point, please. we don't really have time. we have a few folks behind you. >> i'm asking a question. >> summarize it if you can. >> here's the question: what are the steps that we need to take and help from here as it is seen with our arabs to have them start solidifying the games and laying the infrastructure of the these gains to make the revolution not so staying so liquid, so fluid? that's the question. >> thank you. :

>> from atlanta to start with i am pleased to allow more time for questions because this is our chance to have feedback with the panelists. i'm just really inspired by the speech. i think it's amazing and it's great to see the end of the dark ages it's not just the revival of the arab world and think it is the end of the dark ages. but along the same lines i hate to bring negative criticism after the positive talk along the line of self criticism the

end of the arab world has not yet been matched with here among arab-americans. i have to say because i feel it's very obvious and he alluded to that i don't think we should even cast any doubt on the genuine nature of what is going on in the arab world. of course they're out to the cult outside forces. people are watching what is happening in the u.s.. the have people like us visiting their countries. they see there is freedom of sight. the influence whether it is direct or indirect there are influences but i feel it's a very genuine thing and we should look at it ourselves from arab-americans in this country and especially christian americans. i'm a muslim who grew up in a very diverse environment. i think americans need to support what is going on in the arab world and not be afraid, not be freed of the muslim brotherhood we empowered christian arabs and the arab

world and not let them be subject to all of the future. and my question is to comment on the role from the future role of the arab league. how can the arab league degette alter its fear that have a lot of influence hall, they can get over their fear because i think they can play in major role in the u.s. and the peace process ultimately for a foreign policy. thank you. >> [inaudible] people who beat their regime docking plight when you go home just remember this guy here, everybody knows -- change the screen.

>> everybody knows the story. i'm not going to repeat it. the question is what happened with the situation is not the general situation itself it's covering what is the real problem that there's not a good grass-roots funding base having to get their funding from individuals who have influence over what decisions get made and also they have to be with embassies and influential people and which puts them at a very difficult conditions year. on the one hand they have to represent us and they've done a great job over the years defending arab rights here in the u.s. freda hare are you going to do that?

>> we would be happy to answer this one. >> first of all just one thing because i am here for the same reason but to come here to speak especially the whole thing started late, we should have the right to speak and give our opinions. let me speak here and first of all thank you for your position and the position of the doctor who wrote the piece for binding him from coming here is disappointing people come from all over the world including myself and my family to take part in this because it is a grassroots level community work and it's very disappointing that when yourself you said that and people including have to get involved last minute to try to

rectify and correct the damage that was done. there was a damage done in getting involved last minute last week was already too late and this is for all of us who came all the way here. no explanation except probably play in that song tonight during the dinner otherwise many people are planning to boycott the dinner. number two, just the one thing about syria, it is interesting people say there are two sides of the story. no two sides of the story. there's one side of the story, there is an oppressor and people on the ground. there are people picking up for a reason and maybe a wrong reason. maybe as a regime predicting it from outside pushed because they

are forced to do with and there are a greater number of people on a daily basis being frustrated and going out in the street because they don't have employment, jobs, work, they're hungry and oppressed, so i think putting it all in one basket this is an international, regional situation aron the element. terrorism -- >> thank you. [applause] >> i have a question for one of the facts presented. and you've discussed it it sounded like this gentleman stated equating protesters in syria. there's something like 435 police officers. i would like to know what your source of that is it an

independent news agency? i'm just not aware of their than the syrian government what is your source of that? thank you. [applause] my name is richard and i teach conflict resolution at george mason university, and i know you can't talk about everything but i was hoping the panel would say something about the u.s. nato intervention in libya since i teach conflict resolution when the colonel gadhafi who's not my favorite person in the world said he would negotiate with the rebels and the united states immediately refused to listen to him. i wondered how you felt about the west's nato intervention in a country which is experiencing not just a revolt against the dictator but a civil war, taking sides in the civil war is usually i think not a very good idea. and if one wants to safeguard the independence of the arab

movements and presented the u.s. and europe, playing the imperial role in that part of the world, doesn't half to advocate conflict resolution instead of military intervention in libya? thank you. >> thank you. [applause] >> [inaudible] dak in 65i was in high school in the searing and because i was refused to repeat, [inaudible]

and broke my nose and i am a firm believer in the air of his unity and i handled the cases last week which were a very deep sense of how can we unified adc camano of the human decency relation about dignity. we don't want to see anybody get hurt or offended especially not married. and what we say furthermore that my views are identical and very positive so, you know, to fight

for the arab unity and have decency and dignity. i tried very hard to bring him back. he refuses with an apology or wherever he needed. it's not about an apology. it's not about the prestige, it is to gather, come back. we need you, we need your statement. and for i guess i had lunch with him back over in new york last week and my view is about the middle east. it's similar. i think the regime is one of the most repressive regimes right now. perhaps worse than north korea. [applause] so, again, please, this isn't information about the agenda.

it's very, very untrue. it is a misunderstanding. we are trying to rectify it. we tried very hard some of you to bring back here he said no thank you. so please, we need your help and support and input. it's destructive criticism unnecessary, unwarranted and not true. >> sorry to interrupt. if i have support what adc has money for payroll [inaudible] what my role would be as an arab and a concerned citizen, concerned arab-american citizen come and a few others can do that. when the arab-american community refuses to support the institution financially, few of

us bring it back. just be careful. the show must go on. so if you are supporting it -- my wife is not happy with that but she's seen my checkbook theatre de i'm being honest with you and this is the reality of it. we need your financial support and would be greatly appreciated. i am sorry, professor treen [applause] >> can i use this microphone? >> certainly. >> i grew up in a household when i was young that was adc members and so on, and i think any arab-american in this country is incredibly sympathetic because it is a defacto organization that represents arab-americans and at no greater time has it

been important and present and particularly after september 11th. but, i accept what you have to say but the press release put out was also unacceptable. it did not make clear the situation and used this language about adc not taking the position to promote any particular side of a dispute, but the dispute is something that's a small conflict i have with my wife about what kind of car we are going to buy. the situation with regard to basic human rights and political freedoms and the use of incredible brutality against largely civilian peaceful protesters and at the beginning the completely civilian protesters that's not a dispute. so it's incumbent upon the organization to be unequivocal

support for basic principles of civil liberties, political freedom and human rights, and the press release didn't do that i'm afraid to say. [applause] >> over this affair with the agenda fiasco and furthermost we learned over time that they had to get involved and we tried to stay away from the conflict whether this or that, we try to meet a balance but we are being dragged in whether we like it or not. obviously from this point on it is i agree with you, professor, 100%. there's a long and to be drawn over the many years and honesty must be preserved and respected and support it. >> we are reading the

institutions, we of businesses, family, life, and we have the staff left in adt with the financial that we are dealing with. we don't have the steps to deal with any issues. obviously we have an issue dealing with the affairs two weeks ago. we got so much of our own time on the convention because we only had what was there. we tried to do the best we can while meanwhile we try to do the best we can. our job is to protect our citizens to read our job is to defend the u.s. institution as well because we need the equality and fairness because muslims and arabs doesn't signify we are less of a citizen than anybody else. we depend upon institutions and this is the reality of it.

>> thank you. >> we have to leave. i'm very sorry that -- [applause] [inaudible conversations]

white house national economic council director gene sperling has been participating in the discussions between vice president biden and congress over the budget. she spoke this week about the federal debt at a conference hosted by the committee for a responsible budget and the new america foundation in washington, d.c.. in this 20 minute portion you will also hear from former republican senator alan simpson, who cochaired the national commission on fiscal responsibility and reform. >> thank you. i'm sorry i could not be here at my initial time. but we were in -- i don't know if it is meeting six or seven of the group, and it won't surprise you to know that i'm not going to reveal too much or negotiate, but i will say the following.

it is a very serious process, there is a seriousness of purpose in the room. everybody at that table takes it very seriously and comes well-prepared, and goes line by line through the details. so the talks are toft believe cutoff but positive and progress continues to be made. let me just make a few general points. number one, we should be engaged in this process of seeking a bipartisan down payment on deficit reduction regardless of whether or not there was a debt limit issue. it is important for us to show the american public of a broad

market's that despite our deep divisions in washington we are capable of coming together to make progress on getting our fiscal house in order and showing we can live within our means. and i think that that would be a very positive development. the progress in the 90's wasn't made in one swoop. it was a combination of the 1990 budget agreement, the '93 budget agreement, 1997, and i think the commitment to save surpluses for social security. so, making a serious down payment and important progress matters and what send a very important signal. so we should be doing this regardless of whether or not there was a debt limit issue. that said, nobody should use the default of the united states as a threat or tactic for their

budget agenda, no matter how admirable or where the that agenda is. no one should ever use the first of the united states with our legacy starting with alexander hamilton as an acceptable form of a political negotiating tactic. again, no matter how worthy the ultimate objective is. second, the president -- of our strategy this year was to get through the first initial budget and as soon as that was over to come forward and try to get a bipartisan negotiation going forward. getting the first part donna took longer than we would have liked were many people would have liked but the was done on a friday night and next wednesday the president put forward a 12

year plan to get to $4 trillion in deficit reduction if. that plan was very detailed in some aspects and such as the deficit cap, we were doing on health care spending in the out years through our mechanism in other places we just made clear we were willing to hit important targets and medicare and medicaid and other mandatory, and i think -- in in revenues -- and it sends an important signal we were willing to look at all the major budget categories as part of a comprehensive deficit reduction plan. we did say and we do believe that social security should be dealt with in its own right, and should not be looked at as a means for dealing with a 54 tenure deficit problem, but we

-- as the president always has, has encouraged a serious bipartisan negotiation and compromise on continuing this has the rock-solid and solvent benefit for future generations as it has been for past generations. as i think you are seeing here, we are not apologetic about the fact that for us a deficit reduction plan is not a means of an end but is a component of the strategy to grow our economy and a way consistent with our value which is to have a growing middle class in which success in our economy is not based on your birth but ability to climb and ability of a very multiethnic society to rise and be part of a middle class without pushing anyone out. that's the ultimate goal and we believe a strong deficit-reduction plan as a

critical component of that strategy. but it is also important to ensure that we are investing in the future and it's also critical the we do so in a way consistent with encouraging a stronger recovery at this point. those are parts of a strategy that not only can go together, they should go together. and let me make one point on the investment part. i've heard for over 20, 25 years the discussions by so many people around this table as to why we as a country wanted to have a strategy to deal with the baby boom retirement, and truthfully, we were in a position when i left my last year of the clinton administration, we were on track to deal with of the retirement of the baby boom generation in a way that was not going to pass on significant debt to the next generation.

i will go into how we lost our way but i will say the following. part of the goal and purpose of that was to ensure that the strains of an older more aging society did not prevent us from investing in our children and research, and innovation, the things that have helped make our country great. so the notion that as part of the strategy it hits well to cut those parts of domestic spending that are fundamentally about investing in the productivity innovation and research of the future to meet counters' much of the fundamental goal and us being able to, part of begole was to ensure we did not starve the investment in our children

and education and research innovation. so to say that it doesn't matter or that it's actually a positive thing to be cutting those parts of the budget to levels we have never seen on record or not since the 40's or 40's should not be part of our strategy, and in fact one of the things we need is for people to make clear not all spending is the same and to make the tough choices about those things that are critical to giving people opportunities to ensure the children's chances in life are not over determined by the accident of their birth and to make sure we are still investing in the basic research and innovation that has helped us lead the world for generations to come. the issue i will say that there's no question but one of the most difficult aspects right

now is whether or not when we are looking at a comprehensive deficit-reduction, revenues can even be a piece on the table. i want to point out that it is -- that is the norm for a serious bipartisan budget agreement. it is what happened in 1982, 1983 on social security, 1986 even the tax reform was neutral but raise taxes on some work on others. in 1990, 1993 and then 1997 even though there were not new revenues there was an agreement to continue their revenues from 1997. prime minister cameron has in his serious field far budget cutting in the u.k. includes a dollar of revenue for every $2 of spending cuts or about $3 in spending cuts for every dollar of revenue if you count savings. the reason this is important is

for three reasons. one, it is hard for the members to work without revenue. i think some of the most unfortunate parts of the house budget agreement, the house budget plan driven by the fact without revenue they were forced to cut far too harshly in some areas particularly affecting the least fortunate in the most formidable. but beyond the numbers not working out, for those that have been involved in major deficit reduction plans we know the following. it is never popular to read it succeeds because this kind of equally painful for everyone in a way people think is fair. that sense of sacrifice is of those who vote for budget agreements to get the moral

authority to ask for sacrifice across the board. we are a democratic administration and in our framework over $100 billion in medicaid savings. we hope with our flexibility that will not impact people too harsh, but the fact is we are the essentially asking everyone to be part of the sacrifice. one loses their authority to ask that of everyone if at the same time those who are being asked to take a pinch or to sacrifice in the short term for our long term benefits feel that their sacrifice could have easily been avoided if it had not been for tax relief to the most fortunate so it's not just about the numbers working out, it is being able to tell everyone that everyone has to sacrifice, and again you can suggest all of your sacrifice would have been

unnecessary had it not been for tax relief for the most fortunate, it makes the tough and difficult choices elected officials have to asked of their constituents difficult to do, and finally we need a sense of shared political sacrifice, the sense that when people go back to their own groups to support them to the people on their side and explain why they did difficult things they can say that it was mutual, that everybody held hands and it difficult things together that they could not have dhaka alone. if people compromise on longstanding positions not because they wanted to but because it was the only way you could get divided government to work together to do something larger and better for the american people, it is very difficult to do that. if a huge component such as revenue is completely taken off

the table. so my last point and then i will stop is just to say however we work this out, our sense of shared sacrifice should not be that if the toughest choices become too difficult, we default to asking those who are most unfortunate are those with the least economic and political power to take the overwhelming bulk of the sacrifice. and i asked those -- i suggest it should be acceptable in our dialogue for of those of us to suggest how the tyranny of the numbers can cost millions of people their health care without being accused of being political if one looks at the medicaid savings being at 770 billion in the house republican plan, 35%

savings in 20201 of the projection, 5% by 2029 nearly half. two-thirds of the savings of those funds go to people in nursing homes or families with serious disabilities. two-thirds if you want it is almost unimaginable you can have that degree of savings without significant reduction in health care to those in nursing homes were in families with disabilities on less you were to take it all from the other which is four or more children to suggest that is just to suggest is there a way to the numbers on a map from the tyranny of the map allow for another outcome? to raise that issue should not be off the table or considered a demagogue.

there must be a way that we can have a discussion about what the impact on people is. i have not used any freezes or political jargon. i'm just suggesting why the numbers in that particular area worry me deeply from a policy in the value perspective. thank you. >> thank you. just before you came, it was suggested in the three to one ratio republicans have given their expiration of the bush tax cuts and the democrats have given nothing. respond to that. >> i'm sorry, what is the one that they've given? >> expiration on the boesh tax cuts. >> i haven't gotten that e-mail yet. [laughter] i haven't gotten that twitter, i haven't gotten that phone call. but that would be -- >> [inaudible]

in the commission's report. [inaudible] >> it's all in there and here we are at the same point. i like gene, he's a great guy but if this goes back to that we will never make anything on the report. i know one thing and i will share it with you. >> senator, i didn't comment one word about the simpson plan and if i had i would have done so in a complementary way that yours represented the type of balanced plan whether you agree with all the details were not that we should be aspiring to. >> i have sat here and in fascinated [inaudible] spoken about the disadvantaged and the people on social

security who can't work. we correct remarks for that and we need on the commission that is given by republicans, by the democrats and one independent nothing came from the president, nothing. i'm not talking about specifics or anything else. you are a great guy and that goes right back to the same stuff and the republicans say [inaudible] if you torture statistics long enough eventually they will confess. [laughter] >> of the game of three to one or ten to one we will never get there. but we have not a single witness

the we will get out of this with double-digit growth for two decades and cannot get out of this whole, not one single. we sat there for the year and i was here for 18 years and couldn't believe what we have now in the situation sticking it to each other. >> can you leave it there? >> i think i will. >> it isn't going away. it doesn't matter where it goes the can't avoid the commission report and forget whose credit, you can't avoid it. >> in all fairness i didn't mention medicare in my remarks. i said we needed to come together and what i felt the conditions were for bipartisan compromise we have to be able to

move off. i suggested why the position you have not taken or your commission didn't take the you couldn't have a penny of revenue was harmful to both a sense of shared sacrifice into the numbers adding up and the political shared sacrifice you would need to get a more significant deficit reduction bill. >> all in mentioned is one program, medicaid. it is not a program that is often -- i don't mention it because there's political advantage. i mentioned because the reason i came into public service, senator is i could use my privileges to defend those who have less privileged. these are port-au-prince in our country, these are the people that all i said, senator, i didn't say anything about your plan

>> [inaudible] >> senator -- this is completely unfair to be put in the position of defending himself in this way and one of the problems on the lead in the budget cycle who want to have these kind of discussions but when someone actually says here's what might be going on it's like well, we can't -- for not saying that the right way. he is the only one in this room who is in the meetings, he's the only one in this room who's actually been involved in the negotiating these kind of deals and currently in government and its fair if you disagree with him just say you disagree with him. >> i just don't know. >> senator simpson, i'm going to ask you to just let jeanne who was kind enough to join us here today, i want to give you a couple minutes. >> and then let's wrap up with closing comments of those who would like to make terrific

etiquette the whole time and -- >> i'm sorry that my arrival changed it, but i did not use any phrases and i do think that we should be able to have those discussions about the impact is and i believe in bye partisanship and i believe that we have to compromise as a country. i'm in budget negotiations with people who i disagree with what senator kyl and congressman eric cantor, but they come to the table every day with a sense of seriousness, very well-prepared and we are trying and very hard to find enough agreement so we can make progress and again that is very important. we do have disagreements. i don't think expressing those in a civil we are talking about potential impact. again, i mentioned one aspect

that i think doesn't get much political power but it's something working it out and i compliment both faugh and did a very good job of trying to ensure whether you agree with all the aspects or not there was shared sacrifice and there was not a sense of putting a disproportionate amount on those who have low-income and i want to say again i believe that as a country people have to be willing to move up that i am, moved up their hard and fast positions us included but you have to do so together and there has to be a sense of mutual compromise and mutual shared sacrifice, and that was the main point i was trying to bring

home. we will have differences in those and i think if they can be expressed in a civil way that is all the better. but i am not going to forego the ability to say where i am deeply concerned when things are going to hurt those who are that i think our less fortunate, nor in saying that do i mean to in impugn the motives or the intent of anybody who might be on a different position. i think for example that the ring back to my initial point that there are things in the house republican budget that were there because they had no choice because he decided there were no revenues and so they were forced again by the tyranny of the numbers to go deeper in the areas than i guess many of them would have preferred to. i stay with my caveat which apparently got me in trouble here which is not that we should avoid the hard choices on

revenues or medicare or anything else, but again as we do that, we do not put a disproportionately negative impact on those that have the least economic and political power.

>> federal reserve chairman ben bernanke says failure to put our fiscal house in order will erode the vitality of our economy, reduced the standard of living in the united states and increase the risk of economic and financial instability. she made those comments at a conference on the u.s. economy hosted by the committee for the responsible budget and is a new

america foundation in washington, d.c.. it's about 15 minutes. [applause] >> thank you. good afternoon. what an impressive group of talent we have around the table. i'm gerry pleased to speak to such a group with a distinguished record of identifying critical issues related to the federal budget and working towards bipartisan solutions to the nation's problems. today i've like to briefly discuss to set up the meeting the fiscal challenges the nation faces, the importance of meeting those challenges come and how it affects the economic future, and -- >> of the gross domestic product the federal deficit widened to appreciably since the onset of the recession in december, 2007. the increase in the deficit has

mostly reflected the automatic cyclical response of revenues and spending to the weakened economy as well as the fiscal actions taken to ease the recession and to aid the recovery. as the economy continues to expand and as the stimulus policies are phased out, the budget deficit should narrow over the next few years. unfortunately, even after economic conditions return to normal, the nation faces a sizable structural budget gap. the congressional budget office and committee for responsible federal budget project the budget deficit will be almost 5% of gdp in fiscal year 2015 assuming the current budget policies are extended and the economy is at that point close to full employment. greater concern is the projections that extrapolate current policies and make a plausible assumptions about the future evolution of the economy which show the structural budget gap increasing significantly further over time.

ferc simple under the alternate of scenario by the cbo, which assumes most current policies are extended the deficit is projected to be about 6.5% in 2020, and almost 13% of gdp in 2013. the ratio of the outstanding federal debt to gdp expected about 69% at the end of this fiscal year would under that scenario rise to 87% in 2020 and 146% in 2013. one reason the debt is projected to increase quickly is the larger the debt outstanding, the greater the budgetary cost of making the required interest payments. this dynamic is clearly unsustainable. the nation's long-term fiscal imbalances did not emerge overnight. a significant extent they are the result of an aging population and fast rising health care cost which have been

predicted for decades. the cbo projects the federal outlays for health care entitlements which were 5% of gdp in 2010 could rise to more than 8% of gdp. even though the projected fiscal imbalances associated with social security systems are smaller than those with federal health programs, the too are significant. although we've been born but the development for many years, the projections are becoming reality to a large and increasing level of government debt relative to the national income risks serious economic consequences. over the longer term, rising federal debt crowds out private capital formation and reduces productivity growth. it to the extent that increased by borrowing from abroad for the future income would be diverted to interest payments on

[inaudible] callow? any better. okay. high levels of debt into the ability of policymakers to respond effectively to future economic shocks and other adverse events. after the costs including an increased possibility of a sudden fiscal crisis. [inaudible] hello? >> interest rates can serve quickly if investors lose confidence in the of devotee of the government to manage its fiscal policy. although historical experience and economic theory do not show the exact threshold at which the perceived risks associated with the u.s. public debt would increase remarkably. we can be sure that without

corrective action our fiscal trajectory is moving us ever closer. perhaps the most important thing for people to understand about the federal budget is that maintaining the status quo is not an option. creditors will not lend to a government whose debt relative to national income is rising without limit so one way or the other fiscal adjustment sufficient to stabilize the federal budget will occur at some point. these adjustments could take place through a careful their liberties process that ways priority and gives individuals and firms have adequate time to adjust to the changes in the government programs and policies. the adjustment has come as a rabbit and much more painful response to a slowing or actual fiscal crisis in an environment of rising interest rates, collapse in confidence and asset values and a slowing economy. the choice is ours to make.

the primary long-term goal of the federal budget policy must be achieving fiscal stability a straightforward way for the sustainability is a situation in which the ratio of the federal debt to the national income is stable and moving down over the longer term. this goal can be obtained by bringing spending excluding interest payments roughly in line with revenues or another which buy approximately balancing the primary budget. given the sharp run-up in debt over the past few years it would be reasonable to plan for it period with primary budget surpluses which would serve to bring the ratio of debt to national and come back down towards recession levels. fiscal sustainability is a long run concept achieving fiscal sustainability therefore requires a long run plan, one that reduces deficits over an extended period and for the fullest extent possible is incredible, practical and

enforceable. in current circumstances it is taking a longer-term perspective and forming concrete plans for fiscal consolidation is policymakers can avoid a sudden fiscal contraction that might put the recovery at risk. at the same time, acting out to put in place a credible plan for reducing future deficits will not only enhance economic performance in the long run, but could also yield near-term benefits by leading to the lower interest rates and increase consumer and business confidence. while that is crucial to have the federal budget that is sustainable, our fiscal policies should reflect the nation's priorities by providing a condition to support ongoing gains and living standards and by starting to be fair to both current and future generations. in addressing our long term fiscal challenges we should reform the government tax policies and spending priorities so that not only reduce the deficit but also enhance the

long-term growth potential of the economy for a sample by increasing incentives to work and save, by encouraging investment in the skills of the workforce by stimulating private capital formation, by promoting research and development and by providing unnecessary public infrastructure. we cannot reasonably expect to grow our way out of our fiscal imbalances. but the more productive economy will ease the trade offs that we face. it's easy to call for sustainable fiscal policies but much harder to deliver them. the issues are not simply technical. they are closely tied to our values and priorities as a nation. there's little wonder the debate has been so intense and progress so difficult to achieve. recently the negotiations over the long run fiscal policies have become tied to the issue of raising the statutory limit for the federal debt. i fully understand the desire to use the debt limit to force

necessary and difficult fiscal policy adjustments but the debt limit is the wrong tool for that job. failing to raise the debt ceiling in a timely way would be self-defeating if the object is to chart a course for the better fiscal situation for the nation. the current level of the debt and near term borrowing means reflects spending and revenue choices that have already been approved by the current and previous congress and administration of both political parties. failing to raise the debt limit would require the federal government to delay payments for obligations already entered into. in particular, even a short suspension of payments on principal or interest on the treasury debt obligations would cause severe destruction in the payment system, induced the downgrade of the u.s. government debt to eight fundamental doubts about the creditworthiness of the united states and damage the special role of the dollar and treasury securities in global

markets in the longer term. interest rates would likely rise slowly in recovery and perversely worsen the deficit problem by increasing the required interest payments on the debt of what might well be protected period. some have suggested payments by the treasury to be prioritized the principal interest payments on the debt outstanding and thus avoiding the default on the federal debt. however, even if that were the case, given the current size of the deficit and the time pattern of the government free seat and payment the treasury would soon find it necessary to prioritize and withhold critical disbursement such as social security and medicare payments and funds for the military. moreover, when a debt related payments might be met in this scenario, the fact that many other government payments would be delayed would still create serious concerns about the safety as treasury security among the financial market

participants. the hypocritical of holds the first we should do no harm. and the beating of the critical fiscal issues we should avoid unnecessary actions or threats that risk shaking the confidence of investors and the ability and willingness of the government to pay its bills. reason this concern i am by no means recommending the delay or action in addressing the nation's long-term fiscal challenges. quite the opposite. i urge the congress and the administration to work in good faith to develop and implement a plan to achieve long-term sustainability. i hope such a place can be achieved in the near term without resorting to action still cast doubt on the creditworthiness of the united states. what would such a plan to look like? and cleared metrics are important and it together with other mechanisms to establish credibility as a plan. for example policymakers can commit to enacting in the near term a clear and specific plan

for stabilizing the ratio of debt to gdp within the next few years and as substantively setting the ratio on a downward path. indeed such a trajectory is comparable to the one proposed by the national commission on fiscal responsibility reform. to make the framework more explicit, the president and congressional leadership agree on a definite timetable for the decisions about both short-term budget adjustments and longer-term changes. fiscal policy makers look now to find substantial savings in the ten year budget window and forced by well-designed budget rules while simultaneously undertaking additional reforms to address the long-term sustainability of entitlement programs. framework would include a commitment to make a down payment of fiscal consolidation by enacting legislation to reduce the structural deficit over the next several years. the task of developing and

implementing sustainable fiscal policy is daunting and will involve many agonizing decisions and difficult trade-offs. but meeting the stringent a timely manner is crucial to the nation. history makes it clear the failure to put our fiscal house in order wilkie ruda the vitality of the economy, reduced the standard of living in the united states and increase the risk of economic and financial instability. thank you very much. ..