policy on the debt ceiling. and later the senate returns at 2 p.m. eastern for the swearing in of nevada representative dean heller who succeeds senator john ensign who resigned last week. that's followed by a period of general speeches and a procedural vote on the nomination of james cole to be deputy attorney general. >> you can now access our programming anytime with the c-span radio iphone app offering four network audio streams of our public affairs programming all commercial-free. you can also listen to our signature interview programs each week, and it's all available around the clock wherever you are. download it free from the app store. >> now, author and bard college professor walter russell mead. he talks about the evolution of u.s. foreign policy and how it compares to those of other countries. he's the author of "special providence: american foreign policy and how it changed the

world." this 50-minute event was part of a daylong conference hosted by george washington university. >> call the group to order, and if maybe you might just suggest to anyone who's out in the hallway that we're getting started again. we've got a, you know, rich luncheon program in store. so thank you for reassembling. we've been giving you some school -- i mean, some food for thought in the morning, and now you've had half an hour or so for a little food for sustenance. we're going to let you do both now for about another 45 minutes. you can both continue to eat and, please, do pick up some more coffee in the back if you need to. but at the same time we're going to commence our discussion again, and we're extremely pleased to welcome to the symposium and to our luncheon

discussion walter russell mead. walter is the james clark chase professor in foreign affairs and the humanities at bard college in new york state. i struggled to figure out exactly where it was, but i gather it's sort of halfway between new york and albany, right? sort of straight up the river. i know they've got a great view of the new york countryside, so i can see why he took flight there from washington. you're still also, are you not, the henry kissinger senior fellow? he was until recently the fellow for u.s. foreign policy at the council on foreign relations. now, i have a special affinity for walter both because we write about similar topics, largely from a similar perspective, and because we were both obscure analysts, academics, scholars in the 1990s writing books for the century foundation in new york. now, our respective books were published in 2002, and that's

where the affinity stopped. walter's book became very well known, and walter became famous, and i remain an obscure professor. [laughter] but walter's 1992 book is a real gem. i assigned that book and have assigned it since it came out every year to my graduate foreign policy course. it is one of those books that has a timeless quality to it. i'm speaking, of course, of "special providence: american foreign policy and how it changed the world." the book not only popularized the schools of thought idea that has inspired our project in terms of it application to foreign countries, but it also made the somewhat novel argument that over the centuries few countries have had a more successful foreign policy than the united states. you can imagine that argument stunned some of our colleagues around the world, especially in europe. and in part because in the book

walter, essentially, expunges from the american experience the primary european school of thought in dealing with foreign affairs, that is realism or what walter called continental realism. and as we know, that's been the lode star of at least many european scholars and statesmen over the years, and it's one of the legacies that we enjoy from the european experience in the 18th, 19th and early 20th centuries. i always wondered how walter got away with that, actually, how he expunged continental realism or european realism from the american lexicon and still got the henry a. kissinger senior fellow chair at the council on foreign relations. [laughter] that's a mystery. in any case, he pulled it off. the book, by the way, won a

number of prizes. he has since written a couple of other books, there may be a third one that's just out? no, okay. peace and war which came out in 2004 and then "god and gold: britain, america and the making of the modern world, "which came out in 2008. he is traveling all over the world. we corresponded with him over the last month in brazil and london, other places. he does a blog which i recommend to you. it's an extremely interesting blog with a nice piece yesterday or saturday, i think, on syria. of so, walter, it's with a great deal of pleasure that we welcome you to this occasion, and we hope to a project that shares at least some intellectual communion with you in terms of your interest in the schools of thought. please. [applause]

>> well, thank you for that introduction and, also, for the invitation, henry. and thanks to you for organizing what i think is a genuinely important event in our field of international relations, foreign affairs, foreign relations, whatever you want to call it. at bard after a great deal of hesitation and agony, they changed the name of political science department to political studies. they felt that was more modest and appropriate, and it reflected better the degree of certainty which the discipline is able to provide. i think it's a wise choice. one of the things i like about this project is the way that i think it focuses our attention again on what this discipline is supposed to do, that is, to help policymakers and wider publics who shape the debate over

foreign policy and affect the kinds of choices that we make to make those constituencies smarter about the world. and able to make better judgments. to some degree what i think our discipline at it best is trying to do is to make the incommunicable wisdom that used to drive dean acheson so crazy when george kennon would stress the importance of it, to make that a little more communicable. >> there we go. lack of communication. [laughter] >> my -- you can see my technological skills at work right here. >> that's okay. there's just that -- >> what do i need to do? the laptop need to stay open. all right. [laughter] incompatibility of technologies here. can we move it like this so that -- okay.

so that this will not fall as quickly. okay. all right. [laughter] look, when i think -- can you hear me this far from the mic? >> do you have a powerpoint presentation? >> no. [laughter] okay. >> thank you. >> when i think about the kind of thing you're trying to do in this project which is, ultimately, to bring culture back into the discussion of foreign affairs in a thoughtful way, i do think of george ke, this non as an example of -- kennon as an example of someone who did this so brilliantly and profoundly that it shaped two generations of american foreign policy thought. kennon brought his understanding

of soviet culture, russian history together with his understanding slightly in some ways less complete of american political society and political values together with a vision of how the world worked and what the, what the world political realities, power realities were in the 1940s. and he was able to lay out from that a sense of what the russians were after, where and how those ambitions created real problems and conflicts for the united states and what sorts of actions could the united states take, what sorts of negotiating stances could we take that would allow us to pursue an effective method of countering the dangerous elements of what the soviets were doing. and that policy of containment, though it was reviled and disputed and contended over and fought about, really does do a

pretty good job of encapsulating the center of gravity of american foreign policy right up through 1989 and 1990. that, i think, shows what this kind of analysis can achieve and how important it can be. to do it well. and if i were to define what i thought was the most important task facing people in our profession today, i would not say it is to come up with a seven-point plan for bosnia, although seven-point plans for bosnia are always very good especially if they work, but rather to create, create the kinds of people who can look at whether it's in bosnia, whether it's the u.s. relation with india and, indeed, in other countries who can look intelligently, deeply and wisely into this and come up with creative, useful ideas.

little bit away from theory, a little toward practicality. but it's not the sort of pragmatism of the uninformed or uneducated. it is, again, its wisdom. i think this project of encouraging people to look at the way that other countries and other communities think about their options and think about their strategies will promote that kind of ideas among foreign policy analysts here in the u.s. finish and i think what daniel mark key said was -- markey said was absolutely spot on, that he wished when he was in government he had the advantage of this kind of information. it would have provided him a great deal of help in trying to just understand what am i -- who are these people, what are they, what are they thinking as they look at me, and how can i begin to think about how to deal with them effectively?

if we're going to do that well, if we're going to produce them well, i think we need to think a little bit about the kinds of studies we're going to produce, the kinds of inquiries that we can carry forward. what does it take to make a kennan? i would say -- and perhaps a slightly improved can kennan. i'll give dean acheson that much credit. a slightly improved george kennan. first, it is a deep knowledge of your own society; its politics, its history, its economics, its culture, the history of its forbe relations. interestingly -- foreign relations. interestingly, american foreign policy is very seldom taught as a summit in our universities -- as a subject in our universities today. there are few really good texts on the subject. it's even less taught outside the united states. but a deep understanding of the

history of this country's foreign relations, i think, is an absolutely vital first step to the production of people, the education of people who can make good foreign policy into the future. then i would say the next thing is a knowledge of the other. in this case, let's talk about the significant others. the key countries, cultures out there with whom your foreign relations will bring you into deep contact. so that what george kennan was able to do about russia one would hope that our policymakers in the future, their education will prepare them to do this about a number of places. that there's a good generalist background that helps you understand at least at some level of complexity various regional cultures, national cultures, foreign policy debates

around the world. and then, also, the -- then prepares you to go more deeply into ones that you may personally be more professionally concerned with or that may erupt and force us all to focus on them. we would also need a knowledge, and i think this is also important, of the historical process, the direction of history as it appears both in our society and around the world. in the united states, we live in this idea that for the last three, four hundred years things have basically been going in the right direction. you know, the development of an english-speaking, global/liberal commercialization in which certain values that we care about achieve at least lip service in other places and, in general, you know, we're sort of like beavers who have been making a dam and creating a beaver pond. and we think it's pretty good, you know?

the beaver pond is getting bigger, that's great. well, you know, the rabbits and the weasels that have had to move as the waters of the pond rose are not as happy about the beaver pond as we are. so we need to understand this historical process, both the ways in which our relationship to it as a society and as an individual shape some of the presupposition we bring to our analysis of international affairs. but equally, ways in which other societies have, have been shaped by this encounter. that in the world of, in much of the world of islam, the rise of the anglo-american liberal commercial society sort of simultaneous with and in some cases had a causal relationship with the destruction of every single one of the islamic empires of modern times. the persian empire, the ottoman empire, even in nigeria where

the arrival of the british ended the expansion of islam in the north. so the historical process looks very different from where you are. this will inevitably shape the way people form schools of thought, the way domestic politics resonates. i remember once talking to some indian friends about 20 years ago, you know, why can't we have a nicer relationship, you know? why can't we be more friendly? i said, we don't want to take anybody over, we don't want to conquer anybody, we just want to trade with you. my friend said, that's what the british said when they got here. [laughter] that's exactly what they said. you know, fool me once, shame on you. [laughter] so, you know, one has to understand this and rather deeply, i think, to begin to get a sense of where are they coming from. when i say x, what do they hear?

and what do i need to say in order for them to hear what i intend for them to hear? so these were the thoughts that were behind me when i started writing "special providence," toiling in the salt mines of the century foundation. by the way, i should say to those of you who do teach "special providence" that the completely insane price of $45 represents entirely the decision of the century foundation. i have nothing to do with it, and i don't get any of the money. so, please, tell all your students not to hate me, if you can. [laughter] or at least not to hate me for that reason. [laughter] by the way, during the bush administration -- i still do this some -- i spent a lot of time traveling around on the state department speakers' programs to talk to people around the world about american foreign policy. i increasingly define my mission as trying to get them to hate us

for only the right reasons. [laughter] no, don't hate us for that. this, okay, i understand. but, that, don't hate us for that. and that's actually what a lot of diplomacy can be. anyway, i tried to think of the concepts of these schools when i was thinking about them in the american context. the first thing i did was i broke with using theoretical models or abstractions. i could have called the will -- wilsonian school liberal internationalism, and i could have done those nice powerpoint charts of, you know, the four quadrants and show how each of these represented a different sort of abstract concept. but i didn't think that's actually the way foreign policy debates move in our society. debates, you know, sort of logical debates over abstractions. it's communities, it's cultures,

it's, a lot of it is emotionally-based. and if you want to understand the way americans respond to events in the world around them, you somehow have to, have to communicate all of that flavor. not just the black and white, you have to have the color. so i picked names; hamiltonian, jeffersonian, jacksonian. even those are inexact. i mean, particularly in the case of thomas jefferson n. a very long career he was for and against almost anything you can think of. in general his position seems to boil down to if he did it, it's constitutional. [laughter] which, its -- it turns out in that way, if no other, he's been the father of all succeeding presidents. so nevertheless, you can point to certain currents of thought and feel anything the american case that really do trace

themselves back to the 1760s. and so i looked for these continuities, i looked for these communities of thought, and i tried to ground our understanding, my understanding of the discussions that we have over what to do now with the cultural forces that shape the people who participate in these and help us understand what they hear when i say x. i also, i have to say, i tried to be fair. it's very difficult because -- to be fair -- because most of us start with this idea that there is one good foreign policy at any moment. and, in fact, that may be true. but, you know, even if, let us say, the liberal internationalists are theoretically correct about foreign policy, you know, the way the world will end up and

the world will ultimately end up a peaceful world of happy, liberal democracies, okay? the that still doesn't tell -- that still doesn't tell us what to do in bosnia today. one still might need to act as if cold realism were the correct theoretical case. the line between theory and policy is, actually, much more tenuous than we tend to think. in any case, it finally began to seem to me that, in fact, policymakers never really know the future. that was a shocking realization. and that they are making decisions on the basis of imperfect knowledge, and they're calculating political domestic risks as well as international ones. and so that one needs -- and, in fact, in the american case one of the ways in which our system has worked well is that the debates among these different schools and the schools' rise

and fall and influence depending on how successful their recommendations are perceived to be. or how pragmatic their perceptions are perceived to be in particular circumstances. the u.s. policy system is able to alternate between fairly cynical real-politic moves, lib call idealistic wilsonian moves, very aggressive assertions of the national interest or stepping back from time to time to let, met thing -- let things be. we're able to do this even though we don't have a single controlling intelligence in the country, a business mark who -- bismarck who rules the roost and is able to direct everything according to plan. and this is a very anglo-sax son picture of how foreign -- anglo-saxon picture of how policy works, the invisible hand that is sort of better and works better than a single grand plan

might do. it's why a country without a strong state or a powerful foreign ministry, state department and so on can, in fact, over time show success in its foreign policy because the political process keeps us focused in various ways on the national interest even though nobody in washington necessarily has from administration to administration, decade to decade a single coherent, guiding picture that is ruling us. in any case all of that that i did, which some people have found useful, in fact, for me surprising numbers of people have found useful as a way to analyze the u.s. the book's been translated into chinese, and people teach it in chinese universities and other places, how the american system works, you know, how applicable is it to other countries, one asks.

and this is part of the question you guys are beginning to try to answer, i think, in this book. and it does seem to me that if i learned one thing from what i did in foreign policy, in "special providence," it is the uniqueness of the american system. that is, you know, liberal internationalism may exist in every culture as an abstract idea or can, can come, can be transmitted. but wilsonianism has a special thing as a set of american principles and values, you know, has a unique relation, historical implantation in shape and scope. so i think it's going to be the necessary first step. this is what i would counsel anybody trying to study, to think about schools in other countries, schools of thought. is to get deep in the weeds of that country's history and

culture. and don't think too much -- don't think at all when you're doing your analysis about can this be compared to this country or that country. just try to get it on its own terms. um, the -- you know, for example, if you were to study french populism as opposed to american populism, i think one of the things you would quickly run up against is that all through modern french history there's been, there have been really two contending populisms. one populism traces itself back to the jacoben cause and the other is the counterreaction, sort of the von dei v. paris. and both of these are populist in that they often describe the

attitudes of large numbers of not particularly well-educated people. they're sort of default positions for french culture. so you can't quite speak of a french populism that works as the jacksonian nationalism that i write about in the united states. they occupy somewhat parallel positions in these different universes, but understanding the differences between them is, if anything, more important than understanding the similarities that they have. another thing to think about is that the relationship between civil society and the state or the people and the state is a little bit different in the united states than even in many other democratic countries. and this effects profoundly the way foreign policy works in the united states. and the way in which different schools of thought are

manifested. one of them is that in our state department in particular unlike most foreign ministries around the world, political appointees reach very deep into the heart and substance of the bureaucracy. our state department is much less of an autonomous, inwardly-focused foreign policy-producing machine than, say, the japanese or the brazilian foreign ministries or many others one could name. and so in this way american society, american foreign policy is much more affected by changed in the political winds every two to four years. it's also true that the division of power between congress and the the executive is set up in ways that magnify the importance of minorities, especially the blocking importance of minorities. so the fact that it takes two-thirds of the senate to get

a treaty ratified means that our nationalist populist, our jacksonians can usually get up a pretty good case to ratify -- to oppose treaty ratification. it's the biggest miracle probably in american history in the last 30 years was the ratification of the panama canal treaty which was also a political disaster for the administration that did it. but those, you know, so things like the international criminal court, the kyoto protocol and it successors are going to be very hard because in the u.s. we've set up a way in which this populist nationalism can sit at the table when treaties are ratified. in other countries that's not as true. so one would need to understand not only the forces in civil society, but the levers that civil society has to manipulate the policy process.

and then one needs to understand to see how things are beginning to change how changes, for example, the greater democratization with a small d in a country like india. the increasing transparency, the growing role of smaller parties and coalitions and so on. how, if at all, is that changing the way, you know, the relationship of foreign policy to the rest of politics? to the kinds of -- these are the kinds of questions one has to answer. this method of analysis is going to lead to more questions than answers. we're not really talking about science here, although, you know, it's an organized body of conjecture more than an organized body of knowledge perhaps. and we're, we're hoping to find useful rules of thumb rather than laws. and we're hoping, i think, to -- ultimately, we need to think

that as a profession we're hoping to form intelligent individuals and an intelligent public opinion rather than coming up with a sort of, you know, set of universeally valid ideas that can be proven by regression analysis and other things like that. that's not the goal, i think. and i tremendously value this project of looking at different schools in other countries precisely because to the extent you succeed in this, you will be making communicable what previously was incommunicable knowledge. you'll be making accessible the kind of understanding of other cultures, other countries that previously one could only have at the basis of a long career of study, living and working in a particular culture or country. so it's important work, i'm glad you're doing it.

go back and work much harder, is my advice. there's lots to be done. [laughter] thank you very much. [applause] .. >> people have looked at what's happening in the middle east and what's happening in the obama administration. some people say the old idea that you have to choose between realism and idealism has been completely raffled. now it looks like maybe if we do the morally right thing, or what people in the middle east also a great is the morally right thing and support democracy, then when

the parking. is no longer choosing one which we of the. this is kind of paradigm shift and it involves -- some people, just not knock at a solution is neatly and bowling things over because they're doing now with these events suddenly unfolding but with a real paradigm shift going on now, huntington is out, have things changed that much? or maybe not? what do you think? >> i think the first person who said that, although i don't think he mentioned huntington and kissinger was thomas jefferson inhaling the french revolution. and, in fact, if you look at it, the history of the last 200 plus years has been a history of revolutionary ways that in various ways inspired both enthusiasm and then ultimately a lot of confusion and heart searching. in the u.s., we definitely had that reaction with the french

revolution. the next time it came along was a latin american wars of independence and revolutions. and windows revolutions like the french revolution turned into sort of, had very disappointing consequences, civil wars, anarchy, someone and so forth, that was a kind of falling off in america, you know, realism reigned and idealism was out the window. 1989 was one of those revolutionary ways that work. and when you talk, some of this is generational, policymakers who were at a certain age in 1989, 1990, have a kind of default got emotional believe that revolutions work in the sense of actually producing liberal democratic societies in the majority of cases. politicians with either longer or shorter memories may have a different assumption.

so there i'm afraid i have to say, because the last moment of the grand revolutionary way and our interests, our interests and our values are identical. actually george w. bush said that in his second inaugural. francis fukuyama said that at the end of the core concept of the end of history, although frank is a much more nuanced thinker. so it's the oldest thing in american history, what you just said. and the fact that so may people each time it comes up think that it is new is one of the reasons that people like us need to work much harder to do our jobs well. >> yes, sir, in the back. >> thank you very much. i'm with the united states of africa 2017 task force.

you are lucky i was not a student in the '60s here because i always asked questions. fonts about what you are talking about. one would have to ask you on what basis should foreign u.s. action taken, what should be the conditions, should be based on facts, intelligence or fabrication? think about mass destruction, iraq. and then also think now about the latest situation. what are the basis for your taken action in foreign countries? misperceptions? paranoia of the decision-makers?

>> well, if one looks historically, you can see that all of those have been at times important players. you know, when i began my remarks i talked about the importance of understanding emotions and culture, and also imperfect knowledge. you know, the war of 1812, you know, was fought over the british orders. the british had actually repealed the orders of in council before the war was actually declared. so there's the spanish, you know, the spanish blowing up of the battleship maine. president lincoln, his first nickname in national politics was spotty lincoln, because president polk said the reason the mexican wars the mexican troops fired on u.s. troops in u.s. soil, lincoln kept saying show me the spots, show me the spot where this happen.

so he was known as spotty lincoln. it's rare that anybody is as helpful as either jefferson davis for the japanese in 1941, in clearly firing an obvious first shot. and i think it's true but i think this is true not only of the united states, i think it's true of all countries and all leaders, one brings one's hopes, one's fears, one's ambitions, one's interest, one's values in a kind of a mixed bag to every crisis. and in a crisis things happen fast. we don't always know why we do what we do. so i think, there again when i suggest is, study the record and realized that we can say, normatively one should never do x., or one shouldn't. but in life, one does and one probably will again. yes? >> thank you very much.

i'm a student at the school, a research assistant. first of all, thanks for the center for putting on such a lovely pale. much, much earlier on i believe the first bill which was on china, the doctor said something about not trained or functional our regional concentration of groups, that tendencies and what you've outlined with the jacksonian, jeffersonian continuity, or discontinuity of miles of riding a tendencies that different u.s. administrations might engage in, would that be more prescriptive or descriptive of other countries using the respective lives of foreign policy on the u.s.? >> i'm sorry, what would be -- would well be more? >> labeling them as tendencies. >> i think other countries could be, you know, would do well to understand this american tendency, these different american tendencies. for example, i think if the

japanese had really understood what the political reaction to pearl harbor would have been, i doubt they would have launched the attack. and, in fact, that larry that most of the time, the average american -- the polarity, is not particularly interested in american foreign policy. and as long as the elites are not costing them a lot of money or her a lot of money, or seemed to me people to go get killed, they kind of let us do what we want. but there are certain red lines that, when they are crossed, then the jacksonian skit engaged. and when they are engaged they expect things to be resolved in a certain way. so certainly for, and kaiser wilhelm i think arguably made the same mistake in world war i. he really thought that america was so sort of internally divided, ethnic politics and so one being what they were, that the u.s. would not be able to

bring considerable force to bear in that war anytime soon, if not ever. if he had understood that better, i don't think the zimmerman telegram would have been written the ways in which that telegram just ignited a certain reaction in the american popular mind. so i definitely think that for other countries there are tremendous advantages in understanding the way we do in the way we don't respond. other questions? yes. [inaudible] my name is chris neil, i'm a student at the l.a. school. in your recent article in foreign affairs, you talk about obama, our jeffersonian, part wilsonian, and we heard today that any was described as the ambiguous country. you also described jefferson as ambiguous.

do you think that obama is ambiguous? >> first of all the article was in foreign policy, the one you are referring to. which i should point out that my more recent article in foreign affairs was about the tea party comp so that's what i thought you're going to ask me about. look, i think president obama does, i think we have seen this still at work, in a sense he like all of us, he's gotten more than one school of thought in his it. the way i describe the schools of thought is that unlike hands of cars. they are like the forces in a hand of cards. some people have more heart, more wilsonian characteristics, maybe in other people. some people have more clubs, more jeffersonian or whatever, right? so, you know, obama seems to be long in two suits, okay? he is a long in the jeffersonian suit of, you know, again i think

it reflects a lot of the experience, his expenses of a young and the bush administration. the u.s. gets in trouble when we engage too much overseas. we define our interests expansively. we start having a lot of conflicts. this helps create a police state, you know, patriot act and so on, as lead to crackdown on civil liberties when we are under attack. it diverts resources away from both domestic and for that matter more important international problems. so you need to define your interests of down, worry less about ideology than pragmatics. i think that's clearly a part of president obama's worldview, and the way he interacts. on the other hand president obama, you know, in a sense believes less in america as something that has been created and needs to be preserved, but he believes in america as a great city, a shining city on

the hill which we need to build, which is in the future. and we need to do that, the way we do that is by working not only to build a city on the hill here at home that building freedom at home, abroad, standing up for what's right. you know, if you won't future power to prevent the genocide abroad, usual power. who are you if you can stand aside and let certain things happen. so i think he is genuinely as a human being born between these alternatives. now, and they are both in my give completely legitimate ways to think about the world. the problem is that those two in particular, you know, are hard to reconcile into a clear line of policy. and which often do, i think jimmy carter is a president who had some of these same instincts, both sets of

instincts. what often happens is you can start doing things for human rights as long as they are cheap. you know, that seems like the obvious way to reconcile the two. now, what that instantly exposes you to is charges of hypocrisy. because, you know, you proclaim your principles very loudly, but you only defend them when it doesn't cost you anything. so other people look at you and they draw conclusions. and that i think is one of the problems that president obama has faced. but another one is that your wilsonian, you know, just as jimmy carter's pursuit of human rights help destroyed the détente and a new relationship with the soviet union, that he thought could underwrite in general for strategic foreign policy that he wanted, so innocents president obama's, you know, decision that the right thing to do is to help president

mubarak move onto the next each in his career, i.e. a prison cell. you know, that been completely interferes with other goals, or now he's involved in libya. let's all hope it goes well. but here's the problem now in syria. partly because they are encouraged by hearing the americans talk about duty to protect. here are people who live under a regime that is not only potentially genocidal, has actually killed 10, 20,000 people. to preserve its own power. if he interferes in syria, he will, you know, this will kind of in any reset with iran or really short-circuit a lot of issues, getting involved much more deeply in the middle east. it shakes the iranians. that's another option. but it's to much bigger things. the biggest problem with

wilsonian policy for an american president is that conscience is not strategic. right and wrong are not commensurate with strategic advantage there. if you give it czechoslovakia, it wants paula bickett always wants more. and it always wants everything. jeffersonian ism, this caution is elevated, strategic thinking into common into the major principle. of your foreign policy. so president obama is struggling to reconcile to absolutely valid worldviews that have a hard time coexisting. and the problem is that it exposes his policy to all kinds of criticism and also danger. i wish him well. i really do. >> i will take the prerogative

to ask the last question. these have been extremely helpful remarks. part of what we tried to do in this process, and i would completely agree with you that one needs to start a culture, culture of communities within each country. [inaudible] so schools on fox of other countries -- schools of fox of the the country. cultures communicate by the motions and by experience. but they also communicate by abstractions. those are different in each culture, but nevertheless it seems in order to access ultimately a school of thought, either in the united states and understanding pearl harbor, or a culture of another country so we

don't do things they don't understand, you've got to find common abstractions. you've got to find some language of communication between the cultures of those countries and the culture of our country. we've settled on some analytical distinctions to this particular study because we are struggling to try to find, you know, the basis on which we can communicate. because you really can't committee on the basis of emotion and experience. we are outsiders. that's part of the construction of countries. so if you could have one of your last comments on the. >> i agree with you that it is attention that is not finally resolves. solvable. it is there. of course, this is good news for those of us to make a living in the field come it means we will still be needed. but i would tend to have a bias, and maybe this is because that's the way my mind works, to start

with the grassroots and work up. that is to say, as you move forward on this work with the rising powers and so on, i would say you want to produce, you know, if you're going to speak ideally, you would produce a token billion look at india, at japan, and russia, at china. in a, that integrates that, the foreign policy perspectives into just a mastery of the country. and then i would then look at the perspectives that emerged from that kind of depth and think, okay, what are the cross, you know, how do we build the structures. because i think in less we do that, there's a certain -- because of the analytical framework of modern political science is so anglo-american, and what is an anglo-american,

so european, that relying on the framework and actually obscure some of the key questions from actually appearing. you know, the word nationalism in india means something so different from what it means in france or in denmark. but in the united states it means something else again. so these words, you know, the french call those cognates but don't actually have the same meaning false friends. and i am more worried about the false friends that i am about open enemies and so forth. so, what i would suggest again is that the theoretical integration of the results of studies of the cultures surrounding foreign policy in different countries come into some sort of international across -- >> just a couple minutes left in

this event. we will leave at this point i go now live to the national press club were a group of tea party activists are holding a press covered today and targeting the house speaker, john boehner, and congressman polis and other members of congress for getting in on the debt ceiling. this is live coverage here on c-span2. >> chairman of the freedom jamboree and tea party national straw poll convention which i mentioned already will be held in kansas city. in october. he was "time" magazine face of a tea party and leader of 1.9 million tea partiers who marched on washington against obamacare in september of 2009. he's a veteran of the secret service, the pentagon and a vietnam combat veteran with the u.s. army. that's william temple. second speak will be joseph farah, and he is the editor and founder and chief executive officer of wmd.com, and he is a

nationally syndicated columnist with creators new service and author of the tea party manifesto, and other books. our third speaker will be brian westbury, and brian is the chief economist for first trust advisors in wheaton illinois. he's a former chief economist for joint economic committee of the u.s. congress, and he's a member of the academic advisory council of the federal reserve bank of chicago. are for speaker is doctor daniel j. mitchell, senior fellow of the cato institute and a former economist for the u.s. senate finance committee. fifth we have reverend cl bryant. he's the director of tea party founding fathers. is a member of the red river's tea party, shreveport and bossier tea party, and tea party

patriots tea party patriots. a fellow at freedom works and former president of the naacp in garland, texas. he's a documentary producer, and you can find out about that as runaway slave movie.com. he's a baptist minister and founder of one nation back to god.com. that is reverend cl bryant. and, finally, we have bob vander plaats who is the vice chair of the tea party national convention. he was the tea party's 2010 candidate for governor in the state of iowa. and bob is the ceo and president of an iowa-based organization called the family. before i turn it over to william temple, i'm going to read a statement that we were given by michele bachmann in lieu of her absence. the tea party is everyday americans, and everyday americans want congress to stop

frittering around the edges of our government spending crisis with small cuts. they don't want the debt ceiling raised and they are demanding that washington to live within its means. i'm not able to be with you today, at today's tea party press event. if i were i would tell you that i hear you and i agree. it's time to reject the debt ceiling scare tactics and address the truly frightening reality that our debt is at $14 trillion, and growing. the debt ceiling but will offer an opportunity that was squandered during the vote for the 2011 continuing resolution. even as you gather in washington today bureaucrats are spending tax dollars to put the boots of obamacare and make it nearly impossible for us to stop this massive job destroying budget busting entitlement. any vote on the debt ceiling must include a vote to fully define the obamacare. to do less is to ensure that the next debt ceiling vote, the 75th increase in the last half-century will not be the

last, and that is unacceptable. thank you to the tea party for not giving up the fight. your stubborn determination to return our country to its founding vegetables gives me great hope for conservative accomplishments in the current house of representatives, and even for even greater victories in 2012. again, that was congresswoman michele bachmann from minnesota's sixth district. and now i will turn it over to william temple. >> good morning. i'm william temple, and i play the part of one of the first signs of the declaration of independence, the person on the left and the first one the british would have done. we do this colonial outfits remind the current government of the first revolution. and we are in a revolution right now, the american people. when the tea party movement started in early 2009, i joined hundreds of thousands of others

who, like our founding fathers eminence of u.s. citizens and soldiers who have gone before us have taken up the fight for freedom over and over again. my role as a founder of our local tea party group in the golden isles of georgia, i eventually had the honor of literally leading the 2009 march on washington their with a fife and drum corps. 1.9 million of my fellow citizens as we marched in washington against obamacare and big government tyranny, which obamacare represents. the first act of tyranny since the british were kicked out of this country. on march 1, 2010. last december i was elected by my fellow tea party leaders to chair the tea party national convention this september in kansas city, kansas. in that capacity i am in touch with virtually every one of the

thousands of tea party cell group leaders across the country. i know how they will think and feel since they are the real grassroots folks that ride the bus is 10 hours up here to d.c. and put their last paycheck to do it. but right now we are very upset about those that we sit here in 2010, just last november come to service in the u.s. house. during the fall of 2010 the house republican minority promised us 100 billion in cuts for the 2011 budget. most of the huge house gop freshman class, while they were candidates, also promised us they would not raise the national debt ceiling as the current cap of 14.294 trillion. based on these promises, the tea party 2010 efforts swept house republicans into power, and everyone knows it.

and john boehner into the speaker's chair. yet, we've been deeply disappointed. instead of a fighter for u.s. taxpayers, mr. boehner has been a surrender is, if that's a word, who waved the white flag before the first shots are fired. before the battle is even joined. instead of delivering that 100 billion promise cuts, mr. boehner opened his baby at 35 billion cash at his bidding at 35 billion obtained 20 billion, spit in the ocean, folks. worth about five days worth of u.s. borrowing. y.? it seems house speaker john maynard boehner and his fellow rino republicans in name only fled to spend other peoples money just as much as the democrats. last year the house republicans minority joined with the tea party to fight fiercely against obamacare. but once in power this year,

nader's house republicans majority, after a hollow purely symbolic repeal vote have adamantly refused to use their genuine power to fix obamacare, medicare, medicaid, or any of the other out of control entitlements in abusive washington spending which threatened to bankrupt our nation and destroyed our currency. not even a question. washington is barring 40 cents per dollar of federal spending, 4 billion per day. to bury our children beneath a smothering national debt, yet these wimpy house rhinos refuse to hide president obama's mastercard. representative paul ryan, and we've all heard about his great budget, so-called courageous budget, adds 9 trillion to the u.s. debt and doesn't even get balanced until, get this, 2063. i'm old enough already as button

gwinnett, but i will never see that happen. house republicans hold in their hands a wmd, a weapon of mass discipline, if they would use it. all they need to do is lock arms and say, mr. president, we're not even going to call a vote on raising the debt ceiling. we won't even think about i'm hiding your credit card until you have joined us in an acting bipartisan entitlement reform and fixing the obamacare mess. that's what they should do. to wield this awesome weapon, house republicans don't need to pass anything. they don't need the cooperation of harry reid, the senate democrats, or the president. all they need to do is nothing. wouldn't that be lovely to of congress do nothing? just sit on their hands and refuse any vote, to allow more borrowing be on the current debt

limit. the tea party plans to score just one vote in the u.s. house for purposes of candidate ratings this year. a few vote to raise the debt ceiling -- if you vote to raise the debt ceiling you get a zero from the tea party. if you don't vote to raise the debt ceiling you score 100, and you are a hero. everything else from votes on the budget to writers to appeals to trivial spending cuts is just smoke and mirrors. this is your town. we will be judging the house republicans and the democrat colleagues on one issue only, did you vote for more debt ask that's it. red ink requires pink slips. federal layoffs and downsizing for d.c.'s ruling class just like for all the rest of us out there. yet, boehner aims to maintain full employment while the

private sector bears the brunt of the washington main economic collapse. i wish our tearful house speaker which is showed some compassion for american taxpayers and our children that he and mr. ryan have already surrendered to president obama. it's a cowardly act of treason against coming generations, and we may be able to get into something really to cry about in 2012. today, rino hunting season opens. and yes, i brought my musket but you will notice there is a flower in it. we were not the ones who did 7 million damage, dollars damage in wisconsin by the way. to all tea partiers and voters, we say, stock them with phone calls, blog less and picketing of their district offices. they will vote for more debt without even depending upon the gears repeal. obamacare must go. that's why that house is filled

with republicans. but please, not the pretty flowers in the barrel of my musket. we are calling our kansas even the tea party woodstock festival. we are urging nothing but peaceful, yet that down, peaceful, nonviolent yet relentless pursuit of all house republicans who have gone wobbly in for more national debt. the tea party movement opposes any house gop action on the debt ceiling, and we oppose more debt, the tea party. but because i know our people very well, i marched with him, i have rallied with them all over, i think it is safe to say that the tea party movement as a whole might possibly, just possibly forgive boehner and the house republicans, a small bump in the debt ceiling.

heck, we might forget to get our legislative scorecards printed. now, how does that happen? if obamacare is revealed beforehand we might make a deal. five top market-oriented think tanks including heritage, cato, american enterprise institute and national center for policy analysis agreed on top, the top 10 things the house gop needs to fix obamacare. yet boehner, writer have simply ignored it all. another if. we might be in a forgiving mood if the other health care entitlements of medicare, medicaid and the u.s. tax? cash tax code drivers get fixed before him. everyone agrees on the president and his deficit commission to conservative republicans that fixes are necessary. so why does paul ryan's budget

the ladies out so fixes for a decade? another if. if the only thing offered on the table to obama read is a debt hike of 100 billion, we were not supposed to get that issue? 100 billion, not a penny more. that's the -- in fiscal year 2011. if the president doesn't like it, let him figure out what to prioritize, and there's a lot you can prioritize, and what to cut when the cash starts running out. that figure also approaches the ballpark of a months worth of u.s. and. 100 billion, a months worth occasions he sets up another debt ceiling. so after about 100 billion cut, we will meet with him again. then we will try, talk about the next 100 billion. if at least half of

discretionary spending gets cut, most of it is even unconstitutional, unsustainable, silly, or evil. how can we tell future generations that we settled them with trillions in debt for fannie mae, freddie mac, hud, planned parenthood, national public radio, which is not which is paid for by government funds, tobacco subsidies that cause cancer, and epa co2 regulation of human exit. we will tell our grandchildren. how can we tell our children that we do their do their debt great in order to hold official washington harmless from the kind of layoffs that the private sector has experienced in every session caused by congress as banking and housing policy. yet, none of them are going home. how can we tell them that we

kept on borrowing 4 billion per day in order to buy a third of u.s. corn crop for ethanol, subsidies despite food prices for the world's poor. and if boehner stops misleading, another if, if boehner stops ms. lee house members and all america by echoing treasury secretary geithner's default defeat, its ally, folks. when he tells them that house and action on the debt ceiling equals the default to federal bondholders. it is a lie. because there is plenty of tax revenue to hold interest on t-bills, and geithner himself is in charge of paying that interest. what mr. geithner really means when he says we will default on federal obligations is simply no more borrowed cash, will be available for every kind of spending authorized by people

who can't say no. and in another if. if social security, social security's unfunded liabilities, and those of the entitlement programs, including antimarriage subsidies in u.s. welfare policy, that fuel crime and other costly socio- pathological -- too much from last night the social pathologies it addressed in advance. and then another if they get the house armed services committee and the pentagon slow down on and checking open homosexuality and females into forward combat roles. is that necessary? when the pentagon's own studies show that the military of the feminization may have an extremely costly impact on recruiting and retention, when islam is have shown their willingness to sexually brutalized republican --

brutalize american female reporters, why would john boehner's house republicans be caving to political correctness? why would house republicans who know better by fostering inappropriate attraction in the intimacy of tents, bunks, barracks, platoons, subs, tanks, convoys, cockpits, latrines, showers, toilets and locker rooms when we are fighting wars in three muslim nations as a . as a combat veteran i know. we don't have time to worry about the guy behind us. if a balanced budget a minute requiring a super majority for tax increases passed the house and senate for ratification by the states, and we're not going to hold our breath on that one, but we would like to see it. and then finally, if white house leadership start following the examples above a hill voices like tea party caucus leader michele bachmann, freshman

christi gnome, republican study committee chair representative jim jordan, and senators rubio, paul, dement, moran, lee, vader and coburn who have been talking or playing to filibuster against raising the debt limit. the tea party will not be in a forgiving mood this fall at the tea party national convention in kansas city. we are going to kc, not d.c. this year. as the gop primary season opens, if house freshmen and others elected by the tea party caved to obama, we will find replacements for them this fall. thank you. >> thank you, william. my name is joseph farah, and i have a very brief statement. when the republicans took over the house of representatives in

last november's election, i emea they began thinking -- i emea they began thinking what the new gop of authority could it comes with controllable and half of of the congress. obviously passing any means will legislation objectionable to the administration or senate democrats was out of the question. house republicans could propose cutting the budget but could never hope to persuade their counterparts in a democratic controlled senate to go along with them. let alone the man in the white house. they could rangel with democrats and take symbolic action to demonstrate to the public they were real differences between the two parties, but at the end of the day i could think of only two actions house republicans could take that would allow them to a certain themselves and impose their governing

philosophy on the senate and the white house. and of those two actions are saying no to any proposed tax increase, because without their assent there is a chance for democrats to raise taxes. at least until 2013. the second was saying no to a hike in the debt limit. and in this case without their assent there is no chance for democrats to continue business as usual, or even implement programs such as obamacare. in fact, it would require something republicans have been calling for for decades, dramatic cuts in the budget that would actually require washington to return to something resembling limited constitutional government. but by january, only days after the republican majority over the house, as you've heard, leadership began issuing statements indicating the second

of those two actions was off the table. john boehner stated time and again since then that the debt limit had to be raised, had to be. now, having spent a significant amount of time looking at the options of the house republicans, i was initially mystified by boehner's position. because in effect he was capitulating to business as usual in washington. i was naïvely, i think, sure he just hadn't thought this through properly. didn't he understand the power he had in his hands? so i organized an innovative grassroots high-tech lobbying effort directed exclusively at house republicans to persuade them to vote no on raising the debt limit. as so many of them had promised to do while campaigning for the fall election. and that is the no more red ink

campaign, no more red ink.com. and today is delivered about 1 million hardcopy letters to 241 house republicans who have all the power they need to say no to more borrowing and spending. now, i know this campaign has galvanize a lot of support among house republicans, because we've been doing head counts. i'm sure john boehner has been doing head counts as well, but we been doing them now for several months to see the changing votes. when we started the campaign in the beginning of february, i could only count about a half-dozen house republicans fully supportive of a no vote on increasing the debt limit beyond 14-point $3 trillion. today, the vast majority of those house republicans do. and we're approaching the

necessary 218 votes to stop it cold. that's why i'm here today with my tea party friends to remind republicans of why they were sent to washington last november, and to warn them of the consequences of betraying their promises and the rhetoric to change the direction of washington governance. if republicans provide the votes necessary to continue the borrowing and spending madness we've seen over the last several years, they will be telling americans effectively there is no alternative to the democratic party irresponsibility. they will be telling americans, representative government is dead. they will be telling americans republicans are all talk and no action. and they'll be telling americans if there is virtually no difference between the two parties. and they will be seeding their own fate in the 2012 elections. thank you very much.

stuck my name is brian westbury. i'm to remind you, chief economist first press advisors. we are a money management firm out of wheaton, illinois, and in a way my day job is to think about how to protect people's assets and grow them overtime. and as result i get very worried about the size of government, the growth trajectory of government, tax rates and the intersection of policy and public policy with the economy. also, back in 1995 and 1996 i was chief economist of the joint economic committee so i was here when the government shutdown in 1985 and 1996, part of that was over a debt limit vote. and i want to remind you that back then the deficit was about 4% of gdp.

we use the phrase $200 billion deficits as far as the eye can see. today, we are talking about trillion dollars plus deficit as far as the eye can see. 11% of gdp versus three or 4% of gdp. and so when i compare this back in 1996 -- 95, 96, i do this for a reason. and that is that the government was shut down. it was a major political brouhaha, if you will. we can decide who won, who lost. in the end by the late 1990s, early 2000, we had a surplus in the federal budget. it was just 10 years ago when the federal budget was in surplus. i remember allen greenspan saying he was worried about the surplus because it was going to get rid of all the government bonds in existence and he couldn't run monetary policy if

there were not any government bonds. that was just 10 years ago. we now have a trillion and a half, 11% deficits, and that's why i am here. i support as a financial market representative, if you will, and an economist, the use of the debt limit as a tool to get spending down and the budget under control. not allowing the debt limit to increase if we were to hold it steady, is not a default on u.s. government debt. never once in the past 65 years on a monthly basis have revenues been less than the interest owed on the debt. in other words, as long as we decide to pay the interest, we can pay it every single month

from now to into the, basically, without a tax hike, without changing anything of the budget today. by the way, any principle that becomes do, we can roll it over. we were just issue more debt. it does increase the debt capital the bottom line is, we will not default on our debt to foreigners, ruining the united states credit rating if we don't raise the debt limit. number two, standard & poor's reduced the outlook for the american bond market to a negative outlook. this was reported by some to be because people were worried that the debt limit would not increase. anyone who believes that has to go read the statement put out by standard & poor's. it was a very, very clear it said, the obama administration

has proposed for trillion, or trillions of dollars in deficit reduction. representative ryan has done the same thing. if they were to get together and move in something like this direction, cutting trillions before the election of 2012, we wouldn't put the country on negative outlook. however, we judge, this is standard & poor's, and i'm paraphrasing, we judge that these two sides are so far apart that they are going to be able -- unable to come together before 2014. and in our opinion, again i'm coding standard & poor's, that means that the budget is at risk and that, in fact, they're putting us on negative outlook because of the political environment, not on reaching consensus about cutting spending, not because someone like the tea party is talking about not raising the debt ceiling. finally, i was looking at the

bible last night and talking to read about solomon. solomon was considered wise. he asked for wisdom from god. and he was present with a dilemma. two women, one baby. they both claimed it was their baby and he said, okay, cut it in half. and this smoked out, if you will, the real mother because she was willing to give up the baby, not have it cut in half. and i look at this dead sea debate sort of that kind of story. that we have to be serious enough about cutting spending and using the debt ceiling as that tool as perfectly come in my opinion, logical, it's not extreme. and, finally, my final point is that the global financial markets, they are smart enough to figure this out. they are smart enough to understand the nuances of the political debate. and if the debt ceiling is used

as a tool, a weapon of mass discipline, i believe that the financial markets not only will handle it, but move through it. and if it works, and spending is actually cut, we will leave the other side of this debate in very good shape. i want to remind you again though, early 1990s was the jobless recovery. the late 1990s was one of the greatest booms in history, and part of that boom was because spending was reduced at the federal government level. we were able to keep tax rates lower. the government fell as a share of gdp, and the private sector exploded upward. this is a very important battle. i be the financial markets can handle it just fine. and what they're asking for is the spending reductions. and if the two of the debt ceiling is used, they are going

to be a-ok with that. thank you. >> my name is dan mitchell of the care is a too. i just want to make a couple of point. echoing something brian said, the federal, issue is expected to collect more than $2.2 trillion. the interest on the debt this year is supposed to be about $207 million. now, even if we assume the government forecasts are off like the usually are, there is more than enough money to pay every single penny of interest on the debt. this is not an issue about default. the treasury secretary is being deceitful. the fed chairman is being very misleading on this issue as well. default is not the issue. the issue is whether or not we get government spending under control. i want to make one very important point about this. the deficit and the debt are the symptoms. the underlying problem is a government that is too big and has been a bipartisan problem. during the eight years of the bush administration government spending exploded from one point a trillion, to to .5 to obama

promised change but he raised in the same direction with the fake stainless and obama to. that's why we are in the fiscal ditch because government under a public and democrats over the last decade since we have a surplus of a bright was talking, government spending has exploded. the question is how to get out of the mess. if you look at the budget forecast, it's very simple. according to the congressional budget office revenues will increase by an average of about 7% a year over the next 10 years and that's assuming the tax cuts are permanent. so if revenues are growing 7% a year, it doesn't take a math genius to realize you reduced making its expended rose by less than 7% to you. if we froze been at the current level, which is what the canadians did in the 1990s, to go from a 10% of gdp deficit to a budget surplus, if we did with

the canadians did in the 1980s we would balance the budget by 2017. even if you let government spending grow by 2% a year to balance the budget by 2021. and what are our options for achieving that modest fiscal discipline? i wish which has been but all we have to do is limit the growth to get to the balanced budget. unfortunately, there's very few leverage point. the debt limit is one of them. if the debt limit goes through without using that leverage to impose some modest discipline to get us on a track record to undo the mistakes of bush and obama for the last 10 years, we'll have done a great disservice toward children and grandchildren. thank you. spectacor, i'm reverend c. l. bryant, i've been with the tea party movement since 2009 where i joined william temple in washington, d.c.. this down with 1.9 million others of our people. i was proud to be a tea party within. i am proud to be a tea party are

now. because the truth was true then, and the truth about what we are talking about and have been talking about for these two years is true now. we do not want a fundamental change in the health of this country and what has made it great. and the reason we stand together is to make certain that the core values of this country remain intact. we see that there is a coordinated effort, both by democrats and republicans, to fundamentally destroy the core values of this country on which its financial health has rested. and has prospered. we send this message to john boehner and every rhino on capitol hill, that we did not

get you the gavel of the house of representatives to play nice with the liberal democrats. we did not give you that gavel and the great bully pulpit that you have and the big stick that you have so that you would not use it. what is the point in having to stick that we gave to you if you are not going to use it to protect the interest of the american people? now, also, we send this message to those who have, in fact, spoken about changing the very nature and at the very our army protects this country, and the principles that have guided it. the pentagon has spoken and has told this particular administration that it is not prudent to do the things that

they're doing as far as don't ask, don't tell. and as a pastor, as a minister, i speak to other pastors across this country today. it is time for you to stand up and be bold enough, to speak to the issues that affect the people sitting in your congregations. it is them who will be affected by the policies of this administration. and let me remind you that it was the pastors, the preachers when this country was founded that were how did the most by the british. why? because they're able to inspire that passion in the of this country to be who we eventually became. america is the greatest success story the world has ever known. i am living proof of it because i stand here as the great grandson of the former slaves, but yet today a free man,

defending the very document, the constitution of the united states, that made me free and able to speak to you today. so as i leave you, i say to each and every one of you, americans out there, to stand up for america. stand up for god and country. god bless the republic. [applause] >> thank you, reverend. i am bob vander plaats, president and ceo of family leader out of iowa. and in front of you here, you have quite a collective group of people. ..

>> what i'm looking for in a presidential candidate and i'm quite up front and i say simply we're looking for exceptional leadership. america faces real challenges if we're able to provide the next generation with the hope and stability of previous generations. that their america will be better off than the america of their parents. many of the next generation are starting to question that. these real challenges demand exceptional leadership. in 2006 senator obama said, quote, raising america's debt

limit is a sign of leadership failure. at that time he was against raising our debt limit to $8.995 trillion. but now in 2011, president obama and his liberal cohorts are demanding an increase to the $14.3 trillion debt limit to feed their out of control spending frenzy. given obama's own words in '06, his demand for increased debt today is a sign of leadership failure. failed leadership from the president demands exceptional leadership from others. this is why i joined with the tea party founding fathers and support their freedom jamboree coming up in october. this is why we're calling on speaker boehner, congressman ryan and many others to courageously step up and provide

exceptional leadership. this debt limit reality provides a perfect opportunity to substantially reduce the size and scope of the federal government. to absolutely refuse to increase the nation's credit card limit and to begin the long overdue process of entitlement reform. frankly, this is our only hope for a sustainable and optimistic future for the family. it's not only important that we have exceptional leadership in congress but that we elect a replacement for obama and provide leadership in the white house. the organization i lead in iowa, we are ratcheting up our 2012 presidential campaign. when i get a chance to meet with them i tell them the family leaders efforts and initiatives point toward strengthening the family. and it has to do with life, it has to do with marriage. it has to do with the constitution and it has to do

with this fiscal issue as well. this includes for advocating for fiscal policies that give families the best opportunity to thrive financially. along those lines and in light of why we're here today, i'm telling iowans and others across the country that america needs a president that will lead on tax reform. on reforming medicare, medicaid, social security and on drastically cutting directionary funding, we need a president who not only opposing raising our debt ceiling but opposes our deficit spending that leads to debt in the first place. a president who will settle for nothing less than a truly limited and balanced budget and believe it or not, as important as it is a limited and balanced budget it's not the fundamental issue. at the foundation of this madness we're talking about a abdication of constitutional parameters. regarding to the size and cope

and hold to the founders attempt to the limited role of government in your lives. this is a freedom issue. failure to do these things is a direct assault on hard-working families across america and a tremendous setback for future generations. we need a president who's more concerned about the next generation than the next election. we need a president who cares more about we the people than about me the politician. and in iowa we are leading the charge to discover and to launch that leader. our standards are high because, quite frankly, they need to be. i invite all 2012 presidential candidates to journey to iowa, to other states to the freedom jamboree on october 1 and october 2 in kansas city to share their constitutional, their conservative and their optimistic vision for america. which must benefit for generations to come via exceptional leadership. make no mistake, regardless of

what the president may say, america is an exceptional country. and it demands exceptional leadership. we the people will demand nothing less. with that, i thank all my peers up here in their presentations today and now we'll open it up for any questions from the press. [inaudible] >> on the don't ask, don't tell and changes in the military -- [inaudible] >> do you agree with that is that a similar fight to put don't ask, don't tell in its place. is that the same keeping the debt ceiling -- >> i think it's a ripple effect. when you start -- when you start going away from core value issues, the ripple effect leads right to economic issues as

well. ron paul was with us not too long ago as well as some other potential candidates in iowa and some of their comments were, if you tell me where you're at, say, like on the sanctity of human life and on core value issues i'll tell you where you are at on economic policy and so i think when we leave the fundamental core values it will only translate into poor economic policy and that's what we're seeing today. and why people aren't willing to grab that leadership baton to get this budget back intact. [inaudible] >> many are risking their lives in afghanistan and iraq believe in this core values? >> i'll answer that. >> please. [inaudible] >> i was in combat in vietnam. i didn't know what the sexual orientation of any of my fellow soldiers was. and it worked very well. don't ask, don't tell works.

you didn't ask me when you asked the question what my sexual orientation is. and i'll tell you right now don't ask, don't tell and we'll all get along just fine. [inaudible] >> it's private. >> some of the tea party agree with you that speaker boehner in your words is sufficiently leading on the debt ceiling charge and some are saying it should be challenged in the next election. are you going that far? do you believe that he should be challenged in the next election? >> i believe what we're about here today and i think even in william's opening comments he made is we're trying to encourage speaker boehner and congressman ryan to demonstrate leadership as well as the other peers that were elected on november 2, 2010. and we're hoping they'll step up and provide that leadership, not increase the debt ceiling, repeal obamacare.

that's why we sent them there in the first place, november 2, 2010. do the entitlement reforms, slash discretionary spending. but what we're looking for leadership. i think that jury at least for me, i can't speak for all of them up here, at least for me that jury is still out. >> are you going to be keeping score and watching who votes for and who votes against. is that, in fact, putting pressure on speaker boehner? >> i definitely believe that. there's no doubt that's putting pressure on speaker boehner as well as other members of congress of saying we're watching your actions because, quite frankly, actions speak louder than words. >> forgive me if this is repetitive but i think you have a lot of people coming in now. what -- i heard -- the first speakers i heard was calling boehner and ryan rhinos, i believe. is that, in fact, what the message is being delivered here

today and -- maybe if you could just repeat a little bit -- >> well, our republicans are in name only and all of us in the tea party and i think the press will agree that we were highly responsible for mr. boehner and the house tea party caucus which they call themselves to get elected. to get elected and we expect that definition, we're defining them as republicans in name only, in one issue, if they'll hold the ceiling on the national debt, they're not. if they raise it, they're going to be advertised everywhere and we're going to run candidates against them in their own districts if they raise it on that one issue only. [inaudible] >> well, and they've got time to change. i think they moved the date to august now, so we're going to -- we're going to pressure them

some. yes, ma'am. >> what i've noticed -- i'm looking at the revenue stream compared to the barometric product and what i noticed when we increased our spending by 800 billion, that took it up to 18%. and then we've had a drop-off of revenue ever since. shouldn't we demand as a obvious mathematical issue that they cut 800 billion that they incurred or started to increase two years ago and then a trend down to 14 or 15% so that we could pay off some of the debt and contract the base as a businessman that's a prudent reason. >> as a businessman my math teacher would be over here but we've got some economists here who can address your question better than i can. >> federal government spending when bill clinton left office was 18.2 gdp it's now up to 24,

28 gdp and that's the reason why we're in the fiscal mess. deficit and debt is the problem. revenues right now are depressed because of the economic downturn. but according to both cbo and omb they are going to climb back up of the 18% gdp by the time we get to 2020. so, obviously, balancing the budget is a simple matter, bring the spending back down to where it was as a share of gdp when bill clinton left office. [inaudible] >> isn't it inflation than real growth. the problem here is that they never got to 26. they got to 20% in -- prior to 9/11 but ever since they dropped the revenue, we need sincere cuts below the baseline in order to stimulate the true growth. we need to re-establish these markets to get off the bubble machine that we've been deriving our income from. >> the inflation washes out on both sides of the ledger, obviously, it's bad to have

inflation but that's separate in many ways from the issue of the burden of government spending as a share of the economy and looking at the deficit and debt because it's too high. >> that's great. i will agree with everything dan just said. one of the reasons that we are having a slow recovery right now -- one of the reasons that the unemployment 9% is because the government is so big and the formula is very simple. the larger the government is, the more share of gdp we spend, the smaller the private sector is. it's straightout math. if i borrow and tax to fund the government, that money can longer be used in the private sector so the bigger the government is, the smaller the private sector is, the smaller the private sector is, the fewer jobs there are.

cutting spending is good for the economy. and then for you -- your question about coming in at 10:00 and missing some things -- what i said and others up here said was that a lot of this today is about the debt ceiling and the debt limit, and that using the debt limit is a good tool from an economist's point of view to get spending down because it will benefit the economy. so the whole point is cut spending. and if you have to use the debt limit to do that, i think it's well worth the effort. the economy will benefit on the other side. >> i want to inject one more thing here on the whole issue of government -- big government, interior, commerce none of them are found in the constitution, as a federal responsibility. we've allowed that to be developed over the 80 years --

the last 80 years. and we have with us, and he showed up, george washington and i want you to understand debt is a moral issue. and so i've asked him to say a few words on debt. >> thank you. we're here on monday after mother's day. and i said my mother was the most beautiful woman i ever saw. all i am, i owe to my mother. every man, every woman in america and around the world owes a debt to their mother and their father. but that's a debt of gratitude. that's not a debt that we owe because our elected servants have been spendthrifts. they're two entirely different types of debts. on my farewell address of the seventeenth of september 1776, i said a very source of security

is to cherish public credit and one method is to use it sparingly as possible. and avoiding likewise the accumulation of debt. not only by shunning occasions of expense but by vigorous exertions in time of peace to discharge the debts, which unavoidable may have been occasioned by the necessity of throwing upon us wars. and throwing upon posterity our debts is a burden that they ought not to bear. a debt is a tax upon the future of america, upon children and our children's children's children. there is no practice more dangerous than that of borrowing money. for when money can be had in

this way, repayment is seldom thought of in time, the interest becomes a loss exertions to raise it, and imposition on industry and it comes easy and is spent freely and many things indulged in that would not have been obtained if it were not purchased by the sweat of one's brow. and finally, in a letter that i wrote to james welch on the 7th of april, 1799, after i had left the presidency, i said to contract new debts is not the way to pay old ones. >> thank you, sir. >> thank you. >> mr. temple brought up the issue of ethanol politics. as you know, there's probably no area of the country that has

benefited more from ethanol policy and farm subsidies than iowa and particularly western iowa. how can the conservatives justify that continued policy? you want to have it abolished? >> well, think where we're at when it comes to energy policy and i don't want to speak on behalf of the entire group. i think we're up here individually as citizens who are addressing the need for leadership and reform in this country is that in regards to energy, you know, i'm an all the above guy. i think we need to be drilling here. i think we need to tap into the energy base that we have here in this country. i think we need to look at alternative and renewable fuels. i think ethanol is a piece of that. but i think we've also taken a look at -- there's been a lot of things that have been subsidized and we're saying everything needs to be on the table. this debt ceiling is a huge issue to us. to pass on this type of debt to

the next generation, i think it might be one of the most immoral things that we can do to the next generation. so what we're saying is, don't increase the debt ceiling but let's put everything on the table. and let's repeal obamacare, get rid of -- or start doing the entitlement reforms and then go after discretionary spending. but i think all that needs to be on the table. >> again for the late arrivers, you got to give us the short summation. boehner is supposed to speak tonight in new york regarding the debt ceiling about what you would tell him if you had the chance and just -- >> to sum it up, we're telling boehner and all the house republicans they came into office with tea party help. we now expect them to hold to their promises and hold the ceiling on the national debt. they can sit on their hands and do nothing which might be easy for them and if they do nothing,

we won't add to our national debt. we are saying stop raising the national debt and this excessive, huge government spending which is bankrupting our nation and endangering the lives of our children and grandchildren. >> if i can add one thing to do that, one of the points that we made especially both brian wesbury not raising the debt ceiling does not meaning default. interest on the debt is only $707 billion. i think one other theme that you heard from many speakers is that if something is meaningful is achieved, whether it would be spending tax, repealing of obamacare or some other form of fiscal discipline, that might be a worthwhile trade but based on what happened with the continuing resolution fight, there's not a lot of confidence that republicans will actually negotiate with an acumen.

>> the debt is an immoral and insidious tax on the future of america. on our children and our children's children's children as i've said. in the constitution in the preamble for ourselves for posterity we must not place a tax, an immoral tax on our children. [inaudible] >> what other things might be acceptable tradeoffs? >> constitutional limited government. >> you have all sorts of things. senator lee's tax limitation balanced budget limit. senator corker has a t.a.p. act that's updated modernized version of grant ruddman. you have appeal of obamacare. you have just generic spending caps on discretionary caps. there's all this discretionary spending out there. my job isn't to try to say which one is best, which one is

acceptable. it's simply to say during the continuing resolution, they did not get much in terms of negotiation. and that doesn't bode well for what's going to happen from the debt limit. >> from my perspectives, the markets want to see and standard & poor's want to see meaningful and significant -- and i think significant and lasting was their word. i'd call it durable -- i mean, medium and long term correction to the course that we are on. because right now we're looking at trillion dollar deficits plus as far as the eye can see. and let me just add is couple of little comments here. i'm in the private sector. i told you that we're here before this. bear stearns, lehman brothers, wachovia, wamu they were taken

out summarily by the government with accusatory language of reckless behavior and speculation. i mean, if the u.s. government was a bank, the fdic would close them down this friday night. they have run their fiscal books in an awful manner. and what's interesting about this is that when i have discussions with politicians and some in the leadership who i have talked to in repeat days, they're basically saying, well, we need a glide path, a t10 or 5 or even 25 years to fix this because we can't cut it this fast. and my point back to them is the private sector doesn't get that luxury. nothing -- no family gets that luxury. you either cut spending now, lay people off or go bankrupt. and so the bottom line is -- and what's fascinating to me as a

private economist is that then they turn around and say i'm being extreme. i'm the one who's extreme because i'm saying you're out of control. it's fascinating to me. we need 15 years to fix things. well, you don't get that luxury in the private sector. and my final point about this is that this is a bipartisan problem. i don't mean washington. i mean, this was created in a bipartisan manner. you know, paul ryan, you know, i've known for a very long time. i think i met him when he was 19 years old. he was an intern to jack kemp, i live the guy and for the most part he is an incredibly smart and free market and capitalistic person. however, he voted for t.a.r.p., the bush stimulus bill, medicare part d, no child left behind and the list can go on. and the auto bailouts.

so my question to him is, what is he? is he for bigger government or is he for smaller government? because i believe we would not be in this position today if it weren't for republican votes while president bush was in office and what president obama and the democrats have done since then. so this is a bipartisan problem that we are in. and i believe that using the tool of the debt ceiling -- i made the analogy that this is like solomon saying give me a sword, i'll cut the baby in half. it is a drastic action but it is absolutely necessary because neither side will listen. just like the two mothers who claim that the baby was theirs. and so we need a drastic action to bring in a sense -- what i would call an adult kind of

behavior to the budget of washington, d.c. private firms laid off people; went bankrupt in this process. the government, for some reason, thinks that it can avoid that pain and that's what i think a lot of people are saying up here. and just say we can say it clearly and wrap our minds what is going on here, a trillion dollars -- even if ryan's budget was to take hold, 9 trillion would be added and then as william had said, 2063 is -- or 2060 is when this would eventually balance. now, a trillion dollars, just so the average joe gets his mind around that, the time of christ's birth -- if we spent a million dollars a day, from the

time that christ was born, we would not have today in 2011 have spent $20 trillion. we cannot sustain this type of spending. it is immoral. it is impractical. and we came today to say we will not tolerate this any longer. [applause] >> mr. temple, did you say big government democrats and big government republicans are intentionally waging economic war against the private sector? >> well, yeah. that's the result. what got tea party people out in the street two weeks ago, $13 trillion in debt, fostered by the federal government's inaction and its dallying with fannie mae and freddie mac and

while the american people trusted their government representatives they were spending like drunken sailors, both parties. so when i came out in atlanta in february -- or april 15th in 2009 and found 40,000 americans, the largest number of people ever assembled before the golden dome, i thought, well, these must be conservative republicans. and when i started asking them that, they said, oh, no. we're democrats. i said how can this be? you just elected your president two months ago. and their resounding answer was, $13 trillion in debt. and then independents and republicans. so this is not about party. this is about the american people being fed up with its government acting like children. >> one more question. >> right here and right here.

>> it seems a lot of initial steam to the tea party came -- [inaudible] >> i haven't heard very much lately on efforts from the tea party endorsing finance in terms of entire regulation and reforms -- i wonder if you can square a little bit why these themes seem to have gone away -- >> oh, the steam is not there. the two are in bed together. we understand that. but it's the government that has the responsibility of oversight and doing what benefits the american people. if fannie mae and freddie mac are being overseen by the federal government and our representatives allow subprime mortgages all over the place and big business is playing to that,

who has the responsibility to bring it under control? the federal government has the responsibility to not be playing games at the cost of the american people and so it's the american people -- we're not -- we're not for big business getting away with murder. but we understand who has the responsibility to make sure that it doesn't happen. and so we're after the federal government first. >> but if you're going to have regulation, why would you -- [inaudible] >> budgets for the fcc? >> well, the regulations you saw, the 2500-page health care bill, that's the kind of ridiculous paperwork that the federal government produces in which big business can hide, do their things. it's regulations that we need to remove. we need to give the country

freedom, not more paperwork. and all of this is one big -- one big barrel that our federal government -- i'm 60 years old. and the department of commerce, the department of labor, the department of interior, all of these unconstitutional departments have been created over the last 80 years -- their power does not belong here. it belongs in the states. so we want to see the government cut, not just both parties talking about freezing spending. we want to see commerce cut. we want to see agriculture cut. and the last thing we want cut first is the department of defense. there's waste there, yes. but the first responsibility of government is to protect its people. and they're not doing anything about our borders. they're not doing anything about our debt. and they're just creating their open little world where they can retire on million dollar retirements with their own health care plans.

and they've created a house of lourd lourdes. >> even before the dodd-frank bailout bill, the financial services sector was probably second only to nuclear energy in being the most regulated industry in america. i think that's part of the reason why we got into this mess. it was government actions like the fed's easy money policy, the corrupt system subsidies of fannie and freddie and that was the mess and when the government came in and bailed out the people who made mistakes, that's what angered the average grassroots american. and that's why when we see these stories just yesterday about fannie mae wanting another $9 billion of bailout money, that's the problem. if people in the private sector want to make mistakes, make bad bets, go ahead. don't come to the taxpayers asking for money. that's what got the tea party people angry. >> last question right here. >> i have a question. it sounds like the government is responsible for oversight but we

need to get rid of regulation. >> i'm saying that the government is too big for its britches. it's not what the founders intended. what we have in washington and we're going to be running around washington taking a look at all the big departments. i'm not addressing your question, go ahead. >> you say you could raise the debt ceiling if we just 100 billion. could you elaborate on how that would work? >> we come to the card game and we're not just handing over our chips to the liberals on the other side with the help of our house republicans. we're saying if you want to raise the national debt ceiling and we gave you 8, 9 -- and it's in your paperwork, 8, 9 things that we might consider, including getting rid of obamacare, $100 billion raise in the debt ceiling but we're going to play our cards one step at a time, you want to raise the debt

ceiling, what are we going to get in return? that's the way this card game is going to get played. >> let me just add something to this. i mean, again we're not, obviously, all in agreement about specific issues. we're all in agreement about the big picture. let me talk about this debt ceiling and raise it a little bit at a time. let's just argue first before we would get there, if we did not raise the debt ceiling right now, forever and ever and ever, all right? it's stuck 14.3 trillion, it will never go higher, first of all, you have to understand that the government tohas to run a surplus in that situation because we borrow money from social security every month and that adds to the debt so we can't do that. so we're going to need to run a surplus of about 150, 200 billion to never raise the debt ceiling again. then if you pick -- pick your programs. you can pick two of them, ten of them, 100 of them, i'll take -- pay the interest on the debt, pay social security, pay

defense, pay veterans benefits. let's just do those four things. that's all we'll do. everything else in the budget, everything else, medicare, medicaid, department of commerce, education, interior, white house staff, congressional pay -- everything else has to be cut on average 85% to balance the budget. that's how far out of whack this budget is. so what william is saying is, is that, i think, i'm going to reinterpret it a little bit, is that if we don't raise the debt ceiling, the mayhem of spending cuts would be so far-reaching and so dramatic that literally it would tear departments up and parts of the economy to shreds. you can't cut 85% of all spending like that, all right? so what you need is -- at least

i think everybody knows deep down that the debt ceiling is going to have to go up at some point, but what i believe needs to be done is that it needs to be used as a tool, all right, to get spending cut. and if you can do it a little bit at a time, all right, let's -- we're going to raise the debt ceiling for one month. you're going to have to vote on it 12 times this year, all right? and so the whole point is spending has to get down and this is the tool, the weapon of -- what -- mass discipline that can be used to do this. and so we can get spending down very quickly, as dan said, we can balance the budget in six years if we just freeze spending. but the bottom line is that we have to get something like that done. i think everybody realizes that there has to be some -- some movement in these issues. >> by the way, new zealand and candidate both did exactly that,

froze spending in the 1990s. they both went from very large deficits to budget surpluses. it is possible to free spending. yes, that might require a short-term increase in the debt limit but get something real and exchange and as i said before, that fight does not leave us hopeful about negotiating the skill of the gop. >> we thank you very much for covering this. we would invite you -- we invite automatic americans to agenda the freedom jamboree october 1st and 2nd in kansas city. and we would invite you with the media to cover that. >> let me make a stretch -- it's september 30th and october 1st -- >> we would invite you to invite the freedom jamboree on september 30th and october 1st and we invite all potential presidential candidates to be there as well. thank you for your time. it's been a pleasure. [inaudible conversations]

[inaudible conversations] [inaudible conversations]

[inaudible conversations] >> as you heard mentioned during this event, coming up this evening house speaker john boehner is expected to talk about medicare reform and settling the national debt when he talks to wall street executives in new york. he's scheduled to address a dinner meeting hosted by the economic club of new york. that gets underway 7:00 eastern. check our schedule for coverage information on the c-span networks. >> for me when sony says we were protecting the consumers, again, the consumer might want to know, wait a minute, you know, i too

have the right to protect myself and all i'm asking and all i'm saying as a policymaker should they know sooner. >> california representative mary bono mack on the theft of millions of consumers' personal data from sony's playstation network tonight at 8:00 eastern on the communicators on c-span2. >> c-span's comprehensive resource on congress, congressional chronicle has new features to make it even easier to find information about your elected officials. daily schedules, the full list of members, each day's committee hearings plus, video of every house and senate session and the progress of bills and votes. take a look at the new congressional chronicle at c-span.org/congress. >> coming up next, white house cybersecurity coordinator howard schmitt on the administration's strategy to improve personal information security in cyberspace and ecommerce. it was released in april. from a global security summit hosted by the visa credit card

company, this is just under a half hour. >> thank you for that fine introduction and thanks to all of you for me to participate in this very important event. it's wonderful to see so many people gathered in one place looking at issues that i think we all not only benefit from as a society but also fully recognize that there's a lot of challenges when it comes to technology, security, privacy and trust right now. so my comments today are going to be fashioned very specifically about one narrow piece of this that i think there's no other group better positioned to help society, help ecommerce and help the government in working on a common problem, and that's what i'm going to talk about the national strategy for trusted identities in cyberspace or the end stick as we know it.

and, of course, anyone here that's ever dealt with the government, been in the government, you know, there's no shortage of acronyms and i think we've figured out a few weeks ago that there's like seven or eight different things that have an nstic or stack on something else but this one is just strictly the nstic for those who aren't familiar with my office, the familiar established this shortly after being inaugurated. created the office of cybersecurity. and it's dual-added with the national security council and the national economic council and i think that's one of the key things that really set this aside from any efforts that are taking place out there is the full recognition that this indeed encompasses a set of book ends if you would that affect economies and jobs and businesses and ecommerce specifically, but there's also national security, homeland security law enforcement and public safety issues that we

wind up dealing with. the composition of the office itself is just as unique as the title itself within the government. the office is comprised of efforts from across government from the ftc, the homeland security, the department of defense, experts from nsa, department of justice. we've got a wide swath of people that bring levels of expertise. the other thing that it also gives us as our needs change, as specific projects that we're working on policies that are developing, we have the ability to then bring in new talent to deal with new challenges. and as we've seen over the past 15 months or so since we've been working in this case, we actually do have lifecycles for projects. projects created, we get the things necessary to create the policy, operationalize that across the government and then we move on to the next issue. and it doesn't involve the

creation of yet another series of memos and oftentimes as we see particularly in the dc area that sometimes you're judged on the number of memos that come out and not how much work you really get accomplished and our goal is to actually move beyond creating strategies to executing on things. so that brings me, i think, probably a nice segue to deeper discussion about the national strategy for trusted identities in cyberspace because when we made the announcement on april 15th at a u.s. chamber of commerce event with secretary locke, jean sperling, the president's advisor on economy, senator murkowski, there was a big group of people there that we had to talk about the national strategy for trusted identities in cyberspace and that venue is also the best one going. but also it's held in the department of commerce and held

by some of the work with the national institute of standards of technology or nist is how important it is to the economy to businesses as well as to national security as well. but when we convened it at the u.s. chamber with our private sector partners in attendance, it also showed very clearly this is not a government-led effort. this is a private-sector led effort and working with the private sector to create this echo system as we call it is really key to its success. so many of you in this room participated in some form or fashion with what i consider to be a very, very open process as we went through with the idea of creating some trusted identities in cyberspace creating a draft last summer, getting feedback from many, many people in the security privacy, civil liberties, day-to-day citizens, you know, parent groups to look at what is exactly that we need to be putting together as a

strategy? what are the core principles that we look at? and once we create that, who do we hand it off to execute as i mentioned earlier? so what does it mean and what does this trusted identity in cyberspace? a little meeting i had a little while ago was the typical answer question and answer session where they asked the question is, how many here have only one user id and password that they have to manage? and needless to say, everyone chuckled. and then we got to the numbers of 5 or less and they still chuckled. we start looking at the 5 to 10, 10 to 15, 15 to 20 and like many of us, particularly with a penchant for technology, we oftentimes are managing 20 or more user id and passwords. so if you think about how your normal day starts out, and i'll use mine as maybe a little bit abnormal but nonetheless, somewhat indicative, i get up,

log in somewhere to check some email that came in overnight, whether it's work, personal, whether it's facebook, whether it's linked in, i'm doing something that required me log in using an id and password and then because just the nature of the beast, the day happened to be the day that your pay statement comes out so you have to log in to the website to check to make sure that that worked out fine. and you go through all these iterations of logging in to things with user id and passwords which are difficult to remember. we have a tendency as human beings to use the same ones over and over, notwithstanding all the experts say don't do that. at the very best we consolidate the ones if somebody compromises, the best they can do is read my online news service which doesn't have any financial impact on me to the opposite end of the spectrum which something could empty someone's bank account. and managing those becomes problematic no matter what. and so when we start looking at trying to manage them, you also

have to fully understand that in today's environment and until we move to a i.t. environment where our computer systems are better at self-healing, self-repairing, self-configuring, self-updating, we will continue to be at risk from somebody winding up with something on a computer system that would even take the best intentions that we have relative to strong passwords and strong authentication and make that worthless if someone captures that while we're logging in somewhere. so when we look at this, this is a real challenge for us to deal with. the system we've developed that got us here has been rich and robust and we've had unbelievable accomplishments that the technology has given to us. but we also recognize over this time that the threat vehicle -- vectors, they've changed as well. many of us in the room probably remember the whole issue is going after the corporate networks, the university

networks. well, what happened is we've made investments, particularly in the private sector, to build the resources across there. while we were moving away from everything behind a firewall and a data to having distributed information and having at the time it was vpn networks and the ability for customers and our business partners to come in to our network and do the transactions we need to do, we've also gotten better about protecting that. yes, like anything else there have been incidents that have taken place where there have been successful intrusions. we learn from them, we make them work better and we move on. so what happens to the adversaries, the bad actors out there recognize it's not as easy as it used to be to go after the big managed networks so the easy target now is the end user. and any of us that have tried to do, and i think all of us understand that education and training is part of the core of what we need to do from a

cybersecurity for the end users we should never put the end user where he or she has to decide is this email that talks about our 2011 health benefits? is it really from h.r. or not? but, unfortunately, that's what we face many times. and those are based many cases to capture those user id and passwords to give someone access to that corporate network which is more hardened than it used to be or even worse give access to your private information out there of a financial and ecommerce value. so when we start looking across the spectrum typically dealing with the end user, inherently people just wind up using a weak password. a recent industry study showed that 46% of people surveyed never changed their email account passwords and 71% use the same password across multiple sites, including ones that have financial value to them. these are the things that we're looking to work on with the

release of the nstic and when you look at the cost of individuals and the help desk and interactions with end users, relative reset of passwords and dealing with those sort of things -- but if you look down to the end user issue, the average is somewhere between $400 and $2,000 for an end user to recover from an incident in which either their credit card was compromised, even higher levels where the identity was stolen due to online fraud. what happens also -- we have to wind up accounting for that cost some way. these things do not happen in a vacuum. and they do have costs associated with it. and once again, there's a wide range of estimates on what it really costs us as businesses, as governments, as end users but the bottom line is, we can do a lot to help reduce those costs and make the things we're trying

to do more effective. it was estimated in a bureau of justice assistance report from 2006 to 2008 alone, and if you think of the increase that we've had on ecommerce since 2008, which has been significant, the estimate at that point was about $17 billion lost to the economy and, obviously, none of us want to see that sustained. so where do we want to go with this? first, what we want to see is an environment where i can go to a store, i can go to a local store, i can go to an online store if i choose and get my own online identity with inperson proving for high levels of trust or just something that says i'm not a dog and here's my credit card number and other instances. but i also have the ability to use it in different formats, whether it's a usb device, something on my mobile device, a smart card-type environment a soft token or a hard token on a

machine. i want to have a choice based on my technical prowess, based on my level of concern, based on the type of transactions that i carry. that choice has got to be out there. when i interact with the computer system, i also hope my computer to interact with other computers and you think about many of things that we're doing today where we have machine to machine authentication. but there's literally no human intervention at all. i want that to be trusted. i want the computer that's acting on my behalf to actually be acting on my behalf and not something that somebody has programmed into it or somehow compromised. so when i go to my web mail account, for example, i can do that with a level of security that's consistent with those services i want to take at that very moment but then when i log into my bank account i want to take out my mobile device, punch a simple application that gives me a 6 digit one-time password and i can use that as my pin number to log in. and even if my computer is

compromised, that we build the ecosystem correctly that even if the system indeed has key stroke loggers or somehow compromised, that that indeed does not give somebody an advantage over now highjacking all my transactions in the future. it's going to be a tough thing to do. there's going to have to be the development of new technologies, new business processes. but we believe collectively that the benefits that we derive from creating such an ecosystem is going to far outweigh any of the sort of learning process we need to go through. but we also need to make sure it's convenient for people interoperatively because that's one of the things it doesn't work if i'm only going to use it for one environment. and i think back to my own family members including myself where i have the key chain full of the little things that i scan when i go to the grocery stores or i scan when i go to my harley-davidson dealership to make sure i get, you know, harley bucks for what i'm doing to make sure that we still

receive the benefit that we have from advertising and marketing to customize things the way we want to do it. not to short circuit that but to enhance that so when we start looking at things we're looking to we place insecure passwords use first and foremost but while we're developing this ecosystem we're looking to improve privacy and i think every one of us in this room that's ever interacted at some point where there's a financial transaction needs to take place particularly something on a recurring basis. and not because of my work that i've done over the years, but i oftentimes say, well, why do you need that in order to sell me this? why do you need all that information? what are you going to do with it? how long have you going to keep it? how is it going to be stored? how is it going to be protected? and oftentimes as you might imagine, the answer is, we don't know. it's a policy. developing the ecosystem now

that builds on the basic information privacy principles that ftc has come out with in concert with their private sector is the things we need to start looking at. so when i want to buy something, it has the ability to validate that it's really me. that it validates that i am indeed credit-worthy. it has the ability to say every month i will bill you this amount that i agree to it but that's all they need to do. and at some point if we design the system correctly, that i say at some juncture i'm no longer going to do business with this company or they get acquired or they go out of business, whatever the circumstances may be, that i have a level of confidence that my data that they do have, which should be minimized will no longer be accessible to anybody. i have the ability to reach in and say, i'm closing the account and all my data comes back to me. so when we start looking at the enhancing the privacy piece that's going to be a key part of this. and one of the things that i have asked many people, including all of you here today,

is to help build that system. we built a system to date that we have concerns about, the privacy enhancing principles. this gives us the ability to still build something that basically accomplishes some of the privacy enhancing things that we've been talking about for a number of years. the other piece of this strategy and the execution of it is the opt in. this is not mandatory. this is specifically not a national id card. it's not a driver's license for the internet. it's the ability for people to opt in if they choose. so if i want to blog and still criticize products -- i want to criticize any activity including governments, i still have the ability to do that with the level of anonymity that i have today. and that's critical to make sure we preserve that. and we need to make sure not only as we as the government have said this is not going to become something that's not going to be enhancing privacy

and something that's going to be enhancing ecommerce but also making sure that we understand as we build the ecosystem that private sector respects that as well. that we have the ability -- if i still want to do an interaction with a company totally anonymous and that's part of the business model, that i can do that. i don't have to be pigeon hole into a corner and that's the challenge and we need to keep focused on that as we move forward on this. and then we start looking at some of the great advances we're having, whether it's cloud computing. whether it's ehealth initiative, whether it's smart grid, look at the extensions of this national strategy to move in that area as well. and any of you that have that apple on your device that gives you the ability to check your alarm system at home or do your smart grid metering or any of the things that the mobile devices give us, can you imagine doing that in a much more secured manner? where you don't have to worry about somebody logging into your

home and turning off your electric on vacation and find everything is gone. that has to be built into that ecosystem as we move forward and once again the private sector is the place to have that take place. the government will be there as a supportive role. we'll do as a coordinating role and through nist i hear from some government agencies who say why can't i log into this website and look at the data regarding any of my data that the government has through normal day-to-day business with the government? and the answer i get most often is, well, we're not really sure it's you because there's no mechanism by which we can do this trusted identity. so as we build this system, let's build it with the government and we have the c.a.t. and others we have the piv cards and a memo that went

back a number of months back that we're going to require those to be used. strong authentication will be the way we do business internally, not an option. so that choice has to be there. it has to exist and it has to be something that people who are not technologists not only are going to be able to use but they feel comfortable using. and there's probably no crowd better to understand this next comment than the people in this room and you think back to the early days of atm cards and i remember specifically my personal experience -- i was working undercover at the time, and like many of us during that era, i would have to go to the bank and stand in line with my paycheck from the city to get cash out. so not only was it an inconvenience from, you know, we got to wait in line, you build that into your stay, spend two hours in line to cash your paycheck but also for some of us that created a new risk. 'cause here it is i'm flying this paycheck around.

so when the first bank card came out that allowed me to go to the one atm machine in like two miles away from where i was at midnight and get the $25 out which used to last me a week, get that out, it was great. but what's even better when it was federated so i could go to a bank on the other side of town and do the same thing. yes, we continue to work on security features. we continue to work on fraud prevention but look what it's given us over the years. that's what we're hoping to do with the nstic, build the system that gives us that same capability, that same richness and robustness in a more secured manner and a more privacy enhancing manner. ..

>> give us the ability to do that interoperability. so, sort of my asked today, if you would come is the fact you help us get where we are with a strategy to date. but that's a part of the help that we need. we need your help to execute on this. said many times, creating strategies gives us focus, gives us a direction to go. but we really have to do is execute on these things. we are looking for your leadership, your entrepreneurial ship, your technologies to make this real because we have to finish this job. and one of the things i think

collectively that we don't want to do is the year or two years down the road look back and say, we had a strategy, we had a lot of good meetings about it, but we really don't have any concrete proof of we make progress. i'm very, very happy to say the national program office or the commerce already has some ties keep up to make this real. involving state and local governments can inviting -- involving private sector. we need more. we need investments. we need the dedication to say we're going to make this better. because we all benefit from it. if you look at some the data points that secretary locke and my colleagues in congress have talked about, it's the last holiday shopping season, we're getting increase of 23 some odd, 23 points 7 billion i think the number i was given, increase in online sales just since that season. for those of you in the d.c. area to recognize this past winter was not like last winter.

we're just trying to go out and buy a pair of shoes, boots you can wear into foot of snow, you couldn't even do that because the stores were closed. but yet we can still do that online. so the capabilities that we have, and can continue to have, the opportunities that give us as an economy. when i think about places i've been around the world where you are buying a pair of shoes in south america somewhere, and although you don't get to go down there regularly, you still have the ability to order a different pair of shoes and get them delivered. the benefits are great if we do it right. that's what we're looking to accomplish. so to move this forward there are currently three workshops planned, led by jeremy over at the department of commerce. we are looking to bring in industry private sector, academia, researchers, nonprofits, the people that really should care and do care about this issue. the three specific workshops are

planned on governors, because there has to be a good governance model in place on this. we don't want someone to come in and create business and sake give me all your personal information and i will make you a good idea to come and, of course, they drift off and we have a bigger problem. we will make sure there is a government process in place. including taking into account is how do we make sure the companies are trusted, how to make sure those things that we care about from a privacy perspective indeed are built into the systems. the next thing is looking specifically at that privacy, because this is our opportunity to get it right and build the standards into. the third one is look at the technology. what are the very technologies that not only exist today, but the things that are sitting there in somebody's brain right now is sitting in somebody's whiteboard back in the office, wouldn't it be good if we did food, whatever food may be. and as yet to become engineering or design peace that would really help move us forward on this.

so, part of the purpose of these workshops is to get some consensus around what's really important, and how do we move this forward works what are the investments we need to make from a private sector and where are the things that government only can help? there is a website set up, go to the white house.com, excuse me whitehouse.gov/cybersecurity. i've been to the other one. don't ever make that mistake. [laughter] >> whitehouse.gov/cybersecurity and you can link to the nstic information. that will give you more information on the dates and locations of these workshops. i want to ask you to participate in those. socom in closing what i think we can collectively do is we can do a better job about authenticating when appropriate online. exchange lesson information, make sure the information that we do exchange we have better control over as end users, and

recipients of the benefit of the technology. it means creating a baseline for security, privacy and interoperability. in a world that gives us the ability to do this on an international basis to really realize the benefits of it, to make sure it's inexperienced the end-user can enjoy. it's not cumbersome, it's not difficult, it's not the one where i have some family members who would know the difference between a floppy disk and a frisbee. that would go out and say, it's too hard for me to use. because it shouldn't be that way. we need to make sure we're working together to realize this vision. when the president signed this national strategy, it was the idea that this is a step forward in making sure we're doing better things, smarter, more securely, and more privacy enhancing online. and i think working collectively we can do that. so, i ask you to do, to do what we're trying to do, and that is

help us, you do your part to secure your part of cyberspace, and we will all benefit from it. and particularly the implementation of the strategy, to trust identities in cyberspace. once again, thanks again for the opportunity to make a comment here today. i wish you the best the rest of the day. [applause] >> a today a look at the future of the future of the congressional research service which provides nonpartisan analysis to lawmakers. live coverage at 2 p.m. eastern on our companion network c-span.

>> for me when sony says will protecting the consumers, again, the consumer might want to know, wait a minute, i have the right to protect myself. and on asking come on saying is policymakers shipping is to inspect how the -- mary bono mack of the theft of millions of consumers personal data from sony's playstation network, tonight at eight eastern on "the communicators" on c-span2.

>> and now house lawmakers consider how to protect consumers from personal information theft. at this or the secret service deputy in charge of cyber

operations said that 96% of consumer information security breaches are of what will. the electronics giant sony and e-mail marketing services company absalom have both suffered massive security breaches exposing the personal data of millions of consumers. the corporations both turn down the committee's invitation to testify. this hearing is just under two hours. >> good morning. the committee is now in order. i would like to start by saying a wise person once said great challenges create great opportunities. [inaudible] this is the subcommittee's great opportunity the chair now recognizes herself for an opening statement. >> today american consumers have been under constant attack. [inaudible]

your personal agenda can be hijacked without you knowing it by online hackers. the federal trade commission estimates nearly 9 million americans fall victim to identity theft every year, causing consumers and businesses billions of dollars annually. and those numbers are growing steadily and alarmingly. in recent years sophisticate and carefully orchestrated cyber attacks designed to obtain personal information about consumers, especially comes to their credit cards, has become one of the fastest-growing criminal enterprises here in the u.s. and across the world. the boldest of these attacks and threats they present to unsuspecting americans was underscored recently by massive data breach is at epsilon and so. the 77 million accounts don't including some 10 million credit card numbers, the data breach involving sony's playstation network has the potential to become a great brings robert of cyber attacks, and they take it just keeps going up. what the fbi and secret service on the other law-enforcement law-enforcement agencies work around the clock to try and

crack a sensational case, we now learn a second sony online service was also compromised during the same time period. computer hackers obtained access to personal information relating to an additional 25 million customer accounts. that's more than 100 million accounts now in jeopardy. like their customers, both sony and epsilon are victims. but they also shoulder some responsibility for the stunning theft would shake the confidence everyone who types in a credit card number and simply gets into. e-commerce is a violent going part of our economy. we should take steps to embrace and protect it, and that starts with robust cybersecurity. as chairman of the subcommittee i'm deeply troubled by these latest data breaches and the decision by both epsilon and sony not to testify today. this is unacceptable. according to epsilon, the country did not have time to prepare for a drink even though it's data breach occurred more

than a month ago. sony meanwhile, says it was too busy with its ongoing investigation to appear. what about the millions of american consumers are still twisting in the wind because of these breaches? they deserve straight answers and i'm determined to get them. for instance, how do these breaches occurred, what steps are being taken to prevent future breaches, and what's been done to mitigate the effects of these bridges on american consumers? yet for me the single most important question is simply this, why were sony's questions notified sooner of cyber attacks? i find that all consumers have the right to know in the personal information has been compromised, and sony as well as all other companies, have an overriding responsibility to probably alert them. in tony's case company officials first revealed information about the data breach on the block. that's right, a blog. i hate to pile on, but in essence only put the burden on consumers to search for information instead of accepting the burden of notifying them. if i've anything to do with that kind of halfhearted, half-baked

response, it's not going to fly in the future. this ongoing this only reinforces my long held belief that more needs to be done to protect consumer information. americans need additional safeguards to prevent identity theft and i will soon introduce legislation designed to come to this goal. my legislation would crafted around the guiding principles consumers should be properly informed when the personal information has been jeopardized. clearly as i said cyber attacks are on the rise. according to the privacy rights clearinghouse, over 2500 data breaches involving some 600 million records have been made public since 2005. in fact, last month alone some 30 data breaches at hospitals, insurance countries, universities, banks, airlines and governmental agencies impacted nearly 100 million records. that's in addition to the massive breaches at epsilon and sony. the time is come for congress to take the decisive action that we need universal national standard for data security and data breach and we need now. while i remain hopeful that law

enforcement officials will quickly determine the extent of the latest cyber attacks, they serve as reminder as was a wakeup call that all companies have a responsibility to protect personal information and probably notify customers when the information has been put at risk. we have responsibly as lawmakers to make certain this happens. now i'd like to recognize the gentleman from north carolina, the ranking member, mr. butterfield, for five minutes. >> let me thank the chairman for can be this important hearing today. and particularly thank the witnesses. before giving my opening statement i would yield such time as he may consume to the former chairman of this committee, i the full committee and now the ranking member, the gentleman from california. >> i appreciate your courtesy and allowing me to go ahead of you. with an opening statement. i must go to another committee that is meeting at the same time. i would like to thank chairman bono mack for holding this time and important hearing. in the last month we have seen some serious private sector data

breaches that have affected millions of americans. just last week sony revealed that information connected to 77 million customer accounts have been compromised. and then on monday, sony announced even more consumer information was breached your data breaches threaten the financial well being of individuals whose personal information is exploited, to commit identity theft or fraud. there is no one solution to these threats. criminal hackers are targeting us every minute. today we'll hear from federal law enforcement and how the attacking this problem. however, the private sector also must step up to the plate. the private sector can and must do a better job of safeguarding sensitive personal information. information is the currency of the digital economy, and it must be secure. just as a bank would not leave its vault unlocked and open to

these, companies must secure information and keep it out of the hands of identity thieves and other criminals. and when personal information is compromised, companies have an obligation to inform those individuals whose information was lost or stolen so they can take steps to detect and prevent identity theft, or other harm. i'm hopeful that this committee can again in a bipartisan fashion pass the data and accountability and trust act, and work as a team to get the senate to follow suit. that data bill as passed by the house last congress creates two major security requirements. one, an entity holding data containing personal information must adopt reasonable and appropriate security measures to protect such data. and, too, that same entity must notify the affected consumers in the event of breach unless the

entity determines there is no reasonable risk of identity theft, fraud, or other unlawful conduct. i look forward to today's hearing and working together to quickly read past the data accountability and trust act. i yield back the balance of my time. >> let me thank you, mr. waxman, for your leadership on this issue and on this committee. in preparing for this hearing today i was told by my staff that will over 109 consumer records have been compromised as a result of breaches at epsilon data management come and you know marker, and sony playstation, and online intimate networks. if that is indeed a fact, this is very, very alarming. so this hearing today is certainly very important. i want you to do, madam chairman, dustin bray to work with you and our colleagues to pass strong bipartisan security legislation like the data bill that would prevent this from recurring. i ask unanimous consent that a full statement be included in

the record. i yield back. >> i thank the gentleman. the chair recognizes the gentleman from florida. >> thank you, madam chair, and let me also compliment you on having this hearing. i share your disappointment that epsilon and sony have not shown up. obviously, they could provide is a lot of information that perhaps some of our witnesses could not. and i think it ultimately, it is their responsibility to explain it. madam chair, as -- i want to work with you to find out perhaps what really happened and perhaps to extend a hearing on this on my subcommittee. and let me also say to you, this is an issue that ends the 109th congress when i was chair of the subcommittee, i had a bill, a data security bill, and this bill was h.r. 4127.

it passed out of the subcommittee, bipartisan support. it passed out of the full committee, bipartisan support. it did not passed the house, unfortunately. and so, with your leadership perhaps we can get this through the house. so i'm very anxious to support you and help you and your endeavors to actually get a bill through the house and to the senate. this is so important to get the data security bill that i had in the 109th congress had actually passed, which required entities that hold personal information to establish and maintain appropriate security policy to prevent unauthorized acquisition of that data, so companies would have a data security officer. and that officer would have a mandate and the requirement to protect the information. it was interesting that the issue is so important that bipartisan support in the

109th congress was available. so surely i would think we could get bipartisan support again. i know mr. rush when he was chairman he took the bill that we had, and he offered it again. and i cosponsored that dealt with them. and now with a new majority in you, madam chair, and the chairwoman, i think this is a really very important issue for you and the subcommittee to make a stand, get the bill through the subcommittee, through the full committee, and try and get it through the house. i think a lot of people are just staggered by what has happened. and if we should not delay, i think this hearing is important i look forward to participate and also hearing the comments. but in the end i think both parties agree that this is something that should be answered with a bill that is substantive and bring in the jurisdiction of the federal trade commission and others to

help us out. so thank you. i yield back. >> i thank the gentleman, and i would like to sit with one panel of witnesses joining us today. each of our witnesses has prepared an opening statement that will be placed into the record. each of you will be given five minutes to summarize the statement with your remarks were on the panel we have david vladeck, director of the consumer protection. it also testified with paula martinez, in charge of the criminal investigative unit for the u.s. secret service. we have doctor jean stafford, professor and executive director from purdue university, center for education and research and information assurance and security. and last but not least just in brooklyn, director of the consumer privacy product center for democracy and technology. good morning to each of you and welcome you. we are very grateful that you here with us this morning. and if you can keep track of the time by the time clock that are on the table, i'm assuming, -- that's a new improvement.

technology, okay. green, yellow and red. much like a stop look at if you can keep your eye on it we would appreciate it. and mr. vladeck we recognize you for five minutes. >> good morning. chairman bono mack, ranking member butterfield and members of the subcommittee, i am david vladeck, director of the federal trade commission's bureau federal trade commission's bureau of consumer protection. we appreciate the opportunity to present testimony here this morning. the written statement submitted on behalf of the commission on this tape and my responses to questions represent my views. as the nation's consumer protection agency, the ftc is committed to protecting consumer privacy and promoting security and the private sector. we all know that data security is critically important to consumers. if companies do not safeguard the personal information they collect and store, that information can fall into the wrong hands, resulting in fraud

and other harm to consumers. and as more and more breaches take place, there's a risk that consumers could lose confidence in the marketplace. as the commission's testimony makes clear, the commission unanimously supports legislation that would require companies to implement reasonable security policies and procedures. the commission also supports legislation that would require companies to notify consumers in appropriate circumstances when there is security breach so that consumers can take steps to protect themselves. by enacting legislation, congress would also send a clear message that all companies that hold consumer information, including common carriers and nonprofit organizations, must take responsible and appropriate measures to safeguard that information and must notify consumers if their information has been exposed in a breach. at data security statute would establish the standards that companies must adhere to, and by

empowering the federal trade commission to seek civil penalties for violations would be to her poor security practices. these statutory provisions would reduce the incidence of identity theft and other financial arms, saving consumers from the hardships that ensue when there is a breach. the commission's testimony also describes our efforts to promote data security, which focuses on three activities. enforcement cases against companies that fail to provide adequate security, education for consumers and businesses, and policy initiatives to promote better data security. enforcement, or than 30 law enforcement actions against businesses that fail to protect consumers personal information, including two actions we announced just yesterday. in the first case a large payroll processing company that maintains highly sensitive

payroll information failed to take reasonable measures to prevent an intruder from hacking into their payroll processing system. a hacker compromised personal information including social security numbers and financial account information, of approximate 28,000 employees of transport small business customers. in -- ceridian's small business customers. a company offering a web-based application to assist employers in their buying their employees eligibility to work in the united states had week russia had week practices and web application vulnerability as result, an employee of a look out customer was able to gain and authorize access to look out entire customer database, which include highly sensitive information, including social security numbers, dates of birth, passport numbers, alien registration numbers, drivers

licenses, military identification numbers, and so forth. the orders entered in both cases required the companies to implement comprehensive data security programs and obtain independent audits for 20 years. orders of this guide our standard in our data breach cases. and i underscore, we are not authorized to seek civil penalties in this case is so we rely on injunctive relief. the commission also promote data security practices through extensive use of consumer and business education. for example, our websites designed to educate consumers about basic security, computer security, recorded more than 14 million unique visits eric and our business education touches on a wide range of issues. from p2p file sharing which i know you are interested, and the copper industry. we also engage in policy actions.

we published a staff report in december proposing a new framework for privacy, which calls on companies to build privacy and data security, it's a design of goods and services to maintain regional safeguard for consumer data, to limit the data they collect, to retain data for only so long as they have a legitimate business need to do so. in closing, we thank the chair for holding this important hearing and we look forward to working with you and your colleagues on data security. of course, we be happy to answer any questions. >> mr. martinez come to recognize for five minutes. [inaudible] >> please turn on your microphone. >> madam chair -- i think we have another good morning, madam chair, ranking member butterfield and establishment of the subcommittee. thank you for the opportunity to testify on the role of the secret service on cyber investigation but in

february 2010 the department of all massacres delivered a quadrennial homeland security review which established a framework for homeland security missions and goals and underscore the need for a safe and secure cyberspace. as a vital component of dhs we want to support the department's mission to safeguard cyberspace. with great understand of how the criminal world operates the secret service had to the strategy that had a tremendous impact in terms of disrupting and hispanic underground network. we use this knowledge of criminal networks to adopt our response to the challenges posed by financial crimes in the 21st century. breaking up is criminal networks requires a highly court made law enforcement approach focused on constant innovation and tactics to meet these emerging threats. secret service continue develops technical expertise to track down and successfully infiltrate, investigate and prosecute with our partners cyber criminals who pride themselves on their knowledge and technical prowess. in many cases law enforcement has learned the tricks and techniques that cyber criminals

use to hide their identities and their crimes, and in turn develop countermeasures that allow the perpetrators to be apprehended and prosecuted. a central component of our approach is a training provider to our electronic crimes special agent program which gives our special agents the tools they need to conduct computer forensic examinations on electronic evidence obtained from computers, personal data systems and other electronic devices. ..

>> the secret service's commitment to sharing information and best practices is perhaps best reflected through the work of our 31 electronic crime task forces. two of which are located overseas in rome, italy, and london, england. our domestic and foreign partners benefit from the resources, information, expertise, and advance resource provided by the international network of members. the secret service continues to take complex cases that require time, and individuals that take part in criminal activity no matter where they are located. we have enhanced the cyber protection involved in network intrusion, identity theft, credit card fraud, bank fraud in the past few weeks. we have arrested 41 transnational cyber criminals

who were part of the largest intrusions ever prosecuted in the united states. they resulted in hundreds of millions of credit card numbers and financial loss of $600 million to financial and retail institutions. the cases are complicated and directly impact the live was millions of american citizens. at all levels, law enforcement is also having some success in getting the legal system to recognize the seriousness of losses stems from financial crime. this fact is corrected in the length levied against the defendant. as a result of the secret service's successful investigation which i describe in more detail in my written remarks, the three suspects for indicted for various computer-related crimes. the lead defendant plead guilty was sentenced 20 years. there's no doubt 20 years will provide a much greater deterrent than cases seen a decade ago.

madam chair, distinguished members, the secret service is committed to the safeguarding the nation's cyber infrastructure, and will continue to investigate crimes to protect consumers from harm. this concludes my prepared statement. thank you again for the opportunity to testify on behalf of the secret service. >> thank you, mr. martinez. dr. spafford, you are recognized for five minutes. >> madam chair, ranking member butterfield, members of the committee, i've been working in the information field for about 30 years. i'm speaking with that background. also as chairman of usacm, which is the public policy council of the acm, which is the worlds largest scientific computing society. we have a number of members that work in security, privacy, and electronic data. we have a great deal of

expertise in the arena. and our knowledge of this is that this is a very significant problem. we have seen this as a growing area of concern over number a decades. and certainly the data that has been presented what you've heard, what you've seen, indicates that the problem is getting worse. it is not only a national problem, but as mr. martinez has just said, an international problem. we'd like to point out this is a problem not only for private firms, but also government agencies. there is data that is held by government agencies in database and some of it is privileged information because government is in the position to collect particularly sensitive data. that is often compromised and released. the privacy rights clearinghouse maintaining the database where they track various forms of data breaches and releases. according to their figures, it's averaged approximately 100 million records for year for the

last six years running has been released. interesting sony breaches this year has totaled $100 million all on their own. we're well ahead of the record just based on those releases by themselves. if we combine that with the study that was done by the institute, it indicates for companies having the breaches, they cost $114 per record to clean up after the breaches. we come up with a figure of $21 billion per year in costs, to clean up after the breaches, on average, and those clocks are being passed on to the consumers along with that, we have all of the cost for the fraud, law enforcement investigation, other kinds of losses piled on to that, and all of the losses for unreported breaches and other losses that are unreported.

so it is possible that the losses to the american public and economy could be as high as $100 million per year from these breaches. i'll note there was a story in the "new york times" today that some of the credit card fraud underground bulletin board groups are worried that the massive loss of credit cards from the sony breach maybe depressing the price, the underground price for credit cards by a factor of five or ten, because it will reduce the cost of the black market trading price of credit card numbers. perhaps there is some good to be had from the sony breach. looking at the problem, realistically, disclosure notification laws help at some level after the fact. because it does help victims take some action to protect

their identity and protect against some of their information being used illegally. however, it does not solve all of the problem. law enforcement has made some gains. but they are not adequately resourced. we certainly do not have enough in the way of forensic tools. there's more need for research there. and there certainly is a need for more law enforcement agencies and resources for prosecution. but more importantly, there's a preventive aspects. we don't have enough in the way of requiring companies to take the preventive measures to prevent the kinds of disclosures that are occurring. in large part, that's because security is not viewed as something that returns a value. it's not something that adds to the bottom line. it takes away from the bottom line. companies don't like to invest in security. they don't understand the risk

involved by not investing in security. and those that do understand some of the risk, and tight economic times, are willing to play the risk. they believe they may not be hit by the problem. when they are and they have the pass along the cost, they pass it on to the customers and to the rest of the society. that's where all of the large expense comes from. so among the recommendations we have, our -- first of all, minimize the amount of data that's kept by these companies. second age the data. they shouldn't keep the data any longer than they absolutely need to. many companies keep data because they think it might be useful some day. they should have sound security practices in place, there are a number that they know if companies don't apply. they urge you to make sure that government database are covered equally, the same as private database, and any regulation, so

that all are covered by any appropriate reelinglations. -- regulations. and there are a number of others in the written testimony. i'd be happy to answer questions, and usacm would be happy to help in any way. >> thank you, dr. spafford. you are recognized for five minutes. [inaudible comments] >> would you -- is your microphone on? >> is it on now? hello. >> there you go. thank you. just a little closer would help. >> we are extremely pleased to see the committee putting such a high priority in the on the consumers protection in the society. security breaches are sadly nothing new for consumers. as more and more players get access to more and more data, and cost gets lower and lower, consumers are clear at risk for the loss of the personal data. fortunately, or unfortunately,

depending on how you look at it, strong law does exist to require companies to put into place reasonable security measures and notify consumers in the event of a breach. the fcc, as director vladeck explained, has required companies to adopt reasonable security measures, not just financial information, but nonfinancial information as well. the considerable majority of states require notification to the consumers in the event of a breach that could result in a monetary loss. i understand the subcommittee is considering legislative solutions in order to address the issues of data security and data breach. from our perspective and consumer perspective, it should not replicate the existing protections. but should be significantly strengthened off of greater protections. for example, the fcc's authority to get -- to enforcing the poor data security practices could be put into law to be more clear. they would be stronger if the

fcc were given greater resources to bring more cases, and the ability to get civil penalties for persons that violate section five of the ftc act. similarly, we believe that notification laws would be improved if they were to enact the full range of the ftc principals, not necessarily after the fact. as a judicial matter, not legislative solutions, our first advice, do no harm. while it is career that the existing legal framework is not consistent, they offer protections without which we think consumers would be worse off. cdt has testified, we did so because we believed it was a strong bill and minor revisions could be as strong as the best state laws. also often consumers manage it didn't have, which is the rights of access by data brokers.

we thought it would be a net positive for consumers. we believe also that whatever law is passed should allow states to continue to innovate and bring pass new consumer protections for consumers. i think it's important to remember that. in the laboratory of the states, the data brief notification came up because of the relatively narrow precise language, and cdt would be skeptical of any law that prohibited similar invasion for consumers protection. fundamentally, we believe the most effective way to safeguard consumers data would be to enact the comprehensive privacy protection legislation that implements the full range of fair information practice principals. these would not necessarily prevent data breaches from occur, but they would, i believe, significantly mitigate their effects. one the principals is the idea of data minnization. they should only collect the data, to accomplish, and get rid of it if it is not longer valuable. i think it's fair to say, this is honored in the breach today.

companies request and obtain data without notifying consumers that would be valuable some day. walgreens was hit by a data breach in the 2010 in december. they had to send notices not just to current customers, but folk who's are unsubscribe from receiving the e-mails. they didn't explain why they retained the e-mail addresses. last month, walgreens was again. again, previous customers had their information exposed to hackers. similarly, it was reported just last night as part sony, 120,000 were accessed from outgoing database going back to 2009. i guess the good news, only 900 of the credit card were still active. it remains why the numbers were being stored in the first base. i know as a result of the

epsilon database, i haven't done business with in six years and had unsubscribes as well. we believe the law that requires reasonable minnization and tell consumers what they are doing with the data and give the consumers choice about how it is being shared and transferred. we look forward to continue to engage in the members of the subcommittee on appropriate legislative solutions. i look forward to your questions. >> thank you, mr. much, mr. brookman. the chair recognized herself for five minutes for the first round of question. i'd like to start with mr. vladeck. sony took more than two weeks to notify the customers, how long does a company need before it notifies the customers, and what is the average time necessary to inform consumer their information may have been breached? >> we share the concern, i

think, of everyone in the room that consumers need to be notified as promptly as possible. there are two practical exigencies that delay notifications. one is there's a need that the company patched whatever hole there is in the system before the breach is made public. and second, it sometimes takes the company sometime to understand what information has been accessed and who needs to be notified of the breach. we think this should happen as soon as practical, and in the prior legislation, for example, there was an outer limit set at 60 days. i don't know whether that was the right date or not. i can't answer your question about common practices, data breaches very so much, it's hard to extract the general rule. the smaller the breach, typically the quicker the notification can go out. but in a massive breach where the company may still be trying to patch up it's system if it's

still operating, sony, one the systems was not, you do worry about notification before the company has had an opportunity to plug the hole. but i think that we all would agree that consumers need to be notified as swiftly as possible so they can take action to protection themselves. >> thank you. mr. martinez, a couple of questions, can you explain the difference in why the fbi might be involved, as opposed to your agency? >> yes, the statute most used to prosecute cyber criminals is 18usc1030. the secret service shares current jurisdiction with the fbi on those types of investigations. however, the investigations that deal with national security or terrorism that are cyber-related, the fbi is those lead agency in the those efforts. through the ncijff they lead the

number effort in state sponsored or national security type of investigations. we have a representative there. when it comes to criminal matters, we have concurrent jurisdiction. it depends on the relationship the either the specific company might have with the law enforcement agency, whether it's working group or task force or cyber task force where the company might reside. for example, the secret service has 29 domestic crime task forces. one the things we ask our people to do is to develop the relationship with the private sector companies so that relationship is there prior to the incident happening. the last thing we want is that for, you know, sort of when the fire goes off, that's the first time you meet the fireman. we want there to be a relationship. there are a lot of things that us and the fbi do with private sector companies to try to develop those points of contacts prior to the intrusion

happening. >> i understand you are involved with epsilon, but not sony. with you explain that? >> unfortunately, we can't comment on ongoing investigation. i can't comment on the sony, because that's being led by the fbi. all i can say with regard to the epsilon because it's still ongoing, they did notify us early on, and cooperated so far with the secret service in that investigation. >> thank you. mr. spafford -- excuse me, doctor. can you speak a little bit to mr. vladeck's notification consumers, i think we're puzzled with the 60 day timeline. to me it seems reasonable that consumers should not immediately. there's no greater protector of the identity than the person themselves. can you speak pot -- speak to the 60-day timeline? >> after the breach has occurred, it's necessary to find out -- it is -- let me pull it

closer. after an incident has occurred, it is necessary to determine what records have been accessed to determine what needs to be contacted. and what information was possibly taken to be able to inform the individuals what information might be at risk and perhaps give them information as to how to protect that. unfortunately, not every organization keeps the kinds of records that would allow them to determine that. it's also often the case that when evidence has been found that some kind of incident has occurred, that doesn't necessarily tell them how long that incident has been ongoing. they just detect that it has happened, but they don't know how far back it goes. they have to very often pull records, so some forensic investigation, it may take a while to determine how many

people, how far back the records go, how much data it takes. that's not something that occurs instantaneously. >> thank you, doctor. i'm sorry to cut you off. i've run out of time. i recognize mr. butterfield for 5 minutes. >> thank you, mr. chairman. the trust act, we know that, this bipartisan bill has built up widespread across congress to provide new rights for individuals who's personal information is compromised when the breach occurs. first question to mr. vladeck. if hr2221 if it's passed into law and gives the ftc new authority and responsibility, can you talk for a minute about the limitations that are under now with regard to limitation security and how such a law if it is enacted could strengthen with regard to breaches?

>> thank you, yes. it would strengthen in at least three ways. first, i think the key insight in the proposed legislation is that for the first time erect a national standard requiring businesses that hauled sensitive personal information to take reasonable and rigorous safeguards to protect it. so for one thing, there would be a congressionally dictated standard by which we could judge the performance of companies to hold on to personal information. second, there would be a national breach notification standard which would encompass a broad range of companies they may not be subject to all state laws. third, we would have civil penalty authority. at the moment, we have place company that is have failed to protect consumer information under order to make sure they don't violate consumer privacy again.

that doesn't involve general deterrence. it doesn't send a signal to other companies that they have to step up to the plate and protect consumers information. >> thank you, let me direct this to mr. brookman. i agree with you we need more front-end security measures so that the need for breach notification diminishing. you discuss for 2221 for that model and propertier incentive to take it seriously. can you elaborate more? where you suggesting they be fear of enforcement? >> yeah, i think that's important incentive. i think dr. spafford talks -- >> can you please. >> i apologize. thank you. they don't think about it in advantage. they had somewhat of an ad hoc basis the unfair practices means that it is the case that companies must exercise reasonable security. i'm not entirely sure how well it has sunk into corporate america.

even more recently, they have expanded their concept of data security, not just to financial information, but to things like e-mail addresses instead. and i think it was a very strong and important settlement with the twitter case. i would like to see hr2221 or whatever it looks like in the next generation to expand their concept of personal information not just financial information but to other potentially personal information as well, such as e-mail addresses and things like the epsilon breach wouldn't be effected. companies should have to have reasonable security measures in place. i think the ftc is getting there. i think with enforcement, just merely because of limited resources is not entirely clear, i think, to the rest of the world. that is, in fact, the law. putting it into law would be an important thing. especially with the threat of civil penalties behind it. >> let me ask you this, how do we ensure that a company is holding on to personal data as long as necessary? each company has different

needs. how do measure that? >> it's a very tricky issue. there is one the criticisms that came of the privacy buildup that came out last year. it described hard 180 day or 18-month cap on holding data. some companies are like that makes sense. behavioral advertising methods. data brokers, maybe not. they want to maintain the data longer. we have supported a state harvard model for legislation. companies that have similar interest can get together and propose for our industry. let's agree to hold on to the data, 180 days, 6 months, a couple of weeks. they don't feel the competitor's advantage to hold on just because their competitor's might be doing the same thing. >> let me go back to the other end. what about the newspapers reporterred earlier this week, the white house proposed the cybersecurity will be sicklated. the article explained it calls

for federal standard for notification about data breaches and the stronger role for the department of homeland security. special agent martinez, what role would the secret service have, if you know, and what agencies at dhs would have a role? >> sir, the secret service along with other executive agencies has been working with the administration on a comprehensive cybersecurity legislation. specifically in the area of data breach. i think a couple of thing that is the data, that the legislation needs to have, is notice to consumers. but also notice to the government. so that we can take appropriate actions and some type of safe harbor provision to the company that is are adheres to the right practices. in addition the enforcement, which would be handled by the secret service as part of the homeland security, the national protection and programs direct rate like the national

cybersecurity division, they would be involved in cyber intrusions -- >> five seconds led. vladeck, what role would ftc have if you know? >> we would hope we would have authority to enforce data breaches as we do, to enforce failures to inform consumers promptly, and we would hope we'd get civil penalty authority. >> thank you. i yield back. >> thank you, gentleman. the chair recognized the vice chair, mrs. blackburn for five minutes. >> thank you. thank you all for being here. i appreciate that we're having the hearing today. i think one the things we can all agree on is that giving consumers the tool that is are necessary to protect their virtual you if you will, their virtual online presence is going to be an imperative. mr. brookman, you just spoke to this. in your brief comments. i want to go to dr. spafford, if i could.

i appreciate this you start with recommendations to us. and basically, summarize these. i think that the thing that is of concern to me is when it comes to notification, it's basically looks as if what is happening is a culture of damage control. by not doing the expediently, and i think we all realize that the technology is there for almost instant notification. and allowing individuals to know. now i'm one of those that would prefer to see the industry move forward with some best practices and some standards on how to deal with not only the data security issue, but also the privacy issue. whether you are looking at the epsilon case, or the sony case, or the android apps, skype case this week, what we see is an intrusion in an invasion into an

individual's privacy. because of a breach that has taken place in a relationship that they have. dr. spafford, moving to your recommendations on page 16 of your presentation, basically what you are saying is minimize the data, age the data, provide an -- anonymity to the consumer. let's move about that. when you have consumers consent, should you also allow a consumer an eraser switch so that if the company does not eliminate the data then the consumer has the ability to go in and say, you know, whether it is 90 days or 180 days, that they can remove their data? where -- is that a recommendation that y'all would consider workable or plausible? >> it depends on the

organization. there are some circumstances where the information may need to be kept. and the user may not be able to remove it because of -- there maybe other reasons for health reasons, for instance, or contractual reason that is it needs to be kept. but that certainly could be something that for commercial reasons, marketing reasons, the user may have that right or should have that right to have that removed. >> okay. all right. mr. martinez? we have -- we continue to talk about companies being breached. and i find it so interesting that we don't talk as much about penalties for the hackers. and those that are actually the cyber snoops in committing these