ultimately, the taxpayer paid the face amount of the lien. the irs refused to withdraw the lean so that the@@@@girr"rr >> mr. miller, ms. olson's

testimony about the irs's use of lien as to what i learned about the use of liens conversation i had last fall. in that call we discussed irs decision to file liens against taxpayers subject to the tax shelter disclosure penalty even though the irs had agreed not to pursue collection against such taxpayers until congress had a chance to change the law. in general, i'm disappointed and the lack of judgment and discretion and exercise by irs employees, agents, lawyers, collections and appeals officers in certain of these cases. and in some cases, it was an irs regulation that prohibited the irs from abating the penalty such as by not allowing the filing of amended returns. in another case, irs did not consider the negative impact to a taxpayers line which was critical to the business before filing a lien. mr. miller, everyone including

the president and treasury secretary agree that small businesses are economic engines of our recovery. the health reform bill imposing new burdens on the small businesses. so while i appreciate the commissioners statements regarding a kind policy of restraint for individual mandate, i would like to what happens the irs will be doing to help small businesses comply with the multitude of new laws and regulations. specifically, will the irs develop the communications or outreach for small businesses and develop a similar policy of restraint for the employee mandate, and if you think i'm too much concerned about small business, before you answer that question and that'll be my last question, i'll give you the background that when we set up the commission, prior to 1998, and i think it was a couple of years before that, we reported 1998. it was because there was a lot of lack of concern about small

business and outright harassment of small business that we don't see in regard to big corporations. so that's why i'm coming from. if you could answer the question, i would appreciate it. >> certainly, senator grassley. first, with respect to whether we will have an outreach plan for small businesses as well as other important components of the economy, yes, we certainly will do that. we're working on that as we speak. that's a -- as we approach the health care we will do what we do with any piece of legislation which is approach is on a holistic bases beginning with communicating two people about what they are entitled to under the bill and their responsibilities are making available folks to answer questions, putting in place system that is will allow the processing of returns. and obviously we'll have an enforcement component as well. on the second piece as to

whether we will utilize similar restraint with respect to small business, i don't have an answer to that. i do know that when you talk about the individual mandate, congress acted there to limit the number of tools in our tool box. they did not act with respect to small wisconsins, but it's my assumptions that we will work together to get to a place that we are comfortable. >> thank you, mr. chairman. >> thank you, senator. let me ask you, mr. miller. i think this is also true in the state of iowa. there's no permanent appeals officer. irs appeals officer in the state of montana. i think it's true in the state of iowa, there are 18 states without one. some of our states are pretty big. it takes a long time to try to drive to them.

and as a neighbor of other states. what about that? why can't we have an permanent appeals officer from montana. it just seems to me some of these other states too, all 18 states i'm not just going to say montana only. but, you know, if somebody wants to appeal and has to drive to salt lake city or denver, that's a long drive. >> i would agree, mr. chairman. it's a long drive. i don't know what the -- why appeals officer are where they are. i can say two things, one is it is about resources and secondly, we are face to face and the that's the case today. whenever it makes sense to have somebody in montana or iowa. i don't have an answer to that today. i can come back. >> one thing that's always struck me over the years is that

some cabinets, some departments have a lot -- have people out in the field. frankly, they do better and there's more -- better report with the people and the department. compared to other departments. let me give an example. in my state, montana, there are a lot of usda personnel. there are very few housing people in the state of montana. and there are -- and the opinion that montanans have the state is very high. certainly higher than the department of housing or development. because there's nobody in montana. but we do have a lot of issues with that department. and i'm just throwing ideas out to give, you know, the marvels of modern technology. as you mention, not all appeals will face to face. i can put people out in the states. and they can construct not only

face to face appeals but also they can do some of the appeals by correspondence. it might be in some other state. at least you have people there in the state. it gives the appeals officer and his or her people a sense of that state too. and it gives access to people in the state in montana, for example. to appeals officer if the taxpayers want to appeal a decision. i think it's good to have people in washington, d.c., i believe that very strongly outside of the major cities. get them out in the country. so they can better understand what's going on. >> yup. >> we do have appeals officer that are outside of washington. >> i'm sure you do. you do in 32 other states. but you don't in 18. >> yeah. i'm sorry. i will come back to you with a more detailed answer. i'm not sure what the thought

process is. expect again we have a limited amount of resources. there are 2,000 plus appeals. >> no, you didn't hear my point. take those same resources and put them in other places. you can do a lot of work by electronic correspondence. it likes a lot of time for the circuit rider to get there. that's a lot of frustration for people. and frankly, of the executive branch of the treasury to address the tax camp. the last time the tax gap was estimated by, i think either treasury or irs was 2001. back then i think it was 340 billion of dollars. why? it's unconsciencable. if the irs does not more aggressively address the tax gap. these are taxes legally owed but not paid. it puts the burden on the rest

of the taxpayers who are paying their taxes. what's the plan? i made this point constantly. i'm getting nowhere. nowhere. it's just a stone wall. not like you are protecting all of these folks that aren't paying their taxes. >> i don't think we're trying to do that, mr. chairman. >> well, it appears that you are not doing much about it. >> my understanding of when we will update the chart that we have is at the end of 2011. that's the current target. what we are doing is multifaceted. we talk about some of the things this morning. but i split up what we are doing currently, what we will be doing and what i would ask to help us with. >> we'll help, because we don't have a plan. >> the first is what we're doing currently. we've talked about return which is leveraging with respect to

individual taxpayers. we've talked about offshore compliance which is work that we're doing. and we have, in fact, increased the number of examinations, we've increased our nonfiler work considerably over the last decade with respect to where we are headedded, congress and you in particular sort of helped us immensely in terms of the new information, streams of information we will be receiving and we will be able to do that matching as it comes in. that will target specifically the under reporter portion of the program. whether it's credit card, whether it's basis reporting, these are thing that is are going to help in the next few years. what i guess i would ask famously the 2011 budget support which provides staffing for those of some, which provides a couple of ideas as to rho we can move forward, including a employer independent contractor provision that will help us get at misclassified employees.

another key component of the tax gap. >> all right. you know, i asked secretary paulson -- in fact. i want to make sure i state that when he was secretary, he said a goal for voluntary compliance was 90% by the year 2017. compared with the rate of 84% i'm told in 2007. so that's 6 percentage point over 10 year. of that was the goal. i asked treasury and irs developed a plan. so i'm asking you again, i'd like to -- what's today? tax day couldn't be more appropriate. we meet again next year, i'd like to know the degree to which you progressed. i want to hear your plan. by what percentage, what's the percentage progress?

. >> understood. i want numbers. i don't want goals, i want numbers. i want data. i want metrics. i want benchmarks. i am fed up the failure of the treasury and irs to adequately deal with this problem. fed up. there's one way to change that. that's to produce. we want to help. we will help. but i don't get any sense that the irs to really significantly addressing it in a meaningful way. i keep brushing it off. brushing it off. that's how it appears. senator wyden. >> thank you, mr. chairman. i share your view with respect to the tax gap. i look toward to getting that information. i think it's absolutely pivotal. a couple of points, one, of course, ms. olson, if you simplify the tax, you know, system, it'll be easier to collect taxes owed, isn't that correct? >> one would hope so, yes.

now the overwhelming majority of taxpayers in this country are honest, they are people who work hard and they play by the rules. there is just no question about that. but it seems to me that taxpayers that i'm speaking about, the overwhelming majority who are honest often make inadvertent errors, they end up over paying their taxes, or they under pay their taxes because the system is so complicated, it's not possible to get an accurate assessment of what's owed. how rev hasn't is that? i'm struck when i listens to folks at home in oregon that there is a very, very substantial problem. could you kind of put some numbers around it? how much people honestly trying to comply with tax law get snared in this bureaucratic, you

know, water torture and even over or under pay? >> the only number that is i have seen from the 2001 national research program audits of individuals where we asked audits to identify whether an error was essentially intentional or inadvertent. and the auditors only classified 3% of the errors of the returns that they audited -- this is a random sample of individual taxpayers as intentional. but -- >> so -- >> now the -- the irs always say that is we didn't give good guidance to the auditors. they don't know what they answer. that's the only number i've seen. >> and i recognize with your caveat that these are not always, you know, scientific in every particular. but what you have told us is what is my seat of the assessment. it's the vast, vast overwhelming

majority of instances that involve people who are anxious to comply with the rules, they want to be honest, and just getting snared in the net of bureaucratic torture. and that is essentially what i think has to change. now my view is -- and i think y'all have recommended. we aught to have the 1 page 1040. it aught to be one page, 30 lines. this has been recommended over the years by democrats, republicans, all aboard. absence legislation. i don't think we're going to get a one page 1040 form. do you agree? :@@@@ of course very

frustrated as well because you try to get accurate answers to the clients. how serious is the problem getting consistent answers from the irs and what to be done with it? >> this is a result of the complexity of the law and the response when the accuracy rate went down several years ago was to limit the questions they what the answer so we've gotten a very high accuracy rate in the 90s on the phone. but they get there by taking off all of the difficult questions or things the irs called out of scope which doesn't solve the problem. the problem is the law is complex and difficult for the irs employees to answer a particular taxpayers questions accurately, consistently. >> they try to solve the problem by pretended that doesn't exist. >> that's my assessment. >> thank you for holding this important hearing.

>> thank you. senator nancy, you are next. >> thank you, mr. chairman. early eckert you asked some questions i want to delve more into. this will be a question for mr. miller. is the onerous restructuring the 1998 commissioner the internal revenue service shall insure an appeals officer is regularly available within each state. yet wyoming and eight other states don't have such personnel physically located within their borders. the appeals process is the last step processors to to argue the merits of the return before another decision is recorded and collection process begins. so i think it is critical all taxpayers even for all tax payers have unfettered access to the irs officers. once that understand the area. wyoming is a state of high altitude and global to and lots of roads and but somebody has to kind of understand that to

understand the people that live there and i realize the act also permits the irs to video conferencing in rural areas but i don't think the nation's founders guaranteed rights to two process under the constitution. i know in some circumstances that could be hamdi but videoconferencing doesn't give you all the body language and capability. i understand the with the agency budgets are strained the bottom of asking to hire new staff. i think it is perfectly reasonable to suggest the irs redeploy existing resources to provide at least one full time appeals officer and one full-time settlement agent in every state. would you agree to assess the feasibility of doing that redeployment so there would be irs resources that would

guarantee a full-time appeals officer and full-time settlement agent per state? you don't feel they would be busy enough of the state they could drive into the other states or thrown into the more popular states that we would like for them to be in there and i would hope you would agree to get this assistant to the committee in a timely fashion. i'm sure my colleagues from arkansas and idaho and north dakota would be interested in the finding since they are two of the appealed that lack the appeals officer and settlement lights. >> understood. we will be glad to take a look at that. >> i might ask to take a look at it to send a letter back to this committee after you've made that assessment. >> this is of critical importance to almost a majority of this committee. we would like answers on that and i have had comments from our tax payer advocates in the state

about what a difference there would make and it seems just as reasonable to have people come from wyoming to other states or video conference in other states and wyoming and i ask the chairman -- >> thank you very much. now we are going to hear from the senator from kansas. >> i think that is [inaudible] the member for his alleged work senator enzi as well and think you folks for coming up in the wood is a busy time for you and taking the time to come up and try to answer the questions. as you know most of the questions have been about the mandate that individual's purchase health insurance and

basically the bill imposes a penalty that would be collected by you folks for those that fail to obtain the irs obtained insurance. i think that the rule will be straightforward. it's great to be added and mistreating the tax provisions. i think there was a statement made by one of your folks and i would like to know how will people prove to the irs they have health insurance? how will approve the venture and speed reported to the irs? i read several reports in the press there's been a lot of confusion about this. is this going to be a form of a 1099 the detachment from an insurance company or what? how are they going to prove this? >> senator, that is basically correct. the bill in the beginning stage is looking at the systems and all of that and we can get into that, but the bill itself

indicates insurance companies will be sending 1099s. our thought is that is how we will be matching the yes and no answer as to whether you have eligibility taken up by a plan that meets the requirements under the law but the insurer is making a determination. probably in all likelihood we are not going to look behind that. we are going to receive a 1099 that says yes or no. if the answer is no we will talk to the taxpayer. we will do that of course no doubt. >> the next question how with the irs be about to cross check or verify the information submitted by the taxpayer with information submitted by the insurance provider. there is a forum in massachusetts they call it the tanned 99hc form. that is an additional three page tax form and tim page instruction booklet. is that what we envision for everybody? >> i'm not familiar with the

form, senator. i don't think so -- >> i hope not. if it were three pages from the standpoint and ten pages of the destruction it would probably be six and 20 at least. what will happen if an individual does not purchase insurance therefore required to pay a penalty initially as little as $95 increasing up to 695 per person a year how would you collect the penalty? >> with respect to the individual mandate, congress has been very clear in terms of the rules we can use and we cannot. you cannot use levees. it's not a criminal penalty. but there are tools we can use and we obviously will be notifying folks letting them in there with do we have these classrooms. >> as i mentioned the matching program we will be sending out a notice that we happened to notice we didn't get a 1099 with respect to health insurance here

and an explanation of that. >> we have a highly mobile society here within that particular group as well as being highly mobile. i don't know how you will keep up with that by mail, i guess it's mail. we will let that go. let me just point out to set you are still in the process trying to figure that out and i understand that are trying to implement and dread plan for contingencies. everybody does in the business community. every health providers sitting down there with their lawyer, c. p.a. and actor larry. this is the lawyer, cpa at to react i think that day divided it up and they keep coming to my office and there's a gentleman over here to my right asking these questions. if an individual doesn't have a tax liability, doesn't need to file returns that is required to pay the penalty for not having insurance how will you enforce this provision? >> you kind of stepped beyond my understanding of the bill.

if there is no filing requirement i will have to come back as to what the health bill requires that situation, center. >> i'm down to 14 seconds, but the health care provides a tax credit for small business for two years to help manage the cost of providing mandated health the germans to employees but there is a cliff in the second year where the credit expires. what would be the cost of small business? have you made any kind of estimates or guesstimates to provide health insurance without this tax credit? what will be the cost of compliance for small business? that is a very key question. can you comment generally if you don't have a specific answer the cost of compliance for small business. >> i don't think i have any numbers in that regard from the irs. >> but you think you might have? >> i'm not sure the irs would be doing the analysis on that. we are administering the provision as best we can. >> who would?

>> i would assume -- >> if we ask the cbo is that the answer? >> it is possible. we have responsible over administering the credit and they are active in terms of making sure folks know it exists. >> would be the compliance for indigenous and families to meet the individual mandate requirement that requires individuals to purchase entrance to prove the evidence and pay a penalty for not obtaining insurance. it gets back to that individual and the individuals cost and what they are obligated to do or not obligated to do i think that is a question upon it but if you would like to comment on it and also your time is more than expired. sprick thank you. i might also add there is no mandate for any small business with 50 or fewer and we use. >> i just have one question for

mr. miller with regard to the comments the national press club on april 5th in that speech indicated that the individual mandate would be enforced through matching program of some sort based on insurance companies providing 1899 document to an individual who would attach it to the return. then in a recent television interview he stated the irs would not be auditing individuals to check their insurance status. this position was then reiterated today in "the washington post" op-ed. what incentives to individuals have to purchase insurance they know the irs won't be checking and will be seeking to collect individual mandate penalties? >> we will be looking, mr. brusquely. we will be corresponding with people whether that triggers examination or not it is going to depend on a given case. it's not likely what my boss was saying that is not the kind of

case that we send out an agent to pursue it is the kind of case we correspond with a taxpayer congress limited the tools we can use but we will be talking to the taxpayer and we do have a refund offset mechanism in order to enforce the provision. that is in our toolbox. >> let me give you this, some idea something could happen, so if you have matching which is one of the ways of checking if an individual doesn't purchase health insurance and it wouldn't be receiving anything from the insurance company and also has no filing requirement with the irs with the irs the match against? >> again that is senator roberts question as well and i will have to -- i am not sure of the income levels and when that requirement triggers so i have

to get back to the committee on that. >> thank you. i thought i would ask a couple of questions. how many dollars do you think are lost on the tax evasion each year? >> i know the numbers are thrown around a lot, mr. chairman. we don't have an estimate on that. we don't know what we don't know unfortunately is the answer. >> is there a way to find out? >> ultimately yes. we obviously have done i believe some very good things in the last 12 months in this area. and congress has as well as you are very much aware and as supporters are on the fact of the bill is going to get a much better sense of what is out there as people either come in or for an organization's become subject to the 30% withholding alternative so that will give a much better feel for what's out

there. >> that is a provision that we put in in the higher act. >> yes, sir. >> how much do you think that you will clamp down and that local? >> i think i started with the statement we don't know what we don't know. the fact is going to give much more information to know more and so the on a certain part should be reduced considerably within the next couple of years. >> what questions should i ask you next year when we have this hearing? >> i think by this time next year we will have a much better sense of our next targets in the offshore area. i think it would be fair for this committee to be looking for a much more robust discussion on where we are on health care and

much further along on credit card reporting basis reporting in fact the information tools you provided us we should be prepared to discuss a much more detail. >> a year is a long time from now. some of that can be addressed earlier don't you think? >> certainly. and we are not waiting for the hearing to move. some of the information reporting requirements are not yet triggered. they will not be in effect yet. certainly offshore will have made significant progress i hope. >> this is a little bit in complete this answer of yours. basically saying you don't know. help us figure out a way to get that information or then you just now said. maybe we should meet again six months from now.

>> certainly willing to do that. >> do you know you well know more in six months and now? that is enough to make progress report? that's meaningful? >> of sure? >> we will be much further along in terms of the outcome of the monetary disclosure program on the outcome of the john doe work and in follow-up investigations as we pursue other leads in the information. >> how will you know how much is lost offshore. >> that does have to wait until fact of reporting comes in and that isn't a couple of years off. >> why does that takes a long? >> again, we don't know what we don't know. we don't know who is holding off sets out of short. >> why does it take so long to figure that out? >> there is no reporting of that or they are not reporting accurately and the leverage points are being treated by a factor which will come into play in a couple of years.

sprick you have to refresh my recollection. >> it is requiring a dupe qualified intermediary program and increased reporting both on the individual side with respect to the bank accounts that i might hold off shore and also new withholding regime whereby -- >> as we've just been discussing. isn't that the 30%, potential 30% requirement of foreign banks to report? >> correct. >> that is a fact of? >> along with beneficial ownership and statute limitations a whole host of excellent provisions. stat you are very welcome but i can't figure of why it would take so long to find out how much we are losing off shore. >> [inaudible] >> you can't answer that

question more quickly? in respect of what the law says why don't you come back and tell what changes you need in the law if it takes additional legislation. >> there are a couple of provisions in the budget along those lines. >> what are they? >> there is one about the transfer of intangibles overseas to the low tax jurisdiction and there is also the removal of a deduction for certain premium payments to u.s. foreign affiliates for the reinsurance so i would commend those to the committee. >> would be those provisions to deal with offshore loss? >> i think they will help in terms of international, the shifting of income overseas and they will help in terms of that not necessarily offshore accounts obviously but in terms

of the largest business taxpayers shifting the income to a low tax jurisdiction and peacekeeping u.s. tax. >> i appreciate the intent i just urge you to be more aggressive. >> yes, sir. >> okay. thanks very much certainly need a year from now and follow-up on these questions and we may meet earlier. we will meet earlier. and you are going to answer that question by senator enzi and myself. >> yes, sir. >> thank you. the hearing is adjourned.

objection. mr. dodd: withou i thank my cole from arizona as well. mr. president, i came to the floor of the united states senate -- i come to the floor -- i came to the floor yesterday, rather -- to the floor of the united states senate in response to the campaign by though, both outside and apparently unside this chamber, who are trying to literally kill the wall street reform legislation, and to tie that reform to that bill, to bailouts. i pointed out in those discussions yesterday that these arguments are straight out of wall street's playbook, written by political strategist frank luntz -- as we all know, i submitted his political strategy that he offered months or weeks before even consideration of the bill, outlining politically how to defeat this legislation. so even before there was a bill, mr. luntz had a strategy on thousand to kill it.

you have to look at the date of his memo to know what i'm talking about. here we have a strategy basically written by limb to avoid any accountability for the mess that they've made of our economy. if it seems strange to you, mr. president, and others that the minority leader is accusing our bill for being too kind to wall street by reciting talking points written on behalf of wall street, you are a he not alone drve obviously -- you're not alone -- obviously. what seems stranger is the leader's insistence that this legislation is too partisan. perhaps he hasn't spoken to the former chairman of the banking committee, senator shelby, with whom i have spent months working on building consensus, who he himself said months ago that we had achieved a consensus on as much as 70% of the bill that will be presented to this body in a mott o matter of days. perhaps the minority leader hadn't spoken to any of the republicans on the banking committee, mr. president, who

joined with democrats in bipartisan working groups and asked reform months ago, each of which those groups achieved real and meaningful progress that is reflected in the bill that will be on the floor in a matter of days; not just amendments that will be offered, it is in the text of the bills, of those working groups, democrats and republicans on the banking committee. perhaps the republican leader had forgotten that as far back as february 2009 i insisted that meetings with the treasury department, as they were still crafting their plan for reforming wall street, include republican staff, so that republican idea ideas would be e proposal from the very beginning, mr. president. well, this morning mcclatchy newspapers looked into the minority leader's accusations made in this chamber yesterday morning and frankly found them lacking. please indulge me for a moment, mr. president. i'm reading from this morning's newspaper. let me quote, if i can. "mcconnell accused discoed of

drafting bipartisan legislation even though the banking committee chairman has worked roughly half a year with key senate republicans and incorporated many of their ideas into his bill. mcconnell also said the bill contains controversial bank bailouts, but it doesn't." end of quote. and this from today's associated press report, mr. president: "mcconnell on tuesday said his views on the financial regulation package have been most influenced by the comments of community bankers in kentucky, his home state. yet such bankers are represented by the industry groups that most favor setting up an advanced, prefinanced liquidation fund for large institutions, the independent community bankers association, the very community banks that insisted upon the $50 billion, that the banks have to put up if they are real estate going to be unwinded, rather than taxpayers, the very banks that my friend from kentucky claims are advising him on his views of a different view than

he does about the bill that is before us. the newspaper article goes on. it says "mcconnell has also complained that the democratic bill is partisan and the white house intervened to stop democratic-republican negotiations." "senator christopher dodd, the chairman of the bank committee, negotiated for months with leading republicans and found much common ground only to see the vote in his committee unfold along party lines." well there you have it mr. president, in black and white. attacks on the wall street reform bill are false. mr. president, this legislation incorporates republican ideas and democratic ideas and it definitely includes one idea that we all agree on: ending taxpayer bailouts. just ask sheila bair, the chairperson of the federal deposit insurance corporation, the organization that comes in and puts an end to failing banks. ms. bair is also a republican,

former legal advisor to former majority leader bob dole, an appointee of the previous administration, the bush administration. she told -- sheila bair told the "american banker" in an article published this morning, mr. president, "the status quo is bailouts. the status quo is bailouts. that's what we have now," she says. "if you don't do anything," she says, "you're going to keep having bailouts." end of quote. "nothinnothing is what we will e even members deny having this bill come you on the floor of th."it makes bailouts" -- this l that we'll have before this body -- "it makes bailouts impossible, and it should," she says. "we worked really hard to squeeze bailout language out of this bill. construct is that you can't bail

out an individual institution, you just can't do it." end of quote. mrs. boxer: will the senator yield for a question? mrdodd: will happy to yield. mrs. boxer: i want 10 say thank you so much for taking to the floor to explain to the ameá@ @ @ á@ @ @ @ @ @ tb @ @ @t

fund themselves with their own money so that if there's any problem and they need to be wound down, it doesn't cost $1 of taxpayer money, that the fund will be paid for by these businesses themselves? am i correct on that? mr. dodd: mr. president, let me thank my dear friend and colleague from california. she says it so much more directly and clearly than my efforts here to explain this. she's just absolutely correct. this is the ira irony of ironie. the $50 billion provision in this bill was proposed by the republicans. i didn't come up with this idea. this was an idea that was brought up by the community bankers and republicans who said the taxpayer, if there's an

unwinding of a failed institution, the american taxpayer shouldn't have to pay a nickel for that. it should be paid for by the institutions that put nem selves in that position. that's what we did. in fact in the other body they have a stronger provision with even more dollars involved in t the irony of ironies, that a republican provision in this bill designed to insulate the american taxpayer from having to pay a nickel to unwind a failed institution, they're knew calling somehow evidence that this is a bailout. the only reason that money can be used is to bail out -- rather, unwind that institution if it gets that that situation. mrs. boxer: and further, if i could say, my understanding is, if an institution gets in trouble, if they're just going to go down. they're just going to go down. they're not going to be revived. and i would say to my friend, because he's an expert on this -- and years ago i was on the banking committee the, no longer there. i want to make sure i understand

if i'm right on this. i think the american people have appreciated the fdic over the years, because the fdic was another way for taxpayers to be kept out of a problem because it's an insurance fund. the banks are taxed, and they put the money into the fund, and if there is in fact a bankruptcy, you're covered, your deposit is covered -- right now i think it is up to $250,000, am i correct? mr. dodd: correct. mrs. boxer: so this whole notion has worked very well. but in closing, because i don't want to interrupt, you know, the speech of my friend, because i think it's important, it seems to me suddenly there's been a huge injection of politics into a bill that really should have had, as you point out, i say to my friend from connecticut, bipartisan support. if in fact the republicans came up with the idea to have a fee

on these institutions to protect the taxpayers, so that we have no bailouts, and now after meeting with the banks it feels like to me -- and these big institutions -- they've turned on their own idea. but they're using the language that is the opposite of what they now want to do because, as i understand it -- tell me if i'm right -- if we keep the status quo and do nothing -- which is again their idea right now -- we're in trouble because we saw what happens when these big institutions get in strubl trouble. main street starts to hurt. lending starts to freeze. and we have seen millions of job losses due to that horrible time we went through. so i want to commend my friend and just urge him, if he has to come here every day -- and i'll be glad to come over here as well -- to explain to the american people the truth.

i'm so tired of politics obscuring the truth. and we need to put an end to it. we're not perfect. the other party is not perfect. no one is perfect. we don't have the ideas that are going to save every -- cure every problem. but we know one thing from this crisis: we had to turn to taxpayers. what a nightmare. thank goodness, by the way, those funds are being repaid. we're still out some funds. but the vast majority of those funds are repaivmentd but we're not going -- but the vast majority of those funds are repaid. but we're not going to go through that again. i would never vote, and i say that right here, to bail out those huge institutions. i won't do t so therefore let's put something into place where they pay into a fund so if there is a problem in the future and they're going bust, we'll wind them down and we'll wind them out on their dollar. and i just hope you'll keep saying that because, you know, i

don't mind getting in a debate with the other side. as a matter of fact, i think there are great differences between the two parties which makes our country great because we all appeal to different people in the country. it's good for stability of a nation. but let's not come here with false debate. let's not come here with made-up arguments, because that only hurts the debate. and i just wanted to praise my friend. i wanted to thank you for doing this. mr. dodd: i thank my colleague for doing this. you don't have to have a ph.d. in bank. just ask yourself this question: the idea of requiring these institutions to put up money in advance so that if they fail, they end up paying for the cost of unwinding it. who would object to that? who is objecting to this? and i mentioned earlier it was not my idea. this was an idea brought to me by the republicans. sounds moo me -- sounds to me

the people who have to put the money up is objecting to it. these are the large institutions that don't want to be assessed any cost associated with their mismanagement of an operation. and so it's pretty much as plain as the nose on your face. i thank my colleague from california. i'll try to complete these remarks. i know others have other matters that want to be heard. i want to thank sheila bair from the federal deposit insurance corporation. we know her here having worked as legal counsel and being part of the bush administration. when she talks about our bill and says that she did today hear that there's absolutely -- this bill has been written specifically to end any notion of any kind of a bailout by the american taxpayer again -- i'll quote her again -- "it makes bailouts impossible and it should. we worked really hard to squeeze

bailout language out of this bill. the construct is you can't bail out an individual institution. you just can't do it." end of quote. further, mr. president, our bill stops bailouts by imposing -- let me tell you how we do it -- tough new requirements on wall street firms. being too big and too interconnected will cost these firms dearly. and should that not be enough, our legislation, regulators can use the new powers in our legislation to break those firms up before they can take down the economy of our country. it stops bailouts by forcing firms to write their own funeral plans and to pay for their own liquidation in advance so that taxpayers don't have to pay a dime for that. and they shouldn't. and if that isn't enough, our bill stops bailouts by literally eliminating any possibility for the government of the united states to bail these firms out.

you see, these wall street firms, mr. president, believe that no matter how much we hate bailouts, if they're important enough at the end of the day, taxpayers will come riding in on a white horse to save them. that's like they did under the bush administration. this bill kills the white horse. there is no white horse under this bill. and when we pass it -- as i hope we do -- big banks, large institutions, banks will know that if they fail, they fail. their management gets fired under our bill. their assets will be liquidated under our bill. their creditors lose money under our bill. and taxpayers don't pay for any of it under our bill, mr. president. the bill stops bailouts. to insist otherwise indicates that either the minority leader doesn't know what's in the bill or he chose to distort what's in the bill. and yet, mr. president, i read this morning in the "wall street

journal" the republican leadership -- and i quote them -- "struggling to maintain a unified opposition even going so far as to circulate a letter pledging that each republican senator will vote to filibuster this bill and keep it from even being discussed." i hope that's not the case. i can't tell you, mr. president, in my 30 years here what a denial of everything i've stood for and worked on here in countless pieces of legislation for three decades, to have members of this body who have spent hours with me crafting the bailout, including their ideas, to vote against even allowing this bill to be debated. i just know that cannot happen. i just don't want to believe that 41 of my colleagues haoerbgs many of whom -- here, many of whom have worked with me on this bill, are going to sign on to a commitment that they won't allow this bill even to be debated and discussed unless i

agree to their provisions. i've never seen anything like that in my 30 years here. i've worked tirelessly for months to put together a bill that reflects various ideas. i know it doesn't satisfy everyone. i've been criticized by the left and the right on this bill. i understand that. but, mr. president, i tried to put together a bill that reflected what i thought was common sense, sound and good legislation. and i pray that the news i'm hearing about 41 signatures before most of these people have read what's in the bill, have any idea what's in it, are signing on to a political commitment without understanding what's at stake by losing this bill and having the status quo remain, bailouts that are in place, taxpayers are exposed and the 8 million jobs that have been lost in 7 million homes and others that have suffered as a result of this economic crisis get little or no relief. that's a stunning conclusion, if you will, of the efforts that have gone on. and it isn't about us.

it's about the people out there who deserve far better than they're getting. anyway, still even apparent that the republican strategy is to delay and obstruct, even after it's become clear that the minority has very little to offer in this debate except for some false talking points verbatim from the big bank script. the minority leader took the floor again this morning and said -- and i quote -- "the republicans believe the solution is for bipartisan talks to continue." well, mr. president, they will. as frustrated as i am, my door has never been shut. and the door is still open to sit and resolve and work together to get through this bill. but i'm not going to sit around days on end in the rope-a-dope game of never knowing who i'm talking with, whether or not they have any ability to bring people to the table, just to disagree with my idea and i'm still against the bill. i've got to ask myself why did i go through this process agreeing

to much of what they're offering, and there's not a single political vote to show for it, in fact to vote against even debating the bill. why in the world would you go through what i just did to end up at this particular point? apparently someone informed the minority leader, i guess, that those talks have been going on for over a year. so they will continue. then again, he once again made the false statement that the bill would -- and i quote him -- "allow wall street to bail out banks." say it enough, i guess it becomes true in some people's minds. i would say to my friend, the minority leader, if you want to continue this debate, you can start by ceasing the efforts to filibuster this bill even before it gets to the floor, and i would suggest more than two or three people have probably seen it, have any idea what titles are in it, what we try to achieve under the bill itself. if you want to debate, you have ideas, bring them to the floor.

that's what this body exists for. let me also say this: if the debate is going to consist of democrats offering ideas to tackle this very complex -- and it is a complex set of issues -- and critical challenges on behalf of american families and businesses and the pherpbz making -- republicans reading false talking points, then count me out. i'm not going to engage in that kind of debate and that kind of negotiation. i have no interest in that whatsoever. we have a job to do here. if my friends on the other side of the aisle don't feel like doing the work, maybe they should think about the millions of unemployed americans. who didn't go to work this morning because they lost a job in this economy created by the mismanagement, the failure to step up and take steps to correct these problems overt last number of years. hose americans would lov >> would love nothing more than to put an honest's good day's work anterior good day's pay but

they can't because the same banks who are sponsoring this parade of cost our country 4.5 million jobs. lost healthcare and destroyed futures and retirement accounts. that's all gone. what about them? in this debate. are their issues, their views, their concerns going to be discussed. i know, just shut it down. don't even debate the issue because you won't agree with my idea. mr. president, it's not about the process. it's not about committee assignments. it's not about your idea or mine. it's about people beyond the walls of this chamber who are counting on us to get a job done for them. and our failure to step up and even debate these issues and consider each other's ideas, i think, is a tragedy. i know my friends on the other side of the aisle are faced with difficult choice between supporting their party leadership and participating in this complicated, difficult debate. and i'm not naive. i know that's a hard place to be.

but if we can't act like united states senators, for the sake of this issue, for the sake of legislation whose success or failure has such an enormous impact on the very survival of our middle class and our economy as we know it, then why are we even here? why are we even engaged in this if that's what the choice is. so it's easy to understand why the big banks don't like this bill. it's far harder for me to understand why any of us would be sympathetic to those arguments. we don't work for the big banks. we work for the american people who sent us here from our respective states. we work for families who paid a steep price for wall street's risky behavior. we work for the american public that lost those jobs, those more than 8 million jobs. and we still face near double-digit unemployment we work for an american public that lost nearly 7 million homes to foreclosure.

for millions of people who have seen their small businesses fail or their retirement account evaporate in a matter of hours. we work for an american public that is sick and tired of feeling like no one is looking out for their interest. and like the political hacks and lobbyists hold all the cards in these debates and discussions. mr. president, the minority seems intent on proving them right. i hope that's wrong. but i'm worried that they may be right. i'm proving that there's no issue more important than saying no, stopping all discussion, currying favor with special interests and trying to gain advantage. strangingling poe- -- strangling this with filibuster. it will continue this greed and recklesss in no, sir wall street. it will leave us vulnerable once again to another economic crisis. mr. president, i've been here a long time. i know this institution is better than that.

i know there are friends of mine on the other side who care about this bill. who want to be a part of the debate. who want to be part of the solution. and have ideas to bring to the table. and recognize no one group, no one senator are going to write exclusively this bill. but i can't get there if the attitude is we won't even let you debate it or discuss it. that attitude is not what the american people expect of the members of this body. so on their behalf, mr. president, who desperately need us to act i hope that we're better than that. in the coming days before this bill reaches the floor, that we can find that common ground. if not, we need to go forward but we need to have that debate on the floor with the united states state. and with that i yield to the floor. >> my friend from connecticut, who is my friend, may comment about the process.

i would hope we would possibly enter into a colloquy. i noticed he's talking to the president right now. i'll wait just a second. i was hoping the gentleman from connecticut would be interested in a 2-minute colloquy. maybe 5. and i would like to give a preamble if i could, there's a lot of rhetoric going on this reform bill. and to try to reach a bipartisan agreement. we voted a 13,036 bill out of committee, you know, in 21 minutes with no amendments. and we did so with the understanding, at least it was my understanding, i'd love to have it cleared up right now, that the best way to reach a bipartisan deal was to vote a

bill out of committee. we know it was going to be a party line vote to not stiffen opposition by having a bunch of amendments debated and maybe getting people pulled further apart. and then what we would do is try to seek a template for a bipartisan bill before it came to the floor. >> on that point certainly that was the intention. but as you recall failure 441 amendments filed on friday before the announced markup of that bill. and over the weekend staff came with some to work on amendments. i say respectfully no one from the minority side came even that weekend. but over the sunday weekend, it was -- it was suggested to me by the minority -- >> not by this minority. >> no, by the minority. they did not offer any amendments. it turned out to be a 21-minute markup. i prepared to stay there all week and announce in advance that would be the case. just for the purposes of

understanding here, again, that was their decision hopefully we could get to some agreement further down the road. the bill that was on the table that day for the markup was substantially different than the bill that i offered as a discussion draft in november. >> no. -- no question. >> there were a lot of thoughts that was incorporated between that date and the actual markup date. >> and i have repeatedly publicly thankedgate senator from connecticut for going to to that process. there is no question it is a much better bill. it's a very amendable bill. here's what i would say, i think things are being said, you know -- there's no question some of the attacks have been over the top. on the other hand, there's no question that treasury and the fdic created some loopholes. i mean, that's competent executive branch dos because they want the flexibility to do whatever they'd like to do. i would do the same thing if i were them.

but there's some things that need to be tightened up. and i think we could do that in 5 minutes. i really do. i talked to the treasury secretary yesterday. it's obviously more of a committee-committee level deal now and i understand that. and i think we could resolve that. but i think the thing, if i could -- i know there's been discussions about this letter. the fact is i think what we're trying to do is say, let's get this template done over the next couple of weeks. let's don't slow it down. i know you talked about entering a bill on april the 26th. i know there's been talks of maybe sliding away because there's some other cats and dogs that need to be dealt with. but we can do this. and i think if everybody would just calm down and if everybody would quit exaggerating how bad things are -- there's been a lot of cooperation. i just met with the ranking member. i left his office. i think there's a strong, strong, strong desire to reach a

bipartisan agreement. and i hope -- i think -- we're not blamed anybody. but i think the white house is stirring around in this. we got all kind of forces going on. i think the good senator from connecticut wants a bipartisan bill that will stand the test of time. i know that i want one. i know the ranking member wants one. i think most every republican wants one. and i think if we could quit shooting things over the transsome, and things would settle down without slowing down the introduction of this bill down, not slowing it down one day if we just get serious as adults for the next at the point days or so, a week, i think we could finish. and i really believe that. and i would just ask -- i would ask all my colleagues -- and i ask this respectfully of my colleagues from connecticut who, you know, look, things didn't get where they needed to be and i understand what happened. but i still relish the fact that

we came close. and i think we can get back there. i really do. i don't think anyone is trying to subterfuge this. i don't. i met with all my colleagues yesterday on the republican side. we may have a few folks that don't want a bill because they think don't like roths. i'm making that up. but i think most people really want a good bill. and i think the chairman -- i think what you did in december demonstrated that you really want a good bipartisan bill. i don't think it's right -- i will get in a little bit here -- i don't think trying to call one republican senator to pick him off, two republican senators to pick him off -- i don't think that's a bipartisan bill. let's get back to the table -- >> i'm happy -- my colleague wanted a colloquy here and i'm glad to be an audience for him. if he wants -- >> i'm glad to listen. as i have often -- >> let me just say and again, i

came here -- if i'd been -- 'cause i'm responding to the minority leader. members come every morning now saying this bill perpetuates bailouts. i'm not going to sit here idly and allow those accusations to be spread across the country when you and i both know that's not true. when i'm told this is a partisan bill -- i spent too much time over too many years doing exactly what i've done on the 38 months i've been chairman of this committee and develop whenever i can bipartisan solutions to bill. it's motivated me in everything i've done. and so to all of a sudden out of the blue knowing all the efforts that i've made along with others to try and find that common ground, as my colleague from tennessee well knows here, and then to be faced with a minority leader who should know better than coming to the floor making these silly accusations, false accusations about the process that has been anything but partisan about conclusions in a bill that are anything but accurate in fact what's included in the legislation and i'm willing to listen to ideas how

we can make this tighter to stop the bailouts that are occurring in the country. all of that. but then having a letter being circulated where 41 people even most of whom have no idea what's in this bill but just taking a political position because they're being asked to do so without at least having some appreciation for those of us including yourself who have worked so hard on this to produce as good a bill as we can, understanding there's still ideas that many of our colleagues want to bring to this debate and we should have a right to do that, that having a full-throated on the floor of the united states senate, i'm just disturbed -- what does that say to future chairs? why would you even bother doing what i went through in fact when at the end of it the answer is no, i'm sorry we didn't get our way so we're going to stop the debate. i just find that terribly distressing. as a member of this body leaving here in a few months, but i won't here for any more debates. i would say to the newer members, careful.

if this is all the template in how we operate and what i've done in the hearings, involving everyone going through the discussions recognizing you didn't solve any issue. you got to ask yourself the question, why would you do that? if at the end of the process you get a letter circulated stopping a motion to proceed of a bill of this import -- if this had been a you're not allowed in the room we got our right. then i get that. i would sign the letter, in fact, if this is the chase this is not this case in my view. i say that respectfully to my colleague. >> i would respond respectfully that i think the course of action that's trying to get underway is to finish the -- let's face it, you and i went a long way. and we stopped on march the 10th it ended. and i understood, look you lost -- >> we had republicans. >> you had one and that's all you asked for when i started. i don't want to reiterate it.

i never said i would for respect but myself. and i didn't leave the table. i never left the table. so the fact is the bill has taken a partisan turn on march the 10th. there's no denying that. you wouldn't deny that and look at me with a straight face. there are some bipartisan solutions in this bill. i grant that and i thank you for those inclusions. but there's still work to be done. and what i would say to do what republicans are saying let's finish that work before it gets to the floor. you've said this and i don't think i'm betraying confidences. i would never do that intentionally. this is a conflicted piece of legislation. and what we need to do is get the template at least bipartisan in the beginning and then you're right. there's issues volcker rule and there's governance issues, you know, that are going to be amended back and forth but let's at least get the main parts of

the bill right in the beginning. close to right. not the way you would want it on your own. not the way i would want it on my own. that has not happened on a number of titles in fairness. and i would just urge everyone -- there's been a lot of work done. you've done a tremendous amount of work in this committee. let's finish that work over the next at the point days. let's quit yelling at each other. and let's finish the work the american people sent us to do. i'm not lecturing. i say this respectfully. let's just finish what we started. >> i hope that can be the case. >> today a senator hearing looks into the causes of the 2008 financial collapse and the role of federal regulations. you'll hear from treasures from the

>> middle and high school students from 45 states submitted videos on one of the country's greatest or challenge the country is facing. watch the top winning videos every morning on c-span at 6:50 eastern just before "washington journal." and at 8:30 during the program meet the students who made them and for a preview of all the winners, visit studentcam.org. >> homeland security secretary janet napolitano was at the national press club on thursday. talking about efforts to improve airline safety. her remarks are about an hour.

>> good afternoon. and welcome to the national press club. i'm a reporter for bloomberg news and the president of the national press club. we're the world's leading professional organization for journalists and we're committed to our profession's future through our programming and through fostering a free press worldwide. for more information about the press club, please visit our website at www.press.org. to donate to our programs, please visit www.press.org/library. on behalf of our members worldwide, i'd like to welcome our speaker and attendees of today's event which includes guests of our speaker as well as working journalists. i'd also like to welcome our c-span and public radio audiences. after the speech concludes i will ask as many audience questions as time permits. now i would like to introduce our head table guests. from your right, anthony shop principal of liftoff solutions

and an nba candidate at the george washington university. he's also a 2004 harry s. truman scholar a distinction shared by our speaker today who was among the first class of truman scholars of 1977. he's a new member. todd, national editor for "vanity fair." john hughes reporter for bloomberg news and national press club board member. joe, senior business editor at aviation week magazine. rand beers undersecretary for the national protection doctor directorate and a guest of our speaker and we have andrew and chairman of the press club speakers committee. skipping our speaker, for a moment, shaun bullard national press club board member and president. he's the speaker's committee member who led organization of today's event. gail, acting tsa administrator and a guest of the speaker. linda kramerening a member of

the speaker committee and washington editor of "glamour" magazine. she's also helped put together believe event. chris chambers, journalism professor at georgetown university and commentator for russia today. he's also a new member of the press club. mark, director of communications for harris corporation and a former homeland security spokesman. and a current homeland security spokesman and press secretary clark stevens. of [applause] >> our guest today has spoken before at the national press club. although her title has changed since she was last our guest here three years ago, she's handling many issues that were the same that she did during her time as governor of arizona. immigration and border security. today she will be talking about aviation security and terrorist threats. janet napolitano runs a massive federal agency that is still newbie washington standards.

she has seven federal organizations under her leadership. around $60 billion in her annual budget and is responsible for about a quarter of a billion employees. and those employees' jobs are about as diverse as any federal agency including the coast guard, the federal emergency management agency, the u.s. secret service, the u.s. immigration customs enforcement, u.s. citizen and immigration forces, u.s. customs and border protection and the transportation security administration or the tsa. weather purchasing mobile radios for federal law enforcement officials working in the border region, search and rescue hospitals for the u.s. coast guard or body scanners to discover another would-be bomber boarding a plane, today's guest is vital for securing the nation for many of the threats we face be it terrorism or a catastrophic surprise from mother nature. please welcome today's national press club guest, the third secretary of the department of homeland security, janet napolitano. [applause]

>> well, thank you. and good afternoon. it's a pleasure to be back at the national press club with a different job. some of the same issues, but some additional ones as well. as was mentioned in the introduction. very briefly before i turn to the actual topic today, which is aviation security in the ever-changing threat environment in which we live. let me briefly describe our department. it is an amalgam of 22 agencies. it was formed in the wake of 9/11. out of the realization that there were aspects of the federal government that were squirrelled away or pieced together in different departments that really should be under one roof.

i'm often asked how one can manage such a large and diverse organization. and what we have done -- i was going to give a sarcastic answer there for just a moment. [laughter] >> i think i'll -- i won't for this audience. we have done a quadrennial review which is basically federally really doing a long-term plan for the department. the first one ever since this is such a young department. and we have really boiled ourselves down it off five major missionaries. -- mission -- areas. it's a primary threat that runs through almost every area of the department. the second is securing the borders of the united states. be they land borders.

be they at sea. or be they air. the third is enforcement of our nation's immigration laws. and to do that smartly and effectively, even as we advocate for reform of those laws. the fourth is the protection of cyberspace. and i think we're probably the first department or major department of the federal government to identify cyberspace as a separate and discreet mission of our protection. and the fifth is the ability to prepare and advance and quickly respond to any type of emergency that might occur. be it tornadoes, floods, ice storms, forced fires, hurricanes, tsunamis. we see all of that.

by way of further nuance, we are not the first responders per se. but what we do is we work with the first responders in states and in cities to make sure they are ready to respond and then come in when their resources are overwhelmed. so viewed that way, through that prism, you can see now why the department makes sense and how it all comes together. but the topic i wanted to talk to you about today was the issue of the threat to aviation. and what we are doing both domestically and internationally with respect to aviation security. now we know that al-qaeda and al-qaeda-related groups continue to believe that taking down a commercial airliner or to weaponize a commercial airliner

would be a great leap forward in their terrorist view of the world. we also know that they are a very smart and determined adversary. and so they are very familiar with the steps we have already taken as a country and indeed as a world in the wake of what happened on 9/11. and so our task is not only to respond but to really think ahead, not just reactive but proactive but dealing with that threat to aviation security in a world where aviation is a key engine. it's a key engine of the economy, both domestically and internationally. it's a key engine for tourism. it's a key engine for families who live in different places of the world or different states within the united states to be able to get together.

you can't imagine a world, quite frankly, without a safe and secure aviation system. and so our job is to really focus on that. and what we need to do to keep it safe and secure. and to give you a sense of scale because this adds some complexity to the issue. every week there are some 2500 commercial flights carrying a half a million people that come into the united states just from europe. just from europe. and we have 2.2 billion passengers who fly every year. and 10 million business people, students, visitors board international flights bound for the united states each week. those numbers give you a sense of scale. so not only do we need to deal with threats as they emerge. we have to be thinking in anticipation of future threats. and the things we do have to be

things that enable the system to continue to work. now, a lot of what we are doing right now, quite frankly, is because of what happened on christmas. many of the things were kind of in the works. we were already planning, for example, the purchase and deployment of advanced imaging technology called body scanners. we call them aits. but i think christmas put a very stark reminder in people's minds about the fact that aviation continues to be the target of threats. and that the new kinds of threats don't necessarily involve large scale conspiracies that took months if not years to prepare. but deploying individuals who are carrying not things that are metal that can be picked up in a

magnetominatror that could be detonated in an airplane. putting those materials in harder to find locations. making greater use of individuals who don't fit what we think of as a terrorist profile. they may have no derogatory information about them in any intel file. we are seeing the use of women and the recruitment of women for these kinds of missions which is also a change. so it's an ever evolving world that we deal with and an ever evolving threat situation. so what have we done since what happened on christmas? and let me be very precise of what happened on christmas.

on christmas, the day before, umar farouk got on a plane in lagos nigeria. he was screened there. then he transferred to amsterdam. amsterdam schipol airport where he was again rescreened. he did not appear on any screening watch list that would be available overseas. and he got on a plane bound, of course, for detroit on which he was unsuccessful in detonating a load of what is called petn, which is basically a powder form of explosive material. so the president in response to that -- we did an immediate review. what went wrong? what went wrong to enable abdulmutallab to get on this plane and not kill just himself but individuals from 17 other countries?

and what went wrong was twofold. one he wasn't on the right watch list. there was information. but because of some practices in the watch listing community he didn't make it on what's called the selectee list or the no-fly list. the two lists that are pushed abroad before someone boards a plane. not only have organizations like the nctc and the fbi addressed that and repaired and fixed that issue. but we are also pushing a lot more information overseas. so that individuals at foreign airports -- even though they're not u.s. employees per se, but they have the opportunity to have the benefit of that intelligence. and then, of course, the second thing that happened is that because he was not on a watch list he wasn't given a secondary

inspection. and, of course, because he wasn't carrying something that was metallic, it didn't get picked up with standard screening equipment. so what does that mean? and how are we addressing believe at the tsa and at the department of homeland security? well, i already mentioned the watch list issue which is primarily in the hands of the nctc. and the fbi. but we have done some things, too. for example, pushing more lists overseas. we have domestically in the airports that are under our supervision, ouradirect supervision, deployed more types of -- different types of equipment and mechanisms designed to give us greater granularity, more layers of security. so if you get through one you

might not get through the next and you might not get through the next one. by the way, we don't do the same thing at every airport. so when you asked the question this happened to me at this airport but not this airport and that's because it's designed to be unpredictable. because those who seek to attack the aviation system depend in part on predictability. but we have added more behavior detection officers. we have added more k9 teams. we have added more explosive-trace detection for passengers where your handed is wanded. we have been deploying the advanced imaging technology machines into more and more airports. and really by the end of next year, i think there will be 1,000 plus such machines in such

airports. and those who like them and the more they're used and the more, quite frankly, we buy and other countries buy, the better the technology gets. in addition, we have formed kind of an innovative and new partnership with the department of energy. and the department of energy has, of course, within it the national labs. and in the national labs reside some of the best scientific minds of our country. and we have asked them to really help us design the 21st century century checkpoint. not just what do we need to do now but what do we need to be thinking of that would really take us beyond even the kinds of advanced screening that we can do today. so that work is all underway domestically. but perhaps the greatest area of reform has been internationally. because one of the things that was so clear on christmas was

that the aviation system is global. and if you get into the system, you potentially have access to airports around the world. and so immediately after christmas, i think within a week or so after christmas, i sent the deputy secretary of the department of homeland security and the assistant secretary and several others -- we put them on a plane. and they went around the world in 12 days. and meeting with ministers of the like, ministers of interior, home secretaries, transportation ministers to begin talking about what we need to do internationally to make sure the global aviation system remains safe and secure. and then we followed that up with a meeting with ikao which is a international civil aviation. it is the united nations branch that deals with global aviation.

it was formed in the wake of world war ii to keep global aviation safe. and so undersecretary rand beers who is here went to montreal and we began a joint initiative where we have been going region by region around the world reaching an international consensus on improved aviation security. better information-collection and sharing. better passenger vetting and the sharing of information of passengers before they even get to the airport. stronger cooperation on the development and deployment of technologies, newer technologies. and modernized aviation security standards shared across the world that can be audited and enforced across the world. we began in spain meeting with the ministers of interior, of the european union.

and reached a very strong consensus there that resulted what is now called the toledo declaration for toledo spain. we went to the mexico city, we had the countries of the western hemisphere from canada, chile, brazil and others. that resulted in a regional international consensus known as the mexico city declaration. several weeks ago we were in tokyo, japan. i've been at all of these, by the way. where we again forged an international consensus with 20-some odd countries of asia directly represented there. that's known as the tokyo declaration. and then just this past sunday, monday and tuesday we were in nigeria with ministers from dozens of countries from africa, which resulted again in a strong international consensus known as

the declaration. we will finish up in a few weeks in a meeting focused on the middle east where we will meet at the uae. to forge, i think, and hope another international consensus information-collection, information-sharing, better technology screening at airports themselves. and then we will have a global general assembly under the auspices of ikao in september. we will have gone basically nine months to zero to a revised global consensus on what we need to do to not only react to the threats that we know exist but build capacity to be proactively dealing with the safety and security of global aviation. in there we will need to deal with capacity and resources not every country has the same kind

of resources. we know that. that's part of our discussions moving forward. but i think it is highly significant that in all of our discussions with all of the issues involved and possible tensions that could arisen, it is remarkable to me anyway that on this issue, the need to have a safe and secure global aviation system that allows people and goods to travel the globe with every bit of safety and security we can have -- there's been no resistance or push-back whatsoever. let me close, if i might, on the following. even with all of this that has gone on, there's no guarantee. there's no guarantee that somewhere somehow someone will

manage to successfully destroy an airplane or turn that plane again into a weapon as was done on 9/11. we don't live in a world of guarantees. that's just not the environment in which we exist. so i'm not here to say that there's a guarantee now being provided. what i'm here to say is that every step reasonable and we could conceive of both domestically and internationally is being pursued to make sure that aviation remains safe. and i'm also here to say that if something were to happen, we are prepared to respond swiftly, to respond effectively and to respond strongly. that is our tradition as a country. and that is a tradition that we will uphold regardless of any circumstance.

because this nation is one that is very, very strong and indeed extraordinarily resilient. so with that, let me close my remarks. thank you for having me. i want to especially thank rand and gail who have been leading our efforts. i will share with you that when i say that we've been pushing more information overseas, that has been a remarkable effort not only to push information overseas but in such a fashion that it's based on intel and threat-based, a more precise information so that we no longer have to say that if you've traveled through this country 100% of you will get screening, which in the aftermath of on christmas day which is something we had to do. we've been able to turn that system into a more intelligent-driven system as well.

so i'd like to thank gail and i would like to thank rand and the many men and women of homeland security. when i accepted this position, some described it as the ultimate in thankless positions. i don't need thanks. the men and women of the department do because they do a great job. thank you very much. [applause] >> and thank you, madam secretary. and thank you to all the people who have brought in questions. i don't know if i've ever seen so many questions on a national press club luncheon. there's a lot of good ones and i apologize in advance if they don't all get asked. the first question coming from the member of the audience. how can you ensure that planes bound for the u.s. are safe when you cannot compel foreign governments to set up the security regimes that you would want? >> well, i think part of it is

that irrespective of u.s. compulsion, there are passengers from all over the world and from every country that are on those planes. so just because the plane is bound for the u.s. doesn't mean that it's a u.s. plane. and as i mentioned before, there were individuals from 17 countries in addition to the united states that were on the flight on christmas day. in addition, we have the ability at last points of departure for the united states to insist on certain protections particularly at the gates. and we ultimately and always have the ability not to allow planes to be a last point of departure to the united states if security is not being maintained. so that is a stick that we have not employed. and i don't believe it's ever been employed. but it is among the legal authorities we possess. >> are those the sorts of authorities and contingencies that you would then discuss in these international summits?

>> you know, we really haven't had to. i think everybody recognizes that the global aviation system is linked. and that the united states is a key part of that linkage for everybody. so everybody has a stake in making sure that the system remains safe. >> what are the most challenging issues for aviation and aircraft manufacturers today as it relates to airline security? >> i think, you know, manufacturers obviously to make the aircraft themselves as resilient as possible. as tough as possible. to be able to have a catastrophic incident, particularly a catastrophic incident while the plane is in the air. but from a scientific and engineering standpoint, that is

an extraordinarily difficult issue given the vast array of different kinds of material that could be used in the interior of a plane. and so that's why it's so important that we have good information. intelligence. sharing. passenger vetting. and different screening mechanisms used at airports to give us the greatest likelihood that no one like an umar farouk boards a plane. >> how do they develop security standards either for international, ports, land borders in such a way as to not unduly restrict trade? >> yeah. this is -- you know, our job and our function always has to be sensitive to several things. one is the safety and security mandate. one is the protection of privacy and civil liberties which is a great concern as you add layers

on in the protection world. and so one of the things we do is we have a chief privacy officer and a civil rights and civil liberties bureau within our department. and they work on and help us even as we are developing changes in policies, equipment and standards at the like. rather than shoe horning those things in at the end. and then we have -- sometimes competing demands of the legal trade in commerce versus port security, it land ports, it seaports or be it airports. and there we work with the private sector. for example, in the aviation environment, i have met now with the association that represents airports both domestically.

and i met when i was in nigeria with the association that represents international airports. and we have also met extensively with the u.s. flag carriers through their association. and the international flag carriers through their association. 'cause they have to be part of the solution. they have issues. they have issues about cost. they have issues about passenger through-put. we all have issues like that. i mean, nobody really enjoys waiting in line at least i have not met anyone who has volunteered where they really enjoyed that line in the airport. and so we know that. and those things have to be thought through and accommodated to the greatest extent possible even as you are adding new or different types of security regiments and putting those in place. and, quite frankly, here technology can also be of

assistance because as i suggested before, as we employ the newtins, they get better, they get faster and more efficient and passengers know more how to deal with them. remember when makingetometers were first installed in airports. raise your hand if you remember when -- thank you very much. and many of the same arguments were made regarding -- they would slow people down. they were an invasion of privacy, et cetera, et cetera. and it turns out, no. and that they are an objectively better way to protect the air environment. the new generations, the explosive trace detection models and the aits are the next generations and they are objectively better. are they 100%? no, as i said in my concluding remarks, nothing, nothing in this environment is 100%. is it objectively better? safer?

absolutely. >> following up on that, what steps is the department taking to reduce false positives on individual identification? either because they share the names of individuals on a watch list or due to imperfection of the facial technology. >> and if you are one whose caught in that, it is very difficult. in part because we rely on passenger names, for example. now, some things are happening now that over the next year or two will reduce greatly the incidents of false positives. through something called esta and secured flight. these are initiatives underway being implemented that will assist us in keeping that number down.

the other thing we are working on -- and it is a work in progress, is a quicker, more efficient redress system. in other words, if you still -- you know, if you're still a false positive and you keep getting pulled aside regardless of what airport you are at because your name and your d.o.b. or whatever matches and that occurs, there has to be a way to be able to clear the list. we call that redress. i think our redress system right now is not where we want it to be. from a consumer standpoint among other things. and so over the next months and year we will be working to make that a more efficient system as well. >> also for a time, when will we

implement a plan that the tsa has been touting for years? [laughter] >> as soon as we can. [laughter] >> related, how goes for a full-time tsa administrator? >> as soon as we can. [laughter] >> look, as you know, the president has not -- he's nominated two people but they have not completed the confirmation process. and i'm going to embarrass her right now. but it has been my fortune as the secretary to have as the acting head of tsa who knows this business and knows the issues and has been able to run this department and keep me advised of what is being done on an absolutely class a level.

we have civil servants in the government who do a wonderful job even as the president decides on who the next nominee will be. >> there are, of course, many issues that people in the audience in watching our c-span would like to hear about. this question is about the nuclear security summit that's been taking place in washington this week. how you will the homeland security department execute or carry out the spirit of this summit by tieing border enforcement with drugs on bomb materials that some smugglers and gangs could be hired to bring in fissile material? >> well, you know, let's switch out of aviation to land borders because the question really goes to that. although sea would also be applicable here. and, you know, the united states has immense land borders north and south with lots of ports of entry, lots of lanes of highway.

and remember, in addition to the security issues, as i said before, we also have the trade, the commerce, the tourism issues that need to be taken into account. mexico by way of example is the number one or two trading partner for 22 states in the united states. that border has to work. traffic needs to be able to flow. and so the issue becomes how do you keep out contraband like narcotics? how do you keep out illegal immigration? and then at another end of the spectrum as it were actual nuclear fissile-type material. well, there on that we deploy scanning technology, both land and sea designed to detect that sort of material.

but there again we don't want to wait until something is actually at the physical border of the united states to pick up something. now, that's why it's so important -- i begin everything by saying this is about layers. and the layers begin with good information-gathering. good intelligence analysis and sharing. good ways of picking things up as they go through the supply chain if i can use that phrase. of getting actually to the physical border be they land, air or sea in the united states. and so we have responsibilities in all of those areas. as you might imagine, our country is unique in the amount of border -- land border in particular that it needs to protect. >> more questions on the land border. recently arizona rancher was killed by someone who was in this country illegally. what does that say about our current border security needs

online. and will american ranchers and landowners will see increased activity in our land borders soon? >> as you mentioned in the intro, i'm the former governor of arizona. the former attorney general of arizona and the former u.s. attorney for arizona. i know that area very well. i did not know the rancher personally but i know other ranchers from that area who knew him. that's a long time ranching family in arizona. in fact, i spent an hour on the phone a week and a half or so ago with a number of ranchers from that part of arizona which is near douglas for those of you that know the state. the investigation is still ongoing as to as the investigation of the murderer or murderers. we are working by the way closely with mexican law

enforcement on this, which is a growing trend with us. working very closely with mexican law enforcement, which we need to do. not just in this area but along the u.s./mexico border. we had prior to rob's murder put a lot of additional resources into the southwest border particularly arizona because there was so much activity there. we had increased the number of border enforcement teams. we increased the number of mobile radar machines. we increased the number of checkpoints. we had -- you know, i could go list by list when everything was increased. nonetheless, this outrageous crime occurred. so number one, working in every law enforcement investigatory tool at our command, identify the perpetrators, bring the perpetrators to justice. and then number two, working to see what, if any, additional resources would be helpful not

just in arizona but other parts of the border as well. i think the visit by the president of mexico next month is a very important visit because he is engaged in a real -- an effort that deserves our applause but more important than our applause, our absolute cooperation and commitment with him and that is to really go after these big drug cartels that are the cause for much of the violence along that border and break them up. they've been there for a long time. they've been there for as long as i've been in arizona, which is many, many years. and it's time that for our security as well as mexico's. both countries have a stake in this that they were broken up. >> following on that looking at the texas border, who's running juarez these days and what does

that mean for homeland security? >> that's right across from el paso, texas. that has been the site of literally thousands of homicides, drug-related over the last several years. and when i say thousands, i mean -- i think -- i mean, i may not know the exact number but i think last year was something north of 6,000 homicides, drug-related. 550 of whom were law enforcement officers, right? right over our border. and so this is something that is of intense importance both to mexico and the president of mexico, president calderon has been investing major resources in restoring the rule of law to cidudad, juarez and chihuahua. and we are working on our side of the border to assist in

things like inspecting southbound vehicles for arms or bulk cash that's transiting the border to go back to the cartels. for the first time, for example, we're inspecting all rail traffic that is going to south into mexico. that hasn't been done before. looking for the type of contraband -- you know, the drugs come north and the arms and the cash go south. so we have a role to play both in preventing the drugs from coming in but also trying to keep the arms and the bulk cash from going south to the cartels and we are working on that as well. >> as a search for the alleged perpetrators continue in the rancher case and with the violence we're seeing around the border earlier this week the arizona house of representatives passed a bill that increases the power of local police to stop question and detain people they suspect may be illegal immigrants. are such powers necessary? is it a good thing for states to be so in front of the federal government on immigration policies? and given your experience as

arizona a.g. and knowledge of the legislature, based on what you know of the law, is it constitutional? >> i know a little bit about the law. [laughter] >> i think the kind of law that evidences why the congress needs to take up immigration reform because immigration reform needs to look at increased enforcement tools that we need. it needs to look at the issue of flows of workers now and in the future. and it needs to look at how we deal with those already in the country illegally. and without that kind of commitment by the congress to really deal with it, i think we're going to see more and more states take up the issue of immigration. and the danger we run is having a patchwork of laws. and in this area and i say this as a former state a.g. and a former state governor, while i

do not believe the federal government has exclusive power where immigration enforcement is concerned, the kind of wholesale turnover that i believe this strapped arizona law represents really in my view doesn't strike the right balance that we need. but, you know, quite frankly, until we can move forward off immigration reform -- i know the president is very committed to this. he's asked a number of us in the cabinet to be working on it, which we have been. we look forward to when congress begins to take up this important subject. >> how does that balance come in to play when you hear folks who are frustrated with immigration policy say, just build a wall between the u.s. and mexico? >> well, i think i was the originator of the quote that said you show me a 15-foot wall and i'll show you a 16-foot

ladder. just building a wall doesn't reflect, a, first of all, the reality of the border. i mean, it's a physical place. and it is thousands of miles long across some of the most rugged terrain you can imagine. so to build and maintain a wall with the notion that you don't do anything else and that in and of itself is an immigration policy is of neither wise nor effective. you've got to have a system. you've got to have a system down there that includes boots on the ground. it has to include technology. and fencing and infrastructure. that's part of an overall system. ...

>> there have been several examples showing a rise in self radicalized or homegrown terrorism. individuals who may be younger and inexperienced compared to for terrorist butter capital as but islam. what actions is dhs taking to educate the american public to increase their own awareness of the threat presented by homegrown terrorists of any

origin in hopes of identifying them before they attack? >> this is really a change that i have seen, even in my 14 or 15 months as the secretary of homeland security. and that is the increase in the number of u.s. citizens who, themselves, are radicalized to the point where they may travel to talk to or yemen or someplace, or be in the camp, learn the trade crafts of a terrorist, and then returned. or learn much of it just simply via the internet. among other things. this is something that that we are focused on now in working with local law enforcement. in other words, you know, there

are 800,000 some odd pair of lies and yours out there around the country, known as law enforcement. what to look for, what are the markers from when somebody is moving from first amendment activity, plain old angry rhetoric, which we have had as a country since we began to actually planning a violent act. it means being able to share a threat or threat stream information. for example, if there's a threat that someone is planning to build bombs or of a type that requires the purchase abnormal amounts of hydrogen peroxide, then making sure that police and others are watching to know and know how to get information about whether someone is making abnormal and large purchases of hydrogen peroxide.

it is a bad exchange of threats and threat information that really, i think, as we move forward will give us as a country the architecture that will enable us to minimize the risk that threats will actually materialize into reality. and so we begin right now and are working very closely with local law enforcement on how to we deal with the homegrown threats. >> in earth edward dennis blair told lawmakers that al qaeda and its ability had made it a high priority to attempted attack on american soil within the next six months. raising citizens awareness of the domestic risk and help thwart an attack. what is dhs doing on this front? >> well, i think we inform -- our emission particularly with state and local law enforcement making sure that intel that is

spread around the beltway also makes it out of the beltway to fusion centers and other places around the united states where it can then be employed on the ground. and the other thing is to make sure that people are prepared for emergencies of what ever type. that they know what to do, where to go, how to reunify if the family happens to be split up if and the event occurs. it could be a natural event. but the plain fact of the matter is that preparation and knowledge are ways to make sure that, as a people, as communities, and the country, that we are resilient and that we respond with strength and resiliency. and that way you minimize living in fear. we shouldn't live in fear. we should live with the fact that we are in an effort changing environment, we deal

with it we react and we also proactively deal with it and then we're able to respond, should it happen. >> early forecasts by accuweather and other organizations suggest that this year's hurricane season will be unusually severe. what steps is a dhs through fema taking to prepare for this? >> you're just trying to cheer me up with these questions. [laughter] >> we have gone from nuclear to hurricane. >> we had dennis quaid here on tuesday, the actor, and it was a very different tone. [laughter] >> maybe he want to do a job switch. >> we already through fema are working with communities around the country on hurricane preparation. and it's a number of things. its grant to look out is for the own mitigation it is making sure that warehouses are ready, mr

ease our stock, potable water is ready. equipment is prepared. exercises have been done, all of the rest. we have fortunately as the fema administrator, craig fugate, who was the emergency manager, the director in florida for a number of years, and really knows the hurricane business inside and out. and so he's leading our preparation efforts there. if i might suggest, i would be a very good speaker for this. >> taking your point and going away from the discussion, the disasters and capacity and terrorism and homeland security threats, something like the asia for you to address. there's a vacancy in the supreme court coming up. really? [laughter] >> given your background as a former arizona attorney general and governor and with your legislative executive and legal

system experience, who do you think would be a good nominee? [laughter] >> whomever the president appoints will be an excellent nominee, and he has many good choices. >> switching back, this would with a nuclear summit in d.c. -- [laughter] >> you will like this one. there were military trucks in the street, and a biceps was accidentally killed, which leads to this question is question. are we striking the right bounce between security and freedom as we protect public events? >> yeah, i think there still some review being done of that accident, i think was a national guard truck, but it was a terrible thing and my sympathies to the family of the individual who was killed. in terms of the question presented, which is are we striking the right balance, i

think as i mentioned before, we build those issues into our analysis and our development at the outset before we are even doing major problematic change. we want to be thinking those things through. that being said, the palace is not always so obvious. sometimes your e-mail of implementing something and you realize you don't have it quite right. and you have to make adjustments and you have to be flexible and agile enough to do that. the goal is to protect america, while we protect american guys and american values our freedom, right? so it is something that we work on constantly. we adjust for constantly, and we think about really in every major problematic development that would you. >> earlier this year we had the

head of the coast guard who will speak later this spring. from his position that we have several questions about the coast guard including what role do they play as we move forward to more effectively mitigating evolving terrorist threats, things like hurricanes, it's are. what you see the role of the coast guard in that context be? actually, the coast guard has an enormous and multifaceted role in a lot of different things. they have a footprint in assisting abroad, and we have in the seas around the world, they are responsible for the protection of the nation sports. and so for example, they have been working on the application of the twit program, which basically our security cars for port workers have access to

secure areas. they have the responsibility for search and rescue for the protection of the nation's waterways for legitimate commerce, and obviously, whenever there is an emergency, particularly of a hurricane type nature, they are usually first on scene. the most recent example of this, quite frankly, was haiti. they were first on scene in haiti. and were on scene for weeks thereafter making sure that we could bring in search and rescue teams from around the country, assisting in the bring in of equipment, and other things necessary to get haiti restored, or stability restored in haiti. in the aftermath of the earthquake and helping in a whole variety of ways. so the coast guard is a huge

asset for the country. and quite frankly somebody who grew up in new mexico and was the governor of arizona, i didn't have a lot of experience with the coast guard. coming into my position as secretary. and i must say, they are a total pleasure to work with. it is a total service oriented military branch. >> we also had several questions about cybersecurity and the aftermath accusations of sovereign nations hacking accounts. and when he is a nonstate actors using the internet as a way to spread message and communiqués, potentially violent threats against the u.s. citizens. what efforts are you doing in that area to sort of better monitor and better combat some cybersecurity threats? >> will come in the wake of the president cyber review, dhs has lead responsibility on protecting the civil aspects of federal government, the

so-called dot gov sites as well as working with the private sector on their sides, dot com sites. we are building basically as a subsection of the department. we're hiring right now aggressively. we've been given direct hire authority to hire up to 1000 cyber professionals to work in this area. we have unified a number of our different cyber assets that were spread around into a facility known as the in kick. and we're working very closely with the white house cyber coordinator and others on how we move forward. there's a lot of work to do in the cyber area. and i think, ken, as i mentioned at the very beginning of my

talk, it's one of the reasons why we identify the protection of cyberspace as a key and separate mission area of the department of homeland security, particularly because so much of the nation's critical infrastructure is controlled by cyber networks. we are in telecommunications, financial institutions, utilities or water. they are controlled by cyber networks. so both because we have the responsibility to protect critical infrastructure and because of the cyber, we receive the responsibility on the civilian side of things. this is an area, this will be a growth area for the department. >> we are almost out of time, but before we ask the last question we of course have to present you with the traditional, everyone has been waiting for this bum, national press club mug. >> thank you, thank you. [applause] >> and for our final question i think everyone in this audience would have something to say on

this one, but we would like to hear your story, what's the worst expressed here ever had in an airport? [laughter] >> here's the thing, and i hope you won't think less of me, this is a tough job. it's a big job, as you can tell from my talk yet today. but there are some things that come with it, and one of them is the place. the plain fact of the matter is, no pun intended, i have been in an import into as a passenger for about 15 months. and, of course, before as governor, but i will say this. the most recent experience i had that was not worse but interesting, was thanksgiving -- the wednesday before thanksgiving this year. because i went out to national airport, reagan airport, to work the line and help people get

through the magnetometer, get through the screening device you're so i basically wanted to work with our own tso, see what you're doing doing, see that lines were moving. how it was going. and it was a interesting. you gave me a great appreciation of what our tso's do and the care with which they need to do their jobs. and i also saw an immense variety about the shoes. [laughter] >> thank you all very much. >> thank you. and with that, thank you for attending today's national press club luncheon. this meeting is adjourned. [inaudible conversations] [inaudible conversations] >> russian president dmitry medvedev visited washington this week to attend the nuclear weapons summit.

while in town he spoke at the brookings institution about russia's economy and foreign relations. this is an hour and 15 minutes.

>> russian president dmitry medvedev visited washington this week to attend the nuclear weapons summit. while in town he spoke at the brookings institution about russia's economy and foreign relations. this is an hour and 15 minutes. >> good afternoon, everybody. i'm strobe talbott, and it is my great personal honor on behalf of of all of us at the brookings institution to host this extraordinary event, dmitry medvedev, the president of the russian federation. as all of you know, he is here in washington to participate in a summit that is intended to promote nuclear safety. that is a cause that he and

president obama advanced just last week when they signed the new s.t.a.r.t. treaty in prague. these two leaders have also, in their personal interaction over the past year, given a new start to u.s.-russian relations. before turning the program over to him, i would be remiss if i did not convey on behalf of of all of us our deepest condolences to president medvedev and his fellow citizens on the tragedy that they suffered as a result of a terrorist outrage two weeks ago on march 29. i happened to be riding as a passenger on the moscow metro just a few days ago. it was a powerful and moving experience, a reminder of the courage and the fortitude of a great people. i might add that we all observed

from a distance with admiration and with compassion another recent event in moscow. while russians were still grieving for their own compatriots, president medvedev led a throng of muscovites in laying flowers at the gate of the polish embassy in moscow this weekend. the russian people are fortunate to have in our guest of honor today a leader who is working so hard to modernize their economy and also working with mr. obama to build for all of us a safer world. mr. president, the podium is yours. [applause]

[speaking in russian] >> translator: ladies and gentlemen, first of all, i would like to say a few words. first of all, i would like to thank you for the invitation to speak in this leading research center of the united states of america. it is by right considered to be the stronghold of liberal thought, and i know that this plays has won the fame of the talent foundry of the american political class. now, this is high time that i quote robert brookings, who once said that the activity of the institution he had established be based upon the belief that there is a necessity to do precise and impartial identification of matters in this study and presenting ideas without any kind of ideology. from the first days of their

work, your analysts advocate precisely this principle, and this principle helped finding solutions for most difficult problems of the global politics and internal problems as well. today, the world is going through a period of profound transformation and faces serious challenges in its search for new models of development of although this phrase can be used for any period of the development of the humankind. and for us it is very important that there is concordance of interests and interdependence of our approaches. the world will be harmonious only when the parts which make it up will not collide, but interact and create the basis for development. democracy, human rights, and market economy make up the basis of not only national

development, it also some common set of international values. the dialogue between russia and the united states makes up an important part of those. i am sincerely happy that our cooperation is starting to yield concrete results. moreover, i must say that i am glad that, over the last year, we managed to change the atmosphere of the russian-american relationships. that doesn't mean that our relations have become cloudless and everything is perfect, but the environment has been changed and there are direct results. and i must say that i am glad that i did part of that. this meeting is taking place right after the washington summit on nuclear security. i would like to say it has been a complete success. i don't remember a most such

clear summit when all the participants would be unanimous in their assessments of the situation. this is not economy. this is not global crisis discussion. this is the topic crucial for every state, and it's a real threat, a real challenge, for all of us. last week, i would like to say once again, president obama and i signed a new treaty on reduction and limitation of strategic offensive arms. and we made real progress, whatever the analysts say at about this treaty. they keep saying that the balance is changing, and decade be advantageous for some of us, but nevertheless this is a real success.

russia and america have not an easy history of relationships. sometimes we run into problems. sometimes we suffocated each other and embrace. at other times there was an abyss dividing us. but we should not try to find differences. we should build a long time pragmatic relationship for the future based upon democracy values and economic freedoms and common goals to counter global threats. true, we have a very different history, and people see things, sometimes they see things in different ways. the u.s.a. has been developing a market economy for two centuries already, while our country in

the 20th century has gone through a sequence of economic and political experiments and ordeals. so as i strongly believe, russia needs several decades of gradually building up an efficient political and economical system. and this is the only way old disputes will be leaving in the past. to make this happen, there is no need to teach each other how to live well. we should communicate on a regular basis in an honest manner, being absolutely frank. the problems our country are well-known to us. those are corruption, technological under development, and unhealthy lifestyles.

but we have begun to change our system 20 years ago. and this is some, i would like to highlight this. the system does have its own traditions and it has the trace of all time traditions. they have become a habit. sometimes they are an obstacle, but to a certain extent, they provide protection to society. they prevent it from falling apart. we know how to do with these problems. using the expense of our friends, we have to build partnerships on a whole range of matters. on our part, we are ready to provide assistance to the united states, if it is needed, and sometimes it is needed in resolving some problems. declaring the principles of democracy is not what is needed.

a lot of countries do that, and not even changing laws, although improvement of legislation is a necessary task for us, this is not enough. what is important is that we exercise the principles of democracy. practice is the criterion of truth and political practice, or legal practice, indicates all the best and the worst part of a system. this is really important and that's when we will fight successfully corruption, and we will discharge people who are unqualified for their service. and what is important today is receiving feedback from the citizens. and i think that they should be done by every official, every statesman, whatever of authoritative level they have

they should use in technology. i tried to do this, and i believe others should do that as well. today we have a lot of opportunities to do that, and sometimes i think that very often states people have become slaves to their aides who sort the materials, make the files, and present them to read. and sometimes they decide what can be shown to the leader and what cannot be shown because they want to present their country and their work and a positive light, but the time has changed. whenever i read, our president obama reads, we always have the possibility to go online and see what is happening in reality. this doesn't mean that the internet is the final source of

truth, but this is an alternative source of information. we don't need our aged that much today. we can't immerse ourselves into information. this is a very important advance that we don't sometimes realize to the full extent. we will cooperate with the united states on the most important issues like countering terrorism, transborder crime, and piracy. we regulate regional conflicts. we are trying to counter the climate change effects, and we pay special attention to the international relationships regulation like the united nations. this is a good platform. it is universal. and we work in the framework of

g8 and you 20, and we're going to continue this work. we are going to overcome the effects of the global economic crisis as well because we do not know what is the outlook. but there are various scenarios, and soon we've will be with each other and form of g8 and the form of g20. we are dealing with regional security issues, and i would like to draw everyone's attention to the initiative. not the reason behind it. this is not a trick made by russians against nato or o.s.c.

we are trying to add better tool to the security system. another issue on which we work quite extensively and we discussed it, maybe you will have some questions on that, the iranian nuclear issue. now a lot is being said about the need to impose sanctions on iran and the reasons for those sanctions are totally clear. iran still hasn't responded to the compromised suggestions. we are discussing these suggestions on sanctions with these on gues in the sanctions with our colleagues in the six-party talks. the last time we talked about this with president obama in prague when we saw each other to sign the new s.t.a.r.t. treaty. it doesn't mean sanctions are a good and healthy thing. and they don't always bring about the necessary results and certainly they should not punish the people. they should only prevent the use

of nuclear weapons. in that case they can be efficient. we are assisting afghanistan in their transformation towards a stable and sustainable developing state. we are trying to assist them in ensuring a peaceful life. we work together in the political area trying to ensure a political settlement. we are re-enforcing the local authorities assisting the police. we are working together on transit issues. i believe all these are eventually contributing to a common result. though, so far little is being done to counteract the drug trafficking originating from afghanistan. mainly that is because america is less effective by these problems and russia and europe are suffering more. this is the drugs that go to all the countries. and we should achieve a greater

progress on that. we have similar approaches on the middle east settlement. we need to create necessary conditions for the creation of an independent palestinian state. so far we're facing i don't have difficulties. -- a lot of difficulties. until then we cannot expect a curable and sustainable cure in the middle east. so far the united states are taking vigorous efforts to recover the constructive process. including through talks we totally support this idea. and this year i have met almost all of the middle east leaders. i supported indirect talks. and i hope hope it will eventually lead to direct negotiations. any stop in the development always brings about lagging behind. that is why our country started

modernizing its economy and started technological innovation introduction. so far frankly speaking we haven't done that much. and frankly speaking here we would like to count on the partnership with leading economies of the world including the u.s. economy. and i would be very happy with our discussion with president obama when we started discussing our agenda not with the middle east and not with iran and not with the problem of s.t.a.r.t. treaty. but we started our discussion with than economy called creation between our two countries. and the truth to be told it is the area that most failed in our relationship. now we have recovered a dynamic development in these areas. we have established a constructive relationship at the personal level between the presidents. but there are no economic result to that so far.

so i would like to reiterate that it would be a very useful thing, though, business is business. and it is governed by its own rules. we cannot impose things on it. but we can create conditions conducive to its development. i have quoted a saying by the founder of this institution, mr. brookings, and it would be wrong should i not quote this institution the incumbent u.s. president when he was addressing of a meeting in russia. he said that america needs a powerful, peaceful and prosperous russia. those are good words. but russia in turn also needs a responsible peaceful recognized and dynamical developing america. an america that enjoys the respect of the entire international community that develops partnership with other countries on an equal footing.

and that develops its position towards the development of a new system of international relations. that would be a great thing to achieve. at this point i would like to finish my remarks and now we can start the more interesting part of this meeting. q & a sessions. if you don't mind, i will stay here to take your questions. >> we will in a few minutes open the conversation to include our friends here in the audience. but perhaps i could get the conversation going a little bit between the two of us by asking you to follow up a bit on two issues. and they're both -- they both boil down to one question which is what next? what next for the negotiations between the russian federation

of the united states on nuclear and other armaments now that you have the new s.t.a.r.t. treaty done awaiting ratification, of course, on both sides? and what next by way of follow-up on what you have described as a very successful nuclear safety summit here in washington? >> [russian translator] >> frankly speaking, i really hope that more work [speaking in native tongu [speaking in native tongu [speaking in native tongu [speaking in native tongue] >> speaking of the outcomes of the summit i hope we will not go home feeling happy. as to the s.t.a.r.t. treaty i would like to see one legal fact of that. the ratification of the treaty. if it does take place it will mean president obama did not work in vain and should there be no ratification it will mean that we have gone back to some kind of soviet times when these

kind of treaties were not ratified. but on the other hand, it would be very important in my mind that our relationship should not be reduced to nuclear cooperation or through the limitation of strategic arms, though, certainly it is something people expect of us. and in this regard we have assumed a great responsibility toward the international community. i would like us to have a much broader cooperation on all the other areas. as to the future of the treaty and our further steps. i would like us to undertake all the necessary procedures provided for in the treaty. i would like the treaty to be transparent. i would like it to be acceptable to both our societies to russia and the united states. i hope it will not cause any tensions.

and i hope it will help us to build on our future cooperation. though, frankly speaking, besides strategic offensive arms there are other types of arms that are quite dangerous as well. that also require an agreement between us that require a discussion between us. because there are conventional forces that can cause a dramatic damage. and on such systems we haven't yet coordinated our position as to what to do next. there are issues on which we should formulate a common position like nuclear terrorism, like nonproliferation, like control overstates that are threshold countries and that are trying to use all the ways to sneak into the nuclear club. this is our joint responsibility. and i would like us to work on that together.

>> thank you very much. i suspect maybe some of our colleagues will want to return to these issues but if i could ask you one question about russia and the global economy. and that is what you see as the prospects for russia being part of the world trade organization? [speaking in native tongue] >> translator: being honest, i think that we should have -- be in the wto long time ago because we've been on a threshold longer than any other country. being big countries and china. and russia's obsession to wto is politicized highly. it has become a carrot before us. they keep saying behave well and we will accept you to the wto. but this is not correct.

because if we assess to the organization everyone will benefit not only russia. it's a very important part of international economy. whatever people say we have a lot of things to offer. and harmonization. we would like to -- to the wto. and we should make this procedure not humiliating for us. and i will be frank, i know that barack obama will not be offended. he said that russia should join wto fast. we started the process in 2006 when our relationship was just evolving. but there was no result as of yet. and we count very much on a favorable position of the new

administration to force the joining of russia to the wto. this does not run counter to other commitments like customs, with russia and kazakhstan. all the processes can be harmonized and benefit from it. >> thank you, mr. president. i'm going to invite the president to put some questions succinctly as possible to president medvedev. and i would ask to please be sure they are questions. and that you identify yourself when you stand up to ask. we have -- we have microphones around the room. i'll start with ambassador rick burke. >> richard burt the global zero initiative. mr. president, i listened very carefully to the answer you gave

strobe talbot about what's next. and you outlined a number of areas that the united states and the russian federation could work on, european security, conventional forces, proliferation. does that suggest -- does your answer suggest that a new round of further reductions in nuclear forces is not a russian priority? a new round of negotiations following the s.t.a.r.t. treaty and hopefully its ratification? is not a russian priority? or would you support a follow-up negotiation to achieve deeper cuts? [speaking in native tongue] >> translator: mr. burkely, i would like to say that this is an important priority for russia as well as for the united states.

ratification is a process that should be addressed by all of us together by each country. and we have agreed with mr. obama that ratification will be simultaneous. not to make everyone -- not to put anyone in an awkward situation talking about further reduction of strategic potentials. this is our aim in general. there is no doubt about this. and to date at the summit i said that the idea of a global zero today is not an illusion. but we should be honest with each other in talking about responsibility about the situation on the planet. this is not only russia/america responsibility. though we have the biggest part of armament. if one day people will arrive at global zero, that will be made not only by russian/america. that should be a collective effort.

and i will not point the finger at anyone. but we have partners who are less willing to cut their potentials than russia or america. and we have to convince them to go that way. but talking about the further process talks, we are ready for that. and we are going to engage in this. this is not natural. but today we have made a threshold ceiling for the next 10 years. and this is enough now. and if there is a need, then we will discuss the new levels. but these 10 years will be peaceful for us as long as we ratify the treaty. and if -- the thing written in preamble it will not happen. it says about the link between abm and strategic offensive arms. this is a hard issue. we have been discussing it for long.

and we have created this formula that the party acknowledged this link. and also we have worked out a principal or a statement that the treaty will be in effect as long as the development of abm or other honors developmental will not contradict the principals of this treaty. this is a sensitive moment as president obama, i'm optimistic about this. and we hope we will not stop the treaty or withdraw from it. having some problems about abm or other issues. but everything depends on us. and the politicians who will treat this issue later on. >> part of your delegation and perhaps he can coordinate with his american counterpart senator

kerry on the two ratification processes. [speaking in native tongue] >> translator: would you like to make a question? now you have this opportunity. >> you've been invited by your president to -- [speaking in native tongue] >> translator: thank you. i will ask a question in russian. mr. president, next week -- next week we will be discussing with the senate this synchronized simultaneous ratification. and the main issue that is being asked by all counterparts, when will the russian president submit this document to the russian parliament?

[speaking in native tongue] >> translator: the first week of may and then we will do the same thing then. we can do that as a package deal. like two packages in the morning i make a call to mr. obama and ask him, are you doing it? and then i do the same thing -- i send the package right there. >> maybe there's some advice to synchronize our own legislative branch. >> we have one problem -- we have a problem, strobe, as you know, it's called the united states senate. [laughter] >> but if i could -- i'm congressman bill delahunt. welcome and congratulations on signing of the treaty. and i know many of us in the house of representatives hope that the senate does proceed to ratification. i do have a question and you

referenced the economic relationship between the united states and russia. and recently we had a visit from the state duma delegation headed by the deputy. and that issue did arise. and i think we all agree that the level of commerce between the united states and russia is unacceptable. it's abysmally low. we have some ideas, on the house side, how we would like the russians to make some adjustments. but if you had a wish list of what you would like to see coming from the administration and from congress in terms of initiatives economically, what would they be? [speaking in native tongue] >> translator: well, the question is, how many wishes can be fulfilled?

[laughter] [speaking in native tongue] >> translator: there are wishes that are never to come true. that we are not even mentioning anymore. because they are wholly impossible ones. they are wishes impossible to fulfill such as the withdrawal of the amendment. it's such a complicated thing that even in front of this high audience, i'm not speaking about it. well, seriously speaking, we need to review our current economic relationship before the crisis our bilateral trade was 25, $30 billion. this is not that much taking into account the size of the american and the russian economy. frankly speaking, the volume of trade between russia and the e.u. is $250 billion. the trade between the russian

federation and the peoples republic of china is smaller now. but still it is 2 1/2 times bigger than that with the united states. but it's not only about the volume of trade. it's about the investment as well. as far as the investment is concerned, the situation is not good but at least it's a parity situation. the economy is around $7 billion. this is nothing. it's zero. the volume of the russian investments in the u.s. economy is $6 billion. this is a little bigger than with other countries. but after all, it's not that much anyways. the volume of the dutch investment in the u.s. economy is $150 billion.

this is the differences in the -- that anyway the mutual investments bring countries much closer together and they fulfilled a development. most importantly there should be understanding between investors and the state should see these investments positively as well. le treatment to such foreign investment. in our country, the development climate is not the best possible and we should do everything to make it more attractive. it doesn't mean that things are so perfect in the united states, but there are things we need to do in order to improve the climate and its elements, including some economic regimes that could be used, including

the situation with the legal system. we can improve the functioning of our courts. we could combat corruption. those are the barriers to those are the barriers to trade and investment and not only from the united states we see these problems and most importantly our partners should see their own problems as well including those problems that impede russian investments or the implementation of projects in third countries. >> let me ask if it's true what i call the retirement is an impossible dream an impossible wish. impossible wish? >> i do not believe it is impossible and i think there is sentiment in congress today to address the issue. you are probably unaware, but there has been the formation in the house of a russian caucus and it's an issue that is being discussed and discussed

seriously. >> toby? >> thank you, mr. president. there was a great outpouring in the united states of unity with russia after the terrible terrorist acts and in part this is due to the many contacts that have been made between americans and russians in the past 20 years which is a very positive development. in your first comments about this attack you said that russia had to deal with terrorism very harshly but also respect human rights and the rule of law. but we've heard a lot about the first and very little about the latter. and indeed there was a tightening up in the political system. you've talked for many months about the reform of the security structures in the judicial system. my question is this, how do you convince society? how do you convince other people in your government that part of

the fight against terrorism is respect for human rights and for all of russia citizens? and how do you hope to avoid the overreactions that have taken place in other societies after terrorist acts? [speaking in native tongue] >> translator: well, you have touched upon a hard issue. it's not always that the society requires that human rights be respected in the wake of a terrorist attack. as a rule the society requires that criminals be punished. and in a most serious way especially for terrorists. and only some secondary voices speak to the human rights. and this is something typical not only for russia.

this is not only a trait of the civil society of russia. this happens in all the countries. in the wake of terrorist attacks. the people demand retaliation. but we're living in the 21st century. and we understand that including in case of such attacks a full-fledged should take place. and it should involve all the parties concerned that are in charge of such issues in the country. and a final decision -- the final ruling in such cases should be made by the court. but there is a gap between the public sentiments and the position of the law enforcement and judicial system. and this is an actual problem that we cannot turn a blind eye on. besides, it is necessary to establish a climate of understanding not only inside our society. but also understanding between the russian society and american society.

between the russian political establishment and the u.s. political establishment. i'm referring to the following. we need to use the same scale to each other after the perpetration of the latest savage terrorist attacks in the russian metro. the reaction of the entire world was very consolidated and correct. it was consolidated as ever. nevertheless, in some cases we still see that old stereotypes are used that are quite offensive and insulting to russia including these cases are seen in the united states. i reviewed the press after the attacks. and terrorists were still called rebels. we cannot accept that. it is inacceptable to us. i believe it insults the memory of those who died in the subway station. this is a small detail that is quite indicative on such issues.

we should be much closer together. we should hear each other better. and then we will be more successful in overcoming the consequences of such terrorist attacks. speaking about the great of solidarity of the russian people towards the u.s. people in 2001, this solidarity was quite high. and we should learn to use the same scale while evaluating each other's situations and we should be -- show solidarity to each other in many events. even such tragic ones as the deaths of president of poland and a great part of the polish elite. >> thank you. i'm the director of the foreign policy obr