>> and now senior white house economics advisor lawrence summers. in a speech last week before a group of economists he talked about the administration's economic stimulus plan and

warned of higher higher employment rates. >> fred, thank you very much for that generous introduction. you saved what was most important, my service to the peterson institute for last. it was interesting the way you characterized my background. i came to washington and on your description learned about the economics of financial crisis and then i returned to harvard and learned about politics. [laughter] >> it's good to be back to the peterson institute. i've updated what i used to say during the clinton administration. during the clinton administration i would remark on

the fact that keynes had talked about everything policymakers did was just a distilled frenzy of an academic scribbler and i would comment nowadays it was a reflection of a fax coming from a powerful and influential think tank. that reference to a fax seems very dated even eight years later. for me, it's still in response to an email. perhaps if i was younger it would be in response to a tweet from a think tank. in any case, we have over time acted more wisely as a country because of the work that has did not done at the peterson institute, and i might say we have made better decisions in international economic policy because of the contributions

that fred has made to the debate. note that was carefully phrased to make clear that i didn't always agree with fred's contributions to the debate on international economic policy. today i want to provide a progress report on the obama administration's efforts to rescue and rebuild the u.s. economy. i'll begin by talking about where we were as the president was taking office, what we've done and where we are today. and i'll conclude with some observations on where i think we are going. beginning last january, though only a half a year ago it's easy to forget how far we have traveled. when president obama assumed office, he faced the most serious economic and financial crisis of any president since franklin roosevelt.

typical of the prevailing sentiment was paul krugman's warning let's not mince words this looks an awful lot like a second great depression. the economy was in free-fall at the start of the year with no apparent limit on how much worse things could get. over the three months ending in february, the economy lost 2.1 million jobs, the largest three-month decline by a factor two since the second world war. g.d.p. was declining over a six-month period at an annual rate of close to 6%. and even before any policy changes the budget deficit was projected in 2009 to be well in excess of a trillion dollars. financial markets suggested significant risks of implosion. it looked at fact-tale probabilities as calculated from

options. they suggested a better than 1 in 6 chance that the dow would fall below 5,000 at some point during 2009. markets were expecting 38% of investment grade corporate bonds to default within 10 years. municipalities faced tremendous difficulties issuing new bonds to the point where munni bond rates which is supposed to be below treasury rates because of the tax benefits soared nearly double treasury yields. fear was widespread and confidence was scarce. traditional measures of consumer and business confidence fell to low levels not seen in decades. the anxiety could be measured in one -- in one of many ways. to take one modern indicator, google searches for the term "economic depression" were up

fourfold from their baseline level. and something similar was true of mainstream media references to economic depression. that is what the nation faced just six months ago. in addressing this crisis, president obama started from two main premises. first, the most immediate priority was to rescue the economy by restoring confidence. which depended critically on breaking the vicious cycle of economic contraction and financial failure and financial failure and economic contraction. second, to assure confidence, the recovery from the crisis would be built not on the flimsy foundation of asset bubbles but

on a firm foundation of productive investment for long-term growth. the president was clear from the beginning that these two tasks needed to be dovetailed. that confidence in our ability to rescue the economy depended on a sense of our commitment to reform and a vision for a rebuilt economy. the economic problems that confronted the united states as president obama took office were of a distinct character. this was not the standard post-world war ii recession in which rising inflation led to monetary contraction which led to economic contraction. nor, was it the kind of crisis frequently experienced in emerging markets and that fred

referred to in his examples of the 1990s in which a country experienced a sudden loss of external confidence forcing adjustment and demand contraction. indeed, the dollar strengthened over the second half of 2008. rather, the crisis was qualitatively similar to the crisis in japan after its asset bubble collapsed, the early stages of the great depression and other major domestic financial crises in which asset bubbles burst, credit flows contracted and deleveraging reduced spending. we on president obama's economic team -- we're very much aware that there were few, if any, examples of success in rapidly

restoring economic growth and financial stability after such broad-based financial crises. we concluded that past failures were a reflection of insufficiently aggressive action taken too slowly and vowed that our policy response would be neither too little nor too late. the administration decided as a first priority in focusing on the rescue of the economy to reverse the vicious cycle by directly supporting incomes and a return to financial stability. our policy started with a major

commitment to fiscal stimulus. economists in recent years have rightly become skeptical in normal times about discretionary fiscal policy and have regarded monetary policy as a better tool for short-term stabilization. our judgment, however, was that in a liquidity trap-type scenario of zero interest rates, a dysfunctional financial system and an expectations of protracted contraction, the results of monetary policy were highly uncertain; whereas, fiscal policy was likely to be potent. we also concluded with monetary policy being used enteretcally to use all available tools to

move the economy forward. while in the context of a problem that appeared significantly smaller at the beginning of 2008, i had advocated stimulus that was timely targeted and temporary. our analysis of the situation at the beginning of 2009 suggested that the stimulus needed had to be speedy, substantial and sustained. ultimately, the president proposed and the congress adopted the largest program of fiscal stimulus in the nation's peacetime history with the total cost of 5% of g.d.p. the size of the stimulus reflected a balance of several considerations. the magnitude of the output gap the economy was facing, the difficulties of ramping spending up and then ramping it back down

after recovery in a high budget deficit environment. the question of how much could be spent both quickly and productively and the recovery act was one of several initiatives by the administration that would have an important impact on to the state of the economy. as to composition, we quickly concluded that in a world of substantial uncertainty and one in which it was important to get stimulus started quickly, a diversified approach was appropriate. that's why we settled on a program that emphasized support for household consumption through tax cuts and expansions in unemployment insurance in food stamps, support for small business through lending and expanded access through capital, support for state and local governments and investment in priority areas like healthcare, infrastructure, clean energy and education.

we pledged at the time the recovery act became law that some of the spending and tax effects would begin immediately. we also noted that the impact of the recovery act would build up over time, peaking during 2010 with about 70% of the total stimulus provided in the first 18 months. now, five months after passage, we are on track to meet that timeline. more than $43 billion in immediate tax relief has reached households and businesses. another $64 billion has been channeled into the economy through aid to state and local governments, expansions and social programs and spending on education, housing, and transportation projects. in addition to the amount that has already been paid out, another $120 billion in spending

has been obligated by the federal government and so is calling forth contracting for projects and beginning to work its way into the economy. as of may, tax cuts, fiscal support for state and local governments and family assistance programs in the recovery act have both boosted disposable income by nearly 2%. in addition to provide fiscal stimulus, the administration also is set to work on addressing the origins of this crisis, a financial system in severe distress. there were many. from across the political spectrum. who proposed precipitous action to universalized guarantees or nationalize major financial institutions. there was an even larger group who believed the policy needed to start from the premise that the financial system as a whole

was substantially insolvent. even alan greenspan asserted it might be necessary to temporarily nationalize some banks in order to facilitate a swift and orderly restructuring. after considering all the options, secretary geithner led the administration in a somewhat different approach. we recognized the irreversibility of such actions as nationalization. we recognized that there was a very substantial risk that government could be a source of fear rather than a source of confidence. and that strong actions taken towards one institution could have major implications for other institutions. we also recognize that a substantial part of the flow of credit in the american economy did not depend on banks but depended on the shadow banking system including the securitization of consumer financial assets such as

mortgages. our approach sought to go as much as possible with the grain of the market. sought to move away from earlier approaches that treated the financial system as a monolithe and instead provide a basis for differentiation among financial instruments and financial institutions. to tackle the foreclosure crisis and reform the nation's financial regulatory system. central elements of the plan included the stress test process and the capital assistance program which sought to add confidence to the financial system by providing clarity on the situation of individual institutions and to increase capital in the banking system by

calling forth private capital. since the release of the stress test results, banks have been able to generate over $80 billion in equity and to issue over $30 billion in unguaranteed debt. another element was a range of measures designed to improve price discovery in the securities markets and jumpstart the securitization markets which in turn should operate to increase lending throughout the economy. we sought to support the housing market by providing significant tax credits for first time homeowners in the stimulus bill putting in place a set of measures designed to offer assistance to millions of homeowners by reducing mortgage payments and preventing affordable foreclosures. although we still have a long way to go, treasury plan is now moving swiftly with approximately 160,000

modifications begun so far and the pace accelerating. we also recognize the importance of financial regulatory reform as an adjunct to confidence. the administration recognized at the same time that the risk of collapse was not limited to financial institutions. a prospect of uncontrolled bankruptcies in the automobile industry would mean thousands of potential job losses in manufacturing and ripple effects throughout the economy. we stayed out of day-to-day operations but did demand fundamental restructuring, overhaul of management and business practices and sacrifices from all stakeholders. the president also recognized the important global dimensions of the economic crisis. as of last winter, centrally all

of the world's major economies were contracting at once for the first time since the second world war. the combination of the chronic current deficit and the net export growth is usually a key part of the recovery from financial crisis underscored the importance of global growth for the united states. the president insisted that restoring global growth be added to the london g20 agenda and sought with considerable success to encourage other countries to stimulate their economies as we were doing. we worked with british prime minister gordon brown to lead the effort to more than triple the resources available to the imf with the objective of maintaining the flow of capital to emerging markets at a tense time. it was a period of substantial action over the last six months.

where are we today? if we were at the brink of catastrophe at the beginning of the year, we have walked some substantial distance back from the abyss. a majority of businesses now report that they expect improved market conditions. the opposite of six months ago. consumer sentiment has also begun to improve. those options that we're saying 1 in 6 of a dow under 5000 this year are now saying it's closer to 1 in 1000. the implied default rate on investment grade bonds has fallen by a third. municipals issue bonds in much more normal ways. the g.d.p. contraction is slowing and many private

forecasters expect to see positive growth in the second half of the year. and, yes, if you look at the rate of searches for economic depression on google or you look in the mainstream media, it's back to normal baseline levels. to be sure, unemployment is substantially higher and job loss has been greater than most observers predicted last month unemployment is likely to rise. this is obviously a major area of concern. but contrary to a significant amount of contrary, this does not provide a basis that the recovery act is falling short of its goals. both administration and independent forecasts predicted that only a very small part of

the total job creation expected from the recovery act would take place within six months. indeed, the council of economic advisors study predicted that only 10% of the total job impact of the recovery act would take place during calendar year 2009. given lags in spending and hiring, the peak impact of stimulus on jobs was expected not to be achieved until the end of 2010. there's another aspect of the job loss statistics that's worth commenting on. it is noteworthy that the higher than forecasted job losses are not associated with substantial weaker than expected g.d.p. rather, it appears that a given

level of output is being produced with fewer people working than historical relationships would suggest. an economists language -- there was a fight whether i was allowed to say this when i worked in the white house. there's a significant residual in the law relationship. the unemployment rate over the recession has risen about 1 to 1.5 percentage points or more than would normally be attributable to a contraction of g.d.p. of this magnitude. to put the point differently, normally in economic downturns, productivity decreases as firms keep workers employed, even as the amount of work to do declines. this pattern of deteriorating productivity has not been a feature of the current recession. in fact, productivity has

actually increased as it did in the last. i don't think anyone fully understands this phenomenon. one positive -- one potential explanation is the greater financial pressure on firms in this recession has led them to do anything they can to shed cash flow commitments by laying off workers at a more rapid pace or leaving jobs vacant when people leave. perhaps the expectation that the recession would be lengthy has also contributed to this behavior. i emphasize these points because they suggest the importance of the structural dimension of economic policy. if unemployment and the surprise part of the increase in unemployment reflects more than just weak aggregate demand, the case for measures to increase the flow of credit and get banks

lending again, as the administration has pursued, has reinforced. these facts also speak to the importance of structural changes that restore long-term confidence including job-creating investments in education, infrastructure, renewable energy and energy efficiency. substantial progress has been made in rescuing the economy from the risk of economic collapse that looked all too real six months ago. while employment continues to contract, the available indicators suggest that g.d.p. is on a close to level path with prospects for positive growth to commence during this year. factors supporting growth include the growing impact of both fiscal stimulus and measures to support the financial system. the wealth effects of stronger asset markets, inventory

replenishment and the replacement cycle for automobiles and other consumer durables. a critical question for the next year will be whether or not g.d.p. growth accelerates to the point where employment growth kicks in, leading too a mutually re-enforcing positive cycle of income and spending increases. towards this end, it will be essential to continue vigorous implementation recovery program and measures to support housing and financial markets. experienced during the u.s. depression and in japan during the 1990s teaches the danger of premature declarations of victory and withdrawals of stimulative policy. for quite some time the united states will be living with the consequences of an overleveraged economy. the common desire of households, businesses and financial institutions to reduce their borrowing and improve their

balance sheets will act as a drag on spending and growth. while painful, these adjustments are essential to laying a found foundation for future growth. it is, however, appropriate that while the private sector deleverages, government through fiscal policies and through central bank lending must cushion the adjustment process by providing public support for spending. if it is essential that stimulative policies be sustained for as long as necessary, it is equally essential that they be sustained no longer than necessary. that is why the president has repeatedly emphasized his commitment to containing the long-run federal budget and reigning the debt to g.d.p. ratio once the economy has recovered. the president's budget contained

numerous proposals on both the revenue and spending sides directed at long-run discipline, fiscal discipline. containing growth in debt is a central objective of the administration's healthcare reform proposals. and the administration has supported the federal reserve's desire to assure that it has the monetary policy tools necessary to manage an eventual decrease in the size of its balance sheet. a sound macro economic policy framework is necessary for the confidence on which economic recovery depends. but it is not sufficient. the rebuilt american economy must be more export oriented and less consumption oriented. more environmentally oriented and less fossil energy oriented. more bioand software engineering oriented and less financial oriented. more middle class oriented and

less oriented to income growth that disproportionately favors a very small share of the population. the president articulated his philosophy at georgetown two months ago. just as a cash-strapped family may cut back on luxuries but will insist on spending money to get their children through college, so we as a country have to make current choices with an eye on the future. we don't invest now in renewable energy or a skilled work force or a more affordable healthcare system, the economy simply won't grow at the pace it needs to, in two or five or ten years down the road. if we don't lay this new foundation, it won't be long before we are right back where we are today. yes, the president has an ambitious agenda. but it is an agenda comprised of measures that lay a foundation for future prosperity, and i

would suggest that provide for the confidence on which the current recovery depends. without comprehensive health reform, there is little prospect of convincing markets that the long-term growth in federal debt is under control or convincing businesses that the united states is the most competitive place for them to invest. without financial regulatory reform, we run the risk that the next recovery will be distorted and perverted by asset market bubbles just as were the last several. without an expanded and improved infrastructure, we risk having growth constrained by lack of capacity and by bottlenecks that exacerbate inflationary pressures. and without comprehensive energy policies, we increase our vulnerability to the energy price gyrations that have caused so much economic pain.

.. as a program of rebuilding the economy moves forward. the american economy is again progressing. thank you very much. [applause] >> and we're commit today a -- take you live now to the national press club for remarks

by republican national committee chairman michael steele. he's expected to give his perspective on president obama's initiative to provide universal health care insurance for all americans. donna leinwand, president of the fast press club with introductory remarks. >>i'd also like to welcome those of you watching on c-span. we're looking forward to today's speech and afterwards, i'll allow as many questions as time permits. for our broadcast audience, i'd like to explain that if you hear applause, it may be from the guests and members of the general public who attend some hour news makers and not necessarily from the working press. our guest today took a twisting path to politics. at johns hopkins university in baltimore, michael steele was class president and a member of the fencing team, but nearly was

expelled when his social life eclipsed his academics. he later studied forth priesthood atville know have a, before turning his attention to law at georgetown university. a corporate finance attorney by profession, mr. steele founded his own company, the steele group, a business and legal consulting firm. formerly lieutenant governor of the blue state of maryland, he mounted a very strong challenge for the u.s. senate seat in 2006, losing out to ben cardin. in january, mr. steele was elected chairman of the republican national committee in a close-fought battle that went six rounds of balloting. he is the first african-american to hold that post. with a republican party in the political wilderness, mr. steele has jostled for a prime spot in the conservative limelight with such figures as rush limbaugh, and sarah palin. today, he has the stage to himself to talk about the

republican alternative to the democratic plans of president barack obama and the party's congressional leadership regarding the critical subject of health care reform. raising the stakes of this debate, president obama has promised a health care bill by the end of the year. the non-partisan congressional office said democratic plans do not reduce the spiraling cost of health care programs, as the president has said he wants. this wednesday, the president will be holding a primetime news conference to try to take command of the health care agenda, following criticism of his input or lack of it from democrats on capitol hill. mr. steele now has the chance to get ahead of the president and seize the agenda for republicans by putting forward an alternative to what the democrats are proposing. please join me in welcoming michael steele to the national press club. >> thank you very much. good morning. it's a real pleasure to be here

and i appreciate the national press club offering this opportunity to address one of the most fundamentally important issues in generations that our country has to face. president barack obama is a good man, and cares deeply about this country, but he is determined with an unprecedented single mindedness to transform it into something none of us would recognize. candidate obama promised change. president obama is conducting an experiment. he's conducting a dangerous experiment with our health care and with the quality of our lives. he is conducting a reckless experiment with our economy and he's conducting an unnecessary experiment with our tax dollars, experiments that will transform the very way of life of our country and its citizens. the president is rushing this experiment through congress so fast, so soon, that we haven't had a moment to thousand if it would work, or worse, to think about the consequences to our

nation, our economy, an our family if it doesn't work. the barack obama experiment with america is a risk our country can't afford. it's too much, too fast, too soon. surveys show that a solid majority of americans are concerned that president obama has no strategy to reduce the deficit. perhaps that is because president obama's strategy is to increase the deficit. in only his first six months, this president's first budget has sought to take on nearly as much debt as we have had taken upon ourselves in the entire history of our country. the deficits for this year alone will be the highest in u.s. history. nearly five times as much as it was just two years ago. his economic experiments have left all of us and generations to come with a staggering bill and the obama experiments are not working. so far, the experiments in that economic laboratory called congress have simply failed or

blown up. president obama told us that a stimulus package would keep unemployment under 8%. it's down at 9.5%. and now he tells us that unemployment will go well, to 12% anyway. that experiment cost us $787 billion. to 3 to understand the enorm of that number, consider this. the interest on the stimulus package, the interest alone, cost us nearly $100 million every day. president obama has committed to borrowing trillions from foreign creditors. in return, they get the lion's share of our future economic output. in short, our children will be working to improve standards of living not here in america but for our foreign creditors. let me quantify that a bit. in a typical year, the total profits for all american businesses amounts to 6% or 7%

of gdp. president & 's own budget projections -- >> that means that even assuming relatively benign interest rates, which is no safe assumption with all the inflationary policies, the president has pursued, roughly 5% to 6% of our gdp will go to paying interest on our federal debt. that means, in short, capital roughly equal to all the business profits in the country, capital that historically has funded the expansion of our economy and enabled us to improve our standard of living, will go instead to our creditors, largely china and opec to expand their economy and improve their standard of living. mr. president, you're putting your party's entire big government wish list on america's credit card. but that card comes with a bill. it is more debt our children will have to pay, because this

reckless administration has an unrestrainable urge to splurge. when president obama faced a credit crisis, a struggling economy, a housing bust, bankrupt auto companies, wall street failures, whatever the problem was, he re responded by spending, spending, and more spending. and now our president is proposing more did you not, morrimore risk, more experiment. his next item is a pull at this trillion dollar experiment with our health care, including a government-run health care plan. it not only risks our economy, it risks every american's health too. president obama says he wants to reduce health care costs. well, republicans agree. health care costs waste too much. health insurance premiums have risen three times faster than wages. health insurance is costing families and businesses too much and certainly we have to fix that. but here's my question. how come the democrats' plan to

save money will cost us more money? how come their plan to reduce health care costs will cost us trillions more in tax dollars. democrats boast that their plans cost only about $1 trillion. now you need to consider the absurdity of that idea alone. but that assertion is based on a deliberate ms. reading of the date -- misreading of the data. the non-partisan congressional office, projections to which they refer, are for the next 10 years, but the democrat hes' plans are only fully implemented towards the end of that window. according to cbo's best plan, once this plan is fully implemented, it will cost hundreds of billions of dollars each year. in the case of the house bill, $202 billion in 2019 alone. and note that i said best guest. the thousand plus page house bill was not released until less than 48 hours before markup and

cbo said that it still had not completed its revenue analysis. for example, cbo stated, we have not yet estimated the administrative cost to the federal government of implementing the specified policy, end quote. in other words, the staggering costs estimated by cbo does not even include one of the biggest expenses in the bill. only washington could make saving money more expensive. it doesn't matter if your insurance charges you more through the front door in higher premiums, or whether president barack obama charges you more through the back door in higher taxes. it's the same thing. under the obama-pelosi plan, costs are going up, and you, the american people, are going to pay. let's just use common sense here. when was the last time washington ever made anything cheaper. or cost less. if you're a small business owner, you will see a tax hike on your income, your payroll,

and you were investments. all of which won't help you to grow and create more jobs. if you're a senior, you face $400 billion in medicaid and medicare costs. if you're working, you face $600 billion in new taxes. and they're just getting started, folks. some democrats are even complaining that they're not raising taxes enough. if you get health coverage at work, they actually want to tax your health insurance. but they're not finished. if you're thirsty, they're considering a 10% tax on a can of soda, and if you need a stronger drink, after hearing that bad news, i've got more bad news for you. they're thinking about raising the alcohol tax too. in addition, they're considering a new tax on employers equal to 3% of payroll, also under consideration is the value added tax, a sort of national sales tax of up to 1 1/2% or more. now foolish me, all this time i

didn't know raising taxes on something actually made it cost less. that's like those commercials that promise you can eat all the cake you want and still lose weight. who knew? a good doctor though makes a thorough diagnosis and prescribes a remedy that is specifically targeted at what ailes the patient. if you come this with a sore knee but are otherwise healthy, the doctor doesn't remove your kidney, put your arm if a sling and perform quadruple bypass surgery. and above all, for thousands of years, physicians have pledged to adhere to one principle above all others -- first, do no harm. we should approach health care reform in the same way. we must specifically target reforms at what ails our system. do no harm to what is right about it. in fact, p about our health care system is in very good shape and we should make sure those aspects are strengthsened, not

eliminated. currently $250 million americans have health he insurance, the majority through private insurance and polls show they are overwhelmingly pleased with their current coverage. second, america is home to the high of the quality and most innovative health care in the world. now, you don't have to take my word for it. ask the saudis receiving care at johns hopkins, the canadians at the mayo clinic or the british at mass general. or ask the committee that awards the nobel prize for medicine. over the past 25 years, the vast majority of honored researchers have been americans. so what is the diagnosis for what ails our health care system? the problem for which we must provide a remedy. in a word -- cost. we spend a colossal amount on health dare. over 15% of our gdp. the next highest industrial nations spend about 10%. and for that amount, in the aggregate, we have similar health outcomes as countries spending less, when measured by such metrics as life

expectancies. our uninsured are a symptom of that cost problem, a problem senator daniel patrick moynihan once characterized as health care costs disease. for certain, some of our uninsured have the means to purchase health insurance, but unusely choose not to in the hopes that well, they'll stay healthy and save money. others qualify for government assistance, but for various reasons, do not receive it. but for most of the uninsured, the problem is easy to diagnose. they just can't afford the insurance. yet, president obama's response is to make health care insurance even more expensive. let me throw another statistic at you. one that remarkably receives little or no coverage from the media as far as i know. according to the latest cbo estimates, under the house democrat version of the health plan, after it is implemented, the cost of insuring each additional individual would be nearly $30,000. and amount far greater than the

average annual cost of insuring an entire family. in fact, according to the henry j. kaiser foundation, the average cost of an employer health plan for a family of four is about $12,800. what's more, to add insult to injury, cbo tells us that every version of the democrat health plan, even after spending trillions of dollars, will leave millions still uninsured. the democrat plan does not contain costs. it shifts them to the taxpayer, to our children, and to future generations that will have to cope with this crushing debt. by implementing huge premium subsidies and establishing a government-controlled health care plan. in fact, the president's plan prescribes short-term pain relief instead of trying to fix the source of the pain. if adopted, that would be malpractice and this plan is likely to be worse than the plans those americans have now. don't believe me?

then believe president obama. on the town hall a few weeks back, president obama refused to pledge he would limit his family to getting the same cures and treatments his plub plan 0 would give the rest of us. now if the president doesn't have faith if his own plan for his own family, how can we trust this plan for ours? the american health care system should not be more like the european health care system, where patients who are over 70 are told no, you're too old for cancer screening, where sick people are told you have to wait in line for this test or that medicine. no thank you, mr. president. the president tells us that he just wants the government-run health care plan as another choice to compete with health care insurance you have now. he says you won't be forced to join but his plan does exactly the opposite. in fact, the president's proposal creates yet another government czar. what are we up to, 20?

who will push government run health care wile dictating to your private insurance company how they should operate, the insurance coverage they should provide and which health care services you should receive? now, we all remembered harry and louise. harry and louise helped save us from hillary clinton's health care experiments in 1994. this year, harry and louise have been replaced by another couple, harry reid and nancy pelosi. harry and nancy aren't really doctors, they're just trying to play one on capitol hill, by experimenting with health care and insisting on a big government takeover. now say you have a job in grocery business or office store or a hardware store. imagine if the u.s. government knocked on your door and said, hi, we're opening up a business right across the street, and it will be a government-run store, we came here to compete with you. and we're going to have to lower prices a little bit cheaper than

yours, because we're the government, and quite frankly, we don't have to pay our bills. we'll just leave them for your children to pay later on. how do you think your store will survive? how long do you think you will stay in business? how long would you have your job? when big government competes, one congressman said, it's like an alligator competing for a chicken. and the health care you have now is the chicken. simply put, experts tell us president obama and the congressional democrats' run plan could lead to 119 million americans being dumped out of their private coverage into a cheaper government run health care program. that's why they're forcing members of congress to vote on legislation to reshape the economy in a fundamental way before a single member of congress has even read the bill. now, i don't know how you read let alone understand over a thousand pages of legislative text in a few hours.

democrats are determined to shove this bill through without permitting any meaningful scrutiny. that's why they are cutting republicans out of the pro he is he is. -- process. the democrats have no intention to have a bipartisan bill. they never have. the president has arranged to have nice photo ops, but that's just about it. back in 1994, when hillary clinton tried to jam a massive health care bill down congress's throat, senator bob kerry, gave a speech on the senate floor in which he flatly stated that he would not vote for a bill that would have republican support. now, i'm waiting for a democrat, any democrat, to show that sort of com courage today and please done throw up the blue dogs at me. their press releases may talk about fiscal responsibility, but in the end, they have been nancy pelosi's he is most reliable voting block. and don't tell me that republicans are unwilling to support a responsible health care reform proposal from a

democrat. the very first major health care reform bill introduced this year was written by senator ron wide i don't know, not just a democrat, but a liberal one, but his bill had good ideas and has drawn as many as republican sponsors as democrats. republican support health care reform that addresses the biggest problem in our system -- run awe way cost. we don't need to spend more money on health care, we already spend more than the rest of the industrialized world. what we need to do is spend it better, starting with a third party payment program, that limits choice, and misal indicates resources -- misallocates resources. we wants the 60 million americans that have health insurance to keep that coverage. we want people to choose their own doctors and make their own choices regarding treatment option. we want to focus on health outcomes, keeping people healthy

through preventive care and promoting good fitness and nutrition. under the obama plan, the vast majority of americans will pay more to get less, it's that simple. we will spend trillions more, trillions, and the 260 million americans who now have insurance will have fewer options and worse care. and we still won't cover all of the uninsured. this is one sixth of our economy we're talking about. if we screw this up, it could last a generation. and congress is trying to do this in the next two weeks? they want to get a bill done in the next two weeks? this is -- this reckless approach is an ill-conceived attempt to push through an experiment and all of us should be scared to death. so slow down, mr. president. we can't afford to get health care wrong. your experiment promotes -- proposes too much, too soon, too fast.

your experiment with our health care could change everything we he like about our health care. and our economy as well. so it is time to stop the experiment with our economy and our health care and our future, mr. president. if you will only slow down long enough to see a better way. a better way of helping our families and businesses get hold of and bring down health care costs. republicans stand with the growing number of americans supporting the patient-centered health care reform movement. we believe of the patient centered health care reform movement offers the best way to reduce health care costs bottom up. with patients and doctors in control, not the government. the old top down washington senate system the democrats propose is designed to grow washington's power to restrict the cures and treatments your doctor can prescribe for you. the president wants to make health care more affordable, so do we, but republicans have a completely different vision of how to do it.

republicans support simple common sense fixes without the big washington experiment. obama, pelosi want to start building a colossal closed health care system where washington decides. so, mr. president, let's talk about some common sense reforms that the american people and their doctors can trust. let's have doctors and hospitals post pricing and outcomes. in this day and age, why aren't the costs of all tests, treatments, procedures and office visits, as well as effectiveness of treatments posted openly on the internet? that will bring down costs. and how about if we make health insurance companies compete with each other with simple, understandable contracts, and minimal benefit packages, so insurance is simpler, cheaper, and fairer. just like many banks are doing with car or home loans, and why

not put in place a simple, one page reimbursement form, so folks can navigate a little more easily. that will bring down costs. and let's protect doctors from frivolous expensive lawsuits, so they can work together with other doctors and patients if their communities to reduce unnecessary and expensive test procedures and costs. i appreciate the president's very brief flirting with tort reform. we'd like to welcome you back to that tort reform table, mr. president, because that will certain brings down costs. then we change the law so you can take your health insurance with you if you have to change your job. eliminating expensive and unnecessary insurance turnover. that will bring down costs. and we cut out the washington health care middleman, reducing expensive bureaucracy to produce big health care savings. that will bring down costs. let's support new paperless computer age health care i.t. systems to reduce the cost of health care management, as well

as reduce medical mistakes. that will really bring down costs. and let's make sure every american has equal opportunity to get the best value and buy the cheapest insurance, no matter where he or she lives, or horhe or she works for. let's change the law, so any american can buy the lowest cost insurance available nationwide, not just in their state, whether from insurance companies, businesses, church groups, college alumni associations or groups like aarp, who often provide it a lot less expensively. guess what? that will bring down costs too. and don't you agree that companies like target are best suited to bring down costs than any politician in washington? so let's use consumer buying power and washington buying pour power, to bring the cost of health care down. let's support a bipartisan idea, effective prevention, wellness

handy stacey management programs, because they will improve our health too. and that will also bring down costs. let's support bold new incentives for companies to develop new treatments and cures, because that is smarter than paying for a chronic, long-term illnesses we can't cure today. that will bring down costs. every american should also get a tax credit for their health insurance premiums. certainly that will bring downs costs. but further, under current law, employees not covered by health care plan, a group which disproportionately includes the working poor, cannot deduct the cost of insurance premiums. incredibly, rather than remedying that injustice, the democrats make it illegal for anyone to purchase a new individual plan. we believe in bottom up up health care savings for the middle class and the working poor. and here's another idea. how about we give small businesses the same cost saving break big businesses get by

helping them form small business health plans and small business health co-ops. guess what? that will bring down costs. then let's support tough new penalties against anybody who rips off the health care system, whether they are corrupt big insurance company executives, unethical physicians or patients or government pen pushers. guess what? that will bring down costs too. an one more thing. no lifetime health care benefits and insurance for congressmen who leave their jobs, unless and until everyone else in the country gets to share in the same benefit. that's the right thing to do. and it brings down costs. now, i know president obama has some tough challenges to get that, we understand that, and the president tells us, he doesn't want to spend more than we have, he doesn't want the deficit to go up, he doesn't want to live off borrowed money. but he also told us, he didn't want to run an auto industry. the president has insisted every step of the wave that his health

plan will not add to the deficit, but just last friday, cbo concluded that the obama-pelosi plan will add $239 billion to the deficit by 2019 and hundreds of billions of dollars there after. that means, according to cbo, not michael steele, the obama-pelosi plan does not do either of the two things the president swore they would do -- contain costs, and not add to the deficit. president obama justifies this spending by saying the devil made him do it. he doesn't want to spend trillions we can't afford, but he says he just can't help it, even though he says he believes in less spending, he says he has no choice but to spend even more. even though washington is on fire with spending, he said he's compelled to conduct this experiment with reckless spending and pour more gasoline on an already growing fire. mr. president, the time to stand by your principles isn't just

when it's easy. you need to stand by your principle with it is not easy. the time your character is tested is with doing the right thing is tough. :

>> in short, yes, you can. show washington who is really in control of america's health care. in america, we don't allow one man to roll the dice with our entire nation. we do not allow one political leader to risk our health care system and our entire economy. we do not allow one political group to gamble with the fate of generations. we have never allowed one political party to experiment with the future of our country. that is, until now. it is time to hit the pause button on this administrations regulus on the economy and our health care system. this type of expectation is not what america voted for. and it is time to put this experiment on the shelf. today the republican national committee is at unveiling a

multi-campaign america's about the risky experience that the president is conducting on our economy and our country. we are taking our message directly to you, the voters out there, through our new website, www.dot barack obama experiment.com your and your advertising such as the tv ad that we are launching today. so that you, average joe and jane, understand what is at stake and what this administration is about to do to you and your family and your community. we want you mobilize and we're going to mobilize voters to oppose further extermination on the economy, especially health care. voters may want health care reform, however, they don't want this kind of reform. today, we are faced with a lot of challenges. we are stymied with increased costs and burdens that some

can't bear. many democrats outside of the obama pelosi reid waxman, know that voters won't stand for these kind of foolish prescription for our health care or for ourselves. we do to. that's why republicans will do everything humanly possible to remind voters about the risky experimentation going on in washington and we all must do to keep members of the house and senate out of the laboratory. this is a time of great economic uncertainty. this is the moment when the very structure of the global economy with the depends on our economic might is being challenged. we will get through this global economic storm. but then we will have to compete and win in a new global economy that is going to grow dramatically in size and complexity in the next few decades. who is going to get all of that prosperity? america or someone else? who is going to own the new economy with more women and minority's, the middle-class

expanding and the entire workforce earning bigger paychecks as we build a wealthier world? who is going to own the future, the coming era of promising, the most powerful economic and technological growth the world has ever known? who is going to lead a world where health care is transformed into people live longer and healthier lives, building upon the most valuable resources on the planet, the human resource that transform nations and continents. who is going to settle a new global frontier of peace, prosperity and progress? i say we are. we, the american people. and i'm telling you there isn't anything before us we can't achieve, any challenge we can't overcome. so be optimistic, for the opportunity before you now dwarf the opportunities our parents had. there are numerical's of science to be found in america will find a. there are new jobs we cannot imagine and americans will

create them. there are new economic frontiers to be settled, and yes, americans will compete and win them. the greatest time to be in america, and american, is before us. all of us here today have a great and noble purpose. as our country calls upon each of us to rise to this critical moment and keep america the greatest and healthiest country in the world. thank you and god bless america. >> will go to some questions. if you have some more questions, feel free to pass them up here. mr. steele, is a morally acceptable for 30 to 40 million americans to be without health insurance? >> i don't know if that's a consideration for politicians versus a pastor. but what i do know is that it is important and imperative that the politicians, the political leadership get it right. it is morally wrong to saddle

future generations with a burden, a debt burden they cannot pay. it is morally wrong to stake a claim in the future in which the government controls your individuality, the choices that you make, and how you lead your lives. so i think that this question is a very important one, with respect to the 30 or so million people who do not have health care. we as a nation have committed ourselves to doing everything possible to help them. but we have to do it in such a way that we don't hurt others along the way. and this opportunity to fix, if you will, the system to bring those 30 to 40 million people into full insurance is a great opportunity we can't miss the north mess up. and our concern is that in a rush to try to get it done, we are losing greater opportunities to secure that future so that in five, 10 or so years we are not

facing something more catastrophic than just 30 million people without insurance. we're talking potentially under this plan upwards of so a hundred 19 million people are so being kicked out of the health care insurance that they currently have. and that's a moral consideration as well. >> why didn't the republicans when they held both houses and the white house to do something substantial to address the health care issue? >> well, i think that, you know, there were efforts along the way, certainly there was the medicare part d., regulation d., passage that the republicans did get through. there's always been a debate about that particular piece of legislation. but i think the other reality is, you know, the will to do it. and the pressures that have been mounting over the last few years have just grown so great, and i think the will is there now for the people to be involved in

this, as well as others. but i just think there has been just a general lack of focus on this issue by many in both parties. i've always believed that if you're going to do health care you have to do it right. you just can't do it partially. you can't have a conversation with just trial lawyers and insurance companies. you have to include patients and doctors. you can't have a conversation without including the pharmaceutical companies. you can't have a conversation about health care without including everyone who is touched by the issue. and in the past, that has not been the way we approached it. it's always been piecemeal. from both republicans and democrats, and i think i applaud the president with the desire to do this. my concern is the rush to do it. too fast, too much, too soon. we are not going to get this done effectively and well in the next 10 days. i don't think anyone in this room believes that and i know the people out in america don't believe it. and what will the bill look like? what kind of health or do you

get for something that's done in 10 days? when it took a year and a half for them to put the medicare system in place in the 1960s. a year and a half to put medicare in place, and were going to revamp the entire nation's health care system, one fifth of our economy, in 10 days. in 10 days. amazing. and so i think we all need to stop and get serious about what we are confronting here, and stop playing this washington game of russian roulette, if you will, with the livelihood and businesses and health care of our communities. >> wasn't as all dedicated in the last election and your side lost wa? >> i don't know who got sued, in the last election. yeah, we lost the last election. i get it. we lose an election and therefore we just now sit back

and let whatever happens happen? really? that's a serious question, someone asked that question? the last time i checked i was an american citizen. i didn't stop being a concerned american because i lost an election. all right? so i think the question is a little bit silly. because i think it's important for all americans right now, regardless of who lost into one. i know a lot of democrats who won last year are right now sitting there going what the heck is this, is this a change i voted for? i know a lot of democrats who won last year who are voting against were walking out on this legislation. i know a lot of democrats who won last year who are scratching their heads going, this isn't a bargain i bargained for. are the americans? i think the r. and that's why they are concerned. so for those of us who lost we are not giving up our right to be concerned about our country. and its prospects and its history and its health care.

>> when will the republicans propose the alternative legislation they have been saying since may that they have been drafting? >> there has been any numbers of effort by members of the house and the senate to put within the president's bill effect of changes or accommodations, if you will, to the totality of this process. now, you know, the republicans can get up tomorrow and introduce its own bill, but you and i know how washington works. the bill that matters is the one that the leadership puts in place, the democrats have the leadership. but it's tough to do when you have been locked out of the process. it's tough to do with your staff is not included in the draft. it's tough to do with the leadership is not included in the discussions. and then you are given a bill at the 11th hour that says here, you guys go vote on this this afternoon. and that's not a bipartisan

process. republicans have, as i mentioned in the text of my speech, have been working with democrats in the beginning of the year to put in place and crap, comprehensive bipartisan health care reform. legislation. and they have been stymied and they have been set aside and castigated as the party of no, we have put in that position or i'm here today, we are the party of saying no to expanse of government, no to an increase in taxes and spending. that's the know we are concerned about. we want to be, we want to work with this president. we want to be at the table. we want to work with nancy and harry. but they are making it awfully difficult when they don't even include members of the leadership and staff in the process.

>> do republicans still support the senator mccain's plan to tax high-cost employer coverage to finance tax credits to help the uninsured? >> that's something that the republicans and the house and senate are going to work through. i know there are different points of view on that particular issue. i stated very clearly in my comments that the idea of taxing health insurance premiums to me is not the way to go. i just don't think taxes work in this economy. i just don't think that is how you are going to solve this particular problem. but the republican leadership in the house and senate will work through with senator mccain and others, what is an appropriate form to take. and we will see when they come out. >> do republicans support an individual requirement to get coverage? >> and individual requirement, what do you mean by individual

requirement? >> to require people to get health coverage. >> do we require individuals to get health coverage? again, that is one of those areas where there's a different opinion to buy some in the house and the senate on this. look, i don't do policy. i'm not a legislator. my point in coming here today was to begin to set a tone and a theme, if you will, and approach to addressing this issue that is centered bottom of. is centered on real people who are struggling with this issue every single day. my hope and my expectation is that the very smart people that we have elected in the house and the senate on both sides will come together and recognize exactly what the american people need and want. because they are telling them. trust me, this white house is pulling just like the dnc is going, just like the rnc is going. so everyone has their fingers on the polls after. which again, it befuddles me to why we are going down this road of more government expansion,

more government taxation, more government spending, more government intrusion, when the polls and the people are saying they want as little of that as possible. so we're hoping that the folks on the hill are paying attention to the people in america who are making very clear what it is what they want and what they don't want. >> why haven't congressional republicans united behind the single approach to oppose democratic bills? wouldn't that make your party more effective? >> again, that's a strategy that the leadership works out. i don't get to make that play call. and so i., you know, i had enough play called i got to worry about at the rnc. and so my job now is to work in close coronation with them as possible as they see fit that helps them get their message out to the american people. and they make the decision about

whom, with whom and who they work with with her colleagues and with each other. >> does a president obama's health care plan represent socialism? >> yes. next question. >> in 1965, republicans said medicare would lead to socialized medicine. how are you so sure health care overhaul will have the dire consequences you predict when your party was so wrong about medicare? >> well, i think that there is -- i think that there is a legitimate debate there about the impact that medicare and medicaid are having on the overall fabric of our economy. you look at the cause and effect that you have to keep feeding this particular engine. i think though that in this case, unlike 1965, the level of spending, the level of government control, and

intrusion is far greater and much more expansive than anything we have ever seen. come on folks, you guys, you are journalists. you scrutinize this step if you are sitting here telling me that this is not unprecedented? that even you aren't shocked at the degree to which this administration is bringing the government, not just into our lives, but into the very relationship between the doctor and patient? between the patient and the insurance company, between insurance company and the market? so i think that what we are talking about here is something far beyond anything we've seen in 1965 or since 1965. this is unprecedented government intrusion into the private sector period. and you can sweeten it anyway you want, but it still tastes better and i think the american people know that. >> how would your plan make the

$12800 affordable to those who can't afford it? how many of the uninsured would it cover, and what cost in subsidies would you change the way doctors and hospitals are paid for patient rather than per procedure? >> i think that's a very good, very good question and it really goes to the crux of what we have to get to, the meat of the situation. really looking at the fiscal as well as the relationship impact that's involved here. look, i'm not proposing any quick fixes. i don't have my head in the sand or my eye, you know, up in the sky dreaming. i know this is going to take hard work and it's going to take a real effort by both parties to come to the table can seriously talk about health care. not just in the abstract, not just in the self interest of promoting one special interest over another year but in the interest of promoting what's

best for the people. so we are looking at how we are going to pay for it, how you take that $12800 cost to families, and how that is a proportioned and how that is paid out. that is a legitimate question but we haven't begun to do that dissection yet. we are rushing to get a health care bill passed by the end of the year, by the end of the month. without that discussion. without anyone answering that question, who really need to. not michael steele. i can prolific it all day long or what we should do but it's the legislators who write the bill. they are the ones who have to put it into practice and into law. but we're not having that discussion. we can't even get in the room to ask the question of the legislators. we saw what they did on cap and trade, a 1000 page bill with a 300 page a minute which came at around four in the morning. no one read and everyone in the democratic party voted for it. how crazy is that? and what are you going to do with this bill?

asked the congressman. folks out there in america, call your congressman up and ask them if they started reading the bill. can they tell you what's in it. well, they can't because they haven't seen it yet. and they will get it at the last minute and they will vote on it. and they will think they have done something. but what they have done is put out on the road to ruin if they do that. and so i want to see us get to the table so we can address, so the people who need to seriously addressed a question like that can do it and come back to us and tell us what these costs really are and what they really mean, and how we are going to pay for it. because the bottom line for a still remains very simply, who is going to pay. and if you tax every wealthy person in this country, i don't care how you define them, you still don't cover the costs of what the president is proposing. so the 95% of you who were told last year that you were getting a tax cut, no. you're not getting a tax cut. you will get a whammy of a tax increase that's going to come in

the form of a whole bunch of other taxes besides what you see coming out of your paycheck. >> so for republicans actually get to the table, do they have answers to those questions that were just supposed? what are the going to actually bring to the table? >> i just laid out, do you want me to go through them again? i can go through them again. let's talk about portability. let's talk about tort reform. let's talk about creating networks for small businesses to co-op so they can go in the marketplace and compete for the best insurance packages for their employees. there are a host of ideas that republicans have put on the table that have quite frankly been ignored or they are not part of the discussion. so all i'm saying is, mr. presidenpresident, nancy pelosi, harry reid, let us come to the table and sit down a real bipartisan way to do this. we like coming down the white house and having a beer and watching the game, but someone is, you know, going to lose a health care opportunity here if we don't get this right.

mena, the american people. and so i think that we put on. i just went through the list. i will happy to go through them again if you can get them, but i think, i've laid out in very broad terms and then there are more specific pieces of legislation that our members, house and senate, have proposed that should be part of the bill and part of consideration. >> what will the political price for the republican party be if it succeeds in blocking health care reform? >> i'm not concerned about a political price that the republican party is going to be. i'm concerned about the price of the american people will pay if this thing passes. it's that simple. not looking at this through the rose-colored glasses of what are our political fortunes. i'm not worried about that. i'm worried about my health care for my family. i'm worried about what my 21 year old son and my 17 year-old son are going to do if they get sick or injured. i'm worried about my mother and my father, god love them, who

are still living up here in dc trying to figure how to pay their health care bills. that's my concern. that's a concern of every american. certainly the concern of everyone who does what we do. i just want to do it right. i want us to get it right. and i think that the consequences will come for those who fail here. those who sattel this economy and our people with something they can't afford, not just in this generation but in future generations. so the price to be paid is steep, but it's not a political price. it's an economic one. it's a community one. it's one that your families and your neighborhoods will, you know, really, really come to bear and i think that's a bigger consideration right now then, you know, who is up and who is down politically. >> okay. in light of the day, i have to ask this question. if we could put a man on the moon 40 years ago why can't we give health care to more than 40 million americans this year?

>> bingo. i mean, that's it. that's it. and the addendum to that is why do we have to up in an entire health care system to do that when the polling, everybody's going, it doesn't matter. it's not just republican polling, but everybody. nonpartisan and partisan on the democratic side polling show that the vast majority of americans like their health care coverage. the vast majority of americans like the quality of their health care. the vast majority of americans don't want uncle sam to judge their health care, what they are concerned about is the cost. and so if we can just deal with that issue, that will solve a lot of the opportunities that we avoided in getting those 40 some million people to the table. now, you've got to look at that number very carefully and just realized that the number may not be as big as you think it is because it includes folks in the case of some who don't qualify for health care, in the case of

others who have access to health care but just haven't accessed it because they didn't know they qualified for health care, for medicaid or medicare. and those young folks who say i'm not going to get sick, i don't want to have to pay for and they just opt out altogether. but whatever the situation may be, whether it's one american or 40 million americans, we have to do our level best to make sure that every single day they have quality health care at their fingertips. when they are ready to accept, access it, however they want to access it. and the government should have very, very little to do with that. >> okay. we are almost out of time, but before i ask the last questions we have just a couple of announcements. first of all let me remind our members, teachers beakers tomorrow, july 21, gayle mcgovern, president and ceo of the american red cross will address a luncheon. and on july 24, representative john conyers and democrat from

michigan will address also the press club at luncheon, at a luncheon. also at a luncheon. and also, i would like to give you our national press club mug. but you're not quite off the hook, so here we go. the last 10 years -- we like to make sure you don't run. the last 10 years cbo scoring for the iraq war was to .4 billion, twice the initial ten-year scoring for health care reform. argue similarly worried with the costs of the war? if so, why aren't you expressing those concerns now? >> well, the cost of the war like the cost of everything else certainly is of great concern to the american people as it is i'm sure to the administration. but i think in a real sense the costs of health care is something that is up close and

right here, something that people touch. it's something people have to deal with in a real way. when they go to get their medicines, when they go to get health services. they are either paying or they are seeing what that cost is in a real way. i think that it doesn't, doesn't take away from the fact that the cost of engaging militarily is a cost like all other costs, but when you are looking at the entire cost of health care as a proportion of our gdp, as the bottom line for our state governments. i know in the state of maryland, health care was about 48% of our budget. 30% of that budget was education. so 78% of our budget was tied up and to think that all the things we did on homeland security and, you know, national defense with respect to the military institutions that we have in our state. was a very small portion of

that. so clearly, whether you are talking at a micro level or macrolevel, the cost of health care, the cost of providing that health care is a major, major piece of anyone's budget. and i think that right now this is something that's impacting our economy. it takes up a significant portion of the dollars that we are allocating. and we need to get it under control, and our concern is that additional spending is just out of line. we are not driving this nation into debt. trillions and trillions and trillions of dollars of debt by the spending that's going on right now with the war in iraq. and afghanistan. health care is driving that never. you look at what this administration is proposing, it is astronomical amounts of cash. and we are going to have to pay that bill. and it's a bill that is related to the health care expenses that this administration wants to put

in place. and so i think that, you know, the federal government, the state governments will be grappling with this issue in a real way for sometime, but we need to do so smartly. we need to do so with a sense of urgency, yes, but with the right amount of pause to make sure that we get it right. and right now, i don't think we are getting it right. we are getting it very wrong because it's i think in the long term going to cost us more harm than good that's intended for it to do. thank you all very, very much. >> i would like to thank you all for coming today. i would also like to thank the national press club staff members who helped organize this. melinda cook, pat nelson, joanne booze and howard rothman. also thanks to the npc library for its research and npc member. the video archive of today's newsmaker is provided by the national press club broadcast operations center, our events

are available for download on itunes as well as on our website. nonmembers may purchase transcripts, audio and video tapes by calling (202)662-7598, or e-mailing us at archives@press.org. for more information about the national press club, please go to our website at www.dot press.org. thank you, and we are adjourned. [inaudible conversations] >> our live coverage continues at 1130 eastern as the national governors association closes its summer meeting in biloxi mississippi. governors will hear about energy, climate change and hiv-aids. at 1230 eastern, c-span3 will be

live with a discussion on the apollo legacy. today marks the 40th anniversary of the landing on the moon. participants in the discussion include buzz aldrin, the second man on the mound, alan bean of a poll 12, charlie duke of apollo 16, shuttle astronaut john grunfeld and deputy director laurie leshin. the u.s. senate gavels in today at one eastern to continue work on defense department programs and policy, and number of a minutes are pending with votes scheduled for today. you can see live coverage here on c-span2. and the housemate that to eastern to consider 14 bills. later in the week more work on federal spending for the next budget year. in particular spending for the departments of transportation, housing, health and labor. lighthouse coverage is on c-span.

's 30 years ago america's cable company created c-span as a public service. a private, no government money. >> secretary of state hillary clinton delivered a wide-ranging speech last week on the obama administration's approach to u.s. foreign policy. the speech covered iran, the middle east, north korea and the war in afghanistan. from the council on foreign

relations in washington, this is about an hour and 15 minutes. >> good afternoon. i'm richard haas, the president of the council on foreign relations and i want to welcome our members and guests who are here in this magnificent new washington, d.c. building for today's meeting. i also want to welcome the many other people who may be listening to or watching this event on any number of mechanical devices that i for 1 a.m. unable to operate. [laughter] >> for those of you who are not familiar with us, the council on foreign relations is an independent nonpartisan membership organization, a think thank and publisher, dedicated to increasing understanding of the world and the foreign policy choices facing the united states. we meet here today, july 15,

2009, just a few days before the obama administration marked the completion of its first six months in office. we will also soon commemorate the eighth anniversary of 9/11. and a few months after that, the 20th anniversary of 11, nine. don't day that we. the last two decades have made clear and in some though, that the end of the dangers of geopolitical era did not sure it an aged of perpetual peace. anyone doubting does need only contemplate the inbox of president obama and those who work for him, some of whom i should add we are fortunate to have with us today. against the backdrop of unprecedented economic difficulties, the united states must contend with the particular challenges posed by north korea, afghanistan, pakistan, iran, iraq, the middle east, honduras,

just to name a few. there are as well the worldwide challenges. climate change, poverty and protectionism, the health, terrorism and nonproliferation. the challenges that are really the hallmark of this era. and making it even more difficult is the reality that american resources are stretched and they are substantial gap between this year's challenges and the capacities of existing regional and global institutions. this then is the context in which today's speaker, hillary rodham clinton, goes to work each and every day. hillary clinton is the 67th secretary of state of the united states. in addition to thomas jefferson, james madison, james monroe, john quincy adams, dean acheson and henry kissinger, her predecessors also include

frederick theodorefriel housing and bainbridge homely. [laughter] >> she is the 27th secretary of state to have served in the u.s. senate. with 15 to hail from the great state of new york. the third woman and the first former first lady. and while i am citing statistics, i thought i would also mention, in case anyone is interested, that no less than six secretaries of state have gone on to be president. [laughter] >> secretary clinton, it is a pleasure and it is an honor to welcome you here to the council on foreign relations. madam secretary, i trust you will not take it the wrong way when i say, break a leg. [laughter] [applause]

>> thank you very much, richard, and i am delighted to be here in these new headquarters. i have been i guess the mothership in new york city, but it's good to have an outpost of the council right here down the street from the state departme department. we get a lot of advice from the council, so this will mean i won't have as far to go to be told what we should be doing and how we should think about the future. richard just gave what could be described as a mini version of my remarks, and talking about the issues that confront us. but i look out at this audience filled with not only many friends and colleagues, but people who have served in prior administrations. and so there is never a time when the inbox is not full. you know, shortly before i started at the state department, a former secretary of state called me with this advice.

don't try to do too much. and it seemed like a wide added a mission only if it were possible. but the international agenda today is unforgiving. two wars, conflicts in the middle east, ongoing threats and violent extremism and nuclear proliferation, global recession, climate change, hunger and disease, and a widening gap between the rich and the poor. all of these challenges affect america's security and prosperity. and they all threaten global stability and progress. but they are not reason to despair about the future. the same forces that compound our problems, economic interdependence, open borders and a speedy movement of information, capital goods, services and people are also part of the solution. and with more states facing common challenges, we have the chance and a profound

responsibility to exercise american leadership to solve problems in concert with others. that is the heart of america's mission in the world today. now some see the rise of other nations and our economic troubles here at home as signs that american power has waned. others simply don't trust us to lead. they view america as an unaccountable power. too quick to impose its will at the expense of their interests, and our principles. but they are wrong. the question is not whether our nation can or should lead, but how it will lead in the 21st century. rigid ideologies and old formulas don't apply. we need a new mindset about how america will use its power to safeguard our nation, expand shared prosperity and help more people in more places to live up to their god-given potential. president obama has led us to

think outside her usual boundaries and he has launched a new era of engagement based on common interests, shared values, and mutual respect. going forward, capitalizing on america's unique strengths, we must advance those interests through partnership and promote universal values through the power of our example and the empowerment of people. in this way, we can forge a global consensus required to defeat the threats, manage the dangers and seize the opportunities of the 21st century. america will always be a world leader. as long as we remain true to our ideals and embraced strategies that match the times. so we will exercise american leadership, to build partnerships and solve problems that no nation can solve on its own. and we will pursue policies to mobilize more partners and deliver results.

first though, let me say that while the ideas that shape our foreign policy are critically important, this for me is not simply an intellectual exercise. for over 16 years, i've had the chance, the privilege really to represent our country overseas. as first lady, as a senator, and now as secretary of state. i've seen the bellies of starving children. girls sold into human trafficking. men dying of treatable diseases. women denied the right to own property or vote, and young people without schooling or jobs, gripped by a sense of futility about their futures. i've also seen how hope, hard work and ingenuity can overcome the longest of odds. and for almost six years, i have worked as an advocate or children, women and families here at home. i've traveled across our country listening to every day concerns

of our citizens. i've met parents struggling to keep their jobs, pay their mortgages, cover their children's college tuition and afford health care. and all that i have done and seen has convinced me that our foreign policy must produce results for people. the laid-off auto worker in detroit whose future will depend on global economic recovery. the farmer or small business owner in the developing world whose lack of opportunity can drive the political instability and economic stagnation. the families whose loved ones are risking their lives for our country in iraq and afghanistan and elsewhere. children in every land who deserve a brighter future. these are the people, hundreds of millions of them here in america, and billions around the world, whose lives and experiences, hopes and dreams, must inform the decisions we

take and the actions that follow. and these are the people who inspired me and my colleagues in the work that we tried to do everyday. in approaching our foreign policy priorities, we have to deal with the urgent, the importance, and the long term all at once. but even as we are forced to multitask, a very gender related term, we must have priorities which president obama has outlined in speeches, from frog, to cairo, to moscow. we want to reverse the spread of nuclear weapons, prevent their use and build a world free of their threat. we want to isolate and defeat terrorists and counter violent extremists while reaching out to muslims around the world are we want to encourage and facilitate the efforts of all parties to pursue and achieve a comprehensive peace in the middle east. we want to seek global economic

recovery and growth by strengthening our own economy, advancing a robust development agenda, expanding trade that is free and free and creates decent job. we want to combat climate change. increase energy and laid a foundation for a prosperous clean energy future. and we want to support and encourage democratic governments that protect the rights and deliver results for their people. and we intend to stand up for human rights everywhere. liberties, democracy, justice and opportunity underlie our priorities. some accuse us of using these ideals to justify actions that contradict their very meanings. other say we are too often condescending and imperialistic, seeking only to expand our power at the expense of others. and yes, these perceptions have had anti-americanism, but they do not reflect who we are.

no doubt we lost some ground in recent years, but the damage is temporary. kind of like my elbow. it's getting better everyday. [laughter] >> weather in latin america or lebanon, iran, or liberia, those who are inspired by democracy, who understand that democracy is about more than just elections, that it must also protect minority rights and press freedom, develop strong competent and independent judiciary, legislators and executive agencies, and commit for democracy to deliver results. these are the people who will find that americans are their friend friends, not adversaries. as president obama made clear last week in ghana, this administration will stand for accountable and transparent governance, and support those who work to build democratic institutions wherever they live. our approach to foreign policy must reflect the world as it is, not as it used to be. it does not make sense to adapt

a 19th century concert of powers or a 20th century balance of power strategy. we cannot go back to cold war containment, or to unilateralism. today, we must acknowledge to inescapable facts that define our world. first, no nation can meet the world challenges alone. the issues are too complex, too many players are competing for influence from rising powers to corporations to criminal cartels, from ngos to al qaeda, from state-controlled media to individuals using twitter. second, most nations worry about the same global threats. from dom proliferation to fighting disease to counterterrorism but also face very real obstacles. for reasons of history, geography, ideology and inertia. they face these obstacles and they stand in the way of turning commonality of interest into common action. so these two facts demand a

different global architecture, one in which states have clear incentives to cooperate and live up to the responsibilities as well as strong disincentives to sit on the sidelines. so we will exercise american leadership to overcome what foreign policy experts in places like the council called collective action problems, and what i call obstacles to corporation. borges has no nation can meet these challenges alone, no challenge can be met without america. and here is how we will do it. we will work through existing institutions and reform them, but we will go further. will use our power to convene, our ability to connect countries around the world and sound foreign policy strategies to create partnerships aimed at solving problems. we will go beyond the state to create opportunities for nonstate actors and individuals to contribute to solutions are we believe this approach will advance our interest by uniting diverse partners around common concerns. it will make it more difficult for others to abdicate their

responsibilities or abuse their power, but will offer a place at the table to any nation, group or citizen willing to shoulder a fair share of the burden. in short, we will be by inducing greater cooperation among a greater number of factors, and reducing competition, tilting the balance away from a multi-polar world and toward a multi-partner world. we know this approach is not a panacea. we will remain clear eyed about our purpose. that everybody in the world wishes us well or shares our values and interest. some will actively seek to undermine our efforts. in those cases ar our partnershs can become power coalitions to restrain or deter those negative actions. and to these foes and would-be foes, let me say our focus on diplomacy and development is not an alternative to our national security arsenal. our willingness to talk is not assigned of weakness to be exploited. we will not hesitate to defend

our friends, our interest, and above all our people. vigorously and when necessary, with the world's strongest military. this is not an option we seek, nor is it a threat. it is a promise to all america americans. building the architecture of global cooperation requires us to devise the right policies and use the right tools. i speak often of smart power because it is so central to our thinking and our decision-making. it means the intelligent use of all means at our disposal, including our ability to convene an connector can meet our economic and military strength, our capacity for entrepreneurship, and innovation and the ability and in credibility of our new president and his team. it also means avocation of old fashion common sense and policymaking. it's a blend of principle and pragmatism. smart power translates into specific policy approaches in five areas. first, we intend to update and

create vehicles for cooperation with our partners here second, we will pursue principled engagement with those who disagree with us. third, we will elevate development as a core pillar of american power. fourth, we will integrate civilian and military action in conflict areas. and fifth, we will leverage key forces of american power, including our economic strength and the power of our example. our first approach is to build the stronger mechanisms of corporation with our historic allies with the emerging powers and with multilateral institutions. and to pursue that cooperation, and as i said a pragmatic and principled way. we don't see those as an opposition. but as complementary. we have started by reinvigorating our bedrock alliances which did frayed in recent years. in europe, that means improved bilateral relationship and more productive partnership with the european union and read vitalized nato. i believe nato is the greatest alliance in history, but it was

built for the cold war. the new nato is a democratic community of nearly a billion people. stretching from the baltics in the east to alaska in the west. we are working to update its strategic concept to that it is as effective in this century as it was in the last. at the same time, we are working with our key treaty ally japan, korea, australia, thailand and the philippines and other partners to restate that are by pat relationship as well as. we are both a transatlantic and a transpacific nation. we will also put special emphasis on encouraging major and emerging global powers, china, india, russia and brazil, as well as turkey, indonesia and south africa. to be full partners in tackling the global agenda. i want to underscore the importance of this task and my personal commitment to it. these states are vital to achieving solutions to the shared problems and advancing

our priorities, nonproliferation, counterterrorism, economic growth, climate change among others. with the states we will stand firm on our principles even as we seek common ground. this week i will travel to india where extra affairs administrator and i will lay out a broad-based agenda that calls for a whole of government approach to our bilateral relationship. later this month, secretary geithner and i will jointly lead our new strategic and economic dialogue with china. it will cover not just economic issues, but the range of tricky dick challenges we face together. in the fall i will travel to russia to advance the binational presidential commission that foreign minister bob ross and i will cochair. the fact that these and other does not guarantee results but they set in motion processes and relationships that will widen our avenues of cooperation and there'll be errors of disagreement without allusion. we know that progress will not likely come quickly or without bumps in the road, but we are

determined to begin and stay on this path. now, our global and regional institutions were built for a world that has been transformed, so they too must be transformed and reformed tech as the president said, following the recent g8 beating in tivoli, we are seeking institutions that combine the efficiency for action with inclusiveness. from the un to the world bank, from the imf to the g8 and the g-20, from the oas and the summit of the americas to aipac, all of these and other institutions have a role to play, but their continued vitality and relevance depends on their legitimacy and representativeness. and the ability of their members to act swiftly and responsibly when problems arise. we also will reach out beyond government because we believe partnership with people played a critical role in our 21st century statecraft. president obama's cairo speech

is a powerful example of communicating directly with people from the bottom-up. and we are following up with a comprehensive agenda of educational exchanges, outreach, and entrepreneurial adventures. in every country i visit i look for opportunities to bolster civil society and engage with citizens. whether at a town hall in baghdad, a first in that country, or appearing on the local popular television shows that reach a wide and young audience, or meeting with democracy activist, war widows or students. i have appointed special envoys to focus on a number of specific challenges, including the first ambassador for global women's issues, and an ambassador to build new public-private partnerships and to engage to ask for committees in the two entries opportunities in their native lands. and we are working at the state department to ensure that our government is using the most innovative technologies, not only to speak and listen to cross borders, not only to keep technology up and going, but to

widen opportunities especially for those who are too often last on the margin. we are taking these steps because reaching out directly to people will encourage them to embrace cooperation with us. making our partnerships with their governments and with them stronger and more durable. we've also begun to adopt a more flexible and pragmatic posture with our partners. we won't agree on every issue. standing firm on our principles shouldn't prevent us from working together where we can. so we will not tell our partner to take it or leave it. nor will we insist that they are either with us or against us. in today's world, that's global malpractice. our diplomacy regarding north korea is a case in point. we have invested a significant amount of diplomatic resources to achieve security council consensus in response to north korea's provocative actions. i spoke numerous times to my counterparts in japan, south korea, russia and china, drawing out their concerns nicking our

principles and redlines clear and seeking a path forward. the short-term result were too unanimous security council resolutions with real teeth and consequences for north korea. and then the follow on, active involvement of china, russia and india with us in persuading others to comply with the resolutions. the long term result we believe will be a cover joint effort toward the complete and verifiable denuclearization of the korean peninsula. cultivating these partnerships in their full range takes time and patience. it also takes persistence. that doesn't mean procrastinating on urgent issues. nor is it a justification for delaying efforts that may take years to bear fruit. in one of my favorite observations, said politics is a long and slow boring of hard wars. it takes both passion and perspective. perspectives dictates fashion.

and patience. and of course passion keeps us from not finding excuses to do nothing. now i'm well aware that time alone does not heal all wounds. consider the palestinian israeli conflict. that's why we wasted no time in starting an intensive effort on day one to realize the rights of palestinians and israelis to live in peace and security in two states, which is in america's interest and the worlds. we have been working with the israelis to ease the living conditions of palestinians and create circumstances that can lead to the establishment of a viable palestinian state. for the last few decades american administrations have held consistent position on the settlement issue, and while we expect action from israel, we recognize that these decisions are politically challenging. and we know that progress towards peace cannot be the

responsibility of the united states or israel alone. ending the conflict requires action on all sides. the palestinians have the responsibility to improve and extend the positive actions already taken on security, to act forcefully against incitement and to refrain from any action that would make meaningful new doshi asians less likely. and arab states have a responsibility to support the palestinian authority with words and deeds, to take steps to improve relations with israel and to prepare their public to embrace peace and accept israel's place in the region. the saudi peace proposal supported by more than 20 nations was a positive step. but we believe that more is needed. so we are asking those two embraced the proposal to take meaningful steps now. anwar sadat and king hussein crossed an important threshold and their boldness and vision

mobilized peace constituencies in israel and paved the way for lasting agreements. by providing support to the palestinians and offering and opening however modest to the israelis the arab states could have the same impact. so i say to all sides, send messages of peace is not enough. you must also act against the cultures of hate, intolerance and disrespect that perpetuate conflict. our second policy approach is to lead with diplomacy even in the cases of adversaries or nations with whom we disagree. we believe that doing so advances our interest and puts us in a better position to lead with our other partners. we cannot be afraid or unwilling to engage in some suggest that this is a side of the night into day, or acquiescence to these countries overpressure and of their own people. i believe that is wrong. as long as engagement might advance our interest, and our

values, it is unwise to take it off the table. negotiations can provide insight into regimes calculations and the possibility, even if it seems remote, that a regime will eventually alter its exchange for the benefit of acceptance of the international community. libya is one such example. exhausting the dialogue is also more likely to make our partners more willing to exert pressure, should persuasion fail. with this in mind i want to say a few words about iran. last las

the prospects have steadily shifted in the weeks following the election. we also understand the importance of offering to engage iran and giving its leaders a clear choice, whether to join the international community as a responsible member or to continue down a path to further isolation. direct talks provide the best vehicle for presenting and explaining that choice. that is why we offered iran's leaders and unmistakeable

opportunity. iran does not have a right to nuclear military capacity for, and we are determined to prevent that. but it does have a right to civil nuclear power if it reestablished as the confidence of the international community, that it will use its programs exclusively for peaceful purposes. iran can become a constructive actor in the region if it stops threatening its neighbors and supporting terrorists. it can assume responsible position in the international community if it fulfills its obligations on human rights. the choice is clear. we remain ready to engage with iran but the time for action is now. the opportunity will not remain open indefinitely. our third policy approach and a personal priority for me as secretary is to elevate and integrate development as a core killer of american power. we advance our security, prosperity and values by improving the material

conditions of people's lives around the world. these efforts also lay the groundwork for greater global immigration by an incapacity of new problems from the ground. the central purpose of review is to explore how to fund and implement development and foreign assistance as part of a broader foreign policy. let's face it. we have developed a smaller percentage of our government budget to development than any other advanced country. and too little of what we have spent has contributed to genuine and lasting progress. too much of the money ever reach the intended target, but stayed here in america to pay salaries for funds overhead in contracts. i committed to tarnish its with ngos but i want tangible results. as we seek more agile, effective

and creative partnerships we will focus on country driven solutions such as those we are launching with haiti on recovery and sustainable development and with african states on global hunger. these initiatives must not be designed to help countries scrape by. they are a tool to help countries stand on their own. my development agenda will focus on women as drivers of economic growth and social stability. women have long comprise a majority of the world's unhealthy, and schools and underfed. they are the bulk of the world's for. the global recession has had a disproportionate effect on women and girls which in turn has repercussions for families, communities and the region's. until women around the world are accorded their rights and afforded the opportunity of education, health care and gainful employment, global progress and prosperity will have its own glass ceiling.

our fourth approach is to ensure that our civilian and military efforts operate in a coordinated and complementary fashion where we are engaged in conflict. this is the core of our strategy in afghanistan and iraq where we're integrating our efforts within -- with our national partners. in afghanistan and pakistan our goal is to disrupt, dismantle and ultimately defeats al qaeda and its extremist allies and prevent their return to either country. yet americans often ask, why do we ask our young men and women to risk their lives in afghanistan when al qaeda's leadership is in neighboring pakistan? the next question deserves a good answer. we and our allies fight in afghanistan because the taliban protect al qaeda and depends on it for support sometimes coordinating activities. in other words to eliminate al qaeda, we must also fight the

taliban. we understand that not all those who fight with the taliban support al qaeda or believe in the extremist policies the taliban pursued when in power, and today we and our afghan allies stand ready to welcome anyone supporting the taliban renounces al qaeda, lays down their arms and is willing to participate in the free and open society that is enshrined in the afghan constitution. to achieve our goals president obama is spending an additional 17,000 troops and 4,000 military trainers to afghanistan. equally important, we are sending hundreds of direct american civilians to be an effort to strengthen the afghan government, help rebuild the once vibrant agricultural sector, create jobs, encourage the rule of law, expand opportunities for women and train the afghan police. no one should doubt our commitment to afghanistan and its people, but it is the afghan

people who will determine their own future. as we proceed, we must not forget that success in afghanistan also requires close cooperation from neighboring pakistan which i will visit this fall. pakistan is itself under intense pressure from extremist groups, trilateral cooperation among afghanistan, pakistan and the united states has built confidence and yielded progress on a number of policy fronts. our national security, as well as the future of afghanistan, depends on a stable, democratic and economically viable pakistan. and we applaud the new pakistan need determination to deal with the militants who threaten the democracy and our shared security. in iraq they are bolstering our diplomacy and development programs while we implement a responsible withdrawal of our troops.

our combat troops successfully redeployed, aiding in efforts to ensure national unity and we're developing a long-term economic and political relationship with iraq as outlined by the u.s./iraq strategic framework agreement. this form the basis of our future cooperation with iraq and the iraqi people. i look forward to discussing it and its implementation with prime minister malachi. our fifth approach is to shore of traditional sources of influence in clinton and other -- economic strength and power of our example. we know our own values by closing the guantanamo bay detention facility. we have been straightforward about our measure of responsibility for problems like drug trafficking in mexico and global climate change. when i acknowledge the obvious about our role in mexico's

current conflict with narco traffickers, some were critical but they're missing the point. our capacity to take responsibility and our willingness to change to do the right thing, are themselves hallmarks of our greatness as a nation and strategic assets that can help us forge coalitions in the service of our interests. that is true when it comes to key priorities like non-proliferation and climate change. president obama is committed to the vision of a world without nuclear weapons and a series of concrete steps to reduce the threat and spread of these weapons including working with the senate to ratify the follow-on start agreement and the comprehensive test ban treaty, taking on greater responsibility within the non-proliferation treaty framework and convening a nuclear summit next year. now we must urge others to take practical steps to advance our shared nonproliferation agenda.

howard ministration is also committed to deep reductions in greenhouse gas emissions with a plan that will dramatically change the way we produce, consume and conserve energy and in the process, spark an explosion of new investment and millions of jobs. now we must urge every other nation to meet its obligation and seize the opportunity of a clean energy future. we are restoring our economy at home to enhance our strength and capacity abroad, especially at this time of economic turmoil. this is not a traditional priority for a secretary of state but i vigorously support american recovery and growth as a pillar of our global leadership and i am committed to restoring a significant role for the state department within a hole of government approach to international economic policymaking. we will work to ensure our economic, trade and investment, debt forgiveness, loan guarantees, technical assistance, decent work

practices, support our foreign policy objectives. when coupled with a sound development effort our economic out reach can give us a better form of globalization, reducing the bitter opposition of recent years, and lifting millions more out of poverty. finally, i am determined to ensure the men and women of our foreign and civil service have the resources they need to implement our priorities effectively and safely. that is why i pointed for the first time a deputy secretary for management and resources, why we worked so hard to secure additional funding for state and u.s. a/id. that is why we are on a path to double foreign assistance and why we are implementing a plan to dramatically increase the number of diplomats and development experts. just as we would never deny ammunition to american troops heading into battle, we cannot send our civilian personnel into the field underhe quipped. we don't invest in diplomacy and

development, we will pale lot more for conflicts and their consequences. diplomacy is an indispensable and instrument of national security. this adds up to ed difficult agenda of the world does not afford us the luxury of choosing or waiting. i said at the outset we must tackle the urgent, important and long term all at once. we are both witness to and makers of significant change. we cannot and should not be passive observers. yarder time to get rid of nuclear weapons and abuses of basic rights. people can live up to their god-given potential. the architecture of cooperation we seek to build will advance all these goals using our power

not to dominate or divide but to solve problems. it is the architecture of progress for america and all nations. more than 230 years ago thomas paine said we have it within our power to start the world over again. today, in a new and very different era, we are called upon to use that power. i believe we have the right strategy, the right priorities, the right policies, the right president, and we have the american people. divers, committed, and open to the future. all we have to do is deliver. thank you all very much. [applause] >> thank you.

for delivering a truly comprehensive talks that was broad and deep. thank you for that, and for doing it here. i am going to go straight to our membership and let them ask some questions. i ask them only to wait for a microphone and to keep their questions as brief as they can be so we can get as many in as possible. just let us know your name and affiliation when we call on you. this is the part of the meeting where i alienate 70% of our membership. i may let you call on people. >> that is your job. >> in 1999, i saw you in gaza with president clinton, altering the plo charter. there was a great deal of hope. do you think by 2010, we will have this agreement between the

israelis and palestinians? and can you say something about syria? >> i well remember that occasion in gaza, and the hope that was generated, and i still carry that hope very much with me, both personally and on behalf of the position i now hold, and one of the reasons why i urge the president to appoint a skilled negotiator as a special envoy. george mitchell briefly accepted. we have been working literally nonstop to set up the conditions for such negotiations but as i said in my speech, we don't think it is just the responsibility of the israelis or the palestinians, we expect the entire region, particularly the arab states, making clear that there is support for the

two state solution. we intend to pursue our efforts as vigorously as we possibly can. i am not going to make any predictions but i can only tell you that our commitment is deep and durable and i don't get easily discouraged. this is a difficult undertaking especially after ten years before where we were in gaza in 1999, what i have seen in the last we 6 months, with respect to syria, we have made it very clear that syrians, including the offer to return an ambassador, we do want an engagement, we expected to be reciprocal and there are certain actions we would like to see the syrians take as we begin to

explore this with them. syria is a critical player in whatever we do in the middle east. i am hoping the syrian calculation of where they should be positional we with respect to their relationship with iran and their support for extremists and terrorist activities, will be changing so that we can pursue a two way engagement that will benefit both us and the larger region. >> you mentioned in your speech the potential role of the palestinian authority. you did not mention specifically hamas. the see any situation in which hamas can play a role in the peace process? >> right now we are firmly committed from the core principles, we have made it clear publicly and privately

through all kinds of pronouncements that we would expect hamas to recognize israel and renounce violence and and abide by prior agreements and we have been very fees that the quartet members have stood very firm with us on that. in the efforts to work out a unity government between the palestinian authority and hamas, the palestinian authority has stood firm because they're committed. we want to get negotiations going between the israelis and the palestinian authority. as i said with respect to the taliban, those who are willing to lay down arms, renowned al qaeda, be willing to participate in a society that is free and open, they are welcome, and that

is true in other organizations, and resistance hasn't really given them or their children the kind of futures they would hope for, and so i am very committed to working to encourage as many people as possible to be part of the two state solution but there are certain and requirements that have to be paid. >> trudy reuben of the philadelphia inquirer. i wonder if you could elaborate a little on the administration's willingness to engage with iran at this point, could you tell us, has there been any response from ayatollah khamenei or the government to the letter that was sent in may, and if these aliens damage iranians should show interest, what if they stonewall how long this would go on if there is absolutely no

give, and could you clarify after vice president joe biden's remarks, has there been any green, yellow or red light given to israel aboabout an attack on? >> we are well aware that the situation after the elections puts a different complexion on both the iranian government, we don't really know what their intentions might be at this point in time, we are very troubled by the repressive actions that they took in the aftermath of their elections as well as most likely a certain amount of electoral irregularities. but as i said, we have no pact that has opened up right now,

but we have made it clear that there is a choice for the iranian government to make. we will wait to see how they decide, whether that choice is worth pursuing. a favor to choose to pursue it, we have made it very clear that this is not -- not an open-ended engagement, this is not a door that stays open no matter what happens. i think that until there is some decision on their part, we really won't no what to expect. with respect to the vice-president's remarks, the president and the white house clarified those the next day. >> we have a two part question and the three part question, please limit future questions to one part.

ambassador shaffer. >> thank you, nice to see you, madam secretary. i last saw you in colombo when you were first lady. >> i remember that. >> you are about to go to indiana and i want to ask about what you expect to get out of the trip. presumably a lot of it will be on the bilateral side but i wanted to ask if you could focus on little bit on the foreign policy and global part of your agenda. are there issues where you see a real prospect of working together with india? are there others that are tougher and what do you see as the entry point? >> we are delighted, our two countries will be engaging in a very broad, comprehensive dialogue. it is the most wide-ranging that i think has ever been put on the table between india and the united states, it has six the others to it, one of which is foreign policy, strategic challenges along with other

matters like health and education and agriculture and the economy. i don't want to prejudge but it is clear that everything is on the table to discuss. we believe in tdia has has a tremendous opportunity -- how they choose to employ that we will decide during our discussions but obviously there are a number of areas where we would welcome indian leadership and involvement that are difficult, there is nothing easy about non-proliferation. anybody who ever read engaging india knows it is a very difficult issue but we want to look at new ways for global and

regional regimes, and particularly nuclear, we're very interested in the role that india sees for itself in the immediate area. you mentioned sri lanka. what are the military and naval implications of decisions india is making going forward. the economic actions that india is taking, they weathered the beginning of the recession better than many places. what are they going to do to keep generating growth, lifting people of poverty, the party made a number of important campaign promises to the poor, particularly the world core. i will visit the first league certified building to talk about climate change and clean energy. we know that in the at and china have understandable questions about what role they should be expected to play him any new

global climate change. it is our hope that we can, through dialogue come of with a win/win approach. india is hoping to continue to expand agricultural productivity but then they have to create an infrastructure. we have to get farm to market roads, storage and refrigeration facilities. this is an extremely rich area, just touch the surface of it. i am excited, i am very much looking forward to my meetings with the prime minister and certainly with minister krishna and others in india and will do whatever we can to broaden and

deepen our relationship. >> you mentioned senator mitchell, any members of your staff want to ask a question? >> they had better not. >> in case the morning staff meeting wasn't sufficiently long -- in the back, all the way, third to the last roll. i see one or two hands. >> jonathan broder from congressional quarterly. there have been reports, in the discussions between george mitchell and the israeli defense minister, ehud barak, acer and number of settlements or houses that have already begun, construction has begun on them already, there was some agreement to allow the construction on these houses to go forward. can you confirm that? >> i am certainly not going to

stepped on the negotiations in any way. any decisions that are made will be announced officially and it is only fair to the israeli government as well as to our own, that we wait until decisions have been made. >> i want to ask you to talk more about the quadrennial diplomacy and development review. i understand from your speech, modeled after defense, more complicated because as the numbers of departments and agencies that have a stake or stakeholders in the process, can you talk about how you envision that happening? >> i served on the armed services committee for six years, the quadrennial defense review was a very important

discipline and pull for the defense department. it forced the defense department to take a hard look at itself, put forward priorities and the means to achieve them and was one of the many reasons, a paramount position, among the many steps we are taking i decided we would do the first ever quadrennial diplomacy and development review. it requires us to think hard about what we are trying to achieve. to be as specific as possible, to match our mission with the resources we need, to justify what we believe we are doing, and to demonstrate results. especially in a global economic downturn, i feel a real responsibility to explain to people who are not currently

employed or hanging on by their fingernails, why am i asking for more money for something called diplomacy and development. i am not asking for money to build tanks or airplanes, i am asking to send people to represent the united states, to engage in important negotiations, the early warning signals, i am asking to send experts into the field who can work with other nations, achieve results that lead to democracy and we need to make that case. we have embarked upon this. is extremely complicated. i have no illusions about that. it is also something where we have to coordinate with a number of other agencies, defense does work that you could call diplomacy and development,

treasury, multilateral financial institutions are certainly engaged at least in development, you have usda, you can go down the list, anyone to try to explain the whole of government approach. in addition to what we will be doing internally we will be working with the white house to bring together all of the other stakeholders in diplomacy and development. it won't surprise you to learn that i am also deep into discussions both with the pentagon and with the congress about bringing back some of the authority and the money that went with them that has been used by the military for diplomacy and development. and the migration of those authorities and those resources is one of the many reasons why the state department and usaid have had more challenging time than usual in the last year's so's this is both a policy tool as well as an attempt to x lane

and justify what it is we believe we can accomplish and i want to institutionalize. howard berman may put it in legislation so it is not just a 1-shot deal. .. the commitment to the alliances that the administration put forward but frankly the response was tepid both on the military and the

civil site. president obama characterized that as a down payment and they would be more forthcoming but yet we still hear some allies hiding behind the complaint that, well we haven't seen the full development of the civil side of the administration strategy so i wanted to ask you, do you see the second and third payments coming from our allies and give us a brief sense of where you are. you mentioned the recommitment of additional personnel to afghanistan, civil personnel on the u.s. side, what about some of our allies with some of our partners in the world? >> well, i agree it was a down payment. and i guess i was more impressed by what we got than perhaps some were because i know how difficult it was to, you know, make the convincing case to allies who felt like they had been either shut out of the process or had a feeling that their contributions were not adequately appreciated so we had a lot of catch-up work and it was part of our overall

strategic review. richard holbrooke is here and he put together an interagency team as well as an international team. we have intense ongoing discussions with our allies and with others and who want to play a part in promoting the strategy that the president put forth. now it's challenging because of the global economic crisis that everybody faces. it's also difficult, as it is in our own country, to understand, well wait a minute you've been there for nearly eight years and now you're adding more troops and you're asking for more funding and you're going to send more civilians. so -- i mean, we have to answer these questions in our own country. and, you know, you saw where prime minister brown in great britain -- you know, they lost eight soldiers. and the government went out and began talking about why it was important to stand with the

united states and others in afghanistan, you know, got from what i could glean, you know, a more positive response than people anticipated because you have to be willing to, you know, try to assuage the fears and anxieties and, you know, paint a picture of where you're going. now, on the civilian side, this has been one of the areas that, you know, jack lew my deputy working with ambassador holbrooke and usaid and everybody involved, we've actually been heartened by the numbers of people who have volunteered to go but we've limited the areas that the united states is going to focus on. you know, 70% of the people of afghanistan live in rural areas. afghanistan used to be in some descriptions a garden of central asia and south asia and because of the soviet invasion and the

resistance to that and then the warlords -- i mean, now it is so eroded and dry and the whole agricultural base has to be reinvigorated. so we're really focused on that. we're not promising to be all things to all people and, in fact, we're working with our allies so that, you know, they will focus on areas that we are not able to any longer. so this is very complicated and the whole idea is to be able to clear and hold, which is what our marines are doing in the south right now, and to provide security for people and to begin to see life return to markets and other means of common activity. and then to go in and work with local people, you know, on their police force, which we will be focusing on, on agriculture. and obviously, since i'm secretary of state, on women and women's roles and opportunities.

and, you know, i'm not -- i'm not here to say we know exactly everything to do and every one of our allies is going to come through but i am -- i'm encouraged by those who feel the political pressure or the economic pressure to shift from military resources to civilian and development resources, and i think we've put together something which has a direct relationship to the strategy that we're now following. >> professor lieber? >> bob lieber, georgetown. after the easy questions let me ask you one a tad more challenging. the previous presidents from jimmy carter through ronald reagan through bill clinton have sought to reach out to iran and every president has had that experience. iran for 20 years has been cheating in its obligations under various treaties. if iran fails to respond

positively to these initiatives and if our friends and allies and others including russia and china are unprepared for significant sanctions. what happens then? president obama either during the campaign or shortly thereafter says the u.s. would not be willing to see iran with a nuclear weapon. and, therefore, i have to ask the question, if these other efforts don't work, is the administration prepared to live with a nuclear iran or not? >> well, as i said in my speech, as you rightly quoted the president, we have consistently stated that we do not accept a nuclear-armed iran. we think it is a great threat to the region and beyond. but as you might guess i'm not

going to negotiate with iran sitting here. and in most negotiations i've ever been a part of either as a lawyer or a senator or in any other capacity, i think if you have a clear set of objectives and you begin the process, you have a better idea of what might or might be possible. we have no illusions about this. you know, i believe, though, that the absence of the united states for much of the last eight years in these negotiations was a mistake. i think we outsourced our policy to iran and, frankly, it didn't work very well. that's how i see it. i want to be in the middle of it to be able to make our own judgments to figure out what we know and don't know. and then to be in a stronger position. with respect to other nations. you know, i think part of the

attractiveness of engagement, direct engagement, is not only to make our own judgments but also to demonstrate to others that we've done so, and to make clear what kind of reaction we've gotten which i think lays the groundwork for concerted action. and certainly in just the last six months in our efforts in talking with other partners, i've noticed a turn in attitude by some. a recognition that it's not just the united states that should be concerned about what iran is doing but that there are implications for others who are much closer than we are to iran. so i think -- as i said in the speech, you know, our policy is one that we believe makes the most sense for our interests, and we intend to pursue it but we obviously have exits along

the way depending upon the consequences of the discussions. >> we probably have time for one last question. stan? >> hi, stan. good to see you. >> i want to ask you -- >> here comes the microphone. >> stanley roth, the boeing company. i want to ask you to expand on one of the points you made toward the end of your speech, the state department's whole of government approach to economic issues particularly, as you work on the economic recovery of the u.s., the role for trade beyond just the reference you made to free trade agreements. where would you like to see us on the trade side and exports are obviously going to be the recovery plan. what role do you see for yourself and the state department in terms of commercial advocacy, which is sometimes tough the environment based by the american business overseas. >> well, commercial advocacy is part of our list of responsibilities, as you know, and it's one that i take very seriously, but i'd like to just take a step back and look at the

broader picture of the state department's role in economic aspects of foreign policy. you know, from my perspective, trade is a foreign policy tool as well as an economic one. and we're in the midst of looking hard at our trade policy trying to determine how we can be more effective in making the case to the congress and the american people about trade but also making it clear to the rest of the world that, you know, we're a trading nation. and we want to be. but we're at a point where the economic implications of foreign policy are now very heavily seen as part of the intersection of nations. i mean, the g20 is assuming greater and greater importance. i mean, you remember it started in 1998 as a result of the asian financial crisis, and it has stayed as a player because it serves a very useful purpose. you have people at the table who

before were not welcomed or were not even thought of in the same breath as, you know, the united states or great britain or someone else. so i think the role of the economic agenda of the state department needs to be strengthened. we work closely with treasury. we work closely with the national economic council but i'll give you a quick example, you know, david lipton who works with larry summers in the white house just went to pakistan for us to do an assessment, you know, pakistan's capacity to meet the imf requirements, and what it needed and how it was doing. was that an economic analysis? was that a strategic? security? political? i would argue it's all of that. so why would we say oh, well, no, we're not going to be part of the economic mix when it's critical as to how we're dealing with other countries. you know, part of the reason

that i worked to have our dialog with china be inclusive and comprehensive is because strategic and economic concerns cannot be divorced. so on all of these issues, the state department has to play a role on the economic front. and we're working very collegiately with everybody. i mean, obviously, you have different perspectives, different jurisdictions. we know all of that but there is a recognition inside this administration that it's an all-hands-on-deck whole of government time. everybody is being, you know, required to get up and do your part and redefine what it is and expand it so that you can be the most effective player possible. so i think this is just part of our responsibility now. >> so after six months, what has much struck you about this? what surprised you the most? >> well, i'm really impressed by the quality of the people i work with.

at both the state department and usaid, just the level of passion and intense commitment, the willingness to, you know, work long and all hours. you know that from your own experience. the excitement of being part of the new administration, which has meant so much to so many people around the world and, you know, has certainly caused people to rethink who we are as americans and maybe give us a break, cut us some slack as we get organized and get going. i still think it's hard to justify not having our full government in place six months after we started. that's something that we've got to do something about. [applause] >> you know, i mean, we are trying to get our political leaders in place to work with our, you know, very dedicated foreign service and civil service employees, but, you know, we're still not there yet. and i had no idea when i was in the senate asking a million

questions to every nominee how really shortsighted that was. [laughter] >> but it's amazing. you know, the other thing i didn't realize is that, you know, when all else failed, if there was a problem that had a foreign policy implication, write a letter when you're in the congress. ellen tausher who's our undersecretary for arms stroll and nonproliferation. i probably wrote hundreds of letters and now i have to read them. [laughter] >> and it just depends what side of the table that you're sitting. but it's been -- it's been a real privilege and an honor. and i think we're making a difference. and, obviously, we're going to work as hard as we can to translate that into the results that the american people deserve. >> everybody here wishes you a successful and safe trip, you know, to india and thailand and it's an honor for us to have you here today. >> thank you so much. [applause] >> thank you.

[in the audible conversations] [inaudible conversations] >> now buzz aldrin developed the choreography for future lunar explorers the steps to which those who follow will traverse the moon. >> you do have to be rather careful to keep track of where your center mass is. it takes two or three paces to

make sure you've got your feet underneath you. two or three paces can give you a pretty smooth stop. like a football player, you have to put off to the side and cut a little bit. ♪ >> it's called the kangaroo hop, that would work but your forward ability is not quite as good.

>> host: back to biloxi,

mississippi, the site of the national governors association governor mike rounds of south dakota. governor, we're going to pick up where a couple of callers left off talking about -- talking about medicare. there's a headline in the aberdeen news, the aberdeennews.com that said that says south dakota set the standard for medicare expenses. it's the cheapest business for doing >> host: that paired with headlines this morning that the governors are concerned about the obama administration's plan or the congressional plan that's developing, expanding medicaid costs. >> guest: we are concerned. the upper midwest -- i think it's not just south dakota but in the upper midwest you'll find that our costs are below the average and the quality of care is above average.

in fact, there's a dartmouth study out right now indicating if you could actually take the cost containments that have been involved in the savings and the quality measures that have already been instituted in the upper midwest, you'd actually change the amount of g.d.p. that's spent on healthcare from about 18 down to about 13%, which would, i think, meet most of the goals that most of the politicians of the united states today would like to achieve. >> host: governor mike rounds with us until 9:30 eastern on a number of issues, healthcare, obviously. we'll also talk about the economy. >> host: governor, we'll start off with a question about the economy in south dakota. how are things -- how are things

there? >> guest: we're diversified. we've got a strong ag economy but the manufacturing that we do have has been hit very hard primarily because of the changes in the credit card industry will be significant within our state. it's anticipated that we'll lose across united states about 70 million credit cards that will not be issued over the next 18 months that otherwise would have been. a lot of those would have been issued out of south dakota. and so we're going to see a significant impact on our financial services portion of our industry but ag so far has been strong. we should have a good harvest this year but we don't know what prices are going to be. overall, we won't recover until we see an improvement in our jobless rate. now, some parts of the country are going to look at us and roll their eyes when i say we're having a tough time because we're at 5.1% unemployment. we're used to have unemployment rate down 2.5, 2.6, 2.7 range so we've seen a significant range of our own unemployment.

most in fact manufacturing area. until that comes back again and until we start to put those folks who really do want to work and have never been without a job until now until we get them back to work we'll feel the pain of this recession just like to everybody else. >> host: a reminder to our viewers at recovery.gov you can link to the state of south dakota and see how much money the state is getting in stimulus money, the federal stimulus money and how it's being spent. governor, give us an idea of how that money is being spent and how it impacts your budget plans. >> guest: sure. well, this year -- or at the end of the year, the year that just finished on june 30th we spent $71 million in stimulus funds we took advantage of all the funds available. we implemented $88 million of stimulus funding through the state stabilization act and 88 million for this next year and we should have somewhere north of 65 million available for the 2011 budget. so we're using it. we think as long as the taxpayers have been committed to

borrow the money right now and to spend the money, we've put it back in to taking care of programs such as medicaid. medicaid in south dakota runs about $265 million in terms of our cost of a $1.2 billion general fund. so it's significant but that's kind of where we put our money that came directly into the state. we also took the transportation funds and we put out as many of the dollars as we could in bids already this year. we've done about $38 million in funding for new rural water projects and so forth. we're trying to get the money out as quickly as possible so that we can get contractors working, putting people back to work again. >> host: back to the job number, the jobless number you said a little over 5%. you were expressing some concern over that being a bit higher than the usual number for south dakota and these losses in the manufacturing industry. so what does south dakota do on its own in terms of retraining people for jobs, of finding new

areas for workers to enter? >> guest: we actually -- as soon as it became apparent that we were not going to be immune from this recession, we started a plan in which we went out -- we went to eight different communities in south dakota and we shared with the different community leaders what we had available through the department of labor. over $32 million in federal dollars that could be made available to help people get through the tough time. we did the increase in the unemployment on a proweekly basis by another $25 per week. we also then went to the -- a different chambers of commerce and said, look, if you've got employees and they are without work, we want to get them back in to a training center whether it be for a commercial driver license or a technical schools and we'd pay the tuition or we'd get them into one of our university settings for a certificate program that would improve their opportunities for a different job once this starts to come around again.

so we wanted to give them more tools to use if they were not going to be employed but at the same time, we went back into the contractors and so forth and said, look, if you can use these people, if you've been short in the past and at 2.8% or 3% a lot of contractors had been talking about the fact that they were finding it tough to get people to work for them in the last couple of years, we said now is your opportunity to bring in some of these folks and put them back to work again. so we've tried to address, first of all, the individuals that wanted to get retraining, find a place to do it. second of all, we went back out and looked at new locations like pesticide applicators and herbicide applicators that had a tough time finding folks on a long-term basis to work for them. i tried to get back out and talk to these folks who wanted to go back to work. then for young people that were coming out of high school and out of college looking for work in the summertime we provided internships. we maxed out on the internship dollars for them so that they could pick up some college credits, work either for the state or for a business and the

businesses really responded and we had a lot of requests from businesses saying, look, give us a youngster and we'll put them in an internship for the summer and that kept them out of the job market and those who do use that work had some of soles seasonal summers. >> host: welcome. >> caller: yes, thank you. i just have a little concern about the healthcare issue and, well, one i was watching the representative's amendments on medicaid fraud and in miami, you know, how many thousands of dollars bilked out of the medicaid system yet they voted him down and yet he proved that other companies have been able to do this. and another thing is that where does the president get off as far as penalizing people for not

carrying insurance in this bill that he's proposing here? >> host: did you say for not carrying insurance, for not --. >> caller: right, right. 'cause, you know, and then also, you know, the small business people. i mean, one of which we were at one time we were a small business, and another thing is my concern about the division that it's going to cause between, you know, our representatives and us as people because i understand that the governors are representatives of all of our people, you know, they don't have to fall into the government plan. so thank you so much. >> host: governor rounds? >> guest: well, first of all, anytime you have a major program with lots of dollars in it, the opportunity for fraud is there and we've got to be vigilant. i think the president has made it clear that he won't put up with it and most of our states -- we've got very stringent laws about how we take care of and how we audit for the

dollars that are entrusted to us and if we don't do a good job, we're in trouble with the feds and we can lose some of our money as well that comes back in in future years. on the healthcare reform issue, i think most governors will tell you that there is definitely room for improvement in healthcare. our concern is that we don't want to lose flexibility on a state-by-state basis. we've done some really good things across the united states on a state-by-state basis already and we think we should learn from those areas. second of all, we're very concerned that when congress starts to make promises, promises for putting more people on medicaid, when they start making promises about a public healthcare plan, we get nervous because somebody has to pay that bill. and in the house version right now that came out, they suggested that they would pick up the costs and yet most of us are suspect in that we don't believe they've got any place to go to get the money. we also know that in the past, eventually, there's always the opportunity or the attempt to pass it off onto the states.

a good example in south dakota is indiana health service. if you want to see the perfect example of why nobody should ever be stuck on a public health system, take a look at our native americans and what they're stuck with in terms of indian health. in south dakota right now it's pathetic. and yet 9% of my population relies and through treaties is entitled to healthcare from the federal government through the indian healthcare act. >> host: what's the problem with the indian healthcare? >> guest: they make promises for the ongoing services and they don't fund it and they have no place to go. what they end up do is treating them for life and limb only. they don't get help on a day-to-day basis for the things that will stop from losing an arm or a leg. federal government will pay to take off a leg but they won't pay a podiatrist to come in and try to save the leg and those are the kinds of things to me that are flat out wrong with a public system.

i'll give you an example of what else they've done in terms of indian health service. we got word in south dakota that native americans can now come in and they can contract. they can come off of the reservation and come in to a private provider. and they will not pay a co-pay or a deductible. but the state will now pick up all co-pays and deductibles. not the federal government. but the states will now pick up the co-pays and deductibles. one more way to pass off the cost of healthcare. those are the types of things that i think bother a lot of governors because that's what we've seen happen in the past is the promises are well intentioned but when it comes time to pay the bill, the governors get stuck in many cases with paying a larger and larger portion over a period of years. .. it going to

come back to the states where it is part of our problem or where they simply say we only pay a certain percentage of the services being provided which means the physician at the hospital pass the cost to private sections of the economy making it more difficult for other folks who have private pay insurance to afford their own insurance. those are the concerns we expressed. i will tell you president obama, our discussions with him, has been very sincere in his interest with reforming the health-care system, he made it very clear he does not want to see that pass through to the states, he expects the reform to the appropriate and doesn't want it to become a system of care --

the challenge is meeting those goals. >> host: here's a call from clarion, pa.. this is linda on the independent line. >> caller: hello, thank you for taking my call. the one thing i want to focus on the most with regards to health care is with so many jobs over the last 30 years being sent overseas in manufacturing in the last 15 years, white collar jobs, there is no longer a tax base revenue. that is out of the picture. bringing jobs back to the united states or creating new jobs without a lot of rhetoric is important. regarding health-care, when we have some representatives accepting contributions from the insurance industry, the medical industry and the pharmaceutical industry, it appears they are working for them and not for us. most common, average americans, middle-class, working class or working poor, are really sick and tired of the rhetoric.

i happen to have lived in ireland where they have socialize benefits, it does work, it is cost-effective, except the people in the pharmaceutical industry and medical industry don't make the massive profits that they do in the united states. >> host: i will get response from governor rounds. >> guest: i am not familiar with the island system. i am familiar with what we have here, that has been instituted so far by our congress in the past, and part of the way in which they meet the criteria is by simply not paying those organizations or those providers that we count on for health care and they end up passing it on to everybody else, higher costs for everyone else on the procedures and so forth, medicare, medicaid pay a percentage of the going rate and when that happens if it is not enough, it is passed back to everyone else and it is recognized because one of the discussions in the house bill is

if they put more people on a plan of medicaid by increasing the percentage of people that are eligible for medicaid, they also recognize, the physicians, more money on a per individual basis to make ends meet. there's a recognition that that is occurring but we haven't seen in this country successful approach like has been suggested. we do have a private system that has worked for about 92% of our folks, a combination of a plan for insurance or a private pay system. i don't want to take that system and toss it out. i would like to make improvements on the existing system, keep the folks, keep their coverage in place or find a way to expand the coverage for those individuals who simply can't afford it. the real question is, how do we truthfully say this is the cost

and we are prepared to have other people pay the bill for them. that will be the real issue. >> host: tell us, the housing industry in south dakota, how are folks doing, those who have had some difficult mortgages, ual ing those readjusted? >> guest: most of our folks did not go out and buy above their means, they did not go out and get low-interest mortgages that then were bumped up in price. most of them made some good decisions up front. new housing industry slowed in terms of new construction like the rest of the country. we haven't had the mortgage hit in south dakota like we have in other parts of the country, we were expecting to reap the profits of a growing value in their home. most folks brought it home because they needed a place to live rather than one they're going to sell later for a profit. >> south dakota gov. mike

rounds. we are going to leave this recorded program and take you live to biloxi. gov. joe mentioned gaveling in this session, focusing on energy and the economy. we will talk to business leaders on initiatives to address climate change and promote green jobs. live coverage on c-span ii. >> our it lineup includes the president and ceo of the institute for 26 century energy at the u.s. chamber of commerce. katie -- kathleen mcginty,

funding partner of carry grind technology partners, a devoted company to clean energy technology development. chairman of the largest steel producers and a large energy user. and ira c. magaziner, chairman of the clinton foundation, climate initiative. these leaders representing the business investment and philanthropic communities, each brings a different and important perspective to the subject of energy and our economy. following each of their remarks we will open the floor to questions. at this time i will call on our host and say on behalf of each of the governors and our families, to thank governor barber and his wife, their staff, what a wonderful conference they put on, taking care of all of our needs, wishes and desires, made it a very pleasant day and we appreciate gov. barbara for all he has done

and his staff and i want to thank him and bring him to the podium at a news time. [applause] >> before i introduce the first speaker, i do want to tell you we have enjoyed having you here, and i want to fight in front of you all, we work really hard to make this happen. joe floyd and his staff have run the conference, people did a great job. the hard rock, and more than 100 volunteers who turned out to be part of this, and finally, i want to thank the people from the department of public safety who worked lot of overtime to do this. we will get that out of the way

first. chairman? >> karen harbert is chairman of the institute of the u.s. chamber of commerce, executive vice president, managing director of that operation and she manageds the day-to-day operation of the institute including policy education, communications initiatives. shea designed and implemented the policy initiatives, oversaw budget reviews for fossil, nuclear, renewable energy and the energy efficient standards at the department of energy, and she is gracious to be with us to talk about energy policy. >> gov. barbour, thank you, and thank you for your leadership for this important event. my job is to burden our discussion with a little bit of fact and i will do that. would you like me to speak to the floor or from the podium?

>> wherever you are comfortable. you want to come up here? >> that is fine. great. you all know better than i do that the provision of affordable reliable energy is so fundamental to our economy, our economic recovery and also to our national security and i will say the choice is that you make, that this administration makes, that our congress makes a coming years will be with us for decades to come so we need to approach it with the appropriate seriousness at it needs to the fact base. before we know where we are going, where are we? the appeal center double in january but was was on the mind american citizens? energy came up as no. 6.

global warming came out as no. and 20 on a list of 20. that is where the american mindset is. when gallup did a poll in march about climate change, an interesting new statistic came out that there is an increasingly growing population out there that is skeptical of what they are being presented in the media as fact. 41% of the american people are now skeptical about the validity of what is being presented. when asked if they were willing to pay more to address climate change, a huge change from where we were in the 90s one almost double the amount of people were willing to pay more and because of the economic times in which we find ourselves, we're basically split on whether we should or should not pay more to address the challenges associated with climate change. what is happening in the world? between now and 2013, the demand for energy will go up 50%, 70% of that will be in the

developing world, china has thirty million cars on the road, they will have three hundred million cars on the road by 2030, we still have a billion and a half people without electricity but the demand for electricity around the world is going to go up by 100%. here in the united states we know that our demand for energy will go by as much as 30% and we no electricity demand is going to go up by 20%. what are we doing about it? hole, which provides 50% of our electricity, many governors are blessed with that natural resource, if we have climate change legislation passed through the senate, those in the coal business will face new penalties. nuclear, which provides 20% of our electricity, we have 20 utilities which have put forward applications to the nuclear relative a story commission to build 26 new reactors in our

country. we have not built a new one in 30 years. funding for to reduce capital cost of these nuclear plants, to underwrite them was excluded from the stimulus, expanding guarantee authority has been eliminated from the 2010 budget. we have defunded yucca, no longer have the proposition of a permanent repository for our nuclear waste and the administration announced we will no longer pursue near-term reprocessing of nuclear waste and the utilities are still paying every year into a nuclear waste fund and yet the government is in breach of its obligation to remove that nuclear waste. on the transportation side, we are 96% dependent on oil for our transportation, but we are not doing anything to access the tremendous reserves we have in the united states. we have placed 85% of our reserves off-limits for 30 years. the north korea have expired and we have not put any of those new

leases out for elise, and we're pulling back on the leases that are available and allowable for lease. in addition, in the budget that has been considered in congress, there are $80 billion of new taxes on oil and gas companies. we are extracting -- restricting access and taxing as companies on their existing operations and we are blessed with great news of new natural gas around our country but we will make it very difficult to get to and that is a game changer. we have more natural gas, more energy security and it is a cleaner-burning fuel. to show you quarter by quarter, second quarter of last year verses second quarter of this year, you're seeing a reduction in the number of oil wells and gas well completionss in our country. it will not happen in five years or ten years, we're talking about decisions made today that are impacting us today. on the other side of the ledger let's talk about renewable. solar and wind account for 1.3% of our electricity, we are investing tremendous resources,

production tax credits, manufacturing credits, mandating the expansion of this, it is all good and we should be doing that but even if we quintuple the amount of solar and wind in our electricity supply we would need more based load power. we can't forget we need to keep our economy coming. on the efficiency side of things, there's great opportunity. we can do more with less energy and we are investing a tremendous amount of money and making our passenger fleet more efficient. with renewables and efficiency it is not sufficient, we need more energy supply. the problem is we have a new saying, if you remember nothing about what i said today, remember banana. we no longer have that in my backyard, we have a play on our economy, banana never built anything near anyone. the reason is we no longer have red tape, we have green take. we have projects all across our country that are bottled up with mitigation, abuse of permitting

environmental regulation at the state and federal level, this is what it looks like. over the past two years we looked at 300 energy projects for siding and licensing and all of these have been stalled or stopped by litigation, using environmental regulations. it is not just in natural gas comedies are renewable projects as well. we are taking viable options on all forms of energy off the table. we were talking before this session, even making the building of a solar panel and solar arrays in the mojave desert not doable according to senator boxer. we have a real problem. we need more energy, more infrastructure, they create jobs in your communities, but we are letting them be held up. a couple words on climate change. the epa has a full plate with the proposition of an endangerment finding, we know the waxman barky bill which passed 119-212, 22 delegations

had a majority voting for the bill. you can do the math on how many delegations did not a majority in an. that complicates the senate debate tremendously. we know that debate will happen under senator boxer in september and the president just returned from the g-8 where the g-8 committed to to develop world reducing emissions 80% by 2015, similar to what the waxman-markey was. but the developing world walk away from those negotiations and did not agree to any commitments. where are we? the u.s. units 8 big it tons of carbon dioxide year. that is a lot but there is a sliver of good news, we are submitting less than we did in 2007. who is doing better than us? one country only, france, they

have 80%--the developing world has a tremendous growth in greenhouse gas emissions. 80% of the greenhouse gas emissions come from those economies, not from ours, led by china and india. as we look forward to copenhagen and beyond it is imperative that the developing world the part of the discussion and admit anything we do there will be no impact on the environment and adversely impact our competitiveness. a graphic depiction of waxman-markey. it is very complicated. it shows waxman-markey proposes 397 new regulations and over 1,000 new mandates. it is complex by any stretch of the imagination, it is a bill

that is 1500 pages long and has multiple components but the most interesting part is the provision that came in at 3:00 in the morning on the day before the bill was supposed to be voted on which is an unemployment assistance program. it says for any employee in the fossil fuel industry who loses his or her job because of the promulgation of this lot is eligible for 156 weeks of unemployment assistance at 70% of your salary. it is an admission there will be job losses with this bill. there are big differences in analysis of this bill. the chamber of commerce says 2.7 million people will lose their jobs and because of this. other analysis is the impact will be smaller. the bottom line is it is so complex we don't know. we need better analysis and we need more transparent discussion. what we do know is if it is successful, there will not be a test on this, i put it up to call your attention, if it is

successful, we have to remove a gigaton by 2020. it is the equivalent of, instead of building nuclear power plants, replacing them with 130 new nuclear plants. we haven't built one in 30 years. 1 27,500 in the bills. do we have the policy and regulatory environment in place to do that? do we have a manufacturing base to do that? do we have the credit and capital ability to do that? if we do it, if we are successful this is what will happen to our economy. we will have the co2 emissions intensity of what bangladesh has today. that is the red line.

i am not doing this to fear monger, we need to do something. this is to put to rally on the table that the transformation we're talking about is a huge and we need to approach it very seriously with the appropriate amount of policy and regulatory and capital incentive to make this type of change feasible. what do we need? we need more realism. we can't take our solutions for the future. i would like to say we have silver buckshot. we need oil and gas and we need to produce more at home. certainly increases our energy security. we need nuclear, we need clean coal, alternative transportation fuels that don't compete with food over the long term. we need renewables. we absolutely need renewables. we need a sustainable policy to insert themselves into our energy midst. you know we need to modernize our infrastructure, seeing it every day, we have a twentieth century infrastructure trying to

support a twenty-first century economy. it doesn't work. china is leapfrogging over us in their infrastructure quality. we need to get serious about overcoming that and we need to get beyond, planet earth, banana, if we don't get something built, we will never have that infrastructure. we need to streamline a permanent process to get these jobs and get this economy moving. last but not least, we need to invest in our innovation, intellectual infrastructure. at the end of the day, innovation will carry this economy and if we don't remain competitiveness, we won't be competitive in any others. there are serious cloud on the horizon, more american jobs, not fewer, and a growing gap in public and policymakers, policy going one direction and the american public going another. 70% one more oil and gas, current administration policy, congressional action is taking those options off the table.

we needed transparent discussion, it is going to cost something, but we need to bring the american public along. capital is scarce, we want to invest it here, in boise, in boston, not just in beijing and mumbai. we need to be serious about making sure those investments happen here. lastly i want to remind you, as government leaders, we need to be very, very serious about the role of the private sector verses the public sector. it is on the back of the private sector that our country has become so successful and on the back of the private sector that will drive our economic recovery. as we seek to define delineation between public policy and the private sector, we seem very careful we don't unincentivize our recovery. energy obviously begins and ends with energy. if we don't have affordable

energy we won't have a successful recovery. thank you. [applause] >> thank you for a wonderful presentation. we have time for one or two questions. >> just on the oil sulfide, i have to stay with the largest reserve of oil shell, it is unfair to characterize the federal government as backing off a quest for commercial leasing that permits, actually the private sector that says they don't know the impact of the technology that they're try and demonstrate. they don't know the impact of ground water so they backed off of their commercial lease. the secretary of the interior, i know him pretty well, he supports oil shale development and the research and development programs but at this time it is just not fair to say the federal government has backed off. what we are asking them to do is what they're doing. we are asking them to make sure

the technology is proven out, what the impact is on water quality, technology, the amount of water consumed because there is a scarcity on the river basin, the amount of energy that is consumed to do the technology, stick a heating element in the ground and convert shale to liquified oil and extractor a conventional process. we have asked them to go slow because we have done this stands in nearly 80s when we built up an entire community and an entire commerce around oil shale development and it went away in a day when the price of oil changed. for our purposes, we are not about trying to prevent oil shale development. i can speak for the folks -- we had discussions about this, we went to promote and go forward, we don't want it to go bust in the day because communities can be impacted dramatically and we absolutely want to know the

impact of wildlife, water, air, and until we do, we don't want them to design the rules for commercial leasing. >> there has been significant investment in research and development. you are right about that. those need to continue over time and there needs to be partitioned between the federal government and private sector in that regard. what the private sector is saying is in order to realize there's going to be a benefit at the end of this significant investment, hundreds of millions of dollars in investment in r&d, there will be a cost the best prospects for greater commercial leasing, the one that sureties so they can commit to that funding stream for increase r&d. it is a partnership that needs to happen, and a promise that will be expanded commercial leasing. they want that long-term view and that is what i think they're looking for. we have had a lot of discussion with secretary salazar. we might see forward movement. oil sale can be a very significant contributor to our

energy security at home. but we need to make sure that there is a signal to the private sector that they will recoup those investments they are willing to make and that is important. those are investment being made, jobs being created that they won't make those if they don't think they will be able to bring those resources into the marketplace. >> time for won more? >> when i see aone more? >> when i see a chart, thank you for coming in mid-what the world is going to look like in 2015 i know they're not right. we saw how much china would be producing in 2015, we don't know. i know that in china they are leading battery technology, solar technology, they are meeting in coal gas technology. they're making some significant steps. if what we are able to is look

at ten year or 15 year progress grid and predict where we are going to be in 2015 i will predict something else. just a few deal logic structures in montana has enough oil at the rate that we have increased technology during the last ten years, the price of oil will be $2 a barrel in 2015. for those of us who say we cannot move on climate change because china and india will not and are not, america needs, and either we will be or we need to getleads, and either we will be or we need to g we cannot say china is leading and just get out of the way. >> the negotiations under which we are trying to participate use that as the end game, where do we need to be in 2015, people are trying to see beyond where

they can. we don't know what technology will be available in 2015, you are absolutely right but we are trying to divide targets based on existing knowledge. that is very tricky. if we were more realistic and design something much more near-term we would be better off because we know what the schools are, what the instrumentation is that we have today. prior to the stimulus package we were investing less in research and development in energy than we did after the 1970s oil embargo. we have ignored the opportunity and we are paying that price. we should be investing more in our and the. we need to be concerned about those investments just staying in the laboratories. we have to work quickly into the private sector and shake the market and provide concessionary financing so we can use these technologies to reduce our greenhouse gas emissions and keep our economy competitive so i think we are in agreement that we can do things to improve our environmental stewardship while improving our energy security including getting access to some