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>> wrapping up his funeral service in hyannis, mass. for eunice kennedy shriver who passed away on tuesday at the age of 88. her brother, senator edward kennedy, is battling brain cancer, his wife is standing in his place. also attending, vice president joe biden, oprah winfrey, jon bon jovi and massachusetts gov. duval patrick. the family will only release details of a private burial after her internment.

>> president obama hold the health care town hall meeting today in belgrade, montana, according to the associated press, as many as 500 protesters are expected to rally outside the event which is taking place in an airport hangar. live coverage starts at 3:00 p.m. eastern on c-span2. conservative lawyers and activists are meeting in pittsburgh tonight for the second annual rite on-line conference. keynote speaker is former congressman pat toomey who is running for the senate in pennsylvania. coverage on c-span starts at 7:40 eastern. tonight on book tv a conversation with author christopher buckley, the son of william f. buckley jr. and his latest book is a memoir called losing mom and pop. book tv's index starts at 8:00 p.m. eastern on c-span2. >> the newest supreme court justice, sonia sotomayor,

attended a white house reception with president obama. we will show it as part of c-span's america and the courts saturday at 7:00 p.m. eastern. >> this fall, and to the home to america's highest court, from the grand public places to those only accessible to the 9 justices, the supreme court, coming the first sunday in october on c-span. >> discussion now on the obama administration's trade policy, the american enterprise institute in washington post this event, is about an hour and 45 minutes. >> good morning, i'm claude barfield, scholar at the

american enterprise institute, i would like to welcome you all to what is our second annual what the hell is august, we're going to hold the conference anyway. somebody reminded me of this this morning, it was just a year ago, weeks after the collapse of the talks, we decided we should take a look at what happened and maybe not wait until september. is anybody -- are we just going to have a couple of us sitting around a table? will anybody be here? my faith in the trade mafia was sustained by the fact we have 150 people signed up which is just about what we had this morning. we have a very successful morning a year ago and i am sure we will this year. we have an excellent panel and i will introduce them in a minute. i would like to make a couple of remarks, stepping back a little

bit and seeing trade policy in the larger context. before i do that, i have to remind myself and remind our speakers this morning and you, that with the obama association coming in a huge financial crisis, deep recession since the 1930s, problems in afghanistan, problems in iran, hillary clinton going off the wall yesterday in africa, a couple days ago, it seems like these people have been in office for some time but we have to remind ourselves this is a six month assessment and to be fair to this it ministrations, ron kirk, u.s. trade representative, still doesn't have his full staff. the senate is holding up one of its key employment. preliminary judgments can be made but we should be careful. that said, this is washington, a think tank and we have speakers who write on these things, we will make some preliminary

judgments. i would like to make three points in three areas relating to the limitation, potential limitations and barriers, challenges and opportunities that president obama has moving forward in the trade area. the first relates to the political situation he faces and the political situation he faces within his own party. as i said in a couple of earlier remarks, in other venues, it goes back to the pogo cliche, we have met the enemy and he is us. mr obama, the first set of challenges go straight to the congress, specifically in the house of representatives where there is a substantial minority. democrats who really have come to office, been elected on

platforms that are substantially globally skeptical of global trends and events. we have to be very careful. this is not necessarily protectionist. certainly not in the sense that they're going to go out and push for holy tariffs but he does face in the house of representatives a group of congressmen who really think we ought to have a new trade policy and think that the president was on their side as part of his campaigning and certainly in the primaries, that he was for this caused. i would point out to you the relatively new democratic working groups in the house, the trade working group has 60 odd members. a number of these members, by the way, were elected in 2006 and 2008, more than half, 66% of the new democrats who came in after the 2006 election, had run

explicitly on anti global platforms. they could say we didn't hide what we stood for. the other point politically that is important, the districts that had been previously republican districts, nancy pelosi and the leadership really wants to hold on to, they have some problems. i don't want to pushed this too far, just signing up for a caucus or putting in a bill as the house trade working group did in june, so-called trade bill. it really turns -- changes in trade policy, just signing that bill is not evidence that people will work for it but it is important that the trade group got over 100, i think it is 125

democratic representatives to sign on to that. that leads me to the second back at. to go back to 2006. the democratic era in trade did not begin in 2008 with the election of mr. obama. it began in 2006. the house leadership as well as the senate leadership, two years before obama came into office, were used in making judgments on policy, particularly in trade, on their own, without guidance or having to pay attention to a white house that they were at odds on, the bush white house. so you have a situation where the congress has already begun to take the lead. without going into detail, the house forced the bush should ministration to compromise on new trade promotion authority rules, free trade agreements.

my colleague and i were called because we opposed that compromise and we were accused by lt.s of being rigid. as it turned out the administration was not going to get anything out of it. they didn't. you had a major change in trade policy at least in terms of the tpa. even before obama got in office. and behind that, this will be interesting to see, and increasing restiveness in congress, bipartisan to some degree, with a grant of authority that the congress has given over the last 50 years to the executive. this transcends partisan differences. it was hit under. because it was congress verses

what will congress ask? how will that want to increase its own part of the process, and what will be the reaction of the bush administration? we met loyal opposition, a number of the transition people in the obama administration in late 2008/2009. one of the points we made is is your government. it is going to be your president the congress may come after in terms of congressional authority and that is the challenge. that leads me to the final point, in terms of congress verses the president. president obama's own leadership style, and what that portends in the opportunity of trade, there

is a new article, coming up in the wall street journal, the point of which, in terms of his own personal staff, particularly the economists on the staff, obama is a detail guy, he wants to get in and know all kinds of things about economic policy, that he and his administration proposed and what are the arguments against him? this is an amazing contrast with the way that he has handled major issues since he has coming to office in dealing with congress, where his style of leadership has been not to get involved in details, to hang back, let congress sweat the details. as a footnote, my colleague, norm weinstein wrote a piece a month ago, challenging the financial times, criticizing this style of leadership. norman argued that given what he called the disfunction valley of

progress was better for the president to hang back. i won't challenge you but i don't agree with you but i won't challenge you on the stimulus package or health care, but in trade, it will be a disaster because particularly in the house, there is a lot of mischief that will come forward and we have seen this. my colleagues may talk about this. we have seen this with the amendment that cut off the small program, and coming down the road, of more importance, we don't know how this will play out, direct challenge to presidential authority in the climate change bill, where the proposed tariffs down the road, the way they're implemented, greatly constrict the president's ability to intervene in the national interest. so that you have as a background in these things, points to look

at. the political situation, the institutional, and his own style of leadership, what that means for trade. let me turn to our panelists. i will go in the order that they are going to speak. we start with an overview by bruce stokes, international economics columnist for the international journal. he is a senior fellow at the council of foreign relations and currently at transatlantic fellow for the marshall fund. my colleague, bill levy from the american enterprise institute, will follow. he came in 2006, was a member of the policy planning staff for the secretary of state. before that he was a senior economist in the council of economic advisers. then he taught economics at

yale. third edward gresser, a senior democratic leadership council, i don't know about the democratic leadership council, the policy institute. before that, the last two years, he was adviser to the u.s. trade representative charlene both of ski, and before that it traded pfizer for senator alex baucus. and don murphy, vice president for interventional affairs at the university of congress. he was in the chamber for a while before he was -- he headed their tradition for lack of america and before that, a member of the independent republican institute. why don't we get started and go with all four of our speakers, then we will have questions and comments. >> thanks, fisher to be here. i too am impressed with the turnout of the crowd.

you should be proud of yourself for turning out on august morning for a discussion of trade, something we love, did to our hearts, something that is great to see. my task this morning is to lay out, if i can, the political environment in which a trade policy will take place as soon as we actually get one. we really haven't had one yet in this administration. the short and story is the narrative that we have come to know and love about public attitude towards trade is only half right. i do not think there is evidence of rising protectionism. in fact, it may be just the opposite. if it is not the opposite, at least there are some openings

for this administration to do some things. some of your suppositions about public attitudes, unfortunately i will confirm some other suppositions about public attitudes about trade. it is a mixed message at the very least. i would like to talk briefly about what i think should be some of the framing concepts of a new trade policy if and when we ever get one. but let's start with the public attitudes first. this is the story we have all come to know and love about public attitude towards trade, using data from last year. basically the public thinks trade leads to job loss, coming from the pew research center survey. nothing surprising except there has been such an increase in two

years in terms of concern about jobs. the public believes that trade lowers wages. i would back out to you that their experience over the last generation is wages haven't increase and an economic theory, if you dump several hundred people into the global labor pool, it should have a depressing effect on wages. as much as we might amend this concern and quibble about the details, the public may actually have a sensibility about some of the impact of trade on a livelihoods', that those of us who are immune from this don't fully appreciate. ..

>> and then jumped back up in

2009, right at the time of the april primaries. i'm sorry, a year after the april primaries in 2008 when trade was taking a pretty bad rap. something has happened here. i think we can attribute it to a number of things. this is probably mostly the obama bounce. people trust obama. if obama pursues trade, then maybe we can trust it again. creates an opportunity for the economy. i am surmising dispute we don't know that for a fact, but to see that kind of increase in change. what else was happening in the economy at the time? the economy was getting worse. we had a new president. that people believed in overwhelmingly. but it may also reflect the fact that in bad times as we knew in the early 1990s, in bad times, people actually became desperate. and they were looking for anything that could help the economy. but it may be as result they are rethinking the benefits and

people saying you shouldn't trade in the process. we can't draw firm conclusions about this but i think it is a good sign for this administration and the country. trade good for the u.s. economy. note, there has been a jump. from march of 2008. this is not what one would have expected given the trajectory of the overall economy during that period. it compounds the narrative we have all come to know and love, but i think we need to integrate this data. we have to understand that our simplistic assumptions about public attitudes are just that. they are simplistic. there is more turmoil out in public opinion then we would like to accept. >> this survey done this more summer, even more recent data. again, you can see that there has been a dramatic increase in the number of americans who say that trade is good or somewhat good for the country.

you see a similar bounce in queue data when they ask a second question which is is it good for you and your family. now, there are two ways to interpret this data. the u.s. in 2008 had the lowest percentage of its population, barely half, who said that trade was good for the country, among 27 countries that were served. in 2009, we were still the second lowest, but in a jumped up to 65. had gone from half to two thirds so we are still significantly below european populations in our appreciation for the value of trade. but things have rebounded in a very significant way. and whether that is because people are desperate and they are looking for anything to avoid the economy, including trade, or whether they have face in a bomb and they did not have faith in bush is that at some point probably irrelevant from the viewpoint of the obama administration, there is an

opportunity here to do things that didn't exist in bush's last year. a second opportunity. this again comes from pew and they ask the question our free trade agreements good for the united states. in beuerlein, this is slightly different from district to. in other words, this is an act of the u.s. government. this is a policy that congress has to vote on. and, in fact, there has been a sharp increase in the percentage of people who believe it. is a pour plurality now believe, lasher a poor olive he believed they were bad for the country. it is not overwhelming. it is not 70 or 80% think it is good. probably not what economists would like to see, but there seems to have been a turnaround in public opinion. again, an opportunity has been created here that the administration may want to try

and take advantage of. one final miff i want to try to explode in his presentation, and it is this one. if i can find it. it's not moving. fine. the slide that is not up there that i would be happy to send to all of you is a slide, again, from the pew data of the summer. democrats now believe trade is good for the country more than republicans or independents. now this doesn't speak to clontz point about the democratic opposition of congress, which of course the initial issue. but again, this perception that democrats are somehow isolationists and have their head in the sand is not borne out by the data. and i can tell you from other data that hasn't yet to be released democrats are less likely to support by american

provisions that are republicans. so it does seem to me that there is an opportunity here for the administration to make progress. final point, and that is, what should be it seems to me the lessons we learned from the great recession as we go forward to shape a policy in the new obama administration. after the great depression, after the mistakes of the smoot-hawley, in the postwar era, we use those lessons to shape trade american policy for two generations. it does seems there may be lessons we want to draw from the great recession to shape policy going for. one is we have to have a trade policy. that's a horse a current sustainable deficit our current deficit of gdp is understandable. we had a crisis.

we are now down, we're moving toward a trade, a current account deficit of two to 3% of gdp. most economists believe that is more sustainable to we have to have a trade policy that supports that. i would be the first one to point out trade policy is not the main way to sport that. there are all sorts of other ways. currency policy, domestic policy, trade policy is one element. but that should be one of the framing concepts. the goal should be to have a sustainable current account deficit. it doesn't have to be zero but it should not go back to five or 6% of gdp and if it does we are in trouble again. to do that, i would suggest that we need to think more about reciprocity and ballads and benefits in trade agreements. these are both elements of the gap which have not been applied to past trade agreements because we thought they were -- did not serve our interests. we may want to rethink that. and second, we need a trade policy that convinces both industry and the people that

this trade policy will benefit them. to that extent, it seems to me we need a trade policy that is based on standards, technological standards, that ensure the competitiveness of american industry. the chinese are pursuing these kind of standard base followed after an policy. we need to be a net gain. i would argue we need to be in that game with the europeans. and we need a standards based policy that convinces consumers that imports are good for them. and i think this raises the issue of health and safety issues, primarily. we need to convince mothers out there who are feeding their children vitamins and imported food that it won't make them sick. economists argument is that overtime labor rights will improve if you just get a country a couple of generations. that doesn't help that mother who is worried about what she is feeding her baby today. and we need a trade policy that assures that mother that as a

globalization proceeds, and more and more of what she put in her baby's body is imported and it is safe, that it meets the highest possible standards. another one of those doors of a new trade policy are not going to be easy. but it does seem to me that that is the lesson we need to learn from the great recession, and from the public unease about trade that we see in the data. thank you. >> a great start. and some food for questions and back and forth in this agreement later. >> thank you. good morning, everyone. in my remarks i'm going to touch on some of the things in a recent international economic outlook in search of a bomb trade policy. which is available on the website. the four things i'm going to touch on our first, the useful ambiguity of president obama's stance on trade both as a senator and in a presidential

candidate. second, the way trade policy in this administration has been shaped by not any grand strategy but by reaction particularly the congress. third, and clot has mentioned this already, the constraints of the administration faces at home and abroad in dealing with trade policy. and then i will close a bit with some upcoming events and decision points that may tell us more about the administration's plans on trade. first, trying to discern where the presidents of true sympathies lie in trade. well, for the last several decades, you could figure out roughly where a president was going to stand on trade from the positions they held in their careers and in their campaigns leading up to the election. there would be the occasional surprise in the way they approach particular issue, but from both parties they were broadly committed to training and they governed that way. president obama was somewhat different. one of his great political achievements actually was to persuade both protectionist

interests and committed multilateralism in this country that is true sympathies were with them. he would write eloquently of the benefits of trade and described himself as a free trader, and then he would stand for the assembled masses in ohio and stand that nafta had cost 8 million jobs. he would argue for a friendlier more multilateral approach to the world, and that we should listen better to our allies and stop bullying them. and then he would oppose free trade agreements such as the one with colombia and lest they would do just what we told them. from a political standpoint, that ambiguity was and remains exceedingly useful. there are strong rifts within the democratic party, and so within the republican party as well. the democratic party in particular it can be a touchy topic. were a the president today declared that he would take a serious risk of offending the group that he needs for his other ambitious endeavors. the president could attempt to heal the rift but that would take substantial effort on his part and he prefers to devote his energies to other matters. the difficulty of course is that presidents are often propelled

to make decisions and even an action can have serious implications. so with that let me turn to my second point, and here i will paraphrase. some come to office with a trade policy. some craft a trade policy when they get there. and some have trade policy thrust upon them. the obama administration falls into this latter category. i think it midsession probably would've been quite happy if they been able to pass through all of 2009 with trade remaining quite as an. instead, within the first weeks of taking office, they had to deal with congress' push to limit stimulus funds to american producers. i won't say too much about that. i know is where my colleagues is going to address this but let me just offer one corrective to a common interpretation of that episode. and a comment telling, congress began foaming at the mouth and slobbering about protectionism. president obama then calmly and coolly brought congress back in

requiring us to honor our international obligations. the problem with this version is that five days before the president made his position clear, his vice president has spoken on the issue on cnbc. and vice president biden said i don't think there's anything that is anticompetitive or anti-trade when we are stimulating the u.s. economy the purpose is to create u.s. jobs. i don't view that as some your. as a harbor of protectionism. so i think it is legitimate to have. >> he admitted any mention of honoring obligations under the nafta, that came later. president obama's modest effort to rein in the buy american for but also his own administration. i bring this up is now stationed without schizophrenia on trade policy has persisted as it has been staffed a. and there are those who take a more skeptical view. the buy america episode was followed by others as claude mention. notably the killing of the

program killed mexican trucks to operate across the border and restrictions on imports of chinese chicken which they have challenged with the deputy appeared in each case congress to flee. in some cases the president discussed his discomfort but signed them into law nonetheless. this pattern seemed to repeat itself on a more threatening skill when the house passed its cap and trade build a month or two ago. the administration was deeply involved in negotiations over what that bill would contain. presumably it has some clout with the congress completely controlled by the president's party, yet the legislation emerge from the house with strong preproduction all requirements. the president denounced as a menu of times but apparently had not been a red light for his team meeting with him on the hill. there have been some positive signs for the administration on trade despite its explicit compline combine comedy and michigan chose chose not to label china a currency manipulator. ron kirk came out in a with a very forward speed or series of speeches in which he advocated

moving forward with stalled trade agreements. shortly after those speeches the white house clarified that it was ready to do no such thing drawing criticism from both baucus and grassley so the ambiguity persists. the third category, to be fair to the president, he is fairly counted on trade. his party has spent a decade and a half espousing the view that they are only simple if they have strong labor and environmental measures. i will just note as a card-carrying economist at the reluctance to go portrayed measures has nothing to do with whether one requires food safety. those are two separate issues. that a country has every right to serve and enforce its own food product safety standards is very different from going down to lima for sample and writing someone's labor laws for the. while a small country like the move may be able to have a u.s. congressman do that, the administration faces some difficulty because when they deal with larger countries like

brazil than it will probably be problematic. and one of the democratic criticism of the bush administration approached that it was too focused on small economies. so the trade policies that sell best within the democratic parties seem to be the least welcome a broad. the administration could hope that a stronger social and safetynet, i.e., the obama health care plan, would be able to give way to new trade action. if you buy the opening premise that trade agreements cost jobs, why should they then be seen more favorably once health care is not linked to employment. industry that job loss would be less painful in that case but it still is probably not going to be welcome. the problem is with the initial argument considered the job losses to trade agreement which is not well supported by the evidence. there is also a continuing confit over whether congress and the executive should be a driving force on trade. congress holds the upper hand in this dispute because they are

granted the authority by the constitution. in practical terms even if president obama were inclined to pursue new trade agreements he doesn't at the moment have trade negotiator authority norwood restoring that authority be a simple act of resuscitating what was allowed to lapse earlier. in the rush to kill or forestall at least the columbia free trade agreement, the house demonstrated the old approach was inadequate. so that would be a difficult challenge. let me move my final set of points, and that is what does all this mean going forward? what can we predict about administration trade policy? well, i think it is clear that this middle near-term likelihood on what happened, instead i think we can focus on three potential battlefield where we could see some action. enforcement, administer protection and doha.

first enforcement, this summer did ministration announced an enforcement was going to be a central open of its trade policy. the bush initiation had failed to enforce rights under the agreement. it is not yet clear whether this enforcement policy is going to rely mostly on moral persuasion or under dispute cases. either approach is going to face difficulties. moral suasion pursues that the critics hold the moral high ground and that may not be how the u.s. is forcing following the first month of obama's trade policy. if it is new dispute cases there are several hurdles. first there is often a gap between what existing agreementagreement say and what we wish they said. we saw this in part or in the parts of the case of the u.s. laws against china on property not long ago. second one the date plaintiff to push a complaint and that was a long-standing problem involving china in particular. finally a raft of new dispute cases like the strain of the day btl. so some difficulties on the

enforcement front here on administer protection for the case to watch is the section 421 case of the chinese tires. there is a case found out by domestic tire producers but by labor interests. if you are trying to discern a couple of rules to explain to the obama administration behavior, are one, don't annoy the chinese after all they are paying for the administration's grand plans. and two, don't annoy labor interests. they are the political base figure those rules come into conflict. both labor interests and the chinese have highlighted the upcoming decision on chinese tires. one is an opportunity to pursue a more balanced trade policy and the other is a test of whether the administration is really a protectionist. finally, on doha, the president has joined repeatedly his g-20 and giacomo is important for successful conclusion but how do you get there. will present take a leaf arguing

scaleback cultures asked that will be a reversal from his campaign stance that he is shown as he has done that before. how would he deal with an admission for the deal that was on the table last summer. that would take a substantial investment of political capital. so far the administration has stating the goal of a successful conclusion, that neglect has actually been noted a broad. there was one story about how month more on regional agreements since the us-led clerk turned away from doha. perhaps one might argue that the time is not right this year but maybe next you will be better. i don't want to end on such a down now but i'm sure it will explain why things are really okay. let me just offer my own feeble attempt at optimism. so i think the president was entirely sincere in his desire for warmer relations with the rest of the world.

it is likely to demonstrate the importance that the rest of the world places on trade relationship so my hope is that this may prompt the president to step up his game on trade policy. >> thank you. there is another event that may or may not, be interesting to see what the panel thinks. and that is the president is hoping that g-20 and pittsburgh. it is a big deal around the world. the administration has promised at various times in late spring that though they hadn't deshpande trade policy review that was supposed to go through the spring. it is now finished but we haven't heard anything about it. in relation to that they said the president will make a speech, a big trade speech sometime at the end of the summer, early september and they have pointed to the time before the pittsburgh meeting. so we will see. that is certainly something that will be noted if he doesn't do it. our next speaker is aggressive. i should say before i turn to ed, phil mentioned we don't give out the paper, papers these days

but if you go to the website that the event, each of us has papers on trade policy. and i want to mention before introduce him, he is on i think in the last month the paper for the democratic leadership council called more growth, less gridlock. recommendations to the ministration on trade policy. i'm am sure he will be talking about that now. >> thank you very much. so thank you someone for inviting me and echoing colleagues on the other panel and thank you all for coming out this morning. i think i will start where bill left off, as he's had a couple of reasons to think things aren't so bleak as doctor leahy was portraying them. and also one reason to think things are much more bleak. the reason things are much more bleak is that we're living through a once in a century event in the world of trade. since this morning, u.s. census

released its monthly trade data. this shows the first six months of trade in the united states. they show that lasher for six months of 2008 we had, there this year 0.9 million. for six month last two exported 0.92 billion. excusing, $0.92 trillion worth of services. this year 0.75. this is a decline in trade that has not happened since 1937. did that happen during the second world war. did not happen during the economic crisis in 1970s. did not happen in the early 1990s. so u.s. trade has contracted in a way that none of us now living can remember. so the real world of trade for people who buy and sell things is pretty bad. the world of policy over these six month i would say is not nearly so as bad as phil was

saying. yes, there is a buy for american position which i didn't occasionally apply. yes, there is a problem with mexican trucking. now, there is no big steel safeguard. now, there is no doubling of farm subsidies as there was in the beginning of the bush administration. typically administrations in their first year high to arrange a domestic coalition, bring their people on board, exile some unfriendly people from it. this has been the pattern in every administration. the last three republican administrations have done safeguards. i think the bush administration is unique in raising farm subsidies. the things that the obama administration and congress have done so far, you know, have caused unhappiness overbroad, among the economists, but they are really pretty small. they don't affect much great and they don't seem to me to be setting very much precedence for the future. what does seem to me to be the

important thing that president obama has done is during the debate over by american is america needs to do its very best to stay compliant with the obligations we have taken on. during a period of collapsing trade and financial attic and unemployment in america rising by half a billion people every month, that's a big thing. that is a real wall against a closure of the world economy that has been built up, and i think will serve the country and the world pretty well for the next four years. then let me move on to the policy agenda. i think when you look at the administration, you see a group of people who have a real sense of mission. feel they were elected to do some things that are big and important. they need to oversee recovery from the financial crisis. they need to improve the american standing in the world in general, and reshape our standing with the muslim world

in particular. they feel we need to give american public some additional sense of security and stability at a time of economic crisis, and some long term changes in the economy that are troubling in some ways. win the global economy policies fit into those priorities, i think the administration has been pretty bold and willing to face down opponents within the public and its own part. i would vote to the launch of the chinese dialect that i would point to a very substantial revision of the trade assistance program and an ongoing and probably this year provision of food safety programs as bruce was mentioning. i would point to the effort in the face of some pressure to keep world markets open. so if you think of trade policy as globalization policy i would say the record is pretty good. if you think of trade policy as trade policy, very narrowly and purely, you know, in our line of

work, it is an open question work in progress. i would say a big problem trade advocates face, and the problem the administration is trying to work through is that the agenda it has before it doesn't really fit the national priorities very well. it is not all that ambitious. and it is not one you can go to the public wouldn't say this will make life better or this will serve america's great social security needs very well. let me run through it. free trade agreement inherited from the previous administrati administration, with korea, colombia, panama. saved for my over active i think he's a good agreement and they should pass. but i will also say that the centrality of fda to u.s. trade policy really since the middle of this decade has not been all that productive for us. the fda's past since 2001 and there have been 14 relationships and i think eight agreements, or maybe seven agreements,

something like that. they have covered about 8% of u.s. exports and about 5% of u.s. imports. on the export side of the season pretty good growth but it is a very marginal contribution to our overall trade portal now. the import side, our partners have actually lost market share. those 14 countries had four points or% of u.s. imports in 2000 now they have 3.7%. so as a tool for helping the partners they have been all that effective. and as a tool for helping the u.s. economy in general has been marginal. and as long as the big economies with which we carry on most of our trade, which is to say europe, china, japan, maybe in the future brazil, india and so on, as long as they are not on this fta list and the ogrin is marginal. then you have the doha round. centrality of agriculture to it is very important to poor countries and i think american

farm -- farmers and ranchers have a good case to say that their industry is more restricted and more limited by foreign trade barriers than any other. agriculture is about eight or 10% of american exports which is not going to go even if there is a big and successful doha round. so i think if the administration goes to the public and says we want to make a big push for doha at least as it is and for these fta is the public will say the president is a smart guy, i kind of trust in. not got much to do with me. and given that trade is a difficult issue within the democratic party, i think of the administration is going to make a big push for trade, and spend political capital on it, it needs to have a somewhat different agenda that will do more for america as an economy and do more for our national security goals. as a nation. and let me give i think three dish two points from a paper that i would like to see.

one is we need to look a bit harder at ourselves and our own policies because they are not always that pretty. if you look at the american tariff system, we collect about 25, $26 billion in tariff fees every year. about 13 million of that comes from clothes, plus textiles, plus shoes, plus luggage. industries that employ very few people here, but our overwhelming importance to the exports of some very poor countries in asia, and to some such as cambodia, bangladesh, and so forth. and to some very security sensitive countries such as pakistan in particular. pakistan has three and a half billion dollars to the u.s. we impose a $306 million pair of penalties on those products every year. meanwhile, the administration is try to get congress to give pakistan a million and a half each year to promote growth and job security and a job employment there.

as we penalize the one industry that is actually promoting jobs and growth today. this is not a sensible or reasonable approach that we need to look at ourselves that we need to fix those elements of our own policies that are damaging to our foreign policy goes into our national security needs. second, i think is an economic matter. trade policy needs to be reoriented away from fda's and towards the large industries that are employers are in big countries that are our main trading policies. i would point in particular to information and media, to invite them in an energy technology that the administration is looking to to create employment and growth, to industries like health, services and medical technologies. these are areas that america has looked to as big employers and to secure america's leadership in the future. and i think they need to replace the fta is of the center of

american trade policy and an economic matter. they should be done if possible in the doha round, if not been through the agreement model on information technology agreement of the 1990s. finally trade policy needs to do more than look to the future we will have in the next decade many new industries that we don't have now that emerge from internet, nanotechnology, biotechnology. they will often arise from very new and difficult issues. we've already seen a lot of debate particularly with europe in biotechnology and privacy. we should be working now with europe and japan and canada and australia probably with korea with the developed countries, to define a set of standards and product approvals and so forth that will allow these industries to grow and contribute to us and the rest of the world as they should. and if we have that sort of, you know, set of issues to deal with

in trade, things that will really help us deal with our great security problems and national threats, things that will really contribute to the country's hopes for growth and employment, then i think the administration can really go to the public into congress and say it is important that we do something difficult to does the reward will be very great. and i think the burden is on trade advocates as well as on the administration to develop the ideas and the policies that will allow the administration to do that. i think trade policy will then be worthwhile. i mean, i will close there. >> thank you. >> it's a pleasure to be here this morning with this distinguished panel, to think a bit about the obama administration's trade policy so far. as you have heard, the presidentpresident will outline his vision for a new framework of trade in a speech at some point in the weeks or months ahead. but while we have been waiting for the speech, trade policy has

not been dormant. and its wakefulness hasn't necessarily been a good thing. there has been concern about creeping protectionism and the cost of inaction on the pending trade agreements and negotiations. so i will try to briefly assess these issues from the perspective of the business community and i will offer some thoughts on a hopeful trade agenda that perhaps the obama administration can believe in. first, what protectionist measures have been undertaken by the obama administration in the 111th congress? what has captured the attention in an alarming way for the business community, have they been serious? as ed points out this is been a terrible recession, and pressures for protectionism have risen. a couple of months ago, the world bank reported that 17 of the g-20 countries that pledged repeatedly not to engage in protectionism had nonetheless done so. but to cut to the chase, it would be an exaggeration to say

that the world has been descending into a maelstrom of protectionism. yes, we should be vigilant as the cost of economic isolation can be high, but this isn't 1930. we are in general seem the wto rules and our other agreements serving as an effective brake on protectionist impulses. so so far those rules are being respected. with a couple of dangerous exceptions. and i would like to do in on one of those, but why american mandates in the recovery act. because it is as you dig into it you start to see how serious it truly has been for many people in the business community. due in part to objections from the business community and from major trading partners such as the european union and canada, the recovery act was indeed a mended so that the buy american were limited, the recovery act had to conform to u.s. commitments under the wto procurement agreement, and other

agreements. so that resolves a large part of the difficulty at the federal level. however, $280 billion in the recovery act spending is being channeled to state and municipalities, many of which are not constrained by those international agreements. outside of road building, states and municipalities have never been forced to comply with buy american rules in the past. nonetheless, the office of management and budget has issued guidance requiring state and municipalities to comply fully with the recovery act buy american mandates. this is unprecedented. at the time of economic crisis, and in the context of a stimulus package that is intended to spend money quickly and create jobs quickly, this is a self-defeating idea. and it is retarding economic recovery. the buy american requirement for us-made steel and transportation infrastructure has not been a huge shock to the system,

similar roles have been around for 30 years. but it is elsewhere we see the problem. there is a $130 billion north american market for water and wastewater treatment, equipment, infrastructure. and there we have a real mess on our hands. canadian firms are now being excluded from u.s. municipal contracts, and retaliation by canadian municipalities could result in billions of dollars of lost business for u.s. companies. also, the buy american rules are being interpreted in a way that bars of some us-based manufacturers from bidding on projects. that's because many u.s. manufacturers rely on global production chains that integrate components from all around the world. and american manufacturers are finding it difficult to comply with buy american rules because it is often impossible to avoid sourcing at least a portion of their content from other countries. the recovery act included $7 billion in funding from municipal water and wastewater

products. the house committee reports that each billion dollars in infrastructure investment creates about 35000 jobs. and an additional $6 billion in economic activity. so do the math. that means that more than 200,000 jobs that his portion of the recovery act funds could save or create, if they weren't tied up in red tape relating to buy american rules. it is also more $40 billion in economic growth that is being left on the table. now, most of the recovery act of spending relating to housing and school construction isn't on line yet, but you can be sure that when it comes along we will be hearing more about the cost in those sectors as well. now, i wanted to take a moment and focus on buy american because it shows that whether we like it or not, trade policy happened. or as bill says, it is thrust upon us. in this case it is happening in a damagingly with job losses and

a growing threat of retaliation. on monday, president obama was in mexico and he commented on buy american. he said we have not seen quote, we have not seen some sweeping steps toward protectionism. this has in no way to endanger the billions of dollars in trade taking place between canada and the united states. in general, that is true. but in this instance of a buy america and it is a problem on the chamber's website, we have profiled up some small and medium-sized companies, of course technologies of wisconsin, aqua aerobic systems of illinois, that are definitely facing a crisis of lost sales and potentially large layoffs due to buy american rules. i am highlighting this in part because it is not too late. the omb has received comments from the business community on its interim guidance, and it has the authority to fix this. omb is due to issue its revised guidance shortly, and that could

lift the unprecedented burden of buy american rules on state in the missile governments or so, fingers crossed. i will turn out briefly to what the new administration has not done in trade policy. name, its failure to move forward with the pending fta is. i will spare you the benefit of the benefits of these excellent agreement with colombia and panama and south korea, the chamber believes they will lose sales, create good jobs and bolster important allies. from a business perspective, the foremost goal of trade policy should be to tear down foreign barriers to u.s. exports. as at least three agreements proposed to do. those barriers are alive and well. and they pose a major competitive challenge to u.s. industry and agriculture. in july, the world economic forum issued its annual global enabling trade report which ranks of countries around the globe according to their competitiveness in the trade arena. one of the reports of several

rankings gauges how high the tariffs are that a country's exports face. leading the pack, as the country whose exporters face the lowest tariffs globally is chile which has a massive network of free trade agreement with more than 50 countries. now i am reaching for my visual aid. while the report found that the united states did well in a number of areas, we ranked a pathetic 114 out of 121 in terms of tariffs based by our export overseas. in other words, american exporters face higher terras abroad than nearly all of our competitors. it may be a truism that 95% of the world's consumers live outside the united states, but what are we doing to lower the barriers that prevent american companies selling to them? >> as congressman kevin brady pointed out the last time congress globe noted to lower exports was in 2007 when

congress approved a free trade agreement with peru. since then though, the house has voted six times to lower u.s. terras on imports. why is it that some in congress are pleased to offer foreign workers free access to our markets with 300 or 400 house members voting in favor, but they oppose helping american workers by lowering tariffs on a reciprocal basis? i have been winning what to call this philosophy. mercantilist policies encourage exports and discourage exports. but the reigning philosophy in congress seems to be roughly the opposite, to encourage import and export happen as they may. so i went to google and i tried to find the opposite of mercantilism. i found that the best label for this exotic philosophy may be laissez-faire capitalism. but i would to insult anyone. especially members of congress. don't misunderstand me.

the chamber is not calling for the united states to freeze barriers to imports. many of edward gresser's ideas about lowering the high terras at the u.s. imposes on some developing countries are proposals that our members would strongly support. but this is not sustainable. and that which is not sustainable will not be sustained, i had in my notes here. [laughter] >> this contradictory -- this contradictory position is a particular threat to the democratic party. a more consistent and logical position would be to embrace reciprocal trade agreements, just as democrats have already embraced one way free trade coming in. it would also be more consistent though to oppose trade liberalization consistently. so this is a threat, as well as an opportunity. most democrats are already pro-import. a great communicator like president obama could help them find their way to being

pro-export as well. briefly i would like to differ a little bit with its restrained assessment of the performance on the fta is. i would just like to point to a gao report that came out on monday, excellent timing. it concludes that the commercial benefits of these agreements have exceeded expectations. growth in two-way trade ranged from 42% to 250%. gao found that post fta average annual growth rate for exports were all higher than pre-fta growth rates in several sectors of the u.s. economy, the met like agriculture and manufacture made gains in market share versus suppliers from other countries. i can tell you that firsthand that the business community has found it extremely helpful. to close, i would like to offer just three brief recommendations for a trade agenda that i think the obama administration can

embrace. earlier this year the chamber issued a report entitled international engagement. it will be on the website. this is a much more extended version, but i will stick to my three-point. first, go on the offensive. the administration will be stuck playing defense against protectionist measures like buy american into it devises a forward leaning trade agreement of its own. as a prize writer jack kinsey used to say the best defense is a good offense. it did ministers now redundant with the absurd trade act, but for by congressman and senator sherrod brown have attracted more than 100 supported in the house. of course not. the internationalists among the administration, folks like larry summers, ron kirk, hillary clinton, timothy geithner, gary locke, they understand this. assignments in the white house has left a vacuum in congress like nature abhors a back and. a week ago the chamber joined with five other leading business groups in calling for the president to make the case for a

leading forward leaning trade agreement included in his promise speech. quote the united states cannot stand still in the international economic sphere. we need to revitalize our export and international trade leadership by moving forward on multilateral, regional, and bilateral marketing opening up opportunities. second, clear the decks and passed the ftas if you want to build a growth oriented international economic policy, focusing on asia, as the administers and has said that it wants to do, correia and fta with korea is the place to start. if you want to have any kind of engagement with the moderate governments of south america, economic political or otherwise, then columbia and the fta with colombia is the place to start. and if you can't pass the agreement with panama, you have completely caved in to the idea, the ludicrous idea that american workers can't compete with

anyone. finally, embrace multilateralism. head is just one of a number of trade experts including former u.s. who have suggested that the big new trade deals of the future should be plural lateral sector agreement under. examples include information technology agreement from the '90s, and also the proposed environmental goods and services agreement which would do away with the surprisingly high tariffs and nontariff areas facing green goods and services. but you can't get there without doha. abandoning doha would deal a serious blow to the still young wto, and it would have better trading partners around the globe. the only way out is through. embracing all bilateralism seems a natural path for democrats. and it isn't clear while this hasn't already happened. a couple of months ago jim backus spoke in this room at an event on trade and climate change. is a former congressman, a former official and former

chairman of the wto appellate body. a unique combination. i wrote down afterwards a quote of his and i think i have it mostly right here. it puzzles me that my party, the democrats, can consistently and in a principled fashion embrace multilateralism, but reject it in the one area, trade, where it has been most successful. the obama administration has a sterling opportunity here to change that. ladies and gentlemen, our economic circumstances are making trade more important, not less. antechamber looks forward to working with the administration, congress, and many of you here today to advance a trade agenda that avoids protectionism, that continues to welcome imports, and probably advances the export interests of american workers and companies. thank you. >> thank you, very much. there are lots of individual points, questions that i have and i'm sure others have. but i want to turn to the

audience can i do have one general question and i suppose one could say this is worst-case scenario, but not really where i started from. and i know that the answer to this will lead you to conjectures about the overall situation of the united states. it seems to me that there is a plausible case to be made over the next couple of years, and we could go right to 2011, you really won't advance at all in the trade front. i am just picking up on things that people said or we knew before. ed made the point and others made it that the administration, part of the administration's argument has been that they need to get a much better base internally, and that means domestic reform. initially, they had said it would good, in the late bush years if we could just get a big trade adjustment. we are the biggest trade system we could imagine. and still the administration moved onto we need health care reform, we need other boasting

up the social base of the united states or can they seem to have decided in may, june, we haven't talked about this, but everything else will stop until then. they haven't made that announcement but basically they pulled everything back, and i don't see when that starts again. the ftas are a real problem in terms of the factions we've talked about, a much bigger problem than doha. doha itself presents the administration with a situation where the major interest groups in the united states basically told them bipartisan here, what's on the table is not acceptable. to what i am thinking of, when do you get forward? some people argue to go to 2010, it's too late because the midterm elections. the administration at the moment is having, making heavywater on things like health care, this may change, the economy may get better. but i can see us going right into 2011 without much happening. and then you face 2012. so what is the likelihood you think something like that

happening? >> if i were a betting man i think it would probably place my bet on your projection. i think that as much as i support the need for a stronger social safety net, in the united states, it certainly -- the public support for globalization and trade in europe may in part reflect the fact that the competition created by globalization is not as endangering to individuals in europe as it is in the united states. the administration argument that first we have to get that in place is really a delaying tactic, because people aren't going to overnight believe that it will work. let's assume that in fact the premise is right and you need a stronger social safety net to build support for globalization in the united states. it will take years for people for that to sink in, for people

to understand that if they lose their job because of trade they will not lose their health care, that if they lose their jobs they will infect you retrained for the use to not get retrained. that impact employment may not be as onerous in the future as it is now. bear in mind, the obama administration has done nothing to prove the underlying races in the united states. so i would agree with you. i think that this is a delaying tactic. it may be true and it is also a delaying tactic. that even if all this stuff would get passed, which is how we do things, it would still take time for public opinion to change on these issues. and so much of this is out of their control. i mean, progress in doha also depends upon our trading partners, the indians, chinese, and others be willing to move also. and we have no evidence of that as of yet. >> anyone else?

i don't ed has written about this. he talks about the differences within the democratic party who say we have to stop until we get, we have to stop until we get a better safety social net. i don't know what your current thinking is. >> well, in answer to your direct question, there will have to be some -- or doesn't have to be. there very likely will be some trade policy fairly soon, and several of our trade preference programs are going to go to lapse or blink out of existence at the end of this you. congress will have to decide whether to continue them, particularly the indian trade preference act. my guess is that they will probably do continue them so there will be some trade legislation. probably there is a window for the fda's early in next year. if it goes much later than that it will be difficult. doha, i don't think the wto

members have been talking about finishing the agreement and having it done and voted on next year. they are talking as i understand about completing an agreement sometime in 2010, which mean a boat in 2011. so i don't think there will be no trade policy activity, but either it will be fairly small and limited to preference, or it will be preference plus fta or fta plus some other thing. i think a really big trade legislative event is probably not likely until 2011. >> so i just want to follow-up, the kind of things you recommend here about the agreement or moving toward new sectors, advanced, that is something that one realistically, one would have to think of in terms of a second obama administration, or another president, is that there are not? >> no, when i was writing the paper, what i was thinking about was a four year term. what can reasonably be

accomplished within a four years. we could do the support for the muslim world in very poor countries this year. sectorial agreements could either be done as part of doha or separately. as i recall the information technology agreement was about six or eight months work. it had a lot of background before so it would take longer to do something that was in other industries, and it would take longer to do something that was real serious and involved three is under services and non-tariff barriers as well as tariffs. but i think this is a reasonable for your program. i wasn't thinking about a decade or an eight-year program. >> okay. >> you asked a question, you know, does the obama administration had a plan to broaden its base, how important is that base? i would argue that the base is probably of support for trade.

isn't that bad. you know, the peru trade agreement passed by a two to one vote. it is one of the most bipartisan vote that we saw in the last congress. you know, trade adjustment is kind of a different beast but it wasn't the one item in the stimulus package that was negotiated bipartisan, and bicameral basis. how big and that base grow? you know, you can do all kinds of things to try and entice a dialogue with the house trade working group but are you ever going to win them over, you know, this administration, if they're going to make it contingent upon moving forward on trade that they need to have support of that magnitude, up to 400 house nevers, that's a very high bar and it becomes very difficult to accomplish.

>> please identify yourself. i am perfectly happy to accept not only questions, but declarations as long as they are reasonably sure that you can't write an article here in front of the audience. okay. and we have got a microphone around, so when i -- let me start right here because the microphone is here. >> thank you. i am a chinese reporter working for 21st century business herald. take you for all of you to come here and give us a checkered speech in the middle of summer. my question will be addressing the china tire case. based on the panelist's observation of the president's limited record on trade policy, what kind of -- what kind of decision do you think the president is going to make on this case? do you think he is going to grant the remedy on this case, and why?

>> okay. guys, we are away from big principles right to the nitty-gritty. >> if i had to guess, i would guessed that there is some remedy. i continue a story that goes in either direction. i could say well, they faced a similar conflict when it came to the decision in the chinese currency manipulator. and the president has vowed that he was going to do that. secretary geithner, in his confirmation hearings repeated this. it was a same conflict between what the chinese government clearly wanted and what labor interest groups wanted and he opted to not name china a currency manipulator in april. what conclusion do we draw from that? on the one hand you could say that's really telling us where their true preferences lie. again, they will sort of a sum of a similar choices. or you could say that just puts them deeper into hock. they need to make sure that

their political, sport and ever they need to do something to appease their political base. i guess i slightly off towards that lighter but you can tell either story possibly. is a very interesting case. for those who are unfamiliar with this for 21, this was part of china's accession to the gibby gilbert was a safeguard. it was a very, very low hurdles that the u.s. can put restrictions on imports with sort of very minor injury occurring to domestic industry. and there are a number of such cases under the bush administration. i had an opportunity to participate in a couple of these. it is a bilateral policy and a multilateral world. so it was sort of great public concern about trade with china. there was pressure to do something. the problem was that whenever we look at the situation, what became clear was that it president bush had chosen and

some of these earlier cases to back it would have meant that imports that were coming from china would have come from other areas, whether it was vietnam, india or brazil. and even if one had only been concerned about u.s. workers and not about u.s. consumers, for example, this would not have anything for u.s. workers. i think there are some of the same discussions we are seeing a. the problem is that there was a sort of very strong philosophical approach which said the reason the bush administration didn't do this was this ideological commitment to free trade and they were willing to sell out u.s. workers and things will now be different. widget that premise is going to make it very hard to say, oops, we just checked and there are more countries other than just china and this may not do much. . .

that means to be considered very strongly. secondly, somehow we have to have an adult conversation with beijing about the fact that we can all walk and chew gum at the same time. we can fight over things and still work together. the chinese wanted to be all or nothing. we have cases with the europeans

on very difficult issues all the time, and it doesn't impair our discussions with the europeans on a whole range of issues. we tend to, whenever we have a trade fight with the chinese, find out the chinese won't show up for meetings so we they won't talk in the meetings because their noses are out of joint. the chinese have to learn that in the real world of global trade politics you can fight and talk at the same time and i think that if we again, purely diplomatically, this is all over the merits of the case, we send another signal to beijing we don't want to upset you because you will retaliate, we enable that dysfunctional behavior by the chinese and we should avoid that. >> i.t. bruce is right, rightly or wrongly, and this could be bipartisan here, a decision that goes along the lines of the bush administration which i would support for other reasons will

feed into the skepticism of the legislature about the executive policy. i have to concede that even though -- if i were in the oval office i would recommend the other way for the president, but as we heard this morning the president wants all the details so we have to bore him congress is going to come after you more and your administration may be and try to cut your authority, your leeway, your discretion. i also think in terms of china i think the chinese it seems to me at any rate are finally beginning to be more comfortable with wto cases. initially -- we have the situation that democrats beat up on the republicans. if they hadn't done enough cases, initiated in of cases against china when they knew the dirty secret was everyone had to agree, everyone being wto members, that for the first years in order to not swamp the wto with cases he would ease off and only after 2006 when the chinese actually -- the full obligations were now something

they had to live up to to go forward -- the chinese reacted as if somehow this was the way things ought to go for a long time. i think now they realized they are better off if the united states and europeans or japan or whoever goes through the wto the alternative which is either unilateral or some sort of combination. okay. let's see. i will come right here and then i will just come right across. if i missed anyone that there please raise your hand so i can see. >> jeff screen from u.s. department of commerce. i was very intrigued why several speakers comments on moving to a sectorial agreements, expanding on the concept of the information technology agreement. of course the trade environment is the world in quite different than when the iata was proposed and implemented. i question as put to you see as some of the u.s. political

challenges to sectorial agreements and how do you think our major trading partners and countries would react? >> i will take a shot at that. i'm somewhat skeptical of the sectoral approach. i'm not sure it is so much a problem of domestic political challenge because you can pick your sectors exactly as it was suggesting. if we are setting the agenda we will picket sector we are not going to have those domestic problems. i think the difficulty is finding that sector where you have lots of countries around the world who see themselves as gaining from an agreement and i think we are -- there are particular circumstances that lined up with technology. although i've heard from some participants that they should have been holding out their concessions to get something in replete. so i -- i completely agree with the premise which is the wto is

sort of stock and we need to think of different things. i am in favor of thinking about poor lateral agreements but brought ones because we often need that to try and find a balanced deal where you will have the right number of participants so that would be the question i would pose and i am somewhat skeptical you would find those kind alignments on the international scene. >> those are reasonable concerns. i would say there has been no multilateral trade agreement since 98 so there's reason to be skeptical about any initiative because trade policy is hard. it's hard to get countries to agree to anything and there are always reasons to say, you know, doha eckert culture is too hard there or not countries except australia and brazil but want agricultural reform. we should pick something else.

i think the path we have been on since the i.t. is one we haven't had many agreements and so, i think if someone has a better idea that will create as much growth and employment here than any other big producers, you know, i would welcome it, but i think the past we have been on on doing substandard fta where we are pushing eckert of what to do very elaborate you know, satellite transmission iaer's hasn't been that productive and at least in concept piquing the big countries in the big industries will be productive. >> the dirty little secret is the only way we will get many of the stone is if we abandon the most favored nation principle, and that is apostasy in the trade theology. the post portrayed theology. but what i am struck with in private discussions with treat people all over town is how often they volunteer the fact we need to rethink mfn and that is

one of the challenges we are going to face intellectually, politically going forward to enable the strategy which i think is the right way to go but that's one of the obstacles we have to wrestle with. >> one observation i'm also convinced on abandoning mfn. if you look these industries particularly technologically sophisticated ones they are only ten or 20 countries that are a participant. most others are bystanders and having an mfn based trade policy was fine because it included all of the ita producers. i am not so convinced he would have to make that choice. and because of all of our preferences in fta we have made already. we don't have many mfn policies except those which are like ita or most countries don't have

terrorists anymore. >> right here. >> negative peter, i am a lawyer in town. i was struck by the fact that working for the aba trying to open markets for american lawyers has proven to be quite difficult and in fact to the extent it was successful it is largely because we ignored the rules and other countries that would otherwise keep us out but i was struck by the fact of the services are now 75% of our economy of the discussion about trade seems to rest on goods and farm products and so long and very little attention is paid to the services in the sector which is such a significant part of our economy and the europeans as well and i wondered whether the same dynamics that are affecting the production of goods will also affect services which is in fact the big growth part of our

economy. >> this is a very good point. worldwide there's about $16 trillion in exports each year. 9.5 trillion in manufacturing, 2.7 trillion in natural resources, 1 trillion in agriculture and about three or 3.5 services. so in general services or about one-fifth of trade. for the u.s. they are more like 40%. the u.s. is one of the heavy trade portfolios in the world and i think any american trade policy that doesn't have surfaces, a core objective is now serving the country all that well. >> i agree with that. a couple things to keep in mind. one, the uruguay round was the big breakthrough in services and both in terms of substance and as those who lived through know the political muscle came from service and companies. they didn't get everything they wanted but it seemed to the

world and seems to me it seemed to them they got a lot so as you got to the doha around there wasn't a lot of -- there wasn't a love interest and also this was the doha development round. for a long time people paid little attention to services. i think belatedly the industries of the united states and around the world have awakened to the fact they have been ignored and as a matter of fact this was true in the bush administration was guilty until the last year or so when it finally began to say in the wto negotiations you cannot ignore services. lavina put forward proposals about ending the round last year which put of second class and that i think stirred the resources and the administration. i can't believe the obama administration is not going to be when we're looking for political support will not be pushed forward that we get some in the final package that you get some advance and sectors.

the bad news for that is that is very tough. it's coming late. the developing have reacted against the united states say and look you don't have to tell us exactly what you will do but we want something on the table with services. that's another point about the obama administration faces a situation in services as well as manufacturing and a culture where the major interest groups are saying it's on the table now is not adequate and i don't know how will play out. it has been deleted but it's there. i'm going to keep -- [inaudible] >> barbara wittman, and i am a trade economist who served as the trade policy coordinator in the western hemisphere for the state department for four years. the striking point that i welcome from ed gresser is there will be action on both preferences and fda.

now murphy talked about the standing as 114th out of 121 countries. and about fact there have been six positive votes that grant tariffs to the u.s. and since we pressed one reciprocal agreement. the one fundamental point we've been addressing a long time as we were very nice about getting lots of poor countries access to the markets and what has been the goal of all of the reciprocal fta to convert a one-way street to a two-way street the benefits our exports. now, the general comment about fda -- fta the fact is i've worked 40 years and multilateral negotiations of one kind or another and you never get there at the table with everybody. you get there one by one. if you have to do it with fta before you have a common basis of understanding you can do it with everybody, great.

what i'm looking at now in fall or early next year what we have to do with the preference programs in the fall the problems as i see with the practice programs in the absence of going ahead with the reciprocal trade agreements -- [inaudible] go on with a pattern where washington likes to give way markets without getting anything from exporters. part of that reason is most -- >> can you get to the question? >> it will be, give me 60 seconds. part of the reason is we have a lot of people -- that's the way of doing business in washington. the lobbyists for the country's keep getting their preferences and nobody seems to be convinced that you want a permanent -- they want people to punish countries and take away their programs so they don't want to give a permanent reciprocal.

now, the question is yesterday canada signed an agreement with panel. we have one pending with them. very likely canada is going to ratify there's before we can. do you think this can put any pressure for the approval of some of our agreements because when we look at the competitive ranking this all these agreements and we do very badly. canada has jumped the market with several countries where we couldn't get it through. does anybody think yesterday's action will help? >> no. the stakes are high enough and the political strains are big enough whether it is what e you with correa or canada or panel i have a hard time seeing that as the factor that will make the administration say my goodness i realize trade is important. >> i disagree a little bit. i don't disagree with the administration but i do think

for instance and i will be interested in their reactions from others the e.u. and the korea agreement will set off at least some pressure. it will be just -- if you go with other middle sliest to large companies -- if the e.u. continues and there's little size countries that move you get to the point that there is from a markham this point of view that drives politics in the united states is going to be reaction and it's fun to be just like 21 when bob zoellick can come in and turn to the caterpillar company and general motors, u.s. voters now, general electric, whatever and say look we've got all these great deals, chile has 15% tariff on tractors, caterpillar and we are getting screwed the fact we have to pay it now. it will build up. what will work out phil may be white. this gets to the point and made i agree these are small fta's

then you're talking about economies that are fairly large and so, in the future whether it is a bilateral or we go to regional which is quite different life think the dynamics will change and the numbers will change on the impact of the u.s. economy. >> i hope that claude is right. it would be in the national self-interest of that is what happens. i think the most important thing you said is you described a process that has been going on more or less the last two generations which is trade policy has been hand made foreign policy. and we all know that the foreign policy establishment in this town is stronger than the trade policy establishment and that will be hard to overcome but i do think one of the lessons of the great recession and the need to have a more sustainable current account balance is that we can no longer afford to

always defer to foreign policy needs rather than economic policy. it does not mean economic and policy needs of waste of foreign policy needs, they shouldn't. i think the strongest argument for the corrine fda is a foreign policy but that said and done at the margin if we are going to ensure ourselves we have a more sustainable current account balance coming forward it seems to have to be greater priority placed on the economic reciprocal benefits for the united states. >> my name is phyllis buck off nine. -- phyllis kaufman. kind of being the biggest trading partner with the u.s. i feel like the administration has been ignoring the complaints from prime minister harper about

america. it seems there are thousands of jobs that rely on the relationship that we have with canada. my question is is by america affecting this largest a provision that was added to please come the labor groups to support obama to be elected and it's not actually going to have a long-term effect on this relationship or is the u.s. in a way taking for granted these relationships and always paid attention to the ones who made more noise like china and mexico? >> i think it's not over yet you know the outcome. that's not the case in this instance because the funds being dispersed through the recovery act are coming at a relatively slow pace. we will see them coming out over

a year or two. over time we are going to hear more and more complaints from u.s. companies and canadian and european and other companies jobs being stopped it, lost. so this is not going to go away anytime soon this is a real threat and the canadians are not about to drop it. >> they don't protest too much. the reason this is a battle is there is money on the table now and it didn't used to be -- much of what we are doing is legal under any obligation we have under the wto. model of it but most of it. i was recently talking to the folks in brussels which is our equivalent of u.s. t.r. because they have begun a pretreat agreement with canada which to make claude's previous point would be an eye opener if it actually succeeded. i ask the folks in russell what do they see as the largest obstacle to a free trade agreement with canada and they

said the by provincial provisions in the canadian law. the canadians have the same series of buy canadian problems we have in the united states with our by america. but it's easy to pick on the united states. we are a big target with broad shoulders. there is a residual anti-americanism that runs through this. it's a nice thing to kick the americans in the shins couple of times. it is beyond me why we don't take back but let's face it we are all sinners in this game. the europeans have some of the same by national provisions in their legislation and we should take at least some of this with grains of salt. >> early at mant factors alliance. two quick comments and the question. first would be a good starting point for assessing current u.s. trade policy is a chinese

proverb many false to agree with claude the fta with korea, e.u. and canada and others are going to make much more urgent that we decide which way we are going to go particularly on the korea agreement even though the panel agreement whereas caterpillar here there's one particular several billion dollars of building the canal and caterpillar's main competitor for the heavy earthmoving equipment is a canadian firm and that is why canada is in. my question is out the dough hawk ground and to seek a little more better -- i don't see this movement so fast. we can stand still a lot longer because people talk about 2010 but that is the modality, the abstract for me a list and past negotiations, and i go back,

tokyo round, kennedy round, was one or two years and in the real negotiations began with awfulness and at sections and balancing. it's a huge undertaking and negotiations could go on for years. my own feeling but i would like your reaction, when you talk about the modalities in late 2010 there's at least couple years before you can have and agreement with all the listings which you need before you could approach, chris. so i would say doha ground, you know, 2012 or 2013 before congress would have to focus on saying yes or no and i would ask your reaction. and i being too relaxed about how long it's going to take? >> i do think it's a very difficult juncture. the business community in general thinks ambassador kirk has got it right. the modalities such as they are

are on the likely if we just sign on the dotted line right now it would be unlikely to generate significant new market access for american exporters. this exercise of trying to attain clarity about what exactly the united states would hope to get in the market access i think it is proving to be a politically sensitive with other countries. we wish him the best of luck and are backing him up. if he fails to get the clarity that he's looking for and that vision is attained and we see something reasonable, then it's hard to see what the next steps are going to be. >> [inaudible] -- than their real negotiations began -- >> but so much is built into the modalities. that's the way this round is. >> the developing countries are already interpreting this new

obama administration initiative as an attempt to move to a request or offer an approach, so we will see how they react. their initial response has been negative which is a reminder progress in this round is not just dependent on office. if in fact we get rebuffed on moving into a more clarifying request offer approach to the modalities, then who is the onus on, as were those who refuse to have more clarity? >> i'm going to partially agree with you. i think the concern how this is going to move forward, i don't think it is set in stone it is two years after you do modalities' then you make progress. i feel what you need is a prolonged u.s. leadership. bruce is right this doesn't entirely depend on us. you have an awful lot of will last year and i don't think it

was the administration's fault it didn't work or the contras. the other players do matter however it's also true i think u.s. leadership is key if you're going to get something to move forward. it's sufficiently complicated, the u.s. is sufficiently big and that is beyond prolonged leadership. i have little doubt of somebody dropped a reasonable doha package in the obama administration's lap next month they would say that's great, thanks and they would work it. the problem as it is going to take a substantial amount of time working with different groups and that's why it doesn't work to say well i am sort of passively disposed towards trade if there is going to be progress on these multilateral fronts he would have to have acting engagement. the other problem we face is awarding ambition and doha doesn't work because it's not that everybody has gone 25% of the way towards an ideal agreement and we could wrap up there. people have moved to different speeds and that's why you were

getting this as you know the sort of pushback. so i agree with you that it looks like a long haul not necessarily those that the modality is an insurmountable obstacle. >> time for one question here in the back. >> i just want to -- >> can you identify yourself? >> stuart. thank everybody for an outstanding presentation especially bruce's analysis. we have to know when to to seize the moment and restore approach trade progress of consensus in the united states. they are uniquely positioned to do that because they listen to take input from everybody from traditional business community to the labor unions, which by the way our 50% of the democratic electorate the labor

union council and 25% of the overall electorate. so their needs have to be accommodated number to come for better or worse this for 21 has come a long way and enforcement is critical to the building block of bringing middle class americans along light trade consensus. i wanted to ask a broader question to close. i agreed of larger scale issues like conclusion of doha are easier to get political consensus than small less consequential bilaterals but there are three issues you haven't addressed today -- >> we have really got to move now. >> trans-pacific negotiations is that a good opportunity for the u.s. to assert its leadership on? the anticounterfeiting agreement critical with all of the ip enforcement consensus that exists in this country that we need to perhaps build upon and

bruce particularly, the u.s. he you bring out of the underbrush that is occurring and that lead to broader bilateral initiatives between us? >> i'm going to exercise the right of the operator to say those are great questions and we will answer them in subsequent meetings. i just sit on the one hand and joined the author might libertarian and tama were out about trusting any government whether it is obama or bush or clinton or carter. but secondly, i do endorse very much you're point that this has been a great panel and please join me in thanking them. [applause]

how is c-span's on did? >> the u.s. government. >> private benefactors. >> i don't know i think some of it is government raised. >> it's not public funding. >> probably donations. >> i want to say from me, my tax dollars. >> america's cable companies created c-span has a public service, a private business initiative. no government mandate, no government money. president obama welcomes president mubarak of egypt to the white house this coming tuesday. it's his first trip to washington in five years. at this event we hear from egyptian newspaper publisher about the middle east peace process. from the middle east institute in washington, this is a little over an hour. >> thank you for joining today. it gives me pleasure to welcome dr. abdel moneim said who will be discussing the arab-israeli peace process and steps that need to be taken to finally

achieve comprehensive peace. i first met our speaker back in 2001 when i was reporting for npr out of the route and i would go to egypt to get the egyptian reaction to the second and my editor told me that dr. abdel moneim said was a must interview and much to my pleasure i discussed not only was he a great interviewer but he gives great sound bites, three seconds of great content, a wonderful treat for a radio journalist. but he's more than just a great sound bite maker. he's also a great egyptian intellectual thinker and writer who's written extensively on the middle east peace process as well as politics and economics of the region. he is currently chairman of the port of the "al-ahram" newspaper which i believe you just joined about a month ago, is that -- director of the "al-ahram"

center for political and strategic studies, egypt's main think-tank and held that position for quite a few years. he's the founder of the international alliance for arab-israeli peace and egyptian peace movement and has been a senior research fellow at the bell for harvard university and fellow at the brookings foreign policy and many other positions. he's visiting from cairo on the eve of president mubarak's meetings with the president on monday and we are very lucky to have him here with us today. but before we begin just a few housekeeping matters. this tuesday august 18th we are hosting the international crisis group. they will be discussing a report recently authored about tensions between kurdistan and the iraqi government. his report is called on iraq and the kurds, trouble along the trigger line. it just came out last month and provides analysis what he

believes the new territorial and political and economic fault lines are in iraq. and wednesday august 19th, pakistan study center is hosting a discussion about development challenges in pakistan with the former head of the university. i hope you can make those talks next week. and now help me welcome dr. abdel moneim said. [applause] >> thank you very much. thank you for you all coming this afternoon. i have the most impossible mission here to tell you what will happen or what is the madonna in the arab-israeli thing. most the audience here has been in the business of the arab-israeli peacemaking and war making and the past decades and

all as we have this kind of guess work about what's next. but the key for answering this question were trying to answer this question rightly or wrongly is to call the moment of what it is. after the camp david talks in the summer of 2000, and then but follow it through clinton and the taliban negotiations, we had a period of violence which is a testimony of one of bob laws of the arab-israeli conflict. the arab-israeli conflict is if you don't make peace you make war. so we are into one of those laws after another last war which was the war in gaza and the arab-israeli conflict never failed to be innovative. we got a country to country war

in 1973. we got columns, tanks, planes crossing and counter crossing, and you get suicide bombing on the other hand, you know, use a certain kind of violence to try to press on the other side of your views and we have everything between come from state liberal violence. and in between we have things like hezbollah which any state actor that is a new term used surrounding the business of the conflict. so we have a moment now and i would call it to the obama moment. it is obama moment because that was actually what triggered people talking about what needs to be done that obama probably is the first american president to decide he is going to solve

the conflict. throughout his campaign, after the campaign he said and the first day he started calling president mubarak and started making very important points. so the signals were on. every american president lino the first few months at least is shying away from the business of the arab-israeli conflict including bill clinton. even president carter, back in early 1977 it is just keep that monster away but that is a president who came and said all i am going to head on into that problem and sulfate. and it was not something from his general approach domestically or internationally. he's dealing with iraq alone, medical care head-on.

he has quite an umbrella about dealing with such problems. so in a way he is critical. he's on doing that to show interest here or there but now he is interested to get to the bottom and get it into a conclusion in a reasonable amount of time. now, you know, what he's going to do and what he is doing in the last few months i must now be very frank with you that i found to stories one in cairo and one in washington. the only -- president obama start listening to everybody and after calming down was his wonderful speech in cairo now he is proceeding to have the final four of the leaders of the region and after that he will

formulate a kind of framework, we will collect from work, peace plan and come out sometime in the fall, september october. i don't know how much the president will be taught by ramadan in the east but he will say here is my plan. and his plan should be negotiated between the parties. that is the vision of cairo and why president mubarak is here while his plan is in the making it is important to consult with the close american friend and ally. that is the story from cairo. the story from washington is quite different. the story from washington from people like talked to that there is nothing in any way related to the plan or vision but there is the issue that settlements and

normalization and that the obama administration wants to create the environment for negotiation or peace process. something which is contrary to what we know or have been told before that the administration is seeking peace agreements, not peace process and even instead of haggling over the peace agreements we are haggling over the settlements and the normalization issue. i just to david in article by a friend of mine called sex and marriage and the arab-israeli conflict in which he put the things like this that the israelis and arabs are like two feuding families and a small village which is the middle east in a way is a village, and they

have been in conflict for too long and then the big guys of the families decided april, a boy for this family and that will end the conflict. so the king into the marriage contract and find it's difficult to much money will be paid, what will happen to the inheritance. moscow one of the boys obviously suggested about the boy and the girl get together in a love making session and this way will make normalization faster. people said that can't happen. there is premarital sex and durham and america but not in the middle east. as such of the whole thing came into hobbling again about that,

about all the things related to normalization and the advice he ended his article by saying, mr. mitchell, you know, get to the contract. forget about normalization, forget about the marriage, did to the contract. the advice here or the approach that the idea if israel is going to build 400 units here or going to that unit there we keep the game going which is the essence of what president obama was against from the first place that every peace process and santoli process is dustin process and the process is always challenged by other people who are planning to disrupt the process and this kind of settlement, this probably kind of raucous which

might come some time or any kind of violence that may come here or there will actually lead to disrupting the whole process and then we start all over again. is it possible to do that or not? i don't know. but my feeling is the following that somehow, you know, the issue of normalization and settlement are both plants it seems the two parties cannot ignore and they are trying to make it to the minimum i mean trying to make it to the minimum is to create something that is the enough for the domestic politics of both sides. for the israelis to have a step regarding settlement saying that

leads to the completion of the 400 units which are already under construction and on the other side to make a kind of multilateral forum in which the arabs and israelis can get together and call what normalization and then come down to their real business of making the contract. that is the kind of scenario that seems plausible to me. goes this way is to look particularly on the light of president mubarak to washington my guess is not enough. it is too light to keep the arab-israeli approach into that direction alone. i guess in the realm of the egyptian american relations we have got to be much more

strategic. we have got to be much more strategic to include you can't keep that scenario they just made without syria. syria is an important part of the game so the game has got to be comprehensive you can do it palestinian is real because syria got some of the cost whether anybody like it or not and in fact i must say they have been helpful in the past few months actually have been helpful on the cease-fire will all we have now couldn't continue without the syrians that hamas coming to negotiate couldn't have been without and the wave of elections how will but if it was. the syrians i guess are expecting a kind of reward for

this that they will be a part of a serious peace process out well. in the wide circle i guess also is important having not only the arab-israeli conflict is isolated at least in american eyes from five strategic situation in the region which is i will say deteriorated in many ways since september 11th. september 11th we of the war in iraq, the war in afghanistan and others in the region. i am singing the strategic situation is deteriorating mainly because of the increasing number of the failed states in the region. we have already somalia, iraq but very soon the situation in sudan is very honest and i guess

i am not feeling as much in cairo or in washington the detection of the earthquake that is taking place there. they are coming from afghanistan and pakistan and the horn of africa, the situation over there. if you add all that together, then you have a very ominous threatening strategic situation. so that in a way engulfed the arab-israeli conflict in many ways but also make it the resolution much more important than any time before. people might say the middle east was always dangerous. i believe it is dangerous this time because we are faced with a situation that we've never faced before. we are faced with a situation in which a danger comes from people

called on state actors but actors that we don't know. i mean, we have events, we see the red lines. we have one action of terror that happened in the desert of egypt in which we have a linkage between terrorists working between somalia and sudan. these kind of networks put together, terrorists, organized crime as well as state sponsored terrorism of different sorts. so we have quite a mix of international threat. the last group we discovered in egypt shorthand called hezbollah terrorist group in cairo is an international group.

, some europeans and arabs together with connections that go from table on to lebanon to somalia to other places with threats related to the conflict in dealing with hamas and partially dealing with other issues like suez canal and maritime pieces in their raid see. so, we have a general situation that is i believe needs attention and going into the arab-israel conflict is very important and i guess president obama realizes this. but i hope that he will not get into the kind of i will say

direct slide shows and these slide shows will take a lot of effort helped and ends with finger-pointing you did that, you didn't do that and we come back to substantial issues. one of the conditions of peace is recognition of israel as a jewish state. as far as anybody concerned iran said this is a islamic state of iran and business of iranians and israelis to decide what is the name of their countries. but to ask other countries to recognize. but these issues come. i want to say when you want to increase or raise the level of the ceilings for negotiations to bring things to identity, to god, to religion, yet that is capable of spoiling anything

positive. i will stop. thank you very much for listening. [applause] >> we have a lot of journalists here today. so let's begin with questions from the press. the gentleman in the white. if he could state your name and affiliation. thank you. >> good afternoon, bob dreyfus with the nation magazine. i wonder if you could -- i wonder if you could talk about the reconciliation between fatah and hamas and egypt's role in that and make some predictions about coming out of the fatah congress where that might go and we might expect over the next six months. >> well, the negotiations between hamas was not easy and i must say you have got to

quantify and to the internal dynamics of negotiations itself and the environment and i mean the parties that are affecting those who are negotiating. there was about six issues that i don't remember all but there was a number of issues that the both sides were differing throughout the negotiations. the general principle was that the palestinians will go to the election next january and in general area they will decide once more in a way we is going to lead them into the negotiations or into the war whether it is fatah or hamas, a kind of going to the people to decide. and the purpose of the cairo negotiations is to make the road map for this. and here comes the second issue in the negotiation about the

government which in arabic i don't know exactly how we say in english it means consensus kind of government. it is a unitary kind of a government. but it is not. but was talked about was to have a government independent of both sides agreed upon both sides, nominated by both sides from independent palestinian personalities. that they would take the palestinian people to the road to the election. that was agreed upon. there are other issue is rated how to deal with the elections and want to deal with the detainee's of both sides in gaza and the west bank. there was also about the victim's of the past few months of clashes between the two sides and how to handle this.

all of that is an agreement about. there are glitches here and there but the glitches are held by basically hamas in order not to come to signing. so the egyptian business of diplomacy and putting their heads together already has been successful but hamas in a way i guess is held by as i said before the city and position what the city and position is allowing hamas to come and talk, refrain these kind of small issues in such a way that will delay the coming to the conclusion. an egyptian strategy is that's one important part of the big piece that i talked about. the big piece is to get the palestinian had solid situation and support it and send a hi delegation to the fatah confidence and ramallah.

we used whatever inference we have over the different factions to make the conference successful. and as such, the egyptian approach used to come to enter that reconciliation. there is no objection for hamas to be a political force within the palestinian political spectrum in the opposition. but also not to have veto power of what the general palestinian situation will be if the situation for negotiations mature. so we will keep egypt -- there is another approach suggested that to isolate hamas altogether and isolate on till the time comes but that kind of view i think was not pursued. >> to more questions from the

press. >> helen mccotter -- >> wait a second. >> you seemed to be saying that president mubarak is going to be urging, maybe i am extrapolating, but could you -- will president mubarak be urging obama to move towards final status peace talks more rapidly and do you think president mubarak has said the plan for that or any kind of scheme? >> well, you know, there is not a lot of details said about the scheme there is a word everybody used which is we know how the settlement will be. this kind of mysterious words about something that we know and are not sure but we know in the heart we have something around clinton parameters. that is the way i understand it. so, president mubarak, that will

be using or at least that is what he thinks that already we have a parameter for agreement is not coming to urge president obama at dewey i guess that is what they talked about in the previous meetings. the meeting in cairo and they met at the g8 in london and i guess they talked on the phone even the idea here from what i know is that they talked in a sense of partnership. there is a general change in the chemistry between the leaders of egypt and the united states so the idea as else i said the story from cairo is president mubarak will be ready to listen to how we are going to proceed in order to implement what we both know will be the final

solution but as i said what i hear from washington and you probably know more that it is not quite -- washington is not quite ready for that and still there is some time for more talking on the normalization and if she was as there are too important pillars for confidence-building. anything else is my own opinion in the sense that all confidence-building attempt to build with a lack of confidence between the two sites >> yes, question, gentlemen in the back. >> i work for "al-ahram" newspaper in the united nations. you mentioned in your initial

remarks about -- sorry. you mentioned about -- [inaudible] i'm terribly sorry. yes, you mentioned there are two different stories regarding what is happening in the middle east regarding how egypt and the united states see what is happening now. do you have any explanations for these two different stories? i mean, why is egypt seeing the so-called peace process in a way which is different from the official u.s. point of view? and also you referred to four other states in the middle east as failure states, sudan and iraq, somalia, and yemen. do you think anything can be

done by egypt or the united states in order just to help them, not to go to this catastrophic situation? thank you. >> well, for the discrepancy i guess it could be as about how much you emphasize. when the two sides talk about an issue and usually i think the united states is also looking for comprehensive peace but it is a matter of the emphasis and the feeling of can you go now for a final status negotiations are make much more preparation. so here it is a matter of speed, urgency, and emphasis in both sides. that is my interpretation on why the story is different. ..

>> but i guess is there is a necessity to work out of the repercussions if that happens. a test that will be threatening to the red sea, to maritime routes, to egypt, of course national security. and i guess that is something we have to pay attention to, earlier than when we come to the moment. but if we can prevent it,

diplomatically, politically, even economically. but i wonder very much what anybody can do, you know, in yemen or attempts in the south to revive the idea to the yemeni state. or the situation in darfur and other places. if it particularly breaks down from the north. i mean, all of those possibilities are there. and i am not specialist in these cases. however, what i care about is actually how to realize that there is a dangerous and serious problem there. number two, is how to account for the day after. if it happened, i guess we shouldn't just wake up and we find piracy in the horn of africa, and that piracy is

increasing. then we decide how to deal with it. i guess in situation how to contain the situation in a place like somalia and the common failing states. i think earlier the better in dealing with such situations. >> let me first welcome you to washington, d.c., doctor moneim said. the title of your talk, the arab-israeli peace process, i think that using his point of view, it is like trying to find a black cat in a black room that has no cat in the first place. it is an elusive process that doesn't seem at all to be going

anywhere. israel, with all its military power in the region, does not want peace. it appears. and of course it showed in the last election. you had in fact given an excellent overview of the problems that surrounding the region itself, within the region. outside of the region. but you did not talk about the agenda in the united states, which is more than important because of unemployment, current recession, current health programs, and therefore as far as he and israeli conference is concerned, in my opinion, it is going to be on the back burner. so this adds another dimension.

i don't really see any hope, and less you can outline some of the hopes in the future. thank you. >> thank you very much for your kind words. i beg to differ with you. i mean, i don't know of any time in which arab-israeli conflict was not within an involvement that was seriously bad. i mean, if i came back to 1977, 1978, 1979 when the biggest breakthrough happened in the kitchen is ready we can, we had an america that was totally demoralized. we have the reemergence of what was called at the time the second cold war, you know. nicaragua, and a number of other countries going to the left and being close to soviet union. we have -- at the time, we have a very, very difficult and tough

cold war. and there was recession. and there was inflation. and it was called stagflation at the time. and it was double-digit. and all of that was bedtimes. in the middle of all this, it happened, peace. so i think all possibilities in the middle east are quite even, in my point of view. it depends on how much you really work on it, and ready to take risks. that's why i called it the obama moment. all is what i said is dependent on how much the american administration, after the previous american administration decided that it's going to, you know, iron in the middle east in sort of an image, use military force, teach people how to be democratic, all of the rest of, you know, previous

administration menu, with a new menu that is a bit big constructor, a strong dialogue and there is no mentioning of use of military force. even when, you know, will explain we might differ on this of how many soldiers are going to afghanistan. so you will have a different lake lake which are two of a different approach. you will have more emphasis on the human cultural interaction between different, you know, adversarial sides in the region. so in differing with you, i would beg to give it a shot. i agree that there are more disappointments in peacemaking in the middle east than, you know, feeling of having a positive feeling. but let us not forget, i mean, we have the gulf war and after that we ha madrid.

what happened really in the past 20 years, the bad guys would have much more, you know, skillful, much more clever, much more determined than the good guys. i am a believer that there are some good guys this time that might make it. but as much as you did yourself and other people for that conflict is you just can't keep it going on. you have to keep drawing. because there are people who are trying to rekindle it all the time. i mean, all those who are building, making violence, taking the conflict from being between two nationalisms into being between religious affiliations. it makes it much more difficult and we don't have the luxury.

i will say even in egypt. i mean, there is this saying let us get rid of that. i think, we are away. we make peace and we make peace, but, you know, what do we do with gaza? antidote once in there, you'll find cozza that will collapse and some of the titles were used to smuggle out of both ways. so we are involved. and where better to be involved to seek peace than to be involved with the sake of war. >> my name is jim douglas and i just returned from cairo. in particular, i was given the internal and external threats. would you be able to give an assessment of the egyptian defense industry and courses, and then also what economic initiatives seem promising that

would left the economy basically in egypt? and then also as a sidenote, how do you do hiv reporting? [laughter] >> well, there are two subjects that i don't know anything about. the defense bar and the hiv something like that, part. but i can give you something on the economic part. it was touched like all countries with economic crisis. and economic crisis reduced the foreign inflow, you know, earnings to egypt because of the swissuez canal, our exports particularly to the united states. so we have quite an injury there, not luckily we made kind of reforms in our banking systems so we don't have any bad

debts or real estate business in egypt was not that mature to suffer from what was suffered here in the united states. and i give a number or a mix of stimulus package, and some how lowering the acceptance of growth in the country. in a way, ended up that year with reasonable outcome. a growth rate of about four to 4.5%. which is not glorious, but it was not negative. and i guess there are signs that things are positive in terms of financial market, in terms of the real estate business. i mean, there is a lot of numbers that tells that next year probably will be better.

>> by the way, this water is for you. >> thank you. >> if i understood you correctly, you are talking about the group of suspects that have been rounded up in international connections. you said they had other issues. one of them if i understood you was the suez canal. i should know this, but what is the issue with the suez canal? >> the issue with the suez canal as we have an infrastructure for using force. and my interpretation, expecting at certain moments in the thick confrontation with israel or the united states or with both of them, and they were doing the groundwork from egypt to upper egypt to sedan to yemen, in order to respond. i mean, if you make a kind of military scenario, if somebody

went and attacked iranian nuclear, you know, facilities, and iran would like to respond, they have a number of choices. they have a number of choices to do it in iraq, to do it in the gulf region, or to do it in faraway places. it depends on the appreciation and estimation of the american power as capuchin in the region, and what we think is intention of the united states in terms of a pull off strike against iran. so it was a iranian network to build an infrastructure in the region to use it in the time of confrontation, if it came at any time. and on the other side, to help the palestinians or hamas in particular because it is one of the assets that it is used in a much larger kind of adversarial

relations or confrontations in the region. >> you can state your name and affiliation. >> i am an egyptian american and i have been a you can area for the last four years. you mentioned a story from cairo. you mentioned the story from washington. how about the story in jerusalem, especially with the present of the new king, now they call him the king of spin, netanyahu. so what is the story in jerusalem? >> well, when i said the story from cairo, that's because i am coming from and washington because that is where i am. but the story from israel is complex and it will probably need a few need a few israelis

to explain it. but i guess is really view is trying to get everything before you start anything. the story in israel is that we are into a conflict that will continue for a long period of time. and if we can keep a status quo in which everybody is called, then israel will be fine. and you will find a variety of people who are in press or some of the commentators even here in the united states. they say that israel never finds it better than at this time. and when things are calm, the economy is not doing badly, there is nobody is shooting at israel. there is no suicide bombing. and for israel that is a good

time. they catch on that, on that story is whenever that kind of call him continue for ever. and so they have got to keep engaging the other parties. and i have, and that is my guess on the story, is that for the israeli strategy is how to pass the obama moment. and as such, you know, if the obama moment was used, i guess israel will be faced by hard choices. as such, when we say israel, are you talking about netanyahu? actually you have some ideas sometimes what is not known about the idea of separation. there are either, there will be pressure to come up with some ideas of how to deal with israel settlement, or they will have to

face the israeli people. i mean, support and general that cling to parameters, or at least there is enough majority on both sides. and so the story from there is stalling and getting time. >> picking up on what this gentleman said, that because we are now so in the united states, so involving domestic issues that there wouldn't be any support for dealing with the middle east. i would like to take a counter argument. i think it is the fact that we are so tied up and not interested in foreign policy that it might be the moment at which the forces would otherwise be against the settlement in this country sort of preoccupied with other things. can't get the attention. but i am wondering, suppose the scenario, the egyptian scenario occurred, and somehow or another

there was some official statement from the united states that it supported what everybody seems to think of if there ever is a final settlement, what it has to be at least as far as the borders are concerned. what do you think the impact of that would be on israel and on palestine? >> well, you know, prediction is a nightmare of any analyst. i mean, how the relationship. i wish that i can tell you they will live happily ever after. once there is a settlement. i guess there is a possibility there, a possibility there for the region to take one of the major issues out of the picture and get involved in another kind of business. if i understood you right if you are talking on the settlement situation -- >> what would be the impact of the united states and egypt coming out with support?

>> i think both countries carry away. when egypt comes it is not only egypt, it is egypt with a number of arab countries are taking the egypt league. the united states is a big country. and i guess taking the right step in its own right will not be only fixed of that, it will be taken to other at higher levels. i assume, you know, there is for instance, a proposition to take it to the security council and come out with a resolution. it will be very difficult for people in israel or palestine to ignore that. if we look of the history of the arab-israeli conflict, it is controlled but different external. actually illusions. and from the balfour declaration, it was from england, all the 194 and 181

related to the partition plans and the settlement, to the 242. i mean, as you go on you will find extra and superpower and great power and regional powers for the conflict is quite great. and i don't see this time is an exception. okay. if there is an international, regional concept of states that say that is the direction, i think of that as the only way and i am for the imposter this in the sense that when they come into, they have to make concessions that would really come into the heart of the national dream. as for the israelis, i mean, to talk about taking off some of them at least, the whole jewish dream about holy land, it will come to an in. we are not talking about the jewish state as much as talking

about and is rarely stay. for the palestinians who are, you know, thinking that in believing that the homeland, the one that they were kicked out from it in a period of atrocities and violence and violations of international law, you know, it will come into the middle in the heart of their international dream. to help them, to take the pain of that moment and deal with the future rather than dealing with the past, in dealing with an entity, i guess that's the need for countries like egypt and united states, france, russia, china, to get everybody on board into this process. i guess it would be very important. >> i am standing with the cato institute. following up on tom's question, what would be the repercussions on an attack on iran and eu

think it would affect the domestic situation in egypt? >> i will start with the answer from the end. i think it will have an impact that we got during the iraq war, for instance, when the united states attacking iran. it was out of anger. but that will be it in a sense. however, you know, much more important than the internal reaction, it will be the strategic reaction to this. because iran is not -- it's not a small country. it is a willing as devastate with the religious character of it or revolutionary character of it. it is a pillar. iranian, persian civilization at present time. and i guess it will be a big earthquake that will be very

difficult to handle wow. look at the repercussions of iraq creating or getting into the shiite, the amount of violence that happened in iraq and spread to terrorism and other places. iran will be iraq and times over, and i guess we have strong central government. they will have a lot to fight back with. and they are fighting back major egyptian interest in the gulf, iraq, saudi arabia. and did some other things that i referred to. we don't know, once you start the game, then all targets are open for shooting. and certainly egyptian american relations will be targeted for shooting as well.

>> dan lieberman. as one aspect you haven't regarded which is the refugees were miraculously displaced persons. without resolution of the displaced person problem, isn't that a showstopper? and if we put it off too much in the distance, then we lead to a possible compromise which in the intimate upset all the previous agreements. >> there is no one issue of the arab-israeli conflict that is easy. you know, the issue of jerusalem, the issue of settlement, the issue of refugees are all real delicate ones. settlements are not only buildings. they are related to religious vision, and jerusalem is touching all the religious christianity's, islam and

judaism. i am not going to stand here and tell you, i think it is a solvent that i think there are different formulas that were worked out. however, it will remain, you know, the position taken by the palestinian people. the palestinian people now will have their choice. either to have no deal because of the palestinian issue, and wait for a better day, you know, that they can. or to come into an agreement because actually the refugees are not all of them refugees anymore. i mean, those are in the west, kids now into their third generation, americans or canadians, or in some arab countries are in a stron austra.

that will be another, you know, that is not my point of view. that will be a second refugee status. the refugee coming from georgia coming to be a refugee or secod rate citizen in israel. so here it is choices, i guess the palestinians have got to make. the issue will people give negotiations and settlement a chance, and using what i call the obama moment. or just it will pass. there was moments like that that past. i guess the bill clinton camp david was a moment that past. i guess we have in the middle of the night is 1995, a moment during rabin and the momentum and the momentum was not capped. and get past. so are we going to pass it this time or not rex i hope the

leaders, that is their business to seize the moment. because once you don't seize the moment, wait for the next war. >> freelance correspondent. personally thank you for you coming. if i may, could you tell us about this, i cgs recommendation to diffuse. and what is the position and u.s. position on this issue? and in order to pick that up, could you say something about the prospect of the violence in iran? >> iran? >> no, iraq. >> i think he was referring to a report being discussed in the

following talk. >> the recommendation. but also the turkey position and u.s. position. and more important, because of your expertise -- >> that is a report that is going to be discussed in the next panel on tuesday. >> the next question, as you know, since you are expertise in this, what is the prospect of the little divide but in iraq? thank you. >> iran or iraq? iraq. i am not an iraqi expert to tell you what is happening there, but i will tell you what i know. number one, iraq and when united states leavitt, it will be a sick country anyway. asic country because there is already the differentiation between its own sets, as a

country because liberal violence of there. actually surpassed any liberal that people can take, i mean, in any country there is a sense of a ceiling of decency about killing people for doing violence that might affect kids or schools. in iraq, the level of sectarian violence, without -- >> we will leave this to go live now to a president obama. is holding a health care town hall meeting in belgrade, montana, this afternoon. it is near the city of bozeman. this is one in a series of events the president is holding to bolster support for health care legislation that is making its way through congress. live coverage on c-span2. [applause]

clas. . we also know the value of an honest work and let me tell you, there is plenty of this honesty out there about what health care reform will and will not do.

now you have all seen the tv show smith busters, right? i have been going around the state busting myths about health care. what is bogus information about rationing care, cutting benefits for seniors, doctor-patient relationship-- [inaudible] [inaudible] [inaudible]

as you can see we are having technical difficulties with their feet from belgrade montana. president obama is there holding a town hall health care meeting. the town of taghreed near the city of boseman. this is one of a series of events the president is holding to look for support for his health care plan. we are looking to-- we are hoping to repair our technical difficulties and be able to go live, back to montana.

well we work to correct their problems we will return live to the great, montana for president obama. again, you can see we are having some technical difficulties with their feet from belgrade, montana. president obama holding a health care townhall meeting there.

we are going to continue to work to fix the problem there. well we work to fix the problems, some health care town hall video. [inaudible conversations] [inaudible conversations] >> what is your job? i just wondered what your job

is? >> do you want to know what my job is? yes, i work for the government. >> why are you here? >> i am here because i want to get it done right. i think they are rushing to get it done wrong. >> why are you here? >> i oppose socialism. i am a proud american. >> i am here and nobody sent me to come here. i came here on my own and i don't belong to any-- i am here because we need term limits on our congressman and our senators who were not doing their job. whether it is republicans or the democrats, we need to change that. people need to wake up and do something about it. >> i want my doctors and i don't want socialized medicine in this country.

gant candidate they are extremely disappointed. don't shove it down my throat. >> we are not going to have a single-payer health plan. the president says we are going to have a single-payer health plan. on the other hand he says we are not going to have a single-payer health plan so there contradicting themselves. i would like to find that what her opinion is. [inaudible] >> basically to disagree. >> why is that? >> it is my children's future. and of taxes already. >> did anyone send you here? >> no, i came on my own. >> i want the government to have any access to my bank account, which is part of the bill. >> i think they are going to

fast. i think they are putting things in that they don't even know about, and i can't support that. they went so fast with the stimulus. they need to slow down now. >> i think it is time for a change. i think this whole process around the country is being hijacked by extremists. i would like to see broader access to health care for americans and health insurance is getting ridiculous. i family spends $14,000 a year on health care. it is obscene. a need to change. >> we are leaving this to go live to the president. he is speaking at a townhall meeting in belgrade, montana. >> where is michelle? what is this, chopped liver here? michelle and the girls were supposed to go white water rafting. now, i just heard some rain out there so i don't know what is going on there, but they are on their way. i want to first of all acknowledge some outstanding

public officials and great francis, first of all the man who was working tirelessly to make sure that the american people get a fair deal when it comes to health care in america. please give max baucus a big round of applause. [applause] one of my favorite people in washington, probably because he has not gone washington, still gets the same haircut. give it up for john. [applause] your own start here in montana, the great governor of this state, please give brian schweitzer and his lovely wife, nancy, a big round of applause.

[applause] the lieutenant government, john bollinger, is here. give john a big round of applause. [applause] the mayor of belgrade, wes nelson, is here. [applause] the mayor of boseman, craig jacobsen it is here. [applause] and somebody who i believe is destined to be one of the greatest secretaries of the interior in our history, a former senator from colorado, ken salazar is here. please give ken a big round of applause. [applause] it is nice to be back. it is nice to take a break from the going on in washington. i am thrilled to have a chance to spend some time with the

folks in this beautiful state. after all, here in montana you have that bears, moose and elk. in washington and you just have mostly bowl. [laughter] so, this is-- that is a nice change of pace. [applause] [laughter] i especially want to thank katie for her introduction. [applause] where did katie go? there she is right there. katie's willingness to talk about such a painful experience is important, because we have to understand what is at stake in this health care debate. katie's story is the kind of story that i have read in

letters all throughout the campaign and every day when i'm president. i hear about them in town halls all across america. the stories of hard-working people who are doing the right thing. they are acting responsibly, only to find out they are penalized because others are doing the right thing, because the others aren't acting responsibly. on tuesday i was in new hampshire, talking about people denied insurance coverage because of preexisting conditions. today we are talking about folks like katie who had their insurance policies suddenly break up, even though they were paying premiums, because of a medical condition. they got sick and so they that is when they get dropped. tomorrow and colorado we will be talking about the people who have insurance but are still stuck with huge bills because they have a cap on their benefits or they are charged exorbitant out-of-pocket fees. when you hear about these

experiences, when you think of the millions of people denied coverage because of preexisting conditions, when you think about the thousands who have their policies canceled each year, like katie, i want you to remember one thing. there but for the grace of god go i.. [applause] most of us have insurance. most of us think, knock on wood, that we are going to stay healthy but we are no different than katie and other ordinary americans. no different than anybody else. we are held hostage at any given moment by insurance companies to deny coverage or drop coverage or charge fees that people can afford at a time when they desperately need care. it is wrong. it is bankrupting families, it is bankrupting businesses and we are going to fix it when we pass health insurance reform this

year. [cheers and applause] we are going to fix it. again, i want to especially thank max for his hard work'֖ a bill as chair of the finance committee. he has been committed to getting this done. this is obviously a tough time in america, a tough time here in montana. just six months ago we were in the middle of the worst recession in our lifetimes. we were losing about 700 jobs each month. economists of all stripes feared a second coming of the great depression. that is why we acted as best as we could to pass a recovery plan to stop the freefall. i want to just beat briefly about the recovery plan because that has our people's view of the health care debate. the recovery plan was divided into three parts. one-third of the money in the

recovery act went to tax cuts that have already started showing up in the paychecks of about 400,000 working families in montana. 400,000 working families have seen their taxes reduced because of the recovery act. [applause] we also cut taxes for small businesses on the investments that they make in more than 200 montanans small businesses have qualified for new loans backed by the recovery act, including ten businesses right in the boseman area. [applause] another one-third of the money in the recovery act is for emergency relief for folks who bore the brunt of this recession. what am i talking about? unemployment insurance. we have extended benefits for 40,000 montana residents. we have made health insurance 65% cheaper for families who rely on kober when they lose their job and they are out there looking for work.

[applause] i think as your governor will testify for states facing historic budget shortfalls we provide assistance that is save the jobs of tens of thousands of workers who provide essential services like teachers and police officers. we have prevented painful job cuts but we have also prevented a lot of painful state and local tax increases. so, that is two-thirds of the recovery act. the last third of the recovery act is for investments that are already putting people back to work, rebuilding infrastructure. their nearly 70 transportation projects already improved here in montana. these are just fixing up the roads that run to the national forests. could just doing the work that america needs done and most of the work is being done by local businesses because that is how we are going to get this economy growing again. so there is no doubt that the recovery plan is doing what we said it would, putting us on the

road to recovery. we saw last friday the jobs picture is beginning to turn. we are starting to see signs that business investment is coming back, so people i think sometimes when i listen to them on tv or these cable shows, they seem to have a selective memory. we started with this mess. we are now pulling out of it but that doesn't mean we are out of the woods. [applause] that does a mean we are out of the woods. you know that. and boseman for example the local judge center reported seeing more than 8,000 job-seekers for 160 jobs so we can't sit back and do nothing while families are struggling. because even before this recession hit, we had an economy that was working pretty well for the wealthiest of americans, working well for wall street bankers and big corporations but it wasn't working so well for

everybody else. it was then economy of bubbles and buzz, an economy in which recklessness and not responsibility was reported. we can go back to that kind of economy. if we want a country that succeeds in the 21st century, then we have to lay a new foundation for lasting prosperity. and health insurance reform is one of the key pillars of this new foundation. [applause] this economy won't work for everyone intel folks like katie and her husband can start that small business without the fear of losing their health coverage, and the companies are slashing payroll and losing profits to pay for health insurance. until every single american has the security and peace of mind of knowing they have got quality, affordable care. and the fact is health care touches all of our lives in a profound way. now, that also makes this debate

an emotional one. i know there has been a lot of attention paid to some of the town hall meetings that are going on a run the country, especially when tempers flare. tv lows a ruckus. what you haven't seen on tv, and what makes me proud are the many constructive meetings going on all over the country, everywhere across the country. you are seeing people who are coming together and having a cybil, honest, often difficult conversation about how we can improve this system. that is out democracy is supposed to work. earlier this week held a town hall in new hampshire. a few thousand people showed up. some more big supporters of the health insurance reform. some have concerns and questions. summer done right skeptic. i was glad to see that people were there not to shock.

they were there to listen and ask questions. that reflects america. a lot more than what we have seen covered on television for the last few days. [applause] i want to thank you for coming here today in that spirit. now, before i take questions i just want to talk briefly about what health insurance reform will mean for you. we still have work to do in congress. bills are not finalized, but i just want you to understand about 80% of this has already been agreed to. here are the basic principles that folks are talking about. first, health insurance reform will mean a set of common sense, the consumer protections for folks with health insurance. said those of you who have health insurance, this is what it will mean. insurance companies will no longer be able to cancel your

coverage because he gets sick. that is what happened to katie. [applause] that can happen anymore. if you do the responsible thing, if you pay your premiums each month so you are covered in case of a crisis, when crisis conseque have a heart attack or your husband finds out he has cancer or your son or daughter is rest to the hospital at the time when you are most vulnerable and most frightened, you can't be getting a phonecall from your insurance company saying your insurance is revoked. it turns out once you got sick they scoured your records looking for reasons to cancel your policy. they find a minor mistake on your insurance form that you submitted years ago. that can be allowed to happen. one reports-- [applause] one report found that three insurance companies alone had canceled 20,000 policies in this way over the past few years.

one man from illinois lost his coverage in the middle of chemotherapy because his censure discovered he had not reported gallstones he did not know about. a true story. because his treatment with delayed, he died. a woman from texas was diagnosed with an aggressive form of breast cancer, was scheduled for a double mastectomy. three days before surgery the insurance company canceled the policy in part because she forgot to declare a case of acne. a true story. by the time she had her insurance reinstated the cancer had more than doubled in size. this is personal for me. i will never forget my own mother as she fought cancer in her final months, having to worry about whether the insurance company would refuse to pay for her treatment. the insurance company was arguing that she should have known that she had cancer when she took her new job, even though it hadn't been diagnosed yet. if it could happen to her, it could happen to anyone of us.

it is wrong and when we pass health insurance reform we are going to put a stop to it, once and for all. that is what max baucus is working on. [applause] number two, insurance companies will be prohibited from denying coverage because of your medical history. a recent report found in the past three years more than 12 million americans were discriminated against by insurance companies because of a preexisting condition. no one holds these companies accountable for these practices, but we will. insurance companies will no longer be able to place an arbitrary cap on the amount of coverage you can receive any given year for a lifetime, and that will help-- [applause] that will help, that will help 3700 households in montana. we will place a limit on how

much you can be charged for out-of-pocket expenses as well because no one in america should be broke when they get sick. [applause] and finally, finally we will require insurance companies to cover routine check-ups and preventive care like mammograms and colonoscopies because that saves money and that saves lives. [applause] so, that is what health care reform is all about. right now we have to get a health care system that all too often works better for the insurance companies than it does for the american people. we want to change that. now, if you are one of nearly 46 million people who don't have health insurance, he will finally have quality, affordable options. and if you do have health insurance, we will help make sure that your insurance is more affordable and more secure. if you like your health care plan, you can keep your health care plan. this is not some government take

over. if you like your doctor, you can keep seeing a doctor. this is important, i don't want government bureaucrats meddling in your health care but i also don't want insurance company beaurocrats meddling in your health care either. [applause] that is what reform is about. [applause] [cheers and applause] let me say this. under the proposal that max is working on, more than 100,000 medal platts montanans will get a health care tax credit. more than 200,000 montanans will have access to a new marketplace where you can easily compare

health insurance options. nearly 30,000 small businesses in montana will be helped by new tax benefits as well. and we will do all of this, we will do all of this without adding to our deficit over the next decade, largely by cutting waste and ending sweetheart deals for insurance companies that don't make anybody any healthier. [applause] so, the fact is, we are closer to achieving health insurance reform then we have ever been in history. we have the american nurses association and the american medical association on board because america's doctors and nurses know how badly we need reform. we have broad agreement in congress on about 80% of what we are trying to achieve and we continue to work on the other 20%. we have an agreement from the drug companies, who violently oppose reform in the past to make prescription drugs more affordable for seniors.

aarp supports this policy and agrees with us that reform must happen this year. but, because we are getting close, the fight is getting fierce. the history is clear, every time we are inside of health insurance reform, the special-interest like that with everything they have got. they use their influence, they run their ads in their political allies try to scare the heck out of everybody. it happened in '93, it is happening now. it happened by the way when lyndon johnson tried to propose medicare. it happened when john f. kennedy tried to propose medicare. we can't let them do it again. not this time. because for all the scare tactics out there-- [applause] for all the scare tactics out there, what is truly scary, what is truly risky is if we do nothing. if we keep the system the way it is right now, we will continue to see 14,000 americans lose

their health insurance every day, and that could be you. premiums will continue to skyrocket, rising three times faster than wages. that will be you. the deficit will continue to grow medicare will go into the red and less than a decade, so for all the seniors out there who are understandably worried about medicare, understand if we don't reform the system, in about eight years medicare goes in the red and given the deficits that we have right now, we have got to start thinking how are we going to pay for that? insurance companies will continue to profit by discriminating against people for being sick. so if you want a different future, a brighter future, i need your help. the change is never easy and by the way it never starts in washington. it starts with you, so i need you to keep knocking on doors, talking to your neighbors, spread the facts.

[applause] fight against the fear. this is not about politics. this is about helping the american people and if we can get it done this year, the american people are going to be better off. thank you, montana. [applause] thank you. [applause] alright, everybody have a seat. so, we are going to try to take its many questions as we can in the time that we have got, and we have not preselected anybody or prescreen the questions. all we want to do is just ask you to raise your hand if you have got a question and i'm going to go girl, boy, girl, boy

so i don't get into trouble. there are people in the audience with microphones, as you can see, so once i call on you if you can just wait until they bring the microphone, stand up so we can all see your lovely face and introduce yourself, and then i will answer the question. if you can keep your questions relatively brief, i will try to keep my answers relatively brief. this young lady right here in the blue blouse. right there. ..

>> now if you think that how can that be, you probably don't notice it because what is happening is if you have health insurance through your job, more and more of what would be your salary and wages is going to health insurance. but you don't notice it. you just notice you aren't getting a raise.

but a bigger and bigger portion of compensation is going to health care here in the united states. now that is point number one. clearly we have a situation that isn't as efficient as it should be because we are not healthier than these people in these other countries. having said that, most of the countries have some form of single-payer system. there are differences, canada, and england have more of what's called -- what people i guess would call a socialized system in the sense that government owns the hospitals, directly hires doctors. but there are a whole bunch of countries like the netherlands where what they do is it's a single-payer system only in the sense that government pays the bills but it's all private folks out there. private doctors, private facilities. so there are a bunch of different ways of doing it. now, what we need to do is come up with a uniquely american way

of providing care. so i'm not in favor of the canadian system. i'm not in favor of a british system. i am not in favor of a french system. that's not what max is working on. everyone of us, what we have said is let's find a uniquely american solution because historically, here in the united states, the majority of people get their health insurance on the job. so let's build on that system that already exist because for us to completely change that it would be too disruptive. that's where suddenly people would lose what they had and they would have to adjust to an entirely new system. and maximize green that's not the right way to go. so all we have said is in building a better system, what are the elements. well, number one, for people like you, you should be able to get some help going into the private insurance marketplace and buying health insurance. so we would give you a tax

credit, a subsidy of some sort, to help you obtain insurance. now the problem is if you are going out there on your own, then it is much more expensive than if you go with a big group. so we would allow you to buy into a health care exchange that would give you some power to negotiate for a better rate because you are now part of a big pool. we would also make sure that if you do have health insurance, that you are protected from some of the policies that we've already talked about that have not been very good for consumers. so you wouldn't be able to be banned for preexisting conditions. there would be caps on the amount of out of pocket expenses you would have to spend. so we would reform the insurance market for people who already have health insurance. and if we do those things, making it better for folks who already have insurance, making it easier for you to buy insurance, and helping small businesses who want to do the right thing by their employees but just can't afford it because

they are charged very high rates, they can't get a good deal from the insurance companies. if we do those things, then we can preserve the best of what our system offers, the innovation, the dynamism, but also make sure that people aren't as vulnerable. that is essentially what we are talking about with health care reform. and so when you start hearing people saying, you know, we're trying to get socialized medicine and we're trying to have government bureaucrats, and metal in your decision between you and your doctor, that is just not true. okay. >> it's a guys turned. the german right there in the back. >> i think most of us know that medicare is one of the best

social programs of this nation has ever put together. [applause] >> it works extremely well and helps the people who need it the most. that money doesn't grow on trees. how can we be assured that increasing coverage to others is not going to make medicare more expensive or less effective? >> i think this is a a good point and i appreciate that question because a lot of seniors are concerned about this at first of all, it is important to know that medicare is a government program. so when you hear people saying i hate government programs, but keep your hands off my medicare, then there is a little bit of contradiction there. and i have been hearing that quite a bit. so i just want to -- i want to be clear about that. [applause] >> medicare is a terrific program, and it gives our senior

security and i want medicare to be there for the next generation, not just for this generation. but if we don't make changes in how the delivery system works, if we don't eliminate some of the waste and inefficiencies in the system, then seniors are really going to be vulnerable. so what we've proposed is not to reduce benefits, benefit on medicare would stay the same. it's not too ration. but what we are asking is that we eliminate some of the practices that are not making people healthy. example number one. subsidies to insurance companies under medicare amount to about $177 billion over 10 years. that is how much we think we could save by eliminating subsidies to insurance companies that are offering was called that your advantage. it doesn't help seniors anymore than regular medicare does.

and so if we took that $177 billion, we're not making seniors worse off. we've got that money now, not only to strengthen the health care system overall, but potentially to cover more people. navigations companies don't like it, but it is the right things to do. let me give you another example of changes that we should make. right now when you go into the hospital, you get a procedure under medicare. if you end up having to come back to that hospital a week later because something went wrong, they didn't do it right, the hospital doesn't pay any penalty for that. they just get reimbursed for a second time for a third time. same fee, same service. now think about that. if auto repair shops operate the same way. you take your car in and you get

it fixed, and a week later the thing is broken again. you go in. the guy says let me charge you all over again and i will do just the same thing. that doesn't make sense. so what we have said is let's give hospitals and incentive. let's say to the hospitals we are going to charge you for overall treatment of whatever the problem is. and if you get it right the first time, you get to keep a little extra money, but if you keep having the person back again and again, then there is a disincentive. those are the examples of the kind of changes that can be made that are not reductions in benefits but they say the system money over all. and by the way, will actually increase the life expectancy of the medicare trust fund. which is in deep trouble, if we don't do something. because as you said, money doesn't grow on trees. so we are actually trying to help preserve medicare and make

people healthier in the process. all right. [applause] >> the young lady in the back there. right there. well actually, i was pointing out -- i didn't see. the young lady in the blue who stood up there. >> good afternoon, mr. president. my name is sarah landry and i am a bozeman resident. sorry, i'm a little verse. >> you're doing great. >> thank. i am a single mother of two children. i am an msu student. i have a son that suffers from many disabilities. he is disabled for the rest of his life. he is 11 years old. he suffers from autism, he is nonverbal. he suffers from extremely hard to control epilepsy, and he is type one diabetic. he has been sick with these

albums ever since he was nine months old. my question to you is, i real i heavily on his medicaid to support good health and care for him. what with this reform would happen with his medicare coverage? or medicaid coverage, sorry. >> first of all, thank you for sharing your story. you are a heroic mom. [applause] >> so we are grateful for you. your son is lucky. if you currently qualify for medicaid, your son currently qualify for medicaid he would continue to qualify for medicaid. so it would not have an impact on his benefit levels and his ability to get the care that he needs. some of the reforms that we are talking about though, what i

just referred to as delivery system reforms, where we help, for example, encourage doctors when they are seeing a patient, instead of having five tests, do one test and then e-mailed all the tests to five specialists. those kind of changes can save money in the medicaid and the medicare system overall, and that will actually help governor schweitzer, who has to come up with half of medicaid in his state budget every year. it will actually help him and be able to pay for. so we are not changing the benefit levels who qualifies for medicaid. we might see some expansion of medicaid, in fact, under the reforms that have been proposed in some of the legislation. but we do have to make the whole system overall just a little bit smarter, make sure we're getting aid better bang for the buck so

the money is there for the services that your son needs. okay. this also includes by the way preventive care, wellness care. because our system really is not a health care system. it's more like a disease care system. we wait until people get sick, and then we provide them care. now think about it. are we better off waiting until somebody gets diabetes, and then paying a surgeon for a foot amputation, or are we better off having somebody explain to a person who is obese and at risk of diabetes to change their diet, and if they contract diabetes to stay on their medications. obviously, the second is more cost-efficient. but right now the health care system is perverse. it does not incentivize the things that keep those people better or it keeps them out of the hospitals in the first place

and that is a we have to change overall to make sure the resources are there for your son. okay? [applause] >> it's a gentleman's turn and i'm going to call on that gentleman right there. right there. >> my name is randy. >> hold on a. >> my name is randy and i am from montana. as you can see i'm a proud nra member. [applause] >> i believe in our constitution, and it's a very important thing. i also get my news from the cable networks because i don't like the spin that comes from them other places. >> you've got to be careful about those cable networks though. [laughter] >> max baucus, our senator has been locked up in a dark room there for months now. trying to come up with somebody to pay for these programs.

and we keep getting the ball. that is all we get is bull. you can't tell us how you're going to pay for this. you are sitting here. you're sitting over there. you're going to take a little money here and take a little money there, but you have no money. the only way you are going to get that money is to raise our taxes. you said you wouldn't. max baucus says he doesn't want to put a bill out that they will, but that the only way you can do that -- >> i'm happy to answer a question. >> thank you. >> look. you are absolutely right that i can't cover another 46 million people for free. you're right. i can't do that. so we're going to have to find some resources. if people don't have health insurance are going to get some help, then were going to have to find money from somewhere. now, but i've identified, and most of the committees have identified and agreed to, including max boxes committee,

is that overall this bill will cost, let's say it costs 800 to $900 billion. that's a lot of money. that's a lot of money. that's over 10 years ago. all right. so that's about 80 to $90 million a year. about two thirds of it, two thirds, can be obtained by doing some of the things i already mentioned like a limiting subsidies to insurance guppies. so you're right, that's real money. i just think i would rather be giving that money to the young lady here who doesn't have health insurance and giving her some help in getting it to insurance covers that are making record profits. now, you may disagree, i think that's a good way to spend our money. [applause] >> but your point is well taken because even after we spend, even after we eliminate some of the ways, and we have gotten those savings from within health care system, that's only two

thirds. that still means we have to come up with one third. and that is about $30 billion a year that we have to come up with. now keep in mind the numbers change partly because there are five different bills right now. this is all going to get merged in september. but let's assume it costs about $30 billion a year over 10 years that we do have to come up with that money. when i was campaigning, i made a promise that i would not raise your taxes if you make $250,000 a year or less. that's what i said. but i said that for people like myself who make more than that, there's nothing wrong with me paying a little bit more in order to help people who got a little bit less. that was my commitment. [applause] >> so what i have said is, so what i have said is let's, for

example, this is a solution that i originally proposed. some members in congress disagree but we are still working it through. what i said is we could lower the itemized deductions i can take on my income tax returns every year, so that instead of me getting 36 percent, 35% deductions i would just get 28 percent, like people who make less money than me. i've i am writing a check to my local church, i don't know why ogles them should be getting a bigger tax break than the person who makes less money than me, because that donation means just as much. if we just did that alone, just that change alone for people making more than $250,000, that alone would pay for the health care we are talking about. so my point is, my point is, number one, two thirds of the money we can obtain just from eliminating waste and inefficiencies. and the congressional budget office has agreed with that. this is not something i'm just

making up. republicans don't dispute it. and then the other third we would have to find additional revenue, but it wouldn't come off the backs of the middle class. let me just make one final point. i know that there are some people who say i don't care how much money somebody makes. they shouldn't have to pay higher taxes. and i respect that opinion. i respect that you. but the truth of the matter is that we've got to get over this notion that somehow we can have something for nothing. because that's part of how we got into the deficits and the debt that we are in in the first place. [applause] >> when the previous administration passed a prescription drug bill, that was something that a lot of seniors needed, right, they needed

prescription drug help. the price tag on that was hundreds of billions of dollars. you know how we paid for it? we didn't. it just got added onto the deficit deficit and the debt. so it amuses me sometimes when i hear some of the opponents of health care reform on the other side of the aisle, or on these cable shows, yelling about how we can't afford this when max and i are actually proposing to pay for it, and they passed something that they didn't pay for at all and left for future generation to have to pay in terms of debt. [applause] >> that doesn't make sense to me. can i say this though? randy, i appreciate your question. the respectful way you asked it, and by the way, i believe in the constitution to. so thank you very much.

i appreciate it. [applause] >> all right. right there in the green in the back. >> thanks. so when funding dried up last fall due to the economic downturn, i lost my job at a nonprofit helping struggling teens. and i would like to thank you because, because of your stimulus funding to community health clinics, i now have a new job helping people who are -- [applause] >> -- mostly uninsured. i made therapist. so i wanted to thank you for that but there was a crap in there where i lost my insurance in between losing my job with a nonprofit and my current job. and i would like to ask you how you will help people with that gap when they are unemployed. >> first of all, the recovery package, the stimulus help people precisely with that gap when we said we will cover 65% of the cost of cobra.

how many people here have been on cobra, or try to get on cobra? so just for those of you who aren't familiar with it, if you lose your job, under federal law you are able to access something called cobra, which allows you to pay the premiums through the health insurance that you had until you find your next job. sounds like a good deal. here is the only problem. as i said before, most of us don't realize how much our insurance costs our employers. because we are not seeing the actual bill that is being paid mostly by our employers. so when we lose our job, suddenly we get this bill for a thousand dollars or $1200, or $1500 a month. and that is absolutely the worst time for you to have to come up with that money is when you have lost your job. so what we did was, we said because this is such an extraordinary crisis, let's pick up 65% of that, temporarily, so that the huge numbers of people

who have lost their jobs because of his financial downturn, they get a little bit more of a cushion. now, that was the initial help that we wanted to do to provide that bridge. when we pass health reform, you are going to be in a position where, first of all, you will be able to select a plan that you can carry with you, whether you have lost your job or not. and depending on your income levels, you will also be qualified for a tax credit that will help you pay and continue your coverage, even if you have lost your job. and for a lot of people, this is especially important for a lot of people who are self-employed. because increasingly, you know, if you're a consultant, you are somebody who is has opened up your own shop, a little mom-and-pop store somewhere, you are the people who have the toughest time getting insurance. because you just don't have

enough employees and for the insurance companies to take you seriously. that's why what we want to do is create an exchange. it's like a marketplace where you can go and choose from a menu of different options. different kinds of plans that you think might be right for you. and one of the options that is being debated is should there be a public auction. op.[applause] >> i did what was planus briefly because this is where the whole myth of a government takeover of health care comes from, and not even every democrat agrees on the public option but i want at least people to be informed about what the debate is about. the id is if you go to the market place and you are choosing from a bunch of different options, should one of the options be a government run plan that still charges you premiums, you still have to pay for it just like private insurance, but government would not -- this government option

would not have the same profit motive. it would obviously be like a non-for-profit. it would have potentially lower overhead. so it might be able to give you a better deal. should you be able to choose from that option among many others. that's what the debate is about. [applause] >> what the opponents of a public option will argue is you can't have a level playing field if government gets in the business of providing health insurance, they will drive private insurers out of the health insurance market. that's the argument that is made. and that is a legitimate, it's a fair concern. especially if the public option was being subsidized by taxpayers. right? if they could just keep losing money and still stay in business, after a wild, they would run everybody else out. and that's why any discussion of

a public option has said that it's got to pay for itself, it is not subsidized by private insurers. the only point i want to make about this is whether you are for or against a public option, just understand that the public option is not a government takeover of the health insurance. everybody here who still has current private insurance, you know, you would more than likely still be on your private insurance plan your employers wouldn't stop suddenly providing health insurance. so that is where this idea of government run health care came from. it is not an accurate portrayal of the debate that is going on in you can right now. all right? it is a gentleman's turn. this gentleman right there. right there. yes, sir. desser. >> think you. given your comments regarding the public option, i would like, if you could, to comment on the following, and also welcome and thank you. i believe in reform as well. i have learned that medicare

pays about 94% of hospital costs. and i have learned that medicaid pays 84% of hospital cost. and i have learned this from a reputable source, my brother, who is chief administrative officer at a large hospital group. he also explains to me when i communicate with them that private insurers, his hospital, collects about 135% of costs from private insurers, and that makes up the difference. so if public option is out there, will it pay for its way, or will it be underfunded like medicare and medicaid? they could. >> it's a great question and i'll try to be sustained on this. this is a complicated area. anybody who has ever gotten a bill from a hospital knows it's a competition area. but here's the short answer. i believe that medicare should -- medicare and medicaid should

not be updating savings just by squeezing providers. now, in some cases, we should change the delivery system so that providers have a better incentive to provide smarter care. right? so they are treating the illness instead of just how many tests are done or how many mris are done or what have you. lets pay for are you curing the patient. but that is different from simply saying, you know what, we need to save some money so let's cut payments to doctors by 10% and see how that works out. because that's where you do end up having the effect you are talking about. if they are only collecting $0.80 on the dollar, they've got to make that up somewhere, and they end up getting it from people who have private insurance. this is true also by the way of emergency room care. each of us spent, even though we don't know it, our employer pays for it so we don't notice it on our tab, each of us spends about

$8000 per family, maybe $900 per family, paying for uncompensated care. people without health insurance, going in, getting fixed up, that money comes from somewhere. it comes from you. you just don't see it on your bill. and so if we can help provide coverage to people so that they are getting regular primary care and they are not going to the emergency room, we will obtain some savings. and that is partly going to randy's earlier question, that is partly how we will end up paying for getting people health insurance. because we are already paying for it right now, we just don't notice it. we are paying for it in uncompensated care that is subsidized by the rest of us who have health insurance. all right. i think this is the signal that i only have a few more questions. i'm going to take two more questions. if i'm in montana i got a call on somebody with a cowboy hat.

[laughter] >> you've got a little plaque on there. >> montana ambassadors. we're a business advisory group appointed by the governor. we have served three republican in two democratic governors and i would like to welcome you on behalf of the montana ambassadors. >> thank you so much. >> you make a great ambassador. >> thank you. >> my question i'm glad you called me it has to do with the cobra question, because i am in the building materials business. i owned a lumber yard and a beautiful little town of a thousand people about 40 miles southwest of here. and i was, when the economy took a nosedive i was forced to take my workforce from 11 people to six. and i am like most import in america, i want to provide things in my responsibility on like to take care of our peeps so to speak. >> is that a montana phrase?

peeps? [applause] [laughter] . .

[applause] >> so for all of you, we're sitting on your what did you call it? nothing. as i said small businesses is probably as vulnerable as anybody. and one of the things that max has been working very hard on. this just doesn't get advertised. i just want it make sure everybody is paying attention here. one of the things that we're trying to do is give a substantial subsidy to help small businesses allow their employees to get health insurance. there's a lot of employers just like you who want to do the right thing, but they are the small shop, they are operating on small margin, and they have no leverage with the insurance company. we want the small business to be able to buy into the exchange. that allows you to buy the purchasing power of everybody in the exchain to get the best rates.

that right away would drive down the premiums that you have to pay. and the second thing we want to do is for employers who are doing the right thing and providing health insurance that is real, then we want to give you a tax break so that it's easier for you to make your bottom line. now this is something that a lot of small businesses will benefit from. nobody is talking about it. since small businesses are the place where you're seeing the fastest job growth it makes sense for us to provide this kind of protection. this i guarantee it will end up in an important component of whatever we pass out of washington. all right? [applause] >> i've only got time for one more question. it's a guy's turn. i want somebody who's got a concern or skeptical about health care reform.

here we go, there we go. i knew we could find a couple here. so i'll call on this gentleman right here in the pale blue shirt. hopefully that list is not too long. all right. go ahead and introduce yourself. >> i'm mark montgomery. i appreciate you coming here. it's great to be able to do this. >> thank you. >> mr. president, i make a living selling individual health insurance. [laughter] >> that's okay. obviously i pay very close attention to this insurance debate. as you know the health insurance companies are in favor of health care reform and have a number of very good proposals for congress to work with government to provide insurance for the uninsured and cover individuals with preexisting conditions. why is it that you've changed your strategy from talking about

health care reform to health insurance reform and decided to bill if i the insurance company? >> okay. that's a fair question. first of all, you are absolutely right that the insurance companies in some cases have been constructive. i'll give you a particular example. etna has been drying to work with us in dealing with the preexisting condition stuff. that's absolutely true. there are other companies who have done the same. i want to just be honest with you. in some cases what we've seen is also funding in opposition by some other insurance companies so any kind of reform proposals. my intent is not to billfy insurance companies. if i was, we would be saying that private insurance has no place in the market. i don't believe that.

let's work with the existing system. we have private insurers. we have to make sure that certain practices that are very tough on people, those practices change. now at one point i want to make about insurance, some of the reforms that we want for the insurance market are very hard to achieve unless we've got everybody covered. this is the reason the insurance companies are willing to support reform, because their attitude is if we can't exclude people were preexisting conditions, for example, if we can't cherry pick the healthy folks from the not-so-healthy folks, well that means that we're taking on more people with more expensive care. what's in it for us? the answer is they have more customers. and they are willing to make

sure they are eliminating some of these practices. so it's important when people ask me, why don't you do the insurance reform stuff and not expand coverage for more people, my answer is i can't do the insurance reform stuff by itself. the only way that we can change some of the insurance practices that are hurting people now is to make sure that everybody's covered and everybody's got a stake in it. then the insurance company are able and willing to make some of the changes. but thank you for the question. i appreciate it. [applause] >> all right. even though i shouldn't do this, i'm going to take one more question. and i'm going to call on this person right here to get the last word. all right. >> thank you.

>> go ahead. >> thank you, mr. president. and thank you for coming to belgrade and bringing your family to the last best place in the world. because you're a constitutional scholar, i think it would be terrible to let you escape from montana without sharing with you the most per spect preamble to the state constitution. >> i'd like to hear this. this is a good way to end. >> we the people of montana grateful to god for the quite beauty, the mountains, rolling plains, trying to improve the quality of life, the quality of opportunity, to share the best things of liberty for this and future generations and establish this constitution. i hope you take a look at the whole constitution. you'll like it.

>> that's very nice. thank you. montana you've been terrific. i hope this has been informative. thank you for the questions. let's get to work. thank you. [applause] [cheers and applause] [cheers and applause]

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>> mr. obama finishing up this town hall meeting in belgrade, montana. about 1300 people showing up this afternoon to hear the president in an airplane hanger in the airport. we'd like to get your thoughts. did he get his message across? did he say what he needed to change to change your mind? the phone lines are open right now.

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♪ ♪ ♪ ♪ >> okay. our phone lines are open to hear your thoughts on the meeting this afternoon. first we'll go to oklahoma with justin on the republicans line. >> caller: yes. well, i definitely don't think the president got his message across. i'm an 18-year-old college student. i think him talking about what he wants to do. but there's discussions between the house and senate. the differences there aren't what the president is talking about. >> let's joe on the independence

line. >> caller: yes, i understand what the president is saying. and it's rather clear to me that this is a time for everyone to gather information, make opinions about the pros and cons to any amendment to our present health care system and not to make a judgment of statement as if it was affirmed that it is the last statement on the bill that hasn't been passed yet. we need to take the information that the president has gave, inform what the options are, and be very clear to not formulate an opinion on something that hasn't taken place yet. it's still in the process and we have to use our common sense until we have a bill that is

down-to-the-line streamline until we can know what we are arguing or supporting. >> next to chester in new york. >> caller: yes, i wanted to say that i have insurance. and i am skeptical about the plan about the government health care and being involved in health care. but obama, he's opening my eyes a little bit. you know when he speaks about the fact that we pay for health care before we even get our paycheck. he kind of makes it more clear to me that there is a cost, a high cost, that reform has gone to aid and diminish on an individual basis. i don't buy my health care, i get it through my job. i think that everyone needs to get the opportunities for health care if they are losing their

jobs or if they are purchasing it outside of their jobs because it's not a benefit of their employment. i'm realizing that i am paying for that and my friends and family are paying for that. i'm open to hear what else he has to say. i appreciate him talking and answering questions. >> thanks for your call, chester. on to california, pat on the democrat line. >> caller: i think he did a very good job of answering more questions. and i was interested to see that he discussed the stimulus bill, because i think that has clouted by some and clarify and build trust that the government is really working for the people. i think that was lost a bit in the last few years. the skeptic is a lot of lack of trust in the government.

i'm delighted to see that people seem to be listening, and i hope that continues. >> and we thank you for your call. the president leaving the airport hanger in gallatin, montana. as you can see there, the president arriving from air force one. and he is greeted on the mat by montana governor. we will continue to take your phone calls. on to belle view, illinois. joyce on the line. >> caller: hello. >> go ahead, joyce. >> caller: okay. i was hearing pro and con about this. i'm trying to be fair. i'm a college teacher. i thought i would listen to what he said today. my concern is that the length of this bill, i saw it on the

internet and read most of it. i think that rushing it through when congress coming back right away is really kind of scary. because there are areas that i think need to be gone over very carefully. and they need to be a little bit more open when these town hall meetings so that people can express themselves. sure, there are a lot of people that are shouting and so forth at the meetings. but it's something that it involves the whole country. >> give us one of your main concerns about the president's plan. >> one of my main concerns, well, there are two. one deals with the house insurance for sponsorship by companies or employees that are retired and their spouses. is this going to continue as it has been or are they going to change that? is it going to mess up the insurance system?

another area is for the aging. i think they need to be a little bit more explicit about counseling and so far for older people and how that will be carried out. because there's something building right now, i think of the movie "solar green" where people were disappearing because they were a certain age. i can see this building. it needs to be brought out in the open, and it really needs to be clearly be discussed, and it needs to be discussed by our representative from the different states. i had voted for obama. and i thought he was a bit of fresh air after the person in the office before. but i guess one of the things that i question was reading that plan, it's over 1,000 pages.

and he's only been in the office over 100 days, how did he manage to get all this put together in that short of time? >> thanks, joyce. from washington, can on the republicans dine. >> caller: , yes, i've been in republican and real hard core there for a long, long time. i'm 60 some odd years old. for the first time in my life i've had the question what a republican is. and i listen to the president talk and pretty well lay it all on the line. i listen to the cable trying to sell me a -- what i know. i just know realize that they are lies. and i think of the episode on the space movies that they had. these people were all about

profit. and i'd like to know how these representatives can get buy -- by forgetting about us retirees who have to live off the little we get and the people in the medical administrations making millions of dollars of profit. and when i go down to get a medicine that my doctor prescribes to me, and i'm told that i can't have it because it doesn't follow within my insurance plan -- >> thanks, dan. let me get pictures of the president as he arrived this afternoon in belgrade, montana. continuing to take your calls, we go to tallahassee. on the republicans line. >> caller: hello. >> can you turn the tv down? >> caller: sure. he needs the tv turned down. okay. >> okay. you're on the air.

>> caller: i'm a 35-year-old lady from tallahassee and i'm a republican. i did vote for barack. the company that i want to think about is i think it is overrated. i think people have just gone by hearsay and haven't really fully read the bill itself. i'm also in political science as well. and i was looking at the commercial that the aarp put out. it says a lot. everything is blocking the wrecker car. we think we are really overlooking the fine details. think we should start taking them out. i think people are getting bent out of shape. >> thanks for your thoughts. atlanta on the democrat line. >> caller: yes.

i just want to be able to say that i think this is a -- thing that barack obama is doing for us. based on the fact that i'm 39, i'm diabetes, i'm unemployed and don't have insurance coverage. based about what he said about the previous administration, it's about time we have a president who fake -- takes the time to do something for those who are unfortunate to do it for themselves to be able to make sure we all have health coverage plans so that people like myself who have an ailing health problem can still get the proper health care that those who have that pocket as they say in my neighborhood -- >> thanks. the president will hold another meeting tomorrow in colorado. that is set to start at 5:45. from grand junction, colorado tomorrow. it will be on cspan.

we will continue to take your calls on the town hall today in montana. on the independents line. >> caller: yes, i did not feel like -- my concern is when did this option become the only option? you know, the united states has the best health care in the world. they have their government run health care. sure, it's fine for the shots or whatever. but you have people that are diagnosed with cancer. they come to the united states for care because nay have to wait so long in canada to get the care they need. so my question is when is this option become the only option? i don't want government to run our health care. that's the way i feel. >> our last call, on the

democrat line. >> caller: yes, i always feel much better about the plan for reforms in our health care system when i hear from the president's mouth himself. i don't take too much of the information that's being given by other entities about the health care number because it's so diverse. people are still confused. people are still afraid. and i'm afraid too. but -- and i'm on medicare. but i feel better, i feel a lot more relaxed after hearing the president himself say what he's working on, what congress is working on to better the health care reform. i really appreciate the fact that we are allowed this venue to say what's on our minds and

i'm so glad that we have a president like president barack obama. >> thanks, appreciate your call. and we appreciate all the calls that have come in. as congress continues it's summer recess we want to hear from you. are you attending one in your community? what do you think about the health care proposals? share your thoughts on video at cspan.org/citizenvideo. conservative bloggers are meeting in the pittsburgh for the second annual right online conference. live coverage on cspan starts at about 7:40. tonight on book tv a conversation. he's the son of william buckley jr. beginning on 8 p.m. eastern on

cspan 2. >> radio talk show brian jennings on the new fairness doctrine. he's interviewed by monica crowley. >> british voters are expected to go to the polls in national elections. this weekend conservative party leader david cameron is talking about how it would change british politics. >> and our review of some of the major decisions by the supreme court handed down. they will discuss employment law, political speech, and the heritage foundation in washington is the most of the two-hour event.

>> good morning and welcome to the heritage foundation. we are proud once again to be sponsoring the annual review of the supreme court term. we will talk about the supreme court decisions completed. some of our panelist will want to look about and talk about the term next year. let me do a quick introduction and i will turn it over to him for the rest of the introduction s. todd gadsian know is the commissioner of the u.s. commissioner on the civil rights. he worked before he joined the heritage foundation in 1977, chief council for the -- he served in the office at legal council at the u.s. justice

department. todd let me turn it over to you. >> thank you, rich, for the introduction and to to helping put on this event. >>it's been a big week in washington. the cvo warned that the health care plan will cost more than their sponsors say. the worst record in baste baseball. and an aggressive shot and killed. is there anything else i was forgetting? anything else about including the four-day hearings in the senate committee. my introductions will be brief

to give them more time to discuss the important cases of the term. miguel estrada will go first. he is the constitutional law practice group. we are always delighted to have him on the program for his incredible wit and wisdom, including his experience arguing 18 cases before the high court and his participation in many others. miguel was an assistant to the solicitor general when he began his supreme court practice. he also assisted u.s. attorney in the appellate section of new york. he is trustee of the historical society and has been recognized by his peers as one of the most outstanding practitioner. his name has been invoked because his nomination did not receive a vote in the u.s. senate.

relevance of the nonevent today can be debated. he was forced to make a lot of money for another decade before his time came again. and given miguel's brilliance in the court room, i predict the same fate for him joining the federal bench. well, as for now, he'll have a smart remark. his firm's practice group was involved in several court cases. next on our program's deal, katyal, he served as acting visitor general. neal has argued several cases before the supreme court. but as the private practitioner and for the government. since 1997 neal has been a

professor when not in government services. in 1990s he was assistant to the national security affairs including defending the constitutionality of the kosovo. he convinced the court to issue a landmark with the decision. since january neal personally argued two of the terms most important cases, the voting rights and another base involving a novel constitutional argument involving convicted felon's access to post conviction to dna evidence. last but not least, michael carvin, he's a partner in a law

firm where we specialized in civil rights and litigation. he has argued several cases before the high court himself, including the ceasing of the u.s. house of -- before his private practice he was principal deputy assistant and the office of council and relevance for some of the cases as deputy in the civil rights division. one of his notable appearances was in the florida case. i should add that miguel estrada was on the dream team with his partner who completed the argument in that historic case. now mike has participated in several high profile cases involving voting rights and other issues including filing a brief in this year's case

challenging the constitutionality of the preclearance division. maybe i should add he is a returned guest. several people in the audience will now how shy he is. hopefully you will help encourage him to tell us what he really thinking about the cases and other cases next term. with no further adieu, let's start with miguel. >> thank you for having me. i was going to start when you made the very kind remark by responding that you have now ensured that my wife will take out a contract on your life. but, i'll let that go. please, i'll start with three cases that made you think sometimes that you're not quite sure if the supreme court is running a court or you know the

line -- the tv lineup for a major network. let's start with fox versus ftc where the issue of the court is the extent which a learning star can go on television say the f word. he used to be the rule for many, many, many years until the court got into this issues that you cannot use indecent language if you use the s word or f word as former vice president cheney did that senator leahy on the floor of the senate, you would not understand that the vice president was inviting congress with the senator and maybe that was not literally indecent because as the fcc used to say, this has been used as an

intensifier rather than literally as the description of sex or other activities. this changed -- i could not make my government up. this changed earlier in the decade when the fcc concluded that any other all lit rations of the f and s word for sexual as the case maybe and therefore indecent only to be said by their own assessment of the conflicts. that got to the supreme court and the pure point of administrative law as to whether the fcc had enough grounds for flipping its definition. the court ruled for the fcc. what's interesting about the case is if you count noses, it is fairly clear that the government is going to lose the next round on first amendment

grounds with them going so far to say that he is, and i'm sure people here will be shocked, that he is now willing to overrule cases that have come up with different standards for television broadcasting than their currently applied to newspaper and cable networks. you know, that's the 7 p.m. slot in the television. then we move on to the pop boiler which has to do with whether the ceo of a company that has a very important case in the west virginia supreme court, you can divulge your effort to having one person that you would like to be on the court because you think my vote for you might be on the court and having that person be elect ed and give him $3 million. this is one of the things that

even john grisham couldn't come up with. and the people that are usually considered the liberal wing of the court with him, the court found that that was too much to stomach and there was violation of the due process because of the court. it's the type of thing that makes you think this does make me quosy. is this the best way to deal with this. the chief justice had a list of 40 questions which may prove difficult to answer as we move forward as to what happened next. sure, you might think this case is easy. but there are any number of things that come up after to where you go from here. and finally for the tearjerker, the 9 p.m. slot on the

television is why -- this is a very tragic case of a musician who lost her forearm as a result of having acquired gangrene when a drug was injected through what's called the iv portion method. and why it is again -- going to cast a whole wrath of preemption. even though the label has been approved, and it would be difficult for the manufacturer to change it, that that was not a defense where when we sued the manufacturer in a jury trial in state court and that effectively you could have a jury in the

position of coming up with the additional warnings that often have been put on the label that fda didn't thinking of asking the manufacturer to put on the label. this case it's significant. it was a headline case. it was very important for the business community, which when it's convenient finds a lot to be said for the federal/state balance. and it just points to a great deal of instability going forward in the doctrine of the supreme court there are many ways in which this case can be be distinguished from the prior case which was some years ago and involved, you know, car safety. and that's going to be a very important area going forward. we don't know if justice will be effected now that justice tomas

is on the team of giving a lot more leeway in the statement of these areas. >> on time, i'm watching the clock. >> good. good. >> i want to begin by thank you the heritage foundation for having it hear. it's the point that you hear that miguel was assistant solicitor general from 1992 to 1997. in 9194 a young --1994 a young law student had him as a boss. he was an incredible boss. >> i don't know how he means that. >> i mean that in giving me all the feedback, criticism, and answering advice during that informative year. one thing stuck, i remember i said who should i work for after i graduate. he said one name, john g.

roberts. that was when he was in private practice. so it's a real privilege to be here. and part of my privilege is representing the government is not to make any news. i won't make any news today. and i'm talking about my personal capacity. maybe talking about a couple of the cases i want to give you all a word about the solicitor general office. our job is to represent the united states for the supreme court. our office is very small, just 21 lawyers. but we're involved in roughly 2/3 of the cases before the supreme court and are arguing on, you know, virtually every day that the court is sitting. there's a great premium in our office placed on stability. we don't really change positions much from one administration to the next. and unlike other parts of the justice department in which you have all the deputies being political deputies that the appointed by the president.

in our office they are career deputy. the one with the least experience has argued 60 cases. it's not to say we won't think about the position in a different way. we had the case of savannah redding, the 13-year-old that was stripped for ibuprofen. we represent the thousands of prosecutor, we generally come out on the side of not finding amendment violations. there's only been one where we said we can't find violations. we looked at the case. we said yes this does go beyond what the 4th amendment permits. we also said the court should qualify immunity to the officials who engaged in the court. that is what the court did on the 8-is decision.

it's -- when i was doing the cases on my own who is basically a bunch of student, i would do the table of authorities and contents myself. by the way, i never argued, again you could think that decision is wrong, i had nothing to do with that decision. i argued don versus rumsfeld. they had a real lawyer. for me, don got stuck with me. we have a very small budget. it's something like $10 million for all these cases. that is a budget for private practice. this is what we do in a year. and it's yeah -- so it's a really quite remarkable to -- so it is really -- i think it's a

very good dollar value in d.c. with that in mind let me talking about two cases, the voting right case which i got to argue the last case of the term. this is the case about the 1965 voting right acts preclearance division section 5 of the voting rights says that restrictions if they want to change their voting practices they need to get preclearance from the justice department or from a federal court. this has been a landmark provision in the civil rights. there's obviously debate, whether it should be retained, but i think both sides before the court and both sides on the court recognized the historical importance of the provisions and success they had. and franchising millions of voters. well, this small municipal

district challenged the right arguing that is beyond congress' power and also arguing a technical stat tour argument that even if the courts were to inside the constitutional question, they should find a way for the utility district to be effort from the preclearance requirements, a bailout, and be outside of having to get preclearance for every voting change that they make. the decision came with a very strong court of appeals decision behind it, 121 pages. it came to the court with a very extensive record in congress. it had been reauthorized four times. most recently in 2006 after 21 different hearings spanning over 10 months and with the 16,000 page record. it was a decision that congress voted unanimously to affirm the act. the house vote was cite

similar. it was signed into law by president george w. bush. when the case came to the court i think many people thought this would be occasion for the court to make a great constitutional pronouncement about the kind of reach of congress' powers. instead the supreme court said that the bailout provisions should be read in order to permit this district to bailout. i think that was a very tough argument on the statute. i think for the court to do. i think the statute that finds that those can bailout a certain way. and the court basically engaged in some creative rewriting in order to reach that result. now that might be the right result. i think one debate that will be all we're having in the next year is whether or not a multimember court the principal is the most important

characteristic. if it were, i think your answer is simple. so in that case and in many other cases this term and others a clear consistent physician that is unmuted by other consideration including other justices to go along. justice roberts took another side. this is a ringing endorsement of those who thought he would do so. maybe in my next set of remarks i'll talk about osborne versus alaska. >> thank you. >> yeah, i'd like to pick up on the civil rights case, the one he just mentioned, and the two others. there's still on the second circuit of what gnu heaven --

new haven, and therefore they disabled all of the white and hispanic firefighters who were eligible for promotion. there was another case that hadn't gotten my media attention which involves section two of the voting rights action. and basically i'll describe these cases individually. but the main point is there seems to be a consistent theme. in in case reflecting the fundamental tension and dilemma. after the constitution requirement that you can't disfavor anybody on the basis of race or not. i'll take a step back to explain what i mean. if you have completely mutual

motives, test or high school diploma, that has impact of african-american that's illegal. if you have a discriminatory result, it's illegal even if you had no intent to disadvantage minorities. the basic point that media and scholar's miss is the intent. they are just two different ways of ruling out discrimination of being more muscular version. in reality the effects fest is a mandate for discrimination against nonminorities as we pointed out in 1989. when they were in title 7, the effect test is in effect a requirement. if you say that you need to hire -- it's illegal to hire fewer blacks than there is in the

proportion of the relevant work force or in the neighbor. let's call it 30% for discussion sake. if you have an impact or less than 30% black promotion or hire, that is a requirement that you encourage in reputation quote as you hire or promote 30% blacks. now that's a pure effects test. if you didn't have an excuse on behalf of the government that says okay we're illegal. e want to be able to give you some justification on why we did engage. the fight has been an effort to since they understand -- >> hold the microphone closer. >> i'm sorry. >> for the c-span audience, we want them to hear all of your brilliance. >> since if you made the justification standard demanding like business then in essence you've mandated a compelling government interest not to do it.

if you make the justification weak, is it reasonable that the employer did? then the employer will have a lot more discretion. so the debate over the last 15 years or so how tough of a justification can you impose on people and how much tension is there between the effects and the standard. he was the most obviously of the examples. because again engage in sort of a classic thing. our numbers don't look right, we're going to scrap the test and start off over. when the court gravels with this issue, they are two polar opposites justifications. no matter how bad the impact and how unjustified, you can never

intentional discriminate against the firefighters just because you want to avoid an impact test. the court said no, there are certain circumstances. the justice department said if employers want to do it, let them. we'll got it in good faith. they've understood that the effects test are de facto requirement. they've came up with the mid the ground with evidence and thinking that you're impact is illegal. if you do then you can engage in race conscious efforts to quote, cure the problem. obviously they are still trying tostada the the attention between the effects and the intent test would be with these sorts of things. the point i'd like to make here is that the imported the

constitutional standard into title 7. so the point is now the private employers also have to engage in the strong basis in evidence in terms of justifying this sort of thing. no more feel good diversity efforts. you need to have some strong basis if you didn't engage in those activities you would face title 7 liability. and the other cases in which this came up was clearly the barton base. i'm not going to have time to describe all of it. the guest was the people arguing under section 2 lost in front of the court, and the reason the court gave for their loss was two. even if there is a district where minority could win the election if they were only 30 to

35% of the relevant district, that doesn't give them any entitle the to winning the election. it doesn't guarantee they will, what it guarantee c)z they will have an equal opportunity, equal to other group. and no other group in society that's 30 to 35% can expect to win. and the other point they made was if you expand section 2 in this way, you will inject race into every redistricting effort made by local and state. and that is something that creates the incredible tension with the shoreline of cases which say you can't engage in race. going forward this will be very significant. justice kennedy's consistent theme throughout every one of the last voting rights cases has been there's the tension that i was just describing between the notion of what section five and the justice department is imposing is race based and

maximizing minority representation. the same result under section 2 and the constitution demand of color blindness. i think -- i know i don't have time to discuss the case neal discussed. it is a signal to congress that they have a reform section five or at least five of the justices are going to strike it down in the years to come. principally or at least because of this dilemma where the statutes are mandates they include race anteconstitution is try to leave them out. >> thank you all. you guys are all standing under or on time. i won't take their time. we've agreed to two comment periods before we recognize audience questions. and i'm happy to be corrected by neal about which landmark wrong-headed decision he argued. it was the wrong that maybe is

more consequencely wrong that set the stage. with that, welcome back. >> i wasn't found of that. -- can i respond to that? >> well, i just don't know where to begin. it just seems to me, i tend to agree with neal that when the court did in the case whether you can get out the preclearance requirement was very difficult to justify. and the court i think recognized that. and i think that just simply goes to show that the court may have been willing in 1965 to say we do need to have this other states under the supervision of the justice department. that gets away from the world of

discrimination and if you get the federal and state balance that becoming harder and harder to justify. i have no doubt that congress will do nothing about this. but this is a sign. the court is telling the congress you get one shot. and you better fix this, because it ain't going to fly. and i am confident that there is somebody on the hill that say let's look at this and come up with a tailored approach. and therefore, the writing is essentially on the wall. but that's what the next challenge that congress has done. on the richie case, i tend to agree with mike. i find it very hard to understand how this is a closed question. i understand the point that there has been discrimination in the past.

which, of course, is a compelling one. but in so far as that nobody claimed the discrimination that had occurred, the notion that you're going to take individual members of the public of any race to single them out on bases of their race was troublesome. and if any of you have had time to read what justice alido had to say, that is not troublesome, it was just ugly. if you get into what was going on in new haven government about this, it was racial politics. :