut farm, and leon will deny it, but i hear he was growing restless, he wanted less time on the tractor, more time in the office. Last time in california, more time in washington. Interacting with the west wing and members of congress. Who would not . [laughter] so we gave him his wish. Leon, i will always be grateful that you agreed to return to Public Service, and, sylvia, i am so grateful that you put up with him. Your leadership of the cia will forever be remembered for the blows that we struck against al qaeda and perhaps the greatest intelligence success in american history, delivering justice to osama bin laden. [applause] by then, leon had every right to expect that he could return home, and i admit that when we first asked him to lead the pentagon, his answer was simple no. But i kept asking him. I am persistent. That is how michelle married me. I just kept at it, and it is a testament to his patriotism, to his sense of duty, that leon agreed to serve on this one last tour. Perhaps it was the memory of his parents and opening their homes up to gis added to the pacific, perhaps leon served himself, a young lieutenant in the army. Perhaps it was the experience of watching his youngest son deployed to afghanistan. What we do know is this as our nationss 23rd secretary of defense and every action beyond panetta has taken, every decision he has made has been with one goal in mind taking care of our sons and our daughters in uniform and keeping america safe. Just think of the progress under his watch. Because we ended the war in iraq, winding down the war in afghanistan, our troops are coming home, and next year our war in afghanistan will come to an end. We have put the core of al qaeda on the path to defeat. We have been relentless against its affiliates. Because we have a sacred obligation to our troops to take care of them like they have taken care of us, we are approve it true we are improving treatment of warriors, setting up support of families, and helping our newest veterans transition to civilian life, and that includes jobs are veterans need as we do nationbuilding at home. Because we believe in opportunity for all americans, the tenure of secretary leon panetta, the son of immigrants, the first generation american, will be remembered for historic progress in welcoming more of our fellow citizens to military service. For the formal and final repeal of dont ask dont tell. For opening combat roles to our incredible women in uniform. In short, for making our military and our nation that much stronger. Because we forged a new Defense Strategy, we will be better prepared for the future. Better prepared to meet the threats that we face, without a larger military footprints, better prepared against cyber attacks, better prepared to advance our interests in the asiapacific region, and after more than a decade of war, better prepared for the broadest range of contingencies. Keeping us prepared will be the mission of my nominee to be the next secretary of defense, a combat veteran with the experience, judgment, and vision our troops dessert, chuck hagel. And since we are now just weeks away from the automatic cuts to federal spending, including defense, let me say this there is no reason, no reason for that to happen, putting our fiscal house in order calls for a balanced approach, not massive indiscriminate cuts that could have a severe impact on our military preparedness. So here today for the sake of our prosperity, for the sake of all these men and women in uniform, and all their brothers and sisters in uniform that they represent, now is the time to act, for democrats and republicans to come together in the same spirit that leon panetta always brought to Public Service, solving problems, not trying to score points, doing right for the country, not for any particular political agenda. Sustaining our economic recovery, balancing budgets, leon knows something about it, but also maintaining the finest military in history. Leon, this too will be part of your legacy, for no one has raised their voices firmly or as forcefully on behalf of our trips as you have. You have served with integrity and decency, and grace. You are a reminder of what Public Service ought to be carried you have lead with heart and you have lead with humor. Indeed, they say that you have never seen our Wounded Warriors smile as wide or heard them laugh as loud as when they get a visit from their secretary of defense. Whenever the challenge, leon, you always give it to us straight. Sometimes in words that cannot be repeated in public. [laughter] today, we want to make sure to thank soviet and the entire Panetta Family for sharing their husband, and their grandfather, with the rest of us. For sharing bravo come the first dog of the pentagon. Sylvia, leon bus service has been your sacrifice and we promised this time he really is coming home. Leon, from your first day in uniform until today, your dedicated service to america has spanned nearly 50 remarkable years. As you review these fine troops one last time, as you return home and walkoff your farm, know that the grant arc of your life speaks to our larger american story, where you can say with confidence and pride that you have fulfilled the hopes that brought carmelo and Carmelita Panetta to these shores all those years ago. You made them proud. You have helped keep alive the american dream. For not only your children and grandchildren, but for all about children and grandchildren. And for that we will be truly grateful. Leon, as your parents would say, grazie. God bless you, and god bless the United States of america. Ladies and gentlemen, our secretary of defense, leon panetta. [applause] thank you very much. Mr. President , i am deeply touched by your moving words, about me, about my family, more importantly about the men and women who serve in the department of defense. All of us are truly honored by your presence, and i think you. Let me also take this moment to thank Michelle Jill biden for the outstanding work they have done in leading the joining forces initiative, which has provided great support for military families who have done so much for us. Marty dempsey, i appreciate your kind remarks. Marty and i have testified before congress. Is the 11th time yesterday that we have done that. And we have also done tend press conferences together. We are developing a very convincing case for collecting hazard pay in these jobs. [laughter] as we used to say when i was in the army, there is not anyone i would rather be in the foxhole with and marty dempsey. I cannot tell you what a privilege it has been to work with you and to work with all of the service chiefs. We have dealt with some very tough issues, and there is no way, no way that i could have done this job without your support, without your loyalty, and without your dedication. Members of congress, leaders of the administration, leaders of the department of defense, distinguished guests, many dear friends who we have known over the years, sylvia and i are very thankful to all of you for coming here today. This is without question the fanciest sendoff i have ever gotten in washington. [laughter] let me remember the words of president harry truman, who once said if you want a friend in washington, get a dog. And that is just what they did. And i am grateful that bravo is here today. Bravo was in all of the meetings when we plant the bin laden operation, and he also set in in many sensitive meetings and discussions i had in the pentagon. I want you to know that he has never told a seoul what he heard. [laughter] he is definitely not a lee kerr, leaker, at least according to that definition of the word. [laughter] you have heard of the movie 0 tarp 30. The producer is considering a sequel called zero bark 30. Has been 50 years of Public Service, and i will and always cherished the deep and lasting friendships that i have made in washington. Had i am extremely grateful that so many of those friends could be here this afternoon. I have spent a long time in this town. As the son of immigrants, as the president pointed out, i have truly lived the american dream. Being an italianamerican, in contrast, at senior levels in the executive branch has been for me a very unique experience. I have never lost my awe by the side of the sight of the capitol and the white house at night. It is still a very special experience. I remember when i was first elected to the house of representatives, there was a member that the president may recall, by the name of frank, from chicago, who came up to me and said, panetta, that is an italian. I said, yes it is. He said, good. He said i wanted you to join the italian caucus. Of course i was not going to say no to an italian from chicago. [laughter] he said it great. He said we do not do much on issues, but we eat good. [laughter] and that was true. Many years later, when i came to langley as president obamas director of central intelligence, i got a mug from my family with a big cia the last inning for california italian american. In all seriousness, mr. President , i want to express my deepest thanks to you for the opportunity to serve this country again as a member of your administration. It has been a tremendous honor and privilege these past four years. And especially now as the 23rd secretary of defense. I hope that in some small way i have helped to fulfil the dream of my parents, the dream that they wanted, and a dream that all of us want, of giving our children a better life. It has been for me a hell of a ride. I will never forget the pride and exhilaration when i walked out of the white house after the president announced the success of the bin laden operation, and i could hear the chants of those people who were gathered around the white house and in Lafayette Park yelling, usa, usa. Thank you, mr. President , for your strong support, and what was a very tough decision. The memory of that operation and the team that helped put it together, both the Intelligence Team and the military team, will be with me forever. I will remember traveling to combat theaters and bases around the world, looking into the eyes of brave men and women who are putting their lives on the line every day for this country. I will remember the moments when we have honored veterans of past wars, and when we have been inspired by Service Members and Wounded Warriors returning from todays wars. And i will always remember the moments of grief, when it this nation is rendered has rendered fallen honors to Fallen Heroes and when we have had to comfort their families. And condolences to those families who have lost loved ones has been for me my toughest job. These moments of selflessness, these moments of sacrifice, of oism give me ar was a renewed sense of pride in our country and gives me a sense of optimism for the future. I have witnessed a new generation of americans, ask themselves, what they could do for their country. And i have seen a profound difference that talented men and women with a sense of duty and sacrifice can make in the life of this nation and in the life of our world. For more than a decade of war, our democracy as dependent on the men and women of the United States military to bear the awesome burden and to preserve our freedom. They have done everything the nation asked them to do and more, and i will have no greater honor in my life than to have been able to lead them as secretary of defense. I learned a long time ago that there is not much you can accomplish in washington on your own. You need a team behind you. And at the department of defense, i have been blessed with an exceptional team, from senior civilian and military leaders all the way down to the chain of command, and together i am proud of the important achievements we have been able to accomplish for the nation. We developed and we have begun implementing a new Defense Strategy for the 21st century. This protects the Strongest Military power in the world and meet our responsibility to fiscal discipline. We are bringing, as the president said, more than a decade of war tour responsible and, ending the war in iraq, giving the iraqi people a chance to secure and govern themselves. And in afghanistan, our campaign is well on track to completing that mission. We are committed to an enduring relationship with the Afghan People so they too can govern and to cure themselves in the future. We have kept pressure on al qaeda and are going after extremists wherever they may hide. And we have shown the world, we have shown the world that nobody attacks United States of america and gets away with it. [applause] we are keeping faith, keeping faith with and caring for our returning veterans and Wounded Warriors. I am particularly proud that we have expanded opportunities for every one to serve and our military, in a democracy, and in a democracy, everybody should be given a chance to meet the qualifications needed to serve this country. It is a basic value that we fight to protect. Despite the progress we have made together, theres no question that there remain some very significant challenges, dangerous, and instabilities abroad, budget constraints, political gridlock here at home, but one thing i have learned is that you cannot you cannot be involved in Public Service and not be optimistic about the future. I am confident that under the leadership of the president , and the leaders of the congress, that we can and must stay on the right path to build the military force we need for the 21st century. Rote,on churchill once we the future is unknowable, but the past should give us hope. This is a time of uncertainty, but my career in Public Service gives me hope that the leaders of this nation will come together to resolve the challenges facing this country and to seize the opportunities for the 21st century. We have overcome wars, we have overcome disasters, which have to overcome economic depressions and recessions, we have overcome crises of every kind drop the history of our country, and throughout our history, the fighting spirit of our fellow americans has made clear that we never, never, never give up. Our forefathers, pioneers, the immigrant families that came here all fought together to give our children that better life. We cannot fail to do the same. None of us in Public Service, none of us in Public Service could carry on that fight without the love and support of our families. Everything i have been able to accomplish in my life, in my life, life and live together, has been because of the support of my family. My immigrant parents, my family, my sons, their families, but most of all sylvia. We have been married 50 years. She has endured, extended absences and long hours that come with Public Service. But she has always been there, and i will never be able to thank her and of for her constant love and support. Herbert valentine gift is both of us her valentine gift is both of us going home together. [applause] it has been the honor of my life to have served in the position of secretary of defense, and wherever i go, whenever i do, i will thank god every day for the men and women in this country who are willing to put their lives on the line for all of us. They have responded to the call of the people, with courage of the bugel, with courage and with selfless dedication to the country. My prayer as i leave is that we all have the same courage and dedication to protecting our nation, the United States of america, the home of the free and the brave. God bless america, god bless you, and got less than men and women in the department of defense. [applause] armed guard, pass review. Forward march. [applause] 80s and gentlemen, please stand ladies and gentleman, please stand for the departure. [applause] defense secretary panetta saying he will step down from his post once his successor is confirmed. He said earlier this week his service as defense secretary was the greatest honor of his life. Next week house convenes at 2 00 p. M. Eastern on tuesday. Thursday the house will take up legislation to continue a federal pay freeze. The senate back on monday at 2 00 eastern. On the agenda, a bill to reauthorize the violence against women act. Live coverage of the house on c span, and the senate on cspan2. Live coverage of the state of Union Address begins tuesday night at oclock p. M. , including the president s speech at 9 00, and the republican response by florida senator marco rubio. Helen taft on discussing politics. I had always the satisfaction of knowing almost as much as he about the politics and intricacies of any situation. I think anyone to discuss with their husband topics of national interest. A became familiar with more than politics involved real states manship. Helen taft in is one of the spansladies in see pc series, first lady straight season one begins president s day, cspan, cspan radio, and hes been. Org. U. S. Chamber of commerce held its economic briefing today. They talked about the spending cuts set to take effect next month. Spending cuts are necessary. Economists from freddie mac and trade associations also participated. This as an hour and a half. Good morning. And welcome to the u. S. Chamber of commerce foundations Quarterly Economic roundtable series with our chief economist marty regalia. Were now finishing the second year with this series, and we look forward to several more years of successful programming with marty. For those of you not familiar with the u. S. Chamber of compoumerce foundation, it is te organization that houses all the foundation activities. We marched a number of the programs that we had all under the u. S. Chamber foundation as of january 1 of this year, so you will see new backdrops in the future with the name of the foundation. The Foundation Seeks to identify and forecast developing issues impacting the business community, and to drive the public debate on these topics. Events like this one are prime examples of our ability to involve experts in debates on topics that are critical to the business community. I am going to start us off today from ourng a bit ago sponsor for the series, but i want to make a brief announcement. This series, economic series, that we host every quarter, has been a accredited by the National Boards of accountancy to provide continuing professional Education Credits for accounting professionals, so we are as excited about that and hopefully you will be as well. This accreditation highlights the value of this and other programs that we hold here at the gender. For more information on that, visit our website or speak to some of the folks outside at the registration desk. After the video, i will ask marty to begin the video. Good morning. Were delighted to continue our support of the briefings. The goal is to assess the impact of the policy on the global economy. G. S. I. Is a demrobal economy with shares traded in the new york stock exchange. As you meet this mornings employees are hard at work around the globe and here in new york executing billions of dollars in transactions across the range of foreign exchange, treasury, equities, commodity, and other instruments. Were a wholesale broker. The roots of the industry go back over a century in the worlds major financial centers. Our climates in exchanging products and exchanging on things that doze trade on traditional exchanges. Things that are traded over the counter. 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Thank you for your time this morning. It is my pleasure to through dr. Martin regalia. Introduce dr. Martin regalia. Thank you. Thank you for coming out an such a rainy day to listen to economists. Im pleased to have three very distinguished economists this morning to help me kind of sort through some of the economies. I will do a little bit of a five to 10 minute presentation and then each one of them will speak then well sit down and have a conversation. We have john felmy who will talk to us about energy. He wont do forecasting of Energy Prices but hell talk about the Energy Situation and what well see in more exploration of energy supplies. It is something that his chamber has made a focal point of the growth strategy. It will be interesting to hear from john. Were also going to hear from frank nothaft. Hes an expert ive known frank for i wont say because he looks younger than i do. It is a long time. Hes an expert in the Housing Market and if that is one of the bright spots in the economy today. Then finally, were going have bob costello who is the chief economist at the a. T. A. We build stuff and we put it on trucks and move it around. If you keep track of the trucks you can keep track of the economy. Im happy they all agreed to be here this morning. If you look at the u. S. Economy you see an economy growing three and half years ago but the problem is it never hit its strired. It grew but it grew at 3. 5 . We never made up the g. D. P. Gap. So you have seen this chart in the recent c. B. O. But it is different because the c. B. O. Has the line turning up and catching up to the red line. I dont. Thats because im not all that optimistic that were going to see growth of an excess of 4 as c. B. O. Has forecasted. Without that, you dont close the gap. That is the problem with the u. S. Economy. We have grown, were doing better than we were four years ago. Were above the blue line is above where it was four years ago but it is not back to where it was. Were not doing noig get it back to where it was. If you look at the last three or four recoyries the charts had vshaped. As a result we put people back to work quickly. This one is the prior to but more so. It kind of immediate anered along. Meandered along. We kind of went along at 3 and at 2. 3. That is the problem. Until we find out why that is and what we can do to get the growth back up were not going to close the gap and were not going to put people back to work. Were still a mall and half short from where we were. The Unemployment Rate has held up incredibly high at 7. 9 . The only reason it is that low is because of the pirpgs Participation Rate is so low. 38, 39 of americans of working age dont participate in the economy. That is a damning stay tftic that does not seem to make statistic that does not make it into the front pages. If we see continued drops in participation were not going to see an improvement in ton employment rate. Last month 150 jobs, 150,000 and Unemployment Rate ticked up one tenth of one . When the rate was ticking down it was Unemployment Rate drops, this time unemployment remains virtually the same. 1 up,. 1 down, were not making headway. That is the bottom line. This is not all bad news. This year were seeing some of the under pendings of the economy look better. The things that look worse or the same are the selfinflicted wounds that our political processes tos on the economy. If you look at the Housing Market, its getting better. Its important, it not just important because of jobs and because of more building and housing construction. It is important because the prices are coming back and that means the underlining value of the home and the vawyoof to neth worth of the average american is coming back. Were seeing the fed continue an agreesive policy. They have given us metrics to watch for. We dont see either of those in the forecastable future, the next year to year and half so we think the fed will remain aggressive and this is a big plus. We see europe. It is kind of off the headline. For europe, no news is good news. Were seeing the euro strengthening a bit. Not great for European Growth but not bad for ours. Were seeing them kick the can down the road on their debt problems so they are not cropping up with three month regularity. Things have settled out a bit there. They have grown a little bit and they are starting to count of the recession they have been in. That is all positive. Things look better. The energy secter is booming in this country. Thats a plus. As a result, my forecast, not johns, were not going to see the kind of early summer, late summer driving season spikes. They will drift up a bit from where they are now, but i dont see the kind of spiking that we saw in prior quarters and prior summer months. Thats a plus. So all of these things factor in. In addition businesses both here in the United States and abroad have huge cash force and none of these businesses go into business to hold cash. The problem is the uncertainty throughout and the fact that the economy hasnt picked up so the Capacity Utilization is low by standards. There is excess capacity even today. We think that cash is going to start filtering back into the economy and, therefore, investment, praps the second most important factor will pick up bit as the year goes on. It will be gradual and on the down side, we have thrown a lot of roadblocks in its path. We have a debt and deficit situation which in the longterm are unsustainable and were doing nothing to correct that. I dont believe it. I dont believe their forecast. I dont believe 4 growth will materialize with 0 increase in the Interest Rates. I dont see it happening. If you get one, youre going to get the other one ticking up and that will be difficult to maintain a stable or declining debt to g. D. P. Ratio. Even c. B. O. Has that debt to g. D. P. Ratio kicking up at the end of the 10 year horizon. We have to stabilize the debt. In fact, we spread the crisis out so we wont go a month without one. We have the fiscal cliff at the end of the year, nothing was done. Then in the 11th hour actually it was the are 15th hour, it was two and half hours after we went off the cliff. What did they do . They raised taxes, didnt cut spending. And postponed some of the other issues like the debt ceiling which is going to come up quickly in the new year and has been postponed to may 19. We also have a sequestration that was postponed for two months and that is coming back at the end of february. We govern by c. R. , we have a continuing resolution debate coming up on or before the 27th of march. We have spread these crisis out over the first half of the year. That is difficult for the economy to manipulate. As we started to see fundamental improvement else, where we will see refocusing on the inability of our government to come to terms with its spending, taxes, and debt and deficits. That will continuely, i believe, rival markets and call into question the optimistic factors were seeing. I would like to call the panel up to here. Were going to start going through were going to do john first excuse me. Were going to do frank first on the housing then john then bob. We will try to keep everything on schedule and get outout of here at 10 30. Thank you thank you, marty. I want to thank the foundation for hosting the event here today and inviting me here. I have slides i will refer to. In terms of the overall Housing Market this is the most upbeat i felt in years. Weve had nothing but terrible news on the housing side for some time. Were starting 2013 with a fair amount of inertia in the Housing Market. Home sales are up about 9 . Housing starts up at about 25 and house price indexes have turned around. They bottomed out in 2012 and weve had positive inertia and i think that will continue into 2013. What i will touch on today is what is driving the Housing Market right now. I think a lot of it is based on low Mortgage Rates. I will talk about that. Im going to talk about the trends weve seen, house prices are up about 5 to 6 over the last year. I think were going to see another 3 to 4 increase in 2013. I will share some nots about what we see for the mortgage market. Lets start with Housing Demand. As i mentioned, weve seen it pick up in sales and construction activity. I think in part, this is driven by the affordability that weve seen in the marketplace. The National Association home buyer affordability and the higher it is the easier it is for a typical family to buy a home. When they ro deuce this affordability, they incorporate three key ingredients. Those three are, Mortgage Rates, house prices, family income. Applied one of those to the blue curve. Mortgage rates are at incredibly low levels. We have the lowest in at least 65 years. Between that and the fact that house prices have come down substantially from their peaks really helps to drive affordability. They are mostly down about 20 25 from where they had been at the peak of the house price cycle in 2006. Between Mortgage Rates at a 65year low and house prices down from their peak. That is driven affordability to high levels and that helps to encourage the turnaround in the Housing Demand. It is still power head winds. Marty mentioned a high rate of unemployment in the economy. Weve had high unemployment for a long period of time. Thats a power head win pushing back on Housing Demand. Unl ployed people dont buy homes. The untemp employed people dont buy Unemployed People dont buy houses. Were up about 9 in 2012 compared to 2011 and were expecting another 8 10 increase in home sales in 2013 compared to the level in 2012. I show you the level of home sales both for existing market in blue and for the new home market in green. That is newly built homes in green. You can see even with the increase in home sales in 2012 and the projected increase in 2013, were moving in the right trajectory but home sales are much less than they were at any time from 2000 to 2007. Were moving in the right direction. Affordability is very high. That is helping to turn around Housing Demand, promote home sales. But went the pick up in home sales, sales are still at a low level compared to where they had been. I want to talk about house prices and i like to think in terms of house prices by looking at the excess supply of vacant homes on the marketplace. This is what we put together to that measures the excess, above normal, of vacant housing across the u. S. We look at the rental market and the Single Family for sale market. We had an oversupply of vacant housing in the peak of the housing cycle. We had about two million vacant Housing Units in the marketplace. When there is a large excess supply in the marketplace, the force is for prices to come down. Rents need to come down in the rental market. That is what we saw after 2006. Take a look at what has happened over the last three years. We worked off a lot of that excess vacant supply. In large part, construction levels have been depressed. We continue to have household formations, not as robust as they were five or 10 years ago. Over the last year there has been one million new households formed in the u. S. But we only completed about 600,000 new Housing Units. That difference between the new housing constructed and the total amount of new housing formations help to absorb the over supply in housing in the u. S. It is a good balance between the overall supply and demand of housing in the u. S. Thats helped to encourage a turn around in housing prices. This is the price of the National Index we created, freddie mac. You can see the big rubup in 2006 and the big crash there after. House prices over the last year are up 4 . That is the best news weve had in years. Even with that 4 increase in the National House price index we still have house prices down about 22 from their peak levels. I do anticipate further levels in 2013, we expect about another 3 4 increase in the house prices indexes. What is different over the past year is not just they have tarting to turn up but the increase in home val use have been broad based across the u. S. Just to give you a simple snapshot on that. Take a look at the last few years in terms of the states have seen decrease or increase in house prices. The states in green had a house price gain over the past year. We look at 20092010 and 20102011. The house price improvement has been a broad base throughout much of the country. Likewise, we look at the rental market, weve seen a decline in rental vacantcy rates which is the blue bars. It is down about 2. 5 points and with the declines in van kansai rates weve seen a turnaround in the level of rents over the last two, three years in National Indexes and in local markets around the country. In fact, just like in the Single Family for sale market there is a decline in the rental markets are very broad based. They have been hard hit by the housing downturn such as florida, california, and so on. Weve seen the largest declines in rental apartments over the last three years. I want to turn now to comment abc the mortgage market. For single families came in around 2 trillion. Thats our estimate. 75 to 80 for refinance. Our expectation for 2013, were going to see an increase in purchase Money Organization nations, so about a 10 increase in purchase money. But also were going to see a decline in refinance. I will tell you why. Many borrowers have refinanced other the last year or 18 months. They have locked in low Interest Rates. They are less likely to come back into the market. While we have the low Mortgage Rates, i think there will be pressure over 2013. I expect fixed rates which are about 3. 5 to remain below 4 but they will be higher later in the year. So well be approaching 4 . Thats going to choke off some of these incentives to refinance. While we have purchase originations rising, and that is such a big part of the market that is sufficient to reduce the total level of singlefamily originations. Not because of purchase money but because of less refinance. Less refinance but that will still be the bulk of lending in the singlefamily market in 2013. Turning to the multifamily originations. We saw a pick up in the last couple of years and due to apartment owners are taking advantage of low Interest Rates. Were expecting 5 increase in multifamily originations in 2013 compared to 2012 because there is an increase in con stucks. Also, construction but also because there is refinance activity. Finally, i want to close with a comment about the ceasely delink quect loans. We have a large number of singlefamily loans in the u. S. That are delynn quents. Delinquent. We had about five million Single Family homes that were delinqent and that came down to three million. But that is triple what we saw 10, 15 years ago in the singlefamily market. There is still a large stock of troubled loans. The industry as a whole has been successful in working that down but that is high and well continue to see Properties Come through the foreclosure proceeding cycling and come out as real estate owned over the course of the next year. One thing that is so different today is that we have much more Housing Demand because of affordability is so strong and many home buyers looking to buy homes. As we continue to see some flow coming out, the increase demand for homes will still help to absorb that and provide room for increases in home values in the coming year. Thanks again to the chamber and the foundation for the opportunity to share our views and i will turn it over to martin. Thanks, frank. Were going to have john felmy. Thanks for inviting me and thank you for coming. Were a couple of degrees from getting 2 feet of snow. Ive lived here about five teb years and i think we just dodged it this year. I will tell you a bad economist joke. What is the definition of economist . It is someone who is good with numbers but does not have the personality to be an account ant. What im going to do is going through what oil and gas industry, what the opportunities are and what we can do in terms of working an in aspect what happens in affects the economy and what happens in the economy affects the oil industry. You have to Pay Attention to those facts in terms of how the Overall Economic situation is. If we start first, this is my educational effort. If youre getting credit for this is this is what is going on with gals prices. The top line is the retail price of gasoline according to a. A. A. The bottom line is the dollars per gallon. If you look per bar yell cost it is hard to compare the two barrier barrel cost it is hard to compare them. Crude prices are up almost 30 cents a gallon. Youre talking about 80 of the cost of gasoline and so on. So what you need to do is divided by 42 and that will tell you what is going on in terms of these markets. You can have other factors that can affect those margins. But that gap between the crude oil price and the retail price is taxes, roughly about 60 cents a gallon and Everything Else is delivering it. I put this chart up because it has an impact on the u. S. Economy. The average household spends about 2,700 on gasoline and we use about 700 billion gallons of gas a year. For every penny that is spent more on gasoline instead of other goods and services. There is an impact that one needs to Pay Attention to. Weve seen this over and over. If you look back over the last 40 years or so the difference between crude oil and gasoline prices is about 1. 17 and that is roughly about 50 cents in taxes. That can have an impact on Consumer Spending. One of the big things i hear is well, gasoline prices go up like a rocket and come down like a feather. That is not always true. I looked at the last two price increases weve had and you see the jagged line is the retail price. That defines symmetry on how fast they go up and how fast they go down. It is almost perfectly symmetric. When you hear those arguments dont take them at face value. We saw another increase, and it is the same case. People make those assertions but i would be careful about that. Why are crude prices up so much . I like to say it is three big factors, china, china, china. U. S. Is still a large player it is smaller than it used to be. As long as we have continued growth in demap in place like china buying 24 billion cars followed by india. You will see a powerful Movement Forward so with tight supplies fortunately, were seeing positive aspects here in the u. S. What you do see is a case of a relatively tight market. What youve seen is total demand is down, gasoline demand is down which is tied more like retail sale, employment and so on. Diesel demand is also down. I carefully compare these diesel demand numbers with the truck numbers, they should move together. They prototy much follow each other. Jet fuel has been down for 2012 and a lot of that is packing planes full and having more efficient aircraft and so on. If i turn to the Fourth Quarter, we see things are still down. So in particular, the diesel demand is down. When i heard that g. D. P. Was down it did not surprise me because that is tightly tied to a component of the economy. Again, we saw a decline of total overall petroleum and gasoline demand. The good news if you look forward to the january numbers where you have preliminary data, we saw diesel demand down. We did see gasoline demand up. That is a positive sign in terms of moving in the economy. Hopefully, well see this continue. I agree it is a weak economy and that is reflected through the fuel demand. What else is going on . Natural gas. If you look at the top line that is the price of crude oil. The bottom line is the price of nample gas. You can see how much natural gas. You can see how cheap natural gas has become. We have all these developments of shale gas you have it in pennsylvania, my home state. But you also have oil plates in north dakota, south texas and that leads to increase in production of oil and natural gas. Five years ago we would not have been able to anticipate that. That is good news in terms of supply, energy cost, employment. One of the previous slides it showed 2010 and the only state that had positive state had north dakota. It is now the second largest state producer of oil in the country. Why . Because we had dramatic improvements until technology of hydraulic fracturing. So weve seen this improvements that have really dramatically changed the course of production that we would never have dreamed of. Im going to close with is that we have an opportunity based on a study to generate millions of jobs, trillions of investment, and billions if not trillions of federal, state, and local revenues. We have the opportunity to do this from nonconvention oil alone. What we have right now is a choice. We can make wise decisions moving forward to develop all of the above resources. Or we can repeat some mistakes of the past, in particular the proposals for the gas industry are repeated. And we have potential for more regulation which could slow down the whole process. So we have an opportunity onceinalifetime, ive been analyzing energy for 40 years and we can move forward between what we produce in this country from imports from canada we can become energy selfsufficient. I never would have dreamed that was possible five years ago. Thanks very much for your time. I will turn it over. Thank you. Were going to have bob costello now. Good morning. Thank you for having me. So i represent the Trucking Industry and i think it gives us a different view. The reason is a 600 billion industry and it hauls 67 of all the freight in the u. S. It gives us a unique insight to what i call the good portion of the economy. We dont put services on the back of trailers but was put almost Everything Else, anything you can touch and feel. A lot of people like to look at this data. As john said this year you can look at volumes of trucking in a couple of different ways. One is the amount of weight that is moved. That is what john referred to. Another one is the number of shipments and we call it loads. They measure two Different Things for a lot of freight. Often it is completely full, you cant put any more freight on it but youre way below the weigh limit. So it does not always match up. Our index showed us it was up 2. 4 but in the fourth inquiry either it was up 1 . If you look at number of loads it was off 2. 1 from the year earlier. I will show you why the difference is. It gives us insight to what is growing in the economy. Now, like a lot of industries, small firms in the Trucking Industry are having a particularly hard time. They are having a difficult time reinvesting their capital, turning over their trucks. I will show you that in a minute. Their volumes are bound even more than larger carriers. Small businesses are having a different time. All right, this shows the different sectors and it gives us insight to what is grow and what is not. The typical box trailer, it is not a tank truck, it is not a flatbed and that you can see was off significantly last year. Now, what is growing if the economy we heard . Energy production up lot. Those are the fracking sites. When you frack, what do you use . Fan, water, and a little bit of chemical. All of that goes into tank trucks and it is very heavy freight. That is why tonnage overall was grow better than the number of loads. When you measure the weight it counts more. The other thing that is growing housing starts. That is very heavy freight, that is flatbed. Temperature controlled is mainly food. It is interesting, a lot more electronics are going in temperature controlled. They dont want it to get very hot or very cold. Most temperature controlled is food. I think this is interesting because it confirm what is we already know. Were producing more energy and housing is starting to rebound. This industry is smaller than it was a few years ago. The economy is rebounded, it is not growing as fast as it should as marty showed you. It has rebounded but like manufacture production that has nod gotten back to its peak were not operating as many trucks as we once did. Large carriers, this shows you where the fleet sood at the end of 2012 compared to two points. December of 2007 and then december of 2011. It is still off 4. 6 from the peak. Small fleets, their volumes have not recovered. Therefore, they are not growing their fleet and they are certainly off quite a bit. I bring this up because i actually think if we were wrong on the economy it this would not be the case. If we get a couple of quarters of g. D. P. Growth i dont think we have enough trucks on the road to haul the freight. We need to invest in new trucks. The interesting thing is were not growing our fleet on purpose. If you match up supply and demand and demand being the red line, the number of loads or the number of shipment. The number of blue line is the number of trucks, you can see we had too much equipment on our hands. Over supply and price plummeted. But what happened . We started to see a rebound in demand. At the same time, we cut our fleet and now they are matched up. A lot of transports are similar, whether it is airlines or trucking company, the airline license today are trying to get their capacity to match the amount of demand out there. We have done that. This industry is not getting ahead of itself, it is not just buying a bunch of trucks for anticipation of a recovery, which is very unique. In the past, we used to do that. So i think weve matured as an industry. We need to invest and invest significantly in new equipment this shows you that. This shows you the average age of the entire fleet out there of those types of vehicles. Normally were in the five and a half year area. We were approaching seven years and it came down in 2012 a little bit. But were still north of six and a half years. In order to get that average age down at about five and a half years it would take an investment of threals 40 billion. Trucking is reflective of a lot of industries in the economy. You just put off those investments during these down times. Youre nervous about the uncertainty and policy, you dont want to hire too many people and invest in too many capital. We have a lot of investing that needs to take place once the economy starts to do better. The last couple of slides is on labor. Despite elevated Unemployment Rates and so forth, we have a labor issue. Lots of jobs in trucking. One area one way we know this is going on besides talking to fleet, we look at driver turnover rate. If drivers are in high demand i call them the free agents of trucking. If youre a good driver and you have a good Safety Record you can go to any company you want. They will give you a signon bonus. Today, Companies Give about 2,000 signon bonus to come to them and start driving. Turnover rates are creeping up and we bottomed out at 50 . That is probably about the floor for this industry. Even if those times when were hauling less freight, if youre a good drive you can go to different companies. This tells us theres a lot of pressure in the driver market. In fact, we need to hire almost 100,000 new driver for trucking each year. I group in a town of 100,000 people. There are many reasons why we need to hire that many drivers. Eventually were going to grow our fleets more. If you have have a truck, you have to add a driver. Our drivers are older on average than most employees out there. Retirement is the number one reason. Last year we had a shortage of drivers, 25,000. This year because housing is starting to improve, construction employment was up about 1 . They start hiring more people because of continued growth in the construction industry. That is going to take more pressure on our industry and we could be short at the end of this year on the upwards of 40,000 drivers. We have an industry that wants to hire people and you need to be on the road, today it is about a week on the road. We need our volume shows the economy has slowed and you talk to Trucking Companies aand this say that fright is a little bit better. Freight is a little bit better. We need to invest in a lot of capital in the upwards of 40 billion for new trucks and trailers and other equipment. We have an industry looking to hire in this my and hire a significant amount of people. Thanks, bob. Now we get to the fun part of the program. Were going to open it up for questions in just a minute. If any of you have questions write them down and there will be microphones circulating and address them to whoever you want to. Those on the panel can jump in and, you know, give their two cents worth as well. It is not a deal where we get one question and one answer. Before we get to that, i get to ask some questions. The first one i got is to bob and john. What do you see in terms of lending availability . We see great rates and high affordability, are banks lending again . Is there availability of credit . The same thing in the truck area. What is the finance optioning look like . In terms of the commercial loans i realize Oil Companies donal use banks financing as a primary source but what is the availability of credit to expand into this growing Energy Supply . How quickly can we get in there and take advantage of this . Well start with frank and move right across. What is the bank legending situation look like in your industry . It has gotten a bit better. We had about 2 trillion in Single Family originations and that is the biggest mark weve had in the three, four years in a singlefamily space. There are certain loans that are not available at the peak of the refinance boom. Those are the highrisk products that disappeared from the market. You dont see negative loans, you dont see the from sister, the no income loans that were fairly common back in 2005, 2006, and the beginning part of 2007. Those loans have gone away. We have fully documented loans and primaryly a fix raid. Like 95 of all the loans are longterm fixed rate mortgages. I think lenders have been a bit more cautious in recent years but i think that is a good decision relative to the loose underwright we saw back in 2005 and the early part of 2007. Lenders waiting to see in terms of what regulations come out and in terms of qualified mortgages. Once those rules come out it will provide more certainty for lenders so they can decide, you know, what is the right path they want to take to underwrite on the loans. On the commercial side we see some loosening up of credibility writing standards. Have good. In terms of Trucking Companies, it has gotten better as well but it is still a challenge for my industry. One of the Biggest Challenges weve had is our equipment costs have surged over the last two years. Even in the depth of the recession and the reason is we had two mandated engines. We had the fuel change then we had two mandated engine that changed from 2006 to today. What that did was the cost of the truck, the tractor in 2006 would cost about 95,000, today it is 125,000. We have added so much more equipment on it for the environment. The good news is it is much better for the environment but there has been a cost associated with that. So cost is up and lending is not what it once was. I show you the small fleets are not growing. In part of the reason is because i also showed you the age has gone up significantly. So the trucks are not worth as much as a three year old truck that you might trade. We have small fleets that have to sell two used trucks to afford one new one. Part of that is because they cant get financing for as much easy and thisvy to put more down. The other thing they have to put more down. The other thing i see over last two years the lease financing it used to be 10 any truck you arequire in the year especially for the smaller fleets it would be 10 of those trucks. Today it is 30 hrs40 tpwhaws is the only way 30 40 . It is a challenge and one that is holding us back a little bit. I have to agree with that. There are thousands of small oil and Gas Companies that do rely on financing for moving forward for the investments they make. Things are improving. But there are complicating things that are interesting. One is doddfrank, potential regulations in terms of how you classify certain contracts whether they are traded on exchanges versus bilateral deals. If you get financing on your production and those kind of things were working our way through the other thing that is interesting is housing. Some of the booming areas where you have seen like in north dakota, you get a lot of works that move there and they need housing. Unfortunately, in terms of getting a mortgage there are real rules that can prevent you from getting a mortgage if you havent worked a job for a certain peed. For boom areas that has been a real limitation in terms of labor. I was talking to a banker up in north dakota and this was his biggest woe fa you can deal with that you would get more workers and housing, and more production. Im going to start with you, john. The other guys can chime in too. We talk a the Energy Industry and the potential for growth in that Industry Driving growth in the u. S. How fast and how fast can that energy be exploited . How fast can it show improvement in the general economy . Youre not going to go from finding the stuff in the ground to refining it and pumping it in the tank in six months. But you would start to see very notable noticeable improvements if we explore these resources. How fast can we do them and what do you see as some of the obstacles . One of the biggest is getting access to the resources. We have a vast amount of oil and gas in this country that is offlimits, east coast, west coast, the gulf, and alaska. Until you open up those areas nothing can happen. What we need to move forward in the fiveyear plan for the offshore area that has been delayed. We need to carefully look at some of the lease restrictions weve seen over past four years. Once that happens then you can start a schedule of all the Environmental Assessment you have to do, the planning, then you start leasing. Once you do that then you have exploration activities so it could be a couple of years before you start drilling. We need to move forward as quickly as possible. Lets open these areas up and go through the process. Then you can start getting lease revenue coming into the government. You can start if it private or private individuals then you get royalties from production then you get Everything Else that falls in line with investment and jobs. The big aspect is access. If we have regulatory policies that slow that down then it is more of a challenge. Bob, can you where do you get the trucks to facilitate this kind of growth . You point out that tanker trucks were extraction related and that there is a shortage. I guess you cant take any truck and turn it into a flatbed, can you . You can to a certain extent. I have a member who has taken 500 of his trucks on the driving side write showed you that freight was down and moved it over to help with natural gas and help in north dakota. The challenge is getting all the tankers that are needed. The manufacturers cant build it fast enough for what is needed for that. The other thing is there is a lot of interest, as you might imagine for Trucking Companies to get natural gas trucks. Not the local delivery trucks but the bigheavy duty truck. You got a fuel that cost half per gallon basis of diesel fuel. There is some real obstacles to that. Those trucks cost 50,000 60,000 more than the diesel truck. Then you got your maintenance facilities and so forth. There is a lot of interest in the Trucking Industry that converts, at least a small portion of their heavyduty and crisscrossing the country. Frank, we heard about housing shortages and rental shortages and the like in some parts of the u. S. Where were seeing the energy pick up. You dont flip a light switch there either. Are we meeting that the mand . Are we seizing those areas with rising housing prices, are we seeing more construction in those areas . Are there things we should be doing in anticipation of more combrothe in these areas . We have seen a pick up in housing activity in those markets. North dakota is an example. It is one of the strongest Housing Markets for years already. The turn around in Housing Demand was not in the it is been the strongest for years. If you look at home values. Home values were up sharply three years ago reflecting the demand for housing. And builders have responded building a fair amount of rental in north dakota as well. And so there has been a big increase in new construction on a percentage basis in north dakota, thats probably the strongest percentage increase weve seen in new starts over other states in the last three years. We received a little bit of blow back when the chamber started to focus on the energy area and people kind of focused on it very narly as Gas Production of prices. It effects housing and Housing Demand and supply. It effects many m small businesses. Not just the fundamental input into the economy but there are a lot of other piece that is drive growth, g. D. P. Growth and job growth if we would pull some of the get a better mix of regulations and really start to exploit some of these resources that we have. Next question im going to run through and then turn it over to you guys out there. The q4 versus what were seeing. Weve seen an economy thats been growing pretty consistently but prettily aneem i canly as well for three years. There have been a couple of good quarters and bad quarters. The Fourth Quarters was a bad quarter. I think when you start to peel the onion down a little bit you see the con sums was stronger in the Third Quarter than the Fourth Quarter. You look look at the big negatives it was defense spending. How do you guys look at that urge Fourth Quarter compared to the first half of this year. Sit going to look like an aberration in the rare view mirror . I think it was a bit of an aberration and one of the real positives i saw in the Fourth Quarters was the contribution from the housing sector. For much of the recovery, housing has not been there. Housing continued to weaken and be a net subtraction from Economic Activity in 2009, 2010, 2011. Finally in 2012 housing began to contribute. And it contributes through the pickup in home sales. Housing starts have flowed through residential fix and investment. Residential fixed investment contributed about. 4 of a percentage point overall g. D. P. Or helped make itless negative. What we are expecting to see is a bigger role in housing for supporting Economic Growth in 2013. We are expecting that over 2013, housing through residential fixed investment will contribute close to a half of a percentage point to overall g. D. P. Growth. Im not same boat. Im not overly concerned about that reading. Last spring i was starting to get concerned about inventory levels throughout the supply chain and something we were hearing from our members, their customers and of course it was showing up in intoir to sales ratios and so a big chunk of that negative was a destocking if you will throughout the supply chain. It hurts trucking and you saw many of our numbers were off on a year over year period in the Fourth Quarter more so than the g. D. P. Reading, i actually look at this as a positive. If we get inventories back to where they need to be that will help trucking volumes this year and get things righted if you will. So not overly concerned. We did like to see the Business Investment and household con sums pick up. I saw the faurth quarter as a continuation of what you saw through the recovery. We saw weak gasoline demand. Thats driven by employment and sales. Yet for much of the recovery you had fairly strong diesel demand and thats consist president with a lot of bobs data. But then you saw a shift through last year, 2012 ultimately ending with, as i said, lower diesel demand in the Fourth Quarter relative to gasoline. Aze mentioned, Going Forward we have seen low diesel demand from preliminary data for january but weve seen a rebound in gasoline which is consistent some of the sales data and so on. So it seems like the ship is turning a little bit. Now were going to open it up. If you have a question race your hand. Identify yourself and direct your question to anyone up here and well see what we can do with it. Do we have any takers out there . I think we have one back here. Good morning. Marty, my question is for you, sometime in the next few months to the point of your remarks we are going to be faced with either sequestration or the some kind reduction in government spending. Can you give us a sense how you think that might play out and what the implications are for the economy. And given the fact Consumer Spending is still about 70 of the g. D. P. , the implications for the consumer . I think sequestration, the worst aspect of sequestration is not the overall cut. Because we know we need to trim spending and we need to cut or change the trajectory of our spending Going Forward, predominantly entitlement spending. Without that, i dont think well ever get our budget under control and at some point we will be downgraded by the other rating agencies and at some point we will see Interest Rate increases and the people that hold our debt around the world less interested in holding it at low Interest Rates. All of that will effect the u. S. Economy. When i look at sequestration, i dont look at the cuts impacting the economy in a negative way. They are not going to help growth in a short term but they have mitt gailting factors which off set the negative. Its the way the cuts will take place. What we tell our congressmen and senators, thats why we send them here. We send them here to spend money. Thats what we do in an economic sense. Because we expect the federal government to provide public goods, roads, infrastructure, education, National Defense, and so we send them here to spend. And we know that in order to pay for those goods, we are going to have to tax. So thats what they are here to dorks to spend and to tax. What we hope they do is priority ties. We hope they like at what is out there, what do i need to do first, how much do i need to do and only do. That and sequestration flies in the face of that reason for sending them here. It obvious yates the need for in fact it legitimate lates against pry orty shagse. We tell them go out and lop tevering same. Everybody who has ever done a budget, whether its a divisional budget, a Company Budget, knows the ball game and we all pad a little here and. There and we put a project in here that maybe we dont really need and we know that if we get cut we are going to cut that one first. No, you are going to lop everything. Take it off. And that is well its spuped policy. So we ought to figure out a way to priority ties easy these cuts. That was the job of the Super Committee. There was an agreement made a year and a half or so that you would get a debt ceiling increase and 1. 2 trillion in cuts. Then another increase and 1. 2 trillion in cuts that the Super Committee was supposed to put together. They were select members of the congress that were supposed to do it. And they didnt do it. And knowing they might not do it. Congress said were going to put something in there that is so dumb, so stupid that nobody would let it happen and thats what were dealing with now. And thats a sad state of affairs from the political process. Its a very sad state affairs. So now to come back is say what we should do with sequestration. I find ate maizing the president who talks so much about balance and fairness. A year ago on getting the balance when Simpson Bowles came out was four to one. Then as we went along we saw the discussion kind of shifted and as the election prospects rose and fell, that balance suddenly became two to one. Then in december after the election it was the talk was one to one. And then when we actually saw the deal done, it was zero to one, zero spending cuts to the tax increases. And now were actually hearing negative to one. Its not two to one, t its negative to one. Because the president wants to dount cuts that were already made in the future and he wants to replace the agreement which was that you would do the stupid sequestration policy if congress couldnt come up with the cuts. And were going to replace those cuts with more tax increases and oh by the way, john, thanks for stepping up, because they are all amed at oil and gas industries. This is not good public policy. So what we would like to see is some prirpteation. Should bedo away with the cuts . No, thats not a good thing. When you look down the road, we havent established a sustainable fiscal poll sifment under the most optimistic Economic Forecast starts to turn up and the g. D. P. Starts to rise. If you look at the Interest Rate assumptions they are pretty pollly anish because there are no increase in Interest Rates and even beyond that very modest increases in Interest Rates. With 16 trillion in debt, youve got to every percentage point increase in Interest Rates adds about 160 billion to the service call. And that very quickly starts to cause an increasing spiral. I worked at c. B. O. , we used to worry about debt to g. D. P. Ratios of 5 to 6 , because thats the range they could spiral out of control. We havent seen anything close of a deficit to g. D. P. Ratio of 6 in the last four years. By the way, even under the best assumptions of c. B. O. , we are looking at two to three years before we get below the 5 rate. We need the cuts. They have to be made. We have to look at and because those cuts across the board are going to effect Certain Industries more than others. The Defense Industry is going to be impacted more than others. We have to make a decision how we want that to play out and we dont have that discussion. You just obvious yate the need with an across the board cut. And its not good policy. The cuts are necessary. I dont think the cuts are so large if they were instituted f the congress were to sit down and pick the appropriate cuts that those cuts would lead to an economic downturn. The forcast they came out with when we were talking about the fiscal cliff said you are going to lose 500 billion if you did nothing. The 500 billion total would cause a mild recession of something on the order of about. 5 of g. D. P. If you look at mood disforcast. So now were talking about a sequestration that is a fifth of. That were looking at something where we got 40 of. That i dont see a recession coming because of that. There was a factor into that, because in many cases c. B. O. Reverts back to a static approach, you dont look at what is happening in housing which is better than many of us think is happening. You dont look at the Energy Sector which could expand as well and do better under the next few quarters as it did over the past few. So i dont think its pushing us back into recession and i think if we priorityize the cuts that tled set the stage for doing more of that down the road. Any of you guys want to add anything . Just i think in terms of energy you are right. We have an opportunity to move forward to generate jobs and Energy Security. But its going to take conscious decisions in terms of making decisions like slip boarding the Keystone Pipeline because youll immediately start generating jobs and all the indirect effects. But unfortunately what we have is a debate against it for some reason that somehow the opponents of canadian oil thinks stopping it will stop developing the oil sands. Thats not true. The oil sands are worth Something Like ten times the g. D. P. Of canada, the notion they wouldnt be developed is silly. If you believe in environmentism youll bring that oil here because its low emissions. We need exports of energy. We we have an opportunity with so much gas we are producing we can export it at a good price which keeps jobs in this country. There are positive things we can do that will help the economy right now beyond the budget process. Other questions . I think we had one over here. Hello, frank, you had some interesting facts on some of the subsets in the Housing Market, rentles, multifamily homes. Realizing you are not a realtor but an economist, might you have any on trend in housing or trends caused by the bubble or trends caused by generation al changes or anything Housing Market . Thanks for the question. One topic that keeps coming up is has the desire or belief in the Home Ownership changed in some way compared to attitude several years ago. And my take on the surveys that ive done over the last few years is that desire for Home Ownership at some point in the life cycle has not changed. That the young families today that are being formed and creating households still have that same desire long term for Home Ownership as younger cohorts i mean as older cohorts or their parents v. One thing thats decincht they recognize ive got to put my financial house in order first. Ive got to save up more money. And there is a recognition they have to make a larger down payment and maybe delay the time at which they become a first time homeowner. So what i think well see over time is that todays young cohort, young families will have the same ultimate ownership rate over their life cycle, its just they may delay the time at which to become a first time homeowner. Over ones life cycle, about close to 90 of households become a homeowner at some point in their life cycle. That is not what you see about in the news. The Census Bureau puts out Home Ownership rates at 65 . Thats a Different Number than what im talking about. The Home Ownership rate is just a percentage of households today that is owners versus renters. But mixed in that is mixed in many different ages. Young cohorts, older cohorts and 90 of all households are home owners at some point in their life cycle. So that hasnt changed but the age which People Choose to become a First Time Buyer and transition into Home Ownership may have changed and that may be delayed to what we saw several years ago. Household formations are up thofmente they are not up to their trend so it may take a little longer for this group to get in there but the group is getting bigger. Thats absolutely right. We had 1 million net new households last year and thats the best in a few years. The projections longer term is that the rate of household growth will continue at about 1. 2 per year, thats the longterm projections and we have currently about 120 million households in the u. S. So if you do the math that works out to Something Like 1. 4 million net new households per year longer term. We are still below that but we had a pretty good year this last year and i think the trend is looking fwood Going Forward. If youre a home builder and youve been able to survive, there will be a pick up. That new formations that is 30yearold kids moving back with us. I keep trying to explain to them thats a takeaway and i dont know if i sway that appropriately. Its net so those folks that move back into their parents basement. Other questions . What when you look out there and we look at these fiscal problems and we look at the discussions, i mean we have a state of the union coming up next week. What in your area would you wish for . What would surprise you and what do you expect . And ill start with bob in the middle and well work to the extremes. That would be one of the things that trucking has been struggling with for a number of years, and of course the chamber has been a great partner with us on this issue. Were not investing enough in our infrastructure. That creates a lot of jobs, creates productivity in the long run. And you actually have an industry here. How Many Industries do this . You have an industry that says please tax me more. We want toth fuels tax to go up. And so we would love to see some progress made on this. Weve gotten so separate in this area that we are now talking about perhaps there needs because politicians cant make a decision on this and havent seen 1990s on the federal level, maybe we need to go to indexing on the fuels tax. Youre talking about fuels tax on infrastructure not to pay for subsidies . What we need is more infrastructure and that is a public good and that needs to be paid for and generally with tax revenue. So i dont think anybody is faulting that. I think the thing gets sold we need higher tax to reduce the deficit or pay for Something Else. A fuels tax was intended whether its done so successfully or not was intended to pay for infrastructure. Absolutely. Were not really happy about that. What are you hoping for next week, john . I havent been consulted on that. The president in the Campaign Said he was for an all of the above energy policy. Lets have announcement that is support. That lets move forward with the Big Decisions like keystone xl and leasing decisions five year plan. The things you need to accomplish an all of the above policy. Id like to see stop this discussion about taxing the industry and trying to characterize it as subsidies which is simply not true. And id like to see some more opportunities in terms of where can we open up areas that are off limits. Because that can generate an enormous amount for the economy right when we need it. One thing i think lenders have been concerned about the i wereation of new regulations and rules that tesket lending and the Housing Market. So to the extent we can get more clarity and certainty what that framework will be like Going Forward, i think lenders can take advantage of some of that flexibility once they know what the rules are in extending credit. The other thing i mentioned is not a particularly sexy topic but i think its an important one and thats Financial Literacy for younger people. And trying to reach out to the industry to come up with a way to really promote Financial Literacy and education before college level. Get into the hools, so that we have an educated group of young folks who come out and understand about the importance of having their financial house in order, the importance of having a good credit history. Understanding what it means to be smart about using credit whether its on mortgages or Consumer Credit or even student loans. Thank you. One last call for questions if there is any out there. Can we get a microphone over here and well end this on time. I represent mobile broad band viders and probably those smartphones have helped the Trucking Industry. I think the panel can say generally the continued growth in mobile broad band and technology generally . From a trucking perspective, yes its been critical to our industry over the last decade or so. The days of drivers going to pay phones and calling in to find their next load, now it pops up and tells them exactly where to go and when to be there and so forth. I think there is still a lot of the penetration is probably not all the way there yet in trucking and there are a lot of opportunities for better and improved. Thats something they are willing to vest in because it impacts their bottom line. The ability well drillers to capture what is going nonwell logs and distribute that back to a Central Location for analysis and dealing with understanding what is going on is really essential to moving forward to be able to develop our Energy Resources much more quickly and efficiently. Frank, anything there . No, when bob mentioned pay phones, i chuckled a little bit. Do they still exist . This has been an interesting discussion because its an economy when you look at it, there is a whole list of positives, housing and energy fed policy. What is happening in the energy area and what is happening even in europe and abroad. And then there is a list of negatives and virtually every one of the negatives is selfinflicted. We have the potential finally to see this economy break out and push above that 2. 3 and maybe significantly above it. But i think that our policy options are what is holding us back and what i would like to see and hear in the state of the union is a real plan for addressing our longterm deficit over a reasonable length of time. One that actually does recognize and specifically addresses what is going on on the spending side. And tells us what they are thinking specifically on the tax side so that there some evaluation can be made. I think that would go a long way toward stimulating a debate on entitlement reform in the congress and that i think would be a net plus for the economy as well. So its not all bad news even though its a rainy day. I want to thank all of you for coming and hope we can do that again in a couple of months. Thank you all very much. [applause] captioning by the National Captioning Institute www. Ncicap. Org House Democrats held a retreat in virginia this week. Today president clinton addressed job creation and gun control. Here is a portion of the former president s remarks. Its important to turn not to give up on anybody, to talk to them. The worst that can happen is that people see were not crazy, all these people saying youre trying to end the Second Amendment and all that are wrong. And then maybe they listen to you on the four things they do agree with you. But they cant hear the four things they agree with you on if they dont know where you are on the fifth issue, in this case im talking about guns. Thats my only political advice i want to give you. You start up the storm with the healthcare. There are a lot of people that dont explain it. Make sure it works. Dont let it go because its already in law and its somebody elses problem. You can see all of his remarks tonight on cspan at 8 00 eastern. One of those House Democrats is our guest on news makers this weekend. Minority member of the house budget committee. Hell answer questions about the countrys Economic Outlook and the spending cuts set to take effect next month and drafting the next federal budget. News makers is on cspan sunday at 10 00 a. M. And 6 00 p. M. Eastern. What ive discovered as ive gotten older is the worst strategy to achieve happiness is life is to make that your primary goal. If you make happiness what you are striving for, you will not achieve it, you will be narcissistic and selfinvolved, caring about your own pleasures and saveses in life as your paramount goal. Happiness is best thought of as a by product of other things. Its a by product of meaningful work and family and friends and good health and love and care. We get happiness not by aiming directly for it but by involving ourselves in fundamentally trying to have integrity and be a good person. Whole foods cofounder and c. E. O. Examines how the inherent good of business and capitalism can lead to a better world sunday night at 9 00 on cspan2. And find more book tv online. Line us on facebook. Maryland senator ben cardin spoke today in maryland. He said its Unlikely Congress can find an alternative to the spending cuts scheduled to take place march 16789 that would be a 1. 6 billion cut for the n. I. H. Good morning. That was a nice response. Its wonderful to see you here this morning at the National Instutes of health where we have the great fourn to have was United States senator ben cardin. Welcome to all of you and those who are watching over the web. I want to say a few words about the senator and he is going to address you and we will have time for questions and answers. And we have ways to receive those for people who are here and over the internet. And we will make sure to respond to all directions from which those questions may come. For those of you with who live in maryland and about three quarters of the people who work at n. I. H. Have that residence, this is your senator. He is become a National Leader on retirement, security, the environment, homeland security, Minority Health and health dispar tiss and he is been a consist president supporter of the National Instutes of health and our mission and the work we do. He was elected to the senate in 2006 where he currently serves on the finances, Public Relations and business committees. He seshes as cochair on the Security Commission in europe. Prior to this he represented mary mayors third Congressional District in the house of representatives. And before that in the maryland house of delegates where he seshed from 1920671978. He was spoker. He is a champion for medical Research Support for marylands World Class University Hopkins University of maryland and several others. And he is a strong supporter of our states buy Tech Industry which is not located here by chance. Hes also been i think a strong supporter throughout all of this as the importance of looking for curious for many diseases and protect our citizen frs buy attacks. Hes been here in a town meeting. We arrive here today at a particularly interesting moment given this is the month of february and there is a threat which im sure he will talk about of something called the sequester which might strike us by march 1 if nothing happens. Current estimates being that would reduce the n. I. H. Budget for 2013 by 1. 6 billion, already well into the fiscal year this would be a severely stressful situation. I know all of you here who believe in the mission come this morning hoping to hear words of encouragement about ways in which our enterprise can move forward in this time of uncertainty. I know he is a strong supporter of a goot outcome here so were happy to have him come this morning to tell us something about that and to encourage all of you who are working hard as supporters of this enterprise, as public seshvants who believe in what you are doing and to tell that you this morning. So please welcome senator ben cardin. [applause]. Thank you very much. Thank you for your extraordinary leadership on behalf of n. I. H. It really is a pleasure to be here. Dr. Collins pointed out that along with senator i have the great honor of representing the state that headquarters n. I. H. And it is a great world class institution, no question about it. We not only have the World Class Research facility at n. I. H. , but we have the World Champion baltimore ravens. [applause] we collected on the bet yesterday so were in good spirts. I havent finished all the wine that was stonet us from california yet so i might indulge a little bit over the weekend. But we had to endure the california dentist crafts which are not as good as our crafts in mayor. It was a sweet moment and we thank you for that. Its a pleasure to be here. Joan is here representing chris part of our congressional team. We thank chris for everything he does as the leader in the United States house of representatives on budget issues there is no stronger advocate for n. I. H. Than chris. My colleague in the senate, barbara mccull ski who is taking on a new responsibility as the chair of the senate appropriate yations committee. I tell you thats going to be good for this country because shes a real champion of responsible budgetting. But its going to be good for maryland to have the chairman of the Appropriations Committee. I want to acknowledge john walker on behalf of the work force, thank you for being here. My main purpose for being here is to have a town hall meeting to allow you to ask questions. Now i have been here for ribbon cuttings and ground breakings and very happy occasions. They are nice. Today im here as we start february just a few weeks away from march 1, which will bring about sequestration automatic across the board cuts that will effect the work that you do. And i want to be here to answer your questions. We are only a few weeks away from the end of the continuing resolution and its not clear what the end of march will bring for the legal operation for you to be able to spend money. Thats something we need to talk about. So i want to be here to try to answer your questions as your United States senator by first start by thanking you for what have you done and what you continue to do for our country and for our world. What you do here is world class. There is no compable facility anywhere in the world. What you do is the best in the world. And yes, i can talk about the Economic Impact that you have on our community in Life Sciences there are 6 million jobs, good paying jobs that depend upon the basic research that is generated from what you do here. That is critically important, the number of jobs that we have. The impact you have on maryland and our employment. And i thank you for that. But what i think is critically important is how youve changed the way of life, the quality of life for people around the world. I had a chance to meet one of those individuals just a few minutes ago. The work that dr. Reen hand does on renal cancer. That is just one face of a person who would not bes with us today, who wouldnt have survived but for what was done here at n. I. H. And that story has been told thousands if not millions of times over. When i was a youngster i had a cousin who was diagnosed with a disease and decide shortly after. I later found out it was karen. We didnt talk about that when i was young. Cancer was a death sentence when i was a young person. Have you changed that here at n. I. H. The work thats been done here has given hope to so many families and have cured so many diseases. I think about the progress weve made in heart disease. When i was young if you had a heart disease, it changed your life forever. You have changed the landscape on understanding our heart and how we can live healthy lives. Youve changed the hand scape on hiv aids. It was a death sentence, no longer, thanks to the work thats been done here at n. I. H. Youve helped us understand Mental Illness and changed the landscape on Mental Illness. So many different areas that you have led have changed what we know about diseases and how we can improve the quality of life. So i first come here to say thank you. Thank you for what you have done. I know congress has a strange way of saying thank you. But i am sincere. You are the front lines of service to not only our country but i think to our world and i very much appreciate that. So let us move forward to the problems we are having. We have a budget problem in our country today. We have budget deficits that are not sustainable and how are we going to dale with these budget deficits . Thats the issue before the congress that we are dealing with. We dealt wit this week. We had president obama who visited with the democratic members of the United States senate in annapolis and it was the issue we talked about the most. How are we going to deal with our budget deficit . I could talk about how we got here, the policies that led to these deficits but im not going to harp than because we have to figure out how were going to move forward. I will emphasize one point. This deficit was not caused by our federal work force. You are not responsible for their deficit. [applause] we could talk about the policies of going to war and how we pay firt etc. But we have these large deficits and we need to deal wit. Let me bring you up to date because the last time i was here was a little over a year ago and we were talking about the budget control act and how we had to deal with this deficit and how we were going to bring down discretionary domestic spending and how we were going to deal with longer Term Solution that is required to us deal with revenues and mandatory spending and i ask your understanding as we pass the budget control act. And at the we were analyzing a recommendation that came out of a president ial commission known as the Boles Simpson commission. That Commission Said we had to reduce the deficit by 4 trillion or 5 trillion to have Sustainable Growth in our country. Take a minute and look at the progress that weve made since that last visit. Simpson bowles which was generally recognized as a balance add proach, a bipartisan approach to deal with our deficit asked to us reduce the projected deficit by 4 trillion to 5 trillion, we have 60 coming from spending cuts, 40 coming from revenues approximately. Since that time, we passed the budget control act that brought the deficit down by almost 1. 5 trillion over ten years. Almost all of those savings were on the discretionary domestic side. We froze budgets, aws know. You know that firsthand with your pay freezes. We did that and we were able to achieve through these budget caps about 1. 5 trillion of savings. Then on december 31, it may have been january 1, because it may have been after new years. Congress passed the compromise to avoid the fiscal cliff and that contained almost yours truly trillion of deficit cuts and most of that was true additional revenues by establishing the permanent tax rate at 39. 6 of wealthiest people and permanent tax relief for middle class taxpayers. We are up to around 2. 5 trillion of deficit reduction since we last talked. Now we are getting to march 1. And march 1, if we do not act, sequestration will take effect. These are across the board cuts. These were never intended to take effect. They were intended to get congress to act on a longterm budget plafpblet that was the intent of it. But were at the day of judgment, march 1. And they will take effect to our National Defense budget as well as our domestic budget. The cuts are actually larger on the military side. And if they take effect on march 1, if they take effect, they will cause significant damage to our country, to our National Security redness, to our commitment to provide essential services to the people of this country and to our economy. Let me talk a little bit about the number of jobs. There are Different Numbers out. There we have that it would effect the cuts here at n. I. H. Alone when you look at the direct jobs and the indirect jobs could cost our economy as much as 100,000 jobs. Weve looked at the impact on our federal work force. Maryland has almost 6 of its total work force are federal employees, well above the National Average of 2. 2 . So it will have a real impact on the state i represent, more so than other states. But then there are federal contractors who will be negatively impacted with layoffs hurting our economy. So weve got to avoid sequestration. Thats another 1. 2 trillion more in cuts. We need to substitute a rational plan for these ir rational cuts. Thats what we need to do. Let me tell you what we are working on and what were going to try to do. Were going to try to substitute for sequestration a plan that gets sequestration off the table not for two months or one year or two years, but for ten years. We shouldnt have these types of cuts in Discretionary Spending. Weve already done. That look at the numbers. Look what i told you originally about the Simpson Bowles framework. Weve hit those numbers on the discretionary side. What we need to do is substitute a budget that makes sense for growth in this country so we can create the jobs, train our people, do the research, protect our people, do what is necessary but allow for Economic Growth and responsible budgeting. So how do you do that . I believe you will see budgets that we will be submitting that president obama will be submitting that will say that we will do three things to continue this deficit reduction. Weve already done over half but we need to do more. We need more revenue. Historically revenue is represented about 19 to 20 of our economy. When bill clinton was president and we balanced the federal budget it was close to 20 . Revenues today are less than 16 of our economy. We need additional revenues. And we have suggested that there are ways of doing this by looking at what we call the tax expenditures. These are provisions in the tax code that give tax breaks to certain groups of taxpayers but not all taxpayers. You might be surprised to learn when you add that up on an annual basis it quals about as much revenue as we bring in from the tax code. That 1. Trillion a year we spend in tax expenditures. Not all of those are necessary. Like not all spending is necessary, not all tax expenditures are necessary. We can certainly save over a tenyear period a couple hundred billion dollars by reducing these tax expenditures. That needs to be part of the equation, revenue. We also need to bring down mandatory spending. It represents we spend much more in mandatory spending than we do in the appropriation process in government. And you know that the anguish we go through every year on appropriations. We need to bring down our mandatory spending. The best way to do that is to bring down the cost of healthcare which would reduce not only medicaid and medicare cost, but also the cost to our economy of healthcare. And working on those proposals. Then we can save money on the military side which we have the overseas Contingency Operations which reskets the military operations in afghanistan which are at a high level. They are going to be reduced, we are going to have our troops out in 2014 plus in todays threat against america which is more of the terrorist type rather than another country trying to abade us we can organize our oversees operations in a more efficient way. We should be able to do enough deficit reduction without the type of cuts for our Discretionary Spending particularly on the domestic side. And we should do it in a way that allows to us continue to invest in what will create the jobs we need for our economy, by educating our work force and doing the basic research we need. What is the prost prognosis of getting that done by march 1 . Not very bright. For the congress, for the house and the senate to reconcile their differences and get a bill to the president for signature taking care of all these issues by march 1 is not likely. Its possible. Were going to work for it, but not likely. So we will look at ways we can provide shortterm relief. But ill support that because i want to avoid sequestration. We need to get working now on the longterm substitute proposal and reconcile the differents between the house and senate and get it done. Predict sblet critically important for the work you do here, for researchers who commit their lives to know the funding will be here, not for two months but for a long time. We really need to reconcile our differences and get this done. I wish i could give you clear direction on this. I wish there was a more definitive answer. Gridlock never created a single job in this country. Gridlock is bad for america. Congress needs to act. But i tell you the debates we are having in washington are fundamental to americas future. President obama is right to insist that were not going to solve our problems by asking spending cuts to take the full burden here, we do need revenue. Hes right in his leadership on this issue. And i am hope thaffle we will see a resolution of this issue sooner rather than later. I have confidence we are going to get this cun. I have confidence in this country. When i come here and see the incredible work that you do, it just energizes me and i know i speak for your federal delegation. We are going to do everything we can to make sure these sequestration orders never take effect and we have a plan that will allow the type of job growth that is important for americas future. As i said, this is a town hall meeting. I went on longer than i had planned to but i look forward to your questions in regards to the fiscal issues in washington and we also are taking up some very exciting areas. Weve seen some bipartisan movement on Immigration Reform we are excited about. We intend to move an immigration bill shortly, probably next to the budget the most controversial issue we are dealing with deals with gun safety. And theres been movement on gun safety. Ill be happy to answer questions you have on the gun safety issue. One of my proirpt Social Security how to move forward with the clean chesapeake bay. We have an energy issue that still is with us. There are a lot of subject that is are out. There but when youre here a few days before march 1rks the fiscal issues are the ones i wanted to bring you up to date but ill try to answer any questions have you on any of these issues. Thank you very much. [applause] thank you senator. Please come and join me on the stage and we have people in the aisles holding microphones for people with questions. Let me start with one while people are getting their thoughts together and lining up. I think all of us who work here at n. I. H. Are inspired about the scientific opportunities we have now, unprecedented. You heard about some this morning. We feel like this a moment in history and yet were not sure that message is fully get ago cross. Ive had the chance in the last year and a half to meet with more than 200 members of the congress one on one to have a chance to explain what n. I. H. Is all about. Both parties, both houses, i would say all of those meetings have gone well because the case is so compelling and this is not a partisan issue. Then you wonder is this something that sticks or when the real discussions are going on about decisions that have to be made, is the consequence of those decisions for medical research actually something that people are thinking about . Youre in the middle of those conversations. I know the effect on defense is on everybodys minds when it comes to the sequester. How could we do a better job of making it clear just how much is at stake here . Its a great question. Its interesting the person i had a chance to meet with who is here and part of the program told us quite frankly that he never thought he would need government help. He never needed unemployment insurance, he was employed living his life thinking everything was going fine and then discovered a disease in which only the work here would give him a chance to enjoy a future. Hes now a strong advocate for the n. I. H. Im afraid that Many Americans just dont personalize what is done here. They live in the moment rather than remembering the past and their expectations for the future. That is not the majority of americans. The majority of americans strongly support the work that is done here and want to make sure that you have Adequate Funding for it. The majority of americans want sensible policies for this country. They want to us deal with the deficit in a way that provides for the future of this country. So they want to invest in research and education. They want roads and bridges. Were having a tough time breaking through the division that we have in washington. And quite frankly, the more you can do to underscore the importance of the work that you do, i think the stronger the voice will be for a reasonable solution to our fiscal problems that will permit n. I. H. To get the funding it needs on a permanent basis. So i think this point needs to be underscored more and more. The work you do here and the impact it has on our lives. I was talking we had a chance to talk about the work being done in infection diseases about trying to develop a way in which we can get a flu shot that is more generic rather than every year. Thats extremely exciting to me. I dont like trying to figure out when im going to get my flu shot and whether it works or not. The more we talk about what we can achieve in the future, what america can achieve in the future and we have to invest in it because thats americas future and our childrens future. Were going to go to the microphones. Let me ask people to be concise and have questions and not speeches if you can. Try to aspire to that. Start over here. Thank you for your support of federal workers and the n. I. H. I would like to ask your opinion about a policy option that could be helpful, that is to garagely increase the amount that is paid into Social Security and medicare garagely by. 1 a year for the next decade. By my estimation that change by my estimation, that would be increased revenues of 1. 4 trillion for the federal government. More than enough to eliminate sequestration. I did not mention Social Security because Social Security is not a problem in the budget debate were having today. It is not part of the problems we are trying to deal with. It is an issue we should take up because the longterm demographics of america dictate that we have sound financial footing for Social Security. We are rather proud of the fact that we have given you a problem there. But you are also helping with the solution because you are keeping people healthier, having them work longer. You are getting it on both sides. I fully agree that part of the solution for Social Security long term is to have people pay on their payroll income beyond the current cap. The current cap of 100,000. If you make a million dollars, you are not paying full fica taxes. Part of the solution will be to raise that cap to a more realistic level. In regards to medicare. Medicare funding is already progressive. Im not sure that the same would apply to medicare funding. To me, the easiest way to deal with healthcare costs is to deal with health care expenses. You know that. You are helping. You are dealing with the Household Infection rates. How you manage complicated illnesses. Just treat one part of the problem. All that brings down costs because of the Delivery System is reformed. All of that brings down health care costs. You have innovative here at nih and that will help to reduce medicare and medicaid costs. What is the most effective way that federal employes can protest the sequester . Thank you for that. I know that Chris Van Holland and id served on a conference together and teamed up to defend our federal workforce. We think we did a pretty effective off when we tried to put a more permanent freeze on the salaries and tried to get current workers to increase their pension contributions. You have been the scapegoat for every problem. Theyve just came in on an attack on the work force. They want to eliminate the military part of sequestration. It is outrageous and we will continue to defend that. Our whole delegation will to everything we can. Put a face on this. The reason why the federal workforce is on the attack is because it is an attack on the government, it is not an attack on what you do. Go out there and say what you do and how it is important for what you do to have the certainty of a realistic budget. Dr. Collins was explaining that many people are making career choices could affect the capacity of our country to deal with the challenging issues that you deal with. Explain that. Put a face on the issue. You are real people, you have real lives. You have families and the you are on the front line of Public Service. Dont be afraid to point that out. Help us with personalizing what you do on behalf of your country. Then come help us with the issue that dr. Collins talked about and that is the sense of purpose for how we deal with the budget deficit so that we can have a future for our children. I represent the nih assembly of scientists and it is a democratically elected group. We want to thank you for your strong support of research. We hear that your heart is a live with what we have chosen to keep our careers in, quality of life and extended health. We want to point out that these revenues that you seek also come from the creativity of individuals that create technology, the kind of technology that needs to be acquired by the technology industry, for example. Also many other sources of revenue. We just want to point out that sometimes the talented scientists and clinicians of the nih feel hampered by some of the policies and rules that come our way. We offer our help in any way that we can to try to Work Together with you to figure out ways to ensure the maximum creativity of a federal scientists so that the American People can get the most of their investment. Thank you. We all have to be at the table. We need your input. We have tried to work with the same set of facts. There is 1. 2 trillion dollars of tax expenditures, that was a oneyear number. The problem we have with sequestration is that it is two trillion over 10 years. The annual tax expenditure number is 10 times that amount. The upper 1 of income earners in this country get about 25 of tax expenditure benefits. So, there is room for changes in our tax code that will be encouraged the type of creativity you are talking about and allow us to have reasonable budgets and allow us to move forward as the country in a responsible and fair way. Do we have an questions by e mail . Would you tell us what you have got there and then you will come back to the microphones. We have one here. The person asks, why cant federal agencies being given an incentive for managing their funds prudently by being able to carry over excess funds into next fiscal year instead of trying to spend everything in one year . [applause] i think that is an excellent point. It makes no sense to have an incentive to try to spend money at the end of the fiscal year otherwise you lose it. Why not spend it in the best interest of your mission and the taxpayers of this country . There should be a reward similar to the one that is suggested. It makes good sense for our country and it certainly is worthy come up to how you can put those into the budget process. Thank you for supporting filibuster reform. It did not happen. We talked a lot about the gridlock in the house. I also wonder how you propose if the house cannot pass a budget. Also, how you can show a face of responsibility when you have had so much gridlock in the senate. The question deals with the gridlock in the senate because of the 60 vote threshold. The filibuster in recent years has been used an unbelievable amount of times. Leader reid has hired to file 120 cloture motions in 2012 on which makes it virtually impossible to do our jobs. My own personal view, i believe in majority rule. I believe that election has consequences. I dont think we should have a filibuster. It should be decided by the majority of those duly elected. I got together with 8 of my colleagues, including myself, a couple of months ago in an effort to try to avoid a partisan division on rules in the u. S. And its. There were four democrats, for republicans. It was a Diverse Group of senators including senator mccain, senator kyl, senator pryor, senator schumer. It was a group senator levin was our leader on the democratic side. We came up with reforms that i think will help. The cannot filibuster bringing a bill to the board. Rather now where the minority cannot vote against cloture because they are doing it on a procedural basis. The bill will now be before us. It will get started in debate and voting on amendments before we have to worry about whether we need 60 votes for the threshold. Secondly, there is a limit on how you can filibuster. We can bring the president s judicial nominees up in a much quicker way. There, you have eliminated two of the potentials on going to conference. Getting into conference is particularly important in going to this congress. The most significant reform, we have dramatically reduced the power of an individual senator. If you are going to object, you need to do it on the floor of the u. S. Senate. You can no longer be in your hometown calling the cloakroom and st. , i want to put a hold on the bill. You have to do it personally. We think this will flesh out some of those objections and allow us to move forward and a much more expedited way. I think we made progress. I would prefer to go forward. This was done in a bipartisan way. Thank you. I was very happy to hear you talk about increasing revenues because it is quite clear that we cannot address all of our problems through budget cuts alone. Im concerned try to address the needed revenues only through revamping the tax codes might be insufficient. I am wondering the other streams of revenue you might be pursuing. This could increase Public Health by limiting carbon and are at this for and also revenues to help the budget. I agree with your point. The carbon tax would have several advantages. First of all, it would tax pollution at its source by reducing financial incentives through carbon. You have positive incentives to reduce carbon. You have a more predictive Revenue Source in a gasoline tax. It could be a source for financing our roads, bridges, transit systems. We only had a reauthorization of our program to the end of next year. The gasoline tax will not produce enough revenue to keep the current levels longerterm. Were looking for Revenue Sources that are positive, that we could get bipartisan support such as a carbon tax to help finance the next transportation bill. Helping us with an Energy Program could be the way to go. Do we have anymore questions by email . This is from the office of research services. Has anyone attempted to put into dollars how much time is wasted creating, reviewing, and implementing contingency plans for sequestration, particularly by highlevel staff that need to constantly be in meetings on this topic . The savings from that wasted time alone might pay for some of the cuts. Dr. Collins just whispered to me that that is true. We want your creative people here to do the work that they are trained to do. We want you to discover the next year or dread disease. Energize creative innovator is on research, providing the basic research so that the Life Science Companies that are out there can create more jobs and do their things. That is what we want you to do. When you are distracted and doing all of these contingency plans. Worse than that, when you are holding back on what you would like to do, it is the time you spent in planning, it is the time and the energy we lose by uncertainty. I want to make right decisions, dont get me wrong. No decision at times it is better off than no decision. The uncertainty of how the future is going to be. It is way past time for congress to give you a definitive answer. As when i sought the chance to talk to the president on wednesday, i have stressed the point to get the sequestration and the game hand last said that we can give you that kind of predictability. And get the game plan passed said that we can give you the kind of predictability. That is what we would hope for. I have a question. Some press reports have floated the idea or the perception that forces in congress would like to push for the sequestration because that way it would achieve their goals to cap nonmilitary spending. How true is that from your perspective . There are some members of congress that believe that sequestration might be ok. It would reduce Discretionary Spending by over a trillion dollars over the next 10 years. There is a hardcore group of members who are for reducing spending including military spending. They dont really care too much about the concerns that we have talked about. They represent a minority. I think most members of congress, democrats and republicans agree that sequestration is wrong, even those who believe there should be further discretionary cuts believe they should be selective. They should not be across the board. If you have problems with your budget and you have budgeted to go to the movies and feed your family and you have a loss of revenue, you dont cut your spending equally. You continue the essentially Important Services for your family. We are not able to do that under sequestration. Even those who believe that we should cut Discretionary Spending believe should be done other ways besides sequestration. Most of the members of congress would support a more balanced approach. Most believe that the mandatory side needs to be looked at more than the discretionary side. Most believe that we need more revenue. Can you spell out for us please if sequestration happens, how will this affect our jobs at nih . I will do the best i can. If we reached march the first and if it becomes a more lengthy ordeal and we dont corrected within a matter of weeks, then administrative heads must produce the savings that are required in the fiscal year 13 budget. That is the budget we are currently in. They have about a seven month a totalto achieve base savings. They can look at their total budget and figure out how to do it. When you are the nih, you have two major sources. Your largest source is the grants you get for research. Some of those have been held back. That is very bad. Very bad. Dr. Collins was explained to me the percentage of worthwhile grants, promising france and that are now accepted. It is that a modern time low. I believe somewhere around 17 . That means that, as dr. Collins explains, he has to try to figure out who are the really great great opportunities verses the great opportunities and it is hard to draw that line. Were going to lose a lot of potential researchers. But it also can affect the work force. If you are a federal agency, 98 senator money is in salary, then your only opportunity to reach the target cost by sequestration is to deal with the work force. You can look at turnover but theres not a lot of turnover. That is when you start looking at these horrible things called furloughs without pay. Theyre horrible. And in fact, it affects not only the morale of the work force but the services we are providing to the people of this country. There are really no good options on this sequestration. It should never take place. It should be replaced immediately and it should be replaced for the entire 10year period. We will work hard to make sure that occurs. You mentioned that the nih is a mecca and we should try to make the public more aware of that and reach out as much as possible. One of the things that makes that difficult this year and a ticket to have patient groups, other scientists come to us and learn from us and Exchange Ideas to proportionate cuts in our budget, including travel to have these groups come here. Is there any thing congress can do by way of resolving to lift some of these onerous burdens which are kind of like mini sequesters to us. Dr. Collins could have a free hand to use the money more wisely and effectively. One of the first things i asked dr. Collins when i saw him this morning was, where can use some more money so we can talk about the future . I dont like playing defense. I am proud of the years in which we doubled the capacity of the nih to give grants. I was proud to be part of the congress when we did that. Now, we have lost all of that momentum since the early 2000s because of the budget restraints. Our First Priority is to get our budget back into some semblance of order. Hopefully, we can get that done this year. Then we need to look at how we can give you additional tools. I happen to believe that your ability to interact with the International Community is critical to your mission. You have got to be there. You have got to be able to get the energy from your colleagues around the world that helps your work here. It helps your mission. I think that is a very good point and a strong support this. Let me, if i might, dr. Collins, just point out that our economy is recovering. If you look at the stockmarket, if you look at a job growth from it if you look at housing, our economy is coming back. If we get a reasonable plan, not necessarily a everything i want, but a reasonable plan for our budget, it is not difficult policy choice to make. If we get that done, our economy will continue to grow and i believe will take off. We can get back to the type editions of getting the tools to you to do you do best. I believe we will get there. I do. I believe that our future is very bright. We live in the strongest economic power in the world. Yes, we have to be mindful of global competition. There is no question about that. Things are different today than they were 10 years ago. There are countries investing much more than we are in basic research. We have to catch up so that we can continue to lead the world in this critical area parent of this energy we have here is unique. It is important for our childrens future and the global economy. Im optimistic we will get it right. I think we have tools to get it right. I just thank you once again for being on the front lines. I can imagine the attacks that you get when you hear the attacks on federal workers, you cannot help but take it somewhat personally. So, i thank you for being understanding and sticking with this and serving your community as you do here in Public Service. I am convinced that america will continue to grow, that we will figure out a sensible way to deal with this issue. We will do it i hope sooner rather than later and allow you to continue not only to make this senator proud but to provide a hire, better quality of life for the people in america and around the world. Thank you. [applause] [captioning performed by National Captioning Institute] [captions Copyright National cable satellite corp. 2013] on the next washington journal, a look at the automatic spending cuts. 600 million are from the pentagon. We will talk to the National Security and a deer for usa today nationalsecurity editor for usa today. We will talk about the use of drones. Washington journal live at 7 00 a. M. On cspan. House democrats held a retreat in virginia this week. Today, president clinton addressed the gathering. He discussed job creation, immigration, and gun control. Heres a portion of the former president s remarks. It is important not to give up on anybody, to talk to them. The worst that can happen is that people said, we are not crazy, all these people say you are trying to end the Second Amendment and all of that. They are wrong. Then, they will listen to on things that they do agree with you. They cannot hear what they agree with you on it they dont even know where you are on this issue, whatever is in this case. That is my only political advice i want to give you. You start up a storm of the health care thing, there are a lot of people that dont understand it. Make sure it works. Dont let it go. You can see all of president clintons remarks tonight on c span at 8 00 p. M. Eastern. Tuesday, president obama announced a plan to delay a scheduled spending cuts known as sequestration. The cuts will begin to go into effect next month unless congress and the white house agree on a way to cut the federal deficit. Wednesday, leading republicans outlined their plan to avoid those automatic defense cuts. This is 30 minutes. I am from californias 23rd district, chairman of the House Armed Services committee. Yesterday, the president gave us the proposal that cuts defense spending once again. We have a 500 billion in new taxes and also cuts in domestic spending. It is irresponsible, unacceptable. It leaves our troops and our economy im ready to face the challenges of the future when i went to our Steering Committee to apply for this job, i explained to them the way i saw the job was to make sure that our troops, those who sent into harms way would have everything they needed to carry out their missions and return home safely. Everything in the way of resources, training, leadership. These things are very very important. I look and i look at what is happening with these cuts that we have seen the last couple of years and it is just irresponsible that the commander in chief, his main job should be the same that i look at as my job, only he should be looking out for the soldiers, sailors, airmen and marines that he sent into harms way. He should not send them with anything less than the told that they need. And to be stepping up and continuing to cut i visited with their top leaders and they have told me that we have gone past cutting the fat. We are into the bone. Where they will have to cut will reduce the ability to train and equip these people properly. That will start costing lives. It is time for the president to face up to what the real responsibility is, with the real problem is, and that is to look at mandatory spending. Anyway, i am happy to be here today. We have a proposal. I am happy to join the senators. Were putting forth a bill that will give us some breathing room on the sequestration and pays for all the sequestration for the rest of this year. It gives us time to think about it. It pays for it by having a reduction in the general research of the next 30 years. So it is as painless as possible to protect our troops. With that, i am happy to introduce senator enhofe. We said that we would projecting losses of 780 billion over the next thing years. We said this could not have happened. I have always enjoyed our close relationship and we continue now in a different forum. And me just mention a couple of things. For 14 months, we have called on president to recognize the sequestration. People dont realize how bad it could really be. It was two years ago when senator john kyl and senator [indiscernible] got together with the House Committee and looked at what we would be a wanted do about it. That was the beginning of all this. Unfortunately, when the president can have with the planned yesterday, i saw the plan. I saw the 25 term just this morning, i think it was in the politico press report, the president has instructed his Budget Office to restrict the release of information on the impact of sequestration so there is not momentum in congress to fix it. This has deteriorated some of the members of the Appropriations Committee into may be having hearings. There is no way to delay sequestration to the end of the year. There is a way not to do it. That is what this is all about today. This is a way of doing it without cutting defense is, without cutting domestics, and without raising taxes. If the sequester is allowed to take place and a continuing resolution is not fixed, the department of defense stands to lose billions of dollars. The vice chairman of the joint chiefs said, there could be for the first time in his career instances where the bay at may be asked to respond to the crisis and we may not be able to do it. Where i am really pleased to the committee that we have and the minority in the senate, we have a lot of talent there. We will use all of that talent, we have people who are heading up are six committees, senators sessions, mccain, gramm, a yacht, and others on the committee. It has been my strategy in the past use this town to make sure they are the ones who will be driving it. It will not be a oneman show. Senator ayott is the one who has been driving this so far. I would like her to come forward with this, the bill, which will be ayott bill in the senate and explain what we will be doing with that. Kelly . Thank you, senator enohofe. I want to for thank senator mckeon and my colleagues senators mccain and gramm. We traveled run the country about this last year, a year ago, and talk about the impact on our National Security. Here is where we are. We know, based even from seeing our secretary of defense, from the chairman of the joint chiefs of staff, this weekend, on the sunday shows, what the impact of sequestration will be to our National Defense. I guess i would ask everyone here do we think were safer around the world around now with iran marching for Nuclear Weapons capability . With the assaults and all of the 60,000 people who have been murdered in syria . With the weapons that we have seen from the gaddafi machine that has ended up in algeria . We can go on and on about the challenges we face. Lets not forget that were still in war with our troops that we recently visited in afghanistan. So our National Security challenges remain great and we have already reduced defense spending 487 billion. It is time for the commanderin chief. It is his foremost responsibility to keep the American People safe and stuff sequestration. Our defense should not be used as a bargaining chip because of other policy aspirations that people want to accomplish. We have introduced this bill that is similar to the one that we introduced last year, the chairman mckeon introduced in the house, that addresses sequestration for defense and nondefense through the end of the fiscal year in september without raising taxes, and essentially taking the president s own Fiscal Commission proposal from simpsonbowles, and we also have the congressional pay freeze as well to pay for this. Yesterday, we heard with the president had to say. His proposal is unacceptable. It is insufficient. I agree with chairman mckeon on this. Everything we have heard from this president seems to begin and end with tax increases. Despite the fact that we have already given 600 billion in additional revenue just for a few months fix, he also wants more on that and more cuts to our defense. Even the his own secretary of defense said, if we dont address the sequestration, we will be shooting ourselves in the head. We will be hauling out our military. We will be substantially reducing our naval fleets, our armed forces at a dangerous time in the world. So i hope that my colleagues across both sides of the aisle will join in this commonsense effort. It gives us the opportunity to work out the bigger issue of fiscal issues now that the Senate Democrats said theyre willing to do a budget. I also serve on the budget committee. This bill makes sense. I hope it is passed quickly. Lets put where we are now. We have the president of the United States who said, during the campaign, this will not happen, when he talked about sequestration. Here we are. His administration rewrote along that some people would not be worn on the impact on it. Now he wants to use it to increase more taxes when we have a commonsense proposals right here from his own Fiscal Commission that we could pass to get us through september and it really makes sense so we dont undermine our National Security for generations as our secretary of defense has said. I thank my colleagues for being here. It is my honor to introduce senator john mccain, who needs no introduction. But he always appreciate it. [laughter] i thank senator enhofe for his attention tot his issue. He pointed out the devastating effect of sequestration. If it is implemented, it will cut every ship, truck, a tank, research and Development Across the board. The secretary of defense panetta, a man that i admire greatly, called sequestration a meat ax approach. I think it is important to note, according to one economic analysis, it costs a loss of 350 in fulltime direct jobs, 650,000 indirect job losses. That is a lot of jobs. In these difficult times. Secretary panetta said, this has become a very serious threat to our National Security. Para chairman of the joint chiefs of staff says the same thing. In the late 1970s, after the vietnam war, the chief of staff testified before congress that we had a hollow army, which then caused the attention of the American People and one of the reasons why Ronald Reagan was elected to be president of the United States, because of our rapid decline in National Defense that took place previously. We have seen this movie before and we live in a more dangerous world than any i can remember since the end of the cold war. This is the wrong time for sequestration to take place. We should be able to sit down together and resolve this without, again, asking the American People to have their taxes increased. I think you. Next is the lawyer from south carolina, senator gramm. We will spend 46 trillion over the next decade. The question is can we reduce spending by 1. 20 trillion without raising taxes and destroying the Defense Department . The answer is yes, if we want to. The president has a proposal. I dont think it does sound, but lets vote on it. To harry reid, the house, it has decided on sequestration the past year we have done nothing in the senate. We are not doing anything in the senate. So, harry, please take the president s proposal or come up with one of your own. Put it on the floor and lets start voting. We have our fingerprint as republicans on this sequestration idea. It was the president s idea that we come as the Republican Party agreed to it. We got in this mess together and we will have to get out together. Mr. President , helped lead us. All like anyone else on this stage, you are the commanderin chief. Do you really want your legacy to be that you let the American Congress into a deal that would destroy the military at the time it would need it the most . Do you want to pivot to asia . How do you do that with 232 ships . When about iran acquiring Nuclear Capabilities . Have you modernize the f16 and the f18 . Had you go deep into iran without the f22 and the at35 coming into being . Our enemy would love this to happen here im sure iran is very supportive of sequestration. I am sure that al qaeda Training Camps all over the world would be pleased with the fact that sequestration would gut the cia and the intelligence platforms we have to follow them around. It is not just about planes and the smallest airforce as in the history of the country, the Smallest Navy since 1915, the smallest farms since 1940. It is about the cia. It is their intelligence gathering capabilities. It is also about public education. It is about nondefense matters. So i am hopeful that we can finally start voting in the Senate Rather than just complaining about what the house does. To the president , we bear responsibility as republicans for allowing this to happen. Lead us to a better solution. If you do not, mr. President , he will go down in history in my view is one of the most irresponsible commanders in chief in the history of the country for what you have done, mr. President , that you allow the finest military in history of the world to deteriorate at a time that we needed it the most. Lets not let that happen. Let me just add or emphasize three quick points. One is, reducing civilians by attrition is a good idea, even at dod. I would remind you that yesterday, the recently departed secretary for policy argued in the Washington Post that we needed to reduce civilians at dod as a way of improving efficiency within the pentagon. I would say that applies to all the other agencies as well. Secondly, most of the concern about sequestration is focused on readiness and training, which is absolutely true. If you talk to the lawyers that work with the defense contractors, they think they will have a field day care and some had testimony last year that the legal hassles emanating from sequestration may eat up a lot of their savings. But beyond that, there are a lot of dangerous places in the world. And what we do is try to develop capability to deal with the unknowable contingencies of what could happen at a place like syria or iran or north korea. With less money, you can prepare for future contingencies. The point is that it does not just readiness. It hurts us in the real world today. There are lots of options to deal with this. As was mentioned, the house passed bills twice last year to substitute sequestrations savings for other more targeted savings so that you save this amount of money, youre still fiscally responsible, but you dont get defense and these domestic programs as well. Today, we have another proposal out there on the table. I suspect there may be another one or two in the next few days. Anybody who has been around washington in the past two months knows that, if anyone of us comes and says that the answer to this is taxes, they have not been living in the real world after we after what we have been through the last two months. It is time to get off the campaign trail and to be a commander. A colleague mike turner. The president has gambled with their National Security with sequestration and it is a losing bet. To give some perspective, the Defense Budget is slightly less than 18 of all of our spending. Yet sequestration would have 50 of the cuts falling on defense spending. It falls on 18 of our overall budget. The president has now made a proposal that includes taxes, but also 50 of the sequestration cuts to fall on defense. He said that the sequestered cuts would not happen. He did not say that half of the sequestration cuts would not happen. He said sequestration would not happen. So today we would free proposal that would have half of the cuts. This has been a problem that has been around for over a year. And in this late hour, they come together with a proposal that he knows would not be in our coffers in time to offset the overall expenses that are needed in order to address the issue of sequestration. The bill that were here for today is not not half of a solution. It is a whole solution. As we look at the fact that the world is not becoming a safer place, these cuts are irresponsible. This bill allows us to restore the spending and make sure that our National Security is protected and to look further into our budget to responsibly reduce overall spending. Thank you. Questions . We had talked with you this morning about some of the concerns that even some rank andfile republicans were having about this bill. Some of them are willing to endure the sequestered just to get cuts. Why are they willing to cover some in defense . What do you say to your fellow republicans . We will have a hearing next week, all of the joint chiefs. I think they will tell us that we are really in dire straits. They have said things from we have had meetings on this. We have had speeches, a lot of talk. And there is a waiting for the grand scheme of things that will fix everything. The president yesterday opted for a shortTerm Solution. We just dont think it is a viable solution. It is not one that can pass. We think the solution were presenting here today is certifiable and will fix much of the problem that the chiefs are having to deal with. As has already been said, we have already cut 487 billion out of defense. The 500 billion of additional sequestration and the way things are cut evenly with no thought or planning is disastrous. And the commanderinchief ought to step up and face the fact that he is the commanderin chief. Fine, show us. Provide some real leadership. This quest to continually raise taxes is not going anywhere. We have already done that. Now we are asking for real leadership for a real solution. Are some of your republican colleagues willing to endure these cuts . There are plenty of things to fight about. I think some of the differences i have with some of my republican friends is that were not that far apart. We all want to fix the deficit problem. There is no question. But i think, when they have a chance to look at this bill and understand what were really facing, i dont think we will have a problem. How is this different from the proposal from a year ago . Did we have a pay freeze a year ago . [laughter] it is different. The house had the attrition of the workforce that is in this component. We had a combination instead of every three positions that came open, only filling line. We had two. And a combination of overall across the federal government over a year. This is different here it combines both so were on the same page. And we have the house proposal on nutrition and we added congressional pay freeze on it. What makes you think this time around that the Senate Majority leader will take up this proposal . I would certainly defer to the chairman, but there is a real urgency here. One of the reasons that the president and the administration, during this campaign, didnt want the actual warrant act, the law that requires to notify workers that they may be laid off to go into effect is because they knew that someones people understood the real implications of sequestration, that there would be public outcry. But here we are. A think were in a different place. People understand that there are grave implications to this. I hope that the leadership would move forward with a very legitimate proposal that addresses this issue at least to the end of this fiscal year. Do you feel comfortable tomorrow that you will have a vote on former senator table . I dont know. I want to say this about the question before last, on how does this differ from last year. Last year, they were not desperate. Last year, we were not talking about 487 billion. Last year, we were not talking about the president s own secretary of defense saying that this is devastating and disarming america. I think people are aware that this president has done everything he can to hide from the people the devastating effects of sequestration. Excuse me there is information. Im not exactly sure what they will be done with that hearing. Providing more flexibility . Providing flexibility would be a lastditch effort. This bill is one that will solve the problem. My introduction of that was merely to get the chiefs to sit down and analyze just how devastating this will be and what we could do with the same thought in mind to make adjustments to make it less devastating than it will be. That is the difference. We have already talked to the chiefs. They are working right now. It is best to accomplish this first. They have said that there has to be a component of closing tax loopholes. Youre saying that this situation is desperate is it a desperate enough that youre willing to sit down . It is not desperate enough you can start raising taxes when you can do it without raising taxes. That is why were here today. Will have to have a bipartisan negotiation if youre not willing to entertain what they want. They run the white house. That is right. They run the white house. But that is not the majority of america. The American People did not say that we are not taxed enough. If we had those in this place, we might find common ground. How about this as an idea care go to the president and asked him, during the campaign he promised this would not happen. If i get elected president , i will do sequestration in half. This is a big deal in virginia. This is a big deal in other states. So here we are, after the election. He didnt tell us i will raise taxes three times. 1. 20 trillion in tax increases for obamacare. 600 billion in tax increases to avoid the fiscal cliff. And now you want to raise taxes yet again. How about the idea of trying to find some spending cuts that do not support the military when you have 460 billion to choose from over the next decade. No more backroom deals. But the president s proposal on the senate floor and see how many Senate Democrats to comfortable raising taxes yet again. And to my republican colleagues. After this hearing, if you feel comfortable with cutting the government this way, then you have lost your way as much as the president. What happened to the party of Ronald Reagan who said the number one goal of the federal government and the federal governments responsibility above all others is to fund the department of defense . What happened to that party . I intend to get the party back. I intend to fight for the party of Ronald Reagan. And we will explain to republicans and democrats what happens. And we will challenge our republican and democratic colleagues not to raise taxes every time we have a problem because there is a better way. Economic growth is down. Unemployment is up. Lets start cutting spending. Bring a bill to the floor then. The house has acted twice. The house has acted twice to avoid sequestration. During the president s proposal fourth. As go to conference and resolve it. So far, we have seen no indication that the majority leader of the senate will bring this to the floor of the senate. Lets go to work for a change. Have you spoken with democrats about this proposal . Sure, we have. Many of them say, yes, lets go to the floor. That is what were supposed to do. They may not agree with this proposal, but a lot of the democrats i talk to are aware of how devastating impact will be the sequestration. The path we are in right now is that the congress will not act in the next 30 days. We will take one more and we have to wrap this up. The offset number is 85 billion. Through september. Yes, from the combination of congressional the rest is through the president s Fiscal Commission. We have to wrap this up. Let me say one more thing about the question about what has changed. Up until december, the joint chiefs were commanded to not plan for sequestration. Now they have had time to look at it and we will hear next week some very specific things that they told me in the last couple of days that, when people hear those things, when the call comes, the me not be able to respond to these emergencies. And when the American People find that out, there will be some real change. Thank you. Thank you. [captioning performed by National Captioning Institute] [captions Copyright National cable satellite corp. 2013] a look at the automatic spending cut scheduled to take effect march 1. About 600 billion are from the pentagon. We will discuss that with the National Security editor. A conversation about the use of lethal force against suspected terrorists. Terrorists. We will