[speaking in native tongue] >> translator:. [yelling] >> we would like a request from the court to scan all the documents and all from the file and so that we can all have access to these documents to reduce the cost for everybody and for the court. i second my colleague of the scanning of all the documents and put them on a cd.

okay. we are going to review all the motions. no, you already spoke. okay. take the microphone and speak up. pass the microphone. [inaudible conversations] >> i represent the victim. in the summer of 2001, i request

from the honorable panel to order to scan the files of this -- yes, your honor i just want to second the motion of my -- all the recommends are the same. .. counselor, this notion has been presented the floor. i also represents myself, my

client was arrested and tortured by officers then i'm with kidnapped at 4:00 in the morning on january 25. and i also bring a big case against president -- former president hosni mubarak and the minister of interior. >> i represent martín ali. i second the motions of my colleagues. [speaking in native tongue]

>> translator: your honor, counselors mohammed halas, we represent the states and we bring civil church to their benefit of the state treasury against all of the accused. number one mohammed hosni mubarak 3242 and the remaining defendants in the case 1227 in a billion egyptian pounds, find the favor of the treasury to repair and preparation of audit tmh to the public and private property relating to the crimes that have done described.

the public treasury of the country has a particular article that also dedicated the special fund to pay damages in reparation of both of the guns about these people that were hurt and killed to be repaired from the money sent to stay. and to repair all of the material tools, cars, vehicles, and everything that was destroyed due to the crimes here being brought against

easy-to-use. your honor, as the public persecutions had that these accused committed these crimes, they cause harm to the places where they were, to the ministry. they also recall the harm, financial and material and equipment and installations of the ministries and all the places that they work -- they worked in another damages and fires that were started in all these places and all that derived directly from those crimes that these accused has

committed and also the lack of security that was -- that was stopped during those days to create more chaos and not leading to the closure of the stock exchange and other economic and trade activities. this makes the state and the ministries part and party at this case and they require financial reparation. the state requires a symbolic reparation and your honor, dr. hamid sadik, i represent

myself. and these accused have killed some of you, but i actually assassinated all egyptian people . the criminal charges that i brought against these people are over a hundred. there is one that says that mohammed mubarak died in 2004 in the person we see there is an impersonator. we look like to see -- to subpoena a medical certificate

of mohammed hosni mubarak and also all the surgeries that hosni mubarak hat and the nomination of the supreme justice has not omani. [speaking in native tongue] >> translator: they were nominated to what does this have to do with the case? these demands are totally irrelevant to the caller. this person we see here is an

impersonator. he is not the president of the republic. this is an historic -- this is an historic trail. present name hosni mubarak died in 2004. this person we see here is an impersonator. irony class from the court to proceed to you dna analysis. these are fundamental cases, your honor. >> gave me the microphone. someone give me the microphone. [speaking in native tongue] >> translator: your honor, i

represent that it done i hated abdul. i have a civil case against the accused one, two and four and the sum of 50,000 pounds and one of civil rep duration. let me bring tao in half a minute this station listens to this. the pharaoh ruled with an iron fist, killed its people.

he destroyed the land. today we're here, bringing justice to this historic and civilized trial. president of egypt this year presents, and accused of killing and planning to kill his own people, the people that gave him power for 30 years and was condemned to poverty and death. when the people came out to protest against the date leadership, today we are not judging these crimes, only our corruption we are facing a trial of rights and freedoms.

the rights and freedoms that have been reached. and we ask who committed all of this assassin. your honor, counselors, those accused are all criminals and assassins. they sell their souls to the devil. they forgot that they were brought in the bosom of egypt. counselor, counselor, please, come on. they destroyed the economy of the country. all right, let someone get the microphone from him. please pass the microphone. [speaking in native tongue] >> translator: please, please sit down, everybody.

everybody stays where they are. please sit down. i am going to say it for the last time. give me the paper. give me the motion. counselors, please sit down. please sit down. take all the motions in writing. take all the documents. everybody sit down. counselor, go to your seat. two-year seats. you to your seat. go to your seat.

counselor, to your seat. give me the paper. give the motion and go sit down. please go sit down. your honor, i am one of the that guns -- that guns and my lawyer was not allowed to be present. please leave the microphone and go. thank you, mr. chairman. please, go sit down.

who is here representing the accused? come over here. everybody sit quiet. patience, we gave you room to say everything you have to say. your honor, please use the microphone. your honor, i have seven demand. number one, the lawyer is with the accused one, three and four. he has following command to

clean up the flash memory that has the documents that the case 1227, 2011 criminal amid which has been recorded at the investigator asked ned is reported on page 108 and the second part of the photocopy fio and turn fio. print out the contents of this flash memory and distribute to the counselors. do you have these emotions

written? this is technical. is it written? are these demands return? these are technical. they need to be accurate. what you're asking are technical. we need to be precise. do we have all this in writing? >> translator: just -- just commissary. allow us to make copies, pages that the interrogation documents of the accused number four, which have not been photocopied

and were not included in the files that you received from the court clerks. 43 pages to be exact. they are a reminder of the interrogation minutes, but i found in the interrogation of accused number four, i am missing 43 pages that i would like to have. also, to listen to the testimony of the witness whose names are mentioned on the record. and they are 1631 witnesses. we would like to hear them in front of the court.

number four here, the testimony of the witness whose name has not been mentioned and was not even interrogated, who is general -- general mohammed centauri, who took the responsibility on the afternoon of january 28 also. hear the testimony of witness op med rich, the secretary of the province -- egypt, who has not been interrogated properly and of course we want the

opportunity to listen to him. we also would like to call a number of witnesses, which are all those who have been governors of succinate, except mr. tahiti who has been mentioned, but i would like to year and call these witnesses from all the governors. mohammed fec, mohammed iv. and the current governor. last qwest your honor, that these rules on my request on

july 26th regarding the permission of the doubt during during -- the doctor in charge who was afraid to come i presented this motion since july and it requested the court to kindly rule on that. the details of our demands are in this memorandum. thank you coming your honor. [speaking in native tongue] >> translator: possession is adjourned. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations]

>> alice rivlin said today the increase in the reform is essential to the success of the newly formed joint committee on deficit reduction, which is charge of cutting the deficit budget by about $1.5 trillion. she is joined by former national security adviser, stephen hadley and others talking about the impact of deficit reduction on national security and foreign policy. from the brookings institution earlier today, this is 90 minutes. [inaudible conversations] >> good morning, everyone. welcome to brookings.

i am michael o'hanlon on behalf of myself and peter singer to the far right and colleagues elsewhere brookings, would like to welcome you to this event on the implications of that debt deal and the deficit crisis for american foreign policy. we are honored, peter and i too have two fantastic panelists, two great american spirit to my immediate right, alice rivlin come a senior at brookings, lacourse a sunny director of the congressional budget office, ran the office of management office and was vice chairman of the thread and continued among other activities to be involved in d.c. finances and therefore prudent her medal in many different ways over the years. stephen hadley was george w. bush national security adviser, one of the most distinguished national security advisers as my former colleague hugo dobler explained convincingly in a recent book on that position, historically in the united states. steve also was the coleader last

year with former secretary of defense, bill perry with an assessment of the 2010th quadrennial defense review that seems like 100 years ago already in time so we time so we knew it fiscal issues the deficit debate was far different than in the aftermath of the n-november of a drug revolution when the tea party came to town and everything else happened has been subsequently what would like to do this morning is to begin by myself posing some questions to each of the panelists to frame the discussion and then of course go to you because we are fortunate enough to have television coverage today. when we go to the crowd, please identify yourself, wait for a microphone and ask a short question cannot be specific about who you are addressing it to if you would. i want to begin with alice because i think for a number of reasons that brought perspective on what this recent to accomplish is worth to understand before you get into specifics about its implications might eat maybe what they should

be or should not be for the broader national security budget, the main focus of our budget today. alice, if you could begin with, i realize it's too complicated to ask you to do a full primer on the deal, but a short explanation. even though there's been a lot of explanation, some of them confusing, especially to nonspecialists like myself in terms of exactly what happened over the next four to five months of the current deal. >> raid. well, i think first it is important to say, how did we get here? we got through this dreadful, awful, outrageous process with an artificial crisis, namely the debt ceiling. and nobody who cares about the u.s. government can be proud of his performance. at that moment it was brinksmanship and irresponsible and it's hard to think of words -- adjectives that are

strong enough. but i do think we have a new opportunity now to solve the real problem and that this deal might be the first step towards a positive resolution. what did it do? not as much as its critics from both sides often imply. it cannot discretionary spending for the next 10 years at approximately the rate of inflation grows. if you are familiar with different symbols plan, which i participated in and the domenici, rivlin plan which i also participated in,, those

plans were balanced plans, which did pre-teens, which i think are the things you have to do to solve the long-run deficit problem. they reduced the growth of entitlement spending in different ways. medicare, medicaid, social security. they got more tax revenues by reforming the tax code in slightly different ways. and they kept discretionary spending. now, those are the three things you have to do. this deal has done the first one. and then it says, step one. now, step two is the creation of an extremely powerful 12 member committee joint select committee, half republicans, have democrats with

extraordinary powers. they get to look at either the spending side, especially the entitlement side because that's what hasn't been done yet. and the text i can recommend additional deficit reduction, specified as 1.2 trillion over 10 years minimum. but they have the opportunity and they should take it to do more than that over the 10 year period. why is this so powerful? because if they can get the majority of the committee, seven out of the 12 votes around the plan, he would have to be a balanced plan to get seven out of 1288, that they take it to the floor subject to an up or down vote.

that's it. no filibuster, no anything. and that is powerful a mandate as any committee has never had as far as i know, with the possible exception, that a small potatoes from what we refer to now. then the question is what happens if they don't? what happens if they don't is we have what is known as the sequester, which was designed to be unacceptable to both sides, a substantial cut in defense spending, just what we'll be talking about today and a substantial additional cut in domestic spending of including some entitlement, but exempting

programs for low income groups and limiting the cut in medicare to 2%. and when you do that, it means other things that have to be cut very substantially. so with this committee doesn't succeed, what you get is additional discretionary spending cut, but these are cuts, not caps because the numbers are big enough so they would actually reduce them below for would have been otherwise. and wouldn't fix the problem. the problem remembers because of the demographics and the pressure on entitlements coming from longevity, retirement of the baby boomers and cuts of medical care. so that's where we are. >> if i could follow a period on

the issue of what happens if there is no deal or just refused by the congress and the up or down vote, and i noticed it into complex issues of so-called baseline, but when we look to next year, the tax cut that has been in effect since the bush presidency are due to expire at the end of 2012 according to current law. and if those tax cuts were to expire not be renewed at all, is it true that even more than 1.2 trillion would be -- and just tried to get the arithmetic rate. i'm not trying to make a policy statement. is it to the policy you're talking about would actually be accomplished? another was to get that much reduction in tongues and play by not extending the tax cuts? >> i don't think so. although i think this is still up for discussion. if not the extensions of the

bush tax cut wouldn't be a very large number in exceeding the 1.2, but it is a question of where you start from. and as i understand the starting point, the baseline, it is current law when other words you have to cut a 1.2 below what would happen if current law was followed, which means the bush tax cuts. >> thank you. >> there may be some dispute about that. >> that may be a conversation right there. by the way, i should say there are brookings.edu. we will have featured alice's tax for as well as stephen

hadley report. if i could turn to you and i guess the broad question i've been intrigued and given your thoughts on, a very good report on your concern, that even the milder upper state street deficit reduction may cut defense more than perhaps would be wise. in fact, you and bill perry and your bipartisan team called for an increase in the size and the needy among policy recommendations of the man-size in the defense budget above and beyond what would be needed to keep up with inflation. he must be, i'm assuming a bit concerned about some of the numbers you're hearing now. let me not lead to any further and just as. how do you square the recommendations he made with bill perry a year ago, with the current options we see now for defense budget cut. >> i just want to thank you for convening this panel.

think all of you for coming out in the middle of august. this is above and beyond the call of duty. their report that michael referred to wasn't independent panel review of the quadrennial defense review. this was dod's own review of its budget over the next five years. it was mandated by statute. what we were told to do is look at the threads environment over the next 20 years and then try to describe the requirements we have for defense capability and do it in a financially unconstrained environment. as we were told to do and that's what we said, looking only at dissent financially unconstrained. we propose a lot of measures to reduce costs. what we said is even if you do all the things we recommend to reduce cost, without the threat environment was such that we might actually still have to

increase the top line, even as we harvest and other things. that was then. this is now. what happens in the intervening is that the focus of the american people on the deficit problem has really riveted washington's attention. i largely agree with admiral mullen, chairman of the joint chiefs when he said getting her economic and financial house in order is the biggest national security challenge we face because the strong economy underpins everything we do internationally. it is the basis for a strong military, basis for diplomacy. it gives us economic and financial influence overseas. it is the undergirding of our national power. and if therefore we are going to address this number one national security challenge in terms of the budget that, then everybody is going to have to contribute. i think we have to look at that

pending in that context. from a caveat is the phrase, if we're really going to address this problem in a comprehensive way. you know, there's a tendency in washington. liberal democrats say will cut the defense budget and everything will be fine and conservative republicans say cut nondefense discretionary spending and everything will be fine. well, it won't because even if you do both of those things, it will not be enough. it's about entitlements. if you look at tenures come in the budget deficit is driven by entitlements, social security, medicare, medicaid. if the country is serious and of those programs are on the table and if we are really going to make those entitlement programs fiscally sound, then dod will do its part. so that's the context.

but we can talk about the kinds of things you have in mind for doing the defense budget. but i worry about it because our adversaries out there don't always have our budgetary crisis and they are not taking a vacation or holiday from the threats they pose to us. so even as the ink about dissent spending cuts, it's got to be careful. it's got to be spread driven and prioritize. we can talk a bit about that. >> if were not serious, we don't have a country to defend. >> exactly right. the measure of seriousness about the american people need to insist on its request to talk about social security, medicare and medicaid. but we don't talk about those, were not going to solve the problem. if that simple. >> if i could follow-up and whether the area, diplomacy and all the other things he worked on informed of the people up to think about, include the state

department, foreign assistance, security assistance to the bipartisan accomplishment that often goes unnoticed. the bush administration and to some extent the clinton administration before it an obama administration has succeeded in rectifying the shortfalls that a lot of people have identified over the years and our diplomacy and strength of our state department, cadre of foreign service officers we've got, and of course the international assistance budgets as well. are you concerned about those being at risk? to have the instinct which could cut a little and can apply some financial discipline and a few cutbacks. you have a notional assent of how far the press is could go? are you with the current effort will also target the state department and foreign aid excessively because those are also programs not always popular? >> there's some real risk there.

every entity to which soared in the kind of environment where in. one of the things this process alice talked about is the national security council, so they have sorted in a grouping defense homeland security intelligence diplomacy in foreign aid and assistance. i'm the one hand, i think that's good because a lot of what we call foreign-made is critical to achieving our national security object to it. and we've been trying to talk about one of our recommendations was the consolidated national security company which is a good idea as a planning tool. the problem if you are under enormous budgetary pressure, pressure will be we need to preserve defense spending, so let's cut diplomacy, development of democracy promotion in the lake. and the irony is that the military dissent and incomes down, as the out of places in

iraq and afghanistan as fear of her time in as we face other challenges in places like somalia and yemen and the like, a lot of that nondefense national security spending becomes even more important. it's also a lot cheaper to do things that factor than it is deploying american combat troops. he could deploy and sustain an overseas is the most expensive thing we do. so the ironing is there's a trade-off that needs to be between defense spending and what i will call nondefense national security spending. bob gates was all over this. bob gates and he was secretary of defense that i want to send money to the state department for some of these that dvds because they are so critical to supporting the defense mission. and i hope that leon panetta, the new secretary of defense will have the same attitude and we start making trade-offs between defense and nondefense

security spending. and i would hope in some instances we may cut defense and we may actually add many on the nondefense national security side. >> peter, if i could turn to you. you've written a thoughtful paper which is now foreign-policy.com website and worth a read for anyone here today about not just the numbers of how much we should cut them how we can take a night for a scalpel or in packs, depending to the defense budget, but the process by which we should think about how to set up cots and to make sure and all this rapid fire process of cutting quickly, we don't cut unwisely. can you see a few words about some guidelines that you would suggest the policy community keep in mind to be thoughtful about how do keep whatever country make. >> the honor of the mathematicians to great american leaders.

the numbers that were talking about are such a scale from a shocking. essentially the next five months, we have to figure out how to cut between 400,000,000,001.15 trillion from , most of which will come out of defense. >> over 10 years. >> over 10 years. there's lots of ways to think about those numbers that do how many empire state building is the equal. i prefer thinking about it essentially have to cut somewhere between using the department of defense estimates to chinese military in the budget for seven annual budgets. but my problem is when you look around at the scores in washington right now, there's two types of questions were wrestling with. one is the weather to cut or not and that ignores the fact that the first $400 billion -- that

train of 30 left station. the second, as alice pointed to is the only thing standing between him and that hundred 50 billion in cuts is the very slender thread of first the super committee showing the i would say sort of intelligence and maturity to come up with a package that hates all these other areas like entitlements, like tax reform that would actually have a real effect. and secondly, the rest of the congress and various political parties showing the maturity to vote yes for that. that is the slender thread. and frankly based on their behavior the last couple months, i don't think that is something we can count on. so the weather question as 40750. then most people in d.c. want to jump into the what question.

what to cut. you can see the debates have been a are the coalitions are lining up that this is a critical program is you can't cut it. this is a wasteful program i met at. it's essentially a battle of everyone identifying pat rocks are pet peeves in going after them. what we need to do right now is start to focus on the how question. what are the principles by which we might go about it smartly. and that's what the paper that i was wrestling with good and two. i hope we can talk further, but it's looking at issues like how do you go about making trade of smartly? how do you identify where real savings are versed is false events. how do you start to mitigate and weigh strategic risks? as an illustration, if you're doing cut, what are capacities you can bring back quickly if the strategic environment changes in water cuts that simply he won't be able to restore in a matter of decades. that's the kind of thinking we have to do now. unfortunately that's a tough thinking that washington often

veers away from because for easier, much more comfortable playing the blame game or protecting pat rocks. but it's well past time for that. >> michael, one question comes out of that but i've been trying to get an answer to an alice, you may know the answer. that alice made the point it is 400 alien or 1.1 trillion over 10 years. 15 year when there is program and say none of them look like this. there is a system being purchased that will cost you $40 billion a year for 10 years. if you cut that program in year one and then save the $40 billion in year one, to get credit for the full $400 billion over the ten-year period? if you do, then come and the impact of the lackluster conan

and something that says if you cut something to save you 40 billion the first year, in addition you have to cut something that is you 40 billion more in year two if you see what i mean. >> you get credit for the whole thing. i mean, if it's going to cost 400 billion over 10 years and you get rid of it, then that's 400 billion. let me just reinforce what peter, the 700 feet is talking about if the committee fails. and two points about that. i think the committee by itself may be a slender reed. it will work on that the president and speaker boehner and the rest of the leadership wanted to work. and then it's a slam dunk. and so, that's really the big question. but wow, --

>> in the face of national security, we have to do contingency planning. right now this contingency is one that i would not put in the extremely unlikely based on the passive potential or the likely category. there's another thing steve brought up that i think is one of these principles we need to think about is that, for example, we are only talking about this in terms of cuts right now. we are talking about a 10 year period. one of the things that plays out is that sometimes you have to spend money to save money in the long term. so as an example, department of defense energy spending is a big cost or ever. the amount spent on gasoline has gone up over 225% on an annual basis. if you say okay, i'm cutting a first doing kris energy efficiency, we been made at the

start of it, you lose the saving efforts. but unfortunately has been the way we've gone about it. >> it doesn't have to be. and that the benefit of the 10 year horizon. another point about likelihood, the sequestered, the big amounts that would be cut to committee failed was designed to make it unpleasant to both sides. and cuts of the magnitude you're talking about would be unacceptable to most republicans and many democrats. so it's not a short name that they will happen, even if the committee fails because they could be overwritten. i mean, a lot is the law. >> alice, just to clarify, peter is talking about the 350 billion that's essentially going to come out at the budget already agreed

to amass the result to your original intervention of this cat. >> capping defense and domestic discretionary spending at the rate of inflation, rather than at the rate of gdp growth, which nominal gdp growth which is what the baseline of sins. >> hair-like to cope with inflation, but no more than that. >> is my understanding. using the word hot, which sounds like we'll have a smaller defense budget in the future then we are now is not necessarily right. >> i think it's important for viewers to make sure we are agreeing on that is clear, the expected reduction in war cost is not something if you're on the committee .2 is the big savings. >> it is assumed to be happening

anyway. >> i'll just mention in front of the war cost was 100 million year. now we are done in the 2012th is clear, which begins a course in six weeks, which will be down to 120 billion, for iraq and afghanistan together. right now in the calendar year 2012 -- calendar year 2011, even if it's changed a bit, the iraq cost will be very small by the first of the year. afghanistan will be a little slower reduction, but that's scheduled to come down a great deal in the coming two to three years as well. so the numbers are talking about for saving our non-double counting those benefits. >> should we talk about if we get in peter alluded to before or five things people need to have in mind. i would hope that people who are

chargesheeted us recognize it needs to be threat days. sack of money and needs to be prioritized. we should cut things that are lower priority and think about cutting. the most foolish way to do this to be a 10% across-the-board cut for a 5% across-the-board cut because that does not allow you to safer military to the threat you face. peter talked about sometimes you need to invest in order to cut costs. i would elaborate on that by saving three innings. one, there are things that actually you can cut them in a way that forces you to reform and actually come up with a force that makes a lot more sense. in the personnel area, i think you can do some cutting that will actually really force you to re-examine the personnel

system in ways that not only make it better for us, but also one that will cost you less money. similarly, you can do reforms that are going to drive the process and reduce costs. acquisition reform is something we need to do. it will give this military equipment better, sooner but also can be less costly. finally come as we do these costs, we also have to recognize it for looking over 10 years, we need to cut them if we don't need enough so we actually have money that we can invest in some of those capabilities we are no we are going to need. we need better capability for biological weapon threats, cyberthreats. i think we'll need for money for special forces and some of these other things. so i think what we ought to try to do and what i hope the folks responsible have seven reprint to pull someone baseline that they have posed to on their

black board and from other tasks that really guide them in this process. so it can be an intelligence process that cuts in a way that tries to reform and can actually lead to a more appropriate and maybe even a better force and we have now when you look at the threats were going to face. >> i thoroughly agree with that. who could not. but let me make one more point about the defense budget. steve mentioned earlier the importance of entitlements and health care growth in the budget generally. that is also true of the defense budget. the fastest growing major category in the defense budget is health care and has been for some time. and now we are not talking about for a more weapons. we're talking about promises

made to retirees over a long period of very powerful political group. in the tri-care for life program is an extremely generous and costly health care program. and if i'm allowed and it do, i sat with the meeting was a distinguished military retiree recently who was recovering from a kidney transplant, which had not gone well at first, but despite now here he says total bill was half a million dollars of which he paid 500. he was outraged by this initiative been outraged. the basic story is there is no contribution or deductible of

tri-care for life and we are paying a big price for it. >> is one of the things actually looked at in this independent panel report. one of the things that was interesting that i was talking to george casey, who was then the army chief of staff about this issue as well as some retired military on our panel. what i found heartening with a focus on this problem and said it's really not very to the air force that the retired forsyth is good of the deal deal if it does. >> to try to change it is very hard. >> it is hard and it's up to congress right now. i was heartened by the military panel in george casey said i can tell you it's time to do that. it is time for retirees to pay more. the only things they asked were two things. one, tasted and so people are not surprised.

and secondly, try to means test it because there are some military retirees that can afford it and some can't. i thought it was heartening you had a retired community that began to say we need to make a contribution to this process as well. there's other things he can do. we let people retire after 20 years. and they many times are fairly young. they get other jobs and still get military retirement. one of the things we suggested in our report as let's lengthen the period of service. let's extend the military career. let's have people in 30 or 40 years. let's not make it up or out. if people are good at a job, let them stay in that job. and that way we are paying people, but getting some to for it in terms to contribution to our military. and finally, a longer period of time allows military officers and enlisted to get the kind of educational exposure that will make them more effect than dealing with the kind of challenges they face in places

like afghanistan and iraq. so my point is there is an interaction instead of reforms that can both make the military better and more effect than also less cost to you. one of the things that called for was establishment of a military commission on the military personnel system, the national commission on military personnel to take a look at how these issues and make the kind of reform that adapt the military to the situation we face in our house though would get a lot of cost out of it. this is a huge driver of the defense driver. >> i'll ask when the question of peter inimical to you. either way, there's a very interesting study coming out now which you may be intrigued by, which is a match in the spirit of what steve just mentioned. although, an additional point is that while while benefits might

be delayed, there might also be changed benefits might be delayed, there might also be changed to allow people to stay in the military for five or 10 years to get retirement benefits away with a private dirt and the united states as well at a more modest level, so kind of a contribution to a 401(k) type fund, which doesn't currently exist. you have to stay 20 years to get anything. if you do stay 20 at the lot and that's an aspect the defense business board takes on. the point i want to make is the following. i think one broad question a lot of people have on their minds, especially people who think that it cuts can command a defense and should come out of defense is basically stated the following way. under bill clinton at the end of the clinton administration we were sending in $2011 if you adjust for inflation about 400 billion a year. george w. bush did not plan to increase that a lot.

.. to get rid of that times ten years there's $3 trillion right there. will the would be nights it was quite that easy. let me, in the interest of just trying to explain a little bit of the arithmetic explain what happened to get us from 400 to 700. and by the way, i do believe we can make substantial defense reductions petroleum dollar target scares me. i think it would be excessive and let me give you a sense of why.

the 300 billion increase going from 400 to 700, of the 300 billion increase -- again in the annual budget, i'm comparing a certain year, 2001, to a subsequent year we are in today -- of that increase, about 175 billion is in malkoff so then you have more than half. that number is going to be coming down which is why the 700 billion-dollar number will be coming down. but nonetheless if you're trying to understand what happened that is a big chunk of their right there. second, a lot of the personnel system changes we made in the last years have been free costly. i agree with the point steve and alves have made that some of them have been inefficient. but as a nation war with to conflicts simultaneously and an all volunteer force i think most of us would agree that we certainly have to take care of our men and women and be attended to those who are deployed, those who are injured and so forth, which means a fair amount of that increase while it

may not be optimal, and we probably should reexamine it is understandable and so some of it again does require re-examination but let's understand where that number came from. a third piece is a lot of normal defense costs just in the regular peacetime activities of the department of defense go up faster fan inflation because they are part of our economy, too and we know a lot of costs go faster than inflation whether it's health care which now cost the department of defense 50 billion a year even leaving aside veterans administration activities, which are separate. whether its environmental cleanup, whether it is pay to try to entice good people went to the military at a time when you need competitive wages to do that -- some of these costs just go up faster than inflation. i don't want to double count this allows for any increase that somebody might propose, but it explains some of it and the last piece, and this is crucial to keep in mind, and the clinton years i think we need a sound strategic decision not to buy a lot of weaponry because in the

1990's we didn't need a lot of weaponry because we had bought so much during the ronald reagan buildup in the 80's so the planners first in the bush 41 administration of george h. w. bush administration and in the clinton administration cut the procurement budget by more than half. it is disproportionately targeted for reductions in that period of time. i think it is the right strategic call. some people argue it went too far but and he said it is not an option available today because we have never managed to repeat anything like the 1980's reagan buildup. we do not have military equipment that is particularly young, dependable, reliable today. at best we've been treading water the last few years, at worst we continue to exacerbate the problem because of the intensity and the pace of activity overseas so you have to bear these in mind and the procurement issue explains another 50 billion-dollar increase at least in the 300 billion-dollar gross. so when all was said and done i don't want to see it get it

passed the 400 billion to 700 billion increase you probably have 50 to 75 billion of the total amount that is really within reasonable realm of policies, discussion and debate. that's a lot of money but to even save half of that is going to get to 350 billington your target. that's going to be hard by itself is the notion that a trillion is easy and there for the picking i think does not understand the of arithmetic on what contributed to the cost growth. it doesn't explain the whole situation but i wanted to leave that out. >> go to peter but i have one more point. since i'm the only on the panel -- >> i'm not sure if peter is going to respond directly but i wanted to ask him peter, my question for peter is going to be about any ideas she may have that should be to the mix on reductions it's a little more specific. why don't you go ahead? >> why are we having this

conversation at all or about domestic discretionary. it's because we face a really big catastrophic problem of our debt rising faster than our economy can grow. that's programmed in, and when you sit down in a bipartisan group as i have twice and say what are we going to do about this, then you start with entitlement else steve did and you do various things that will be politically unpopular to reduce the rate of growth of medicare and social security. then you have realized we haven't done anything in the near term because about the retirement program you can't change them right away. you've got to save it in very slowly and far in the future so you are driven to discretionary spending. and you say some of this is not

run as efficiently as it might be coming and we need to take this fiscal imperative to do some things that committees and commissions have recommended for long time to read i don't know whether we need a new committee or military personnel but most of the things you talked about have been around for a long time and are in lots of reports, the acquisition process, everybody knows that it's not very efficient, that the congress weighs in, first the military is smart enough to say every system has to be built in 234 congressional districts, and if you to cut anything including an additional engine for a plane you may not need, then the

commercial way in, as we have to take this and produce some of the sensible things that might have been done sooner and then you are driven to the revenue side because even if you the reprioritization on the defense side and the entitlements we are not going to be about to accommodate a larger population of older people that need medical care without tax increase so you have to have the three things. >> you may want to respond to this debate as well the question i have for you was that as many in the crowd know, you've written some extremely influential books including maybe the to definitive books on private and military contractors and on a military robotics. and these suggest interesting areas of exploring the cost savings and that's not the jump

to have the detailed proposals the day after the target is announced and then to set up a process that's thoughtful but you have instincts about the kind of options we might at least set out and study further that might spring from either of you well-known books either way in which the private work force, the private contractor work force has grown so much over the years with the way in which robotics may not offer a possibility to do certain things more inexpensively. >> i will try to weave in answers to both. it goes back to the question of what principles are going to guide us in this process, and there's a couple principles that i think matter and i will get some heads nodding and disagreeing with me as i lay them out. the first one it's interesting we had ash carter here, the undersecretary defense a couple weeks ago, and he liked to use the phrase the famous bank robber willie sutton said when they asked why do you rob banks? because that's where the money

is. so one principle followed his law and that's true with third you are talking about every dollar that the pentagon spends on weapons, of 30 cents of it goes towards buying the weapon, 70 cents goes to maintaining it. on the question of private military contractors the pentagon spends 55 cents on services that are billable hours from the private military contractors versus 45 cents on buying goods. yet when we look at all of the commissions to the like they are always about cut this program. that's not where the money is. it's like robbing the drugstore right beside the bank. this was -- the personal system is another part of this where it's actually where much of the cost of growth within the pentagon is to read this leads to the second principle which is we have to be willing to

question 20th century assumptions about 21st century national security. one of those assumptions is the personnel and benefits system. we have a personnel and benefit system that is designed for the generation of madman that is now the generation of google. it's expensive, it doesn't fit their needs, its antiquated, is a 1960's model but this is where i will get steve to not not happily with me. is questioning assumptions also goes into other areas. so as an illustration we have to admit there are certain areas within the pentagon spending where the emperor has no clothes and we need to stop spending all his or group. national missile defense. we have spent more on that project than on the entire apollo space program that the man on the moon. now presently the success rate for the ground intercept system

is eight out of 15 limited. so a man on the new inverses not that reassuring success rate. but more importantly, if it does become successful it still is a system that is inadequate to stop the missiles that actually can reach us from russia or china and may be enough to reach the missiles that don't yet reach us bucket under the current budget the budget is supposed to increase. or another example, the nuclear weapons complex, which we only looked at through the lens of negotiations with the nation that lost the cold war. that is we need to look a nuclear weapons, not just through what can we give up in negotiations in other words we need to ask ourselves if you cut 200 or 500 warheads from the 5500 that you have, what is the

tree of? what is the national securities all you? the protection that you are getting from that, 5,252nd or head versus where can you spend that on the action military? i'm not arguing for the global i'm just saying these are the tradeoffs we have to make and mike's point on robotics and other technologies we have to be looking at how we will organize ourselves presently and may be willing to cut certain pet rocks. so, whether it is the fact that how many tanks do you think the army actually has? the army actually has over 5,700 tanks. how many did we use in the 1991 gulf war? 1900. so, as an example, even if we were somehow to get into st mazar mur campaigns, sides of the gulf war and 91 which no military planner would think of, we don't have the logistics to

actually get the tanks there or in terms of air force structure, the cost value of 13 es 35 we can alternatively package that as the eight es 35 space to fe team electronic warfare, four of the m q naim current generation of unmanned strike systems and of the global hawken so 13 verses that package and by the way, you still have an extra $180 million left over so it's not again whether to cut the entire year at 35 program is what are the alternatives that might give the force planners a better option and a wide array of contingencies but we are not willing to break the structures because essentially that's the way we've always done it. >> three quick points to lead this is exactly the kind of debate we need to have. we do need the point.

i will give you my example. we are not going to do iraq again or afghanistan again. i don't think we need to do them again to the country safe from the terrorist threat. i think we are going to use a different model than places like timoney and somalia and it's going to be about training and equipping and supporting local forces, sharing intelligence with them, maybe using our manned aircraft or predator aircraft, may be vocationally special forces. that is the model how we will wage the war on tear over the next ten years. can you see what does that mean for our military? what does it mean for the ground forces and we have to ask exactly the questions peter asked about the big tank formations. i would argue that if we are going to have that model we also need a civilian capacity to help the state's better perform for the people as the deal with these terrorist threats. second, strategic forces.

you know, arms control i think has been one of the great forces for preventing countries to do smart things with their military because they wait to have a negotiation where they can get some credit for it, and i would like to see us not have a next strategic arms negotiations. i would like our russian and american military planners to sit down and talk about how they would like to streamline the respective forces in a transparent and reciprocal way so that we can actually move much more quickly missile defense, we can have that conversation. of course it is in direct that china. it's not directed at prussia extracted in north korea and iran and i can tell you the last time that we had a missile test we had two major tests by north korea. it's a long range intercontinental ballistic missile. that's the good news. but on the occasion --

>> the systems perform better than peter wood said just but i will tell you that once in the bush administration and once in the obama administration we put our national missile defense system and the air force base vv to base in alaska on alert so that we can protect against that missile if in fact it were coming to a western part of the united states. we also use those systems to take out a satellite that was headed towards earth that was not making the controlled reentry. so it is a needed investment for a limited system that is directed at north korea and iran, and those are very unstable powers. but again, my point is not to beat peter but this is the kind of conversation that we ought to have to say what are the efforts of there and what are the real capabilities we need to meet

those threats and then we have to have the courage to make some debts and prioritize and cut them. s back with that, let's go to you. please come as i say, identify yourself after the microphone has arrived and pose a question but specifically a one panelist. let's start with you. >> i'd like to ask both panelists the reaction to the composition of the committee are you encouraged committee of concerns. >> alice, would you like to start? >> i don't want to comment on the individual's. i think it is for people appointed by the leadership of a point, and it does not -- it strikes me as a pretty good group and representing the

congress with no real extremist. >> the father was a good group as well if inexperienced group there are a number of people who know how the legislative process works and how to reach a deal there are clearly some members who reflect extreme positions within their parties and i think the leadership of the co-chairs because alice mentioned something important and they really are most effective if they can be unanimous.

>> one other point i think is a lot depends on the leadership largest of the co-chairs it's the leaders behind the scenes or hopefully out for not and by that the speaker and the president particularly. >> that's why i think it's important bill leadership really try to put pressure on the group to breach something that is fairly broad consensus the will make it more powerful and politically within the american people and seven out of 12 if you're going to get a streamlined consideration that alice talked about. >> we had this problem with a group bill perry indicted and bought a wide-ranging group and a fairly consent set of good consensus recommendations and our sense was rather than going to the lowest common denominator we found that if you were old and could make your

recommendations on the vehicle for the proposals for a wide range of people you actually got more likely to get consensus by the bullet rather than the lowest common denominator and if there was one of hope after this group i the would be bold and go beyond the 1.5. >> far beyond it. >> it would be bold and see if we can get something that is going to say to the international community and our own people and the to make tough decisions and really take on this problem. that's what the american people want to see and what i hope these folks will consider. >> and there's also aside from the question of composition there's a principle i hope the follow the also the folks in the other agency with the implications of it the first thing to cut is the chatter. they are not going to be able to

be bold if they're running to the press and the like and the secretary dates required staffers to sign the nondisclosure agreements we are going to need something along the equivalent of this so that my fear is we will constantly see options being floated out there in the press which will shut down the old thinking that is needed and will lobby groups are going to pop up and the like and the other we need to remember is that if the group and if these other entities are going about this seriously everything is going to be on the table but in the act of putting everything on the table it's going to feel like to those within the military, with the other agencies that their programs and even their jobs are under threat and so when you don't want to have happened during the next few months is a sort of demoralizing effect where people are only hearing about the various cuts floated

and not understanding the context that they are made, the strategic trade-offs and etc. >> i agree with that, but we keep talking as though this group was going to be talking about defense cuts. i don't think it is. the defense cuts are the fallback position descriptions could be focused on entitlements. >> here in the same road and we will work our way back. >> from the commodity markets counsel my question is specifically for steve hadley. we've been talking of your report, and i think if a understood correctly one of the recommendations was to increase spending on the needy and i would like to understand more about that. why specifically the navy and not the other branches and then i have part b which is, currently we have been talking about some of the other sort of

non-defense foreign spending in terms of whether it's democracy promotion or foreign aid or that kind of thing. can you help us understand what he would increase or decrease in that portion of foreign budget? >> the navy is all about asia and if you look at over the next ten years the united states has a huge interest as does the rest of the globe and what happens in asia. if you look the projections for economic growth over the next ten years and alice is the expert on this is all asia all the time at this point in time. you have the emergence everybody talks about the major emerging countries, china, brazil, india. i call them the major surgeon companies -- countries, and the integration of china into the global system is a very big challenge for all of us.

china is the big player in asia. it's scary number of our allies in that region, and it's very important if we are going to participate in the economic growth and if we are going to continue to provide a stabilizing influence in asia as we have since the end of the second world war we need to be present in asia in every dimension with our diplomacy, with our military which has a reassurance effect with our allies and says to china but we have some capacity there if it adopts a more aggressive posture with respect to alice and the key to the military presence is the needy and the needy ten, 15 years ago as 500 plus ships now projected to go to something over 200 the role in the surface area that is covered by what is not any less. so, that's the point about we've got a problem in terms of trade. asia is to get there by trade agreements and we are on the

sidelines so that's driven by the need by the united states to be present in asia. second of all, the point is we have spent since world war ii a lot of money and resources to learn how to recruit, train, exercise, fight and improve our military, and it has given us the best military and the world by far. it is a huge resource, and that's why as we talked about defense cuts we've got to be careful not to squander that resource. we have not made anything like that effort to develop the civilian capabilities that will go in after a conflict and help rebuild countries and governmental institutions, train the police and stand of the law enforcement capability, get economic activity going,

increase the services, all the things you need to do post conflicts to get a country like afghanistan and iraq back on its feet but also precontract some countries don't descended to violence. every time we have one of these challenges we do it as a pickup game, we don't do very well. we haven't made the kind of investment to develop these severely into the these like we have on the military. it's a very hard thing to call for the country to do at a time when we are in the kind of budget crunch we are. i grant that. but over the long term i think we need to invest in these kind of capabilities and that's why i hope that we follow what bob gates said and at the same time as we deal with our budget capabilities we don't do it on the backs of these abilities which not only to be preserved as anything they need to be expanded over the next decade.

>> another question. >> here in the blue shirt. >> thanks very much. from the strategic policy institutions, the question sort of follows the previous one as the broad principles that are going to bite the kind of cuts that were -- the u.s. is facing. it's interesting. this device has been much about the internal dynamics of the size and the shape of the u.s. military has implications for allies such as australia, countries like us and the south koreans who are growing in the military quite quickly in response to the point steve made about the changes in asia. so what my question is both to peter and to stephen perhaps, what are the implications of the cuts that are coming through in the defense budget year or the grand strategy if you like and in particular strategy in asia. >> i think you hit upon another

one of those principles which is through this process not within the super committed within particularly the pentagon and the nsc etc. and really the broad policy community as we are resolved through this over the next five months the principle is to keep your friends in the tent, and that relates to engaging with allies both about this process. the first level of engagement actually may be for all the frustration we sometimes have with other allies reducing their defense budgets they now have lessons learned to pass on to us. but the other aspect of it is that looking for where are our alliances creating the capacity that's troubled rather than where can we be sharing a particular area in asia as it essentially the navy and the air force is moving towards what they called the a year and see

battle doctrine which is designed to deal with a growing threat from any ship or submarine capabilities in the navy and from the asian power that shall not be named. the problem of the doctrine is that we actually haven't engaged with our allies about the doctrine even though it relies on those allies it's a similar thing there are certain capacity is where we are doubling up this aspect of may be having that communication and finding where can we share also has other aspect, a tough message needs to be set out to other allies that essentially were not in the position to do the 20th century things we did before. to put it more directly, we can't both be creating capacities and only one party is willing to use them, something we specifically seen in the

operations and essentially we are getting the point now where we are going to have to say you either get in the game, pay for someone else to play or we are not going to provide the service. that's the tough part of this dilemma that we are facing cuts in import a reminder when we talk about the comparison between the budget on the other powers out there and i did it myself in comparing the skills of the chinese budget the difference so why we spend so much is that we are a global power with a global network of alliances and there is a relationship there and regardless of decisions lie would disagree with and where we deploy force and the last decade we have engaged in certain discretionary operations, but we have other alliances that don't change, and that's why we can't look at this as just going back to 2011, the 2001 levels. >> steve? >> i would agree with that and

australia has been a terrific ally. when we really need someone to be with us australia is a country that has been there. i think some of our european allies -- eurith has to decide the going to have a real military force or not because they have cut their budgets and the forces are shrunk. they don't work together in an integrated way you see that in libya and europeans are going to have to make some tough choices about where they go on their defense astonishments even while the deal with some very severe economics the heavy tendency to get a free ride and those days are over. >> another question. >> here in the front row. sorry, in the back. >> i washington lawyer, and i don't think how this special committee and the success unless

they face the whole question of the meaningful tax reform. both commissioners to talk about 1.1 trillion of the tax expenditures a year. a lot of them had to cut back and maybe it isn't the 1.1 trillion available. but what success do you think this committee can have when so many members have already committed not having any tax increases even if you take away a loophole for one particular group is considered a tax increase by this group of people. so what do you think the chances are? >> i couldn't agree more, mark. i think the tax reform that increases revenues is essential to the success of this committee as it is in trouble with reform

that reduces future growth. those are the two imperatives, and if they are successful in bringing forward a package that includes a serious tax and entitlement reform it probably can't all be done at once but good steps in that direction. then we are not going to have this conversation about the defense budget, and we will have moved forward from a precarious position in which we might clearly faces of the recession to the sustainable budget so that's right we have to do two things and this is the committee that can do it. >> another question. >> kuran the third row on this site.

>> the american foreign service association. i would like to go back to a point he made earlier, mr. hadley, about integrating the diplomacy more tightly. i think that makes a lot of sense. but in terms of the current budget debate to you think that the grouping has put them in competition especially given the secretary leon panetta's vigorous defense budget and the fact that the spending is popular with the public, the state department list so and in some cases foreign aid is not popular at all, and how do you think we get past to something as you described? >> it's a little bit of a case to be careful what you wish for because one of the problems is foreign aid. it sounds like a giveaway program and americans unfortunately tend to understand it as such they think it's a much bigger portion of the federal budget from the fact it

is. as a way to understand the purposes and they think it is much more substantial than it is. so, to counter that, in the bush administration and the clinton administration tried to do this as well we try to make people understand the foreign aid is not actually foreign aid. it is something we do oversees that advances our national security interest. so we were very much interested in putting these kinds of diplomacy and development assistance programs into the national security context as a way of protecting them for cuts. fast forward now two years to the deficit problem that we faced having succeeded in putting them together. now it's a bit of a hobson's choice because it is told package has to shrink the concern is we will preserve defense spending at the expense of these items.

i think it is right to think of them as an element of our national security strategy. it is the risk that they will suffer as a consequence, and i think the only way to do it is to have a discussion so that people understand what those programs actually do and the contribution they make to the national security. i think bob gates was front and center on that, and i suspect you will see leon panetta when he gets into it picking up the drumbeat because a lot of these programs, the principal supporters are actually the u.s. military. because they are men and women overseas that have seen the value of the programs but again it is no reason we have to have an informed debate on the subject because there is a risk. another question. yes, ma'am, the fifth row. yes.

>> i'm from "the wall street journal" and my question if anybody on the panel would like to weigh in last week as president about the announced the unemployed veterans especially those who are returning from iraq and afghanistan unemployed in greater numbers than other groups of veterans i'm wondering if there's any discussions that any of you have participated in and is there any chance that the cuts to the defense budget could have an adverse impact on those returning veterans given that the department of defense has played a role in helping them with the transition process. >> i think people will be pretty sensitive to that. if you look at the quadrennial defense review that reviewed, they talked about the commitment to maintaining the all volunteer force, but they also talked about our commitment to the veterans. general john cartwright, who was the vice chairman of the joint chiefs retired last week and i went to his retirement ceremony

coming and one of the things she said that i think resonated with the audience and i think will resonate with the american people was that our men and women in uniform who, in harm's way on behalf of all of us and to many of them have come back and grievously wounded that we have a lifetime commitment to these people. this isn't just to get them back, he'll their wounds and get them started on the integration into society. we need -- we have a commitment to these people that extends throughout their life, and i think the american people get that. one of the big differences, and alice and i can remember this between, you know, the iraq experience and the vietnam experience is that the american people really love this military and the respected and see it when people go through airports and people spontaneously break out in applause. so i think the american people

get it, and i think they provide support to these programs and i hope the people who are tasked with to responsibilities will keep that in mind. can i say one thing -- again, i'm sitting here on this thing this is way outside of my expertise, but i would just say one thing. i think a lot of republicans particularly conservative republicans when they hear balanced approach, they hear tax increases. and when they are in a situation where the economy is soft, the last thing you want to do is increase taxes. >> immediately but nobody's talking about that. >> that's the point though. alice has made exactly that point. we have to have a debate on this because, you know, there are some for example republicans who would like to see some tax reductions, the corporate tax rate reduced because corporations are at a competitive disadvantage overseas. so the question is whether we can be wise enough and clever

enough to basically get people to say yes, you may get some tax relief but the only way you're going to get tax relief is if we can do some closing of loopholes and things like this. i think -- i keep one of the problems is this debate has gotten politicized. and what we need is this -- [laughter] >> and we need to have a sensible discussion on this because this is a tricky business. we have a huge deficit problem and we have a very soft economy and the last thing we need is a double-dip recession. so we are going to have to work these out and again i am way outside of my area. >> it is to all of the things we are talking about and entitlements for instance one has to make the same point about medicare and social security and

medicaid. one would only reduce those benefits with a lot of lead time but people don't understand that, you talk to people on the street and they say i need my medicare. it's going to get cut. nobody has been talking about cutting the benefits immediately or indeed raising taxes immediately. it hasn't even been part of the conversation but people have such a figure that they are afraid of it and i made this point on a television program no one was talking about cutting medicare or social security immediately i got hate mail saying yes they are. laughter christa mick interesting to read two last questions and then give the panel a chance to respond and conclude with observations and we will take to the very end on opposite sides of the aisle one after the other, please. >> christa want to applaud

stephen peter for recognizing the importance of asia into the air sea battles, but i want to see that a lot of the challenges that are being faced the challenges on the air and space power, the air force the no less a strategic force and a stabilizing force within asia faces some of those problems. and so, as you discuss your principles for where you want to go, how prominent welfare consideration for the industrial base to protect those aspects that give the united states a distinct and an asymmetrical foreign policy freedom of action that relies upon global warming and surveillance to rely upon the air mobility and rely upon the ability to have an air superiority and reach out and touch the world to make the effect swear need to respect before we get responses come over to you and with a vietnamese americans and i think you for bringing up the violence approach and asia, and my question has to do with business because that's the whole focus

that the next battle is economic and right here in america. so, why we are cutting the budget which we somehow have focused to build upon the business here in defense of our own jobs to protect our jobs for our veterans in case chinese come here and established companies here with support from the old government without the ability of the company. so, with any sort of channeling some of the budget from air force and other weapons into the budget to support the small businessman. >> i think that we will look the other way from which we began. if you would start in the way that he would like for the questions on the table. >> short and i actually want to hit the question of the veterans as well. one of the things we need to

recognize and goes back to the principal of cut the chatter is that folks within the military, and i experienced as through conversations recently including one just last night are starting to, you know, phrase things with my job gets cut or they are making their decisions on how and where would offices, what service, with offices they choose to go towards based on the think might happen in the budget so we need to realize there are people behind this and it's another part of it what we do not want to happen is the sentiment of someone coming back from afghanistan and iraq and divide given of think you very much we will see you later. that is to be avoided all costs. the second part of that the was that we need to be clear in our discourse related to the pentagon and this is not just in

these discussions but even things like promotion strategy that we don't turn cost-cutting into the holy grail can't we are seeing that kind of like starting to have been so that concerns me because this aspect of war fighting is what distinguishes a veteran from another type of benefit. of benefits programs or entitlements program and men and women asked to go into harm's way on behalf of the nation. to the point about what can we do related to the industrial base in asia and the like i think it hits again that idea of where are their capacities that will be needed more in the 21st century verse is the 20th century so we can't go back from the 2001 budget and in 2001 you didn't have a cipher command back in 2001 we didn't have over

7,000 unmanned aerial systems and the force that in 2000 when you also didn't have 44 other nations other people also building systems that's the strategic situation today but another aspect of this is the importance of areas like research and development and every budget cut process in history and in the u.s. and unfortunately in every bipartisan advisory commission related to the current sow proposed that r&d be cut by a greater amount than the rest of the force, yet r&d is the seed corn for when the strategics attrition changes. so that is an example. and also, by the become the r&d in my mind is really what sustains the national defense industrial base not so much thinking about it in terms of the distributing jobs in every congressional district. so those are some of the

principles we keep in mind in this process. >> every time we have done these defense budget cuts we tended to do it well, and in some instances we have regretted it when a military challenge subsequently emerges to this. so it's very hard to do it right, and peter has laid out in the articles and writings and i try to as well even getting some criteria and a really forcing the process to respond to those criteria. second thing i would just like to say, you know, this is a very challenging time for the country. and sometimes i think there is a sense out there where americans are beginning almost at the first time to run -- to wonder whether the challenges before us are too big to handle. i was out and he said last week with madeleine albright talking

about my 11, and one of the things she said at the end which i think is very important, she said 9/11 was a huge challenge. i don't think people really remember how traumatic that was for the country. and the kind of terrorist attacks that we anticipated at that time. through a lot of that effort, by a lot of americans, most of what we feared after 9/11 colin the mass casualty attacks, weapons of mass destructions did not happen. and the united states and actually got through the ten years and we dealt with a problem of the challenge in a way that didn't require us to fundamentally change hour were society, and other than who we are in all always have been. there was a challenge and we pulled together as a nation, and we overcame it. we now face a huge challenge in terms of the budget deficit. i feel we need to remember from things like 9/11 this is an extraordinary country, and we can't do these things.

we do it in our own messy way. there's a lot of politics, churchill's of the americans always get it right, they always try every alternative first and final leg in the end of the right they tend to do it right the can get this done it can overcome these challenges that so we have to recognize we have to give it a smart way. but we have to keep in mind that we are facing a new threat and a new situation with respect to the future of the federal budget. we have not been in this situation before we have done other budget cutting and we will do other budget cutting in the future but right now we are facing a situation which is totally unsustainable. we cannot go on like this the

spending under the impact of health care and aging is rising faster than our economy can grow. we can't go on that way. and it's not a blame game, its good intentions and we created programs that were very popular, but we have to cut back and raise more revenue and improve the tax code what has to be done as we keep saying over and over on this panel and stays in overtime. but it has to be done. there's no escapes coming and that is the challenge to this new process and we will see in the next few months whether it works or not. the deadline is thanksgiving. that is not very far from now. so, we are either going to have

a solution or we will be starring in a pretty deep the event. >> sooner we know to the redskins are going to the super bowl. [laughter] >> i want to make one very brief comment in response to the question of helping our businessmen and businesswomen. this is an unusual note to finish with the discretionary accounts are often severely criticized and they should be scrutinized, but that is also where we sometimes do our investment because these include support for education for scientific research, they provide a lot of the services that many of us want like food safety, airplane safety and so on, and so all the more reason why we need a balanced approach but that is to look at where the big money is which tends to be much as anything entitlements and so i just want to underscore on that last point that if you are worried about investment in the future economy there are actually some programs the government does that are important for that and we have to remember what they are as

well. let me thank you all for being here and please join me in thinking this panel. [applause] [inaudible conversations]

>> looking at the headlines today on, lots of abuses by e hiline writers, gop debateat hitting hard at each other in obama and iowa.tlanta the alana journal, a gopst in i. hopefuls joust in iowa, "chicagi tribune" gloves come off during the iowa gop debate and same with pittsburgh post is they let the doves gloves and now she the gloves analogy -- pittsburgh post, they like the gloves analogy. what was noticeable for you last night? guest: the race sort of changed

and solidified certain candidates, starting to drop in contests and asking voters to choose. the most visible and exchange was between former minnesota gov. tim pawlenty and congresswoman michele bachmann. they went at it quite aggressively in terms of michelle bachman basically saying tim pawlenty was to political, and hymns and she has no record. the-and he said she has no record. suddenly, mitt romney, was not really the target of attack, started to add a case against texas gov. rick perry who will enter the race looks like this week. use of mitt romney say, herman cain and i are the only ones who can only do this job because we a private sector experience. i think that was the beginning of an argument against rick

perry. host: in the national polls, is an estimate the difference adding rick perry to the lineup. guest: it seems to draw a certain amount in the national polls, but those are pretty meaningless at this point did rick perry has a long way to go. we will see. host: talk about the straw poll on saturday. c-span will provide live coverage, every minute of it. what will it mean in the end? guest: well, the straw poll, somewhere around 10,000 people probably who will come and be courted by these various candidates. it is a show of strength. right now, i think the reason you saw michelle bachmann and tim pawlenty attacking each

other so fiercely, it is not how many candidates are scarcely surviving, it is a test of strength. host: it is likely some of the second and third tier candidates might decide the voters are speaking to them? guest: yes, but i guess the media may essentially decided for them. tim pawlenty has been working hard to win. he has -- he looks good on paper. there is a sense he has to show voters