with the u.s. involvement in afghanistan and iraq. and as we'll hear from general d dudick, there's 400,000 in afghanistan. and the u.s.-led training effort is now as of this week 157,000 police, the cost of this training to the united states alone is about a billion dollars a month. today police assistance programs for the united states government are a multibillion dollar effort led by the department of defense and the department of state but involving a number of other federal agencies. as programs have grown in size and in costs they've also grown in kind. as you saw from the opening photo exhibition running here on the screens, policing around the world is heavily impacted by history, by culture, by legal systems, and by levels of development.

the police force is different markedly by country, u.s. police assistance differs markedly by agent and by agency in the countries in which they are working. so today, we have assembled a panel of very distinguished experts to discuss the various experts that the united states government takes in approaching those countries. you have the bios of our speakers and i won't take time and i'll make very limited introductions the. speakers will come to the podiums in the order they are speaking. i want to introduce david yang at the office of democracy and government which oversees u.s. aid over police assistance and dr. yang will introduce john b. canon who is the author of usaid for democracy and governance officers assistance to civilian law enforcement in developing countries and we're very pleased to have john here today. in the past when john did the

book he was a senior advisor to usaid and police issues and today he's the director and i'm probably one of the only people in the room who can say international criminal investigation and assistance programs without flubbing it. but anyway, welcome. >> i made it. >> i made it. i always hear that. our second speaker will -- following john will be michele greenstein the director deputy of criminal justice in partnership with the international law enforcement. michele is another old friend. it's nice to see you back here. our third speaker is lieutenant general james dubik u.s. army retired who is a fellow for the institute of the study of war. welcome to the institute for the study of peace. [laughter] >> one leads to the other. >> hopefully, yes. in the right order. now, but today he's really here to talk about his experiences of

commander of the multinational and security transition command in iraq in which he created the current iraqi police force. and finally, our final speaker is colette rausch who's the director of the center of innovation for rule of law here at usip and the creator of what we call the justice and security dialogs program, a very innovative approach that brings together of police in civil society in countries of conflict to solve local props so we have a great lineup of speakers. i think the best thing to do now is to get started. so dr. yang? >> thanks, bob. good morning, everyone. thanks for coming out and what's shaping out to be a dog day of summer here in washington. but you're right to convene early bob, so thank you very much. i would like to thank the u.s. center of peace for hosting this event today.

usip has provided outstanding relationship -- i salute the president dick solomon, charles nelson and all of their colleagues at usip for their stewardship for this important resource. now, with the opening of this beautiful building, usip is even more important than before. for those of you watching on c-span, let me paint you a picture that you can't see from your tv screens. we're located here in this beautiful new building on the far western edge of the national mall. we're up on navy hill and if you look down, through the windows of the stunning atrium, you'll see in your foreground the lincoln memorial and in the backdrop you'll see in the distance the washington monument and way off in the distance, the jefferson memorial. if you have really good vision,

which i don't you can see nestled in the trees some of the other monuments on the national mall. you'll see the vietnam memorial, the memorials of world war ii soldiers, the korean war memorial and the memorial to franklin roosevelt and a new memorial springing up to martin luther king, jr.. so as we look out on this building from this important institution, it will welcome this building thousands of new visitors to the national mall and to this new stop on the national mall. so as these visitors from the united states and around the world pay homage to american soldiers and peacemakers of past centuries, they will also be able to come to this building and learn about the efforts of the united states and the international community to resolve the conflicts of the 21st century. i'd like to give a special thanks today to bob perito. bob, as many of you know had a long career in the u.s. state department as a career foreign

service officer. instead of going fishing which he richly deserved to do, he launched a second career almost two decades ago and has been a leader for the several decades and a pioneer of security sector reform. his leadership right now of usip security sector governance center serves as a catch stone in his second career. as you know, the security sector governance sector is one of several centers of innovation here at usip. and i would argue that the title itself security sector governance center is one of the most valuable contributions and innovations of this center for it argues through its title that the need to root security sector reform and democratic processes civilian control and the democratization of the societies we're trying to assist. so bob and all of your colleagues at usip, my

colleagues at usaid and i share your understanding of this important linkage between peace, security, democracy and human rights. that is we all believe that sustainable peace, justice and security depends to a large degree on democratic development in the protection of human rights. that is sustainable peace depends on the reform and democratic reform of national security forces. bob has written persuasively recently that the success of the transition started by the arab spring will to a great degree will depend on the democratization of security forces there. so my colleagues and i at usaid appreciate usip's leadership in framing this important linkage on behalf of the usaid administrator dr. shaw and my boss the director of the

assistant administrator for the bureau of democracy conflict and humanitarian assistance nancy l linborg i give you greetings. i bring you human welfare, in his speech he basically argued now in 2011 a quarter century after the founding of usip, and a quarter century after usaid has been involved in the promotion of democratic assistance, many are uncomfortable with the idea of democratic human rights are is being is a integral part of our human development. but dr. shah argued in his speech, quote, we can't rely on the unsustainable stability provided by autoo crats or endorsed by governments instead we will seek real democratic

reform as a means to further peace and give people the ultimate voice in their own destiny and development. at the end of his speech he said and i quote again, if we can expand our engagement with citizens, if we can successfully intergrate democracy, rights and governance into our broader development portfolio, and if we can embrace the momentous opportunity presented by the arab spring, then we can deliver this truer understanding of human welfare, unquote. thus as important part of usaid's assistance in the area of democracy, human rights, and governance is to support the democratization of military, police forces and intelligence services. civilian police, i would argue, given their large presence in the daily lives of those citizens, are perhaps the most important of these institutions in the larger framework of human development. that's why usaid currently conducts 40 civilian police

assistance programs across almost 30 countries in the world. we support civilian police to combat trafficking and persons in mexico, nepal and cambodia we support civilian police conduct community-based crime prevention in guatemala and el salvador. and we support civilian police to protect human rights in colombia and ethiopia. indeed, a survey last year of usaid's field missions showed that a full 75% of our missions said that security and justice issues are very high or high priorities on their agenda. so for all these reasons, we're very proud of and very excited about our new field guide for assistance to civilian law enforcement in developing countries. the guide draws lessons from our past assistance and it provides both a conceptual framework and a practical roadmap for our

future program. just as an aside, the quadrennial development diplomacy and development review that was led by secretary of state clinton and dr. shah late last year issued a report saying -- asking usaid to establish a center of excellence on democracy, human rights and governance and i would say that we would be proud in the future to replicate john's guides as a model for the kinds of publications we seek to produce in this new center of excellence. as bob said, john is the author of this report. he served four years for us as a senior police advisor at usaid and recently went to be deputy director. he worked on this guide for a full three years and traveled around the developing world interviewing many people in order to put it together. but as importantly in putting it together, with his background in

international law enforcement in as many years as a police officer in the phoenix police department in arizona, john explicitly wrote the guide to express the whole of government approach to mirror and embrace the call of the qddr for whole of government approach to security sector reform. so this guide is a testament to an aspiration towards even closer corporation between usaid and our colleagues at the department of state, justice and defense department. and finally, i'd like to thank my colleagues from my office in particular eric binhart and julie who helped organize this forum today. so, john, thanks very much for your work. we miss you at usaid but we look

forward to further collaboration. >> thanks very much, david. and good morning, everybody. thanks to the panel, certainly, and to bob and his staff for all the work that's been done to put this together. thanks to you for coming today. though i'm not quite sure whether you'd want to come see the new building or come listen to us, whatever your motivation, thanks for coming. i want to spend a few minutes providing a little bit of background -- thanks, david, for your great introduction and kind of an outline of where we've been and where we hope to go. also i'd like to talk a little bit about the intent that's behind the field guide and some of the main themes, not all of them, i don't think, but some of them that hopefully come through to anybody that picks it up and takes a look at it. my experience goes back to haiti in 1994. i was still engaged as a police officer in phoenix at that time. and one of the main lessons, i think, i walked away with which i would assume others in the room share in their -- they look back to their first experience in that -- in that type of

situation is the difference in the problems that we faced there and the kinds of problems i was familiar with in phoenix. obviously, to say it's a different world is probably an understatement. and since that time, it seems to me that the need, the desire for our -- for good and effective police assistance has grown even as the world has shrunk and we all, i think, are familiar with the problems associated with globalization and crime that crosses borders now more than ever. that's a little bit of my background that i took to this task in writing the field guide. after i joined usaid in 2007, we were engaged internally on a lot of discussions about this kind of work. and the fact that we were not aware of any sort of guidance any sort of document that existed to help people in the field who were charged with a pretty difficult task trying to

identify ways and means to assist police agencies that are developing in other places. clearly, the officers in the field and the usaid missions very familiar with the problems that crime creates. it obstructs education. it obstructs economic development. and certainly it affects the ability to govern. and so putting all of that together in creation of a practical guide was certainly job one. something that people in the field could use. but there were other motivations, too. i wanted to increase the understanding across the community of interest which you folks represent certainly about the complexities and the difficulties of providing good police service. as sort of a corollary, what

does it take to maintain high standards in a police organization? to say that's a full-time job is a gross understatement. and i think even i wanted to some way provide perhaps a baseline or a backdrop for discussion, to improve the state-of-the-art if possible. i also wanted to re-enforce the fact and this echoes some of david's comments that effective and legitimate criminal justice services are a cornerstone of development work and of democracy. most parts of the world the police are the most identified representative of the government. because of that visibility, police corruption, police incompetence can taint the entire government's enterprise. the ripple effects of that, i think, are well-known. some people say that a large part of success in life is just showing up. but for the cops i think it has

to be a lot more than that. i like the term credible presence. i think it says a great deal about what an individual police officers or a police organization needs to strive for and can attain. maybe the best way to explain this idea is to describe what it isn't. i'll talk about just a short story about a conversation i had about a cab driver just earlier this year in a developing country. and i asked him, if you're walking down the street with your family and there's a police officer coming the other way, what do you do? he said, we cross the street. we go the other way. even with all my experience, for some reason, that just kind of fell on me like a ton of bricks.

that simple question and answer, i think, encapsulates or describes what we're trying to accomplish when we go to a country to try to help folks but why we're trying to do it. the cabby had reasons, probably good ones, for that answer. the reaction from a citizen to a police agency that routinely operates outside of internationally accepted standards and norms. the concept of public servants that probably doesn't have any place or any meaning in that police organization and certainly doesn't have any place in the culture of that organization. that's a pretty significant thing to get your head around at least it is for me. the arrangement that democracies hopefully can create between themselves and their citizens an expectation of fair and lawful governance and a reasonable sense of public safety on the

one hand in exchange for a level of trust and good citizenship on the other never materialized for that cab driver. and probably not for most of us fellow citizens. and the results of that broken contract are not just seen in the relationship between the police and the citizens, they're seen across a broad spectrum of social and cultural life. pick up a newspaper and read the headlines. easy to see. so how do we get to credible presence? how do we change the answer to that simple question to something like, you know, i tell my children that if they're ever in trouble and if they ever need help, they can go to a police officer and everything will be okay. how do we get there to that? well, the short answer, short but not simple is something like this. we need to create a well-led police organization that's based on core values and honesty and fair public service, obedience

to the law and high standards. of course, no law enforcement agency delivers first class police service every time. but quite a bit has been learned about how to get closer to that goal especially over the last 20 years or so. the guide seeks to break down some of that knowledge into its component parts, everything from political style policing to community-based policing from job task analysis to merit-based promotion. from core values to criminal investigations. and combine that knowledge with some of the realities that are faced in the developing world in sort of a package that provides practical advice. the results, i think, combined some conventional wisdom, things that probably wouldn't surprise anybody in this room. but also some reshaped ideas, some new ideas and some

questions and hopefully some potential answers. just run through a few examples. first, the guide supports application of a pretty simple framework to fight crime. prevention, intervention, and enforcement. multidisciplinary approach, absolutely. the police aren't going to do this by themselves. second is the idea that training is just a tool. it's just one piece of the long sequence of events and actions and assistance it has to take place. it's a means to an end. whether you're talking about a well-run police agency or a good development program, it's not a goal in and of itself. third, the importance of focusing on the development of effective police agency core competencies. talk about staff functions, talk about back-office functions, however you want to phrase it, things like leadership, management, supervision, professional standards, policy,

budget, personnel, structure. all of these things that are hard to measure in many ways are in my mind absolutely mission critical to the job that we've all signed up to do. why is that? that's because if you peel back the layers, if you dig down in all of the serious dysfunctions that we observe in a lot of places, use of force, excessive use of force, corruption, poor criminal investigations, ineffectiveness of a police organization in general, you're going to come down to those core competencies that are dysfunctional. so that seems to me to be a real key. and fourth, a focus on the value of relentless focus on the value of leadership within the police organizations that we're trying to assist. and introducing in parallel with that, change management.

bringing those two things together in a way that will lead to a path for reform. and reform that is not driven by us. a reform that's not driven by outsiders. a reform that's driven by the people inside these organizations that we're trying to help. as david indicated since completing the guide, i've moved on to u.s. department of justice. there i found the same dedication and the same perseverance and that perseverance is in cap the letters by the way that i saw at usaid and the staff there. those traits were repeatedly displayed by a number of people who assisted me in developing this field guide, some of whom are here today and i want to recognize them. you know who you are. thanks very much. i'm hopeful that the guide will serve usaid and also that others will find it valuable,

obviously. i would also encourage all of us, people in this room, people we work with, to raise our expectations, to strive to meet a higher standard of performance. i think recent history shows that we have to bring all of our skills to bear and how much depends on our ability to do that. thanks. >> good morning. i'd like to start off by thanking bob and usip for putting on this important event and to my fellow panelists and john for your remarks. and for giving me an opportunity to speak on a subject that is near and dear to me as i know it

is for my fellow panelists. the innovative approaches the agency representatives are here as we strive to tackle the critical issue of effectuating meaningful police development and reform. as bob mentioned my name is michele greenstein. i'm the deputy director of the office of criminal justice and partnership in the bureau for narcotics and international affairs commonly known as inl. it's a large organization all of which is dedicated of different aspects of supporting anticrime and counternarcotics, activities abroad using a variety of operations and fora. today i would like to give you a preview overview of inl and what we do and some of the innovative approaches we are taking in foreign police development which are also -- which we are also mirroring in the corrections and

justice sectors such as directly partnering with state and local agencies to access the most current expertise available in all aspects of law enforcement. within the state department, inl is the lead on international narcotics and law enforcement issues. the inl bureau assists countries around the world in their efforts to develop their own capacities to fight crime, administer justice and safeguard the rule of law. these are all priorities of critical interests to our own national security and foreign policy objectives. in every region of the world, emerging and maturing democracies recognize that state and secure communities are prerequisites to peace and prosperity. the bureau manages approximately $4 billion in u.s. foreign assistance resources. we operate in over 70 countries and employ roughly 70,000 people. inl works in both conflict and post-conflict countries but regardless of where we work, our

overarching goal is to build our partners' capacity to control criminal threats within their own borders and to avoid safe havens with criminals. we work with the criminal justice agencies which are the recipients of our assistance. while there are some broad similarities from country to country, each location where we work presents its own conditions and challenges. as a result, while our programs can have similarly objectives, each has to be tailor-made. the majority and programs are implemented through bilateral partnerships with our host nation partners and still more are realized through working through multilateral organizations such as the united nations. inl supports u.n. and other peacekeeping operations around the world, contributing u.s. police officers and justice sector officials to missions in, for example, haiti, southern sudan, and liberia. throughout all of our efforts,

inl seeks to achieve long-term sustainable changes within the justice sector institutions. our programs are designed to address needs identified by and with our host government partners built upon their strengths and focused on developing institutions. we have learned that one-off training simply will not have a long-term impact. training needs to be coupled with policies, with procedures, with the legal frameworks that are needed to provide the proper foundation and all of the other proper points that john mentioned that go into the actual development of a police organization. and our programs also seek to identify and cultivate leadership within organizations who will assist in that difficult change and then help them to find and implement their organization's role in often tenuous security and development environments. in all of this work, inl relies on a multitude of partners and we continue to seek to broaden

our base of colleagues with whom we work. as you are aware, here i go, the international criminal investigative training assistance program within the department of justice is one of our partners. as are our doj's components. inl also works closely with usaid. in fact, we have the privilege of reviewing early drafts of john's excellent field guide presented here today. now, i'd like to highlight some of the new steps we have taken to enhance our ability to deliver high quality programming that truly leverages a wide range of talents, skills and resources, for one inl has significantly increased our own in-house technical expertise in the area of police, justice and corrections. which accomplishes a number of goals. it facilitates, integrated programming across the criminal justice sector, enhances our ability to respond to new and emerging requirements in a timely manner and improves

comprehensive program design and our monitoring capabilities. to augment our in-house team we reset the task of unique skill sets of active serving law enforcement officers as advisors, trainers and mentors. ..

>> through these partnerships, police departments gain contact of firsthand knowledge from direct involvement with the counterparts in countries of interest to their own work at home. in the coming months, inl will continue to increase not only the number of the partnerships, but the pairing of the partnerships with direct programmatic requirements. let me give you a few of the examples in this regard. the chicago police department and the harris county, where houston is, sheriffs department has been instrumental in helping provide active serving, spanish-speaking investigative personnel for the mexican federal political investigators. n.y.p.d., new york police department, promoded creole speaking police officers for haiti and the l.a. sheriff part has been supportive of inl's

development in thailand and cambodia. we are partnering with 15 lawsuit organizations to provide training and mentoring in the u.s. for iraqi police officers. in the area of corrections, we recently concluded a training in colorado for hoduran prison staff and earlier we worked with the state of maryland to work with the republic of georgia on the best practices and procedures. but our involvement does not end there. we work with the host country to both track and follow up on that training back within country support within they return home. we are acutely aware that it is difficult for agencies who are strapped for personnel to allow active professionals to be gone for long periods of time. we have worked very closely with agencies to accommodate that where people are gone for as

short as 30 days and sometimes up to 90 days or longer, depending on the agencies ability. active duty officers are fully integrated into the inl program in the country. inl is working to diverse law enforcement efforts not only in the skills but the makeup. in particular, the secretary of state is devoted to increasing the number of women in the overseas mission. as experience as shown, including women in the full spectrum of policing as practitioners, implementers, and recipients of assistance, it's critical to our own success. inl responds to the growing need to train the female counterparts overseas is increasing. we are actively seeking female officers of the highest caliber to partner with us in this very important endeavor in part to reaching out through female law enforcement organizations in the united states. inl has learned many valuable

lessons in how to conduct police development over many years. to access and put them to work, inl is also under taking an effort to develop guides in the area of police, justice, and correction, to incorporate the good practices in our own work. we are, of course, also drawing work that has been and is being done in the inl. inl is looking at the training to our own advisors overseas, to ensure they are receiving the best training we can provide to support their efforts in the field. the initiatives is working to enhance overall efforts in the area of police development. thank you. >> let me add my thanks to

usaid, and everyone else who help set the important panel up and to your participants who will take the discussion much more interesting than even the remarks that we provide. i was really interesting. maybe we worked together in haiti, i was part of the invasion in 1994, not at port-au-prince. i was in the separate brigade. you probably had just about as bad of food as we did too. i'm not a military policeman. don rider is a military policeman. i'm an infantryman, paratrooper, rangers, i came to police work quite by accident. i was in haiti, the first night that i was there. the marines that i was relieve

had a firefight that killed 11 police and army guys. they all ran away. the marines left and said over to you. i found myself responsible for providing police for the second largest city in haiti. then two days later, my division commander called me up and said jim, restart the police force. i said, sir, i don't think we're ready yet. he said, no, no, just go find two guys that weren't that bad. and put them back on the streets. it was a complete disaster. the disaster that luckily led to meeting my wife, who was not in haiti at the time. that's a different story. maybe for afterwards. but from then, i went on to a little less involvement, but with a special police in bosnia, the italian care in the area, the missions support unit.

in iraq, i was responsible for training the police and military forces during the surge, 2007 and '08, and accelerating their growth, not just in size, but competence and competent as well. i've been in the project with general mcchrystal, petraeus, and caldwell. that's how i got involved in the police business. i found the same position that john described. i had no guide to this. really the first guide i read is after i had all of the responsibilities and i read bob's book. god, i wish i would have had this thing before i started. i look forward to reading yours now, john. so i can act as a voice to yours too. i bet there's going to be many similarities in what i say and in the four reports since i've

wrote since i've retired. they are all available on the web at the institute for the study of war. and the sequence that i was talking about, bob, was the sequence of war should lead to peace. not the other way around. and the first is building security forces in capacity in iraq. a description of the activities that we conducted to accelerate the growth. second, the accelerating combat power in afghanistan that i gave to mcchrystal and petraeus. the third, police force and law enforcement systems and then the last which has a portion about police forces, the u.s. in iraq beyond 2011. again, these are all available to you if you are interested on the web. but where to start. trying to summarize every case

is so different. every country is different. every situation is different. i tried to gather up my experiences in four mitts. the four myths, i think, are still very much alive in certain places. i hear them whenever, wherever i go. sometimes they are less prevalent. as we get ready to face the post-gadhafi regime, i bet they are arrive and well. first myth, training some number of police in providing some equipment will quickly produce a capable security force. this is crazy. there is no way that you can set a number and say we want x numbers of police forces. when you get there, check the block, you are done, leave.

that rests on the misunderstanding that the spear has the point and the shaft. in that if you just focus on the point, you can't throw it anywhere. if you try to throw it. it'll just go clunk to the floor. there's no staining ability in training, in building just the police force itself. that's the face of an enterprise. in the enterprise, the shaft of the spear includes the systems that the previous speakers have mentioned. training is one. it's not the means and to the end itself. without addressing the entire enterprise from national through county or state or whatever you are dealing with to the individual station of policeman. without seeing how all of that is connected and putting in the tissue, the headquarters, the

interfacing systems of continue professionalization and training and logistics support, forensics, all of the tie -- items that make up the back end of policing that you don't see when you walk down the street and see a policeman. you don't build that shaft, you are wasting money. good and many experiences you are wasting lives. you are certainly wasting a lot of time. we saw this in iraq for a good number of years. we saw this in afghanistan for a good number of years. and this approach, identifying the number, is simply not true. it's a myth in my view. doing a job like we're describing begs for organizational and durational demands. organizational demands. if you approach the problem with just training, then you will

produce a headquarters that trains and trains alone. or identify an organization that trains and trains alone. training itself began as a means, not an end. the set of activities, leader selection, leader development, training and professionalization, the linkage to the judicial system and the set of other activity that is are described i'm sure are john's field guide and i've written many others that involved the books. the headquarters for an organization or a set of organizations with some cohesion is required to make sure that not just the tip of the spear, but for the duration required can do the job. to define the problem merely as a training problem and identify an organization to do the training and think that you are done is to, again, fall through the myth on the tip of the

spear. the second in my view, the myth is a choices between quality or quantity. either you train a bunch of guys, women to be policeman, very quickly and you throw them out on the street, or you dedicate yourself to doing what's right. this -- this is in my view, i'm from -- my academic training. this was a false dilemma. in certainly cases at least like those with which i've been associated, if you just train a bunch of guys, put them on the street, you are going to do it over and over and over again. merely identifying quantity is really foolish. we did this again in iraq and afghanistan. how many years -- how many numbers of policeman do you have to train to realize it's not just about training numbers of policeman.

i don't know the answer. seems like the answer is infinite as far as some perspectives. on the other hand, quality. it is no doubt in my mind that the best thing i could have done in terms of the highest quality while i had the responsibility was to take individuals, plus them through a very long training and education program, make sure they had at least high school to begin with. put them on the street with a mentor, and then make them a police officer. had i done that in 2007, we would have lost the war and been in a much worse position. so the issue for at least a person like me is what's sufficient? first off. that's good enough for now. and second, how do i embed into the system an understanding of quality? so that next year the police force a little better than this

year. a year after that, a little better. i take my experience as an army officer in that regard, certainly the army that i joined in 1971 following vietnam. got better every year after vietnam. the army that we have now didn't grow whole cloth, one whack, 1967. we had to take a number of steps over a number of years. this tells me that quality is an iterative characteristic, not an absolute characteristic. sufficiency, what's sufficient between quality and quantity? what's sufficient? and how do i build in the systems so that it gets better? third myth, once -- it's related to the first one one -- once training and equipping is done, then you can transition to civilian control and go home. this is again -- this is, i think, a myth that is based on a

mistaken analogy that training police is like a bass fishing tournament. you catch, fish, release. you don't recruit, train, release. the partnership program that follows is very much the continue to mentorship program is very much part of the continual training. this transition is a gradual transition. maybe is the case, probably is the case that the individual policeman level, you may transition earlier than you can at the state or provincial level. because the changing habits of behavior at the national level takes a heck of a lot longer. changing habits at the

state/provincial level takes longer. connecting those two together, takes longer. so the transition business is not again about training a set of numbers. they are trained, equipped, we're out of here. it's again part associated with the first myth. but it is so dominant that i think worth talking about as a separate myth. the last myth, and then i'm going to talk about one principal at the end. that should govern, but still, i think, has insufficient coverage. the last myth that you can approach police training like you do military training. that's what i started. i am a military trainer. i do very well as a military trainer. you want to brigade train? give it to me. division, accord, not a problem. police are different. and it's the difference between imposing security which guys like me can do very well, when i

showed up with 7,000 guys with guns, there was really no problem. that's imposing security. and military forces do that well. that's not enforcing security. that's not enforcing what already should exist as a communal agreement about how we should police do that. there's no police force in the world that can impose security on the city that has no social contract, no implicit agreement. that's why you call out the national guard and federalize the army. when you get to the position like l.a. in the l.a. riots or the riots in 1967. imposing security and enforcing security are two different things. military guys do the first, police do the second. how you approach the second, very much is different than how you approach the first. police forces need a set of conditions to exist. that you don't need conditions

to exist to impose security. i just show up with 7,000 guns. that's the only condition that i need. chi -- chaos, no problem. i got communications. with police, this is a different deal. a certain set of conditions have to exist before you can really start training. again, in my experience, training police in the right way. if the conditions are that policeman are afraid for their lives, or afraid because their families are intimidated, or they are paid so little they must prey off of the society they are supposed to protect, or no set of systems that support them, so they steal and rob to get whatever they need. these conditions have to be gone. and in some situations, requires the imposition of security before the conditions are gone and can start working on a police force like we all know

and agree we should do. one principal. those are the four myths. one principal: set the conditions from the start to achieve unity of effort and coherency of action. notice i did not say unity of command. you would expect an army guy to say that. but the number of people, the number of agencies, variety of agencies required by their nature to associate with police and law enforcement systems, a justice system, confinement system, education system, you must at least when the u.s. side, you are going to include state, you are going to include justice, you are going to include usaid, and i believe in certain cases where the conditions of security have to be imposed first, you must have the department of defense. but the unity of effort among these departments is absolutely essential. otherwise, you have people

defracted from the goal that we all had, rather than concentrated. you don't have cohesion of action. you have diffraction of action. you have a coffin, of course, pick whatever analogy that you want. again, after ten years of war, we still see the difficulty in achieving this unity of effort in coherency of action. notice, i didn't say again, the principal is put one agency in charge. maybe that's right. i don't know if that's right. the real answer is how do you get unity of purpose, unity of effort, and coherency of action among the agencies who are going to naturally be part of this enterprise. so those are my four myths. that's my one principal. and i took forward to the conversation and questions. >> thank you very much.

>> our final speaker, colette? >> given that it's baseball season, i'm going to use a few analogies here in the spirit of baseball. since i'm batting last in the lineup, i thought i'd lighten things up by using a powerpoint. also there will be a video embedded. also to give you exercise, as if you were watching baseball where you have to keep turning this way, i apologize. but it'll give you some exercise at this late morning time. also i want to express my sadness that the nats lost last night. i was informed they lost to the cubs 10-9. i wanted to express my sadness. i'm going to close with a baseball aaly. thank you, bob. i'm pleased to be here with so

many colleagues and friends that are here in the room as well as on the panel. and i've worked with many of you over the years and i want to thank everyone for their commitment to building and strengthening rule of law in various post conflict environments. as bob mentioned earlier, my name is colette rausch, i direct the rule of law here at the institute. when i was asked to do this type of work, i was dropped into an environment, completely unprepared. i was a federal prosecutor at the time in 1998, and two weeks notice, i was dropped into bosnia to help rebuild the justice system. i first had to figure out where bosnia was on the map. i figured out as much on the plane ride which was handed to me about the time i got on the airplane and flew over there. that was consistent that time. fast forward. i would like to think we are all better prepared and with field

guides and assistance and support and usaid are preparing, i'd like to hope that we are all learns and growing and that we are doing a better job. like everything, there's always room for improvement. so my comments now are formed, obviously, by my field experiences over the past about 13 years in different countries. that's a context in which i'm going to place my comments. we all know that just because a conflict officially ends, whether that's through a peace agreement or maybe there's a peace and stability operation in place, where it's military, police, combined, we know that doesn't mean all is well. we know that violence continues. we know it can be residual violence, splinter groups, or nearly formed groups. we also know there could be political or religious or ethic-based violence. we also know because of the security gap that's very, very common in postconflict environment, we know that

certain factions prosper in that gap. we know that criminal organizations, across-the-border criminals increase because of that gap. and to address the challenges, we often turn to promotes justice and security sector reform. and we also look to do that in a very -- adeally -- in a comprehensive way. that we look across the entire justice and security sector, and that we look at an institution-wide approach. and that we're looking at interventions that could entail many, many different things. training equipping. as we learned, you can never just stop there. also restructuring institutions, glibbing oversight and accountability mechanisms, passing laws, and i would go on and on in an ideal world. but there are a number of challenges to the comprehensive as i'm going to say topdown,

holistic, you know, integrated, whatever we want to call it approach. one is obviously it takes time. and when i say time, i mean a lot of time. not the year budget that we used to get and then start all over. not even the 2, 3, and when we are really lucky, the five year budgets that we get that you rarely see those. i'm talking decades. and i won't even say generations. there was a world bank study. i don't want to misquote this. let me just say, it was many, many multiples of decades for change to occur. especially when the social fabric does not exist. it takes a lot of time to build it. we are not just talking about the technical things. your talking about the human connections and the way relationship are formed and trust and other things are built over time. also it's extremely difficult to get an agreed upon security or justice sector reform strategy. why is that? well, because everyone has a different vision, some are

self-interested, some look at it according to their own view, so you have the kind of in fighting or difficulty bringing together justice and security agencies to agree. various political actors to agree. especially after conflict. because all of the thing that is often times drove that conflict don't just vanish. just like violence does not vanish. when you are working in countries like afghanistan, it's not just the formal sector actors that you are working with, but customary, tribal systems, there could be a plethora of justice, we call it legal pluralism, operating in one country. trying to get everybody on the same page obviously is a challenge. and also many justice and security sector interventions are many times flawed. and not as effective as they should be. and that's because many times we base our information on incomplete understanding of really what's happening on the

ground. what is the reality of the ground? and the multiple realities? not just the reality of the capitol, but the multiple realities of different areas. especially in postconflict environment where there are divisions based on ethnic, geographical, regional. again, things that fuel the conflict are still there. we don't have always a unified system or unified country that we are working with. and often times, the reform consult very few people. many times those at the top, the elite group. we aren't conducting adequate consultations before being devised or trying to create the strategy. we see the reform provisions to the exclusion of a broader set of stakeholders. often times the processes happen behind closed doors and there lacks the transparency. people feel shutout.

as a consequence, what we see is we witness a shortage of the successes that we want to see. and what happens when you have a shortage of successes, insecurity, instability, violence prevails. okay. what do we do? we don't give up. like i think some of us do at our darkest moments that you want to give up. you know, go become a gardener, grow organic vegetables, lots of other things that seem appealing. the answer is not to give up and pull back funding or effort. but to change how we do it. so we need to find ways to be smarter about how we do the work that we do, how we spend our money, and how we use our resources and our human capital and the people that are doing it that are just as valuable. so what we really need to look at is to have an operational analysis beforehand. : are going on that

i wasn't aware and i was looking at things through a very narrow lens from my experience. it's getting on those other levels going on and trying to understand them. doing this at the same time that we're working out this kind of broad-based top-down

institutional level. so what i'm going to talk about now are two tools that help us, one, conduct an operational analysis, a new operational analysis not doing what we do, fly in for two weeks, talk to the likely suspects an hour at a time and then base what we're going to do on that and i've been part of those assessments. you look at things in a deeper, broader way. the second tool is justice and security dialog or jst. both of these tools have been developed like everything as a work in progress over the past four or five years to a number of programs that we've engaged here in afghanistan, liberia, sudan and particularly in nepal which was particularly helpful given its context and through our partnerships at the time with usaid oti and inl and doj

had different parts in partnering these different tools. so let me talk briefly about the justice's security dialog and then you get to see the quick video i promised. jfc engages a big tent of stakeholders, a big tent in shake holders because as i mentioned, a broken framework fabric of society requires as i mentioned a patchwork of everybody being brought together. not just a small group, not just one small sector, not just the military or not just the political actors but all the sectors coming together including the community, government, society, all people who need to buy into this system and be part of it and agree. and have that social contract. and the week before last, we published a case study, it's thick, a case study on jsd and tleeshsz a smaller version on

our website but we tried someone who was involved walk step-by-step to paint the picture and just distill it and just a few policy recommendations. jsd, despite its name dialog is not just talking. it's not just talking and then leaving. it's really a vehicle or a means to do things that are vital to strengthening rule of law and post-conflict environment. there are a number of different things. it all has to be dependent upon the country context and the country reality. i want to preface it that way. it's number 1 size fits all. there are principles, there are principles. but ultimately there are a few things that can be done or a number of things that can be done depending upon the context. these could include identifying the gaps and challenges in the justice and security sector, developing innovative solutions and strategies that are driven

by the people in the community by the police themselves, talking to the person on the street, talking to the villager, talking to all levels getting deep and wide in the community, deep and wide in the police service, deep and wide in all different sectors. resolving conflicts and problems. as you're going along through the process because as we know, there's violence, there's challenges. trying to do some dispute resolution through these dialogs as you're trying to build the bigger picture and create stability as a whole country. building trust between the police and civil society as well as the community. sharing information. deepening lines of communication between the police civil society and community. and jsd could have a number of direct impacts. as i mentioned it's not just talking. in nepal, for example, there have been a number of direct impacts that are discussed in the report. but a few examples are after a lot of youth-related violence, youths were frustrated, wanted things moving forward,

frustrated at the senior members of the political parties were not acting, through facilitated dialog at the request of the police, the youth and police were brought together. they came to an agreement. actually a written agreement and after that, the rates of violent protests and political violence plummeted in that district and it's still the case. also increased cooperation between the police and religious leaders. in nepal, there was -- the mosques and catholic church were being targeted. there was a bomb that went off and result in the deaths in the catholic church. the religious leaders worked with the police on how to handle this. and that had -- that had helped the situation from that targeted violence increase. and also improved police public cooperation on day-to-day basis. so i'm just going to now do the short clip.

[movie noise] [street traffic] [speaking in native tongue] [speaking in native tongue]

[speaking in native tongue] [speaking in native tongue] [speaking in native tongue]

[speaking in native tongue] [speaking in native tongue] [speaking in native tongue] >> if you'd like to watch the full clip, it's on our web. the second tool is conducting a

justice and security survey. ideally, these tools -- justice and security dialog and survey are integrated because they both have the same goal and oftentimes, part of the survey can gain information through -- from the dialog sessions at the same time finding of a survey can then be fed into the dialog session so oftentimes the best way forward depending upon the context again very context-specific is to intergrate them. and the justice and security survey in short, as i mentioned is -- it's a goal to identify how things are operating in practice in the field. i'll mention again going right and going deep and going in any sector. when i did this in nepal, it meant surveyors going into areas that were inaccessible and that's where the maoists had strongholds and that's where they were able to get the

insurgency started and getting in those areas and villages and to find out and often time it's the first time anybody ever asked them what's your vision of justice and security? what does -- do you go to the police? who do you go to in their conflicts? what's your view to access to justice? these very basic questions and oftentimes, as i mentioned the first time anybody asked them that question. so just a survey itself not just to gain information to help justice and security sector reform efforts but it is a process by which to bring in people who oftentimes may be marginalized and not have a voice in the process and obviously it's a very useful information operationally to help build reform efforts. in conclusion, to address instability and crime in a post-conflict environment it is critical before engaging in any form of justice and security sector reforms that time is taken to truly listen and engage at all levels through mechanisms such as justice and security

dialog and a well-crafted access to justice survey. a platform is needed for people to voice their grievances, provide meaningful input and participate in a formulation of policy recommendations. i think this is particularly important and the present day reality of what we're seeing in the middle east and north africa. and within that context, we see a demand for justice, security and accountability. these are defining features of rule of law. there is a call in the streets for having a voice in the process of reform and change that affects every person's life at all levels. we would do well in all of our efforts to heed that call and ensure that police assistance programs reflects these voices. >> thank you, colette. i want to thank david yang for his kind remarks and i want to thank all the members of the

panel for four really exceptionally interesting, informative and short presentations. i now want to open the floor. we're going to do this in the following way. i'd like to ask questions to move to the microphone that's on this -- those who are watching in the overflow rooms in the institute you're invited to put your questions on cards. and we'll collect those and we'll bring them here and we'll ask those questions accordingly. and while people are moving into position to ask their questions, i want to exercise the perogative of the chair and who does the training and when you look at the wide verity of

programs that the united states government presents, the training efforts is actually provided by very different kinds of people. some by federal and local police, some of it by a new category of temporary hires called 3161's after the title of the law that created the program. by contractors that work for a number of commercial firms, by military police officers and by ordinary u.s. soldiers. and my question is, since we have all these people doing these training to the panel, i would like everybody to comment, does the united states really need to develop a professional police training and assistance corps which would be available if we can't have a national police force could we have a national training program wide somewhere in the federal system that would be available to actually do this work. so let's start with john and we'll just run down the panel. >> well, thanks for that easy question, bob, i love the

softballs. whether we can do it i don't think there's really a question. i think we could do it. i think there are some pretty strong arguments, in fact, of favor of doing something like that. one thing that's kind of my management background, the management side of me says how do we maintain that capability and when there's a surge requirement up and down. so i think there could be some pretty significant management concerns. but i tried to address that with the crc concept the civilian response corps concept that i'm sure many of are familiar with. our ability to deploy that and i hope it's to be improved a bit but i think it's certainly

something we could do, it's whether or not we decide as a and including all of the particular elements of that and whether or not it's worth the investment and how to manage that. >> yeah, michele? >> i similarly think it's an interesting question and i would have some of the same questions that john raised about it, about how, you know, it has to be done. and i also thought some of the civilian response corps and how those people -- some of them, you know, are already involved in this and are doing this and are receiving a standardized set of training across crc to be able to -- to bring some of that. i think some of what you're getting at is, are we approaching it in a similar way. and i think that's an important question. one of the things that we're trying to do in that regard just at the tail end of my remarks is to look at all of the training

that we're giving to all of our advisors. and also we're doing that in partnership with looking at the training that we're giving to our 3161 employees as well to make sure that everybody has a core foundation of knowledge and an understanding of how to be a mentor, how to be an advisor, how to actually take the technical skills that you have from your professional life and apply those in this new environment. >> thanks. >> ideally i think the ideal answer is yes. even your introductory comments of 100 plus countries each of which is different. each of which have separate requirements, i think the practicality of the case it's just not possible to have a standing corps of people, to have a standing corps approach that can be used prior to

deployment, prior to employment, i think the answer to that can be yes and should be yes. >> okay. colette? >> i would just echo what john said. i think ultimately -- i mean, many of us have been engaged with this for over a decade. i think practically speaking it's just not possible. i think the better effort is placed at trying to identify the principles and needs. when there is training you're sharing that among the different organizations that are training rather than a single focus. i have seen actual movement in that direction. it just, obviously, needs to be more and encouraged more fully. >> thanks very much. we can now move to questions. i want to do it in the following way. i'd like to ask for two questions and then we'll ask for the panel to respond. and i'd like to ask our questioners if they would identify themselves by name and affiliation. you get the first question. >> my question -- and i'll

preface my question by saying i prefer -- [inaudible] >> the program for albania but my question pose on federal comments that were made by the speaker, which has to do with sustainability. it's not just a question of quality in general but it's a question of what the country can afford? if the economy of the country -- i mean, we're training how many police in afghanistan and, you know, what the cost of that is per month and, you know, what the gdp is and a lot of is from income from drugs. how do you sustain it in the long run when you have created a quality corps and you do leave and the country can't afford to

pay for it. >> thanks. well, i work for dyncorp international. and i work for administrator in the operations and my conclusion was that the most critical thing you need is a criminal justice syst system. i really appreciate the general bringing up the, you know, unity of effort working in this area. i would like to support that a little further. should the four main agencies dealing with the criminal justice system -- should there be a lead agency if the current model which i think is relatively uncoordinated and

should there be a new approach to how the u.s. government police training is -- >> i would ask all the panelists to comment on that. we'll start with colette this time. we'll go the other way. >> you know, it's interesting because the issue of sustainability and connecting that to the reality again of what we can deal with. i think a lot of i think when you look at addressing the rule of law not just police but the whole system of justice really has -- the focus has to be the starting point. i think sometimes what happens we come in with a very grand

view -- social about that. and start pulling away from that. it's costly and it's time-consuming and it may or may not work and it does not always take hold. i think all of us are promote answering approach and researching and looking what's there and building upon what's there. it may not look like our system and something that we would want initially but you're trying to build steps and you can't go from a to z, you know, overnight with 10 cents when it's going to cost, you know, $100,000. >> general? >> well, of course, sustainability is a big deal. and afghanistan is more than an issue than iraq and oil many and they had $11 billion in their own security development. afghanistan is an entirely different case. the conundrum at least in my view, if you set a cap on the number of security forces that afghanistan can afford, then you set a goal that we will be there forever. or we leave. and let the country descend into whatever it's going to descend

in. how you manage what is sustainable now becomes an issue of contributing nations over time and a force that that has that aspect of sustainability rather than itself. afghanistan is never going to be able to afford police and military that it needs to secure itself. not for any near term. >> there are 50 in the countries is in the world -- [inaudible] >> yeah. that's the biggest one. not the only one. this is a huge, huge problem. and probably a conundrum in the truist sense. colette's comment about building on what's there is really important especially in a criminal justice system, not just the police system. building on -- i think it was your term multiple systems, multiple legal systems, acknowledging that is a

legitimate model of building upon it rather than trying to impose one is part of our difficulty when we come in to a country. and we can do much better in that. sustainability, i wish i could catch some litmus paper and it turned blue. boy, that's a tough one. >> michele? >> the sustainability issue is a very interesting one and i think it's different depending upon which place you're operating in. there are some places where clearly what ends up being created is not going to be affordable. and that's clearly not sustainable. but sometimes there are situations -- and this gets a little back beyond the point about iterations of quality that there may be different points in, for instance, in a conflict

or post-conflict report where you might need something for a larger size that's part of an interim system and that over time as the situation stabilize and see that's partly of the planning that the numbers can be reduced to numbers that are sustainable. >> john? >> regarding the sustainability question, i think that colette's justice dialog kind of approach helps in a couple of ways. first, there's someone names who i can't remember the name right now who says begin with the end in mind. if we have some sense of what a country can afford, that probably should be early in the conversation with the communities, with the citizens, with the ministry-level folks, with the idea that we're not going to be here forever. and we can't help you pay for

your own security forever. secondly, and i mentioned earlier the focus on leadership. some of the things that we really have to have in my opinion to make ourselves and the countries we're trying to help more successful don't cost a whole lot. attitude is pretty cheap, for example. a police officer's attitude is a critical piece of their service delivery and of their relationship -- ability to build relationships with the people they work with and the community they work for. so i think there are some pieces of this that don't really require a lot of long-term investment. certainly you got to pay people a living wage and the general mentioned that very eloquently very early on but i think that's -- that there are things that are not necessarily having big dollars attached to them that can be really important in making progress.

the second, excuse me, question about lead agency approach and that sort of thing, certainly i'm not in a position to know when or if that may ever happen. i do believe, though -- and i've seen this happen and i know it works. people can kind of set their agency head aside at the right time and the right place and put their mission hat on and it's pretty amazing to see what can happen when that takes place. >> thanks very much. okay. i'd like to take one question here and then i'd like to take some questions from the other rooms here that are watching this program on television. please go ahead and ask your question. >> hi. i'm mary stato with the friends committee on national legislations and my question is, specifically, for michele but i certainly welcome other panelists to answer. and that's regarding your statement about inl's current work in conflict and post-conflict countries. and i'm curious about the work you're doing in countries that are not currently experiencing conflict but may down the line,

particularly, as the qddr stated conflict prevention should now be a core civilian mission of the state department. how does inl intend to realign itself with that priority of the qddr and how do you see your work shifting in the future? thanks. >> thanks very much. there have been a number of questions submitted on cards from the other rooms and they all deal with this issue of corruption and police corruption. and which is a major factor in all police assistance programs. so i want to ask all the members of the panel to comment on this issue of how -- how to deal with police corruption? how do you do this in the context of a police assistance program and how do you do it in a way that's sustainable? so we'll let michele respond first to the question from our questioner and then we'll ask all the panel to respond to the question about corruption. thank you.

michele? >> thanks for the question for the qddr and conflict prevention. clearly conflict prevention is a theme throughout the qddr document. and there are so many aspects of what the work that the development agencies and the state department and d.o.d. do that relate to conflict prevention. and in some ways conflict prevention is about shifting the lens of how you think about it, of how you think about the work that you're doing. in terms of actual qddr implementation, that's an ongoing process that all of the state departments involved in right now. and so i can't really go ahead and comment, you know, on particular -- particular things that we're doing. but we have long seen, especially, in our post-conflict work taking the kinds of -- certain types of activities and

part of -- what's the right word here, recidivism, to try to prevent recidivism in trying to not involve communities that were not previously involved in police force training and that type of work. >> thanks. and let's start our response on this question about how do you deal with police corruption? john, you have a lot of experience. >> certainly, police corruption is a huge problem -- thanks. it's reassuring. i guess i would start -- once again try to start at the beginning and that is with the value system in the organization. and that's sort of an easy cop-out. but leadership -- and i may be sounding like a broken record but leadership has a responsibility to make values real.

and to carry that values flag and we all know of some high profile failures from time to time. we are all human beings, of course. but what does that really mean? well, i think it really means some practical things that can be employed, for example, and, of course, there are political implications here. but a contract for the senior organizations, law enforcement organizations that helps insulate them a little bit from the political factors that may cause them to make bad decisions. it gives them some time to build an organization based on a good values system. i think, in fact, that's even being done in one country, i believe, in jamaica at the lower level of the organization. so that every few years, essentially as a police officer, your contract is up and you go through a review process that may include a polygraph, for

example, to kind of make sure that you still are upholding the values of that organization. there's a series of things -- and i'll try to keep this short, that i think are successful in a lot of places, number 1 is, of course, the initial training process has to do with the inoculation, if you will against corruption but there has to be booster shots along the way. there has to be internal processes. this gets a little bit back to those core competencies i spoke of, audits, inspections, all of the things that are necessary to keep folks and remind folks what is their jobs. i think there are both some strategic things that can be done and some much more practical and ground-level things that can be done. it's a long slog and it's going to be two steps forward and one step back, but i think if we keep our eye on the ball, i think we can make progress. >> okay. anybody else want to take that question? >> the general. >> well, for me it's not a

question will there be question, the answer to that question is yes, any place you have a group of human beings together, some of them are going to be corrupt. the issue then becomes what do you do in face of the corruption? and how do you reduce the conditions that either encourage it or discourage it? corruption itself is a complex issues. there's different types of corruptions, some are more nefarious than others. some more difficulty than others and reasons for corruption that range for any number of -- a whole variety of reasons. but on the practical side on at least how i approached this, first there's external pressure. we do have laws that prevent us from using our money to give to organizations of certain types or who exhibit certain behaviors and withholding those funds are

a type of pressure as you develop a police force. leadership john can't mention enough. and i'll use the national police in iraq. when the jones commission report came out and said the national police should be disbanded because they were part of the sectarian violence and contributed to it, this was a hugely beneficial statement. the then-minister took this to heart and we talked and he said what should i do? well, mr. minister, you have no choice. it will be disbanded. i cannot support it unless you have your own reforms. and you have to do it. i can't do this. he chose a new expanding general of the police who fired all nine and the brigade 17 of 27 commanders. we fired of the 2 commanders refired some numbers of the battalion -- and that kins

continues it's a statement of leadership and we aren't going to put up with this. training and professional development which is a very big part but the transparent and repeatable systems is part of the deterrent of transparency, the system of pay, the system of promotion, the system of leader selection, the system of equipment delivery. these systems in many countries are anything but transparent and repeatable and are part of the corruption system. so as you work on preparing the institution and its processes, you start narrowing the opportunities for corruption. and last, the internal affairs. a very gruesome statistic. minister bilani's internal affairs director had assassination attempts on his life in the 15 months i was in iraq. this is a very aggressive director of internal affairs. now that's not something that we would want to hold up as, okay,

the standard is how many attempts on your life, but it gives you an indicator of the attempt that was being made to eliminate corruption and where you have an institution that has no such attempts in a situation like iraq, afghanistan and others, this also tells you something. >> yeah, and i would just definitely echo what the general mentioned and then expand it because in many of the countries in which we're working with police and the broader justice sector, everyone points the finger at the police because it's a very public demonstration of corruption that you're seeing on the streets when you're being, you know, shaken down or pay off with something but it goes all the way back -- it has tentacles as a society in different levels. for example, in one country, it was happening with the police but the political actors were exerting political interference with the police. if you want promotion you have to pay political people and the

business i say -- the police were shaking down businesses because the minister above was then shaking down the transportation minister who then shook down the taxi drivers. i mean, it's this whole ripple, ripple tentacles everywhere and so i think in that situation all the things that the general mentioned as far as oversight, exerting pressure and working with civil society and community to get this aired and it was a really interesting dynamic. there was one dialog where the police started pointing fingers at the civil society who were complaining the police were corrupt and they're saying you're corrupt too. you're making victims pay to complaints and you have more complaints you'll get more donor money. and all of these things were going on you may not even be aware of and how people are impacting and part of that corruption process in any way, it's broadening it. it's a fact of life but finding creative ways to attack it and not promoting -- not promoting but, you know, allowing it to be more conducive and putting pressure. >> thanks very much.

i'd like to invite two questions from our questioners. once again if you can state your name and your affiliation. thank you. >> hi good morning. my name is sharon carter. i'm a foreign service officer from usaid now in the office of military affairs. and my question -- i was taken by the general's comments about wasting time and money and potentially lives. and my question is -- or my observation is that we as a government -- we have a can-do attitude. we go overseas with a can-do attitude. and so what advice do you have when -- it's really lack of political will to do the fundamental reforms that are necessary and we recognize that we are not in the driver's seat so local leadership is in the driver's seat. john, help me -- lots of problems with the program in peru, for example, that has not proven to not have gone very far

because the absolutely excellent and right approaches we tried to put in place, the local issue did not want to take on. if it's a no, can-do and we have a approach and can we say no can do exit and how do we get ourselves to do that or is there actually an alternative? >> thanks, that's a very realistic question and afterwards, i'll tell you about a couple of situations that we were involved in, one in which we walked. please, go ahead. >> hi, my name is derek caps i'm with usa -- part of the civilian response corps and had the privilege of working with john briefly last year. and i'm now working in the middle east. my question was to -- i wanted to ask you putting the police in a larger context, the assistance program in a larger context, what -- 'cause there's a lot of attention that is paid to the police and a lot of resources given to the police particularly

in a post-conflict transition situation but what do you see from your experiences as a the linkages with other elements, not just governments but economic growth, transitional justice and those sort of elements? and how can the assistance given to the police also help amplify the effects of programming in other areas? >> thanks very much. general, if you want to start. >> i'll start with the second question since i didn't get -- make sure i answered that one. when -- and i'll use the surge in iraq as kind of an example. when most of us think about the surge, we think of the "x" number of troops and the counter-offense that it facilitates. that in my view was one of the five surges that occurred in 2005 -- or 2007 and 2008. and it goes to the question

about linkages to other elements of national power. it goes to an understanding of security in a broader sense than merely imposing security. so surge 1, of course, was the counter-offensive that was facilitated by the increase in conventional forces. and special operations forces. surge 2 was the increase at provincial level, in the governance capability of province governors and their counselors by the extraordinary number in provincial reconstruction teams. this had a huge positive benefit in the counter-offensive because once the counter-offensive was over the prts started doing immediate work with the provincial governments and councils. the third was a diplomatic surge that was both internal to iraq and the region. ambassador crocker and the extraordinary talent that he had on his team had a very

aggressive engagement program with the prime minister, the prime minister's major deputies, with other parties not in power in iraq and with key leaders in the iraqi parliament so a diplomatic and political surge. the economic surge -- by the end of 2007 -- or correction, 2008, the rail system was reestablished, the communication system was basically reestablished. the electric grid was at prewar levels. the oil production was at prewar levels and growing. the bridge and road network was in, ports and airports were open, all the infrastructure for economic development were put in place. so these sense of surges worked together to improve the sense and -- sense of security, and i think demonstrates the

questioner's perspective on whole of government, on all elements of national power growing together. each one, though, did develop and is still developing at different rates. this is not a world war ii kind of situation where the front line squeegees system. it takes longer than to develop the training system. the development of physical infrastructure takes shorter than the development of governance capability but we've seemed to think that we can squeegee with milestones that move the whole broad front forward and it just doesn't reflect the reality of the security situation. >> thank you. can we invite other members? >> i want to comment on the on amplifying the effects.

i agree that these resources sometimes when they are put in one place at the same time, in a coordinated way can really have quite an impact. some of my colleagues here who worked on some of these things at the same time that i was working on them, but in particular i'm thinking of the haiti stabilization initiative that we worked on a few years ago where it was a collaboration between state department, usaid and we also worked closely with the u.n. in terms of trying to bring some stability and some development to a very troubled part of port-au-prince where security was deployed, police development resources were deployed and development resources and it really had an impact and so i think those things working together can come into it. >> anybody else? please go ahead. >> i just wanted to comment

briefly on the -- our can-do approach and working in a no can-do environment and political will. to a certain extent i think that's everywhere -- i mean, i think when you're working with the justice and security sector and you're dealing with power bases and you're dealing with people who don't want to change or even if people do want to, change is difficult and it's uncertain and i think it's a reality and it's a level of degree. some are very can't-do so i think from really from my perspective when i look at it from programming situation, that's where, again, i'm such a firm believer in really understanding the landscape and seeing all that's possible. and as the general mentioned, things don't move together at the same rate. in an ideal world we figure out what's needed. we come up with some wonderful strategy. we would do it and all would work out, everybody would work together and all the strands would catch up and that's not

reality. looking what the landscape is and from a programmic standpoint figure out where you can move. it's like you know an amoeba and because there's a big block and certain officials who have absolutely no interest and why are we wasting millions of dollars and pour it into an program. it may cost $10,000. it may be a conversation, whatever it is. it's planting seeds. it's like when i was a prosecutor and i had this naive vision that i could solve all of the fraud against the elderly in las vegas, nevada, where i was a prosecutor. i was young. [laughter] >> this was 20 years ago and then it hit me, wait, that's not going to happen. but what i can do is work with that, you know, fbi agent and work with him on writing a really good search warrant or i can prosecute one person. it's planting seeds and then knowing that those seeds can grow but again, the way we envision it we got a year and we got to make it happen, it's just not going to happen. do we have one or two questions. go ahead, please. >> i'm with motorola solutions.

and u.s. government puts much effort and time and funding in ensuring security globally. the private sector is a force multiplier of the effort that the u.s. government does to ensure security globally. how can they be involved in a way that creates a win-win situation both for the newborn police force or the new trained police force and also a win-win situation for the u.s. company that's looking for opportunities in the global market? engaging with agencies like usaid and inl is sometimes very complicated. and long-winded and so i was

wondering if you could share maybe some process that might make it easier for u.s. companies to engage. thank you. >> we'll give that to michele. before i hear from our next questioner, i want to put in a question from one of the other rooms. it came in on a card and it's -- the general question about the fact that we're not out there alone. there are a lot of other countries involved and so that not only are we coordinating interagency when we're engaged in these programs we're also coordinating across various countries. so i'll leave that question with the panel and we'll take one more question. we've got about 5 minutes left and so we'll ask the question to -- ask the panel to wrap up in this last five minutes. welcome, nice to see you. >> good morning. my name is neil ravine i'm with the office of conflict management and litigation at u.s. agency for international

development. john, congratulations and condemnation to you and your team. this is the kind of work -- a desk reference that can really make a difference at the field level and i appreciate your effort. my question is this, and sort of on the theme that michele talked about, the panel has really talked about the tremendous challenges that this endeavor takes in terms of leadership, in terms of fighting against corruption and confronting capacity deficits and the question of political will. about a year ago, a book came out that was a real washington read it was called "switched" and how small changes can make big differences down the line and one of the things they recommend is looking for bright spots and i really would like to take advantage on the expertise of the panel if folks could search their memories on what would be examples from your experience where the necessary ingredients to really create a change on the ground and again to go back to michele's example but to hear from the rest of the panel on where those ingredients did come together to create meaningful change? >> thanks, neil.

john, you want to start. >> sure. >> john, turn on your mic. >> an insurance question and it connects to the private sector. i think there's some potential and i would suggest that maybe we could improve in this area and that is helping create public momentum for change. we hope that democracy is beginning to function in a lot of these places. and, of course, one of the pieces of that is that when the public is concerned and hopefully there's response and legitimate response on the part of government. and the private sector piece of this is that helping folks understand, you know, more security or better law enforcement, better criminal justice is in everyone's interest. and that includes folks in the private sector and the business community and they often have a

voice in what happens in their country. there are organizations and chambers of commerce and that sort of thing and i think they can be effective and they can also help create some of that momentum for change. so that's -- that's that particular response. just one real quick thing on the bright spots. certainly as i think i mentioned early there's some things going on in jamaica in the police world in the internal affairs, i think, have a lot of value. i mentioned contracts and i think there are some other pretty advanced kinds of tactics and techniques going on there to improve the integrity and reduce the corruption in that country. secondly, when i was at usaid we had -- and still have a project going on in el salvador called change leaders and i won't describe all of it here but it has shown some value, i think,

for the police and, in fact, to the extent the prosecutors in l el salvador have asked to be part of this project. i think there are some signs of light out there, if you will. >> thanks. michele? >> i'll just touch very briefly on this question of the private sector. i think that there's a lot that the private sector can actually be involved in terms of capacity-building in terms of the -- in terms of what's being -- the services that are being delivered. and just another example that comes from haiti experience that comes to mind, we were doing a program to improve police communications and we're installing some radio, some individual -- [inaudible] >> yes. i don't remember all the exact technical details but what i do remember that was really meaningful to me was that all

the folks that were being -- were brought in to install the equipment and that we kept on in terms of maintenance were all locally hired people, people actually -- some technicians that were part of the haitian national police and that there was a knowledge transfer from that private sector company that was coming in and doing that in terms of sustainable. >> first quickly, when the italian police showed up to train the iraqi police in october of 2007 they had an immediate positive effect. just by showing up, the iraqi national police wanted to be like those guys. it was unbelievable. and the transformative effect of their -- the italian training program in combination with the leadership changes i mentioned earlier was hugely

transformational in the iraqi national police now called federal police. i could give you a half dozen other good stories. second, we are not alone. this is a multinational effort. in haiti i think i had 13 nations working in my brigade combat team. in iraq i had 11 general officers from 11 different countries working in multinational headquarters that i ran. and that wasn't the nature training mission which is, of course, multinational to begin with. and leadership in these kinds of environments is a collaborative effect. it's a huge boom, i believe, to have this kind of diversity of perspective on the senior leadership team. so that a person like me doesn't get locked into my experience alone, which is maybe extensive in some areas but very limited in some areas. so the multinational aspect is huge and then last on the contract business, i would make

just two comments. first, if we could shift from what i call two-finger contracting to five-finger contracting. in the actual business that i ran in iraq and i'd seen in afghanistan, the movement is actually five fingers, you know, we do it for them and we do it and they watch and we do it and they watch and then they do it. unfortunately, our contracting goes from thumb to little finger. and it i say somes out everything in between. we have to learn how to write contracts that acknowledge all five fingers. the second, the finesse in our contracting system -- if it's not nonexistent it's almost immeasurable. the reality of any of these situations we're talking about is that facts on the ground shift very gar and -- very

quickly. and you're stuck with the requirements written. and you're in assistant mismatch, therefore, not because of anything that people have done bad and not 'cause anyone is not good, they're all good. but if you write a contract in 2005 that's activated in 2006 that can't flex to the situation required in 2007, you're automatically in a position where ends and means don't match. now, i'm not a contracting professional. and i'm very happy not to be a contracting professional but i do hold that out as a challenge to those contracting professionals we have because it is a big problem. >> last word. >> okay. just to comment on the little things that can make a big difference. i think one take-away that i would have from many different experiences is the quote that margaret mead -- it's attributed to margaret mead and really it's a small group of people who come

together and work that really make that difference. and i say that because a lot of times it's just somebody taking a step up and connecting with others that that can be modeled for others to follow. for example, in one company i was working in, the police were not interested in engaging. and it came from the top. but a change agent in whatever we want to call them, someone who saw a vision stepped across the table to actually meet with some of the human rights defenders who have been throwing, you know, sticks and bricks and everything at them and it was such a divide on each side that he stepped across and started working with that person. the other divide was the senior leadership and police. you'd walk in a room maybe a sea of blue and then of the senior leadership nobody spoke except for that person and i knew there was a lot of important information out there but we weren't going to get it. but in certain regions, the leader took the step to let his junior officers including the women in the room -- there were

just two, speak up. and ones he did that, with information that we got was unbelievable and again, that was an opening. the bright spots are people stepping up and be willing to make those connections. >> thanks very much. i'd like to thank our panel for a very informative presentation. [applause] >> i'd like to thank our audience for really good questions. i know all of us sitting down looking down of you this is an audience full of friends and colleagues and experts in this field and thank you for coming out on a warm summer morning here in washington. and i'd also like to thank c-span for being with us throughout this morning. i have a request from our security folks, and that is when you exit the room, if you will just go across the atrium

through the double doors, that's the fastest way out the building. we found this is a very complicated building. sometimes we found people wandering for days who decided to go up the steps and were never seen again. so out the atrium and out the double doors. thank you very much. [inaudible conversations] >> we think there are too many structural barriers to entry and growth by these competitive

options that consumers should have better access to. >> tonight, the wireless associations discuss a new fcc report on the choices consumers are making in the wireless phone market. the communicators on c-span2. >> the supreme court is now available as a standard and enhanced ebook and tells the story of the court through the eyes of the justices themselves. 11 original c-span interviews with current and retired justices. this new edition ebook includes an interview with the newest supreme court justice elena kagan and add to your experience by watching multimedia clips from all the justices. the supreme court, wherever ebooks are sold. >> we take you live now to capitol hill as the senate convenes to resume consideration of the motion to proceed to a bill on the deficit. a roll call vote has been scheduled for 5:30 eastern time.

the nonbinding senate measure will call for those with high incomes to make meaningful contributions to help reduce the deficit. you're watching live coverage of the u.s. senate here on c-span2. and also this hour, just to mention, the president will be meeting with the vice president and congressional leaders to continue talks on the debt and deficit. you can find continuing coverage on the c-span networks. the presiding officer: the senate will come to order. the chaplain dr. barry black will lead the senate in prayer.

the chaplain: let us pray. lord god almighty, unto whom in all ages people have lifted up their hearts, as we begin this week we are aware that americans are watching on television the daily business of this chamber. grant our senators wisdom to solve the complex issues of our time. inspire them to see the wisdom of cooperation. strengthen their minds and bodies to endure long hours of labor and to build alliances across the aisle

that will lead us and our nation to a better tomorrow. let the struggles they experience help them develop a more robust and meaningful relationship with you and those around them. may your spirit be above and among them that in these days of destiny they may make your ways their ways. amen. the presiding officer: please join me in reciting the pledge of allegiance to the flag. i pledge allegiance to the flag of the united states of america, and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all.

the presiding officer: the clerk will read a communication to the senate. the clerk: washington, d.c., july 11, 2011. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable christopher coons, a senator from the state of delaware, to perform the duties of the chair. signed: daniel k. inouye, president pro tempore. the presiding officer: under the previous order, the leadership time is reserved. also under the previous order, the senate will resume consideration of the motion to proceed to s. 1323, which the clerk will report. the clerk: motion to proceed to consideration of s. 1323, a bill to express the sense of the senate on shared sacrifice and resolving the budget deficit. the presiding officer: under the previous order, the time until 5:30 p.m. will be equally divided and controlled between the two leaders or their designees.

mr. conrad: mr. president. the presiding officer: the senator from north dakota. mr. conrad: i ask further proceedings on the quorum call be dispensed with. following leader remarks, the senate will resume the motion to proceed to s. 1323, a bill to express the sense of the senate on shared sacrifice in resolving the budget deficit, with the time until 5:30 equally divided between the two leaders or their designees. at 5:30, there will be a roll call vote on the motion to proceed to s. 1323.

mr. president, i understand that s. 1340 is at the desk and due for a second reading. the presiding officer: the clerk will read the title of the bill for the second time. the clerk: s. 1340, a bill to cut, cap and balance the federal budget. mr. conrad: i would object to any further proceedings with respect to the bill. the presiding officer: the objection is heard. it will be placed on the calendar under the provisions of rule 14. mr. conrad: i thank the chair. mr. president, we are in the midst of a defining debate on the budget of the united states. all of us understand we have a debt threat looming over this country that's as significant as anything we have faced in many years. mr. president, democratic members of the senate budget committee have worked for weeks

to device a blueprint that they think has merit and that deserves to be part of the debate, and so, mr. president, today i am here to outline the key elements of that budget blueprint. first of all, i think it's critically important that we all understand that we are as a nation borrowing 40 cents of every dollar that we spend. that is not a sustainable circumstance. admiral mullen, the chairman of the joint chiefs of staff, has indicated that our national debt is our biggest national security threat. this is the top military man in our country saying the debt threat is the most serious national security threat. why does he say that? well, because here are the facts. the debt of the united states, the gross debt, all of the debt that we owe is now approaching 100% of our gross domestic

product, the highest level it's been since after world war ii. this chart shows a threshold of 90%, a gross debt of 90%. why did we draw that line on this chart? because, mr. president, the best evidence we have tells us when you cross the 90% threshold on the gross debt of any nation, you are in the danger zone, you are in the red zone. the distinguished economist carmen reinhart and kenneth rogoff wrote a book "growth in a time of debt." here is there conclusion. we examine the experience of 44 countries spanning up to two centuries of data on central government debt, inflation and growth. our main finding is that across both advanced countries and emerging markets, high debt to g.d.p. levels, 90% and above,

are associated with notably lower growth outcomes. mr. president, this is a key fact all of our colleagues need to know. when your gross debt goes over 90% of your gross domestic product, your future economic prospects are diminished. that means fewer jobs created, fewer -- less economic opportunity, a nation that is at risk. mr. president, that's where we are. and look at what the congressional budget office says is where we are headed. on the current trajectory, we're headed for a debt that will go to 200% of the gross domestic product of the country. and this is not the gross debt. this is the publicly held debt, which is smaller than the gross debt. so this chart now looks at the publicly held debt and says that

is headed for 200% of g.d.p. mr. president, we cannot stay on this course. it is critically important that we change direction. for every one percentage point in interest that we pay, pay, $1.3 trillion is added to the debt. for those who say don't worry about the debt limit, let's remind them that what will occur if the united states refuses to pay the bills that it's already incurred is that the interest rates will go up. those who have loaned us money, if we renege on our commitments to pay them, will then insist on higher interest rates, all borrowers will insist on higher interest rates, and for every 1% increase in interest, we will pay $1.3 trillion more on our

debt. so those who think somehow by not extending the debt limit we're going to help on the debt, no, just the opposite is true. the debt will increase and increase dramatically. mr. president, here are the hard facts with respect to the relationship between spending and revenue over the last 60 years in this country. the red line is the spending line. the green line is the revenue line. and what this shows very clearly is that spending is the highest it's been as a share of g.d.p. in 60 years. yes, we have a spending problem. but it is not exclusively a spending problem, as some assert on this floor, because revenue as a share of g.d.p. is the lowest it has been in 60 years. to deny that essential fact is to deny the significant elements of a compromise that are required to solve this problem.

mr. president, spending is the highest it's been in 60 years as a share of our national income. revenue is the lowest it has been in 60 years as a share of our national income. both have to be addressed if we're going to solve this problem. and for those who say well, it's not a revenue problem, yes, it is. this is an article that appeared sunday, may 1, in "the washington post"." on the way to a surplus, a a $12 trillion u.s. detour." remember in 2001, we were told we were on the way to paying off the debt of the united states. this article by lori montgomery in "the washington post" on may 1 indicated the fundamental reasons that instead of paying off the debt, we have a debt that is mushrooming. this one paragraph says it all.

the biggest culprit by far has been an erosion of tax revenue triggered largely by two recessions and multiple rounds of tax cuts. together, the economy and the tax bills enacted under former president george w. bush and to a lesser extent by president obama wiped out $6.3 trillion in anticipated revenue. that's nearly half of the the $12.7 trillion swing from projected surpluses to real debt. federal tax collections now stand at their lowest level as a percentage of the economy in 60 years. the point that i just made. so, mr. president, when democrats on the senate budget committee approached this problem, we looked at it in historical perspective. now did we get into this problem?

half of it is on the revenue side. and so we chose to deal with a solution that deals on both sides of the ledger. yes, to cut spending. absolutely that must be done. but we also cut so-called tax expenditures that are really just spending by another name. loopholes, exclusions, deductions, tax preferences, abusive tax shelters and tax havens that are hemorrhaging revenue that rightfully belongs in the treasury. people avoiding what they legitimately owe to the united states by engaging in abusive tax shelters and tax havens that is costing us substantial revenue, and we'll get into the specifics of that. the house republicans chose a different path. they only want to focus on half the problem. they only want to focus on the spending side of the equation. they don't want to touch the revenue side of the equation.

mr. president, i believe that just denies reality. that runs away from the hard reality of how did we get in this situation? and again, we got there by, yes, spending that is higher than it has been in 60 years as a share of national income, but also revenue that is lower than it has been at any time in 60 years. mr. president, if we're distrudgeful with ourselves, we're going to have to dpeel with both sides of this equation. mr. president, the plan that senate democrats on the budget committee have agreed on looks at a budget framework that includes roughly the same amount of deficit reduction as the house republican plan. in fact, we have somewhat more deficit reduction than did they. they have a plan that was $3.9

trillion of deficit reduction. our plan is $4 trillion. mr. president, the actual difference is about $50 billion, but because of rounding, it turns out they're at $3.9 trillion. we're at $4 trillion. the actual disiches about $50 billion more in deficit reduction -- the actual difference is about $50 billion more in deficit reduction. so, mr. president, this is what happens to deficits as a share of g.d.p. under the framewor frk that we're offering. you can see, this year the deficit i is 9.3% of gross domestic product. we bring it down very steadily until we get down to 1.3% in the tenth year. and lower deficit in -- a lower deficit in similar terms as a share of g.d.p. thank the house republican plan. let me repeat that. the senate democrats on the

budget committee, our plan, reduces the deficit by the tenth year by more than the republicans in total and in the tenth year we have a lower deficit in dollar terms and a lower deficit as a share of g.d.p. mr. president, this is what happens to the debt itself, the gross debt. as you can see, it peaks out at 100% in 2011 and then we bring it down gradually but steadily to about 98% by 2021. the key is, instead of having the debt line going up, up, and away burying this country under a mountain of debt, we stablize the debt and begin to bring it down. something that every serious economist has said is absolutely essential. mr. president, in terms of spending, i indicated current spending is the highest it has been as a share of g.d.p. in 60

years. our plan takes that down from 24% of g.d.p. to 23% and then freezes it at 22% of g.d.p. for the rest of this decade. now, some will say, there go the democrats again, they're spending too much money. i would say to them, if we could get the spending down to the levels that obtained during the reagan administration, would be acceptable, because exactly what we do. under the plan of senate budget committee democrats, we get spending down to the exact same level that pertained to the same level during ronald reagan. spending averaged 22.1% of g.d.p. that is precisely what our spending equals in the budget framework i outline here today. mr. president, we include every

part of the federal budget, including the defense budget. just as the fiscal commission did, just as every other bipartisan deficit-reduction plan has included, we looked to defense spending for savings, because no part of the budget can be off the table in terms of a deficit-reduction plan. i would say, separately, social security we deal with separately, because social security need not be, should not be part of a deficit-reduction plan. savings on social security ought to be for the purpose of extending the solvescy of social security. but in terms of those parts of spending that are considered on-budget, defense has to be included in any savings. why do i say that? well, look what's happened since 1997. spending on defense and war has

gone from $254 billion a year to $688 billion a year. it is a key reason spending has exploded. before the fiscal commission, some of the defense analysts, the best defense analysts in the country came before us and told us, 51% of all federal employees are at the department of defense p. 51% of all federal employees are at the department of defense. and that does not count the contractors. when i asked these analysts, well, how many contractors are there? their response was, senator, we can't tell you. i said, is that a matter of security? is that a matter of clearances? no, senator, we don't know. i said, well, what's the range? about how many contractors are there working at the department of defense? the answer was, senator, 1

million to 9 million. between 1 million and 9 million. we can't tell you which is right. i mean, we've got a serious problem. -- of contractors working for the department of defense and the department of defense can't even tell you how many contractors they've got working for them. mr. president, we've got a problem. the previous secretary of defense, secretary gates, said this. "... the budget of the pentagon almost doubled during the last decade. but our capabilities didn't particularly expand. a lot of that money went into infrastructure and overhead and, frankly, i think a culture that had an open checkbook." mr. president, a lot of that money went into infrastructure and overhead -- overhead -- and,

frankly, it culture that had an open checkbook. mr. president, we can't afford an open checkbook anywhere. we've got to go after waste, fraud, and abuse in every department. we've got to go over infrastructure spending that really doesn't contribute to improving our defense. we've got to go after overhead -- overhead costs that have really run amok. mr. president, chairman ryan of the house said this about defense: "there are a lot of savings you can get in defense ... there's a lot of waste over there, for sure." and yet when they came with their plan, they continued the path of increasing defense spending year over year without any discipline. this is the plan that they outlined. from $529 billion a year headed for $667 billion a year. and that doesn't count the war funding. mr. president, in our plan, we

have done what the fiscal commission called for. we have acheeched the same savings out of -- we have achieved the same savings out of security as the fiscal commission did. $886 billion out of the security function. now, that includes defense. obviously defense is most of security. but in the security category, also falls homeland security, also is included veterans' spending. veterans' spending, by the way, is one place we don't cut a nickel. the veterans deserve to have the promises that we have made to them kept. and under our budget, every dollar that has been promised to veterans will go to them. mr. president, that doesn't mean we can't save money out of the security side and the fiscal commission, which by the way is the only bipartisan plan that has come from anywhere -- five

democrats, five republicans, one independent -- endorsed a plan with $886 billion of savings over ten years out of the security function. and the budget by the senate budget committee democrats adopts that finding. mr. president, the budget that the senate budget committee democrats are advancing also has government-wide savings. we freeze members of congress pay for three years. we freeze legislative branch and white house budgets for three years. we freeze civilian pay for two years. that is already -- that has already been adopted, but we include that in our budget. we reduce the federal vehicle fleet by 20% because, frankly, in our investigations, we find in this area that there has been

an explosion of vehicles in the federal fleet, and i think all of us have seen it with our own eyes. this is something that's got to be taken on. we reduce travel costs of federal agencies by 20%. we reduce federal printing costs by $1 billion by 2015. and we reduce the number of contractors that we have previously described. mr. president, the house republican plan on revenue is really almost impossible to believe. in a circumstance in which we have record debt, in a circumstance in which the revenue of this country is the lowest it has been in 60 years, what is part of their answer? cut taxes some more. and cut them for the very wealthiest among us. cut them another $1 trillion for

those who are the most fortunate among us. mr. president, i'm not making this up. this is the house republican plan. take a circumstance in which we have record debt, the lowest revenue we've had in 60 years, and cut taxes for the very wealthiest among us by another $1 trillion. by extending the top rate cuts, by a $5 million estate tax exemption. mr. president, they actually cut revenues $4.2 trillion below the c.b.o. baseline. let me repeat that. they actually cut revenue in their plan $4.2 trillion below the congressional budget office baseline.

mr. president, that is inexplicable. maybe we can start to understand it when we look at what a former reagan economic advisor said about the house republican plan. mr. bartlett said this: "distributionally, the ryan plan" -- the house republican plan -- "is a monstrosity. the rich would receive huge tax cuts while the social safety net would be shredded to pay for them. even as an opening bid to begin budget negotiations with the democrats, the ryan plan cannot be taken seriously. it is less of a wish list than a fairy tale ultimaterly disconnected from the real world, backed up by make-believe numbers and unreasonable assumptions. ryan's plan isn't even an act of courage; it's just pandering to the tea party. a real act of courage would have been for him to admit, as all serious budget aifnlgts know,

that revenues will have to rise well above 19% of gross domestic product to stablize the debt." mr. president, revenue today is 14.5% of g.d.p.; again, the lowest it's been in 60 years. if we look at the last five times the budget has been balanced, in the last 50 years, here's what we see: revenues had to be close to 20% of g.d.p. they were 19.7% in 1969, 19.9% in 1998, 19.8% in 1999, 20.6% in the year 2000, and 19.5% in 2001. that's the last five times the budget has been balanced. each of those times revenue was close to 20% of g.d.p.

now it is 14.5% of g.d.p. anyone who seriously argues that you can solve this problem just on the spending side of the equation is not being serious. mr. president, the budget framework that we offer today has revenues at 19.5% of g.d.p., almost equivalent to what it was during the clinton years when we had balanced budgets and in fact stopped using social security money to pay other bills. during the clinton years, revenue averaged 19.4% of g.d.p. under our plan, it averages 19.5%. so revenue is clearly not out of line compared to the other times we've balanced the budget and in fact during the clinton years when we had the longest economic expansion in this nation's history. for our colleagues who say, oh,

you can't touch revenue or you'll kill the economy, you'll kill job creation, really? how about the historic record, the historic record shows very clearly that during the clinton years when you had revenue at the same level as tbhef this plan, you had the longest economic expansion in this nation's history -- 39 quarters, 32 of those quarters during the clinton years. the -- the longest period of uninterrupted economic growth in this nation's history. and you had revenue at the same level that we're talking about in this plan. mr. president, facts are stubborn things. facts are stubborn things. a previous president said that. he was right. the fact is, we had the longest period of uninterrupted growth

in our economy during a period in which revenue was at the level that we are proposing in this budget. that is a fact. mr. president, the proposals in the budget framework also seek to bring us tax fairness. we have tax reform that simplifies the tax code, scales back tax loopholes, protects the middle class, improves progressivity and fairness in the code, promotes u.s economic growth and u.s. competitiveness. because we lower the corporate rate. we lower the corporate rate from 35% to 29% to make america more competitive. and we pray for it by closing corporate loopholes. we also address the tax cap, offshore tax havens and abusive tax shelters and ensure that corporations pay their fair share. mr. president, the specifics of our revenue proposal are as

follows. the tax cuts, the so-called bush-era tax cuts, are extended for singles earning up to $500,000 a year and for couples earning up to a million dollars a year. so, mr. president, 99% of the american people will see no rate increase, none. 99% of the american people will see no rate increase. 1% will and those are those sufficiently fortunate to be earning over a million dollars a year. they're the top 1% in this country, and we ask them to go back to the rates of the clinton era with a top rate of 39.6%, cap gains rate at 20%, dividends rate at 20%. those are the very rates that pertained when we had the longest economic expansion in our nation's history. for those who say it's a job killer, they've got to come up here and explain how that can be

since history shows something quite different than their claim. mr. president, we also provide for alternative minimum tax relievrelief. that costs $1.5 trillion. that's not a tax increase. we are lowering taxes that would be imposed by the alternative minimum tax that is increasingly gobbling up middle-class taxpayers. we're preventing that from happening. it costs $1.5 trillion to fix so we're replacing that revenue with other revenue. i don't consider that a tax increase. that is merely substituting revenue for revenue that we are subtracting to prevent middle-class people from being caught up in the alternative minimum tax. we also reform the estate tax. going back to 2009 levels, which

are $3.5 million a person, $7 million a couple. that means well over 99.5% of estates would be completely exempt. mr. president, that is a fair plan. we also assume net $2 trillion of additional funds from closing tax loopholes, cutting tax subsidies, promoting tax fairness. that is over ten years. we assume that tax preferences for individuals are reduced 9% to 17% depending on the amount of offshore tax havens and abusive tax shelters that are closed. and we assume, as i indicated earlier, that the corporate rate is lowered to 29%, offset by reducing corporate tax expenditures and closing corporate tax loopholes, specific policies to be determined by the finance committee, as they always are.

mr. president, let me indicate, when i indicate that there is a range for reducing tax expenditures from 9% to 17% depending on how much savings we get out of offshore tax havens, here's the math. over the next ten years, the tax preferences, or tax expenditures, as they're sometime called, will cost the treasury $14 trillion. let me repeat that. the loopholes, the exclusions, the preengsz in the tax code will -- preferences in the tax code will cost the treasury $14 trillion over the next ten years. on top of that, offshore tax havens and abusive tax shelters will cost the treasury another $1.4 trillion. that's according to the permanent subcommittee on investigations. so, mr. president, if we recover nothing from tax havens, to

reach our revenue numbers, you'd have to reduce tax expenditures 17%. but on the other hand, if you recover 80% of tax haven losses and tax shelter losses, the reduction in tax expenditures would only have to be 9%. 17% reduction in tax expenditures if you get no savings from tax havens and tax shelters. a 9% reduction in tax expenditures if you recover 80% of the losses from tax havens and tax shelters. probably the realistic expectation ought to be somewhere inbetween those extremes. mr. president, if c.b.o. scored the proposal by senate budget committee democrats, they would not say there's any tax increase here at all.

let me repeat that. if the congressional budget office scored this proposal by senate budget committee democrats, they would say there's a $765 billion tax cut over ten years. well, how can that be? how can i be saying there's $2 trillion of additional revenue over ten years and the congressional budget office says if they evaluated this plan by senate budget committee democrats, they'd say there's a $765 billion tax cut? the reason is simple. in our plan, we extend all of the middle-class tax cuts. in addition, we actually broaden the middle-class tax cuts so that nobody is affected by a rate increase unless they're a couple earning over a million dollars a year. we also provide the alternative minimum tax relief to prevent millions of middle-class people

from being affected by that law. as i indicated earlier, that costs $1.5 trillion over the next ten years to shield middle-class taxpayers from that law. and, third, we provide estate tax reform at the 2009 levels so that well over 99% of estates are completely shielded, are completely exempt. mr. president, again, when our republican colleagues say, some of them do, "well, you can't have a higher tax rate even on those earning over a million dollars, it will kill the economy." really? how about looking at facts. how about looking at the historic record. how about being informed by what has actually happened before? because when we look at history, we find quite a different answer

than our friends on the other side are providing. what we find is, the last time the top rate for those earning a million dollars was 39.6%, we experienced the longest period of uninterrupted economic growth in the history of the united states. that is a fact. we had 39 quarters of economic growth from 1991-2000. for 32 of those quarters, bill clinton was the president of the united states. and we had a top rate of 39.6% on those couples earning over a million dollars a year. mr. president, our friends on the other side say, "you'll kill jobs." you know what's fascinating? i remember this debate back when we passed deficit reduction under president clinton. and you know our friends on the other side said the exact same thing then. i remember i was seated here listening to the republican leader then claim that if we

passed the clinton plan to get the deficit down and balance the budget, we would crater the economy. those were the exact words that our friends on the other side used at that time. that if you raised rates on the wealthiest among us, it would crater the economy. what happened? not only did we not crater the economy, we had the longest period of economic expansion in our nation's history and 24 million jobs were created, the best record ever. that's the facts. that's what really happened. not some fairy tale here about what happens if you get the country back on track, if you move toward balancing the budget, if you move toward getting the debt down. because that is, in fact, what happened during the clinton years. yes, we had the highest rate of

39.6% on those earning over a million dollars but it didn't crater the economy. no. the economy grew, the longest economic expansion in this nation's history. and, mr. president, 24 million jobs were created during that period. the best record ever. mr. president, let's just look again at history. the last five times economic growth was above 4% in this country, the top tax rate was 39.6% on those earning over a million dollars. facts. facts are stubborn things. 1994, top rate was 39.6%. growth rate 4.1%. 1997, top rate was 39.6%. economic growth was 4.5%.

1988, 4.4% economic growth. 1999, 4.8% economic growth. 2000, 4.1% economic growth. the strongest economic growth going back decades in every year the top rate on people earning over a million dollars was 39. 39.6%, precisely what we're proposing in this plan. mr. president, i think it is undisputed by serious economists of whatever philosophical stripe that these tax expenditures have to be reined in. we are now spending $1.1 trillion a year on tax expenditures. some of the most conservative economists in the country have said that's just spending by a different name. mr. president, here's martin feldstein, professor of economics at harvard, chairman of the council of economic

advisors under president reagan, and he's written a column called "the tax expenditure solution for our national debt." here's what he said. "cutting tax expenditures is really the best way to reduce government spending." it's called revenue but it's really spending. "eliminating tax expenditures does not increase marginal tax rates or reduce the reward for saving, investment, or risk taking. it would also increase overall economic efficiency by removing incentives that distort private spending decisions and eliminating or consolidating the large number of overlapping tax-based subsidies but also greatly simplify tax filing. in short, cutting tax expenditures is not at all like other ways of raising revenue." this is from the head of the

economic advisors under president reagan saying we ought to cut tax expenditures. that's exactly what the senate democratic budget plan does. we cut tax expenditures 9% to 17% depending on how much we are able to save from closing off these offshore tax havens and the abusive tax shelters. if we get no savings from tax havens and tax shelters, then we'd have to reduce tax expenditures 17%. if we're able to reduce tax havens and the other loopholes, the offshore loopholes, the abusive tax shelters, by 80%, then we'd be able to reduce tax expenditures by 9%. mr. president, it's just not martin feldstein who said we ought to go after those tax expenditures. it's also alan greenspan, the former chairman of the federal reserve. here's what he said. "i think that the republicans ought to identify a very

significant amount of so-called tax expenditures which in fact are misclassified. they are expenditures, they are outlays and many are subsidies and subsidies are not the type of thing that you want for an efficient market system. there are a lot of them." mr. president health care reforms that's what we're proposing. let's go after these subsidies, these subsidies, these exclusions. while we're at it, let's go after these offshore tax havens, abusive tax shelters. let's shut them down. if there is any doubt about where this money is going, here it is. 26.5% of tax expenditures go to the top 1% in this country. 26.5% of all tax expenditures go to the top 1%. so when we're saying you may have to reduce tax expenditures

17%, you could do it all just with the top 1%, those earning over $1.1 million a year. because that's where the benefit is going. let me show you in another way. the top 1% in dollar terms, the value on average of tax expenditures for those who are in the top 1% in this country, earning $1.1 million per year, they get on average a benefit every year from tax expenditures of over $205,000. for those who are in the middle quintile, those earning $39,000 a year, their average benefit is $3,000. you can see that the top 1% have a benefit from tax expenditures

that is 66 times what people in the middle get. mr. president, it is not unfair to go to those who have had the greatest benefit from the national economy over the last two decades and say to them, "we need you to help a little bit more to get out of this rut, this debt rut that we're in." and you know what? that's not unfair, because they have had the greatest benefit over the last 15 years. and here's something that shows it, i think, conclusively. this is the effective tax raeult for the 4 hundred -- rate for the 400 wealthiest taxpayers in america. in 1992 it was about 27%.

in 1995, the tax rate of the wealthiest 400 was 30%. 29.9, to be exact. look what's happened since 1995. the effective tax rate for the wealthiest 400 taxpayers in america has gone down to 16.6%. they have had their tax rates cut almost in half. okay? anybody else had their taxes cut in half? i don't think so. the people who have had their taxes cut in half are the wealthiest among us, so it's not unreasonable to go back to them and say, hey, wait a minute, we've got to go back to what the tax rates were here. not back to an effective rate of 30%, but a top rate that we had in the clinton years when we had the largest economic and longest

economic is expansion in our nation's history. that seems reasonable. mr. president, we also know it's not just on the individual side but on the corporate side as well, this is a little five-story building down in the cayman islands. 18,857 companies say they're doing business out of this little building. anybody believe that? anybody believe 18,857 companies are doing business out of this little five-story building down in the cayman islands? i would say that's the most efficient building in the world. can you imagine, a little five-story building, 18,857 companies say they're doing business out of there. they got maybe 100 employees in that building. those are the most efficient people in the entire world.

unbelievable what they're doing. you know what? they're not doing business. they're doing monkey business, because what they're doing is cheating all the rest of us who pay what we owe. why are they down in the cayman islands, 18,857 companies, calling that little building home? because there are no taxes down in the cayman islands, and they're showing their profits in subsidiaries that they say are operating out of that little building. so they can avoid paying taxes that the vast majority of us pay right here in the united states. that's outrageous. that's unfair. our republican friends say, oh, you can't touch that. it's a tax increase if you do. really? that's a tax increase? i don't think so. mr. president, offshore tax haven abuse is proliferating.

if anybody doubts it, go google offshore tax havens and see what happens. see what happens if you google offshore tax havens. the experts here on the permanent subcommittee on investigations have said this. experts estimated the total loss to the treasury from offshore tax evasion alone approaches $100 billion a year including $40 billion to $70 billion from individuals, another $30 billion from corporations engaging in offshore tax evasion. abusive tax shelters add tens of billions more. mr. president, the democrats on the budget committee said we've had it. we're going after those people. we're going to insist that they pay their fair share just like the vast majority of americans already do. so we're saying we're coming after you. you've got a tax haven. you're down in the cayman

islands, we're coming after you. you've got an abusive tax shelter, we're coming after you. it's not fair to all the rest of us, we're paying what we owe. mr. president. mr. president, education is the foundation for future economic strength. an educated population is a key source of economic growth. broad access to education was by and large a major factor in the united states economic dominance in the 20th century and in the creation of a broad middle class. indeed, the american dream of upward mobility both within and across generations has been tied to access to education. this from harvard economist claudia golden and lawrence katz, "the future of inequality: the other reason education matters so much."

mr. president, when we see what our friends on the other side are doing, they're cutting education 15%. we don't believe that that's the right priority for the country. yes, overall spending's got to be cut. we do cut spending almost $2 trillion in the democratic blueprint. almost $2 trillion, but not education. mr. president, another key priority is energy. we all know what's happened to gas prices. they have soared from $1.81 a gallon in december of 2008 to over $3.50 a gallon by july 4. i just paid $3.77. we all know what's happened to gas prices. and many of us believe a key priority is to reduce our dependence on foreign energy. house republicans have a different idea. they cut the programs to reduce

our dependence on foreign energy by 57%. we reject that proposal. we don't think it's in the national interest. mr. president, infrastructure: roads, bridges, airports, rail. here's what the u.s. chamber of commerce said about infrastructure spending. if we don't change course over the next five years, the economy could forego as much as $336 billion in lost economic growth as transportation networks continue to deteriorate. i'm well aware of the fiscal constraints facing this congress and the nation, but we must avoid cutting off our nose to spite our face. without proper investment and attention to our infrastructure, the united states economic stability, potential for job growth, global competitiveness and quality of life are all at risk. that from thomas donohue, the president and c.e.o. of the u.s. chamber of commerce.

mr. president, republicans in the house weren't listening, because they proposed cutting transportation funding in their budget by 30%. we reject that cut as well. mr. president, it does not make sense to cut education, cut infrastructure. it does not make sense. it will only weaken our position. and on health care, the house republican plan ends medicare as we know it, replace it is with a voucher system -- replaces it with a voucher system, block grants kphaeudz, -- medicaid. it ends the countercyclical nature of the medicaid prafplt and it defunds health care reform, increasing the number of uninsured by at least 34 million people in this country. mr. president, the house republican plan, they've said it

saves medicare. i don't think so. i think it kills medicare. why do i say that? because under traditional medicare, now the beneficiary pays 25%. somebody who is eligible for medicare pays 25% of the bill. under the house republican plan, they would pay 68% of the bill. that just stands things on their head. instead of people having medicare as a social safety net when they get to their senior years, they would have it pulled out from under them. mr. president, we have rejected the house g.o.p. approach and would remind our colleagues that we have had large health care savings that were already enacted last year in health care reform. the congressional budget office says that will save in the second ten years $1.3 trillion.

so, yes, everything's got to be on the table, but we just took a big run at getting our health care costs back in line. $1.3 trillion in deficit savings, according to c.b.o. mr. president, in conclusion, the overall -- the overview of the budget framework that we're offering our colleagues for their consideration provides $4 trillion in deficit reduction over ten years. it's actually $5 trillion if measured on the same basis as the fiscal commission. we have adopted what we think is a more plausible baseline in light of things that have happened so far this year. stabilize the debt by 2014, cut the deficit to 2.5% of g.d.p. by 2015 and 1.3% by 2021. we have tax reform that simplifies the code, that closes

loopholes, that goes after offshore tax havens and abusive tax shelters and restores shelters, will reject the house g.o.p. plan to end medicare as we know it. we protect education, energy and infrastructure investments. we have balanced deficit and debt-reduction planned. cutting spending by about $2 trillion. providing additional revenue by about $2 trillion. and let me conclude as i began by saying our revenue plan would be scored by the congressional budget office as being a $765 billion tax cut, because we are replacing revenue lost by extending other tax cuts. we're extending all the middle-class tax cuts and expanding middle-class tax cuts up to those earning $1 million a

year. and we are fixing the alternative minimum tax. that costs $1.5 billion over ten years. i don't consider that a tax increase at all, because you are reducing revenue that would otherwise come into the treasury under the alternative minimum tax, and i think almost all of us think is unfair, and replacing it with revenue by reducing tax expenditures, which even the most conservative economists in the country say needs to be done. mr. president, that is the blueprint that senate budget committee democrats are laying before our colleagues. we're under no illusions here. we know that this is a year in which the normal process is not being followed. we skwrupbd stand that there is -- we understand there is a leadership negotiation at the highest level. so we understand this is not going to be dealt with in the normal course of doing business. we understand there is a leadership negotiation. but we believe there are some

ideas in this package that deserve consideration as those negotiations go forward. mr. president, i thank my colleagues for their courtesy and their patience, and i look forward to this continuing debate as we take on the debt threat that looms over our nation. i thank the chair and yield the floor. the presiding officer: the senator from georgia. mr. isakson: mr. president, i commend the budget chairman on his contribution to this debate and his contribution to our country. i enjoyed listening to his remarks and appreciate many of the remarks he has offered today. i rise to talk about an anniversary today. not my anniversary or his, but the anniversary of dodd-frank which passed a year ago today. this morning at a press conference, barney frank, the part of dodd-frank, held a

speech before the national press club. in it, he made some comments that are very important, and i wanted to share my agreement and support for some of the things chairman frank said. i did not vote for dodd-frank when it passed a year ago, but i did along with senator hagan and senator landrieu offer an amendment which was adopted by the senate and ultimately agreed to by the conference committee. it was an amendment known as q.r.m., qualifying residential mortgage. an amendment to carve out an exemption from risk retention for a well-underwritten mortgage loan. the dodd-frank bill, as many in this room will remember, originally called for a total 5% risk retention on every residential mortgage made, which would have eliminated many people from making a residential residential -- making residential mortgages at all. in fact, chairman fraipg today or ranking member frank in his comments said we had is hundred% risk retention prior to 1994. he's right, that's when savings and loans made loans, and that's when the federal government

insured the others and savings and loans had preferential interest rate treatment so they could make preferential payments to people to save in their institutions versus a bank. but the federal government took away the .25% differential the savings and loans had and the banks became competitive with savings and loans for short and long-term deposits of savings and all the savings money flowed to the banks that offered other products, so savings and loans went out of business. when they did, there was no residential mortgage money or no conventional money available in america. what happened? the securitized market began, freddie may and -- freddie and fanny began. until the collapse which culminated in 2009 and we still are suffering from today, until that collapse, securitization was a very reasonable and safe way of raising capital for mortgages. what happened in the mortgage collapse was not a failure of equity or skin in the game by the borrower. it was the collapse of underwriting.

mortgage lenders got into loosey goosy underwriting, subprime credit. they made loans to people that were higher risk in order to price it at a higher rate. they blurred qualifying requirements where all of a sudden if you walked in, you fogged up a mirror with your breath, you could probably get a mortgage loan and they could probably securitize it. dodd-frank was designed to see to it that didn't happen again, and i commend them for it, but as government often does, sometimes it goes too far when the pendulum swings back the other way. thus is the dilemma we are in today as the rule being proposed by the fdic, comptroller of the currency on the q.r.m. rule is going to require in addition to quality underwriting a minimum 20% down payment. now, mr. president, for years in this country, we have had 90% and 95% conventional financing or in terms of f.h.a., 3.5% down payment and v.a. none at all. there have been various varieties of down payments that have been allowed based on the loan and its insurance, but with this rule of requiring risk

retention on any loan with a down payment of less than 20% except for an f.h.a. or v.a. loan is going to literally destroy what's left of the residential housing market because it will extract what is probably 40%, 45%, maybe 50% of the current market today. senator landrieu and senator hagan and myself in q.r.m. propose that people have a qualifying ratio of debt to income that's sufficient to amortize the debt, a third-party verification they have a job, a credit score that indicates they are willing to pay their payments, an appraisal that indicates the house is worth what they are paying for it, and a down payment with mortgage insurance required if the down payment was less than 20%. today i want to quote from ranking member frank. when talking about risk retention, he said i am troubled because there is an assault now on risk retention. barney frank, adding that even though he believes the 20% requirement in the q.r.m. rule being circulated is too high.

when asked further what would be a good down payment, he said at least 4 or 5, something above f.h.a. i want to commend the ranking member because esprit sighsly right. although he in his original intent with dodd-frank did not want to bifurcate residential qualifying mortgages by some having risk retention and some not recognize the importance of doing some of that bifurcation and having some exception to risk retention. they would have realized that anyway if you realized the exempted from the requirements of dodd-frank and left them solely on the conventional market. so i want to thank congressman frank today for his comments as they relate to q.r.m. and his identifying the down payment requirement currently being circulated is entirely too high. it is entirely too high and it's very important that we get the final rule which will be published on august 1. to have a reasonable down payment of 5% or more rather than 20% or more. 5% or more will ensure there is

skin in the game. with the other qualifying and underlying provisions in q.r.m., it will ensure the quality residential mortgages are being made. now, for the president, i'm not one to offer advice often to the president. he's the president, can do as he wishes, but today in politico, there is an article about the president is now returning to revisit the residential housing market because he understands employment is not coming back until housing comes back. he understands the american dream is for some people now an american nightmare, and he understands what's been done so far has not been working. well, i want to suggest to the president that if he thinks what's happening now is a nightmare, you just wait until this q.r.m. rule that is being circulated now actually goes in effect. without it being changed, continuing to require 20% down payment, you will have a further lack of demand in the housing market which already is almost at least anemic if not feeble, because most americans who want to buy a home can afford 5% or maybe 10% down, but they can't afford 20%.

and if you put -- and that's middle america. if you pull them out of what's already an anemic housing market, you have no housing market at all. as this dodd-frank rule is being circulated in the next two and a half, three weeks before it's finalized, i hope we can keep up the driewmbeat for the regulators to be reasonable in their approach. understand risk retention is important but also understand homeownership is important. understand we have a collapse that was not down payment related. we have a collapse which was underwriting related. so if you have strong underwriting and minimal skin in the game of at least 5%, you have a qualified residential mortgage that does not have to have risk retention, and therefore you have enough capital raise in the mortgage markets to fund a housing demand which hopefully is going to continue to grow. in the absence of securitization, in the absence of an exemption for risk retention for a qualified residential mortgage, there will be no housing market in the united states of america. f.h.a. is already under so much stress and duress, it is awful and it is frightful.

the veterans administration is a privileged loan for those who have served and made the ultimate sacrifice for our country, and they deserve it. freddie and fannie are exempted because we have them in conservativeship. they will not be in place for long. something will have to replace them. but if the q.r.m. rule being circulated now does in fact go in place as it is written with a minimal 20% down payment, it will be the last nail in the coffin of the american housing market. the unintended consequence of reaching too far to react to a terrible crisis which we had will put the death knell of the housing market squarely on the shoulders of this congress, this administration and these regulators who are currently carrying out those rules. so i just want to commend ranking member frank on his comments today, his recognition of the q.r.m. rule being circulated as too much, recognizing that a 5% or greater down payment is a reasonable approach and recognizing that underwriting is the important key to see to it that we have a

housing market. i commend the gentleman from massachusetts. i thank him for his adding that comment today to the national press club, and i hope the regulators, the fdic, the federal reserve, the comptroller and the treasury heard it, too. if they didn't hear it and they remain silent and continue with 20%, they will be doing exactly the opposite of what the president of the united states stated he wants to do, and that's bringing the housing market back in america. i yield back. mr. begich: mr. president? the presiding officer: the senator from alaska. mr. begich: before i talk on the budget, i want to commend the senator from georgia as someone who has been in the real estate business for many years. like the senator from georgia, you are absolutely right. if homeowners are stuck with a 20% minimum, the odds are it will crush the housing market. can i tell you this personally because i'm helping my mother do her paperwork now for her home, and i will tell you if she was required to put 20% down, she would not be buying that home today. we hope to close the home in the

next 45 days. we are fortunate that she is able to do that, but 20% would take her right out of the market, unable to buy the home that she wants to retire in. so the senator from georgia, thank you for making those comments. i hope more people hear it in the administration, that they don't hear that as we know with the housing market, it is a critical component of the ability for us to continue to pull ourselves out of the recession. so thank you for making those comments and noting that. mr. president, i know senator conrad was down here earlier, the chair of the budget committee, to talk about the democratic budget framework. first i want to say thanks to chairman conrad. here is someone who has been on the budget committee for 25 years since 1986, been chairman for many of those years. unbelievable capacity and understanding of the budget and what needs to be done. he understands it, he clearly recognizes that we have to have a balanced approach.

for months yourself, mr. president, myself, we sit on the budget committee along with the chairman on the democratic side have been working to try to figure out how we craft a balanced approach. how do we ensure that at the end of the day we recognize that we have to have a budget that continues to help grow our economy, create fairness in the system and make sure we take the responsibility of creating a more accountable and financially responsible budget, not only for this year but for the years out and dealing with a comprehensive approach to dealing with the deficit. this is not an easy task to say the least, and i can say stampeding here and i know, mr. president, as a member of the budget committee also none of those meetings were easy in the discussion if i could say that. robust debate, robust controversy on some of the

issues we talked about, but also a lot of ideas. what's in front of us. no one can match the chairman's approach of how to address an issue like this as he lays out slide after slide, the impacts from the macro to the micro of this budget and what it will mean, but it's clear that the budget proposal that he has laid out, the framework as he calls it by the democratic majority of the budget committee is is $4 trillion in cuts for deficit reduction and is achieved in a very fair and balanced way. without putting the burden on the backs of seniors, working families and small business. this is a balanced approach. the deficit-cutting mechanisms are drawn half from savings and half from revenues. revenues mean closing loopholes. his photo there which as we sit

here and present to the president are positions -- it's hard for people i know in the balcony to see the photo, but i know a five-story building, it's not a very attractive building. it's a five-story building in a tax haven that grants thousands and thousands of businesses a shelter from their fair share of paying their taxes. the idea of this revenue component of the proposal we put forward is closing loopholes, closing down tax-avoiding schemes that rely on abusive tax shelters, and, yes, cutting tax subsidies, ending the practice of giving the wealthiest of the wealthy tax subsidies so they not -- that they simply do not need. it really is just about promoting fairness. and guess what? as we dealt with this budget, it's a $4 trillion reduction, a number that the bipartisan commission hit as their target,

one we hear out there now in the press a lot, but one we felt was a reasonable approach. it's more than the house budget that was proposed. the house budget included savings only on the spending side. and actually worse in the outlook of the revenue side, and we simply do not believe that's good enough. the budget is about fairness, about ensuring that we have a system that's balanced, but also investing in the right areas so we have long term and continued growth. we do not give more tax breaks to corporations than the rich and then put the burden on the backs of seniors, poor kids, working families, disabled. it is unacceptable to put the burden on our most vulnerable population. the budget is truly a moral document. it defines where we're going to go, what we're going to do and how we're going to look in the next 10 or 20 years as a run.

i know this, when i was mayor of anchorage in 2003 when i got elected, i had a budget around around $215 million with a 3 million hole in it. pretty significant in sense of proportions, but we had to deal with spending and reducing it. we had to create a fairness in the revenue but we also had to invest, but we also knew the document and the work we were doing on the budget would define where our community goes. not just in the year that we're doing it but in the next three, four, five, 10 years, 20 years down the road. and i was very pleased, i know when i got elected to the senate, it was i think "businessweek" and others that rated the city that i was mayor of, anchorage, as probably the most likely city in the country to recover from the recession the fastest. as a matter of fact, "forbes" has listed it not only last year but this year as the place -- i think it's number three this year -- as the city of scwob growtjobgrowth. because of the foundation we laid.

we had to make some tough decisions. and i remember as mayor, it was no fun, i know the role of the presiding officer in his role in the county that he represented, they're tough decisions we have to make but you have to make them. i can still remember one headline that, as we were trying to figure out what to do with our library system that wasn't running as well as it could, i remember this headline today and it was "begich lays off 21 librarians." not a very good headline, to say the least. but what did we do? we reexamined it, reinvested, increased our partnerships with the private sector. today the library system is more robust than ever before. new branch libraries serving more kids than ever before. better facilities, new equipment, new technology. it's more robust than it's seen in decades because we had to make some tough decisions for the long term. that's where we are today. especially after the disappointing news we had this last week with regards to the job market. when economists thought we were going to have 120,000 new jobs, we ended up with just 18,000.

unemployment rising to 9.2%. as i said, this plan protects critical investment that will help us build the future of our economy here. it invests, as mentioned by chairman of the budget committee, chairman conrad, education, energy, which is, of course, for my state critical, infrastructure, core infrastructure that again i use my experience as mayor, we built more roads than all the mayors combined in the last 20 years in my short time as mayor of anchorage. we built more vertical construction -- fire stations, convention center, knew glee up, other facilities -- museum, other facilities that helped, water, sewer, power, new generation of gas turbines. all that because when you build that infrastructure, the private sector will attach to it, will be attracted to it and will build off of that.

so this budget that's again presented by the majority on the budget committee keeps our investments in education. energy, infrastructure, which, in turn, will ensure that we continue to move back into the realm of being more competitive on a worldwide market. mr. president, also, all of you have heard the budget proposal lays out some ideas on tax reform. not just a little bit here and a little bit there but fairly significant. when you talk about our corporate rate in this budget proposal by the majority in the budget committee, it brings it down to about 29%. it's not where i'd like it but it's better than where it's at today. it gets us more competitive on the world market. a group of us also have introduced a piece of legislation to, in advance of this budget proposal, it was the

wyden-coats-begich bipartisan tax fairness simplification act. the legislation provides real tax reform for a very outdated system. it plays off of exactly what the majority lays out, a budget proposal that talks about tax reform to create certainty for our business community for long-term investments, and we take it to one more step. not only do we look at the corporate component, we look at the individuals. can you imagine this -- mr. president, presiding offic officer, as an individual right now, we deal with six different rate structures. if we could truce to three -- reduce it to three, which our bill does, and you could do your tax return on one page. can you imagine the amount of time, effort, money individuals will save? so we take the budget proposal that the committee that i sit on, the presiding officer sits on, we take it one step further. not only do we focus on

stability and certainty for the business community, which is critical for the long-term investments they need to make to ensure all those trillions they have literally locked up in their cash accounts because they're not sure where we're headed as a country, we create certainty, but then we also ensure that the individuals -- that the individual has a compressed rate, a fairer system and simplified, which we think is an important part. tax reform is an integral part of the conversation on deficit reduction. i'm pleased that conrad's proposal also provides some of the same tax reform principles as i mentioned. as i mentioned, it not only deals with the rate structure but as he detailed very aggressively closing shelters, loopholes and not just for one industry over another industry, which has been some of the debate, it's a fairness of all. we look at it all because we

want everyone to be treated fairly. now, let me talk about a couple more pieces in the budget -- the majority's budget of the budget committee. again, chairman conrad went through in great detail but i want to put it in -- and emphasize this point some more. the a.m.t., the middle-class tax cuts, and what does this mean? what does this mean for the average person out there? right now, 4.3 million taxpayers are affected by the a.m.t. which is a small little tax provision that many years ago was set in place to really get the richest of the richest of the richest, but it was never indexed, never inflation adjusted so it's grown and gro grown. so there's 4.3 million taxpayers we have today, if we don't fix this tax problem, it will increase to 31 million people will have additional taxes to pay. so what are we doing?

we're putting what we call the a.m.t. patc patch to fix this pm so 30 million-plus people will not have this additional tax burden. we think it's right. we think it's the right approach, and it goes to the people who need it the most. in addition, this framework, again, that was laid out today, for single and couples -- singles, $500,000 and couples a million and more, will not receive the tax relief as everyone below them will receive. the tax relief will be focused on families who earn a million or less. why is that important? because not only are they families but almost 98% of all businesses, small businesses earn a million or less net income pretax. so you protect the small businesses that are the backbone of this country, the backbone of my state.

i can tell you, as a small business person -- you know this as one who worked in a small business that grew to a larger business -- it's the backbone. it's what makes the difference between the hiring of every single day when people see their revenue stream starts to increase, they hire -- small business hire immediately. they need those employees. but this proposal's not only for the individual and then also the larger corporation, bringing down that corporate rate, but it protects almost all the small businesses in this country and, of course, being very biased, in my state. what does that mean? that means when you calculate it all in real dollars -- and you heard the numbers -- when you think about the tax reductions, the tax savings for middle-class americans, small business is well over a trillion dollars. between the a.m.t. and

preserving the tax relief for families under a million dolla dollars. it's significant. that is money that small businesses will reinvest into their businesses employing other small businesses to do the work. it is families that will have more disposable income to put into the economy, which, of course, means more purchases from businesses, which means more hiring and just has a constant ripple effect. it's about people who will really actually put the money. when you talk to businesses and business owners, and i have, and i spent a lot of time with them as a small business person and a senator now meeting with business folks on a regular basis, it's over and over again they tell me, put the money in the hands of the consumer, then the consumers will spend that money, improve the economy because as they spend money, we will add more employees, buy more product, it goes on and on and on. so there is a difference between what we're trying to do in the

sense of the value of who receives the benefit of a comprehensive budget proposal. a budget proposal that the majority in the budget committee have worked -- has worked on for the last two, three months at least and before that trying to figure out the right approach. it is a balanced approach. it focuses, as i said, on dealing with budget reductions, accountability, ensuring that where there is waste, we go after it aggressively, where people are taking advantage of the system at the cost of the everyday person, we go after that. but we don't forget that we have to invest in the core issues of education, energy and infrastructure, s so we continuo grow this economy. if we don't have a balanced approach in this process -- and i know on the other side, they'll argue over and over again that first let's do spending and then we'll do with the other things. you have to do it all together. i'm telling you this as a person

who ran a city for almost six years, ran businesses for many years, you can't do it on one piece of the equation. it's a three-prong attack. you know, some of the folks i know around here after years of service have gotten a little amnesia of how it all occurred. we can sit here and blame individuals, blame certain presidents, certain majorities but we are where we are and we have to deal with this. and it's not going to be fun. it will be uncomfortable. it will make us have to dig deep into what's the right thing to do for the long-term health of this country and what we need to do to ensure that america becomes what it used to be, a stronger country economically than it is today. where we are in the lead when it comes to innovation, we're the lead when it comes to developing new technologies to lead this world in its economic growth. but we can't do it in this process of i'm only going to do one thing and only one thing

only. that doesn't work. it's going to be an approach that is broad sweeping. but we're not going to forget in this process that we're not going to throw people overboard that have helped build this ctd. when you think of our seniors who spent a generation building our country to where it is, ensuring that people like myse myself, the presiding officers and others, have an incredible opportunity, and thinking about where they need to be. this budget plan keeps social security off the table. we recognize there are issues that we have to deal with it and its sustainability and we recognize that, but it is not a driver, it has not contributed one penny to this deficit. we need to treat the social security in a way that ensures sustainability in the long term and there are simple solutions to that that i know we can get to. we also ensure that medicare is taken care of, that benefits are not reduced.

we also, as the chairman said so eloquently earlier, our veterans who serve now in iraq and afghanistan and all around the world and have served before, they're protected. veterans who we owe a great deal to, that in some cases before i got here, i know there was a lot of debate in the veterans' committee which i sit on, we've been working very hard to make sure they have the benefits they deserve. we need to make sure we fund them. when we send them to war and then they become veterans, after their service, we have an obligation, an obligation that should not be sliced and diced because we want to make political statements on the budget-cutting process. we neethey need to be protected. as i said, this budget does many things. it's a fair approach. it may not be the perfect in all sense. i can tell you, there's things that i don't like in it that are going to impact groups that are concerned about how we approach this, but we're all in this

together. we need to make the approach the right way. but those that are so hardened now that say it's only going to be about spending cuts, which get me -- let me make it very clear, i think the budget committee majority on the budget committee, the chairman, we're not afraid of dealing with budget cuts. we have do that, $2 trillion of budget cuts. -- we have done that, $2 trillion of budget cuts. $2 trillion. not billion. trillion. we have to get used to that here in the senate. not b's and m's, they're t's. $2 trillion of budget cuts. but we also tbals by -- balance it by getting rid of loopholes, tax shelters in a fair, balanced way so that everyone pays their fair share, put we als but we ae sure that we invest in our future. because if we're shortsighted around this place, we'll pay for it the next year and the year after that and the year after that. so this is truly i think the right approach that goes after ensuring that the middle class are not the people carrying the burden, as they've been doing

for the last several years, especially in the last two years, clearly, and that everyone participants. but we also make sure that investment is done the right way. i know the chairman laid out in great detail all that's in the framework. we think it is an important piece to lay down, that democrats have been working, have been working every hour, every day, even when we're back in our home states trying to talk to constituents, we're talking about the budget. i know the presiding officer tells me about stories every night he heads home. and we bring all that information right here in this body. we did it in the majority in the budget committee. i know i put up a web site request of alaskans telling me what they want to say, what they wasn't to have as revenues. like good alaskans, they were

otobashful. they were -- they were not bashful. they were very adamant about what they wanted and what we should cut and what we should not cut. i've used that in my discussion with the majority of the budget dmeet to figure out what the right approach s i think it is the right approach. it is the right approach. i think some might call it a big deal. you know, in the u.s. senate, this is a big deal. we're in the big place. this is where big deals happen. this is where it all happens to happen. because we drive the economy in the sense of our certainty and our policies. if we can't have a strong deficit-reduction budget, we're not going to create the certainty that the business community needs to invest, which will in turn employ more people and create a better dmi forous here and obviously will have an impact around the world.

mr. president, i just want to say thank you for this opportunity to say a goo -- to say a few words, again commending the chairman for all his hard work. i will on this comments. the stroir i told you about the branders and the headline i had to have, that was in my first six months of office when i was mayor. two and a half years later i won reelection with within of the largest margins in the city's history. so i would say this to anybody who's trying figure out are they going to win their primary, win their general election, put that all aside. that's what i did when i was mayor and had to make some tough calls. did i know if i would win reelection or not? i don't know. but i knew i had to do the right thing because it was the city i lived in. it was the state that i grew up in. and it was important for us to make the right decision, which at the end of the day is usually the right political decision. that's what this body has to do.

and it's not fun, because people face primaries, they face general elections. some will win, some will lose. but if we're true public servants, truly it doesn't matter if we're sitting in this room or signature outside there. we're always public servants, so we have to do what's right and do what's right in this critical fipple for this country and really in the global perspective. combos if we don't ask, don't tell right deficit plan, it will ripple through this country and it'll ripple through this world in the wrong direction. so, again, mr. president, thank you for the opportunity, thank you for the chance to say a few words but also i implore my colleagues on the other side to think about today's opportunities for the generations in the future and not about today's elections, and i mean on both sides of the aisle. it is about the moment of what we will do for this country. i yield the floor.

mr. hatch: mr. president? the presiding officer: the senator in utah. mr. hatch: mr. president, i ask unanimous consent that i be permitted to speak until i finish my remarks. officer without objection. the presiding officer: without objection. mr. hatch: in recent days i have spoken several tiles on the matter of tax expenditures. i am going to address this subject again today, and it is a timely topic. everyone is talking about our out-of-control deficits and debt. there are divergent opinions on how best at that to deal with our nation's increasingly perilous fiscal situation. but there's one thing that everyone seems to agree on: both the deficits and the debt are us sustainable. if we keep going down this fiscal path, the los face a crisis similar to that in greece and sooner rather than later. the numbers could not be clearer. federal spend something as a shaver our economy is trending

at a pace a 15% to 20% greater than its historical average of 26% of g.d.p. if we leave in place in year's level of taxation including the marginal rate relief of the 2001 and 2003 tax cuts and perhaps the tern tern, the federal tax take will equal or exceed its share of the economy. now, liberals suggest that the deficit and debt can only be resolved with a significant tax increase. this is either deliberately misleading or sadly delusional. they are either selling snake oil to the american people or they refuse to come to grips with reality. sticking their heads in the hand is not an option here. as you can see, federal taxes and spending as a prafnlg g.d.p., the red line happens to be the spending line, and as you can see, we're way up here in the obama 2012 busmghts the blue

line happens to be the average between 1960 and 2009. as you can see, it is way down here. our spending is out of control. the markets and the american people understand the nature of our crisis. non-defense discretionary spending is at historic levels, and our entitlement programs are headed for bankruptcy. when former speaker of the house nancy pelosi responded to the utterer failure of president obama and congressional democrats to come up with a medicare reform plan, re-responded, "we have a plan. it is called medicare. " that attitude is a recipe for bankrupting the nation. a bankruptcy that will take our seniors down with it. the left might prefer to ignore reality but here's the undeniable truth. our nation faces a spending crisis that tax increases cannot fix. i wish that the media would get

this. they are so enamored with the idea of a brand bargain on deficit reduction, that they miss a fundamental point. the problem is spending, as you can easily see by this red line. it is way out of whafnlg whack. and going back to the dry well of raising taxes on the rich is not going to wonch the fact that democrats in the senate have not put forward a budget in over 800 days is neglecting one of the core constitutional responsibilities and it's all the evidence we need that they are afraid of the bill coming due on all of tha their spendin. they understand that their hard left base will not accept structural changes under any circumstances. but they also understand that the american people will not stomach for a minute the tax increases that will be necessary in the absence of such reforms. this is a difficult position to be in. so rather than deal with the facts, they traffic in object few scaismghts this morning i--

--they traffic in obfuscation. this morning i heard that removing some of tax breaks for energy companies would fix or deficit crisis. getting rid of those tax breaks would raise $21 billion over the next ten years. yet this fiscal year alone in 2011 we will have a projected budget deficit of about $1.5 trillion to $1.6 trillion. so where is the rest of the money going to come from? last week i came under fire for stating what i think to be a relatively noncontroversial fact: here res what i said. in 200951% of americans had zero or negative income tax liability. here's what that means. in 2009 only 49%, a minority of all households in this country, 49% of tax units shouldered 100% of the nation's tax burden. and 51% of the tax units, a

majority of all tax units in this country, either owed nothing to the i.r.s. or better yet got money back from the i.r.s. in excess of their tax liability. 23 million of them got refundable tax credits. much more than they pay in employment tanches which are social security. and by the way as they pay into social security they're only paying a third of what they ultimately draw out, according to the actuaries. but they are not paying income taxes. this should be no less controversial than saying that the sun rises in the east. it touched a nerve because last week after raising this issue on the senate floor, msnbc and the liberal blogosphere armed with the talkingpoints from the senate democrat war room went ballistic suggesting that i wanted to balance the budget by raising taxes on the poor. i'm not surprised but this completely misses my point and

the point is this schoon no matter what these democrats tell you, the middle class are already shouldering around 100% of the nation's tax burden and 51% pay absolutely nothing in income taxes. furthermore, because of this proverse -- perverse distribution of federal income taxes, there is no way to fix our deficit hole and start paying down the debt by increasing taxes only on the so-called rich. here's the bottom line. all of the left's talk about taxes on the rich and closing loopholes and going after corporate tashing rates is meant to divert attention away from the fact that the president's out-of-control spending puts democrats in a position of having to raise taxes big-time on the middle class if they are going to balance the budget without structural reforms to our largest spending programs. tax increases on the wealthy will not get our nation to fiscal balance. even if we let the bush tax

breaks expire for the top income bracket, the total amount raised over ten years would be $615 billion. that's over ten years. yet our deficit this year alone is $1.5 trillion to $1.6 trillion. this is why the issue of tax expenditures is critical. just so everybody knows, i a made it pretty clear i thought in my last remarks that i don't want to tax the truly poor. those who would help themselves if they could. i don't want to tax them. but you can't tell me that 51% of all households are the truly poor. i don't want to tax them either. but it is apparent that we're going to have to find a better way of broadening the base of the tax system. democrats talk about tax expenditures as though they were the holy grail of deficit reduction. just close these loopholes and

happy days are here again. the public is being misled in this type of debate but don't take my word for it. today the associated press had a story with the following line: "spine meter: obama, dems skirt issue on tax hikes." this is what it has to say. "proposals under consideration include raising taxes on small business owners and potentially low- and middle-income families. you won't hear about that from obama. instead the president focuses on the very rich and speaks efemmistically. here are a fiewft phrases the president has used of late to talk about what amounts to raising taxes for some of the 'what we need to do is have a balanced approach whereby everything is on the table. '" he goes on to say, "we need to take on spending in the tax coaxed tax breaks for oil companies and hedge fund managers and corporate jet owners. you can't reduce the deficit to the levels that it needs to be reduced without having some

revenue in the mix." all of those are quotes by the president. they are doing their best to hide their intentions but the writing is on the wall. democrats are aging for historic tax -- angling for historic tax increases and the way they would like to accomplish this is by reducing oarlting tax expenditures. cutting back tax expenditures is a convenient way for democrats to tax middle-income families without having to say they are raising their tax rates. this is what we were talking about when democrats discuss tax expenditures. they are talking about their pension, your comir, the talking about their ability to purchase a home or save for retirement, put away money for your children's education. this is exactly what we're talking about. that is where the money is. it is not in bonus depreciation for corporate jets and it is not in tax benefits for energy companies. when democrats talk about tax expenditures and tax loopholes as a way to bring down the deficit and debt, they are putting a bull's eye on the

backs of middle-class american families. we heard a lot this morning about republicans walking away from the president's bargain on deficit reduction. i know that the people of utah applaud speaker boehner for not signing on. this morning the president's allies inned media were out asking why. republicans walked away from this deal. with the president willing to put entitlement spend on the table, why aren't republicans willing to put taxes on the table? first, it is worth noting that the president and his democratic allies steadfastly refused any structure changes to entitlement spending. and second, for democrats putting taxes on the table and tax expenditures means tax increases on the middle class. and that is a nonstarter. this issue of ttach expenditures is confusion and demand greater clarity. as ranking member of the finance committee, it is my responsibility to correct the record on what the curtailment or elimination of tax

expenditures would really mean for taxpayers and families. if you listen to my friends on the other side of the aisle, you would think tax expenditures are -- quote -- "spending through the tax code." you would think they are mostly loopholes in the tax law designed for special interests like ethanol blenders. another mantra you will hear too often reviewed by the media is that tax expenditures disproportionately benefit wealthy taxpayers. a few days ago i talked about what tax expenditures are and what tax expenditures are not. they are not spending. you can find the text of that speech from july 6 on the finance committee web site. and they are not in the main loopholes for special interests. just the other day i talked about the major features of family financial planning that would be up ended if tax expenditures were curtailed. i referred to employee pension plans like 401(k) accounts. i also mentioned charitable gifts and homeownership interest

deduction. if my friends on the other side are successful in cutting back tax expenditures, american families, workers and investors can expect the cost of all these activities to rise. if the costs rises as a nation, we will be poorer because we will have less retirement savings. fewer charitable contributions and more expensive homeownership. you can find the text of that speech from last thursday on the committee web site as well. today i'm going to consider the oft repeated line that tax expenditures disproportionately benefit the wealthy taxpayers. for purposes of this discussion only, i'll adopt the president's definition of rich. that is singles with adjusted gross incomes over $200,000 per year and married couples with incomes over $250,000 per year. i want to be clear that i do not lump all of these folks in the bill gates jr., le pwropb james,

warren buffet or gilligan's island's resident millionaire. i'm using the president's definition of rich because most of my friends on the other side use it. he also claimed tax expenditures reside disproportionately with rich taxpayers. the democrats rhetoric on expenditures does not jibe with reality of our tax code. the data is clear. tax expenditures tend to skew towards taxpayers below the president's definition of the rich. if my friends on the other side examine the data, they will find that their assertion about who benefits from tax expenditures does not square with the facts. they will find that their assertion that tax expenditures disproportionately benefit the wealthy falls flat on its face. in which of the coverage of tax

expenditures, it has been taken as an article of faith that they disproportionately benefit wealthy taxpayers. similar assertions have come from the white house and congressional democrats. the one exception it my friend, the ranking democrat on the ways and means committee, sander levin. congressman levin cautioned against treating tax expenditures as rich persons' tax benefits, and his position is well-founded. the source for this assertion, that tax expenditures are tax benefits for the rich, is a tax notes article dated may 3, 2011. i ask unanimous consent to insert it in the record at this point. the presiding officer: without objection. mr. hatch: the article is written by roberton williams of the tax policy center or t.p.c. t.p.c. is a tax policy think tank that is the product of two center left think tanks. the article presents conclusions from a t.p.c. distribution

analysis of tax expenditures. the analysis concludes that about two-thirds of tax expenditures benefit the top quintile of households in the study. viewers on c-span may wonder what a quintile is. it refers to a fifth of a given population. the t.p.c. analysis is, therefore, measuring the top fifth of the population. according to that study, where does the top fifth of the population begin? it begins at $123,000 of household income. it should be noted that household income is a bit broader than the adjusted gross income, which is the basis of the president's definition. according to t.p.c., that top quintile earns 5% of income and shoulders a huge amount of the federal tax burden. they say it is 67%.

now, perhaps not too surprisingly, t.p.c. finds that tax expenditures for the top quintile approximate that top fifth's share of the tax burden. with the exception of the refundable credit tax expenditures, a taxpayer has to pay income tax to benefit from a tax deduction credit or exclusion. those asserted that tax expenditures are mainly wealthy taxpayer benefits are principally relying on t.p.c.'s distribution analysis. if confronted with the t.p.c. data, it seems to me they have four choices. their first choice it would be revise downward the income basis of their definition of rich. they can say we really did not mean families at $250,000 of income. we meant families of $123,000 of income. that would be similar to the adjustment made for obamacare.

joint tax distribution tables for obamacare showed that for every family below $200,000 that received an change credit, four families paid higher families. every middle-class family that receives a premium subsidy, five pay higher taxes. that's just a fact. i guess i said five t. really would be -- it really would be four would pay higher taxes. the second choice would be to revise the proportion of tax expenditures so that the tax expenditure dollar amount reflects the benefits attributable to taxpayers defined by the president as rich. the president's rich taxpayer definition is the top 3% to 5%

of taxpayers. it means the group of taxpayers with roughly 25% to 33% of the size of the group in the t.p.c. analysis. put it another way, the t.p.c. population of -- quote -- "rich" taxpayers is three to four times the size of the group the president and my friends on the other side define as rich. if a consistent definition of the rich were used, the dollar amounts of tax expenditures in play would be considerably lower. since the goal of the group pushing the cutback of tax expenditures is to relieve spending constituencies of the pressure of curtailing spending, my guess is they will not choose to reduce the tax expenditure kitty. their third choice -- their third choice would be to simply curtail or eliminate tax expenditures for higher-income taxpayers. this tpourbgd could largely eliminate rates for capital gains and dividends.

let's take another look at this because it shows a big share of the capital gain tax expenditure goes to the top fifth. it looks like about 95% of tax expenditure accrues in the top fifth. you'll see about 50% of it accrues to the top one-tenth of 1%. do we think it would make sense in the current economic climate to double or triple the tax hit on investment? at one point at least the president's answer was no. in august 2009, the president was asked by a resident of indiana -- quote -- "explain how raising taxes on anyone during a deep recession is going to help the economy." here is the president's response -- quote -- "normally you don't raise taxes in a recession which is why we haven't and why we've instead cut taxes. you don't raise taxes in a recession. we haven't raised tax in a

recession. unquote. so what is their fourth choice? their fourth choice would be coming clean with the american people. under this option, they would say tax expenditures disproportionately go to families who are not rich. they would acknowledge cutting back tax expenditures was part of a deficit-reduction exercise, would hit the middle class and betrait president's promise not to raise taxes on middle-class families. there is additional evidence they are sinking as they struggle answer the facts. i would ask my friends on the other side to take a look at the joint tax distribution tables on many of the categories. joint tax publishes these taeublgs every year. they are available on the joint tax web site. i have a chart that summarizes the percentages of tax secures that go to taxpayers under

$200,000. i'll have to bring that with me the next time. that's the break point that joint tax uses. the percentage of tax expenditures that go to taxpayers under $200,000. it closely squares with the definition of rich used by the president and his liberal allies. anybody above $200,000 is richard by my friend's definition. you can find this data in the tax expenditures pam phret published annually by the joint tax staff. now, i would like to talk about the tax expenditures that joint tax distributes by income. i have listed them in order, from the largest in dollar volume down to the lowest in dollar volume. the first known is well known to tens of millions of our constituents. it is the mortgage interest deduction. if a taxpayer saves up a down payment and borrows for a home,

they can take the interest paid as an itemized deduction. that means that 30% of the benefit of mortgage interest tax expenditure goes to taxpayers over $200,000. taxpayers with income below $200,000 receive 70% of the benefit of the mortgage interest deduction. how do we measure whether the mortgage interest deduction disproportionately benefits taxpayers over $200,000? well, there is a line in the -- in the, in the taxpayer's approach to this in bold letters tanned reads -- quote -- "compare total federal tax burden." that is the baseline of how much is shouldered above $200,000.

we have an aggressive tax system. taxpayers earning over $200,000 shoulder 06% of the tax burden. those earning less shoulder 36% of the tax burden. taxpayers earning less than $70,000 shoulder 36% of the tax burden. who benefits from these tax expenditures? we're going to get into that. that means by a ratio of almost two to one, taxpayers under $200,000 benefit from the mortgage interest deduction. and since $200,000 basically fits the definition of rich used by my friends on the other side of the aisle. we can see the nonrich disproportionately benefit from the noninterest deduction. let me talk about another tax expenditure. i'm referring to the earned income credit, or e.i.c. it is a refundable credit.

that means taxpayers receive it whether they pay income tax or not. that is why the credit is basically scored as spending by the congressional budget office, the c.b.o., and joint tax. there is a bit of irony about this tax expenditure. because it's refundable, it is more popular with my friends on the other side than other tax expenditures. that is those other tax expenditures go to those who actually pay more tax, or pay income tax. the refundable measure is popular with those on the other side because it is a robust tax mechanism. president obama would show the plumber cast economic theory supporting this policy when he said we need to spread the wealth around. here's the iron kwraoerbgs my friends -- irony, my friends on the other side characterize it as spending through the tax code. yet the tax expenditures they most support are the refundable ones like the earned-income tax

credit. it should come as little surprise that the favorite is one scored by congressional scorekeepers because the earned income credit tax expenditure is refundable, you shouldn't be surprised to find so-called rich taxpayers do not benefit from it. the chart confirms this point. the third tax expenditure s-rt current -- expenditure is the current 1,000 tax credit. it is by definition limited to lower- and middle-income taxpayers. we should not be surprised to find that none of it goes to higher-income taxpayers. and the chart confirms this point. zero to taxpayers over $200,000. let's take a look at state and local taxes. it is the fourth one on here. the chart shows that 50% of the broad based deduction goes to

families. number five on this list is near and dear to many utah families. it is the itemized deduction to charitable contributions, or donations. of all the tax expenditures listed on this chart, this big chart right here, this one, charitable itemized deductions, distributes in the highest proportion to taxpayers above $200,000 in income, the chart says 5% right here. -- says 55% right here. 45% of those under $200,000. keep in mind, taxpayers with income over $200,000 bear 64% of the tax burden. now, this means proportionately the charitable deduction benefits taxpayers under the the $200,000 level more than taxpayers above the $200,000 level. now, let's take a look at number six on this chart. it is the tax rate portion of social security benefits right there. anyone advocating a cutback on

tax expenditures is advocating a cutback on the after-tax social security benefits for a big chunk of the senior population. guess what? we're not talking about wealthy seniors. according to this chart, 2% of that favorable tax treatment of social security goes to seniors with incomes over $200,000. my guess is that few of the seniors benefited from this policy on yachts or regular -- own yachts or regularly fly corporate jets. number seven is the itemized deduction for real property taxes. right now, their constituents take the edge off that heavy local tax hit with the itemized deduction. if many of my friends on the other side have their way or hack away or eliminate tax expenditures without also cutting their constituents' federal tax rate, guess what happens? in the case of local property taxes, the net effect would be to raise the property tax by as much as 45%. some of my friends may suggest

that only those with villas are taking the property tax deduction. this chart says otherwise. it says 80% of real property tax benefits go to taxpayers under under $200,000. how about number nine on the list? number nine on the list is the itemized deduction for medical expenses. obamacare cut back on that one, but if my friends on the other side reduce or eliminate side tax expenditures to avoid dealing with out-of-control government spending, this deduction would be cut back even more. the chart shows on these medical medical -- medical itemized deductions that 89% of this tax benefit goes to taxpayers earning less than $200,000. number ten is the dependent childcare credit. this is a modest tax credit that working moms and dads can tap.

like the child tax credit, it mainly is used by middle-income families. the chart confirms it. it indicates that 96% of the benefits of this credit go to families earning less than than $200,000. now, the final item on the list is the student loan interest deduction right here. this tax benefit is income limited. not surprisingly, all of the benefit goes to taxpayers earning less than $100,000. 100% of the benefit. now, i don't think a lot of the recent college graduates using this deduction are in the market for a yacht, but if you listen to my friends on the other side, you would think because this benefit is labeled a tax expenditure, those who benefit from it have a schooner docked in the local harbor. now, mr. president, i'm not saying that only middle-class families benefit from tax expenditures. wealthy taxpayers benefit from lower capital gain and dividend rates. let me refer to this, the ten

largest tax expenditures from the period 2010-2014. but the lion's share of tax expenditures goes to that part of the middle class that is already shouldering much of the nation's tax burden. most of the tax expenditures are either income limited or of limited value to wealthy taxpayers. likewise, low-income families don't pay income taxes. they receive tax expenditures that are designed for the nontax-paying population. so who is left? the answer is the taxpayers who are not rich by the president's own definition. the answer is middle-class families. on our side, the reaction to all these choices would be simple. many on our side including the ways and means committee chairman kemp have put it this way. keep your hands off tax increases, including cutbacks in tax expenditures for deficit reduction. preserve those tax -- reserve those tax expenditures for tax reform, and that way the taxpayers receive the benefit,

lower rates in exchange for a broader base. that broader base would include reform of tax expenditures if chairman camp and i have our ways. any other approach is just another tax increase. and they will just spend every dime of it on this other side. the president this morning gave another press conference. he asked what the holdup was in arriving at a deficit reduction compromise. the answer seems pretty obvious. contrary to the president's vague assertions, the left-wing base that he is depending on for his re-election refuses any meaningful structural reforms to the spending programs that are currently bankrupting our country. that means that the only serious deficit reduction option available to democrats is massive tax increases on the middle class. democrats won't acknowledge the inevitable tax increases that their agenda assumes, and republicans won't give the president any cover in his drive

to -- quote -- "spread the wealth around." unquote. that is what is holding up this process. let me offer a suggestion. instead of berating republicans for not signing onto historic and economic trucking tax increases when unemployment is at 9.2%, maybe -- maybe the -- maybe the president should take his own party to the woodshed. maybe he should ask the liberals in his party who refuse any meaningful structural reforms to entitlements to get serious. maybe he could go on television and explain to the american people that we have over $60 trillion in liabilities and the tax increases are not going to bring that into balance. instead, the president and his party sit around and spread the myth that simply getting rid of tax expenditures and loopholes -- and they certainly aren't loopholes, the ones i have been talking about -- will fix our deficits and debt. we have two reasons to worry about that wrong-headed approach. one, to the extent deficit reduction energies are diverted to cutting back tax expenditures, the pressure is taken off.

the root cause of the deficit and debt problem. that is pressure that should be brought to bear on out-of-control spending programs is released. two, the productive sectors of the economy, workers, small business owners and investors are burdened with yet more federal taxes. for many reasons, cutbacks and tack expenditures are a deficit reduction dog that won't hunt. now, if you look at all individual tax expenditures, you can see these are the ten highest tax expenditures by percentage. let me go back to the preceding chart. if you look at all these tax expenditures, mortgage interest itemized deduction, 70% of people under $200,000, earned income tax credit, 100%, child tax credit, 100%. state and local taxes other than real property, 50%, charitable and itemized deductions, 45%.

social security benefits, 98%. real property tax itemized deduction, 80%. education credit, 100%. medical itemized deductions, 89%. dependent childcare credit, 96%. student loan interest, 100%. now, look, my point is we have got to come up with a better tax code. i am dedicated to changing this awful tax code that we have that is too complicated, too large, too expensive, doesn't do the job and is just a bunch of muttering around and puttering around by members of congress, and simplifying that code so everybody knows which end is up. on tax expenditures, i'm going to be happy to look at tax expenditures, but they should be

reserved until we do real tax reform. if we have to give up some of these expenditures, then there better be appropriate reductions to account for that. and we have to do it by flattening out that tax system which we all know is completely out of control and completely difficult to comply with. as a matter of fact, i don't know anybody on the senate finance committee who fills out their own tax reforms -- or tax forms, rather. most of us could do -- i don't know if most of us could do it because if you have ten different tax preparers on a semi complicated tax return, you would probably have ten different approaches to that. that shows a pathetic system that is wrecking our country. and just to make it sure and clear, when the president took over, the bottom 40% of all households did not pay income taxes. yes, they pay payroll taxes, but

23 million of them got refundable tax credits, much more than they paid in payroll taxes. keep in mind, i don't believe we should tax the truly poor, but now that's up to 51% in just a little over two years under this administration of people who don't pay any income taxes. are they all truly poor? i don't know. all i know is it doesn't sound right that the majority of people, the majority of tax units in this country do not pay income taxes and the minority has to carry the whole burden. now, if they are truly poor, i understand and i would be the last one to tax them, and i think i have a 35-year record here of being fair to the poor and fair to families and above all fair to children. my name's on an awful lot of important bills around here, and i have led a fight on a lot of bills that help people in

distress, so you can imagine how aggrieved i felt when one of our great television stations was distorting one sentence, it seemed to me one sentence out of a 30-minute set of remarks on the floor that made it very clear that i don't want to tax the truly poor, that surely we have to the to have everybody participating. i actually think everybody ought to participate, even if it's only $1. we ought to all have some skin in the game. we ought to all help save this country. we can't do it without the middle class, and the middle class isn't just the top 49% of all wage earners. this is an important issue. it's one that we have to resolve, and we have to resolve it fairly. we have to resolve it in a way that is meaningful and in a way that will help save our country, too. i think we made the case that

you can't pile it all on the 3% to 5%, the so-called rich, which includes 800,000 small businesses where 70% of all jobs are created and everybody knows that's true. and every time you tax them and take moneys away from them like that when they are paying pretty hefty taxes as it is, they hire less, they do less, they quit their businesses. some move offshore, some have businesses -- move their businesses to otherive up. we can't let that happen. we have got to have a fair tax situation, we have got to have democrats and republicans work on it together, we have got to quit thinking -- quit playing this card that basically pits one group of people against another.

all i can say is this. i'm concerned. i'm pointing out difficulties in our tax code. i'm pointing out difficulties in some of the arguments the president is making. i have to say that anybody who reads my remarks fairly will know that these points i'm making are real points. these charts really are important. as you can see, taxpayers under under $200,000, would be bereft without these benefits unless we can revamp the whole tax code in a way that you don't have to have tax expenditures. tax expenditures are certainly not spending, these we are talking about right here and now. so if you compare the total federal tax burden of those earning over $200,000 pay 64%, those under $200,000 pay 36%,

all of that is important for us to understand. and, mr. president, i yield the floor.

a senator: mr. president? the presiding officer: the senator from wyoming. mr. enzi: thank you, mr. president. i rise today to talk about some missed opportunities. last week, i talked a little bit about how i thought the president had missed the opportunity with his deficit commission, he had missed the opportunity with his state of the union speech and he had missed the opportunity with his budget. well, almost two weeks ago, president obama scolded congress for not making enough progress on debt ceiling and budget negotiations. he said we needed to stay in washington last week and get things done. i took him at his word. i thought the administration and the majority were serious about staying in washington to push forward and get some results. we were all in washington last week but we didn't get anything done. the debt and the deficit and the lack of a budget aren't the only issues facing america. when are we going to have real issues processed through committees that provide real solutions? despite reports suggesting that

democrats had reached an agreement on a budget deal among themselves, the majority did not present us with that budget. despite the president's comments that congress needed to be in session to reach an agreement, he refused to meet with our caucus. we've gone more than 800 days without passing any sort of budget in the senate, and when we stayed in washington last week to work on a budget deal, democrats refused to bring up that budget for a vote. last week we had an opportunity to make headway on the debt ceiling issue. i spoke on the floor last wednesday and implored my colleagues on both sides of the aisle to join me in rolling up their sleeves and figuring a way to get this fiscal mess this country is in solved. i laid out the facts and figur figures, frightening numbers that should have galvanized us all into action. instead, we're still pushing for a comprehensive solution to the problem or none at all.

this isn't deal or no deal time. now here we are, and what was supposed to be an important work week has come and gone. what do we have to show for it? we had one vote canceled on the libya resolution. a substitute vote on whether the sergeant at arms could compel attendance, which was a nonbudget-related matter, and we had one legislative vote on senator reid's resolution about tax increases. this resolution is a sense of the senate which is not something that can become law. at this juncture more than ever, we don't need publicity pieces. what we could have done is move forward with the balanced budget amendment that all 47 republicans have cosponsored. or we could have voted on my legislation to reduce spending by 1% each year until we achieve a balanced budget. or we could have voted on legislation that other

republicans have offered that would cap spending. or we could have voted on legislation offered by republicans to ensure we pay our creditors in the event that we cannot reach an agreement on the debt ceiling. unfortunately, we didn't do any of that and instead spent a week holding one legislative vote on a sense of the senate about raising taxes that even if passed would not have the force of law. republicans have proposed a variety of ideas that will help us get out of this fiscal mess we're in. some are baby steps. some are giant steps. every bill doesn't have to be comprehensive. members of the majority have said republicans were using every tactic to delay. what was last week, a vote on the sense of the senate? the house passed a budget in april. in the senate, republicans proposed two additional budget measures.

the only plan presented by the majority, president obama's budget for fiscal year 2012, was unanimously opposed. that's 0-97. not even a single democrat voted for the president's budget. sounds like a different course is needed. i thought we were here to take care of business. is one legislative vote on an opinion piece considered taking care of business? not in my mind. i'm willing to bet that the american people don't think so either. this is exactly the kind of behavior that's frustrating people in wyoming and all across the country. they've asked us to come to a -- come do a job, they've put their faith in us that we'll take care of business and get this country back on solid fiscal footing. the american people want us to thoughtfully and seriously work to address the debt ceiling and reduce spending. taking one legislative vote in a week doesn't pass the smell test

for getting the job done. the work product we gave the american people last week is appalling. we're staring the most predictable crisis in american history in the face and with only one legislative vote last week, we essentially said, it's not dire enough for us to get something done, it's not important enough for us to stop playing political games and stop running the clock. i'm hopeful that this week will be different. i'm hopeful we'll actually make progress on budget negotiations. i'm encouraged that the president has finally taken it upon himself to engage leaders on the matter. his direct engagement should have been happening for months and his refusal to get directly involved has put us in the situation we're in today, with three weeks until the treasury department is left without options for the debt ceiling.

we've lost time, we've lost opportunities, we've lost the focus started by the deficit commission. every day that passes that we don't get anything done is one more option lost and more money spent on borrowed time and borrowed money. businesses across the country can't afford to waste a day, much less a week, without productivity. if they did, i guarantee you they would pay a heavy price. and if their unproductive behavior continued, they'd have to close their doors. people going to work every day can't afford to sit around and not do their jobs. if americans and businesses across this country have to work hard and stay productive to provide for their families and keep their businesses running, so should we. the standard shouldn't be any different in the senate. as for a solution that relies on increased taxes, when congress fails by spending too much, the

easy answer is always to raise taxes. there are many republican proposals for raising revenue without raising taxes but we cannot get in a situation where when we fail, we charge the people more. usually results in less revenue anyway. the motion we're voting on tonight is a sham. when it passes, we have permission to add amendments to the sense of the senate resolution, maybe. in other words, we can amend the opinion of the senate that cannot become law. how long will we amend and debate an opinion? i'm disappointed we didn't get anything done last week. i hope we all learned a lesson from the week we just lost. the issues facing the country today are too important and too dire for us to waste time like we did. i know right now committees are not having real markups so there's nothing in the drawer to

vote on. and even the few times a bill has been brought up, the majority did not want to vote on amendments and shut the process down. that isn't getting us anywhere. we need to change course. the time for action is now and i hope we can use last week's failure to get things done as an incentive to roll up our sleeves and get to work. i yield the floor and suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

the presiding officer: the senator from arizona. mr. kyl: thank you, mr. president. i ask unanimous consent that further proceedings under the quorum call be dispensed with. the presiding officer: without objection. mr. kyl: and that i be allowed to speak up up to five minutes as if in morning business. the presiding officer: without objection. mr. kyl: and without my glasses, mr. president, this might be a little difficult. i wanted to indicate, mr. president, that today i'm introducing with senator john mccain senate bill 1344 which is a response to arizona's largest wildfire called the

wallo fire. and this act is called the wallo fire recovery and monitoring act. the fire in arizona burned over about 40 days 538,000 acres of arizona land making it the largest fire in the history of our state. and just to put it into perspective, that's nearly 841 square miles or almost four times the size of the city of chicago. the fire destroyed 32 homes and four rental cabins. nearly 10,000 people were evacuated at one point and it cost the taxpayers over $100 million before it was finally extinguished. and unfortunately it will likely cost at least double that amount for the necessary rehabilitation of the forests that needs to occur now. after a fire like this, there's only a short window of opportunity to hasten forest rehabilitation, to reduce the

risks of flooding and insect epidemics and future fires and to capture at least some of the economic benefit from the dead and dying trees to help pay for their restoration costs. given the urgent need for acti action, as i said, i'm introducing today this arizona wallo fire recovery and monitoring act, joined by my colleague, senator john mccain as an original cosponsor. this legislation will expedite the removal of hazard, dead and dying trees in community protection management areas within the wallo fire area. the removal projects carried out urn the act would be completed within 18 months of enactment. the reason for this time line is that when it comes to timber haaharvesting of fire-killed tr, the costs of delay are extreme. fire-killed trees will lose more than 40% of their value in less than two years. due to the intensity, the size, and the magnitude of the fire, there's a tremendous amount of

dead and dying trees within the wallow fire area. portions of the forest that have bender -- that have burned pose a risk to forest users, to communities, to private property and to the remaining resources, and these risks include the hazards of falling trees, erosion and flooding, reburns due to excess fuel loads, and insect infestation risk to the remaining live trees. under these post-fire conditio conditions, timber salvage is a management tool to mitigate these risks, to generate revenue and jobs, and to put the forest on the road to recovery. we saw the negative consequences of delay firsthand in arizona after the rodeo chettiscire fire in 2002, which at that point had been our state's largest fire. bureaucratic regulations and lawsuits so severely delayed salvage efforts that by the time the projects were cleared to proceed, the trees had lost most of their economic value.

congress should not stand by and allow this situation to be repeated. that said, we're not looking to eliminate environmental safeguards or to exempt timber harvest from federal environmental laws. this bill is narrowed tailored, limiting the removal of hazard, dead and dying trees to those trees located within community protection management areas. one of these areas includes the wildland urban interface and other developed areas critical to communities. in addition, a comprehensive hazard, tree and commercial timber evaluation, and an environmental assessment under the national environmental policy act, or nepa, are required. all appeals and judicial review would follow the processes and the bipartisan healthiest restoration -- healthy forest restoration act. the sale of post-fire harvested timber may be controversial in part. most of the scientific literature that does exist is

based on forests in the pacific northwest. the forests in that part of the country, however, are very different from the dry ponderosa pine dominated forests that burned in the wallow phi. thus, the bill would require monitoring for all timber removal projects implemented under the act. finally, from a fiscal perspective, there's never going to be enough federal funding for the forest restoration work that needs to be done to save the forest that remains. acknowledging this reality, this bills keeps the proceeds and keeps them on this forest to help pay for future forest restoration treatments. this bill strikes a responsible balance between environment at concerns and economics after catastrophic wildfire. i urge my colleagues to support its swift passage and, mr. president, would ask unanimous consent that a brief summary of the bill follow the conclusion of my remarks. the presiding officer: without objection. mr. kyl: thank you, mr. president. i note the absence of a quorum.

the presiding officer: the clerk will call the roll. quorum call: mr. kyl: mr. president, excuse me, before the clerk calls the roll, could i also ask unanimous consent that the time be equally divided during the quorum call. the presiding officer: without objection. mr. kyl: and i note absence of - and i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: m oregon.

mr. wyden: i would ask unanimous consent to vacate the quorum call.

the presiding officer: without objection. mr. wyden: mr. president, last week the house speaker, speaker boehner, and president obama and his administration were both calling for comprehensive tax reform as part of a large budget deal. now obviously today that seems to have lost some momentum, and i just wanted to start this afternoon by saying that tax reform is too important to abandon after 48 hours worth of discussion. and to his credit, chairman conrad recognizes that and certainly that's what i heard this weekend when, like the distinguished president of the senate, i was home, had a chance to be across eastern oregon in small towns, and i think there's a keen awareness that it's not possible to cut our way out of

this economic challenge. you also have to grow. you have to grow. you've got to make growth-oriented changes in tax law. and that is what the conrad budget clearly offers a wide berth to do. and in fact i'm of the view that pro-growth tax reform, for example, is one of the few ways to generate revenue that both democrats and republicans will both support. when you put people to work -- and we've got millions and millions of our fellow citizens out of work today -- those are folks who can in the private sector start paying taxes again. that's what happened after the last major tax reform bill in 1986. in those two years, the two years after major tax reform,

6.3 million new jobs were created in the private sector. we have an opportunity to do that again and the conrad budget offers a wide berth in which to do it. so you generate revenue, revenue that both democrats and republicans can support, create jobs in the private sector the way democrats and republicans have said they want to do, and certainly it's pretty clear that, as of today, there really isn't anything as promising in the economic tool shed for long-term growth as tax reform. the fact is, a lot of other alternatives have been tried. certainly the federal reserve has done its share. we had the recovery act. there have been a variety of steps that have been taken. my colleague from oregon, in my

view, has done yeoman's work on the effort to make sure that homeowners, it is an enormous economic problem, have additional time to work through the very challenging situations that millions are facing in the housing market. so we've thrown a lot of economic tools at this huge challenge. but we obviously have a lot more to do, and i don't see any more promising path, any more promising path, than tax reform for the long-term economic growth that this country needs and the conrad budget offers a wide berth in order to tap that opportunity. the fact is, mr. president, we understand what needs to be done in terms of tax reform, and the fundamental language, the principles of that kind of reform are laid out in the

conrad budget. we ought to go in there, clean out a score of these special interest tax loopholes, use that money to hold down rates for everybody, and keep progressivity. three key principles, and a number of my colleagues have spoken on this. i know my friend from arizona, with whom i serve on the finance committee, senator kyl, in a very fine op-ed piece that he wrote in "the wall street journal" not too long ago talked about tax reform built around exactly those principles: cleaning out the loopholes, holding down the rates, and, to his credit, senator kyl specifically talked about the need to ensure progressivity in the tax code. mr. president, senator coats and i have introduced legislation that picks up on those key principles of the 1986 tax

reform legislation. in fact, we really modernize the code in line with that kind of thinking. certainly important to do, because there have been thousands and thousands of tax changes made since 1986. so it's certainly time knowing there and trim out -- trim out all those unnecessary special interest tax breaks, and we can do it in a way that will create jobs. for example, right now in the federal tax code, there are actually incentives to export jobs out of the united states. you say that to yourself -- "export jobs out of the united states?" what we want to do is we want to export goods out of the united states. in rural oregon this weekend, the farmers will telling me about how they want to get their

agricultural products into asia and other markets around the world, so we can grow things here, make things here, add value to them here, and ship them somewhere. that's what we'd like to be exporting. instead, under the tax law, there's actually an incentive to export jobs. you set up shop overseas and when you're doing business, you know, overseas, you get to defer your american dasms. so what senator -- your american taxes. so what senator coats and i seek to do -- and this is something that i think is even more important today than it was a quarter century ago because of the global economic challenge -- senator coats and i take that incentive that now goes for exporting jobs out of the united states and take those very same dollars and use those dollars to dramatically slash rates for

companies that offer what i call red, white, and blue jobs, jobs here in this country. and the conrad budget offers a very substantial berth for taking that kind of approach in tax reform, where he specifically calls for lowering tax rates for american businesses. and i particularly want to see it done because of the message i heard this last weekend, where folks specifically, without my even mentioning tax reform, talked about the need to keep jobs here at home. so, mr. president, we're going to over the next few days see, of course, the negotiations with the president and the congressional leadership go forward. chairman conrad and other members of the budget committee will be out discussing these issues as well. but i just hope, number one, that the cause of tax reform is

seen as far too important to give it up after a 48-hour flurry of interest and everybody then saying, well, i guess we'll have to do it another time. the time to make sure it's done is now. senator coats and i said earlier this month, what we ought to do, recognizing that you can't write a complete tax reform bill between nods and august 2 -- between now and august 2, what weigh ought to do is get a commitment, really lock in a strategy to do comprehensive tax reform in the fall and early next year. that alone would send, in my view, a positive and bipartisan message to the financial markets of this country, that there really are going to be some changes. so, mr. president, what we need

is a road map for economic growth. there are other features of the conrad budget that i think make a lot of sense. many a particularly pleased about the -- i'm particularly pleased about the opportunities for investment in infrastructure, roads and bridges, certainly that would provide an opportunity for something that's worked in the past, the build america bonds program which has been so successful in our state. i think senator kerry's ideas for an infrastructure bank are excellent ones. i support those as well. the best thing about that approach is that we know that we have to find a way in our consumer-driven society to start stimulating demand, demands for goods and services. there are few economic multipliers in our country for the short term, like transportation. so the conrad budget that puts a premium of those kinds of

approaches in the short term makes a lot of sense for me as we look to the longer term, which i would really define as the opportunity to sit this country on a progrowth economic strategy with tax reform in the forefront in a way that helps our economy to be both fairer and more efficient. we'll also see a lot of other benefits, mr. president. it was brought up to me over the weekend that at home in eastern oregon, a matter we've talked about before, like the alternative minimum tax. talk about something that just defies common sense, the idea that the alternative minimum tax would force middle-class people, people making $60,000, $70,000, $80,000 a year, to fill out their taxes twice using two

separate systems just defies any semblance of sanity. so, referring again to what happened this weekend, are we really going to tell american taxpayers getting clobbered by the alternative minimum tax that after two days' worth of discussion about tax reform, we're just going to walk away and pursue some other topic? that doesn't make any sense to me. and certainly chairman conrad's budget, which does, as i've indicated, provide a broad birth for tax reform, makes it clear that he shares our view. so finally, if you have in front of you, as we will with progrowth tax reform the opportunity to create jobs in the private sector, generate revenue in a way that democrats and republicans can agree on, make ourselves more competitive

in tough global markets and do it in a twhaeu brings the political parties together -- do it in a twhaeu brings the political parties together, i think it's clear that that has the fundamentals of what can take this country's economy in a better and healthier direction. i want it understood, mr. president, in spite of what happened this weekend, in spite of this sense that maybe tax reform's going to be put off yet again, i'm not going to give up for a minute. we're going to have another hearing that's going to be very important this week. chairman baucus,ed and the chairman of the finance committee and ways and means committee will get together so we know what needs to be done. now it's a matter of having the political will to go forward. i simply want to say to the

senate, i think i can say senator coats and i, despite the idea that this is too hard to do, can't be done now, let's put it off for another time. we're going to come back to this floor and say again and again it's been done. we need to do it now when there are so few other tools in the economic tool shed. and it would be wrong to walk away after this brief flurry of interest in something that is so fundamental to the economic well-being of millions of our people. mr. president, with that, i yield the floor and note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: