Transcripts For CSPAN Tonight From Washington 20101210

the founder of mci was one of the biggest man in my life. he was a great mentor for me. he said, do not try to look into the future. imagine yourself in five years? where do you want the company to be and how did you get their? what are we going to do in 2025? they had thought out to 2025, they would not have made the decisions in 1960 that sealed the fate of my immediate predecessors. they were good man, capable and smarts. they were the victims of structural kos that work -- structural costs that were committed in the the 1960's. >> i hope it was water coming out of the exhaust pipe. i want to thank you on behalf of the economic club of washington. let me give you a gift. [applause] it is a map of the district of columbia. thank you all for coming. thank you very much, dan. host [captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute] [random conversations] >> secretary of state hillary clinton is scheduled to talk about middle east policy tonight. she is joined by ehud barak at any event hosted by the brookings institution. we will have that effect at 8:00 p.m. eastern here on c-span. >> metal and high school students, as you work on your documentary -- middle and high school students, as you work on your documentary films for the student cam contest, listen to our judges. >> i like to see investment and care into the topics you are telling us about. be sure to be interested in what you are telling us. if you not -- if you are not interested in what you are telling us, chances are we will not be interested either. >> i am looking at big deals where people have look at the c- span content and said, what elements of c-span video but the more -- the most sense for telling the story i am tried to tell. >> for information on upload in your video, go to studentcam.org. >> the c-span network is available to you on television, radio, online, and on social media networking site. by our contact anytime theses and video library. we take c-span on the road with our digital bus and local content vehicles. it is washington your way. now bill in more than 100 million homes. created by cable. provided as a public service. >> with the u.s. unemployment rate hovering just under 10%, the urban institute of to a panel discussion looking at the u.s. stops market and initiatives that might help lower that number. speakers include officials from the national league of cities and independent business. from earlier today, this is one hour 25 minutes. >> in this great recession, the total level of job losses far exceeded that of downturns in recent memory. as a result, the ranks of the unemployed exploded over a short number of years. even more people are involuntarily working less than full time or are too discouraged to be counted among those looking for work today. another alarming piece of evidence is that the share of the unemployed who have been out of work for six months or more is at an all-time high. most experts and expected economic recovery to be slow and for job growth to be anemic for years to come. this is a disturbing forecast because persistently high unemployment rates combined with the problem of long-lasting on the planet for many poses serious -- long-lasting unemployment for many pose serious threats. the unemployment programs to address these problems were designed in different times. they are not up to become a challenge. the urban institute has launched a program of rigorous research to inform the policy debate and to inform policy development on this set up unemployment challenges. are thediscussions first in a series of forums on unemployment and what to do about it that we will be holding as part of this initiative. deprave you a couple of upcoming fall when -- upcoming forums, on january 5, we will be looking at the challenges and concerns of to particular groups facing unemployment challenges, and people trying to it did the job market and older people -- tried to enter the job market and older people who had hoped they work at getting the job market. on february 23, our focus will be on how the safety net should be retooled to operate more effectively in times of high unemployment. today, what we will be discussing is why job creation has been so tepid in the current recovery. what we know about cost effective strategies for expanding jobs and what public policy can and should be doing to jump-start job creation and demand for workers. we had a terrific panel to tackle these questions. i am hoping that the conversation is more on what we now or think we know about tackling these problems rather that on how discouraging the problems are. our panel in alphabetical order is a senior economist at the upjohn institute for employment research. he focuses on local labor markets. he is the author of "jobs for -- "jobs for theo poor." bob is the economic education director for the federal reserve bank of richmond. cliff johnson is the executive director for the institute of youth education and families at the national league of cities. that institute's core concern includes education, youth development, child safety, and family economic security. he is the co-author of two books on labor and social policy. bob lehrman is an economics professor at american university. he is an expert on how education, employment, and family structure which together to effect economic well-being. our moderator is an economic institute fellow. previously, she was vice president for governance at the center for political and economic studies. i would like to thank everybody for joining us today. i invite you to come back on january 2010 and february 23 for the next two sessions in this series. i will hand the program over to margaret. >> thank you. as was indicated, this is not exactly an unprecedented economic situation. it is highly unusual. three years to the month after the recession started and 18 months after the nber says that it ended, we find little acceleration in job growth. we are also at the end of the federal fiscal stimulus package with just a few more months for many of the funds to be utilized. the question is, what do we do now in order to jump-start job growth? we have had less -- we have panelists who will present ideas. >> thank you, margaret. thank you to the urban institute for hosting this forum on this important topic on the job creation. my focus is going to be on how the u.s. can immediately create jobs on a large scale in a cost- effective way to a job creation tax credit. we need more cost-effective got creation policy because we are short 10 million jobs. if we want to get that the employment population that we had at the beginning of the recession -- if we have an unusually rapid job growth, it will take at least five years to close this job gap. this job that has significant long run economic costs, not just social costs. 1/5 of the involuntary unemployment becomes chronic, which aren't -- which probably lowers the capacity of our economy. stimulus is important for job creation. only indirectly increases jobs by increasing output. that created fiscal stimulus is at least $100,000 per job created because that is the average ratio to output to jobs. the most recent tax cut deal between the president and congressional republicans had an estimated cost of a hundred $58 billion. according to the center for american progress, the job creation will be 3.1 million jobs over the next two years. if you look at that and do the math, because per job here is about to let the $75,000. job creation estimates are conservative. i should also note that the recent tax cut deal has benefited those in job creation. still, the cost is high. more cost effective job creation strategy is required that we target job creation. what is public service jobs, which cliff johnson is going to talk about. there was a proposal that i wrote in a paper. the obama administration proposed a similar tax credit in early 2010. this proposal was not enacted. instead, congress adopted a proposal by senator schumer called the hire act, which is less effective. that act provided tax credits for hiring the long-term unemployed. we should start over and adapt a true job creation tax credit. if enacted today, our proposed job creation tax credit could work as follows. the credit would provide any employer, whether for-profit or nonprofit, with a 15% tax credit for net real peril expansion in 2011 and 10% in 20 -- in net real payroll expansion in 2011 and 20% in 2012. using payroll expenses means the credit would not be received if they simply hired to fill a vacancy created by someone quiting or firing. the employer has to expand payroll. the fact that the payroll -- that the credit is not paid on all payroll, reduces the costs enormously compared to a payroll holiday. the fact that the credit is not paid on any job vacancy, all the new jobs, reduce its costs or hiring. it helps business cash flow, which is important for small businesses. the credit is refundable. it does not require the business to be profitable or to be a for- profit business. that make credit more relevant for more employers. the credit could be claimed as businesses filed their normal withholding or income taxes. it has little additional administrative burdens. the credit goes to any employment expansion. it does not require hiring any particular employee group. in recent hire act requires hiring people unemployed for a certain amount of time. it will lower the take up rate and reduced effectiveness. we estimate that the credit would at 2.8 million jobs to be taught in the first year and $2.3 million in the second year -- tops to the economy in the first year and 2.3 million jobs in the second year. you are boosting unemployment and boosting gdp and increasing gdp and increasing safety expenditures. let me address some common questions that we received about the job creation tax credit. what is the evidence that this credit will work? there are several studies up a similar new job tax credit from the 1970's. they suggest a -- you get a similar number of cost per job created. and a similar cost effectiveness. why would anyone expect a modest 15% credit would cost employers to expand? no one is arguing that a 15% tax credit is going to cause an employer who is not thinking of expanding to expand. the employers who are thinking about expanding in the next three or four years will speed up their plans. the surveys we have done with employees -- which employers suggests that will happen. what about the dead weight and the fact that the tax credit will go to employers who would expanded anyway. this tax credit is about $7,000 with the average job. the only need one in four to subsidized jobs to be induced out with the cost per induced got to be -- he did not need a high hit rate -- you do not need a high rate for it to be cost effective. dead weight loss is much greater from tax credits to cover all hiring. why aren't all businesses more enthusiastic about this proposal? my experience is that businesses do not like tax credits that are targeted on particular behavior? they prefer a tax credits that go to all businesses without conditions. the reality is that the credit does not have to be popular with every business for it to be effected. i found that most employers did not like this proposal. they made some quite a bit too out comments about the proposal. -- some quite vitriolic comments about the proposal. in sum, a job creation tax credit could create 2 million or $3 million per year. that would go a long way to restoring the employer recovery. thank you. >> cliff? >> thank you. the mayors and other leaders are accustomed to anticipating and planning for likely stress to their community. this is probably most of it in the emergency preparedness area where mayors have no idea when the next hurricane is going to strike or the next flood will come through their streets or when the next swine flu epidemic is going to be on their doorstep. they know that that is what to happen at some point. they had an infrastructure in place for thinking about it and a strategy for responding when it happens. a prudent approach to recessions with parallel that. you have no idea in the course of the business cycle when the next recession is going to hit. we have almost 100% certainty that there will be a time when we will see the big spike in unemployment. we have been through this door rises in the jobless next over the -- historic increases in joblessness over the last few years. in the '60s and '70s, we had something that came closer to an infrastructure that would allow us to be prepared for that eventuality. we made considerable progress culminating in the public service employment program of the late 1970's which provided jobs for more than 700,000 disadvantaged adults in 1978. between 80% and 90% of those expenditures could be traced to a net job creation. in 1981, we completely dismantled that infrastructure for a public job creation. in some sense, it represented an of unilateral disarmament in the face of the uncertainty of business cycles. public service employment was eliminated in 1981. we put a complete prohibition against public job creation into our work force development programs that persisted there for decades. i do not want to dwell on this history. the key point i want to make is that this was not the product of deep social science research, thoughtful science and policy evaluation, careful examination of the effectiveness of public service employment in the 1970's. the evaluations that were done, and there were many, were pretty good and encouraging enough to suggest that we should continue down that path. it also was not an obvious case of the inability to administer what is clearly a large and complex social enterprise. the record was good on that front. public's august employment reached an oppressive scale -- reached an impressive -- public service employment reached an impressive scale. what happened was quite different. public job creation is caught in the political crossfire up one of many periodic flights we have in this nation about the role of government, the size of government. in the light -- in the late 1970's, the culmination of kennedy crises, a sharp spike in inflation, caused -- the culmination of the energy crisis, a sharp spike in inflation, they became the victim of bad backlash. the conventional wisdom now is that public job creation is politically unsupportable. there were discussions earlier in this administration and earlier in this recession about it. i think the administration reached that conclusion. we have some reason to question whether that is the case, particularly now as the recession has persisted with such severity and that -- severity and depth. there was a bottom up effort through the emergency contingency fund. trinity's, counties, states, have -- communities, counties, states, have created at a senate in scale, public jobs creation projects that have been interesting. some of them have been quite innovative and a perigee. we have seen little public concern or \ critz it is perceived as a humanitarian response -- it is seen at a humanitarian response. we can provide resources to city, county, states, and get out of the way in the short term to allow that continuation of a bottom-up grass-roots approach. the extension, expansion, building upon what was going on in the emergency contingency fund would allow local and state initiatives to continue along those lines. one step beyond that, we could focus on providing additional federal dollars to local communities is to be added under an existing federal formula, probably something like a modified version of a community development block grant to get dollars out quickly. it would be pretty straightforward to establish what i think up as a fast-track mechanism that would allow local communities to immediately proceed with public job creation projects that were focused on a pretty narrow list of pre- approved activities or projects. my own thoughts about what might be on that fast track list are projects like repairing schools, community centers, and libraries, cleaning up the vacant properties to relieve or closure-affected neighborhoods, and enhance that the levels to reduce hunger and promote family stability, augmenting staffing and headstart and early education programs to promote readiness and early literacy, and enhancing maintenance of parks, playgrounds, and public spaces. it does not matter what is on that list. the point is to think up things with the great majority of the american people would say, that is a good thing to do. that is a worthwhile thing to do and a good way to give jobless americans who need work and opportunity to be engaged. -- to be re-engaged. we need a larger vision around public job creation. this will not be our last recession. we need a longer-term view and a longer term strategy for recessions and widespread unemployment. something that mirrors the structure we had to prepare for emergencies and natural disasters. one year ago, the national league of cities joined with three other national organizations to develop and endorse a more comprehensive long-term public job creation proposal. the proposal addressed many of the issues that would have to be addressed in a permanent job creation strategy. as such as allocation and distribution of funds, allowable uses of those funds, of the ability and targeting provisions. it is much easier to do and suitable to do within the structure of a public job creation program. importantly, protections to minimize substitution and of employees. you will find that proposal in a paper i wrote. it is on the urban institute web site if you are adjusted in more details about what a full-blown proposal with the plot. hickel has to be creating some sort of capacity for infrastructure to support a job creation, one that could be radically expanded at the onset of a >> would close with a bottle of wine as a pro. now than ever. that is because we have made a lot of progress over the use and creative use of publicly funded jobs. it has not been progress that we have made on countercyclical job creation. it has not been responding to the recession. it is an approach through what is now called a transitional jobs programs where publicly funded jobs are created to make their way into the labour market. that is a combination of countercyclical job strategies in times of recession and a transitional jobs infrastructure for better times and create a path forward in terms of how we can have a permanent infrastructure for the creative use of publicly funded jobs and one that will allow us to be much more prepared for the next recession. thanks. >> thank you. >> good morning. it is almost two years since the stimulus act was passed. at the outset, it was a sizable number of analysts that were convinced that this was going to do great things in spurring jobs. by and large, i think that those people are convinced that it worked very well. there are a substantial number of economists and other analysts, including me, that thought that it would not do very much, if anything did a by m. large, i am sure they believe that it did not do anything. you may take the position of -- there are different ways that economists guard their secrets. i think we will have honest disagreements over the proposals that are being discussed today. for instance, the job creation credit. it may work. it may not. when i look at it, i affirm that it is going to say that we are going to downsize so that that guy over there can increase his employment and we will split the difference. we mentioned dead weight loss. that is an example of it. we can disagree on balance or not. for me, the problem is that they are going to be a submerged between -- beneath much larger problems in the united states and the world economy today. if you ask me why there are such slow job growth, there are some factors at work. first of all, small businesses produce about 65% of the new jobs in the country. they are simply not hiring now. what our members tell us is that the housing crunch -- small businesses finance their expansion by means of borrowing on their real estate equity. their private home, their office, their investment properties. that is how they grow. the barrault on those mortgages. a huge percentage of those mortgages are under water with no relief for the foreseeable future. they are now devoid of the chloral that is necessary for them to expand. there is -- the collateral that is necessary for them to expand. we are now approximately three weeks from the end of the year. we have no idea what marginal income tax are going to be. we do not know who it will hit and who will not hit. these are problems that could have been dealt with over the last two years and were not. congress is pulling an all- nighter for their exam tomorrow. they are operating in an environment like that and they cannot make decisions. how this comes out, will be up to these companies and they cannot make decisions on expansion and hiring until they know where these rates will be. they have lost two years because of uncertainty over tax rates. thirdly, in the healthcare advisor, and the biggest of all questions that small businesses face over the last 25 years and will face for the foreseeable future is what is the cost of health insurance going to be for me and my workers and how might want to handle at? unfortunately, let me preface this, we need to do something about health care. it has been killing small business for over two decades. what emerged from a two-year process was pushing these other items, the tax rates and the housing crisis also the agenda in favor of pursuing an extremely large health-care law. in the end, it produced a law that will cause a tremendous number of problems for businesses over the next couple of years. it is corn to bury it businesses in a mountain of costs and red tape -- is calling to bury businesses in a mountain of costs and red tape. -- is going to bury businesses in a mountain of costs and red tape. it will cut the deficit. businesses have to live under the knowledge that there is this a lot -- of this very big law. i get questions about how we will handle the paperwork burdens and what are the paperwork burdens going to be in our answer has to be that we do not know. there will be about 10 years of regulation riding and each year you will have to spend a lot of time with your broker, your accountant, your attorney, and you will have to find out what they are going to be. there are feedback loops on taxes. in the new law, if the owner of a small business, if he happens to report his business income, as most do, under 1040, his wife gets a salary at her job. there will be a 0.9% payroll tax added onto her income which will hit his business income. if they sell a beach house, there is a 3.8% tax on profits. if these taxes costs and -- if these taxes kos an aphid -- acid reflux, there will be a -- if these taxes cause an acid reflux, it will affect the rate. for firms with over 50 employees, a huge uncertainty under the extent of penalties. to figure out what kind of penalties, the entreprenuership would have to know what their employees household incomes -- not only what i am paying my employee, but what is their husband or wife earning. how many people live in their house? that gives rise to the employee spouses uncle tax. if an elderly uncle moves into their house, it could trip up the wire that lance tens of thousands of dollars of penalties on the companies. and the other thing, because this law has to be fixed, we have seen the 1099 problem. i will be comfortable that it will be fixed, but it will burn precious time. this is detracting from solving those things. the question of how we get businesses and jobs growing again, how do we get governments i back on the ball on job growth, those are great questions. unfortunately, we have not begun asking those questions yet. this is a well intended plan that the panel is proposing will be able to be anything but a ripple on the top of these larger trends. we will have discussion on it. >> i am going to propose two ideas. neither of which are highly costly in federal dollar terms, but both make sense in the short run and long run. in the first one is to create at least 1 million home ownership vouchers patterned after the rent voucher program that we already have and the second one is to provide a $5,000 per worker subsidy for expansion of registered apprenticeship training along with an increase in marketing budgets for the office of apprenticeships. let's start with the housing idea. this comes with the notion that a big part of our job losses have been in the construction sector. between mid-2007 and 2010, u.s. jobs are down about 36%, but construction jobs are down about 6%. 30% of all jobs lost in the private sector since the early 2007 or in construction. this is a huge area. we are seeing that the house price declines and construction unemployment fee on each other. house prices and declining means less construction and less jobs and less housing demand. there is a negative feedback loop. now, normally, construction is a cyclical industry that comes back during a recovery, but so far, not in this case. as was pointed out in a "wall street journal" editorial, it was said that both the depression and post-world war two era readily was signaled by an increase in housing investment. new housing construction expenditures have remained flat since the great recession was declared in 2009. the housing demand has not recovered because 15 million owners are estimated to owe $770 billion on their homes more than they are worth these are the continuing problems -- the are worth. these are the continuing problems. in addition, we have what bob just mentioned about the problem of home equity limiting the expansion of small businesses in hiring because the small business people have very little collateral as a result of this huge reduction in house prices. now, we have tried some plans. i will not go into it. suffice it to say that we have tried ways of restructuring mortgages, a homeowner tax credits, these plans have generally been poorly targeted. they do not make sense in the long run. the benefits -- it is unclear why certain groups are getting benefits and others are not. largely, they have been a failure, all they have spent large amounts of money. but what about home ownership vouchers? what is it? it would expand the current rent voucher program that would provide low-income families with an amount necessary to cover the monthly carrying costs of buying a home. the families would pay 30% of their income in return. the maximum amount would be equal to the local printer voucher for the monthly cost of caring for a home in the 25th percentile of all local homologous -- all local home values. for disciplines would have to participate in a home ownership training program. there also have to put some escrow in for repairs and it would provide local housing authority is funding for jobs to address some of these homes. we could have a recruitment plan. i cannot go into details now. why does this make sense? rents have increased by about 11% since the house prices have dropped by about 20%. the fair market rent, which is the benchmark for subsidizing rent vouchers, that fair market rent is more than enough to cover the carrying cost of homes in about 90% of communities. in many cases, the amount is hundreds of dollars more a month than you would have with the housing vouchers. i have done some calculations on this. i have looked at nearly all metro areas, but in this packet, i'll look for communities. we can see that house values would be well enough -- low enough so that the rim voucher is more than covered by hundreds of dollars a month. if we add into that that people would be paying 30% of their income, even very modest earnings supplemented by the itc, would mean the cost would be very low. i estimate that we could finance approximately 1 million housing vouchers. i even have an offset. the offset is to lower the low income housing tax credit, which is a supply oriented subsidy, which is just the opposite of what we need today. we need more demand for owner occupied housing, not subsidies to increase the supply this program -- increase the supply. this program would would increase housing affordability. it would reduce the waiting for the current program and it would increase sustainable ownership for a long time. one of the things that people talk about is "haven't we tried that before?' first of all, there would be very little risk. they would hit some home ownership training and they would get a very good mortgage. so, that is the first idea. the second idea is to expand apprenticeship training. this is a great way to subsidize human capital, which we are trying to do through the school an approach, and expand jobs. there are very large sectors of the work force in apprenticeships. our apprenticeship system works were it is tried. we have very low budget amounts. the office of apprenticeships is only about $24 million a year, which is a drop in the bucket compared to the need. i was just in indiana yesterday and it turns out that to cover all of indiana, the office of apprenticeship employes to people. -- employs two people. this is a way of integrating education and training that link to careerist directly. no employer will provide an apprenticeships option unless they have a job to go along with it. therefore, you do not have a low of mismatch. you do not have lost earnings will you are undergoing training like the situation in community colleges and four year colleges. the evidence shows that the gains from apprenticeships for exceed the gains even for technical training in community colleges. i think that we could move in that direction and have a substantial impact on jobs, but also it would be sensible in the long run, i want -- in the long run. these are sensible in the long run standpoint. >> i would think all of the panelists for sticking to their time allotments. that gives us more time for questions. i get the first crack. sometimes i do not know where to begin. i will start with him. -- with tim. could you elaborate on the difference between your plan and what is on the table and to speculate as to whether they could work together or some modified version of it could work if this package moves ahead? >> as i mentioned, the bill that was passed was not the obama a administration proposal. distinguish it from the proposal a have with john bishop and what you think it would be less affected? it is less money. in terms of creating jobs, the subsidy is solid. it is six. tucson% -- is 2.6%. if someone is hiring right now, you do not get very much subsidy. you get a $1,000 bonus if you keep the person for a year. the credit that we were proposing was somewhere around $7,000 per job. it was a much bigger subsidy. ct says that you have to be unemployed for 60 days. there are many problems with this. one is that employers simply it seem to not want to deal with this. there are stigma of fax -- effects. most of the research indicates that there would be lower effectiveness. if you want to target the disadvantages, then you are talking about public service jobs programs. the third aspect is that the higher at a + 2 -- higher act applies to all hires. one of the things that this does is increase is the dead weight loss problem. this is normally about 10% of employment in the u.s., even in a recession. there are expansions by some firms and new jobs created by some firms. in contrast, what you decide -- once you decide you're going to hire, you're going to end up subsidizing and most employers will say that they will tell their tax accountant to figure out whether or not we can get any of this, but we are not going to take this into account or change our hiring procedures of who we hire to do this. in my opinion, if you want to target job creation, target job creation. this targets hires. this targets hires of the long- term unemployed, which employers to not want to deal with. they form the south to different tax accountants to find out what they are eligible for. if you look at the data, there have been some preliminary reports by the treasury department and it is hard to see re act.act of the higher a i cannot see any sign that the quantity of this year is any different from previous years if you look at that data. i have not had a formal analysis of it. maybe we would find a modest effect. i'm pretty skeptical. i think that we need to start over again with an approach that targets will we are trying to increase, job creation. >> you talked about the two proposals that may take a little time to get up and running. do you have a policy or a strategy for boosting job demand in the short term? >> i like kim's proposal. . tim's proposal. proposal. in south carolina, where they put together a tax credit along with four or five people to market it, they have been able to create a new apprenticeship program for week. -- program per week. i do think that you could move the apprenticeship program very quickly. on the housing side, you can move pretty quickly because there are communities that have experimented with it on a very small scale. if the government got behind it, i think it could move very quickly. people are already paying more in rent than would be the cost of a home with a good mortgage. the cost may be very low and it would have this multiplier effect. aside thet's put uncertainty. let's say that we could find a way of getting equity for expansion. what would you think about the proposal that tim has made in terms of the tax subsidies. -- subsidies? are there others then once you have mentioned above would make it attractive? >> -- than the ones you have mentioned above the would make attractive? >> there would be a lot a lot of gamesmanship. people that were already going to hire somebody would cash yen and other companies would be subsidizing them for plants of the already had. -- plans of that they already have. -- plans that they already had. the companies that we talked to have a simple message. part of it is the housing thing. if i can i get credit, and if no one is buying my product, what i want to hire someone? that is the reality that they face every day. i do not think it is one to make a big difference. -- going to make a big difference. i do not see anything on the horizon suggests that this will make a difference. this is a reality that they face. >> we have to recognize that we have employment today, somewhere around 140 million. if there is a stimulus of 2 million, that is on the base of 140 million. that is still a relatively small%. -- small percentage was even in today's economy, during an average year, jobs are created by employers that start up and expand. there are jobs being created and people are thinking about creating jobs. this works on the margin. this season of prospect of selling additional goods or services. it takes a business that is on the margin of thinking about this, that may be thinking about expanding in 2013 and said that this is something that will label me to expand more cheaply during the initial time. there are a lot of investment costs in hiring new employees. the question is, would rather hire new employees when you could have some of those investment costs covered by this wage credit program which you would get if you hired people in 2011 or 2012 under this proposal. if you wait until later, you do not have those investments costs. you do not have to change very many decisions to make a significant difference in the job market. >> cliff, you talked about the need for an ongoing infrastructure for a public service job. what would be the nature of that infrastructure and do you have any idea of the approximate cost of doing that on an ongoing basis? >> public job creation programs are complicated programs to run. there is no question about that. part of the challenge of the bad policy cycle that we have had over the years is that we get into a deep recession and unemployment spikes and the pain gets too much at one point and only at that point do we get serious about putting people back to work and we try to do with very quickly. it is a pattern that leaves the system vulnerable to sloppiness . and infrastructure, it probably would be rooted in the development system. it also would be strongly connected to community because part of that strategy is about doing useful work in communities and there is an enormous amount of useful work to be done in our cities and towns across america. when i was at the center of budget priorities, there was an extensive paper on what needed to be done to more fully fleshed out the very long list -- flesh out the very long list of public benefits. there are lots of relationships that need to be built to run an effective job creation program. particularly between local government and work force agencies and nonprofit organizations. that is one to be better over time. what drives me crazy about the public job creation to date is a tendency to focus on the ministry of challenges we typically cost menace -- focus on the ministry of challenges. when you think about the katrina experience in new orleans, it was terrible. it was a terrible breakdown in our governmental structures. we did not walk away from that experience and a side we were going to scrap the whole national system of emergency preparedness and disaster planning to be walked away and said that we have serious problems that we have to fix. local officials and state officials will appear sleeves to make it better so that the next katrina but does not have the same experience -- next katrina does not have the same experience. on the implementation son, we redoubled the effort to solve the problem. somehow, in the jobs arena, but has not been the dynamic. the dynamic has been to solve the problems and say that we cannot possibly do this and throw our hands and walk away. >> i have a question for cliff. i would be curious if, tomorrow, people are watching this and congress says that this is a great idea. let's do this. it is enacted the next week. fees of lee, from your experience with these programs, what scale to you think it would be reasonable to talk about for 2011 or 2012? >> the scale would grow over time. the first thing i think we would do is go back to the structure where we cut off large numbers of publicly funded jobs. you turn that spigot back on and allows states like illinois and cities like los angeles to get back to what they were already doing. i think that you could get within four to six months, you can get jobs in place. >> how many in 2012? 1 million? >> i think so. he peak in the context of public service employment, we could go beyond that. >> one program that i like was the program in minnesota in the mid-1980s. to four months, i think that you can do something. i am glad to hear that you agree. s over here may disagree. i will take them in the order from left -- from my left. >> one thing that concerns me about the proposals that you're talking about is whether you are fighting long ago wars. i heard to cite data from the 1930's and things that have worked the question is, are we in an economy that needs massive, structural change and these programs are not recognizing it? the other bob noted that this has been -- construction is a cyclical industry and its return is a sign of the return of the economy. sometimes cyclical trends term structural. -- turn up structural. we are in an unusual situation. we have tremendous cities of sparkling in houses that are entirely empty. the question is, are we actually want to see an increase in the return of demand for construction men have this huge overstock of houses in the country. i think it is a serious worry. look at detroit. they're trying to grapple with their problems. i do not think we have factored in these proposals. it is something that has been written by your colleague that has noted that for the first time in u.s. history, we have passed the point -- to put it simply, there is no discretionary spending left in the government accounts at this point. everything from day one is fully spent when congress walks in the door. if you look at programs that rely on government to fund them over the long haul, are you turning that into something of a promise that you cannot keep? i do not know the answers. those are the questions for me. >> i will refrain from responding. somebody mentioned the magic word of public jobs in the 70's. >> let me get to that. first, bob talked about how we are for to get out of the housing situation. we certainly will not get out of it by subsidizing a larger supply of housing. i think that we have to shift it towards the demand. . -- the demand. point. demand rand has either gone up or is stable. turning to the public service employment, i think that you have to remember that in the 1970's, part of the backlash was that there was massive substitution. a lot of that has to do with the fact that the early stages of the public service employment programs allowed for higher wages and allow for people who were just unemployed -- allowed for people who were just unemployed. mayer's love the program because they could simply expand hiring in a not so different way than they were doing anyway. then, we tried to have a more targeted program in the late 70's. a program that limited wages. you only want people that cannot get other jobs to take those jobs and you want to maximize the number of jobs. as a result, the mayors were not so fond of that. when they found that we cannot use our normal work force for that. we did not want them to do that. today, you have the same thing. cliff said nothing about wages. wages are critical. for an efficient program, you need relatively low wages. in a lot of major cities, there will be people screaming. they say that these are starvation wages and you cannot afford a family on them. they ignore the fact that when you have a wage, you can also get the earned income credit which would be a 40% of subsidy for wage. -- 40% subsidy for wage. there are a lot of decentralize ways to create jobs. small groups could fill up eight two page proposal and walk out puts it would create and you would have a competition. you created a competition. he had four more proposals then you have funds for which is good because then you choose the best ones. you have a strong monitoring program and you have this bottom of system that builds on the entreprenuership of local organizations. you can get things running more quickly and they can relate to neighborhoods and relate to people and if you cut them up, if they are not doing what they promised, you can cut off a few projects without cutting off the whole city of chicago. you want to look towards those approaches as well. >> i know that cliff but wants to respond on a point or two. while he is responding, i can't queue of people for questions -- i can queue up people for questions di. i think we will start at the front and moving our way back. >> i am delighted to hear about this. he described the learning curve that i think that the country needs to go through. these were adjusted so that by the time you got to 1978 or 1979, you had very metal will -- very manageable substitutions. there's always going to be some of mouth. -- some amount. public service employment is under a great disadvantage because everything is visible. a reporter can go and see, or whatever. this is going to have what tim referred to as leakage. leakages enormous. but it is invisible. -- linkage -- leakage is enormous. but -- leakag leakeage is enormous, but it is invisible. i love bob idea about competitive structures. the only issue for me is that it takes quite awhile for the federal government to get a competitive program up and running and so i think that you really need a fast track option that allows local communities to immediately died in -- immediately dived in. >> coming up and about 50i minuteve, secretaryin state hillary clinton. she will be joined by -- we will have that for you live starting at 8:00 p.m. eastern here on c- span. first, the state department spokesman. the chief palestinian negotiator said he will not return to direct talks until israel stops building settlements in the palestinian territory. the u.s. has formally stopped pushing for a settlement freeze. this portion of the briefing is about one-half hour. >> your highlights of the secretary's speech, tonight, it seems that it could have been written and she could have said them almost two years ago. is this speech going to admit that your efforts have not been successful? back through my notes, tell everyone how important it is and what is at stake. tell them how important it is to do something until the two sides that are important to the core issues. it is like your literally back at square one. >> and we think that the many conversations that we have done over the course of almost two years, i think we have built up a foundation for what lies ahead. admittedly, we have dealt with the challenge of the moratorium. we believe, at this point, it is necessary for the party is to begin to tackle the core issues in detail. that said, over the past and we have been in direct negotiations and we have had dialogue with both sides. we have good understanding of what they're expectations are. we have had conversations on specific details and tackling the details. we think that this will help us. this has been the focus of the conversations. this has been the case with members of our middle east team. we believe that we have advanced to the process, but more intense work lies before us >> this seems to be diametrically opposed. how was it possible that this is an advance? right now, -- >> again, as we have indicated, is still our intent to reach an agreement on the core issues. we believe that that is achievable. we believe that is still possible. the general will be here for dissipating in of vince. he will leave on sunday night and will be in the region. as we begin this more intensified focus on the core issues. he will be meeting with the prime minister and the sequence of those meetings is still being worked out. >> >> when we spoke with eric and outside, he said -- he sounded pessimistic. what happened at the meeting today? >> as i said, we have work to do going forward. we expect to have a more intensified focus on the core issues. it is time for the party is to grapple with the core issues. we believe that progress can be made. we understand that we have to build confidence. each side continues to question whether it can be successful. we believe that by working on the core issues, we can build momentum and we can build the confidence and we recognize, as we said, there has to be direct negotiations. that remains our goal, but we understand that at this point, we're shifting to more intensified focus on the substance itself. >> they told reporters that the secretary was given letters to bring back. what are you asking them to do? >> the purpose of these meetings was to help assess where the parties are and what their expectations are. they are not pursuing a moratorium. we have outlined our ideas on how to proceed toward forward. george mitchell will be following up. i will be very judicious and what i say. the secretary offered her thoughts on what needs to be done, now. we will fall with george mitchell next week. >> do you have anything to say on the case of the palestinian activist? he has been imprisoned by the israelis. >> i will take the question and see what we know about that. >> >> former president carter expressed concern about his treatment. he is a non-violent movement leader. there has been concern that the israelis put him in jail. >> it seems as if what the secretary is trying to do is to full -- is two-fold. the plan to do this indirectly? can you say that yes you are going to do this indirectly? >> suddenly, it seems as if she is more explicitly addressing the palestinians. >> again, as we have said, it is up to both sides to make the difficult decisions to reach an agreement. we are prepared to do everything we can to support them. as we go forward, if there is an impasse, the united states will be prepared to offer proposals to overcome those obstacles. it is ultimately for the parties themselves to reach an agreement. we do believe that we have got to return to direct communications. in the meantime, dealing with both sides, we believe this is the best opportunity to create some forward momentum and help overcome the trust deficit that does exist. we still think that progress is very possible. >> some indirect talks on the main issues is your plan? is that fair to say? >> we are not going to put a label on it. >> i am not asking for a label. i am trying to understand. >> for example, right now, they are not in direct negotiations and we are trying to get them back into direct negotiations. we are going to lead a more intensified effort focused on the substance. we will see if we can ultimately get to an agreement, recognizing that a return to direct negotiations will be necessary. >> your the middle man. is that correct? >> we have expended a great deal of effort to get to where we are. we are committed to this. we believe the parties themselves remain committed to this. we will have george mitchell in the region next week, following up on the meetings of the secretary has had. >> what are you allergic to say yes? it is the opposite of what you described. they are not talking to each other, but you like to talk to each other. and-but you would like them to talk to each other. you sound like a frustrated marriage counselor. >> it is not just that. it is any label. they referred to the political horizon. then you guys call them in direct talks at first -- indirect talks at first d. >> why will you not call them direct talks? >> i am not going to put a label on them. >> wanted to do that before? >> -- wanted to do that before? -- why did you do that before? >> we are born to continue to focus on the implementation of the u.n. security council resolution to show our support for the tribunal. >> on burma, are you considering listing any sanctions from burma? >> we would do that for what reason? we are prepared, as we have said, to have a different relationship with burma, provided that burma takes significant steps forward. there are very clear requirements for burma. it is not about the united states dictating and to burma. it is in burma's best interest. obviously, we welcome the release of a prisoner, but that does not solve the problems of the 2000 political prisoners that still remain in custody. it does not solve the challenge of the fact that the central government is still at war with many ethnic groups within its borders. it does not solve the challenge of having a political system that has a broader push it petition -- has a broader participation. this is the same kind of government. we are prepared to engage burma. we are prepared to change our relationship. that would include the lifting of sanctions, but burma would have to take affirmative steps to warrant that kind of consideration. >> in regards to the wikileaks. what is the kind of relationship that burma has with the north koreans? >> we have study that very closely. we have concerns we have that concern because of recognized history of dangerous technology. it is something we continue to watch closely. >> the said committee put out a statement which calls for the united states to suspend it directly to the united states immediate family members so as to send a message that the united states really supports the issues and a people's rights to choose their leaders. this is obviously a key player in congress. do you have any sympathy for his call for his calling will predict for his calling to the aid for the government -- do you have any sympathy for his calling to a for the government? >> led us focus somewhere we are now. -- let us focus on where we are now. this is critical to the future of haiti. we have publicly stated our significant concerned about the results that have been announced. there is a process under way. today is the last day to file formal complaints to challenge the results. we are committed to support this preview. in need soon be credible -- it needs to be credible. the people of haiti have to believe that these are the candidates that they have chosen and they have not been chosen by the government behind closed doors. this is a critical moment for haiti. we are prepared to support haiti. we are sending a message to the government that this election has to be done properly with the wishes of the haitian people. we will adjust our future relationship by the actions that haiti undertakes. we are committed to supporting this process. let us see what happens first. >> you have no sympathy for senator leahy's -- >> the senator is outlining some actions within our purview. let's get to the end of the process and find out why it happens. >> you do not think the exercise of this kind of pressure might be beneficial toward getting to a more credible outcome? >> there is an existing process ongoing with in haiti. the election is not done yet. i think it is premature for the united states to take this action until we are convinced the existing process cannot work. there is a lot at stake here we want to see the process unfold. we believe they can lead to a credible report. >> [unintelligible] >> the ambassador is at the hospital at the president time. beyond that, we will let me know as we find out more. >> can you say what time he went to the hospital? >> i cannot. i did know he was working here this morning. >> this happened in the secretary's office? >> it happened on the seventh floor. >> did he collapsed? >> i have told you everything i am telling you. he is that the hospital. he is being evaluated. >> did you say he fell ill? >> i do not know. >> i saw him not so long ago down by the cafeteria. >> i do not know. i will be very circumspect until i know the full details. >> cannot say that he fell ill? presumably he did a few went to the hospital. is that to rise to ask? >> he felt ill -- is that too much to ask? >> he felt ill. >> is your team asking the government for new elections? >> it is not the united states to take the future leadership. it is for the united states to make clear to change the relationship between the united states and burma. burma has to take many actions including opening of greater political space for more credible elections in the future. >> he has made some very gleeful comment about wikileaks questioning american democracy. >> mr. here? >> from nato. >> do you have any ideas? >> i've not seen mr. putin's latest comments. >> the secretary talked about this letter from president obama warning of consequence if he did not step down. what is in it if he does? >> as you know, the hallmark of effective government is the peaceful transfer of power. it is something that we take for granted here in the united states. it is by no means a certainty in other parts of the world, including the ivory coast where the president is always -- already a five years passes designated term. preeti passed his designated term big bear -- past his designated term. he has the opportunity to be a statesman and become a cynic mark in the future of the ivory coast to -- significant market in the future of the ivory coast. there can be a peaceful transition like ghana. you had an economy that is moving forward with economic growth and that kind of country. with that kind of political stability, that is the climate that bring significant government support and private sector investment. it is a country with resources. what is absent is a commitment to democracy and stability that can make a meaningful difference in the lives of the citizens. there are two paths for the ivory coast. one is greater integration in the region and around the world b. the other is increasing isolation. >> do you think burma -- what sort of contacts had had with the president? >> -- contact had you had with the president? >> the president has had contact with him. johnny carson -- we are monitoring the situation. i can i give you any particular dialogue this week except for the president's letter but . [inaudible] >> the pentagon said there were state officials. >> i will be happy to check on that. >> de you have any formal complaint? >> we have been told a formal complaint is coming. >> yesterday, you said you would be looking into it these kind of incidents would be arriving in the future. what are you looking at? >> we are in touch with the department of homeland security. there may be ways in which we can improve communication so that officials know when diplomats are coming in help battle facilitate their movements through security. everyone from diplomats to ordinary citizens are screened prior to boarding airplanes. that happens around the world. there may be ways we can improve ordination so this kind of situation will not happen again. >> they are saying your diplomats are treated like kings in india in day should do it end/ the u.s. and they said she was pulled out because of her appearance. she had a sari. >> for a particular comment on what happened in jackson, i will defer to the tsa. >> why should diplomat the given any special treatment over that of an average american citizen? >> you know, i thought jimmy clear that all passengers -- i thought i made clear that all passengers are subject to screening. to the extent that ambassadors main wear traditional dress, it that can tell tsa with the assessment of the rest that any passenger my proposed comment that might be helpful. >> why should that passenger be any different than an indian businessman or woman wearing a sari? i do not understand. why would there be an easier way? >> i am not suggesting there treatment would be different for their today suggesting -- suggesting their treatment would be different. we are happy to help facilitate that. we are seeing it there is any way we can improve this process. >> in this case, she would have been hauled out for this additional pack down regardless, at least i would hope that tsa does for everyone. how can this advance warning change anything? >> it is not my place to get the department of homeland security advise. >> they may appreciate it. >> thank you very much. we understand these kinds of situations are not unique to indian diplomat. this happened with other diplomats. when you do have instances like this, it can impact public man defender -- public misunderstandings and diplomatic tension. as they go about our business of protecting the travelling parts citizens, we want to make sure their treatment is safe and done with guidelines. >> their officers follow proper procedure. if we can improve the communication between embassies here and tsa and if there are any special requirements, that might help avoid the kind in this understanding that happened. >> puc signs that china is planning a more constructive role when north correa? are they fully engaged is still falling short? >> the debt between -- deput will have a read out. what is most important is we share a common interest. they have the same interest as the united states has. china wants the same thing, for north korea to seize their provocative actions. we may have a difference to view as to what the right step is now and we look for it in the future. >> you said a cause diplomatic tensions. is that how you would describe this? >> we share concerns. its population had the opportunity to visit the united states for any region, it is subjected to increased scrutiny because a type of dress. that raises concern in other countries around the world. everyone understands that security at airports is a reality. they want to make sure they are treated properly, it barely, and not subjected to unusual security measures. we understand that. whether it is this incident or others that have happened, the last thing they want to do -- we the citizensjectect that travel in our airplanes. everyone has the same objective in making sure that all passengers are treated as fairly as possible. >> use said they acted appropriately. i am not sure you understand why the secretary would except a complaint from the indian government if there were no rules broken? what was the miss understanding here? everyone acted the way they should have. >> i have given you all i have. >> one question into wikileaks. it you are asking to unplug every day -- [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> this is a look in washington where we are expecting remarks from secretary of state hillary clinton. she will be speaking on the u.s./israeli relations. also here is israeli speaker ehud barak. earlier, bill clinton made a surprise performance to support the tax bracket -- package. mr. clinton said "i personally think this is a good deal and the best thing we can get." they just met in the oval office. we wait for this event to get under way. earlier, we spoke to reporters about the tax cut package in the week ahead in congress. tax cuts are the big issue. what do you expect to see on that in the coming week? >> we are looking at a vote in the senate on monday. it is thought capped off by a surprise appearance by former president bill clinton. >> what impact do you think the senator filibuster will have? >> it really galvanized a lot of liberalize opponents. they saw it as some last-minute heroics even if it is 72 hours out from the event of them i think it -- event. i think it went into the politics of the obama administration. >> house democrats were expressing disapproval. where does this go? >> i think it is difficult to say. it is still making over the weekend to bring on as many democrats they need to get this down. they are speaking about whether to bring this to the floor. i think they can win some concessions. >> what version is most likely to pass? >> i will look to win similar to what we have now in terms of the income taxes. a look like ethanol will be added to a sweetener. >> senate republicans say they will block any bill. any between those two expected to move this week? >> the big thing to keep an eye on is the do not ask do not tell repeal. they are hopeful that a tax cut it done in an orderly manner they will be able to move forward. that is a big one for democrats. they need to calm things down. >> what about the larger defense authorization bill? >> it depends on whether the stand alone moves. he might look for the bill to take a back seat for the meanwhile. harry reid might try and go for it. it to be difficult given the debate demands that republicans are making. >> what do you expect for the house version of the stream at? >> senate leaders say they plan to bring it up for a vote sometime. it is such a type calendar that democrats face in the senate bill harry reid hopes to adjourn for the christmas holidays next friday. if they get this deal out did the way, it is line to be a race to the finish. >> you can see is articles at thehill.com >> will now take you live to hear from hillary clinton. she will discuss u.s. last israeli -- u.s./israeli discussions began. there is a key palestinian demand for returning to the peace talks but there it is being hosted by the brookings institution. you have led efforts to improve children's health. you are for protecting women's rights around the globe. you have given courage to so many women who live in fear. now you have turned your head to middle east peace seeking. that is the most difficult of all. that is an understatement. say you are the secretary of state. when do you have time or breed? with god's help, you will some they a grandmother -- you will soon be a grandmother. i can tell you, it is a game changer for the better. you are no stranger to the forum. is the first tenure has addressed the secretary of state. for that, thank you. please join me in giving a very warm welcome to hillary rodham clinton. [applause] >> thank you very much for th. i appreciate the introduction. nothing is imminent so far as i know. it is a great pleasure for me to be back here and part did this very important forum. i appreciate your introduction. i appreciate the french ship they you and cheryl had given to me and to my family. you have been friends for many years. he is unparalleled as a champion for peace. he represents the best qualities of israel and america. he is absolutely unstoppable. he is dedicated his energy and support to many important causes and help so many people. he has no deeper passion than the one we are here discussing tonight, a strange thing u.s. /israeli relations and securing a just and lasting peace in the middle east but th. i think pam big bear -- i think pam. -- him. in particular, i thank you for bringing the crucial issues surrounding the middle east. i want to acknowledge all the colleagues from israel who are here. certainly coming you will hear from defense minister barak. there are other members of the issue of the government here. i am delighted that prime minister fayad is here. he has accomplished a great amount in the short amount of time. yet brought strong leadership to the palestinian authority. >> you do not have to precede cables to know we are meeting during a difficult time in the pursuit of peace in the middle thet but them i under staind frustrations of many feof your across the world. i want to focus tonight on the way forward. and have a resolution that since the conflict once and for all and what it will take to finally realize that the illicit but essential. i want to offer the deepest condolences of the american people for the lives lost in the recent fires in northern in israel. israelis are always among the first to lend a hand to an emergency strikes anywhere in the world. when burns, said the offer help. it was remarkable to watch. turkey sent planes. egypt and jordan donated chemicals and equipment. the palestinian authority despite firefighters. the night his state was also part of the effort, deploying expert firefighters and thousands of gallons of chemicals and suppressants. it was testament to the deep and enduring bonds that unite our two countries and the partnership between our governments and people. the night is states will be there when israel is threatened. to israel'smmitment security and its future is rock- solid and unwavering. that will not change. from our first days in office, the obama administration has reaffirmed his commitment for me and press -- commitment. for me and president obama, it is a deeply held personal conviction. over the last two years under president obama's leadership, united states has expanded our cooperation with israel we have focused in particular on helping israel meet the most consequential threats to its future. our security relationship has grown broader. we have not just work to maintain the military and, we have increased it to new advances like the iron dome, a short range brought the defense system that will help protect israeli homes and cities. there are exchanges and joint exercises. for israel and for the region, there may be no greater strategic threat and the prospects of a nuclear arms in rahm. you just heard my husband speaking to that. let me restate the united states is determined to prevent iran from developing nuclear weapons. from our partners, we have implemented sanctions this fight is being felt in tehran. they have faced the tough choices as the theme for this forum for them. we get stepped up efforts to block the transfer of dangerous weapons and financing. i ran and the proxy's are not the only threat to regional stability or to israel's long- term security. the conflict between israel and the palestinians and between israel and arab neighbors is a source of tension and an obstacle to prosperity and opportunity for all the people of the region. it denies the legitimate aspirations of the palestinian people. it poses a threat to israel's future security prevent it is at odds with the interest of the united states. they have convinced some that this conflict can be waited out were largely ignored. this view is wrong and dangerous. the trends that results are in danger in the decision of a jewish and democratic state in the historic homeland. israel they should not have to choose between preserving both elements of their dream, that that day is approaching. at the same time, the evolving technology of war, especially the exchanging reach, means that adobe is increasingly difficult city guaranteed the security throughout the country without implementing peace agreements that in these threat. there is growing support for violence ideology. it undermines the prosperity of the middle east. the united states look at these trends. we conclude that ending this conflict once and for all and achieving a comprehensive regional peace is important for safeguarding israelis future. we also look at our friends the palestinians. we remembered the painful history of the people who never had the state of their own. we are renewed in our determination to help them finally realize there a legitimate aspiration. the lack of peace, the occupation that began in 1967, continue to deprive the people of dignity and self determination. did this is unacceptable. ultimately, it is unsustainable for bo. for all the people of the reading, it is in their interest to end this conflict and bring a lasting comprehensive peace to the middle east based on to state or to people. for two years, yet heard me emphasize that negotiations between the parties is the only path that will succeed in securing their respective aspirations for them this remains true today. there is no alternative other than reaching mutual agreement. the stakes are too high comedy pain too deep, and the issues too complex for any other approach them. they had a long way to go and they have not yet made the difficult decisions that peace requires. like many of you, i regret that we have not gotten far their -- farther faster. yesterday, i met with negotiator ourd underscored support. it is time to grapple with the core issues of the conflict. starting with my meetings this week, and this is exactly what we are dealing. we will also deepen our strong commitment supporting the state building at work with the palestinian authority and urged the state of the region to develop the content of the arab peace initiative and to work toward implementing his decision. over recent months, prime minister netanyahu and abbas have met face to face several times prepare a i have been privileged to be present during their meetings. i am also had the chance to talk to each leader privately. these were meaningful talks that build new clarity about the gap that must be bridged. both sides decided to get there to pursue a framework agreement that would establish the compromises on of permanent status' issues and pave the way for a final peace treaty. reaching this goal one not be easy. the sides are real and persistent. the way to get there is by engaging in good faith with the full complexities of the core issues and by working to narrow the gaps between the two sides. by doing this, the parties can begin to rebuild confidence, it demonstrates their seriousness, and hopefully find enough common ground on which to eventually launch direct nicosia asians and achieve that framework. the parties have indicated they want the united states can continue -- to continue our efforts. the united states cannot be a passive participant. we will force them to lay out there is used without delay with a real specificity. we will work to narrow the gap, asking the tough questions and expecting substantive answers. in the context of our private conversations, we will offer our own ideas in a bridging proposals were inappropriate. we entered this with clear expectations of both parties. , me say a few words about some of the important aspect of these issues. on borders and security -- the land between the jordan river and the mediterranean is finance. -- finite and each side might know which parts belong to each. the messy love -- they must agree on a single line. the palestinian leaders must be able to show their people of that the occupation will be over. israeli leaders must offer their people to recognize the borders that protect israel's security. they must be able to demonstrate that the compromises needed to make peace when not meet israel will merkel. -- vulnerable. it must deal effectively with new and a. emerging threat families and on both sides must go confident and live free from fear. on refugees, this is a difficult and emotional issue. there must be a just and permanent solution that meets thing means of both sides. on settlements, and this is an issue that must be dealt with by the parties along with the other final status issues. the position of the united states has not changed and will not change. like every american administration for decades, we do not except the legitimacy of continued settlement activity. we believe the action is corrosive not only to peace efforts, but to israel's future itself. finally on jerusalem which is important for jews, muslims, and christians. there will be no peace without an agreement on this, the most sensitive of all the issues. the religious interested people of all faiths around the world must be respected and protected . we believe their good faith, the party sinn mutually agree on an outcome that realizes the aspirations for both parties for jerusalem and safeguard its taxes for people around the world. these issues are woven to get there. considering a larger strategic picture makes it easier to lay the compromises that must be made on both sides. we are not moving forward in a backing. from day one, the obama administration has recognized the importance of making progress initially reenforcing tracks. negotiations between the parties in institutions as they prepare own state.ern their it is caught in some negotiators and helps create a climate for progress. even as we engage both sides with an eye toward eventually restarting direct negotiations, legality and our support for the efforts. we recognize that a palestinian state achieved through negotiations is inevitable. i want to commend them for their leadership in this effort. under the palestinian authority, security has improved dramatically. services are being delivered. the economy is growing. it is true that much work remains. -- to reverse a long history of corruption and mismanagement. palestinians are crowded the progress they have a sheet. the world bank concluded that if they maintain the momentum in building institutions and delivering public services, it is a "well-positioned for the establishment of a state at any point in the near future. the night did states is continuing our efforts to support this important work along with other international partners including the government of israel. to bring together key players to focus on solving challenges, we have launched an initiative, partners for a new beginning chaired by madeleine albright and walter isaacson. we are working with the authorities on a range of issues. i was pleased to announce the transfer of 1 senger $50 million in direct assistance to authorities. this began drilling new and much needed wells. with recent israeli approval, we soon will begin several water in protection projects in gaza. these and other efforts to expand water treatment have already helped well about the palestinian families gain access to clean water the united states is working with the authority, israel and international partners to ease the situation in gaza and increase the flow of commercial goods. we are pleased with israel's recent decision to allow more exports from gaza. it will foster legitimate economic growth and there. this is an important and overdue step. we look forward to seeing it implemented. we look forward to working with israel and the authority on further improvements while maintaining pressure on hamas. we recognize israel and renouncing violence and the fighting by past agreements. this is the only path to achieve palestinian dreams of independence. security forces did what bogart. where, and play with new security that contributes to the economic position as they continue to be more professional and capable, even to israel to facilitate the efforts. we hope to see a curtailment of intrusions. four of the progress on the grounds, a stubborn truth remains. well economic and progress is important and necessary, it is not a substitute for political resolution. the aspirations of the palestinian people will never be satisfied. israel will never enjoy a recognized borders until there is a two-stage solution that ensures dignity and justice for all. this outcome is in the interest of israel's neighbors. the arab states have a pivotal role to play in ending the conflict. egypt and jordan have been viable partners for peace. we will also continue our diplomacy across the region and with our partners. senator mitchell will be this week and ford jerusalem and then will visit another -- a lot of capitals. the arab states have an interest in a stable and secure region. they should take steps that show israelis, palestinians, and their own people that peace is possible and that there will be in tangible benefits if it is succeed. in make it easier for the palestinians to pursue a final agreement. their cooperation is necessary for any future peace between israel and syria. we continue to support the vision of the arab peace initiative, a vision of a better future for all the people. this proposal rests on the basic bargain that peace between israel and her neighbors will bring normalization from all the arab states. it is time to advance this vision with actions and words. israel said -- should seize the opportunity while it is available. know how much the united states and other nations around the world work to see a resolution to this conflict, although the parties themselves will be able to achieve it. sometimes, i think both parties seem to think we can prepa. we cannot. even if we could, we would not because it is only a negotiated agreement between the parties that will be sustainable predella the parties themselves have to wanted. the people of the region must have to decide to move beyond the path that cannot change and embrace the future they can shape to get their the -- they can shape. they have not been ready to take the necessary steps. going forward, they must take responsibility and make the difficult decisions that peace requires. this begins with a sincere effort to see the world from the other side eyes, to try to understand their perspective and position. palestinians must appreciate israel's legitimate concerns. israelis must accept the lead tenant territorial aspirations of the palestinian people. ignoring the other side needs is self-defeating. to have a credible negotiating partner, each side must give the other the room to build a constituency for progress. part of this is recognizing that its trade the and palestinian leaders each have their own domestic considerations that neither side can afford to ignore. it takes two sides to agree on a deal and to size to implement a deal. both need credibility and standing with their own people to pull it off. this is also about how the leaders prepare their own people for compromise. demonizing the other side will only make it harder to bring each public around to an eventual agreement. by the same token, both sides need to give the other credit when they take a hard step. as we grapple with the core issues, in each side will have to make difficult decisions. do they deserve credit when they do so. it is not just be the united states that acknowledges news that are made. to demonstrate their commitment to peace, prime minister netanyahu and prime minister -- president abbas should take the steps and focus on the four questions even in a time when we are not talking directly. to demonstrate their commitment to pace, leaders should stop trying to assign blame for the next failure in focus instead on what they need to do to make succeed preventts unilateral efforts are not helpful and undermine trasust. the united states will not shy away from saying so. america is serious about peace. we know the road forward will not be easy. we are convinced that peace is necessary and possible we will be persistent and press forward. we will push the parties to grapple with the core issues. we will work with them to continue laying the foundation for a future palestinian state. we will redouble our diplomacy. when one way is lost, we will seek another. we've won not lose hope. peace is worth the struggle. it is worth these setbacks and the heartache. a just and lasting peace will transform the region. israelis will be able to live in security and have confidence in their future. across the middle east, an advocate of peace and coexistence will be strengthened while old arguments will be drained of their venom and their extremists will be exposed and marginalized. we must keep our eyes trained on future and recognize it. this is what makes the compromises worth it for both sides. we are now in the holiday season, a time for reflection and fellowship. the national christmas tree is lighting up the sky . jewish families have just completed the eight days of hanukkah. the festival of lights of every- even when the future but the market, there is light and hope to be found through perseverance and faith the bill might -- and thefaith. abraham is the father of all the faces of the holy land. he is a reminder that despite our differences, our history, and our futures are deeply intertwined. today we should remember these stories. sometimes you'll be asked to watch difficult roads together. sometimes the roads will be lined with naysayers, second- guess sears and rejections. the with faith in our common mission, we can and will come through the darkness to get there. that is the only way toward peace. that is what i hope we will keep in mind as we make this journey, this difficult journey toward a destination that awaits. thank you. may god bless you. [applause] thank you madam secretary for your very inspiring words. my wife and the secretary or kissing so i will shut up. [laughter] i am proud to act reduce a former prime minister. for the past three years he has served as the deputy prime minister and minister of defence. he has also served as chief of staff and is one of israel's most decorated soldiers. he fought in the battlefields and courageously has been fighting for peace, working very closely with this administration to move the peace process forward. process for thinking you -- thank you for giving us the opportunity. [applause] >> secretary clinton, the guests, and friends, good evening. last week, members of the jewish people of the world came together in their homes to mark the holy day. candles were lit and the lights in the house were lit with the glow of hope. each year the candles of hanukkah signify struggle for the mutual freedom, celebrating the time of the spirit and of the idea of this hope. the world of the maccabees changed history. they built an independent, so bring jewish state. the victory brought hope to our people after years of exile. we are fortunate to live in a generation that witnesses the miracle of israel's survival. isael's existed in it that strong and vibrant, the balding and striving towards the horizon. bearing in mind our painful history old as well as recent, we have an obligation to ensure our safety and strength. the united states is israel's leading strategic partner, strongest ally, and best friend. the u.s. is committed to preserving israel's character and jewish state. a sophisticated and fall full america believes the middle east should be is essential, but not enough. america will demonstrate its determination to stand up to enemies of israel and the bar moderate neighbors. former prime minister understood and recognized the great importance of nurturing a strategic relationship with a major power. this, if you will, is one of the foundations of our nation's security doctrine. founders of this movement were people of both vision and stature. they left behind the old order with a single goal, to create a modern society in the historic land of their forefathers. they strove to create an open society that would be a grisettes it society -- would be a progressive society. it would be jewish and democratic in the spirit of the declaration of independence up 18 -- of 1948. there would be a society where where young's -- israelis would be proud to associate. it would be a country that leads in science, technology, education, and culture. equality for all, human dignity, and quality of life. we can all be proud of the achievements the state of israel has accomplished until now. day by day, israelis are pushing the foothills and turning the impossible into the possible. from construction of solar energy -- the start that nature is erupting. as 2011 approaches, we find ourselves at a critical juncture. we have a dialogue towards a political agreement with our neighbors. we cannot ignore the new realities of the world. wikileaks will deeply affect international dialogue. in iran where the few threaten to destabilize its main elements of the current world order, nuclear proliferation -- faith in these new realities will require fall planning and combined action all leading members of the world community. i hope this cooperation will materialize. the center, the better. for the last 2000 years, three times each day jews have prayed and raised their eyes towards have been saying, "may heat make peace and bring peace on us." it is something that is not just talk about. it is prayed for. this is not a religion, but a means to realize a vision. there is a note back to him in the region. without peace and without -- without peace, both israelis and palestinians will continue to perpetuate the cycle of violence and bloodshed. the alternatives are far worse. nature dictates the need for tough decisions. all of these alternatives is the immediate and clear danger of israel's right of self-defense. our security is undermined by a loss at hezbollah. we must secure israel's safety and future in a tough environment. when we accomplish this, thanks to the military might of the idf and the unity of jewish people throughout jerusalem. we also need political wisdom. the world is changing in front of our eyes. it is no longer willing to accept even temporarily our continued war between two people. what is to be done? it is essential that israel will have a comprehensive strategy in which we take the initiative to advance israel's goals. i recount them one by one. number one, first and foremost, maintaining our spatial relationship with the united states of america in order to strengthen our defense and ensure our qualitative means as well as protecting our posture in the world. number two, increasing cooperation and deepen common interest with the moderate leadership. creating a political horizon by continuing to isolate hamas. number four, established the foundation to beef up security. this will encompass all the coalition's, finalize all claimants, and bring an end to the conflict as a whole. number five, pro-active attempts to peacefully remove soldiers. number six, building eight multi-layer interception system against rockets. this can significantly reduced the damage from future attacks and deter future aggression. number seven, last but not least, an event in nuclear iran. iran has become the world's alternate terror, arming, training, and financing. they are determined to reach nuclear weapons and determined to antagonize the jewish world. diplomacy should remain the first tool of choice. it remains essential not to remove any options from the table. i would be happy to hear that president clinton shares with us and with president obama at the white house. what guides us in the peace process? the nature of the challenge is sharp, painful, and simple. 43 years ago in a world thrust upon us, we took over land and territories with great emotional significance for the jewish people. but another people was there. one that numbers 1 million and has its own plight. this requires decisions and answers. 11 million people live between the jordan and the mediterranean. 7.5 million israelis and the rest are palestinians. there is only one political entity called israel controlling all this area, it will become inevitable either among a jewish state or a democratic one, it this palestinian bloc would vote it is a democratic state. if they will not vote, it is not a democratic state. sit by securing peace and security, we are not doing the palestinians a favor. we are simply working towards ensuring the future identity and success of israel. we are shaped by assets, not by sound bites and slogans. a, at the dead of states for two people. -- two states for two people. see, holding the majors ultimate loss under israeli sovereignty and bring the isolating supplements back home. d, solving the refugee problem within the palestinian state. e, we will discuss with reference to western jews and the jewish suburbs which are not heavily populated. agreed upon solutions in the holy basin. f, signing a new agreement that declares an end to the conflict and fidelity of future claims. g, this must be based on strict security arrangements. it is a tough neighborhood. it is not for the week. -- it is not for the weak. the palestinians must knowledge that they have no chance of defeating or weakening israel. our experience dictates the security arrangements must include compelling elements. preventing rockets and missiles from entering the west bank. providing effective operational answers for future potential unconventional attacks from our narrow eastern border. having spent most of my adult life fighting for israel in uniform, i allowed myself to state loud and clear that there is no contradiction professional or otherwise between the two state solution and the security of israel. on the contrary, the two states for two people is the key condition for enabling israel to continue developing the tools for a modern society. the pessimists fills difficulty in every opportunity. the optimist sees opportunity in every difficulty. i am aware of the difficulty, but i am also optimistic and believe it can be done. this critical hour may also be the finest hour for the people on both sides. despite good faith efforts, together with demonstrations, we were unable to launch the second moratorium in 90 days. that should not keep us from losing sight of what needs to be done. we must find a way to renew negotiations with the palestinian leadership headed by president abbas and prime minister fayed. we need to overcome suspicions on all sides. in israel, we have to go beyond egos, expand the government if needed, and brace ourselves for the immediate task of moving decisively forward. i believe that the coming few weeks can enable us to find a way to make it better. millions of eyes in the middle east and around the world are looking at us, expecting us to do just this. i acknowledge thisati am doing everything in my power to ensure that this opportunity will not be missed. we must leave up to -- we must live up to our responsibilities to provide leadership and not lose touch with reality. paraphrasing president kennedy, [unintelligible] it is the one most consistent with our character and courage. i pledge to you that we will continue to struggle for israel's security by working determinedly to achieve peace. the lord will give its people strength. amen. thank you very much. shabot and shalom. [applause] >> please resume your seat, ladies and gentlemen. we will ask the press and cameramen to leave the room so we can move to the next discussion, which will be off the record. >> tomorrow on washington journal, the cato institute talks about its new web site that has a line by line analysis of the federal budget with recommendations for cuts. mitchell ceasar will discuss the future of the democratic party and president obama's relationship with rank-and-file democrats. kevin mccormally will offer tax advice for 2010. washington journal live at 7:00 a.m. eastern on c-span. >> in london, students riots over tuition and politicians debate the debt crisis. this month, to na expense to two programs this weekend with interviews from london. m sunday atthew parris, a former member of parliament. "q&a" this weekend at 8:00 on c- span. >> some -- former president bill clinton spoke with reporters at the white house today in defense of the tax cut agreement between president obama and congressional republicans. he urged the senate to ratify the s.t.a.r.t. treaty. this is about 35 minutes. >> obviously there is a big debate going on about taxes and about the need to grow the economy and create jobs. just about every day this week, i have been making an argument as to why the agreement that we struck to provide billions of dollars of payroll tax cuts that can immediately help rejuvenate the economy, as well as tax cuts for middle-class families, insurance for people who desperately need it, credits for college, job tax credits, and a range of business and investment credits are so important to keep the recovery moving. i just had a terrific meeting with the former president, bill clinton. we just happened to have this is a topic of conversation. i thought given the fact that he presided over as good an economy as we have seen in our lifetimes that it might be useful for him to share some of his thoughts. i am going to let him speak very briefly and then i actually have to go over to one more christmas party. he may decide he wants to take some questions, but i want to make sure that you work with them directly. >> thank you very much, mr. president. first of all, i feel awkward being here and now you're going to leave me all by myself? [laughter] let me say a couple of things. first of all, i still spend about an hour a day try to study this economy. i am not running for anything. i do not have a political agenda. i am try to find al what to do. i have reviewed this agreement that the president reached with republican leaders. i want to make full disclosure. i make quite a bit of money now so the position the republicans have urged will personally benefit made. on its own, i would not support it because i do not think that my tax cut is the most economically efficient way to get the economy going again, but i do not want to be in the dark about the fact that i will receive a continuation of the tax relief. however, the agreement taken as a whole is, i believe, the best bipartisan agreement we can reach to help a large number of americans and to maximize the chances that the economic recovery will accelerate and create more jobs and minimize the chances that it will slip back, which is what has happened in other financial collapses like japan is facing. it is something we have to avoid in america. why do i say this? first of all, clearly the extension of unemployment, which gives people a percentage of the income they were previously making, that money will be spent and it will bolster the economy for the next couple of years. secondly, the conversion of the "make work pay" tax credit that was passed before which goes to 95% of the american people, it will give according to all of the economic analysis of the single most effective tax cut you can do to support economic activity. this will actually create a fair number of jobs. i expected to lower the unemployment rate and keep us killing. thirdly, -- keep us going. thirdly, something i have not seen much about in the reports, this agreement will help america over the the long-term because it continues the credits for manufacturing jobs and energy coming into america. in the less two years, there have been 30 high-powered battery factories being built in america. we will probably be at 40% by 2014. this is an important thing. it is a huge multiplier to create new jobs. in my opinion, this is a good bill and i hope my fellow democrats will support it. i thank the republican leaders for agreeing to include things that were important to the president. there is never a perfect bipartisan bill in the eyes of the partisan. we all see this differently. but i really believe this will be a significant netplus for the country. i believe a lot of people are breathing a sigh of relief that there has been an agreement on something. do not minimize the impact of the unemployment relief end of the payroll tax relief. and of the continuation for the incentive to grow jobs which will trigger more credit coming out of the banks. ultimately, the long-term answer is to get the money that banks have in cash reserves back into the economy again. the $1.80 trillion in corporate treasuries not now being invested out there in the economy again. i think this is a netplus. i think the people that benefit most should pay most. that has always been my position. that is for reasons of fairness in rebuilding the middle class. i think this is a much, much better agreement that would be reached were we to wait till january. i think it will have a much more positive and that of the economy. for whatever is worth, that is what i think. i would like to say one other thing on another subject, just to be recorded on record. they do not need my support on this because there is good republican support including the first president bush. i think the s.t.a.r.t. agreement is extremely important to our national security. it does not a radical agreement. boris yeltsin and i agreed in principle of the same terms. we did not proceed because it could not be ratified. i am not sure the senate would have ratified it then, but i think they will now with enough encouragement. the cooperation that we will get from the russians and the signal that will be sent to the world on non-proliferation, we know there are things going on that threaten nuclear proliferation. it is very important. when people full with these weapons, they are expensive to build, expensive to maintain, and expensive to secure the material that goes into making the weapons. this is something that is profoundly important. this should be way beyond party. i hope it will be ratified. >> first of all, a lot of democrats on capitol hill say this is a bad bill that president obama could have gotten more. >> i do not believe that is true. in january, they will be in the majority. this would dramatically reduce their incentive to extend unemployment benefits to support the conversion of the "make work pay" tax credits president obama enacted into the payroll taxes. i read all these economic studies. every single unbiased economic study shows the best thing you can do if you're going to take the tax cut passed to grow the economy is to give payroll tax credits. i just got back from a trip to asia. hong kong had a stimulus. i guess we are not supposed to use this word. you know what they did? they gave almost a% of the low- income working people two months free rent. they gave money to seniors. the most important thing they did was payroll tax relief for one year. all the people who study this believe is the number-one thing. i do not think they could get a better deal by waiting. the other thing nobody is talking about -- i did out there now and i do a lot of interviews. these tax credits have made us competitive again. i did not see a single story crediting senator reid's election and the two plants that were built in nevada. both companies are owned by theyese interests who felt would compete with us in the future. i do not believe there is a better deal out there. >> units in the republican congress taking office in january. what was your advice to president obama today about how to deal with the congressman in the opposition party? >> i have a general rule that whatever he asked me about my advice and whatever i say should become public only if he decides to make it public. they can say whatever he wants to say. >> here is what i will say -- i have been keeping the first lady waiting for about 30 minutes. i am going to take off. >> i do not want to make her mad. please give. >> you are in good hands. >> thank you. go ahead. >> mr. president, is there anything else that can be done, in your opinion, to listen up the credit markets that have been so tight? if people cannot get their hands on capital, how can they be the on turnovers -- how can they be the entrepreneurs they want to be? >> we are not talking about risk. that is what the financial regulation bill tries to stop. it charges the federal regulators if the wall street banks -- we know they have to have more leverage than the traditional community banks. that is true in arkansas or any place else. let's start with the community banks. if they all money conservatively -- they can loan $10 for every dollar they have in the bank. if they have $2 trillion uncommitted to loans, even though some may have more mortgage issues -- most of that mortgage debt has been unloaded to fannie mae or freddie mac. i do not like the securities, but they happen. what i believe is going on is, first of all, the business community has not come forward as aggressively. this will preserve all the small business incentives that were enacted by the congress in the previous two years. there are 16 new measures to give incentives to businesses to take loans. it appears to me that the community banks, at least, are somewhat uncertain about how the financial reform bill, which i supported, applies to them and what the cost of compliance might be. the two big things that bill did was require regulators to monitor every month the big banks that caused a meltdown and then it set up an orderly bankruptcy mechanism and the band's future bailouts. that bill actually said that if this happens again, the shareholders and executives have to eat it. there are a whole lot of other things, credit cards and other matters to deal with. i think it is really important just to do an aggressive, one under% information branch. i would go so far as to do it bank by bank by bank by bank so that everyone knows exactly what they have to do, exactly how much it cost, and how quickly this can be resolved. then it is important to make sure the committee banks and their borrowers understand where the small businesses of america are and where the manufacturers are with the various loan guarantees and credits and deductions that are available under these walls. we too often assume that when a law passes, people know it passes and they know what is in it. that may not be true in this case because there has been so much activity as a much debate about it -- it was a debate that occurred in the course of the campaign -- in my opinion, that is what needs to be done over the next two or three months. we have to get this country out of this mess. $2 trillion in the bank is $2.30 trillion in loans. i also believe the same thing with big companies. we should analyze the situation of every company that has $1 billion in cash. we should ask them to be honest with us about what it would take to get them back in the investment business. these companies clearly have a preference for reinvesting in america or they would have put this money somewhere else. they have not. it is an amazing thing -- $1.80 trillion in corporate treasuries. it has been since 1964 that that they had this kind of cash balances relative to their value. those are the things i think we have to do now. i cannot answer your question except that the bankers i talked to in arkansas, in small places that i visit around where i live in new york, they all say they know they need to wrap up the activity. we have to get the green light about how we will comply with these walls. you may be able to use our program to do it. we may be able to work to this stuff with people. i just think they do not know yet. >> some of your fellow democrats are saying that the president did not fight hard enough for his work principles, that he caved in politically. some say he should be a one-term president. has the damage, not only his own political aspirations, but has it that the party down? >> i do not believe so. i respectfully disagree about that. look, a lot of them are hurting now. i get it. i did 133 events for them. i believe the congress in the last two years and did a far better job than the american people thought they did -- at least the american people who voted in the midterm. i went to extraordinary efforts to try to explain what i thought had been done in a way i thought was most favorable to them, but we had an election. the results or what they are. the numbers will only get worse. -- the numbers will only get worse in january in terms of negotiating. if unemployment is dropping like a rock, maybe you could have this so-called mexican stand off and the voters will hold someone responsible for raising taxes. that is not the circumstance we face. the united states has suffered a severe financial collapse. these things take longer to get over the normal recessions. we must first make sure we keep getting over it. we do not want to slip back down and panic. in order to make it happen, we have to go beyond direct investments whether they are stimulus projects or tax cuts to private growth. to get there, we have to achieve a high level of growth that traders' confidence. i personally believe this is a good deal and the best he could have gotten under the circumstances. i just disagree. i understand why people are writing this news, but i disagree. >> if you made a number of very effective calls for the health care plan last year. i've been asked to make any calls to democratic members of the tax bill? there are a lot of comparisons being made between the 1994 in the 2008 elections. do you think those are analogous to the current situation? >> all of you will be under enormous pressure to build a story line. there are some parallels. i will let you do that. i am out of politics now. i care about my country and i want to get this economy going again. i believe that it is necessary for these parties to work together. for example, the story line is how well we work with republicans at all of that, but we played political kabuki for a year. we had two governments shutdowns. people just did not feel it yet in 1994. we cannot afford that. we have got to pull together and both sides will have to eat some things they do not like because we cannot afford to have the kind of impasse that we had last time over a long period of time. we do not want to slip back into recession. we have to keep this thing going at an accelerated pace. i think this is the best available option. >> in fairness, the sec as the election was over, i did my foundation trip to asia. i just got back from the west coast. i flew overnight to get here today. i have to leave again tonight. if i were asked to, i would be happy to talk to anyone, but i have not been asked. the president did not have a chance to, in fairness. he knew that hillary and i were appearing before the forum tonight. >> i had the feeling you're having a good time giving advice and not governing. >> i had quite a good time governing. [laughter] i am happy to be here if the bullets are fired they will not hit me unless they ricochet. i am happy to be here because i think the president made a good decision and because i want my country to do well. election, the american people in their infinite wisdom put us both in the same vote. it is the garrote or sink. i want us to grow -- it is either row or sink. i want us to row. i had a long talk with the prime minister today. he, first of all, has done a remarkable job of being a loyal prime minister but not being involved in the political imbroglio that has been going on. there is a decision made to review the vote in its entirety and have some outside observers, in due are credible and knowledgeable. they will announced how they propose to do that. today was a pretty calm day. they expect the region to be pretty calm. we are going to have our commission meeting next week. we may moved it to the dominican republic, but i think the best thing we can do for the people of haiti is to prove that there is patients on the commission and that the donors are still committed to the long-term reconstruction projects whoever gets elected president. the best thing they can do is -- everyone understands they had to carry out this election under difficult circumstances, even getting the identification cards to everybody proved difficult, but what i can say is it appears they are going to try to have a recount procedure which they hope will require more support from across the political spectrum. meanwhile, we want the commission to keep working. the world bank has released about $70 billion of the $90 billion in project we approved. the government will be hiring more people immediately for those projects. we will approve a lot more projects on the 14th. that is my focus now. >> do you think your appearance here today will help sway votes for the administration among house democrats? the reason i ask you that is because a lot of them are sort of antsy about the presidents of triangulation. they are still smarting over that perio. that may not put them in the direction you want them to be pushed. >> idle." that obama, you ought to go back and read a lecture that franklin roosevelt gave in 1926 before he was the vice-presidential nominee. they discussed the dilemma of the progressive movement in american politics. you know, i have an enormous amount of respect for the democrats in the house and i have already told you that some of our best people lost. i get where they are coming from. i can only tell you that my economic analysis here, given all of the alternatives that i can't imagine actually becoming law, this is the best economic results for america. i think it is a an enormous release for america to think that both parties might vote for something, anything, that they both agree on. there is no way you can have a compromise without having something in a bill that you do not like. i do not know if i can influence anybody. if i could, i will go some places. all i can tell you is what i think. >> your credibility of the deficit, what you think about the concerns about the short- term and long-term deficits? >> i do not think i did a good enough job this election season. i am not sure we did. the difference between now and when i became president, when we immediately went after the deficit is quite simple. when i became president, it was after 12 years in which the cumulative debt of the country had risen from $1 trillion to $4 trillion. it was the first time in american history where we had a run structural deficits. that is of any size. we were having to pay too much for money. it was costing us a lot to borrow money in the public sector, taking 14 cents of every dollar of the debt at the time, and it was crowding out the opportunity of the private structure to borrow money. passport the recession that we had in the early '90s. -- that sparked the recession that we had in the early '90s. this time there was the collapse of a financial system that took interest rates to zero. people say the interest rates went up on bands in it -- on bonds in the last couple of days. is it because of the economy growing? that does not bother me. we have to get out of a deflationary. the biggest problem we have now is deflationary. -- the biggest problem we have now is deflation. we had for surpluses when i was president. that is what i'd like. i like balanced budgets and surpluses. if i were in office now, i would have done what the president has done. you have to put the brakes on a contracting economy and then you have to somehow hold it together until growth resumes. when growth resumes, you have to have interest rates higher than zerio. -- higher than zero. you should be encouraged interest rates are creeping up again. that needs to be a competition for money. it is a good sign for the economy. we will have to take action to eliminate the structural deficit again. i think it was a mistake to go back to a structure for the deficit -- go back to a structural deficit. if we did not have to borrow money from our trade partners, we would have more economic freedom and economic security. i want to see what comes out of this, but i expect to support some vigorous actions to eliminate the deficit and get us back in balance. >> there are enormous issues of importance from education to energy and the deficit. this is still a very divided country. do you think the american people what the president to compromise with the opposing party? is that a message that democrats will have to accept? >> yes, but i also believe that it is a message that republicans will have to accept. keep in mind, the interesting thing was that a lot of the hard-core conservatives think the republicans gave too much. there is a column in the post today. it was written by a briquette man. -- brilliant man. they said they got the tax cuts, but most of them were targeted at the middle class working people, the unemployment benefits were extended, with some of them did not want to do, and the american people supported them in the vote. there are some conservatives that do not believe in this economic theory i just to advance to you, to believe that republicans -- who believe that democrats got more out of this than the republicans did. i think that is healthy, too. everybody has got to get a little. i think the one thing that always happens when you have divided government is that people no longer seek principled compromise as a witness. this system was set up to promote principled compromise. it is the ethical thing to do. in a democracy where no one is a dictator, we would all be at each other's throat all the time and would be in a state of constant paralysis if one's power is divided there is no compromise. -- if once power is divided there is no compromise. i can give you for of five things i think should be done to improve it. i think it is ferocious to repeal suitable reform. i think it is the best chance we have to take america back to no. 1 in college degrees. i think it is worth fighting against repeal of the financial reform said that we will not have another meltdown and, if we do, there will not be another bailout. i think there are a lot of fights worth having. i think the republicans want to fight them to since they ran on that. -- the republicans want to fight them, too, since they ran on that. after the fights are over, we will be able to find principled compromise is on those areas as well. to me, that is worth doing. but the economy first. we cannot go back into recession. we have to keep falling out of this mess we are again. this is a good for step, those on the substantive merits and on the psychological relief it gives to the american people in general and the small businesspeople, community bankers, and others who can start doing things to get better in particular. >> thank you, mr. president. >> that concludes monday's briefing. [laughter] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> leaders of the congressional black also said today that a vast majority of its membership -- opposes president obama's agreement with republicans. speaking to reporters at a news conference, barbara lee of california said our membership rejects continuing tax cuts for the wealthiest earners and richest estates. >> good morning. i represent the ninth congressional district of tel born yet, also chair of the congressional black caucus. i stand here with my colleagues from the congressional black caucus this morning to reiterate a message that i delivered during which the's democratic caucus meeting with vice president joe biden. the overwhelming majority of the congressional black caucus members are opposed to the current tax plan. we will have a specific proposal that we will be presenting today that congressman bobby scott, donna christiansen, and our task force had been working on. they have been putting this together of the past couple of years. congressman scott and congresswoman christiansen will speak in just a minute. before they come to the podium, let me say that the vast majority of our members are opposed to the estate tax provision and to extending the bush-era tax cuts to the wealthiest 2% of americans. our members want to support responsible, very clearly defined positions, which is why we really do support extending -- and we voted for this and will continue to vote for this -- extending unemployment benefits and provisions to create jobs. we understand there are tough choices that will need to be made next year. we are extremely concerned that the cuts that could be made should this package passed will disproportionately hurt the poor and low-income communities and further erode the safety net. we do not want to create a situation today that will exacerbate the conditions for americans who are already hurting. that would be unfair and would be unwise. i would like to ask congressman bobby scott to come forward, a member of the house budget community -- a member of the house budget committee. thank you again congressman scott for your leadership. >> thank you, chairman lee and congresswoman christiansen. congresswoman lee has asked me to get a consensus among our members so that we can proceed with the president's proposed test that compromise with congressional republicans. we are an ideological diversity group. we have a lot of different ideas about what we should be doing. i, for one, believe we should let all of the tax cuts expire because i worry about draconian spending cuts to vital programs congress will make next year. after speaking with my colleagues, i can tell you an overwhelming portion of the caucus is against the proposal as it stands. it begins as a nonstarter, particularly the offensive estate tax. this provision cost more than $60 billion over two years, yet the republicans would support the $60 billion for the estate tax relief, but we cannot afford $50 billion to extend unemployment insurance or $14 billion to provide are struggling to seniors who are going another year without a cost-of-living adjustment. they even opposed the perfunctory cost-of-living adjustment for federal employees. we cannot afford that, but we can apparently of for $60 billion for the wealthiest 2% of americans. the congressional black caucus reach consensus on three areas we believe we can unite behind. first, we support the extension of emergency unemployment insurance benefits. we believe we should extend benefits for those that are exhausting the benefits they have. second, we insist on guarantees that no plan will deprive social security of nest -- of necessary revenue. we believe the idea of a payroll tax or an equivalent payment to a taxpayer, such as a rebate check, is a good way to get money into the hands of working americans. finally, we have to kick the proverbial can down the road in addressing the deficit and the inequities in the tax code. we support the beshear tax cuts for the middle to low and come americans. -- we support the bush-era tax cuts for the middle to low income americans. we hope this will allow our recovery to truly accelerate and help communities affected by the recession. the coast of all of these proposals is approximately half of the president's proposal and will create virtually the same number of jobs. i believe if we properly extend any of the bush era of tax cuts , which eventually will have to pay for those tax cuts. if you look at the recommendations, we know what $3.80 trillion in tax cuts will cost and what we will have to do for that. that is the cost of extending all the bush-era of tax cuts. they oppose cuts to medicare, social security, elimination of the home-mortgage deduction, across the board tax cuts on everything, including $100 billion cuts to the middle -- to the military budget. one day we may get serious about dealing with the deficit. these are the kinds of cuts we will have to make in order to find a $3.80 trillion in deficit reductions. i recognize we are in a recovery. if we adopt this plan, we will have more resources to deal with job creation. finally, we have a choice. if we do a tax cut, somebody will eventually have to pay for it. you cannot give everybody a task that like oprah winfrey or santa claus. eventually, somebody will have to pay for it. we have to make these decisions right at the same time. what we are suggesting is that we let many of these tax cuts expire and then deal with the tough choices next year. >> congresswoman christiansen. >> thank you, chairman lee and bobby scott. our desire to get rid of the bush tax cuts did not just art now. we were never for them in the first place. anybody who follows the assets cuts could see how they would grow. -- anybody who follows those tax cuts could see how they would grow. we are forced to cut spending south on the kind of programs that this gives our republican colleagues another chance to play gotcha. when we moved to fund implementation of the affordable care act, there will be no money. gotcha. when the 2012 election rolls around and we do not extend the tax cut again, at a democrats will be accused of raising taxes. we are not playing that. our communities are not going to give up their first opportunity to have equal access to health care. there are many that would be provisions -- there are many provisions that we work hard to include. committee held centers, at trinity health worker grants, community -- others that were not about to let go. we are not going to give up the opportunity to improve the schools, colleges, this children's educational achievements. we are not going to give up a chance of the american dream. we are not going to let them stop our efforts for equitable treatment for the territories and we are not going to let them block the pathways out of poverty. we are not going to let this country be less than it can be. we are not against the wealthy. we represent everyone in our community. democrats are not waging class welfare. the so-called middle income tax cuts goes to everyone. including the billionaires'. i do not know what all the bellyaching is about. the bush tax cuts have not created jobs. more people have slipped into poverty. the por are worse off than ever before. the gap between rich and poor has greatly widened and that is not bad for the port side, but it is bad for all of us. it weakens the foundation. we are not against her president. we are advocating for what he and all of us have worked for all along. that can only happen when there is equal opportunity for all who live here. it will not happen if we borrow and spend all of that money and unnecessary giveaway to those sued do not need it. that is why we oppose this agreement. we look forward to working with the president and all of our colleagues to come up with a plan that is fair and equitable for all of the american people, one that stimulates the economy, creates jobs, and will help grow our economy for the future. thank you. >> let me just commend the chairperson of the congressional black caucus and art experts -- our experts. we are simply here to say that we want a fair deal. there was the new deal in the roosevelt and there was a fair deal under truman. every new deal is not necessarily fair. we see this deal as not being fair. one of the leading senators, leader of the tea party, only questioned how will we pay for the extended unemployment benefits as if all the other costs were unimportant. we have to really have a vision of what is going to be best for this nation. when the the bush tax cuts were enacted, at that time, that was the seventh priority of the american people. they were not asking for it to operate they felt they did not need it. 10 years later, the situation is the same. interestingly enough, i have received calls from my very diverse district from the wealthiest part of the district and they are saying that, we do not need the cuts. we do not want them. we are concerned about america. we have political leaders fostering a plan on people, the wealthiest, who are really not asking for them. we have had 10 years of the bush tax cuts. we have the highest unemployment that we have had sustainable incarnation and -- in its history. excluding the great depression. if the tax cuts create employment and jobs, and we have had 10 years of it, how do we say that we have to extend them? if it is about stimulating jobs, it has failed in this past decade. i, once again, strongly support the congressional black caucus's proposal and we hope that the president and the administration and the republican leadership will listen and that we can come up with a fair deal. >> thank you very much. we will open now for a few questions. give us your name and your news organization. >> [inaudible] >> we do not see this as a personal issue at all. secondly, the part of what we are trying to do is to talk about how we fix this. so that we can move forward and help turn the economy around and not create a deeper hole in terms of deficit spending. >> [inaudible] >> let me tell you, you know what happened yesterday. the majority of the democratic caucus sent a very strong message that we do not intend to take up this tax proposal as it has been presented. >> [inaudible] >> i will leave the politics to others. we have a situation and we are making economic choices. if we let the tax cuts to expire, one day we will have to pay for them. extend all the tax cuts, $3.80 trillion in deficit reduction. we can see what it costs to pay for these tax cuts. one of the reasons that democrats have -- you make all of these decisions at the same time. here is a health care plan that we want to pass and here is how we will pay for it. i am willing to pay the taxes. the republicans traditionally have done these sequentially. how would you like a tax cut? how would you like it prescriptive drug benefit? that looks good, too. you never get around to actually paying for it. at some point, we need to get serious about the deficit and start making choices. the kinds of choices that will have to be made in this plan and you have seen -- they are draconian cuts. the programs that we have an interest in it, medicare, social security, education, health care, are in jeopardy if we spend all of the money without any recognition of how it will be paid for. i think people underestimated the size of this plan. this two-year compromise is larger -- it was estimated $998 billion. that is larger than tarp. that is larger than a stimulus package. it is more than a first -- the health care plan is $940 billion. at some point, someone is going to wake up and recognize that we will have to pay for it. >> [inaudible] >> relationship is very strong. we are working with the president in the best interest of our country. we have been working on each and every issue and i think when you look at the record, you will see that members -- we have supported 99.9% of the president's agenda. we work to try to reach consensus on them. >> if the senate passes a version of the bill, [inaudible] >> we are going to look at what takes place. there are a variety of legislative strategies and options that we are considering. but we do not know exactly how this would play out. >> [inaudible] >> again, there has been no discussion about how these things will be paid for. it is oprah winfrey and santa claus. everybody gets a tax cut. how are we going to pay for it? the republican budget that was put on the floor last year included a repeal of medicare. they replaced it with a voucher that does not keep up with medical inflation. it selects medicare whether on the vine. that is one way that the republicans -- most of them voted for the budget. his budget included an effective appeal of medicare. if that is how they intend to pay for these things, a lot of people might decide that they are against the tax cuts. you are asking these questions in abstract. how would you like a tax cut? without the other side of the equation, how do you propose to pay for it? there has been no discussion. that is going to end up somewhere else. i have been here 18 years and we have never cut the defense budget. that is another $100 billion that has to come from somewhere else. how will we pay for it? >> [inaudible] >> we would like to see that. i am sure that the president would hear the same message that we delivered to vice-president biden. >> [inaudible] >> we have only seen half the bill. we've seen all these tax cuts a very popular. how are they paid for? are you going to repeal health care? are you going to cut back on education? how is it paid for? we are only during half of the proposal. the proposal gives you an idea that to come up with $3.80 trillion and we are on track. if the proposal passes, we are on track to essentially extend them all. the idea that you will extend them into a presidential year and then cut them -- we have already established the principles that it constitutes a tax increase. if we cannot do that, what are the chances that we will be able to do its in the middle of a presidential congressional election? the tea party will be intimidating all the republicans. they will be running like santa claus. what are the democrats going to do? in the last -- the last presidential candidate running on a platform of increasing taxes was walter mondale. that was not a successful strategy. you are asking half of the equation. our concern is how they will be paid for. i think you can guarantee that if we extend all the tax cuts, if we let all these through, up $3.80 trillion, at some point we will end up paying for them. our concern is that the people paying for it to are the people who can least afford it. >> i do think that a major part of our objection is that we feel that it is going to be bad for african americans. the republicans have said, for example, on health care reform, one of the ways they plan to attack it is to the appropriations process, by spiraling the provisions. this is the first set. the diggs step. >> -- step. >> [inaudible] despite your ideological differences, do you share some [inaudible] >> i hope we do sit share some common ground with members of congress, but how can senate, who believed that $990 billion is too big of a price to pay. extending middle income tax cuts and ensuring that the state tax is not reduced, that is a way to begin to move forward. i hope that there is some bipartisan consensus with the congressional black caucus on many of these issues. >> if you drive the data up so high comedy will have to say, we had cannot afford traditional programs that we have had. for example, low-income heating assistance. i could see that being a target for the conservatives saying, we cannot afford it anymore. section 8 housing, already it has been leveled out. i can see that being an ideal target. public housing in general. but we see is that -- what we see is that when you find a deficit continuing to grow, there has to be caught. the cuts would be -- even in our education and labor committee, when the child the attrition bill came up, they voted it down. -- the child nutrition bill. health care 4911 survivors, -- health care 04 9/11 survivors. there was no compassion. wages cannot afford it. red ink, cut it. we have seen in arizona where they are talking about and are rationing out. the governor just refuses to have certain kind of programs funded through their medicaid program. this is the beginning and we have to -- it is the tip of the iceberg. the congressional black caucus refuses to allow this to happen. >> thank you very much. let me close now by saying and reminding you of the fact that when president bush took office, he had a huge surplus, which president clinton and george that are treasury would hold. president bush moved forward with very similar types of tax cuts and what happened? unemployment rates went up and down debt the cent increase. we do not believe that we need to go back there. the same economic policies that have failed and the same economic policies that have created so much misery and so much pain and such high unemployment rates and an increase in poverty in our country. for those reasons, we have presented our alternatives and we are standing in opposition to the president's plan. thank you very much. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> michael o'brien clearly tax cuts are the big issue. what do you expect to see on that in the coming weeks? >> we saw a pr pushed by the white house. >> what impact do you think bernie sanders this filibuster will have? >> there really galvanized a lot of liberal opponents of this legislation. they saw it as some last-minute heroics. i think it could have the danger upper slaying some fence sitters to oppose this bill. but that lead into the politics behind the obama administration. they rolled up a big gun with president clinton. >> house democrats were expressing some disapproval. where does this go in the house? >> i think it is difficult to say at this point. you will see a lot of wrangling, arm-twisting, deal making over the weekend to try to bring on as many democrats as they need to get this done. ultimately, the discussion early falls to speaker policy. i think that if they can win some concessions on key issues like the estate tax, he might see a vote move forward. >> one person is likely to pass both chambers? >> i would look for a version very similar to what we have now in terms of the income taxes and payroll taxes. a look said provisions for ethanol will be added as a sweetener. >> senate republican says -- say they will block every bill. anything besides those two expected to move this big? >> the big thing to keep an eye on is the don't ask, don't tell repeal that will be introduced as a stand-alone by senator lieberman. they are hopeful that a big tax cuts get done in an orderly manner, they will be able to move forward. that is a big priority for democrats. they need this one to call up their base after a very turbulent week. >> what about the larger defense authorization bill? >> it depends on whether the standalone moves. you might look for the defense authorization bill to take back seat for the meanwhile. tell --on't ask don't if it is the only option, harry reid might try to go for it, but it would be difficult given the debate demands that republicans are making. >> what do you expect to happen to the house version of the dream act? >> sinnett leaders have said that they plan to bring it up for a vote some time. that is what the ad -- that is what the administration says that they hope for. it is just such a tight calendar. harry reid says he hopes to adjourn for the christmas holidays on december 17, next friday. if they get this tax cut a deal at of the way, it is really going to be a race to the finish. >> michael o'brien, you can see is article. thank you very much. >> next, the ceo of general motors talks about the challenges facing his company. then, remarks by the white house coordinator at for weapons of mass destruction. after that, secretary of state clinton and israeli deputy prime minister. >> this weekend, no feldman on fdr supreme court appointees. how the men who began their tenure as friends ended up as scorpions. find a complete schedule on our website. some of to get our schedules e- mail directly to your in box. >> this month, for the first time on television, american history to be showing interviews from the nixon presidential libraries. this weekend, sir david frost and his 1977 interviews with richard nixon. also airing this weekend, from the harry s. truman library, a discussion on america's containment policy after world war 2. the head of rare books and special collections at the library of congress on the federalist papers. see the complete schedule online. bancan also press d.c.'s alert button and have our schedules e-mail to you. telling the american story every week and only and c-span3. >> a month after general motors return to the stock exchange, the company's ceo discusses how his company is fairing. the federal government put about $50 billion into the automaker to prevent it from slipping into bankruptcy. the washington economic club hosted this event. it is an hour and five minutes. >> over the last two years, we have had a lot of distinguished speakers. i've tried to be as dispassionate in introducing them as possible. i probably will not be as discussion this morning because my business partner for seven years and a very good friend and i will probably be less dispassionate than i normally am. dan joined carlisle in 2003 and rose up to be the head of our global biles business. he was a member of our management committee and provided enormous value and helped us to grow. when he told me that he was going to be the ceo of general motors, i was not happy, honestly. i said, do you know how much money you are leaving on the table? he said that he did. i said, ok. does your wife know how much money you are leaving on the table? [laughter] to your children know how much money you're leaving on the table? i honestly think that you will hear that he did this out of a sense of patriotism. i doubt that there are very many people who has made as big a financial sacrifice as he did to help serve his country. we've never disclosed and i will not disclosed it today, but it is an extraordinary amount of money that he walked away from. i applaud him as an american taxpayer, but it was a lot of money. [laughter] money is not everything -- he began life in minnesota. he went to the naval academy and graduated in 1970. he served in the navy for five years and when he left the navy, he went to work in the petroleum industry in england and there he got a master's degree at the london school of economics. it he returned to the united states to work for at&t. then he joined a little company called mci. he became head of the southeast division. when carlyle was started, i recruited bill conway to join him in 1987. dan replaced bill as the c.f.o. and moved to washington and ultimately rose up to be the president and chief operating officer of mci. he was recruited away to the bid to be a partner in new york at a private equity firm and he became the ceo of one of his portfolio companies. he did that for a number of years. then he became the ceo of nextel and transformed the company. he then became the ceo of xo and served his fourth company. he then left that enjoined carlisle in 2003. when he left to become the ceo of general motors, i knew it was a daunting task. he did an extraordinary job. he was elected to the position on august 11 of this year and they have completed a historic i.p.o. -- the largest ipo in history. i doubt there is anyone u.s. singlehandedly put as much money in the coffers of the u.s. government as he did. as a result of that i.p.o., the u.s. government has been repaid $23 billion. i refer to him as our $23 billion man. he has shown his extraordinary skills as an executive and a ceo. i doubt that the i.p.o. could have been done unless he was there to shepherd it through. already, he has shown extraordinary skill and we are very pleased that both day and is here today and i think as a taxpayer, we are pleased that he is now the ceo of general motors reported -- general motors. [applause] >> i had a thought while david was speaking. when i meet my old and the reward, invite david to the funeral. [laughter] this is really a pleasure and honor to be here today. it is hard to be unemotional about today. there are some many of my friends here and i have deep ties in this community, having served in various positions at the mci, which was the fountainhead of many of the changes that you see in the technology worldwide trade my friends from nextel. i was on the board at time warner, for many years. and the carlyle group, which is great. to the gentleman i have known for 20 years, and my college roommates is here. he is a dear friend. he knew me when i had hair. which even my wife cannot say. to my room together for 3.5 years at the united states naval academy. and of course, my wife, who i could not have embarked on this adventure without her. how many veterans are there in the group? would you raise your hands? thank you for your service. [applause] thank you, david, for the kind introduction. it is great to be here. i flew in last night and yes, i did fly commercial. [laughter] i am not that dumb. i did the whole airport saying. i actually chose the enhanced pat-down of the entire body. take your best shot, big guy. i have been through its trade the road show was an experience on many different levels. but it was worth it. 18 months ago, a general motors was pretty much flat on its back. in june 2009, we filed for bankruptcy protection. that is old news now. just think about a for a moment. general motors, the icon of american -- american manufacturing, one time the holder of 50% of the u.s. vehicle market. its standard bearer of what was termed the modern corporation. it would bankrupt. it was unimaginable until iraq -- until it actually happened great 39 days later, this is to help from the u.s. taxpayer and others, general motors was relaunched. critics davis very little chance of success. many thought we would remain in on the public dole for decades. others simply left us for dead. 16 months later, after emerging from bankruptcy, this new gm was relaunched and one of the most successful initial public offerings ever. i spent many decades in business, most recently in private equity. it was my job to assess companies, their jobs, their prospects, up their management, and make bets on their futures. i can promise you that two years ago, there was precious few in this country that gave gm a chance to were willing to bet on its future. three weeks ago, people by the hundreds of thousands, did just that. they bet on general motors. they saw a company with a new business model focused on three things. designing, building, and selling the world's best vehicles. they saw a new company with a competitive cost structure, improved capacity utilization, leaner inventories, improved brand equity, and customers willing to pay higher prices for great vehicles. all of which resulted in improved earnings and great cash flow. they saw and automotive company competing in a growth business. hard to imagine not too many years ago, one that was better positioned than any other company in the world in the emerging markets of india, china, and brazil. they sell a new company with a strong balance sheet and plans to make it even stronger. they saw a new company position to break even at the bottom of the markets. to a dozen non was a 50-year low for the automotive industry in this country. we actually made money. the company would only make money at the high end of the cycle. if we achieved a mid cycle correction in the next year, gm is very well positioned to move forward. the new investors assault a company being managed by a mix of new talents that was intent on the change and a team of highly skilled insiders who are running key operations around the world. most importantly, they saw a great new products in the marketplace, like the cadillac srx. it took nine market share points in one year. buick lacrosse. buick is the fastest selling brands in america and the last 12 months after its the gm to rein -- 12 months. it is the first really strong ego subcompacts that we have produced in this country. they also sell a company that is selling more than it did a year ago with a brands. finally, they saw a lot of people beginning to believe in the new gm. a company that has learned from its past and is committed and determined not to make the mistakes of the past. at gm, we're building a culture that values speed, agility, and competitiveness. it will continually adapt its business model to the rapidly changing world. it puts the customer first. this may not seem revolutionary you, but trust me, it is. [laughter] what does this mean? it means that we are working hard to set the pace with a new car is like -- it was recently named 2001 urban part of the year by decisive media. it is a segment leader. it features things that we will start to differentiate on. we have on star. we intend to make on start in every car on the road. you will see dramatic changes in the internet application to automotive and automotive safety. it means we are bringing customers the newest design and technology like a bolt. -- volt. it is like no other car on the road today. there will be four of them of stairs for you all to see. it is only $25 for a trip around the block. we are trying to raise more revenue every opportunity. [laughter] this car will go 50 miles on a single charge. then it converts to a generator, at 86 horsepower engine and it will go another 300 miles. you can literally drive this car from washington, d.c. to los angeles. not to say that we will develop other cars, those are battery electric cars. we think they have a place in the marketplace, but they'll be more of a metro car. from the start, it was designed to change the way that we think about the automobile. we have made a strong statement in that area. just in 2011, the accolades have been many and wide. car of the year award by automobile magazine. motor trend. we were also named the truck of the year. that is very rare for an automotive company to have both car and truck of the year by motor trend. it was also named car of the year by green carded journal. we are confident that it will be one of the most important cars that gm has ever produced. in fact, when i think back over many people's lives in this room, the iconic car might of been described as the 1964-1965 mustang. i held my children will reflect back to that the volt was the iconic car of their generation. one of bill launched cars -- launch markets will be washington, d.c.. there are seven great we intend to start shipping next week for commercial purposes -- purchases. it is a statement that we are thinking globally as well as acting in what we believe to be society's best interest. last month, we announce that chevrolet will invest $40 million over the next few years for various clean energy projects throughout america. why $40 million? these projects are designed to reduce about 8 million and ted metric -- 8 million metric tons of carbon dioxide emissions in the united states. that is the carbon footprints admitted from all chevrolet's that will be sold between now and the end of 2011. we wanted to make a strong statement that we're just not out for a fast buck. we want to be a responsible member of our society. this is a big and important goal and one we are committed to achieve. we think it is the right thing to do for our customers, our company, and for the communities that we live in. it is part of gm's commitment to the environment and to a clean energy future. to be fair, this is not the result of me. i am a member of the team. many of these projects were started well before the bankruptcy. i think we have to give due credit and gratitude to the people that had the foresight at general motors to develop these great cars and trucks of darnell winning so many awards. i think it is testimony to the tenacity and the persistence and the focus of the gm employees to look for the dark days of the bankruptcy, at the days leading up to the bankruptcy, and kept focused to deliver great products. there was a lot of turmoil around the industry. it was most impressive and it is the source of inspiration to me personally and a privilege to leave such a great team of people who are so committed to doing what is right for their company and for their country. in many ways, what it comes down to in the future, to give people like you -- we have to rebuild the trust in the general motors product line. it took many years of lilly not listening to our customer base -- of really not listening to our customer base and poor quality to destroy what was once a great damage. i will tell you today better quality is second to none. there is no foreign transplant or foreign competitors that produces cars any better than we do. these are world class cars. that has been verified by external metrics. i am proud to be a team leader of a great company with great products. i hope he will reconsider or consider your next purchase, four of which will be upstairs following the meeting. gm is a company and as we went through the ipo and we knew we were going to have a special offering, everything from the press release, we survived a near-death experience. we deeply appreciate the support we got from the american people on a state and federal level and we will not forget that. for the first time in a generation, and i'm not kidding, this was a company that had many structural problems, post-retirement health -- the list goes on and on. that has all been rectified. for the first time, we have a level playing field. as the 71 of our earlier lines, made the best car win. if that is the magic by which we are measured, i am confident of our future. we look forward to returning the public's trust and respect every day. we look forward to a bright future. with that, david, i would like to turn it back to you. i know you want to ask me a lot of questions. [applause] >> i understand you drove over in a volt today. what was it like? >> ecstasy. [laughter] i've only had my life threatened twice so far. i have security now which is something new for me. i felt secure with you, david. he drove the car. usually, i drive in an suv. i wanted to drive the car here. he was impressed. this guy drives professionally. it is not the propulsion system. we commonly referred to the geek-mobile as the prius. i would not be caught dead in a prius. we have used 1.2 gallons of gas. 80% of the people in america drive 40 miles or less per day. you should be able to drive the average -- we should be able to drive -- it is going to be for sale as of two weeks from now. >> we have to under thousand orders. -- 200,000 orders. we liquid cooled the battery pack. it weighs 400 pounds. many of the battery electric vehicles will be air cooled. we are forefront in the technology. we spent $7 billion for research and development. we put another $7 billion in engineering. the air cooled battery pack is estimated to last three-five years. pack for a years or 100,000 miles. we know the residuals will be good at the end of three years. when we come out with a battery electric, that could be a problem to residuals. >> when you are here, what car are you driving? >> would until you see the new camaro coming out. i know this sounds like an advertisement. [laughter] the new camaro convertible, you're going to love that car, too. it has been a great seller. >> what exactly did you walk away from a lot of money? [laughter] that would have helped your children and grandchildren. what was the motivation? >> i was asked that question last week. i doubt if they show this on television. he was quoting you. i think he said this, he mentioned a specific number. i know you told larry summers. [laughter] >> he was staggered when i told to him. >> are your recruiting him? >> today is his last on-the-job. >> i know. there is more to life than money. i was not put on this earth to just make money. i cannot tell you, in my lifetime, there it's been iconic events. when i got married, my children, my grandchildren. when i walk on the trading floor once the deal was done, there were 400 people and they stood up and clapped. one of the traders on the floor told me, when they have -- when they had to delist general motors, he cried. when i went back detroit -- when i went back to detroit, there was an employee meeting of 2000 people. there was a man my age and he cried. he said, 18 months ago, i thought this company was gone. it is hard to describe -- and those experiences, no offense to carlisle, it is a wonderful place. it is a wonderful, great people. i know that i made the right decision. this company, quite frankly, that is too important to fail. the american industrial infrastructure is too important to let it go down. the implications here had general motors -- had general motors gone down, we spent $80 billion a year in our supply chain ford was not in that good a shape two years ago. if our supply chain had gone down, i think it would have caused huge disruptions for everybody. i do not know what the cost would have been. it would have been a lot more than a lot of people have projected, in my opinion. sometimes you have to do what has to be done. i am not that special, but someone had to stand in. >> a when you did the i.p.o. nt 1 around the world, will work -- and he went around the world, what were the impressions that you got? what do you think made the stock sells so well? you were going to originally prices in the mid-20s. it priced at $33. obviously, their work -- there was great demand. what were the main factors that propelled the interest? >> the fact that we have a great contract with the union and the substance and form have a competitive cost structure here in north america. what really intrigued and surprised me when i went on the board in 2009, it was the market position. we will produce almost as many cars in china this year as able the united states. -- as we will in the united states. we are continually gaining market share. we have the most enviable position in china. but we talked about our plans -- we all live here and believe me, if you think about this, when i was at mci, we would not run the same ads in a birmingham, alabama, as we did in brooklyn. there are different regions. california is kind of a culture of its own. so is alabama. so is minnesota. so is china. we'll look at china in four different ways. the big cities, shanghai, hong kong. and then we looked -- if you looked out in the western provinces, it would not sell in any industrial markets because we have to sell it for down in the $5,000 range. it does not have electric windows. that would free all of us out. -- phreak all of us out. it might hurt my wrist. we not only sell pulp market, but we will slow down market. -- up market, but we will sell down market. we have a new chevrolet that is coming out. it looks like a bmw. we stock all the cars in that sector up against the chevrolet and we are right in the middle from a price point. we asked people to take those same cars and they drove them all. they put that car here and bmw here. it will write down the line. there are new cars coming, new models that will stand us in very good status. >> you will pay a total of about $32 billion to the federal government. how much money does the government have to get back to break even? what stock price would they have to sell the remaining shares in order to break even? >> they own 61% of the company before. they own 27%. i just happen to know these numbers. [laughter] they own a third of the company. $33 a share is what they need. that will mean that somewhere in the high forties or low 50s. the previous break even was about $42 a share. we sold for $33. >> do you give any advice to the government about when they should sell the remaining shares? >> no. it is a very clear and bright line. the administration has been great about this. they do not involve themselves in the boardroom or the management or the operation of the company. we had a shareholder meeting this summer. there were four people there. the u.s. government, the canadian government's, the help trust for the union, and boaters liquidation corp. representing the bondholders. it is not our business. if your financial advisor said you wanted to sell, you would not want these guys are saying, i will tell you when you are going to sell. it is not our role to tell the federal government anything. they determined how much they wanted to sell. >> they still can determine salaries and so forth. is that still appropriate? >> that is still true. [laughter] >> should go on to the next question? [laughter] >> i am visiting with the special paymaster this afternoon. not about me. we have to be competitive. we have to be able to attract and retain great people. we have been able to do that. but it is largely out of a commitment. we have been able to attract pretty damn good people. we're starting to lose them in now. that is an issue for our shareholders. in their best interest, we should get some relaxation in. >> when you were asked to join the board, do remember the board before you became the ceo? did the government know that you're a republican? did they care? what impressions to take away from the company when you joined the board? what was the biggest shock? >> did you plant this, david? i would describe myself as a: paul republican. -- colin powell republican. >> there are not many of them left, i guess. [laughter] >> there are at least two and it sounds like there are more. i know john mccain. he went to the naval academy. i consider him a friend, so i supported him, yes. i have supported democrats as well. >> when you joined the board, what was your biggest impression that she had not been on the board before. what was the biggest

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