playing by the rules? guest: richard, that is one of the issues that the obama administration and past administrations have been actively engaged in, and congress as well. in so much of the united state'' relationship with china -- these are two global powerhouses -- there is an interconnection, a relationship between the two countries that are like a coke tendency -- a code dependency, but at the same time there is a competitive one -- trade. the united states government, the administration and congress, has been prodding china to basically let its currency rise in value. the administration and critics believe that china has been keeping its currency at an artificially low rate.

what does that mean to you? what does it mean to americans? the argument is that it means that it makes it harder for u.s. companies that sell goods to china to sell them because it puts our -- it makes our goods higher priced, more expensive to foreign buyers. so this whole issue that revolves around the currency levels is something that the administration is actively engaged in. host: we are talking about the fed pause purchase in $600 billion in assets. the front page of "the wall street journal" as well as "the financial times." stafford, virginia, independent line. caller: i would just like to make some corrections in in the guest's comments relative to the

creation of the fed. the fed was created when congress was out of session, and many of the people in congress or not there to vote. it is not federally funded, and is controlled by the top 10 banks in the country, and it lends money to the federal government based on what rate to the quantitative easing. >> live now to today's pentagon briefing under way. >> one year anniversary of the tragic shooting that killed 13 and wounded 32. of our secretary mchugh and general casey will travel to participate in the ceremony. remembering those lost, and honoring the soldiers and civilians who helped into the wounded. you may recall that in 1908, they were in the process of deploying to iraq and afghanistan respectively when

they and others came under attack at home after reports that those units have recently turned home from successful tours overseas. meanwhile, the prosecution, the accused shooter is moving into pretrial hearings. the entire fort hood family has shown truly exemplary strength and resilience as they work to recover. we will continue to support them in every way that we can. now to secretary gates' upcoming travel schedule. late tomorrow night he departs from melbourne or he will join secretary clinton for the 25th annual australian united states ministerial consultations years. secretary gates is an secretary clinton's fourth international trip together, and they will be joined this time by chairman mullen. you may recall that disney was originally scheduled for last january, but was postponed due to the catastrophic earthquake in haiti and the need for both secretaries to remain in washington to help manage the

u.s. assistance effort. i should note that haiti is currently bracing for another natural disaster, tropical storm, and we are again positioned to respond quickly. several days ago south contracted the u.s. as evil jima to steam towards haiti during a crew of 1600 military and civilian medical engineering, aviation, logistical and other support personnel to help where needed. this year's gathering is an occasion to reflect on the strength and resiliency of the u.s. australian alliance, a bond offering to democracy of shared cultural, culture, interest and values while also considering the path for together. in particular the discussions will address our joint effort in afghanistan where australia is the largest non-nato troop contributor with over 1500 troops serving largely in a ruse gone in rc south. our work together across southeast asia both to confront the region humanitarian development of an environment of

challenges, and also to provide assistance to partners on issues ranging from new dastardly to maritime security. finally, the vital role our military partnership continues to play in asia's overall security environment. from melbourne, the secretary travels onto malaysia next tuesday. there he will meet with prime minister nishida as well as defense ministers said he'd. who actually visited the pentagon earlier this year. they will discuss our strengthen bilateral military ties over the past six years we have held an increasing number of joint exercises, and malaysia has been an important contributor humanitarian and peacekeeping missions globally, as well as a discussion on security issues in the region and other areas for potential cooperation. is this it follows on secretary clinton's, and is yet another signal of our deepening relationship with malaysia. one final item. secretary gates join secretary clinton president obama in urging the senate to approve the

new s.t.a.r.t. treaty. before the adjournment of the current congress. he and many other former defense secretaries national security officials, from both parties, have frequently voiced their strong belief that this tree is absolutely critical to the effectiveness of our nuclear arsenal, our knowledge of russian nuclear capabilities, and u.s. national security over all. with that, out of the way, let's get to questions. >> falling on what you just said about the s.t.a.r.t. treaty, is that the secretaries calculations and that the treaty is more likely to be able to be passed if it is done in a lame-duck? what chances do you give it with the change of political calculus if it holds over into the new congress? and separately, also related to

the republican gains, what do you think will become of the don't ask, don't tell legislation? is there any chance you'll be passed in the lame duck, and what happens to it if it doesn't? >> let's start with the first, first of our many, and you will have to remind off the second. but on the first, i don't believe that either the president or his secretaries are advancing this during the lame-duck session, because of some political calculus that it may stand a better chance of passage during that time. i think we are advancing it at this time and pushing for ratification, because we need is and we need it sooner than later. why wait until next year, next spring perhaps, for something that we have been year now without the s.t.a.r.t. treaty,

and its verification of traditions. so we think this is what's necessary. it was necessary weeks, if not months, ago. and we hope that congress will, the senate would just this as quickly as possible. when they reconvene after the recess for the elections. there's no sense in putting off what we need now to the next congress, but i don't believe our urging of this, of the action to be taken is because we think that it fares any better chance in this congress than the next congress. we are advancing this now because we think it is the right thing to do and it is what is needed by our country at this time. [inaudible] >> again, we are not -- what congress decides do legislatively with regards to don't ask, don't tell or any other issue for that matter is largely their business. they take up things in the order

that they see fit. obviously, you saw the president yesterday address don't ask, don't tell in his postelection press conference. you also saw today during his cabinet meeting, and specifically outline his desire for new start to be dealt with. so i don't know what the congress will be with regard to that. all i can take is that what we're in the process of doing. as i think you all know, the secretaries report, is due on his desk by december the first. the working group as i understand it, is very much on track to beat that deadline. so i think, you know, 26 days time, the secretary will have the work product that he thinks is so necessary for us to be able to fully understand the full implications of a repeal, of don't ask, don't tell, and then what additional measures we need to take in preparation for that eventuality. you know from his discussion of

this dating back to last february that he believes it's better to do something smart and stupid, and that this report is very important to us doing this smartly. so our focus now is getting this report finish, giving it to the secretary, having had review it, carefully considering it, consider it, and then take measures from there. >> can i follow-up on that that? >> sure. >> right now the department is urging congressional action on s.t.a.r.t. but not urging congressional action on don't ask, don't tell, that's kind of what it boils down to, right? >> no. we are clearly urging congressional action, actually the president on s.t.a.r.t. i think you saw president. benny: don't ask, don't tell as an issue, as a priority for him yesterday. we have been very, very clear on this. again, dating back to last february when the secretary first, and the chairman, first

voiced support for the president's position on this, which is they are for a repeal but they want a study to take place in advance of that repeal to educate us about how to deal with this change. we have not yet completed that study, although we are very close. let's let that finished. let's let the secretary get it and consider it, if they will chart a course from there. >> it could change the second half of the lame-duck session, because at that point the review will be done, so depending on the outcome of that review, this department might have more to say than congress? >> i am not prepared at this time, julian, today what action we expect to take upon receipt of the report that all i can to you right now is the report, the working group is coming to a conclusion with its report. they expect to make a decent first deadline which was a very ambitious one that the president

and secretary put in place last february for consideration of the full ratification of repeal across every aspect of how we do business in this department. so once the secretary gets it, i ensure that it will be a priority item for him to review and consider. and then provide leadership for this department on how to move out, based upon what the report tells us. by don't have any news beyond that for you today. anything else on this? go ahead. >> is secretary gates going to urge that they pass this year or is he not going to engage in? >> i mean, clearly we would like a defense appropriations bill and the defense authorization bill to be passed as soon as possible. we are operating on a continuing resolution that will i think expire early next month. we, of course, always prefer, roxana, to have these things done in regular order.

we are now operating on an extended cr, but that has a life to it and we much prefer to get an appropriations bill, and operations bill passed rather than have to extend the cr again. and potential have to do with appropriations and authorization's come next year. so yes, there are many things we like the congress to be dealing with, but, you know, clearly funding this department, authorizing this department activities are our priorities as well. [inaudible] >> i don't know how ultimately the congress is going to consider these bill. that's for them to figure out their we don't opine on such things. we clearly want our appropriations. weekly one hour authorizations. how they construct those, i'm not going to tell them how to do their business. >> just a quick one. there's a reason you should have

the answer off the top of your head, but have any servicemembers been separated from service since the change in the procedures for implementing don't ask, don't tell where announce? >> the most recent changes which is leading this to ultimate approval by the services secretary within coordination of the general counsel and undersecretary of defense, not to my knowledge. >> but you don't know for sure? is anyway to just check on that issue? >> sure. i think, not to my knowledge that we will check. i think it is highly unlikely. i think that is something that probably would have come across my desk at some point. okay? yes. >> how concerned is the secretary of the july 2011 deadline for troops to begin withdrawing from afghanistan is pushing president karzai into the arms of iran's? >> i don't get the sense that we believe president karzai is, as you describe it, being pushed into the arms of iran.

>> his aides said he received bags of cash from iran. >> i seen the press reports. as i have told some of your colleagues, they don't surprise me. i think iran, for a long time, we discussed it on this podium, vis-à-vis iraq and afghanistan, has been playing both sides of the fence. on one hand, trying to curry favor as these payments would indicate with the afghan government. while on the other hand, supporting antigovernment forces, training, equipping coming funding, directing them. in their operations in afghanistan. not nearly to the degree that we saw in iraq, but troublesome nonetheless. so the fact that iran may be attempting to do this, i don't think it is quickly surprising, but that said, listen, we are dealing with a sovereign country

here in afghanistan who lives in a very, very difficult neighborhood. it has long historic cultural trade, ethnic ties to iran, particularly in rc west. and they have to have a positive working relationship for there to ultimately be stability throughout that region. so the fact that iran or afghanistan wishes to have a better working relationship, i don't know that we see as particularly problematic, provided iran wants to play constructive role in bringing peace and stability to afghanistan in the region. if their desires are not ours in that respect than that is troublesome. but they have to be, they live in this neighborhood. they have to have relations with the neighbors. we hope those relations are constructive ones.

but, you know, president karzai can have relations, productive relations with us and also presumably with his neighbors as well, without it undermined necessary our efforts in afghanistan. >> but are you hearing increasing complaints in president karzai or his office about the july 2011 deadline? >> no. not at all. i think they understand what the deadline -- you call it a deadline. what this date is all about. understand that there's a twofold purpose here. one was, as you know from the strategy, which show a real sense of commitment to the effort in afghanistan by inserting another 30,000 u.s. forces, another 10,000 coalition forces. at the other hand, there was also an effort to sort of make clear to the afghans that we are not going to be able to do this forever. so they need to step up to the plate, and assume more and more

responsibility, particularly on the security site. i think that message has gotten through loud and clear. you have seen this dramatic development from the development from the afghan national security forces over the past year. they have grown by 100,000. our operations now in kandahar, and operation, you now have 60% of our forces down there are afghan forces. compare that to our operations in marjah earlier this year where, i think the ratio was five u.s. troops to every one afghan. so that capability, their effectiveness, their size have improved dramatically over the past year. and it's really becoming a different -- difference maker on the graphic is one of the reasons general petraeus credits our success in kandahar, since they began in earnest in late august, early september when

full search force was in place. >> i mean, with the new congress coming in office in january, many of whom have been very vocally opposed to the july 2011 date. if they are able to assert pressure and push the idea, with the pentagon be opened or receptive to a loosening of that date? >> first of all, this is a presidential policy. so funny but it's a question to peter the president and the white house. but i think there's is a misperception as to what july 2011 is and what it isn't. this is not a date by which we all of a sudden decide see you, fellas, we are out of here. and our forces leave the country. this is a date by which conditions based we make determinations about where we can begin to thin out forces, and where we can begin to

transition increasing security to the afghans that as a general petraeus and others have described it many times lately, this is not about us withdrawing from any particular region. it is about as thinning out, giving the afghans increasing responsibility for the security situation there, and then taking the dividends from thinning out and sending some of it home, per the president directed, while also reinvesting others elsewhere in the country where they are also still needed. so i just, i don't understand why people are confused about what this isn't what it it isn't. this is not but as enemies us departing afghanistan, next july. >> then the commander in rc south just recite those from afghanistan that they're not going to have an idea of how much progress has been made until june, you know, that things are very seasonally base. you can't judge an area in

november, you know, you have to judge it in june after the harvest. so just wondering, what are the most important and volatile areas of the country, you're not going to have a good read on into june, but the decision has to be made 30 days later. >> chris, i guess what i would say to that is, i think it's pretty obvious that the areas of afghanistan from which you are most likely to be able to thin out forces are probably not kandahar and helmand. i mean, i would remind you that 60% of all the violence in afghanistan is centered in helmand, kandahar, and kunar provinces. so three of 34 provinces account for 60% of the violence. so 10% of all the provinces is where the taliban has focused their efforts. i would remind, kunar is a distant third because visually

one district in kunar which is troublesome. so kandahar and helmand are the most problematic of the provinces that we're dealing with. i think those are the ones in all likelihood where you would see the least amount of think that i don't know that as a factor yet, because these determinations have been made. but looking at months and as it makes sense, the security situation there is most contentious at this point and you would likely be looking for a thinning out in other parts of the countries that are more secure at this point. probably more areas in the know is, more areas in the west, perhaps, that necessarily in the cell. although, for some, july is a long way out and we are by no means going to sit on our hands this winter. i do know what the taliban is going to do in what it is stored in the downtime for them, a time for them to sort of we treat and try to reinvigorate, we are themselves. we are not in anyway going to take the foot off the pedal this winter. we will take the fight, continue

our operations all winter long. we will see what the enemy does during this period of time, but there is a lot of fight left to be done before these kinds of determinations are made next spring. so the dynamics on the ground can still change considerably before these decisions have to be rendered. >> as far as security and afghanistan is concerned, i'm sure secretary gates must have already advised president obama -- >> get right to point, chris, one thing you should keep in mind now, i think there is, and i see this in some of the stories that get written from downrange. i see this bit of schizophrenia sometimes in the coverage, the same area can be covered very differently by different reporters. i think using some people clearly know that the tactical operational progress that is being made by our troops in kandahar, in particular and in helmand as well.

but there are other stories that sort of say, well, governance is still lacking, people don't feel secure enough to take the job opportunities that are being presented to them. so the civilian side of this is still not what it should be. what i would say to that is a couple of things. first of all, historically always been a lag between sort of our security progress and our governance progress. i mean, by some accounts there can be a six month lag between those things. but i think it only is logical and stands to reason that you need to study a certain security climate before you can have, you know, the government's capabilities that we would all like the afghans to have at this point. and we really begin, as i mentioned earlier, operation and kandahar and in surrounding areas, in september.

so although we have been, we have noted extraordinaire progress over the last couple of months, i don't think anybody has the expectation that we would be saying, you know, a dramatic change in a cabinet situation down there in that amount of time, although i think you can go to any objective observer and say governor we the and some of the, you know the people below him are performing very actively under very difficult situations there. sorry. >> what i was saying, as for the security security situation in afghanistan is concerned, and now the president is going to marco and ensure secretary must have some advice -- [inaudible] >> my question, what do you think the role now in the future

will be sent to have a new congress, and now president will be discussing issues in india? >> listen, i think the best people to talk to with the president's trip to india if the white house. i think it's inappropriate to try to wade into that right now. i think i'm on the record as far as india's role in afghanistan. i don't have any new or add to that. >> what i'm saying, secretaries will to advise president obama during his trip to india as an official. >> i think the secretary's advice passionate. [inaudible] >> to include 34 u.s. warships that would be moved to the

mumbai area. whether not these reports are true, they have certain startup a lot of interest and i was when if you could comment on the warships. >> i think there's been a lot creative writing that's been done on this trip over the last few days that i've seen other reports with some asked in our local figures in terms of what it costs to take these trips. i don't know the costs. we don't speak to the costs. we obviously have some support role for presidential travel. we don't speak to that in detail for security reasons, but i will take the liberty this time of dismissing, it's absolutely absurd this notion that somehow we would be .10% of the navy, some 34 ships and aircraft carrier to support the president trip to asia. that's just comical. nothing close to that is being done. but, the notion that the president would require security as he travels to india and

elsewhere should not come as a surprise to anyone. you know, this is a country that sadly we stood a devastating terrorist attack what, a couple of years ago. so it is, it stands to reason that we want to take precautions for presidential travel. but that's the issue you should probably most directly address again to my friends at the white house. >> and thus any special security requests come this summer with his trip we would be interested to know that. >> i would not speak to you about special recruit ethnic security requests or any security requests. all i will say is this department is playable in support of presidential missions but we don't care, for security reasons, to discuss the particulars of that. i made an exception. batting down this absurd notion of there being 34 ships, more than 10% of the navy deployed in support of this trip. that is most certainly not the

case. >> back on the election -- >> i have a note here back to your question. there been no discharges under the new policy that the secretary instituted about a week ago. yapped? >> back on the elections. what sorts of concerns are there by the secretary or other officials of new challenges for new changes to defense policies by the new congress, particularly the war in afghanistan, but also the planned iraq withdrawal, the possibility of military action against iran and whatever other issues have been discussed? >> i mean, i've got variations on this thing over the past couple of days, the election hastened the secretary's departure? did the election going to make his job even more challenging? to the first question, no.

his calculus on when to finally leave his job is based upon personal considerations and not politics. and his notion of when he would like to leave was formulated long before these political whims -- winds began to blow. with regard to the second question about how does the election outcome change it all, or make our lives more challenging, i dismissed that one as well. i mean, there is, thankfully, a long tradition of bipartisan cooperation on national security issues. we expect that to remain the same under this new congress, as it was under the last congress. so i just don't buy into that. our core relationship fundamentally does not change. now, will different

congressional committees under different leaders have different priorities and folks is? perhaps. but i think that we enjoyed a strong working relationship, this department is, with the secretary in particular and with the members on both sides of the aisle, with not just the chairman of these committees, but also the ranking members of these committees. so these changes we don't anticipate making much, making a very dramatic difference in how we deal with congress. i would also note, as historic reference, that you recall secretary gates came into office on decent 18th of 2006. this was, you know, what, six weeks after the last flipping of a congress in november of 2006. so he dealt with the kind of change that we're about to see in these committees when he first took office nearly four years ago. so it's fundamentally not new to is that we don't expect it to be

dramatically different. we still expect a very strong working relationships across both sides of the aisle, and we fully expect a strong bipartisan cooperation on national security issues that we have enjoyed over the years, will continue under this new congress. kevin? >> i want to go back to the civilian lag time of security and afghanistan. the secretary has said that this is been a problem before and it's a way of to help alleviate the byrne on the truth and get the troops home sooner. i'm wondering how much that worry is continuing in afghanistan, given -- >> i think were tied by two different things. i'm speaking more to afghan capacity, particularly out in the most difficult security climates. and i think you're addressing the notion of somebody support from the usg.

>> specifically to build the afghan capacity somewhere is secretary gates plays with the balance or is there a word that the lag -- >> no, we've seen -- we sing basically this year a tripling in southern support to afghanistan. i think you now have upwards of almost 1100 civilian personnel in afghanistan. and not just in kabul, although the preponderance i think still may be in kabul. but in, you know, deployed around the country as well. yeah, i think the preponderance is still in kabul, but hundreds deployed around the country as well. so there's obviously a core group that is there to try to support the central government

building up its capacity, but also hundreds out in the field trying to work the provincial and district governments as well to try to enhance their capabilities. i think he is very pleased by the support that our military is getting on the civilian side, and, you know, the numbers clearly are are out of whack, if you look at them just on face value. you see 1000 versus almost 100,000. but i think you talk to anyone of our guys who are deployed in afghanistan, and they would say that the civilians, particularly those who are deployed out in the field, our huge force multipliers. that they have the effects because it's not just them, it's ngos, afghan civilians, others. they have the effect of sorted one civilian by some estimates is, how's the impact of sort of

10. so i think the numbers are hardening. the trend lines are encouraging. is are still more work to be done? clary so. but i'm sure people are very pleased with how the same side of has progressed. louis? >> there's been reports only this week about the f-35, the joint strike fighter, and particularly there will be more cost overruns, more scheduled delays that secretary gates was briefed on this week. can you confirm that? and can you speak -- >> what i would say, louis, is that the department regrets that someone chose to provide unauthorized and incomplete information to the press on the jsf program. admiral who was a new program manager has been doing a soup to nuts review of the jsf program.

it is the most thorough, the most extensive, the deepest dive yet we have done into the f-35 program. but that assessment is not yet complete. therefore, what has been leaked to the press is premature, and i would suggest to you that in some respects it's inaccurate. so it's not appropriate for us at this juncture to publicly discuss something that is not complete, and that ultimately has not yet been decided on by the departments leadership. because once admiral enewold's assessment has been complete, it will be provided to leadership. it was in shape and inform our problematic options and remedies that are under consideration. and then the secretary will make a decision about a path forward, and we will provide that information to congress, and to you all, at the appropriate time. but we're not there yet.

>> what do you mean by the secretary will make a determination? >> well, it's important i think, louis, to step back and remember what's happened here. clearly this program has had its challenges over the years. i mean, we have been dealing with this for quite some time now. and just when you think you have some appreciation for what the situation is, we have learned later that is, there are other complications. not all that is unexpected, given this huge program and given how sophisticated these aircraft are. but clearly we have been disappointed by some of these developments. by many of these developments. but remember, back in february the secretary fundamentally restructured the program. based upon this, this very stark assessment with the joint estimating team provided to him. in addition to sort of restructuring a number of

aircraft, test base and all these things that he also withheld, i think $600 million in payments to lockheed, and he fired the program manager, to put it lightly. he was not satisfied with the performance out of the program office. he canned the program manager and he inserted a more higher ranking, more experienced professional to run that, run that operation. you now have a three star and their in vice admiral been like that and as a member to mention too early, he is in the midst of this, deep dive, but he's doing this, not just dependent on him and a small cadre got his 120 people who are working this issue within. and they're not taking anybody's word at face i. they are demanding that there be evidence to back up what they

are being told about the state of the program. so they are clearly in the process of doing that, finding some issues that have not been known to us before. but we're still not done. so it's premature i think for me to go, louis, frankly much beyond that at this point. >> you mentioned the austrian beast next week. the f-35 is not certain an american program, but has international partners going into the purchase including countries like australia. is their consideration about their path forward, and he spent the efforts that will be a part of the discussions next week? >> i do know that the f-35 is on the agenda -- i will check for you, louis. this is, that maybe a little too problematic for this mystery of concern to secretary of state participation as well. but clearly, not just australia

but, you know, the u.k., italy, the netherlands, turkey, canada, denmark, norway, and that is real, all of these countries are keenly interested in this program. so we are, you know, when i spoke about the appropriate time, we will show this information with congress and the american people, we will obviously share with our partners as well in this endeavor. i would note to you that there are, you know, there are economic pressures being felt on all these countries. until some of them had to make, some of them are not in a position to come even where we added stage in a program where we could be delivering aircraft sooner than we apparently will be, or had hoped to originally, that actually works to perhaps to their advantage, given their economic situations, but overall these are committed partners to guess who ultimately need these

aircraft to have fifth generation capability, to have the kind of air to ground, air to air, capabilities, you know, to have air superiority in the future. >> the defense attorney for major hasan at fort hood has said simmons like what's happening tomorrow commemorating the anniversary of the massacre make it difficult for his client to get a fair trial in that environment. [inaudible] >> sure. i mean, is the suggestion that that community, which was so rocked by that shooting last year, not cause, not take time, to remember the 13 people who were killed? it's entirely appropriate for that base, the extended community, and, frankly, the

military as a whole to pause tomorrow and remember that tragedy. the accused killer in this case will still get a fair trial. he is dealing in a very sophisticated judicial system. with very professional attorneys and judges. his ability to get a fair trial, and our ability to mourn and remember and mark the year anniversary of this tragic shooting are not mutually exclusive. justin? >> what you think you know about this military sniper? has now shot up five at the military buildings. are they all done with the same gun? do we believe is a military issue? do you have anything on his identity? >> listen, this is an fbi led investigation. obviously, there are certain an

investigative contributions being made by some of the services, but fundamentally it is being led by the fbi so i would refer you to there. we are obviously concerned. it is clear is someone who has an issue, to say the least, with the military. and it clearly puts potentially our service members and the civilians who support them in harm's way. so we watching it closely. the secretary is being a prize of developers as well as. he also has full faith and confidence in the fbi and the other departmental investigative services to get to the bottom of this. >> you know what they're doing to help the fbi? >> those are investigative matters. they shouldn't be discussed publicly but whatever assistance the fbi requires, it is being given by, you know, the navy and whoever else is now involved in this. [inaudible] >> that he believes it might be

a marine gift do you act with that believe? >> i would have no way of knowing. i would have no way of knowing. clearly, this is somebody who has issues with the military. beyond that, i would have no way of knowing. >> if investigators may be no than they're telling -- >> i have no idea. i'm not involved in the investigation. this is an fbi lead. they can probably be -- [inaudible] >> i as i said i'm not involved in the investigation. the fbi is in the lead. and it's just not appropriate for us -- if there is something that we feel is the would help the investigation by sharing it publicly, i'm sure the investigative authorities will do so, will do so in a timely fashion. so if they felt it was helpful, larry, and i did hear that, it was probably done and attacked it since. i don't have anything new to offer on that respect for you to

share for us to gain additional public participation in this investigation. yes, in the back. >> could you comment on the study of the rare earth supply to the military needs, and whether you support aspect of back. >> we have some stuff on that. i'm happy to talk to off the podium. i am not a square with all the intricacies of it, and if the ir when my colleagues are happy to walk you through it. >> do you have any time frame of u.s. and south korean military exercises? >> we have lots of military exercises. [inaudible] >> i don't know that we canceled an exercise. we can cancel any exercise. >> we've been trying to work out the next appropriate date for us to jointly exercise in the yellow sea with the uss george

washington. we are still working on that date. but rest assured, we will do so with that aircraft carrier in the yellow sea. so stay tuned as a win, but we will be back there with those assets. but this notion of canceled i think it is hyperbolic. there's a lot of moving parts are when it comes to large joint exercise, particularly one involving a aircraft carrier. is difficult to get all those parts together and assembled and full agreement on when to proceed with this. but we will do so. we will be back in the yellow sea. we will be there with the george washington, and so stay tuned spent when will it be? next month? >> is still being determined that it is still being worked. when we have it all nailed down i am sure we will share it with you. all right? gordon, the last one. >> the question. president karzai is concerned about the contractors in afghanistan this morning.

do you have some current sense of what the department is doing and how to alleviate the concerns? >> i frankly know on this post what i've read online. it sounds, we clearly have been working, you know, general petraeus as well as embassy kabul, very closely with president karzai and his team on trying to fashion the most responsible way forward in this regard. president karzai has made it abundantly clear that he wants to do away with private security contractors as quickly as he can, but also as responsibly as he can. he has made exceptions for static protection of certain diplomatic facilities, and that was clearly encouraging and responsible. there have been concerns voiced to him about the impact of sort of pulling the rug out on private security contractors, or on in geos, by taking the

contractors away precipitously and impact that would have on development projects. and that would, i beseech our efforts in afghanistan are not just driven by security needs. are also of driven by governors and development. we are working with the afghan government, try to fashion a responsible way forward that still allows for adequate security to be provided to development projects around the country. while we are still growing the a in ff to the point where they would ultimately be able to assume responsibility for protecting convoys in support of the father projects, the actual project itself, but those things are still being worked with right now. and we encouraged by the fact that he has allowed for more time for consideration of this issue. okay. thank you all. [inaudible conversations]

[inaudible conversations] >> earlier today the oregon governor's race results were announced with democrat john kitzhaber named a winner. >> coming up at to be should we will continue live coverage as cq-roll call continues its midterm election review. capitol hill reporters look at who's up and who's down after the election. ]?]??

>> the head of britain's secret intelligence service, talked about terrorism, intelligence sharing with the u.s. and secrecy in a speech to the society of editors in london last week. this was the first public address by a serving chief of as high as, known as mi6. and his 101 year history. the sas overseas britain's foreign intelligence operations. >> thank you very much for that warm introduction. stole wanted to my lines come and thank you all for everything that you have both done for making this occasion possible. times published a recent letter earlier this year. it read sir, is it not bizarre that mi5 and mi6 otherwise known as the secret services, currently stand accused of being

secretive? i may be biased but i think that we do something rather important. most government work these days is done by conventional and transparent processes. but not all. britain's foreign intelligence effort was first organized in 1909 when the secret intelligence service was formed. we just publish an official history of our first 40 years. i'm sure you will have read all 800 pages of it. the first chief used to pay the south of sis officials out of his private income dispensing cash from a desk drawer. i'm sad to say that even after the chance statement last week, i'm not in the same position. and sis is existence of which is set by simon was admitted only in 1994. and we burst move slowly on these things. this i believe is the first public speech by a serving chief of the bush secret intelligence service. and why now might you ask?

well, intelligence features prominently in the national security strategy and the strategic defense and security review published last week. we often appear in the news, under the popular and mi6. we have a website in arabic and russian. we return our staff openly in the national press. the debate on transsexual is not one for. in part because we been so determined to protect our secrets. in today's open society no government institutions is given the benefits of the doubt all the time. there are new expectations of public and legal accountability that befell. in short, in 2010 the context for the u.k. secret intelligence work is very different from 1994. i'm not going to use today to tantalize you with hints of sensitive operations or intelligence successes here but i want to answer to important questions.

what value do we get from a secret overseas intelligence effort, and how can the public have confidence that work done in secret is lawful, ethical, and in the interest? first, how do we all fit in? secret intelligence service, mi6, we operate a broad deal with threats overseas and gathering intelligence from human sources. security service mi5 works here in the u.k. protecting the homeland from terrorist attack and other threats. they produce intelligence thinking negations and takes the lead in the final world. these three specialized services form the u.k. intelligence community. we operate and what the foreign secretary called a network world, technology plays an ever-growing part in a work. the boundary line between home and abroad is increasingly blurred. so the three agencies working

increasingly closely together. and the next five years we will see us intensifying that collaboration to improve our operational impact and to save money. yes, even the intelligence services have to make savings. what is secret intelligence? well, secret intelligence is important information that others wish you not to know. it's information that deepens our understanding of a foreign country or grouping, or reveals that intentions. we at sis have made our intelligence from secret agents, the people, nearly all foreign nationals have access to secret information and to choose to work with us. . .

>> this report tells us something new. in our reports value can be overplayed that tells us what we want to hear or under played. it is a part of the picture and may be accurate even if the trusted agent who gave it to us is sure it is. sources of intelligence have to be rigorously evaluated, and their reports have to be weighed

alongside all other information. those who produce it, those who want to use it have to put intelligence in a wider context. the joint intelligence committee plays a crucial role, and the review following iraq was a clear reminder to the agencies and center of government, politicians and officials alike of how intelligence needs to be handled. the board reviewed our imlemmation to make sure we implement them fully in spirit and substance. i'm confident they have been, and we'll look at them again. where do we need secret intelligence? well, let's start with the terrorist problem. most people go about their daily work not worrying about the risk

of a terrorist attack. i'm glad they don't worry about that. part of our job is to make people feel safe, but those threats exist as we'll recalling now with the 77 inquest. that said on any given day, the chances that an attack happens on our streets in central london feels small enough to be safely ignored by the public. you and millions of people like you go about your business in our cities and towns free of fear because the government works tire leslie out of public eye to stop terrorists and would-be terrorists in their tracks. i read intelligence reports every day describing the plotting of terrorists on maiming and murdering people in this country. it's an enormous tribute to the men and women of our intelligence and security agencies and to our cooperation

with partner services around the world that so few of these appalling plots form into real terrorist attacks. some are british citizens trained in how to use weapons and make bombs. others are foreign gnarls who want to attack us to undermind our support for forces of moderation around the world. many of the reports i read describe the workings of the al-qaeda network, rooted in a version of islam. al-qaeda have ambitious goals, weakening the power of the west, toppling regimes and seizing the places of islam to take authority. they are unlikely to achieve these goals, but they remain set on trying and stand ready to use extreme violence. john evans described the threat. preesly because we're having

some success in closing down the terrorists, the extremists are preparing attacks on british targets from abroad. it's not just afghanistan and pakistan,. yemen also poses a threat. u.s. national and propaganda and instructions over the internet. our intelligence needs to go where the threat is. we are highly adaptable and flexible. we don't get pinned in one place. there is no single reason for the terrorist phenomena. some blame political issues like palestine or iraq. others site economic disadvantage, distortions of the is islamic faith. there are many theories.

i worked a lot in the islamic world. i agree with those who say we need to be steady and stand by our friends and overtime moving to a consistent government, one responsive to people's grievances will help. if we demand a abrupt move, we may undermind the controls in place and terrorists will end up with new opportunities. whatever the cause of so-called islamic terrorism, there is little prospect of it fading away soon. sis deals with the realities and threats as they are. we work to minimize the risk. our closest partners are in the muslim world. in the u.k., the security service, mi5 leads our counterterrorism effort doing a superb job and sis's work starts with the priorities that the

security service sets. it's not enough to intersect terrorists here. they need to be identified and stopped well before then that means actions beyond our own borders. over a third of sis resources are directed against international terrorism. it's the largest single area of sis's work. we get inside terrorist organizations to see where the text threats are coming from. we disrupt terrorist plots against the u.k. and our friends and allies. what we do is not seen. few know about the terrorist attacks we helped stop. it scarcely needs said, but i'll say it anyway. tackling terrorism overseas a complex and dangerous. our agents and staff risks their lives. much intelligence is partial, fragments. we have to build a picture.

it's like a puzzle with pieces missing and other puzzle pieces mixed in. other offers around the world make judgments on short notice with potential life or death consequences. agents warn us as a planned attack. we may need to meet that fast and clearly to understand the details clearly, to work with mi5 and police to agent on that intelligence here in the u.k.. ministers and lawyers needs to be briefed and consulted on next steps, we need partner agencies abroad to pull information, monitor individuals, or detain them where there a clear and specific concerns. disrupting the terrorists is a pain staking process with much preparation. then sudden rapid activity, details have got to be right. it all has to be tackled fast and securely. there's little margin for error. all this goes on 24 hours a day,

every day of the year and keeps us safer than we would be without it. terrorism is there and despite our collective efforts, an attack may get through. the human cost would be huge, but our country, our democratic system -- >> we're leaving this recorded program now for live coverage as cq roll call continues. they look at who is up and who's down after the election. >> ken strickland is the producer for nbc. we have an esteemed crew here to shed insight on what we can expect going forward after tuesday's results. i'm not going to waste a lot of time talking although that's really again my nature and let these guys have the floor. i'd like to start out by getting their take away from tuesday's

election and what they think we can expect both in the short term from congress and next year in the next congress and whether or not all this talk of compromise is a lot of talk or if we're actually going to see these two sides coming together. carl, do you want to start and give your thoughts? >> well, i think we're supposed to be talking about who is up and who is down. that might seem pretty obvious; right? in some ways we know the answers and there's some nuances underneath. democrats had a very tough night in the house, and it's still going. our count shows 63 losses, i think, as of this afternoon, and there's a few more to come, so that's a monumental change in the house, and i don't -- if you even watch what happened yesterday and watch what happens

today, senator mcconnell gave a speech which i'm sure you watched at the heritage foundation, he talked about working together and also talked about having a vote to repeal the health care law, and if he can't get that, repeatedly try to have a vote to repeal the health care law. i think that gives you an indication of what we are in for in the next few years. i think it's going to be tough. i think the republicans feel very empowered and are going to push very hard against the white house, and if they can get some bills over there to make the president veto it, so be it. if they can sort of jam the senate, they're going to try and do that. i think that they have a strategy. they came in riding this tea party wave, and i think that's going to create some problems for them, but i think it's also, they're going to have to respond to it. a couple just one little interesting fact so far that

i've seen is of the losses by the democrats in the house, all but i want to say seven or eight were in districts won by president bush in 2004 which was the last, what we would call the last nonwave election. democrats are looking at this now as the voters sort of returned in those districts to their traditional voting pattern after democrats had success there, and now they have to recruit people to run again in those districts, and it's not going to be easy. i'm sure my colleagues would agree for us who cover congress the next two years are going to be pretty interesting and entertaining and fascinating to watch i think. >> so, emily, what do you think? do you have a similar take, or do you think we might actually see some compromise? >> well, i really think that the republicans and the democrats who have come out and sort of said, well, what the voters said

is they want bipartisanship and for us to work together. i think they are right. that's what the voters do want, but what the voters voted for is gridlock. you can't split the house and senate between two parties especially given the tea party wave that brought in the new members # of the house and expect to get a lot done, and just listening to the rhetoric over the last two days of democrats and republicans, i mean, republicans are saying we're vindicated. mitch mcconnell said the american people appreciated we said no to everything in the senate, where as harry reed had a conference call with his caucus yesterday where he and his leadership was basically saying we're operating from a position of strength with the presidency and senate majority. to me that spells not a lot of change. >> at the same time, the president invited members of

congress and invited the governors, he gave a big speech today and yesterday about look, we took it on the chin. it didn't feel good. it felt bad, you know, and at the same time, you know, mcconnell today said obama needs to be a one-term president. which is it? >> i think it's going to be interesting to watch the dynamics between the white house and congress. i mean, between how's the administration going to approach things now? you think about the three big pieces of legislation that passed. democrats had such overwhelming majorities that they never had to negotiate with republicans. they said they were going to and they can point to signs where they did, but health care, stimulus, and now reform, if you add up the republicans who supported those bills, you have less than 10 easily in the house and senate. the numbers are now that in the

house the republicans run the show, and in the senate the democrats don't have the option nymph peeling away one or two or maybe three republicans to get deals done. you have to assume now anything that gets done in the senate has to really include some true bipartisanship, some conservative republicans or traditional republicans at least. another fascinating thing to watch in the next couple years is the relationship between the republican leadership in congress, the tea party back candidates, and the tea party itself. if you listen to the folks who represent the tea party, they feel the people they voted in the office they are responsible for are on probation as one person said. they're going to check every vote and they're going to be like the nra or any other pro-choice and pro-life group. if you don't vote a certain way, we'll make a note of that.

what's their reaction going to be? think about the whole scott brown nomination when he came in. the tea party was very excited about him, and then it faded away and there was everything from disappointment as far as the tea party was concerned. that will be worth watching. >> what happens? does john boehner have to immediately try to do something to get these tea party, these new pea party-inspired freshmen vested? or do they go old school? carl, what happens? >> well, i think the republicans will come out immediately and push for spending cuts. that's probably the easiest issue for them to deal with, and that would be responsive to the tea party folks. they do have one really big problem coming up, voting to increase the debt limit or the debt limit has to be increased, and republicans have let democrats do that in the past

few times not giving them any votes at all, and then hammering for that obviously, and now the republicans are going to be responsible for that or responsible for not letting that happen. that is going to be a really great story to watch. i think that they'll push for spending. i think that's their easiest way to do it, but i think that they're going to have a hard time fulfilling all the desires of these groups and people put them in for this rapid change or a 50% or 40% cut in the budget. i mean, that's just going to be hard to make happen. >> does that mean there's going to be cracks in the unity? republicans were able to stick together over the last two years and oppose the democratic agenda. i mean, do you foresee, emily, a divided republican conference on either side of the senate or house? >> well, i think the senate gop

conference has serious thinking to do, especially some of the old bowls there, the appropriators for example some of whom are still very much in favor of earmarks, and have defended themselves, you know, about and the need to do that, and i think as carl said the debt limit is going to be a big issue too. i'm of two minds on this spending issue. on the one hand i feel this is probably where democrats and republicans have the most opportunity to compromise because you've already seen a lot of moderate democrats feeling sticker shock over the last couple years says especially in the senate saying all right, that's it. we're not voting for nymph this, and of course the republicans are taking back the fiscal of romantic conservatism. npr on the night of the election said we're going to have to cult spending more than we tried to even in the lame duck. i think there is compromise

there, but at the same time, i think depending on how fervent some of the new republicans are about cutting these things, you could have a government shut down scenario if you can't get the guys who voted for raising the debt limit to vote for it. >> eric cantor who will be the number two republican in the house has said that they wouldn't have a shut down. now whether or not you can, you know, make that iron-clad, i think obviously what happened after 1994 and the backlash from the shut down, you know, there's a scenario where you could have no bills passed, but an agreement that you're just under the permanent continuing resolution or something like that. i'm there's government -- i mean, there's government shut down that doesn't seem like a big deal if there's a government-wide default because they can't increase the debt limit. you're talking something pretty

international finance. >> it's just continuing finance and keep the government operating and not true to -- >> something that's different this time from the 1994 takeover is the republicans didn't get the senate. it creates a whole different dynamic. >> normally when the house flips historically since 1930 -- >> since world war ii. >> whenever the house flips the senate flips too. that's historic. >> the republicans on capitol hill are still responsible for delivering things, but now it's a divided government that might empower republicans actually because -- >> from the tea party thing, one the things i was very concerned before the election about the potential of the tea party backed candidates coming in, and i started making calls to former

aids and some current ones to find out how is the republican leadership especially inspect senate going to deal with this. they said that the leadership basically had to move quickly to try to assimilate them in there, that mcconnell and his team would have to really try to channel all that energy and all that ideas into the constructive ways and not destructive ways. his message would be to a tea party backers that this is halftime on a much longer game as far as getting to a presidential election is concerned. it goes something like this, you know, we wop the house -- we won the house, this far from the senate, the president has it and no signs of economy getting better. we don't want to do anything to divide republicans and unit democrats. how does he do that? he has to think strategically and be psychological about it. the tea party someone described as part policy and part person

personality. sharon angle is not there and christine o'donnell and ken buck will not be there. people coming in the gop are essentially in what they already have. the caucus is broke up in little factions there's the conservative jim demint where the tea party candidates might align themselves. there's a very small moderate section, and it's going to be curious what people like ron johnson from wisconsin, how he will vote considering he's from a very democratic state, so will he join that moderate faction? but the result of the republican caucus is follows k -- kyl and it's just more of everybody. the same issues they had before

will persist. one objection in the senate if it's on a specific issue is no different than ten objections. they still have the run the same traps for each person that objects. it's going to be a charge because they are 100 ib dependent contractors, and i think there's going to be a point where you look at the fights on the floor or the committee hearings versus the final vote. the tea party republicans will tell you that on 85% of the issues, they are all the same, and they make the case on the first big votes they take in the senate or in the house, they will be on the same page. the bush tax cuts at the end of the day vote with mcconnell. health care, repealing health care, they vote with mcconnell. anything that looks like cap-and-trade, they vote with mcconnell. part of their strategy they say is take that energy, you know, put them on the education department and earn their

stripes. you know, find out what it's like to work on the committee. if you have ideas and support, maybe there's a policy to reduce and atrack mod ram democrats. it's channeling that energy and giving them a platform of sorts. >> what happens in the immediate term? we're coming back to session on november 15. there's a lot of lame ducks in the house. a lot of lame ducks. you know, everyone is throwing things out. what's going to happen? obama said we need to do s.t.a.r.t. and the bush tax cuts expire at the end of the year with a continuing resolution to deal with and the medicare reimbursements with doctors. what is actually going to get done and will we find people are more or less inclined to do anything? >> i defer that to emily. >> i think the most likely scenario, although it's not a sure thing is they kick the can

down the road on the bush tax cuts in some way, kick the can down the road on spending although there's talk of trying tuesday an omnibus, and the question in my mind is of course, for how long? did they just kick the can on government spending until february or a year long continuing resolution? i don't know the answer to that. i don't think there's a lot of appetite to compromise on the republican side on either of the issues, and the best that democrats can help in firm term -- terms of spending is a cr at this year's level. it's probably going to have to go lower than that. >> i want to talk about the democrats. >> one more thing on the lame duck. i want to know what's going to happen president bush tax cuts. if those expire, when people get

their check on january, they'll see less money, and the republicans turn around as they started before the election and go the democrats went out of town without putting this on the table. republican, you know, it's an easy argument to make that the republicans can say we're about to adjourn and on january 14, everyone will see less money in their paycheck in the recession unless we address that. >> about lame ducks, you know, they are no notoriously awkward situations. you have people who have been defeated and now some of the most popular people coming back. >> the chairman of powerful committees. >> yeah, the three chairman, earl pomoroy, a very popular member and you have a week or two of people cleaning out their desk. i don't know if there's appetite for a big fight. a lot of people would prefer to

come in, have their going away party and literally go away. >> under the staff that has to get their resumés cleaned up. >> speaking of going away parties, what do you think nancy pelosi is going to do? >> i've been told, i'll say this here. i've been told confidently today by people who know she's leaving and that she's staying. [laughter] >> and you guys wanted answers. >> that is a true statement. >> i've been told the opposite that she's staying and then leaving. [laughter] >> yeah. >> i think the speaker is taking a lot of time talking to her allies, talking to people, and trying to make a decision what she's going to do. the -- she i talked to people who were with the democrats were election night and said she was very stoic and worried about her numbers.

these are people she in some cases talked into running again and worked hard to save them. i think they're loss was a personal loss to her. i don't think she wants to make a decision very quickly. i'm sure there's members who feel both ways. i talked honestly to members who think that they might need a fresh start. i talked to others who think she should stay. i know that nancy pelosi certainly we all had this experience is not someone who walks away from a fight, and if it's perceived that way, she'll say. the "new york times" today taked about how the election strategy evolved and there's a quote in there from a republican saying, you know, this is all about getting nancy ploys sis fired. if she sees that, she'll say i'm not going to be fired. i honestly think she's still

making her decision. >> how long does she have? i mean, the election was tuesday. it's now thursday. she's kind of in her office, not saying anything except to dianne sawyer a-- apparently. how long does she have? >> the longer she waits the more it's out of her control and if she's lucky people rally around her or say she needs to go. they'll talk to us and saying this is ridiculous. we need a plan. we don't have anything. granted the senate democrats have the luxury of retaining their leader in this election, but the first thing harry reed did was have a conference-wide conference call with all senate democrats to give them a pep rally talk, but the house democrats haven't had that yet.

they have not regrouped, and so, i mean, i think who knows when that magic moment happens with the tipping point as it were, but i don't think she has that long. >> as far as the senior democratic leadership is concerned a conference call yesterday with harry reed and they go through their opening statements and everybody -- there's been scuttle among staff and press whether reed is getting tossed out. a reporter asked a question specifically for kick -- dick durbin, do you support harry reed? they both said at the exact same time, absolutely. the reporter was not sure who said it. she asked which one said it and at the exact same time they both said, we both did. [laughte gets the job is never the person who makes the first move.

if they end up with 53 seats in the senate, but they feel pretty good about that, the senate democrats. they feel good about that. senator reed actually won his race more comfortably than a lot of us imagined, you know, michael bennett, that's probably one the most amazing results of the election cycle. >> in colorado? >> in colorado, appointed senator in this environment in that state to win reelection. they feel they were able to make sure argument in some cases pretty well and contrast that with the house where, you know, if the republicans may be slightly under performed in the senate, they overperformed in the house, and you know, at some point there has to be an accounting for that. >> who controls the agenda? is it obama or john boehner? >> nobody asked the president at

the press conference yesterday if you're still relevant, but you know they were thinking about it. what do you think? >> i think to some degree the house republicans do. they're in a position to control -- that's the one thing the senator republicans always said about harry reed when something goes wrong, we don't control the schedule or calendar. well, in the house, if john boehner is leader, he will. they will decide what comes up for votes and what the votes will look. they can't throw things over the sidelines and say it's a bad bill. they have to write legislation, get it scored and go through the waiting period of wondering if it touches the deficit and get the results back. on the other hand, the president is the president, you know, he controls the pulpit and has the microphone, and he will have to work with harry reed to do things to counter whatever the

house republicans decide to do. they both have skin in the game now. >> i think that's why i said originally the voters just voted for gridlock because it's very difficult to have two different parties with two very different sets of priorities with different agendas and sending them to each other. you know, it's i think that it's going to get really muddy in terms of that, and the president hasn't shown a tremendous ability as far as i've seen to drive a message of any sort which is part of why he's probably in this predicament that he's in, so you have a president who was great on message in a campaign can't control a message as the president, and then you're going to have two guys battling out in the house and senate for who's controlling the agenda. >> i thought we controlled the

agenda. [laughter] >> the one thing we haven't talked about though is 2012, which is, i mean, you know, we have a president running for reelection, that's going to be his number one priority. well, come -- you know, november 3rd became his number one priority. republicans want to win the white house and take the senate in 2012. what does that mean? >> there's a big conflict between the president's priority and microphone mcconnell's priority obviously. i think having the president -- i mean, historically, you know, a second term, you know, president running for reelection generally does well. i guess the true test is going to be the economy. i mean, two years is like, you know, 50 lifetimes in politics. there's so much that happens between then and now. what's going to happen? afghanistan? what's going to happen in pakistan? what's the economy going to look like? where are the jobs going to be? is there another unknown thing

we have not considered sitting on the wings waiting to fall on this country? having the presidential ticket changes things. when nbc went through a research to guess how things would look in polling, there's a consensus if all the people would have voted in the 2008 presidential election and voted in the midterms, the result might be different and be dead-even, but now it is what it is because the turnout was low because it was a midterm. i think it remains to be seen, but one of the big factors is the economy. >> what does that mean for the agenda? if the president runs for reelection and senate republicans who say it's a two-cycle strategy and didn't expect to take the senate in 2010, but in 2012, how does that affect what actually gets done or doesn't get done? >> well, i think you described a prescription for gridlock in some respects. there's obviously, you know, we talk about the permanent

campaign, but now it's like the really superpermanent campaign. the day after the midterms, people are now talking about the presidential race. it will color what's going on. a lot of things will happen that's not serious legislative efforts, but about making a point. however, and i think senator mcconnell, leader boehner too. you find this in congress, you have to do something. something has to happen. both sides need accomplishment to campaign. you can't, especially with republicans in power, you can't just say we stopped this. we have that. you have to produce something. they do try to find areas where there is agreement. i think spending cuts are going to continue to be something that's talked about. democrats argue that they have been obviously much more fiscally responsible than republicans.

they think they are the pay as you go party. there's room there. i think energy is an area to get something done. president obama is a supporter of nuclear power. it is a being -- >> as long as cap-and-trade is not in the discussion; right? >> exactly. i think there's things to be done on energy. it's a popular issue, an issue that breaks more geographically and on partisan lines because it depends what part of the country you represent. i think energy is something. i think there's a little bit riding on this deficit debt commission. you know, if they could, this commission is supposed to produce something by the end of the year, am i right? >> december 1. >> if they produce something with some ideas in structure, that might be something that both sides can get behind. i just fear on any spending issue at this point now, the republicans have to outcut no

matter what democrats might support. i think they have to find some areas where they can say turn around and say we did something. if they can point to it -- >> that goes for both sides? >> right, both sides. if they -- if an -- it's even better in creating jobs. >> i think they're going to try to look for ways, i think whether they succeed or not is another question, but i think both sides are looking for ways to address the economy as ken was sort of eluding to. that's the other message i think that people and politicians take from the elections is the economy has not recovered and people feel they are hurting and the politicians are just fiddling while rome is burning. >> on the energy fund, mitch mcconnell laid out try things to be compromise on. i don't think -- there's not a lot of qawrl about

battery powered cars. clean coal mr. mcconnell talks about and find pockets in the country where coal producing states have a little push back there. nuclear power is another one so i think there's low-hanging fruit. people shouldn't forget in congress they passed an energy bill with bipartisan support, and when they were talking about doing an energy bill, you know, they said go back to that. it had things with agreements. they can go back, find those things, and move forward on that to create jobs, jobs, or jobs which is what we'll hear over and over and over again. >> that's lisa spelled out; right? >> yeah. >> to that point, the tea party obviously has been great for the republican base. the republican strategists and the people at the top also know

that this election was about up dependence, where independence went. they want independence, and they say you can't win independence by not doing anything. you have to produce something, and i don't think it's going to particularly pretty. >> what about the message? what are we going to hear over the next two years or coming weeks from obama, obviously, compromise, how is he going to try to get in a winning position? i'm not talking voting-wise, but getting the public behind him and do what clinton did? obviously there's the issue of try an giew late and the republicans, how will they get on offense and control the message? what do you think both sides will be saying? how will they sell themselves and get on top? >> i think the republicans are going to say we're listening to the american people because

mr. bohner said that yesterday. >> what if -- >> we're still listening. >> i think that's what mitch mcconnell said yesterday. the white house has got to change. the democrats have to change, and if not, maybe there's more change in 2012, ie, we'll take everything. >> what does obama say? what is obama's counter? >> i think if you look at it in the simple form, it's a huge conflict as there's supposed to be. on one hand they need to work together, and on the other hand you don't win by saying look what my democratic friends and i have done together. they are the bad guys, we're the bad guys. you find some, you know, a balance which i assume they'll do and low hanging fruit to show compromise, maybe it's emergency

or spending. it will be an interesting thing on who can prove they can cut the most, but then at the end they have to find some separation too, and what's that issue going to be on? republicans now that they control the house, they have the opportunity to pass bills. i mean, they can basically pass a bill, get it scored by the cbo and shows tremendous amount of savings. here's what we have, we sent it to the senate and they sat on it. what do senate democrats do? at the same time will they pass the same bill to show it's a little different? it's going to be a constant conflict. i'm curious what the first compromise will be. it's probably spending because the president has to run and they need money for that to happen. >> i think it will be interesting to see how the republicans act. if the republicans continue to resist overtures or like at the meeting that they're going to have later this month, then

they're going to say, see, they never have wanted to work with us. they've never wanted to do that. i think already this morning that the speaker in leader reed's office when they heard of senator mcconnell's idea of repealing health care, okay, do you want to repeal health care with people with preexisting conditions? that's what they will do. they will push back along those lines and they want to take away things for the american public basically. >> i think the obama white house has two options. i mean, they are already kind of positioned and try to position themselves with we want bipartisanship. this is what we campaigned on and the republicans didn't work with us as carl was talking about. if things don't happen and the economy doesn't get better, they have a villain to blame. it's the house republicans and because of then we couldn't get this done. if they do have compromises

whether it's low hanging fruit or bigger stuff like clinton and welfare worm or something like that, then they will say, look, we promised we'd do it, and we did. they have options here to frame the message i think. >> do you think that obama followed the clinton model though? do you think that he -- i mean, is it really even possible? can we even talk about getting something as big as well form -- welfare done? >> i think anything bigger than a bred basket at this -- bread basket at this point is vital. if you're the president you have 18 months to get anything big done, and now we know why. that's what they did. they went after health care, the science regulatory reform bill, and the stimulus. the notion of getting anything massive, you know, i think one republican told me that the notion of anything comprehensive is dead on arrival.

anything exroansive, you know, sweeping energy, sweeping education -- >> immigration? >> you know, sweeping, it's like al cart things. no wholesale shopping this year. [laughter] maybe you're a costco person, i apologize. [laughter] >> i think the fact the senate didn't flip changes the situation from when president clinton was in though; right? then he had the entire republican congress as a foil, and he was allowed to try an giew late the democrats because they were not in power in io place. i think it makes it a lot different for president obama and i think it makes the discussion of using congress as a foil for him to win a second term had it not changed over is a little diminished in some ways because the contrast is not as

clear because harry reed is still the majority leader. it's a little different situation. about the white house i would, my colleague peter baker brought this up at the white house yesterday when asking or someone did that when, you know, the president met with the republicans the first time after the election and eric cantor was having a discussion with him and said well, we won the election, eric, we get to do what we want to do. i guess those roles will be reversed in that first meeting coming up. >> one thing i'm curious to see what happens in the course of the new congress is something that byron described to me is the bleachers. there's a new phenomena of talk radio and 24 hour cable and these amazing amount of outside groups and their influence. you know, it's really a small

percentage of people that engage in that, but that's the same percentage that vote every election, so what is the reaction going to be to that? i wonder if the tea party how accountable they will hold the people that got elected too on some of the first votes on things. >> they are already threatening too. >> yeah. some people take a we will not compromise staps which is a direct conflict with the founding fathers thought the senate should work. it's supposed to be a compromise. that also will be something i look forward to seeing how that unfolds as weem try to -- people negotiate on things. >> do you think the senate becoming more or less relevant? >> you know, maybe i'm a senate snob, but i think the senate is always to some degree the most relevant because that's where the -- that's where things get tied up. the house routinely, we heard pelosi talking and we passed 4 million bills because the senate

is where things have to get done and bills have to be cut. >> will it still play the same role then? >> look, it plays that role even when both chambers are the same party. look at health care, the biggest bills to be passed, where did they get held up? the senate. they had to jump through hoops to pass health care. same team. stimulus, harry reed had to peel away one or two or three republican votes to get that done and same with financial reform. the majority can steam roll the other party. when it's in the senate, that's where it gets gummed up. no matter what the machination is, it's the senate that stops it. >> that's where the bipartisanship emerges if there is in or the gridlock. >> obviously, we are playing this boehner versus obama

dynamic. i think that's where the tension will be. >> yeah, it is relevant and all 100 members will tell you that. i think the house is the story right now. >> right. >> and that's going to be the focus, but of course, they got the ability to make things happen in a little different way, but, you know, there's going to be a much more attention on the house at least at the start of the congress i think. but some members of the senate themselves will get a lot of attention i think. >> yeah, i think that is where the narrative is. i think at the end of the day, you know, to some degree some journalism is about story telling. you is john boehner raising to power and one of 500 children, i mean, 11. [laughter] and the president obama -- >> taking his call. [laughter] >> i was off a few numbers. i think that's the narrative and that may be the easiest place to

draw the contrast. when you running for reelection, if you're trying to win against your o ponts, you have to -- opponents, you have to figure out who the good or bad guy is. i think that's an obvious place people will look. >> who are the members you're watching outside of the leadership? who else are you keeping an eye on or blocks of members that you think are either going to be more relevant than they had been in the past or just people you think will will be worth keeping any on? >> in the senate we were talking about that before hand, but actually if you look at the senate and who -- there's a huge republican class coming in, and i think it's at 13 right now, so probably 8 or 9 of those are establishment republicans. they are not tea party republicans, but at the same time, they may be feeling some loyalty or a need to be more tea

party esque once they come in to hold to the standards to the people who bucked the establishment and what no. i think those are the interesting people. what does rob portland do? does he attach far to the right? he's note a conservative fire brand but more of a deal maker. will he serve that role in the senate or won't he? you know what i mean,? mark kirk and some other guys who aren't as -- >> a senator from illinois -- >> yeah, how are these guys going to operate? are they going to be themselves? will they be someone different because of the message that they believed they received from this election? >> i think that, you know, the senate -- it's -- there's so many great and interesting personalities and

stories. rob portman and roy blunt, they come into the senate immediately as players. they are really skilled legislatures. he was the number two guy in the house. >> you can probably flush the story out, but a colleague of mine was reminding me if things were different k roy blunt could be the speaker now. >> right, john boehner just beat him. you have those folks, and one group i'll watch in the senate is the moderate republicans because they were key -- >> like olympia snowe? >> i won't name names because i don't want to label them. [laughter] >> as soon as it comes out there's going to be a primary. >> right. now that senator snowe is up for election, she's going to be running in a new environment. i'm not sure if the republican won the governor race in maine? >> yes. >> okay. i think that's the first time in sense maybe the 70s that there

was a republican governor in maine. that's a new environment. does that affect how the people who were the keys really to making the agenda happen in the last two years, does that affect how they act? the house is just going to be -- you know, you want to watch paul ryan, the new budget chairman a whiz at this stuff, and what's he going to do? dave camp, chairman of ways and means i presume. >> darrell -- >> yeah, you won't have to look far to watch him. >> you can take that. >> he's going to be very aggressive in pursuing oversight, so there's, there's plenty to keep on eye on i think. >> someone mentioned earlier there's basically including independents, 23 democrats in cycle as of today, and they obviously are worth watching. some of the names on that list include jim webb.

>> ben nelson. >> jim nelson. >> nike luger. >> how would you like to be senator herb cole of wisconsin who watched russ feingold get taken down by a guy who was virtually not even a national figure or a state figure until he ran for reelection. i think the word that will permeate people's minds in congress is the word spooked. i think people are going to be so spooked by what happened, it's unpredictable, votes about the deficit, spending, votes about their colleagues. i think that's going to be interesting to see if that manifests itself in any way as far as votes are concerned. >> another group i'll watch is the members of the appropriations committee because, you know, it was the best committee and most powerful committee, and now it's more

like a liability. you used to get on there, send the money home, and it's the ticket to reelection, and now it's a negative. it will be fun to watch to see if there's a change in culture at the appropriations committee. mr. john boehner said he wants to change the whole appropriations process. that will be interesting. >> and don't forget jim demint. >> and his colleagues aren't. >> yes, he put out a lot of money to support the tea party backed candidates. it there an allegiance forming naturally or in an unnatural way around him and tom coper, they were tea party before tea party was cool. [laughter] that's how i look at it. >> is there anything that mcconnell has to do to do with jim demint? obviously they are not personally close.

demint that has proven to be difficult. >> i think they have to quickly co-op with a hand full of tea partyers he's going to have, and just from talking with people before the election, i think that was, that was the plan, you know what i mean? mcconnell and demint have no love for each other at all, and even though co. burn and demint have the same leadership, but if any, mcconnell would say to the tea partyers here's tom, let me introduce you. >> i don't think it's any secret that senator demint has not endeared himself to his colleagues in the republican conference, and i think there's even more unrest about him, and there's already stories written about this today because of what

happened in the election. i mean, the senator mcconnell obviously feel if they might not have had such conservative gym demint endorsed candidates in colorado and nevada, you would be looking at the house seats. one thing to watch with senator demint is of course who can handle himself well is instead of ken buck, and christine o'donnell, he has dan costz and roy blunt and some other activity. he's being joined in the conference by people he opposed in the primary. that may cause him some heart burn at some point. >> at the end of the day, it is

still very much a very coledge yal body. if you go to work and your colleague is throwing you under the bus, it's hard to get beyond that. maybe it's not obvious, but at the end of the day winning, anybody has to deal with coalition, who is joining you and standing with you on legislation. that makes it tough. >> i want to bring it close with a lightening round. >> i'm not good at that. >> one, i want you to predict whether nancy pelosi stays or goes and two, predict if harry reed fills out his entire six years of his term. carl? >> i'm banned by new new "new york times" policy from making predictions like that. you can say it both ways.

either way i have to deal with it, so -- [laughter] i'm not sure about harry reed. i can definitely see him not doing six years. >> i can see him not doing six years as leader. >> i don't know if that's what you're talking about. >> both. the full six years and -- >> i think he fought too hard for this, this win from two days ago. >> i meant as leader. >> i'm not saying it's happening any time soon and i have no conclusions that it would, but -- indications that it would, but i envision four years from now he has a transition of some sort because i don't think he runs again for sure. as for pelosi, i wish i knew and i could get inside her head and know what she's thinking. i think and maybe i'll get in trouble for this, but normally it's been any time in the senate so maybe i won't get too many calls, but i think if the

democrats in the house are smart, they'll allow her to leave gracefully because they probably need some new blood. >> that's why i didn't want to answer that question. [laughter] >> i'm a dead woman now. [laughter] >> i can say with absolute confidence that i have no idea. as far as the nancy pelosi part goes it's just, it's just not my strong suit as far as the house is concerned. i think even to give an honest assessment, i don't know enough has transpired yet. one of the amazing things about working on the hill is even if you don't report something, you think you have a good of idea of what will happen, and somebody mentioned that nancy pelosi has to talk to her caucus. i can remember standing in the hallway that this will happen, and they talk, and it doesn't happen. i think the key things she needs to factor in whether she stays

or goes needs to play out. . .. >> i want to thank you guys for joining us. thank you for listening. i guess we just applaud the group. >> thank you. [applause] [applause] >> i'm supposed to let everyone know where they are supposed to go for the breakout sessions. the economy breakout session is going to be in the amphitheater,

the defense breakout session will be in the oceanic room. i don't pretend to know where that is. but i know it's not far. and the last session is in the meridian room. thank you very much. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] >> this midterm election review with continue with it's next panel at approximately 3:30 eastern discussing the economy. and a programming note, at 5 eastern a conference with chief palestinian negotiator saeb erakat. >> this week, jonah goldberg discusses the election results, the conservative movement, and the next wave of leaders on the right. join us with your calls, e-mails, and tweets, sunday at

noon eastern on c-span2's book booktv. >> until live coverage continues, here's some of the viewer calls on "washington journal." >> host: let's begin with the front page of usa today with the headline "now what?" compromiseo you expect gridlock? the balance of power stands right now in the house democrats 186 new democrats, 239 republicans, and as we said, we don't know about 10 house races that are still left out there that hasn't been called yet. if that happens today, we'll let you know. as we get the word from the associated press. by the way, you can follow along

on our web site, c-span.org. we still are aggregating the election results there, courtesy of the associated press. we have a map that you can go to and find out where it all stands. in the senate, democrats have 50 new senates, republican 46, and then there are two independents that will likely caucus that will happen and will continue caucuses with the democrats. on those two outstanding senate races, in washington state. patty murray has a slight lead. if she wins, if she holds on, she would caucus with the democrats, bringing their majority to 53. in alaska, it's likely the republican would win, whether it's joe miller or lisa murkowski. she has said she will caucus with republicans. their number would likely go up to 47. we want to hear from all of you. what do you expect? republican controlled house,

democrat-controlled senate, and a democrat president. from san diego, dean on the democrat line. your first. go ahead. >> caller: hello. >> host: good morning, dean. >> caller: how are you doing? i want to say one thing. >> host: okay. >> caller: we all know what happened when obama first took office. he got this comment that was so bad from george bush. he was looking over there. and trying to improve the economy and do anything that he can. and we as american people have put the democrats back in charge, the republicans back in charge. you know what, we are going to get exactly what we deserve. because they won't start the mess, they won't create the mess, everything we have been hearing is no, no, no. we have gone around wanting

shelter. the republicans had in mind to do what they started creating jobs. they don't want to create jobs. they want to make obama fail. that's sad. we as american people know what's going on. we are going to have some hard times in this economy. >> all right. that was dean. hell venn a republican in fullerton, california. go ahead. >> caller: yes, even if gridlock occurs, that will be also good. the obama administration was rubber stamping anything that obama was shoving towards us, shoving towards congress. i think what they were doing, the democrats and obama, they were reacting out of desperation. and i think the republican dominance in congress, or in the assembly, it's going to shut that engine down.

and it's going to make them more introspective, going to make them for thoughtful about passing legislation that requires more money and putting us more into debt. i don't care if gridlock occurs. i think we are heading towards destruction. they need to start thinking you cannot recover the economy. in all fairness to obama, no one, not one politician, no one can recover the economy. because the damage is so severe, and it's been going on for so long. it started actually with the clinton administration. but with the key point is, what i'm saying is, it's politicians tinkering with sound economic theory and research only to make themselves look good in the eyes of the voter that has caused this economic -- i'm going to call it what it is. it is another great depression. these people, these are politicians, they need to stop trying to apply quick fixes,

quantitative easying, i don't think he's the best advisor in this situation, and sort of let the invisible hand at the market start taking control instead of covering the politicians in control. > host: helen, coming up at 8:00 we're going to be talking about what the federal reserve announced yesterday. $800 billion in asset, quantitative easing. we're going to be talking about what they are trying to do to stimulate the economy coming up then. let me ask you, because you said divided government isn't such a bad thing. you also talked about our economic situation. do you think -- are you okay with republicans and democrats coming together on some major piece of legislation to address the economy, both sides making some compromise >>? > caller: no, i'm not.

there's a strategy called exnillo. they have the power to create something out of nothing. the exchange the central bank is giving the money, the money doesn't exist. it's merely paper money. what's going to happen is the politicians believe the banks will then start lending and stimulating the economy. the banks are not going to lend this money because this money doesn't exist to lend. and this is just another fantasy created by politicians, and fronted by economists like bernanke. >> host: okay. we'll have to leave it there, helen. we'll talk more about it at 8:00. we want to know what you expect going forward from the election. the leaders of both parties were out yesterday holding news conferences, talking about what they are thinking and how they are answering the call from the

electorate on tuesday. house leader, republican leader, john boehner who is expected to be the speaker of the house, here's what he had to say. >> last night the president was kind enough to call me. we discussed working together. on the american people's priority, cutting spending, creating jobs. and we hope that he will continue to be willing to work with us on those priorities. but as i said last night, the new majority here in congress will be the voice of the american people. and i think we clearly expressed that last night. we are going to continue and review our efforts for a smaller, less costly, and more accountable government here in washington, d.c. >> host: and president obama at 1:00 yesterday responded to what happened on election day. and he told talked about working with republicans. here's what he had to say.

president obama: that's why i'm eager to hear good ideas wherever they come from. whoever proposes them. that's why i believe it's important to have an honest and the civil debate about the choices that we face. that's why i want to engage both in democrats and republicans in serious conversations about where we are going as a nation. with so much at stake, what the american people don't want from us, especially here in washington, to spend the next two years refighting the political battles of the last two. we just had another tough election. we will have another in 2012. i'm not so naive to think that everybody will pull politics aside until then. i hope to make progress on the tasks faces us right now. we need to work harder an building consensus.

>> host: president obama and presumably the next speaker of the house working with each other. mitch mcconnell said this yesterday, he suggested the parties would work together on the $1.3 trillion budget deficit. >> host: that's mitch mcconnell, the minority leader in the senate saying what he thinks there could be compromise on. by the way, mr. mcconnell will be speaking at heritage foundation at 11:00 a.m. eastern time. according to the national journal, we will be delivering the speak and why making president obama a one-term president is the gop's top priority. from the prepared remarks he said this:

>> host: we'll be covering mitch mcconnell's speak today live 11:00 a.m. eastern time, 8:00 pacific time. district heights, maryland. john, democrat line. go ahead. >> caller: good morning. thank you very much. it's amazing after listening to the president yesterday and listening to mr. boehner and had an opportunity here senator orrin hatch. it's amazing how they are continuing the same lies that they told before the election. the president stood there yesterday and said what the government did was not a policy, it was an emergency when they dealt with the banks, dealt with the automobiles, all of those things he had to deal with as far as spending the american taxpayers money was not policy, but emergencies.

that's the only thing that kept this nation fromming really going down the drain. they write back with the same lies again. what i want like to expect which we won't get is accountability, integrity. i mean because no one is speaking of how the country got to the condition that it's in, and who's accountable for it? nobody wants to look back and bring somebody up front. i mean so me personally, when i hear -- and i heard them leading republicans coming back with these same lies after the president made his very claim to the american people that spending that he had to do was not policy, but emergencies. and the republicans wanted to stop the extension of unemployment. i mean it's amazing how these people have been misled to vote against their own best interest because of a certain element out there that just twisted everything and lies about everything and then get them all emotionally

worked up without them using the political comment they would need in order to vote for the best interest. it's bad what's going to happen. like you said, one ambition to stop the president. that's said. because when you have an ambition to stop the president, that means you are not going to try to do the people's business. that's what i'm looking for. >> host: all right. more on "usa today". he looked at earmarks and spending bills. and the promotion of electric cars, tax cuts for the wealthy. he said compromise is possible on that area as well. newt gingrich, who was speaker of the house in 1994 when the republicans took over then says obama isn't in a position to dictate policy. michael on the republican line. requested. >> caller: hi. >> host: good morning. >> caller: what i expect going forward, i hope that republicans can come to the table

with some ideas, something other than tax cuts to stimulate the economy. i hope that they can eventually get to a point with working with the president to come up with good ideas and the economy and other areas. to me, i'm pretty pessimistic on that notion. because if you are a number one goal is to make the president one-term elect president, how committed are you, really, to solving these problems? you are only committed to your political future. so that kind of rubs me the wrong way. i just hope that the american people know what they have done by giving the republicans the house. >> host: hey, michael, you are an independent. have you voted for republicans in the past? >> caller: in some cases, i have. but my position now is that i want to see

what's best for the economy. and i haven't heard any single good ideas come from the republican party in years. >> host: all right. what about on the whole raising -- continuing on with the bush tax cuts. giving them a two-year extension for those that are wealthy, or two-year extension across the board and deal with it later. do you think there's compromise on that? >> caller: well, what's going to happen after the two years? another extension? i believe that they should end the tax cuts for the wealthy. i understand the cost. it's astronomical. i believe we should have the tax cuts done now. >> host: all right. this is how they address the tax cuts and

election. some of democrats pealing away from the >> host: in a strategy dubbed decoupling which is more pallable to them, the republicans can still dig in their heels and propose -- >> host: georgia, charlotte on the

republican line. go ahead. >> caller: hi, are you there? >> host: we're there. we are listening. go ahead. >> caller: okay. my personal opinion about this whole thing, every election -- you know, it took the country a long time to get in the condition we are in. it wasn't overnight. people are yelling because obama hasn't done this. he's only been in office for two years. give the man a break. let's give him a chance. as far as the past election goes, it's just more lies. you know, i haven't heard anything coming from either side. they need to quitclaiming each other, they need to quit taking power. both of the houses want the power to do what? neither one of them was doing anything expect fighting. let's put down the gloves, take away the knives, and work together. this countries needs our -- those people in power to work together to solve what our problems are. >> host: so you don't

think there was a referendum on president obama? >> caller: you know something -- president obama first became elected, there was a lot of people in the press that was disrespectful and mean to the man. people are saying he's not a u.s. citizen, and all of this other kind of crap. i don't hear too many reporters out there stating what a person has to do in order to comply and what hoops they have to jump through in order to prove what they are and they have the right to run. >> host: okay. that issue came up yesterday where both the republicans and democrats talked about whether or not there was a referendum on the obama administration. the national governor's association, haley barber talked about the issue. >> even in governor races, this is a referendum on obama's policy, and policies of

pelosi/reid, and it was repudiated by the voters. a lot of democratic governors will agree with this. going forward, governors believe we can work with the congress to try to set things in a better direction. the voters yesterday voted against excessive spending. piling it up deficits. trillions of dollars of new debt being loaded on our children and grandchildren. huge tax increase right around the corner in january. and a government run health care system. we governors, because almost all of us have to have a balanced budget, we have to cut spending. >> host: governor haley barbour talking yesterday. president obama also talked about how americans view his efforts and what he has done so far. here's what he had to

say. president obama: i'm doing a whole lot of reflecting. there are going to be areas in policy where we are going to have to do a better job. you know, i think that over the last two years, we have made a series of very tough decisions. but decisions that were right in terms of moving the country forward in an emergency situation where we had the risk of slipping into a second great depression. but what is absolutely true is that with all of that stuff coming at folks fast and furious, a recovery package, what we had to do with respect to the banks, with respect to the auto companies, i think people started looking at all of this. it felt as if government was getting much more intrusive into people's lives than they were accustom to.

now the reason was it was an emergency situation. but i think it's understandable that folks said to themselves, maybe this is the agenda as opposed to a response to an emergency. and that's something that i think, you know, everybody in the white house understood was a danger. we thought it was necessary. but i'm sympathetic to folks who looked at it and said this is looking like potential overreach. >> host: you've heard from president obama, the republican leader talking about what this election means. we want to know from you. it's your turn to weigh in. what do you expect going forward? tim, independent line, you are on the air. >> caller: hi, i got to say that i think this is the best political show in the country. so after saying that, my idea -- i have an idea for the congress and the president. >> host: okay. >> caller: back in the 1950s and '60s, one the political hot

buttons was the american taxpayers paying for the security of europe. and japan. and here we are 60 years later, doing the same thing. so here's my proposal. they call our bases in europe and sell them to the european union for $2 trillion. do the same thing for japan and malaysia and all of other countries for $2 trillion. and the middle east for $2 trillion. that's $6 trillion. and then the money that we would save over a period of 10 years, by doing that would be another $4 trillion. so there's $10 trillion that we can save on our national debt. >> host: all right. lynn is a republican. go ahead, lynn. >> caller: thanks for taking me call. the democrats still do not get it. they do not get what happened at the election, that we, the american people, want lower taxes, we want to stop the spending, we

want jobs. now i heard reid yesterday on c-span saying that the -- it was the republicans that were the party of no. they are not the party of no. the democrats are the party of no because they are the one that did the back room deals that would not let the republicans in. i get so sick and tired of these democrats calling in and bashing the republicans. don't they care that we have all of this spending to leave on our children? >> host: lynn? >> caller: why can't we take the money that has not been used towards the stimulus and put it back where it belongs to we don't have to pay. >> host: lynn, on the issue of the deficit and leaveing it to the american children, your grandchildren, people who have calculated these numbers have said it's not just spending. your going to have to raise taxes in order to

get a big enough bite out of the deficit. >> caller: well, that was their problem. but him bailing out all of those auto makers, i know a person that had a dealership in michigan, and he did not want to give that up. but he was forced to. and when we are forced to, just like this health care, i love what my health care is. i don't need the government in my face telling me about that i can't have my own health care. and that's what the president lied about. he said many, many times, you can keep your own health care. he said that. and all of the people listening to this program, and the americans know that. he lies through his teeth. and if he thinks he's going to walk with republicans like he said, he's not. he's not a leader. he should not even be in that white house. and it's not that he's black or anything like that, it's just the fact that he has the lack of experience. he has no know how on how to run the country. >> host: okay.

health care is sure to be one the issues that coming up. this is the headline in "the new york times". mr. speaker blng blng >> host: back to the "financial times" this morning. it says in the lame-duck session, they will offer also test of fiscal policy.

>> host: other challenges will follow early in the new congress with the republicans likely to seek and push through the more than $100 billion in spending cuts they pledged during the campaign. they maybe rebust that the economy still needs government support or at least insist that any fiscal retrenchment be delayed. as that debate unfolds, there could be a showdown >> host: stephen, democratic line in kentucky. go ahead. >> caller: yeah, i

don't think there's going to be as much change as far as what's happening right now. i think the president has tried to implement policies to save american jobs. he's bailing out gm and chrysler. i think i'm a democratic. donald trump said you have to create things. and we don't don't -- we are not creating anything here in america. until they bring the jobs back from china, there's not going to be no jobs. >> host: all right. baton rouge, louisiana, claudia, good morning, republican line. >> caller: yes, my name is load -- claudia. we'd had the floor for the republican line. they are just walking and talking. you can have all of the money and the power in the world. if you can't ask the people to accomplish what the republicans really destroy when bush administration was here for eight years, you know, and they'll be in walking and talking and

throwing their money -- >> our live coverage as the midterm election review continues now with a discussion of how it impacts the economy. panelist will try to answer the question does it matter who's in charge? participates include william hoagland, scott lilly, and "cq weekly" john cranford. >> at the far right is joe seigland. bill frist in the senate. to my immediate right is scott lilly, who did similar work for david ob and other places on capitol hill. he's now at the center for american progress. i guess i'd like to start this with a note

that another long time budget watcher, stan tweeted yesterday the morning the result of tuesday was going to be gridlock, stalemate, and shut down. i'm not sure i agree with that. it seems kind of conventional. so i'm going to let these guys have a few minutes to talk about what they think is going to happen. then we'll go to some questions. one the questions that i'd like to put on the outset is how can gridlock, stalemate, and shut down be avoided, or can it? which of you

-- >> you had a mandate to cut spending and increase jobs. almost anything that you do that will cut spending is also going to cut employment, there are very few things outside of cutting spending that the government will do to stimulate jobs, particularly in the near term. i think you are two party that is are coming at the question of governance and an entirely different way. we have a huge divide between the political parties over the question of what is the roll of government?

and that is what i think caused stan collander to make that prediction. it's very hard to see one party that thinks that government should play a major role in trying to restore economic growth and the other party who believes that government is the problem finding very much common ground. you will have, i think, an effort by the house republicans to try to cut spending in any way that they can. and you will have an effort by many in the senate and by the white house to sustain, particularly the most important parts of the spending effort. or of government spending. with agreement to cut spending in certain places, but not nearly as deeply as i think the new republicans are going to want to cut it. that's going to result in a very delicate

dance. ultimately, if one party -- if one house of congress decided that they are not going to spend money, it's pretty hard to make them spend it. the republicans in the 1990s when they controlled the congress, they got themselves into such a difficult situation in terms of their public image that they had to go along with much higher spending simply to avoid a confrontation that would look like another government shutdown. i don't think that's necessarily the scenario that's going to replay itself in the same way. and the white house, quite frankly, is going to have to get a lot smarter politically, in terms of dealing with the opposition than they've demonstrated so far if they hope to win that confrontation. so with that, i'll turn it over to bill. >> thank you, scott.

thank you, john. for the many years -- when i worked on the hill for many years in the senate, whenever the president's budget came out on the first monday in february, we always had a staff exercise where we had to put together an instance analysis. and it had a half-life of about two hours after it was produced. sometimes i feel kind of similar about some of the conferences. in all due respect, what we say here has a short half-life. having said that, who's in charge can have an impact on the economy and could, of course, work both positively and negatively. i think congress matters. i think fiscal policy matters. i think spending and revenues matter. and just being an old budget person, i think still deficits and debt matter. so might argue when the republicans were in

charge in congress, during the bush presidency, they did have an impact on the economy. maybe a negative impact. one might also argue, it seems to me that it was the independent federal reserve system that helped create the bubble that brought about the collapse of the financial system and the severe recession beginning in 2008. that they were responsible for. and congress really didn't matter. alternatively, i think you could argue that the voters apparently felt very strongly on tuesday that democrats in charge of congress these last two years did not do enough to correct the negative impact of the economy from either the previous administration or the federal reserve. and therefore, what they did too much of or not enough of that they did matter.

so i think placing blame on a credit appropriate or not on congress, it doesn't really say anything. at least the american public thinks congress matters and should have something to do with the economy. as these two professors out here want in maryland, reinhart and roggard in congress has been pointing out the last two years, large financial crises do long-lasting damage. and they are characterized by three things historically. asset markets collapse, they are deep in the prolonged collapse. this then is associated with the profound decline in output and employment. and then the real value of government debt tends to expand. i think the real difficulty going forward over the next two years,

many years, regardless of who's in charge and regardless as who is to blame for the economic woes that we have today is the fact that our democratic system that has operated so successfully to prevent quite frankly tyranny and has shielded us from extremism with it's built in shared balance of power. and a tendency towards deliberative decision making. and divided government. that that's same system that we honor and respect from our forefathers is the same system that works against congress today in manage an effective fiscal policy in a coordinated monetary policy. a few days ago before the election, the "financial times" said to mix together democratic defeatism,

republican recalcitrants, and tea party hysteria into a system designed to slow down decision making, you do all of that, and you have a recipe for paralysis. maybe that's where stan was coming from. i think it's a very unfortunate that this is coming exactly at the wrong time in our economic cycle, and our fiscal outlook. i think the feds action yesterday to try to increase liquidity into the system with its planned purchase of $600 billion in long term treasuries raising their prices and longering long-term interest rates to hopefully increase long-term investment and employment and growth. i think the fact that this occurred the day after the election was purere serendipity.

of course, the goal of the action was to drive down the value of the dollar. you are going to find critics that say the fed have overreached, the fed is going to double their amount, and therefore, they are going to increase inflation. so what would now this congress do? scott says cut spending. fine. but what spending? i've looked with all due respect to my colleagues in the house. i've looked through the pledge for america. i cannot find anything specific here. okay? on that score. >> if you can't, bill, i don't think anybody can. >> let's be more specific. again, very carefully stated here for a republican, is this the

right time to pull the punch bowl away when the economy is still fairly week? extent tax cuts, sure. i think it will happen. i think it'll happen in the lame-duck. i think a deal will be cut there. but this is the lame-duck and you're going to add to our long-term deficit with that action. you are going to require more borrowing later. so how are you going to get this back to a sustainable debt to gdp ratio going forward? i think given those two professors continual admonishments about the financial crisis and how long it takes to work off something like we went through, i think the action of the fed yesterday was appropriate. inflation is not a problem today. and that i think congress should work

somehow within the tandem with that policy to begin developing a very measure long-term bipartisan fiscal plan to restore some economic growth that will quite frankly not calm very quickly over the next two years. unfortunately, that plan requires congress willing to make some extremely difficult political decisions. that they have been unwilling to make in the past and i'm not quite sure that the change in control, particularly in the house, is going to change that. it will cut spending. we'll try to cut spending. but it is not likely to make it's way that easily through a senate or through a presidential veto. now you cannot veto yourself into higher spending with an appropriation bill. but i think what it really means is bipartisanship working across the aisle, and it

probably means freezing, scott is not going to like this, freezing appropriation accounts, eliminating programs. it means a reducing reimbursement rates for highly sensitive programs, social security, medicare, medicaid, farm subsidies, public pension programs, and yes, it also means to make a fundamental restructuring of our tax code to do away with the mere number of various tax credits and deductions and yes, it means increasing revenues and dare i be so bold as to say some form of a consumption tax or national sales tax. i think it can be done. i disagree with the conventional wisdom that we are in for two years of stalemate. i want to be -- i guess i'm still naive enough. i want to be optimistic about the future. i look back that

something that scott and i went through. we had divided government in 1994. we had government shut down. and we came to a bipartisan agreement in 1997 and moved forward and worked together in a bipartisan manner. so congress, i think, does matter. i think the federal reserve matters. and i think that we will continue to work together to find some solution and i'm -- i want to remain optimistic that we will find that solution in the division that exists today. >> well, okay. so let's walk back through some of what you'd just touched on. both of you. i want to spend just a minute here talking about the fed for a minute. i want to move from that into another point. that is there is a very strong argument from -- mostly from the right wing. not entirely. some people on the left wing have the same sort of view. the fed has overreached. it's out of bounce.

it is a problem. i think if he were in an unguarded private moment, ben bernanke would say, congress isn't doing anything. we had to act. you had mike pence come out and say the action yesterday was out of bounce. i think you've got a broad, unfocused tea party argument instead needs to be reigned in, if not abolished altogether. certainly there's a few folks out there who have argued for that. i wonder if just to start this, and in an idea of trying to figure out where there's going to be agreement, is there going to be agreement sort of in the middle that maybe the wings are wrong in arguing that this extreme position that the fed was out of bounce. is there a possible -- is there a possible ground here for john

boehner and mitch mcconnell and harry reid to conclude that -- and whoever is in the charge of the democrats for the house. i'm not sure we know who that is yet. we need to agree to take the extreme things off of the table. i'll throw one more out there. the notion that a debt limit maybe a cause for a potential shutdown. sometimes in the next six months. the debt limit. if treasury comes to congress sometime in the first part of 2011 and says we need to raise the debt limit, there are going to be a lot of tea party folks who say, no, we are not. those are two kind of dangerous spots, aren't they? >> well, i would say first of all, i've seen efforts within the congress over the last 30 years to try to rally

a movement within congress on the policy. the constitution actually delegated the power for the congress. so the creation of the federal reserve was a delegation of congressional authority to an independent entity. and there is illegally, i think there's a lot of standing for the congress to get in fault. but i think there are very few members who understand monetary policy at a level that they are comfortable having a big fight over that. and the ones that do or probably more accurately, the ones that think they do, which is often the major distinction have a hard time rallying this peers to get involved with it. say, on the other hand, if the tea party movement decided that this was an issue that they wanted to engage in, i think that they have the kind of power right now that they

really could bring their leaders to toe. i do not think that republican leaders in either the house or senate are going to take the tea party on any time soon. i think they are -- i think nerve that party is afraid of them. i think they've got the capacity to challenge members. a very substantial portion of -- and not many people realize this, but assuming that we end up with 62 -- an increase of 62 seats for the republicans in the house, which is kind of where people are coming down right now. that means that you've got a freshman class of 88 out of a total of 242 republican seats. that's a huge block within the caucus. it's 35% of the caucus. if as many as 30 veteran

republicans in the house were to vote with the freshman and the freshman voted this a block, then they could control the speakership, the committee assignments, and the legislative agenda. so there's, you know, -- you've got a lot of muscle among this group of people. and i think one the problems of the leadership is pence has much stronger connections to that group of 85 than mr. boehner has. i think he has to do a fairly delegate dance on that. >> mr. boehner does? >> yes. >> with respect to the debt limit, i'm not so worried. you know? i think about the koch brothers. i don't know whether their net worth is $10 billion or $20 billion or whatever. but i would speculate there's a significant

amount of that debt that's in u.s. treasuries. and they are not unlike an awful lot of other people who have been funding the movement over time. and the fact that the people that they sent to washington are going to default on the debt of the federal government, i think would not be a -- something that they would like. and i think that -- >> so the koch brothers and the chinese will be making common cause. >> that's right. absolutely. i think as hard as it is, there will be a lot of back and forth. the democrats are probably going to say we'll vote for this thing. but you put up the 218 votes first. then we'll vote for it. >> i i -- you know. i was going to say, scott, that first of all, bernanke is a republican, he was appointed by a republican president. thank god today the

federal reserve is there. i do think that they may have taken about every tool in their tool box and used it as far as they can go. i don't know what the next step here is after monetary, you know, quantitative easing. >> no qa3 out there? >> i don't see it. i think he's tried. he's recognized there was stalemate in congress that was not being addressed. so i think it's -- i think the debt -- i think -- yes, there's going to be a populous to do away with the federal reserve. i don't think that's going to happen. our system is dependent on the federal reserve and federal system. thankful for it. anger is not a strategy. you can be angry about

your government, but fine. what's your proposal? what's your strategy? and saying i've been through this so many times cut spending. cut spending. fine. but tell me. let's be clear. your 2/3 of our federal spending is social security, medicare, met interest on the public debt. you can't get public interest on it. let's be honest, medicare, medicaid were were those discussed during the debate? if anything, no. i'm back and the president -- i get so frustrated in these debates and discussions. your here in washington now. now reality will set in. you'll find out we're not going to default on our debt. and, in fact, maybe it's

not maybe one the solutions to reaching a bipartisan agreement or a compromise will take us up to the brink. but then to tie the extension limit has yet maybe this wasn't the best example. it was tied. >> well, it was also true in '95, and the ultimate deal in '96. i'm glad you agreed on that point. it would be very bad if we wound up impoverished. because the dollar was worthless. let's move on. if we are not going to have a fight over the debt limit that stops the world from working, and if we are not going to have the monetary policy engine stopped from keeping the economy rolling, fiscal policy becomes the other choice. there are still calls for additional spending and/or middle class tax cuts to promote a

resurgence in the stagnant growth that we have now. 2% doesn't meet the need. bill, you said you thought that in the lame-duck we'd see an extension of -- i presume you mean the 2001, 2003 tax cuts. is there an opportunity to go beyond that? is it a good idea? can the anti-deficit crowd be quieted with an additional middle class tax cut on top of that? >> first of all, there was -- i think there will be an extension. and, in fact, i believe the president even today is talking about working out some sort of an agreement. question will be whether it's just on the middle class or for those above $250,000 or whether that goes up or not. >> you seem to suggest today without a whole lot of specificity, we

talked all the way up to the top. >> all the way up to the top. i think the question is for how long will you do the extension? i think that's an given. my issue here is that extending the current tax code with all of its warts and failings is not the solution in the long run. so i would hope the extension is not very long. unfortunately, it could be for two years. we'll go through this again. oh, by the way, let me just as a side bar here. because people will say, hoagland, you were there when you did the tax cuts in 2010. this is one the -- i was. and we did put together the tax cuts in 2010 -- excuse me in 2001 that then resulted in being expired. and as scott knows, a lot of this has to do

with the budget geeky stuff because we couldn't extent it without erasing the bird group. that's a different issue. >> the reason that we are fighting about this, is because of budget geeky rules. >> expect and one other big issue though, please try to remember where we were in the spring of 2001. we were dealing with projections of surpluses as far as the eye could see. and that tax cut went into effect in the spring and probably the timing on it turned out to be fairly decent. because it became -- it really became effective right after 9/11. >> the checks were going out in august; is that right? >> so it worked out okay in terms of the stimulus. but the problem is that we should never have made tax cuts for 10 years on basis of projections that nobody could have trusted

anyway. that was the projection. and that's why the tax cuts are expiring here at the end of the reconciliation period. >> i think it's important when you look at what this new majority that's taking over the house representatives is willing to do with respect to fiscal policy and half of fiscal policy is revenued to begin with. you are not willing to touch revenues, then you are very much constrained. every successful deal, budget deal, going back as far as i can remember, and that's unfortunately, quite a long time now. it has involved some measure of revenues. and i think if you look at the problems that we have, and i think we have some serious

budgetary problems long term, they are largely related to the demagogue fy of the regulation. if we keeps revenues at 17 or 18% of gdp, we are going to run up a horrible debt. but revenues is not something they will look at. they have just concluded a campaign where one of their major points was that the other party was trying to cut medicare benefits. so they obviously are not going to do very much on medicare. and i would add social security as part of that. and as bill mentioned, the servicing the debt is something that nobody can cut. so we are down to about 34% of the half of the budget that's spending. out of that 34%, half of that is defense. and they -- i have not given me any indication that they are willing to

do anything with defense. i think defense, military uniform pay is going to tonight to go up with the cost of living. : >> i think you'll be surprised and deeply frustrated what they can do given the restraints they put on the fiscal policy they willing to accept.

>> well, and the new republican majority already said they're challenging the defense department on his $100 million cut over the next five years. >> i don't want -- once you work for a united states senator, it seems you work for them for life, and so i don't want to co-op something that's going to happen in about a week and a half here before the president's commission reports or does not report, but earlier this year, senator who i work for for 25 some year, and my very, very first boss in this town, dr. alice woodland at the congressional office formed a task force on debt reduction out of the bipartisan office here in town, and we have been orking on

this and they'll be coming out with a report on that. it's coming out prior to president's commission. i can only highlight for you that even though i tried to get to balance in 2020, that is not going to be the jargon. the jargon will be reducing the debt of gdp to 60% or some level so we're not a greece. we're going to change the whole prosecution. those coming to town say balancing the budget, that's not it. the issue is can you lower the debt of gdp to a sustainable level, otherwise we're in real deep do-do. that's the number. >> everybody's come to the conclusion that 60% of dg --

gdp is a sustainable place? >> that seems to be the consensus, yes. to get there though, you can still do what you were suggesting, john, you can still do that by having in the short term a, let's call it what i think it would be, is a payroll tax holiday while we're in a short timeframe limited to find the prime the pump on more time, but with that you have to have a deal for how you're going to address it in the long term, and that means coming back with again fundamental changes to the tax code, fundamental changes to our entitlement programs, and it's not going to be pretty or easy. that's where we are today it seems to be. there's no way to grow yourself out of there or spend own cut your way out or tax your way out. it has to be a combination of

all the above. >> bill already touched on something i was going to ask youth. i'll throw this to you. we have the president's fiscal policy commission which may or may not make recommendations on the first of december. it's convention thal wisdom in this town that commissions do what they do and it sits on a shelf and nobody agents. the only one i remember with enough to succeed is greenspan's commission in 83 #. >> i'm not sure we have the same level of crisis mode. >> yeah. >> but certainly the thinking is i presume that this election with its focus on debt and deficits and stepping all -- spending and all that there seems to be a crisis that people are talking about. >> can we rally the public to 60% of gdp?

>> that's the problem. that's the problem. >> i seriously question -- i mean, you know, there are democrats and republicans in this town who can get together and put together a very sensible path. unfortunately, they're not in office. >> i was going to say none of the people i worked for in this last year were elected this year. >> you know, i have the impression of this new republican majority that they would fight an effort of the type bill described which i think sounds very reasonable, and i think people that have studied the federal budget and fiscal policy and national debt in any period of time would see the need in moving it in that direction, but i don't see any

prospect at all that it would be -- you know, it's not that they wouldn't help try to pass it. they would do everything within their power to try to defeat a proposal that approximated what bill just described. >> so in the alternative, we have one member of the house, a smart member of the house, who has put forth his own plan, paul ryan. the document you pointed to a minute ago as far as i know doesn't adopt any of mr. ryan's approaches to solving what he regards as a serious fiscal crisis. is paul ryan too much for the republicans at this point? is he thinking too much for them? he's going to run the budget committee, so it will be an interesting game; right? >> the chairman to be with all, i shouldn't really say this, but like scott says when you've been in this town as long as you

have, you start to worry about this. paul ryan was a staffer in the united states senate, worked on the budget committee with me many years ago, so that shows you how things circle around here. is he too much? i think what paul ryan has put out is very bold, very courageous. it's huge. it does address the issue. i think he would have to do is little bit more on the revenue side to balance it out, but thank goodness somebody is laying out, proposing something so that you can start and work on something. at least he has ideas. at least he's putting it on the table and is willing, and having put that out, he's still reelected here i guess, so i think it's helpful to have those ideas, but it's an idea. it's a proposal. in our system of government

hopefully some of that filters in and at the end of the day we end up with a product that starts to address the concerns that he's raised. >> the republicans did remarkably well on tuesday with the senior citizens people over the age of 65 voted democrat i mean, voted republican by 58% which was a significant driver, and they also as is always the case voted in very large numbers, so they had a strongly disproportion impact on the results. i would say if paul ryan's proposal becomes more than a think piece and sprawled out in greater detail so that senior citizens understand what he's saying and it has something to the republican party, they can kiss that 58% good-bye and get

28% in the next election. it, it focuses a huge part of the burden on low income senior citizens who really would have no way of compensating for it, and it's, you know, in fiscal terms, it's realistic. it does make serious cuts unlike the pledge to america, but those cuts are going to be viewed as very unfair and undually harsh by, i think, huge proportions of americans, not just senior citizens. >> we weren't supposed to get into a fight up here, so we won't do that, but i will say that i believe that most of the proposals as it relates to social security and medicare quite frankly more likely to hit the young people out here than

it is to hit the current retirees going forward. i agree, it's hard to sell that and convince people you're proposing reductions in medicare or social security that do not affect the current recipients, but the current recipients here who are quite frankly of not even getting what social security has been already quote promised to them. >> well, that's the issue; right? we don't know that maybe for me or us if we retire we might get some of what's been promised, but the 20-somethings out there paying in now are not necessarily in that boat. is there a question in the audience? i'd be happy to throw this open. yes, in the middle. >> cameron lucy, 12 years at

omb, worked at emery and all those folks. you guys are kind of heros. i'm asking the question of where's the leadership on the senate side specifically to try to find a way to look at all three of the drivers, the economy, the revenue side, the fiscal side, and broaden the conversation so that instead of just talking about personal income tax, maybe we talk about some of the things that you left off the table in the 90s like capital gains or corporate rates. >> i guess to the senate, i personally am sad to say that bob bennett from utah of course didn't win his primary, and of some of the leadership thoughtful side, i think he was one of the more thoughtful

senators who worked across the aisle, and so to be brutally honest with you, i'd have difficulty telling you right now where the leadership is. i presume my former ranking member, now chairman of the house senate committee, mr. conrad thinks about these issues. unfortunately, he's up in 2012, and i wonder if he would decide the farm bill is more important than the budget in the next two years and may consider that as the opportunity to leave that area. i'm sure if i sat here long enough, i could get myself in real trouble by talking about various senators, but i think you raise a basic point. it's not so much -- i guess it's not so much the leadership in terms of economic and fiscal policy from my perspective. it's more the ability to reach across the aisle regardless of

whether you have an expertise, and i'm going to show my age here in terms of i know he left under a cloud, but danforth and george mitchell and tom daschle are willing to work. >> dare we say it's time for adult leadership? >> it would be nice. >> does mitch mcconnell hold the balance of power in the senate today? >> i think he has a lot to say. how's that? >> about how the senate will operate the next few years, and i think he can be a real key to whether or not there's a willingnd to work with the president in a bipartisan manner and reach across the aisle. he's going to have a tough time even with the senator elect from kentucky who already said he's

going to challenge him every day. i mean, i never heard of him. is this on the record? >> it's on the record. >> i better be quiet. it's on the record. [laughter] >> i mean, i was quoted several years ago saying rather snidely that the house was very both parties in the house were very happy to send tom koa -- coburn to the senate. i think those difficulties are going to be compounded significantly with rand paul and a whole cast of new characters, and also by the fact that you got this external force and all the outside money not coming through the republican senate

campaign committee. it's coming in independent expenditures from people driving this agenda, and with a threat that they will take on incumbent republican senators in primaries if they don't behave in a certain way, and that greatly changes the kind of authority and bargaining power that a leader in either party will have, so i think mcconnell even though he's going to be positioned to have a lot of influence over the majority has got huge problems within his own party that will actually put him on a shorter leash than he's been used to. >> further questions from the crowd? if not, i have one. so the republicans have said,

and i think promised almost they will try to repeal health care. probably not going to happen, probably couldn't be done over a veto or get it through the senate, but, bill, you'd know more about this than me, isn't it possible that there are provisions in the health care that require proarpgs in the come -- appropriations in the coming year, and if there's no money, than a lot of these things will not just happen? >> well, you're asking a budget person when you should ask the appropriator next to me. >> i was asking the health care expert at the moment. >> it's a good question because obviously first of all i'm not wearing my cigna hat right now. i'll go with my budget hat. >> okay. >> i've gone through the bill. there's a very excellent report when you're out of congress, you have difficulty getting these

congressional research services to put a nice study out that shows that which is subject to appropriation and that which is subject to or has been already appropriated subject to transfer. i've gone through the list. i've added it up. yes, there is for fiscal year 2011, about $7 billion in programs that are subject to appropriation, and as scott would know better than i, yes, congress since the appropriation bill originates in scott's old chamber, yes, they could step back and not fund or reduce that authorized to be appropriated. my guess is that's true. however, when you go through the list of those items that are subject to appropriation, they are the grants, they are the demonstration projects, wellness prevention programs, compared to the effectiveness there, and by

the way, the $50 million in grants to the states for carrying out medical malpractice. now, you cannot fund those and have an appropriation bill without those in there, but is that going to fundamentally undermind the larger legislation? no because most of the larger legislation is prefunded through transfers out of part a and b of medicare, or it's an entitlement. now, you can still come back and revisit that through reconciliation or something or you could probably put it an aappropriation bill, a rescission of that which has been, but then the president has to sign that, and i don't see that he would sign that. i don't know how you veto yourself into as i say into higher spending. you could not -- you could not just fund, but i don't think that this defunding of the health care bill when you really go in and look at the

accounts, it will have an effect. it could have an affect on the accounts, but i don't think it underminds the fundamental issue and the changes that are out there in terms of the underlying present of the bill. >> this is the question of the week, and everybody's scrambling to get a more precise answer, and i don't think anybody has gamed is out entirely, but much of what was structurally important is covered with mandatory appropriations that were made by law in this act. it would take a repeal of those provisions in order to stop the money from flowing to, for instance, the state programs to monitor the premiums of health insurance companies. the -- there are other things that i think are important that need to

company the health care bill, but i agree with bill, there are companies that are discretionary that will need to be included in the 2012 appropriation and which may well not be included in that appropriation, but they will diminish the quality of health care perhaps, but leaving them out will not stop the program from going forward. >> on the subject of just, here's the pledge again. i studied this. all you've heard is repeal health care. yes, but then you go on through the other things, medical malpractice. that's possible of a bipartisan agreement. purchase insurance across state lines, possible. i want to get down to the real nut here. ensure access to patients with

preexisting conditions, expansion of the high risk pools, make it illegal for an insurance company to deny coverage with someone with prior coverage on a preexisting condition, and lifetime spending limits. all these things are in the current bill, and once again, it's going back where is the meat? what are you changing, and how are you changing it? >> the individual mandate i think is. >> and that could be a problem. that could be a problem. so let me have a prediction from both of you. scott. you go first. how will this play out over the next six months? will we get a full year cr out of the lame duck or cr into february? will the republicans do what the democrats did a few years ago and then do a cr carried through fiscal year 2011 and start an appropriations process for 12?

what do we see? >> well, i think nobody can answer that question. there is serious interest in doing an omnibus bill. there have been very extensive negotiations between the house and senate over the makeup of that, and there appears to be a bipartisan interest in the senate in passing an omnibus bill, so i -- most people -- >> in the next month. >> yeah. most people are saying that's not possible. i think it may not be likely, but it is possible. i think it would be a service to everybody to have that happen because you would have agencies knowing how much you have to spend. you would give the new congress a chance to come in and learn something about the federal budget before they start changing it, which i think will serve their purposes better than -- >> there's going to be a lot of

freshmen. >> yeah, and i think that would be the best outcome. i think next to that might be a full year cr would be the most preferable because you have all the things resolved and allow the new congress to come in with a fresh, a clean slate and an ability to think more strategically about how they want to play their cards and try to have an impact. it is entirely possible, however, that they will have a three month cr running through the middle of february until early march. that will very likely lead to a major show down with the white house and the senate over how much specific programs are funded at. one of the things they've expressed anger at a number of

agencies including the corpg for public broadcasting, and i think they would be well served to spean more time learning about some of the agencies they are angry with and understand the implications of major funding reductions before they jump in and start to slash. >> unless they decide they need to cut 8 or 9% and close them all down. >> well, i think they need to have a very serious impact study on what an 8% or 9% cut would result in, and i think they'll find out there's a lot of things that they actually feel they support that would be very badly damaged by that kind of a budgetary -- >> you think the odds of an omnibus or full year are good at this point? >> you know, i think, i mean, i wouldn't say it's 50/50 #, but i think there is a 30% chance of

an omnibus bill passing in the lame duck. bill? >> scott's closer to it than i, but i would say that i think the time available in this lame duck session is extremely short when you consider they are back one week with leadership elections, out for thanksgiving, and then back. unless they work up to christmas eve this year, i don't think the time works in favor of an omnibus bill. i think that would be the appropriate approach, and i would expect a cr, but you're right, it would be to cut a deal in three months or six months rather than a year to give people to get educated about the government funding proposal. >> so it could be a long haul into 2011? anything further from the audience? if not, guys, anything else you want to add? i think this has been good

conversation. >> thank you. >> thank you. >> thank you very much for your time. thank you, everyone. [applause] [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] part of this day long forum on the impact of the midterm elections, you can see it on our website, c-span.org. there was more election news today. the results were announced leaving two governor races still too close to call. in illinois governor pat qin and phil brady are waiting for results. in minnesota, dayton holds a small lead over emmer. a recount is likely as votes are

separated by 4.2% and calls for a recount. coming up today at 5 p.m. eastern, the chief palestinian negotiator addresses a form up at the woodrow wilson center. see that live on our companion network station, c-span.

>> state didn't's spokesman led off today's briefing by updating reporter on president's trips. later he addressed why the u.s. designated iranian groups and charges that the u.s. has been -- [inaudible] this is 25 minutes. >> obviously, the secretary completed her day in wellington, new zealand and met with prime minister john key, foreign minister, and leader of the opposition, phil gulf. after meetings she signed the wellington deck --

declaration and ties the united states and new zealland to a strong partnership. tomorrow she has a range of activities, but we'll move on to reviewing ongoing cooperation between the united states and new zealand. we expect over the next couple of days as her schedule permits, the secretary will reach out to congressional leaders including harry lead, mitch mcconnell and, you know, john john boehner on the house side as representative ross laiden to offer a congratulations and pledge, you know, cooperation as we continue to address national security and foreign policy challenges, you know, facing our country. obviously, on a range of issues from ongoing support for

operations in iraq, afghanistan, pakistan, other issues of nonproliferation and so forth, we need sustained congressional support to succeed. in particular as she talks to her former senate colleagues, i think she'll also reach out to incoming senator elect mark kirk as well and stress the importance of radification of the new s.t.a.r.t. treaty during the upcoming lame duck. it was reported to the senate floor on a strong 14-4 bipartisan vote, and leaders across the political spectrum including secretary of state and republican and democratic administration and our entire military leadership including seven former commanders all endorsed this treaty, and we've had excellent discussions with a broad range of senators in recent weeks, and will continue

to work with our senate colleagues to ensure timely radification. we continue to be focused on hurricane or tropical storm tomas. the storm whether tropical or hurricane force is expected to hit late tonight or early tomorrow morning. we've worked with the haitian government and international partners in anticipation of the storms. not only will the strong winds challenge the haitian people, but also significant danger from the expected heavy rains, mud slides, and flooding. years of deforestation in haiti adds to the danger. in port-au-prince where the damage was significant last year, there are 400 shelters available in around port-au-prince, and these shelters can accommodate close to 1 million people, and we've

encouraged the people of haiti to move to the shelters if they are able, you know, in anticipation of the storm. if there is a silver lining here, and it's a very small one, the storm is tracking west of haiti, but clearly the island will still be significantly affected. we have significant capacity on the ground helping haiti now, and additional resources are standing by as we mentioned in the last few days and hovering and prepared to assist in the storm's aftermath, and since january haiti's disaster response capability, you know, has improved, and the haitian government, you know, is taking aggressive action. in the aftermath of the storm we expect a great deal centering around water and public health. we will have an effort to monitor, you know, public health and hygiene and be alert for any

additional outbreak of cholera, but we also have significant resources prepositioned and are prepared as necessary to move additional assistance to haiti. nearby, tomas has affected the islands of st. lucia and others. our embassy in bridgetown declared a disaster there, and is providing $50,000 which is under the ambassador's authority and is being provided, you know, to each country to help with local procurement of emergency relief supplies. staying in the region, we can confirm the deaths in mexico of two additional u.s. citizen students shot in juarez on november 2. this brings, you know, a total of six over the past week who have been fatally shot, and also

brings to 84 the number of americans, you know, killed thus far this year in mexico. this underscores again the existing travel warning that we have for mexico and for this particular region, but we continue to corporation with mexican authorities and, of course, with these latest two deaths, we offer our deepest con doll lenses to the families. >> [inaudible] >> at this point no, but the investigation is underway. turning to europe, the united states welcomes the visit of seshian president and prim minister. the visit demonstrates the continuing efforts of croatia and serbia to address the

tragedy. we commend leaders for advancing reconciliation and look forward to a common future in the european union with regional rilingses that benefit all. turning to sudan, scott is there continuing to consult with the parties. we continue to support the work of these southern sudan ref ran dumb commission partners to ensure preparations for southern sudan's ref starts on schedule with voter registration on november 15. the united states and united nations delivered materials to sudan officials and are now distributed to the centers and training and hiring of workers

has already begun. ambassador has been home with consultations here in washington and plans to depart tonight to return to continue discussions between the parties. also, in africa, the united states continues to encourage all actors in guinea to continue preparations for the second round of elections on november 7th. we remain concerned. there are been delays with elections in the past, and we don't want to see any further delay. the people of gi knee should exercise their democratic choice and set a course towards a democratic future. after 52 years of nondemocratic rule since independence in 1958, the people of guinea deserve a remitted government -- represented government with a civilian elected president.

here in washington, senator mitchell met today with palestinian negotiators to discuss continuing efforts to encourage the parties to advance towards negotiations on a two-state solution. this follows up on a lunch that assistant secretary jeff feldman hosted yesterday, and as you've heard from the secretary today, we do expect to meet with prime minister next week and the details of that meeting are still being worked out. finally, tomorrow a senior u.s. delegation makes the formal presentation of the human rights counsel in gee knee that presenting the united states report is assistant secretary esther brimmer, a legal advisor, harltd koa and michael posner

covering the human rights record on important freedoms like freedom of speech, association, and belief. it examines a range of challenges including discrimination and topics related to civil liberties in the context of our national security, and it was developed with a host of u.s. civil society actors and organizations. >> can i follow-up on that? >> sure. >> the u.s. -- [inaudible] >> i'm sorry, what? >> is the u.s. worried that it might get the president's term -- >> not at all. the report has been out since late august, and it does highlight, you know, some areas where there is an ongoing debate in the country about certain areas, but the report on balance underscores that we have human rights record in this country that is second to none. we present the report proudly

and are happy to defend it if anyone has any questions. this is part of what we're trying to do, you know, obviously every, you know, the human rights counsel has encouraged every state that is a member of the united nations to make a report, an assessment, on the human rights situation in each respective country. this is our turn to present our report. we took it seriously, and we'll demonstrate that, you know, the process we had in scheduling a range of sessions around the country with people interested in the human rights environment in this country. you know, we believe this shows too the rest of the world a transparent open process through which there's an debate as there is in this country and other countries about issues of human

right concerns. >> so can you just walk us through what state department now has done there in the way of aide? there's an additional nine because of the specific -- is that right? >> well, i meant to bring down a more detailed, you know, record, and i fort to put it in my book. >> then can you -- >> we have a fact sheet. >> okay. there's been one report so far of locals in a camp that they were trying to move them in advance of flooding in the area and locals were upset and started a riot. what kind of security is there that the state department is aware of -- >> no, but i think that you have in haiti just as you have in the united states, you know, there

are some people in advance of a storm that move and evacuate, and there's some people for a variety of reasons who choose not to. this is just a human phenomena. haitian government officials go out to the camps and have encouraged aggressively people to find shelter either in government shelters or, you know, with friends and family, but we recognize that for a variety of reasons there are people in some camps who have chose not to move. >> is there security sense at this point after the storm there may be a need for additional security presence u.s. or other nations? >> you know, i don't -- we do have, you know, there is security in haiti both the haitian national police supported by, you know, and i don't know that we are playing a significant role in the security front at this point. we know that there will be, you know, significant demands, you

know in the immediate aftermath of the storm. we have prepositioned supplies. we have significant capability already on the ground in haiti. you know, obviously in these kinds of situations, you know, this will obviously place great stress on the people of haiti. we know that, you know, particularly with flooding and mud slides, that's going to be a loss of life. that's inevitable, but we will be prepared to do everything we can to meet the immediate needs of the haitian people. sure. >> the secretary had remarks today and seems confident that the negotiations between the israelis and the palestinians my resume -- may resume and saying today and the israeli achieved

negotiations last week. is there any agreement or understanding you can tell us about? >> samir, i think that if we reach a point where both sides agree to reenter direct negotiations, we'll will be -- we'll be the first to let you know. we are working through it, but this is still a work in progress. yeah? >> yesterday the state department designated a terrorist group in iran. i was wondering if this designation has to do with the iran's government statement that the u.s. is supporting -- >> that acquisition is fort. the united states does not support terrorism, did not have any relationships and provided them with no support. we designated him for a simple reason. they met the criteria under u.s.

law to be designated as a foreign terrorist organization. it has engaged in terrorism. it does represent a threat to the united states and to our entererses -- interest in important region in the world. >> there's reports that u.s. pressured you to remove videos. >> i'm not aware of any discussions we've had on youtube about that. go ahead. >> do you think that this is terrorist act or -- >> i don't know if we're in a position to say at this point. >> regarding the survey of the protection program, the units. can you say a little bit about

the process tweenl the u.s. -- between the u.s. government on the programs? >> other than what i said a couple days ago that we work closely with the host nation government. we share information. we have the same goal of protecting our embassy and other diplomats in norway. i've got nothing further to say in terms of the specific process. >> when i asked you you said the norway government was aware, and they are not. who's lying here? >> the security of our embassy involves, you know, cooperation between our security officials and norway officials. i'll stand by those words. >> why have you hired a building outside your embassy in norway

and -- >> that's a better question to ask our embassy embassy. i haven't been there in awhile, so i can't provide you any insight. >> both the state department in norway and the justice department says you have activities outside the -- >> you know, look, embassies are all over the world are targets were terrorist attacks whether they are u.s. embassies or the embassies of other governments. it is right and proper that we would take appropriate steps to protect our diplomatic posts anywhere around the world, and we expect any government to do the same whether it's somewhere out overseas or here in the united states, so, you know, we have a program where we, you

know, look carefully to evaluate if we believe our embassy is under observation and potentially under threat. we share that information, you know, across the united states government, but as appropriate, we share that information with our host government partners. the essence of addressing this challenge which confronts the united states and other countries in the west is the very kind of intelligence cooperation and law enforcement cooperation that has been a hallmark of our alliances for a number of years, so how much the host nation government knows about specific@s, i can't -- specific activities, i can't say, but everything we do is fully consistent with the agreements we have with any host government nations anywhere in the world including norway.

>> is there written agreement about this? >> i can't say. at this point i defer further questions back to our embassy in norway. yes. >> you said that there's no sign that the americans killed were targets. is there any sense of what -- i know one of them was recent. >> let me clarify. these matters are under investigation, so we'll find out, you know, the circumstances. it is mobile that, you know, specific individuals may well have been targeted. it is also possible that individuals just found themselves in the wrong place at the wrong time. i'm not aware we reached a judgment on any particular case, but i think you will find if you look back on the, you know, those who have been killed this year, you have a combination of both situations. >> targeting for being

american? >> or either because they worked for united states government or in some cases they were involved in illegal activity. >> wikileaks is preparing to drop more maybe not yours but from the u.n. or something. do you have any comments on those plans? >> well, we regret all the activities that wick leeks has -- wikileaks has done past, present, and future. yeah, just working through some in terms of storm preparedness, among the things prepositioned in haiti, you know, 40,000 blapghts, -- blankets, 16,000 hygiene kits, 30,000 water containers, 20,000 kitchen sets, you know, working with fema, you know, they've

been a part of this effort. we've got cdc continuing to monitor, you know, cholera outbreak, but, you know, those are among the kind of gear that we have prepositioned in haiti. >> when you knew about the storm or had that been there for awhile? >> since we knew about the storm. we also have -- it was a range of stuff that is already there as well, so we've got, you know, warehouses that are well-stocked and that material has been in haiti already will be obviously there in case it is needed. >> do you know how many personnel you have this specifically because of the storm? >> come up afterwards and we'll see what i got here. >> okay. >> thank you.

>> coming up today at 5 p.m. eastern the chief palestine negotiator delivers a message and see it live on our come companion network, c-span.

now part of a forum on green technology and intelligence. the thransic magazine hosts this panel looking at what is -- [inaudible] this is an hour. >> hi, welcome back. i'm alice a yrk er with the -- ayers with the atlantaic and i welcome you back. on behalf of myself and our underwriters, the i.t. corporation, general motors,

boeing, and our underwriter, morgan stanley, we're glad to have you with us. the second half of the day focuses on the environmental impact and reducing that impact can be good for business and increase competitive advantage for the corporations both nationally and internationally. we're fortunate to have two panels on that subject and a keynote speaker this afternoon. i am pleased to introduce to begin our conversation on this panel to industry, megan is the curator, and if you follow her, she writes daily on a wide range of topics as well as what companies can do to create

better and greener products. she holds a bachelor degree in english literature and an mba from university of chicago. she'll be leading us tonight. thanks. >> i'll ask the panelists to introduce themselves and give a minute on their backgrounds and sort of what they've been working on in this area, so, i'll start with -- [no audio] >> >> my interest stems from the environment and not much of an economy, but i've been interested in the relationship between the thinks and i've been on the faculty for 20 years now and i teach courses on strategy and on global markets which is to say macroenvironments, trade, and finance.

we do our teaching through the case method and i wrote cases about some quite interesting companies in this space and as it happens, none are represented here. >> i'm truman seemans, part of a consulting firm that focuses on stainability, like a little mckenzie-style boutique working with general electric and other large corporations sustaining stability in business models, and maybe there's a theme. i also got turned on to all of this growing up in the region actually around the chesapeake bay around there and worked for the last 20 years at the beer section of -- intersection of business policy and civil society with the treasury department as their climate and energy advisor and climate negotiator with

mckenzie and climate change. >> i'm kathy kelso, national director of the apollo alliance that was formed back in 2003. initially as a member they were then called business, labor, and environmental community leaders. in 2004 we issued a report called clean energy for america, the first report that linked job creation to transition to a clean energy economy. we work in 18 states and cities across the country as well as at the national level to promote policies, create energy security, climate stability, and importantly what we call economic prosperity. i came to apollo after serving eight years in california as deputy state treasurer launching interesting environmental initiatives. >> good afternoon, everybody.

i'm tom, and i head up the industry sales and have worked for several different companies in the industrial space for 28 years and have been with this company for 18 running a number of different businesses, and in the past year head of the sales, and the fascinating part to me is having been out to the fortune 500 companies and a company like ours going from lightbulbs to high speed rails and seeing the risk associated with the word green and sustain the, there's tremendous opportunity for companies like ours to support and drive that, and we're very interested in what people think and how we can help support and make america run better. >> i'll start out by the opening question. what does it mean to green industry?

of course, we go out and look at green products, but now we're at the stage of going beyond the greenhouse hold cleaners and get companies to think the processes are more harmonious with nature. what does that process mean for today's company, and how interested are there in pushing it forward? >> that's a great question that goes to the basics we teach in strategy class in the first year of hair -- harvard business school and chicago as well. if you think about the wedge of the willingness to pay for customers in the output of the firm and the total cost of delivering that good or service to the customer, the job of business strategy is to create that wedge, and then to defend it against competition which is likely to push willingness to pay down overtime and push costs up overtime; right? if you think about that