we understand the value of employee is being hurt when they have differences with their managers. joining us tonight are all 22 of our commissioners. i'm very grateful for your hard work on behalf of the state of tennessee. i think it is worthy of mention in 22 of them coming from diverse backgrounds from having a wide variety of responsibility all 22 have said the most critical thing we can do to make state government operate more effectively is to address our unemployment system. well, last year we faced a budget, we face a tough budget when we had $1 billion less to work within the prior year. but you, the house and senate members in the chamber can together with a irresponsible realistic approach and made the tough decisions the were necessary and passed the budget unanimously. we have good news this year. revenue collections continue to be encouraging. for 16 consecutive months we've seen total tax collections coming stronger and projected over the previous year. our challenge lies in the fact that although the growing revenue collections are only just recovering to levels of to the sums of money for the recession. our current budget also included $160 million in funding legislated to go away. the cost of the fund inflationary growth areas such as ten care, the basic education perham and employee benefits consumes a large portion of the revenue growth each year. our budget this year reflects our economic realities. savings for the future and reductions sometimes painful to balance the budget. i am pleased to say that thanks to the hard work of our employees last year's expenses ended up nearly $20 million below budget which obviously means considerable savings for our taxpayers. [applause] our commissioners have been serious about working in each of their departments to identify areas where we can save money. that kind of responsible government allows us to fund our strategic priorities while keeping taxes low. well, compensation is a key issue in state government to no one's surprise just like everywhere else. last year i was pleased we could provide a 1.6% paced stevan please move on several years without a raise. i am proposing a 2.5% pay raise in this year's budget. [applause] however, i also think we need to do a true salary survey comparing the state salary to those in the private market and those of the federal and local the from a salary. this budget includes the money to fund the survey and includes funding to be set aside as a first step towards addressing any major seller of the discrepancies that might otherwise as a result of the survey. [applause] budgets should be a reflection of your priority. this budget is no different. we are asking for continued support of the fast track and grant program in the amount of $70 million, some of which will be available in this budget year to provide incentives and a very fast paced global economy. we are also continuing our commitment to the west tennessee site by including $25 million in this year's budget. [applause] this is the only site still left in the state inventory, and it's critical that we finish the infrastructure so it can be a prime location for major employers who are looking for a great place to locate. it's worthy of mention in while many states have cut funding for the k-12 education in the last several years due to the recession, tennessee hasn't done that. we are not only not getting the education budget, we are continuing to fund the cost increases for the vp. [applause] must be another priority for the state of tennessee. while college isn't for everyone, it must be for more tennesseeians in the future than it's been in the past. [applause] with 21% of our population has a degree compared to the national average of 30% and over half of the new jobs being created over the next decade will require degrees encouraging more tennesseeans to aspire to higher education as one of our key roles as leaders of the state. for most of the last two decades, higher education has received less funding for the operating budget. that changes this year. [applause] in addition, we are increasing the amount of money available on the need based scholarships. we simply have to keep tuition increases in tennessee to a minimum so we can encourage more access for more students. [applause] access is critical to a successful education program. let me speak plame the last several years we haven't been funding higher capital plans to the degrees necessary to meet the growing student demand. we need more space to train students in science, technology, engineering and math, critical subjects in which we must provide more trained graduates. this budget will finally provide the state funding for the long overdue science building at ntsu. [applause] the science laboratory at the university of tennessee box velte, the new patient diagnostic center of the university of tennessee health science in michigan as well as planting money for new buildings of the national steel community college, northeast state community college and the university of memphis and the university of tennessee chattanooga. [applause] as many of you remember the budget two years ago included cuts to critical services as a result of the economic downturn. the state was able to believe those cuts by finding them with onetime federal money. however, 160 million of those cuts were slated to go into effect this year. it included many critical programs for the state programs like the coordinated school program, extended teacher contract, alcohol and abuse treatment programs, child care benefits, juvenile justice grants, diabetes prevention and matching dollars for the 401k programs for state employees. i'm proud to say this budget restores over $100 million of the cuts to protect vital services for our citizens. [applause] finally, any good budget in tough times is a balance of strategic cuts and reinvestment leal making certain we are keeping taxes as low as possible. else prepares in to raise the level on the estate tax in tennessee. [applause] this year's budget would raise the exemption from $1 million to a million, $250,000. the goal of reaching the federal exemption level of the $5 million while i am governor. [applause] i am convinced our current estate tax is cheesing people and capital out of our state and it discourages people who don't live here from investing here. quite simply, the only way that new jobs created is when people are willing to invest capital. in a time like this when the economy is still struggling to rebound and i'm going to do everything i can to encourage people to invest their capital in tennessee. we've done that by making our legal system more predictable, reviewing the state rules and regulations and focusing on strengthening our attractive business climate. likewise many of you have long expressed the desire to decrease the tax on groceries in tennessee. [applause] this budget proposes to do just that, taking the state portion of the attack from the 5.5% to 5% over the next three years we are also putting $50 million into the rainy day fund this year which brings up to $356 million. while it's important to return tax payer dollars to the taxpayers every chance we get, we have all seen the importance of a healthy rainy day fund to pay for critical services during difficult times. i will continue to make it a priority to build the reserve steadily while i am in office. [applause] our budget also reflects the process that each department spent the last year going through the top to bottom review. you may remember at the outset of our administration asks each commissioner to evaluate his or her agency as if they were starting from scratch. if he were beginning state government all over again, would your department look the same? the work on these reviews was extensive. for example, children services sought input for more than 4,000 people including staff, shareholders and focus groups which resulted in 11,000 comments. the commissioner and deputy commissioner of human services cost more than 600 employees across all divisions. as a result, the departments have identified millions of dollars in savings from restructuring of their organization and we expect additional savings as implementation ochers. several departments found through the process the cost advantage to eliminating outside for example, looking at saving money by selling some full-time positions with state employees instead of using consultants in several areas. [applause] last year you may remember me talking about focusing on our driver's license centers. commissioner gibbons and his team have been a great job of standardized hours of operation across the state will the kiosks in all of the divisions by summer a total of 40 kiosks to be rolled out soon. our final report on the process will be available of the end of february and out line which each department is in the process of doing or will be doing to implement their plans. we also applaud the top to bottom review process to the 200 plus boards and commissions and state governments by falsely reviewing their history, mystery and cost to make sure in 2012 they are fulfilling the purpose they were originally intended to when they were created. as a result we proposed several changes. we are recommending the tennessee regulatory authority to be changed from the full members and five part-time members of a full-time executive director. we believe the new structure will be more efficient and effective and attract highly qualified and experienced candidates. we are also recommending some executive directors of the agency's report directly to the governor. for example, i believe that tennessee higher education commission should have a more direct tie to the governor's office. they function as a policy arms for higher education issues and like the policy chief for the cattle education reports to the governor it makes sense that higher education should have a similar structure. we are also recommending consolidating extreme agencies to limit overlapping functions. one of those proposals is also part of our public safety action plan. we propose moving parole oversight from the board of probation and parole to the department of corrections for the more seamless process. a national study shows that tennessee ranks fourth in the nation for four alleged crimes per capita. i'm proud 11 different state agencies have joined together to create a plan that i believe will change the trend. they are working to implement a multi-year strategy that includes restriction drug abuse legislation aimed at improving the current database to make it easier to identify abusers. tennessee ranks second in the country behind only west virginia and prescription drug use. tennesseeans averaged 27 prescriptions every year versus the national leverage of nearly 12. in the emergency room visits for the prescription drug overdoses now equal the number of the visits illegal and over-the-counter drugs in tennessee. we are also recommending placing more non-violent drug addicts into the drug court treatment programs. this will better serve those offenders by focusing specifically on their addiction. [applause] it also saves the state money because the department of corrections pays $35 a day for the care of an offender and drug court and $65 per day for the same person to be in prison. we are proposing the sentences for certain gang-related crimes. tougher sentences for gun possession for those with the felony convictions and calling for mandatory incarceration time for the peak domestic violent offenders. [applause] too many times repeat offenders aren't facing any consequences under the current law. in 2010 domestic violence offenses made up more than half of all reported crimes against tennessee and according to an annual study by the violent policy center, the rate of women killed by men in tennessee is the fifth highest in the nation. keeping our citizens safe is a fundamental responsibility of state government. the public safety also plays a significant role in assuring that tennessee continues to be an attractive place for businesses to locate and grow. many of us in the chamber spent a lot of time focused on job growth in tennessee this past year. i travelled across the state of visiting with employees and business leaders, hosted a group of the capitol and the governor's residence, called on companies outside of tennessee for in-depth discussion about the strength and weaknesses as a place to locate jobs. after hundreds of conversations with businesses, large and small, companies the located here and those that we wish would locate here i am convinced of this. tennessee can continue with anyone when it comes to attracting jobs. [applause] the work environment, quality-of-life tax burden and committed workers and is a great place to do business. there's one consistent white -- problem on here, there's the concern about the death and birth of employees with specific skills. if we are going to be a state that attracts companies to locate here and grow here, a state that keeps its best and brightest graduates here with good paying high quality jobs, there is nothing more important that we can do to focus on education. when a plant manager in jackson hires workers from kentucky and a chattanooga manufacturer imports workers from georgia because they say they can't find tennessee graduates with strong enough skills and mouth and science that is unacceptable. those are our jobs, for our graduates and we have to get them that. we have to believe in better. [applause] we have to believe in better for our children. as we all know there's been a lot discussion over the past year about the politics of education and accusations have gone back and forth and fingers have been planted about who cares about students and teachers. tonight i ask all of us to set those aside and focus on the things we all know to be true. first the world is changing and we must raise expectations for students, teachers, administrators, parents and ourselves. second, after decades of lagging behind the country when it comes to education results for, tennessee is on the right path to education. we got on that path through historic bipartisan commitment that led to tennessee leading the race in the funding and commitment to raising standards with the new core curriculum and the institutions of higher education to focus on the edge graduating students to complete college program. we are doing this hard work because we all believe in better for our students. i'm highly confident that tennessee will be one of the first states to receive a waiver from the federal government's no child left behind a wall. under the outdated federal rules, tens of thousands of hard-working teachers have been going to work everyday often leaving their students to sycophant improvement only to be told that the schools were failures. that's wrong. and with this waiver we can build a tennessee accountability system that measures growth and improvement and gives every school a chance to succeed by getting better each year. [applause] virtually every state wants a waiver from no child left behind. but make no mistake, we expect tennessee will be one of the first states to receive this waiver because we are already taking on the hard work of education reform. we must continue to build on our momentum to make our schools better. we can't put off until tomorrow what we should be doing today using data to measure student performance. and i believe if we are willing to evaluate 10-year-olds, which we have been doing since we started sending home report cards, then there isn't one good reason that adults shouldn't be evaluated, too and there isn't one good reason to wait. it's important of course we keep working to make our evaluation process better. the state collaborative on reforming education will be spending the year talking to teachers and principals statewide to evaluate our evaluation system and after gathering and analyzing the information, we know there may be changes that need to be made. but we cannot slow up the tremendous progress this state has made in recent years. there's too much at stake for our kids and for our economy. you know, there's something deeply concerning that's changing in the country right now. today, 70% of americans would say that their lives and economic prospects have been better than their parents. but only 33% of us believe that there will be true for our children. the american dream is at stake. when people asked who they attribute the blame to, the answer is not big business, it's not unions, it's not educators, the answer is government. the truth is americans haven't lost faith in americans they've lost faith in those who lead. they don't need it to be like washington. they can be better for tennessee. [applause] all of us ran for election and we were to be here because we wanted to make a difference. i think we have a chance to do that in tennessee, to move tennessee for word. i think tennessee can be a place we are about results and not about rhetoric triet so here are my final promises to you. first, i promise to be relentless when it comes to providing the very best service to our taxpayers for the lowest price they deserve it to be the second on the issue or policy, our administration will always work to get the right answer, not just hour own answer. [applause] so many people today are working hard but they are worried about their future and our country's future. we await to them to get it right. let's not waste this chance to get it right for tennesseeans for today, for next year and many years to come. as i stand before you this evening i challenge all of us to believe in better. if the elected leaders of this great state it's what tennesseeans expect from us and that's what we owe to them. working together we are going to achieve a better tennessee. thank you very, very much. [applause] [applause] the republican government talked about his budget blueprint which includes funding for colleges, roads and drug enforcement along with a number of spending cuts. the state of the commonwealth address is 50 minutes and it comes to us courtesy of wcev in richmond. [applause] >> thank you. thank you. you've obviously come back well rested. mr. speaker, mr. president, justices of the supreme court of virginia, judges of the state corporation commission, ladies and gentlemen of the general assembly, my fellow virginians, good evening. it's both my duty and my privilege to join you tonight on the set of steven spielberg's b5 epic feature film. [laughter] for the annual state of the commonwealth address. i hope it's all right with everyone because i invited some of your neighbors to night. the first lady and four of the mcdonald children and my new son-in-law are with us here in the gallery. [applause] now i think this is why i believe, 21st commonwealth only the first i've delivered and set very special night when all three branches of the government are gathered in a building designed by thomas jefferson from which are centered lady as promoting liberty and opportunity. i want to congratulate all of you newly elected men and women to the general assembly and also the new leaders elected in each today. thank you for your service to the people of virginia and i also want to thank all of the families and spouses of the newly elected members because they are in it with you as well. i also want to commend the members of the virginia senate, particularly the members of the democratic party for passion yet statesmanlike organizational matters in the senate today. over the past years we have shown that while we heal from diverse regions we align with different political parties and subscriber to the competing philosophies we can still come together to make progress on the issues most important to the 8 million people we serve. ladies and gentlemen, that has been and must remain the virginia way because it was. this session we must remember that while seating charts and committee assignments have changed, the virginia way he cannot. so to the members of the majority tonight i say to you don't be arrogant, don't overreach. to the members of the minority party, i say don't be angry, don't obstruct. and to all of us in putting the exit of branch i say let's be civil and let's be productive. we are blessed to live in a commonwealth with an unemployment rate that is the lowest in all of the southeast. we are the best state in american business. we have the nation's best public university system. and over these years we have weathered the economic storms better than most states. and i think we owe the success to a number of factors. we kept taxes low, regulation and litigation to a minimum and we made prudent and wise investments and economic development in education, in transportation and in our people. but perhaps more importantly, we have found a way daily to rise above the partisan politics to solve problems and get results. our representative democracy stood the test of time as the most effective and the most fair form of government on all the planets. america was born on the bank of the james river. from virginia came four of the first five presidents, eight and all, the author of the declaration of independence, the father of the constitution. governor patrick henry, first governor of virginia attended the cornerstone of the building in 1785, and yet, 205 years later, the same capital welcomed douglas wilder as governor of virginia, the first african-american governor in the country. the early leaders who guided this young republican group into the mature global power that we are today came from here in virginia. now it is our collective duty to lead the great republican to a prosperous future and i say to you i think that virginians are ready. every day they show their exceptional character. a few of those exceptional virginians have joined us tonight. .. we pledge to you that his great sacrifice will never be forgotten. [applause] [applause] [applause] at almost that exact same time of the tragedy in blacksburg, another military veteran turned law enforcement officer was facing a similar situation in carolina county. after detaining a suspect found along i-95, senior virginia state trooper michael hammer had placed the suspect in the car when suddenly the individual grab for his weapon, forcing it to discharge into chipper hammer's upper leg. bleeding previously in the midst of a violent struggle he was able to reach another weapon that he kept nearby and was able to subdue the suspect. trooper hamer was washed to marry washington university hospital where hospital where he underwent emergency surgery. tonight, mike hamer is still recovering from his injuries but he and his wife natalie are here with us in the gallery and i want to say trooper hamer europe or avery and your commitment to the safety of the citizens of virginia will not be forgotten. [applause] [applause] [applause] [applause] that heroism demonstrated by the officer krause and trooper hamer is why i'm supporting a review of a necessary amendment to the virginia line of duty act so that all qualified first responders and their families receive all the key statutory benefits in their time of need and not later, and i ask you to support that this session. [applause] that same spirit of service has also been displayed by virginians on the battlefield in foreign lands. since september 11, 2001 nearly 14,000 members of the virginia national guard have left their families and their jobs to defend freedom. over 230 virginians have given their lives to the service of their country and the global war on terror. on december 18, the last convoy of american soldiers left iraq, ending nearly nine years of struggle in iraq. eight days before that, i had the honor of welcoming tom stanton over 200 members of the virginia army national guard from the second assault battalion 224th aviation regiment who had been serving in iraq since april. with us here tonight are the battalion executive officer major carl engstrom and his wife, joy. we also have members of that unit a father and a son who were deployed together. first sergeant calvin franklin joined by his wife michelle and first-class franklin. gentlemen, thank you for you deep commitment to freedom. [applause] [applause] [applause] [applause] the brave men and women who volunteer for the virginia national guard are a great -- and so that is why propose we provide in-state tuition regardless of how long they have lived in virginia. [applause] we have more veterans than any other state in with your help this session we will continue to make this the veteran friendly state in america. you sir virginia, we serve you. we serve all virginians well when we run a wise and frugal government defend individual liberties and the rule of law and care more about enacting good policy then make me a good quote. simply put, our people want results, not rhetoric. they want solutions and not sound bites. over the past few i say that is how we have governed together working across party lines last year we put the most new funding into transportation in a generation and i want to thank the leadership of speaker bill howe and the senate. as a result over $4 billion in new funding was provided in our six year plan to support rail projects across the state. the funding is supported hundreds of projects in the advertisement and awarded nearly $2 billion in new funding in contracts in 2011. it has also made possible public/private partnerships like the midtown downtown tunnel in hampton roads, the coalfields expressway, southwest virginia, wrote 58 between hillsdale and stewart and the i-95 hov hot lanes in northern virginia. we have also created a complex awarding 100,000 more degrees in the next 15 years to young people and important disciplines. i want to thank delegates kirk coxon rosalynn danson senator tommy norman. because of their work colleges were able to submit 5800 additional students this last fall, well done. [applause] together we have also created nearly $100 million in new economic development for job creation. companies like bechtel, amazon, green mountain coffee roasters, albany industries and amazon are all coming to virginia. i want to tank the lieutenant governor bill mullen our chief officer senators jeff colgate and jerry kilgore for their leadership in making this happen. over 56,000 more jobs have been created in virginia since our first full month in office. [applause] overseas visitors are coming here at a record pace, $321 million in 2011 and i was on hand this past year to open up trade offices in agricultural offices in new delhi, in mumbai, in shanghai and in london to be able to sell virginia products around the world and create more good jobs here in. trade missions are getting results. just last month alone one ship left chesapeake virginia and deliver $25 million worth of soybeans to china. two weeks ago another vessel began the same journey with another $25 billion with the soybeans to china. from brunswick to beijing that is how we are going to grow our economy in this global marketplace. i want to thank delegate steve landers for his leadership in getting those new funds to grow our agricultural exports and create new jobs. working together we have eliminated $6 billion in budget shortfalls not by raising taxes but by reforming government and reducing spending. we turned to massive budget deficits into nearly a billion dollars in surpluses during these last 10 years. [applause] i would say these are all collected bipartisan accomplishments. virginia is charging a fiscally responsible course to a brighter future. but ladies and gentlemen it is no time for victory laps. our global economy still in certain. the actions of the federal government are still very unpredictable. van employment the employment rate is still unacceptable. this is not a status quo period and the lives of americans in virginia and so i suggest to you but should not be the status quo session for the virginia general assembly. dallas and i can't ask you to fix every problem in the short time that we have together this session but i can ask you to fix some big ones. we must do more to score job creation. we must reform our pension system now. so that it will be there for the hundreds of thousands of virginians depending on it. we must make our k-12 education system more accountable and innovative now so all of our students get a world-class education. we must complete higher education reform and investment now so that more students can get access and afford college. we must improve our transportation maintenance system now so that citizens can get to their jobs and to their families, and we must pass a fiscally responsible structurally balanced budget on time that provides the stability and liquidity that we need to navigate the in certain years that lie ahead. [applause] and i want to applaud the work of delegate putney and senators donned in the leaders of both parties for proposing much-needed reforms to the budget conference committee process to facilitate timely and reduce drama. thank you, well done. [applause] isiais you'd better work together starts in finding work for 260,000 virginians who are currently unemployed. it is the most threatening issue facing our state. virginians need good paying private-sector jobs of the session i'm asking you to invest another $38 million to the targeted programs that spur job creation. i propose initiatives for tourism, for film, for agriculture and forestry products for technology, modeling and simulation, cybersecurity, international markets, workforce development, advanced manufacturing and life sciences. why? because these are proven job and revenue generators for our state. i'm also proposing a new investor tax credit to provide working capital for small businesses that create 70% of all the new jobs in america. and foreign extension of time during which that major business facility job tax credit can be taken. states are competing not just against other states but against other countries around the world for jobs. when deciding where to move our where to expand businesses tell me that they are first and foremost looking for a well-educated and well framed workforce. i think we owe every student the opportunity to be career or college-ready when they graduate from high school. [applause] my dad always told me you need a good education to get a good job and that was right so i propose an increase for funding for k-12 education of $438 billion to strengthen the system for teachers and school employees but also to increase dollars going to the classroom to hire more teachers in science technology and math, to improve financial literacy and strengthen virginia's diploma requirements. we will also provide new funding for the successful communities and school programs as well as funding so that all tenth-graders can take the s.a.t. test early and the start of a new health science categories and our commonwealth. however well we put more funding into the k-12 budget more funding alone does not in and of itself guarantee greater results. over the past decade total funding for public education in the state has grown 41% while student enrollment has only increased 6%. this budget will provide significant new funding but it will also take more accountability, more choice, more rigor and more innovation in our school system. i think providing flexibility is important. i have suggested it's time to reveal the state mandate the school divisions begin their school term after labor day unless they receive a waiver. already 77 of 130 have these waivers so the exceptions authority become the rule. i think local communities can best balance the teaching in calendar days against the important concerns of the tourism and business leaders because they know their situations in their localities far better than we know it here. our teachers are well-educated and motivated professionals that deserve to be treated as such. just like workers in most every other job reviewed annually and are therefore able to more accurately be promoted and rewarded for their success, so too should teachers. i'm asking that we remove the continuing contract status of teachers and principals and provide in its place an annual contract. this will allow us to implement an improved evaluation system that really works and give principals a new and much needed tool to manage their schools. along with a merit pay pilot program that you helped me find last year we will provide more incentives and more accountability to our education system so we truly can attract the very best and the very brightest to teach our young people. and i know you agree we have got great teachers in virginia. people like stacy, fourth-grade teacher at john adams elementary school in alexandria who was recently named the national history teacher of the year. i happen to think my sister nancy who teaches in amherst county is a pretty gosh darned good teacher and your house majority leader is a pretty good schoolteacher. we all know teachers. [laughter] mr. speaker i don't thing would be can vote in the middle of my speech can we? we on the teachers who deserve to be better recognized for the invaluable role they play in the development and the learning of our young people. so we will also fund policies to ensure that all young people can read efficiently by third grade so that they are ready to become lifelong learners. social promotions are not acceptable. when we pass a student who cannot read well and is not ready for the ninth grade we have failed them. our public education system has also embraced multiple learning venues and opportunities. i agree with president obama that we need to expand charter schools in our country. i'm proposing we make our laws stronger by requiring a portion of the state and local share of the as a few funding to follow the students and approves charter schools and make it easier for new charters to be approved and for them to acquire property to get up and running. i also think we need a fair funding formula for the fast-growing virtual schools sector so i propose a portion of the state and local share of the s&p funding should also follow the students in this area and we will implement new regulations for a crediting virtual schools and their teachers to make it easier for this technology to be deployed. now we should also increase the choices for low income students and their parents. so i'm asking you this session to provide a tax credit for companies that contribute to an educational scholarship fund to help more of our young people get their education of their choice. [applause] [applause] i want to thank delegates walters dosh and mark for their leadership the session on that issue. here is the bottom line. the child's education should not be determined by their geography or their zip code but by their god-given abilities and their hard work. -- should be the formula for success. we will also propose innovations to promote greater school enrollment in high school and community college so those motivated students that want to get a headstart on a their college education can do so. the goal of all these proposals are very simple and that is when you walk across the stage at her high school graduation and you you receive that diploma you should be able to be career ready or college-ready. when our students are ready for college, colleges should be ready for them. the american dream becomes more attainable when there is more access and lower cost to a college degree. our sweeping legislation you passed unanimously last year i believe set a visionary blueprint for reform and reinvestment in our colleges and our universities. but now we have to put our money where our policies are. i'm asking you this session to invest over $200 million in new funding for our colleges and our universities. additionally i am promoting a dynamic new funding model for higher education to replace the of old adequacy formulas. achieving the goals that we approved last year. institutions will be rewarded based on increasing the number of degrees particularly in the stem fields, improving graduation rates, expanding practical research and other fat terse. it will also require colleges to be more efficient and more accountable themselves by reprioritizing 5% of their current general fund dollars by 2014 to meet those same key policy goals that we approved last year in the statute such as year-round use of facilities and greater use of technology to leverage more programs and more courses for our students. these actions all do an important thing and that is that they cement the direct between higher education and job creation and they begin to reverse this unacceptable trend over the last decade during which the average college tuition in virginia doubled. and i say to you the parents and students in virginia can no longer afford those days of doubling tuitions are over. [applause] ladies and gentlemen are county can't grow -- last year's transportation construction funding bill was significant but a lot more has to be done. we all know that increased fuel efficiency in the use of alternative fuels have caused tax revenues to decline, a trend that is likely to stay with us. our growing deficit in transportation maintenance is the result and it must be addressed now. transportation is a core function of government so we have got to treat it like one. so i'm asking you to increase transportation's share of the year and unassigned surplus balance to 75% and also to dedicate the first 1% of our economic growth over 5% to transportation. now, to seriously address the transportation deficit i am also requesting that you increase the dedicated transportation allocation of the state sales tax from .5% 2.75% over the next eight years. the introduce budget starts that process to show it can be done by increasing that percentage to .55% over the biennium and that will generate $110 million in the transportation maintenance dollars. let me put it into perspective for you. that amount is one-eighth of 1% of an 85 billion-dollar budget, the largest in the history of virginia. so i say to you if we can't find the resolve to use one-eighth of 1% of the budget for additional transportation maintenance funding than we are not serious about maintaining our transportation infrastructure. i will also propose other reforms the virginia department of transportation reduced timelines for construction and motorcades to make our road projects go smoother. we will reform and promote new expansions in the port of virginia, great asset for us that can be a global leader in international shipping and a growing commercial -- on the eastern shore. i think it is time we take gone the woefully underfunded state retirement system. as of the june valuation of funding status of the system was 70% were state employees in 66% for teachers. bay said that those numbers will go to 63 and 61% respectively in 2013. that is unsustainable. so, i do not want to pass this problem onto another governor and you should not want to pass this problem onto another general assembly. so i say to you our responsibility is clear and that is why i've proposed have proposed the largest employer contribution to the virginia retirement system in history recommending $2.21 million in total funding to the systems for state employees and teachers including $876 million from the state's general fund. this more than doubles the amount of money we put into our retirement system during the last budget. the state is now going to do its part. localities will have to fund their share of the teachers retirement. teachers are local employees and local governments have the duty to fund their share of them. doing the right thing at the state level is not an unfunded mandate. the rates have been set and the bills are now due. this cash infusion by itself will not fix the problem of the retirement system. jointure and stable retirement system in the decades ahead state employees who do a phenomenal job for us every day will be asked to accept changes and adjustments to the crs plan. in the days ahead i i will announce a number of very specific reform proposals to ensure long-term solvency of the system and i look forward to working with you to enact some of those. i also want to continue the success we found in bringing private sector management to state government. you remember in 2010 working together we enacted a 3% performance bonus for a state employees contingent upon them achieving a specific amount of savings and their agencies by the end of the year. it worked. their great efforts save taxpayers over $90 million after the bonus payment was made. that is good government. so i'm asking you to do that again this year. i've propose another 3%, one-time bonus for state employees in december of 2012 contention again upon a specific amount of savings being achieved and employees individually meeting specific performance measures on their performance review. this will again report good performance. last summer we all collectively held our breath as we watch the debt limit fight in washington. today we see the year and the international unrest. i will say to you that uncertainty for us. while we cannot control what congress or what europe do, we must prepare as well as possible here in virginia for the future changes that are certain to come. that is what i to do in this budget. the budget i propose is not raised taxes but forces the government to set priorities and live within its means and plan for the future, something i wish our federal government would also do. [applause] i am asking you this year to put $50 million into a newly created federal action contingency trust fund. this fund will help us to handle and pecks from a necessary and likely future federal spending cuts, and to take prudent acts and to diversify our common me that depends on spending. i'm proposing we enhance our cash reserves by doubling the rainy day fund to $600 million by the end of 2014. we will also eliminate the accelerated sales tax policy this session for 96% of all merchants by allocating $50 million towards that purpose in fiscal year 2012. like gold is to get rid of that unfair policy before i leave office, but not before. together these budget strategies provide structural balance that reduce unfunded liabilities and they invest in job creation and transportation and in higher education. these ideas were well received last friday when i travel to new york with the money committee, leaders to be with all three bond rating agencies. we continue building a commonwealth of opportunity. i will also ask for partnership in critical areas of government. this budget provides $5 million for additional land conservation to continue our bipartisan effort to conserve more open space to protect the environment. we have far to been able to add in the last two years 100,000 acres of land to the protected status category during these two years. we are also making progress in restoring that great jewel that is the chesapeake bay. striped bass production was at an all-time record in 2011. the blue crab population is at its second-highest level since 1997 and even the eagle populations are often in the bay watershed. the recent budget surplus has allowed us to contribute over $85 million to improving water quality. this brings more business to virginia farmers and is a significant contribution to the water quality improvement fund. providing for public safety is one of the top duties of government at every level. that people aren't safe and secure in their neighborhoods, businesses won't relocate here and our communities will not prosper. thanks to some of the smart policies would have all had over the years and the selfless service of first responders and law-enforcement officers like derek krause and mike crime in recidivism are actually down in virginia. but you know we still face challenges. repeat drug dealers are a major perpetual cause of crime so this year i'm proposing tough new laws to put away repeat drug dealers or longer periods of time and i put the money in the budget to make sure we can accomplish that. because of these dealers are behind bars they can't sell drugs to our kids and they can't steal from their neighbors, and they can't contribute to the tragic cycle of addiction that has stolen the lives of too many people. we can break that cycle when we combine tough sentences with other effective policies. said this year in the budget i provided localities with a mechanism for obtaining authorization for new drug courts. as long as they meet certain requirements that provide data necessary to evaluate their success. for those released from prison who have learned from their mistakes and want to be productive citizens, we will provide them greater positive opportunities for change and more effective prison re-entry policies. we are a remarkable nation. over 90% of all offenders that we incarcerate get out of resin. they are going to be back on the street and we don't want them to go back to prison. what we want is more good citizens and fewer victims. this year's budget maintains critical 599 funding for local law enforcement, fully funds our sheriff's and adds 40 new swats in our future trooper schools. a more secure society is also a more prosperous society. we are going to step up our effort to make virginia the energy capital of the east coast. that starts with pursuing and all of the above red white and blue approach to energy using all of our own natural resources here in virginia. more domestic energy production equals more american job creation and greater energy security, something we should all support. an important part of our nations -- is right here in virginia. just 50 miles off the shore are oil and gas deposits that can be accessed in a responsible manner. you all remember we passed legislation in 2010 by strong bipartisan support approving offshore drilling. america needs the energy and virginians need the jobs. [applause] [applause] so i'm urging the obama administration to end the delays and that now to include virginia in the 2012 to 2017 at her continental shelf plan. if they want, then congress will act and i want to thanks senators warner, senators webb and congressman goodlatte for leading that fight in our nation's capital. must also continue to demand that the federal government stopped the overreach and over regulation of our important job creating coal and natural gas industries here in virginia. [applause] [applause] and congress must also act to revitalize the nuclear industry which capital is in lynchburg virginia by setting reasonable policy on the storage and disposal of fuel rods after 30 years of inaction. we will also pursue the development of alternative sources of energy like wind and solar and biomass as long as they are cost competitive for our consumers. in october we had an exciting announcement and that is the nation's first facility for the certification of large offshore and land-based electricity reduce by a wind turbines will be developed on the eastern shore. wind energy is a developing industry in virginia is now the forefront of its so that's why i've included $5000 in the fy13 budget for research and vepment to accelerate the private development of the virginia wind energy area. we are also evaluating some meritorious private sector proposals to move the commonwealth substantial vehicle fleet to alternative domestic fuel so we can reduce our reliance on foreign sources of oil. making the virginia the energy capital will create more jobs and revenue for our citizens. we must also continue to reform state government and make it more efficient and more effective or as jefferson said more frugal. over the past decade state spending has grown 23% faster than the rate of growth so we have room for improvement in managing our finances. i'm proposing that we close the prisons, cut and effective programs abolish unnecessary agencies, and memberships in how site organization to make our government work smarter. [applause] and this is the session ladies and gentlemen where we should honor our founders by putting into our state constitution a strong property rights amendment that protects the private property of every virginian. we will continue our recent work to dramatically improve funding for individuals with intellectual and developmental disabilities. [applause] last year together we invested $60 million in new funds to strengthen the capacity. i've already authorize 60 new home and community-based for individuals to transition from institutions back to the community and i want to thank delegates kirk scott and chris jones for their leadership. in this budget i'm recommending we put another $30 million into mental health funding because we must transition more individuals from institutions and community-based care. is the right thing to do for them and for their families. [applause] medicaid funding has improved 1600% over the last 29 years. during the 2011 session substantial ways to improve the quality and cost effectiveness and integrity of the medicaid anymore and acted. we are now moving forward with the statewide adoption of caring coordination. this will allow state government to better manage or medicaid expenditures while ensuring virginians receive a high-quality health care that they need. as you arrived here tonight ladies and gentlemen and at a particular suitable time in the life of virginians and the life of our nation, the world around us is changing with incredible speed. gone are the old regimes of iraq, libya, egypt and afghanistan. china and india are on the rise. facebook and twitter replaced text which replaced e-mail which replaced phonecalls. iphones rule products and procedures are obsolete quickly. even one term governor's, but not too quickly. in the midst of all this uncertainty and structural change i think virginians want government to provide some measure of stability by funding and providing its core services well. they want good jobs. they want safe neighborhoods and successful schools. they won a modern transportation per -- system and an equal opportunity to achieve the american dream. we are a nation that rightly guarantees equal access and opportunity. we don't guarantee outcomes. that is why we are free people. that is the kind of government we have brought two centuries ago. it is made united states the most prosperous nation in the world has ever known and we are we are blessed to be americans. in the mid-1840s and fifties, during the irish potato famine millions of my irish heritage fled to ireland -- from ireland to the united states. having little idea what to expect on the other side of the ocean but hoping for survival. in the galleys of the ships that sail from those ports in england and ireland to places like dublin and cork, the errors government posted bulletins with the heading quote in the united states wealth is not idolized but there is no degradation connected with labor. and industrious youth may follow any occupation without being looked down upon and he may rationally expect to raise himself in the world by his labor. over 100 years ago that same promise of america led my grandfather to come from ireland to ellis island and then to massachusetts in search of his own dreams and in pursuit of his own opportunities. back to to me typifies the america and the virginia we all believe and. that is the america that we are blessed to call home. over the next 60 days our job is to enact policies that will ensure that this remains a a robust commonwealth of opportunity for any man and any woman of any race and any creed from any beginning and anyplace will always have the opportunity to raise themselves up in the world by their god-given talent and their labor. [applause] [applause] so working together i know that we will do that. thank you all for your work together this session and may god continue to shower his blessings on this great commonwealth of virginia. thank you. [applause] [applause] [applause] last month delaware governor jack markell talked about his priorities at the annual state of the state address. is $3.5 billion budget proposal includes additional spending for medicaid and education. from the state capitol in dover this is about 45 minutes and it comes to us courtesy of w. h. y. y. ytd in wilmington. [applause] [applause] >> thank you. [applause] governor welcome to the joint session. we look forward to your address. lieutenant governor, and prose tim de luca members of the 146 general assembly, other elected officials, members of the judiciary, members of the cabinet, our employees, carla and the people of delaware. in my previous reports on the state of the state i spoke to you of turbulent winter blizzards and these images captured the moment as we fought through the worst economic downturn since the great depression. this economic storm pose particular challenges where delaware and issues upon which we have depended for decades like financial services and automotive manufacturing but it made landfall in almost every corner of our nation and while delaware was not alone in facing this storm, the way we responded was unique. the politics of lehman division, the rhetoric of distrust in the partisan warfare witnessed elsewhere never found a home in our state. instead we pulled together and we prepared for the future. and leaning on speaker gilligan's 40 years of experience -- [applause] the leadership of both parties in this general assembly worked with us and we make tough made tough decisions to balance arab budget while still make make king investments necessary to keep moving forward. we cut where it was possible and we invested where was important to create jobs to improve schools and to build infrastructure. and at a moment when washington d.c. that stands for deadlock and dysfunction delaware strength resides in the capacity of its people avon in challenging times to work with common purpose, to choose perseverance in place of pettiness and partisanship. and as our economy recovers albeit more slowly than any would like, we have got to resist the temptation to rest and be satisfied with the status quo. as thomas friedman and michael man the mandelbaum right in their vote, that used to be us, the best organizations when when there are big shifts in the marketplace, when others are overwhelmed and in disarray, they put distance between themselves and their competitors and as tempting as it might seem to take this moment to pause and catch our breath this is not the time to stand still. this is the time for delaware to leap ahead to lead. the capacity to build on existing strengths and to adapt successfully to change is the quality that distinguishes companies that surge to the head pack from those that languish. capitalizing on science and innovation, dupont today is a bioscience company, not the same chemical company that was 20 years ago where the gunpowder company it was 200 years ago. w. l. gore, ashland astrazeneca and ilc and their financial services companies have all of it falls to keep up with changing markets and technologies. consider amazon which is one of our larger employers. it has become an all-purpose on line retailer by leveraging the distribution capability that it originally developed to deliver looks. our employers are changing. capitalizing on their strengths and thinking about tomorrow and to lead, to be the place where these companies grow, delaware must be ready to do the same. we must be ready to win in deterrence. delaware, our economy directly benefits from our leading employers. we have attracted and retained a significant employers. pbs energy, sallie mae, baltimore oil, pfister automotive, miller medal, bound air farms and capital one. we have got to continue these efforts and remain nimble and opportunistic and aggressive when large employers present job opportunities and that is why i will again recommend significant funding for the strategic fund next year. but to do more than just keep pace, to put distance between ourselves and our competitors, we have got to look beyond the direct benefits are larger employers provide. we must capitalize on their presence to build our competitive edge. we are to have terrific small businesses, but we aspire to be more creative and grow quickly and to accomplish that we must nurture the small businesses and new companies that will thrive in the soil for job creation that are world class workforce create around us. following up on the recent imagine delaware forum sponsored by the news journal we are finding new ways to support entrepreneurs and over the last months we have studied best practices and entrepreneurial support centers around the country and places as far away as silicon valley and as nearby as the science center in philadelphia and wilmington and the attack park in newark. flexible incubator spaces, wraparound services like legal and accounting assistant, educational opportunities for potential entrepreneurs and investors an outstanding opportunities for collaboration. and working with representatives lavelle and brian short and groups like first innovation we will apply what we have learned to further support emerging startups and growing companies in delaware. not every company who uses these resources will be successful and it will take those achieve results. our goal is not to capture a headline tomorrow. is to facilitate the creation of jobs for a generation. while nurturing the businesses of the future we must also focus on growing our small businesses today. small businesses need access to credit and will utilize the federal small business credit initiative to help more credit worth the businesses get the known -- loans they need to expand jobs. we are pleased to be the first state to announce a partnership with facebook and this partnership will help our small businesses fully engage in a powerful use of social media to market their products and services. we have got to put ourselves in the shoes of those who create jobs. we have got to understand the industries in our state that are than any other state. we have got to be more committed to this extent of businesses in our state than any other state and we have most of being gradients of businesses are looking for him a good schools and institutions of higher education, reasonable taxes, high quality workforce, the wonderful quality of life and a responsive government. a company considering expansion or investment also values great infrastructure so whether they are accessing moving products to market or transporting employees between home and office, we want them to note that they will find that they need and not in shanghai and bangalore. that is why last year we made the decision together to invest $40 million to further support our roads and bridges and we created the delaware infrastructure which has already paid off with amazon's decision to expand here. that is also why we have invested $10 million in the port of wilmington. in the coming months we will consider opportunities for a public/private partnership to expand and modernize the support significantly increasing our capacity to handle global trade. in doing so we will not only protect those jobs currently at the port but also serve the needs of future growth as we leap ahead of our competitors. when companies decide whether to invest their next dollar in delaware, it's not just the quality of our roads and our bridges and airports that they care about. they want to know that our air and our water clean and that our community suffered the parks and recreational trails that make life for employees and their families healthy and rewarding. i had talked to business leaders on a regular basis who have -- quality-of-life battersea pleased to them because it matters to their workforce and to overlook it, your state is likely to get overlooked. our focus on quality of life is proving economic development and environmental protection are compatible goals. this focus resulted in an rg transforming the indian river power plant from one of the dirtiest coal-fired plants in the country into one of the cleanest and is leading to the conversion of the energy center in dover from cold to cleaner burning natural gas. all the while creating hundreds of construction jobs in the process. the edge marplan in wilmington from coal to natural gas and taken together these and other improvements are modernizing our energy fleet in reducing air pollution in a way that equates to saving 450,000 cars off the road. [applause] our efforts to promote a high-quality of life are not limited to reducing pollution from our power plants. we seek opportunities to connect delawarians and visitors to all the history and natural beauty that they have first state has to offer. during public/private partnerships, transforming it into a revitalized area retaining its milltown roots. r. bayshore initiative is enhancing delaware's coastal regions and boosting the economy by restoring critical wildlife habitat and improving access for world-class hunting and fishing and kayaking and hiking. one of the best ways we can improve our quality of life and promote healthy lifestyles at the same time is to make our state more walkable and by couple and in the next year working with representatives kealy and senator bendable we will launch the first date pathways plan and i'm proposing we dedicate $13 million to build miles of new and enhanced trails throughout our state for every delawarian to enjoy. [applause] building on the strong foundation of existing trails and greenways already in place we can make delaware one of the most walkable and by couple states in the country. employers looking to create jobs also care about the availability and the cost of electricity. that is why we have reduced the utility tax last spring and why we provided incentives for businesses to invest in energy saving technology. we need to continue to promote energy savings investments but when i talk with business leaders about investing in delaware i sometimes hear concerns about municipal power and the lack of any choice and competition to hold down prices. now let me be clear. i have been approached by a number of businesses which because they are located in the service area of the municipal power system they are required to procure their electricity from those municipalities at rates that are uncompetitive with those charges elsewhere in delaware and importantly uncompetitive with other parts of the country where they have similar facilities. i am sensitive to the revenue needs of our municipalities but if these businesses leave our state, these jobs may well be left lost forever and as expressed to me by senators simpson and representative dan short, we need to work together to meet the expectations of companies choosing to do business here that the rates they will be charged for municipal power generation will be fair and competitive and i'm ready to begin that conversation with our municipalities. creating jobs must remain our number one priority and this is particularly chervil when it comes to our returning veterans. i was privileged to visit recently with our troops in kuwait and afghanistan and we have with us today sergeant bruce stevens of dover and senior airman jason dura check of wilmington. [applause] [applause] [applause] both of them served actively and afghanistan and the first tank is that we owe our veterans when they come home is the chance to partake in the abundance of opportunity that they make possible for the rest of us. their mission puts them in harm's way. door morale is high. their skills are exceptional. let's work together to ensure that they have the opportunity to put those skills to work when they come home. [applause] .. jpmorgan chase is leading in this area hiring thousands of returning veterans and providing incentives for vendors to do the same. and to encourage others in the private sector to follow their lead. we will propose expanding tax credits to the delaware businesses that hire veterans. [applause] the biggest driver for a business when deciding when to locate and expand is the quality of the work force. that's what will determine whether the business becomes an innovation leader and gets left behind in the creative test of its competitors. the late steve jobs put it bluntly he's a double employs 700,000 factory workers in china because it can't find 30,000 engineers in the u.s. that it needs on-site at its plant will need to do something about that and that is why when the history of our time here is written that we are making to raise student achievement will prove to be the biggest game changer of all. because begin to give their parents and teachers and administrators, private employees, foundations, public officials to develop, develop and implement a carefully crafted a plan that aims high and put children first. we've been recognized as a national leader in education winning the nationwide race to the top competition. but together we are making great strides. we've established standards to ensure that we are being honest with our children about what they need to learn to succeed in the global economy. we've put in place and improved assessment systems so parents and teachers can track student progress and identify quickly when students risk falling behind. we are supporting teachers with resources that help them raise student achievement and we are moving forward to evaluate our teachers in part by the basis on the progress there students make. now in today's global knowledge economy, those who are not pushing forward are falling behind. and for delaware to maintain its position of leadership is absolutely vital that we keep pressing ahead and i thank the senator and representative for their leadership in this area. [applause] i realize those uncomfortable with the changes being made animal all these changes will work exactly as intended on day one. we will learn from our mistakes and continue to maintain an open dialogue to improve. but even if you believe and what we did the past is sufficient for those times it will not be sufficient going forward. arana the world young people are reporting hard in school said that are dramatically improving and if we stop our of efforts now it will be to the detriment of our kids and their future. so pressing ahead means implementing without additional delay the performance appraisal system with its focus on student progress. now these implementation plans have benefited considerably from the advice of hundreds of delaware teachers and we are grateful to them for their help. [applause] this is a challenging process and it is one that must succeed. as a parent and somebody that has visited dozens and dozens of our state schools i want to ensure that our changes help of our children not only to score well on tests but also to develop a love for learning that will inspire the nations and their creativity. this is a difficult balance but it's one that is already being achieved in many classrooms throughout the state and one that we should work together to expand. and because i visited all those schools and talked with principals and teachers and other school staff, i know firsthand that there are the truly great things going on in delaware's class rim's. but we need to do a better job of getting the word out and howard weinberg of the association has asked me to join with him and his association and the business community to let the people of our state no how many great things are going on in the delaware schools and that is an invitation that i'm excited to accept. [applause] pressing ahead also means moving forward to the will of language expansion initiative. our students have got to master world languages to work with and compete effectively against workers around the bottle. we already made completion of the world language a graduation requirement. over the next five years we are going to create a partial programs in 20 schools where students will spend half of the school day learning in another language. [applause] and finally, pressing ahead means acknowledging what research has clearly established. raising student achievement begins before children enter kindergarten. i've heard this message from hundreds of teachers. children receiving quality really care and education more likely to be successful in school and in life. and investments promise high yields to get my attention in the realm of public policy there is no high year yield investment than this one. [applause] so let's bring we joined together to make some of the most significant investments in early childhood education in our state's history. and as it turns out, those investments are paying dividends sooner than we expected. the judges of the national race to the top early learning challenge noted our commitment and reward those with significant additional federal funds. now here's our plan. first, the professionals who care for our children will have the proper training. second, the early child care facilities where our children spend their days will have the best teaching and learning tools and third, the success and challenges of the centers will be closely monitored to ensure continual improvement. that's our formula for success and we expect to raise the percentage of high needs children in quality programs from 20% to nearly 80% over the next four years. [applause] and to let us know where our kids stand when they start school we will introduce another kindergarten assessment and i thank the sea and our kindergarten teachers for their work with us on this initiative. a company that doesn't invest wisely with theirs away and perish. to succeed, we invest in our business supporting infrastructure, quality-of-life, children and work force. we are only going to be able to make those necessary investments if we govern responsibly and this requires a state government that is innovative, efficient and transparent. governments that are open and transparent are more likely to manage taxpayer resources responsibly and that is why we've launched the i found it cheaper web site to make it easier for state employees to report when our contracts don't offer the best value and that is why we are making it easier for all of delaware to access information about their government. when citizens want information, they should get answers, not bureaucratic barriers. and thanks to the legislation passed by this general assembly and the executive order that i signed a few months ago quote you come to the wrong place will no longer be an acceptable answer to a request for public records from the executive branch of government and i urge our counties and towns and school districts to join us in this commitment to transparency. [applause] thanks to the leadership of all for the general assembly has made significant progress over the last three years and making the legislative branch more transparent. the legislative committees are now subject to open meeting requirements. last year our budget was completed and posted online well before june 30th. transparency also needs to extend to the way the lobbyists do business unit legislative hall which is why my ad fenestration well team up with the president pro tem bill luke and gilligan, the majority leader's to provide some common sense measures that we hope we will support. citizens deserve to know who is lobbying and what they are lobbying for and we will make it so with the new on-line reporting tool where citizens can see by piece of legislation which lobbyists are advocating for their clients. we've been successful pulling together sometimes and no small part because of the responsiveness of the delaware government. the trust of people and their state government shouldn't be undermined by perception of lobbyists have had in excess. governor unresponsiveness governing efficiently and working closely with the joint finance committee under the leadership of representative williams and cementer mcdowell we've eliminated more than a thousand positions in the executive branch and slashed the vehicle fleet. we negotiated our space to save millions. we stopped the unnecessary printing. last year we confronted the unsustainable long-term costs associated with our state employee pension plans. the prospect of these looming costs gave rise to shrill rhetoric and battles in other states. but here we work together. am i administration, representatives with both parties and both chambers the leadership of the public employee and education unions and we achieve results, a package of reforms that will save the taxpayers more than $480 million over the next 15 years. [applause] our search for greater efficiency continues with an extensive examination of the criminal-justice system and under the leadership of lt. governor and with the participation of attorney general biden and a law enforcement and the judiciary we are conducting a faeroe review to figure out how we can get the most for the taxpayer dollars that we spend on public safety. we look forward to receiving the recommendations of the justice reinvestment initiative task force later this spring and working with you to implement those reforms that can have the most positive impact. there's one cost driver that looms above all others and will solve all of the savings we achieve elsewhere if not addressed. it's the cost of health care. last year we increased spending on medicaid by $56 million. my budget will recommend an additional $21.7 million increase for next year. over the last ten years this program alone has grown 127% to the point where federal and state spending together exceed $1.2 billion each year. the total commitment of taxpayer dollars on health care is staggering yet the expectation is that year after year we will continue to pay more for health care whether we received quality results are not. the incentives that we have in place and our health care system reward neither efficiency nor quality. these incentives encourage more services and tests not better results. we've got a system that doesn't encourage healthy behavior and patience and doesn't discourage on healthy behavior. in a sense, we don't have a health care system, we of basic care system. we are not going to solve the national health care debate here in dover. but we can reduce our cost and improve quality by focusing on how the state procurers of care. the idea may sound far-fetched but we have quietly been making progress. for example, we know that seniors requiring long-term care often prefer to stay in their homes and that so long as they get the care of home that they need, the results are often better and less costly and starting april 1st we will replace our traditional reliance on institutional care for seniors with a strong emphasis on community living. this will improve care and save money and i want to thank secretary wan crafts and her staff for making progress on this very important issue. [applause] our housing authority, our department of health and social services are using the same approach to improve the quality and reduce the cost of the care that we provide to those that have traditionally been cared for in our state hospitals and to young people aging out of foster care young people like manji and nat stevenson. [applause] and they join us here today because when it comes to issues affecting the teenagers to aging out of foster care, we will make no decisions about them without them. [applause] as of these agencies are partnering to provide housing and of the support of wraparound social services. so these individuals can achieve independence and we will propose to expand this initiative. the use of technology and health care is critical to improve quality and reduce cost. when you go to the doctor or the hospital in delaware today you may find your doctor can access recent love pork and pathology reports instantaneously. and soon your doctor may be able to pull your prescriptions and a craze and mri and this allows your doctor to make quicker and better medical judgments and makes it less likely that your doctor will order unnecessary tests. in this use of information technology to provide better more costly care is increasingly a reality. it's to create a claims and cost database. business leaders have come to understand that the key to improving performance is harnessing the capacity of information technology to aggregate and then analyze data and this database will allow us to figure out while some providers get better results and some create more cost without better results to show for it. we will be in a position to reword what works and change what doesn't. while this innovative technology is important, delaware's biggest purchaser of health care this state needs to insist on incentives for providers that are aligned to improve quality and discourage waste. taken together our medicaid population and our state employees and retirees represent nearly 40% of the health insurance market here accounting for a total of $1.7 billion of taxpayer expenditures we look forward to working with the provider community to get these incentives right because the incentives at work today are the wrong ones and we are pleased the medical society and the health care association are already active on this issue and have agreed to work with us. [applause] providers are not the only ones who have a role to play here. moving from the sick care to the health care system requires the people that we ensure to take responsibility for making healthy choices. we need to encourage them in these traces for their own sake and for the sake of all of us who and absorbing higher health care costs in the form of higher premiums and higher taxes. about two years ago i created the governor's council on health promotion and disease prevention. they've done some terrific work as has the eldora initiative and they are also working to provide an incentive to their employees to take better care of themselves. we will build on much of this worked in. within state government it's time to make all of our campuses in their entirety smoke-free. [applause] otherwise you're facilitating behavior that's not only harmful to those who engage in it but we know with certainty will heavily bird in the future generation of taxpayers. will be easy and it will take time but its work to which we must come at urgently and earnestly and we are to put ourselves on a sustainable financial course and retain the freedom that we want and our children and our future if. creating more and better jobs come with, improving quality-of-life, the best schools and learning opportunities for our children from getting the most out of each tax dollar, strengthening the trust of our people and government in these are challenges even in ordinary times. we don't live in ordinary times. change and challenge accompany us every day elwin's family foods is no longer selling chickens across the region. now it's part of hirim selling paltry myriad before chrysler's light we will be building blew energy servers to provide clean energy or the once built suvs and tense tents. we can see in this moment in opportunity to change the game in our favor. the economic ground is shifting under everyone's feet. others are finding it difficult to adapt. they're pointing fingers rather than pulling together. they are holding each other back rather than lifting each other up. our history and culture demonstrate that we do better than that in delaware. but to to get advantage of this moment and build a lasting and competitive edge for our state and as people, we've got to do more than simply work with rather than against each other. together we must act with confidence and imagination. we can't settle for an economy that depends upon a handful of major employers. merger and environment start up businesses can experiment and for life. we can't settle for schools that are better funded versions of the schools we remember from 20 years ago. we hope the schools that will prepare our children for the jobs 20 years from now. we can't settle for the sick care system we inherited from our parents. we will create a health care system that pays for performance and delivers quality care at a price that families and taxpayers can afford. i think each of you, the people of the wear and the state employees who served for your support over these past three difficult years. working together, we have captain delaware moving forward, and now is time that we forge ahead. with our own work as hard elected leaders guided by sound judgment and god's blessings, we can secure a better future for our citizens. we can win. this is our time to look ahead, to leap ahead, to lead. thank you. [applause] [applause] >> i don't hear a fundamental disagreement in the philosophy that if people get a ged that enhances their lives and enhances the ability for them to get a job on the road i don't hear a disagreement with that. on a share in excuse as to why not to do it but rather the fundamental philosophy of trying to rearm people with an education so that when they go into the work force they have an additional tool to link the program designed for 70 plus years functioning to provide financial support when you lose your job and that you have to be in this training at the first of all won't work for some of the practical considerations but second i don't think that it contradicts the notion that you are suggesting and i agree with the more education you have to be better off you'll be in this economy. next former state department special envoy to the middle east dennis ross gives his perspective on israel, iran and u.s. relations with the middle east. he spoke with walter isaacson of the aspen institute for an hour and 15 minutes. >> welcome everybody. it's good to have back our own friend dennis ross. this is a michelle smith and robert smith foundation roundtable also aspen institute are putting it together. i think you'll for being here looking around the table i realize this is a man who needs no introduction to you. that said henry kissinger's line saying i may be a man who needs no introduction there is no man who enjoys one more, so i will say she is written one of the great books for george h. w. bush policy planning president clinton the current president obama's administration as well as secretary hillary clinton with madeleine albright everybody's here. nonpartisan also speaking only for himself but for any of the previous administrations accept the truman administration is the only one you feel confident to speak for such as the german u book that's going to start in the administration we are looking forward to that very much. dennis, let me start by asking about the view from israel with everything happening including the hamas reconciliation and cerium and iran being the great extension threat. why is it that israel can't do what seems to be a relatively obvious and easy thing to position the soulful for the coming crisis which is cut a deal with the palestinians. >> well it's always easier to say cut a deal with the palestinians than it is to cut such a deal with the palestinians because ultimately it takes to to be a will to do anything. you're asking a question of itself is it begs for context and i know that it's my middle name. my mother didn't know that when she named me but it actually is my middle name so let me try to set some context. the question is a very important one in terms of trying to understand how the israelis may be looking at the region. you look at egypt and see what is basically the rise of the muslim brotherhood, an organization that isn't by any shape or form likely to be friendly. israel has had a cold case with egypt, but it is not only ensure that it could shave a certain kind of posture in terms of its military doctrine and budget, it could count on what was a stable secure border and so now suddenly it looks at egypt where it is a no-man's land where the muslim brotherhood may have from their standpoint very little at stake in controlling what goes on with regard to what could come out. the point of reference is look at the changing egypt as the threat. it looks to its north and sees 45 to 50,000 rockets that hezbollah has in lebanon. it looks to the north and east syria where in the best of cases it sees enormous unknowns even if it assumes as many now do that the regime is doomed and is not going to survive it doesn't know what the process of its demise is going to be, doesn't know the timing. doesn't know what is going to happen. the more likely you could have a whole range of different kinds of comes from the israeli standpoint could also be quite threatening. the relationship right now jordan is important and good and the jordanians are actually playing a very serious important role right now trying to preserve what i will describe as a discussion process that and the israelis and palestinians live in five preparatory talks. they are working hard to preserve that process but that's a work in progress and it's not exactly clear what's going to have and as a result of it and particularly now with what is at least a new development on the reconciliation between hamas and fatah i think we always have to approach the reconciliation process between hamas and fatah with a high degree of shall i say humility where if we approach this nobody predicted actually what was going to happen announcements don't always translate into immediate behavior. let me think again quickly. does it look like that much more israel. >> i will give a very honest answer i don't know anybody that sits here and says they know you should be skeptical of. the two sides themselves are not 100% to know what this is going to translate into. what it does reflect the way is something i think is likely to emerge over the coming year and that is i think it is a step towards elections. you will have elections because in the awakening they've become kind of the symbol of credibility and the pressures on the two sides are going to grow very high end and that having elections. sitting in jerusalem will looking out given all of the unknowns this is a time to hunker down and do nothing it is an understandable posture to have. from my own standpoint i will say when you think strategically the problem of hunkering down and doing nothing is your choices shrink. they don't expand. so you want to think about how i expand the available options i have, not how can i shrank them to be available to me because even if the range of options are not great, the smaller the number, the less likely they are to be good and the worse likely to be so. number one, from the israeli standpoint don't shrink your options. number two, don't assume the story is now written. by that, i mean take a look at what's going on. there is no surprise they seem to have the upper hand. they were allowed to organize, they had in place they could speak their mind, they came to embody social justice because they created a certain approach to providing at least limited social welfare. they were authentic and with a reflected in terms all classism put in the lower class is. the kind of credibility, they had a kind of effectiveness, they had an organization, they had invited to become an agenda, and none of the secretaries liberal forces had that. savitt the build in advantages right now but this is a new middle east and it's not the least talked-about in 1993. they decide they are going to come in and rule the way that bill moly or mubarak did their rent find they can't do that. sprigg but what you're saying is as real could affect the process for the better if they had moved down the peace process. >> i don't think the muslim brotherhood crusade would be paying an enormous amount of attention to this issue unless they are trying to divert attention away from not being able to deliver and that basically follows the mall of people like mubarak of domestic change what they would focus on when there was anger is to divert attention away. they find ways to deliver because they're dealing with public souci themselves as citizens now and not subject and as citizens the of the right to make demands and expectations and the right to hold government accountable. i think what this leads to is if there are going to be elections this year they are going to be an awful lot about shaping the future identity of the palestinians and ensuring that the palestinians to believe and nonviolence to believe and coexistence are the ones or violated. estimate you came very close both in the parameters in the never of the austin facility and even can't david to the palestinian-israeli deal would be is that still the outline of the deal that could be if they both could get there? >> i would love to be able to say yes. i'm not sure. i don't think the contact linda them will very to producing. when i see from the israeli standpoint to nonviolence it's not because i believe necessarily the context exists to do the deal. >> the one context it's going to be a great concern is this a time to be running risks given all of the unknowns that you face out there and who could take advantage of the situation but look on the other side. are they really ready today to try to do a final view? the context is operating in. he looks around the region. who are his friends among the leaders? what are their preoccupations? was the muslim brotherhood of rising? and how would they react to it? may be the preoccupation is internal. the factor is if they try to do a big deal right now inevitably he has to make compromises. there is no such thing and doing a deal that doesn't involve compromise. does he feel confident given the current context that if he makes the kind of compromises the would be required even if he is achieving she is also having to concede something as well use of the context his current deal confident that that he's not in the face enormous opposition the reason i don't want to give up on trying is i don't you to test the proposition. it's time for timidity. those to see that they know each side can't take the big step for they can't take these the steps i can understand the difficulty of taking these steps we try to produce a political process which is what the jordanians right now with the support and the administration support is trying to produced for these preparatory talks. >> you think they should continue to have the lead for the moment? >> i think that they are proving that they can be effective and i would note a lot of people would say this is unusual. well, you know, for better or worse yes, such it is, yes. the fact is when we were negotiating the deal we reached a point where we actually hit the block we couldn't overcome and people forget that was king hussein that helped us at a critical moment. he helped us overcome them what was also the block we couldn't overcome. subject the jordanians to have a history of playing a helpful role at certain moments, and given the context, and as i said, when you look around the region today king abdullah of jordan is one of the few leaders in the region who is focused on this, cares about this, and has a relationship and also has a relationship with the prime minister. so, i think it makes sense to continue to try for the political process. what i want to suggest is even as you try for the political process a thing from the israeli standpoint it's important for them to be thinking about what are the steps they can take that will help validate those names who are engaged in the state building process who believe in nonviolence and coexistence because if you are going to have elections they are going to compete against those who reject the existence and believe in violence and from the strategic standpoint i would say they have a long-term -- a long-term interest in having those who believe in nonviolence become validated and become more credible. i would always like to see what the first that they take i would like to see the parallel and reciprocity. but i can say if you are going to have elections this year it's very important of those published in the in-store competing against hamas are able to say we are achieving something in the way that you achieve something are receiving so you can show what a piece on this on the "washington post" a couple weeks ago, so when it comes to the area the incursions' maybe they are being phased out and you come up with is the criteria that allows you to do that. or you increase that palestinian police presence and the responsibilities there. in the economics of the things you know is this is 60% of the west bank. they have limited access economically. for them to be more effective economically having greater access economically would be important, but it's not just for the economic benefit, but they will see that something is changing. the nature of the control is changing. >> they deliver to the europeans are helping. >> i believe there's a potential but they will see value in this because for those who believe in the tuesday outcome if the palestinians believe in the violence are the ones to validate the of commesso becomes. >> i would give a shout out to jim who runs the middle east investment initiative which is working hard on the area and medium-sized loans. in about a month or do you think he will say to president obama and others about especially president obama on iran? >> that's important preoccupation. when i was out running the region that they are looking at. >> we knew we would get to iran. this is casting major shuttle ever everything they are thinking about doing. there is no doubt this would be a prime conversation interested in the presence. they talk about the nature of the conversations we're having with the israelis and on this issue i think from the israeli standpoint you hear it less from the prime minister and a preoccupation refers to the zone of immunity and what he means by the zone of immunity the multiplicity, the accumulation of the oil enriched uranium, the hardening of the site, the overall infrastructure i would describe this both the hard and soft part of the infrastructure even if they were to strike militarily for the military option disappears and for the israelis to give up the military option with the uncertainty about whether or not iran will have nuclear weapons or not is a big decision. now, what they have also said is it's an important part to keep in mind. if they are crippling sanctions they believe the work. think about what that means. when israelis say that it means the judge that they do have a cost benefit calculus. if you of crippling sanctions you can't affect the behavior so it is just there is no support and if you take a look at what i think the administration has produced, it has created a context. the president was saying last night the essence of the conduct that has been created is they are more isolated than ever, the best indication of that is you have a vote in the general assembly. you have in the region the clear shift of the balance of power and the kind of concern we once saw particularly among many states about being tough with us in private about iran. saudi arabia after the european union announced they are going to boycott the purchase of oil they will fill in they say that is repeated. as of this suggests the balance of power for a lot of reasons which changes fundamentally the perception and attitude towards iran in the region contributing to the change to the regional balance of power so you have them internationally, the change in the balance of power against the region and what is the emergence of the crippling sanctions and we know the effect it's having on the iranians in terms of the economy. the currency has lost half of its value. when you start talking about boycotting the oil the export 18% of the oil to europe so you're talking out almost a fifth of the oil this will be a loss of revenue. china cut in half the purchase for january and february which may not have been home because they are trying to link up but it's also smart business when they say that in fact there will be a boycott on the oil and they cut their own purchase of help when they say if you want to sell less you have to have a discount which means a further loss of revenue, and on top of this the chinese premier goes to the region, spends six days in the region, goes to saudi arabia, kuwait or arguably the hardest line when it comes to iran. beyond that he made the blunt statement out there. it's been a key guarantees the oil flow will go there. >> are you saying there is no need for the military strike? >> the context has been created where the iranians are increasingly aware of the price they're paying and the key to the strategy has been to concentrate that we would then leave them out. i would say if you are going to pursue a diplomatic approach any chance of success the only way you're going to do this by creating such a context. the prospect of inducing them to give up the pursuit of nuclear weapons was never going to work because there is nothing you can offer them that is worth as much as having that program. but if you look historically when they have made serious tactical addresses on the way out. i read the supreme leader's speech. he's adopting a tough line publicly i would expect nothing else. i wouldn't expect them to adopt publicly. but the fact is they are also now talking about meeting the five plus one and when the foreign minister talks about meeting the five plus one this is the current when he talks about meeting the five plus one he's also talking about the step-by-step approach of the russian proposal. the last time they met in geneva and a stumble they talked of the programs of the foreign minister is saying they will meet with the five plus one. they want to talk about the step-by-step approach in the proposal and the step by step proposal is something that was raised by the five plus one in these meetings last year. last year they wouldn't talk about the nuclear program and not a signal they will talk about the program. i'm not suggesting any negotiation is going to be simple but i am suggesting the context has been created where you have a chance for diplomacy to work and you have the kind of pressure that they themselves call for so that does suggest to me in fact there is time to try to make the diplomacy work. estimate syria, what should the u.s. be doing now? >> i saw the secretary of stat >> i saw the secretary of state called yesterday for the friends of syria group which is the right thing to be doing. if i take a step back i think what the veto on saturday dramatically undercut the effort right now to try to produce a macina area. i thing if you look within syria right now it is operating on a promise with at least the constituencies that support where he says we can outlast this because basically we have an insurance policy and that insurance policy has provided by the russians and that insurance policy ensures there won't be the kind of intervention that insures that there's a limit as to what can be done to us and so stick with me we will be able to outlast this. i think the russians and the chinese call along with this resolution i think the message with and syria would have been quite different. i also think it would of had an effect on assad. i don't see assad as gadhaffi or else hiding out, and somehow, you know, with no electricity, no water, and i don't see assad that way. i think if assad salles the real balance of power was changing from the outside it would have an impact further on the inside i think that you could see the potential change so in answer to your question just one other. the more that you create a sense of inevitability that the changes coming the more i think that you will be able to effect what is going on the inside so i think the idea of the syrian opposition approach is right. i think it does make sense for us to do more with the syrian opposition and i am to stand up until now requiring fmc to their own effectiveness was important but it's also important to create the had fmc is having an impact. squeezing the sanctions making them more effective as important doing all we can. >> that's when you do with russia not cooperating. >> what is russia's's reason is it a grand historical thing about the autonomy or is it -- >> i think it's several things. >> is it lavrov? >> let's put it this way. on saturday putin was focused on going on the streets of moscow. i think that he's focused on which going to happen on march 4th, and then afterwards she's thinking about what's the kind of government is going to put together. his preoccupation as much more on the inside. there may be a kind of anticipation that putin is seen as wanting to demonstrate the independence. the of the only naval base in the middle east is in syria but you would think if you take a step back and you want to preserve a position and syria, the only way you're going to preserve the position and syria is being on the right side of history. the longer you are seen as helping to prop up assad and basically what is now a killing machine and the way that he treated this as a licence to unleash which how many people looked devotee goes over the weekend. you're looking at aircraft they plan to fire in the buildings. the fact is the russians have a stake right now in demonstrating that they are the ones who helped produce the transition, not today are the ones who are an impediment to it. right now it's not just the friends of the syrian opposition the we should be focused on which is important. i think we should be working closely to build up the pressure where they are feeling increasingly uncomfortable and the more they begin to see their own position in the region more generally can be put at risk will take a step back. we are talking about the arab league that put together the transition plan for syria. this is the arab league that we are talking about the body that hysterically was primarily mcgovern y no it could protect the regimes. there's a reason because all of them are more attentive to their own public and what is going on in syria is a magnet for the public preoccupation and it's unacceptable and also something that again for their sharpens the attitude in the region as a whole. >> last question before i open it up and obviously deals with egypt and what's happening with the duties and the people why is that happening and what shall we be doing to respect this is one of those issues that is from the outside increasingly hard to understand. there's been the tradition in egypt of the occupation with protecting sovereignty and a symbol of sovereignty and the like, but i know that the staff for the supreme council of the courts are saying the ngos doing a lot on the ground. schenectady's are congressionally funded iri and nationally democratic institute. >> i know you know. i was just about to say i know that's what they say. i happen to know these institutions. there is no way that they were doing. they were talking about how you could register to vote and participate in elections and develop a political agenda and an identity. this is how you help foster civil society a time when they're presiding over the process of transition and the civil rule because then single us out looks like such a throwback. it is a challenge for us because it hard the fact of the matter is the idea of somehow not be able to provide assistance to egypt right now when it's important for egypt is a potential problem. on the other hand it to engage in these kind of the hitters and think that there's no consequence to them is also a real problem. >> you don't think we should be cutting off the military 1.6 million? >> i think we should -- it is an unbelievable the alana. we have to do everything we can to persuade the egyptians to find a way out of this and the way out of it is to pursue the prosecution's which is indefensible and inconsistent with what they say they want in terms of the transition to the civilian leadership. .. >> that seeps into the bloodstream zero eject bereday haft devin space for continuing competition and the elections that are repeatable and freedom of speech and assembly. nidal criminalize the private sector. we need to repeat the standards because he will find the public will hold whether is seeking to govern. >> but those countries to whom they give the most assistance pakistan, egypt israel, we seem to have the toughest time of influence when we really need it. yes. and will you introduce yourself? >> you indicated it would be in israel's rational self-interest two best -- bolster the palestinian authority at this time but there was a major prisoner release and has given hamas credibility and i have never been particularly impressed of the measures the israeli government has taken to bolster the palestinian authority but everybody agrees this is the most nonviolent rational group of leaders ever. is it not possible given the extreme right wing nature of the coalition government that there is that the understanding i don't mean there is nothing overt that each side believes time is on their side and preferring the extremist be in the driver's seat or me very influential? >> i don't think so. said deal was not done to validate hamas. it did have that effect but there was a fear they could lose that andy israeli government has a compact with their recent decision if you go into the military if something happens they will do everything that it takes to get you back. so that explains the deal but the fact is that it had the effect of the hamas narrative. you have the elections this year and steps were taken although not by design but the consequence to validate that narrative you have to take steps to validate the other narrative for our don't think, this government does not want to bolster hamas. if we had a representative sitting here they would say they spend a great deal to enhance the economy but it has done better because they have eased restrictions and mobility to make that possible. but i suggest to take that step further. when you look he makes his occupation palatable but i say no he makes the occupation and. what i want to see your steps to see the occupation shrinking as those who vowed to eight -- to validate because they are the embodiment. israelis have their differences but part of the problem in its third year question is we have a major psychological gap between the two sides of the two leaders. so why even try to get into a negotiation? the prime minister netanyahu said if you impose conditions on medium posen nobody else am prepared to talk to israelis but not to make progress looks like you constantly try to discredit me nationally that i speak to israel. so each of them have cemented psychologically their view of the other. it is very hard to break through that. the jordanians are making an effort to try to break through that. it is worth applauding in i think it does have some potential. easy to underpin what i validate or look at a parallel regardless because if you have elections, they will shape the future identity and to what affects that in a positive way. >> we will try to get back around that. there is 19 people on my list chris? >> could you elaborate on what you said earlier you should never limit your strategic choices viet that is what the administration has done with syria to take any military intervention off the table. secretary clinton said absolutely no military intervention. do you think that is why is? >> i think when you are in a situation where you just end one war and wind down another it is not a simple thing to start talking about another military intervention particularly when you don't see a lot of support for its international the. having said that, i do think that there are options one has to be thinking about right now. there was discussion at one point about the humanitarian corridors, who are those of us who conjure up wonderful memories but it is important that he has more to worry about every half due cynic about how to build the pressure corrects right now my focus is on the russians because i think they could be a genetic. >> . i don't think they're in a comfortable position right now. the vote is 13/two that means the indians. actually it is striking. with the syrians did over the weekend was embarrassed the russians more and it made it look like what they did is they gave them to go beyond what they we're doing before. i would try to mobilize the arabs to do more with the russians. that this might standpoint and probably up better way to go. when you talk about proletariat options, i do think about how we could increase the pressure and he should not think that. >> the problem with hunting down doing nothing is what should they do over the next 12 months? >> missing procure and then maybe that you could perform as we suggested last week? >> [laughter] id the administration is fully capable to manage its own communications. but i would say in answer to your question that what the jordanians are doing right now in fact, trying to get the resumption of formal negotiations, the talks that were held, there were five talks. my impression from the jordanians they think they were promising. and really big issues were put on the table. the aim is to get to what was called for in the quartet declaration of september 23rd talk about preparatory talks the ada is they are direct in within 90 days of when the talks began that both sides if you have comprehensive proposals that allows you to get to the issue of borders. >> it is a lot better to resolve the issue then do with it to say let's try to stop it or limit it. the fact my advice is too both but clearly from what i understand they have not given the that shows promise and i would try to build on that and if the steps of the offers to offer. >> there is not a lot to we gained from what maybe possible. at this point* there is something that is possible there and that would not give up on it. >> you think that first agreement is possible? >> i believe he has agreed. look, the truth is both leaders in the end to deal with all the issues. if you go back to what the president spoke about in me, he offered guard finds on territory insecurity because the idea was to create a foundation on issues that were less budget >> but it could be achieved if the palestinians sees as her attorney that but if the israelis see with a need in this dim plight of security is there and significant to their standpoint, then it is easier to take on the other issues like the refugees. and the courts have this statement for both sides to present within 90 days of the preparatory talks under way to prepare the two sides have a different approach. one feels they were in direct preparatory talks say and the israelis said they did not begin until all of january 3rd. and technically speaking costs but the fact is at this point* the members of the quartet including jordan -- jordon think it is serious than build on it to prepare you would get to the tenth in tenth. >> the lady from cnn? >> >> we always talk about. but i am wondering if you have a repeat of 2006 palestinian elections and hamas does make a good showing, would you recommend repeating the same course of action the u.s. and international community did to boycott? my personal feeling, i don't feel they're eating given the opportunity to show if they would cover nor moderate because any facts it back into a corner and we never knew. i in a stand there are these red lines but would you make any changes to that approach >> you are asking two different questions. one relates to who could be merged individually in us cents, which and on the first one, i don't think it is never a good idea for anybody on the outside to look like they and fight the palestinians brokerages for those people. >> my concern of 2006 but my problem was we have agreements we hope to negotiate. that actually created criteria at agreed to four who could be candidates. but they should not be. at that time, the provisions of that agreement were not followed. i would prefer that had been the case. >> if you vote for those who believe in a 5p lourdes going the distance and they should not assume there would have a relationship with us. that is fair. what is it right is if we create a misdirection new push for elections then you don't respect the outcome. >> did that happen with hamas? >> i do. at least we need to be consistent. we have certain principles. my own attitude is we create conditions for the plo in the end they met the conditions. i don't know why we treat them differently but you could see hamas. we are dealing with the muslim brotherhood who would have thought talking about we would love to work with you to form a partnership. is there any way you could guide them toward that? >> by whom? [laughter] i think if hamas wants to deliver, take a look at the polling of gaza. one of the things i said before it be something of the international community and we all work to help validate those principles of non-violence, think of the significance the first election we have seen where it is posed in the i's. that is remarkable progress think there is a hungry for success. some think about turkey. if the palestinians came to embody the successful model because you look at what they are doing on the west bank that would be significant for the region. that applies also they will all be dealing in a different universe. it is not the same middle east. when i made the reference people see themselves as citizens, we should not underestimate the significance of that. they were acted on the subjects. they could not make demands, they had no rights. no accountability. now they have discovered their voice. of the fact they have discovered their voice suggests to me they are not about to give up easily. here is another interesting example for all of those using coercion could work to apply the rules it does not work and syria. >> i was asking to go back to our brand to decipher the various warnings of potential of military action they almost seem to go through mood swings. is this a debate inside israel that is under assault or a message for the united states or four iran nor is it possible to measure what message arrives? >> one of the things you know, for certain with international relations but particularly in today's interconnected world you could have multiple audiences. when you can indicate things. but it doesn't mean when you have a message that's even with multiple audiences are multiple messages that they have to be competing themselves. if you are sitting in israel you wanted to use the crippling sanctions that you see people being adopted. one could ask a question of the rest of the world was not convinced israel might take military action would they be is really to adopt day shia's ready to adopt those stations? that means they are prepared to adopt a. there is no doubt some of what they do has been designed to motivate the rest of the world with a kind of actions they themselves think may alter iranian behavior. the israelis never wanted us to be israel against iran but the broker against iran so i have no doubt some of the reasons is to motivate the rest of the world but what makes it credible is they've put this in existential terms state team that yesterday if you see that a viewer israel you will have the capability to deal with that. does that mean they are posturing? and no. but there is no doubt some of what they could do has the effect on others. i go back to the fact the there is an alternative to the use of force which will be seen. >> ambassador you laid out the very important point* about the arab street controlling the political process and the most important issue is jobs. walter isaacson just wrote a fabulous book about steve jobs as did -- a different kind of jobs with they're very connected because the arab street is so connected to the internet and facebook. why is it the u.s. administration is so slow to come forward with facebook applications that teach job and power of rantoul's how to get a loan norstar the small business our market the business in view podcast on facebook to be ready for the post apple world in the air of spring? >> i don't represent the administration and. any more. but if you had somebody here from the state department search and they the secretary of state put a premium on the new media to connect with the region and using new media you raise an interesting play there are multiple applications for the new media at it is not just a vehicle for communicating are trying to create the mobilization but it can also be some things that could be used quite effectively to try to create jobs at a time and we have the enormous stake in the success of it but if you look at one of the senior members of the muslim brotherhood over the weekend talking about the importance assistance coming from the outside but also the premium of their interest in promoting and responding to their economic needs. i would say this is a virtual ground we should be thinking about how we could add to it how creative we could be and we will take your suggestions. >> we are very engaged icahn ensure you ge entrepreneurs to look us up we don't have all of our followers on facebook we do reach through multiple media over half of the embassies and entrepreneurs we have them set up in egypt readjusted merit cash to announce we will set one up into the shatt and morocco. we have been active in jordan in other places we were just there with a group of entreprenuership three broad in silicon valley investors on and on i could share. >> i would add an give her a shot out because one thing we have done here is to serve as as a secretary secretary clinton but also condi rice with the palestinian partnership of which was my co-chair reach try to set up both jobs and entreprenuership and economic investment we lourdes justin marrakesh secretary albright came with us and in each one of the region's we met to with the people needing the facebook groups and to speak as a former board of governors we have tools for people and working with facebook twitter and others to make sure it is a fan firewalls could be broken and anonymity is assured when need be. all of that to create a sense of partnership with u.s. arab world to create entreprenuership and jobs and i urge you to talk to some of our people here on partners for a new beginning and what we tried to do so they can pick up next year with merit cash as well? >> i am extremely familiar with the vital work that shelley and you are doing with all due respect it was not put on facebook an arabic you're doing extraordinary work in so many different places where if you go on to go and try to go and arab back you cannot find it and you could have a force multiplier of leveraging of that investment with these programs if you would broadcaster put them into arabic. >> we will have the innovation and commission meeting next week in which crown source translation into all of the languages we are trying to work that out but obviously especially with the international broadcasting of the united states it is done with all languages. but you are right we have to be faster and people like alex at the state department of our pushing hard. go ahead. i am sorry. >> my question is good to enormous blows to iran and hezbollah is the fall of the regime in syria i want to know if you think the israelis have any ability covertly are overly to expedite the fall? is that something they would be willing to pursue? >> i would not exaggerate the ability. without knowing, my assumption is you are much more likely to have other arab states that are much more active in that
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