but to cut to the chase we still have not cut off diplomatic relations with the gadhafi government against which we are participating in the use of military force? >> that's right, sir. we've suspended our diplomatic operations. >> but not broken, but not severed them? >> yes, sir. >> i find it extremely odd. the second concern that i have is with respect to the precedent for the unilateral decision by a president of the united states to use force in an environment, just to summarize, we're not under attack. we're not under a threat of attack. we're not actually implementing a treaty. we're not rescuing american citizens. we were not responding directly to an incident as we were in 1986 when i was in the pentagon by the way when we retaliated in libya. but purely as far as i can tell

for the notion of a humanitarian situation that existed outside of the realm of united states vital interests actually if you listen to what secretary gates was saying, that really disturbs me in terms of precedent. what comes out of this. have we established a new precedent? what's your thought on that. >> there were a variety of factories, first he did have an imminent catastrophe i have no doubt but you would have seen a bloodbath in benghazi if there had not been outside intervention and you had an unprecedented security in order to protect civilians. third, you had a you been in of our closest nato partners, the same people we look to for cooperation in places like afghanistan who were urging us to join them in acting. fourth, you had a wider set of stakes, you know, the countries on either side of egypt and tunisia going through their own

revolutions and very fragile states themselves and the unrest in libya could easily have, you know, further aggravated those -- >> i understand the logic that was given and, you know, i'm empathetic with a good bit of it. but there were a lot of counter vailing extensions and the u.n. abstentions and the key abstentions china, germany -- i think there were five. i can't pull the fifth one up in my head right now. but i just find it really troubling and particularly two months later that a unilateral decision by a president of the united states in an environment when these other factors weren't present that has been ongoing and could set, i think, a very disturbing precedent for how decisions are made for the use of force. i'm going to lay that down and it's something for further discussion.

the tip report was mentioned -- i want to -- i want to commend to you the results of a hearing that i held on this. i hope you will look at it because i think the legislation is getting ready to be renewed. i think there are some inconsistencies in the way that we are carrying out an otherwise well intentioned policy and they have particular imp indicateses in asia. this was the focus of the hearing where we are -- we have been -- the benchmarks that we have been using are convictions rather than, let's say, a settled -- an issue with a very settled rule of law that doesn't actually get the convictions. and also comparing a nation -- a country against itself when the implication is they're being compared against other countries. the classic example of that that came up in that hearing was that we've given nigeria a one and we've given japan a 2. and these are very stable

societies who are able to deal with the rule of law, you know, in a very -- how shall we say in a way comparable in many cases to our own, and i really think we need to fix the law so that we're measuring the right sorts of things as we put these policies forward 'cause it's causing a great deal of resentment of people who are otherwise our close friends. >> i read the transcript of that hearing and i think it was very helpful. i mean, it's a complicated process to go through, but i think you raise some very legitimate questions which we'll sort through. >> well, i hope we can work with you on that because we're going to come up with some suggestions how we can, as i said, implement the intentions of this policy but in a way that our friends and people whose governmental systems are pretty stable can understand what we're talking about. thank you, mr. chair. >> thank you, senator webb.

seeing no other members, ambassador, thank you for your appearance here today, your answers. the record will remain open for 48 hours. we urge you if you got any questions to answer them as expeditious as possible so that we can have your nomination move as expeditiously as possible and with that, this hearing is adjourned. >> thank you. [inaudible conversations]

>> pictures from london just moments ago this morning where president obama is continuing his six-day trip to europe. this was the scene just a couple minutes ago where he met with prime minister david cameron as they head over to a news conference this morning. that news conference was set for 7:00 this morning. we understand it now is expected to get underway in just a couple minutes so we do plan to have live coverage of that when it happens here on c-span2 from lancaster house. prime minister cameron and, of course, president obama departing 10 downing streets just moments ago.

[inaudible conversations] >> again, the president and prime minister david cameron heading over to lancaster house where they will hold a news conference and we do plan to have that live for you when it gets underway here on c-span2. while we wait for that to start, we'll show you now pictures of the president as he arrived at buckingham palace yesterday.

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>> president obama at buckingham palace yesterday with first lady michelle obama as they arrived again yesterday. part of the president's six-day tour of europe. this morning the president met with prime minister david cameron on policy and economic issues and in a couple moments we expect a news conference from the two, from this scene, lancaster house. today's news conference is expected to re-enforce the cooperation between the u.s. and britain foreign policy issues, from libya to afghanistan, pakistan, counterterrorism and the middle east peace process. they are also expected to pledge their support for the protests in the middle east. this is live coverage on c-span2.

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of a news conference with president obama and british prime minister david cameron. this scene, lancaster house, is where they will hold that news conference. a little bit later today, president obama will address both houses of parliament. he's expected to talk about the importance of continued ties between the u.s. and its european allies. the news conference set to begin in just a moment. this is live coverage on c-span2. [inaudible]

[inaudible] [inaudible] >> again, live at lancaster house in london, waiting for the

start of a joint news conference between president obama and british prime minister david cameron. it's expected to start in just a couple moments. real quickly as the president continues his six-day tour of europe, he will this evening be giving -- actually, this afternoon he will be giving a joint speech on the parliament of the u.s.-european alliance and this evening the president will hold a dinner in the honor of queen in the wind field house. it's the home to the u.s. ambassador to the u.k. tomorrow, the president will leave london for the g8 summit in france. it's hosted by french president nicholas sarkozy. the president is expected to meet with russian president dmitry medvedev. and with russia's joining the wto, the world trade organization and holding meetings with the japanese prime minister and then friday the president will finish up his meetings at the g8 summit. also include leaders of egypt,

tuneedsia and the imf. he'll head to warsaw poland for the final leg of his trip meeting with the polish president. he'll attend dinner with the central european leaders and then saturday the president will discuss nato security and economic cooperation with the polish president and he'll later take part with the joint press conference before heading back to washington, d.c. again, live from lancaster house waiting for the start of a joint news conference with president obama and british prime minister david cameron. [inaudible]

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[inaudible] [inaudible] >> thank you.

my apologys for keeping you waiting. it's a pleasure to have president obama here today. we were just having a barbecue in the gardens of number 10 downing street with some of our armed service personnel from the united states and from the u.k. and it was a great reminder of the incredible debt that we owe all of them and their families for their service, for their sacrifice, for all they do to keep us safe. it was a great event. and it was wonderful to have barack and michelle there. it was also the first time in history as we stood behind that barbecue that i can say a british prime minister has given an american president a bit of a grilling and i'm going to hold onto. over the past year, i've got to know the president well. and whether it's in routine situations like sitting around the g8 table or the slight ie less routine of getting a phone call in the middle of the night, i've come to value not just his leadership and courage but the fact that to all the big international issues of our time, he brings thoughtful

consideration and reason. and i know that today, mr. president, you'll be thinking of the dreadful tornado in missouri and all those who lost their lives and loved ones and our hearts in britain go out to all those people, too. now, barack and i know well the shared history of our countries. from the beaches of normandy, to the engine river our soldiers have fought together. from labs in cambridge, massachusetts, to cambridge, england, our scientists have decoded dna and cured diseases together. and in millions of interactions every day, including our massive business relationship, our people forge friendships together. that is what makes this relationship special. but what makes it essential is that it's not just about history or sentiment. it is a living, working partnership. it is essential to our security and it's essential for our prosperity. and i feel every day just how important this partnership is.

the president and i together with my deputy prime minister have just had some excellent discussions. we've been talking today about the two things we care about most, getting our people jobs and keeping our people safe. because every night millions of british and american people take the same worries to bed with them. they're asking if they can find a good job, if they're going to get a paycheck month, and if there'll be work for their children when they grow up. the stark truth of the world today is that no country is owed a living. we've got to pay our way and we've together earn our way. and that is what the president and i are determined to do. barack and i did not come in to politics to cut public spending but neither did we seek office to see our great economies decline or to land our children with unsustainable debts. and that is why in the second half of this decade, we're making sure that debt ratios will be falling on both sides of the atlantic. at the same time, we're investing in our roads and rail

ray -- railways and science and innovation. and the success of this won't be measured in exports and trade flows it will be in the feeling of the factory worker whether they're in phoenix or the shop keeper in liverpool or the engineer in ohio, people know if they work hard, then prosperity will be there for them and the promise of a better life there for their children. as well as the economy, the president and i had some very good discussions on security. now, americans and brits do not need to explain terrorism to one another. both our people have suffered at its hands and indeed they have died together. my wife, samantha, was in manhattan on 9/11. and i'll never forget the five hours of trying to get hold of her. and she will never forget the new yorkers that she met that day or the sense of solidarity that she felt that day and that we have felt ever since that day. and today as we come up to its tenth anniversary, we should

remember the spirit of that city and the sympathy we feel with those who lost their loved ones. now, there are those who say that this terrorist threat is beyond our control. and we passionately believe that is wrong. we can defeat al-qaeda and the events of recent months give us an opportunity to turn the tide on their terror once and for all. i believe there are three actions we must take. ..

>> we've broken them, the momentum of the insurgency and even in kandahar and central helmand, they are on the back foot. now is the moment to step up our efforts to reach a political settlement. that talibans must make a decisive split from al qaeda, give up violence, and join a political process that will bring lasting peace to that country. we are agreed to give this the highest priority in the months ahead. second, we must reach a conclusion to the arab-israeli peace process. i congratulated the president on his recent speech on the middle east which was bold, visionary and set out what it need in the clearest possible terms. and and to tear against israelis and the restoration of dignity to the palestinians. two states, living side by side, and in peace. yes, the road has been and will be long and arduous. the prize is clear. conclude the peace process and you don't just bring security to

the region, you deny extremists one of the most profound and enduring recruiting sergeants. weakening the calling and crippling their calls. that is why whatever the difficulties we must continue to press for a solution. our third action must be to help elevate the changes in north africa and the arab world from a moment in history to a turning point in history. we've seen some extraordinary things, protesters, bloggers toppling dictators, people taking to the streets and making their own history. if global politics is about spreading peace and prosperity, then this is a once in a generation moment to grab hold of. it is not a time for us to shrink back and think about our own issues and interests. this is our issue, and this is massively in our interests. those people in tahrir square and tripoli just want what we have, a job and a voice, and we all share in the success or

failure. if they succeed, there is new hope for those living there. and there is the hope of a better and safer world for all of us. but if they fail, if that hunger is denied, then some young people in that region will continue to listen to the poisonous narrative of extremism. the president and i are agreed we will stand with those who work for freedom. this is the message we will take to the g8 tomorrow when we push for a major program of economic and political support for those countries seeking reform. this is why we mobilize the international community to protect the libyan people from colonel gadhafi's regime. why we will continue to enforce u.n. resolutions with our allies and why we restate our position once more. it is impossible to imagine a future of libya with gadhafi still in power. he must go. in all of these actions we must be clear about our ambition. iraq -- we saw the end of the cold war, and the victory over

communism. we saw the invasion of kuwait by saddam hussein and the world coming together to liberate that country. throughout it all we saw presidents and prime ministers standing together for freedom. today, we feel just as passionately about extending freedom as those who came before us. but we also know that idealism without realism does no good for anyone. we have learned the lessons of history. democracy is built from the ground up. you've got to work with a grain of other cultures and not against them. real change takes time. and it's because of this we share the view that our partnership will not just continue, but it will get stronger. this is a partnership that goes beyond foreign affairs. at home we have similar goals to bring more responsibility to our societies, and to bring transparency and accountability to our governments. in all these ambitions our countries will continue to learn from each other and work with

each other. and as ever it has been a pleasure to talk to the president, and an honor to have him with us today. mr. president. >> thank you, mr. prime minister. i am very pleased to be back in the united kingdom. i know that you have arranged for typical london weather. over these past two days and i'm very grateful for that. i want to thank her majesty, the queen and the british people for the extraordinary welcome that has been extended to me and michelle. it's a shining example of the general warmth and affection that our two nations feel toward one another. since david took office last spring, i believe we have now met or spoken at least two dozen times. we may be leaders from different clinical positions, but on a whole host of issues we see eye to eye. we even took the same side in an

epic match of double table tennis against some local students yesterday, and we won't rehash the results of that. the relationship between our two countries is one that's not just based on warm sentiment, or common history, although those things exist. we share ideals and shared values. as david said it is a specialty relationship and an essential relationship. i believe that it is stronger than it has ever been. i'm committed to making sure that it stays that way. the successful meetings with had and a joint initiative where announcing today, on the depth and breadth of our relationship. we discussed our efforts to strengthen global recovery, create good jobs for our people. investment relationship between the united states and united kingdom is the largest in the world, one that accounts for nearly 1 million jobs in each of

our economies. we believe we can make that relationship even stronger with deeper cooperation in areas critical to our future prosperity like higher education in science and innovation, and areas critical to our national security like cybercrime, and areas vital to the stability of the world, including international development. during our discussions today we reviewed our progress in afghanistan where our brave servicemen and women have fought side-by-side to break the talibans momentum, and where we are preparing to turn a corner. we reaffirmed the importance of beginning the transition to afghan lead for security this year. completing the transition by 2014. we discuss the opportunity exists exists for promoting reconciliation for political settlement, which must be an afghan lead process. president karzai has made it clear that he will talk to anyone who is willing to end the violence, split with al qaeda, and except the afghan constitution.

and we welcome the positive cooperation between afghanistan and pakistan on that front. at the same time the prime minister and i both agree that our nations have a long-term interest in ensuring that afghanistan never again becomes the launching pad for attacks against our people. so alongside our nato allies and partners, we are committed to a strong and enduring partnership with the people of afghanistan. as historic change unfolds across the middle east, north africa, we agree that the pursuit of self-determination must be driven by the people of the region and not imposed from the outside, but we are both committed to doing everything that we can to support peoples who reach for democracy, and leaders who implement democratic reform. tomorrow we will discuss with our g-8 partners out of those of us in the wider international committee that can support nations that make the reforms

necessary to build a framework for democracy, freedom and prosperity for the people. at the same time we will continue to strongly oppose the use of violence against protesters, and any efforts to silence those who yearn for freedom and dignity and basic human right. that's one of the reasons that we're working together alongside with our nato allies and partners to protect the libyan people, and will continue those operations until gadhafi attacks on civilians ceases. he must step down from power and leave libya to the libyan people. we also discussed the situation in syria with a serial people have shown great courage in their demands for a democratic transition. the united states welcomes the e.u.'s decision to post sanctions on president assad and we're increasing pressure on him and his regime in order to end his policy of repression and begin to change the people seek.

we discussed yemen where the yemeni people call for greater opportunity and prosperity, and a nation that is more unified and more secure eric and we expressed our joint concerned of the deteriorating situation on the ground there. we have applauded the leadership of the gulf cooperation council seeking an orderly and peaceful resolution to the crisis. recall in president's solemn to movie neatly on his commitment to transfer power. and at a time when so many in the region are casting off the burden of the past, we agree the push for a lasting peace that ends the israeli-palestinian conflict and resolves all crises is more urgent than ever. i appreciate the prime minister support for the pretzels that i laid out last week on borders and security which can provide a sound basis from which the two sides can negotiate. as increasing tensions in our the region, derailed sedans confidence a peace agreement,

we're working closely together to encourage the margin recommit to a peaceful resolution to the crisis and calling off the rapid reinforcement of the u.n. peacekeeping presence in the region. we also reviewed our close corporation it comes to countering terrorist threats, prevent the proliferation of weapons of mass instruction and the means of their delivery to states like iran. and our unrelenting efforts to keep our people safe. finally, we launched a joint initiative to exchange the best ideas and practices when it comes to supporting our veterans and our military families. today, before we came here, michelle and i joined david and samantha for an outstanding barbecue at number 10 for active duty members of our militaries, along along with their spouses who make extraordinaire sacrifices as well. it was a wonderful event, and a moving reminder of the long line of american and british service members who made heavy and a

rogue sacrifices in the joint defense of our shared values that our people hold so dear. so, mr. prime minister, thank you not only for the barbecue but for the opportunity to spend is very productive time at number 10 with you and your team. i enjoy my visits you as always, and i am confident that are special relationship will continue to grow even stronger in the months and years ahead. thank you very much. >> thank you very much. david robbins from the bbc. >> thank you very much indeed. prime minister, can you confirm that you plan to ask the war in libya i send a ground attack helicopters? and mr. president, can you confirm that united states will sit that particular mission out? and a general question for you if i could. you talk about an old war in afghanistan and a new one in libya. is your partnership really that different than the one between bush and blair? >> thank you. lots of questions in there.

first of all, president and i agree that we should be turning up the heat in libya. i believe the pressure is on that regime. you see it in the fact that the rebels have successfully delivered misratah. you see in the success of other parts of the country. you see in the strength of the coalition. you see in the growth of the national transitional council. so i believe we should be turning up that pressure, and on britain's part, all of the options for turning up the pressure. obviously, within the terms of u.n. resolution 1973. because we believe we need to keep enforcing that resolution, protecting civilians, pressurizing that regime so that the libyan people have a chance to decide their own future. and within that, those are the options we will look at you ask the question about this relationship and past relationships. i think every relationship between a president and the prime minister is different. i would say both of us strongly

believe in a special relationship. we both called it an essential relationship, but we believe as i said in my speech we have to learn the lessons of history about how best we promote the fight is that we share, and that means yes, going with the grain of other cultures. it means yes, having a patent understanding of building democracy takes time. and you have to work on the building blocks of democracy and i believe this can all be done in a minute but i believe in a partnership we are both extremely strong together and wanted to see the same, whether in afghanistan where we want to see a peaceful and stable afghanistan that no longer requires the presence of foreign troops to keep it free from terrorism. and we want to see a libya where people have the chance to decide their own future. but we are doing things in a different way. we have ruled out occupying forces invading armies. we're doing what we can to enforce resolution 1973 and allowed the libyan people to choose their own future. and we are very committed to doing that work together. >> well, first of all i to think

that we have made enormous progress in libya. we have saved lives as a consequence of our concerted actions. i think it is important to note that we did so under a u.n. mandate, and as part of a broad-based international coalition that includes arab countries. and i absolutely agree that given the progress that has been made over the last several weeks, that gadhafi and his regime need to understand that there will not be a letup in the pressure that we are applying. and the united kingdom, the united states, and our other partners are putting a wide range of resources within consistent with the u.n. mandate in order to achieve that pressure. and i think will ultimately be successful. the goal is to make sure that the libyan people can make a determination about how they

want to proceed, and that they will be finally free of 40 years of tyranny and they can start creating institutions required for self-determination. so, in terms of historical analogy, i just want to underscore, this is not the united kingdom and the united states alone. we have a broad range of partners under an international mandate designed to save lives and ensure that we did not have the sort of massacre that would lead us then to say to ourselves why do we stand by and do nothing. with respect to afghanistan, similarly to have a broad-based international mandate and a broad-based international coalition. designed to make sure that afghanistan does not serve as a base for attacks against our people. we've discussed with what we have said in lisbon with our nato summit, that this will be a

year of transition because of the work that we've done in the enormous sacrifices that both our militaries have given. we are in a position now to transition, to start transitioning to an afghan led security process. and at the same time we're going to be engaging in the sort diplomatic work that is required for an ultimate political solution to the problems there. and i'm confident that we can achieve it. i think that there's no doubt about that united states and the united kingdom have a unique relationship. and that is going to be consistent regardless of who the president and the prime minister is. it's going to be consistent regardless of what parties we come from. there's so much that binds us together. that it is not surprising that we are typically on the international -- on the international stage, going to be working together as opposed to

cross purposes. but as david mentioned, i think that the one thing that we have learned is that even as we promote the values and ideals that we care about, even as we make sure that our security interests are met, that we are using military power in a strategic and careful way, that we are making sure that as we promote democracy and human rights, that we understand the limits of what the military alone can't achieve. and we are mindful that ultimately these regions are going to be, that the fate of these regions will be determined by the people there themselves. and that we are going to have to work in partnership with them, and that i think is the best example of alliance leadership, and it's something that i'm very

proud to be a part of. julie. >> thank you, mr. president. you said that moammar gadhafi's exit from libby is inevitable and that the u.s. will continue with the campaign until his attacks stop. does that mean you'll committee is to the campaign until cannot is removed from power? and would you be willing to commit u.s. resources if that means speeding up the gadhafi's exit? prime minister cameron, deeply the u.s. and other nato allies should increase their role in the libyan campaign as of the british lawmakers have suggested? thank you. >> i have said from the outset that our goal, the reason that we intervened in libya, was to protect people on the ground. and to give the libyan people the space that they needed in order to bring about a change towards democracy. and i also was very clear in terms of how we're going to

participate. we would very heavily on the front end, disabling their air defense systems, carrying the lion's share of the burden when it came to setting the stage for nato operations, and then that once the transfer took place to nato command and control, that at that point our primary role would be a whole range of support that utilized america's unique capabilities. that's what we're doing but i also rolled out us putting any ground forces in libya. we have proceeded consistent with that. there are times where, for example, with our predator capabilities we have a unique capacity that we have brought to bear and we will continue to do that. and the prime minister and i consistently discuss on a regular basis what can't we all do to make sure that that pressure continues to apply.

i do think that it is going to be difficult to meet the u.n. mandate of security for the libyan people, as long as can copy and his regime are still attacking them. so, we are strongly committed to seeing the job through making sure that at minimum, the dobby doesn't have the capacity to send in a bunch of thugs to murder innocent civilians. and to threaten them. i believe that we'll build enough momentum that as long as we sustained the course that we are on, that he is older going to step down. and will continue to work with our partners to achieve it. so we have not put forward any artificial timeline in terms of how long this will take. my belief is that the more resolute that we are now, the

more effective the coalition is in rallying all the resources that are available to it, that we're going to be able to achieve our mission in a timely fashion. one last point. and this speaks to the issue of whether there are other additional u.s. capabilities that could be brought to bear. david and i both agree that we cannot put boots on the ground in libya. once you rule out ground forces, then there are going to be some inherent limitations to our airstrike operations. it means that the opposition on the ground in libya is going to have to carry out its responsibilities. and we're going to have to dig effective coordination, and we are doing that with the opposition on the ground. but i think that there may be a

false perception that there are a whole bunch of secret super effective air assets that are in a warehouse somewhere that could just be pulled out and would somehow immediately solve the situation in libya. that's not the case. the enormous sacrifices that are being made by the british and the french, by ourselves, by the danes, and others, you know, we are bringing to bear an array of air power. that has made a huge difference. but ultimately this is going to be a slow, steady process in which we are able to wear down the regime forces and change the political calculations of the gaddafi regime to the point where they finally realize that they're not going to control this country. the libyan people are going to control this country. and as long as we remain resolute i think we're going to achieve that mentioned --

mission. but there's not a whole host of new and different assets that somehow could be applied. partly because we been extraordinary successful in avoiding a significant civilian casualties. and that's been part of our goal. that's been part of our mission is making sure that we are targeting regime forces in a way that does not result in enormous collateral damage. and that means we may have to sometimes be more patient than people would like, but ultimately i think it promises a greater success. and it sustains our coalition and support for it. not just here but in the arab world as well. >> thank you. i so agree that the two key things here are patience and persistence. that is what the alliance is demonstrating and needs to go on demonstrated. i just make two points. first of all, i think the president and i completely agree

on this point. of course, the u.n. resolution is not about regime change. the u.n. resolution is about protecting civilians from attack and taking all necessary measures to do so. with that said, both political leaders included the to hear, has said it's hard to see how you can put you in resolution 1973 wind -- with the gaddafi still in control of his country which is why we have been so clear he needs to leave libya. in terms of the u.s. role, i would make this point which i'm not sure is widely understood in britain or in your. it's already a huge number of those sorties and the support and air assets that are actually bringing the pressure to bear our u.s. assets. the enormous effort at the beginning as the president said but also sustained amount of assets that have been used. and as the president said, there are also the unique assets and capabilities that the u.s. has, that others don't have that are

so vital. and as he said we all have to ask what is it that we can all do to make sure the pressure is really brought to bear. that is what the british are doing, the french are doing, the americans are doing. and i know we'll discusses in the margins of the g8. i will make his point as we'll. as well as the military pressure, don't under estimate the pressure of building up the opposition, the context we have with the council. the facts are opening offices and billing support and strength from the allies. don't underestimate the extent to which the arabs are cutting off arab per proxy wishing because they're using them into tanks and other military equipment. and also the other stuff that i know americans and others are taking to try to release libyan assets back into the hands of the national transition council and recognizing them as the right interlocutor for us to speak. so in all those ways we can keep the pressure up over the coming period while showing patient and consistent at the same time. tom from itv.

>> mr. president, you talked about the need for robust action under countries deficit and debt position to be agree with the prime minister's supporters that he led the way on the issue, or do you feel that, in fact, he has traveled too far and too fast? can i just ask you both as a sidebar, last we talked about the case on which the punisher has expressed very clear views. have you found a solution? >> on your second question, mr. mccain and, have proceeded through all the processes required under our extradition agreements. it is now in hands of the british legal system. we have confidence in the british legal system coming to a just conclusion, and so we await resolution. we will be respectful of the process.

with respect to how we deal with debt and deficits, i said two years ago the first time i came here in april of 2009, the first g20 summit that i attended, that each country is different. and each country will have to make a range of decisions about how to, at that time, dig our way out of the worst recession we had experienced since the 1930s. at the same time, that we put our countries on a path of sustainable growth, the ultimate results in jobs and prosperity for our people and a growing middle class, across the board, and we succeeded in the first part which is to yank the world economy out of recession. and that was in large part due to concerted action between the

united states, united kingdom, and other countries. now we've got that other challenge which is how do we sustained growth in a way that's responsible and responsive to the needs of our people. that requires us to continue to make investments in education, science, technology, infrastructure. things that help our economies grow. but it also means governments that live within their means. and, obviously, the nature and role of the public sector in the united kingdom is different than and has been in the united states, the pressures that each country are under from world capital markets are different. the nature of the debt and deficits are different, and as a consequence, the sequencing or

pace may end up being different, but the one thing that i'm absolutely clear about is david and i want to arrive at the same point. .. >> to the best of intentions and it turns out they're not working as well as they should. if the program is not working well, we should get rid of it and put that money into programs that are working well.

it means that we got to make sure that we have a balanced approach and that there's a mix of cuts but also thinking about how to enjoy revenue so that there's a match between money going out and money coming in. and each country is going to have to go through what is a difficult and painful process. what i'm confident about is that we will be able to come out of this stronger than before. and i think both the people of the united kingdom and the people of the united states want to see a government that's reflective of their values. the fact, you know, they take their responsibilities seriously. they pay their bills. they make sure their families are cared for. they make sacrifices where necessary in order to ensure their children and their grandchildren are succeeding and they want those same values reflected in their government and i think both our countries will be able to achieve that. >> thank you. >> first of all, in the case of gary mckinnon, i mean, i understand the widespread

concern about this case and it's not so much about the alleged offense which everyone knows is a very serious offense. it's about the issue of the individual and the way they're treated in the operation of the legal system and as the president said, making sure that legal system operates properly and carefully. the case is currently in front of the home secretary who has to consider the reports about gary's health and his well-being and it's right that she does that in a proper and effectively quasi judicial way. i totally understand the anguish of his mother and his family about this issue. and we need to make sure this case is dealt with in the proper way and i'm sure that is the case. on the issue of deficit reduction, number 1, we also spoke about this at the g20 but even before that when you first came here when you were running as candidate. and i completely agree with barack that each country is different and has different circumstances -- i mean, britain does not have a reserve currency. we're not in the same position

as the u.s. is with the dollar and i think it was necessary for us to set out on the path of deficit reduction without delay after the election and i would argue the proof for that of the u.k. has been what happens happened in the capital markets and as the president said capital markets treat different countries differently. and what you've seen since the election is actually market interest rates in the u.k., bond yields effectively come down. whereas, if you look at what i see happened in greece or in portugal or in other european countries you've often seen those bond rates increase. that in my view that is the risk we had run if we had not set out on the path of deficit reduction. but each country is different. but when i look across now and see what the u.s. and the u.k. are currently contemplating for the future, it's actually a relatively similar program in terms of trying to get on top of our deficits and make sure the debt is falling as a share of gdp because as the president said, in the we understand we

share a very similar set of values about not wanting to load responsibility for these debts on our children and not wanting to shirk our own responsibilities for straightening out our own public finances. so as he said, we may take slightly different paths but we want to end up in the same place. it's an extremely difficult thing to have to do dealing with your public finances, getting on top of your deficit but it's absolutely essentially and we've talked about the national security but in the end there's no national security unless you have economic security and that's an argument we have to make every day here in the united kingdom. >> thank you, mr. president. yesterday in his speech before congress the israeli prime minister referred to the palestinian right of return as a fantasy. and i wonder if that's a sentiment you agree with in any way? and also if you could outline for us a little bit how you -- your views on that issue as well as the future of jerusalem?

and, mr. prime minister, if i may, you said at the top of this press conference that you consider the president's principles outlined last week to be bold and visionary and, in fact, what needs to be done. and i wonder if that means it makes you less open to the palestinian campaign for recognition of statehood before this fall. thank you. >> my goal, as i said in the speech i gave last week, is a jewish state of israel that is safe and secure and recognized by its neighbors. and a sovereign state of palestine in which the palestinian people are able to determine their own fate and their own future. i'm confident that can be achieved.

it is going to require wrenching compromise by both sides. over the last decade, when negotiators have talked about how to achieve that outcome, now, there have been typically four issues that have been raised. one is the issue of what would the territorial boundaries of a new palestinian state would look like? number 2, how could israel feel confident that-it security needs were being met? number 3, how would the issue of palestinian refugees be resolved? and number 4, the issue of jerusalem? the last two questions are extraordinarily emotional. they go deep into how both the palestinians and the jewish

people think about their own identities. ultimately, they are going to be resolved by the two parties. i believe that those two issues can be resolved if there's the prospect and the promise that we can actually get to a palestinian state and a secure jewish state of israel. and what my speech did was to say, let's begin the work with the very hard-nosed but transparent and perhaps less emotional issues of what would the territorial boundaries look like? and what would israeli security requirements entail? i believe that if the palestinians and the israelis

begin talking about those two issues and get some resolution, they can start seeing on the horizon the possibility of a peace deal, they will then be in a position that will be a very difficult conversation about refugees and about jerusalem. that's not something that any party from the outside is going to be able to impose on them. but what i'm absolutely certain of is that if they're not talking, we're not going to make any progress. and neither the israeli people or the palestinian people will be well-served. let me just make one more comment about the prospects for a serious peace negotiation. the israelis are properly concerned about the agreement that's been made between fatah and hamas. hamas has not renounced

violence. hamas is an organization that has thus far rejected the recognition of israel as a legitimate state. it is very difficult for israelis to sit across the table and negotiate with a party that is denying your right to exist. and has not renounced the right to send missiles and rockets into your territory. so as much as it's important for the united states as israel's closest friend and partner to remind them of the urgency of achieving peace. i don't want the palestinians to forget that they have obligations as well. and they are going to have to resolve in a credible way the meaning of this agreement

between fatah and hamas if we're going to have any prospect for peace moving forward. as for the united nations, i've already said, i said in the speech last week and i will repeat, if the united nations can achieve a lot of important work, what the united nations is not going to be able to do is deliver a palestinian state. the only way that we're going to see a palestinian state is if israelis and palestinians agree on a just peace. and so i strongly believe that for the palestinians to take the united nations route rather than the path of sitting down and talking with the israelis is a mistake. that it does not serve the interests of the palestinian people. it will not achieve their stated

goal of achieving a palestinian state. and the united states will continue to make that argument both in the united nations and in our various meetings around the world. [inaudible] >> i believe that hamas, in its own description of its agenda, has not renounced violence and has not recognized the state of israel. and until they do, it is very difficult to expect israelis to have a serious conversation because ultimately they have to have confidence that a palestinian state is one that's going to stick to whatever bargain is struck. that if they make territoryial compromises, if they arrive at a peace deal, that, in fact, will mean the safety and security of

the jewish people and of israel. and hamas has not shown any willingness to make the kinds of concessions that fatah has and, you know, it's going to be very difficult for us to get a palestinian partner on the other side of the table that is not observing the basic quartet that both david and i believe in, renounce violence, recognize the state of israel, abide by previous agreements. that is, i think, going to be a critical aspect of us being able to jumpstart this process once again. >> thank you. and i describe the president's speech as bold and visionary because i think it did an absolutelily vital thing which is to talk about '67 borders with land swaps. as the president said, if you think about what both sides absolutely need to know to start

this process, those two things are in place. first, that the israelis need to know that america and the allies like britain will always stand up for israel's right to exist, to defend its borders and it's absolutely vital that the israelis know their security is absolutely key to us and the second thing the palestinians need to know that we understand their need for dignity and for a palestinian state using the '67 borders as land swaps as the start point. that is, i think, what is so key to the speech that's been made. so neither side now has, i believe, the excuse to stand aside on talks on the specific issue of u.n. recognition. and the president is entirely right. that in the end, the palestinian state will only come about if the palestinians and the israelis can agree to it coming about. that is a vital process that has to take place. as for britain, we don't believe the time for making a decision about the u.n. resolution --

there isn't even one there at the moment that is right yet. we want to discuss this within the european union and try and maximize the leverage the european union can bring, quite frankly, on both sides to get this vital process moving. both of us in recent days have been to the republic of ireland. i went on part of the queen's historic trip -- [inaudible] >> clearly, we're having technical problems and so we'll move on from here and tell you about what's happening with the president's schedule. he is in the midway point of his six-day tour of europe. and what's coming up tonight is a joint session actually this afternoon or this morning. he'll be speaking to a joint session of parliament. that will be happening at 10:30 and we plan live coverage of that on c-span. tonight it will be a dinner in honor of the queen and tomorrow it's on to the g8 summit in france. the president will meet with french president sarkozy and

later russian president dmitry medvedev. president obama and the russian president are expected to discuss trade, nuclear security and the wto. and then meetings with the japanese prime minister. friday, the president will leave the g8 summit after meeting with the leaders of egypt, tunisia and the imf. the president heads to poland where he'll talk with the polish president and then attend a dinner with the leaders of central european. saturday a joint news conference with the polish prime minister and then the president will head back here to washington. >> these reforms, and we're not going to let that happen, of course. and i don't think there's any tlafshlgs going to happen. but, you know -- >> we're live now at the newseum of tim geithner. this started about 15 minutes ago. >> be shaped and put in place have some traction so, again, even though our system is much stronger today, much better

capitalized, the weakest parts are gone, and we did this much earlier, much more quickly, much more aggressively than any other country. we got to make sure these reforms can work. >> have these mysterious forces that you have referred to -- >> dark forces, i would say. [laughter] >> have they had any success? >> no. and they won't have success ultimately, again, because they can't -- they're not going to -- really, think of it. think of what this crisis caused. you think people have a credible prospect of legislation the reforms would undue. it's not going to happen and i'm sure we can prevent that. >> you mentioned holding up appointments but there's a number of appointments that this administration has yet to make. you have actings a lot of that. >> i'm glad you point that out. think about this anybody, i think, wants to make sure we have a strong financial system that does a better job of financing innovation, you know, the great growth companies of the future and everybody recognizes it's got to be a more

stable system, if it's going to be good for business, consumers have to have better protection, i think those are unambiguously shared ambitions you have to have peoplener in these jobs and know what their doing and who understand their markets and the strategy that prevents that from happening cannot be in the interest of the american financial system. and so what's happened is that by making the confirmation process really untenable for most people to contemplate, they've deterred people willing to come and put themselves through that process. so the reason why all those jobs are sitting empty is because they have raised the bar so high, untenably high. and that is a mistake. and it's irresponsible. and terribly bad for the

country. remember, these are -- these are really difficult, complicated choices, complicated problems. and how could it make sense for us to make it harder and less likely. you get talented people with some experience willing to do these jobs. it can't be a good idea either for the financial community or for the people that say they want to defend their interests in the congress. >> so mr. secretary, you say it's hard to fill these jobs. >> we want to put up people who can be confirmed. we want to put up talented people who can do those jobs. finding the intersection between those two things is more difficult. people are willing to come and congress is unwilling to confirm, you know, nobel prize winning economists. people with no political history, no political background, no politics, independent people who have a great record of experience running jobs that are difficult to do in supervision and things like that. so that's going to have to change.

you know, i hope it will change. we're working very closely with the people we need to work with to try to find a way to, you know, unfreeze this and it's very important that we do that. >> mr. secretary, before this i was visiting with playbookers and many were kind to suggest questions but the question that was most often suggested this morning -- people want to know how you felt about the portrayal of you in hbo's movie "too big to fail" based on andrew ross sorkin's book which we affectionately called "too big to read." [laughter] >> i have -- i hate to admit this. i have not read the book. >> what? you're in it. >> i've not seen the movie, either. >> you went to the screening of it. >> no, didn't go to the screening. >> what? >> i agreed -- very important distinction. i've got a lot going on in my life. a lot to do. [laughter] >> by agreed to be interviewed

by mr. sorkin and mr. amid who wrote a great book that i did read actually called "lords of finance" about a different financial crisis, a much worse one. i agreed to go sit with them and talk about the crisis, lessons looking forward and looking back so i haven't seen the -- >> you have jet black hair in the movie. >> my hair is very gray now as you see. >> that seems very new york. you went to the panel but not to the movie. >> i guess. [laughter] >> what a number of people said about the movie they want to know as you work out as much as you do in the movie? you're extremely fit in the movie? >> i do try to work out as much as i can. i'm sure he's a great actor by the way. people say he's a great actor. but i have no interest in really reliving the dark moments of 2008. >> you've talked and your colleagues have talked about how

close we came to catastrophe. like what was the moment that you became convinced that it could happen or maybe it was more likely than not to happen? >> well, i think you got to look back a little further than that. you know, this really began in the summer, late july, august of july of 2007. and you saw the first signs of panic and what panic does to behavior. of course, it got, you know, of course, progressively worse, more scary and i think it was at that point where you saw in one famous example people really -- well, i won't describe the example, but you saw the classic -- the classic beginnings of people running away from any kind of risk and what that does to a financial system. dramatically worse -- when we came into the fall of '08 when the movie, i gather, really

begins which is to talk about -- well, the way people think about this. they think about this the weeks of the failure of lehman and aig and all of that. but going into those weeks in september, you know, it really was a gathering storm. a huge amount of momentum behind it. the world was shifting very, very quickly into recession. you know, the u.s. economy was falling in the fourth quarter with an annual rate of almost 6% a year. so a huge amount of momentum behind it. and that was threatening to engulf, you know, the strong institutions of the world. large companies, not just large banks. and that was a very grave -- a very grave moment. i think none of us new at that point. it was grave in part because we came into that crisis with in fact basic tools governments need to, you know, draw a circle around a firebreak around the failing firms and prevent the fire from jumping. we had none of those basic tools and that's what made it so dangerous. and again, that's another reason

why, i think, with the reform act we're in a much better position to continue things because now we can force institutions to hold more capital against risk and when they make mistakes, we can make those mistakes less damages to the innocent. we can prevent the fire from jumping the firebreak. and setting aflame well-run conservative institutions. >> now, are there bad actors from that catastrophe who are still out there? >> i don't know the answer to that. i think -- i think i'd say it this way, mike. part of confidence and trust in the financial system is confidence that you have an enforcement regime with cops on the block that will go after and effectively deter not just, you know, illegal behavior, bad behavior, abuse. and part of it is not an enforcement challenge. it's getting reforms in place again that you can't prevent them from making mistakes but we can do is make sure when people

take risk they're not taking risks that imperil the system as a whole to the economy and so to rebuild confidence in the financial system, you need both those things. you need an enforcement system that works and you need a set of rules that do a better job of preventing disaster. and we have a long way to go to try to rebuild confidence in both those aspects of a financial -- they were the great strength of our system for decades and decades. but we lost that. it eroded and we got to build it back. >> now, as you can see, there's been reports about criminal investigations into behavior that went on. do you believe charges will eventually result? >> i can't comment on that but history has not been written on that yet. and you have to watch -- you have to still watch ahead, look ahead on what happened in that process but again, i think -- i think we have a very strong enforcement mechanism in the united states. i think stronger than any other financial system in the world.

and i think you're going to see people try to make sure they're using that authority as carefully, aggressively as they can to deter this kind of behavior in the future. >> do you believe criminal behavior occurred? >> i'm not really in a place to make that judgment. i can't know that and again, in our system one of the strengths of our system i don't get to make those judgments. people in the executive branch who will make those judgments are in the judicial system in the enforcement area. >> right, right. when you say history hasn't been written, what do you mean by that? >> i just mean it's not over. you know, there's a lot of things moving through the system now and we'll to have wait and see how they come -- >> you're talking about these criminal investigations? >> well, just in general, yeah. >> now, what are some companies that did it right? who could you point to who came through the recovery in a way that you would -- >> you mean, financial institutions? you mean? >> anybody involved in the

catastrophe? >> i don't know. i think -- i don't think any of them cover -- and i think the most honest and the most knowledgeable of them, even the ones who look the strongest today will admit that. you know, they'll say like so many other people around the world, they made a bunch of judgments about the future. they assumed a more stable future than was realistic. they assumed that house prices wouldn't fall. they assumed that everything was stronger than it seemed. and they all got caught up in a race to the bottom on care and prudence. they all got caught up in a -- in the pressures that led to more leverage, more risk-taking and they all got caught up in a -- i think a terribly damaging compensation race built on completely unrealistic expectations for what financial businesses could produce in terms of return. and so i would say no one distinguished themselves. >> mr. secretary, i've heard you

say in recent months that you're optimistic about some sort of action this year on corporate tax reform. i wonder where that's at? >> we are -- we've been saying for a long time -- the president began to say in the fall he would like us to do this and so, yes, that's to look at a range of options, come up with a set of reforms that would heed the following objectives. what we want to do is to make sure we can do everything we can through the tax system to improve the incentives for investing in the united states. so you see more jobs created here. what you want to do is create a system where it's more likely that in the large american-made companies build their next plant here where it makes sense for them i had to here. it makes sense and you want the major foreign companies businesses have the u.s. be a place to build new businesses and you want to make sure you get the tax incentives better for doing that. and we've been spending a lot of

time consulting with broad-based community and labor community in ways to do that. people on the hill, i have a regular private breakfast with ranking member of the tax rating committees and we've made a lot of progress and i think we have a framework, at least a set of options, which would be good for the country, good for the economy, good for investment. and would have some prospect of commanding bipartisan support. but, you know, in the midst of a very different complicated set of negotiations of how to bring our long-term fiscal position into better balance and that's going to, i think, dominate the -- dominate the field, the playing field in the next two months realistically and it probably shouldn't. and we need to get through that, i think, before we start this process more formally because we don't want to really do anything right now that would carrying one of the following risks. we don't want to do any