Transcripts For CSPAN2 Key Capitol Hill Hearings 20140607

He was on the committee with ted kennedy. In 1988, he founded Podesta Associates with his brother tony. He served president clinton as deputy chief of staff and then whitehouse chief of staff. He was cochairman of president obama in 2008. He is the father of a proud airforce member. So much for biography. Our thanks to the angus ceo who are sitting at the table back there keeping me from the pain of premature requirement. We are on the record here. No tweeting. No filing of any kind while the breck fast is underway. There is no embargo when the session ends. This is one of the last ways of fussy folk waves so if you have a question send me a subtle, nonthreatening signal and i will call on you. We will let the guest make open comments and with that thanks for being here. Thank you, david. I will talk for two minutes and say that a lot has been going on in washington this week. But one thing i have been particularly focused on is the rollout of the proposal to reduce Carbon Pollution from power plants across the United States which jenna mcarthy raised on monday. I am coordinating the energy and power plants. Power plants con tribitute to a third of the gas emissions. It is the largest source of Carbon Monoxide so it is important to reduce them. The president began to discuss this proposal when we went to Childrens Hospital to tape his weekly address a week ago today. The reason he did that is there are Huge Public Health benefits that will come from this rule. More than a 130,000 asthma attacks among children avoided, 2800 heart attacks avoided, 27006600 premature deaths. More than 1800 visits to hospitals for cardio illnesss avoided. 310,000 less work days lost. Today at noon we will release a report that links the effects of Climate Change to Public Health. Many come from the cobenefit of reducing traditional pollutant like so2 and knox and pm 2. 5 emissions. But Climate Change itself will increasingly be a problem for our Public Health and the report we are releasing, the white paper, goes through the National Climate assessment as well as the ippc report to show how the effects of Climate Change will have effect on ground level ozone that is predicted to raise, for example, the emergency room visits in Suffolk County by 10 over the next decade. There are more frostfree day and more plantbased allergens in the upper midwest will which lead to more lost work days. Carbon pollution enhances the urban heat island effect and it has a particular effect on the elderly affect who are living in environments where they can be affected by the strong heat waves and the distribution of diseases from west nile or lyme disease are being effected in the United States. Particularly dealing with this rule and reducing Carbon Pollution will have a big effect on asthma. It is the third leading cause of hospitalization for children. Latino children are 40 more likely to die from asthma than caucasian children. This is a big deal. We intend to get the job done and created a flexible roll that believe be implemented by the state and it will have enormous Public Health benefits. I wanted to start with that because it is what i have been up to. I would note the jobs report came out this morning and we have a rule in the whitehouse that we dont talk about that until 9 30 so i will watch daves clock here and if anyone wants to ask me about that when the bewitching hour hits i am happy to talk about it. We will start with kate from the post and then darren good and go on from there. Press coverage of the power plant rule listed four, among others, four hurdles that could stand in the way of implementing it. A court challenge, action by coa coa coaldependent state and action by congress or the next president. Which risk did you consider the greatest and what are you doing to counter it . We are committed to gets this done. That is why we released it now. We have a year to finalize the rule. We are taking comments for 120 days. We had a request for the number of senators to extent the normal 60 day period to 120 days. The epa agreed to have discussions. We will hear from stakeholders across the country over the next 120 days. When i came into my position in january, one thing i needed to do was make sure the direction of the epa the president game last summer as part of the overall plan was to propose this rule by june 1. When i said that i didnt realize that was a sunday so we did manage to get it on june 2nd and we are committed to finishing the rule by next june and that will give the states one year to create impleme implementitation rules. The regional plan is the best way to go and if they chose to go that route like the southwest states or california has done, to go to a more marketbased system and get together to find the most Cost Effective reductions then they will have until 2018 to finalize those plans. I am quite confidant we will get our job done and that we will resist there is an attempt to try to overturn this through the congressional review act. I am certain we have the vote to uphold the rule once it is finalized. There is a goal under the massachusetts and the epa that recognizes carbon as a dangerous tool and we have the right to regulate it. There is no doubt there is going to be challenges but they have had a stunning strome of success in terms of holding their authority to tackle the major causes of pollution and illness in your country as you know the president has been quoted as saying i dont care to be president without the senate, but the former bush speech writer wrote in the post this morning that in the context between president ial legacy and democratic control obama has chosen legacy adding that obama is comp licating this and putting people at risk. What is wrong with this analy s analysis . Some of you are familiar with when i banned the word legacy in the whitehouse during the Clint Clinton administration. Hes has a desire to built a cleaner and stronger brighter for the future and tackle the problem of catastrophic Climate Change. We are seeing the cost of that already from increased droughts to heat waves to storm surges to Sea Level Rise across the country. We are seeing them across the country and in the Public Health as mentioned earlier. The president s obligation is to do what he needs to do under the legal authorities that he has been granted by congress through the Clean Air Act to ensure we tackle this most important problem. And i think that if you think about it from a political perspective the Washington Post had a poll out showing there is broad support to take action to reduce carbon country. 70 across the states in red and blue and republicans and democrats. There is strong support for taking action to reduce Carbon Pollution. There is no doubt there are some states where this is an issue that presents a different political challenge. Particularly coalproducing states and there is no doubt polluters will come after this rule and they will try to attack it and knock down the approval rating. And they will try to put it squarely in the context of the political campaigns that are ongoing in 2014. But i think if anyone who wants to go out and talk about the benefits from this rule, do what the president did, visit a Childrens Hospital in their home state, i think they will find that the politics is such that you can defend taking action here and the public will support that. I think that we think that people who deny the existence of Climate Change, who want to run suggesting they are not scientist and they dont get it and they cant see what is going on, and they want to deny the Public Health effects the pollution is having on our families and children in the country. I think that is the loosing side of the argument. I am certain that if you think about this in the time coming forward anyone trying to run as a climate denier in 2016 is going to have a hard time running on that nationally. People need put together the resources to fight back from the coch brothers and others that is politics people have to decide on a statebystate bases have you read Hilary Clintons book and what do you think about her writing about her disagreement with obama about arming syrian rebles rebals it i think it was probably a hard choice. I have no doubt that the narrative she tells in the book, from her experience as secretary of state, will be honest and she will lay the facts out as she felt and saw them. I am anxious to read it. I read excerpts from the book and saw a couple passages. But i am still catching up like most of you. I am sure it will be interesting for the public to see what it is like to have to take on those tough problems that she took on quite successfully as secretary of state. I can the public is waiting to lineup at the bookstore in manhattan on tuesday and get copies of the book. Darren . Thank you. This is a complicated epa rules and i dont want to get into the weeds. I will try not to also. One thing that stood out is some states have as late as 2018 to finalize as you do this and that puts you in the next administration. Do you run the risk of seating too much leverage and ground to the whitehouse especially if a republican is there . I think the country needs to tackle this problem. I think with the deadline of 2018 existing for states that want to join together to try to reduce emissions in the most costeffective way possible. I think states that chose that option will make a commitment to do that and Carry Forward with making the reductions. The rule will have been finalized so the need for states to reduce admissions will have been finalized by the end of the Obama Administration so they will be under legal obligations to try to take the reductions down. I think the states that decide whether they want to join with california and i know that there is some discussion on the west coast of not only washington oregon but other states combining with the ab32 system that company implemented or more states want to join reggie and maybe new jersey would be going back into the that or other states depending on the election in pennsylvania you might see that happening. There are other states that might decide that is the path forward. But i think once you made the decision there is going to be a legal obligation and political commitment to move forward and i think the rule will be implemented. President bush tried to overturn a number of rules that president clinton issued in this term and i dont believe many were successful. Many in the environmental arena. A few president bush took credit for including the diesel rule and others. But he tried to reverse the appliance efficiency rules and the courts upheld them because they were finalized as was appropriate and under the laws that were prevailing at the time. So people can try to, you know, to roll it back and i am confidant. Of course i am confidant we will have a president who embraces the cause of tackling Climate Change and reducing emissions. If you think about a challenge in the 2016 context and the politics of this, if you a climate denier trying to run nationally i think you will have a hard road to hoe. Can you talk about what is next for the Climate Action plan . Are these rules the peak . Do you hope to accomplish more in the remainder of obamas presiden presidency . The Climate Action plan that was put out last summer is based on three pillars. Mitigation, of which this is a i would describe this as a crown jewel but there are other elements including implementing efficiency rules for heavy duty trucks and more deployment of renewables. We are doubleling the amount of renewables on land. We had a successful solar summit with the president out in california recently expanding the commitment to distributed solar and more building efficiency through the better building init initiative. The second is resilience. Communities are going to have to react to what is baked in the system already, plan for and build more resilient economies Going Forward. So there is a whole work stream on that and the president proposed a billion dollars in the current budget to give the states and communities the resources they need to begin to plan for the, if you will, baked in effects of Climate Change. The third son the International Front is on we have a strong dialogue at the Multi Lateral level. The president was just at the g7 and this was a serious topicic and all of the leaders reconnected to trying to move forward in the negotiationegoti paris in 2015 and all committed to put forward significant reduction strategy for the post2020 period. They spent a lot of time talking about Building Energy security as well. There is a lot of do on the international site. One of the principle places we are in dialogue is with the chinese. There is news coming from china, mostly from the academic ad visors to the government on what they intend to do in the post2020 period. But there is movement in taking on commissions to have their emissi emissions peak and then decrease. This is one element of a multi prong strategy. [inaudible question] why not do that permanently and turn the whole thing into a voucher which works . I think the veteran system and i think that people who you have seen it in the press, people that served veterans well when they are getting care. This has been a problem of getting into the system. I think that the bill senator sanders and mccain just agreed upon last night is a much better way to go than privatizing health benefits. I think the resources contained in the sandersmccain bill on getting more primary care doctors in the into system that foc focus on improving the facilities that would come from the resources that are contained in that bill would be a better way to go than privatizing the system. And you know, that builds on the president s commitment which sometimes gets lost in the conversations of having expanding access for pts and agent orange and for taking care of the veterans that are the baby boomer veteran and the post9 11 people thwho need the quality of care the va is capable of delivering but we have problems in the way and structure it was being perfo performed. And the acting secretary is now taking action and as he announced in the recent days he is going to put improven improvements to get that underway. They are happy at the way he is effective in raising money but dont feel he is effective in framing a message the democrats can run on. When are we going to see that and how does he break through all of the other issues getting the headlines of Bowe Bergdahl and va and everything else. I think the president s framed a choice between an economy that works for a middle class and worker people vur versus an economy that is based on failed ideas. His push for raising minimum wage is catching on and we see states raising the wage and pushing for pay equity. His push for reforming the way individuals are paid for overtime. These are all things that are valuble pointers in the direction that a Democratic Congress would lead the country versus the way a republican would. He is doing this job first for foremost and putting issues on the table we can make action on and noting the democrats are more effective to get the economy working and get wages growing the American People. He is not out running himself and he is going to engage when it is appropriate. He makes that argument i think to democratic. When . I think he has been out there talking about the issues that are important to the american public. And rather that is the cost of college, the minimum wage, the pay equity and there are issues on capital hill that democrats want to campaign on. I think he is not on the ballot. They are and they will have to make the case but i think he can provide a narrative and supporting environment that he is trying to make. Let me tell you where we are going next. John, susan, david, karen, and alexis, jim, lauren and todd at the end. Thank you, david. Sir, you talked about candidates runni running. We had a virginia candidate and a kentucky candidate and both came out faster than the republicans in denouncing the new standard and referred to it as an assault. The republicans claimed it is war on the four and it will lead to higher electricity rates for the lowest earning people. What do you say when another democrat criticize this within hours . With respatect for the republicans, i think the poor might be concerned to learn of the lack of concern for them. If you look at the real economics of this, as the epa steps in. I think there are things we need to do to ensure that people and the administration has a commitment to make sure that people get affordable, reliable, electricity and we think the bill gives the ability to that. The states need to implement it. I mentioned the reggie system. The nine states there have spent a significant amount of money weatherizing the homes of lowincome individuals and they have reduced their bills by 2 billion. So it is possible to do that with the right possible. I think that is what we are asking the states to look at and they have the flexibility to decide how to move forward with that. The other thing that i would say is i would come back to where i started which is the poor are the most effected by the Public Health affected by implications at the continued levels we are seeing. I gave you statistics to show you that. They get both the Public Health benefit and i think there are ways to ensure that electricity remains affordable and reliable and that is why the flexibility is built in the rolls to do that. Respect roles to the politics in the coal country i would say a couple things. First of all, this rule does about end coal in the electric system. It reduces the amount over a fairly long period of time between now and 2030 from about 40 of u. S. Electricity production to about 30 . You see increases in gas. They would be done to raise the efficiency of coal that is being used. So the oldest, the dirtiest and least efficient plants i think the states will make the decision. We are not taking coal out of the electric system. It is now 9 32 so questions on unemployment are available. Susan page . You are the most qualified person in the world to address this question. Having served in the clinton and Obama Whitehouse how would a Hilary Clinton president be different from an Obama Presidency and a clinton pr presiden presidency . That is a topic i have not pondered. Each person coming in brings their own skills and the challen challenges and times are different. We faced the break up of the soviet union and that is being challenged but i think the proje project. I think that the challenges will be different i think the people bring their own personalities and talent to the job. I think that one thing that the three of them share is i think the purpose of the job which is their primary duty is ensuring everybody has equal opportunity. That is what motivated all three of them. And i think if she runs she will get up every day as president as clinton and obama did and go into the oval office and think what can i do the help the middle class and helping people. If you were going to chose three words to describe Hilary Clintons presidency what would they be . Disciplined. Tough. And determined. Jeff . On the hill with the Bowe Bergdahl deal has been the terms of his confinement in qutar. As the president was shoeing it over and weighing the pros and cons, what was the bottom line he decided to do for security . And how big of a problem is this with these guys out there . The secretary of defense made the determination that the transfer was in the National Security interest of the United States and the threat posed by the detainees would be substantially mitigated. There were promises given by the qutaris and i will not get into that. But the are ways to monitor them as well. First and foremost the president thought we had a commitment and duty to leave no man or woman behind on the battlefield. He exercised that and thought it was the right thing to do. And the secretary of defense, who had to make those findings, felt like first it was in the National Security interest to move forward and second that the threat posed by the detainees transferees could be mitigated and that is what the discussion with the qutariis was all about. We have a lot of ways of knowing what people are doing around the country and world. David . I think it is fair to say we will keep an eye on them. I know you have been in you current role in this administration for a small portion of this administration. But the president had nearly six years to go big on Climate Change. And specifically to address Carbon Emissions from power plants. Why did he wait until now to do it it . I have to say in the first two years we were seeking legislation. And a bill passed the house that ultimately didnt pass in the senate. That was an economywide approach that i think if you are an economist might say it is slightly more efficient at getting the reductions. In the meantime, he got substantial reductions in the transportation sector and came back to the office to work on the Climate Action plan and the centerpiece of that was to take reductions from the power sector which is the largest sector for co2 emissions, 40 come from the power sector. So he has been trying to get legislation, when that failed, an assessment that congress was unlikely to move forward, i think he worked in sectors in the economy to reduce co2 pollution has much as possible. And that is why we are in the position to reduce the rule by 17 by 2020. Or in that range. And had the president not taken the actions in the Climate Action plan let he me start that over. Had he not done anything, including the transportation improvements, for those that thought this was all about fracking, emissions would have been 4 above 2005 levels. Having done those actions in the first term they would have been 5 below 2005 levels. As a result of the Climate Action plans, it will be in the rachel of 17 . If you look across the global, the United States has reduced remissions more than any other country over this period of time. And i think that is a testament to his leadership both in terms of the investments that were made in clean energy at the beginning of the administration through the recovery act and that these important regulations, including much more efficient appliances and commercial appliances. Karen . Do we have the benefit of serving the administration from the outside and inside now and serving in the Clinton Administration, some critics, including accused this whitehouse of political tone deafness on the whitehouse rose garden speech on Bowe Bergdahl and perhaps the president s, in some peoples view, slowness to take action on the va scandal. I i am wondering what you think about that. That happens both ways. I think the president knew this was a controversial decision. This was a decision, and he spoke to this, that he took ownership of. He went out in the rose garden because it was important to explain to the American People that this was about an actual human being who is under great distress and being held by the talib taliban. And while controversial he needed to explain that to the American People. He makes no appaology for that he said yesterday in europe. I think it was the right decision and we will move forward with it. With respect to the va, he asked secretary Eric Shinseki to do a review and afterwars shinseki decided the department was better led by someone else and he accepted that. These are tough calls. I think particularly the decision to bring back the sergeant was a tough call. We knew it would be controversial but we combo knee it was the right thing to do. John, because of your role in the transitioning i want to come back to the Guantanamo Bay question. Does the president believe he has the Constitutional Executive Authority before the end of his term to close Guantanamo Bay on his own say so believing that is a natural security issue to transfer the detainees before he departs . I think the president wants to close Guantanamo Bay and he is working hard to do it and i think he is doing with within the bounds of the law that are being passed by the congress. So i think that we have let our friends on capital hill know what restricts are unacceptable in the current round of negotiation and i think that we will just working to ensure that the remaining it tainies are moved or tried and that the Guantanamo Bay is closed by the end of the administration. Just a followup. There is a quote in the new york city times today from a Senate Democrat saying we have got to stop putting out fires relating to Guantanamo Bay. Are you sympathetic to Senate Democrats that feel that way . I think we would like to be talking about the Economic Future of the country. But when the president has an obligation and there is a problem as we found in the scheduling at the va you have to tackle it. When there is an opportunity to bring the sergeant home it is tough call but you have to make it. That is what is served up to you. I am sorry. Im going to wait until after november to deal with the opportunity to bring one of our young soldiers home who has been, you know, who has been captured by the taliban. You dont get to make that call. You have to make a decision right then and there. He made it. He made the right decision to bring sergeant Bowe Bergdahl home. I want to ask you about your focus on using the president s executive order. The whitehouse asked jay johnson from the pentagon to stand down for now on any actions or administrative actions that can be taken because we think House Republicans can act between now and august. I wonder if the mere threat of taking action is jeopardizing your position because republicans say, you know, he is going to do something on his own and at the same time given the limits of what you can do. Are you putting yourself between a rock and a hard place with the advocates of legal status who want broader action from you . I never really tried to make a living psycho analyzing a republican. I think there is an opportunity. I think Speaker Boehner would like to see legislation move forward. That is what i think. And i think that is what the president thinks. That there is an opportunity to get comprehensive Immigration Reform down and that is a much better solution and a permanent solution for a broken immigration system and the pain that it is causing across the country. So if that means we have to wait to see whether the Republican Leadership with get on an agreement together that can earn bipartisan support over the summer the president is prepare tod prepare prepareed to do that. But the secretary is reviewing his ability to eliminate the pain of family relocation and i think we will have to think through watt our options are if the congress is unable to act. And you know, that is i think that if we went ahead and acted, i am fairly certain that they would use that as an excuse for in action. We will have to wait and make an assessment sometime during the course of this summer about whether they have the capacity to act. Are the moves you have at your disposal broad enough to satisfy someone who wants something comprehensive done . I am not going into that. The number of unaccompanied minors coming across the border is rising and i am sure how the administration is looking at that in the form of Immigration Reform and how that might com pel them to act now where before maybe they were waiting to hold off longer. We have seen a bump coming from Central America as you know. And the law requires that unless the children are unaccompanied minors coming from canada or mexico cannot be returned. They have to be turned over the to department of health and Human Service and that surge in numbers put pressure on the system. So secretary johnson pulled together an agency to work had problem with a Task Force Led by fema and ted fugate to find and make sure the children this is a heart breaking situation where you see 1012yearold kids unaccompanied by a parent and fleeing violence particularly from tCentral America. It is another reason why we need to reform the system and get a Legal Immigration system that is working and it is viable. But we have to deal with the humanitarian requirements and all of the agencies and the government are finding appropriate places to house and make sure the kids are safe and welltaken care of. Any indication that the republicans in congress with looking at the issues as a reason to expedite their actions . I dont know the answers to that. Back to the epa issue, so the critics of what the administration is doing point to these figures that i think come from the chamber of commerce that show this would cause about 224,000 job losses for the next 1516 years. And you said something that struck me. You said Climate Change is an existintial issuess and are you taking into account there are job losses sure. We think it will have a positive effect because it will build out here clean energy and more building efficiency in the electric system over the long p term. So the claims of massive job losses have been debunked. They are based on a set of assumptions that have zero to do with the rules. They are fantasy job loss numbers and they have been debunked by independent experts who looked at them. That is not to say there are not going to be places and occupations where you will see job loss and we need to be sensitive and attend to that and make investments in communities that might be affected by job loss whether it the loss of a plant or otherwise and ensure and in the whitehouse, we are marshling our efforts to make sure we can respond to that. But i think the congress has an Important Role to play in smoothing that transition. But every time an environmental regulation has been put forward the polluters say massive job losses, lights going off, electricity system crashs, bills going through the roof. They are wrong before. They are wrong now. I think that the particular Chamber Study you referenced as i said is based on assumptions that have absolutely zero to do with the rule that the epa put forward. So it is a fantasy analysis i will take that. But in terms of your motivation, if you seek Climate Change as this kind of threat why balance anything . We are paying the cost. We had a 100 billion in losses from extreme weather events. We think we can build a stronger and better economy based on a cleaner energy future. The people invested in the status quo, the polluters, want to keep getting the rents from the current system. That is what the debate is. But there is no question that is opportunity to build new industries, to create jobs, to create new technology, to make the world a Global Leader in clean tech is available to us. Question is whether we will put the right policy environment in place to ensure that goes forward. So i think that we are very much about trying to build a strong and powerful and good economy. But that will come through investments in cleaner energy and not in reliance in the systems that we have had in place which are now increasingly burdening our economy through these losses in agriculture and in forestry and in extreme weather losses, storm surges, Sea Level Rise. If you want to ask the question where is the risk . Clean or dirty . I will have the reinsurance industry. You mentioned that the president s commitment to veterans got lost with the fear over the wait list time. I was just wondering if there is any review in the executive branch of the fact there were so many gi reports on the waiting list problem and it wasnt identi identified sooner. And also the review with the Bowe Bergdahl situation and not to review congress and the level of anger over there with respect to the second, people who made the decision are out briefing the congress so they will hear why but i think there was evidence or at least there was is an analysis that a premature disclosure would result in the loss of his life because of the divisions in the taliban. So they will answer those questions. Are with respect to the former we are always trying to take a look and i am sure in this case in particular give gibson and now neighbors who is over at the whitehouse, are growing going to drill down and look at that question. And i think we owe it to our veterans and american citizens to always be asking why did we miss that . Not just in this particular case but across other issues in government to increase the efficiency and effectiveness of government. So you try to learn from error rather than just, you know, run from it. I think that is what we will to do here. With respect to the specific question you asked me, again, i think that is what rob and the acting secretary are in the process of doing. Trying to figure out why was this wasnt a oneoff problem in phoenix. There was more systematic error here and why wasnt that attended to earlier. We have a minute left. So i will take a moderators perogtive and ask you how is the role different . Why did you come back . We appreciate and hope you come back. Thanks. [inaudible conversations] russia and United States is a nation which believes in its mission. And our missions are similar. We believe in freedom. We believe in distributte our core values. The core was still there. It didnt go anywhere. The Biggest National idea for russia during all of those years was the victory day. We will again started. Welcome to the Economic Advisor repress conference and reebok the those who are joining us via Vice President of those relations here at aba. We meet twice a year the presentation reduce the from yesterdays plea is not our meeting is completely off the record todays presentation so silly represents the opinion of this committee should not be interpreted what the fed they believe. Almost all members were able to stay today and after the event you can ask questions. The members in attendance today are Scott Anderson bank of the west, robert west, robert, america bank, bank of America Merrill lynch, pnc, deutsche bank, suntrust, huntington bank, regions financial corporation, state street street, and northern trust. After todays forecast we will have a question and answer session repassed you please state your name in the name of your publication. Salome introduced the chair and chief economist to get things started. Chris . Good morning and thank you for being here. I know it can be tricky to a get away from the desk on a friday so we appreciate that you are here. I think if you picked one word to describe the mood in the room yesterday as we sat down to discuss our forecast it would be optimism. We are optimistic that we will see solid growth Going Forward through the rest of this year into next year. In the First Quarter gdp growth fell 1 that was in part the weather but more than that. It was the global slowdown in activity that looks like dave mini but violent inventory correction. The good news and bad news was confirmed this morning that we are back on a much better track. 217,000 jobs to day on average about 250,000 with the first two months of the quarter is confirmation that we will not only have a decent balance of the activity but we expected gdp growth will reach almost 4 in the Second Quarter of this year then we will settle into Something Like 3 percent growth Going Forward. You look closely at the forecast, the growth rate does decelerate but not much. We start out at 3. 25 at the end of 2015 looking at something closer at three but were optimistic the Unemployment Rate will continue to fall we expect it will be five plays 6 at the end of 2015 within touching distance of our estimate of 5. 5 at the natural rates of unemployment at the same time we expect a moderate rise of Interest Rates during that time as well. That allows for one thing recent Economic Growth moderates but also keeps inflation in check over the period. We do expect inflation will excel raped. But our sense is from the 1 numbers at the moment will be closer at 1. Five yen by next year close at 2 which is the feds ideal target. In terms of sources of growth we expect Consumer Spending will be modest looking at a range of about 2. 75 or 3 percent. Devil contribution to gdp comes from private investment we expect housing will recover from the recent soft batch and investment will run at close to the doubledigit rates. Were also expecting Business Investment will pick up partly based on the fact that companies are in a good financial position with cash on the Balance Sheet but it is anecdotal we have seen a pickup in interest in loans that suggest companies are beginning to contemplate stronger spending. Looking at Foreign Trade and inventorys there is quite a bit of volatility. That is where most of the weakness was. And we figure that volatility has likely to continue the aeronautics the acting positive or negative over the long run. So while there may be irresponsible for a quarterly surprise, we dont think they will change the trajectory of growth. Finally when we came to discussing the of said there is remarkable agreement even with a gross picture of the view is tighter than at other meetings. There is general agreement there is a slight range of views but from the strongest to the weakest there is not a lot of difference partly because were in the elevator or a middle stage of the cycle. Things have played out as expected the biggest was the First Quarter now we have quite a bit of Second Quarter data to suggest orders and spending and job growth from a better track. It is similar to our view of the fed particular the that the fed has been nuclear that bar wing some kind of extreme shock they will stick to the pace they have established in the committee is an agreement that it will end this year november or december. And most of us in factor in agreement it will be in november. After that we are looking for the fed to begin normalizing Interest Rates to move the fed funds rate up in the second half alone 2015. There is a little bit of divergence but not much. The first hike is expected the third Fourth Quarter and from there we think the fed will stop for investing securities to allow the fed Balance Sheet to begin to shrink. Is important to stress while it is the beginning of a tightening move, it is still what we consider a normalization of Interest Rates. Rates are so extraordinarily low right now at least in the beginning it is more about removing accommodation than out right to tightening. That is the forecast if anyone has questions i would be happy to answer them. I want to talk about the of a bear market. People call it a good report today could you talk about the caveat so the picture or the saw spots or fitness structural or cyclical or the time frame . Absolutely. We had good news in todays report but the question is if the discussion went deeper than that. Some of the things setter not going as well. Absolutely. In particular we talked about the appropriately fall of the Unemployment Rate in the sense reid no Labor Force Participation is not what it has been with prior cycles. In fact, not only what it has been but it is dropping and normally you would see growth. We talk about underemployment and how that also is in the labor market but the forecast is we will see slightly faster job growth than we have. We are optimistic that on average we will see more than 200,000 jobs per month this year and optimistic that pace will pick up further in 2015. And were optimistic the unemployed rate will come down. There are reasons to think the graphics play a role in the job of Labor Force Participation. But there are also reasons to think there is a lot of cyclical damage done and while it is extremely difficult to estimate to bring your it is we are comfortable there is plenty of slack left in the labor market. In addition, we do have ideas about how to approach it. If we discussed the way to the thought to be put on long term unemployment for some shortterm. Our sense is normally long term unemployment reaches the equilibrium partly because people lack skills there are still quite a few skills in the group began to that would be a reflection of the extreme nature that still graze on the economy. So money considering how many people might come back into the labor force but if we do continue to see job growth maybe not quite as strong but at 200 , a lot of that will go on the next couple of years. You are anticipating the pickup of business and i am curious how does that work out with Small Community banks and the larger banks . Is set across the board . It is about the anticipated pickup of lending and we are expecting it will be across the board. Not necessarily even between large banks or small banks but we are considering day a couple of things when we made the forecast that there is stability with delinquencies in the looks like we are finally getting to the point where the default rates are bottoming out as well. So that creates a more stable environment to work from. Another reason lending is picking up we have more clarity with regulation. I am sure you are aware there is a significant tightening. And the new directives how to apply that over the last couple of years but we have a much better sense of what that is to make Decision Making easier. But more important is we are starting to see a pickup of loan demand. It is a little more balanced for example, looking at Consumer Lending doubled within a couple of categories they are still strong but were starting to see other types of lending pick up as well a recent example is home equity has begun to recover and our sense is Community Banks can purchase of pay in that kind of lending at a greater rate so maybe at that 2. 5 four 3 . The question was do we think the fed is giving more flexible with the inflation target . That is not something that we discussed yesterday in the meeting. I can answer that question with my own view but i dont think they have changed their guidance there is uh bit of flexibility but i suspect that judgment will be made on the specifics clearly one of four temporary reasons that could be a reason to allow it to continue but that is my view not of the committee has been met peter barnes with fox business. Is there anything else there that you worry about that keeps you and your colleagues up that night . To knock the recovery offtrack . We have seen bad weather. Ukraine in. Other events. Yes. One of the things that we have discussed is the upside and Downside Risk and with the list of the Downside Risks, geopolitics is writeup there. It is not just the military action although that is part of it but the crackdown on credit in china. It is something we applaud your is necessary but it is tricky to negotiate in china is extremely important to a global economy. Also watching the title of regulation as well. That is related in the sense in europe there are still stress tests under way that european banks are a little slower than the u. S. Wants to implement new capital and liquidity requirements. And it is a potential source of economic weakness if not handled delicately. But none of these were big enough concerns to tilt the of forecast. On the other side there are potential reasons for optimism. One that we kept circling back to is the possibility we will start to see more spending from wealth. We have seen a decent appreciation in home prices so homeowners feel a little better off than we have seen some in in equity valuations and it may be possible consumption could be better from a fairly conservative forecast. Wall street journal. To what extent did it to see any change of the underwriting or lending standards . You talk about the Regulatory Environment being more stable but is that constraining or given those other things about default rates there has been some descending . Listening . I think the bulk of the conversation, the consensus of view is it is a little tougher to get a loan now than it was part merely because of the new mortgage rules that went into effect. The average guy goes course for people getting mortgages are higher than they were last year as a result of the new regulation. In terms of other lending may be a little easier to get a Business Loan than it was maybe a straight up a bank loan than it was but mortgage lending is an important part of our business and it is tougher to write those loans now. Reuters. Benching reinvestment, what is the essence of stopping reinvestment before the rate hike or after . I am not sure i enter stand the question. I get it. It is about time being with sending reinvestment with the Balance Sheet when the bonds roll off. Does that, before or after the first rate hike . It is just barely before. The range of you when the first hike is coming, to see it in the Second Quarter quarter, led the bull clarinda third and Fourth Quarter 2015 and one expecting in the First Quarter of 2016. Most of us agree that three investment is likely to win to in the middle of 2015. It would be just in front of the first rate hike. Looking at the fed exit in totality going into this unprecedented extraordinary rescue of the economy running up the Balance Sheet and now it is beginning it process to accept and unwind it says under charter territory. Just as the crisis was the exit will be. Any sense of the level of confidence with the feds ability to do this . And talk about the chinese with their tricky situation and it will also be tricky for the fed. I think were more confident than we were before or that we have been in the past because the fed has introduced new tools to manage the exit and the first repo facility that there is an appetite for that. What that does is gives the fed the ability to keep the security of the Balance Sheet even if the excess reserves are drawn down to give them access to cash from other sources. That gives them the flexibility and that there was an end a concern expressed by a the committee and accuse them of flexibility to gracefully exit and to avoid any shock. Febris some thought of the markets been to care about that . What did you think about that . Is there a danger of suddenly and later . The question is about the recent remarks in of a speech may be a little worried that theres so little volatility and Interest Rates are directed lower and to it could be a sign of excessive risktaking and that is something we discussed yesterday. We went back and talked not only with federal institution but those of us who have Capital Markets groups to get a sense of where our customers are as well. Hand to while there are some modest indications the spread of the highyield corporates suggests the appetite for risk but in some areas that they could have interestrate portfolios because the regulators have done a very good job to make people be aware of the Community Banks of the sharp rate hike and what that might do to their investment portfolio. So while low volatility and low Interest Rates could be an indication of risktaking , and again it is difficult to find it. Were not seeing signs of longer sells for our customers. Any of their questions . Date you very much. [applause] [inaudible conversations] the week the senate ended on a bipartisan now with an agreement between sanders and mccain on Veterans Health care. We are joined by the editor in chief for will call. As this bill possibly comes to the senate floor next week what is the reaction so far and what are the obstacles in the senate handed dash house . Senator mccain is a decorated war veteran and has respect not just on capitol hill but in the Veterans Community his blessing on this legislation does give a fairly clear path Going Forward so not windage this will all go to obama is dusk but the house would like to see chairman miller from florida right his legislation and take of look at some serious allegations as to what happened that could slow down to make it to the president in addition the house says there would like to see some sort of violence for veterans to get private health care while they are waiting. That could mean that it could slow down but in the senate bebel save they are glad the agreement was forged. Host they may also a take of Student Loan Debt announcing a measure that democrats plan of the student loan plushy in june. What are they proposing . Go over way to interest lower Interest Rates. You have to look at everything the senate does has the election in your plush. But they found that successful in 2006. We are looking at how they can check out the signature domestic achievement of the president s legislation, how have they been doing a little bit debtor in recent months. So you have seen is focusing on them and with pedagogy and now this issue, a lot of questions about it. The rollcall reporters were told as they left the private briefing on the hill earlier this week that they didnt feel like the collect the administration was really giving them forthcoming answers. Senator mark cook is a republican from illinois and he felt like bergdahl was a deserter. So what the president out of town during the celebration in normandy, this is now him coming back to washington for the coming week and youre going to see a lot more focus on this. I expect a lot more criticism from republicans were not happy about the entire deal. We have the editor in chief at rollcall, you can read more and follow her on twitter area thank you for being with us. Thank you for having me. Tonight on cspan2, deputy National Security advisor on the international communitys response to the russia and ukraine conflict. In a discussion about europes Economic Future. And later, john podesta. Does this met with the founding profit of the church of jesus christ of latterday saints. The earliest account that we have of the first vision occurs in a book that he began writing in 1832 in the front part of the book he wrote a personal history about his life and in this history he talked about the history that he experienced welders earlier. He had clerks at work running forehand and we finish with this project and we will have about two dozen volumes about 500 pages per piece. This we can learn about the rich history and literary life of felt like city utah, saturday at 6 00 p. M. Eastern on booktv and sunday at American History tv. Cspan2 provides live coverage of the floor proceedings and key Public Policy events and every weekend, booktv, the only Television Network devoted to nonfiction books and authors. Cspan2 is created by the cable tv industry and brought to you as a Public Service by your local cable and satellite provider. Watch us in hd, unlike us on facebook and follow us on twitter. Today the Brookings Institution held a conference on the security and future of europe. This talk is 45 minutes. Weight is an element am i hope you had a chance to enjoy some lunch. And they are our limits to the vast enjoyment, but we hope that you had a great lunch. We are extremely pleased to have tony blinken here to finish off on our annual conference for us today. Tony doesnt have an immense amount of time because he has to leave at about 1 15 p. M. So i want to get this is under way as quickly as possible. We are so privileged to have him here given all of the things that are obviously happening on the agenda. Obviously the president and everyone is traveling in europe and he probably has a few things to do manning the office and holding down the fort, as everyone offsets. But we are so delighted with tony who agreed to give our keynote because he has been such a longstanding supporter of many brookings activities. Hes a fellow think take contributor and also in some sense president at the center since 10 years ago. And so there is a direct correlation there as they Work Together on the european front with very good preparation with other issues and then to work as a senior director for the middle east. So tony is probably keeping him very busy. Many of you came back to washington at the beginning of the Clinton Administration with the National Security council staff. He became the Deputy Assistant adviser when he moved to the white house and so tony has a very long record of advising people and so i think we should all pay particular attention to some things that he has to say today. And now we are asked to go back to his deep transatlantic routes and talk about the effect of this crisis. So tony, thank you so much. [applause] thank you all so much. It is always great to be back at brookings. So many good friends and colleagues here, so many people including phil and others. Also an institution and the Previous Administration and future administration relies upon this on a daily basis for intellectual capital, which we dont have an apparent anomaly on. So its wonderful to be here, particularly good to be involved with the senator from Kings College and i appreciate you all hosting ever so much. I thought that i would try to trace where we are with ukraine by going back and tracing how we got to where we are. And obviously this is a very active issue as we gather here today, there is a lot going on in europe with the president and his european counterparts and with president Vladimir Putin and this will be very much as always in the headlines. So i want to start by going back. If we go back to the protests that began, its fair to say that while the catalysts for the protests for change basically reversed themselves on the Association Agreement with the european union, something that europe expected, the United States expected, russia expected and the ukrainian people expected. And that was the catalyst and i think what we saw there, and that was a profound sense of disenfranchisement against so many ukrainians for my loss of life with corruption and with technocrats who are suing the countrys resources and economic stagnation and the lack of opportunity. These all came together and then we had the catalyst of the 180 on the association and then we have russia and the actions and i think it can be said russia used its greater size and its wealth to try to bully and intimidate us and to use its influence through forests. We all know the series of events that took place with the annexation of the crimea in the build up of Russian Forces in the covert support to arm separatist buildings and the support for illegal referendum. This includes the tripling of the price of gas to ukraine as well. All of this is fueled by a propaganda machine. These onto profound ironies. First they enjoyed far greater freedoms than the ukraine and russias own citizen under president Vladimir Putin. And second the extreme form of federal is that russias exhume pose is exactly what they exert and russia. The stakes for the United States were threefold. So if you go back to the it was a part of the Munich Security Conference and that was the speech that laid out the idea of this reset, but the Vice President at the time has been a clear difference in Going Forward and maybe the most important is the profound reduction of this and that was challenged by russias actions in the ukraine. So is the principal in the 21st century that we are drawing borders by force. Undermining the territorial integrity of the democracy and that is something that needed a swift and stern reaction. And finally there was something particular about the situation in the ukraine is critically important and that goes back to. And the soviet union fell apart, it left many successor states with Nuclear Weapons and they all agreed to give up their Nuclear Weapons, one of the great achievements of the latter couldnt administration. But it wasnt prepared to do that until they had a Firm Commitment by the United Kingdom and the United States and the reported to guarantee just that. The idea that this piece of paper could be in effect on a by the russia into ukraine, profoundly called into question what message this would send that might be considering Nuclear Weapons as a terrible message to send and i think it can be looked at it was met with a violet reaction. We work hard to de escalate the crisis and bring the parties together and the Vice President was constantly on the phone with the then president and he was deeply engaged with his European Partners as well as with president Vladimir Putin and the objective is to see if we can forge a diplomatic agreement for a way forward the results of crisis peacefully. But once they went into the crimea, our policy shifted and the president sent three very clear directions to befall this day. First we need to isolate russia and then we would support the ukraine and third we would reassure our partners. So let me spend a few minutes on each of those. For some regard to russia. The goals were simple and straightforward with the cost that russia had taken including taking further irresponsible actions and we hope to shape the decisions that the russian government would operate in Going Forward. This involved in the first litany of things that happened immediately following the incursion into crimea and the efforts in the United Nations to isolate russia politically and we saw that with the Security Council and with china not siding with russia were russia found itself in we rejected the referendum that took place in crimea and also in the east and even with Something Like that st. Petersburg economic conference and this just in happened, it took hard sustained focus work starting with the president. So some people say they didnt have to go to a g8 meeting with the g7 issued a tough statement or there is a u. N. General assembly. It is significant and it matters because one way that they defined power is by the geopolitical standing and influence the russias able to obtain in undermining russia politically and isolating at an even more significant were the measures they took to isolate russia economically. And this includes other Key Countries for two reasons. First, the Practical Impact of being able to impose sanctions is much greater. That second, the political impact is also reinforced it reinforces the sense of isolation and so i think as you all know we engage in the process with restrictions on doing business with key figures in russia and also the ukraine and we have targeted sanctions and six members outside of the government, 11 ukrainian separatist and we deny export licenses for military technology but creates a climate of uncertainty that actually imposes costs without having to pull a sense of National Identity is deeper than it has ever been. It is true that in the shortterm the actions that russia took in so forth, there are the unintended consequences and what message do their actions in the ukraine and this includes chechnya and pakistan and other countries. This could open a can of worms and then finally, when you think about how to define power or how president Vladimir Putin sees power, it is probably a combination of two things, russias geopolitical influence in its economic strength. And indeed, there was a recent survey taken in russia where the russian people were asked what would be the two Top Priorities and they were very interested in the results. They were evenly split. International influence and create conditions for individual prosperity. So by russias actions in the ukraine, both of those priorities are in profound jeopardy and indeed, so is president clintons contract to his deliverance of the prosperity. So there is a way out. Integrate russias economy, diverse and diversify away from fossil fuels and that remains ultimately from president putin wants to pursue it. And they are left with few choices in terms of sustaining power and there will be a strong incentive on president putin to play this card in order to produce a total of shortterm support evaporates as people understand the cost to it so that is the danger and certainly the hope for the entire administration and i will come back to that briefly. In the second line of effort that we have pursued is an equal effort that was put into Building International support led by him in a very systematic way. We produced in economic support package with the imf and others for 27 million over two years. Its critical with Energy Subsidies including macroeconomic management and competitiveness and strengthening the banking sector, tackling corruption and increasing Energy Efficiency and security and this was anchored by a 17 billiondollar imf agreement which was achieved in record time and then there were another 4 billion from other countries and the world bank and the Loan Guarantee on low income families. So separate and apart from that we have been pursuing this to the ukraine, u. S. Technical support with political reform, Capacity Building and anticorruption programming and etc. And then most recently we have seen election support from the United States from europe and others. Its worth commenting that this was a remarkable achievement considering the duress under which it was conducted. It was most free and Fair Election as an independent country. And we would often marvel at the irony including how to be disenfranchised because they were the very people creating this disenfranchisement. Most folks in this room are too young to remember this, but there was a wonderful movie when i was growing up call Blazing Saddles by mel brooks and theres a great scene where the sheriff is surrounded in the house by the bad guys he comes out of the House Holding himself hostage and saying this. The president was determined hearing from many allies and partners and listening to the deep concern that day had faced with russias actions to take immediatee0] nk3 steps to reassure to bolster the article five commitment that lies at the heart of nato. What we have done is produce a virtually continuous air land and sea presence in to the reaches of nato. In the immediate to send additional f16 to poland and f16s to the baltics and rotated chips into the black