with great reeling -- regularities. why bother attacks america when we can bleed americans overseas and cause president obama to send 30,000 more troops which is enormous expensive effort. >> host: democrat caller. >> caller: good morning of i thank you for what you said about israel. this would be the question of -- my question. why is it that the united states does not want to talk about israel? or the people or our politicians do not want to talk about israel in the forefront? and my comments are this. when the country was very young, you mention also about the oil. and other callers have mentioned oil. the -- our country almost was built on oil and gold. and appalachians and other areas. what happened? and why can it not be

resurrected now? >> guest: well, the easiest root to buy it from the arabs and other things at home. i think we need to be more careful on israel. israel in my mind at least has every right to do what it needs to do to defend itself and preserve itself. nately, including that. however, we have no interest in the israelis and palestinians. that is a religious war in which we have no stake. why do we not talk about that? there are many crops that are extraordinarily influential in funding.

i lost a job last year simply because i said that i suspect mr. obama would maintain traditional u.s. policy toward i suspected mr. obama would maintain traditional u.s. policy toward israel and that cost me a job that was both a position and a salary. >> host: where was that? >> guest: the jamestown foundation, i was a writer and published article every two weeks and i said it kind of flippantly at one of their conferences that i thought obama doing what i call the televisa it to step, and during the presidential election campaign to get closer to the israeli lobby man that he wouldn't change policy toward israel and that was enough to have the donors to that foundation indicate that i should determine did. >> host: have you been able to find work in the think-tank world since then? >> guest: no, but i have been

actively looked. i have enough other jobs but you always talk about the israel lobby and its power and to see it up close and personal aimed right at me was very educational. in fact, it was worth the experience of losing the job as mackie were quoted in the times of london times' on-line about the bombing that killed the eight cia employees last week. wednesday's bomb wiped away decades of experience in iraq and eight years into the war the agency is desperately short of work. you quoted it's a devastating blow, we lost an agent with 14 years of experience in afghanistan and inç practical terms what does this mean in afghanistan and aside from the loss of life and the families, what does that mean for the u.s. experience there? >> guest: it means that particular base in afghanistan was essential to providing information that facilitated military operations and part of the ability to collect that

information depended on the experience and so the measurable impact of its besides the tragedy of losing eight lives is probably less able u.s. military capability in that region for the time being because we have not grown crop of experts on the islamic militancy as we did for example during the cold war against the soviet union. we just don't have that bench strength. >> host: stuart, florida good morning on our independence line. >> caller: let me ask you a question, let's talk about something you don't want to talk about, let's talk about when they were plotting 9/11 how they working with the ciaplotting then and were working with the cia and you felt you didn't detect anything. can you elaborate about protecting mrs. clinton's run for presidency, not wanting to go to war in and talking to her

husband and trying to downplay the war until they got out and laid it on bush? >> guest: the cia doesn't operate inside the united states and the officers that work for me provided mr. clinton with 10 opportunities to eliminate osama bin laden either a time seizing u.s. military power, twice to capture him and taken to a third country which would have been an end to have. again that the agency is not a domestic service. and i have to say that we were just talking about the eight officers who died in hosts, at least two of them as far as i have been told were people who gave mr. clinton those opportunities in 1998, 1999 and mr. brennan was essential in arguing against giving back to -- those operations a chance to protect america. he instead the wanted to trust the saudis to do our dirty work for us, so i'm just a

bureaucrat. that's all i ever was but in terms of the people who risked their lives to protect america mr. clinton had multiple opportunities. osama bin laden to be an annoying memory today in out the cause of the brief we have had since 1996. >> host: to you think he is alive and if so wear? >> guest: yes in our culture if he was dead they would beat both grieving and celebrating because they embraced bardem.ç it would be hard to keep his death a secret as the death of any american president. the other thing is we have a great deal of evidence, hard evidence, al qaeda has never tried to hide the death of a senior leader even in the midst of a war it announces the deaths and announces the person who takes in their place and at times they rub our nose into by publishing curriculum of the person who is the successor. my own guess and it's a way that is he's in the northern half of

the afghan pakistan border. up around in a place called toner on of the afghan side on the pakistan side. it is a very -- in area where the saudis have proselytized a lot so it's very congenial religiously and it's an extraordinarily remote and difficult area. >> host: one more call, this is jack in san antonio, texas. >> caller: i like to ask you a couple questions. use said is really no strategic value whether or not israel or countries in europe forç that matter our democracy is. so we do disagree with it germany's decision to support israel the very beginning to allow to exist or would you care whether europe was ruled by the nazis or not? and also you say that the average resident over there could care less if there is a

starbucks or mcdonald's in saudi arabia, but also would he care whether israel exists or not? it seems to me that's the more for your the western influence on their women, ability to control women whose mack we will get an answer. >> guest: in terms of a europe, the time nato was formed in truman and george marshall, we have to do that because not to dr. seuss but we needed to defend ourselves and them against the soviet union. that age as gone. and to continue expanding the nato alliance to create more ious for war for the united states is a mistake. and would that have opposed truman's decision to recognize israel? i certainly would have because it's obvious where it was going to lead. that said what i would say is no country has a right to exist. the u.s. doesn't have a right to exist, britain doesn't, bolivia

doesn't. countries exist and they can get along with their neighbors, if they have a thriving economy and social system that is equitable. it countries deserve to exist we would be resurrecting the soviet union, the latin kingdom of jerusalem and every other country that has gone down the tubes. every country has a right to defend itself but no country has the right to exist. >> host: michael scheuer, your folks want to read your posting is an editorial, as? >> guest: we are just about to start a website called on the intervention.com which will be available in the next month or so. >> host: we appreciate you joining us this morning. >> guest: thank you, sir,.

up next a senate hearing from last summer on high-speed rail travel. the heads of the federal road administration in amtrak were among the witnesses along with federal regulators and high-speed rail advocates. this is about an hour 45 minutes. >> [inaudible conversations] >> we could do several things here parent often add events. with german to be full. they just invite members of the audience to come up and make it look like it is a big panel appear. so you've got senator one and myself and senator lautenberg on

the way and that's all you really need it but i don't want teredos to be upset. there's a lot going on today and part of its obviously is what happens with the metro rail system. it's actually depressing senator warner, a sad that there is no current way for the ntsb or the department of transportation or anybody else that can make recommendations but they have no enforcement authority. i did not know that. until this happened. the people can have a variety of philosophies about the federal government but it seems to me that where you have any heavy training being hits by vice versa light training being hit by a have a train and there is something that went wrong and,

yes, we would know we will speculate and will all come out in the end and in the meantime the only thing that really counts is all those families of the dead and sometimes of the families of the injured suffered longer. but there is no authority to tell them that have to run a safe train. there are recommendations but no authority. the chairman has arrived. >> sorry, the train was a little late in getting here. thank you, mr. chairman. among the chairman here, he is the chairman. thank you all for being here. and my apologies for a couple minutes off target. what we will try to do in order to expedite things is we will

limit its opening statements to the three of us. make them short end the other members who may come to include their opening statement in theç record. for in their questions. we're going to go in five minute cycles here. so i will start to buy once again thanking you all for being here. the roles to play are very important and we're pleased to have a chance to talk to you. this hearing comes to order. and we gather here at a rather sad moment been here and in many lives were lost with the crash of the metro and there are numbers still to be computed of those who are not only paris but those who were wounded.

and it tells us as we see the confusion that follows an effort that has followed to is how important the use of the matra, the metro, a transit system is. and for the lastç six years -- for years we look and see that too amtrak because we're talking now about intercity but we can't ignore the contribution that transit rail makes. the last few years we have seen amtrak a proprietorship records year after year. in 2000 need to amtrak at ridership it more than 28 million riders, marking the sixth straight year of gains. these gains approved two important points.

it establishes the fact that people are sick and tired of waiting in traffic, standing in line at the airports, inhaling dangerous emissions, and just waiting indefinitely for their travel mechanism to be there. if we provide convenient and reliable rail service americans will choose it. secondly, these gains prove that time cries out, this time cries out for major investment in high-speed rail. we need to fill a rising demand for faster and more efficient rail services. for years we've had quite -- we have had plates -- we've had to beg for funding for passenger rail against those who want to bankrupt amtrak even as more americans are demanding increased amtrak service and discharge we have here -- and

this chart describes some of the hurdles we face for you who have problems with discerning would ease of these covers, the blue is highway investments. since 1949 aviation is the yellow and intercity passenger rail you can just about as yet the bottom is the green band. and when we look at how much we have invested in our highways and aviation system, is obvious that we have invested too little in the rail. now, we are not suggesting that those other muds are too important, but we need to invest more in real. last year we took a major step toward with my landmark law to prepare for the next generation ahead of the traveling to a man that's obviously building.

the law provides $13 billion over five years to repair and update amtrak infrastructure and growth service into towns and cities that are ready for passenger rail. we also created new grant programs for high-speed rail investments. has been a long road, but this new law finally paves the way for a solid an ongoing federal commitment to passenger rail. fortunately we have strong partners in the white house and president obama, vice president biden and to the help of secretary lahood. they know that too keep our commuters mobile and to keep our nation compared stiff and get our economy on track we cannot simply rely on cars and planes to get people to place to place. we need a balanced transportation system and high-speed rail is part of that balanced equation. that's why the recovery law we passed in february contains more

than $8 billion for high-speed intercity passenger rail. this money will not only improve rail service, it will create jobs and in this tough economy these transportation investments are smart investments. it put people to work, reduce delays, and digestion and cut carbon emissions and our dependence on foreign oil. president obama and his administration have presented a great vision for high-speed rail network here at america and i'm committed to working with the president to turn that vision into reality and i look forward to hearing from our witnesses on how we can make that happen. i turned first to the ranking member of the subcommittee, senator thin, and then we will hear from chairman rockefeller and ranking member hutchinson. >> thank you mr. chairman for calling this a veryç timely hearing and they've got a very distinguished panel today that i

want to welcome. we look for to hearing from you. my state is one of the few in the country that doesn't have passenger rail and you have to hearken back a long ways in the annals of history to a time when we did in. i recall my father who is now almost 90 talking about taking back in the 30's the railroad from my hometown to mitchell which is about 130 or 140 miles and that was a fairly frequent thing and people at that time travel by rail lot. passenger rail but it's been some time since we've had that south dakota where we're dependent on freight railroading, so i can probably approach this issue may be more dispassionately than most since it's not something that have interstate although maybe without the stimulus money we could get some, that would be nice. but i do want to say is an opportunity obviously the

funding been made available for high-speed rail in the president's budget not only the stimulus money but also the other 5 billion that's in the next five annual preparation cycles. but i also would argue its did pose some risk, it's a great opportunity for advancing development to address major urban areas but also great financial risk to taxpayers, it's not wisely carried out. and this is the key area i'm most interested in hearing about. in my view the federal government generally does a poor job of deciding on how to spend its money and this is especially true when it comes to discretionary programs for the have to choose between competing projects. one common result is the money is spread thinly over projects and ast( a result none of them actually get done correctly or quickly. or the government uses soft criteria that results in choosing unviable are unsustainable projects. we also find costs by our

control at their original estimates unrealistically low for the beginning. how does the department of his irritation and the federal railroad administration intend to decide between projects and how the construction be overseen. specifically what i like to hear the payless discuss is out there will be chosen and criteria used and how the department validate the data such as a writer ship and project costs by applicants and what oversight will occur and carried out to assure the projects come in on budget and on time. i hope congress will very closely monitor how this program is implemented and hope this program succeeds and when we look back five years from now and after spending as much as $13 billion at as envisioned that we will see great progress in advancing high-speed rail and our country. to me success means rail passenger trains that serve real public transportation is constructed on budget and on schedule. that are filled with passengers making the rounds economically

viable. i want to thank our panelists for appearing today and for sharing their testimony. thank you mr. chairman. >> thank you very much. the chairman of theç committee, senator rockefeller, i want to make him a general. [laughter]ç >> thank you chairman lauenburg. first of all, i want to apologize. and not on the judiciary committee. the white house is very anxious to have all senator is made with judge soto my air recess, i have been assigned a time at 3:15 p.m.. that is kind of for life. for her should she win which i think she will so i have to excuse myself but i do that without any misgivings because

this is frank lautenberg passion and has been for years.ç really more than anybody. so i also welcome all of you including governor rendell. i just said i never see him in person so he's on television here now and it's kind of exciting to meet some a like that. [laughter] >> mr. chairman, you don't know how exciting it is, i've worked with them and. >> now, i agree totally with senator lautenberg on the excitement of high-speed passenger rail. i've spent 10, 12 years either cheering are being ranking in the aviation subcommittee of this body. and it just a kirsten been watching -- it occurs to me that we're down two relatively few airlines with lots of problems

and if you just looked at the pattern of people's behavior, they want to use pastorale, they want to use rail. and they want to use fast rail so that is what this is about. i look at west virginia, people necessarily assume there is a lot of passenger rail through west virginia and it's actually huge as it is obviously in southwestern virginia also. in fact, our amtrak service which senator lautenberg helps so much has increased, it's doubled in one of its lines. in the last year, doubled, and the other has risen by 19 percent. now west virginians don't travel endlessly so this is a very important statement.

earlier this year senator lautenberg and i joined as he indicated with the vice president at $1.3.1 billion application to the stimulus package, it was called the speech is or not very interesting, but the money is real. and that's what counts. and i have to stay in a non-partisan fashion that is really thrilling to have as senator lautenberg pointed out some in the white house who really wants this and really cares about it, who doesn't like that level of greed up there and wants to increase the green and has already done that. i want to make a special point to said that i believe that passenger rail can do so much for us as a country. that's not just a cliche. we need to increase the use of passenger rail.

enormously not just for passengers, but for a rate -- rate and we want to do it as fast as we possibly can. it affects our climate change, it affects one-third of our greenhouse emissions in this country, the deferment of energy national laboratories says that inner-city passenger rail is 17% more efficient than air travel. that is 21% more efficient than auto travel. it says something. so encouraging greater use of it is a court -- terribly important. i will do everything i can senator lautenberg to work with you to make sure that we can do this. and we will, it's inevitable, it's part of america's destiny. i think the chair. >> and i apologize to the audience into the witnesses.

>> thanks very much, senator rockefeller appear in your position as chairman of this committee is one that gives us encouragement that we can achieve this goal of ours and having a more important rio leyna to our transportation system and we thank you for your encouragement. senator hutchison. >> thank you mr. chairman. and am very pleased to be at this hearing and also to have the opportunity to have a texas presence at the hearing because you and i mr. chairman have worked for a long time on amtrak, keeping amtrak by bob and i will say we've had a very productive partnership and keeping the national part of amtrak also liable. and i think that is essential and now that we are beginning to see the possibility for high-speed rail, i think it becomes even more important to

have the national part of the system also have the opportunity for high-speed rail to be connecting into amtrak and therefore provide really better synergies and writer ship and service to both amtrak and a high-speed rail than i do think will help ease the traffic congestion in many parts of our country. i was very pleased to mention the amtrak reauthorization bill last year. the first amtrak authorization bill before this last one was 1997 and i sponsor that one as chairman of the surface transportation subcommittee. and i think we did some great reforms in last year to begin the process of having a federal partnership for capital grant programs for states. to be able to invest in rail. and i think that is an important

step forward to making it more viable. because many successful rail project is going to have to have a multi partners, to have to have private sector, federal, state, because it's so expensive in the early investment is expensive but then it becomes much more efficient after it is finally built and established. i'm pleased to welcome mr. sabo in your new position of fra will play a major part in this and i'm glad you're going to have seven weeks to determine what the parameters for high-speed rail should be. and i think having them all over the country is another good sign. ..

and i just want to recognize governor rendell was something i have worked with for a long time. his brother is a constituent and a good friend. so, we have a lot of interest here and i look forward to hearing from the witnesses in the theater dissing bush panel. thank you very much, mr. chairman.

>> thank you very much. we made a decision that he tested the size and the quality of the witnesses here today that we would forgo opening statements and we will try to deal with this act viciously and have just five minute rounds or six minute rounds to give an extra minute therefore used as members see it. and i'd like to introduce the witness panel. a good friend and governor, ed randel of pennsylvania. just like the people of new jersey are neighbors from pennsylvania rely on trains on a daily basis. governor rendell has been a vigorous advocate for passenger rail and i recall clearly dissatisfaction, but his energy in getting a new braille between philadelphia and harrisburg. and it met with almost immediate

success and that's the kind of stories we expect to be constantly. the honorable szabo, this is the first time you've been before this committee since your confirmation. we're looking forward to hearing your working develop first-class rail passenger service for our nation. i know you have your hearts behind that. and the honorable judge robert eckels, chairman of the texas high-speed rail and transportation corporation. susan fleming director of physical infrastructure issues at the government accountability office. and tom skancke, commissioner of the national service transportation policy and revenue study commission president and ceo of the skancke company. and we thank you all for being here.

and governor rendell if you would, please take five minutes to summarize, try to meet the target if we can. >> thankmr. chairman, you forgot mr. boardman. >> my god, -- [laughter] [inaudible] were taking advantage of relationships you were glad to have you, joe. you've done a great job at amtrak. we're proud of you. and i thank you governor for the reminder. will start you off at a fresh five-minute spirited mac mr. chairman and ranking member thune. it's a pleasure to be here. i think this is a tremendous opportunity for the country and i would and knowledge i set the opportunity we had when we built the federal highway system. but we need to do up right. i come here today wearing three hats as governor of pennsylvania, as chairman of the national governors association

and is cochairman of building america's future, an organization dedicated to improving and investing in america's infrastructure that i started with governor schwarzenegger and mayor bloomberg, bipartisan organization. and we believe that promoting intercity rail is a key priority for america's overall infrastructure plan. mr. chairman, you talked about the success pennsylvania has had. teamed up with amtrak we invested $145 million in approved the time of the philadelphia to harrisburg or and from 120 minutes to 90 minutes. and in two short years our ridership has gone from 898,000 to nearly 1.2 million as a result of that change. if we build it right, people will write it. i have absolutely no doubt about it. there's been similar progress around the country and a lot of emphasized on doing what we did. the house for a client has been improved to 110 miles an hour.

and i want to talk about that in a second. i believe as we look at intercity passenger rail, we can't be content as a nation to build out 110-mile systems. if we do that, we are absolutely confining ourselves to second-class citizenship, compared to asia and europe. we have to find a way to build and finance true high-speed rail. as you know, the train in shanghai runs at 68 miles per hour. the japanese bullet trains are at 170 miles per hour. the french tv chief at one to 60 miles per hour. we can't be content to just build an ordinary system. now, what will high-speed rail do high-speed rail do for us in addition to moving passengers and helping our climate control? it will create jobs for citizens, jobs and building out the system and orders for american factories. let me stress the importance of that. in pennsylvania alone, where generalized transportation and

most of these factories tend to be hard hit areas of the country. in theory, pennsylvania, they employ over 4000 people. they are ready to build the next generation of high-speed locomotives good in a little town across from harrisburg, the biggest joke corp. the world has a plant that builds railroad tracks. it has 400 workers. with just the $13 billion investment, they intend to increase, maybe double or triple the size of their workforce in doing such. tgv, the french rail system is run by a company called as mcf, a national rail company. they employ over 200,000 people in good paying jobs. let me remind you, for you as a country once it decides to the u.s. so just imagine the number of jobs that would be permanent jobs in building this high-speed rail system as well as all the construction jobs and the orders for the factories in building the system it tells you that, if

we're going to do this we have to do it right and we have to do it at scale. 13 billion i know what senator thune said. and once have come at $13 billion is a lot of money but in another sense it is a small amount of money to do what needs to be done. to build high-speed rail at the california coast it is estimated to be 45 billion-dollar cost back there. to build a high-speed train from philadelphia to pittsburgh, which would link the middle in a court to the midwest would cost between 20 and $25 billion alone. a couple of months -- a couple weeks ago vice president biden had a meeting with six governors. and it was a very interesting meeting. the governors were all pushing for their own projects, hundred mile projects, the midwest governor said that they have a plan to link the midwestern cities up at 100, 110 miles an hour. governor king said there is a plan to link richman with a hundred 10 miles an hour train.

and governor nixon and governor patrick joined them and said, slow down. we can't meet this effort building 100-mile an hour train systems. or else we are truly confining ourselves to be a second-class nation when it comes to transporting our systems. we have to look at the mac labs. we have to look at the bullet trains. we have to look at improving. if we did the work on improving the amtrak we could go to new york to washington and an hour to 30 minutes. would you go to new york and philadelphia in 33 minutes. we could confining shuttle. we would improve east-west air traffic all over the eastern seaboard. we shouldn't be flying people 500 isles or less. you should be putting them on a high-speed train. now ranking member thune asked a very good question. how we decide which of these projects, whether they're 2 billion or 400 billion. how will we decide which

projects should be given priority? i suggest that we create a national infrastructure bank staff by professionals, not necessarily professionals all of them and transportation. it could be some former members of congress, some former secretaries of transportation and bring projects on a cost-benefit analysis, write projects on priority what they do for transportation -- transporting people, how many people, the effect on climate change. all those rings and independent rating system because the public wants that. the public does not want transportation dollars authorized to the same old system. and certainly not for projects of this magnitude. and lastly, how are we going to pay for it because $13 billion as ranking member subset of that is a lot of money, but it's just a drop in the bucket. how will we pay for building high-speed rail system in this country? i think two ways i would recommend of the congress considered using some of the money that comes from a national climate change law to do just

that. what better way could we help our climate in getting cars off the road, trucks off the road, and building a high-speed rail system? secondly, if that money is going to spoken for elsewhere or that they'll never comes to pass, i think the time has come to look for -- at a federal capital budget. you know the federal government is the only political entity in the united states that does not have a capital budget. to have a capital budget to do the things we can do with a capital budget, you have to change the way that the cbo and omb's score. they can score the total investment. they just got used or the debt service like we do in pennsylvania. we score, what we pay for in that year. a federal capital budget even at the federal capital budget of up and the total picture, but just fund the infrastructure bank it could work. the time in my judgment the time calls for bold and strong

actions. if we do this, the obama administration and this congress will be remembered the same way president eisenhower and the congress he worked with is remembered for building the national highway system. thank you very much. i didn't want you to speed up at the end, but you got me so excited about height need that -- [laughter] thank you very much. and now for mr. szabo, we'd like to hear from you. >> thank you i'm a chairman lautenberg imus senator thune, senator hutchison and senator said the committee. it's certainly an honor to appear here today on the off of president obama, vice president biden and ray the hood. the vice president has a vision that ensures safe and efficient choices, one that builds a foundation for economic competitiveness. one that promotes energy efficiency and environmental

quality. and one that supports interconnected among livable communities. and in each case, passenger rail is an integral part of that vision. in many cases, even modest investment in existing right of ways can result in high-speed rail with competitive trip times and continue rails unmatched safety record. transportation is the lifeblood of any economy. and not only will the high-speed rail vision and prove mobility, but obviously the construction will create many short-term jobs, but more importantly, the sustained investment will revitalize domestic rail suppliers in the manufacturing industry. rail is already among the cleanest and most energy-efficient means of moving goods of people. in fact, one study indicates that implementing the current federally designated rail court

orders would result in an annual reduction of 6 billion pounds of co2. a network taking our national rail system as a foundation with traditional speed and then overlaying high-speed rail corridors, commuter rail systems, and providing connections with the transit will provide those interconnected communities that we see. senator hutchison mentions the fact that we've been doing extensive outreach and we feel that that is critical in the development of our guidance and as we continue to move forward with the national rail plan. we believe that that's fundamental. that we need to reach out and engage the various stakeholders right from the inception of all this. particularly pleased that in the seven outreach sessions we've conducted so far, nearly 1200 people participated with a high

level of enthusiasm and with a great deal of very, very beneficial comments that were in fact incorporated into the guidance that we just released. our success is going to determine, be determined by these partnerships. and like the construction of the highway system, states are going to play a very critical role. we are on track and we are using essentially the same model that the europeans did in their rolling out of high-speed rail. our near-term strategy seeks to advance new express high-speed corridor services at speeds over 150 miles per hour and corridors of 202 to 600 miles. in the quarters of 500 houses seek to develop both emerging high-speed rail corridors at speeds of 90 to 110 miles an hour, a track shared with freight operations and also develop high-speed rail corridor

systems at speeds of 110 to 150 miles an hour on dedicated tracks. in addition, will be looking to upgrade the reliability quality of traditional 79-mile an hour intercity service. please to report that our guidance document is out. it was out on time and it provides for tracks for possible funding. objects that are individual projects that have individual utility and individual benefits. a track for corridor programs which is more comprehensive on implementing a full buildout of a corridor plan. a track for planning to assist those states that aren't quite as far along, but still have a keen interest in implementing high-speed rail plans. and then an area for projects that will provide for 5050 split that will allow the state that are willing to help match dollars, allow us to stretch our dollars further.

the criteria for selection will be based strictly on merit. we will be measuring the public benefits, those that are measurable, achievable, and cost of the goods. a key element will be the applicant's ability to mitigate risk. the applicant's ability -- their fiscal capacity to carry out the project. their fiscal ability to cover capital and operating expenses. and their ability to have adequate project oversight. this is a transformation for fra. historically we've been a safety agency and safety remains our top priority. but it's important to note that our passenger rail staff is, you know, our staff is from a quieter area when all we had to do was issue a couple of grants to amtrak or perhaps to a short line railroad. and clearly that is changed.

we are asking the members of this committee to support the president's fiscal year 2010 budget that starts to address the staffing problems and managing a program of this magnitude will bring to the agency. and then we also ask that project oversight take down be consistent with more -- the more traditional 1% instead of the quarter of 1% that was authorized in the recovery act. and with that i look forward to your questions. >> thank you very much. and now mr. joe boardman, the president and ceo of amtrak as a current ceo, former fra administrator i'm a former transportation official. joe, forgive me again for leaving you at the station when the train was pulling out. but i'm back apologetically. >> all is forgiven and i hope never to be viewed at the station, senator.

[laughter] thank you, mr. chairman and senators. amtrak has been providing intercity passenger service for nearly 40 years and we regard ourselves as leaders in the field. a tap of our three daily trains operate on some part of the northeast corridor, which is currently the only high-speed railroad on the continent. its operation, and it's operation we've built gradually but surely into 150-mile an hour railroad. this has given us a unique and unparalleled experience in the operation of service about 100 miles an hour under north american conditions. i recently returned from an extensive tour of our western operations. in fact, 9000 miles worth of writing the train and 47 amtrak repaired meals. they were all good, but it would've had a little more variety. i can assure you that the mode of our employees and their supporters is optimistic. people are excited about the future of amtrak and intercity

passenger rail and there's a real sense that we have a historic opportunity ahead of us. the passenger rail investment improvement act pre-establishes a new partnership between the federal government, the states, amtrak home and the freight railroads. this committee played a pivotal role in the development and enactment of the legislation. this is my first appearance before this committee on as president of amtrak. and so on behalf of the company and all of our supporters, i would like to thank the committee and in particular senator lautenberg and senator hutchison for your wisdom and your efforts on our behalf. under priya each entity has a clearly defined role. the states of the strategic planners. you decide which market should be served by rail and they fund the operating cost for new works in the quarter services while the federal matching program provides funding for capital projects. states will need to provide the annual funding for those portions of the operating cost that are not covered by revenues. the u.s. department of transportation coordinate state efforts and administers the

federal capital fund for quarter developments. amtrak is the nation's rail operator. it designs and provides service on behalf of the states and the federal government of cooperation with those companies, which on much of mill railroad. a lot of the ideas contained in it will probably be components of the transportation reauthorization bill that's going to come before congress in the coming years. the american recovery and reinvestment act or arab built on this issue and expands on it. it provides amtrak with a direct grant of $1.3 billion for capital improvements. it sends a high-speed rail, intercity passenger rail and rail congestion mitigation grant programs with $8 billion of capital fund. error will focus attention and funding on those projects that can be accomplished in the near term essentially in the 57 years to address the needs president obama has proposed to make about a billion dollars a year

available for grant funding. a lot of the discussion that has followed has been about speed. but the real issues are trip time and market rival vince and the national yardstick for comparison is the automobile. so when we talk about improving speed, we need to be taken about those increases in the context of their effect on trip times. frequency is also a major component of relevance and we need to make sure that we're developing a sufficient number of frequencies on our services to provide travelers with a range of choices. there are really three ways to build, develop, or improve passenger train speeds. the best-known method as one that a lot of people have in mind when they say high-speed rail. and it's by an order of magnitude the most expensive and time-consuming. trains operate routinely in the 122150 to 220-mile an hour range. these projects are wired in new right-of-way with very high standards of engineering. our railroads require the newest and most modern equipment are

electrified and serve relatively few intermediate points. they're basically an point focused services. another model is a higher speed service that's developed incrementally on an existing railroad. to do this, tracking infrastructure upgrades are upgraded to an existing line on a depending on the route, this could also entail some smoothing out of curves and perhaps grades as well some improvement to grade crossings and signal systems. this is exactly the process that began in the the northeast corridor after 1976 when amtrak and control of it. and those are the years we've gradually we speeds from -- 225 and a place as do 135 and 150 miles an hour. there is a natural sweet spot of 100 miles an hour that offers some significant advantages. you don't need to close great coffee. you can operate diesel powered services with equipment. most importantly don't necessarily need a dedicated track right away. although in some circumstances they may be desirable.

those are formidable cost advantages and 110-mile an hour service still allows a reduced trip time that make rail service committed in certain markets. finally, there's a third strategy to improve service. that's reducing the portions of your journey by train cover of a lower speed. our goal is not raw speed, but it's rather an economical, reliable trip time competitive service. a big part of reducing trip time involves finding ways to raise operating speeds at that low-end of the range. we recently replaced a heavily trafficked crossing at chicago's brighton park. there was no interlocking protection to trains had to come to a stop before getting a signal to proceed at 10 miles an hour. we can now move trains through that interlocking of 40 miles an hour and this is allowed us to take several minutes after the operating time. i hope the committee will take amtrak and intercity passenger rail in mind as it considers the pending legislation we expect to see in the coming months. transportation admissions need to be addressed in any proposed

climate change policy solution and that we believe expanded intercity passenger rail offers significant opportunities to reduce carbon emissions. i want to commend chairman rockefeller and chairman lautenberg for the recently introduced transportation policy bill. this is an excellent framework for the reauthorization and this is in the direction of a boat neutral program that uses policy outcomes to guide transportation investment. transportation policy that focused on outcomes would allow the federal government to focus its limited resources are investments that are cheaper the benefits. >> thank you. >> thank you. >> and mr. eckels, we are pleased to have you with us. i didn't mention before that the high-speed rail program transportation corporation that you are with is a texas facility and we have had the good fortune to work with senator hutchison

over the years. i must say that she was a light at the end of the tunnel -- some of the really tough moments that we had. it was a pleasure to work with you. thank you. mr. eckels, please. >> it has been a joy working with senator hutchison over the years. and into our current process. before you buy your stuff for missing mr. boardman. i want to them as a party person for their help on airplanes and their support and assistance. i also want to thank ranking member -- there we go -- ranking member thune and all the senators for being here today and entries that you have in this project and our states and these projects across the country. i believe that this technology will transform transportation and mobility in the united states and i know that i'm by no

means disbelief and the comments were hearing today. governor rendell made a good point about high-speed inter- rail service to find a 195 miles an hour and higher. it is we think the most important thing to remember as we talk about high-speed rails as evidenced by the examples around the world. the projects that actually work to provide rail and significant to reduce potential congestion in our crowded skies and highways for reducing carbon emissions and demand for foreign oil. it will create hundreds of thousands of jobs and stimulate or orchestrate growth across our country right now. i was not invited here to talk about reaching to the choir for high-speed rail. we are aware of the benefits and all talked about that today. i was by here more to discuss how close we are to sending these benefits in what must be done to ensure to get where want to be. the president and secretary rahood have said they want world-class high-speed rail in this country. to reap the kinds of benefits are talking about today and

senator thune to justify the investments that authority began its increased as recommended by this committee we must set the bar incredibly high. again, government governor rendell i said we are ready for and must have truly efficient travel. genes that are capable of 185 miles an hour or more. when president kennedy said they could put a man on the moon before the 1960's, he knew that his bold aggressive promise would bar the culture new mindset and ultimately a new administration and nasa to become a reality. this kind of example is something that i think we should be mindful of today. don't misunderstand me. i've complete confidence in the united states congress and secretary rahood. i know i doubt that the president has assembled to ascertain and deputy administrator we had the pleasure being with her a few weeks ago and he's not one of the outreach sessions. they are fully capable of

developing a system throughout the nation. in order for america's and the broader sense of the term moonshot to become a reality, we and that is all of us here as well as the congress must work in concert with the same bold vision. he must consider this revolutionary initiative in its proper context and recognizes a clear view of this administration of congress combined with the public and private sector support for groups such as the texas high-speed rail and transportation corporation to california, florida high speed rail authority among others working closely with bill miller and after with other organizations represent a once in a century opportunity to make a real positive impact on art countries economical landscape. let's be certain we all have our eye from the same price. passenger trains traveling at least 195 miles an hour or more on a new dedicated track system and high-speed infrastructure. if we have a separate infrastructure we increase safety against collisions and

improve economic and affixed to the community. as he. as we look to build this new system, supporting to remember that we are breaking new ground in the station. would request a price flexibility of use of federal funds to provide for market studies or engineering and environmental studies. and all the projects i'm involved with at the local level and primarily traffic and toll road, where the only toll road in the nation over 500 miles of system. we always feel that the projects ahead of schedule and under budget. the key to being ahead of schedule under budget was having the right schedule and right budget during the schedules underhand so we knew what the spending in the end. the market environmental studies are important to attract private investment as well. and all of the discussions up until mostly for we have been discussing driving investment in private public partnerships. there are places in the world for high-speed rail is at least covered its operational costs and make a profit for investment there are places in america to her work raising a cosmic sense for private investment. to attract these investors we might show that the routes are

viable the demand cost. to encourage private investment we should offer tax is an additional taxes in private activity bonds, other funding and other financial mechanisms for the federal level. also i encourage you to look after the projects we don't try to put in one formula for the entire country. innovative project delivery systems are important. their different needs in the northeast corridor, california, illinois, texas. in texas where the linear airport kind of model where and again senator hutchison has been very close working with us, that's in every part of the country whether it is a transit system airport or seaport they are owned and operated by cities or counties. if you will give local governments the opportunity to connect our airports or seaports in our transportation metro transportation systems, we will for the first time replies into a truly viable interconnected mobility system. we are grew very grateful and supportive of the administration

for high-speed rail and are encouraged by the size and financial commitment for the next service transportation bill. we are not working under the assumption that the federal government or any state government is prepared to cover the cost of these projects for our country. i do think the governor did give comments about being able to sustain the systems that we build, but we believe the cities and counties play a role not in our coming together to try to make that work. we do have a local government corporation and capacity to bring that coalition together to bring not project on our side to provide a service 3440-mile texas t-bone quarter that senator hutchison maginot bring 60 million texans to new orleans atlanta and the east coast south-central corridor to oklahoma city to little rock and up into memphis and ultimately into the midwest. this texas project, while impressive in itself will require a unique partnership of several state and local officials as well as the private sector. and we would very much look

forward to working with this committee and with fra and amtrak to make that happen. thank you for having us here and i look for two questions. >> ms. fleming, we welcome you and ask you to make your remarks now please. >> mr. chairman, ranking member thune, ranking member hutchison and members of the subcommittee, thank you for the opportunity to discuss high-speed intercity passenger rail in the american recovery and reinvestment act. the eight ilium provided by the act for high-speed and other intercity passenger rail projects have focused more focused on and generated a great deal of anticipation about the possibility of developing high-speed rail system in the united states. my testimony has two parts. i will discuss the factors that we have identified that affect the economic viability of high-speed rail projects and how fra leiby strategic plan incorporates these factors. first, while the potential

benefit of high-speed rail projects are many, these projects are costly, take years to develop and build and require substantial upfront public investment as well as potentially long-term operating subsidies. determining which, if any, high-speed rail projects may eventually be economically viable will rest on the fact are such as ridership potential, cost, and public benefits. high-speed rail is more likely to attract writers in densely and highly populated corridors as especially where there is congestion on existing transportation modes. characteristics of the proposed service are also important. as high-speed rail attracts writers were it compares favorably to transportation alternatives in terms of door-to-door trip time, frequency of service, reliability, safety, and price. cost largely hinge on the availability of rail right-of-way, land-use patterns and corridors to bring. once projects are deemed economically viable private

sponsors face a challenging task of securing the significant upfront investment or construction cost and the sustaining public and political support and stakeholder consensus. we found that in other countries with high-speed rail system, the central government generally funded the majority of upfront cost of high-speed rail lines. the 8 billion recovery act funds for high-speed rail represents a significant increase in federal funds available to develop new or enhanced intercity passenger rail service. this amount however represents only a small fraction of the estimated cost for starting or enhancing service on the 11 federally authorized high-speed rail corridors. furthermore, the challenge of sustaining public your support and stakeholder consensus is compounded a long project lead time, the diverse interests of numerous stakeholders and the absinthe of an established framework for coordination and decision-making. moving on to my second point, f. ra sushi chicks planned attempts to address the absinthe of a

framework for investment in rail. in a recent report, we discussed the need for clear identification of expected outcomes, ensuring the reliability of ridership and other forecast to determine the viability of high-speed rail and including high-speed rail with a re-examination of other federal service transportation programs to clarify federal goals and roles, link funding to needs and performance, and reduce stovepipes. fra strategic plan is for a vision that a plan. for example, does not define goals for investment high-speed rail. how these investments will achieve them and how the federal government will determine which corridors should investment. fra is a first step in federal meant. fra said that while flesh out its approach to developing high-speed rail that are under its control. fra also told us it plans to spend recovery act funds in ways

that show success to help keep long-term political support for these projects at the local level. in conclusion, the infusion of up to eight ilion and recovery act funds is only a first step in developing potentially viable rail projects. the host of seeming intractable issues such as their high cost, uncertain ridership, and need for broad political support that of pampered development of these projects is still with us. in these issues will need to be resolved to effectively spend recovery act funds. mounting these challenges will require federal, state, and other stakeholder leadership to champion the development of economically viable corridors in the political will to carry them out. and will also require a clear, specific policies and delineations of expected outcomes and realistic analysis of ridership cost and other factors to determine the viability of projects and their transportation impact. v-victor chairman, this concludes my statement. i will be pleased to answer any

questions you or other members of this committee may have. >> thank you very much, ms. fleming. now mr. skancke, we thank you and invite you to give your testimony. >> thank you, mr. chairman. the tough part of being a caboose is you cover and let attract the previous train has covered here it keeping in line with all the other -- >> keep the mic a little bit closer. >> is that better? >> yeah. that that afternoon numbers of the committee. thank you for allowing me to have the opportunity to testify today. in 2005, it was a point of the national service transportation policy and revenue study commission by senate majority leader harry reid. in january of 2008 after two years of meetings, he carried, and research, our commission recommended to congress a vision for transportation policy and funding in america. a new vision which includes a framework that will reform and

hopefully revolutionized the way we do transportation policy and funding for the next 50 years. one of our recommendations would substitute reform of our passenger rail system. over the next half century the united states is projected to add 150 new residence. a 50% increase over it current population. this increase will cause trouble to go to an even greater rate than the population well. we will need to provide new choices which require a cultural shift for the traveling public. we presented a report to congress in january 2008 that recommended the entire country should be connected by passenger rail by the year 2050. the recommendations also defined that the passenger rail corridor should connect population within 500 miles of each other. just 11 months later the gop included that the existing intercity passenger rail system is in poor financial condition and the current structure does not effectively target federal funds to where they provide the

greatest public benefits such as transportation congestion relief. corridor roads generally less than 500 miles in length have higher ridership or for better financially, and appear to offer greater potential for public benefits. we also wrote amended to congress that our nation the best at least a billion dollars per year over the next 50 years and passenger rail systems. resident obama and senator reid and this congress realized that that investment in passenger rail is needed now on october the next 50 years. so a billion dollars was it into the stimulus bill to not only create jobs but to kick start the program to begin a valiant new vision for america's transportation modes. i think mr. president and senator reid and this congress have a vision for transportation our nation and is much like that of president eisenhower, which is connected in america. the united states is way behind the curve in rail service as we know. as far east, near east, europe, and the middle east have been

investing billions for many years. our lack of vision and investment is deteriorating our global competitiveness and our quality of life. that nation's new vision should not just focus on existing passenger rail lines, but should expand beyond the current corridors. in my opinion, the vision should include a western connection much like the recommendation of our commission. enacting all 22 western dates in phases, as a system, not a thesis, should he priority. the first phase of a western connection is currently being considered in underway, which is the desert express highway passenger corridor connecting victorville, california to las vegas. this project will also connect victorville to palmdale, california does connecting from los angeles to san francisco. this project will eventually connect three major western metropolitan maker regions. each project meeting the criteria set by our commission and the g8 over being corridors of 500 miles or less.

this vision is one that takes leadership and encourage to get it done. it can be done and it should be done. i know having grown up in sioux falls, south dakota, it sure would've been nice to take in a 40 or 60 minute trainride to minneapolis for mike thanksgiving or a vikings game. but instead of stucco mini blizzard because we had to travel by car. these systems will be costly to design, fun to construct, but we can do this. this is the united states of america. mr. chairman, and three policy changes for this policy to consider in the new authorization. first, we must agree upon a bold new vision and make the cultural shift in the way we do transportation. a vision the american public can invest in and believe in an includes passenger rail that connects america much like the eisenhower interstate highway system did. we must do it today. we must do today what our parents and their grandparents did for us. invest in a new vision. reform the current program and revolutionize the way we do

transportation policy and funding. second, we must reduce the time it takes to deliver a rail project in this country. twenty years a new starts is just too long. we need to get our projects delivered in three to five years. this is not environmental streamlined as some like to call it. in this process delivery. agencies cannot just sit on projects. we do not need to create an oversight office. we just need to get the project now. we don't need to open up the need for process to get this done. it can be done by reviewing the wickedest services. third, the system must be outcome turbine. key performance measures for rail systems would include reliable, on-time performance, congestion mitigation, safety and environmental benefits improve choices, improved choices, mobility options for all communities and reduce energy use. the system state to be in their own rights-of-way at a minimum amount of shared track to metropolitan areas and on-time delivery for passenger

predictability. it needs to be reliable or the public won't use it. in closing, albert einstein once said and i quote, without changing our patterns or thought we will not be able to solve the problems we created with our current patterns of thought. so, let's change our patterns of thought so that we can change the problems we created with her current patterns of thought. mr. chairman, you should be thanks for talking about this high-speed rail. your leadership demands in washington d.c. and is right here in this committee. now is the time to make that investment. we need to restore hope and performance in our transportation system. our fellow citizens are counting on us to get it done. thank you your >> thank you all very much for your excellent testimony. we're going to start with a -- they think what we'll do is allow six minutes for each person.

and i would ask governor rendell a question. and that is that president obama has made high-speed rail a priority. he started with a billion dollars to recovery act. the president has also proposed a billion dollars for each of the next five years for high-speed rail. now, what sources of funding might congress consider for these future high-speed rail investments. but before i ask you to answer, i would say you've got to be a little cautious about the climate change money. we are working arduously to say that there are many problems -- some of them more severe than others. among them is our infrastructure focus today on the rail. but also on climate change to make it possible for generations

that follow to be able to breathe the air and conduct a healthy life with a climate change. and one of the best things for climate change as i think you said israel, high-speed rail, efficient rail. so what sources of funding might congress consider for the future high-speed rail systems? and you said it earlier and i concur with you that $13 billion is not a lot of money when you think of the neglect that's taken place over these years. what we've invested in braille is pitiful by comparison. and to the needs of not only more efficient operations and less importation of oil, etc. at the security needs for the country to be able to function at times of emergency.

so, again, should rail on high-speed service received a dedicated federal funding like our interstate highway system or aviation system and that is for the first part of the question i asked. >> well, as a sportswriter in philadelphia who writes columns a month and he entitled that, if i were king of the world. and he delineates all the changes he would make in sports professional sports. well, if i were king of the world, we'd stop messing around. every one of the g-7 nations has undertaken massive infrastructure repair programs. upn and germany, countries a fraction of our size, have spent over a trillion dollars. at one time in a five to ten year infrastructure repair program. that's what we should be doing of the nation. we should finance it through a capital budget and we should change the way we score such financing mechanisms. it's the only way we are ever

going to get this done. i mean, we're kidding ourselves. we're doing something to pat ourselves on the back inside boyet heard secretary rahood and i think it's terrific. he says $13 billion is terrific your $13 billion is better than nothing. well, sure it is, but it doesn't get us anywhere down the road. we can't do infrastructure on the cheap. we have to invest what we need to invest and we have to find a way to do it. and we have to find a political courage to find a way to pay for it. i think a capital budget is long overdue -- >> i ran a pretty good-sized company and i can tell you that if we are operating on a cash basis -- the >> you would financer needs out of capital costs. refinance building entrances in the same war we purchased at paperclips in the federal government. it is nuts. it is time to change and we better do it soon because

infrastructure like the framework commercial you can pay me now and behold that they can of the 875 or you can pay me letter and he points to the car 4625. it's not getting cheaper. it's not getting cheaper. >> you and i are very much on the same page and now we have to do is convince about 85 others here that we are doing the right thing. ms. fleming, in your march 2009 report you studied -- each of these companies has committed support for its high-speed rail system. it's a real mistake to expect a high-speed passenger rail service to be successful without government contributing toward capital and or operating

expense. >> what we found is that there was a real commitment and priority in france, spain, and japan. and the majority of upfront construction cost was borne by the federal government, the central government, and these countries without the expectation that they would recoup these initial investments. and most of these countries, what they did was build an additional trunk line in order to show success and then build upon that. and so, the commitment followed with a significant amount of money and what that allowed to do that model allowed them to begin initial construction, relatively quickly than if they didn't have that large investment by the central government. >> thank you. i'd like to ask you a question, mr. boardman and hope that we can get a quick response. my understanding is that all manufactures cars and high-speed

rail equipment are interested in competing for the eight ilion dollar provided in the recovery act. what can we do to encourage more american countries, companies to enter into the high-speed rail manufacturing market? the >> mr. chairman, i was encouraged yesterday to see that in the field hearing that the dni hat, ge locomotive provided testimony where they are ready, they said, to build the next generation of diesel high-speed and their definition was 110 to 124. they had their ceo, lorenzo simonelli at the hearing in pittsburgh. and so i think they are catching on to the fact that there's a commitment here in this country and i think that's the most important part of that. >> and the office is investing $7 million in helping them build that technology, senator. >> thank you. i am going to turn to my ranking

member here, senator thune free to ask your question. >> thank you, mr. chairman. senator wyden and i have a proposal called to build america bonds, which i think is sort of theater which are talking about. it's a way of bonding for capital improvements. i agree entirely that the way that we budget around here defies any sort of common sense or, you know, rational basis for making these types of decisions. it's clearly not the way that the decisions need to be made in the dirt if you're running a private business. so i appreciate your observations about that. and i would say to mr. skancke that if brett fired his blame for the vikings next year, there will be a lot more people who want to get from sioux falls to minneapolis and preferably quickly and without having to drive through blizzard. [laughter] if i might direct a question,

this would be to mr. szabo and ms. fleming. the problem with developing reliable questions for ridership in cost. the concern is that overly optimistic project proponents are going to overestimate cost and if the federal government makes investment decisions based on faulty forecast, we are going to fund projects that won't be successful. so, i guess the question and maybe i direct this first to mr. szabo is first how are you going to evaluate such projections for proposed projects and are you going to use your own projections or rely on the project sponsor for those? >> well, first off one of the key components that we will be ranking the applications on will be their proposed management plan and their management of risk, which includes covering all of the operating cost and any cost overruns.

those responsibilities belong to the applicant, not the federal government. so clearly, it's in their best interest to protect themselves to ensure that those forecasts are accurate. one of the things that we plan to do is to use a template, where essentially applicants will provide the data to a. what will run that data through her own calculations to ensure that as we compare the projects, we are getting an apples to apples comparison. we believe that god will help ensure the integrity of the data and help us make sure that we have accurate forecast. clearly at fra we understand the fact that the projects that we choose are going to have to be successful. we understand that we cannot squander this opportunity. that if we are not in fact very

careful about the projects we select and ensuring the success of the projects that we select. if we fumble that wall, there won't be a next generation on this. so, we understand the responsibility that we have and were prepared to take that challenge. >> senator, can i add something quickly to that question? one of the ways to ensure that you're getting accurate estimate is if a state is recommending it, make the state shipping some money so that a bear the risk as well. amtrak and pennsylvania shared the 145 million-dollar cost of the expansion of philadelphia to harrisburg. >> that's a good suggestion and one that we ought to why things take to heart if we do and start looking at and evaluating these projects. >> senator, it is a big part of our plan. >> it is? okay. let me ask ms. fleming to follow

that question. you think the department should take or make sure these forecasts, when it relies on this information, that you want to make them as accurate unturned as possible. and you believe there are to be some outside neutral party that evaluates these forecasts, two? >> as you can imagine, ridership and other forecasts are key factors in determining whether a project or system will be economically viable. and unfortunately, you know, statistics and results have shown the ridership tends to be overestimated in cost is underestimated you so we feel that there are several ways to try to get and provide more reliable statistics. the first week on the following governor rendell which is asking them to share some of the rest of underestimated costs. for those projects were there seeking federal assistance. another way would be to obtain estimates and forecasts of

independent sources where there isn't a state in the specific project has been considered. and lastly, make in the forecast subject to peer review and maybe even making the data publicly available. so i think those three things would maybe better ensure that the information would be more reliable. >> mr. szabo, after we spent $13 million is likely to be appropriated for high-speed rail over the next five years, do you expect the united states to have at least one corridor of substantial length that is served by a japanese or european style high-speed railroad? >> anything of importance that first soft we wait and see what is applied for. you know, obviously i can't urge commenting on what we're going to do until applications come forward and are weighed, you know, graded and then approved. but clearly again, i think we

understand the need to ensure that we have a very tangible, very, you know substantial successes. and, you know, clearly again our vision is to follow the model of what the europeans have advanced. you know, keep in mind when the system in spain first opened up, you know, again ms. fleming talked about how essentially they begin with one trunk line. they did here if they begin with their one trunk line, essentially it was six to eight trades a day, running about 125 miles an hour. and from that, they were so successful that they incrementally made the improvement that got them to roughly 20 trains a day at speeds of 200 miles an hour. so, this is going to take a buildout, a build out like the construction of the interstate

highway system. and again, we need to understand again that tgv system in print today if you ride from paris to strasburg. and you come out of paris you're doing approximately 200 miles an hour a dedicated right-of-way. the two thirds along the way, you flow onto what they called traditional track and you're doing speeds of about 125 miles an hour. so it's not either or proposition . >> mr. chairman, my time is expired in 19! all very much. >> uncalled elsewhere and senator udall is going to take over and senator boxer will be next. senator hutchison and then it's all up to senator udall from new mexico. he's going to fix the whole problem. [laughter] >> thank you, chairman. >> senator bob byrd, under which way out the door and went to thank you very much for this hearing and high-speed rail is

critical. i went to pick up on senator thune's comments about the funding. and senator thune i want to pick up on your point about the funding because they're very critical. this $13 billion standing alone just can't go so far, but in my state we have an election about putting a $9 billion funding package and the people voted by, which was remarkable given the latest votes that we had. so, you know, the people they are really understand it in our system and i bet most everybody in this room has been to my state. it will eventually connect sacramento or estate capital to san diego in the south. that is the first phase will be between los angeles and san francisco and points in between. ..

by 12 billion pounds per year, supposed to be 160,000 construction jobs and literally they are saying in california hundreds of thousands of permanent jobs and 2035 so i think as we look a lot of the problems facing us this great

recession, the co2 problem, they need to be energy independence, the need to make people feel comfortable getting out of their car, this seems to be one place. so i have two questions. the first one, both of them actually to mr. szabo. what is your long-term plan for development of high-speed rail nationally and what factors to consider the most important when it comes to finding? were laced a contribution that bear some way to hear? >> yes in the guidance we issue that is one of the elements that while not mandatory in most of the tracks, the funding tracks would provide it, it certainly is something that is weighted and certainly is something that is encouraged. you know, our vision frankly matches what they have done in

europe and i think it's important to note you can compare it a little bit to the road system where you have local roads, if you have county roads, state highways, u.s. highways and have interstate system. in all all play a very poor and the role and that all interconnects with each other to provide hopefully first-class road system. our approach will lead to the same on rail just like it is in europe. in europe and japan not every train is going to hundred miles per hour. many of them are but there continues to be a niche in the market for 110-mile service, there continues to be a niche in the market for traditional 79-mile per hour service. >> will state effort to matter? >> absolutely, a critical element yes. >> i said i have two questions but i have three. the second one is two mr.

skancke who served as commissioner in the national service transportation policy and revenue steady commission. you been important in advising us if the apw committee to proceed with the next highway bill etc. and then i have the last question to mr. szabo. so mr. skancke, do you believe it dot has a realistic plan to implement a high-speed rail nationally and what steps must we take to ensure we have sustainable system in the u.s.? >> senator boxer, i don't think the nation as a whole has a plan for high-speed rail. you know me very well to know that i'm very candid when i answer questions so i will try to be -- >> that's why i asked. >> i think our nation lacks the vision in how we're quantum of our american public how to 2050. is why this congress and safety mou. the transportation commission and i think the way we get there is we have to sell the american

public particularly on rail as we get people out of their own horse and buggy which we have forced them into. that it is a cultural shift. we've had to convince the public that high-speed passenger rail is going to be predictable, it's going to be on time and reliable and we do that too is -- one, we just make the investment. we don't talk about what the program is going to look like or how it's going to -- we've done that. we studied corridors. we know what the alliance should look like. i believe that we just needed to do it. we need to step up come up on debt, finding funding mechanisms that are needed, and make the necessary investment. it's that simple. >> so my last question is a predictable reliable and have another word. >> dependable. >> but you didn't say, of

course, is obvious. >> yes obviously safety. >> so my last question deals with the tragedy that occurred in the metro line. we just wrote a letter and senator rockefeller and i to talk about the need to move forward with positive train control, and other lifesaving measure. because we really are going to have to address this. this was awful and we've seen these things happen in my state so my question to you and my last question is, i do intend to move forward with positive train control and do it quickly so we can let people know they're moving port on the safety question? >> absolutely, we have a congressional mandate to ensure positive train control is implemented by 2015 and is our intent to make sure that deadline is matt. secondly, it's impossible to talk about high-speed rail without at the same time talking

about positive train control. and again you are using the european models. they have their european train control. you can't have trains going to hundred miles per hour if you don't have some element of positive train control. >> with back to fix this with the ones we've got going now so i hope to move quicker than 2015. that is someplace i have to compromise but i think it has to be switched to the map. thank you mr. chairman. >> thank you. senator hutchison. >> thank you mr. chairman. let me start with mr. eckels and just ask, let me first saint that i hope that there will be funding for projects other than those that may be further along than the texas t. bone. and if you could apply right now for federal funding as part of the stimulus, what would you ask for it to do? >> today our biggest need is a

market, route environmental and engineering studies. before we go on brown with a system we want to make sure is a system that will be viable and have a market that will support the system. unlike the east coast we don't have regular service today and so to develop one we need to make sure that we are building a system which can be priced so we can compete with the automobiles, aircraft and also to keep them operational systems. i think brain the discipline to the marketplace in the system -- it can help set a schedule and construction and, the technology that will make sense and would be viable for the long term for the state. >> let me ask mr. szabo, i'm looking at a map basically the amtrak system with high speed -- high speed quarters that have the designated darker red.

is this the beginning of a planned system that those are investments that are already being made? and you favor the ones that are already in the amtrak system being upgraded to high-speed or are you looking at other directors like a new high-speed rail project that might feed into amtrak and therefore enhance amtrak capabilities? >> one of the next that we absolutely must take is the development of a national rail plan. when i say that i made from a most comprehensive standpoint. we have to understand how high-speed rail is going to overlay on traditional inner-city rail, how commuter rail is clear to overlay on top of that. and frankly we have to understand how it's going to interact with the freight rail networks so there are all these

components that need to be looked at to ensure that we have a comprehensive strategy when it comes to rail. you can talk about high-speed rail without talking about impact on the freight. that map is a document that happens to exist today, but certainly there's a need for a much bolder clearer vision in a national strategy on how to get their. >> have you ever talked or even put on the table with the amtrak corridors that to share freight rail lines which make for problems. >> yes. >> of on-time service which cause problems, have you ever put on the table and sharing the space and adding on the same corridor as the freight rail

which if you did get a reasonable deal like maybe three years of that space in exchange forgetting out of the freight rail system which they certainly would benefit because they don't like dealing with amtrak, have you ever thought about trying to get a second rail on the same right away as one of the ways for higher speed rail service and highly congested corridors? >> i think clearly there's multiple options. the key is that whenever we do it and clearly if we are going to have high-speed rail coming true high-speed rail has to be on a dedicated corridor door but whatever we do we're going to have to make sure that we achieve a win-win relationship with the freight industry. we have an obligation to make sure that if the passenger

trains are operating that they are operating on time, you know, clearly reliability is a very critical component of ensuring a high quality passenger rail operation and growing ridership. >> have you looked at having 82nd tract near to make that happen? you can talk about it but in reality at least on the one i know so well, the experience has not been good and. >> again any of these options can be considered. >> well, i would ask if in the parameters of the spending of this stimulus money if that is a factor, in looking at those congested areas that you might be able to get a more streamlined service forest before that might be an option? >> certainly that could be a component that would be measured

in in a state application to os. there are clear bandages to that as far as reliability which is one of the components we measure of safety is one of the components we measure. so again if that was part of an application it's a criteria that could be viewed very favorably. >> so a state effort is one criteria that would be very important for matching funds and then possibly a possibly ease congestion for higher speed rail and congestion instant application that would be also a good actor? >> that's right, yes. >> judge eckels, let me just ask you obviously the texas t. bone is not find to be looking at and it amtrak route, but are their

options on the texas t. bone that might provide dual rail with rave the line or are you looking at a different all the right of way? >> in the very fast track portion of the system as mr. szabo pointed out, the system would have to have its own tracks and we think should be a separate track in a way but as you describe within the urban corridors working in the cities and the highway to 90 corridor from houston and in the north, we tied in with the harris county authority and the union pacific railroad, the houston metropolitan transit authority, the metro service provider and high-speed rail and right away and share common corridor. and the idea where it's appropriate to lay track adjacent to the freight railroads and there's a number of places where it makes sense particularly in the urban corridors for you have constricted right of way to get

into the city to the population centers, it makes more sense. so we move out it depends on the demand we get from the fray to side for the increase the capacity and we found them to be reluctant to give up the right away claiming they needed for future development and it's there's so if it continues its a problem but we think it makes great sense. we would like to consolidate as much as possible in the right of way and the rail lines to the extent we can curb the requirements and technical requirements. >> yes i think coming to some realistic terms where the freight rail is going to be in everyone's interest because they have a business to run and you can understand their wanting to keep control of their tracks. that's what i think getting sort of separated out where we can in but not having the huge extent of eminent domain and issues.

>> there are many places where it's cheaper to relocate the freight rail and by a new ride away and take over there right away, and there are places where that makes sense for the freight rail and we are working on that in texas. >> thank you, i appreciate all of your coming in and helping us get to this because it's a very important new capability for america to have true multi modal planning for transportation. thank you. >> thank you, senator hutchison. as senator boxer was leaving she mentioned that the letter between qian senator rockefeller and asked that it be put as part of the record that was the letter on the positive train control and there's no objection in will be ordered to be part of the official record. governor rendell, i appreciate your enthusiasm for capital budgets and also for high-speed rail and i can see you're

obviously very knowledgeable supporter. i wished i way we could get the same kind of enthusiasm in the west and one of my questions here was, y no high-speed rail corridor in the southwest? we have good size population centers in el pass so, albuquerque, denver. as i look at the map here, it looks like that makes sense so i am wondering congress, we have been designated were haven't authorized the 11th. we have of rust 11 high-speed rail corridors in the department of transportation is only decimated 10. i hope you are reserving the last one for the southwest but could you tell me a little bit of the sinking -- the thinking on the 11 and where you're and what your thoughts are on an el paso albuquerque denver corridor?

>> i'm assuming that's to may. >> yes, it is mr. szabo at. >> frankly there is no position to announce at this time relative to any 11 high-speed rail corridor but the import news is it is a necessary in order to be an applicant and the the grand canyon's we wish to. i think most of this gets addressed again as we start taking a look at the national real plan. quite frankly it's possible there is a need for more than 11. we need to take a look at where are those markets, where there's good potential, what is the interest from those states and his starkly there has not been a strong interest from the south west, but it sounds like the level of enthusiasm quite frankly nationwide is changing considerably.

so i think the issues of whether there is a 11th corridor, 12 corridor, 13, whatever will get fleshed out as we put together a national real plan. >> senator, can i add to that? the way this is going to happen and it is to do it to. and is up to congress and the president to find funding to do this in scale. and the states and local governments should japan, but i think it comes incrementally so for example -- i have thought and thought and had wall street people in to try to see how i could finance high-speed rail from philadelphia to pittsburgh, to her mouth our rail, because of we build that there's no doubt in my mind that the seller would then be 200 m.p.h. and then pittsburgh and detroit and chicago area would comes to the texas t-bond may be your best shot. and they can build the texas t-bond and prove that it works and how tough is it -- i don't

know if el paso is on its. >> senator, el paso is one of our strong supporters of the high-speed rail, not that they expect to see the 900 miles from houston to help pass so built in this before, it's lager in e-systems but the line from all basso to albuquerque to denver see it as a possibility in the see the proof in this system on the t. bone. it would then provide the capacity to move toward. >> one of the things that has been fascinating governor richardson stepped up and did a commuter rail. and there were a lot of doubts and an earlier governor had talked about doing it and was ridiculed by the press but he stepped up and did it. on-time and on schedule, and ended up as it has been going

about nine months now. it has passed the 2 millionth passenger. in a very short time one of you i think mr. skancke mentioned a reliable, you used the term reliable ridership and predictions. i don't think anyone would have predicted in new mexico -- >> this is the same time or hit the $4 gasoline and when are a terribly rural state and people are known to travel 120 to 150 miles per day to work just to commit to. but that sounds a little bit like governor rendell, you build and the people will,. i think looking at our energy future and i don't know if any of you have comments on that. it may be very hard to predict what reliable ridership is right now. please governor rendell at. >> it omb, cbo and the gao were

predicting the success of columbus's venture, if they were and rising grain isabella we would all be speaking in italian. [laughter] you hit it right on the head, senator. some of this we've got to do because we know it works and other parts of the world and some we've got to do on faith. when i visit the $74 million, that's not a lot of money down here, vice president mondale once said we spend and that sum of money before breakfast in washington, but for the commonwealth that's a nice talk of change. i was unsure and there wasn't any study we were going to jump up writer ship that much, but i knew we had to try. this was our best shot a look at the tip on the via pennsylvania, this was our best shot to prove there was a market for high-speed rail and it worked. so sometimes you just have to it as mr. skancke said, you just have to do it. >> senator, and the texas mexico connection it's not just about

the train system. we spend time talking about the passengers but also is about the development of the national economic activity with a monopolist we have referred to in these urban areas, that would grow as a result of the infrastructure in place and that is one of the things that's hard to measure until it's in place. >> mr. skancke, did you want to talk about it? reliable ridership issue? >> i think we have studied and writer ship in this country for hundreds of millions of dollars. i didn't say years, hundreds of millions of dollars. and as i said, we have to stop studying. no on all of the amtrak corridors around the country that there is a need in a demand in this field prices go up writer ship goes up, as congestion goes up right ship goes up. we don't have to guess.

the problem we have is we are afraid to do it. of because it may fail. but we need to do is not set up our high-speed rail entrances systems to fail. let's set the month to succeed. create systems that work, not pieces. so as we all said instead of doing 100-mile segments let's try 500-mile segment and let's actually -- i will be partisan press second -- let's build a line from los angeles to las vegas. let's build a line from phoenix to las vegas. let's go from albuquerque to denver. let's try to. what do we have to lose? nothing. if we fail then we fail but we don't even know what bill year is because we haven't got their. >> senator -- senator udall, as the good governor was saying to made, who is there a guy that build our 110-mile per hour service?

i said it's a good thing he did for amtrak. but that's not true and i want to say that because david and i are friends and i've talked to him and accused him of using the money from the turbo project in new york to get that done, but i know he got also penciling your money. i think what tom is talking about is absolutely true. it was an exception. and that is that the culture in this country is not a train running culture. in the northeast corridor about 43 million people live within about 40 miles of where we operate. fossella is a success. in 2000 had about 37%, this was before fossella started, of the chair rail markets was with rail. today in 2008 we have just the opposite of that. we have 63% of the rail and air market and that's service that is two hours 45 minutes from new

york to washington. and on the north and from new york to boston and was at about 20% and is now 22 percent, it's not about 49% in the semi so we are demonstrating success. but the piece that we can't mess and i think mr. szabo really pointed out that we need to do both, we need to talk about having very high speed and it needs a connection. i didn't hear it connecting to amtrak and it might but amtrak isn't the only connected intercity to service coast-to-coast border to border in the united states and we need incremental improvements to the 90, 110, so that people build a culture of riding the train, so they fill up the high-speed trains that are connected in some fashion and it might even be in an airport but it could be

somewhere else or you are connecting our system. people want to be seamless. they don't want to go to the border of pennsylvania and new york on route 15 when we have to build in connection if you remember, gunner, to make sure that new york kept up with the leadership coming out of pennsylvania to make that interstate connection pare down and that's the difficult -- difficult with today's railroad. we are jo is connecting. >> the text zevon will be connected to the amtrak houston natural in downtown houston. ntsb great, is a good way to finish and we very much appreciate this panel. it's very informative and thank you very much. >> thank you, senator. >> thank you. [inaudible conversations]

[inaudible conversations] and now a panel discussion on the future of u.s. economy. economists and scholars talk about spending, taxation and the national debt. this panel is hosted by the university of virginia miller center. it's just over an hour. [inaudible conversations] >> welcome back toward concluding round table. it we have in the last cell -- 12 hours considered much ground. the roundtable is designed to take what we've learned and contemplate the big questions, not that we haven't done that so far. questions having to do with is there an optimal level of debt coming due debt and deficits but

american leadership at risk, thus preserving the status of the dollar requires sacrifices so far as domestic fiscal policy is concerned a? we have drawn from our earlier panel's to bring together representatives from each one to talk about these issues. we have from the german government, bray from the national governors' association, the peterson institute, thomas rice from ucla, alice from the brookings institution, and build from cigna. two lead us to these questions we will be led by margaret brennan, a reporter and anchor for bloomberg television. i'm especially happy to introduce market because she's a graduate with a major and foreign affairs, my home department. and she received her be a in 2002. all of you you the a students, when you wonder what you can do and contemplate what you can do with a major in foreign affairs, here's your answer. [laughter] margaret. >> thank you. and am still trying to explain

to my parents what i'm doing with foreign affairs and minor in arabic and i'm still trying to figure that out myself some having fun because i get to talk to one of ali smart accomplish people like the panel we have today. right before the session i was reading headlines on my blackberry and i saw that house majority leader steny hoyer has said they will vote next week on raising the debt level to either 1.8 or $1.9 trillion so as we have been talking the can has been kicked further down the road. the fourth time in 18 months the debt has been talked about and effectively changed so we will see how that vote happens next week. but i would say one of the take away is that would have just from consumer response or even the response to the question of debt and deficit the debt is a four-letter word that has adel in of a strong reaction in the consumers' faith women here

because it's not real.

one before that i was in ireland where they were talking about spending more than half of gdp on bailing out of their financial sector to try to stabilize it, so this isn't just a conversation this seems far removed and just confined to the halls of congress and not meeting anything. there is money and spillover effect in certainly in the international space, which is where i want to begin our conversation right now. so, when you hear all these topics i throughout as well as the u.s. there is a question when it does become dangerous, when deficits to become the interests. when is that? where are we right now? >> so you want a number?

let me come to the number at the end. [laughter] i think as ellis said clearly the run-up in debt which is rightfully frightening people was unavoidable, was necessary because it averted a financial and economic catastrophe. so that buildup was necessary. it is now high, true but it is not unmanageable if you look at it historically or cross-country. it isn't unmanageable. however, there are two things. one, can this number be brought down in the medium term and to and from 80, 85 to where it was before we begin 40%, that is one big -- that is part of the medium term consolidation that needs to happen. the second thing is i spoke

about yesterday and again reflected is we have added an additional dimension of the vulnerability because now a large part of this government u.s. audio use are held by foreigners and frankly let's be honest here if you are a security person sitting in the national intelligence think some of it is held by a potential a rival to our superpower status and that is not irrelevant, so the combination of high debt, the fact there is a lot of uncertainty whether it can be brought down credibly i hope our this is right. plus the fact foreigners holding large part of it, that is what i think is vulnerable. so in terms of action i do think we need to bring this down fiscally, and i do think that larry summers is right that in the long run a superpower status and net indebtedness are not

compatible. one can argue that but in the specific case of the u.s. that is a problem. that means also the u.s. pattern of growth has to become less reliant on consumption and more reliant on generating positive net exports so in the long run we also reduce our international indebtedness. they will say international indebtedness doesn't matter and maybe there is something to that but if you were running policy and if you had the strategic interest in mind you would also try and reduce international indebtedness, which means a depreciated dollar, growth strategy that goes away from consumption and imports and fought of finance to goods and services and exports. that is what the u.s. needs. >> christian, when we look at europe right now, all of a sudden greece matters. all of a sudden spain causes the

leaks to the traders on wall street because they see s&p and fitch and moody's, the rating agencies of a sudden say we don't like the fact that you have such huge deficits right now. when do those deficits matter? we see today there are questions starting to float about whether or not ireland and greece would be able to even stay in the ozone. they've been dismissed but they are certainly floating because it has been deemed debt and deficits are out of control, so when do they matter when the market decides? >> of course. fundamental answers to these questions there is a figure it is a question yesterday it was said i think it was charon it was all about confidence and i think as long as confidence is not lost i think also the deficit may still be a problem but it's not a catastrophe. so if it comes to greece and spain of course it is difficult. i think as was said also has

macroeconomic, structural policies especially on the construction sector but they are doing good on banks on the other side we have to say spanish banks are doing very well. so i think the spanish problem is manageable. it is a little bit more difficult for greece because i think greece -- the administration is not in every sense working probably at least if i follow a report eurostat which is monitoring and also the reason administration on delivering data and sometimes have the feeling not even the minister is knowing the data. simply not delivered. so there is a problem. the last remark to that still is this a danger for the zone, yes but i think we also have to keep in mind that the bureau didn't come euro has a growth intact. the stability impact if you look at the hole in spite of the

crisis you may see that it worked quite well. it brought down deficits and debt for most of the countries. so i think as long as the confidence also in the overall stability and growth is not lost i feel we can cope with that but i will not deny that there is a certain risk and of course we have to be careful and you know there is also some critical discussion starting from some big european country looking to the stability and growth factor and we have to be as we say alert not to let it go. >> so when you were talking about consumers starting to perhaps under duty to get, concedes that these numbers are real and they could potentially be a danger and they need to be addressed right now to what degree do you think these headlines we are seeing smuggling right now are going to play into that? is there sort of a question of

confidence that is going to be heightened? an issue because of this right now? >> probably. although will i actually said was that i felt general unease about the economy and economic future is what drives the average voter and the attempt of politicians to connect that to government overspending as it is often put or high debt does resonate or might well resonate. but you haven't gotten a number of anybody so i'm going to give you a try. bill and i are involved with a group of people putting together a set of proposals for trying to get the deficit -- debt under control, and what we came out

wallace 60% of gdp if we can stabilize the debt at a around 60% that would really be good. it would be quite hard to do that and would mean cutting the projected deficits over the next ten years the end date was 2018 and by quite a bit. but why 60%? three's no magic number but there has been a sort of international consensus around 60%. it is in the treaty and has been endorsed by the imf -- >> is that a good thing or bad thing? [laughter] >> well, a lot of people have thought about this issue and come out with 60% is about right. now there is no magic to that. but that is what we are seeing in this report is if our goal -- we should set a goal and the

goal we suggest is to stabilize by 2018 at 60%. so there is a member for you. >> so, thank you. because we were letting you still think to the end of it. i wasn't going to let you get away but well done. so when you were saying there, and thank you for clarifying. there wasn't so much growth coming from the consumer in terms of concern with the ability for the politicians to connect the dots is exactly what you're saying. >> i think that this happened in the 80's. but there wasn't a lot of understanding about the debt but the politicians began on both sides it was bipartisan to connect the high deficits to the future of the economy, and worked. >> so, when you look out -- you are looking at the gubernatorial space, right? but in the midterm elections we are going to be seen that are around the corner knowing the political space as you do are

the botts going to be connected? >> i would agree with alice the could be connected on something like social security but there's a well run problem there. it's a matter of political will. willpower. but we kind of know what to do. it's not complicated so it seems to me moving their i think makes a lot of sense probably a little more pessimistic on the health care we have to remember health care is the pac man of state government and federal government, 90% of the problems are basically health care. at this point i'm assuming these bills are going to pass in congress. in some ways the debate is going to change at this point and i think the senate bill was going to dominate given how fragile it is for the 60 votes and so on. and you have to start looking down and breaking down the pieces and pulling back and deciding whether you can create a framework around those changes

that begins to bring health care costs down. a lot of people argue i've not been one of them a lot of people argue to have to get everybody in the system before you do that government, bill and i were talking a little bit, they didn't get the public program. i think they got more than the public program in the latest sort of -- you got to remember what happened. you've got another 15 to 17 million people now and medicaid. i don't know the exact number but clearly with a body in medicare 55 and older you're going to pick up two or 3 million more. now you've got the program operated by opm. you will have a body in there of probably 7 million people. there's a provision most haven't focused on which is the state can set up a separate program for people, government-run, between 133% of poverty and 300% of poverty. i know a number of states will essentially do that and then finally, in all probability the

exchanges are going to be run by states. so as the system comes forward you've got a bigger medicare and bigger medicaid that fixed rates, other components which are going to have negotiating rates. the bad news it's going to take four or five years to get this up and operating so i'm not sure there's going to be a lot of changes. but we have to start thinking how we bring this together. it may well be medicare and medicaid are dictating rates for the other groups that in fact negotiate. >> if we take that is the presumption we are going to see something, bill, i would like you to respond to what we are talking about here. but there's also the broader question and certainly i know for some of the younger people in the room, too, medicare and medicaid again, something, not very concrete to the average person to talk to me, what you,

about the impact would be if we see health care reform as was just suggested on research and development, on the type of health care and options that will be available to the average person in the immediate term. >> okay. g -- >> it hasn't been well articulated in the media or in the public space. >> i had a boss that said you don't answer the question that's been asked, give the answer you want to give so i want to make one quick point that there was an impression that on my camel i was a donner, i was a gloom and doom are so i want to start on a positive note and that is i think we are a rich country, a good country. but i will say we are probably similar to being -- we are the best looking horse in the glue

factory, too. [laughter] now, having said that -- >> that was cheerful. [laughter] >> it is a tough question that first of all i would say unfortunately and we will probably have a discussion about this let's go first of all to whether or not the group of the uninsured out there and i will get back to you, the uninsured is primarily this whole focus of this bill has been on the individual market and the small group, not the big guys, not the national accounts and all that, it's been the small individual and that individual as the young people back here who if they had to go out and buy health insurance on their own they would find it extremely expensive because they are not in the pool. i support all the polling mechanisms and exchange mechanism bringing them in. unfortunately because, and this gets into the weeds and this is

why health care reform so difficult because of the reading and the bending issues quite frankly the aarp is beating the young people out again which is unfortunate because premiums would be higher than they would have been if he went on the market today because of a pending issue. this has to do with the way we treat your insurance. so first isn't a very good message to the young people in this room i don't see this particular bill was going to lower their health insurance premiums going forward. broadly speaking the other thing most of the items you touched upon, margaret, as i see and i am getting into the budget stuff john knows well and that is it seems to me we are talking about things that are subject to what we call appropriations, annual appropriations and discretionary spending, research development even comparative effectiveness. i know that there is a dollar amount in their imposed on the insurance industry but most of that is subject to appropriations. why is that important? if you can't control the

entitlements and you come back and set an overall -- if john's proposal in the box, you are going to continue with a squeeze education, university grants, student loans, right down the line. so in the long run it is a circular unless we do something about controlling those entitlements and the growth of those entitlements it will continue to put pressure on the kind of investment programs we need for the job people today. >> when using controlling the growth of entitlement tell me when you really mean by that. >> unfortunately it rolls off the tongues of nicely, doesn't it? [laughter] people -- i'm a farm boy from indiana, someone pointed that out. great, eliminate -- eliminate the farm programs. i don't care, go ahead eliminate that will buy $20 billion may be. that's not -- when we talk about entitlements less be honest what we are talking a lot, social security, medicare and medicaid. the three hardest issues we have politically to do with. and as i said this morning what

worries me and i guessing with ray on this 1i think we are taking some of our degrees of freedom of the table with this bill that we are not going to be able to come back and address those programs unless we set up something like john said, some sort of and then tied to our lives and the proposal we will come out on monday i guess with the rising red ink is you lock in, i'm not a big formula and the you lock it in and pick a number, 60% debt held by the public, lock that in and anything changes beyond that you have an automatic across-the-board. raising taxes or cutting spending or both. >> tom this is also in your house of health care. what is your response to that? >> to which part of it? [laughter] the presumption of we are going to have to see entitlements,

basically any kind of medicare and medicaid social security slash to come is that fair first full before i ask you to respond? >> the term slash bothers me. [laughter] >> say what it is. >> reduce the -- slow the rate of growth to bring it down from currently two times the rate of growth of gdp just to bring it back down to the rate of growth in economy i would be happy with. >> we have to slow the growth for medicare and medicaid. in fact if you look at the both house and senate bill about half of the financing is supposed to be coming from cuts in the growth and medicare so it's something we are willing to do. the fact aarp supports this legislation that is being funded by cuts in medicare is quite significant. i'm a little bit more sanguine we might be able to do something in terms of controlling in terms of health care cost. it's going to continue to grow

fast in the rest of the economies of the proportion of national income going to health can go up if you look at estimates from the late 90's some of them predicted we would spend over 20% of national income and health care. we are spending about 16%. now over the years we have found ways -- they haven't sustained but we need to control health care costs when we do. we can go back to the early 70's there were wage and price controls of all things out of the nixon administration and the late 70's -- in the late 70's there are voluntary controls and possible sector under carter because there was concern because there would be in a voluntary mandatory controls to be we saw a bit in inflation and health care during the managed care revolution of the mid-1990s if you look the last couple of years you will see that actually the distance between growth and wages and growth and health care costs has slacked and partly

because we have raised deductibles and co-payments so there are ways in which we control health care costs. i do think they will continue to exceed the economy but i think if we have to we will find ways to cut them, cut the rate of growth. they will not be very pretty ways. it's going to entail reductions in benefits but i don't subscribe the idea it is bring to spin out of control. having said that we need to do something about medicare before part a trust fund before 2017. >> before 2017? >> that is when it is supposed to run out. >> alves i know you want to respond and i would like if you would you were there during the clinton administration when health care was at that time in the headlines much as it is now and was seen as detrimental politically to put it diplomatically. >> it didn't pass and it shows a president who was not able to pass something he had put his

enormous prestige and his wife's behind and they didn't handle it right. they did not receive although everybody said they were for health care reform they were for different kinds of health care reform and there was no consensus and what most people will mean by health care reform i'm going to get the same amount of health care for less money and it's very hard to explain to people that's not possible. i'm with the optimist. i think there is a lot that we can do and have done -- managed care was an example, to make the system somewhat more efficient and it is so inefficient and high cost compared to everybody else right now that we can squeeze out quite a lot. in the long run health care spending is going to grow faster

than the economy and we have to figure out what to do about that. but for a while we can get some of these efficiencies out and medicare has a history if congress will let it of being able to lead. when medicare changes its rules it is the biggest payer, and if it changes its rules and says we are going to pay for an episode in the hospital rather than teaching hospital does, the private payers along with fat and brings cost down. if you would share the story about how you don't think necessarily the broad public medicare and medicaid is viewed in the true sense of what it is as a program that it's not truly understood as a some form to

summarize essentially what you're seeing some sort of socialist program what they see as an of cider will find puzzling, and i am with the optimist because i think that eventually this country will sought out the problem is to provide an optimist so here's my puzzle and as an outsider i would like to pos this to all of you that know it better. as alice rightly said in her excellent t-note letcher seems to focus on the entitlement side. there isn't the same focus on the tax side the question is why is the case. it session number one yesterday began with a premise, there's a tax revolt, this country want to accept higher taxes so let's focus on entitlements. now the problem i see, and i see that promise as coming from very

real and very important from at least a certain section within the society but the question i have is that if the negative in this country is essentially more government is bad government we are going to bury it back and pay for it. the compromise alice proposed we need to get expenditures under 24, 25% of gdp that means taxes have to go up to around that much if you to stabilize it. i would have thought this crisis actually should help that narrative because i hope this crisis will have discredited the alan greenspan kind of market fundamentalism said at the end of the wicked fall back on government, the t.a.r.p. and fiscal package were necessary. and if that comes up that this is what this society needs, that

can pave the way for the social consensus that says entitlements need to be controlled, but equally borrowing taxes like vat or consumption tax need to be part of the discourse. and i don't see that to the same extent i see the emphasis on entitlements. >> you don't see public support for higher taxes? when would you? >> as i was telling you what is struck about the panel, the medicare panel is lots of elderly people in this country don't think of medicare as a government program and there is a problem that's gotten into this that needs to be addressed. >> let me respond briefly. 160 million americans get their health insurance not through medicare and medicaid in this country and i want to tie the tax issue because i agree totally with i believe it was

the commissioner. we have a tax discussion and it got blown out of the water. the quickest way as i see to do something about the cost of health care over all is to modify the way we handle the employer sponsored insurance exclusion, and that unfortunately president obama attacked the candidate last year proposing something along those lines and that is removed off the table. one small little tax proposal which i think should be made in the bill with the cadillac tax it is being fought it strenuously today to take that out. so it's not we haven't had a tax discussion in the context of health care reform -- >> it strengthens my proposition there is a problem here in the public discourse. >> you agree there's a problem in the discourse that there's not much conversation about higher taxes?

speegap well, you're making fun of it -- >> i'm not, i'm just to let down to it is because i feel like we are getting lost in a lot of jargon and that hurts a lot of the stories we are trying to tell so that's why i -- >> let me come back to what bill said. most americans get their health insurance from their employer. they don't pay income tax on that benefit. if they did they would have an incentive to say to their employer i would rather have the wage bill and the wage increase their margin as health benefit. but they don't do that now because the health benefit is tax free and wage benefit isn't. so john mccain was right about that. he did introduce that and i think president obama, a candidate obama made a mistake

in trashing it and probably knows that now. but it's not that no candidate, even a republican candidate can propose a tax increase. john mccain didn't call it that but he did say we have to pay for a broader health care coverage with getting rid of the exclusion from the income tax which is a big deal number, and it would have been a good policy hiding. >> the more general point about, you know, the social discourse is a little bit unbalanced -- >> why do. i do. and i think we are not saying if you want these benefits then we've got to pay for them and figure out how. >> we have numerous governors to get defeated over raising taxes. it is the reason we don't have energy taxes on imports or such.

it's the reason we don't have carbon taxes and as ellis indicated before we come up with alternative ways because we don't want to call it tax so the politics of the tax, they've been off the table in a serious way for quite awhile now also as previously alice indicated the crisis isn't going to get so big we are going to get a value added tax because we've got to put money in both medicare and social security trust funds and pay down the deficit and it's going to be one heck of a large omnibus agreement. the question there is what happens to health care coming up in riverside. >> to follow-up on that you think we are going to see a vat tax? of the state level you do see the sales taxes, so how is that going to be balanced? >> it is a problem because depending upon how it is done it is going to preempt the state

sales tax. >> the value added tax. >> some people might argue i think al listed at one time of putting a piggyback -- having the state be a piggyback tax, having it collected by the federal government really to the states for states' sovereignty reasons that puts me in a dog your place. [laughter] >> i don't work for the voters, so i think this is a simple straightforward way to basically buy out the states by saying the federal government will collect a national sales tax so you could make it a vat, doesn't matter and we will share it with the state's on a formula basis and then fight about the formula. the germans do this by the way. and it would be a windfall for states that didn't have a sales tax but there are few of them. and he would have a fair and uniform national tax. >> can we put it in a fare constitution? >> i would be happy to. [laughter]

>> hajdu jump in since you have your hand raised also want to get to christian since we were talking about the germans having a model alice was just speaking about. >> you to do that or move on to christian? >> would you remind if we had christian respond and come back to you. >> the vat has risen the last legislation period the beginning of the legislation period was a big political problem and was a problem from the start of the great coalition so the vat in principle is not really disputed. there is a dispute in germany right now there are several rates of the vat. there is a normal rate in the low word rate and a discussion on how to abolish the lowered rate or increase the lower rate for subsidizing certain things like hotels right now at a moment's a very stupid aspect of the new government program but in the tendency of course and this is not only true for

germany it is true for most european countries to concede the indirect tax increases their part of the whole tax revenues and if you look at a mobile factor as the tax basis of you still see that capital taxation it's difficult even income tax for school labor is more difficult so you are really looking for taxes which are able to finance government without going into debt and i think this is what the new german deficit will so it is a box approach in principle so okay this is your for cyclical reasons corrected the net deficit allowance and now you have to see how you do it, how you get a finance either on the expenditure side or on the revenue side and then of course you have to value what tax will probably the least hamper your growth, for instance

tax base, green tax base, one of the last things so this is the german way of thinking and this is closely linked to the european stability growth impact system i think there you see where the discussion is going more in the direction consumption taxes. also there are small consumption tax is we shouldn't forget about that principle you could think about smokers taxation, drink alcohol taxation, small things that we should not forget about them. >> a number of those things are talked about on a statewide basis in the u.s.. and that raises its own controversies among many economists to say how do you raise any kind of tax during the recovery, which we presumably are in but it may be a tenuous. >> i would like to make a very critical or say kind of maybe april 1st remark. the best macroeconomic problem would be to call for that

increase 2012. >> or 14. >> or 14. call for the vat increase and would be much better than a lot of expenditures now given for the macroeconomic purposes. >> we couldn't actually get a vat up and running before then anyway. >> tom, you've been waiting patiently. >> this goes back to health care. i want to respond to bill's fought on the taxation, the cadillac plans. we learned last night you have to get all of your ideas in one minute and 15 seconds so i will try to do that but it gets into a lot of things. i don't have a problem with the taxes on the cadillac plans. i don't think it is going to get us very far and i don't think it gets into the problems we have that paced the health care system. if we have a tax on cadillac plans it means benefits are going to have to go down. one of the ways that is likely to happen would be a for example higher deductibles and higher

co-pays. what we know for the research evidence is when people pay more they do cut back but they cut back on things they need just as much as things they don't need very much. i cut the meat axe approach to health care reform. i think that what we want to do in terms of reforming medicare and cutting the cost is not through it all to the consumers but rely more on the providers. that is what john skinner's talk was about earlier today that if we can conduct research to find out what is effective than provide financial incentives to organizations and individual providers to give them incentive to do that we can cut away. so i don't think focusing on the providers will be more productive than focusing on the consumers. >> focusing on the providers in terms of cost controls? >> yes. giving them incentives for the necessary services, not the unnecessary services. >> what do you mean by that?

incentives? >> we already have certain programs called pay for performance that do that. the compromise that the freshmen senators came up with had a lot of these elements about the medicare commission about setting up accountable care organizations trying to bumble payments, just ways to pay for high-quality care but you don't pay for the low-quality care. we've had lots of demonstrations on this. this is not stuff that we have already tried we just haven't enacted it nationally. there's a lot that can be gained by trying to bring down growth rates in the high utilization areas. spec does that mean salary in a doctor's instead of compensating them for procedures performed? >> not necessarily. the account will care organization he was talking about cancer that any payment system they want.

>> one of the things always been a fundamental changes besides the tax code is the way we've reimburse the fee-for-service we have today. you heard the doctor's name mentioned a number of times. i'm always struck by the article he wrote in june or july when he went down to the texas and found the most expensive piece of equipment in the doctor's office was his pan. oversubscription subscribing and until we change the way we reimburse and with all due respect to this bill, pilot studies, for a pilot studies for years. when do we move from pilots to actually doing something and that is my major criticism even with the freshman proposal. >> alice, did you have something to say on that? >> putting in medicare commission with teeth what actually do that and that was in the original proposal and has

been weakened in the process. but we do have an existing organization known as mad pact which has made a very sensible proposals over several years along the lines we were talking about and then congress has backed away from them. congress has got to figure out they've got to let these reforms go ahead. >> i'm going to come back to you and turn back to where we started part of the conversation which is looking at the question of when that starts to matter and put it in the context with you throughout their security concerns. you were talking about a major buyer of u.s. presumably meant china. when you were talking about the national security concerns. right now in the financial media focusing to a large degree on the dollar weakness but obviously playing into the u.s.

influence but also somewhat of a positive and use the american goods being purchased to helping be purchased outside of the borders. so how do you balance that? >> first i have to answer the member's question. what is the number? >> you ready now? [laughter] okay. >> i think alice's 60% number is you cannot really quarrel with it because internationally it kind of is enormous and the imf has given its stamp of approval supposedly although that is a good thing or a bad thing to but his pocket experiment i'd like us to come back cities expected to use to work at the imf? so the stamp of approval was not necessarily a good thing? but not necessarily a good thing. [laughter] so the flout experiment, right supposing we have started this crisis we went into this crisis at 60% of the debt to gdp and

we've added 40% roughly over this 100% of gdp that would spook psychologically that might spook markets. and the other contest i have is the china actually went into this crisis with public debt of 20% of gdp and in some ways the chinese were highly effective by the crisis because there was exporting so much that when the demand collapsed in the world economy their experts really took a beating. because the public debt to the gdp was so low they had the fiscal ammunition to throw everything at the problem to recover. in my own country india has 80% of gdp was not able to do the same thing. so while i think 60% is a good target and that i think looking at the experience of this crisis in good times especially to have good growth growing forward i

would be much more comfortable with something lower than 60%. we began at 40 so why not get back to 40? exactly. coming to the other question about the dollar i think we have to keep in mind and separate the orderly decline that is happening now of the dollar is what the doctor orders, it also exports, it helps us to reduce our foreign indebtedness which is what we need to do for political reasons but what we don't want to force as the decline turning into a stampede. but don't want it to become like a classic emerging company to the country like to buy or russia in 1998. and that is where that borderline can be very fine. you can call that confidence, what ever but retaining that i think having the fiscal house in order and credible plan along the lines many of you said

that's absolutely essential. >> i saw a lot of hands go up about this. >> can i throw something back at you? >> okay. >> you started this conversation by saying we were going to raise this diplomat next week probably. as good as we to be a vote next week. >> and at $1.8 billion. >> jolie. >> sorry. [laughter] the statutory debt today is 12.1 so okay part of the dilemma i see in the media is explaining something, or gdp is about 14 trillion some 19% of the statutory debt. while i agree with alice part of the study coming out agree with 60% domestic help what we're leaving out of this is the unfunded liabilities that are and that number for social security and medicare and i feel

like this number of 60% we argue about this is fine where it relates to this report. what we are leaving out on the table all this other unfunded liability that is still hanging out there. and i don't know that the media can communicate that in one minute and 15 seconds or whatever it was. >> it helps when it is communicated from the floor of the senate or when it is clearly tracked were clearly communicated elsewhere otherwise we get back to the problem last night according to do the homework. so give me your number then. >> while we are already at 98% if i throw in the unfunded liabilities of social security and medicare. >> already there. >> already there. we are well above the 60% so i would argue for even stronger member. margaret may offer a lesson, why we don't have the 60% i don't

know whether you all know the genesis of this would be a 60% i think it is the -- 60% is because of the end of the 80's those european countries which are relevant have the 60% as an average level and how does it come to the other figures because you then say what stabilizes 60% with a nominal growth at that time of around 5% this is a deficit of 3% so this is the tree of the european rules from 60% was the average and then the 3% deficit with a nominal growth of 5% stabilizes this, and of course we are right now beyond this and i think especially if we look at the preventive european stability and growth and this is again the court essential of the new german rule has to take account for implicit liabilities. and this is why we are now going more down and i think if we look at -- and i should is in the panel you can see and this is also the logic of the preventive

that the 60% is not bad and i know the international organizations have said yes, but it was liabilities we have to go further down 60% as a good goal but for germany it is clearly too high and we would go below 60% in the direction may be of 40 if you want to have the figure. >> that seems to be the new consensus, 40. at least here. alice? >> i did what is really important is the direction of change. and there is no magic number and bill is right when he says 60% is debt held by the public. it does not count the amount that the social security and medicare systems we are indebted to them and have to pay those liabilities so these are a lot of numbers to keep juggling.

but what is really important is the direction of change. as long as this debt held by the public or total debt is rising as a percent of gdp you are in trouble. we need to get it coming down. >> go ahead. >> this discussion is on the unraveling of the dollar in the crisis. but there is a couple of other causes pretty significant. first is the cause of the interest itself is growing quite rapidly and i think once interest rates move up that is printed a pretty significant and there is obviously intergenerational if she was around there. but there is also the second issue i worry about is because of the entitlements all of us in the government are basically cutting discretionary which means we are cutting infrastructure, we are cutting research and development and we are cutting education and training. from a long run competitiveness standpoint that number ought to be a lot lower because we are reading our seed corn here right

now and that's not a very good long run future. >> when you were just talking their first of all i do want to get back -- i do want to ask alice when she thinks the interest rates are going up i do want to talk about when we are talking about slashing, reducing greatly, stopping the rising, however we hedged -- when we are talking about changing entitlement spending i remember i was a beebee producer of the time that the into the white house for the anchor i was working with at the time about changing the social security program as it stands to be in essence another version of how easily you invest your 401k, basically that people be able to do their social security money and put it in the market oversimplify into a great degree, but essentially that is what we were talking about at the time. >> then we had a huge crisis the

past year and have that seemed like my god, thank god we didn't do that. but if you talk about slashing and thailand spending, reducing it, slowing the rate of growth what is that sort of cushion for this and to be retired going to look like, what form should it take or are you talking about when we say reducing get it no longer is existing. what you say when you been cut and benefits? reducing? >> slowing the growth. >> are you changing -- >> social security -- >> but how do you do that? change the program entirely or make it into some other form? >> some of it is easy like social security, you make that discretionary or half of the cpi. most of those things are pretty easy to get in the health care area it is difficult i think because are you doing it in actual benefits or reimbursement rates, how much is it coming out of the provider versus the individual. >> you're talking about who is paying into it?

>> or who is receiving it. >> can i try -- >> i don't think anybody thinks that social security needs to be totally changed. it's the question of how fast to the benefits go up and what age do you get them. the two most likely ways of adjusting the benefits are raising the retirement age and changing the wording of the initial benefit, the amount you get when you retire so that it doesn't go up as fast. it doesn't increase as fast as wages to do. it is structured now so that the initial benefit of anybody that retires rises over time with the wage level that means it is a

real increase in the benefits. doesn't have to go up that fast. a very small change would mean the social security system could get back in balance quite quickly. >> we all three raised the retirement age to 67 triet >> we have, but our longevity has gone up more. >> but what about the retirement age, we raised it 66 to 67. has the retirement age risen at all? so people are not retiring at an older age now and they were before? >> just the complication of the public policy and the interactions and the unintended consequences at the same time or united states congress, united states senate is considering changing medicare to have a bye in between 55 to 65. quite frankly if i was an employer out there i would say goodbye. so you just work the opposite

direction in terms of extending retirement by having a policy that provides the company to say go over on to the medicare by ian and you are off like roles, don't have to worry not paying your benefits, these unintended consequences we talk about are so -- that is why this is so difficult and i am sorry to the media it's difficult to follow, difficult for the american public to follow it difficult for us to follow but there is so many of these trends going on is the best way to phrase it. >> i think we only have a few minutes left if i am right. i do want to give the audience a chance. are there any hands out there? anyone want to ask a question. >> something called my attention and i wonder if the panelist -- >> microphone. >> i'm sorry. >> my name is richard collins. i read something i felt was very

interesting idea and in light of all that i have learned at this conference and i compliment you all the statement that i read about was obama is going to be the american gorbachev. does that mean anything to do all? if it does i would like to get reaction because it encapsulates a lot of what i've learned here today and yesterday and that means we are declining power with a system that is extremely expressed and we have to somehow explain to our own people and to an international community we are going to have to change? >> i don't know if he is a gorbachev, i know i hope he's a nixon to china because it seems the issues discussed here is like nixon going to china he's going to have to go that far, have to come around.

>> what you mean coming around? >> he's been to have to put on the table reduction during the tough decisions, john xbox, putting them in the box. we are going to have to take on entitlements in a big way. we are going to have to raise taxes it's hard to say that. but if we address this issue of 60% gdp he's going to have to break away from some of his own party members. >> i don't know quite what the questioner meant that it might mean he was a gorbachev in the sense of being a onetime president if it is received was going to blame for these problems and he didn't fix them and he was the one who said we have got to face up to them and do these hard things and the public didn't like to. >> i think in the gorbachev known as someone who did something really good but as people really hated him. [laughter]

>> were there other questions? >> i was not here yesterday and this was approached by polis and will sit down. we are talking money here, big bucks. fraga fraud, f-r-a-u-d, last i remember the government investigated during the jimmy carter administration when he was investigating the gao, the gsa, whatever it was but i have heard and correct me if i'm wrong but it's a frightening number, our medicare system has fraud in the b, billions of dollars. that would pay for a lot of mri's and so forth; and i correct? i understand that some of the parts we pay for, remember the hammer, a big investigation, which lasted two days about

being $500 for hammers and so forth in the military so forth what energy, what time is spent in our government at federal level investigating and stopping fraud and each and every department, are we spending as much time there? as we spend debating issues come sitting dollars investigating fraud? >> alice? >> i think we could do better on medicare and medicaid fraud. there is a fraud. there are providers who bill for people. patience they never saw. and that we could put more resources behind that that was then the clinton administration when donna shalala was the secretary she put a lot of effort into the fraud and

payoffs and then it slipped behind it makes doctors very uncomfortable but it's quite important. >> 60 minutes dustin work on that important topic in the public space. but i think we are coming off on just about one hour here. i think we are done. thank you so much. [applause] ladies and gentlemen over the last two days we have commented on the fact over the past year the global financial crisis has generated consensus here and abroad to increase government spending of the last year or so was quite necessary to deal with some very severe long-term consequences government responses and so the point was too little attention was given

to the long-term fiscal consequences of programs to deal with them all down of the last year or so, so i hope we have dealt with some of those questions about providing more attention to the impact and the long-term consequences of debt and deficits and how this country and others can govern in those situations i listened with little amusement of thinking that in this session we were going to get all the answers to all the questions that have been post over the last couple of days and reminded me saying attributed to harry truman after world war ii trying to get advice and was being frustrated and not finding answers and was said he was in search of a one armed economist. [laughter]

so the guy could never make a statement to him and then say all the other hand. sometimes i get the feeling in a lot of these great discussions the questions are so complex that the there is no simple answer. you can make a statement and then immediately counter with on the other hand there are these considerations. that may be where we are today. but we have reached the conclusion of this conference. i want to thank the patron saint mark kaplan, conference director david -- [applause] i want to thank david, conference director. [applause] and jeff and ashley turban for putting this all together. [applause] this has been a very lively and productive in beijing conference. th